Lose Weight by Reading

How many of you have lost weight by just reading? I’m assuming the answer is nil. You have a much better chance of losing weight by reading a book about weight loss and then actually implementing some of the techniques. Why am I asking such a dumb ass question?

I’ve come to the conclusion that reading about entrepreneurs, startup stories, funding and other related topics is just a waste of time. It gives an entrepreneur a false sense of “working” because they feel the next article in their RSS feed will provide them the secret sauce to startup success. It’s the equivalent of reading about other people’s weight loss stories and thinking that by doing exactly the same thing you will achieve the same results…fail. I think we can all agree that logic is flawed yet many entrepreneurs follow the same logic day in and day out. Everyone is different when it comes to weight loss and finding the path to startup success is no different.

I’m guilty of falling into this trap as well, why do I do it? Because when I meet with friends and we discuss the latest blog post from Paul Graham it gives us a sense of being educated and smart. In reality we are just avoiding the real issue – company growth, team dynamics, revenue and profit margins of our own startup. In fact, the latest blog post from Paul Graham weighed in at over 4,000+ words about startups and growth. Many folks on Twitter are saying it’s one of Paul’s best essays. Give me a break, we tend to complicate things and then we need a 4,000+ word essay to tell us user growth is crucial for startups…well no shit sherlock.

Over the past couple of months I’ve been reading the book “Founders at Work” which was ironically written by Paul Graham’s wife Jessica Livingston. I was hoping to glean some insight from the stories of the founders and it dawned on me that all of the founders never read other peoples stories and instead just went out there and created something. Many of the stories talked about the challenges they faced and how they over came them and pushed forward. From that perspective it’s great to hear success stories but if you think you can read it, absorb it and re-create exactly what someone else has done, you are kidding yourself. I’m guessing you are just hoping for something to happen as opposed to making things happen.

You routinely hear the phrase – book smart vs. street smart. I think the phrase is so apt for this situation where people read so much and sound intelligent during conversations which make them book smart. But, the street smart person will try 100’s of things till she finds something that works. I’m not saying book smart is a bad thing in fact many entrepreneurs have some fairly impressive degrees and read a lot. However, they also know when it’s time to execute and not sit on the fence and read about other people’s success stories.

Will I completely tune out? No. From time to time we eat junk food and I’m sure the same thing will happen with reading about startup stories. It’s all about managing your time and not letting other people’s stories consume you.

The above article was syndicated on VCCircle.com.

India's Innovator's Dilemma?

The term innovator’s dilemma is applied when talking about how a company handles disruptive technologies that could cannibalize their existing revenue streams. Innovator’s Dilemma is also the name of a book written by Clayton Christensen where the term originally came from.

Kodak is a company that couldn’t handle the innovator’s dilemma and recently filed for Chapter 11 bankruptcy. As crazy as it sounds but Kodak actually invented the digital camera. However, it didn’t commercialize the technology because it couldn’t look past the highly lucrative camera roll and printing business. Those revenue streams would have been killed but it potentially could have made a killing with it’s latest innovation – the digital camera.

Another recent example is Cisco. Since the early 2000’s Cisco has been selling internet telephony products which were complex and required a lot of expensive equipment. In the meantime, Skype was building a consumer product that was easy to use and cheap. Ideally, Cisco should have bought Skype but it couldn’t look past its enterprise customers that were buying expensive equipment. And remember, back then Cisco was looking to be a consumer focused company by acquiring brands such as Linksys and Pure Digital, the makers of the Flip camera. Instead, Microsoft saw an opening and eventually acquired Skype. Now Cisco is challenging the Skype/Microsoft merger because it fears its own video conferencing solution may be blocked and enterprise customers would opt for a Skype/Microsoft solution.

This brings me to India, which I believe is stuck in it’s own version of innovator’s dilemma. Inefficiency, middlemen and leakage are all words for the same thing – corruption. When technology is pitched as a solution to curb corruption people come out of the woodwork and say how the proposed system is too expensive or too difficult to use or politically motivated. The reason for the bad press is because no one really wants to change the way they work.

