Thursday, January 29, 2009

Enough about Passion and Changing the World: That is Not The Entrepreneur's Job

The old joke goes like this.

Question: What do you call a very polite, friendly, kind, good looking monster?
Answer: A failure.

Why is this joke (mildly) funny? Well, it's because it plays on our sense of values and how it may conflict with the specific role occupied by an individual. Yes, we like polite, friendly, kind, and good looking creatures.

But the
role of a monster is to be none of these ... and so, defined by its specific role, such a monster would be a failure.

The same could be said for entrepreneurs.

An entrepreneur's job is to build lasting companies that makes lot of money. Period
  • An entrepreneur's job is not to change the world.
  • An entrepreneur's job is not to show passion for a product.
  • An entrepreneur's job is not to do what he or she loves.
An entrepreneur's job is to build lasting companies that make lots of money. Period.

Sure there is nothing wrong with changing the world, or showing passion for a product, or doing what he or she loves. But at the end of the day, if that person has not built a lasting company that makes lots of money, he or she has failed as an entrepreneur.

Take sports. The job of a competitive swimmer is to swim faster than anyone else. Sure it's great if the swimmer feels passionate about the sport, but no matter how passionate one feels about it, if he or she cannot swim faster than the person in the other lanes, that swimmer has failed. The swimmer may be a very fine person, but as a competitive swimmer, the person has lost.

Entrepreneurship is a sport.

It is a competition.

The rules are very clear.

And that is what makes it so exciting ... It does not matter if you are black or white or brown or tall or short or fat. If you create a company that spews out massive profits year after year, you have won the competition. You have earned the right to call yourself an entrepreneur.

If you don't ... well you can be a good father, a poetic soul, a dreamer, a passionate person ... but you will not have won the entrepreneurship game. Like the monster, you would have failed.

There is nothing wrong with failing at entrepreneurship
, just as there is nothing wrong with failing at competitive swimming, or anything else.

But the sooner an entrepreneur and young budding CEOs realise that there really is only one metric that counts in this game, the sooner we will get beyond the recent Web 2.0 silliness and thereby give birth to a revitalised start up environment where some truly amazing, long lasting companies will be created.

Thursday, January 15, 2009

What Entrepreneurs Can Learn from Indian Street Delivery Workers

We are beginning to see a lot of bankruptcies and firings at Internet startups. This is obviously very sad.

However, almost all online businesses and startups which launched in the past 2 years deserve to fail.

Why? Because their only revenue model is VC funding, and their only long term strategy is to get bought out or go public before it runs out of money. Sadly enough this idiotic formula has proven successful during economic boom times, and as a result it has brainwashed a whole generation of so-called "entrepreneurs" who unfortunately can put up a website but could not run a real business if their life depended on it.

What type of real business do I mean? Take the dabbawalas, for example, of Mumbai ... street delivery workers. As Sagar Gubbi writes: "Take a stroll on one of Mumbai’s busy streets and you are likely to meet men clad in white attire and Gandhi topis (caps), scurrying past with cartloads of lunch boxes. They are Dabbawalas of Mumbai, well known for their six sigma-rated service quality. A dabbawala (a Hindi word that translates into ‘a person with a box’) is someone who delivers home-cooked lunch to office-goers and businessmen in Mumbai, at a nominal monthly fee.

A dabbawala’s service might involve only delivering cooked food from the client’s home or both cooking and delivering the food, based on the client’s preference. Sounds simple, eh? What’s stunning is the fact that dabbawalas deliver nearly 200,000 dabbas (lunch boxes) everyday, with six sigma quality, which means that there is only one mistake in every 6,000,000 deliveries!

The dabbawalas have existed for more than a century and have become an essential part of Mumbai’s social fabric. They travel either by foot or bicycles or suburban trains and barely use any technology. Their service is uninterrupted, even during Mumbai’s dreaded monsoon rains.

There are an estimated 5000 dabbawalas in Mumbai, most of whom are illiterates and come from very poor backgrounds. They are all shareholders of Nutan Mumbai Tiffin Box Supply Trust which has a turnover of nearly 450 million rupees (approximately $11.25 million) per annum. Dabbawalas have never gone on strike and four years ago, they allotted just 20 minutes to Prince Charles to meet them so that their customers are not kept waiting.

Their excellent teamwork and time management system has been featured as a case study by Harvard Business Review and they have presented their business model to various corporate houses such as Tata, Coca Cola, Daimler Chrysler and Reliance Industries. Riding on this success, the Dabbawalas are now planning to start a Supply Chain Consulting business.

The dabbawala story is an inspiring success story and demonstrates that simple ideas, when executed with discipline and dedication, can bring amazing results at the base of the pyramid."

The dabbawalas are profitable, have never taken external funding, provide incredible value to their customers, and they make only 1 mistakefor every 6,000,000 deliveries. How much better the world would be if every web 2.0 "company" could do the same?

Friday, January 9, 2009

Winning the ARMEs Race

An acquaintance of mine from Eastern Europe wrote to ask me about what it would take for media businesses to succeed in this increasingly challenging environment.

My view is that in this brave new world, media and entertainment companies will find that they have to fight and win four battles at once in order to create truly incredible businesses:

1. First, the Battle for Attention: How successful are we in getting people to try our service? How much of a consumer's time are we capturing? How engaged is the consumer while they are with us?

2. Second, the Battle for Retention: How many consumers return regularly to our products and services?

3. Third, the Battle for Monetisation: How successful are we in translating attention and retention into revenues and profits?

4. And fourth, the Battle for Extension: How successful are we in leveraging our consumer base, products and services into new channels or areas for growth?

