Category Archives: startup experience

Rocket Execution

“It is not the idea, but the execution that matters”

For a long long time, the above principle has been the key to huge success, but for innovative entrepreneurs the above principle is seeing a generational shift.

I am reading a book called ‘The Dhandho Investor‘, written by Mohnish Pabrai – an iconic figure in the investment world, and the Chapter 14 in his book is titled, “Invest in Copycats rather than the innovators“. Simply because copycats are likely to show multiple degrees stronger financial returns to the investors than the innovators.

Despite active participation of people globally in consuming technology innovation at a higher rate than the previous year, stock markets continue to behave absolutely opposite. Such a contrast it is!

Having seen two pioneering software product startup cycles, and having witnessed both web and mobile evolutions very closely over last decade, I have come to believe that it is not the execution that wins the innovators anymore.

It is the “Rocket Execution” that keeps the innovator alive in today’s times.

Rocket Execution

Rocket Execution

I often state the term “Rocket Execution” in my conversations, however, people end up misunderstanding/ misinterpreting the term every single time. In a quick succession since yesterday, I read news about two young companies, which I truly admire.

Yesterday, I read about the next round of funding news of InMobi. InMobi team started early 2007 and pivoted towards current idea after a failed attempt. Let’s look at their statistics

165 countries (presence),
1000+ employees
$400 million revenue
750 million monthly active users
2.6 billion app downloads
126 billion monthly ad impressions (which is roughly 170 million impressions per second).

The company was valued at $1b in 2011 (within 4 years of existence). It is aiming to double the valuation in 2014 (within 3 years). Hopefully the next billion would be added in 2016 (within next 2 years). This is a classic example of ‘Rocket Execution’ because if you do not grow at that rate, technology innovation elsewhere will outpace you.

Today, I read about the $19 million funding news of Housing.com. A company that started around June 2012. Let’s look at their statistics

25 cities covered in India
12 co-founders (Whoa!)
900+ Employees
2000 houses listed per day
50,000 houses mapped in Bangalore
80,000 houses mapped in Mumbai

If you notice the quality of listings on their website, you will understand the value of listing 2000 houses per day. At this rate, the company will list 700K houses annually, which is not at all a bad number. But just 2 years in operation, the company is aiming to list 10,000 houses per day, 5 times the rate at which it lists today i.e. 3.5 million listings annually. This is another fantastic example of rocket execution. Scale before another technology innovation trumps your innovation.

If that was not enough, an interesting tweet from Navalkant validates the emergence of Rocket Execution little scientifically. It states

1999 – $5M to launch a product, 30M serious computer users.
2014 – $5K to launch a product, 3B serious phone users.
Leverage per $ is up 100,000x

So don’t get excited if you got a million users within a year, until the next million happened in 6 months and the next million in 3 months and so on. Rocket execution is the only way to leverage the never-existed-before power of the connected world.

Disclaimer – The published data is gathered through public sources and it does not reflect actual number that may be relevant now.

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Are you building an innovative Work Culture too?

If you are an entrepreneur or the one who can help us crystallize the thoughts w.r.t. building an innovative work culture, please follow the discussion I posted yesterday on Pluggd.in around building an innovative culture in your own startup.

Follow the post here.

Why should you join early stage startup?

What does an early stage startup mean?

Though the definition would mean different to different people depending upon how many and how closely they have observed startups, In my association with four startups at different stages, I believe three of them qualify to be early stage startups broadly, and how do I define them are:

  • At the idea stage, where the team & fundamental ingredients are getting into place.
  • At the prototyping stage, also called bootstrapping and may be seed-funding stage.
  • Or already bootstrapped but still Pre-Angel or Series A Angel/VC stage.

Here’s the reason “Why should you join a startup at an early stage!”

As I had mentioned earlier that I’ll be presenting this BarCamp at Delhi, I owe an apology to all those wanting-to-be-attendee(s) for canceling the presentation on the spot.

The concept is taken from a book called “Life of Pie“, where the author discusses about the science behind the dilemma of lion while coming on to the stage.

Analysis: Early stage startup strategies!

In the world of the phrase “the only thing constant in the world is the change!” everyone seems to be changing, so are the strategies around building the companies. However, there are subtle patterns visible.

Patterns to observe:
1. With the exponential increase in the consumer facing internet applications, clearly defined “barriers to entry” has shrinked to one or two killer features in the product.

2. Earlier investors talked about revenue figures, today they like to see “user traction“.

You can only build sustainable viral user traction only when you have clearly demonstrated the barriers to entry to your game. It is so often an illusion as to what does “barriers to entry (bte)” actually mean?

