All posts by Mukund Mohan

My discipline will beat your intellect
Learning

Trends among the Ultra High Net Worth Individuals that will shape Global attitudes

There are 170K+ individuals in the world who have more than $30 Million in net worth according to the Knight Frank report on UHNWI. They own a total of over $20 Trillion in wealth. That’s a staggering 25% of all wealth in the world. Owned by less than 0.00001% of the population. By 2025, the number of UHNWI is expected to be at 230K.

Over 82% of these people had their wealth increase over the last year (2014) and over 80% expect it to increase the next year as well.

The biggest concern about their ability to generate more wealth (as if that’s needed) was family succession issues.

What does their asset allocation look like? 45% in equities (stocks), 10% in home (property) and rest in other assets (cash, gold, art, etc.)

Where are these UHNWI located? 45K in the US, 60K in Europe, Latin America has about 10K and Asia the rest at about 40K+.

Surprisingly only 40% were inherited wealth. The rest made money via entrepreneurial means – real estate and “other business” were the top professions. Technology UHNWI were less than 5% of the total.

The other surprising part of the equation is that there are 1844 billionaires, 38K $100+ Millionaires and over $172K UHNWI. Over 17 Million people are merely millionaires. Turns out the millionaires are the new lower middle class.

As the “poor” become “richer” the “rich” get “wealthy”. There is a direct correlation between the increasing middle-class, their aspirations and the wealth of the UHNWI.

The most important cities where you should look for UHNWI – London, New York, Hong Kong and Singapore top the list, San Francisco is in the top 20, and Mumbai is the only Indian city in the top 50.

The air traffic information from private jets is another interesting story within the story. The top 10 routes for private jets are mostly from and to the US, but the fastest growing are mostly to the US from other places. Meaning even if wealth is created elsewhere, most end up in the Americas – to invest, to hang out, etc.

Where are they going to and where are they coming from? They are going from China, India to the UK and Singapore.

So where’ the money – Chinese investing in Miami, commercial properties in New York and London.

The Indians are investing in Europe more – London, Zurich (not a surprise here).

If you are an entrepreneur looking to raise funding from UHNWI, you should expect to meet with their adviser than with them directly apparently. Most of the UHNWI prefer to work on their own business and spend less time mentoring or guiding anyone but their own kids.

Overall it is a very interesting report. Worth a long plane ride read.

Learning, Research

Apple Watch is going to hurt Twitter the most. Law of unintended consequences

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I have been reading the multiple blog posts on the Monday “Spring event” for the Apple watch.

Having worn the Microsoft band for a few months now, I think I now know what I need from a wearable. Note I did not say “watch”. I gave up wearing watches many years ago and switched to a phone for time. I really don’t have a need for a watch and so don’t many others, but they will still buy the Apple “watch”.

I used the fitbit for activity tracking, so I was not actively looking for a fitness tracker before I got the Microsoft band. Being an active user, I think that I want most is “Smart Notifications” from a wearable. That it will track some fitness is an added bonus.

With the very small form factor, it is absolutely important that the right amount of “relevant information” comes to the wearable.

If you just take an email and strip out a few things and send it to the wearable, that wont help.

What you really need is a summary of the relevant portion of the email and the ability to dismiss, delete or provide contextual reply – the relevant actions may differ on the notification itself, but the action should result in not having to pick up the phone for quick responses, which your watch can handle.

Lets look at email notifications first and email call to actions.

I am really surprised the the Microsoft band has no delete or archive actions on the emails received. Which is pretty awful actually. I am pretty sure 60% of all emails that I receive are to be deleted after reading immediately or archived. Of the remainder, I could guess that 50% of them would be able to get a simple answer – Thanks, OK, Sounds good, Approved, etc. I am surprised that does not exist on the Microsoft Band.

The notifications on the Band are not “smart”, which I suspect Apple will get right, because of 3rd party developers.