I am afraid that despite the Web 2.0 hype, very few of the companies have figured out the formula for winning this ARMEs race. Too many of them focus on just one aspect or two at most. Unfortunately, this is like trying to win a pole vaulting competition with a toothpick. It does not work.

Of course for those that have been able to get all the pieces together, the results have been astonishing. In a space of a few short years, Google has grown from an interesting start-up company, to an advertising behemoth, already sporting a market cap over US$100 billion. But even in the case of Google, it took an acquisition of a New York based keyword advertising company to fill in the missing piece.

How is your startup doing against each of these dimensions? How can you fill the gaps? Through organic development? Merger? New business focus?

Tuesday, January 6, 2009

The Curse of Too Much Capital

Leading weeklies are proclaiming the death of Silicon Valley, and technology blogs are carrying "Layoff Trackers," which their readers devour with a combination of fascination and dread.

Indeed, if you believe the popular press, it seems like the tech bust of 2000-2002 was just a precursor to what is likely to come over the next several years ... a nuclear winter for technology startups.

But does this need to be the case?

Perhaps if a startup raises $10 million in funding which the VCs are trying to claw back using every trick their lawyers can conjure up.

But who needs $10 million to start up an Internet company these days? Unless you are starting a search engine that indexes 10 billion pages and are maintaining a 5000 server farm data center to return results in a millisecond, you pretty much need just a few smart programmers, some good designers, and a hosting package.

With a lean structure like that, you can run a company for several years as long as it can generate a few thousand dollars of revenue per month. And if a company cannot generate a few thousand dollars of revenue per month, it should not be a company.

And so, perhaps this global recession will have some beneficial effects for startup companies ... by creating ones that are built to last and don't need to suffer from the curse of too much capital.

Sunday, January 4, 2009

Top 5 Free Internet Sites for Impressing Your Date With Your Creativity (Even If You Are Not Artistic)

The other evening, Sameer, an old friend of mine from my university days asked me how he could impress a girl.

I suppose this is the eternal question, and there will be as many different answers as there are people in this world. However, I told him that I was always impressed by people who could express their creativity.

Sameer was disappointed with my answer. "Unfortunately, I don't have an artistic bone in my body," he said.

I thought about this for quite some time. And then I realised, that just as we have now outsourced our intelligence to search engines, we could now outsource our creativity to an Internet solution. So, I quickly put together the following list and sent it off to Sameer. Today, I heard back from Sameer. Apparently, the list worked. :)

The Top 5 Free Internet Sites for Impressing Your Date With Your Creativity (Even If You Are Not Artistic)

  1. Photofunia: I used this site to create my avatar. A great site that lets you make some amazingly creative and sexy photo manipulations. I can guarantee that you will impress your date if you take a snapshot of her and then run it through one of Photofunia's images. Developed by a creative team in Russia.

  2. Animoto: Would you like to make a music video in less than 2 minutes? All you need to do is upload some recent photos, and animoto does the rest for you. Much better than a slideshow, and it literally takes the amount of time to upload a few photos to the site. Run by a team based out of New York.

  3. Befunky: Change any photo into a Frank Milleresque image like in the movie. Very cool and sexy. Easy to use and incredibly beautiful results. Dveloped by a team based in one of my favourite countries, Turkey.

  4. Fotoflexer: Essentially an easy to use Photoshop equivalent for free. Several advanced options as well ... including retouching photos. Run by a team based in Berkeley.

  5. Prezi: Powerpoint is like, so 2008. Try this service from Hungary. You will never go back to boring old Powerpoint again.

Saturday, January 3, 2009

Why I Don't Have a TV

Many people ask me how I live without a TV.

The reasons are simple.

1. Waste of time: The average person watches 5 hours of TV a day. That is almost 17 years of one's life spent watching TV. That is 17 years that could have been spent creating a piece of art, starting a company, helping someone in need, raising a child, making love. We only have one life to live. Why waste such a precious gift?

2. Skewed perception of reality: TV is designed to get people to buy products. Full stop. And to get people to buy products, companies need to make people feel deficient, lacking, unhappy ... that is, until they buy the company's product. Companies need to redefine normality in terms that advantage them.

The real world is nothing like the TV world. Take a walk on the normal street. In India, you will see millions of people who look nothing like the people you see on TV and TV commercials. These are the real people. And yet, companies want people to feel that the real people are stars like Aishwarya Rai, and that if you do not wear the perfume they are wearing, you are not normal.

3. Materialism: After I got my first job out of university, I decided to move into my own flat. This is somewhat new in India, but since my work was in Bangalore, I did not have a choice. Over the next few months, with my new income, I starting accumulating goods.

My favorite TV show at the time was Friends, an American show about young people in New York. For a while I tried to imitate their way of life. I spent my spare time in cafes, and I bought a lot of the stuff advertised on TV to match the Friends lifestyle. Then one day I looked around, and all of a sudden it seemed so futile. We spend all of our lives accumulating junk, and then we die.

This is why I don't have a TV.

Friday, January 2, 2009

My First Post

For several years, like many Indian girls, I have kept a journal of my thoughts. I never showed them to anybody, however. Instead, I believed that one day, my own ideas would develop to the point where I would not feel embarassed about sharing them with the world. When that day came, I thought, I would publish my thoughts in a real printed book.

And yet, as time passed, I slowly realised that such a day would never come. Even philosophers, in their old age, look back on their earlier work with at least a small amount of embarassment. Likewise, I saw that my ideas thoughts will always change and evolve, and that I will always look back at my earlier thoughts with at least a small amount of embarassment as well.

And so, as the new year came, I decided to start this blog. I make no pretensions about it. It is simply the thoughts of a young girl in India, living in a confusing world, trying to make sense of it all.

I hope you will join me on this journey. For, I believe that everyone has a story to tell, and everyone has ideas that are worth sharing.