Productivity in Indian Startups

1 points by vijayanands 9 years ago | 2 comments

India is the third largest startup hub in the world.

A good metric to measure productivity is the size of the team that it takes to build the company around, and the revenue per employee as a metric.

Skype had a team of 27 when they got acquired. Instagram had 13. Whatsapp had 32 Engineers and 55 employees when they were acquired by Facebook and had a whopping 900mn people using the service (and was doing approx $30mn in revenue). Gmail for eg, is still managed by a team of 100 (engineers).

Salesforce a 6.6$bn revenue company has 19,000 people working for it. Zoho has revenues of approx $300mn and Freshdesk has a revenue of about $60mn.

If we do a Revenue per employee extrapolation, Freshdesk would have approx 90,000 people when it does the revenue that SalesForce does. Zoho will have 100,000 people.

On the Pureplay product front, Hike for eg, has 250+ employees (and aims to double it this year), while its counterpart Whatsapp still has the original approximately 55 strong team. Snapchat is however a 1000+ member team and posts 400mn in revenues (and plan to reach 1bn+ this year). Reports suggest that Hike posted a revenue of 100K USD last year.

Most startups have a target of a million dollars of revenue per employee. The same number in India looks abysmally low - even though the salaries are more or less starting to look the same (with adjustments to PPP).

Q: Is there even a difference between Indian Startups and the Outsourced Servicesof the past era?

Cognizant (which does services) has approx 266,000 employees and posts revenues of 13.49billion - approximately double that of salesforce. Our Indian "product" startups would have approximately the same size of workforce of services companies to attain that revenue numbers.

Bottomline : Something has to change.

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nnn1234 9 years ago |

Per your Question,Yes there is a difference.Ownership and Control of direction are controlled by the startup and not a service providers "client".

Here is a better metric( which you hinted at ) compare number of users per employee and proximity to the employee.

something does have to change, we need to build AOL,PAYPAL and Nokia ( there are analogues with Reliance,eztap,Micromax )

I would say let the top line solve topline problems, we need better bottom line solutions if we are to do any country by country comp

ankurdhama 9 years ago |

I just don't get the idea of using the word "productivity" in technology and innovation. Tech and innovation are about solving problems and creating a sustainable business model around those solutions and it is not like a factory where you are following a predefined procedure to produce stuff, like TV, cars etc.