Start-up scandals – saving a rocky ship with a huge mandate

How Israel is boosting Startup India

ShopClues founder Sandeep Aggarwal filed an FIR against his estranged wife Radhika Aggarwal and Sanjay Sethi, both co-founders, for allegedly usurping the e-commerce company from him. He himself awaits trials in US courts and is out on bail in India with charges of criminal defamation, violence and outraging the modesty of women.

Yet another start-up scandal rocks the country. Marking another black spot on the luscious industry which once created waves for its expansion mechanisms, young talent and quick money.

Sometime back, Arunabh Kumar, the founder and CEO of The Viral Fever, was accused of sexual harassment as a result of which he stepped down. The Viral Fever (TVF) was India’s first YouTube channel with original content to cross a million subscribers. It created the only Indian series to feature in IMDb’s Top 250 TV Shows list and is often regarded as the “voice of millennials”.

While Silicon Valley has long been inspirational for Indian start-ups, recent scandals like Dave McClure of 500 Startups, Chris Sacca of Lowercase Capital and Justin Caldbeck of Binary Capital have made Indians over cautious. Travis Kalanick was forced out from Uber Technologies Inc. after a string of controversies including sexual discrimination. Closer home, we have key founders of well-known start-ups stepping down for similar reasons. Ola, Uber, Housing, Grofers, Foodpanda and Zomato — all had their share of negative coverage in the last two years. Ola’s continuous war with Uber, Pepper Tap – a promising venture gone wrong that finally led to its untimely wrap up, Flipkart devaluation and finally FoodPanda and Ola’s sexual harassment cases – all have sent a chill down the spines of start-up professionals.

What could be the reason behind such widespread negativity for this promising and growth oriented field. Is there something fundamentally wrong somewhere? Can it be fixed, if not 100% but in parts.

It is essential to dissect these incidents and analyse what could be probable ways to keep these unfortunate incidences at bay in this volatile and demanding industry.

Deeper due diligence – investors will have to keep a hawk’s eye on probable founders. Committing to due diligence not only ensures greater scrutiny but also pushes for finer aspects from slipping away.

Internal committees for complaints – Acceptable behaviour and zero tolerance policies are being put in place. Staring, sexist jokes, calling female colleagues by inappropriate names, are becoming a part of structured guidelines in many companies.

Trainings and classroom sessions – Continuous talk will create free flow of dialogue. Sexual harassment training is fast becoming a basic essential just as human resource, legal and financial ethics compliance.

Easy growth – With venture capital money continuing to flow into the sector, many entrepreneurs find themselves with quick money and an enormous social media profile – all at a young age. This leads to corrupting influences creeping in. Appropriate training and counselling sessions can be a way of handling this.

Breaking the ‘bro culture’ – start-ups are often founded by people straight out of college and hence there is a tendency to recruit friends/associates from own circle to get the business up and running. This becomes an extension of campus with sexist jokes/hostel culture occupying centre stage. Given the way many of them come into existence, it is essential to scrutinise the founder base even more crucially and not just superficially.

Initiation of POSH – companies need to propagate Prevention of Sexual Harassment (POSH) as workplace laws, mandated by the government. POSH Act requires firms with more than 10 workers to implement policies to deal with misconduct, punish offenders and create committees including a female employee and a representative from a non-profit working in the area of women’s welfare.

Start-up culture has, no doubt, received a lot of flak in the past few years. Not only are these companies ready to pick fights and burn the edges with their competitors, but even the Media doesn’t shy away from giving them undue attention. In the long run, though, a clear mandate for no-tolerance on certain issues, high standards of ethical practices, a grip on the growth perspectives and an eco-system of experienced hands; will get this rocking ship across the seas.

How fast and diligently do they deliver will be the litmus test.


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