Tag: Startup

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General Thinking

Making things Happen

For life as we know it, to exist on Earth

Earth had to be at the right distance from the sun, warm enough, but not too hot nor too cold.

Earth had to have a hot core so that the planet is alive and developing everyday. The core gives earth its magnetic field, which shields us from countless radiations.

Earth had to have an ozone layer so that the UV rays from the sun does not fry life on earth.

Earth had to have a moon, so that tidal activity was possible to keep the water cycle active. The moon also shields the earth from astroids.

Earth had to have liquid water.

Earth had to be in a part of space where it would not be hit by a large meteor or comet for a considerable period of time.

 

It takes a lot of things to come together to make something right, it only takes one thing to be out of place to make something wrong.

To tell someone, something is NOT possible, is very easy; to make it possible is very difficult. Entrepreneurs are people who set out to make something possible. So the next time you think an idea is shit, think about it once more.

Categories
Entrepreneurship General Thinking

Belief is the most valuable currency for a startup

If the owner of a pharmaceutical company that produces Vitamin tablets; says that he believes that Vitamin tablets are a very important source of nutrients for the body and he eats the tablets everyday.

Do you think, he really believes it?

He may or he may not, you can’t tell.

His beliefs are within him.

But do YOU really believe that it helps? Within yourself you should be able to tell for certain. No? Let us say that you do not believe what the man is saying.

I would like to bring to your attention, a recent study that indicates that over the past century the availability of vitamin tablets has increased the quality of life and helped increase life expectancy amongst individuals. In the early 1900’s, life expectancy at birth was 31 years, these alternative nutrients have increase life expectancy to 67 years. The lack of access to these medicines has meant that in parts of interior Africa, life expectancy is still close to 40 years.

Life Expectacy

Source : Wikipedia

Now what do you think?

Are you at least questioning yourself?

 

 

The study that I just quoted was made up! I connected various pieces of data to spin this story.

The truth of the matter is that no matter how strong your belief might be, that belief can be easily influenced by information that someone else offers. So our beliefs are not set in stone.

In my experience, belief often separates success from failure. Hence it is the most valuable currency that anyone can bring to a startup. More valuable than any skill or money. A strong belief makes you push and try to achieve things that others would not. This is what separates the ordinary from the extra-ordinary.

During a startup journey you will come across challenges that at first glance might seem insurmountable. If you have strong belief in what you are doing, you will find a way to make it work.

Doubt has killed more dreams than failure ever can.

I have always maintained that when Steve Jobs came back to Apple he brought this one important ingredient to Apple. He brought belief to Apple. He brought a belief that a world with Apple is better than a world without. All the great, talented and gifted people at Apple were able to rally behind that belief. Look what they have achieved.

P.S. – When I talk about belief I am referring to WHAT you seek to achieve, not HOW. The how will keep changing based on how the market responds.

Categories
Entrepreneurship

Taking the Small Steps

Large market size is important; but a startup invariably starts niche and then grows. When I try to explain this to entrepreneurs, I find that most people walking down the path of entrepreneurship find it very hard to understand the need to start niche. Everyone can use this product is the usual answer I get. Most entrepreneurs I come across, who are working on tech products or online businesses expect a million customers to show up in 6 months!

Starting a business is a marathon, not a sprint. It will most likely take 10 years of your life. It is in very rare cases that someone gets a Billion dollar exit in 3 years.

The larger goals and the larger market is important; but when you are starting out, the here and now matters more. You probably do not have the money or the capabilities to serve the larger market to begin with. What is most important is to keep moving forward a step at a time.

When starting a business the first few customers are by far the most important and the most critical. They are important because they put their trust in your product/service and decide to patronise you, at the same time, these are the people who provide you some of the most critical feedback which help shape your product/service. Also, it is probably the only time in your startup journey that you can spend time listening to each customer and understanding the qualitative richness of what they are saying.

Since it is cricket season, I am going to use that example. You might want to be the best national player, but you cannot say, you will play directly at the national level. You have to try to excel at club level, then get into smaller regional teams, and progress thereon. The greater goal of reaching the pinnacle motivates you but nevertheless you focus on the here and now. You try to score the century in the small matches that you are a part of. Shine at the opportunities provided to you. Make people realise and say that this player has got real talent. This probably helps a talent scout spot you and move you up into a higher level of the game, where you should be able to excel again to move forward.

