Why Maverick Founders Also Need Coaches

The recent unfolding saga at two of India's most esteemed startups, Paytm and Byju's, has sparked widespread concern, revealing significant controversies and self-inflicted value destruction. Once hailed for fintech innovation and ed-tech prowess respectively, both companies find themselves embroiled in crises stemming from a lack of institutional checks and balances as they burgeoned over time.

Paytm's banking subsidiary faces regulatory scrutiny due to oversights in KYC norms, plunging it into crisis. Byju's, on the other hand, is entangled in accounting discrepancies and financial misreporting, exacerbated by a board comprised solely of the founder and family members, lacking independent oversight.

Despite being exceptional visionaries and disruptors in their fields, the founders of these companies have encountered difficulties. Like proficient athletes needing ongoing coaching, maverick founders require continuous guidance to refine business models and establish robust governance frameworks. The lack of such support has contributed to their current predicaments.

At their peaks, Byju's commanded a USD 22 billion valuation, and Paytm reached USD 20 billion during its IPO, but has since plummeted to USD 2.1 billion, impacting small investors. These incidents highlight the importance of proper regulatory checks and balances for founders, which investors often overlook in the pursuit of high returns.

These cases underscore the need for swift implementation of guardrails during rapid growth, including advisory boards, compliance officers, and professional coaching for founders. While it's hoped both companies will navigate their crises successfully, there's a broader lesson for Indian founders, startup boards, and investors to introspect on these issues to prevent future mishaps.

As India evolves into an entrepreneurial hub, it's vital to establish mechanisms for accountability and maturity within startup ecosystems. This serves as a valuable lesson for future generations of Indian founders, emphasizing the importance of entrepreneurial spirit alongside institutional mechanisms suited to mature organizations.