Agritech startups .. train wreck in slowmo …

ReshaMandi, a startup that raised over $40 Mn in equity funding, is facing insolvency pleas and has allegedly coerced employees to join another company, Genzr Solutions Private Limited, leaving hundreds of former employees awaiting salary dues. - ReshaMandi's downfall was attributed to rapid expansion across various verticals, revenue inflation, and financial mismanagement, including inflated revenue, fake vendors, and loan defaults. - ReshaMandi's founders and management personnel have joined Genzr, a seemingly unrelated company, raising questions about the acquisition and the funding received from an unrelated source. - The failure of ReshaMandi has raised concerns about VCs investing without adequate due diligence and the accountability of investors and founders for the company's financial situation and treatment of employees. Source: Inc42 - https://inc42.com/features/inside-the-upheaval-at-reshamandi-a-questionable-2nd-innings-after-a-40-mn-collapse/

in your organisation, who are the people who actually make more than a crore (in cash, ESOP not included). I am trying to validate the stuff I hear from my friends that every other guy in startups is making butt loads of monies and I look around and find even getting a 30-40+ Lacs job is demanding and not flying by the minute

What’s the chatter regarding Indian startup’s in agritech? Dehaat, Waycool, Ninjakart etc.. hear they’re hunkering down but are likely to survive the next couple of years at least…

Two months ago I posted this rant on Grapevine (https://share.gvine.app/CLkpBuEqcCvrzKvx6) which I think is one of the most viral posts on the platform. Since then I took a break, learned Vipassana, went to the mountains, read, and reflected. Here are some truth bombs that have been exploding in my head 1) There is a leadership crisis Is it me or do today's self-proclaimed leaders just suck? Look around Grapevine: insecure toxic managers forcing people back to the office, overhiring CEOs who don't know WTF to do, and founders just abandoning ship. "Leaders" and founders today are about as disconnected from reality as the political class, because like politicians most of them are privileged, sheltered, and already wealthy. 2) Technological innovation doesn't mean progress. I couldn't laugh harder when I saw the Indus Valley report basically saying that maybe all of us VCs overestimated how much money we could make funding lending and consumer apps. Maybe funding lending apps that "open up credit for the poor" isn't sustainable when the rate of interest is >18%? Technological innovation doesn't always mean real-world progress. A lot of times, it just ends up perpetuating and amplifying pre-existing inequality. 3) Endless growth toward nothing Most of India's startup money comes from the West. Most of that money was just printed to repeatedly get out of an economic crisis. That's it. There was no great vision to fund the future of humanity behind all this new capital. Just Central Bankers and Presidents pressing the "Create Money" button to delay the inevitable. Most of us here owe our wealth to Easy Money. https://www.youtube.com/watch?v=EpMLAQbSYAw PS: A book, that completely flipped my worldview during this time is this: https://www.amazon.in/Debt-First-Years-David-Graeber/dp/0143422715. I urge all fellow foot soldiers of capitalism to read this. Until the next rant, stay sane, safe, and debt-free!

There are essentially four parties in the startup economy: 1. The Consumer 2. The Enabler(read, Startup) 3. The Service Provider 4. The Investor Now let's look at Game Theory motivations: 1. The Indian Consumer wants to minimise money spent per unit value extracted, the Western Consumer wants to maximise value extracted per unit money spent. (There's a massive difference.) 2. The Startup depending on the stage wants to maximise User Growth and Free Cash Flows. 3. The Service provider wants to maximise financial incentives. 4. The Investor is wants to maximise the XIRR of their fund. For this they need to reach a multibagger liquidity event. Now let's look at what happens when: 1. The Consumer gets f'ed over: The startup attains pricing power through deep competitive moats allowing for monopolisation. They can jack up the prices to ensure nice FCF, greater rewards for Service Providers and great returns to their investors. (Think, Uber can charge anything to you now) 2. The Startup gets f'ed over: The users get bang for their buck, the service providers get good incentives, the investors push for higher growth but unfortunately the startup does not have enough capital to service their Cost of Operations through their unit economics, so they will either run out of cash or investor patience. Either ways, they are doomed. (Think every legit startup that failed) 3. The Service Provider get f'ed over: This is the likeliest scenario as they have the least power in this dynamic. Rewards will be reduced over time or made harder to achieve. They have no option because they got no option for sustenance. (Think any on-demand service providing app) 4. The investor gets f'ed over: Now imagine there is a startup that can balance the act very well. They have a service that users are willing to pay a margin on. They pay their service providers fairly and have decent unit economics. Now, the investor will do halla about destruction of shareholder value from little growth. (Is this the case with BluSmart?) Maybe that's why building in India is tough.

https://www.moneycontrol.com/news/business/mensa-brands-fires-200-employees-as-business-shows-signs-of-slowdown-10699211.html

Absolutely sad to see the state of the startups, most of them. I am a founder myself, and this is a post with equal disappointment with myself as much as it is for anyone else who relates. Look at all these companies that have raised shit tons of capital, and now make a fraction of money that has been invested in them. The raised money is spent on outsized, non business sense making acquisition costs, only to keep repeating it till the tap runs dry. Then when all stakeholders get bored, the service quality plummets, the employees are fired and whole sectors are admonished as being bad. But, my question is, which sector where large sums of money was invested in early days have come out with flying colours. Fucking nothing ! Edtech, proptech, agritech, ecommerce etc. etc. etc. kuch bhi nahi. Is there any sector where a startup which has raised in the 100s of millions in the first 5 years have actually built a sustainable business at any scale ? Then scaling down, isse acha, scale slowly. The worst part of this whole drama, is pushing the innovation wheel backward and destroying customer sentiment. Isse acha, raise less money inititally, build slowly, and only scale when the market is ready. Artifical growth makes no sense, unless you have a treasure chest that shall never run out. Even in that case, spend the money on assets and not on random acquisition costs, direct or indirect. As founders, let's do better, nahi ?

So recently, I read a lot of posts on Grapevine regarding some startups having no vision, poor management, toxicity etc etc, yet, many of these startups are doing quite a good business. I understand there is no correlation between work culture of a startup and it’s business outcome, but certainly, when a startup has poor management and unclear vision, then it should have troubles. That is not the case. Ola Electric seems to be doing well, Zomato became profitable and there are a few other MNCs with a similar scenario. As an employee, I really want to understand if we are missing something here, like maybe lack of foresight, or are we being greedy with respect to salary and stuff, or maybe we don’t empathise with founders? Sometimes I really try to understand the perspective of founders, but then nothing can justify pathetic workplace or poor management.