Just how vulnerable Indian startups?

Ever since the arrest of the CEO of startup Stayzilla, the startup eco-system (or echo-chamber) has been abuzz with speculation, innuendo and flooded with advice on what you as a startup should or should not do.

For an example of “advice” see this in YourStory. My key takeaway from this article is: “Be compliant, keep your nose clean, ensure you get sane and good legal and financial advice and be compliant” if you are a startup.

All this is sane and even sage advice. But the threat is largely seen from a corrupt and nitpicking bureaucracy. Not from other companies, individuals.

What the article should have stated upfront was the real issue- the core issue – is our lack of transparent and responsive and fair legal framework. So, laws only work for the powerful, rich and connected. And since a startup is anything but rich, powerful or connected- at least to start with, it is very very vulnerable.

Did Yogi or Stayzilla fall foul of the government? No. He had a commercial dispute with a supplier. Now he is behind bars, in the silicon valley of India and the online campaign being run by all the startups put together is only circulating among their own. Here’s the story of Yogi and Stayzilla.

All those tweeting or FB-sharing with hashtag #ReleaseYogiNow ask yourself, is this the first time you have witnessed law enforcement over-reach? Or, mis-carriage or justice? Or cases dragging on for decades?

If you are a small guy and you bill your client and he does not pay- do you have a protection? If he claims non-delivery or deficient delivery, can you fight him legally?

If your case comes up for hearing in some far away state capital or worse, in some mofussil court, can you afford the cost of the battle- the time and the money?

While my sympathies are with Yogi and his family, his story is that of any of us- those who are neither rich nor powerful and who need to focus on work- but can’t because they are distracted by all sorts of things.

Compliance is laughable- compliance to what? It is a jungle out there. And, exactly how vulnerable are Indian startups? Just as vulnerable as any average Indian trying to run a business.

How our taxation system kills risk taking

It is not taxes but tax compliance that we fear

If you are doing business in India, then you would know this. The taxation system sucks big time.

The moment you raise a bill, you become liable to pay service tax. If the client on whom you have raised the bill, did not pay- even never- that service tax paid on a deemed income is paid to government. It will not come back.

Not just that, you are liable for income tax as well. So, let us say you raised a bill for Rs 100/-. The total invoice amount is Rs 115 (counting Rs 14 as ST and 0.5% each of SBC and KKC.)

If your client paid up and promptly, he would deduct, 10% as Tax Deducted at source (TDS) and send you Rs 103.5 (90% of Rs 115)

Of which, you would deposit Rs 15 with the service tax department. So, you would have with you Rs 88.5.

You would file returns for service tax, every 6 months. For TDS (yes, you deduct as well, from your vendors and employees), every quarter. And, by the way, you would deposit the tax every month.

For a small company, that’s an awful lot of paperwork. If Mr Jaitley is looking to help the entrepreneurs, this is where he should start. Our taxation system needs reform.


What if the client does not pay?

Let’s take the extreme case of a client who simply does not pay. Ever.

You are liable to deposit the service tax on the above bill. So, instead of having Rs 88.5 in your pocket, you have a hole of Rs 15. Not just that. The government has recongnised that you had an income on which you are supposed to have paid income tax. Since no tax was deposited by your client on your behalf, you make good.

This really, really hurts.

Mr Jaitley, why make us pay service tax or income tax when we earned nothing?

The biggest weapon in the hands of the customer

When a client sits on a bill and worse, refuses to pay, he knows you are very very vulnerable. What can you do? Sue him? In India? With so many court cases dragging on for years?

The client knows he has you precisely where he wants you. By raising a bill, you are in his debt rather than the other way round!

The suggestion

My suggestion is simple. Make me pay service tax on payment realisation rather than immediately on raising the bill. So, if the client does not pay, I can write off the bad debt and move on.



Email templates for sales and marketing: hit the ground running

Speeding up your Saleswah CRM adoption

Custom e-mail templates for edit and reuse

Let’s face it; setting up Saleswah CRM is not your idea of fun.

We have tried making it easy, menu driven, wizard based. We have tried taking the not so essential steps away. But, the essentials still need to be done and they number quite a few.

The other complaint we get is, simply put: WHY? Or, more belligerently worded: FOR WHAT? What is the benefit of this particular step in setup that you are asking me to do?

Setting up is one bugbear; learning to use the full power of Saleswah is another. Take email templates and proposal templates for example.

Why upload your logo?

When we ask you to upload your logo and full company address, it has a purpose. Other than personalizing your experience of using the Saleswah CRM, we also use that information to create the quotation format that goes out from you. We get a lot of requests to work with them to create e-mail templates using the built-in HTML editor of Saleswah. They also request us to show them how to insert the personalization/ mail-merge tags.

Free auto-generated email templates for edit and re-use

To help you, we decided to create 2 email templates and 1 proposal template. These are of course dummy templates – but they will hopefully give you an idea of what to expect. You can edit them, freely and save them under a different name. More pertinently, you can get an idea of  how to design your own templates.

There is a trick to inserting your Company logo in the email templates. Unlike in the other personalization tags, you can not simply insert the company logo icon into the template you are designing. You need to click the “insert image” button,  and insert the company logo icon tag in the pop-up- in the field labeled “Source”. Complicated? Not really. If you still think so, we have added a couple of blank templates with the logo inserted on top.

How to get the email templates?

Simply upload your company logo and your company address. Do this carefully, as this information will be used to create your “official stationery”.

Once you update both, you will see a button like this on top. Click on it.

Create new templates from logo and address automatically: Sign up for a trial now!

Once you click on the button, you should see a confirmation message that the templates have been created.

New email marketing templates were autogenerated for you to edit and use.

Happy emailing and “proposaling”!

Two roads diverged in a yellow wood: Microsoft or Google

There comes a time in every man’s life (and a start-up is very similar), where we are called upon to choose. On a whim, I thought of Robert Frost and his celebrated poem and how it really applies to our situation.

Two roads diverged in a yellow wood,
And sorry I could not travel both
And be one traveler, long I stood
And looked down one as far as I could….

The choice is simple if stark. We are a Microsoft BizSpark Startup. very grateful to Microsoft for supporting us with free software for 3 years. But, now, when we need to go to market, our choice is between listing in the Google Apps Marketplace and Windows 8 marketplace.

Both will require work. Listing on the Google Apps Marketplace will mean we need to build bridges with a couple of Google Apps, basically ensuring Saleswah shares and levearges data in our users Google Apps accounts in apps such as Gmail, Tasks, Calendar or Docs. Listing in the Windows 8 marketplace will mean we build an app -perhaps a “lite” version of Saleswah.

Both are tempting. Listing on the Windows 8 marketplace, assuming we are able to do so in the next 3 months, when the number of apps is still relatively low in the marketplace, will mean good visibility. Google Apps Marketplace is crowded. But, here’s the important thing- it is where the footfall is, where the customers go. 5 million business use Google Apps today. I am sure a much greater number use Microsoft products; but, Microsoft does not drive them to a apps market, hasn’t so far anyway, like the way Google does. That of course will change. The very fact that Microsoft has launched Windows 8 is testimony to the changing times.

What is our decision?  Will it be Microsoft or Google Apps? It is instructive what Robert Frost’s narrator did.

Then took the other, as just as fair,
And having perhaps the better claim,
Because it was grassy and wanted wear;
Though as for that the passing there
Had worn them really about the same,

What would you have done in our place? Do let us know. We will tell you what we finally decide next week.