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Shabashy Founder Amar Gautam On Why Peer Recognition Should Replace Traditional Company Appraisals
After graduating as a computer science engineer in the year 2006, Amar Gautam started working as a software engineer at KPIT, Pune. Within 4 years he became a Technical Leader and had shifted base to New York. In 2014, Amar decided to give a go to his business dreams and went on to start his first company Hiode Technologies in Bangalore. In August 2015, he decided to work on an idea that he had ever since he joined KPIT as a fresher. The product of that is Shabashy.com.
Shabashy is an employee appreciation tool developed by Amar and his team, based on his own experiences in the IT industry, how managers function and how rewards & recognition are dealt with in most companies across the world. It is essentially a system for peer-to-peer recognition where an employee's colleagues can encourage his or her success and achievements on a day to day basis.
In this exclusive interview with CrazyEngineers, we got Amar Gautam, Founder & CEO at Shabashy to talk about his early years, how he got the idea behind the Shabashy platform, what are the various challenges he faces, what their efforts are currently focused on, his definition of success for a startup and much more. Read on!
Amar Gautam, Founder - Shabashy.com
CE: Tell us about your growing years and family background.
Amar Gautam: I was born in a highly educated very liberal middle-class family in Bhagalpur, Bihar. Due to the nature of my father's job, he was transferred from one place to another every 1-2 years. So I was in a new school every few years meeting new people. That is one of the big reasons; I don't have many school friends. On the other hand, it gave me an opportunity to experience macro cultures in the state of Bihar while living in a big city like Patna to a small town like Begusarai.
My grandfather was a teacher by profession and an amateur wrestler while being active in the independence movement. He taught me world history while my father encouraged me to study science. Growing up years were tough because I never did extremely well in schools for most of the time I would spend in my den soldering electronic circuits or reading books not related to school education. I don't have sad childhood stories to tell. You can call me a privileged kid who had freedom to do what he wanted.
My family taught me to value humanity, individual liberty, and freedom. I was also trained to honor my failures - this is why I am a person who consistently takes high risks with many failed projects since my college days which I am not embarrassed to talk. One of the recent failures is Bimacrm.com We are four siblings, and all are computer engineers. I studied engineering in Bhopal MP.
CE: Which experiences from your professional journey before Shabashy would you like to share with the readers?
Amar Gautam: I was picked up in my college in the 5th semester to work for a software services company in Pune. Although they valued my contribution and eventually I was put into a budding leadership program early on, I always felt that the year-end appraisal system was not enough for me to tell my story for last 12 months.
Managers were not motivated and invested in your achievements. They took the yearly appraisal as just another job. There was no recognition and almost all of my assessment meetings turned into negotiations for various expectations I would have. On top of everything, when you walk out of the meeting, no one in your team knew what your achievements were.
No one would even remember what you did last January to save the whole team from failing. There was no transparency at all.
I realized, most of my peers would leave immediately after the year appraisal. I figured this could change by recognizing individual achievements right at the moment with a meaning feedback with a reward attached to it. And who could be a better judge of this than your peers? Managers only have a high-level view of who is doing what. Your peers are the people working day in and out with you, and they know when you have helped them save the day.
The first time I thought of building a platform like this was back in 2007, but I never acted upon until now.
CE: What is the core concept behind Shabashy? How would you explain Shabashy to a layman?
Amar Gautam: Recognising this need for individual recognition is what Shabashy does. Shabashy /Shābāshi:/ is a pat on the back in the Indian subcontinent to signal commendation for an achievement, similar in meaning to Bravo and Kudos.
It is a simple web/ mobile-based peer-to-peer recognition and micro bonus platform. Companies can assign a definite budget to each of its employees that then get converted into points which employees can give to each other for the good work they do on a daily basis.
Besides, employees can gather Shabashy points from peers and redeem them for one of the various gift cards. We are always working to bring in more retailers on our platform to offer their gift cards.
The platform keeps the act of giving Shabashy(s) public so as to encourage transparent behavior within a company. When an employee has accumulated enough points to redeem, they get two options. One is to redeem the points for a gift card from partner retailers and second is donate it to a charity of their choice.
