Making things Happen

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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.

What is an MVP?

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MVP stands for Minimum Viable Product. If you wish to setup a website that is going to do something, as you pore over the things that the site can do, you will certainly think up a hundred things. Obviously it is not possible to implement all of these in the first version. It is also ill-advised to do all of them in the first version since that would lead to a great deal of confusion in the minds of the user. Besides, a great deal of education would be required to use the site to its full potential.

Teaching your customer how to use your product is much like teaching a child how to play a sport, let us assume tennis. The first this that you are going to teach is hand eye co-ordination so that the kid can hit the ball consistently and then you will introduce the net and then the court with all of the constraints and rules.

It is much the same when you build a product. It happens quite naturally when the product is a game, take any game as an example. Level 1 is easy and then the complexity rises. It is a lot harder to think of products in this manner where it starts from something simple and then you add layers on top.

Starting with the bare minimum features means that you create a product that has a single point focus and the application can be very easily understood.

 

If I gave you a cycle and asked you to figure out how the application of effort on the pedal leads to the rotation of the wheel

Vs

Gave you a car and asked you to figure how the movement of the piston leads to the rotation of the wheel; 

which might you figure more easily?

 

The MVP is about dialling down the complexity and hence the investment needed to get your business kick started.

Even a Facebook page can be an MVP if you can attract enough people to it and get them to transact through it. I know so many small startups selling their goods through just a Facebook page. No website, no payment gateways, no fuss, simple. If they see good traction, they can move on to building an entire website.

Nastygal.com is a multi-million dollar business. It started as a channel on Amazon which served highly curated and unique products. When they saw that they had an invested and loyal customer base, they moved to build their own website.

Every business is based on an insight on human behaviour. The job of the MVP is to establish and validate the behaviour. If what you expect is what is happening then you can build out the entire product/service that you have envisioned.

The purpose of an MVP is to get the idea across in its simplest form, see how many people are interested and if the kind of behaviour that you seek can be encouraged.

MVP

Since most of my examples are to do with websites does not necessarily mean that this is not possible when it comes to hardware or other kinds of businesses. The first version on most products are quite basic. Obviously if the product is a tangible object, it is important to make it. Hacks such as Facebook pages may not work. Nevertheless it does not have to be a complicated and costly product straight out the door as illustrated effectively in the image above.

Partnering for Demo Day

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We work with several partners for the annual event which we organise under Startups Club, in order to make the day possible. Since our objective is to work and reach out to early stage startups we try to work with those who specialise in this segment. I would like to talk about three of those partners who we are working with for this year’s event.

GINSERV

Often times I come across a lot of startup entrepreneurs who have an idea and wish to start but need the initial money to get started. Due to various reasons they are not in a position to invest the sum that is needed initially for getting the business off the ground.

The initial sum that most of these startups require is to the tune of tens of lakhs and this is not a large sum of money. Further, it is also important for such startups to get access to a network of mentors that they may seek suggestions from and use as a sounding board.

There are very few entities that support startups at that stage of their venture. We found that Ginserv which is located in Bangalore has one of the best programs for the early stage startups. They have a seed fund, which deploys funding under the Business Incubation program setup by the Government of India. Not only do they provide funding but they also provide incubation support, in terms of office space and a mentor network that they have amassed over a period of years.

We decided to partner with Ginserv because they provide one of the most valuable offerings to startups in their early stages. They have been working with several startups helping them with their seeding stages and helping them move forward as they begin to grow. Their applications open once a year and it is highly recommended to early stage startups to apply for the program since it changes them up to reach the next level.

 

SIAM COMPUTING

Starting a business is about having a keen insight on human behaviour and exploiting the same for the purpose of building a business. It is most often those who spend large chunks of their time meeting people who tend to come up with these insights. Also, the people who are tasked with spending time with others tend to be marketing folks and they tend not to have the technical knowledge to build a platform that can serve as a solution. Since, Intuition has brought about the epiphany; these people have the conviction to follow the idea and build a business. Also, since they have been people who have been handling marketing and client interaction for a fair amount of time, they have the  They nevertheless lack the technical skills required to build a product/platform.

