The startups turning their backs on hubs5 min read . Updated: 15 Aug 2019, 10:03 PM IST
- For some entrepreneurs, there’s more to starting up than being in the hubs of Gurugram and Bengaluru as they find in the costs lower and work-life balance better in small towns
- Cost reduction is often been a strong motivator, but so are other factors such as being close to family, better quality of life and less traffic
Growing up in Coimbatore, Bengaluru seemed like a dream city to Dhruv Suyamprakasam, the place where every other person was an entrepreneur and the best jobs were. So, after college, he moved to India’s Silicon Valley with dreams of setting up his own healthcare startup. However, after almost 16 months, he realized that Bengaluru was not ideal for the healthcare business, and decided to move back to Coimbatore.
“Any healthcare business, especially when you interact with anxious patients, needs time to grow. But, Bengaluru as a startup hub is focused on rapid growth and expansion. It was not the kind of place where a healthcare venture would survive," says Suyamprakasam. In 2010, while still living in Bengaluru, he incorporated his healthcare venture, iCliniq.com, in Coimbatore. The next year, he moved to Coimbatore along with four of his seven employees. The pace of the city, the lower rent and cost of living, and the proximity of hospitals and healthcare institutes made it a fruitful move. “We make money in every transaction now. This would not have been possible had we stayed in Bengaluru," he says.
While most startups dream of moving to the startup hubs of Bengaluru and Delhi-NCR, a few have taken the reverse route. Cost reduction is often been a strong motivator, but so are other factors such as being close to family, better quality of life and less traffic. Such changes come with their own challenges that entrepreneurs solve with time.
Suyamprakasam’s answer to the question was it a tough move is: “Yes and no." Investors didn’t need convincing as iCliniq.com is self-funded, but talking his team into relocating to Coimbatore was a task. “It was easier to talk to the ones who had families. The younger, fresh-out-of-college employees wanted to remain in Bengaluru. Fortunately, educational institutes like CIT and PSG in Coimbatore provide a ready source of talent," he says.
For Sibasish Mishra, founder-chief executive officer of BookingJini.com, being able to hire the right talent was one of the reasons he moved to Bhubaneswar from Bengaluru. With seven employees, Mishra, 39, designed BookingJini as an online solutions provider to hotel owners while living in Bengaluru but did a test run in Puri, a popular tourist destination in Odisha. Once proven successful, he registered the company and moved all seven employees to Bhubaneswar, his hometown.
“There are a lot of colleges in the state. Instead of hiring top talent from the best institutes, we chose the second best and trained them. Now they are not just doing their work brilliantly, but also bringing in clients and other employees. They are our brand ambassadors," says Mishra. The move also had an impact on their bottomline. “We weren’t profitable when we moved. Since our costs came down after we shifted, we were instantly profitable," he says, adding that it’s had 300% year-on-year revenue growth.
BookingJini’s operations manager, 26 year-old Shilpa Mohanty was one of the seven employees who has been with the company from the start. Originally from Bhubaneswar, Mohanty didn’t think she’d return to her hometown. “I am closer to my family and the cost of living is lower. But more than that, it is not stressful to pitch to clients here. I have the advantage of knowing the local language and clients can understand our challenges. In Bengaluru, it was more intense and tiring," she says.
Moving a team
Pranay Gupta, co-founder of Panjim-headquartered co-working startup 91springboard, was discussing Delhi’s pollution with friend and co-founder Varun Chawla over dinner one night when they casually spoke about moving. Soon, they considered it more carefully. Chawla made a list of things they needed for the business to prosper, including connectivity to all major cities, cost of living, cost of education and healthcare. Then they brainstormed on all possible options. Panjim, on all counts, ranked well and the team just had one last survey to do.
“We asked our team of 90 people, what they thought of a move. About 60 people decided to move to Goa. We did not want the rest to leave so we made provisions for them to work from Delhi," Gupta says. The move itself was done in phases and employees as well as co-founders took time to adjust.
For Abhishek Daga and Chitra Gurnani Daga, co-founders of activity-based trip planning portal Thrillophilia, the challenge in moving from Bengaluru to Jaipur in 2016 was finding lateral talent. There were plenty of freshers, but those with experience had moved away to find work. “We had to make people move back to their home state. One key criteria while hiring for us became that–to see if they were from Jaipur or neighbouring cities," Abhishek says.
Meeting the right people
A large part of being an entrepreneur is meeting people, both investors and clients. A city like Bengaluru scores well in this regard, with most investors eyeing companies based in the city. However, it was a small challenge, as Daga realized, one that he could solve. “We have a small startup founders group. The ecosystem is growing rapidly now and is probably five-six years behind Bengaluru. It is also easier now to have networking meet ups," says Daga.
91springboard’s Gupta believes networking is only 10% of the job. The rest of it can be done from anywhere. He travels to Delhi often for meetings. “I’m more productive now. When I was living there, I would discuss some things and leave the rest for the next day. Now, the people I meet know that I am flying down for this. So we try to get the most work done in the shortest time," he says. Investors too believe that finding talent in smaller cities can be a challenge. “The important thing for a startup, especially in its early days, is to be close to customers and top talent. If your startup is addressing the needs of customers in a tier II or tier III city, it makes sense to move there. But it will be difficult to find the right kind of talent," says Radha Kizhanattam, investment director at Unitus Ventures, a seed stage investor.
She says it is possible to pilot in a small city but the challenge will arise when it is time to scale up. “As investors, we do not discriminate between those in a metro and those in a tier 2 city. But we do take into account how efficiently they can scale their model. And if that requires them to stay near top talent, then their work city does come into the picture," she adds.