Startup recruitment - the madness needs a method

Placements and offers at IITs will again shoot up the roof once the season starts in December. We'll again hear about overseas job offers by the likes of Facebook and Google with large dollar salaries - even larger now in rupees as the currency keeps dwindling. And now we also have these startups, most of them with weird names, paying huge salaries, like 20+ lacs, to 20-somethings.

I guess in all generations you see people younger than you making more money than what you did at their age, and even what you make now. The bases for salaries are not complicated... coz they are not objective. It may just be a hype cycle each time, leading to crazy valuations. And then there's a price war of some sort - to price same guys higher than what competitors do. In that crazy competition to buy talent, no company really tries to find out whether those prices are realistic, i.e., whether the return on investment on hiring a particular guy or gal at a certain salary would be positive, and by when, if at all... what are the short and long term returns expected from such an investment... how much of professional growth is the company capable of offering any person it hires in his/her area of interest, whatever be the strength of the business model of the company. This should be an important point to consider particularly in the IT industry, especially when choosing among candidates for hiring, coz the industry is composed and driven by individuals of a certain kind - mainly powered by knowledge and analytical skills - thinking individuals, whose skills have short-lived relevance but whose abilities to evolve is tremendous - and hence, so is the hunger for growth. The highly rampant hiring and firing in the rapidly developing tech / tech-enabled start-up landscape is unhealthy for the intellectual and emotional well-being of such talented individuals, and therefore the industry should treat its talent with caution... as smart and talented individuals, rather than commodities with x y z skillset.

Most of the contemporary managers and even CEOs of these start-ups do not have a mature understanding or point of view on these things. They do most of their hiring in an ad-hoc manner and expect everything to settle and resolve in the long run. Can't really blame them for their lack of experience or foresight, coz while that is truly their weaknesses, these are still extremely complex issues with lots of variables at stake for the people running the businesses. Large companies absorb their flab - if they consider some of their workforce as such - until they have to shed some, and economies of scale allow some sustainability to them, in spite of the inefficiencies. For start-ups, even leaders with the right intentions fail to find right and good solutions for managing their human-resource-pool. In the absence of any standard systems and practices, and resources and scale to afford those, things often get unimaginably complex.

Here are some random real-life cases that are eye-openers of some sort:

• A guy with 4-5 years of technology experience, struggling in his current job, is offered a salary of 98 lacs INR per year from a startup that was recently in news for wrong reasons. 
• An e-commerce startup which had multi-million dollar investment was forced by its investor to hire only IITians and to push the employee count to 20+ in a few months time. The startup ended up hiring fresh graduates from IIT at 10+ lacs INR salary. Those guys failed in their jobs coz lack of any work-experience and absence of training programs in the company to groom fresh recruits.
• Highly skilled employees getting burned out due to being heavily overworked - 100+ hours per week - and forced to quit companies and sometimes even industries, just coz most of the other employees are not competent enough to handle tasks at work.

All these examples suggest that there is something wrong with the way startups recruit and groom their guys to make them true professionals.There was a saying in the 80s in the US among HR managers in the context of recruitment - no HR gets fired for hiring from Stanford and MIT. It seems the same logic is applied in India when it comes to recruiting from the IITs. Some sweeping assumptions:

• This guy has good grades from an IIT - hire him - he'll build our next-gen product! 
• This girl is in a good company - hire her - she must be good coz she's got this big brand on her resume! 
• This guy has a high salary - let's pay him higher and get him - there must be a good reason he's paid that high!

If the above rationale fail, there's still an ultimate rationalization for everything arbitrary - the founder's gut feel. Nobody can dare question the decision of a 24 year old founder of a company who not only set it up, but also managed millions of dollars in investment. In a nation this hungry for jobs, who would really doubt the wisdom of a job creator? But things are soon changing as the nation now is also having to get used to getting laid off in masses. Although it's been rare for placement committees to question salary figures and structures of companies and the sustainability of their payout promises, they're beginning to do that now - the Zomato blacklisting from IITs is the latest example.