Siam Computing is a company that has been working on delivering some of the best product solutions to various businesses and has been recently working with several startups to help develop tech products that they are looking to deploy. They have a startup product of their own called hisabing.com, which is a MicroERP solution and hence understand the requirements and time pressures that startups face.

For the kind of founders described in the earlier paragraph, Siam offers a great solution that makes it possible for them to build the tech end of the business without having to immediately look for a tech co-founder. The tech end of the company can be slowly built, simultaneously. Siam Computing also takes care of bringing the tech team up to speed and handing over the technology to the startup as well.

 

ECONOMY DECODED

What happens when a group of college kids come together to create a media business that is full of quirky posts which is meant for the youth. Economy Decoded is a blog meant for the youth which provides a different take on the things happening around the world and the experiences that are shaping the youth of today.

In a world as complex as media, it takes some guts and some stupidity to want to create a platform that offers content which is highly differentiated and highly niche. Despite this, the young team at ED has been able to push their plans along to build a media platform which is differentiated, curated and interesting.

We admire their entrepreneurial spirit and their positive attitude and we are partnering with them because some pursuits are worth being with for just the audacity involved.

Sensibility, Intuition and Good Judgement

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There is a expression that I simply hate: counter-intuitive. Counter-intuitive implies that something is contrary to intuition, but in most cases people describe things that are counter-sensibility as counter-intuitive. When someone says something is counter-intuitive, I just assume that they have no clue what intuition is. Read my previous blog about ‘Intuition‘ if you wish to know what I think intuition is.

Sensibility

So what is sensibility? According to me sensibility is whatever convention teaches us. Sensibility tells us that if you throw a log of wood up, it is going to fall on your face or if you say something unflattering to someone, they might get pissed off. It is what you come to expect based on the norms that you are used to.

Is there a situation where, when a log of wood is thrown up, it goes up and does not fall down? Under water?

Saying something unflattering to someone might actually cause them to do what they must.

The norms that we are used to, make us think sensibly. They do not allow us think intuitively.

Intuition

Intuition can be counter-sensibility. It is born out of a great deal of observation and assimilation by the sub-conscious which is hard to define or justify.

“This is going to be by the most appreciate book.” You know intuitively that this sentence is wrong. What is wrong? Gerund? Infinitive? Article? Past participle? I am sure you can’t put a finger on the rule that I am flouting but you know it is wrong and you know what to do to correct it.

Observation and assimilation causes you to know this. Most of the things that we learn are like this. In fact we hardly learn anything consciously.

Intuition is hence extremely hard to explain to another person. It usually flies in the face of sensibility. You feel, ‘I should probably tell this person something unflattering in order to push him to achieve his potential’. How do you know if you will get the reaction which you expect or not? Intuition lets you know.

Its just impossible to explain why.

Intuition at first glance looks stupid.

Good Judgement

Given that most times intuition is going to be hard to explain, justify or defend; it is important to have good judgement.

Let us say, you are running a startup and have a key employee who is based out of the client’s location. This person has had a chance to observe things that you might not have. This observation would contribute towards building an intuition that you would not have. Any call that this person makes on the basis on their intuition is going to be hard to explain and may fly in the face of sensibility.

As a teacher, parent, mentor or leader one of the most important things you can hope to lend to anyone is good judgement. Even if the decision taken does not seem sensible, if its based on good judgement, you can rest assured about the decision. It may work out favourably or not, but the basis would be sound.

So where does this good judgement come from?

Values

All judgements are based on the value system that a person follows. Providing great values is the best way of ensuring good judgement.

Values are extremely important; whether you are the head of a team, a business or a family. Articulating it clearly is even more important.

Strong values breed a way of thinking within an organisation. It develops a culture over a period of time where there are certain things that are appreciated more than others. It also begins to define the incentives within the organisation to encourage a particular nature of behaviour and decision making.

