The Startup Sizzle: The HR Magic Behind Emerging Ventures

Abstract

This article outlines how the distinctive and necessary attributes (DNA) of a startup significantly influence the HR function. The author identifies 13 traits required of human resources (HR) professionals to become successful in startups. He also highlights some of the conscious shifts required from the conventional HR mindset to work in an entrepreneurial setup. This article helps young and established professionals think through their potential fit while choosing to work in startups.

The Context

The startup environment can be best described by these words: Action—Adventure—Anime—Cerebral—Critically Acclaimed—Comedies—Comic and Superhero—Documentaries—Drama—Horror—Music—Money—Romantic—Sci-Fiction Fantasy—Thrillers—Seasonal—Wealth—International—Foreign.

If one or many resonate with who you are—You are in the game!

Once in, knowing a bit of startup distinctive and necessary attributes (DNA) can help. This primarily includes three things.

Founder’s DNA: Up to the scaleup phases of startups, the founder is the Hero of the Story. The founder’s values and their working preferences, such as inherent qualities, traits and behaviours, lay the foundation of the organisation’s culture. These traits contribute significantly to the potential success of their ventures. It can include:

• Visionary leadership: Ability to conceptualise a future state and inspire others to work towards it.

• Resilience and grit: Persistence through challenges and setbacks.

• Adaptability: Flexibility to change course as needed based on new information or market feedback.

• Innovative thinking: Creativity in solving problems and developing new products or services.

• Risk tolerance: Comfort with uncertainty and making decisions in ambiguous situations.

• Work ethic: Commitment to hard work and dedication to the venture.

• Emotional intelligence: Awareness and management of one’s own emotions and the ability to understand and influence the feelings of others.

• Strategic decision-making: The ability to make informed decisions that align with long-term objectives.

• Networking ability: Skill in building and maintaining relationships that can support and advance the business, including funding and customer acquisitions.

• Passion with a mission: Deep investment in the success of a venture and its impact.

Successful founders build their companies on some of the above principles, navigate the startup ecosystem and drive innovation.

Business DNA: The type of business and, thereby, the DNA of the business, the business cycle, the profile of a customer, the revenue cycle and so on, can differ from:

• Tech and non-tech: Solution to a problem, idea as innovation, a first-mover, solving a future/potential problem, exploiting a current opportunity.

• Business of tech as an enabler for scale and growth: Tech as a business solution, tech as the business, captive businesses with dependencies on parent organisations or government.

• Stage of startups: Customer acceptance of solution, focusing on repeat business, market share focus and growth year over year (YoY), cross-border scale/aspirations, cutting-edge innovation in a new path.

• Industry type: Legacy industry, new industry, futuristic market and so on.

Startup stages: Startups evolve through various stages, each presenting unique HR challenges that require tailored strategies to overcome. Knowing the stage can help you understand your role and fit:

• Ideation and launch: At this nascent stage, the primary human resources (HR) challenge lies in building a core team that shares the founder’s vision. The focus is on attracting talent that is versatile, innovative and ready to work in a fluid environment. For example, startups such as Dunzo focused on hiring multi-faceted individuals who could wear multiple hats, driving rapid experimentation and adaptation daily.

• Growth and scaling: As startups accelerate to the growth phase, HR challenges shift towards scaling the team while maintaining the startup culture. The emphasis is on structured hiring processes, professional development and implementing scalable HR systems. For example, Swiggy, during its rapid growth phase, invested in leadership development programmes and technology-driven HR solutions to manage its expanding workforce efficiently.

• Maturity and expansion: At this stage, the challenge for HR is to sustain innovation while managing a larger, more diverse team. HR needs to establish strategic talent management and leadership succession planning, thereby preserving the entrepreneurial spirit and the legacy of the startup. For example, Naukri and Zomato have navigated this stage by fostering a culture of continuous learning and agility, ensuring they remain competitive in the global market.

• Reinvention and renewal: Established startups facing disruption or looking to pivot introduce HR challenges related to change management and organisational restructuring. The key is to manage transitions smoothly, ensuring clear communication and support for all employees. For example, when Flipkart pivoted to focus more on its logistics arm Ekart, HR played a crucial role in re-skilling and realigning the workforce to new business objectives.

• Unicorn startups such as Byju’s (innovation in ed-tech), Ola (rapid expansion and regulatory challenges) and Swiggy (competitive food delivery sector) have redefined traditional HR roles, showcasing the importance of agility, innovation, flexibility, resilience, driving growth and strategic problem-solving, as well as understanding the unique cultural context of India. Their HR policies are tailored to support the company’s growth trajectory while ensuring alignment with the diverse needs of its workforce, culture of performance, operational excellence and customer-centricity.

