There is a thin line between hustle and hubris: KM Birla on building startups

Kumar Mangalam Birla

There is much to be celebrated and learnt from the raw energy and hustle of many new ventures in the startup ecosystem, however it’s also increasingly clear that there is a thin line between hustle and hubris, said Kumar Mangalam Birla, chairman of Aditya Birla Group in a note sharing his reflections for 2022-23.

“The availability of capital, coupled with young talent brimming with ideas, has meant that we have been witness to a unique explosion of new business building…here is a thin line between hustle and hubris and it needs to be balanced well,” Birla said on Tuesday.

Birla said that a success of a startup primarily depends on its team and workforce.

“The single biggest difference between many successful firms and others is not the novelty of ideas, or even the uniqueness of their technology, but a team that can harness the best solutions available,” he said.

Birla identified a few big bets for a startups which needs to be orchestrated based on a firm’s fundamental strengths. These include better unit economics, massive scale, network advantages and speed.

“Metrics still matter, even in the absence of perfect analogues. There is still value to investing in building a view to core metrics - operating profits, gross margins, and cash flows,” he added.

Talking about governance within startups, Birla said that a founder should build a firm for the long haul.

“Unfortunately, there have been one too many examples recently of teams that have embraced shortcuts. Where compromises have been made in the interest of growth. And where alarms are set off too late. Build for the long haul,” he added.