A Tale of Two Start-Ups
Hareesh Tibrewala
CEO : Anhad | Co-founder : Mirum India | Consultant : Stanford Seed | Partner : SVP Partners | Certified Independent Director | AI Evangelist
Came across two interesting stories in the media today (a) Zomato founder sacks his entire sales team, and squarely lays the blame on his team for their failure to meet revenue target (b) Tiny.owl CEO held "hostage" by his (fired) employees for not being able to settle their dues. Having been a serial entrepreneur myself, I am completely able to relate to the situation in these two companies (and while the media focus was on these two companies, I am sure a lot of other startups, may be facing similar situation in their growth lifecycle).
So what are my views on these stories ?
(a) Entrepreneurs, egged on by investors, tend to hugely overcommit. This delivers high valuations (and thus cash on the table) in the initial days but puts huge and sometimes unrealistic expectations of delivery. When the going is good, everyone overlooks targets being missed, and the game of musical chair goes on. But the moment the music stops, and source of cash flow starts drying up, these stresses "crack" the team
(b) Very young and fast growing companies are not able to build a culture of transparency and accountability. In the early days when there is cash on the table, everyone is focussing on how to "burn" money. Consequently no-one in the team really knows how to "earn" money. There is sudden skill set mismatch in the organisation, when confronted with ground realities.
(c) A few weeks back we had the story of an ugly spat between a high profile promoter and his investors.
I am not saying that entrepreneurs should not be ambitious and aggressive. They should be. They should be ambitious, they should be aggressive, they should be willing to take risks and they should be willing to accept failures. That is what entrepreneurship is all about. What bothers me this 'trust deficit' that tends to crop up between promoters and employees or between promoters and investors. That should not happen.
Entrepreneurs must believe that "credibility" is more important than "success" and "value-creation" is more important than "valuations". They must also believe that they are a catalyst of a eco-system that comprises of investors, employees, vendors and customers. And at no point of time should there be a trust-deficit in this ecosystem. Collapse of trust, is a recipe for disaster.
Biogas?? Technocrat | EPC | Mentor | Consulting
6 年Fully agree sir Basic rule of cash flow first, profit next . Trust is the only way to protect the assets created.
Startup l Strategy I Leadership I Human Resource I Talent Scout I Business Development | Operations
9 年Agree with you Hareesh. Speed to market is being used to hide lack of well thought out strategy...as regarding employee issues we might say it is result of over-ambition of promoters / investors, a game of musical chairs, but deep inside these issues is human greed including of those who joined these startups without thinking through about the value they brought to the new age businesses and the risk it entailed.
Luxury Real Estate and Business Consulting. Tenures In Real Estate , Hotels, Aviation, GDS, Corporate and Leisure Travel. Stints in Luxury Automobile distribution and Retail, Early career in advertising.
9 年What Tinyowl employees did or what Zomato promoters did were extremities on either side. However between the ambition of the promoter and the value they are trying to create lies a huge chasm of unrealsitic valuation pumped up by the merry go round of venture funders.
Product Manager - ManageEngine
9 年truly said and described....
Astute Treasury & Finance Expert CFO I Proven track scaling BFSI start-ups I can help taking your company into fast paced growth trajectory with unique capital structure & fintech mix
9 年very well said....really very interesting and thought provoking