Watch out Start-ups!

He was a pedigree professional; had an engineering degree from a premier college, two years of work experience in a consulting firm and an MBA from a prestigious institute. He was the poster boy for budding entrepreneurs on our MBA campus!

By Ratika Gore  
Monday, July 11, 2016

As I listened to my ex-student while sipping coffee in my campus cabin, talking about his decision to quit his new start-up venture, I wondered 'why was this happening?'

He was a pedigree professional; had an engineering degree from a premier college, two years of work experience in a consulting firm and an MBA from a prestigious institute. He was the poster boy for budding entrepreneurs on our MBA campus!

He started his venture in the first year on campus and had the conviction to opt out of the placement process. Since launch, he showed decent revenues within four months of operations, scaled from one to two centres within eight months of starting.

He had the fire, the junoon, stamina for crazy hours, conviction, knowledge, initial success, institute support, and support of his parents and girlfriend. He was not only poised for growth, there were also not too many obstacles in his path. So, what was going on here?

After two coffees and a one-and-a-half-hour-long conversation on various business challenges and workable solutions, he blurted out, "I don't want to work with my partner anymore; I have had enough." The option of a conversation with his business partner did not interest him at all. Evidently, he had been trying to communicate for five months now. An offer to mediate a conversation did not interest him either.

The decision had been made. "Woh mera bada bhai hai! (He is my elder brother!) How do I argue with him? Agar mera dost hota (had he been my friend), I would have challenged him back with a 'what the ....  and argued over beer," he finished off, before looking down.

His business partner is his elder cousin brother. It struck me that his context is now that of a family managed business (FMB).

The interesting part about communication in most FMBS is that 'expectations, obligations and duties' can be big barriers to effective communication. I also work with FMB students on campus and it is interesting to note how communication changes.

"I know him since I was a kid" or "I understand what he needs" are serious baggage to work with. The assumption that "I know what the other person needs" without looking at it objectively can create serious noise on how the sender creates the communication message. "But he should have known what I want" or "I can't argue with his decision, he is older to me" can add noise in how the receiver perceives the message. Serious breakdown in communication happen when there is no real opportunity built for feedback to complete the communication process. One of the keys to success of many large, successful family managed business houses is that they have managed to curate a culture where real two-way communication is encouraged. In fact, the younger generation is expected to come up with better perspectives and ideas.

What intrigued me here was that even when professionals who are bred in a culture of flat structures and open discussions are faced with a family work environment, they can find themselves ill-equipped to take on communication breakdowns. 

Going back to my 'watch-out', bootstrapping or partnering with family members is a very attractive and real option. But, perhaps, one needs to keep one's eyes open to such challenges.

New communication rules and processes can be set up. I would go even further in saying that since a new venture comes with a new canvas, maybe it could also be time to create entirely new traditions!

The writer is a Professor at S.P. Jain Institute of Management and Research, Mumbai

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