I am an outsider. Though I am thoroughly aware of what’s going on in the start-up ecosystem, I’m not the one who pays much attention to it. I’m busy building what I’ve set out for. But the recent uproar(s) did catch my attention. Everybody from teenage bloggers to mainstream media seems to be talking about startups. This is great news! I’ve waited for this phase from the day I started my company back in 2012. But when I see the quality of journalism, which is absolutely pathetic, my joy is visibly diminished. Barring a few, most of them mindlessly copy-paste, invent crap, or just take everything on face value. I don’t trust the media because their motives are never inclined to what the world should know. Anyways, coming back to why this article interested you in the first place…when MediaNama reported the crisis situation at TinyOwl’s office, a deluge of questions hit me. What if employees & founders really want to consider hiring & firing a regular affair at growth stage start-ups? Who is at fault and who should be blamed for this chaos? TinyOwl just raised some more money but what if it was raised to pay off their already incurred debt? What made the employees act so harshly and what made the founder act so unreasonable with employees? Why did the politicians have to step in and resolve the matter? Why were the employees frustrated with everything that ever had anything to do with TinyOwl (including the college from where the founders graduated)? Why is every startup in the country suddenly labelled as “high risk”? Why is there so less regret in the eyes of the founder? Why are the employees hysterical about bouncing PDCs? Tons of questions. Answers, inadequate.
I’m not here to provide a verdict to who’s wrong and who’s right. I just don’t know enough. There is no scope for that in the current scenario. The wrongdoings & the shit has been done. As I said, I’m an outsider with a few contacts in TinyOwl and the media. That’s it. I neither know the founders personally nor any of the employees protesting. There is no clear motive of writing this, apart from the fact that I’m fed up of media stupidity, juveniles trying to decipher the funding scene & pass judgments, the lack of clarity in the Indian food-tech space, the unrealistic expectations start-up employees have & the lack of emphasis on building sustainable & profitable businesses.
So here is my opinion on the questions nobody asked me.
Why you shouldn’t thrash TinyOwl. Start-ups go through change every day. There is fire-fighting every day, people are hired and fired over time, pivots happen and it is all completely justified. I mean, what is the big deal with businesses changing their model or receding away from a city? It’s all a part of the game start-ups play. Investors bet on founders who can fail fast, iterate and do what is best based on changing market dynamics. This brings me to a very critical question. Who are the people we’re betting on and how much have they already built what they desire to? The basic problem lies here, when young chaps raise “massive” money before they even know who their customers are. There is a misconception that large tech. companies are built only with VC money. Maybe yes. Maybe not. But when they bet on founders, with very little or no knowledge of managing that money and making sure profitability is an important KPI, companies like TinyOwl will continue to make these mistakes.
And why you totally should. I read that the founder, Choudhary, recently mentioned somewhere that he’s proud of what he’s built. What are you really proud of? Raising $28 mn and burning it all away with a CAC 200x of the industry norms? Hiring hundreds of people when you knew you didn’t have enough runway to feed them all; promising these guys hikes even when you know you’re going to go bust if the money doesn’t come in the bank on time? Staying in 5 star hotels when your employees are fighting to survive this Diwali? What were you really proud of? I just can’t understand the ego behind saying that. Maybe I’m completely oblivious and unable to see the greatness and smartness behind the unempathetic founding team.
Laying off people, pivoting and taking strategic business calls have to be done. But why did you show every person in your remote teams that you were capable of fulfilling their dreams? According to an insider, you were paying north of 22 lacs to an undergraduate fresher. Are you nuts? You’re destroying the ecosystem & the candidate’s professional career in essence. I’m surprised what rat race are all these new lavishly funded companies into? The opportunity doesn’t seem to be going anywhere so why this extreme pressure to scale operations to multiple cities when you haven’t even cracked 1% of the current local opportunity? What makes you think you’re doing a good job by posting page long newspaper ads and driving traffic at such an early stage of your business? Why couldn’t you wait for 1 quarter to open your next set of offices when you were not sure about the timeline of funds hitting your bank account?
What bugs me even more is the attitude with which these layoffs are done. Why does the founding team just wake up one day and realize their colleagues can be asked to leave. Effective deployment of funds is one of the most critical jobs of the founding team. I keep preaching ‘cash is king’ to everyone around me and how cash flow is integral to everything that a company undertakes; but I realize why I do that… Because I spend a long time bootstrapping my venture to make sure we don’t fall behind paying our vendors & employees. The case is opposite with these new kids on the block raising extravagant amount of cash from investors who love following herd mentality. Investors & Founders who feel they can build massive companies just on the back of millions of dollars are seriously mistaken. Go out, bootstrap your venture and know your customers, talk to them, show empathy, spend time with your staff, and know what they go through every day to help you achieve your dream and I’m sure affairs like these can be dealt in a much more humane way.
If we dig deeper into this, there will be more insights and all of us can learn from mistakes like these. But the fact of the matter is — till the time we don’t stop glorifying VC money as a business objective, we will not be able to balance speed & sustainability.