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STARTUP SPECIAL Pain of Growing Up
Entrepreneurs who begin with a
belief that starting up is all about guts and glory are fast discovering that
it is often more of the former and rather less of the latter
The daily life of Albinder
Dhindsa, cofounder and CEO of grocery delivery startup Grofers, has gone
through a sea change over the past year. After his company received wave
after wave of funding from marquee investors in recent months, its
performance has shot up multifold. And his day-to-day work has become a
marathon of meetings with clients, investors, and potential employees.
“The nature of problems has
changed. I used to be involved in sales, content, cataloguing, and tech. I
don't get time for that anymore,“ he said.
Dhindsa's journey is emblematic of
startup entrepreneurs expanding at breakneck rates, spurred by bullish
investors and eager customers. The adrenaline and media attention aside,
however, such founders have to confront growing pains that are difficult to
resolve.
A founder's role first evolves
from creating a product to positioning it in the market, said TaxiForSure's
cofounder and former CEO Raghunandan G, likening the transition to going from
being a mechanic to a heart surgeon. Then, as the company begins to scale,
“what drew you to a startup is no longer what you will be doing,“ said
Raghunandan, who sold his company to larger rival Ola this year.
At one point, founders have a hard
time when the firm achieves its own identity that overtakes their own, a
transition known as nominal legitimacy, according to Srinivasan R, professor
of corporate strategy and policy at IIM-Bangalore. “This is a phase of doubt
and rediscov doubt and rediscovery for the founders that is extremely hard on
them,“ he said. “They go through a crisis where they ask: how much control do
I retain, versus how much should I give up to managers?“ Entrepreneurs can
lose control not only to middle management, but to investors as well when
funding comes in, said Rachel Gojer, an experienced entrepreneur life coach
based in Bengaluru. “That's where a lot of conflicts happen, so entrepreneurs
have to be very clear on how much control venture capitalists have on what's
happening in real time,“ she said.
In a lot of cases, Gojer added,
entrepreneurs may not anticipate the rate at which the company will grow and
may not have done the planning and groundwork in preparation. A natural
solution is to institute formal processes as the company scales across
verticals and geographies, but entrepreneurs may be reluctant to do so as it
runs contrary to the entrepreneurial spirit of constantly questioning and not
adhering to organizational structures.
And while founders are caught up
in a myriad of incremental problems that alarming scale brings, “it is easy
for companies to lose foresight and long-term thinking,“ said Alok Goel,
partner at SAIF Partners who previously was chief executive of FreeCharge and
before that chief operating officer at RedBus.
Within such a rapidly changing
organisational landscape, therefore, “people have to grow even faster in
order to be in control,“ said TaxiForSure's Raghunandan. This involves a
delicate balancing act--between individual and organisational priorities,
management and innovation, delegation and execution, customer experience and
scale, culture and productivity, the immediate and the future--all with the
flexibility and grace of an acrobat.
If a startup's growth does outpace
that of its leader, then a professional CEO can be brought in, which brings
its own set of challenges. SAIF's Goel knows this well, having been involved
in two landmark exits--Snapdeal bought FreeCharge this year and Ibibo
acquired RedBus in 2013. “With the amount of time I spent, the amount of
passion that I came in with, it was always as if they were my own startup,“
he said. “Unless founders, investors, and the CEO think this way, it is never
going to work out.“
In the end, a lot of the solutions
lie in psychological adjustments that founders need to make, said Srinivasan
of IIM-B.
“They should be able to
reconciliate with the idea that you are the one who built the ship, but you
are not the only one running the ship,“ he said.
Evelyn.Fok
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ET28AUG15
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