Lessons the Indian Startup Industry can learn from the Housing.com drama !

Lions-Fight

A lot has been written about the recent spat between Housing.com CEO Rahul Yadav and Sequoia Capital India’s MD Shailendra Singh. The email that was leaked and everything that followed thereafter on various media sites as well as on social media did not come as a surprise. Afterall, never before had a disagreement been brought out in public in such a bad way ! We understand that such things might have happened before in the past but never before were things handled so immaturely !

After whatever has happened, may be it is time that the entire startup industry tries to reflect upon where it stands as an industry, what each stakeholders responsibilities are and how we should move forward if we want to make a huge success story out of the Indian startup ecosystem. A good start would be to understand one simple thing, We are all in this together !

There is no doubt that being an entrepreneur is tough,  there are too many battles you have to go through each day, there are too many stakeholders, each with their own interests, asking for something from you. It can drain you out. But they say adversities reveal character. And the founder’s character has a deep impact on the company’s culture.

If this is the sort of feedback you get from Industry veterans and especially from a gem of an investor like Mahesh Murthy, you know things need to change.

Your employees, who have trusted you with their dreams, advisors, whose reputation is at stake based on your actions, investors, who have backed all the growth, everyone gets impacted by each decision you take. You owe it to the ecosystem to strive to build a company culture that encourages mutual respect.

Differences of opinion, disagreements and arguments are completely healthy, provided they happen within the walls, not on the street. Take, for instance, that time Mark Zuckerberg  took a meeting with top venture capital firm Sequoia Capital in his pajamas and presented a PowerPoint deck titled “The Top Ten Reasons You Should Not Invest.” But he did not cc the presentation to his entire company and take personal digs on a public forum. Now heres another important tip, even Zuckerberg regrets doing that “I assume we really offended them and now I feel really bad about that.”

I speak to a number of entrepreneurs every day and a lot of them tell me how they were trying to raise funds earlier and how after mid 2013 the investment climate in the country has changed, investors are now willing to invest in their companies and how these investments have made their companies successful; turned their dreams into reality. Investors are a huge reason why the startup ecosystem in the country is booming at this point in time. There was always a lot of talent in our country, the investors have given the right channels for this talent to create something amazing in our country.

Ravi Trivedi of Srijan Capital shares his thoughts with us about this issue.

I don’t believe, washing dirty laundry in public makes good professional behavior.  Once you raise funds, you have larger responsibility towards your shareholders, your employees and customers, and what good for your company’s brand should come first.  What was the benefit of such an action for Housing.com?

In any competitive environment, talent acquisition happens, and I don’t think this warranted such a public exchange, and that too in the language chosen by the founder.  There is likely more to the context, but unless the parties, wanted to bring that out in open and make a public case, this email going public did not serve much good.

For the investors, this incident reinforces how important it is to make sure that you are investing in a right team ! Stories of people changing behaviors after success are not rare and we only need to start looking at such behavioral trends when we are investing in founders.

Serial entrepreneur Prashant Maharaj talked to us about what could be the take away for all of us from this particular incident.

Looking at a founders personal make is extremely important when you are investing in a company is something that has been strongly reenforced by this incident. You cannot really predict how a person will react in all circumstances. However some things such as how founders react to your suggestions, how well they take criticism could be indicators of their personal make. We need to force ourselves to look at these trends.

A lot of times, the way a person behaves depends on how greedy he or she is as an entrepreneur. To what extent a person might go to satisfy this greed.Unfortunately greed and ambition are packaged so closely together that it is difficult to tell apart one from another.

As for the entrepreneurs, the more giving you are the more liked you will be and the more successful you will be. Remember, success is always bigger when you take more people with you along the way !

 
Here are a few more reactions from the industry !

 

In his blog, Deap Ubhi, Founder and CEO of burrp!  writes about his interactions with Rahul Yadav and Shailendra Singh. The blog post, a very interesting read, shares the following piece of advice with the startup community.

The most productive outcome in situations of conflict between investor and founder is for both sides to help the other understand each other, be radically transparent with each other, and ultimately help each other be better.

I know at times it can be tempting to be snarky, witty and reactive; I know, because that used to be me. But part of why I felt compelled to share this with you was in hopes to elevate the discourse above that, because we can all be better.

(Image Credits: http://hdw.eweb4.com/)

 

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