Raise a toast to flipkart’s bansals
Shed no tears for Flipkart founders Sachin and Binny Bansal, who have handed over their baby to a professional CEO brought in by the company’s biggest investor, Tiger Global.
They are probably better off for this and so, probably, would be the startup ecosystem and the larger Flipkart group, as the duo bring their startup vision and energies to bear on new businesses within or outside the group. Every startup founder need not be a Steve Jobs or aJeff Bezos. Google founders brought in Eric Schmidt to run the company fairly early on. Pierre Omidyar founded eBay, brought in Meg Whitman to run it and used the wealth he created at eBay to found the Omidyar Network, which does serious impact investing around the world. Entrepreneurship guru Noam Wasserman (formerly of Harvard, now at USC Marshall, Los Angeles) has studied the potential conflict between a startup entrepreneur’s desire to maximise profits and his desire to retain control, and concludes that the financial goals are more likely than not better served by giving up control to a professional chief executive.
The finding is strongly endorsed by LinkedIn co-founder Reid Hoffman, who brought in a CEO to run the company after it attained scale. His only caveat is that this should be a voluntary choice by the founder, not an imposition by the funder. Running a large company means a lot of grunt work, not necessarily the brilliant envisioning of a new business that fires up founders of startups. Founders should not get hung up on control but choose to work with professional CEOs and focus their energies on what they themselves do best. Founders/entrepreneurs in India’s startup universe should look upon the development at Flipkart with cooleyed rationality rather than with emotion. Once a new business has been created and become a going concern, their focus should be on maximising the value it can generate for themselves, providers of their capital, employees with stock options and other stakeholders, not on who retains control. That is the way to sustain and grow the startup ecosystem.
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