One example is the government’s plan to move to an electronic system of government subsidies and social welfare payments using Aadhaar linked accounts. Initially it would appear that the middlemen would be completely cut out from the process, however by having money go directly to bank accounts many other industries/services might benefit from it. Services such as micro insurance, micro payments, micro financial services, etc… The dilemma is that the middlemen will have to do more work to benefit from these new opportunities and usually that is not taken very well. Hence, all the trash talking about how bad Aadhaar is for the country and people’s privacy will be at risk. This is a classic case of innovator’s dilemma – the middlemen are happy with status quo because they can’t think beyond their current revenue stream.

The above example is par for the course all over India. People don’t like technology because it speeds up everything, makes people accountable and introduces transparency. People are afraid of technology because they feel they will become irrelevant, but you become irrelevant if you ignore technology.

The above article was syndicated on VCCircle.com.

 

The 4 P’s of Startup Success – Profit

You have made it to the fourth and final “P” which is profit, as a recap the other three P’s were – people, passion and perseverance. Unless you are running a non-profit organization, profit is what drives a startup to exist. With those profits, it allows a startup to hire great people, acquire strategic assets, innovate, stay competitive and potentially give back to the community.

Some startups go off course when revenue is the only metric that is looked at. It’s similar to people that are only concerned about the money they will make. For individuals compensation is one aspect, there is also career development, knowledge and many other things to look at. Likewise, when startups only focus on revenue they might look for a quick deal to bring in revenue or might view an IPO as the ultimate path to the big payout. In the past many startups have IPO’d however many of them have faded away as their team, passion or perseverance was not strong enough.

Revenue is important but profit is what really needs to be looked at. You might bring in a large 2 million dollar deal but if you spent 5 million to get the deal, then there is something clearly wrong with the business model. Growing your revenue and profit organically is the best way to build a startup into a company. With the 4 P’s – people, passion, perseverance and profit you have a combination that is tough to beat and it’s the qualities that any startup should strive to achieve.

The above article was syndicated on VCCircle.com and GQindia.com.

The 4 P’s of Startup Success – Perseverance

Now that you have selected the right people to build your team and they are passionate about the idea it’s time to work. However, will they stick around when things get bumpy? Perseverance is what sets the dreamers apart from the doers.

It’s easy to get excited about a PowerPoint presentation and the “hugh” market potential of industry XYZ. In most instances whatever you put down for milestones in your business plan or PowerPoint will most likely not be met. You expected to reach 10,000 customers in your first year but what if it takes 5 years? You might have the passion for the idea but what you really need is the mental toughness to get through the tough times that you will invariably face.

The story of retail heavyweight Kishore Biyani is a classic text book example of perseverance. It may appear he captured the Indian retail market overnight with Pantaloons, Big Bazaar and his various other brands but that is just not the case. Kishore started his career several decades ago selling acid-washed jeans all the while tinkering with the idea of organized retail. For Kishore it took him several decades to be an overnight retail success.

Another example of perseverance is Audi, in the mid 80’s it was dealt a serious blow to it’s flagship Audi 5000 car. In 1986, US television news magazine 60 Minutes aired a segment on the Audi 5000’s “unintended acceleration” problem. In the end, the US government concluded that the problem was caused by drivers confusion in pushing the wrong pedal and not a design flaw. But, the damage was done and overall Audi sales went from over 75,000 a year to around 12,000 a year.

At the time, people were calling for Audi’s demise and hinted it might leave the lucrative US market because of the public relations disaster it faced. However, Audi redesigned the car and sold it as the Audi 90/100 series. Almost 25 years later, Audi is stealing the thunder from the other German brands Mercedes and BMW. Now people look to Audi for design cues and it’s much talked about headlight designs which have been copied by almost every high end car manufacturer.

When hiring, perseverance is one of the toughest attributes to look for in an individual because it’s such a personal trait.  Some people can work on something for 15 years whereas others get disillusioned after 15 days.  Many people like to say luck plays a major role in why a startup might have succeeded but the reality is if you try something 2-3 times you will most likely fail every time. However, if you try something 1000 times then you have a much better chance of succedding. It comes down to trying, trying and trying some more until your product/service is the right fit for the market.

The above article was syndicated on VCCircle.com and GQindia.com.

UPDATE: After I published this blog post, Fred Wilson had a similar blog post that really summed it up – “The Second Year“.

The 4 P’s of Startup Success – Passion

This is the 2nd in a series of what I believe are the four basic components needed to turn a start-up into a successful long-term company.

