Looking for a job? Avoid a freshly minted unicorn if you can. That’s because they inhabit a space which is completely divorced from the real world of business. Witness their recent spate of layoffs.
In the world of publicly listed companies, accountable for their actions, such layoffs are seen as a clear sign of serious trouble. Indian IT services companies who have benched and axed thousands of workers over the last one year, have admitted that they have been forced to do so in the face of a slowdown in their primary markets.
By contrast in the ra-ra land of startups, mass layoffs are often seen as a sign of strength, of the company responding to adverse performance with a smart strategic move. Suumit Shah, co-founder and CEO of Dukaan, which enables merchants to set up their e-commerce stores, in a Twitter post last week said he had to lay off 90 percent of the company’s support team because an AI-enabled chatbot could do better. Another founder, after axing 25 percent of his workforce, said it was driven by the need to be “operationally efficient”.
The responses are not surprising. Indian startups of the current era have always operated on the principle of heads I, the promoter, win; tails, you the employee, lose. In good times, which in startup parlance is when easy money from VCs and private equity companies is chasing them, the founders book their multimillion-dollar villas and fancy cars. And why not. It's their genius which is responsible for the company's enhanced value. As for the rest of the hundreds of gullible employees who exist in the shadow of this Steve Jobs and Elon Musk rolled into one, they are just there to fill up the numbers. At best, there are goodies in the form of parties and stirring speeches. But come the bad times, they are expendable commodities.
Which is why for a bright young person looking to build a corporate career or maybe even start something on her own later in life, the learnings (if one can call them that) from a stint in a majority of such startups are ominous.
For strategy, there is short-termism driven by the amount of cash in the bank. By and large it's fluid and flexible, based not on clearly defined goals but on whatever is the latest buzz word. The culture is one of hustle and not the long hard road to building market share through good products and services. It's one of knowing when to run. As for leadership, the motto is simple. The boss is always right even when he is wrong. So, any kind of questioning is met with disdain. Rare is the entrepreneur who hasn't enriched himself by the time his dream hits the hard reality of an investor who dares to ask that dreaded question, "show me the profits". As happened with Zomato, PB Fintech and Paytm, listing is a rude wake up call.
Another good reason for prospective job seekers to shun a startup is the nature of the relationship with their financial masters. Let's face it, most startups are just pawns on the chess board of private capital. The moneybags of the financial world jerk their wards around to suit their immediate objective which is to sell to the next fool. You learn nothing from a company where the owners are constantly looking for an opportunity to offload their stake to the next highest bidder.
If you are starting out, no matter what your qualifications, look for an organization which has been built to last and where you can learn through formal and informal platforms. Hindustan Unilever (HUL) may be an old, fuddy-duddy company, but six months on the road as a salesman will teach you more about business than any startup can, unless it is your own.
An employee at a clueless startup is like the blind leading the blind. It's like going with a serious medical condition to a second-year medical student in the hope that she knows what she is doing. Sure, one day she might just be a great cardiologist, but will you be alive to see that day.
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