What the Downfall of Thinx’s CEO Says About the Dramas of Startup Life
The startup world has been hit by another scandal. This time, Miki Agrawal, founder and now-former CEO of Thinx, a startup that creates underwear for women to wear during menstruation, is being sued for sexual harassment. A former employee filed a sexual harassment claim against her last month, saying that during her time as CEO, Agrawal touched employees’ breasts without consent, made inappropriate comments, and often changed clothes in front of them.
In some ways, Agrawal’s story reminds me of Travis Kalanick of Uber, another CEO who’s reckoning with HR issues that have caused serious business problems and mushroomed into embarrassing PR crises—the latest, Kalanick’s ex speaking publicly about just how bad the culture is.
In both cases, the HR function was weak or absent, an issue that leaves fast-growing startups vulnerable. While leaders were single-mindedly pursuing business growth and building products, their company cultures were spiraling out of control.
At Uber, HR was powerless beyond its narrow focus on recruiting and hiring. When employees voiced concerns and reported alarming workplace behaviors, they were reportedly rebuffed and intimidated.
Thinx is a much younger, smaller company. Under Agrawal, it had no HR function whatsoever. Those who spoke up about workplace issues were reportedly threatened and punished, and, eventually, employees were silenced in fear of retribution.
In a Medium post, wherein she tries to explain and defend her actions, Agrawal acknowledges, “I didn’t take time to think through it. We grew so quickly… I needed butts in seats fast… to sit down and get an HR person… [was] left to the bottom of the pile of things to get done.” Tellingly, comments are disabled on Agrawal’s post.
The startup dilemma
Startups tread a fine line between offering a collegial, “fun” environment where young, hungry professionals want to work and building a healthy, respectful culture that can withstand the inevitable ups and downs of rapid growth.
Thinx and Uber aren’t the first and certainly won’t be the last startups to suffer under founders with little grasp of how to prioritize and scale an organization responsibly. In today’s business climate, company leaders feel tremendous pressure from investors and board members to hit their revenue numbers, leaving things like employee experience, company culture, and team dynamics as afterthoughts.
Yet serious HR issues can undermine the very growth that causes CEOs to ignore personnel matters in the first place. Startup founders can’t just plan for their companies’ growth phase; they need to think ahead to what success looks like operationally and how they’ll avoid being overwhelmed by it.
Yes, you need HR
Agrawal fancies herself a “taboo breaker,” so perhaps it’s not surprising she ignored something as old school as human resources. Instead, according to a former employee’s legal complaint, Agrawal appointed two “culture queens,” neither of whom had a background in HR (nor did they receive training).
While Agrawal’s move was inadvisable, others have paid proper attention to HR, and have reaped the benefits from doing so. The first of its kind, Human Capital (whose co-investor was an Udemy partner until last year), is a new HR-tech startup accelerator program that’s expected to “help corporate leaders reinvent the human capital elements of their businesses by connecting them with up to 12 HR startups and scale-ups.”
How do these companies get it right when it comes to HR? In my experience, young companies experiencing growth are talking less about strategy, and more about interpersonal conflicts. There are a lot of “unknown unknowns” when it comes to your people, all requiring careful judgment. If you don’t have an experienced HR leader to implement important processes early, you won’t be prepared when issues crop up later that have unforeseen consequences.
Don’t ignore culture
Company culture is the foundation for everything you do now and in the future: how you build your product, win customers, make business decisions, and treat people. HR doesn’t dictate culture, but it does help maintain its integrity.
Neither Kalanick nor Agrawal understood their role in influencing company culture or why it mattered. When leaders aren’t paying attention to negative elements spreading through their company ecosystems, or when the CEO is the problem, HR serves to keep those elements in check.
You can forge tight bonds among coworkers, even friendships, without descending into unprofessional, unproductive behavior. Companies such as Twilio (TWLO) are able to maintain a healthy culture because it’s engrained from the beginning. Having the right culture in place from the get-go can help alleviate some of the problems that may arise with hiring quickly. Bringing on someone new and leaving them to fend for themselves won’t cut it; making employee development and experience top priorities are a must. When employees are placed in an environment where they can grow, develop, and succeed, so will your business.
HR is more than just getting “butts in seats.” It opens your company up to a new opportunity for growth.
People management calls for thoughtfulness, maturity, and a strategic view toward the future of the business, not “culture queens.” Even if you’re moving fast, you need policies to ensure fair, consistent treatment of employees. It’s irresponsible to make this stuff up as you go along, given the myriad situations that can arise in a workplace and the livelihoods at stake.
Instead of trying to bully their way through challenging workplace issues, I’d advise leaders to develop humility and empathy for people who are, after all, working toward the same goals they are. And, yes, they should bring in a real HR pro, too.
Dennis Yang is CEO of Udemy.