Team-BHP
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https://www.team-bhp.com/forum/)
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Startup shenanigans
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https://www.team-bhp.com/forum/shifting-gears/169994-startup-shenanigans-9.html)
Quote:
Originally Posted by Asoon
(Post 5323336)
But in general startups are for someone with risk appetite, extreme passion to his/her field and hunger to succeed, and not just numbers,
People interest in startups following paychecks are destined to fail, in-fact the most successful people I know are the ones who were passionate about creating things and worked at anywhere between 40%-70% of their market value (which they would have got in Flipkart/ Amazon /ITC / HUL etc.)
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Couldn't agree more.
Also from a startup fund's perspective, leaving this here - A message by Y Combinator to all YC Founders urging them to explore cautious growth in these crazy times.
Point #6 in the image above is a gem. But shouldnt they have given this advice 2 years back?
P.S. Is point #1 making any sense? Don't they have people to proofread these kind of notices?
Quote:
Originally Posted by m8002?
(Post 5323365)
P.S. Is point #1 making any sense? Don't they have people to proofread these kind of notices?
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Yes, the sentence is grammatically wrong. Also, people can predict anything.
Nobody actually knows how bad things can get. All you see is predictions.
I may be wrong but when I read some of these posts, I get a sense that the authors of these are getting a sense of perverse pleasure at the failing of startups so they can mentally pat themselves on their backs for not taking up these kind of jobs and sticking to their stable jobs. Says a lot about our risk appetites and aversion to failure as a nation. And perhaps that’s why most young folk in the country still hanker for govt jobs rather than turning entrepreneurs or job creators.
Quote:
Originally Posted by m8002?
(Post 5321949)
Honestly, with the kind of attitude shown by some during(or after) interviews the last few months, I have little empathy for them. I am waiting for a T-bhp thread where these same guys who ghosted employers ( with 3-5 offers) 1 day before joining will now be wailing about layoffs and how unfair employers are.
There are a few who are exceptionally talented and can command huge salaries and get another job easily, but the last wave was just lifting anyone and everyone.
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completely agree with this. I had team members who were average performers but got exceptional hikes(100+) and we let them go knowing that their skills don't match the salary they are asking for. People who are exceptionally talented, companies tried their best with counteroffers to retain them.
The hiring freeze is not just with startups, I have seen big IT firms also slowing or freezing their hiring.
Quote:
Originally Posted by Kapany
(Post 5323618)
I may be wrong but when I read some of these posts, I get a sense that the authors of these are getting a sense of perverse pleasure at the failing of startups so they can mentally pat themselves on their backs for not taking up these kind of jobs and sticking to their stable jobs. Says a lot about our risk appetites and aversion to failure as a nation. And perhaps that’s why most young folk in the country still hanker for govt jobs rather than turning entrepreneurs or job creators.
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What you are saying is true. But there is another side to it. The easy money had made some people believe that they are God's gift to humanity. Downturns are actually good for the society as they cleanse the system and separate the chaff from the wheat.
Quote:
Originally Posted by Kapany
(Post 5323618)
I may be wrong but when I read some of these posts, I get a sense that the authors of these are getting a sense of perverse pleasure at the failing of startups so they can mentally pat themselves on their backs for not taking up these kind of jobs and sticking to their stable jobs. Says a lot about our risk appetites and aversion to failure as a nation. And perhaps that’s why most young folk in the country still hanker for govt jobs rather than turning entrepreneurs or job creators.
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I dont think that was the intent. In fact, some of them raising the concerns are themselves entrepreneurs who have chronicled their startup journey here. What we need to understand is that there is a difference between taking calculated risk and being reckless. I feel we were very much in the latter state last few months.
For example, why would smalltime crypto exchanges get hundreds of millions in funding at valuations exceeding 1B$? Also a bunch of financial companies with mind numbing valuations.
What about the employees who made this move? Were all of them made aware of the risks? If they have knowingly walked into it, then its fine. But was this the case? The companies get an employee paying him 100/200% more in Jan only to lay them off in Apr...I dont see that as risk taking by the company.
Quote:
Originally Posted by Kapany
(Post 5323618)
I may be wrong but when I read some of these posts, I get a sense that the authors of these are getting a sense of perverse pleasure at the failing of startups so they can mentally pat themselves on their backs for not taking up these kind of jobs and sticking to their stable jobs. Says a lot about our risk appetites and aversion to failure as a nation. And perhaps that’s why most young folk in the country still hanker for govt jobs rather than turning entrepreneurs or job creators.
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No one is maligning Startups here. I am questioning some of the uncouth practices adopted by the Founder, investors and employees to chase unsustainable growth. Some of the “Founders” think they can solve any problem by throwing money at it.
I am an entrepreneur myself and am working with some of the best Founders and Investors in the ecosystem, but with good also comes bad.
I can give multiple examples of shady practices by startups, the reason I am critical of them is because they sully the name of good ones. Bad news travel fast and has longer impact than good ones.
Just one example: A startup which hired indiscriminately in the first quarter of this year has fired almost everyone because it couldn’t raise funds in this quarter. Reason, they wanted 12x valuation and rejected multiple offers for funding. The founders thought the bull run will continue and they will be able to command ridiculous valuation, this is even when they were warned on impending interest rate hikes and general slowdown in the VC industry. Today they have cash to sustain for another 5 months, after which they will shutdown. The number of employees who are affected are in the hundreds. Do you think any of these employees would want to work in a startup again?
The good startups have the best work culture, empathy and employee friendly policies in the world, some of the best entrepreneurs are frugal in nature and are mindful of people the hire and they never overpay for talent. They are always focused on Profitability than growth, these are the ones that survive and grow, but also largely impacted by the bad ones.
