Why senior executives are quitting startups to move back to traditional established companies

MUMBAI | NEW DELHI: The movement back from startups to large established companies has started. Several CXOs from ecommerce and startups are on their way back to large MNCs and established Indian conglomerates and there are several others who are on the lookout, according to six executive search firms specialising in senior-level startup searches.

Lack of innovation opportunities, culture misfit, roles becoming redundant are among the reasons that have prompted senior leaders from Flipkart, Jabong, Housing.com, Ola and others to move back to traditional established companies, the search executives said.

In November, Peshwa Acharya, Housing. com’s chief of strategy, marketing and franchising, left the startup to join a large travel, holiday and hospitality conglomerate as chief marketing officer.

Suvomoy Sarkar from Ola joined Sears Holdings Corporation as head of the India analytics centre last month while Manish Maheshwari joined as CEO of Network 18 digital this month from Flipkart where he was the head of seller business and eco-system. A few months ago, Vikas Ahuja joined The Oberoi Group from Myntra, where he was the chief marketing officer.

Among others who have left over the past two years are Aparna Ballakur, who joined PayU as vice president human resources from Flipkart, where she was chief people officer, and Deepak Menon, who joined Microsoft from Jabong, where he was as product advisor and mentor. Others include Vikram Dasu, chief executive officer at Avenue Ecommerce Ltd – Dmart, who moved in from HomeShop18.

“Most ecommerce companies like Flipkart, Snapdeal are top-heavy and looking at high cost individuals working with them trying to force exits,” said Kris Lakshmikanth, chairman & managing director at The Head Hunters India. “There are 100 guys in our database who have come out of ecommerce companies at middle to senior level, who are looking for jobs,” he added. Anshuman Das, managing partner at Longhouse Consulting, said about 30% of the senior executives at startups and ecommerce firms are currently contemplating moving back to larger companies.

“We get a lot of requests from executives wanting to move back owing to funding issues and uncertainty. People who are not able to adjust to a fastpaced state of change and would like to work on broad, long-term plans are better suited for MNCs,” he added.

“There is a fair amount of such movements taking place. Lot of people in startups are feeling jittery and want to move back,” said CK Guruprasad, partner for global technology & services practice at Heidrick & Struggles.

“Companies do not have so much money now to burn on people they hired in a frenzy at one time. Also some of them who have moved in from large MNCs and established companies are not able to adjust with the environment prompting many to look at moving to regular jobs,” he added.

Indian startups are becoming aggregators of product and services, and lack of cutting-edge innovation is also leading to frustration among several senior-level executives. At a time when there are rising concerns around valuations, many feel going back to established companies is a much better option.

“Tech guys have a passion for technology and MNCs believe in giving ownership, identity and freedom whereas for Indian startups cost is a constraint, thus limiting their freedom,” said GC Jayaprakash, executive director at RGF Executive Search. Large ecommerce companies like Flipkart and Snapdeal have recently said they will be more cost effective.

“The era of unlimited venture money is over, and they (startups) all have to focus their energies on getting their core businesses in order. This implies some ambitious initiatives must be scaled back, different competencies become more important, etc, which might make the organisations a less good fit for the people who joined in a different environment. Over the long run, this is going to leave the companies stronger,” said Karan Girotra, who is Paul Dubrule Chaired Professor of Sustainable Development at INSEAD and an advisor to some Indian ecommerce companies.

Suresh Raina, managing director at Hunt Partners, which received a formal mandate for senior executive talent search from SoftBank last year, said that when a high-profile leader is hired in ecommerce, the process is similar to a boy wooing a girl. “Promises are made, expectations are built, but when the hire eventually joins, the reality is nowhere close to what was promised in terms of innovation opportunities or a high growth path. Companies should be more careful in designing roles and reporting relationships which can turn sour very quickly as they are in a perennial state of change,” he added.

Experts feel there are also fundamental differences in the way Indian startups and ecommerce companies operate vis-a-vis their global counterparts. “Prima facie, the business models of Indian ecommerce companies like Flipkart and Ola would look similar to their global counterparts like Amazon and Uber, but the reality is different. The US economy is an API-led economy where professionals can be given autonomy for solving technology problems. Individuals can innovate in the US and can stay focused without causing much disruption,” said Das.

Sinosh Panicker, associate principal at Heidrick & Struggles, said Indian ecommerce companies would like to be the next Google or Facebook but it is very difficult to build a culture similar to theirs by simply hiring people from these companies. “It’s important to note that a lot of these evolved companies already have a successful revenue generating business, allowing them to sustain the culture of focusing on doing the right things for customers and having a long-term approach.”