If you get a bunch of smart app developers to focus on the 8 things most folks do every day, on the phone – check news, weather, sports, finance, email, social networks,  text messages or understand who is calling, then you can pretty much drop the need to pick up your phone by 50 – 60% of the time.

So here are the 3 unintended consequences of a successful Apple Watch launch according to me.

1. The battery life on your iPhone will “increase” since you wont “pick it up and use it as often”. Since 30% (at the low-end) and 60% (at the high end) of the stuff you use the phone for now, you can get on the watch. The battery life wont increase really, but you will charge the iPhone a lot less than every day or twice a day for heavy users.

2. Breaking news alerts, weather, sports news alerts will be more contextual and smart. So you know “just in time” instead of having to scan all of Twitter or social networks to find out what’s hot.

3. Over the longer term (5-7 years) obesity will drop among the “rich who can afford Apple watches” even further. Having a fitness tracker on your wrist that also does other things motivates you to take action.

Which brings me to Twitter.

I think of Twitter a global platform for “what’s happening as it happens” even before the media organizations get to know about it. Twitter knows first. And Twitter’s job is then to let everyone else know.

Well if you can summarize what’s happening and send it via a notification in a smart way, to all those who have the watch, then you dont have as many people posting on Twitter, or retweeting, instead you will increase the # of “consumers of the Twitter feed” even more, reducing the “producers”.

The folks that are “marginal users” of Twitter will use it even less. Why? Largely because they are in it to get information, not share as much. As much as 80% of Twitter’s users consume it but post < 10 times a month.

So, I think Twitter will become less and less relevant to them and more a “protocol” which can easily replaced by other systems.

Another loser from the Apple watch will be those that depend on Advertising on the mobile (Facebook, Twitter, Google, etc).

When you have a watch and use your mobile phone a lot less, the need to view ads on your watch do not exist.

I would short Twitter big time (I should put my money where my mouth is) because I think the Apple watch will drive its value down. I might add that Twitter may go down on its own because of other issues, but the Watch adoption will drive its irrelevance even faster.

Health

With Sugar: Abstinence is better than Moderation #HackWeightLoss

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The most important thing I learned when I hacked weight loss was that diet matters more than exercise. So, I set about trying to A/B test what I ate, when and how much.

I finally learned that moderating processed sugar from my diet was the easiest way to control my diet.

Turns out I was slightly off.

Research and science has proven that sugar is the new tobacco.

In fact sugar is more addictive than cocaine. If you think tobacco causes cancer, then sugar is linked to rotten teeth, obesity, changes in blood pressure and heart disease.

The usual guidelines from nutritionists is to moderate your sugar intake. I think that’s actually dangerous.

It is like telling a smoker to “smoke 5 cigarettes a day rather than 7 or 10” because it will cause less cancer.

Tobacco causes cancer. Period. It wrecks your body.

Processed sugar causes all the diseases that you can survive, but it will leave you with a horrible lifestyle.

I have personally seen this with my own experiments. If I have a small serving or “yogurt raisins” or a small piece of “cake” it almost never is enough. The cravings trigger and I end up eating 1/2 cup full of the raisins or 2 servings of the pound cake.

If, however, I skip even tasting it, I find after my initial craving period, I rarely even miss it.

So, the question is how can you hack your health self without needing all the will power to ensure you dont eat sugar.

Here are some tips I have used.

1. Dont even buy them. Keeping them at home just triggers your cravings.

2. In the mid afternoon when your sugar craving is the most, opt for a piece of fruit. Do this for 7 days and again avoid going near the vending machine

3. Keep a log of the # of times a day you have successfully avoided processed sugar and reward yourself with something you like other than a sugared treat.

4. Teach your pallet to love natural sugars – fruits are the best.

5. Replace your morning sugared cereal with more healthy options (especially good if you are eating traditional Indian breakfasts like Idli or Dosa).