The salary offers by some startups are so insane and out of whack that it's surprising they are not questioned by investors for offering such large salaries while their loss-making business models evolve randomly with no strong analyses or arguments backing their decisions, that go with endlessly dragged excel sheets with ever increasing growth to back the monetarily obese recruitment. And the investors turn blind eyes to all this drama, as their bonuses are tied to short-term bets, hoping a majority work out in a booming market. You can't blame a herd for grazing where it's green as long as the grass is growing. It's considered fair in capitalism to try to get a bigger bite. Someone who cautions the group that the grass may get exhausted if eaten at that rate is only considered a fool. The wisdom - as taught by dominant economic thought - is to eat the most you can when all are eating, and conserve your energies for when the grass is gone. The weaker ones will die of hunger, the grass will regrow to satiate those who remain, and the cycle goes on. You are not supposed to question as to why there have to be cycles, coz when you do, you are called insane and kicked out of the race... and there has to be a race.

Everyone is in a hurry now. And in recruitment at IITs and IIMs, the hurry is by design - to create mad rush and chaos, and thereby a hype for the institute. In my experience it neither benefits the candidates nor the companies. A friend of mine heard his ex-boss say this to his CEO - you can't put 9 ladies together and expect them to deliver a baby in 1 month. Very short placement periods - like a placement week - often lead to random candidates getting hired for random roles. Large organizations don't feel the hit so badly when misfit people play crucial roles, as there is already a flab that can be afforded due to economies of scale that cushions things out. But in startups it is impossible to grow strongly when certain parts are weak... and all of the few parts of a startup are very crucial. High quality products have their own lifecycle which cannot be expedited beyond a point just by investing heavily and blindly and falling prey to people-pricing wars.

It is therefore high time everybody questioned their decisions and the way things are bubbling up unnecessarily:

• Investors: Do I have the scientific and economic basis to invest in a certain company? Am I unnecessarily forcing my biases to run the companies in my portfolio? Am I setting the right terms and guidelines to help groom my companies for long term success, rather than making headlines for investment volumes and crazy salary figures?
• Founders / CEOs: Is my hiring based on the right principles? Am I doing justice to the talent I am hiring and to my company in return? What is my explicit and implicit messaging to attract talent - do I project the vision, mission and culture of the company, or the salary I offer?
• Employees: Is this the right salary for me - for the capabilities I bring and the expectations of my role? Is the company's business model sustainable enough to pay me this salary with the expected year-on-year growth for the long term? Will I be groomed as a professional in this company?

A company is not just about the money it makes by managing all stakeholders. It impacts lives of all stakeholders including its employees and customers. In the long term, companies tend to achieve a balance through natural corrections. But for a startup, if all the talk is about money and none, or little, about the value it delivers, there are definite alarm bells which will be heard sooner than later, albeit all the funding and crazy valuations. So startup founders need to introspect and build their foundations most wisely, and set the right examples for future generations of entrepreneurs.

The bubble is not bursting. Only those who have inflated beyond their capacity or have skin too weak are releasing the winds to the stronger players.

With thoughts from Manish Kumar and Ravindra Naik

The God Delusion

The Tolerance/Intolerance debate is going so crazy, it sometimes sounds funny how people can take sides without even looking at the culture we represent, and even more basic, the species we are. I definitely won't say much out of line, coz I am no Shahrukh Khan. Nobody can ensure I am protected from some crazy bunch of guys motivated by an ideology. Or perhaps a hungry bunch of idiots who are motivated by a guarantee of their next meal.