The second ‘P’ is passion. When hiring people you want individuals that share the same level of enthusiasm and excitement as everyone else on the existing team. Passion goes beyond liking a particular product or industry. Just because you like Ferrari’s does not mean you would make a great car mechanic or car salesperson. However, if you eat, sleep and breath cars and in particular Ferrari’s then you might make a great addition to the Ferrari organization. You have to be consumed by that product or industry and want to read everything about it and learn as much as you can.

I started my career as a technical person building large scale wide area networks and spent countless hours optimizing routers to get TCP/IP packets from destination A to destination B. Did I have a passion for it, probably not. Since the 7th grade, I have been consumed by financial markets. Most of my classmates thought I was going to be a stockbroker because I was reading the Wall Street Journal back then. I love technology but financial markets are my true passion for reasons even I don’t fully understand.

When you are passionate about something you just naturally tend to be more knowledgeable about that topic area because it interests you. And when you are more knowledgeable it adds so much more to the team. The drive and passion does not have to be in the main area of the company. If you are a technology startup and your CFO is in love with Excel and gets excited by P&L statements, then lucky for you.

An example of someone with a lot of passion is Gary Vaynerchuk. Gary has a passion for wine and it shows – he runs a retail wine shop in New Jersey but has became an internet sensation with his Wine Library TV podcast. When you watch one of his podcasts you can feel the excitement and passion he has for wine industry and he can talk about vineyards like its second nature. Gary has turned a field that was typically dominated by older middle aged men and “crushed it” as he would say. With passion comes knowledge and it shows, Gary is someone you would trust blindly because he eats, sleeps, breaths and drinks the wine industry.

Startups have enough drama on their own in the early days and you want the core team to stay and build up the company. Early on, having team members come and go can throw off the overall rhythm of a startup. By finding passionate people they hopefully will stick around even if things look grim because they are enthusiastic and excited about the product or industry they are in.

But finding passionate candidates is not straight forward. Luckily in this age of social networks, you can keep tabs on someones blog or twitter stream to get a better understanding of what interests them. More often than not, you have to interact with them on an ongoing basis to build a mental social graph of what truly gets them enthusiastic, excited and passionate.

The above article was syndicated on VCCircle.com and GQindia.com.

The 4 P's of Startup Success – People

Over the next two months, I’m going to discuss what I believe are the four basic components needed to turn a startup into a successful long term company. They are – people, passion, perseverance and profitability. I will highlight each of these four components in separate posts in the coming months.

It may sound cliche but the most important component is having great people. It took me many years to figure this out, but people truly are the cornerstone of any company. You might have a great idea but without the right people the idea might never reach its full potential. Not only do you require smart people, but people who share the long term vision of the startup. With the early employees you want to build the right culture which is needed to attract top talent as the company grows. For many years Google was the place to be in Silicon Valley if you were a coding genius, the culture was built by early employees who were from a computer science background and insisted on the corporate motto “don’t be evil.” Nowadays, all the top computer science talent wants to work at Facebook partly because of the stock options they would receive but also because the other top people they would be working with. Top talent likes to work with top talent.

In addition to having smart people who know the market you also want people that can challenge business decisions in a constructive manner. Initially, you will spend a large part of your time with the core team building out the business and having people who are easy to get along with in a work and personal environment is highly recommended. Startup’s are inherently stressful and the last thing you need is to surround yourself with negative people. People who are always negative can be very destructive and should be removed immediately, no need for additional drama from within the company.

An excellent example of two companies that have gone in opposite directions even though they are in the same space – Google and Yahoo. As stated before, Google has a history of treating it’s employees like kings such as providing free gourmet cooked meals, haircuts and so much more. They even provide their engineering staff with something called 20%, where a programmer can work on anything that interests them. Google’s real asset is their search algorithm but without the right people to tune it and tweak it might have ended up like so many other internet search giants. At the other end of the spectrum is Yahoo – in the early 90’s it was the Silicon Valley startup to work for, but over the years many top ranking employees left. This led to a vicious cycle where other people left and then they couldn’t attract new talent that was sorely needed in such a competitive industry.

One of the most difficult tasks for any company is hiring people. That difficulty is even more amplified at a startup, as many people don’t want to take the risk of joining an unknown entity. And, if you are lucky enough to experience hyper-growth then you have all sorts of people applying and the hiring standards usually get relaxed in order to fill a job role. By maintaining a strict adherence to hiring great people can only benefit the company in the long run.

