Editor’s Note: Start-Up Founders as Celebrities in the New Economy

Not long ago being a celebrity in India meant either being in the movies or cricket. These were the people who got mobbed. These were the fields where the rags-to-riches stories mostly unfolded.

That’s changing now. In the past few years, a new class of celebrity has emerged: start-up founders. They are pulling crowds at business events, grabbing eyeballs on primetime television and going viral on social media every day. It shouldn't be a surprise then that Prime Minister Narendra Modi's first podcast appearance ever happened on the YouTube channel of Nikhil Kamath, the co-founder of fintech unicorn Zerodha.

As the Start-up India programme enters its 10th year, Piyush Goyal, Union commerce minister, sat down with us to talk about the hopes that are riding on the country’s start-ups to fuel job growth, increase our share of global trade and improve our standards of living. Meanwhile, MeitY secretary, S Krishnan, talked to us at length on how the government is encouraging tech start-ups to go up the value chain.

The crown jewel of this issue is the Outlook Business Outperformers rankings that seek to recognise the start-ups which have moved beyond the early stage, where the idea and a founder's CV hold the maximum importance to the growth stage.

This is the stage that ultimately determines whether a start-up can sustain its revenue growth in the long term, display profitability of its business model and secure funding for blitzscaling. Our rankings of growth-stage start-ups reflect how they are doing in each of these parameters.

However, we have been cognisant of the fundamental differences between sectors. For instance, profitability is a lot more important for a D2C start-up than it is in the fintech sector. But funding is the biggest challenge in fintech which has a large number of incumbent mega unicorns.

While we have ranked the start-ups on outcomes, what really matters is the inputs that build the foundations of a sustainable business—managing talent, orchestrating execution, building culture and focusing on corporate governance.

As the Byju's blowout has shown us over the past couple of years, great performance in the growth stage may betray a serious lack of these fundamental building blocks of a sustainable business. The unravelling of what was once the most valued start-up in the country is a cautionary tale. All the media attention and rubbing shoulders with the powers that be may not be of much help once the skeletons start tumbling out of the closet.

Info Edge founder and veteran start-up investor Sanjeev Bikhchandani told us, "I think there is [now] a greater emphasis on commercial prudence on the part of investors, and therefore on the part of start-ups. Greater emphasis on integrity of data. Greater emphasis on good governance. These three have become a little bit more important."

However, Zerodha founder Nithin Kamath believes that no amount of investor oversight can prevent corporate governance lapses if those at the helm of a start-up are not honest. Kamath also talked to us extensively about building a start-up's culture. "I spend most of my time trying to ensure that the culture doesn't get compromised if tomorrow I'm not there...just making sure that there are 10–15 people in the business who understand the philosophy with which we work," he said.

Last year, Indian new age businesses crossed a combined market cap of $100bn. As dozens of start-ups queue up for Dalal Street, it is more important than ever that founders and investors focus a lot on culture and governance. Otherwise, the newfound celebrity status of start-up founders may turn into 15 minutes of fame.