Values breed culture.

Culture eats strategy for breakfast.

Strategy is just an approach and the approach changes all the time.

Culture determines incentives, if the right things are incentivised the outcome will always be good in the long term.

Secrets about Sales

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In the startup journey one of the hardest and by far the most critical things is to get sales for the company.  Sales is what finally drives the engine and brings the income that is required to prove that the business being pursued, is worth being pursued.

When a startup embarks on sales, it is important to be focused on how they go about the process. They need to be able to describe their dream customers who would not have any hesitation in purchasing the product or service that they are looking to sell. Once this ideal customer is defined, it is very important to go ‘Narrow’ and ‘Deep’. Addressing a specific customer is easier than addressing a mass market with a wide variety of customers who have a variety of needs to be addressed.

The temptation at the beginning is to start selling the product or service to the entire market. There is no surer way of failing. I wrote a post about this earlier here.

A startup thrives on building relationships. Early customers of the company not only patronise the startup but also provide a great deal of feedback to improve the product to better meet customer requirements. These individuals also play the part of marketers on behalf of the startups. It is hence extremely important to cultivate a great relationship with these customers.

When you feel personally invested in something, you want to see it succeed. You want your customer to be in this position. This is precisely the reason you need a very specific customer with whom you can have one shared interest – your business.

Going narrow allows the startup to focus on the individuals who best suite the dream customer profile and makes sure that the conversion can be quickly achieved. Going deep allows for a lot of feedback to filter through as well as enables strong relationships which the business can depend on. Such customers would not abandon the startup to move to another (let us say a competitor) very easily.

All of this put together makes it possible to truly delight your customers.

Marketing is broad and shallow, it tries to address the mass. As a consequence it does not enable relationship building, which is very critical for a startup. Also, the cost of marketing tends to be much higher and the returns on the same much lower than selling directly to a specific customer.

Sales is about relationships and even if you are a larger entity, the relationships need to be nurtured and grown. A larger entity needs to look at sales like a long distance relationship. You might not be able to meet or spend as much time, as regularly. Nevertheless, you can always keep the channels of communication open and communicate regularly.

When engaging in sales, it is also very important to look at the product or service from the perspective of the customer who is being sold to.  Most often one of the biggest mistake that most entrepreneurs make is to try and enforce their perspective on the customer rather than, get around to seeing the customer’s perspective.

If you look at the image above; at first sight, it seems like the image is one, of an old man. But a closer look makes it clear that there are two different people, one old man and a woman. Similarly what your customer sees or what you see might not be the same. Hence it is important to look at the frame of reference of the other person in order to convince them. This is easy, again, if a narrow and deep approach is taken.

Fundamentally, sales is a reflection of how well you understand the customer you are targeting. By going after a narrow subset of customers, startups can ensure that they know their customers well. When you know your customer well, your ability to see their perspective deepens and you are well positioned to close the sale.

‘Fail Fast’ is about decisiveness

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Fail fast is one of the worst expressions coined and even worse understood terminologies. Most startups I speak to, seem to think that ‘Fail Fast’ means start in a hurry, fail in a hurry, shut down and leave. Lower Opportunity Cost!

If this is the philosophy that a startup is following, then failure is inevitable.

Every startup is based on a deep insight on human behaviour. The business is trying to exploit the behaviour to effect certain actions and hence profit from the same.

Once you have identified the behaviour, the next challenge is to find the best way to effect the behaviour – Product-Market Fit. If you are certain about your insights and believe strongly enough, you should pursue to build a business.

Cutting across to ‘Fail Fast’; one of the greatest assets that a startup has is being able to make quick decisions. A small structure and small number of customers means that huge changes can be effected without really feeling much pain. This is the essence of fail fast. If you feel a certain approach to your product does not seem to be successful in the real world, change it.

Take another approach, try to generate clients quickly, if there are too many ‘No’s’ that you hear, invariably the Product-Market fit has not been found. At such a point you change your approach, change how the product is being delivered or even what the product is. You figure out the failure of the model/product and change it.