The above article was syndicated on VCCircle.com and GQindia.com.

The Personal Dashboard

Lexus LFA dashboard

During the late 90’s all the rage on the internet was with portals. The concept was simple, you select the type of information you wanted  – news sources you like, stock quotes for your holdings or local weather information. Then the portal would magically aggregate all the information in a single location.

If portal 1.0 was about external information (news, weather, etc..) then portal 2.0 is about your information. Portal 2.0 or what I’m calling The Personal Dashboard is the next step, where you can quickly glance at various parts of your life in a single location. Parts of your life would include friends (Facebook), work colleagues (LinkedIn), personal finance (Mint.com), health, cars, fashion, etc…

Social Dashboard
Since many websites are opening up their data stream via an easy to use API (application programming interface) the ability to create a centralized dashboard is not that far fetched. For the social piece of your dashboard you would have a mix of Facebook, LinkedIn and/or Twitter in your social news feed similar to how the individual streams look now, but it would be an aggregated summary. For the full blown feed you would have to go to the respective sites to get your daily dose of empty calories better known as social networking.

Personal Finance Dashboard
Yes, Mint.com does a lot of the financial data aggregation but two things: first it’s on their site, I want to see that data stream appear on my dashboard. More importantly I would like to weave Mint.com with all my other financial data streams. Suppose I have Google Wallet, I would want that to appear as well.  For me personal finance is broken down into 2 categories: short term (expense tracking) and long term (portfolio management). Since all my financial feeds are in one location, I would want to get real advice and/or offers based on how I spend on my short term or daily expenses.  If I constantly spend on cafe lattes at The Coffee Bean (which I do everyday in Nariman Point), it would be nice if they kick out an offer for 50% off on a new product they are introducing. Or if I suddenly stop visiting for 2 weeks, they kick out an offer for 20% off on my next visit. This would be completely automated without having to signup for some dumb-ass daily deal site (Hi Groupon!).

On the portfolio management side, it would only present offers in two cases: the product saves me money or makes me money. If there is a better performing CD/FD it would alert me to it. If I can save on brokerage, then it would notify me…but only if I really trade a lot and it would specifically show me a cost comparison based on my accounts details. Consumers would love this, but of course established companies would hate this level of transparency. However, there are new players such as BankSimple.com who might be able to make a difference.

Health Dashboard
Personally, the area of health is what got me started to think about the Personal Dashboard concept. There is a growing trend around the idea of the quantified self –  capturing details such as heart rate, blood pressure and many more data points to learn about your health in real time.  Gary Wolf gave a TED talk about the topic. When you talk about big markets, the health care industry is one of the biggest at 16% of the US GDP and a large chunk going to hospital care. There has to be a better way for people to track their own health and make adjustments in real-time to improve their health. There are several devices available today that offer a glimpse into the future.

Fitbit is the size of a money clip and tracks physical activities, calories burned, steps taken, distance traveled and sleep patterns. At a $100 a pop, this should be mandatory for anyone with a BMI over 30. Another gadget is Basis which is like the Fitbit but also tracks your heart rate. Of course, Apple is also planning to gate crash this party with their products based recent patent filings.

Gadgets are one piece, the other is data aggregation and several companies such as Microsoft HealthVault and RunKeeper have started to support the above gadgets on their platform. Once again these are islands of data and should be part of an overall personal dashboard. These services should interact with each other and kick out real-time advice based on my physical condition or let me know if my sleep cycle for the one week period is normal for my age group, etc… Or I should be able to export my data to a PDF to show my doctor that I have indeed been sleeping 7 hours a day and working out every other day. By tracking certain metrics it lends itself for people to correct their behavior if they are serious about it.

Summary
I’ve touched on 3 areas but there can be many more depending on the lifestyle of the individual. Such as a car dashboard that tracks the vitals of the cars you own – mileage, fuel tank, tire pressure, etc…then it could send a reminder for when the next servicing is due. (Yes the irony, a dashboard of a dashboard!)

The Personal Dashboard might seem like an idealistic view of how our lives should be simplified, but I firmly believe it’s where things are moving to. Currently, all this data is housed in disconnected data stacks but eventually there will be a meta aggregator of all these bits of data we are creating on a minute by minute basis.

The above article was syndicated on VCCircle.com.