Peer recognition ensures employees are recognized adequately, and Shabashy is essentially crowdsourcing the employee recognition through its platform. Companies and managers can get valuable, meaningful data-driven reports which indicate which employee is a star performer and who needs attention. We are always working on our algorithms to bring more sense to the data our users produce.
Shabashy is currently the only product in Indian market providing a platform like this. Currently, we only have an iOS app, and we are working on Android platform.
CE: How does your company make money? Are you profitable? How big is the market you are targeting?
Amar Gautam: We have a free membership for companies with up to 50 users. If they have more than 50 users, we charge $3 per user per month. For non-profit organizations, it is 100% free.
The majority of our customers (companies) are small startups, and they do not have more than 50 employees. Although we are generating revenue from some of the larger customers, we are not profitable yet. We hope to grow with our clients. Whatever money we make pays today for our servers and other operational expenses.
CE: Tell us more about how users can have ROI with Shabashy.
Amar Gautam: We have an ROI calculator built into the website. You can check it out here - https://app.shabashy.com/roi
Studies have show that peer recognition can reduce employee turnover by 31%. An employee turnover is a factor of attrition rate, average yearly salary, average annual value per employee, recruitment time, recruitment cost, ramp up time and an average tenure of employees.
So for an example if you pay $100K average per employee with a team size of 100, attrition rate of 25%, and by factoring in other parameters, your annual turnover cost is $1321K. By spending just $20 allowance per employee per month, you can save up to $248K in employee turnover.
I am not sure if this explains it clearly. It is better just to use the calculator at https://app.shabashy.com/roi
CE: Why do the customers choose you over others?
Amar Gautam: For South East Asia & Latin America, there is probably no others for now. We are the only option for our kind as far as I know. For North America & Europe, we have much competition, but none of them are as easy to go as Shabashy.
With Shabashy, you do not have to go through a cumbersome sales process. You can set up your whole company by yourself. There is no minimum spending, and our prices are the best in the market. We are one of the few who allow our users to redeem their points as they want. We do not force them to redeem with any particular retailer. Although choices, for now, is limited - we are working to get more and more partner retailers on the platform.
CE: What is the most difficult situation you have had to face while running Shabashy and how did you tackle it?
Amar Gautam: The most annoying part of doing a SaaS business is how difficult it is to get a domestic payment gateway. Payment gateway companies in India first of all don't understand what I am selling and second of all, they are bound by so many unnecessary regulations. We handle all our US payments via a US based payment gateway, but we end up paying 5.5% of all transactions to them. For Indian payments, we use bank transfers only which is not a happy state for many startups.
I haven't been able to tackle it yet. The only solution for this problem I have in mind is to register the company in US or Singapore.
The second biggest challenge is to make decision makers in a big establishment to understand that peer recognition works. They are still using the very old system of appraisal and annual reward/ recognition. They do not see that the bell curve system that was designed long before the Internet came, long before the market was so open, and long before everyone on this planet was interconnected.
CE: How big is your team at the moment? What qualities do you look in an employee before you get him onboard?
At the moment, we are a four member team. Before I hire someone, I look for (in the order of preference) -
- High integrity
- Leadership ability
CE: What is your definition of success for a startup?
Amar Gautam: I can tell you what is not my definition of a successful startup - Raising money while making losses is not a success.
Startup is successful only if either it makes money or does something innovative to impact humanity positively. A coffee shop at the corner of the street if making money is more successful than Shabashy.
CE: What are your immediate expansion plans? What are the team's efforts currently focused?
Amar Gautam: Now, we are working on our Android app and the new design for the iOS app. Our focus is less on the web app as we want to make this platform mobile first.
CE: Any message for readers ?
Amar Gautam: Don't ever lose faith in yourself and never be afraid to fail. Share your ideas and don't be the person who thinks someone will steal your idea. If someone else could execute your plan better, she deserves to do it. In the end, it is a win for the whole of humanity.