Startup India, Standup India

Startup India, Standup India - seems like India is now promoting both startups and standup comedy in a big way! What if it really did? Firstly, to make a joint pitch for the two - sort of bundling products - there has to be some logical connection. For one, startup founders would make good standup comedians in my view - they all talk a lot, they all take pride in thinking crazy, and most of them are extroverts. And if they are guaranteed good money, they'd definitely jump in. The second connection that might be looked at, is some crazy babu going by this line of thinking - if the government were to act like a VC, and had to entertain these startups for funding or whatever, then it has to be entertained in return. So these entrepreneurs have to perform some standup comedy. It may seem weird the first time you think about it, but it would soon start making sense. Anyone who has seen the program Shark Tank on TV - where entrepreneurs stand in front of investors and make their pitch - would know that the imagery is not very different, although the content and nature of discourse is. But as we can imagine, government officials don't think and act like conventional investors. They'd any day enjoy some standup comedy more than boring and unintelligible discussions on top-lines, bottom-lines, equity and shit like that. And once the comedy session is done, they can discuss some other lines over chai-samosa.

The vision of the government is amazingly supportive of entrepreneurship, and like never before. And, as one of my friends said soon after Modiji announced the incentives for startups, if we are not starting up even now, we probably never will. Although the incentives may not be practically of the kind and scale that would make it a cakewalk for millions of Indians, the positivity of outlook and supportive policies can make all the difference.

I am reading The Lean Startup by Eric Ries. Have finished only 43.9% of it so far in 3 weeks - quite slow by any standards. I don't know how, I've lost my habit of reading. Just like I got it 2004 from nowhere. May be it'll come back. Anyway... The book is about the right approach for building startups - the lean way - avoiding wastage of time, money and other resources. It talks about quickly building MVPs (minimum viable products) out of ideas, testing them out on samples of the target audience, testing alternatives, comparing, trashing, improving, developing, launching, testing more, improving more, and going on like that iteratively. It says - don't just go on to develop the full product thinking you know the customers want it; rather develop pieces of it to try out the concept and get feedback... and do that continuously to reach higher levels of learning and product maturity. This makes a lot of sense in theory. But execution in this manner requires tremendous alignment of thought process with the theory. I have to know more to see if it works. May be I should test this approach and see where it takes me. But there's higher risk the approach would fail for me if I don't "believe" in it at the outset. It's like trying to reach god while being an agnostic deep down. The lack of belief in the goal or the path to it will always prevent you from applying 100% of yourself behind the goal. Anyhow, I have not taken thheka to prove Eric Ries right or wrong. If his method doesn't work for me, I'll figure out what works for me and proceed. More important is that I have to get my startup moving and scaling up.

First things first... I will start practicing standup comedy from today. Wish me luck...

See you soon!

May be...

Being from these elite institutes of the country puts a great pressure on you to do something that the world admires. Especially in times like now when lots of young guys and girls fresh out of college are starting interesting ventures. Many are failing of course, but we are told that's part of the game. As this new breed is sweeping the business world, people my age are wondering how to catch up. But most of us would soon behave like all older generations - claim respect just coz we have some gray hair! And gulp all ego.. and, while the heart gently weeps, work for these youngsters who are clearly not as smart as we are... come on, elders are allowed to think that way about those younger :)

I myself have had dreams, most of which I forced myself to see, of owning and running companies. And discussing such ideas, or thoughts about ideas which don't come, is one of the most favorite topics of gossip among most people in their 20's and 30's in urban India. The other hot topics being girls and sex for guys, and guys and relationships for girls! (Well, I am just guessing for the latter.) Right now I am part of 2 whatsapp groups where startups keeps coming up as a topic. One is of my friends from IIT and the other is of my friends from IIM, The IITians seem to have more interest in anything related to entrepreneurship - which I can safely generalize about all IITians, as can be seen even from the large number of founder CEOs who are IIT alumni. But not many who are IIM alumni (IIT+IIM not considered under IIM). A very basic reason for that is the culture in these institutes. In the 4 years at IIT, we hear the word Entrepreneur so much that many IITians get inclined to adopt that as the way to go about in life. In the 2 years at IIM, all we hear to that extent are "CV", "Resume", "CV Point", "CGPA", "Job", "Globe" etc. etc. And so all most MBAs want to do is make a good CV, get a high paying job and "globe" their way to the top! And therefore, drawing an inference here from the general observation, in my whatsapp group with friends from IIM, conversations on entrepreneurship lack any real masala.

Anyhow, this bug - entrepreneurship - just flies around without biting me. I am not sure if startup CEO life is what I want. Sometimes I feel these things have been stereotyped too much, to create an unnecessary psychological differentiation where none exists. May be things are not too different either way. May be the barriers to entry into that world which are mostly mental are created by its inhabitants to make themselves sound cool and their achievements too big for common people to aspire for, But then, I am obviously not qualified to say all this as I've never even stepped into that land and felt it for real. I take back what I said... will say it again after I experience it myself and if I ever do. I find this funny - taking back something said and recorded... but since it's considered a legitimate way of striking invalid communications, let's abuse it!!!

The thought of creating stuff that the world finds useful - makes their life easy or fun - is quite exciting. For lazy people, the excitement lies in the thought itself and in nothing beyond that! A true entrepreneur, I feel, should theoretically be a doer, and should love execution more than ideation. Is that true? For great thinkers, there are ways in which thinking itself can be something that can influence the way the world works and even earn money for them. Lazy people have ways to be doers in the world of today. I think I am somewhere in the mid-point in this matrix of traits - thinker, doer, lazy - perhaps a state many call the comfort zone. Probably need to stretch in some of the dimensions, and add an element of risk - may be, I can be an entrepreneur too!

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