Just because your product is online, does not mean that the world is your canvas. Start with the immediate; the people that you can reach out easily. Convince them to use it; take feedback. Find people who love what you are doing. They may be few, but that is fine. They will be the people who will make others patronise you. Keep growing the circle of people who love your product. As it keeps growing bigger and bigger, you will have a real opportunity to get into the big leagues.

Rome was not built in a day, it was not built in week or months. It was built over decades. That, most often, is also the case with businesses. Very few of them ever are built in a very short period of time. Have patience and build it one brick at a time.

Categories
General Thinking

What makes a business, a ‘Startup’?

All too often I come across young entrepreneurs, who are just starting a business through which they intend to hawk their skills. Starting a business does not necessarily make it a startup. It makes you an entrepreneur certainly, but not a startup.

Anybody, who engages in any kind of business is an entrepreneur but only a few among them can be deemed startups. I can’t go around saying, I have a startup just because I setup a Dhaba on NH7!

Unless… the business meets certain conditions; I shall list them below.

 

Attack a problem that has not already been solved

When you attack a problem that has not already been solved, you are creating a market for yourself. The kind of solution that you offer cannot be bought off the shelf and hence it makes the offering compelling.

I know web development and hence I started a web development company. Well, sure you did! But the problem with that is, you are not solving anything new, you are invariably going to compete with the many thousands of web development agencies that are out there already. You lack experience and most certainly the manpower that some of the more established peers have. From that point forward, it is an uphill climb. Besides, since this is a well-worn path, many entrepreneurs have tested and tried all kinds of permutations and combinations of selling the product or service. I do not deem such a business a startup.

Unless… you have found a way of doing the business differently.

 

Building a business model which breaks convention

Take a company like Uber; it is able to get into a business that is as old as the motor vehicle and able to find scale like no other business has been able to, till date. Many companies have tried  running a taxi business. Invariably the biggest problem with running the business successfully has been that the incentive of the owners and the drivers has been misaligned. This has meant that there is no global taxi business; until, Uber.

Uber used a mix of technology coupled with a business model, which is unlike any that existed till then. Most importantly, the company does not own any inventory of vehicles unlike every other cab business prior to it. They own the platform through which they are able to generate demand and they manage to match that with individual taxi owners who are able to deliver a standard product quality.

Uber is just one of the examples of how an old world business has found a new avatar through an innovative business model.

Examples of such companies include Airbnb, HotelsTonight, Google, Spotify, Pandora

The success of each of these businesses hinges on the fact that they did things differently. They changed the way the business was done in the past. Before Google, all search engines used to push the sponsored listing up on the search results without informing the users; precisely why the ‘Don’t be evil’ motto was coined. Spotify and Pandora changed how music was consumed and thereby changed how users pay for them as well. Airbnb changed the ad-hoc renting market forever; not only for home-owners who wished to rent out their houses/rooms as holiday accommodation but also for travellers who seek for cheaper stay options. Each of them have been able to change the way business used to be done, which brought them leadership role in the market and helped them get recognised.

 

Ability to grow across geographies and scale, providing exponential returns

Most of the businesses established prior to the onset of computers usually consisted of certain assets, which cost a lot to replicate across countries, which in turn slowed down the growth of the business. In the case of most startups, one of the defining features is that they are easy to replicate in different geographies and hence lead to rapid expansion across not only domestic but also international geographies. [Caveat: Certain problems are country specific and therefore cannot be scaled in a similar manner internationally]

In all of the cases mentioned above the companies were able to quickly spread the same model across boundaries and ensure rapid growth of their businesses. The increase in scale means exponential returns for any investment that has been made in such businesses.

Despite being restricted by copyrights, companies like Spotify and Pandora have been able to expand to tens of countries resulting in very high turnovers for them.

Scale is by far the greatest defining attribute of a startup. Companies that can cater to a relatively large market can scale continuously and therefore generate greater value for the investors in the long run by unlocking value in untapped markets. Squeezing more money out of the same set of customers often proves challenging and also results in companies acting in a manner which is seem to be contrary to the interests of the consumer.

 

These three attributes are by far, the most important for the business to be classified as a startup.

Categories
General Thinking

Failure

“One often meets his destiny on the road he takes to avoid it.”

