From small acorns to tomorrow’s unicorns

Chitra Narayanan | Updated on January 12, 2018

Chaayos aims to nurture a familial, and entrepreneurial, work culture

A start-up’s ability to scale from an outfit to an organisation hinges on how well it manages its talent

In 2012, when two college friends, Sachin Gupta and Vivek Prakash, started HackerEarth, a hub for programmers, it was like any other dorm-room start-up: there was hardly any structure to this Bengaluru-based outfit. The duo did everything from product to sales to marketing, and everybody worked long hours.

In 2014, by when HackerEarth had scaled up from eight people to 35, it introduced a leave policy for the first time. “Earlier, we operated on mutual understanding, but with 30-plus people on the rolls, there was confusion and we had to bring it in,” says Gupta.

That was the first conscious step towards formalising HR processes at HackerEarth, though subconsciously, Gupta says they had constantly been creating people management systems that were not complex.

Now, with 115 people and two more offices (Pune and Delhi-NCR), a senior head of marketing, and one million programmers on its platform, it has formal HR policies to which it is adding one more layer by piloting a performance-tracking measure.

“When you’re small, you know what everyone is doing. Now, we need a system,” says Gupta. But it’s a customised system, keeping in mind the company’s unique needs. “A quarter before we introduced performance management, we introduced goals,” says Gupta. The objective is that every person in the company knows what his or her deliverables are, and these are arrived at by their manager based on their strengths and weaknesses.

The growth curve

What’s going on inside HackerEarth is what almost every start-up that scales up goes through: finding out that the informal ways of working during their garage days won’t do. To grow a start-up from an outfit to an organisation, HR processes need to be brought in, even if the idea of attendance and performance metrics seems to be a killjoy.

In fact, many a start-up has failed because it cannot manage its talent effectively. Recent troubles at Flipkart, for instance, are attributed to its poor people management, while start-ups like TinyOwl got into trouble because of over-hiring.

At the same time, as Raghav Verma, co-founder of tea retail chain Chaayos points out, start-ups need to ensure that these processes don’t slow them down. “We have worked hard to retain the agility and hustle of a start-up. People need to remain entrepreneurial. The way we like to put it: it’s okay to make mistakes. Repeating them is not,” says Verma, who has many learnings from Chaayos’s big scale-up last year when it grew its headcount to over 500 people.

Set up in 2012 by IITian Nitin Saluja, who roped in fellow engineer Verma on the tea journey, Chaayos has brewed its own set of 19 principles that guide working at the company. “These guidelines capture what all are required from Chaayos employees to achieve magic,” says Verma.

The five ingredients

Verma lists five things that start-ups must do in their people function while scaling up. At the top is communication. “Overcommunication, alignment of people at all levels to the core vision and 100 per cent visibility of all initiatives are important,” he says. The second is to build a playbook, making things process-driven and yet fast to execute. The third is to give employees freedom to experiment, the fourth is to build an entrepreneurial culture, and the fifth is to ensure it stays a fun workplace, one that feels like home. At Chaayos, two office dogs, Fido and Nawab, provide a familial atmosphere.

Gupta of HackerEarth agrees about the communication imperative. He says, “In a small set-up, communication is seamless. But as we grew, it was becoming a problem.” Now, HackerEarth has an All Hands meeting, a sort of a townhall, which everybody is mandated to attend. “It’s a forum where the direction and challenges are discussed.”

Compensation and promotions is another pertinent issue for start-ups. As Gupta points out, in the early days, you can compensate disproportionately and take cuts if necessary. “Now we are going towards parity in pay, though rewards are always linked to performance,” he says.

As they scale up, talent acquisition can make or break start-ups. Admits Verma, “We made a lot of mistakes while hiring initially. We were trying to understand what works for Chaayos.” At HackerEarth, Gupta says, there are now four people dedicated to talent acquisition. And an attempt has been made to introduce age diversity. “From 18 to mid-40s, we have a diverse age group working with us, but that brings its own set of people challenges,” exclaims Gupta

As Gupta and Verma have discovered, with scaling up, the set of challenges in managing people only keep growing: how they face up to it makes the difference between success and failure.

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Published on January 04, 2017
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