SACHIN BANSAL DOESN'T TWEET OFTEN. Since opening an account eight years ago, the Flipkart co-founder has tweeted all of 615 times. It usually takes some important company milestone to make him shed his reticence. Or, as was the case on June 1 last year, a pesky naysayer who got under his skin.

That day, Bansal logged in to tear into serial entrepreneur Alok Kejriwal, who at 47 is a senior citizen among yuppie entrepreneurs. On his blog, Kejriwal had laid out “The real reasons why fashion e-com companies are going ‘only app’”. He did not name Flipkart subsidiary Myntra, but it was easy to see through the reference to “a well-known, heavily funded, stratospherically valued brand” that had recently decided to shut its web and mobile sites and go app only.

Kejriwal’s argument: Most fashion e-commerce companies in India lose 50% on each sale. With investors cranking up the heat to stop the losses, what’s a quick fix? “You starve yourself out.” Closing down your sites means fewer customers and lower losses, “and you have not lost face because you proclaim that you are so avant-garde that you are available only via your app!”

Bansal’s response—“One of the most retarded pieces of writing I’ve read in a long time”—triggered an avalanche of tweets. Some chided him for being boorish. Many ridiculed Kejriwal for dreaming up an absurd theory. Why on earth would Myntra, acquired by Flipkart amid much fanfare for Rs 2,000 crore scarcely a year ago, starve its top line to please growth-hungry investors? How does that make sense?

Here’s the thing: Kejriwal’s theory may have been absurd, but it was also, irrefutably, a product of its times. Of all the years in recent memory, 2015 was the watershed when conversations around the idea of growth turned almost farcical. Hulking claims clashed with conspiracy theories, and the narrative of India’s great entrepreneurial boom threatened to spiral out of control.

For those who don’t follow the news in this space, here’s what happened: Indian entrepreneurs soaked in $8 billion (Rs 54,056 crore) of global capital, established the country as the world’s fastest-growing startup ecosystem, and seized the imagination of the world’s media. It was the year when startups decisively displaced old-economy corporations from the headlines. But before the year ended, sentiment had turned dramatically. Cheerleaders for entrepreneurship had felt the need for little other than the funding glut to put young entrepreneurs on a pedestal. In hindsight, it was inevitable that the slowdown in funding later in the year—startups raised $1.51 billion between October and December 2015, down from $2.12 billion in the same quarter a year ago, according to venture capital database CB Insights and consulting firm KPMG—would trigger reams of apocalyptic commentary on the impending bust.“The daily media gamefied our industry by relentlessly harping on funding news,” says Sid Talwar, partner at VC firm Lightbox Ventures that has backed companies such as InMobi and Cleartrip.

Media frenzy around the crimp in startup funding—or the belt-tightening and job cuts that came in its aftermath—was only a symptom. The real problem was that the numbers coming out of India’s much-vaunted 1.3 billion-strong market were not adding up. Notwithstanding India’s massive mobile and Internet user base, 1 billion and 300 million, respectively, a Barclays Equity Research report published in 2015 said a mere 39 million Indians actually spent money online. Projections for 2016 swung wildly. Google claimed the count would breach 100 million, while industry body Assocham and consulting firm Grant Thornton pegged it at 40 million. Notwithstanding the confusion, there was broad agreement that most online businesses were in a cul-de-sac, where growth was synonymous with larger and larger discounts and deeper and deeper losses.

Investors have gamely defended the heavy costs of buying customers. Their usual counter is to point at the odds that pioneers like Flipkart had to overcome, given India’s ramshackle infrastructure and the novelty of online commerce. “Entrepreneurs have taken a conscious decision to plough money into customer acquisition. They are merely deferring free cash flow,” says Sudhir Sethi, founder, chairman, and managing director of VC firm IDG Ventures India, whose portfolio includes Myntra, Zivame, and FirstCry.