6. Substitute water or plain fat free milk for soda. Avoid adding sugar to your coffee, tea or even adding sweeteners.

With sugar abstinence is better than moderation.

You will be healthier. If she can avoid eating sugar for a whole year, you can do it as well.

Entrepreneurship, Focus, Tips

Counter Intuitive: To have a successful customer development process startups should qualify out prospects

There are many counter intuitive things that happen during a startup’s life. Many have been out there already – a) initially do things that dont scale b) focus on culture more than skills when recruiting, etc.

When I was in sales early on, I used to get this advice from my manager all the time – the objective initially was to qualify out customers.

That seemed rather bizarre. The whole objective of customer discovery is to find the right customers for your product. Or did we all get it wrong?

Turns out before customer discovery, there is actually a problem discovery step.

Before you find the customers for the problem you are trying to solve, you are trying to find out if the problem really exists.

There are many contours of the problem, and one of the best people I have seen articulate this is Manu Kumar of K9 ventures – he talks about Frequency, Density and Pain. 

To find a problem worth solving these 3 criteria are important.

So when you do find a problem, your next step is to find the contours of the problem along these dimensions. Are potential customers having this problem, how much of a pain it is and how often is this a problem?

Now the hard part of customer development and qualifying potential problems is that we all have cognitive biases which makes us want to fall in love with our idea. Instead, the best way is to try and find ways that you should not do this (idea) versus something else.

This is why I maintain a to-dont list. (pdf) Apply that to your problem discovery process.

The entire goal of customer development (after problem discovery) is to ensure that you only get those customers who have the 3 qualifying criteria of frequency, pain and density.

You will find initially that to make the problem “solvable”, you will need to focus on one feature or one part of the problem which is the “most painful”. Your potential customers are willing to sacrifice scale, failure, lack of bells and whistles, etc.  because it solves the one piece of the problem which is the most excruciating.

Deciding which is the most excruciating part of the problem is hard and tricky. You will get many head fakes from many of the people you talk to who could be potential customers.

If you are an introvert and don’t like talking to new people (which is most of us), then your initial customer development list is relegated to colleagues, friends, family and acquaintances.

Most of them don’t like to disappoint you, so even if your product is not solving the problem or not solving the real problem they will likely say things to ensure you are not discouraged. Which leads to you thinking that you are actually solving a real problem.

Which comes back to customer discovery and the goal of meeting every potential customer – it should be to qualify them out as a potential early user. The problem you are trying to solve may not be as relevant, as painful, as intense or as immediate as others.

You want to qualify them out. Early, often, quickly and constantly.

That’s very counter intuitive.

Angel investing, Entrepreneurship

The cofounder dilemma – or when the biggest reason for success is also the biggest for failure

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Over the last 2.5 years I have had the chance to closely observe over 70 startup teams for more than 6 months each (some a lot more) to find out which of them succeed (by their own definition) and which of them fail.

The thing that struck me 2 nights ago at the TIE dinner was a question that was asked by one of the solo founders – why do investors insist on having co founders if one of the biggest reasons for companies closing is “founder issues”?

If you look at the data from multiple sources about the biggest reason for failure in technology startups, I am struck by how high “co founder issues” comes up in the reasons for a startup folding.

After “no market need” and “ran out of cash” – which by the way is another way of saying there was no market need, the biggest reason was team and co founder issues.

Initially that struck me as odd. I mean, as investors, we keep telling entrepreneurs that we don’t fund solo entrepreneurs. Or that we invest in teams. Or that we like a well rounded hacker, hustler and hipster teams. Most investors have a bias against solo founders. We are prone to say – if you can get one person to join you as a co founder, why should an investor join you?

I have one theory around why we do what we do and say what we say. I am going to say it is a theory for now since I have not validated this and certainly can’t speak for all investors.

The reason is that the biggest reasons for failure (poor co founding teams) is also the biggest indicator of success.

Historically, great technology companies have 2 co founders.

