Startups must steer clear of growing with shortcuts: Marico's Harsh Mariwala

Startups must prioritise corporate governance and avoid shortcuts, as such practices can breed a culture that's difficult to change later on, said Harsh Mariwala, the visionary entrepreneur behind FMCG giant Marico Ltd.

“I have been telling entrepreneurs that governance should start from day one,” the chairman and founder said at the second edition of TechSparks Mumbai.

He added, “You cannot start taking shortcuts because if you start taking shortcuts and grow, it will be very difficult down the line to change the culture of the organisation. I have seen so many good businesses getting destroyed because they took shortcuts.”

Speaking about the funding slowdown in the startup ecosystem, Mariwala said, "In my opinion, it's a correction."

He said sometime ago, investors were willing to fund startups that were not doing well financially over long periods of time. "They realised that there has to be a shift in the expectations of funders, which is actually good. I like that because that correction was needed," he explained.

Further, he pointed out that funding is available for companies that focus on building a profitable business. "If a startup has a good proposition, then there will be investors to fund them," he added.

"There are enough and more funders who want viable businesses, but they want entrepreneurs whom they can trust, and not just drive the topline but also drive the bottom line," Mariwala told a packed audience.

The fast-moving consumer goods (FMCG) giant Marico is no stranger to acquiring D2C brands. Its portfolio includes the likes of men’s grooming brand Beardo, ayurvedic skincare brand Just Herbs, and snack and cereal brand True Elements. Most recently, it acquired the plant-based nutrition brand Plix in July 2023.

In July, YourStory's sister publication The CapTable reported that Marico is involved in a legal tussle with Beardo’s biggest distributor over unpaid dues.