General Thinking

Beginning with trust

There was an interesting conversation I had a few days ago.

A startup founder called me and informed me that a large multi-national company had shown interest in their fledgeling product and wanted to deploy it. Before the deployment, they wanted to go through the entire product and understand how it works. He was concerned that since the potential customer was a large company, they might potentially steal the idea.

He had scheduled a meeting with the COO of the company and wanted to send him an NDA before going ahead for the meeting.

I asked him what was the outcome that he sought from going through the process of signing an NDA? He said, he would be able to protect himself. I asked him, in the event that they still went ahead and copied; would he sue? He said no. “Then what is the point?” I asked. He struggled for words.

The unfortunate truth I told him was that there was little that he could do if the opposite side were malicious. As a startup, you have little in terms of resources and you have to make sure that you spend it the right way.

By sending an NDA

  • You slow down your progress – Being a large entity, they would then necessarily be required to pass the agreement through their legal department and this only acts as an impediment for you to get things done.
  • You erect a wall of distrust – You are making your lack of trust in them or particularly that person obvious by sending across an agreement just to talk to them.
  • Ego – As a startup, the world that you are aware of will be a subset of the whole. You are assuming that you are the only one doing something of the nature that you are, which in my experience is always untrue. Don’t make the mistake of overestimating yourself.

Swinging things your way

Most decisions that we make in life are emotional. We might try to explain it with rationale but it is nevertheless emotional. We do business with certain people and not with others, only because we like them. Likability determines the outcome of business meetings more often than capability. 

Hence the cliché – Unsung genius. Most geniuses are not likeable.

I am not an expert but erecting walls of distrust is not the best way to be likeable – Then why erect a wall of distrust right at the beginning. 

Why would someone give you the business – Someone is going to give you money or business because they like you not because you can genuinely do what you claim and they cannot do it themselves. Your job as an entrepreneur is to convince them that they do business with you.

When you do something it should have a purpose – NDAs exist for a purpose – Defence. Have the capacity to defend before you walk that path. 

General Thinking

Trust and Profits

There is a deep corrlation between trust and profit.

It is often hard to see this correlation at work when things are going good. By the time you are in a place to realise it, the ship has sailed or rather sunk!

Facebook has been blamed for manipulating elections and propogating fake news for financial gains. They let advertisers run whatever messaging they wanted without any checks or balances in place. Just as long as the cash tills kept rolling. I read a couple of news reports yesterday that emphasised this further.

The New York Times has started making money again!

The New York Times Company posted expectation-beating earnings, bringing shareholders surprisingly high profits. The news sent Times’ stock up more than 10%, valuing it at more than $24 a share, a level it hadn’t seen since the summer of 2007.

Also, the greatest of all surprises – Twitter turned a profit! For the very first time since it listed in November 2013.

The social network reported its fourth-quarter earnings today, Feb. 8, and as expected, the company posted a modest profit, pulling in $91 million on $732 million in revenue. That’s a jump of 2% on the revenue it posted in the same period last year. It attributed the small rise to increased advertising revenue, stemming from the myriadupdates it made to its product over the last year, as well as video ad sales. (Annual revenue for the company was slightly down in 2017, however—it generated $2.4 billion, versus $2.5 billion in 2016.)

The advertising money is moving. And by the looks of it, it is moving fast. As the image of a company tarnishes, people start to move away from the company.

Facebook has an image problem and the numbers are reflecting that. The question is how far away are they from outright loss of trust.

Entrepreneurship General Thinking

Speed, Trust and Belief

The other day I was driving out of town. It took me about 45 minutes to do 15 Kms inside of Bangalore at 4 AM. There was no traffic on the road. Once I got out of the city though, I was able to drive a lot faster and covered the next 200 Kms in about 2 hours.

For those who are intimately aware of Bangalore, the roads in the city are not great. It is not that I could not have driven faster in the city, it is just that I did not trust the roads enough. As soon as I would speed up, a pothole or some undulation would appear forcing me to brake. More fundamentally, not knowing where these surprises were going to pop up meant I did not trust the road ahead. As a consequence of this I did not cross 60 Km/hr while driving within the city.

People do not like uncertainty.

To the contrary once I got onto the highway, I kept getting faster and faster. As I started driving on the highway, I was cautious for a period of time. As I noticed that the road was more predictable and no surprises were in the offing, I forgot the bad experiences within the city and sped up. I trusted the road that lay ahead of me; This trust in the highway allowed me to speed up and stick to it.

Your ability to go fast is directly proportional to your trust/belief in what you are doing.

When you are driving if you do not trust the next piece of road to be safe you will not be able to commit to speed; If you are running a business and you do not believe in what the company is doing, you would not be able to grow fast.

When you run a company trust manifests itself in the form of belief.

If you are put in a situation where you are left selling your product to someone who is ‘sitting on the wall’; your ability to sell will depend on how strongly you believe in your product. If you really think that this product is worth every penny and that it is going to make a positive change to the customer, you will sell it to the best of your ability. And most often your will succeed at it as well.

What did Steve Jobs bring to Apple? Not knowledge, not technology, he brought belief.

Your  ability to achieve what other call the impossible is greatly accentuated by your belief. This is the reason, in certain cultures, people walk on fire; they believe that they will not be harmed.

Starting a startup is hard. It is like walking on fire.

Do you believe the activities that you are pursuing with your startup is going to change peoples lives positively?


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.