Founders should focus on building valuable businesses versus valuation: Rishad Premji

As startups think of scaling up and making it big at a national or international level, founders should focus on building valuable businesses rather than valuation, Wipro chairman Rishad Premji said at the 19^th Nasscom Product Conclave in Bengaluru.  

“I find this such an obsession today on unicorn status and how much is your valuation…the reality is that the journey to build sustainable businesses is long, it’s complex. It’s slow at times. And if your journey is to make money quickly, the kind of organisation you will build will be very different than an organisation that you want to last. I think it’s incredibly important to think about valuable businesses versus valuations every time,” Premji said.

Premji said that he is disappointed when he meets founders for whom the most important aspect is making money. “That turns me off a little bit because the choices are going to be very myopic and short sighted.”

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The other aspect, Premji believes should be a priority for founders, is building a strong value system for the organisation. “It’s incredibly important you think about the kind of organisation you want to build and the kind of DNA and environment you want to create. And that doesn’t happen by accident. It happens very intentionally,” Premji said.

The third key element for startup founders is having the openness to “surrounding yourself with incredibly smart people who are infinitely better than you, knowing that they are better than you and having the humility to keep them and to encourage them,” Premji said.

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On the impact of remote working on organisational culture, Premji said that people stay in an organisation for two reasons: career path and compensation. “They leave because they can have a better career path or lifestyle-changing compensation, but they also leave and stay for a while because there is connectedness or a lack of connectedness. And I think it’s incredibly important to build that connectedness.”  

Premji said he is a big believer that people should come back to offices. “Organisations grow when people connect over coffee or lunch, assimilate and just get together and chat…because innovation and ideation does not happen in a linear manner. It doesn’t happen when you are on a Zoom call,” he added.