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‘Inside India’s startup rot’: Viral post exposes how deceit, silent sabotage are tearing startups apart

In today’s startup ecosystem, the boundary between hustle and deceit is eroding fast. What once passed as clever maneuvering is now breeding a culture of normalised dishonesty — where manipulating systems and exploiting trust are par for the course. Deception in the corporate world is no longer limited to grand scams or elaborate frauds; it’s becoming embedded in everyday work culture.

A recent Reddit thread has reignited the conversation, revealing just how deeply this rot runs through Indian startups — from falsified reimbursements and ghost inventory to weaponised media threats. And the worst part? Much of society doesn’t seem to care.

A Reddit user recently sparked a storm by exposing how deception disguised as hustle is quietly sabotaging Indian startups. Referencing a discussion where a founder questioned the need for background checks, the user observed, “Most commenters didn’t even read the full post — they jumped straight into personal attacks… Around 50% of the replies seemed weirdly okay with deception and conning companies.”

The thread became a mirror to a broader crisis. “Fake hustlers are rotting the system from within,” the user added, pointing to a deeper societal shift where tricking companies is glamorised, and founders are routinely villainised.

The post shared that several founders shared firsthand stories of this toxic normalisation.

“A deep tech founder was blindsided when an employee quit suddenly, then involved a media contact to fabricate a labour complaint and threaten exposure. “There was no complaint filed anywhere. Just manipulation,” the user recounted.

A D2C startup unearthed a reimbursement fraud running into lakhs, orchestrated by a mid-level manager. “They let him go quietly. No case. Just another battle lost silently.”

One marketplace founder discovered employees were stealing returned goods, stuffing the boxes with rags and bricks, and selling the real items in the grey market. “Fired the whole team overnight. All of them are working at another marketplace now.”

Another founder tracked a senior employee siphoning inventory off the books — an operation so well-hidden it took a year to uncover and prosecute.

These incidents rarely surface online. “Founders just take the hit, keep building, and move on — mostly in silence,” the Redditor noted.

Meanwhile, reactions from the community were mixed. Some netizens blamed cultural flaws. “It’s the Indian mentality to get money with any means necessary,” one user said. Another questioned hiring processes altogether: “Why aren’t we doing reference checks? That should be like hiring 101.”

Others struck a more philosophical chord. “An ethical person remains that way in spite of losses… And an unethical person will be unethical no matter what,” replied a user.

A former startup CEO echoed the sentiment. “Yes, we have normalised deceit. My conclusion is that people will cheat if they have the opportunity and the downside is limited… Lead by example and set high ethical standards which you should never compromise on.”

Yet for many founders, the damage is already done. Faced with betrayal from within, increasing hostility from the outside, and a culture that often shrugs at dishonesty, they’re being pushed to extremes.

As the original poster put it: “Honestly, I won’t be surprised when founders stop hiring altogether and just start deploying AI… Because when you’re building in the middle of a societal collapse it’s rather fair to not have unethical, deceptive humans altogether.”

Source – https://www.businesstoday.in/latest/trends/story/inside-indias-startup-rot-viral-post-exposes-how-normalized-deceit-is-tearing-indian-startups-apart-474644-2025-05-04

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