Who is at helm in a Start up?

Few days ago the news about top level shifts, followed by some top-level exits, in ‘the’ most prominent Indian startup captured headlines when the founders were stripped off of their CXO titles and their responsibilities were reduced to mere placeholder-roles akin to rubber stamps. They were replaced by an administrator appointed by the investors.

The founders still held the majority shares, including veto shares, their respective chairs at the board of directors and the right to vote. And that made many believe that they still held power & control.

The whistle blower troll circle, often referred to as the Startup L. Jackson(s) of India had this information at least a month ahead of its announcement. They kept on hinting towards the upcoming tsunami of layoffs, cost cuts and massive reorganizations. The keenest of the observers started making speculations.

But there was certain class of objectors who chose to turn deaf to all these noises. I had a spat with one such objector over the fact “who still holds the power here“.

 

A naive animal in an animal farm believes the breeder feeds them & hence will never kill them. This happens to people too. Or should we call them sheeple?

The Ship

Consider a startup as a ship, that left the pier with a limited supply of food & water & a mini livestock aboard (no, not Noah’s arc) and has to complete a 90-days’ journey across the Atlantic (no, not Niña, Pinta nor Santa María). Midway the ship hits a rock (no, not the Titanic). The captain’s damage assessment team did a survey and kept their assessment confidential to prevent undesirable panic among the sea-men. But they did not have to ability to prevent actions by individuals onboard.

Some could sense the threat, some couldn’t, and some decided to wait while some chose to believe that the threat was nonexistent.

The Rats

When a ship is about to sink, rats jump off the deck first and per the code of conduct, the ship’s captain is always the last.

It’s not bad to follow your survival instincts. It’s not bad to be a rat or follow one. Saving one’s life should be one’s top priority. There is no reward that can compensate loss of life. Better be a rat & survive than an audacious man on deck to die later miserably.

Proactive Rats

Some rats are wiser than the others, those who read the signs early & observe the symptoms, match the patterns and take action in right time. They are the pre-crastinators.

One among many such signs, one is M&A. At 31:48, Guy explains when a VC firm acknowledges your company as a loser company (say loser A) in their portfolio, they arrange your acquisition by another loser company B in their portfolio to save face.

Procrastinating Rats

Some rats are procrastinators. They are hesitant about jumping off. This hesitation may not be inherent to them. It might just occurs to them because of the the market situations. I mean, what would they do if they left the ship & boarded another which sank immediately after their arrival?

Now, you might complain – that’s totally hypothetical, stop cooking up stories. Well, ebay was shut 2 months ago and they’re recruiting & on boarding people until a week before they pulled the shutter.

So, these hesitant rats choose to take action when the moment finally arrives. They still manage to survive the situation because they remain prepared & well equipped to handle it.

The sheep and the suicidal lemmings

So, this startup had lost its first batch of rats who ran away elsewhere to save themselves from the big tide. But now it was left with the brain-dead lemmings, and the docile & gullible lot  – the sheep.

The lemmings have no ability to think. They just follow the one before them. The possibility of their survival depends entirely on their leader.

The sheep can foresee some danger approaching them. But instead of dealing with they, they decide to bury their heads in the sand & believe that nobody’s going to hurt them.

I’ll definitely appreciate if that’s self-confidence induced audacity.

But if that’s ignorance induced ostrich syndrome, then this needs to be stopped. Choosing to remain in a constant state of denial while overlooking the facts and the phenomena is a blatant insult to one’s conscience, that their emotions overpowered their ability to reason,  that they have shut their eyes and pretending that nobody’s watching them, that they can  no longer distinguish what’s reality and what’s delusion.

The start up laid off several of its staff including their head of products in June-July citing the obvious reasons – performance. Some employees took action and fled for security.

The startup is laying off some from its leadership team.

The threat is imminent. Of course, correlation may not imply causation always. But during the moments of crisis, being a bit pessimistic can be good. Your intuitions may not be accurate enough to help you out in need.

The problem with intuition is that people only remember when their intuition was right–truth be told, their intuition was probably wrong as often as right.

Guy Kawasaki, Art of Recruitment

When the news came, it captured the attention many. Budding entrepreneurs, graduates, engineers, buyers, sellers, economists and even the consumer base in India who had developed an emotional connection with the brand – everyone was curious what was going wrong. All of a sudden, the poster boys of Indian startups became the example of the biggest losers.

But it’s even more surprising to see that there are still people who believe that the तारणहार (Taranhar) will save them from the apocalypse. Good luck to them!

Guy Kawasaki: The Top 10 Mistakes of Entrepreneurs

Long back while dreaming about creating my own startup, I was reading, watching & stuffing myself with information from all sources and I happened to come across a brilliant talk by Guy Kawasaki where he explains the top ten mistakes by entrepreneurs, and at 23:30

Many many entrepreneurs believe as long as they and their buddies own 51% of the company they are in control of the company …

… but the truth is the moment you take outside money you have lost control of the company.

It never comes down to a vote 51 to 49.

This is not the US senate.

The moment you take external investment you’ve already sold your company to the highest bidder. You no longer remain the owner, but become a salaried (or non-salaried) employee of the company who has a mandate to meet the numbers & deliver on the promises.

The rights to vote, the seats at the board, or the percentage of ownership become irrelevant.

So who is at helm?

Can’t help you if you’re still unable to decide for yourself.

 

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