Categories
General Thinking

Teams and Productivity

At the time that a project is conceived, there are certain expectations on how it is to be executed. This is most often the case with most startups; startups begin as mere projects.  Based on the execution envisaged, people are assigned and teams are created.

I have often noticed that as the pace of things increase and changes come into play, as is often the case with startups, the teams are redistributed and resources are re-allocated. The entrepreneurs expect their teams to perform as per earlier expectations. But once such steps have been taken, it is unrealistic to expect the same standard of productivity.

The best analogy is the pit-stop in an Formula One race. 16 people are assigned to change 4 tyres in 2 seconds; if 2 people were assigned asked to do the same in 16 seconds, it probably would never happen.

The only thing that changes is ‘Focus’. While executing, teams need to be focused and when teams are reassigned, some amount of focus is lost. This loss of focus hinders productivity. Hence, it is important to make sure that focus is maintained, even at the cost of hiring some more people.

Categories
General Thinking

The Big G – Growth

I work with startups and businesses which are trying to scale up, hence, soon or later, the question of ‘Growth’ arrives. 

When do we begin to scale up? How do we grow? What is the best way to grow? How much growth in manageable? How to manage during growth?

But every now and then, the most important question arrives. Do we need to grow?

Due to the success of tech startups and their ability to scale up, it has become a false assumption that every business must grow and if it does not grow, it must be doing something wrong with it!

Nothing could be farther from the truth. In fact, growth is a very personal question for every entrepreneur. Growth brings increased income, but along with that, it brings a new set of troubles as well. A greater demand on the entrepreneur’s time, greater management challenges, etc. From the point of view of an investor, growth means more returns on investment (or at least a higher valuation! Not all growth is good!) and hence they always prefer growth but from the perspective of an entrepreneur, it is up to the entrepreneur to set growth targets.

If, as an entrepreneur, one is satisfied with being able to meet his/her family demands and afford a good lifestyle, there is no need to grow any further. Any further growth will probably rob the entrepreneur of the extra time that he/she has at present.

There are those who open a grocery store in a neighbourhood and are satisfied with the income that they are able to generate from it. Then there are those who need to come up with the next big dotcom sensation; the next Million dollar App or a nation-wide yogurt chain. Each of them are right in their own place and addressing their respective needs.

The entrepreneur should know his/her appetite for growth. Knowing this allows them to plan accordingly and prepare for what is to come.

Categories
General Thinking

Starting a Start-Up?

As a part of my work, I come across a lot of entrepreneurs who are looking to start a new venture. Most entrepreneurs that I come across are individuals who are looking to quit their jobs and take up the challenge of starting a business. This makes them look at a start-up as an income replacement machine.

They expect the venture to start paying their bills soon enough, which is quite a high standard set for the venture. This is where most lack perspective and do not look at starting up in the right manner.

Creating a start-up can be likened to having a child. Some are prodigal, some not so much; but almost all of them take a lot of time and attention. They might needs sometime to find their feet and start walking on their own and most certainly till such time you have to support it.

Almost everyone spends too much time putting together business plans and numbers. When you have a child, do you write out business plans? You plan; but not to the extent to putting down every number in black and white. Similarly with a start-up it is important not to plan excessively.

Do something you love doing – You will turn out to be quite good at it if not the best.

Do not plan too much – Thing rarely, if ever, follow the course of plans

Research before you start – Make sure that your idea offers a tangible solution to your target audience. Something better than what already exists.

Think positive – It makes a lot of difference

Back yourself for the lang haul – If the venture does not turn out to be prodigal son that you expected, it need not necessarily be a complete wash out either. Be prepared for the long innings, just in case.

 

Categories
General Thinking

Why Android has lower Internet usage

There is a lot written on how android users are less data savvy that their Apple counterparts.

The actual reason for the disparity is due to the profile of the phones that carry Android.

Apple sells one model of its phone and generates the huge numbers that it does. By contrast android and its partners generate their sales through hundreds, if not thousands of models of phones. Most of the phones which they sell are low end phones which are extremely inferior in quality and performance. The android developers on the other hand are forced to produce apps which can be installed on all Android phones. Now most of the android phones cannot run too many apps. They are not designed for that kind of performance.

