Power Cuts: Worst Nightmare's For Startups.

My Times of India Interview.. read onn..

A brief about me & my startup,

I am Rohan Dighe, Founder & CEO, Social Web Factory. We are a part service-part product based company. My startup is still in a very early stage (5 month old) still operating from a "garage" office. Team size 6.

Please find answers to your questions as below: -

1. Do power cuts affect startups more than larger companies?

-> Yes, the fact that during the pre-funding stage all financials are generally organic in nature, hence the cash flow is limited. Larger companies have larger budgets and hence can choose to opt for external backup methods thus avoiding power cut issues totally.
Also, during startup many can choose to operate at less margins (to get more business) thereby neglecting costs to buy/rent backup systems.

Also larger companies have the option to be located in technology parks which in cases may guarantee uninterrupted power supplies whose costs can be shared across all the companies in the park all of which is not available to essentially "garage" based start ups. with 5-10 employees.

2. How is your company handling the power cuts?

->Initially when the duration of load shedding was small (approx 3hrs) we decided to got for an inverter based backup but then the problem got worse and the load shedding increased to (6+ hours) and that too at prime working times (9:30 to 1:30) & (4:30 to 7:30), so we realized that no backup would work for so long. We evaluated several options.

Diesel Generator – Left out because of diesel shortage, also initial cost too high.
Gas Generator – Cheaper than a diesel one but even gas is a limited resource and we would have ended up using a cylinder every 3 days.

So, finally the only choice left with us was to work night shifts to cope up with the issues of power cut in our area.

It was really difficult convincing employees since during a startup the salary offered is also less as compared to the big companies and it is very difficult to keep them motivated. We had to give each one a salary rise to convince them. Luckily we did not have any female employees but now the power cuts are keeping us away from hiring any.


3. Do you think that if the power cuts were to continue you would consider moving your business to a different city?

->Yes, absolutely without a thought, if this problem gets worst we are out of here. A lot of our clients have suggested and are giving us a helping hand by inviting us to operate out of their offices. (This would mean we would have to cut costs but there is not other option)

Moving to a different city (where the problem is less severe) is an option but then as the business grows costs would be considerably higher. Also, the fact that it would again mean hiring for new talent and setting up base where operating costs could be much higher than current scenarios.



4. Do you think that a start-up especially could become less competitive if it does not access to public power?

->Yes, this is very true, because power is such an issue that just cannot be coped up with, especially for service-based startup it could mean delayed deliveries thereby loosing very important business very crucial for startup.

Clients could just walk off by saying “we are surprised to hear that you have issues which you cannot solve” – and we have lost clients due to this recently. The client’s side on this is absolutely correct because they could choose from other options who could deliver on time and who don’t have these issues.

Furthermore , loss of electricity is not a problem international clients are accustomed too. so the reason that work could not be completed on time because of a power cut is completely unacceptable and makes us look unprofessional.


5. Would you pay more for unrestricted power access?

-> I would say No - why should one have to pay for unrestricted access its a basic public service necessity and duty of the government to ensure proper planning is in place to provide electricity, it is like saying would you pay more to have water 24 hours or would you pay more to have all roads paved or would you pay more to have the phone lines working all the time - absolutely not. If the cost of the electricity rises as a whole for everyone its fine but no one should be expected to be charged more for the privilege of getting unrestricted power access. Electricity, Water, Internet is a public necessity its not a privilege.

Thank you!