By Abhijit Bhaduri
In the cruel world of Silicon Valley, there are no permanent heroes or villains. There was a time when everyone scoffed at Facebook’s plans for world dominance. Today the Menlo Park-based social media network represents 11 per cent of the market cap of all publicly traded US software companies. In 2007, Facebook was making a loss of $153 million. Ten years later, it has a net income of $10 billion. In the past Zuckerberg’s motto of “move fast and break things” was seen to be the reason why he was making losses. Today the same line is seen to be inspirational.
Meanwhile, cab aggregator Uber has ridden the full circle from being ridiculed to worshipped to demonised. As someone quipped on Twitter, “Now that Uber doesn’t have a CEO, COO, CTO, or CFO, I guess this is the closest it has ever been to a self-driving car company.” On Tuesday, even the Uber CEO resigned. Today people may laugh at Uber’s meltdown, but there is no denying that taking a company from zero to $70 billion market cap may offer insights into the leadership model. We Google stuff but we don’t Bing. We “Uber” it, rarely Ola it. Why?
Reimagine the experience
Every pain point is an opportunity to build a business model. Uber discovered that taxi companies will limit the supply of taxis as the fundamental way to keep prices high. Uber did not introduce just another low-priced taxi service, it reimagined the consumer experience. The business model was a natural corollary. Once the prototype was ready, it was ruthlessly replicated.
Uber enters a country, ruffles a few feathers and then takes over. Some cities put up a fight, but the consumers encourage the lawmakers to make way for convenience. Uber now employs 10,000 full-time (non-driver) workers and operates in over 500 cities in 70 countries. Its culture laughs at people who expect work-life balance and don’t work long hours (weekends included).
Startups often have a short-term objective that drives them. It could be all about getting the next round of funding, going public or just getting to a million paying customers. But goals need to be audacious. Companies such as Uber and Facebook think of everything in multiples. Timelines are shrunk. When users complained that the customer service part of the app was slow, Uber set a goal to make it 50 times faster in a week.
During this phase, employees experience chaos and burnout. This is the business-building stage. Human Resources teams just have to ensure that they keep hiring people faster than they leave. Those who stay need to be paid. They need business builders just to stay afloat. But this is also the stage when the organisation needs to rethink its structure and boundaries of culture.
Uber’s misery is proof that people issues and culture are as important as business challenges. Startup founders must leverage HR to build culture – not just manage hiring and compensation. In a world where talent has moved centre-stage, letting culture grow like weeds in a garden is a dangerous strategy as the Uber saga proves.
Abhijit Bhaduri works as the Chief Learning Officer for the Wipro group. He lives in Bangalore, India. Prior to this he led HR teams at Microsoft, PepsiCo, Colgate and Tata Steel and worked in India, SE Asia and US.
He is on the Advisory Board of the prestigious program for Chief Learning Officers that is run by the Univ of Pennsylvania.