Why top executives are leaving startups

BENGALURU/NEW DELHI: A number of senior managers at India's top consumer internet companies are heading for the exit door, with many citing a mixture of low job satisfaction and poor work-life balance at a time Indian startups boosted by soaring valuations are on an aggressive spree to hire fresh talent. For some of those making an exit, there is also a hunger to start up on their own. "There are multiple levels of decision-making as an organization grows and individual contributions to make impact get diluted," said Swaminathan Seetharaman, who was earlier a vice president for engineering at taxi app firm Ola and quit after close to a year at the company. The 41-year-old Seetharaman, who led the development of consumer mobile interfaces while at Ola, teamed up with former colleagues Ganesh Subramanian and Nitin Agarwal to launch an on-demand services marketplace Pianta. Termed unicorns — or companies valued upwards of a billion dollars — Flipkart, Snapdeal and Ola have all seen exits of senior managers in recent months. The latest exit being that of Ravi Vora, the head of strategic initiatives at Flipkart, who quit this week. Others to have quit the country's largest online retailer include engineering head Sameer Nigam, who left in July. Chief technology officer Amod Malviya transited to an advisory role in July. In February, Delhi-based Snapdeal saw its then chief technology officer Amitabh Misra leave to start up on his own. Restaurant listing guide Zomato has seen the exits of marketing heads Alok Jain, and subsequently Rameet Arora, who quit within 10 months. Jain has started an on-demand food venture Yumist. The Gurgaon-based company's chief product officer Namita Arora left within a year of joining the firm. Ola, Flipkart, Snapdeal and Zomato declined to comment for this report. Dissatisfaction with compensation is also leading to exits in several cases. Startups typically offer employee stock options aimed at locking in talent from a year to four years. Often, employees can cash in about a quarter of their holding after a year. "After that, shares can be redeemed on a pro rata basis every month or quarter, depending on the contract," said Seetharaman. However, this is only at an ideal startup. At several others, founders allow only a tenth of promised stock to be sold at the end of a year, with vesting periods rising incrementally to 40% at the end of four years. "There can be additional harsh lock-ins, which make the packages unfair," said the Delhi-based



founder of an executive search firm who works with companies such as Flipkart, Zomato and Snapdeal.
Senior employees are realizing that they too have a chance of making big returns from India's unprecedented startup boom where the top internet companies have between themselves soaked up some $6 bn of funding so far.Misra, who quit Snapdeal to set up his own venture, sold his startup to travel portal MakeMyTrip within six months. Sources privy to the details told ET his returns from the sale exceed his earnings from his former employer.Pressure also builds up when early employees are unable to keep pace with changes. Investors who declined to be named told ET that often they advise founders at high-growth startups to hire afresh when early employees are unable to keep pace with breakneck growth. "As startups grow, the work is directed more towards achieving scale, both entrepreneurs as well as early employees lack this skill," said one investor.However, for those who have been able to translate their learnings at high-profile startups into better career opportunities, there is a flip side. Punit Soni, the chief product officer at Flipkart, left a plum position at Google to return to India lured by the huge potential in the startup market here. "Even to learn to ride an elephant and become a mahout you have to first talk to other mahouts. Only then can you can tame the elephant," said Soni Experts tasked with finding fresh talent for these high-growth startups say several exits stem from seniors being relegated when hierarchies alter. "Shrinking interactions with the founders coupled with decreased influence on impactful decisions are two most frequently cited reasons for individuals to move out of startups," said Harish Kumar, founder of headhunting firm Wenger & Watson. Long working hours, volatile work environment and high levels of stress are also wearing out several senior executives at startups. "The culture of having beds for technology teams in offices can backfire and hurt emotional health," said a senior technology executive who quit a Delhi-based startup.Pressure also builds up when early employees are unable to keep pace with changes. Investors who declined to be named told ET that often they advise founders at high-growth startups to hire afresh when early employees are unable to keep pace with breakneck growth. "As startups grow, the work is directed more towards achieving scale, both entrepreneurs as well as early employees lack this skill," said one investor.