Vijay Anand | The Startup Guy.

Archive for the ‘Business’ Category

I am reading the transcript of the conversations held by the Union Square Ventures, and reading a quote by Sir Ken Robinson (who is now fairly well known in the education circles for his TED Talk). In the talk, he quotes a note from the book “The Empty Space” by Peter Brooke. In a way of not breaking what he said, Let me quote him.

   There was a fantastic booklet a few years ago by a
   guy called Peter Brooke.  He’s a theater director,
   if you ever come across it.  He wrote a book called
   “The Empty Space.”  And he asked himself this
   question.  He was concerned most theater and is —
   loose entertainment — it’s not invigorating.  It’s
   like a passing time.

   His thing is theater as a vibrant,
   social and cultural force.  So, he also analyzed
   what goes wrong with the theater.  So, he asked
   himself this question.  He said, What is the heart
   of the theater?  What is it?  What is this thing we
   are talking about?  And to get to it, he started
   the process of subtraction.  He said, “What can you
   take away from it and still have it?”
  
   And he said, well, you can take away
   the stage.  Take away the script.  You can take
   away the lighting.  See what’s going on, you take
   away the curtains, and you can take away the
   building.  You can take away all the crew, and you
   can certainly take away the director.  All of that
   is very easy.  Take it all out.
  
   The only thing you cannot remove from
   theater is an actor in a space and somebody
   watching.  That’s the heart of it.  And if either
   of those parts is missing, there is no theater.
   You need a performer and an audience.  Theater is
   that relationship.
  
   And he said you should never add
   anything to that relationship unless it improves
   it.  If it gets in the way, if it encumbers it, if
   it makes it more difficult, you shouldn’t have it.
   And that’s his problem with theater.  Everything is
   a distraction from the main business.

More than once, and whenever you do find yourself trying to redefine an industry, change the way a system works, or maybe even build an ecosystem, these words are good to turn to. Define the basics of what makes that system work, and see how it can be re-tuned, rebuilt and made to work better. You have to go back to the basics, if you want to redefine.

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Once life starts picking up the biggest problem for me seems to be managing time, and most of all trying to avoid the moments when I end up cross booking the time slot for two people – yep, that isnt an easy situation to get out of.

When I am at home, and during weekends, I manage my Calendar on my Nokia Handset with an hour reminder. When I am in Office, I use Outlook’s calendar to manage schedules. The biggest issue is the first few meetings on Monday mornings – there are times when something comes up and there is no way for me to check my schedule.

So here’s the solution I’ve gone with.

Using Google calendar exclusively to manage my entire data. I found to my pleasant surprise that Google has a small app that can syncronize your outlook calendars with Gcalendar.

Secondly, after trying a host of free, opensource and cant-seem-to-get-it-to-work apps, I found CalSyncS60 which works like a charm with my Nokia Phone to do a two-way sync with my schedule in Google Calendar.

As of now, life seems to be in order. The fine line between, work and personal line is blurred forever, but it should atleast save me from breaking people’s hearts by forgetting scheduled meets and keep me on time. That’s a fair tradeoff.

There are quite a bit of people that I come across, good and very good people who sometimes have this fear of not being in the ladder. They are great with startups, but are afraid of being left behind in the startup world and constantly keep looking over the shoulder to move up to becoming a corporate and then join the old boys club of retired entrepreneurs.

i have almost come to believe that that is one of the primary reasons why once someone is fairly successful in this country as an entrepreneur, they run off to become a VC, and then become directors in a few companies and are never heard from again in the startup circles. Apparently they “graduate”. And this is somehow seen as the norm.

There is a certain thrill, passion, grit and energy in working with Startups. And if you do fall addicted to it, there is also more than enough means and ways to create wealth in this phase of creativity and corporate development.

But you are going to have to make a decision about staying put, sinking your heels deeper and committing to this space. As someone rightly said “My life never makes sense in the windshield. It only makes sense in the rear view”. Working with Entrepreneurs, working with Startups, and being an entrepreneur is also a lifestyle choice.

Even as the current economic situation hasnt seem to have harmed the Early Stage Investment scene by much, there is some major misunderstanding by First Time Entrepreneurs, starting off in India, who are looking to raise funds. This series hopes to shine some light on some of them

LESSON: MAKE THAT SACRIFICE. GROW WITH THE ORGANIZATION

Scenario: In the last three business plans that I have had the priviledge to look at and to give feedbacks on, it seems that the average entrepreneur wants a salary of around 2 Lakhs a month, seems to be hiring an office attendant or a secretary in the first year, is travelling extensively, starts a marketing budget even before the product is ready, claims a steady income stream, is absolutely immune to market changes, and can solidly break even in 3 years. And oh, they give a 4x return in the fourth year.

You cannot demand a salary that runs in the lakhs. You cant because If I were investing, I wouldn’t know if there is even an incentive for the entrepreneur to slog to make this company succeed anymore. Given the current employment situation, I would even have a slight doubt as to whether the guy lost his job and is getting self-employed with a raise. But I do understand if you would want to live comfortably. This is what I would suggest.

Take a pay cut in the first two years – till your product development is ready. Just so you get a number, You get paid at the same level as your Indian Lead Software Engineer (I have to specific about the indian part, since some folks also have high paid outsourced engineers). That should put you at around 40K a month. Once that is set, and once your product development is done, and your marketing and sales efforts start, align your salary so that a base of 40K and a incentive component from the sales defines what your take home package is. That will assure me as an investor that you are willing to take a paycut to keep costs low and burn things slowly to get through the initial phases and even as the company makes money you arent raising costs, but defining your salary from what is coming in. If you are a company that sells products that sells in the millions, or have several product packages, it would be wise to even define slabs, that define the percentage.

