SUMMARY
Startup founders without much exposure to people management or business execution often struggle to cope with leadership challenges
According to LogiNext founder and CEO Dhruvil Sanghvi, leaders initially find it difficult to delegate tasks as it feels like losing control
With the Indian SaaS market projected to hit $1 Tn by 2030, startups must bolster their ranks with candidates who are well aligned with business vision and values
“Leaders are not born; they are made. And they are made just like anything else, through hard work.”
When legendary American football coach Vince Lombardi came up with this statement – often a hotly debated topic in B-schools – little did he foresee how many startup founders across the globe would consider it an indisputable truth.
Consider this. India is now home to the third-largest startup ecosystem, with more than 57K tech startups launched to date. Together, they raised $130 Bn+, while the country saw as many as 108 startups achieve unicorn status (billion-dollar valuation) and 102 soonicorns (read potential unicorns) waiting in the wings. Yet, many of these startup founders took a leap of faith when bitten by the entrepreneurial bug and hoped that leading a company could be done if one had the passion and the core skills.
The ground realities are different, as founders like Dhruvil Sanghvi will tell you.
Crafting a business vision, hiring the right people to implement it or defining a company’s culture requires many iterations before startup founders can perfect the art. Meanwhile, they will have to learn on the job just like Sanghvi did, said the founder and CEO of the logistics SaaS startup LogiNext.
“Personally, I have gone through big changes in my management style because on Day One, I had none,” said Sanghvi. “I struggled for two-three years to find that sweet spot and develop it.”
Watch Dhruvil Sanghvi, founder and CEO of LogiNext, in conversation with Verlinvest’s venture lead Arjun Vaidya, as the former unravels key founder lessons when it comes to hiring, along with defining and developing a startup’s values, culture and structure as the company scales.
Recounting the early days when he worked with a small team (10 employees or fewer), Sanghvi said, “It isn’t about managing them but working with them because they are practically your cofounders as you are doing everything from scratch.”
According to Sanghvi, if a founder tries to micromanage employees, they start treating him/her as a manager or a boss and may get demotivated.
“On the other hand, you want them to be their own bosses so that they bring more to the table,” he observed.
His strategy has worked well. Built from the ground up, LogiNext, a full-stack logistics SaaS startup founded in 2014 by Sanghvi and Manisha Raisinghani, has gone from strength to strength. The startup has forayed into major sectors, including retail and ecommerce, F&B, consumer goods and more, and claims to have onboarded 200+ reputed companies such as McDonald’s and Decathlon.
But there’s more to it than people management.
When the company was scaling up, and tasks abounded (which essentially meant delegation of work), Sanghvi learnt how difficult it was to let go of certain responsibilities he used to handle.
“It feels very scary on Day One because you feel like you are losing control,” he recalled. “But eventually, you become good at delegating work and learn to be comfortable letting someone else take certain decisions.”
But founders must be watchful while doing this. Being too trusting has its pitfalls , too.
“That’s when I learnt the art of trust but verify,” said Sanghvi.
Although founders want to (and should) trust their team members, they must not do so blindly. Instead, they should guide people and consistently keep a check by applying the right metrics.
For example, one can start with a weekly cadence, letting employees know when it will be held and in what format, before converting it into a monthly routine.
Sanghvi also emphasised the need to be direct without being disrespectful.
“When you are with your family or friends, you don’t wonder whether you are too direct or rude. It is because you know the right boundaries. Interactions among peers or team members and their managers must be like that at every level of the organisation,” he said.
A great way of doing this is through team engagement activities such as offsites or workcations (team outings mixed with learning and development sessions).
“These offsites and team-bonding activities have given our organisation the highest ROI in terms of time and money spent,” said the elated founder.
But there is a serious side to these activities, as LogiNext regularly holds carefully crafted training and awareness sessions for all.
“These are held around important aspects of the SaaS business such as gross margin and recurring revenue so that people understand what they are meant to optimise,” said Sanghvi. “When there is complete clarity, they will naturally build products and go-to-market strategies to attract better quality revenue.”
Asked about the impact of the funding crunch and mass layoffs, Sanghvi said fear and doubt prevailed across the Indian startup ecosystem, and campus hiring took a hit.
“There is a sudden drop in the number of students applying for startup jobs, but that’s not the case in the corporate space. Startup opportunities used to be the hottest across campus before 2022,” he rued.
For context, startup investments in India tanked 81% YoY to $693 Mn in February 2023. More importantly, 78 Indian startups collectively laid off nearly 23K employees since last year, according to Inc42 data.
With the Indian SaaS market projected to reach a $1 Tn opportunity by 2030, emerging startups should bolster their ranks with candidates who are well aligned with those organisations’ business goals, vision and values.
Quizzed about the potential candidates sought by his company, Sanghvi said it would try to bring in people with a capital-efficient mindset.
“We avoid hiring people who never had to worry about costs or always worked in a high-perks/crazy salary environment,” said Sanghvi.
Because frugal innovation is the core of the company culture, and people with different expectations may not be a cultural fit at LogiNext, he concluded.