Sethi also debunks the view that private companies have it much easier than public companies where growth is under constant scrutiny. “Today’s entrepreneurs need to be extremely uncomfortable with small scale,” he says. Year-on-year or quarter-on-quarter growth isn’t good enough for them. “Growth has to be demonstrated week on week, even day on day.”

That right there is the startup era’s biggest legacy: Customer acquisition at all costs, not the quest for profit, is the new face of growth. It’s an established paradigm in Silicon Valley but a profound shift in a country where a legion of family-run businesses, fighting capital scarcity and prohibitive interest rates, had established only one way of growing a business: growing it profitably. “Profitability is just another nuance of growth,” says a senior executive at a trailblazing hospitality startup, summing up the zeitgeist.

Sethi says most entrepreneurs aren’t frazzled by the constant criticism of the nature of growth. “The stakeholders that matter [read investors and the entrepreneurs themselves] know what really matters.” The big difference between startups and businesses born in an earlier era, he claims, is “the hammer of capital”, adding that “So long as we are here to provide that, growth will come.”

There’s another vital difference: Growth in the old world was a function of owning the means of production and distribution. But owning tangible assets is irrelevant in the age of Uber. Growth, hammered home by capital and liberated from the familiar moorings of profit and loss, has come to have a wispish quality. That’s why it can be so hard to make sense of it.

What about the fear that capital is drying up? “It isn’t,” says Talwar. “What you are seeing is a drying up of valuations. People are starting to question value. We are the most expensive startup economy in the world today,” he says, hinting at the common refrain that the problem is concentrated in the upper reaches of the ecosystem—India’s handful of unicorns and those in line for the tag.

Of course, few unicorn founders will admit this on record. Zomato’s Deepinder Goyal is a rare exception. In a widely circulated mail to employees in November, Goyal painted “the real picture”. “We have grown tremendously over the past few months, and our sales team has more than quadrupled in 2015. The hard reality of this growth is that our revenue hasn’t kept up with the growth in our sales team,” wrote Goyal, setting off alarm bells about the restaurant-discovery and food-delivery company known for its tearaway global expansion, but also fetching Goyal applause for grappling with the uncomfortable subject.

Lay-offs, and headlines like “Zomato to focus on revenues; will return to basics” (The Economic Times) followed. “Zomato was very quick to recognise in the August-September period that there are changes in the funding environment. Their new strategy is to deprioritise land-grab and focus on revenues.... a move to break even,” Info Edge executive chairman and Zomato investor Sanjeev Bikhchandani clarified in an earnings call.

“For us, 2015 was the year of learning,” Goyal says. “We scaled massively. We were rapidly launching operations in new geographies and setting up new businesses. Suddenly having that many new competitors in new markets meant everything had to become an equal priority. When you do that, you spread yourself thinner than you want to, and end up losing focus on what matters and what works.”

Goyal says that what growth imperilled the most at Zomato was culture. “We tried adapting to the culture of each country we went to,” he says. “And it backfired badly. We ended up diluting the unique Zomato culture. We learnt by the end of it that you cannot be defensive about your culture.”

The other home truth for growth-seekers that Goyal stresses: Never take your eye off revenue. “Rapid growth almost always translates to an extraordinary cost base, and it’s always better to keep burn in check rather than beginning to feel the chill of a cold winter,” Goyal writes in the Zomato blog. “Build a business that can go for a long drive, not just from one gas station to the next (aka funding).”

AS FUNDING-DRIVEN BRAVADO wanes, the conversation is moving beyond ingenious but opaque growth metrics, such as gross merchandise value (GMV) or app downloads. Old-fashioned principles, like breaking even, are staging a comeback. That, in turn, is causing another shift in the ecosystem. After a few years in the limelight, star entrepreneurs are in a hurry to induct a new set of business builders—often from ‘legacy’ companies—to help negotiate this journey.

“When we are growing our companies, we try to get people who have done bigger things before,” says Sethi. “If a person has handled half a billion dollar-worth of business in a software company and you bring him to a company that is running at say $100 million, you have already created a gap that this person would be extremely uncomfortable with.”

