Start-ups pay top dollar for Silicon Valley talent
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New Delhi/Bengaluru: India’s most valuable e-commerce companies such as Flipkart, Snapdeal and Ola are paying top salaries to recruit product experts from the US as they try to catch up with international rivals, including Amazon and Uber, on building quality products and strong technology infrastructure.
Even smaller firms such as food ordering app TinyOwl and online budget hotel booking site Oyo Rooms are tapping talent from Silicon Valley as they seek to differentiate themselves from rivals by creating standout products.
Analysts say it’s not clear whether this expensive strategy will work, given that Indians shop primarily on mobile phones unlike the desktop platforms that US product managers are used to building and the work culture is different in India.
Top product engineers are usually recruited by tech companies such as Google Inc. and Facebook Inc. rather than online retailers; Amazon and Uber are among the few exceptions as they either have large tech businesses (as is the case with Amazon’s cloud computing arm) or they have built first-of-their-kind products (as is the case with Uber).
Now that Amazon and Uber are expanding aggressively in India, companies such as Flipkart, Snapdeal and Ola need to recruit product and engineering talent that can help them compete with the expertise of these international giants, analysts said.
They add that this is behind the recent spree of senior executive hires by Indian e-commerce firms from companies such as Google and Yahoo Inc.
Flipkart hired its product and engineering heads Punit Soni and Peeyush Ranjan, respectively, from Google earlier this year while its unit Myntra hired its chief product officer Ambarish Kenghe from Yahoo this week. On Tuesday, Flipkart also hired former Yahoo executive Eric Lange as vice-president of product management for its customer experience division. Snapdeal hired its product head Anand Chandrasekaran, an experienced Silicon Valley hand with experience at Yahoo and Openwave Systems, from Bharti Airtel Ltd last month.
It’s important for Flipkart, Snapdeal and the other top e-commerce firms to get top product talent as they’re competing with companies that are far ahead of them in terms of technology expertise, said Sharad Sharma, co-founder of iSpirt, a software products lobby.
“Though Flipkart and Snapdeal are successful in their own right, they need a whole new level of tech expertise to compete with Amazon for the next decade. And it’s much easier to get readymade top product talent from the US than groom people, which would take much longer. However, there are some risks with hiring from the US such as the amount of time it could take for the new leaders to settle in and adapt to the culture, which is very different in India compared with the US,” Sharma said.
For Silicon Valley’s finest, Indian e-commerce firms flush with funds are an attractive destination, much more so than IT services companies like Infosys Ltd, Tata Consultancy Services Ltd and Wipro Ltd. Though the IT services firms are adopting a more platform-led approach, they are unwilling to pay the salaries offered by companies such as Flipkart and Snapdeal. For instance, Flipkart pays salaries of more than $1 million plus stock options to some of the tech leaders it has recently hired, according to two people familiar with the matter who spoke on condition of anonymity.
With Indians increasingly shopping on their smartphones, online retailers are trying to build state-of-the-art apps. The explosive growth in popularity of shopping on apps with their small user interface mean e-commerce firms have little margin for error as they seek to hook consumers, who constantly move between various shopping apps.
Apart from improving their apps, online retailers require skilled product leaders for building technology tools for their third-party merchants and entering new businesses such as advertising.
“The scale of the problem in India, the freshness of the challenge is attractive to tech professionals,” said Myntra chief technology officer Shamik Sharma, who also returned to India from a long spell in the US in 2012. “Product experts will help in creating top-class user experiences on the mobile. They also have knowledge of building strong processes and procedures for building products and they will bring these much-needed processes to Indian companies.”
Start-ups now want to be seen as globally competitive, especially on technology, said Prateek Srivastava, CEO of Basil Advisors, a talent advisory firm.
“Evolved markets have already seen this shift from raw tech power to more sophisticated usage of product focus built on top of technology,” he said.
In the early stage of start-ups, the founders act as product heads. But as the company grows in size, entrepreneurs are realizing that this key function requires focused talent, said Prashant Tandon, co-founder at Healthkart.
“At the end of the day, the product is the heart of the digital business and deserves full focus and highest quality. Hence, now that the digital companies are maturing, quality talent s coming in to drive all aspects, including product,” he said.