It's a familiar story in Indian startups. Two college friends decide to start a company together. The business takes off. Investors come in. Revenue grows. They need more people. So they do the natural thing — hire their batchmates, their hostel friends, their former colleagues. People they know. People they trust.
Three years later, the company is struggling. The product has quality issues. Leadership is fragmented. The founders are exhausted. Nobody wants to admit it, but the real problem is people. The wrong people, hired too fast, for the wrong reasons.
This is not a criticism of friendship. Friends can make excellent co-founders. But hiring based on loyalty rather than fit is one of the most quietly damaging decisions a young company can make. And Snapdeal's journey is a painful illustration of how expensive this mistake can be.
The first ten hires decide everything
There's a saying in startup circles. The first ten hires shape what the company becomes for the next ten years. This sounds dramatic. It's actually an understatement.
When you're a small company, each person you hire has outsized impact. They influence culture. They set hiring standards for the next wave. They define what "good work" looks like. They decide which problems get solved. A company of ten becomes a reflection of those ten people. The founders set the vision, but the early hires decide whether that vision actually gets executed or quietly dies in internal meetings.
This is why the early hiring decisions matter so much. And it's also why they're so often gotten wrong.
The loyalty trap
When a young founder is hiring, the temptation to bring in friends is enormous. Friends are familiar. You already trust them. There's no awkward interview stage. You know their work ethic. They'll believe in your vision because they believe in you.
All of this is true. And all of it can become a trap.
The problem is that loyalty and capability are different things. A friend who is loyal but not the right person for the role will quietly hold back the company. You won't fire them — they're your friend. You won't criticize them directly — it feels personal. You won't bring in someone more qualified — that would insult them. So the role stays mediocre, and the company's progress gets capped by whatever that person can deliver.
Multiply this across five or six early hires, and you have a leadership team where nobody is in quite the right role, nobody is challenging each other meaningfully, and nobody can be replaced without a personal rupture.
Snapdeal's leadership challenges
Snapdeal was once India's largest e-commerce marketplace. Raised huge money. Had strong investors. Was seen as the alternative to Flipkart. Then it slowly fell off the map.
There are multiple reasons for Snapdeal's struggles — competitive pressure from Amazon and Flipkart, pivoting business models, marketplace dynamics. But insiders have often noted one recurring theme in the story. Leadership alignment was a challenge. The senior team didn't always function cohesively during critical growth phases. Decisions got delayed. Strategies shifted abruptly. The company pivoted its positioning multiple times.
Some of this traces to how the early leadership was built. Friends brought in friends. Loyalties ran in clusters. It became harder to bring in outsiders with different perspectives because existing teams felt threatened. And when the company needed to move fast and make hard calls, the friendship-based culture slowed the clarity that's necessary in crisis moments.
This isn't about any individual's fault. It's a pattern that plays out in many friendship-based startups. Snapdeal is just one visible example.
What capability-based hiring looks like
Contrast this with companies that hire based on specific capability fit from day one. Each role has a clear description. Each candidate is evaluated rigorously, even if they come recommended. Each hire has to earn their place, not just know the founder socially.
This doesn't mean friends can't be hired. It means friendship alone is not enough. A friend who is also the right person for the role? Great. Hire them. A friend who is merely loyal but not particularly suited? Say no, even if it's awkward. The awkwardness of a single "no" is far smaller than the awkwardness of firing them two years later when the damage is done.
Freshworks, which we've mentioned before, is often cited as an example of disciplined early hiring. Founder Girish Mathrubootham reportedly agonized over each leadership hire, hunting for the right capability rather than the convenient fit. The result was a senior team that could operate independently, challenge each other, and collectively scale the company from Chennai to a successful NASDAQ listing.
Culture is set by the first ten, not the CEO
Every founder wants to "set the culture" themselves. The truth is, your culture is set by whoever you hire in the first year. Not by your deck. Not by your town halls. Not by the pretty values you print on the office wall.
If you hire people who argue respectfully about ideas, your company will debate ideas respectfully. If you hire people who nod through every meeting, your company will become silent and deferential. If you hire people who obsess over the customer, customer obsession will spread. If you hire people who care more about office politics, politics will dominate.
This is why the best-run startups spend disproportionate time on hiring in the first 18 months. It's not just filling seats. It's seeding the DNA. Once ten people are hired with a certain pattern, every future hire gets measured against those ten, and the pattern replicates.
The hard conversations founders avoid
Founders know, intuitively, when a friend-hire isn't working out. They can feel it in meetings. They hear the complaints quietly from other employees. They dread one-on-ones with that person. But they rarely act on it.
Why? Because letting go of a friend is genuinely hard. Personal loyalty runs deep. The friendship predates the company. You imagine a future Diwali where you and this friend-now-ex-employee sit awkwardly at a common gathering. You postpone the conversation. You justify the status quo. You tell yourself they'll step up.
This avoidance is a slow poison. Every month that someone stays in a role they can't perform, the company loses ground. Every hour the founder spends protecting a friend's feelings is an hour not spent on the business. And eventually, when the founder does muster the courage to act, the damage has often grown far beyond what a clean early decision would have caused.
Three rules for hiring well
There are three principles worth remembering.
First, hire slowly. Take time to meet candidates multiple times. Involve other early team members in interviews. Say no when you're unsure. An empty seat is better than a wrong seat. This is the single hardest rule to follow when you're in growth mode, but it's the most important.
Second, prioritize capability and values over network. Someone you don't know, who is brilliant and aligned with how you want to work, is usually better than a familiar face who is merely available. Hire from outside your comfort zone.
Third, if you do hire friends, treat the professional relationship as professional. Have the same performance expectations. Have the same uncomfortable conversations. If they can't handle being managed professionally by you, they shouldn't be in the company — no matter how dear the friendship.
The Freshworks contrast
Freshworks scaled from a startup to a multinational public company without the leadership turmoil that plagued many Indian tech peers. A big reason is that they professionalized early. They hired senior leaders from outside their immediate network. They allowed internal disagreement as a feature, not a bug. They didn't protect anyone from accountability just because they had been early.
The result was a team that could keep leveling up. Each stage of growth required different leadership skills, and Freshworks had the flexibility to bring in new capabilities without fracturing the culture. This is the real payoff of disciplined early hiring — you build a company that can keep evolving without blowing up.
The best hires challenge you. The comfortable hires accommodate you. Only one of those builds a great company.
What this means for you
If you're ever in a position to hire — whether for a startup, a team, or even a project — remember that every hire is a long-term decision being made under short-term pressure. The pressure is immediate and intense. The consequences are slow and compound.
Take your time. Check references carefully. Have multiple people interview. Don't settle, even if you need to fill the role urgently. And if you must hire someone you already know well, make absolutely sure they'd have gotten the job even if you didn't know them at all. If the answer is no, the decision is probably wrong.
Friendship is beautiful. It belongs mostly outside work. Bringing it inside, carelessly, is how good startups quietly sink under the weight of people who should have been friends, not colleagues.