Lets extend this phrase – Barriers to entry is something that doesn’t look to be obvious. Let the whole bunch of competition look down at you to see what you’re doing & say “hey! is that difficult? Even I could do that, probably in a week!”, its only that the more work they do to try to copy your solution, the more they realize that how farther they are from what you’ve accomplished.

While it makes sense to have barriers to entry clearly marked, you never know when a competitor (even in the womb) sizes up the obstacle course & discovered a way around getting from point A to Z. Therefore, where barriers to entry should inevitably be a part of the game, having marked them clearly could again be strategic i.e. identify the barriers to entry early but refrain to open for the public to fathom the depth of the game, we can probably call them as the “hidden/ invisible barriers to entry”.

With big barriers to entry, there comes a high possibility for the competition to underestimate the level of monetary, human or commitment capital required just to compete with you (leave the industry aside).

Look at Google Maps for example. It is so easy for a potential competitor to think about cloning GMaps with having data sourced from known global data vendors & tweak around to build a clone, however, the barriers to entry is that the data is not available just from a single vendor, every country may have one, every city may need a different one, you will need permission from the govt. of the respective countries for several specified areas and lets say you figured out the way to do it, how good would it be to have realized later that the heart(data) of your solution still remains closed with the third party server boxes & making it difficult for you to build a competitive advantage. Further, while you were busy cloning the GMaps, Google was busy collecting its own data. Where do you go now?

While barriers to entry were many, hidden barrier to entry was to have complete control over the data & have it in your own lovely defined model & format.

However, if we observe, figuring out the hidden barriers to entry makes sense only if you pioneer a concept or lead the game else it is most likely to work against you as you’re going to be spending more time looking over your shoulder & less time innovating & driving the market forward.

Further Patterns to observe:
1. It is clear that VCs love to talk about viral traction also known as “Network effect“.
2. Emergence of many ethical & useful ways to build the traffic to your site e.g. paying the bloggers, online gadgetization etc.

There is no dearth of examples to explain the implications behind Network effect. YouTube, Facebook, Skype, eBay, Monster, Flickr, Delicious etc. simply changed the rules of the game. So doesn’t it makes sense to figure out the ways to achieve this Network effect for your lovely product? Don’t you think so? Actually its not that you will not think so but you will have to think so.

However, it may perhaps be the insanity to think so!

We’re yet to see a company that executed just as it planned in the beginning. If it ever happened with a company, it would have been more because of chance than better execution. Network effects accumulate to most of the companies by chance, as an artifact of something they were doing that led to Network effects.

It takes time to figure out the right path, especially in the early days of the company, its not transparent where any network effect can/ will come from, even if it is obvious its only theoretically easy to have them leveraged to your advantage. In reality we only forecast the user base but if it works against you, there’s no come back. Its seldom a case that you actually know as to how to make it work for you?

Lets look down at it. Access to email & IM comes at priority for me early morning than anything else. That should also mean that it should be same for many millions of users like me, therefore, email & IMs are the huge platforms for Network effect. Lets say I use Gtalk, Avinash too uses GTalk & we both know Rajesh, therefore, it doesn’t make sense for Rajesh to use Yahoo. In reality what happened is that rajesh was using Yahoo, MSN & Gtalk already and then me & avinash both started using all of them as well. I wonder if the network effect based on human tendency of depending on other humans was ever considered when there was no competition? if yes, was it at all serious?

The first mover in a new space can generally monetize network effects by selling quickly before they have to drive profits (Skype in VOIP), but it’s not at all clear that the first mover has any long term strategic advantage that could drive value. So does it make sense to spend lots of time thinking about the strategic advantage you can gain from the network effects?

But VCs love it, bloggers talk about it, advertisers pay for it & obvisouly you have some figures to mention in your business plan. What could you possibly do otherwise at an early stage?

Anatomy of successful products & an unknown soul!

(Trying to knit several unstructured threads of first hand real-time experiences in an unpolished manner. Firstly because I’d like to see & remind myself time & again about them, secondly people like me might relate something with them as well – yes all those better entrepreneurs in the making!)

Note: It is no wisdom, which is not already known, however, presented in different words & examples.

During the college days, while working with Stendek R&D, I mingled up with few finest of the techie minds around, therefore, discussions about great problems yet to be solved among several fields was quite a common phenomenon. It was these discussions that helped me in building a good philosophical attitude towards developing myself as a problem solver (or rather a problem analyzer with a solution oriented approach).

