You’ve a great idea. A financially viable business model (on paper). A few key team players in mind (to get on-board). And on verge of securing a good amount of VC capital. All set for the next Facebook? Twitter? Pinterest? Unfortunately NO.
Having worked in India for a few startups – whether B2B/B2C – have seen the main pitfalls these companies face whilst growing. TechCrunch has published some ground-breaking posts in the past on general Startup advice, but unfortunately, all of them cater to the US economy and lifestyle exclusively. What’s different in India? Unfortunately, everything.
Economy, culture, work ethics, salaries, and more. Most importantly, spirit of ‘working in a startup‘.
So, without further ado, lets see the top 8 things you MUST do if you’re planning for your next startup.
1. HIRING – Hire A players, whatever the cost.
To do: Startups follow a principle, A’s attract A’s, B’s attract C & D players. You don’t want your startup to be full of B, C & D players. Thus, get online – use LinkedIn judiciously, and shortlist a few exceptional candidates for the different senior level positions you wish to fill – Management, Sales, Marketing, Product Development, Engineering, Customer Service etc. If required, pay them 5X or 10X of their current salaries, but hire them based on their skill set, technical expertise, people management skills and overall ‘individual value‘ that they bring to the table. If LinkedIn is not working out, contact Headhunters and Recruiters to get hold of exceptional candidates. Invite them over, and have a chat; and see how they can add value.
What most companies do: They settle for B & C players. Why? Since A’s often want more money, thus B & C players become a cheaper alternative. Eventually, these B & C players completely mess up the Eco-system; and 6 months or 1 year down the line – you see your startup idea has started to fizzle. You panic… and try to bring in more people – sometimes more talented than the original hires, and then you see a complete pandemonium situation in your company – the old ‘B’s & C’s’ clashing with the new ‘As’. Result – no work gets done till a complete overhaul is done. Either you need to fire the B & C players, and keep the A’s; or otherwise, the A’s quit.
2. HIRING – Hire Specialists, NOT Generalists.
To do: Whether hiring for a Senior Product Manager level, or Digital Marketing Manager level, or for that MySQL Database administrator for maintaining the back-end, hire Specialists for the job. I’ve hired for startups in India and often had to clash with Management whose point was – ‘Dude, we can always hire generalists and kinda train them, right?‘ Absolutely wrong. Training on the job is excellent for a company like TCS, IBM, Wipro who are hiring in thousands annually from colleges, training them, and allocating them for being milked like cows for money (on client payrolls). A startup is NOT a milking factory but an incubator for ‘realization of ideas’. Thus, you need completely professional specialists who can hit the ground running at top speed, the “very” day they join.
What most companies do: They hire Generalists thinking will be cheap (lesser salaries), and these guys would be more loyal in the long run. The main problem in this theory is – complete wastage of time and energy, and most importantly, money which they often result in, owing to unavailability of focus, skill set and knowledge. I worked for a Dot.com company in Kolkata a few years ago, wherein the CEO hired one of his relatives for the CTO role – who had been working in Insurance industry for past 10 years. Result – complete pandemonium, no strategy and direction; and result – the top engineers left within a year to join Yahoo! and other MNCs. Also worked for a startup (as a Consultant) once – wherein in my stay of 6 months – I was never sure what the designation of most of the individuals were – cause one day an individual was part of the Social media team doing Facebook posts, next week the same person was part of the creative team, and 3rd week – they were the brand managers, and 4th week – the same member was the ‘Stylist’ in meetings. A completely screwed up situation – with no credibility and responsibility whatsoever. Thus, besides low productivity, pandemonium ultimately ruled the day.
3. HIRING – Hire from Dot.com Backgrounds, NOT from Namesake companies.
To do: Hire Specialists (from point2) but preferably from Dot.com backgrounds. Working in a Fortune 50 company and in a startup is like playing for Chelsea or Liverpool and Mohun Bagan. Both are professional football teams, but with no comparison at all. Thus, you would want to hire guys from the same professional setup, and most importantly, with an identical “psychoanalytical mind set“.
What most companies do: They hire from anywhere and everywhere. In one of the startups I worked, we had a guy who joined us from a Fortune 50 MNC – extremely intelligent, hard working, industrious, process oriented – everything you could ask for in your star employee – but without the key element which is needed in startups – the ‘ability to execute on plans’ at top speed. Good in strategy, but poor in execution. Was it his fault? Completely NO. Companies like AOL/Yahoo!/Apple/Microsoft have hundreds of line level Managers from which thousands of ideas are generated, a dozen or so after endless levels of debate, reach the higher stages, for consideration. A few finally filtered ones, are considered for execution finally. This takes time, paperwork, meetings and more. Would you follow the same in your startup? Unfortunately if you do, you would run out of ideas and funding soon without your product being ready.
4. HR – Assign Definite Roles
To do: Once you have the A player with a Specialist background from a preferable Dot.com background – the Management and HR should kick in to assign a fixed role and responsibility to that person. This is extremely important for the company and also for the individual concerned. You may ask – but in a startup, shouldn’t one be wearing multiple hats at the same time? Definitely, YES. And a big YES. But a designation should be allocated around which the person ought to work.
