As a lecturer, entrepreneur, mentor and angel investor, Ajeet Khurana has a long and rich history with start-ups. In this email interview, he looks at the pros and cons of B-school students joining the start-up scene this placement season. Excerpts…
Which are some of the ‘oldest’ names in start-ups?
Any new business will be called a start-up. So, in that sense, start-ups have been around for the longest time. However, it’s only in the recent years that they have gained tremendous visibility and are being spoken and written about in the media. Contemporary definitions of start-ups tend to narrow them down to venture capital-funded, high-growth new businesses, whose primary focus is on value maximisation as opposed to profit maximisation. Some of the oldest names in India’s start-up scene are MakeMyTrip, Just Dial and Naukri.com, among others.
From education to ecommerce, today there are start-ups that are offering almost everything. Which are the areas in which start-ups have been most successful?
Digital businesses such as Snapdeal, iMobi, FreeCharge and Paytm have seen the greatest success so far. Indian Unicorns, that is, start-ups with a valuation greater than $ 1 billion, are in the digital space. Other sectors such as energy, healthcare and education are also of interest, but haven’t taken off to the same extent.
An established name or a start-up — which is a better proposition for a student getting out of a B-school and why?
Joining a start-up may be a good idea for risk-takers interested in making a significant impact at their workplace. The team sizes are smaller, and the work environment usually lacks the bureaucracy, rigidity and hierarchy often found in established businesses. It offers more room for exchange and implementation of ideas. Many start-ups also offer stock options to make up for lower remuneration, which gives students an opportunity to participate in their ownership. However, it is a game of chance, because at any point of time, not more than 5 to 10 per cent of start-ups are really doing well. So if the start-up you join does well, there’s nothing better. But there is also a chance that it might tank. For someone who wants a more stable career and would like to climb up the long corporate ladder, gaining employment in a large corporation may be better.
What positions do start-ups usually offer to B-school students?
Some of the usual positions are business development, operations management, human resources, product management, channel management, strategic tie-ups, fundraising and sales.
What is the average salary can one expect from a start-up?
This depends as much on the start-up as it depends on the business school of the candidate. My experience has been that recently funded start-ups are often willing to pay more than established corporations because they are in a hurry to grow and meet their ambitious targets. At the same time, unfunded start-ups tend to pay much lower salaries, roughly about 25 to 40 per cent lower than established names. But they try to make up for the difference by issuing stock options, which could make a candidate wealthy, should the start-up succeed.
What is the career trajectory can one expect in a start-up?
One’s career trajectory in a start-up can be quite a roller coaster, depending on how the company performs. If things go well, someone who joins at an early stage of the start-up can hope to be at the very top of the management pyramid someday, with a comprehensive compensation of cash and stock. But it’s important to avoid imagining that things will necessarily end up this well. Several start-ups collapse and render their employees jobless. In such a case, employees have to look for another job, usually at another start-up.
Is it difficult to switch from a start-up to an established organisation?
Switching from a successful start-up to an established organisation may not be very difficult. But in my experience, quite often people working in successful start-ups do not look to switch over to an established organisation. Someone stuck in a struggling start-up may have a tougher time making such a switch and may end up with another start-up instead. Also, it’s important to consider that unlike technical roles such as coding, business roles differ significantly in start-ups and established businesses.