Thus, the relevance and role of HR depend on the startup stage, tech or non-tech, industry, market penetration of business, business stability and level of the founder’s/business aspiration. With a deeper understanding of startup DNA and startup mindsets, one who can learn early will find it easy to navigate and add value to the business.

Traits of HR Professionals in Startups

The following traits are must-haves in HR professionals in startups:

Risk-taking ability: To try out new proposals, take the lead in non-HR areas, face customers and so on.

Innovation quotient (IQ): Desire to innovate new ways of doing, catering to the new age colleagues and bringing in relevance.

Tech savvy: Whether workplace tools, tech products or platforms, it is a prerequisite to scale quickly in line with the new India. HR should focus on digitalising and automating predictable people processes.

Disruption and innovation mindsets: HR should strategise to outpace the competition and explore a borderless market. They should possess better knowledge and agility in the current market and workforce.

Short-termism: Life spans of competitive advantages are shortening, as are our attention spans. Simultaneously, noise is magnifying. HR needs a ‘here and now’ mindset to listen to startup business problems, which can help.

Solution mindset: Ability to think and apply creative solutions that create a wow experience.

Speed of action: Time to market is shrinking. Time to become a unicorn is down from 10 to 4.5 years; so is the time taken for a unicorn to close down (Evernote).

Know your business: Wide, deep, and around the market, competition and market share.

Know your founder’s DNA: Alignment is essential.

Proficiency of HR tools and practices: Plugging into built-in learnings from other startup journeys and using third-party technology tools for multitasking.

Social capital: Your community around the same and similar or cross-border companies.

Startup coach or HR mentor for a fee (no free lunches).

Developing an attitude of give versus take.

Given that startup environments can be volatile, all employees should be prepared to expect the unexpected: Role changes, designation changes, salary changes, location changes and job losses.

The Startup Playbook

The complexities within a startup vary as it scales in headcount from 0 to 10, 10 to 100, 100 to 1,000 and 1,000 and above. However, from the external perspective of the market, customers and governments, irrespective of headcount, the organisation needs to meet the description of a typical startup. Thus, the unit needs to stay young, nimble, volatile, high-energy and innovative throughout the entire growth phase. This puts a huge expectation on HR to build a culture of agility. A daily routine requires searching for precious customer validation, revenue and the much-deserved recognition. The fortunate few have it early; the majority struggle with it for extended periods, and many give up along the lines. A typical startup life can last 8–10 years depending on the speed and support from the ecosystem—investors, governments and customers—with every component as a variable through the years! However, through thick and thin, HR needs to consistently promote the agile culture.

So, why join a startup? An exciting life, purpose, fame and wealth are the key motivators.

While choosing such roles, one also needs to consciously move away from the traditional HR mindset. The quintessential points include

Archiving the hierarchical mindsets: This means doing away with the ‘Sir’ culture, ‘Boss is always right’, ‘Grey hair means higher knowledge’, ‘Incremental is great’, ‘Small and Medium-sized Enterprise (SME) mindset’ and so on. Instead, one needs to embrace insecurities, be a lover of something, value performance over other parameters and value multi-skills over job description (JD) specificities. Performance requires modular short-term metrics that look beyond the conventional frameworks of key result areas (KRAs)/key performance indicators (KPIs).

Authority vs Influence | Stability vs Acceleration | Long Careers vs Building | Process and Systems vs Quick Frameworks | Boss/Sir vs First Names | Fat Salary/Yearly Hike/Bonus/Variable Pay vs Basic Salary + Growth-linked Rewards.

What works: Here and now, action over strategy, business needs over people needs.

Embrace decision-making: Taking responsibility for a situation, being accountable for something, being closer to paying customers, listening to the tone of investors/boards/leadership teams, working on outcomes, being inclusive of teams and having an eye on purpose and impacts.

Reward: Brand/company, opportunity to multitask, do what you love or what you are passionate about, part of impact, part of success, money, wealth creation opportunities through incentives and employee stock ownership plans (ESOPs), builds humility, can help in 360-degree learning mindsets, can be part of failures and learnings from them, bold-hearted, sharing/giving, camaraderie/collaboration mindsets, excitement over a problem and finally making things happen!

Conclusion

Startups are for risk-takers, strong-hearted people and hustlers. These are not everyone’s cup of tea! Startup HRs need to be simple (with less alter-ego), flexible in learning (reduce rigidity), able to smile at adversaries (lesser work-masks), genuine, helpful, assistance and sharing oriented, avid networkers, compassionate towards uncertain work environments and willing to step up as a coach/mentor during business rollercoasters and volatilities. They need to be good communicators, be inclusive in people’s decisions and share wealth during business highs, which can help bring passionate folks into the system. The joy in joining startups lies in transitioning oneself and achieving heights of learning while creating innovative and successful startups.