Written for EO by Vikram Ahuja. Ahuja is a serial entrepreneur, co-founder at X10 and founder of Byond Travel. He is also a member of EO Bangalore.
At the 2019 Web Summit, Ahuja joined a delegation of 16 EO members from 11 countries to lead workshops and speed mentoring sessions. As a Web Summit speaker, he presented on the rise of the “2nd City Office.” Read on for his perspective on the problem of finding talent.
If you’re like many global entrepreneurs and CEOs, you might be facing the greatest business challenge of them all: Great companies need great talent. And there has never been such a pronounced talent shortage in the world.
Talent is expensive
In mature Western economies (the US, UK, Canada, for example), it’s almost twice as costly to operate a business in 2019 as it was in 2009. Wages constitute the majority of that expense.
Talent is scarce
45 percent of employers around the world report difficulty in filling vacant roles.
Finding talent is time-consuming
45 days for a typical startup to hire a technology engineer. 65 days for an online company to hire a digital marketer. Today, finding and acquiring talent is not only difficult, but also extremely time-consuming.
Yet, 82 percent of companies don’t believe they recruit highly talented people.
Unfortunately, most enterprises find themselves fighting a losing battle. 44 percent of startups fail within the fourth year of their existence. More interesting, close to 50 percent of failures can be attributed to talent lead reasons (for example, not the right team or got outcompeted).
Bad team = #fail
“Go after the cream of the cream. A small team of A+ players can run circles around a giant team of B and C players,” said Steve Jobs.
What does one do, then? You simply go where the talent is. Immigration and the growth of the “gig economy” mean the best talent will no longer be where the best companies are being built. And if your business can be global, why can’t your talent?
The rise of the “2nd City Office”—a new paradigm for growth
The term 2nd City Office refers to a team in another city that mirrors the culture, setup, processes and governance of the home office. Increasingly, 2nd City Offices are becoming a strong defensible differentiator for businesses, given that whoever accesses the best talent, wins.
Interestingly, two completely opposite ends of the spectrum have adopted this model in the last decade to incredible success.
Roughly 40 percent of Fortune 1000 companies now operate their own “captive” centers or owned teams—a majority of which operate out of India. It is entirely possible to walk into one of Bangalore’s larger technology parks and see the innovation hubs for Target, Walmart, Lowe’s, Wells Fargo, or Tesco on a side of the street and offices for Amazon, Facebook, Microsoft, and Google on the other.
The other market segment which has understood the advantage of being able to access a rich talent pool of elite talent is startups. A startup founder in San Francisco is more likely to be able to quickly find talent and scale her team in Krakow, Toronto or Hyderabad than she would back home—and at a third of the price! For reference, Uber now has a 1,000-member engineering team in Bangalore. Amazon is set to open its second-largest campus in Hyderabad.
Scaling up your product, customer base and business hinges on the ability to grow the right talent. Are you putting yourself out in front of the best talent to give yourself the best chance for success?
If you’re as excited about the future of work, teams and communities, get in touch and let’s build together.
Vikram Ahuja is a serial entrepreneur with global experience in building and leading successful technology ventures in e-commerce and travel. As co-founder at X10, he helps fast-growth companies around the world build high-impact global teams across leading talent hubs. He is also the founder of Byond Travel, Asia’s largest platform for expert-led adventures.