We’ve seen time and again some great companies, especially start-ups, taking off at supersonic speed and then slowly but surely sliding at an equally fast rate. Simply because they missed the fundamental premise. The same reason why they succeeded.. they overlooked.
The Take off:
A startup takes off primarily because of the innate passion of the founders for the ‘Idea”. Thats it. Period. The idea, the offering which drives them day and night with or without food or sleep. No bmw car or a penthouse in Mayfair matters.
As it starts becoming larger than life size, without them even realising sometimes, their focus shifts. From the ‘idea’ to ‘money’. First for themselves. In terms of huge salaries. Then they go on a hiring spree of super duper guys at astronomical salaries only to prove some ego point. Not checking whether the recruits align at least somewhat with their passion and thereby getting let down in some manner or the other. And finally a race towards the external money. Wow! The Valuations. 1bn to 2 to 5 to 10 and thats all that matters. And how much they are better than competition, not in terms of idea progression but in terms of valuation and valuation and name and fame across newspapers and magazines!! Phew! While the idea passion is slowly getting relegated to some back alley!
And lo and behold the passion has therefore now shifted from the ‘input’ to the ‘result’. And then the slide accelerates. It has to. Some realise this late but some never!!
Ch 2 verse 47, the famous 24×7 verse of Bhagavad Gita: ‘Karmanyevaadhikaaraste…..karmani’ plays itself out.
And then its a Catch 22 for investors..whether to keep betting or to let go!!