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It’s people who will make or break a business, not business models!

I often spend my weekends meeting entrepreneurs and wannabes. It gives me great pleasure in learning from existing treps and sharing my learnings with the wannabes.

Of late I’ve noticed a trend that I feel is catastrophic for companies. While I am seeing this often now, I’ll share references from 2 companies wherein I’ve seen the companies for about a year now and hence mostly know them in and out. No, Niswey is not working with any of them.

Company 1:

The business: A unique E-commerce company. Unique in terms of value proposition for the customer.

The good things first.

Founders: I was thrilled by looking at the credentials of the founders. MBAs from the best possible university, globally. One of them even running a successful business since more than a decade.

Product: Brilliant! Doesn’t exist in India. Niche market but great scope, growing opportunity.

The business model: Fantastic! Can’t disclose anything more here, sorry 🙂

Revenues: Picking up quickly.

Looking at all these, one would easily say, yes put in the money, its safe!

So what’s the problem? People. In just over an year of operations, they had had 15 exits! The team size that day was 14. Of the people who exited, while most of them had good credentials prior to joining, some were performing great, some average and some below average. While performance variance was definitely a worry, the exit rate was alarming!

I was invited by their investors to have a candid chat. They had to take a call whether to put in more money and wanted to know my thoughts.

I told the investor, while business model etc is great, this is a BIG problem. If you can fix this, it will be great! In all a good business.

He immediately replied, “but what will a great business model do if there are no people? Who executes it? How does it grow? Every month we will be looking for replacements and then by the time they understand the business, they are already planning to quit.”

We discussed the people issue in detail, came up with solutions. They went ahead to figure out if they could bring in those changes, and I am guessing they did. 

Company 2:

The business: A services company.

The good things first, again.

Founders: Too good! Different skill set, industry expertise and a couple of them with prior experience in building startups!

The business model: Great margins. Some really big clients in the portfolio assured they were profitable from month 1!

Revenues: First year is still not over and revenues are already a few (INR) crores! The team size is not even 15 so you can safely assume they are hugely profitable, unless they are screwing something really badly behind.

The problem: In one word, Culture.

Employees often take leave (mostly giving lame reasons). They don’t share responsibilities. In fact they don’t even take their own responsibility, forget the team. Day starts at 10.30 and most of them unresponsive after 6.30-7 on weekdays and always unavailable on weekends. No, am asking to work beyond 7 or on weekends but remember, this is a startup, you MAY be asked ‘sometimes’, and not even receiving a call can cause some issues sometimes, especially when you are in a client servicing business. They have an HR. No offences to HRs but hiring an HR where there are not even 10 people? Ask any founder and you’ll know why that’s a bad idea.

In short, a disconnected and disengaged workplace and no culture of responsibility or accountability. And as you would expect, exits have already started happening. If your first few employees are irresponsible, how will the next set behave! What culture will be built? And that leads to the obvious question: how will this company grow or scale up?

If you’ve ever been at a managerial position, you know that its your team that gets you the results, not just your plan/strategy!

Often I see this trend now, entrepreneurs tend to ignore the importance of having good people in their teams. Or if they have them, they tend to not take care of their motivation levels. Remember, money is never a motivation. While terribly low salary can lead to de-motivation but an excessive high salary can never motivate people. Take good care of your employees/team – they are the key to your success.

At the end of the day, its people who will make or break a business!

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8 Comments

  1. i really enjoyed reading this one abhinav…!

    i’m a firm believer that people make anything work! and that one MUST look after one’s people, come what may.

    i’m actually pro-HR for larger setups of course. i think it’s a very essential portfolio. i’m of the view that if a company lacks a good HR policy, employees too don’t show basic courtesies that they should.

    you should really write more often abhinav!!

  2. abhinav, 

    you might like this post by rohan of gozoop – in fact do read everything he’s written!

    http://therodinhoods.com/forum/topics/hiring-for-a-start-up-hire-character-before-talent

     

  3. Thanks Asha. 

    Yes, its a simple fact but somehow people seem to ignore this. 

    Agree on the HR setups for larger setups too, the processes need to be in place as companies grow bigger.

    will try my best Asha

  4. Thank you Abhinav for sharing your experience with us. I am sure nobody will disagree with it.

  5. my pleasure nidhi.

    i don’t have a wonderful memory at all. i use the search feature very often and dig through the archives every weekend!!

