Why ESOPs must be doled out very carefully?

In the very initial days at any start-up, when the funds are in short supply and challenges are too many, the new entrepreneurs may generously dole out partnerships just like Ranbir Kapoor in the Bollywood film Rocket Singh – Salesman Of The Year. In the film, he makes the peon, the receptionist and the technician equal partners of his new venture.

The film does not portray the post-sellout disputes which arise in many start-ups due to unclear ownership terms in the beginning. Sometimes, such disputes get ugly and spread in the public media. The ESOP dispute after the famous sell out of RedBus.in, founded by (Phanindra Sama and friends) to ibibo.com is one such recent example. Phanindra Sama had to face a lot of public embarrassment about ESOPs given to some employees, even after not doing anything wrong apparently. It is unfortunate but true.

Start-ups are generally started by people with similar passion and vision but with complementary skills. Gradually, some more people come on board. These people vary in terms of skills and risk appetite. Many of them come with an expectation of a stable, regular paying job. They don’t wish to risk their security for a potentially high risk ownership proposition because they are not sure of the future of the company’s prospects. It is a personal choice which people make based on their own life stage and priorities. So, they consider the offer of ESOPs as an additional bonus which may or may not materialize because of their own uncertainty about continuing with the company or because of the company folding prematurely.

But, as soon as the company gets listed or sold and ESOPs become saleable, greed takes over. Now everybody wants the share. Ironically, if the founder would have lost money, none of them would have wanted to chip in to share a part of the loss.

So, while deciding about ESOP, one should be very clear and objective without getting emotional. ESOPs should not be given to all and sundry who don’t believe in the company or who don’t share the passion that drives the founders. Hiring some people purely on payroll may be expensive in the short run, but it should be considered in the long run if we believe in our own venture’s value generation potential. One should consider this as some more risk in addition to the risk already factored in.

Entrepreneurs must remember that everybody wants to own the success but failure is an orphan. Nobody wants to own it. We should be selective in choosing our drivers and peons who will suddenly develop aspirations to be millionaires without doing any extra bit for the company. During the regular days, they may have thrown all the tantrums and may have tried to avoid work as much as possible, but when the D-day comes, when the promoters decide to sell out, they suddenly woke up to the realization that “WE founded and nurtured this company with OUR blood and sweat.”

Sensibility should override sensitivity. Ensure that you don’t have to pass through the miserable and humiliating situation like Phanindra Sama had to for no fault of yours. Don’t give ESOPs people who don’t deserve it. Let commitment and merit get rewarded.

We find what we are looking for. Bombay Times proves it.

Medha Jalota (wife of Singer, Musician Anup Jalota) passed away in USA on 24th November 2014. In the news item informing her death, this is how Bombay Times (dated 26 November 2014, Page 10) referred to her past marriage with the renowned filmmaker Shekhar Kapur, quoting from her biography. “the reason she separated from him was because he never fully understood her passion for music.”

On the contrary, as mentioned in the same piece by BT, this is what Shekhar Kapur had to say about his ex-wife, on her death. He expressed his graceful tribute thus through a Tweet : “Probably the bravest person I ever knew. Medha Jalota. Rest in Peace Medha, You showed that life can be lived and loved despite all odds.”

When we have a choice to extract few remarkable lines from the hundreds of pages of the biography of a dead person, what we choose reflects our own preference, our attitude and our focus.

Media is commonly known for looking at and highlighting the dark side of everything. Including at the tragic times of death.

We generally find what we are looking for. In life or in death. Bombay Times has reinforced this belief.

Why all eCommerce ventures are not successful?

I have heard people saying that they bought something from eBay.in, flipkart.com, infibeam.com, snapdeal.com, amazon.in or jabong.com. But, I have not yet come across anybody talking about buying or selling something on OLX or QUIKR.

The only place where I have seen their names is in advertisements, which try to tell me that I can sell my junk through them. Somehow, I am not convinced that selling my assorted used items (which even the Kabadiwala refuses to look at) will be as easy as it is made out to be and people will be waiting to lap up my useless stuff.

I think there are many people like me who are not convinced.

This reminds me of a mother who grooms her young daughter and takes her to all parties and social functions to get her noticed by mothers of prospective grooms. The only objective is to get her daughter married to some boy from a prosperous family.

The rise of some eCommerce ventures and their phenomenal valuations coupled with the easy availability of VC or PE funding has given rise to some silly and greedy start-up mindsets, whose only motive is to create a company which gets picked up or taken over by some bigger giant. They are not interested in developing a business. They are just interested in creating a hype, making a lot of noise and waiting for some idiot to come and buy their junk at ridiculous prices.

And they think that even if they sell junk, there will be hordes of PEs and VCs with loads of money eager to buy their company.

They don’t realize that if they could not convince a customer to come and buy/sell their stuff on their platform, only idiots will come and invest into such junk traders who themselves are soon going to be junk.

They must remember that in every Tech boom, everybody and their cousins want to ride that wave. Today, everybody wants to be an Amazon or a Flipkart. But most of them result into a mother desperate to showcase her daughter.

They should realize that it is not easy to “Bech De” their company so Quikrrrrr….

Making noise on advertisements (on easy VC/PE money) is easy. Making sense is not so easy.

ब्रान्ड पर से कस्टमर का भरोसा कब उठ जाता है?

जब कोई ब्रान्ड अपने Logo या Tagline के विरुद्ध काम करती है, तो कस्टमर का भरोसा उस पर से उठ जाता है |

ब्रान्ड जो प्रोमिस करती है, वहीं करनी चाहिए, और वही सच्चाई Logo या Tagline या किसी भी प्रकार के मेसेज में अभिव्यक्त होनी चाहिए |

अपने पेकेजिंग पर “बेस्ट क्वालिटी” लिख देने से अंदर की प्रोडक्ट बेस्ट नहीं बन जाती | और अगर वह प्रोडक्ट निम्नस्तर की होगी, तो कोइ कस्टमर उस “बेस्ट क्वालिटी” वाली बात पर भरोसा नहीं करेगा |

कुछ ऐसा ही मुंबइ म्युनिसिपल कोर्पोरेशन के सफाई विभाग का है | मुंबइ में आपने देखा होगा की सफाई की ट्रक, सडकों पर रखे गार्बेज-बीन या सफाई कर्मचारियों के युनिफोर्म पर लिखा है  “Clean-up चकाचक मुंबइ” | लेकिन मुंबइ शहर की सफाइ का निम्न स्तर देखकर तुरंत पता चल जाता है कि इस “चकाचक मुंबइ” स्लोगन का कोइ मतलब नहीं है | शहर तो छोडो वह ट्रक, वह गार्बेज बीन या वह युनिफोर्म में से भी कुछ साफ सुथरा या चकाचक नहीं है | “चकाचक मुंबइ” सिर्फ लिखनेवाले की कल्पना से आगे कहीं भी नहीं है |

ब्रान्ड का स्लोगन या टेग-लाइन बिना सोचे समझे लिख डालेंगे, ब्रान्ड उस के अनुसार काम नहीं करेगी, तो ब्रान्ड की कथनी और करनी में अंतर रह जाएगा | ब्रान्ड की प्रोमिस और पर्फोर्मन्स सुसंगत नहीं होंगे, तो ब्रान्ड पर कोइ भरोसा नहीं करेगा | गलत स्लोगन से ब्रान्ड को फायदा कम और नुकसान ज्यादा होता है |