The poor performance of most Android devices is the reason that they are not used heavily therefore consuming much lesser data.

Categories
General Thinking

Apple Maps – Australian Fiasco

So now the police have set about putting up warning about various mapping product. At least the Australian police seem to have cartographic experts who are qualified to put out warnings about cartographic products!

So a few weeks back I was driving from a place called Raichur (North Karnataka) to Bangalore. Yes its a place not too many people have heard about just like Mildura. I was using Google Maps for directions and somewhere along the way this wonderful app located me somewhere in the middle of Czech Republic. Obviously I was a little concerned when the map showed me off by a few thousand miles. To add to the misery, there not a soul in sight for kilometers and I had to continue driving hoping that the direction in which I was headed was correct. I was in Czech Republic for about 40 Kilometers after which it put me back in India.

Fortunately, I did not approach the police about the incident and also I do not believe that the Indian cops are very keenly interested in cartographic issues.

So, What is the point? Well, clearly nobody is perfect. The problem with Apple is that there are just too successful. They have the highest profits in the mobile industry. The company is therefore under a great deal of scrutiny. Also, the millions of blogs that follow the company need fodder to write about and hence they hang onto any obscure report that may materialise.

I would like to know how many of the blogs the Australian Apple Maps incident have actually spoken to the officer involved!

The blogging community need to leave Apple alone. They have made a mistake and have admitted to it. They are not crowdsourcing data, which means that their product development is on a different slope as compared to Google. Let them do what they believe is right and then time will let us know if the approach was right or not.

Till then, just let them be.

Categories
General Thinking

Conservation

So, there is a lot of talk about how we are leading lives which are unsustainable in the long run. Societies have needs that are unsustainable, population growth is unsustainable, consumption growth is unsustainable and on and on…

But think about it, is the entire capitalist economy not about growth? And if this economy has to thrive and survive and deliver consistent growth, how is that going to come about, and manage to co-exist with the concept of sustainability?

 

TED_Tristram_Stuart_The_global_foo.mp4 Watch on Posterous

 

If you watch the TED talk that is posted above, you would note that in developed nations food production has now peaked to 4 times the average requirement. This means that the ease with which food is now being made available ensures the demand for more. 

Businesses by definition need growth and in order to grow they make product or services that people would want. Most often these are products or services that would make lives easier! This is the root cause of the problem of sustainability.

I had a moment of epiphany today, when I was forced to take bath in cold water due to the lack of electricity and noticed, how much less water I used! The odd temperature of water made it uncomfortable for me hence I used less of it.

Now, in my experience the moment you make things harder for people, the better they become at conserving!

Let us say, you supply only cold water during winters in the pipes. Well, I do not foresee many taking those long showers. Water Conservation!

For that matter, if bread was not supplied in the supermarket and one was forced to bake the bread themselves, I do not suppose that the ending pieces of the loaf that most throw away would ever be thrown away. Food Conservation!

Let us say that the furniture business model involved building the furniture by yourself. A model that is the grandfather of Ikea, which involved some sawing and shaving the wood to put the end product together; the demand for wooden furniture is sure to plummet. Timber Conservation!

The underlying idea being that in order to conserve something, you need to make it harder for people to acquire and use the same. Businesses would never want to do this; it is sure to cause their value to disappear, if such practices are adopted. Over the centuries, man in his constant pursuit to make lives easier has simplified consumption. This consumption now threatens to cause the problems in the future, simply due to its unsustainability.

We need to start thinking about the kind of growth that should be avoided. Unfortunately, currently we are replete with only this kind of growth.

How many businesses would be willing to sacrifice growth to ensure sustainability?

Categories
General Thinking

Leave Mark Alone…

At the time that the Facebook IPO was put up and the company was put up for sale, everybody knew that Mark Zuckerberg was going to lead the company and that he was going to retain the majority voting rights. He had unequivocally announced that nothing was going to change at Facebook. Then why the hue and cry??