Lingerie e-retailer Zivame, an IDG portfolio company, followed this formula when it hired Shaleen Sinha, former vice president at the Aditya Birla Group’s chairman’s office, as chief operating officer. Zomato nabbed Tanmay Saksena, who returned to India after six years in the Bay Area, where he was vice president at Disney, handling product growth and launches across markets, as well as partnerships. “He joined us in early 2015 to lead our online ordering business, and helped set up and scale the business across geographies,” says COO Pankaj Chaddah. “More recently, he moved into a product-focussed role. So far, we viewed our partnerships primarily from a marketing and branding standpoint, which have a limited impact on traffic, user acquisition, and transactions. With his experience, Tanmay has helped us take a product-first approach to partnerships and opened up new avenues of growth,” Chaddah adds. (In a sudden development hours before we went to press, Saksena left Zomato. Business daily Mint speculated that the move could have something to do with rising investor pressure on food delivery firms to improve their financials, but Zomato issued no official reason for the move. An official spokesperson said, “Tanmay was one of our best people and we are sad to see him go.”)

At Snapdeal, chief product officer Anand Chandrasekaran is bringing to bear the experience of managing the same role at Airtel. “Both companies are similar in that they think big,” he says. “Snapdeal is a startup where we want to make new mistakes.” Chandrasekaran’s immediate responsibilities include growing the crucial FreeCharge Wallet and Snapdeal’s regional language platforms.

Legacy résumés are coming in handy in critical non-business roles too. In September, Flipkart hired Stefaan van Hooydonk, former dean of the Philips Lighting University in Amsterdam, to head the learning function. But the most significant lateral recruit by a startup in 2015 was Ola’s appointment of the former chief financial officer of Infosys, Rajiv Bansal, as its CFO. “Rajiv’s understanding and expertise in the finance domain is extremely valuable for us at this juncture of growth,” CEO Bhavish Aggarwal said in a statement. “His experience of being at the helm of finance [at] one of India’s most respected companies will help us in adopting best practices.”

Smaller companies have picked up on the trend. Online jewellery seller Bluestone hired Arvind Singhal, former director for south India at McDonald’s, as COO. Chief executive officer Gaurav Singh Kushwaha says a company needs different skills at different stages. “If you as the founder doesn’t let go, you will always be limited by your capabilities.” Others like Sampad Swain, co-founder and CEO of payments platform Instamojo, indicate that hiring seasoned hands from older companies isn’t a threat to the startup spirit. “They have seen, strategised, and managed growth, or hypergrowth, which is exactly what venture-backed business models are here for as well,” he says.

For those crossing over, particularly in middle management, the urge not to become a cog in the big corporate machine is strong. “You want to be part of something that changed the way we all live. I was growing fast in Airtel but I wasn’t making a larger difference,” says Rohin Pinto, who is in charge of Karnataka for Oyo Rooms and earlier handled market operations for Airtel.

TO BE SURE, the growth debate isn’t about to let up, with the government too making a spectacle of startups that are far from making real money. But Talwar of Lightbox Ventures says there’s no need for paranoia. “At the end of the day, these are private companies raising private capital. If things go bad, a handful of startups and a few employees will be the ones getting affected. Not the public.”

Boorish again? Not so much, says Talwar, if you consider the stress on the books of publicly traded companies which have a direct impact on millions of customers, employees, and even the entire banking system. Talwar is referring to a report from Credit Suisse titled House of Debt, which had warned last year about the billions of dollars in debt dogging Indian corporates. Lanco, Jaypee, GMR, Videocon, GVK, Essar, Adani, Reliance, JSW, and Vedanta have seen their debt rise seven times over the past eight years. The loans to these companies add up to 12% of the loans in the Indian banking system and 27% of all corporate loans. Perhaps it’s time to bring that back to the headlines.