'Startups without Plan B will suffer'

'Startups without Plan B will suffer'

'Startups without Plan B will suffer'

There is a lot riding on the startup movement than what meets the eye. Mass layoffs, which were associated with established organisations, are now not foreign to startups.

“The main reason for this is the mismatch of expectations between investors and startups,” said Suhas Nerurkar, a known mentor for budding startups, who moderated a discussion on how ‘TinyOwl Lost its Nest and the Plot’ at The Big Picture, a brainstorming event for startups.

The session on Thursday was used by participants to debate on some of the bad practices in the startup milieu in general. Regarding layoffs, when it becomes inevitable, a performance-based layoff should always be the preferred option over a mass layoff, participants agreed.

In an easy-going discussion, which was the format of the event, first-timers and old-timers both put their two cents on the infamous TinyOwl incident, which saw the company’s co-founder Gaurav Choudhary reportedly being held hostage for laying off hundreds of its employees.

The discussion witnessed a step-by-step deliberation on the events that could have led to the fiasco. First, participants agreed that any decision has to be executed in an ethical manner. It is only when things are dealt with unethically, do they backfire. “If a company can do it in a justified and humane manner, then it is okay,” a participant opined. “The safer approach is to deliver the blow with some padding. Resignation option, severance package and recommendations, when offered to employees, doesn’t really shatter the employee,” said Nerukar.

Don’t borrow from future
The fundamental issue with startups, however, is the lack of a plan B, some agreed.“Startups are continuously borrowing from the future without once thinking of the repercussions if the money doesn’t come,” said Nerukar. “And, the only thing next to not having enough funds is having too much funds,” said Subhash Dhar, one of the founders at Brand Accelerator.

Additional employees and expansion plans, as a virtue of excess funding, puts unnecessary pressure on sales. This may lead to the signing up of fake customers as well as clients.

Naturally then, this sort of mismanagement will have investors pulling out, participants concurred. In this light, the discussion went on to establish that no matter how painful to the founder, there comes a time when founder management has to be replaced by professional management.

The Big Picture in its maiden event, saw over 150 participants, and plans to hold such meetings on a monthly basis.

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