What most companies do: I had a few job offers from Dot.com companies throughout India in the past 6 months. A few of them said – ‘Do join us. We will figure out a position‘. Now that’s deadly. Inquired with a few acquaintances at those Dot.coms and they confirmed my worst fear – ‘Horrible! No structure. No hierarchy. No work gets done’. I once worked for a startup which had the same issue. One of the guys who joined us – first had role – ‘Project Manager’. My first reaction was – ‘dude, what the fuck does that mean?’ Later, it was changed to ‘Special Projects’. And later, he became the ‘Business Development’ for the role. 3 changes in 6 months. Don’t know how much confused he was, but I was pretty much confused.
5. HR – Assign Strict Hierarchy in Roles
To do: EXTREMELY EXTREMELY IMPORTANT FOR INDIA – Indians, by default, don’t love their jobs. Most don’t. Thus, its either – ‘need to go to work for salary’ situation, or (in case of Delhi), ‘girls prefer working in jobs till they get married or otherwise’. Thus, a ‘matrix HR organization’ doesn’t work. Absolutely & Completely. Every startup and SME in India where I worked which had a ‘matrix structure’ either collapsed or still at the startup stage after a decade. Reason being – Most Indians are like thick skinned bulls. You need a very strict hierarchy, organizational structure and discipline for getting quality work done.
What most companies do: Have worked for a few startups where there had very strict hierarchy, discipline and organizational structure. I still remember those days, when myself & my team at 123Greetings.com were the best performers – reason – Work had to be done, whether its raining outside, or there’s a bandh outside or India is going to WW3. Fucking doesn’t matter, till the work is done and deadlines are met. On the other hand, have worked for a few startups where till my stay couldn’t figure out who reports to whom. When spoke to the HR, the dept said – ‘we’re like family’. Yeah right you are – all coming for fun, and no work getting done. I remember an incident which sums up the situation – We decided registering an account for a paid sales channel once where we could sell items online. So, sat with the person concerned who will maintain the account (A) and we wanted to register – and when financial details were needed, we decided to bring in the Financial person (B) in-charge. B didn’t have time that day. Next day, when I went back to A, she said – are you sure we wanna register? B had time that day, but A and myself decided debating on whether we need the details or not. On third day, A made up her mind, that we should register. B was ready also. But some work came up for A. So, we postponed that day. A simple 5-minutes action of entering credit card details for registering for that payment gateway, took us more than a week, which could have been done in less than 10 minutes otherwise.
6. Hiring – Hire Indians, NOT Americans, NRIs
To do: EXTREMELY EXTREMELY IMPORTANT FOR INDIA - You are the CEO & Co-Founder – and maybe an NRI or German or Latin American – doesn’t matter. But middle-level managers and senior managers ought to be Indian always. Am I sounding racist right now? In fact, I shouldn’t be labeled as one and having educated, lived, worked in EU and other countries for more than a decade of my youth. The reason am mentioning this is – Unless these NRI/German/Italian etc. individuals haven’t lived in India, are not aware of the Indian lifestyle, its just not worth it to have them around. Value addition would be zero.
What most companies do: Have seen a few startups do this mistake. Massive loss in terms of salaries and other issues. They hired professionals from other countries, bring them in, try and make them settle in India, these people themselves being frustrated, they end up fighting with others, and as a result – the entire workflow and organizational hierarchy (if any) breaks down. Don’t make this mistake.
7. HR – Salary matters, Employee Stock Options DON’T.
To do: Offer good salary, but don’t try and entice star employees with Employee Stock Options. This ain’t CA, or NY, wherein people already have a few Mercs parked in their garage, and looking for the next Twitter to work for.
What most companies do: Recently a Tech startup contacted me. The company appeared good, the product was good, and then they said – ‘Salary we can’t give much, we will give you Stock options’. I was like – dude, you must be kidding, right? Don’t make this mistake. Stock options are good as an addendum, but not as a salary replacement.
8. HR – Have Morning meetings & Wrap-up meetings
To do: Have every team head – Technology, Sales, Marketing, Customer Service and others have a joint brain-storming session – 15 minutes meeting every morning. Agenda – Any joint issues that need to be resolved, grading them as A, B or C in order of importance. Once done, ask the individual department heads to have a joint meeting as well. To allocate work and get the work done.
What most companies do: Individual meetings, meetings and more meetings. Have worked for a startup once where we had a meeting when to have the next meeting to finalize something. This besides being a waste of time, is a complete moral downer for star employees.
There’s a lot of advantages to working in a Startup, but since most Indians are risk-averse in nature, they would prefer working for lower salaries for a junior level position in a bigger brand, rather than taking the risk of working for a Startup at a Senior level. It shall take time for this mind set to change. One can’t force it. Besides this very nature, I believe there’s definitely ample chance – across all industry verticals to find extraordinary talent for different positions throughout India. Most precisely, in Bangalore, Hyderabad and Delhi.
So, best of luck in launching your Startup in India; and make sure you follow these 8 Rules of Engagement.