The bullwhip effect of the Indian startup system
recently I saw this post on linkedin where there were two founder. one was the senior VP of swiggy and there was another person who started a startup in nov 2023 and recently refunded their funds back to their investors in mid 2024. Then I started wondering more about this and dig more. I got more examples of people who were working at some really high growth companies and many of them returned back the capital
So working all this years at a senior role in product for a high growth company like startup didn't really help him to scale the business?
one would definitely blame it at luck But let's find a different perspective at this.
After digging more i could clearly see a pattern The bullwhip effect: its the effect where a small change in demand at the retail level can progressively larger fluctuations at the wholesale, distributor and manufacturing level.
so for eg lets you have a party for 10 people but then you estimate 15 to come. so you place more order for chips. Now the retailer thinks lets keep a stock of 20. Now the wholesaler will look at chips and tell that lets keep an order of 30. and so on. Thus due to miscalculation . people presume that the demand has increased causing fluctuations.