Lately, I have been thinking very deeply about my college days when the Flipkart story had inspired the entire lot of my batch at IIT-D. We were starry eyed college kids who wanted to do something innovative in India and break away from the "three" most popular moves after IIT:
1. UPSC
2. MBA
3. MS/PhD abroad
I proceeded to then work in various Indian startups and noticed an alarming thing. I began to realise a pattern across all my stints:
The initial founding team does exceptional work innovating, they excel at what Thiel calls "Zero to One", the act of creation. I will concede that although most founders fail to innovate by often copying what worked in the west but the initial founding team usually excels in execution. It allows for initial traction as it breathes a fresh breath in the\ space that they are operating in.
Almost always, when Product Market Fit is "achieved"(whatever that means), the founders begin to deploy insane amounts of funds into growth.
By definition, Growth is not a bad thing. But, I have been noticing that across all startups I have worked at( all raised funds from the largest global funds) that it comes at the expense of product building. And during this era of hypergrowth, the product starts to stagnate while focus becomes marketing and sales.
I often felt that this was temporary. That once we reach enough scale, we would start to innovate again.
But time and time again, the ability to innovate atrophies over time.
Rather than building something that has enduring value by executing faster than anyone, the focus becomes achieving growth at all costs.
This ultimately leads to two outcomes:
1. The startup cannot sustain this growth and retention begins to look dire. The churn becomes unbearable and the startup goes out of business.
2. The startup gets acquired by someone bigger, allowing founders and investors to believe that they created value where none existed in the first place.
I am completely dejected at this.