I love this quote from ‘Kung Fu Panda’. I have seen this quote to be true on so many levels and in so many situations.

Nobody likes to fail and failure is not a very pleasant experience. But some of the best learnings come only out of failure. Despite this we all fear failure, it is imbibed in us by society and years of being told not fail. I would like to know one person who went back from school and said, ‘Mom, I failed the test today’ and received a response which went like, ‘Great! So what did you learn from it’.

It often happens that the fear of failure is on top of an entrepreneurs mind and it causes them to make decisions in order to NOT fail. They do things that seem safe and not risky because failure would come at a cost.

Instead, as an entrepreneur it is important to make decisions to succeed.

What is the difference??

Take coding for example; if you are looking to succeed you will make all the mistakes and break the code as many times as possible till you succeed.

If you are coding not to fail, you will only do the most obvious things that you are sure would compile. You will never want your code to fail. In the process, you may never find the more optimised and brilliant solution that was always there within you.

As you keep writing code, which keeps failing, you understand the issue at a more fundamental level, you understand what works and what does not. You understand interdependencies better, which may not be described like an equation, but your mind is clear about it. This insight allows you to do things that others cannot.

Failure is merely experience that helps perfect you!

But you need to fall before you learn to walk and it is only then that you learn to run.

Categories
General Thinking

Ramblings on Perseverance

SJ
Steve Jobs is considered one of the most successful entrepreneurs of our times. He was involved in three ventures, Apple, Next and Pixar; of which two can be considered bonafide successes. Next was more of an acqui-hire and we really do not know if it would have been a hit, stand-alone.
But if we were to consider the other two enterprises; Pixar was eventually acquired by Disney making Steve Jobs the largest shareholders in Disney. Apple, well I do not think that I need to detail that out.
Pixar was one of the biggest bets which Steve Jobs made post Apple. For those who love to study pivoting, Pixar made the mother of all pivots going from being a high end computer maker to being a animated movie studio. The value that they were able to unlock through the pivot was extraordinary.
Roll back to 1994, all of the three ventures that I have mentioned above seemed to be on the verge of failure. Apple had not delivered a single hit in a long time (agreed Steve himself was not a part of the company). Pixar had successfully chewed through $50 Million and there was little to show expect for a Disney deal to distribute the movies it made, and it is said that Steve Jobs himself was looking to sell the venture. Next had faced failure upon failure and the entire tech world was certain that the latest operating system which the company had been developing was not going to be any match to Windows.
It was sheer perseverance which pulled these ventures out of the abyss that they had got themselves into. The patience to wait and see through the release of Toy Story in 1995 changed the fortunes of Pixar. Next was bought by Apple and Steve Jobs embarked on a slow an painful march towards revitalising Apple and putting out products that the consumers would love to use and admire.
I write about Steve Jobs because I have read plenty about him; although the same argument can be made for some of the biggest successes in business including Richard Branson, Thomas Edison, Sam Walton, Bill Marriott, and many more… More than anything else, it is pure perseverance that has resulted in these successes.
I feel creating a business is like preparing a dish whose recipe you do not know. So if you add a thought like “Fail Fast” to the mix what is going to be the likely outcome? The idea is to iterate with the absolute minimum ingredients to be able to realise whether a model works or not; ‘Fail Fast’ is by far the worst term coined to describe this. ‘Iterate fast and learn from failure’ should be the actual term that should be used.
Persevere.
Don’t put everything that you have at risk, the first time around.
Develop a business on the basis of firmly grounded insights.
Don’t give up if you fail. If you had to give up, might as well have not started in the first place.
It is not wrong to fall, it is wrong to not get up after the fall. It breaks the human spirit.
Categories
Entrepreneurship

Vision and its role in achieving success

I travel a lot and I drive very often. I always try to reach the destination as fast as possible.

I use to think that the speed at which you drive is related to the width of the road. The wider road affords you a lot of room to make errors and therefore allowing you to drive faster.

As I drove on the narrow road to Hyderabad, I realise that speed has nothing to do with the width of the road, but is the function of how far you can see. The further you can see with certainty, the faster your able to proceed.

photo copy              photo

When you think of businesses, the same principle translates into an extremely clear vision behind which you are ready to put or commit all of your resources. If the vision for the business is extremely clear than, you have the ability to throw all your weight behind achieving the same. Not only that, you also have the added ability to push forward against all detractors, of which you may find many.