Fail fast is not about running the ship aground; its about finding the flaws through failure and rooting them out. Schooling does not teach us to fail. The real world requires us to fail, because failure is the best teacher. I wrote a post about this. (Why dropout make good businessmen)

One failure would give you more insight than 1000’s of successes ever could!

Why is this not possible in a large company?

If a company, say Microsoft, were to decide today that they do not wish to be in the phone business; can they just shut it down? They would have to make a case to the board, see the cost of laying-off people and the losses they would have to write off on stocks in stores and supply chain, figure out how to support existing customers; not an easy decision. Therefore decisions take time in large companies, not so in a startup!

Making those decisions quickly helps you get ahead. If you procrastinate, you loose the advantage of being a startup.

Therefore Fail Fast is all about being extremely decisive.

Why Starting up is like Cooking

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I have always maintained that starting a startup is like cooking a dish, whose recipe you do not know. (I have described in greater detail in my earlier posts why the recipe is not known here and here.)

It takes great ingredients to make a great dish. In business, these ingredients come in the form of people, who make up the team. It is therefore impossible to over-emphasise the importance of having a good team in place. This is absolutely non-negotiable. If you compromise on the talent/quality of people who are making up the team, the output is obviously going to be compromised.

While picking a team, the one thing that you must keep in mind is that they should go well together. You may have the best strawberry and highest grade of pepper but together they are not going to create anything palatable. This is what is described as Culture in a business. You need to pick people who can work together well; where the sum of the parts is greater than any of the parts (like strawberry and cream).

Your business is the product of all of these ingredients coming together in the right manner. When you cook, the ingredients needs to combine well, should be cooked well enough to be able to contribute their flavours to the dish and come together cohesively. The product or service is like the dish that is prepared. The ideas from the team members should come together, with each contribution better defining the product/service.

Given good ingredients, it should be possible for you to cook up a good dish irrespective of whether your are preparing to serve one person or 100; similarly it should be possible to make a sensible and profitable business no matter what the scale. (It is okay to be unprofitable due to overhead costs, but not on a unit level)

Money is like the vessel in which the dish is being prepared. It is important, but by itself does not have any value. If there is a problem with the dish, throwing it into a larger vessel rarely solves the problem. Similarly money is rarely the solution to any of the startup problems. It, more often than not, deviates the attention from the real issue. Great ideas contribute to problem solution, not money.

 

To build a great startup:

Start with an appealing dish : A great idea

Get the right ingredients in place : Build an awesome team (Great ideas often save business and ideas come from people; so get great people for your business)

Get the right vessel : Too little money in a venture can be a pain and so can be too much (Look for people you know, who believe in what you do, who might support you)

If you have a vessel of your own, use it. Don’t try to borrow the neighbors vessel : Try to rely on your own money as long as possible. The moment you become answerable for somebody else’s money, it begins to distract you from your main goal. In addition to that, the person contributing the money will begin to influence the business in many ways, which may not always be positive.

Cook a dish and get people to taste it : Reach your Minimum Viable Product as fast as possible and get consumer validation. Make them use it and tell you what they feel. Ask them if they would be willing to pay for it. If possible sell it.

Serve : If you feel you have a product/service, however basic, which can be sold; Sell it. You need to get the money rolling as soon as possible. It is the only way to start defining your business. It is the only way to grow. It is the only way to improve.

Keep perfecting your recipe.

 

Some more similarities that I found were:

Salt and Product Features : Adding features to a product is like adding salt to a dish. If you put in too little, you can always add more later. If you put in too much, it’s a nightmare trying to remove it and it ruins the dish/product.

Salt and Collaboration : When you are at the initial stages of developing a business, every single idea matters. Every little input makes a huge difference to how the business works and how it gets projected. Value all of them. While cooking a dish, of all the ingredients, you use very little salt in a dish, but that little salt makes a lot of difference to the dish. That is power that each idea has, it might seem inconsequential but might end up defining your business.