It was only during this time my confrontation with real techie/ engineering temperament happened (given the multi-kind of activities I observed those techie guys getting indulged into day/night). And yes it was natural to develop some beliefs & learn from the ambiance which many times is no more than the misguided learning. Yes misguided learning!

Misguided learning – Almost every programming stud believed (and also forced me believe) that writing “One killer program or application” is what it takes “to establish yourself to eventually start your own company” or in more optimistic/ marketing terms “to actually become famous”. People like Sabeer Bhatia, Alok Mittal etc. have even proved the theory and thus, it’s not easy to turn this perception the other way round.

Heck … if you dare!

Meaning to write on this for long, just that after attending Proto, Barcamp, OCC & some VCs in quick succession, the desire finally grew intense enough to give a meaningful structure to all this wisdom.

Two broad thought processes dealing with WHY & HOW for starting up are now followed further.

Fame Vs Credibility

Today almost everyone has ideas, almost everyone wants to be independent, and almost everyone wants to build a company. Ask them WHY, the answer broadly is to lead their life their way & become successful (with a hidden hint of becoming famous). Fame definitely brings the serial-success easier to achieve, so why not?

Also, whenever got a chance I dug down the “definition of success” that these people actually perceive. Surprisingly even most of the thoughtful people couldn’t define it more than some materialistic gains, which I (including many others) cease to agree, therefore, it somehow just happens to be an ambiguous English word that lot of us strive for.

Within myself I’ve however felt the two approaches that motivates a youngster (youngster here means a first time entrepreneur) when it comes to do something of his/ her interest

1. To become famous.
2. To build credibility.

Since both the approaches lead to self-motivation, considering any of them as inappropriate could be wrong. However, what needs to be understood is the boundary and limitations that both these approaches bring to your vision. Where these self explanatory phrases do not need a mean description from my side, what still needs to be understood is this simple mathematics that other’s experiences teach us:

Fame is the subset of credible track record

After meeting several wannabe(s) and understanding their psyche with due diligence, I realize how less in number the people we have in industry with this ground understanding. Need to remember that credible track record is something that helps you in how soon your product sees the northern trend in terms of funding, building team etc. etc. Striving for fame rarely leads to a “good” product and never “great” unless exceptionally favored by your astrological stars.

Killer App Vs Successful product

What we as programming studs again fail to see are the other ‘dimensions needed for this killer application to become successful & self-sustaining product’. Definitely “the business model” is the next keyword that will hit our mind when we talk about things like “sustainable” & “successful”.

India undoubtedly is one such country where almost every individual inherits good business understanding by birth; thus, explaining that ‘No killer application/product worth a penny without a viable business model’ would just be kidding. The question however remains is?

Is it only the killer app & the business model that you need to make a product successful? Or to say to build a successful organization/ company?

… and then there are hell lot of things like the team, market, research, funding, entrepreneurial wisdom etc etc. Yes we need to get aligned to all these trivial aspects all at one time. Since there is no thumb rule to success in this journey, therefore the wisdom collected at every step from different gurus will inevitably be different. This in turn leaves any amateur entrepreneur confused about how to develop their product in the form that will sustain in most of the unwanted and unavoidable conditions? And eventually struggle is what creeps slowly into our sleeves.

How good would it be, if we could conceptualize all these aspects of starting up process in a pictorial form or something that we can relate easily to?

The other day I sat confused, trying to hammer myself, wondering what exactly most successful companies/ products have in common? Why is that that some plain ideas go to enjoy the heaven while good ones survive? Why is this startup process so tedious even when we have best of the resources & lots of entrepreneurial wisdom all around? And several questions like that …

Their came the visualization of one of the finest products we know ever made on this planet – yes it’s The Human body! Trying to map 2-3 examples of good software products with it, I derived how all those most successful products resembled this Human body.

In my opinion any damn thing in life to become successful (be it a product, company/ or once own career etc.), it should resemble very much like a human body, broadly with these four major parts intact. How?

i. The Backbone (middle structure)

ii. The Legs (Foundation for the middle structure to stand)

iii. The Hands (Muscle Power, provides reach to longer distance being at the same place)

iv. Face (Structure with senses, synchronizing entity)

1. The Backbone (Killer-ness)

Let us assume that our killer app is actually killer in nature based on fundamental research of competitive products or the market needs, by this definition, it should qualify to be the backbone of the successful entity (product/company/career) we intend to build. This also indicates a good start and that we have some framework to build the castle around.

