The Power of Saying ‘No’ in a Startup – 5 Lessons I Learned from a Failed Startup

noThis column is by Jaspinder Singh, VP – Operations, Parcelled

In 2015, Indian startup ecosystem saw influx of many Silicon Valley professionals. It comprised of rockstars like Punit Soni and others ‘yet to be rockstars’. For me, the journey started in similar fashion. I relocated from SF to Bangalore expecting a hell of a ride. Oh boy… Bangalore hasn’t disappointed me. I chose to be vice president(Operations) of my platoon/company over a well-funded Sequoia rival. We were $5 million Series A funded on-demand logistics company and founders were absolute Para Commandos of start up world.

We were Rainmans of Numbers World and killer hackers of the tech world, yet we went out of business a year and half later. It was mix of mistakes that snowballed into our failure. What went wrong, here’s my take on it

  • Embracing my failures in Operations

After the initial traction, we started to scale up pretty fast. We in Ops saw it as an opportunity to capitalize on
economies of scale but there were issues with such a rapid growth. The apparent pressure was to keep up with resource planning and putting in ops infrastructure in place. We aced it.

The strategic mistake was that we were not able to keep up pace on the ops processes and product side. My assumption that our minimum viable product and existing processes will be able to sustain in scaling up phase, came back to haunt us. It’s only after three months I realized the elephant in the room and started working on our internal applications on war footing level. More than money it costed us client confidence in otherwise some profitable verticals.

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We should have said NO to other verticals and should have figured out processes and product that could sustain on scale for the verticals where we were literally killing it.

  • Over hiring and lack of accountability

We had over hired from the initial days of inception. As a result there were few ‘Needle Movers’ and others were not able to keep up pace with an A-team.Over hiring is like a troubled marriage. We should have opted for prompt (even if ugly) divorce. We did not.

Over hiring breeds lack of accountability. It is not apparent when we had flat structure and small team. But as we started growing big, we could not employ everyone on a challenging project.

We should have said NO to some of the already hired dudes.

  • Misunderstanding what customer experience is

Now everyone in startup world says to provide your customers with a great experience.

We assumed that cleaning the mess created by our clients is same as providing a great customer experience. It was not. We were running at 200% capacity for half a year to manage random order fulfillment requests from our clients. Generally this trend existed for a week or so for a particular client before we started running at much underutilized capacity again. We feared to say No to the client (In this case politely refusing the client for ad hoc business). Customer experience is delivering what you have promised to the client, taking it to a level that client can bully you citing customer experience ended up hurting us big time.

  • Measuring too many things is equivalent to measuring nothing

Now I already mentioned that we were super analytical dudes. We obsessed about numbers and could eat spreadsheets in breakfast.

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The issue with measuring too many things is that we were trying to control everything. As senior management team, we needed to identify the importance of making tradeoffs. Measuring less yet critical parameters would have helped us simplify our reporting and communication structure.

We apparently didn’t do that and ended up confusing our troops what to focus on.

We should have said NO to the analytical chaos at strategic level itself.

  • Getting a preemptive deal from Investors

Now every other mistake can be neutralized but apparently we could not undo this one. This was the biggest strategic mistake that we did.

Preemptive deals are sign of fear that a newbie team has. And newbies we were. It becomes apparent that the team has got a raw deal when the startup like ours closes overnight. It’s amazing that our ecosystem never holds investors even 1% morally responsible.

We should have said NO to a friendly looking deal before getting out there and doing our due diligence.

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Image Credit: Chrisyin

  • Varun Sharma

    Saying NO is so important. So is keeping a watchful eye on cost and hiring. Thanks for sharing your insights. Startup boys like me will benefit a lot from it.

    • jaspinder singh

      Thanks for your feedback Varun