You do that, and all of a sudden I see a real entrepreneur, who could really use with some financial support, and the halo over the head glows and a lot more people just might be willing to seriously consider your financial proposition.

This world is supposed to be full of systems, and systems that carry inefficiencies. Entrepreneurs are in my dictionary, those that can look at those systems – ticking and clicking, and notice where and how the systems can be improved. Some are driven by their hearts and start NGOs, and others get all logical and while at it, also make some money.

In my book, entrepreneurs are those unsung heroes who get set to transform the way – hopefully for the better.

That’s quite a long topic, if we step into that world, and let me narrow it down to the aspect of understanding your end users. Time and time again, we hear phrases such as “Understand your customer” “The Customer is always right” “User-centric design” which in most cases is defined as keeping the customer, and his demands at the centre of the equation and coming up with solutions around them. Do Customers, and users… and most of all humans know of what they really need?

I think this is a crucial question to ask, because analyzing needs and the capacity for a user to pay for a service defines sustainability and in some cases survival for companies – and in this economic situation, for a whole lot of them. So what do users want? Men or Women, as they might be.

I think we have kind of oversimplified the equation at most times asking direct questions about a product. If you get into the details of a product asking questions such as “Imagine if you had an ipod, but better and cheaper, would you get it?”, the obvious answer would be a yes. What one needs to understand, especially an innovator or an entrepreneur is to understand the intangibles. How would buying that product do in terms of the pride, and show-off calibre of that person. A lot usually tends to matter. Long story short, I’d strongly recommend not to ask direct questions. The answers are always in-between the lines. If you interpret it right, you win, otherwise not. But you get better at it over time. Thats the good part.

There is a reason why I am writing this. There was a recent study that I came across that was asked to a group of single men and women as to what is it that they look for in potential spouses. The answers were all tabulated, and then they were observed over a couple of sessions of speed dates. Most of the time, the kind of people that we are “attracted” to, arent the ones that we define as our perfect spouses. And the eerie thing is that, when they did the same survey right after a date, depending of whether a candidate liked a person who didnt match their previous opinion, the answers would sway totally on the other direction. Come back to them after four more weeks and you’d get their old answers back – as the infactuation wears off.

In Summary, we arent capable of knowing what we want. Thats why B2C businesses have such a hard time understanding what their customers are looking for, what ticks, what doesnt, and what makes it all worse.

B2B businesses in that sense are slightly easier, since businesses do tend to have measured and analyzed every process in terms of metrics – either as costs, expenditures, manpower, transactions, or revenue and its all about making a number rise and one go down, and thats easier to measure and deal with.

Do keep that in the back of your head, if you are ideating. As much as customers are king, and their word is final, in most times they also don’t know what they want. You would have to do a little match-making on their behalf. And with time, you’ll get really good at it, if you like doing such things – and that’s the thrill of building a product that clicks.

This is a continuation to a Post that I had written Earlier.

“Yahoo could emerge with an edge, if they leapfrog into other verticals following the same web-based advertisement network.”

For a company which has entrenched itself in the media space, managing advertisements networks i probably the holy grail. I wouldnt recommend that Yahoo give up that leverage. Instead of going head on with Google and losing out on that battle, all they need to do is leverage that asset in a different vertical.

I wrote about perhaps using advertising networks, especially multimedia (audio/video) ads in Radio and television networks. One could argue that the ad server requirements, the infrastructure requirement and cost of operations would significantly vary because of the medium. I’d agree to some extent. But there is also a way to deploy the already existing asset, as-is, into different verticals. Read on.

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So I know that there are a gazillion guys out there in the whole wide world, who have given “open” advise to Yahoo as to what they should do. I am neither an expert, nor am vested into the company to have such generosity towards them 🙂

A friend of mine and I, over some conversations were discussing about some of the bigger brands that we see around us and something along the topics of Return on Equity. Not sure if you are aware of, but Microsoft has a 52% return on equity. Yahoo has roughly about 7% and falling drastically and Google has one which stands at around 26% – and growing steadily. Whatever you may say, Microsoft has played this game with a whole new set of balls and one most people simply won’t understand. And if you ask me, they are a much better company in terms of strategy and products compared to Google, anyday.

Yahoo could emerge with an edge, if they leapfrog into other verticals following the same web-based advertisement network.

Yahoo could emerge with an edge, if they leapfrog into other verticals following the same web-based advertisement network.

But that’s not the focus of this post.

The conversation was that, if a company has Advertisement as its core strength and has built a competence in it, then its going to be very hard for the company to drop that and adapt the advertising network of its partner/rival. Well, for the case of survival they might, but since they do have the core competence, the resources and the minds that can think in that direction, what could they possibly do, was the question.

Fact: Yahoo makes most of its money via advertisement, and that too on banner ads.

This becomes an issue when you have so much internet portals and properties, but just simply have to fill them with advertisements in order to make them viable. And in this day and age of APIs, nobody might even come visit the site to get hit by the advertisement. You are forced to rethink in terms of strategically placing the advertisement within the content, but thats a very very hard thing.

My Take: I think this is probably the same route as making fiber out of rocks. There might be some way to do it, but whatever it is, its one rare, long process.

I’d say, flip the coin, and lets look out to the horizon. Go after other streams, television and Radio… to be precise.

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