What needs to be still defined is the “killer-ness”. A recent discussion with a great visionary & my all-time personal mentor helped in objectively defining the killer-ness, which in simple terms is nothing but the USP of our product, which could be in any of these forms:

1. Technology – Something that is non-replicable at all else it takes significant time to replicate e.g. Google Search Algorithms

2. Speed of Execution – In any race the winner is always the one with maximum speed e.g. Miscrosoft Operating Systems

3. Innovation – Something which demands expert manpower, which either is unavailable or with greatest of the difficulties e.g. Photo search by Riya

If your product has anyone of these elements present, yes you earn the discount for filing the killer-ness to your product.

2. The Legs (Revenue Model)

Then what we fundamentally need are the legs to make this product run and what else than a good business model will help it to run? In essence, the business model forms the legs part of our framework.

Another aspect to always keep in mind is that the revenue model is never a rigid framework (and don’t let it ever become one); it is a continually evolving concept, demanding regular innovation.

I remember meeting few guys at a technology conference, who had developed a very useful software product for the enterprise application collaboration (I could definitely call that as a killer application) however, what I discovered later is the lack of monetization model around it. It was so pity to see the disappointment in their eyes for nobody having an interest to talk about their product & their struggle to formalize the monetization around it.

3. The Hands (A great team)

What we need for this semi-skeleton is the addition of a new structure that can help having a firm grip around the product (grip in the sense, having strong self belief, being always optimistic, to keep striving continuously, continually executing the business etc etc.). What else than a team can help you in holding your belief, product development, taking decisions and brainstorming etc? Yes once you have that Black cat commando team in place, believe it or not, you have actually come quite far yet too far behind to see a successful & sustainable product/ company etc.

More the power in your muscles better are your chances to lift heavy weight to a longer distance. Great team in a budding startup takes it a long long way even with the bad times looming around over the head.

Now think for a moment, a killer app, very good business model & a great team, what else do we need? Isn’t like all the basic fundamental things are actually in place to build a successful product/ company? In fact there must be some examples of success that might come to your mind immediately. Lets say some people see success with these elements in place, lets now call the success achieved with these three ingredients is CurrentSuccess.

4. The Face (Synchronization)

Can we imagine a body without a face? It assimilates all the most important senses required for a normal living i.e. eyes, ears, nose, tongue and Big B(rain), hence needs to be taken very very seriously. This tells me that even after having that killer App, business model and good team in place, still there’s something that is very very crucial for the product to succeed. Lets check them out what could it potentially mean?

Even if we have all the other parts of body in place functioning perfectly, will they be of any use without some good synchronization?

Definitely not! However, our body synchronizes broadly in two ways

i. Internal Synchronization

It requires an un-drunk mind to synchronize them all, to talk to one part of the body on behalf of another to keep running the complete framework (Backbone, legs & hands to work in harmony). This is precisely the role played by the top management (directors) in the company. An advisory board however, suffice to the thought process & actions being taken by the management at various stages (pre-funding, pre-revenue), they help all the functions remain in control in accordance to their directions & talk to other businesses/ investors/ potential clients on your behalf to build partnerships, bring funding & enhancing the sales etc.

ii. External Synchronization

Ears, Eyes, Nose, Tongue are all the senses that take inputs from the outside world, therefore, helps in synchronizing the body with the external world. And do we have at all doubt understanding the importance of any of these organs in their own capacity.

Today the User Generated Content (UGC) also referred as web2.0 in consumer oriented Internet industry, customer support, after sales service, corporate blogging etc are nothing but about building these senses for the product. All this helps in synchronizing & adapting the product/ company with the external surroundings/ expectations.

I’ve now started to believe that the success a product/ company would see without having facial structure in place (i.e. CurrentSuccess defined above) would be a small subset of the actual success that this product could potentially see otherwise. Lets call the otherwise potential success as PotentialSuccess.

If we now observe the gap between these two successes, it usually is a substantial difference. This difference is actually the success not achieved by the company/ product, which in my view should go to the failure account; thus, whole new definition of failure comes as:

Failure = PotentialSuccess – CurrentSuccess

And probably this is the reason, when we develop a product it is not less than our child. After all it’s about giving birth to a completely non-existent entity. So your love towards it is quite inevitable!

Having mentioned all that realization in print about having a body in place doesn’t necessary guarantee of a successful product/company! A body is always driven by a “Soul”, which still is an unknown & most debated entity to everyone around (including me). Its just the interpretations that exists.

Finally it comes to something, something which is unknown!