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    How finding right talent at the right time is a challenge for India’s largest technology startups

    Synopsis

    Hiring and retaining the right talent for a rapidly scaling organisation is a pressing challenge for the likes of Flipkart, Paytm and InMobi.

    ET Bureau
    As Sachin Bansal moulds strategy that can keep Flipkart scaling peaks at pace, he’s also grappling with a conundrum that’s gotten more complex. “We are entering an interesting phase where Flipkart is not a small startup anymore,” Flipkart’s executive chairman said at a recent technology conference. “The question is, how do we set up an organisation in such a way that it builds up itself. How do we create an environment where the next-big-thing happens?”

    Flipkart needed just eight years to become India’s most valuable ecommerce company. Even so, it cannot afford to let its momentum slack as younger, nimbler rivals gain speed. Which makes hiring the right people for different growth stages the most crucial of management functions.

    “It’s a different ballgame scaling a company from 10 to 100 to 1,000. We have made sure we have retained some values across the board but don’t get hung up on old ways of doing things,” Bansal said, “and having to do that every two years is challenging.”

    This month, Flipkart overhauled its management, bumping up Sachin Bansal as chairman to focus on fundraising and strategy and cofounder Binny Bansal as chief executive responsible for daily operations. The layer below, too, saw some roles realigned. An organisational rejig of this nature is a classic example of juxtaposing suitable senior talent with a rapidly scaling organisation, and, importantly, at the right phase of its lifecycle.
    With a number of startups being heavily funded, hiring the right talent is a top priority for investors, too. Venture capital funds Sequoia Capital, Accel Partners and Matrix Venture Partners have teams to assist their portfolio companies identify the right mix of people.

    Experts say there is a seminal shift in terms of the kind of talent required at different stages of a startup’s growth. At the early stage, a startup is still figuring its business model and cracking code, which requires people with flexibility and the nimbleness to experiment and come up with solutions.

    “Then you need people who have experience of having done this before,” said Ganesh Krishnan, founder of entrepreneurship platform GrowthStory. Krishnan elucidates his point citing an instance from one of his most successful ventures, TutorVista.

    After the company raised series-B funding the management decided to hire a chief operating officer. Krishnan recalls bringing in someone from an earlier venture, CustomerAsset (rebranded First Source Solutions after ICICI Bank acquired it). But it was a disaster, he remembers.

    “Not because he was not good - he was a top performer used to running thousands of people. But the TutorVista model was not proven. Running thousands of people is different from trying to prove the model,” Krishnan said.

    A year later, TutorVista hired five people from top B-Schools but with little experience to work directly under the founding team. “That worked beautifully for us,” Krishnan said. The online tutorial company was later sold to Pearson Education Services in 2013 for $213 million.

    “If a startup gets people from multinationals too early in its lifecycle there is the danger of a misfit. They are used to certain ways of thinking and are used to some size to grow business further,” said Krishnan, who consciously avoids bringing in people who have had a standardized ladder of growth. For Paytm founder Vijay Shekhar Sharma, the key parameter to discovering the right talent is based on the person’s ability to take hard decisions with less amount of data and time. “Big companies have the luxury of time and data, which small firms don’t.”

    Image article boday


    For leadership roles, Sharma said, a startup should focus on hiring people with horizontal skillsets rather than mere vertical specialisations. “The role of a person will change over time, especially in the early days. CXO-level hiring should always be done slowly and with caution,” he said. Relevance is key. “Every two years, the company that I was running is run by someone else in my team.”

    Paytm has beefed up its top management in recent months with several key hires, including Vikas Purohit from Amazon India, Abhishek Rajan from Myntra, and Varun Khullar from medical devices firm Boston Scientific.

    Gita Dang, founder-director of Talent Advisory Services, said she often finds a disconnect between what companies want and what they need when scouting for senior leaders.

    “The second disconnect is what the venture capitalist, who has funded them, thinks they need,” said Dang, whose firm has placed senior executives for clients including Goldman Sachs, Omidyar Network, Sequoia Capital and Dell. “The VC will look for somebody who can come in at a different level - and they are looking two levels beyond. Founders don’t necessarily get that.” Hector Beverages CEO Neeraj Kakkar believes every entrepreneur scouting for a senior executive must answer this critical question: “Do I hire for current business capacity or next year or for three years down the line?”

    Entrepreneurs say infusing the right culture is as important to retain senior hires. In 2012, InMobi was in trouble despite growing from 200 to 1,000 people and forecasting a fivefold growth in business, recalls founder Naveen Tewari. That year, no products were launched and growth decelerated. Tewari figured something was fundamentally wrong. Even after hiring the best talent, the culture wasn’t built for product development and innovation.

    “At that point we applied a simple rule: Let’s do and treat people as I would treat myself. This meant, I trust myself, I will trust everybody. I hate being questioned, let’s not question anyone else. And I’d hate it if my board sat down and did a performance review. Let’s not do it to our people.” Tewari got rid of his human resource performance software and reimbursement policies and let his employees run the show. It worked. In 2013, InMobi launched SmartAds, an ad format that incorporates live feeds into rich media ads. This was followed by native ads in 2014 and mobile commerce discovery platform Miip last year.

    “No harm thinking about (hiring) a superstar but you must know when to bring him in,” Dang said, believing that the right time for this would be between series B and C stages of funding. “Else, you won’t be able to keep them busy.”
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