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Business pivots of technology start-ups: Leadership talent implications

Manish Pajan

Several technology start-ups came into existence in the last twenty years or so by exploiting the inefficiencies in the real world, by disintermediating established businesses, by aggregating an essentially fragmented ecosystem and thereby delivering value to all participants in the new “marketplaces”. Think Amazon, Airbnb, Uber Or if you prefer more familiar names, think Flipkart, OYO, Ola.

The defining characteristic of this aggregation/disintermediation/unbundling was of course the technology layer that epitomised the user experience and drove consumer trial, acceptance, and repeats (and enterprise valuation, but that’s another story).

No surprise then that the first wave of hiring for most tech start-ups is usually dominated, at least in sheer numbers, by numerous technology roles: engineers, architects, analysts, programmers, data scientists, etc. A significant portion of the early fund raise goes towards acquiring the guys who “build stuff”. The leadership tech roles such as CTO, Director of Engineering and SVP of Data Sciences are usually among the hottest roles going around, with the best talent often able to command jaw-dropping salary hikes. (Think of the years circa 2011-2013, when tech hiring witnessed a frenzy).

Funded by deep-pocketed investors, these tech players experience hypergrowth before being faced with the inability (and/or unwillingness) of the market to absorb change. This is the point at which one or both of two things happens. Either the companies expand overseas (many B2B tech companies did this and continue to do this) or the companies embrace elements of the old model they sought to disrupt in the first place (a whole host of consumer internet companies have been doing this for a while). My friend Sajith Pai of Blume Ventures, writing eloquently about this latter phenomenon in his recent post ‘Transition of the platforms: Everything new is old again’, cites the examples of Netflix, Zomato and Airbnb as the “re-bundlers”.

To me, this seemingly atavistic turn of events, or re-bundling of an unbundled stack, is particularly fascinating as it brings to the fore several talent implications:

  • Having built a formidable technology team that powered its unbundling-phase hypergrowth, how does a company adapt in the re-bundling phase?
  • How does it reconfigure the skill profile of the existing teams, both tech and business?
  • What are the new skills the company needs?
  • Does it need new talent in similar numbers as before, or different numbers?
  • Where does it acquire this talent from?

The most forward-looking founders, CEOs and CHROs are already addressing these questions. For the others, it is not too late.

Talent development and hiring – especially of leadership talent – should be their SINGLE BIGGEST priority.

To close, I think the existential questions of the “Are we a tech company or a hotel/transportation/X company?” variety are irrelevant. The new model calls for a seamless integration between the offline and the online through the ubiquitous digital device. And this calls for a close re-examination of companies’ leadership talent priorities.