LinkedIn is flooded with posts about the difficult funding climate and its effect on job losses. I personally feel that most of these companies with negative unit economics have created a lot of value for India. Lakhs of people now work on different technology stacks and do global projects. Many of them started their careers in companies like Flipkart and other E-commerce companies. Millions of riders have benefitted from Swiggy and Zomato. New concepts like dark kitchens and stores are opening up and a lot more innovation will happen in logistics over the next few years.
Yes there are companies like Zilingo which seem to have cooked the books, and companies with toxic work environments and narcisstic founders, and these are bad exceptions. However, the overall effect has been transformational throughout the value chain. Imagine a situation where there was no zomato or Swiggy- would delivery partners have had any structured compensation? I don’t think so. The incumbents in India rarely focused on innovation or stakeholder benefits. Yes it is difficult to find an Ola these days, but imagine the situation just 10 years ago- there were hardly any set rates for auto or car based transport because most cities didn’t (still don’t) have an enforced meter system and overcharging/haggling was the norm.
Specifically for Zomato, they have a very high employee benefits expense- almost 28% of their total income. Other costs are also high as a proportion of their revenue. The management will surely do some cost controls and try to make the company profitable. Yes, retail investor capital has been destroyed by this company, but for the industry it is actually good that Zomato exists and is maturing.
Quote:
Originally Posted by Kapany
(Post 5323618)
I may be wrong but when I read some of these posts, I get a sense that the authors of these are getting a sense of perverse pleasure at the failing of startups so they can mentally pat themselves on their backs for not taking up these kind of jobs and sticking to their stable jobs.
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I know what you mean and I do see that happening in the Job attrition thread where some people think that they are smart by staying put and others who move are greedy. That's uncalled for in my opinion.
Quote:
Originally Posted by Kapany
(Post 5323618)
Says a lot about our risk appetites and aversion to failure as a nation. And perhaps that’s why most young folk in the country still hanker for govt jobs rather than turning entrepreneurs or job creators.
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:thumbs up
However, I believe the recent comments in this thread are about the viability of some startups. The following response makes sense to me in that regard.
Quote:
Originally Posted by androdev
(Post 5321881)
Most startups are just opportunistic copies of some successful ideas from the west. Founders mostly dilute their ownership and get as much cash as possible out of the system at the expense of investors. Employees also join startups for high salaries. I am yet to see an Indian employee who will accept equity/options in lieu of part of the salary. This is a clear indication of nobody believing in the company. Investors don't care either - they just want to hit one jackpot out of ten investments - the remaining nine can be dud. They just don't know and don't care which one is which.
I am exaggerating and generalising a lot but this is more or less how startup ecosystem works here.
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The following article has some interesting insights on the gig economy scene in the USA.
For years, economic growth and low interest rates allowed gig economy companies to grow without becoming viable businesses. Now the tides have turned, and they're left defending their clearly unsustainable business models, https://twitter.com/BITech/status/15...NOhBZKFVIu8CuA 
Quote:
Originally Posted by speedmiester
(Post 5324375)
No one is maligning Startups here. I am questioning some of the uncouth practices adopted by the Founder, investors and employees to chase unsustainable growth. Some of the “Founders” think they can solve any problem by throwing money at it.
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With all due respect sir, uncouth practises for unsustainable growth aren’t characteristic of only startups.
Also, sometimes our internal models of what sustainable growth looks like, keeps a limit on what we can really achieve.
Quote:
Originally Posted by Kapany
(Post 5324965)
With all due respect sir, uncouth practises for unsustainable growth aren’t characteristic of only startups.
Also, sometimes our internal models of what sustainable growth looks like, keeps a limit on what we can really achieve.
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Since we are focusing on startups in this thread, I am sticking to it.
All said, India has a lot of potential and there are many entrepreneurs who have built great organisations without burning money and have employed thousands of people all the while making profit. They also needs to be celebrated, not just the ones who are raise funds through VCs
Quote:
Originally Posted by speedmiester
(Post 5325177)
Since we are focusing on startups in this thread, I am sticking to it.
All said, India has a lot of potential and there are many entrepreneurs who have built great organisations without burning money and have employed thousands of people all the while making profit. They also needs to be celebrated, not just the ones who are raise funds through VCs
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I am sure you are right sir.
Lots of truth bombs in the video. I know most of the things/lessons he said by first hand experience. :coldsweat I wish someone had told this to me 18 years ago, when I stepped into my first venture.
https://www.youtube.com/watch?v=Jh4CQFvWYC4
Sharing a tweet. Each can draw his/her own conclusions. Each of these have burnt quintals of cash literally selling their wares at a discount. The PE investors have a vested interest in pegging the valuations artificially high to start with so that the 'bigger fool' or 'toupee pehnao' game can begin. It needs a sustained bear market to bring this nonsense to reality. Our journalists get all ga ga over these start ups not realizing that these valuations completely choke the ability of well run profit making businesses to raise capital at realistic prices. I can bet my middle name that each of these worthies have been funded by one or more PE with round tripping loans to help buy back their own stock (or of a subsidiary) at either super suppressed or super inflated valuations. Make no mistake there is more to these magic supermen than meets the eye.
For the young on our lovely forum - the press gives the impression that start-ups were invented yesterday and are a new phenomena. Wrong. Every business whether services, manufacturing or trading set up over the last century and more was one day a start up. And even today the industrious business communities of India, the Marwaris, Banias, Gujaratis, Punjabis, Sikhs, Bohras etc continue to invest in small & medium sized new businesses each year without fanfare and news headlines. Those are set up with 10% capital and 40% sweat and 50% time (i.e. sustained effort). My experience in investing since 1982 and in start ups since ~2000 is that whenever you see rip roaring success not backed by a patentable serious technology breakthrough know ye all there is financial engineering behind it.
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