Another one bites the dust – startup leaves Bangalore for Silicon Valley

Indian Startups

Another one bites the dust – startup leaves Bangalore for Silicon Valley

Bangalore’s rising salary levels gets it’s first victim – Riya, an image search engine [ later acquired a new avatar called Like]

If you have been a regular reader of, you might have noticed that one of the standard question that I ask Indian startups in the interview is
Is Indian tech community ready for startups?”

While few startups [like Ziva] were plain lucky, others [like burrp] have suffered the pain, and are quite candid that finding talent is tough and the tougher part is matching their salary expectation.

Indian tech community doesn’t buy into stock options – they want plain hard cash.

And probably, this is one of the reasons why Riya is closing it’s Bangalore center.

Unlike Silicon Valley, however, the employees in India didn’t value stock options as much as folks do in Silicon valley. It was understandable, however, given they had never seen a friend hit it big or seen the Google like wealth effects which occur every 5 years in the Valley. Hence, they argued more for cash compensation. This combined with the fact that we were going after the best in Bangalore (the most impacted city in India) increased our exposure to wage inflation.

Thanks to hiring spree triggered by big MNCs, the employees are pampered like kids and eventually, the balance of power is shifting towards the techie crowd.

Bangalore wages have just been growing like crazy. To give you an example, there is an employee of ours who took the first 5 years of his career to get from 1% to 10% of his equivalent US counterpart. He then jumped from 10% to 20% of his US counterpart in the next 1 year. During his time with us (less than 2 years) he jumped to 55% of the US wage. In the next few months we would have had to move him to 75% just to “keep him at market.”

Smells like desi bubble burst? I don’t know.

Is Bangalore really the silicon valley of India? Do we really understand what silicon culture means?
Definitely NOT.

Related: Can India ever build a groundbreaking global software product?

tagged: riya

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