Startup Growth In India!
A $68 billion market cap, a valuation of around $72 Billion and an ever-growing user base. 2016 was a great year for ‘Uber’. However, 2017 was a different story altogether. It was the year that changed a lot in the startup world and affected the startup growth in India.
From the #DeleteUber campaign to the Susan fowler sexual harassment scandal. The very same year, the poster child of Uber – Travis Kalanick officially departed the company.
Also, 30 miles apart in Menlo Park, California, another scandal was brewing up! Cambridge Analytica was allegedly mining data of around 87 million users. This unwinded a whole gamut of privacy and personal information concerns! This led to a massive overhauling of third-party app access and privacy agreements.
The story of two Silicon Valley giants, two relatively young companies, not even a decade old were stuck between ethics and consumer trust.
3 Reasons Why Unethical Growth will come back to Haunt you!
What are ethics? Principles, guides, beliefs or just plain simple words? What is the difference between the ethical or the unethical? Well, ethics are one of the most talked-about topics of our era.
Doing the right things in life and acting accordingly is the core meaning of Ethics!
1. Legal Complications
One of the major drawbacks of an unethical business choice is the major troubles it brings back in terms of legal problems. Practising ethics in business is also important as it also decides the longevity of future clients.
Unethical practices may lead to short-term gains but as a future strategy, it is harmful to the future growth of the company. As a brand, such practices become the staple of your brand and have a direct impact on how the public perceives your brand. Founders need to realise that strong ethical values & culture are the basis of a successful brand.
Example 1: Lawsuits & Unethical Conduct [The Barbie Doll Company]
MATTEL Crisis – Barbie doll was every child’s prized possession in the ’80s. However, Mattel went a little too far to optimise the operations costs! The company outsourced manufacturing to China. This move seemed disastrous for the company. The latest Chinese shipment of their dolls had 180 times the legal limit of lead content. Also, small magnets found in the doll found which reportedly perforates the intestines of some of the children.
2. Shareholder’s & Investor’s Trust
Companies that are VC funded are often dependent on strong market performance and a strong market reputation. Startup growth in India and the world is highly affected by lawsuits, illegal or poor business practices that damage the stakeholder’s trust.
Example: Corporate Influence + Negative PR [MCDONALD’s]
McDonald’s Legislation – The famous “McDonald Legislation” is a perfect example of toxic corporate influence in politics and public life. Under the Nixon government in the 1970s, the founder – “Ray Kroc” was successful in getting favourable legislation that allowed McDonald to pay 20% less than the federal minimum wage.
McLibel Case – The McLibel case was one of the worst PR disasters in the ’80s for any major organisation. Greenpeace – the global crusader of social justice distributed pamphlets titled “What’s Wrong with McDonald’s?” in London. McDonald sued Greenpeace that same summer and the following judgement was a nightmare.
McDonald was subsequently found guilty of exploiting children, misleading advertising, unhealthy food, low worker wages and ignoring animal cruelty perpetrated by its suppliers.
This made the investors & shareholder pretty unhappy and quite unfavourable towards the brand and ultimately tarnishing the brand’s image over the long run. Today, whenever someone talks about any undue corporate influence, McDonald is the default corporate brand. A truly worrying proposition for any company!
3. Credibility & Trust Equals Good Business
Building credibility and building trust among people is of utmost importance for a brand. Successful businesses need a strong moral code and strong goodwill presence in the market, especially in a community-centric place like India.
Being good is good business.
Example: The Trust Fiasco [Uber & Facebook]
Facebook & Uber – Both Facebook & Uber were aware of data mining and toxic work culture issues respectively but they choose to do nothing about it. There was a clear rundown effect with Facebook’s stock losing almost $60 billion dollars in value after the Cambridge Analytica scandal.
Similarly, Uber lost around 2,00,00 users and a chunk of market share to Lyft after the #DeleteUber campaign. Both these companies lost credibility and trust among its users which resulted in either direct monetary loss or loss of market share.
2 Factors that Affect growth & Why you should Trust The Process.
1. Trust as a Foundation
Trust is the foundation on which great teams are built. A vibrant culture allows a startup to attract talented people and retain them for a longer period than usual. A startup only thrives when the trust factor between people and the teams is high.
2. Employee Retention
A high turnover rate at a startup usually affects both its time and money. Core Values of a company are directly proportional to the traits and behaviour found in a company’s employees. Same goes for the work culture, it directly affects the way employees perceive their workspaces.
For Example The SkillShare Value System
The Skillshare value system is the basis of their hiring practice. It’s based on a simple test called the Aeroplane Ride which was earlier known as the Beer Test.
It is starkly different from the usual hiring practices and based on only one factor that is “Trust”.
If someone was able to grab a beer and sit next to a person on an aeroplane ride from New York to San Francisco, then it’s a good fit.
Tips from 5 Best Influencers of our Time!
1. Brian Chesky
2. Gary Vaynerchuk
3. Jeff Weiner
4. Sheryl Sandberg
5. Meg Whitman
The Silver Lining Of Business Growth: The more we trust something, the more we value it. The less we value, the less we trust.
In a world full of new ideas, new businesses and new startups, the only ones who survive are the ones that tell a story to the customer or those who empathise with the end customer. When a company can tell an authentic story to the customer, they induce trust in the service or the product. The next progressive thing to follow is the growth itself!
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