The Criticality Of Training in Startups

It was interesting to recently see the fresh faced, seemingly fresh out of college, telegenic anchor interview the seasoned CEO on a new business channel. The anchor was rather clueless not only about the business but, going by the questions, about the industry, policy and surprisingly about financial and economic metrics. In awe of the CEO, there were no follow up or sharp questions to any of the responses; Apparently smiles and irrelevant bantering were good enough substitutes for the obvious lack of knowledge, experience, research and preparation. With the explosion in TV channels in the last few years, the huge lack of experienced talent in the field is palpably, but unsurprisingly, demonstrated.

“The meetings in Mumbai ran past their estimated times and I was left without much time to reach the airport. I asked the taxi driver to therefore rush me to the airport. As luck would have it, he was new to the city and had been on the job with the startup taxi company for just a couple of days, so he didn’t know the way to the airport! I then had to serve as a navigator through the by-lanes of Mumbai during rush hour – thankfully I arrived just in time. Upon my landing at Bengaluru airport, I was again saddled with a taxi-driver who was new to the city and had to be guided by me all the way home. What luck!” This was a recent experience of a friend of mine.

I recently ordered some dinner, as usual, for delivery from the startup Indian fast food restaurant. I provided my phone number and then had to wait for over 10min for the agent to recall my name and address from the system. Later when the food arrived, I found one item missing while a vegetarian dish had been marked as “non-vegetarian”. I then called the restaurant to complain and thereafter received no less than 3 calls from the restaurant by people with increasingly higher levels of seniority apologizing for the errors.

The above examples are not stray ones. They are symptomatic of the situation being faced by Indian companies, especially startups, across all sectors. Fast growth needs to be managed by trained and experienced manpower and appropriate processes. This is easier said than done since there’s a severe shortage of such manpower across the hierarchy of a company.

As the Indian economy grows, ambitious startups are being founded to take advantage of the opportunities being created across sectors. These sectors however, while being very large and fast growing, are “white spaces” being recently created thanks to appropriate policy and reforms. For example, the telecom sector, today one of the world’s largest and the fastest growing, was unknown 15 years ago. Other sectors like organised retail, digital commerce, power, media, infrastructure, education, services, autos and indeed virtually most sectors of India’s economy are where Indian IT services was 25 years ago, telecom was 15 years ago or where ITeS industry was just 10 years ago. So we have an interesting situation where there are startups catering to ‘startup” sectors! This is unlike the situation in developed and mature markets where startup opportunities are created, thanks to technology and policy, in existing markets and sectors. It is not surprising therefore that there aren’t enough people with the experience of creating and running businesses in brand new sectors. So what does a startup do? Attracting experienced managers and talent from the few established sectors (eg FMCG and manufacturing) is expensive if not frustrating but is frequently both.

The Indian IT services industry has grown phenomenally from an almost standing start thanks in very large part to the huge investments made by Indian companies in training their people to become extremely productive contributors to their growth. Independent training institutes cropped up catering to the needs of the fast growing IT services business for trained manpower.

While startups are frequently under pressure from their VC investors for fast growth in line with their experiences in say, developed markets in the US, the peculiarities of the Indian market need to be kept in mind. Experienced managers with relevant domain expertise and experience will have to be created pretty much “on the job” in the Indian context. This requires an unusual (for a startup) commitment to training.

Successful Indian startups will therefore need to grow and nurture talent and develop managerial and leadership skills and attributes. All this even while the startup deals with the imperatives of growth and financial performance. This training and development will inevitably result in more time required for the startup to scale up to expectations. Investors need to therefore factor this critical aspect into their financial plans. Entrepreneur CEOs need to understand the criticality of having appropriate training, mentoring and advice available for their companies to fulfil their destinies

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Sanjay Anandaram is a passionate advocate of entrepreneurship in India; He brings close to two decades of experience as an entrepreneur, corporate executive, venture investor, faculty member, advisor and mentor. He’s involved with Nasscom, TiE, IIM-Bangalore, and INSEAD business school in driving entrepreneurship. He can be reached at sanjay@jumpstartup.net. The views expressed here are his own.