    🙂

  6. Abhinav,
    I agree with you enthusiastic Team is so important for any organization,which really want to grow.
    For a best results from the team,a leader and clear mission required.
    If Your company has a clear mission then after some time you need not to do any work for employees,they will be self motivated that comes from Leader’s Leadership Quality.

    A Real Leader is Who create Leaders.

  7. I am back to rodinhoods, replying to your post Abhinav. Something I experience day to day is written here. It’s about money for sure, however, when people are put under the strictest of rules & regulations they disintegrate quickly and vice versa also happens. A right mix is required to right control. 

    For instance, I have seen people coming in at 9 am & leaving at exact 6pm because all the organization takes care off is timely working hours. Those who work late are not rewarded or assessed  and some sit for that extra hour to gain that Overtime money, as there salaries can’t pay them well.  

    Similarly, at another instance where people are made to work on Saturdays, waste enough time on Saturdays or really don’t have any work as other offices with whom they work are closed. The attitude in itself becomes a killer. One day off after 8-9 long working hours also becomes a hassle for those who hardly get to relax and the output during weekdays also suffers.

    Minute things like these never come to notice to the top management/business owners as this is only a part of gossip in the canteen, watsapp groups, facebook, etc. 

    With that minor thing, your employee is unhappy, just an organic, non monetary approach can help – Organizations/startups need to understand this.

  8. 🙂

    Check the e-mail I wrote internally to 130 people at 2win:

    Dear 2winner,

    As you will be aware, we completed the April appraisals on time and the increments (if any) were deposited in your April Salary itself. 

    Thank you HODs!

    In this process and over the 30 years of my working (in India), I have learnt a few lessons that I would request you to review to be much more productive in your work. 

    This definitely applies to the 2win culture:

    7 quick tips

    1. Please DO NOT discuss/give instructions VERBALLY. PLEASE WRITE down points in a mail to colleagues, HODs, vendors and anyone you may be dealing with

    CC YOURSELF in the mail so that your in-box also becomes a reminder service.

    2. A lot of us forget things. That’s normal. Humans originally were supposed to hunt, protect, eat and sleep – not to remember 28 things to do!

    Hence, please WRITE DOWN POINTS AND NOTES. Go to a meeting with a notepad and pen (supplied free at all receptions). RESPECT the meeting you attend by taking notes and then getting your deliverable actioned by mail.

    3. If you ask your HOD to do something or pose a query, FOLLOW UP with him or her. DO NOT SAY, “I asked x and he did not reply…”. That’s being irresponsible!

    If you don’t follow up on your deliverable, you are responsible – NOT the HOD.

    If the HOD does not respond, please escalate to either MK or me – to whom the HOD reports to.

    4. Please INNOVATE and be CLEVER! I am sure there are 10 ideas you have on “how to do what you do” better and more proficient. SHARE these directly with your HOD and mark me if you think it’s important.

    JAPAN became JAPAN because of Kaizen. Look it up when you have the time.

    We love good ideas and we will give you prizes (cash) and kudos for them!

    5. Please don’t say things like “Oh, I THOUGHT….”. Don’t think. ASK. FIND OUT. Inquire. Test. Check. Probe. 

    Taking things for granted will never get you far – either in life or at work.

    6. Please, please, be AWARE of your environment and the market and the conditions of the Industry. For the first time in 15 years I came across a situation that a few employees were so UNAWARE of reality that it hurt them in the end.

    Be aware. Not for me or the Company but for yourself.

    7. Be HAPPY

    We make HAPPINESS. That’s what Games are. If something is bothering you, holding you back, making you unsure, troubling you, please come to me. DON’T bottle things up. 

    If you cant share it directly, just write a note on a paper and send it to me anonymously. Leave it at the reception desk and it will come to me. Just mark it “For Management” and it will reach the right hands.

    ***

    I am introducing the concept of mid-year appraisals starting this month. 

    It’s a simple idea: those whose appraisal is in DUE IN OCTOBER will be given a simple form to fill asking about how the past 6 months have been, etc. This is NOT A FINANCIAL (SALARY) appraisal. Rather a work appraisal, so that if people are misaligned to their jobs/have feedback, we receive it now rather than after 6 months.

    There will be meetings face to face only if need.

    *****

    Let’s make this Quarter – April – May – June a ROCKING ONE!!!

    ****

    Wishing you the best,

    Alok Kejriwal
    CEO and Co-Founder
    Games2win – a global top 20 online games biz

    India Handphone + 91 98200-82558

    ‘In Karma I trust’

    obo.jgd.

     

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