Apple did not come up with an idea of a tablet, but they were the first company who had a clear vision and the belief to commit to the vision. There were many other competitors who came up with the same form factor, but did not have the vision or the belief to pursue it. In fact the success of the iPad is just due to that belief, you can see the difference in the results achieved by Apple and a competitor like Microsoft, HP, Lenovo, et al.

Clarity of vision is by far the best gift that you can give to your business.

 

Categories
Entrepreneurship

Business is all about Trust

I had put this topic down a long time time back. I had wanted to write about this subject, but it is probably better that I write about it now.

It is better that I write about it now because of what has happened with a small company called Healbe. Healbe is a small startup that decided to crowd fund a device that they were developing called GoBe. The device what supposed to be able to calculate your calories, hydration, stress, and many more things. You can find the campaign that they had put up on Indiegogo here.

Everything was going good, they were on the way to a Million dollar funding campaign, when trouble began to brew. First they were not able to trace the business or the business people. Then many of the experts began to question the claims that the company was making. Some of them said it was “bullshit”. And today, people have started asking for their money back, because they no longer trust the company.

The money made its way in because of trust and is now beginning to make its way out because of distrust!

For any business small or big, “TRUST” plays a massive role in how the business is perceived and how well it is able to do. A consumer or client puts money on the table because they are willing to trust that the product or service that a person is selling would perform as promised.

If that trust is lost, there is no way that a business is going to be able to survive.

Categories
Entrepreneurship

An Important lesson on managing Teams

I was wondering why it is, that we tend to have better meetings at Startups Club when the group tends to be smaller than when we have larger groups. I found the answer in a book called ‘The art of thinking clearly’.

In 1913 Maximilian Ringelmann, a French engineer, conducted an experiment on horses! After his experiment he concluded that the power of two animals pulling a coach did not equal twice the power of a single horse.

Obviously, he was mind-blown and he decided to test if the same applied in the case of humans. He had several men pull a rope and measured the force applied by each individual. He found that on average, if two men pulled together, each invested just 93% of their individual strength, when three pulled together, it was 85%, and with eight men, it was down to 49%.

This is explained using a phenomenon called Social loafing. When the effort of an individual is not as clearly evident, individuals do not tend to give a 100%.

Social loafing occurs in mental activities also! For example, in meetings, the larger the team the weaker their individual participation. Have you seen meetings where the speaker is goading people on, to be interactive, but barring a few, all the rest of them seem to be dead!

Once a certain number of participants are involved, their performance plateaus. Whether the group consists of 20 or 100 people is not important – maximum inertia has been achieved.

From the perspective of a startup this is a fact that just cannot be ignored, because it is imperative to achieve peak performance from all of the individuals who are a part of the team. This phenomenon makes it abundantly clear what an entrepreneur should be doing with his team; make them individually accountable!

Now do you understand why extremely large companies find it really hard to come up with path-breaking innovation?

Categories
Entrepreneurship

Having your sights on the goal!

So yesterday, my partner’s son had gone to an amusement park and his bag got misplaced. Worse the bag had his newly acquired iPhone. He was still at the amusement park when we came to know of this, and as you would expect it was shocking to hear this.
After the initial “Oh Shit!” “God!” and other choice expressions, we resigned to the fact that the phone was lost. At this point it just occurred to me that the phone could be tracked using his iCloud account. After calling the phone up to see if it was switched on, I lodged into iCloud. The moment iCloud came live and we could see the phone on the map, a new aggression swept the room. “Screw the driver, ask him to wait, you go back into the park!”
Directions were being given, every micro-movement on the map was being tracked and there was this sense of excitement (at being able to see the phone and being so close to getting it); a sense of frustration (when the directions were not being understood); a sense of teamwork (trying to work out alternate ways of explaining the same set of directions); all combined into one; finally we located the device.
It got me thinking how important it is, in general, to be focussed on the goal that one want to achieve because once you have that in sights, the energy that gets infused, by being able to see that goal is immense. This is the energy that makes impossible, possible. Makes groundbreaking innovation, reality. Makes lofty targets, achievable. Having your goal in sight is the fuel that energizes a team during the toughest of times and makes entrepreneurs successful.
This is the fuel, the energy that any startup desperately needs. Never take your eyes off your goal.