One thing is religion - one's concept of the unknown - and another is all the bull-shit stories written around it, to make the unknown sound very real and manifested in earthly stuff. The need for it in the human mind has been exploited by the smart to control the minds of the dumb masses, and over time all that fiction started sounding real, so much so that now even the smart guys take it at face value. And understandably so - coz most of us are not in a position to question everything with hope of getting a satisfactory answer. That's true even for the so called scientific facts, which are again based on trust and belief that someone must have researched all that following reliable and acceptable procedures and came with genuine readings and valid conclusions. And even if all that's documented, who has time and interest to verify all the stuff! Just like a 6th standard science book says matter is composed of atoms and molecules, some book also says there was a man called Ram who was incarnation of a God called Vishnu. I didn't question the existence of atoms, as I want to be a man of science. Even if I did, I am told there is a way their existence can be inferred. I trust that as well. I can't trust the existence of Ram (or Vishnu) nor the non-existence of him, coz nobody tells me there is a basis to prove it, nor to disprove it. Understandably so, coz any theory for the unknown cannot be proved by definition. And if it can be proved, then it ceases to be a theory of the unknown. There is perhaps a point where known and unknown intersect... and moving beyond is our constant endeavor - either through science or through god. While Science only gives us a feeling of trying to move to higher levels of knowledge and deciphering the unknown, God directly places us in the unknown realm, albeit fictional. But we are gullible humans with short life-spans and looking for excuses to stay motivated and for ways to make sense of this life. So god always wins, beyond a point. That point is where science ceases to be helpful, although it may continue to be interesting.

My secret, silent and lonely life at IIT Bombay from 2000-2004 had long hours of introspection and discussions with myself about truth, life, meaning and beyond. Long walks in the campus, and walks in the hockey field at mid-night - on the fine grass there - were absolutely fantastic. A parallel at IIM Lucknow during 2009 were long jogs around the campus in the dark. Unlike the kind of best memories most people have of these stints, my best ones are these long quiet moments of introspection, which I enjoyed tremendously. I can't claim to have found what I was looking for, but these beautiful moments did mould my personality and points of view to make me who I am, to some extent. There are also a few adventures which form part of my fond memories of these times - one was crossing the extremely dark trail in the jungle behind H8 (IITB) from chinks (that time) to campus guest house at mid-night during the time when the Panther scare was at its peak. In fact a few days before I did that one guy was chased by a panther at night... that guy managed to save himself, but was bedridden with fever for a few days. I don't know what came on me to challenge myself to do it at 3.00 AM - but I crossed the whole dark trail - so dark that one cannot see anything at all - I was lucky no panther showed up and I came back to my hostel safe and sound. It was a stupid thing to do, of course. But I pushed myself and did it... in the name of adventure, I guess. I don't regret it. But I guess I wouldn't do it now, at this age. There is indeed something about the early 20s that makes you take crazy risks. Some take good ones and make their life. Some take stupid ones and recall those memories for life.

There were many of my batchmates at IITB who were followers of ISKON faith. It's a large community of Krishna followers who marry science and teachings of Gita and talk your brains out even if you don't give a damn. They used to sell crazy books in the campus and tried to convert more people into their ideology. That was their little adventure of youth I suppose. There is an ISKON temple in Juhu where many of them went in the weekends for free delicious food. But they talked like real psychos most of the time... anything extreme seems nuts... even Science, and especially when it's combined with god to create some supershitty nonsense. But they were harmless folk. Very tolerant, if you were tolerant to their ideology.

Anyway, after last 2 paras of seemingly unrelated crap, let me come back a bit. I hear lot of people speaking and acting about religious intolerance these days, and a lot of people pointing fingers at them, saying they are politically motivated, citing instances in the past when they did not act in a similar fashion nor raise a voice. I think those pointing fingers need to understand that the strength of numbers doesn't always emerge, and for a herd to form for raising a topic that induces fear otherwise, it takes a lot of chance and coincidence. And people draw strength from the herd once it gets formed, for whatever reason. So a lot are able to speak up coz they have the strength of numbers acting in similar way. A lone shouter may be silenced by our crazy gangs with political support. A group shouts, then it becomes a nation-wide debate... while the group has the security of being part of a herd. So understand and acknowledge, rather than getting defensive and pointing fingers. We all know what we truly are, what our culture truly is, what unites us, what divides us and what India should really be. Let's not fool ourselves and let's not fool each other. Time to clean-up our culture!