For many startups in India, raising money is the toughest part. But for the Bengaluru-based hardware startup Ather Energy, which last year unveiled the prototype of India’s first electric smart scooter, there’s a bigger hurdle – the shortage of experienced talent.
The hardware startup industry needs success stories to create the right ecosystem, Tarun Mehta, co-founder and chief executive officer of Ather Energy told BloombergQuint in an interview.
“Finding somebody with experience and impeccable engineering skills, or product skills is a massive challenge. The challenge is about finding the right set of people who will fit in the profile. There is no talent pool where we can pick the people from because there aren’t many hardware companies. We need a Facebook kind of success story in the hardware sector as well,” Mehta said.
Ather Energy which counts Tiger Global, Hero Motorcorp, Flipkart founders – Sachin Bansal and Binny Bansal – among its investors has so far raised $43 million. Started in 2015, the company is building a smart scooter from scratch.
Here are excerpts from the conversation with Mehta.
With the prototype ready, the next step for the firm is production and conceptualisation. What are your hiring plans for 2017?
We had a target of launching by 2016 but things haven’t gone as we have planned. We have a fair bit for testing and integration work of six to eight months ahead of us, so hiring for manufacturing is not the highest priority right now. We will see bulk of the hiring happen in engineering, operations and sourcing. We are a team of 175 and are looking to add another 100 people in 2017. They will join us in the course of the next few months.
The Talent Bottleneck
How important is finding the right talent pool? What challenges do you face there?
Hiring is easily the most important thing and it is the biggest challenge for us. There is no ecosystem in place in India. The sort of talent we get is proportional to the kind of product we will come out with. Finding engineering, production and marketing talent for a company like ours is a very different ball game and we don’t have those sorts of companies in India where we can poach from. Often, we are hiring for functional skills rather than specific experience. You wouldn’t find anybody with experience in battery design and vehicles structure design.
Typically, when you are building a vehicle, one would think you are going to poach a lot of talent from automobile companies like TVS Motor Ltd., Bajaj Auto Ltd. or Hero MotoCorp Ltd. but that’s not really the case. Building a company like this takes a variety of engineers to come together, and building that mix is one of the most valuable things we are doing right now. Only 15-20 percent of the workforce comes from the automobile background.
Give us the sense of the kind of talent you are roping in?
We are getting people from all over the place. We are getting from consumer electronics, aerospace, energy companies, and from abroad as well. Most of the talent continues to be young and the focus has been to make people learn things faster rather than unlearn a lot of things. Most of the folks that we have are between the 25-26 age group.
How much money are you investing in hiring and training?
We don’t have a formal training programme being a young company. But majority of the money we are spending is on talent, which is about 70-80 percent. We don’t spend anything on marketing, distribution. All our investments are really into people and engineering.
What are the trends you are seeing in the hardware industry?
Indian doesn’t not have any large hardware company today. There are couple of hardware startups that have scaled to some level and are doing in-house engineering. Most hardware startups in India are by design not necessarily doing hardware engineering, they are merely customer facing and are picking items out of the shelf from other markets like China. While we are building a vertically integrated company, meaning we practically own our suppliers, and are putting the entire reliability, design and manufacturing in our hands.
Now, we are starting to attract a lot of engineers. We have had people who were engineers before but were working with companies like Ola, Uber, Accenture, others . They are now trying to come back to engineering, even with a paycut and that’s the sort of trend we are seeing. We will be seeing a lot of that happening as we continue to build the ecosystem.
What needs to be done and what is missing in the hardware industry?
Couple of ecosystems globally have got the hardware ecosystem right like China, Germany. India too needs more product focused companies where product and engineering is a priority. It is a long process and there are no quick fixes. We are not just fighting the fight of building a new product or new technology but we are also fighting an ecosystem challenge because like I said India doesn’t have too many product companies. The reality is we need success stories to tap more talent and if you have one company like Facebook in hardware, the entire industry will change overnight.
Presently, we don’t have a lot of experienced engineers in the ecosystem. In fact, ‘Experienced engineers’ is an oxymoron in India. If you are 40 and you are still engineer, people will think there is something wrong with you. That’s true in so many companies and we need to change that trend. And, companies like Ather needs to succeed and more such companies like us need to crop up for the hardware industry to succeed.