The article first appeared on The Quint on April 23, 2022.
India’s burgeoning unicorn startup ecosystem has been lauded as a symbol of innovation and ambition, yet it faces critical challenges in maintaining trust, transparency, and long-term success. The recent public critique by Sequoia Capital, highlighting governance failures in some Indian startups, underscores the pressing need for introspection and reform. The fallout involving BharatPe and its co-founder Ashneer Grover, among others, serves as a cautionary tale about the risks of valuing hype over substance.
India’s unicorns, with a combined valuation of $320 billion, represent immense potential. However, many startups focus on leveraging technology for a vast domestic market rather than fostering groundbreaking innovation or global competitiveness. This approach often prioritizes rapid scaling and inflated valuations over sustainable and ethical growth, creating fertile ground for corporate misconduct and short-sighted decision-making.
The Infosys example provides a sharp contrast. Founded in the 1980s, it grew into a globally respected company by prioritizing values, resilience, and long-term vision. Founders like NR Narayana Murthy exemplified a governance-driven ethos that ensured Infosys weathered setbacks and maintained its integrity. These principles are as relevant today as they were decades ago, offering lessons for modern startups seeking enduring success.
Sustainability for startups hinges on three essential elements, or the “three Os”:
Orientation: Startups must align their strategies with their capabilities and market demands. Companies like Paytm capitalized on bringing global concepts to India, while Ola succeeded by scaling local innovations globally. Understanding one’s strengths and limits is key to avoiding overreach and ensuring effective execution.
Opportunity: Success lies in creating value for stakeholders. Startups need to identify and communicate opportunities that resonate with customers, investors, and employees. Recognizing and mitigating threats is equally vital, requiring foresight and adaptability.
Organization: A robust organizational framework—encompassing structure, culture, goals, and governance—is the backbone of sustainable and ethical growth. Defining what the company stands for and what it will not compromise on is critical.
India’s unicorns must shed the “imposter boy” culture, where hype eclipses accountability. Instead, founders must adopt a value-driven approach, balancing ambition with ethics. Sequoia’s wake-up call should not be seen as a reprimand but an opportunity for the ecosystem to reset and rebuild on a foundation of integrity and excellence. Only then can India’s startups transcend transient valuations to achieve lasting impact and global stature.
Read more: The Quint
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