The movement from established companies to startups has been going on for quite some time. However, time has reverted itself and now various senior executives are leaving startups to join large established companies. Let’s take a minute and ponder on this topic. Currently, the startup ecosystem is thriving like never before, e-commerce is blooming in India. The central as well as state government is promoting startups and entrepreneurship. Then why has this backward migration from startups to top established companies begun?
Before getting into the reasons for this particular migration let’s look at some senior executives who’ve left India’s top startups and moved back to traditional established companies.
Aparna Ballakur who was the Chief People Officer at Flipkart quit Flipkart and joined PayU as the Vice President Human Resources.
Manish Maheshwari who was the head of seller business and ecosystem at Flipkart joined Web18 as CEO. Web18 is owned by Networ18 Group and is Network18’s is the Internet and mobile arm.
Ravi Vora who was the CEO of Flipkart’s Strategic Brands Group quit Flipkart and joined HOOQ as Chief Marketing Officer. HOOQ which is an online entertainment service is a joint venture between Singtel, Sony Pictures and Warner Studios.
Suvomoy Sarkar recently quit Ola and joined Sears Holding Corporation as the Head of the India analytics centre.
Peshwa Acharya who was the chief of strategy and marketing at Housing.com quit the startup and joined as chief marketing officer at a large travel, holiday and hospitality conglomerate.
Vikas Ahuja who was the chief marketing officer at Myntra has now quit working for the startup and joined The Oberoi Group.
Deepak Menon quit Jabong where he was the product advisor and mentor and has started working for Microsoft.
Now, as I mentioned earlier startup ecosystem is thriving and yet people are leaving startups and opting for jobs at either established companies or MNCs. Let’s read why.
Working for a startup: means independence, flexible work-hours, you’re your own master, etc. There are several reasons that people give as to why working for startup is better than that for an MNC. However, let’s read about the problems that startups are facing in maintaining the above stated advantages.
Lack of Innovation
Indian startups are generally copycat models. You hardly find a new innovative startup. Copying plans isn’t necessarily bad. If you have a strong team and you find flaws in the present venture in that field and work over them your enterprise might flourish. However, Indian market has several major startups racing in the same field. For example Flipkart, Myntra, Jabong these are the three major e-commerce players in our country. Now, these three are already facing stiff competition amongst themselves. When a foreign established e-commerce, like Amazon enters the Indian market it becomes really difficult for startups to survive this battle of the fittest. This lack of innovation and easily copying models has resulted in failure of several startups and this movement of top executives as they lack the faith in the success of their venture itself.
Work culture
Indian startups are booming and expanding. However, they’ve not yet started generating successful revenue. This is a major set-back. Indian startups want themselves to have a work-culture similar to that of established companies like Google but what they don’t realise is they do not have funds to maintain such work-culture. Startups are hiring people from large established companies but just having people from these established ventures will not build a work-culture similar to theirs. A continuous flow of sufficient revenue is a must and that Indian startups are yet to generate. Thus executives do not get the desired and promised work-culture forcing major exits.
Seniors are relegated
Working in a startup top executives are accustomed to longer working hours, high levels of stress and a volatile work environment. This builds pressure on senior executives. This pressure increases when employees are unable to keep pace with the continuous changes and breakneck growth. As the startup grows the work starts getting directed towards scaling the startup and several early executives lack this skill. Thus with all the pressure building up the executives find it easier to leave the startups and work in a more stable environment and opt for the traditional established companies.
Bid to lock in talent
Startups mainly offer employees stock options with the intention of locking talent for a time period of one-four years. In an ideal case employees can cash in a quarter of their holdings after the end of a year. However, generally founders only allow one-tenth of the promised stocks to be sold after a year, with vesting periods rising to forty percent at the end of four years. Thus this dissatisfaction with the compensation results in several top executives to leave startups and join established companies and MNCs.
Share with us your views about these top executives leaving startups and heading for established ventures. Do you think winter is coming for startups?
