Saturday, July 14, 2007

Bootstrapping in India

I'm posting my response to a question asked on LinkedIn Answers by Sramana Mitra: "Bootstrapping a Product Company from India?"

Here's what I had to say:
One aspect of bootstrapping is money. The other is people- good people.

We're solving both problems with our strategy of treating our offshore team in India as a services company that specializes in high-quality, low-cost product development for early-stage startups in the Silicon Valley.

But we are really a web-based product startup based in the Silicon Valley with our offshore team based at Hyderabad, India, since June 2005. When I came back from India in September 2005 after putting it all together, I had a team that boasted a University gold-medalist who turned down an offer from Google and deferred PhD at MIT to join us, a national programming competition winner, and a seasoned manager from Wipro. Then one fine day, in March 2006, my whole team just disappeared, and I only had 85 pages of use-cases left to show for it!

Since then, I've rebuilt the team with more dedicated and ambitious employees led by someone who had prior experience of working for a Silicon Valley startup but only a 2nd class B.Com degree. But we're now just kicking ass big time because we're using user-stories instead of use-cases. Our Extreme Programming driven process has done wonders for us, and we're now the experts at applying XP across borders for a cash-starved early-stage web-based product startup - and we're leveraging our experience to help other Silicon Valley startups also bootstrap.

For us, it's less about money and more about a strategic decision to help in our growth plans. We are kicking ass because we offer complete source-code level transparency and control, no long-term contract, better quality, faster, at a fraction of the cost of outsourcing to India. And while the rest of the services industry has only two models, "I Screw You" (i.e. Time & Material) and "You Screw Me" (ie. Fixed Bid), our unique pay by productivity model gives us an incentive to put the most productive people to work on other startup projects as well.

Most importantly, we're not really a "services" company nor aspiring to be one anytime soon. This means we're not doing it for money, we can pass on all the savings from our process to the customer. We're doing it to hire and retain good people in India- where engineers prefer brand-name companies first, and then services companies with steady cash-flow- not "risky" product companies.

The fact that we're also an early-stage product startup in the Silicon Valley- eating our own dog-food so to speak- lends great credibility to our offering. And it helps that we understand intimately the value of being responsive to the customer and market needs.

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