DARE - Because Entrepreneurs Do

The success of Synapse, a CMMI-3 company, shows that you do not have to “think” small just because you are small

My first brush with business after I finished my B.Com at Xaviers, Kolkata and moved to Delhi in 1999, was a real estate dot com venture, sampatti.com. I set this up with funding from a few friends and relatives, no VC. But it didn’t go anywhere and within 6-8 months we decided to wind it up.

Shamit Khemka

Before this, I had run a Bulletin Board Service – a small internet offering in 1994, within the city of Kolkata. It was networked with BBS services in cities like Delhi and Chennai.

I had a background and keen interest in computers, software development and communications networking, which helped me understand the market and what people really wanted. Our failed real estate dotcom venture helped us understand the intricacies of business functions like salaries and manpower. Ironically, the dotcom venture failed though we had a business plan while my next venture, Synapse has been a success although we went into it without any such plan. Synapse came to us as a ‘what to do next’ idea.

After the dotcom shutdown, we were left with five employees and five computers with which we started Synapse in 2001. I had been in IT for a long time, since 1993-94 and knew a lot of people in the industry around India – that helped.

We started by creating websites. We got our first client, a California- based company called Startup Founders with an Indian CEO, through a reference. Since he knew that we were trying to get into software development, he wanted us to create a business networking site for startups and entrepreneurs looking for Venture capital, employees, funding, business ideas - in short a community for startups.

That was our first purchase order worth USD 5000 and we were able to manage it end-to-end without a hitch. This was a good start and it gave us the confidence that we could do well in this market.

Then, he referred us to a few more clients, which helped us put in place our marketing and sales team. Slowly we moved on to doing complex projects. We have grown organically but with solid support from organizations like Nasscom and TiE. We were initially a part of them and this helped us greatly in understanding the Delhi market. Then we moved to bigger software firms. We have been Gold partners of Microsoft since 2004 and a CMMI Level 3 company since 2007.

For managing finances, we took lower salaries and did not take any at all when we didn’t have projects. It was difficult for the first year. The biggest differentiator for us has been moving to Noida in Feb 2005. From a team strength of 60 we grew to 120 and subsequently to 240 employees very quickly. In the last six months alone we have added 60 people.

So, surprisingly our Eureka moment was the move to Noida where we got access to improved internet, communication facilities and staff, which enhanced our services. The Noida facility freed us from worries over infrastructure and allowed
us the time to tend to hiring, training and building our human resource, which is key to the knowledge industry.

In last four years we have grown from 100 to 300 people. A big credit for that goes to EO- Entrepreneurs’ Organization, an international organization with 7500 members worldwide and a very active Delhi chapter. It has helped us grow by telling us how to leverage peer network, best practice sharing, forums, deal network and such nuances. We also became a part of the Software Technology Parks of India (STPI).

On my travels outside India, I learnt a great deal about different cultures, which helped us grow in the US and UK. Currently, we have about 200 clients, 85 per cent of which are US based. We work in Dot Net and Open source (PHP) environments. Over the last three years we have also moved into the SEO and Mobile Apps (Blackberry and iPhone) areas in step with the market trends.

HR has been a problem for us as attrition is an issue in the industry. However, we have been able to manage this problem to a large extent by adopting a process-oriented approach. The road to the CMMI certification was highly educative; what we gained on the way helped us take our staff to a different level, make them process oriented. Also, it allowed us to experience a large company within a small company. It helped us become a more efficient organization more capable of retaining its people and delivering greater value to its customers at lower cost.

We realized that our advantage over bigger companies for employees was the kind of training we could give them in CMMI and similar softwares. Around 2005, our attrition was about 25 per cent while in last six months it has declined to about 11 per cent. Incidentally, it was also a result of our taking on CMMI accreditation. By comparison, the rate is around 15 per cent in good CMMI Level 3 companies and 25 per cent for non CMMI companies.

However, being process oriented has not helped us get more clients, who really are concerned about the value they are getting. Is it helping them save money? If no, then for them it doesn’t really matter.

Another game changer for us has been that we wrote all the 12 processes of CMMI into a software for our internal use and put it online. So, everybody here is trained in CMMI as part of their induction. The environment allows our employees to stay within the realms of CMMI and follow the processes without having to continuously learn the details.

In technology we have been cutting-edge throughout with a backend based on stuff like the Microsoft’s HyperV, MS 2008 server. Sales are a challenge because we don't have offices abroad - while all our clients are outside India. Small IT companies in US and UK outsource projects to us. Besides, we market a lot through SEO as well.