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The art of a good unicorn | Moonlighting as a double-edged sword for startups
Startups need to carefully navigate moonlighting conversations as it could well be the future of work
A product manager, startup founder, and standup comedian walk into a bar. No, they're not three people. It's just one person.
Moonlighting is being hotly debated in recent times. But what does it mean to moonlight? Does it take the spot of La La Land? It’s the practice of working multiple jobs, side hustles or freelancing outside of one’s primary employment to augment one’s income and skills. This may be due to a need for financial confidence in an increasingly perilous job market or even a need for creative satisfaction that may be missing in their primary job.
The topic was in the news again, when information technology (IT) company Wipro terminated the services of 300 employees who were working for competitors, while still being on the payroll. Its chairperson, Rishad Premji, stated that moonlighting was a complete violation of integrity in its deepest form. He, also, opined that moonlighting is cheating — plain and simple. It might be seen as cheating if an employee's contract calls for non-compete and exclusive employment, commonly present in the majority of conventional employment contracts. However, it is not seen as cheating, if the employment contracts do not include this clause or give exceptions.
In an industry-first, foodtech company Swiggy also put a spotlight on moonlighting, when they formally published a policy to enable employees to work on jobs or projects outside their normal employment during their free time. This was contingent on the fact that productivity was not affected and there was no conflict of interest. Swiggy human resources head Girish Menon remarked that moonlighting is the future of work. Yet, anything that is conflicting with their business, competition and abusing intellectual property is disallowed and any breaches of the code of conduct would be addressed by disciplinary committees.
The Covid-19 pandemic upended the lives of millions of people. Amid the Great Resignation, slashed salaries, and mass layoffs, there was a change in the mentality of employees, having been bitten by the entrepreneurial bug. They wished to develop, demonstrate, and monetise what they can do. The pandemic was considered to have increased multiple employment. But, why is it appealing to employees? Maybe, it gave people the ability to do more. Because those who have an affinity for it seem to enjoy the flexibility of maintaining the stability of a conventional day-job, but also participating in the gig economy. If done right, some side hustles may even enhance the job performance of one’s primary job.
However, the problem can arise that data and sensitive information could be leaked to competitors. Trade secrets may end up being divulged. Office resources of a primary job may end up being used for side jobs. If information is stolen to be given to a competitor or for starting a new company, that is a major problem. There’s also a worry that moonlighting may affect an employee’s productivity by making them distracted and negligent due to physical fatigue. Moonlighting may be conflated with doing something unethical.
But, there can also be some systems in place to fairly measure employee productivity. Furthermore, could any activity post-work-hours could potentially be banned by companies? If an employee chose to, for instance, binge-watch TV shows or party at night, that would, also, take up their time or affect their productivity. Sure, there can be talks on how to keep productivity up and balance after-work activity in such a manner that it does not affect performance. There’s already “productivity paranoia”, where there’s disconnectedness of how each side views expectations. Coming to one’s primary job fatigued and unable to work is a problem and must be curbed, especially since you’re contractually obligated to perform.
Startups may be in favour of moonlighting, as folks in different levels and roles like finance, marketing and IT may play adviser roles. For instance, a product analyst at a senior level in an IT conglomerate may be able to help in an advisory role for a fledgling venture. But, is that a conflict of interest?
In the United States, “ethical” moonlighting may be more of a norm, with founders of startups using their experience to build something on the side and understanding how to work with finance, sales, marketing and more. Flexible working conditions made moonlighting conducive for those who wanted to dip their toes in it.
From an employment contract point of view, businesses may impose reasonable restrictions like non-competes and needing x number of hours put in every week. That being said, the idea of placing arbitrary, unjustified and unreasonable restrictions on what can be done outside a work window may cause many to raise eyebrows. Or will strong-arming tactics alienate employees?
Overworking and underpaying by companies may be fuelling this fire. The chatter around moonlighting may also stem from a pain point of industries being unable to keep employees happy in a post-pandemic world where expectations have changed. A latitude inadvertently provided by the pandemic for employees to reassess their avenues seems to have taken place, with work travel time and costs being cut down.
High attrition levels may also cause diminishing engagement and loyalty from employees. Treating employees like labour and not capital may also contribute to disconnectedness. The relationship between an employer and an employee may be strained in India, where it's almost like an owner-slave dynamic. A purely results-oriented approach without taking into account the mental health or satisfaction of an employee might be the straw that breaks the camel's back. If the labour markets are not properly understood by companies, moonlighting, as a phenomenon, might get even more traction and be adopted in a widespread manner.
It’s interesting how moonlighting may be frowned upon by many companies, when some of the biggest companies were founded by folks who moonlit. Steve Wozniak, the co-founder of Apple, designed the first Apple computer while designing scientific computers for HP, for example.
What if you’re investing in other startups while working for a startup you built? Does that count as moonlighting due to an additional source of income? Or think of Elon Musk working for SpaceX and Tesla at the same time. Or Jack Dorsey building Twitter and Square. Sure, they're founders and not employees, but the principle of having alternative sources of income or building other projects seems to stay sound as an argument. Narayana Murthy went from working at Patni Computer systems to starting his own venture Infosys. Sachin and Binny Bansal went from working at Amazon to launching their startup Flipkart.
It’s more interesting when you realise the startups being built were in the same domain. Is it at all possible that some of these founders were sowing the seeds for their own venture when working at these corporations? Is it something to keep in mind that these very successful founders went from these large companies to their startups and if so, is it fair to think they may have been working on their side hustles? Could there have been any element of moonlighting? That makes the phenomenon of moonlighting seems to be a double-edged sword.
A mismatch of expectations has stemmed from friction and startups and companies looking to use frugality as a virtue. Employees, now having a smidge of more confidence, than before the pandemic, are capitalizing on this to explore new opportunities or start new ventures.
What does moonlighting mean for the future of work? Will there be battle lines drawn to prevent it? Or is it just inevitable? Is this a double-edged sword waiting to slash? Does moonlighting help a person explore their options, sample different skills and build a career?
Ideally, people should be paid to do work they love that fulfills them creatively and also sustains them. But a lack of business and financial literacy may make them lost and clueless, unsure of what they can do. Moonlighting, as long as it stays ethical, helps people figure it out. But, startups may just not like paying you to benefit other companies.
The corporate and startup worlds are already thought to be ruthless and they may not be equipped to handle the new age of employees, who experience intense financial anxiety in a post-pandemic world with inflation, recession and job insecurity. Is moonlighting an idea whose time has come? Is what employees do outside their working hours their own prerogative?
One is unable to count on their fingers the number of things that the COVID-19 pandemic has disrupted or re-invented. One of those things is the face of work, which has been irrevocably changed. At a time of the advent of the creator economy, the gig economy, decentralization, Web 3.0 and the future economy, is moonlighting the future of work, as we know it? Is this an inevitable evolution? Only time will tell who owns your time.
Shrija Agrawal is a business journalist who has covered startups and private capital markets before it was considered cool in India
The views expressed are personal