Most investors pattern-match.

So, they tend to talk to 20 folks and form an “informed opinion”. If you look at startups in the technology space historically, the 2 co founders insight has borne out more often than not – Microsoft, Apple, Yahoo, Google, etc.

So, as investors we assume that data (that 2 cofounders is better) trump judgement (that sometimes a solo founder can be just as good – DELL, Amazon, eBay, etc.

So, the question is – why we do insist on having a 2 founder (or more) team than a solo founder?

The answer is fairly simple – investors, like entrepreneurs have biases, or a deviation in our judgement.

If you are a pattern-matching investor, with not much operating experience, then you will go by “best practices”. Then you find other ways to rationalize those decisions. For example – you will quote how startups are very hard and during the hard times you need someone (your co founder to keep your spirits up), or that you need folks with complementary skills to form a company, etc.

Those are largely true and maybe not rationalizations at all, based on the experience of many investors, but I have found that early stage (angel investors) tend to have these biases formed and opinions they have been “handed down” from seasoned investors, who have their own biases.

So, what does this mean if you are a solo founder and still need a “cofounder” since your investors are telling you they invest in teams.

Ideally, you should look for people you want to work with and have worked with before. Note, I did not say “you know well” – that’s necessary, but insufficient. If you worked with them that’s the ticket.

If you don’t have that person and keep getting feedback from investors you are trying to get on board that they don’t fund solo founder companies, what they are really telling you is that there’s other problems that make them not want to invest.

The problem might be that dont know the market, dont understand your product, or any number of other reasons.

That’s the real problem to solve as a solo founder, before you solve “let me get a cofounder” problem.

Entrepreneurship, Learning

When you don’t know what made you successful, you make new mistakes

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Most startup founders tell me they learn more from failure than they do from success. The reason primarily seems to be because you can point to one (or many) things that directly affected your failure, but success tends to have multiple factors contributing to it.

Then there’s the age old “I got lucky”. Which is interesting in itself, because the most successful people I know attribute their success to luck more than to anything else.

Success does have its challenges though in terms of being a good teacher. Most often we are told that what got you to a certain point wont get you to the next “level” and that you need to change your processes, systems, people and technology stack.

I had the chance to talk to 3 founders in consumer internet companies, over the last few weeks about their pilots and how their initial MVP’s are going – most of them had “successful” beta products with engaged users and many referrals. The one thing though they all felt was that they did not learn what made their products stick.

The superficial learning – about features in the product or the instant gratification a user got from their product was mentioned often, but that’s not enough.

To truly go from Minimum Viable Product (MVP) to Product Market Fit (PMF) the most important thing I have learned is that you need to know what made your product a “success” for your customers.

Let me give you one personal example and one professional one.

When I set out to lose weight and get fit (I lost 50 lbs in 25 weeks), I thought the key was to eat less and exercise more. In fact I thought they were equally important. I also believed a calorie lost was a calorie gained. Not true actually.

“A calorie lost is worth at least 2-3 calories gained”.

I learned this the hard way.

When I started, I put my data into MyFitnessPal (MFP) and it said I needed to eat 1650 calories each day or less. MFP, also tracks your exercise (automated via API from MapMyRun and FitBit). So the first few weeks I tracked what I ate and also automatically tracked when I exercised.

I would eat about 2000 calories and workout for about an hour to burn 550 calories and assume that it would turn my weight in the right direction. Turns out that was an incorrect assumption. My weight was flat.

When I truly started to eat less than 1650 calories, and still keep up the workout regiment was the only time I lost weight.

Then I experimented with my workouts and my eating. I tried eating 1500, then 1400 and finally 1300 calories or less each day for 3-4 weeks. My exercise regiment was constant. I lost a lot more weight than I anticipated.

I tweaked it further (because of travel) and reduced my workout to 45 min and still tweaked my eating for 3 weeks from 1500 to 1400, and finally to 1300 calories a day for 3 weeks. I lost the same amount of weight as I did when I worked out for 1 hour.

