Cheques and Balances for Startups

The concept of Western democracy rests in the idea of checks and balances. Judiciary (Law Courts)acts as check to Executive (Governments) and in turn balance is provided by Legislature ( Senate /Parliament). To counter the friction between plebians and patricians in a society, Legislature is further divided into Lower House (House of Commons, Congress, Lok Sabha) and Upper House ( House of Lords, Senate, Rajya Sabha). This divide and then rule policy serves as a risk mitigation force in governance for countries. The risks of course are unstable, violent and unpredictable changes in operation (like revolutions, coups, revolts, dictatorships)

Organizations are famously known to be non-democratic. Startups even less so. Yet every team member in a technology startup is valuable and that value increases after they have got on the job training in cutting edge technologies and exposed to solving interesting problems. You balance their tendency to churn by giving good food, great culture, flexible timing. An important part is stock options granted timely and in a fair manner, and salaries paid. Cheques check attrition in startups. A healthy bank balance in the organization is the only thing that balances the uncertainty and insecurity of working in unstructured dynamic environments like technology startups.

Learning must be balanced by earning for young members of each startup. Older experienced members of startup need checks and balances of  a different sort as they have multiple opportunities in employability and opportunity costs in getting a lower startup salary. Older members of a startup , okay, lets call them seasoned members of a startup have more obligations like student debt, house debt, child education etc.

I wonder if the level of entrepreneurship in a society would increase if we had lesser student debt, by giving cheaper education, by using mobile, internet and video more. Trainings in various kinds of coding languages should also be increased in accessibility and duration. I see many technology stacks being coded in bad choices of platforms solely because the techies were not prompted to enroll in the right paid program for online self-learning. So for example if there is shortage of Ruby on Rails or Python developers in data science in India, rather than invest a small 50$ per employee per month in online based training, companies continue to work with legacies of LAMP, and other legacy software.

You just can’t google your way to being a data scientist or a big data engineer. Trainings are just as important as good food for members in your startup.

What balances the benevolent dictatorship of the passion of the founder. A seasoned mentor in the team. What checks people from hire and fire and reneging on stock option promises. Defined processes established by a compliance person.

It is upto you the founder, or the investor on what kinds of checks and balances you want to create in your startup. Do you want the startup to look like Canada or do you want it to be like Syria? Choose the cheques, checks, and balances accordingly.

 

 

 

 

Author: Ajay Ohri

http://about.me/ajayohri

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s