While Flipkart’s position as e-commerce market leader is hotly contested, it has gained number one position in one area. It has the highest number of senior management exits among its peers.
From CFO Sanjay Baweja, CTO Peeyush Ranjan, the list of high-profile exits at the e-commerce marketplace has been long — Mukesh Bansal, Lalit Sarna, Sunil Gopinath, Anand KV, Prakash Tilwani, Punit Soni and Satyam Bansal. Flipkart also tops the chart in terms of most number of executives packing their bags with shortest tenures.
For many of them, the decision was more about not being able to perform to potential and internal headwinds than greener pastures, data compiled by startup tracker Xeler8 showed.
The average tenure of senior executives at Flipkart was 11.5 months, compared to 38 months at Snapdeal, 27.5 months at ShopClues, 23 months at Ola and 25.5 at Mu Sigma, Xeler8 data said.
“Zoho faced this problem only during its fledgling years. The average tenure was 6.8 months around 2000. But since then the company has made a turnaround and now it is quite common for people to stay there for as long as 15 years and more,” said Rishabh Lawania, founder, Xeler8.
A startup culture comes with its own friction and management styles. While promoters might have a great idea, professional business heads need to be hired too, say investors. “We want to ensure our investment is protected, so we insist that the promoters hire industry veterans. But, many a times there is a mismatch. A head of technology at a unicorn, who was earning Rs 3.5 crore, chose to leave because of the promoter,” said Rahul Agarwal, member, Kolkata Angels Network.
Investors deplore the promoter-driven culture in India. “After Housing.com fiasco with Rahul Yadav, we have started insisting on 51% stake. Traditionally, the investor thinking pattern has been quick return and quick exit. India is the only exception, where investors are fighting to keep the company going,” said Agarwal.
In countries like US, professionals from established companies took a pay cut to join startups, while in India things are different, says Rahul Khanna of Trifecta Capital. “When folks from established corporates moved to startups in the last two years in India, they were paid a preminum. Businesses are still founder-centric here and finding someone who comes from a structured environment to culturally fit into a high growth startup is a challenge. As investors, we definitely look at incentive alignment and depth of the management team and its ability to scale,” said Khanna.
Similarly Vikas Purohit’s exit from the Alibaba-backed e-wallet within seven months of joining raised eyebrows in the VC circle. Other unicorns such as Zomato (41 months), InMobi (30.5 months) and Quikr (34 months) fare better than Flipkart and Ola at retaining senior employees. “Investors want to see startups and their founding team standing by and believing in their idea. If they just want to make a fast buck, get cash, burn and exit — it is hardly ideal for the company or its investors,” said Agarwal.