So the key to success was portion control and food, not exercise as much. That was something l learned. Now, that may work for my body type and may not for all, but it is important to experiment the key to ensure you understand the contours of your success.

Now for a more professional example.

I used to write more often that I do now, but over the last 8 years I have written about 800+ posts to average about 100 per year. Many are forgettable, so there.

I tried to experiment with writing short posts, then longer ones, then ones about current technology (newsworthy and topical) and finally about humor and self learning.

The ones about technology and news generate the most page views. Which, I know I am not supposed to care about, but I do.

The ones where I talk about what I learned from entrepreneurs generate the most comments, which I love again.

The blog posts which are short generate more likes on Facebook and the longer posts tend to get more shared overall.

I experimented more with length of my posts, the topic, the category, the sharing options, and the titles, but I don’t think I have found the formula for “success”.

The only thing I know is that if I write often, I tend to get more emails from entrepreneurs, talking about their own experiences, which I love the most.

So what happens when you don’t know what makes you successful – you tend to make more mistakes, but you tend to also learn a lot more.

If learning is your objective and constant learning at that, then I suggest you dont find out what makes you successful.

I learned that blog posts about my reflection tend to generate more interest than those written dispassionately about the world and its affairs.

I still have to find out what makes a successful blogger and have to define success first. Until I do that I have to be content with the assumption that I will learn more and make more mistakes, not knowing what made a post a “success”.

Other

A comprehensive list of Augmented Reality and Virtual Reality glass products

I was doing some research on AR / VR and here’s a short list of some available and some preview products (glasses) in the AR / VR space. I will be posting a longer entry with reviews of the products I have tried and the use cases. This is a post to gauge the interest on these products.

  1. Meta 1 Spaceglass https://www.getameta.com/
  2. Magic Leap http://www.magicleap.com/
  3. Atheer Labs https://www.atheerlabs.com/
  4. Sulon Cortex http://sulontechnologies.com/
  5. Epson Moverio http://www.epson.com/cgi-bin/Store/jsp/Landing/moverio-bt-200-smart-glasses.do?ref=van_moverio_2014
  6. Vuzix M 100 http://www.vuzix.com/consumer/products_m100/
  7. Google Glass http://www.google.com/glass/start/
  8. ODG http://www.osterhoutgroup.com/home
  9. Microsoft Hololens http://www.microsoft.com/microsoft-hololens/en-us
  10. Optinvent ORA-S http://optinvent.com/Imagine-Augmented-Reality
  11. Technical Illusions Cast AR http://technicalillusions.com/portfolio_page/castar-glasses/
  12. Laster SeeThru http://laster.fr/products/seethru/
  13. Laforge Shima http://www.laforgeoptical.com/
  14. GlassUP http://www.glassup.net/
  15. Sony Smart Eye Glass http://developer.sonymobile.com/products/smarteyeglass/specifications/#seg-header
  16. Oculus Rift https://www.oculus.com/
Other

How the AAP (Aam Aadmi Party) victory is like the launch of the iPhone

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If you are not into politics in India, you can skip this post.

In 2007, Symbian was the dominant operating system among “smartphones”. There was another popular mobile OS – Blackberry. Then Steve Jobs introduced the iPhone. The key feature was it was a “touch phone” and provided the power of the Internet in your pocket.

Then came the Android OS. I personally believe the Android OS was a copy of the iOS. Google did to Apple, what Microsoft did to Apple 30 years ago, but with a key difference – they made it (the OS) free.

Now, the similarities are eerie.

Congress is the Symbian phone. AAP is the iPhone and BJP is Blackberry. It is likely, that BJP or some other party could be Android. They can pick up the best pieces of the AAP and work at scale.

I really doubt that Congress will become the Android phone. They will likely continue to be Symbian or morph into the Windows phone (good for most parts, but with little market share).

