Category — Running a Startup

About a year back, I wrote a post on this very blog titled ‘Starting up Business in India– Beware of the ROC redtape!‘. This was basically a narrative, about how I had to spend three (exasperating) months in getting our startup registered with the office of the registrar of companies (ROC), New Delhi, as a private limited company. I must inform you that, to this day, that post remains the most popular post on this blog, attracting readers from various corners of the world. So much so that, if you Google for ‘Starting a company in India ‘, a reference to this post, is ranked number one amongst the 106,000,000 search results that Google throws up.

But, in what can only be described as a mind boggling turn of events, the Economic Times carried a report today about how it took a software company in Delhi, less than an hour to get their company registered with the ROC office. The software company, Corporate Professionals eSolution Pvt Ltd, got registered from the promoter’s own office in an hour, with some synchronized legwork thrown in at two government offices.

This is how, Pavan Kumar Vijay, the company’s promoter narrated the process: “With all documents ready, we applied online for the approval of the company’s name at 10.41 am. The name was approved in a few minutes. Then the memorandum and the articles of association were stamped and the power of attorney notarized at the Tis Hazari court by 10.50 am. The scanned documents with digital signatures were then filed electronically to the Registrar of Companies (RoC). Soon after, the certificate of incorporation was obtained at 11:40.”

For reading the article, check out this link.

The article mentions that the government plans to further simplify the process by introducing an electronic stamping system, which should bring down the time taken for incorporation to 20 minutes. I am lost for words as I read this story…

Its possible that this is an extreme case but the fact is that, information technology is bringing about a paradigm shift in the way even our governments operate. It is leading to greater transparency, faster throughputs and reduced red-tapism.

Much as we never miss out on an opportunity to criticize the government at the drop of a hat, on this occasion, I can’t help congratulate our government for enabling this. Full marks to them for allowing something like this.

Update- Aditya (who works with TCS) has informed me that the technology for this new incorporation process was provided by TCS. I think this is a PATHBREAKING effort by TCS and deserves to be applauded. Unfortunately, none of the reports I have read about this (including the ET one) cared to mention this.

If your work involves making hiring decisions for software professionals, you’ll agree that the de-facto assets of a software company are its employees. Well, if this sounds like clichéd management speak, just take a glance at a software company’s P&L statement. Anything between 50-75% of operating expenses (depending on the kind of software company it is) is manpower related. No other industry has a P&L statement that is so manpower centric. And the above assertion holds true whether you are a 10 member startup or a 40,000 member software giant.

One might be inclined to believe that India, with its teeming unemployed millions, must surely be a cakewalk for recruiting software professionals. However the ground realities are quite at odds with this expectation, for the Indian IT education system produces a deluge of mediocre candidates and finding the right people is often like solving a giant jig-saw-puzzle (more-so-ever for startups). The signal to noise ratio in any recruitment channel- be it through job sites, newspaper ads, walk-ins or recruitment consultants is hopelessly insignificant. Added to it is the basic problem of lack of standardization. Consider this –

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…I wanna startup…
…But nobody showsup…
…If somebody showsup…
…I can startup…

Thats how Nag@Startups.in summed up his reaction to this comment from me- “good people don’t want to work for startups and for making a good product, you can’t do without good people ”

To get the context, check out comments no 8 & 9 from my previous post - Where are the Indian software product startups?.

Well said Nag, I can see your pain in your poetry…

At Uzanto, we work as a small but highly integrated product development team. This team comprises members across two continents (in New Delhi & Silicon Valley) that work in close collaboration across diametrically opposite time zones. The nature of this collaboration is such that we need affordable, uninterrupted and reliable means of voice & text conversations, the ability to quickly transfer bulky multimedia files, share computer screens and remotely control each others computers, give online demos, do fast design iterations with multimedia elements like images, animations, sound etc.

We could really do with a fully equipped conference room, all with overhead projection systems, video conferencing, wireless microphones, panaboards et al. But a bootstrapping startup like ours can ill-afford such luxuries at this stage and so, we have to make do with what contemporary internet based collaboration technologies have to offer. However, experience backed up by a never ending quest for experimenting with cutting edge technologies has taught us, that it is possible to replicate all the functionalities of a conference room using a combination of relatively inexpensive and easily available hardware and software products. In fact, some of the technological acrobatics that is possible with these products would probably make the best of modern conferencing systems seem boring & obsolete. So here’s my recipe for what all you need to set up a portable, inexpensive conference room, that should allow you to work seamlessly with remote team members.

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According to a published report (India 89, Pak 24, US 5), India ranks as one of the slowest countries in terms of the time taken to set up a new business. While it takes about 89 days to start a new business in India, in the US, it takes 5 days; in China, 41 days and in Pakistan, 24 days. For most developed nations, the duration varies between 10-40 days.

While the report does not say what kind of business is being compared, it is probably a private company that is being used as a yardstick for comparison.

I can vouch from personal experience that the 89 day duration for India seems to be fairly accurate. While starting up operations for Uzanto in 2004, we had applied to the Office of the Registrar of Companies (ROC) in New Delhi in the last week of March. The registration certificate was issued on the 2nd of June and thereafter it took a couple of weeks for the bank accounts to become operational. That makes it about 80-85 for our gestation period.

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