Facebook was a company that had little revenue to support its valuation. The company was to be listed at 100X. Or in layman’s terms 100 times the earnings that the company generating. Now, in the investment world for a fairly mature firm 10X to 15X is considered fair valuation given decent prospects in the coming years. For a high growth company, which happens to be the case with smaller firms due to the base effect, a higher multiple of 30X to even 150X in certain cases are considered.

Facebook will be a decade old, in another couple of years. A seventh of the world population is on it and another sixth (china) is banned from logging onto it. Such a firm by no means can be considered a growth firm. The first five years can be considered growth stage, this company was well and truly beyond that.

There were a few investors (Peter Thiel and company) who invested early into the company. Since Facebook was in no hurry to list, all the other VC firms that had not invested into Facebook early enough thought; ah, shucks, we should have invested there… So they did invest at whatever valuation was demanded by the team as facebook, with the last investment round of funding coming from Goldman Sachs at as abominable valuation (50 Billion USD). Now, in order for these latecomers to justify their investment, they needed to further inflate the valuation. Hence at the time of the IPO we landed up with a $100 Billion dollar valuation.

Every soul that invested at that valuation was foolish. There was no way that the company could have ever supported such a valuation. It was designed to fail. 

The stock is taking a drubbing not because of the way Mark is leading the firm, it was designed to take a drubbing.

Stop blaming him, blame the investment bankers who sold the IPO.

Categories
General Thinking

Apple – Samsung Trial

All the mobile manufacturers are not going to remain knotted-up in arbitrations and trials forever. They will eventually reach a settlement. This fact was known even before the verdict that came out last week. This was the precise reason for which Judge Koh had mocked the lawyers of both the firms for wasting the courts time, during the arbitration stage.

The only real change that comes about due to the verdict is the negotiating power. The reason the CEOs of Apple and Samsung could not reach an agreement earlier, when the court asked them to seek a solution outside of court, was because of neither knew where the negotiating power really lay.

If you look at it from the perspective of game theory, the two sides were not reaching a state of equilibrium due to the lack of clarity over the worst case outcome.

That has been cleared out by this verdict, for the purpose of both sides. If Samsung is facing up to trouble today, Apple knows what trouble could head its way another day.

I predict that settlements will come thick and fast over the next 3 years or so and a new system for sharing patents like the FRAND will emerge. Then they will eventually fight over that as well. But that is for later. This one was just about creating the negotiating platform.

 

Categories
General Thinking

Olympic Graveyards

I often wonder why countries/cities decide to host the olympics…

More importantly why do cities that are extremely well know decide to host the olympics?

The rationale happens to be that the hosting of the Olympics will provide economic stimulus and spur growth for the region where it is being hosted. Well, that may be true if one of two conditions are met:

1. The games are conducted in a city that is not very well known across the world. In such a scenario there is an intense focus created on the city, which did not exist earlier before the games.The names of Olympic cities are generally repeatedly talked about in press and news and get very well internalised in the minds of people all over the world. It can be expected that since the city was not known well earlier, like in the case of Beijing, the investment and new infrastructure will be used by tourism and the roll-on business generated in the future.

2. The other case where the Olympics can be held is if the city is using its existing infrastructure to host the games. In the case of an established city like London or Paris, an event is not going to generate any further mileage in terms of tourism. These are very well known cities and international tourists are not going to suddenly want to flood the city because an event was held. To the contrary generating new infrastructure adds a huge burden to the city and additional business that dont find use after the games. Athens is a shining example of what happens when a well known city splurges on an event that is not going to bring additional tourist flow in the future.

In my opinion London too will have an Olympic graveyard, now that the games are over.

Categories
General Thinking

Frenemies

I wonder how frenemies live?

I am an entrepreneur and I have several business relationships. With the people that I work with, I either get along or I do not get along. There has never ever been a case of getting along while not getting along. What baffles me is when I see companies like Apple and Google doing precisely that. On the one hand they go about filing cases against each other in every court available on planet earth, while on the other hand they tend to develop applications together, buy patents as a consortium and so on.

How does somebody be at war and peace at the same time? How do you not get to a position of resolving one issue while being able to forge partnerships on another? How do you decide? It just baffles me.

I would imagine before every decision, these companies would engage in several complex calculation using game theory in order to arrive at what to do!