Entrepreneurship, Mentors, Venture Capital

What value do #startup accelerators provide to #entrepreneurs?

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Many entrepreneurs and other venture investors have a perspective of the accelerator space with little context or a construct to think about their value. I am biased and run the Microsoft Accelerator and I think most programs are extremely valuable, though I am an insider.

There are key questions I thought I’d answer that are top of mind of most entrepreneurs and investors about accelerator programs.

How do we think about accelerator programs?

The best construct to think about accelerators is the MBA program for entrepreneurs with new age changes and modifications.

Instead of tenured professors, you have (hopefully) experienced entrepreneurs who can share their story and journey towards entrepreneurship.

Instead of textbooks with theoretical knowledge you have playbooks based on actual experiences.

Instead of one teaching assistants you have mentors who have relevant experience in the area that you need help.

Is the MBA program great for everyone? No. It is only relevant for those that believe in the power of the network and want to take advantage of the connections (not only customers and investors but other fellow entrepreneurs as well).

What happens to existing MBA programs? Will they go away? No, but there will be a serious consolidation. I can see a future where MBA programs are catered to generating folks purely to be placed at a large company such as Goldman Sacs or Bain. Tier 2 colleges and MBA programs will have to fold up.

Is there value in other accelerator programs besides YCombinator? If you believe the MBA program construct, then this is a question that answers itself. Even though there are many that falsely believe there are no programs that are better, that’s like saying if you get a MBA from any other school than Harvard, then your MBA is useless. Similar to MBA programs you pay a lot (in the accelerator space you pay equity, not cash) to get that “stamp of approval” or “credibility”. Is that worth it? For most it probably is.

What value to accelerator programs provide? For most novice entrepreneurs it is advice, for amateurs it is mentorship and for the professional entrepreneurs it is guidance and connections (the network).

Do most entrepreneurs benefit from accelerators? Or just the young, first-time-as-an-entrepreneur do? Do most experienced professionals (who work before joining an MBA program) benefit from an MBA program – absolutely. In fact I would argue they benefit more from the program than young fresh graduates, because they are able to take advantage of the connections, network, mentorship and guidance immediately.

What does the future of accelerators look like? Similar to MBA programs, accelerators are beginning to specialize to compete better. There is a need for a lot of management thinkers for companies beyond the consulting and banking industries, which is why so many MBA programs are churning out graduates.

Depending on how you see entrepreneurship play out – will it be a winner-take-all market or a very competitive one with many startups and many entrepreneurs, there’s a likelihood that many accelerator programs will consolidate or get “acquired” by venture capital teams.

In a winner-take-all market, YCombinator wins. Which means, they get the 80% of the best entrepreneurs and rest are fighting for the scraps.

In a more competitive market, YC, like the others has good share, but only 30% of the best companies graduate from YC, and the rest from other programs.

I personally think it is unlikely that the accelerator market is winner-take-all. Similar to Venture capital firms, where there are tiers (Sequoia, Accel, A16Z, etc.) form the top tier, and there are over 300+ VC firms still doing well and many return good money to their LP’s. Granted the large funds deliver over-sized returns, but the rest are still doing pretty well.

Should entrepreneurs apply to multiple accelerator programs? It depends on the connections and networks you choose to leverage. If you are a health company, YC will be of value, but not by much. You want to attend YC to get the stamp-of-approval, but you will benefit a lot more from programs like Rock Health.

I don’t know of too many folks that have gone to attend multiple MBA programs, so I think that a startup going to multiple accelerators will just dilute themselves too much. Unless they attend a program that offers no dilution – like the Microsoft Accelerator program for example or many others.

Which is why TechStars is starting to offer their “equity back” (like a money back guarantee) program – You got value or your equity back.

What others questions do you have about accelerators? I’d love to think about this construct and see if it addresses more questions about the value of startup accelerator programs.

Entrepreneurship

Entrepreneurship is an act of self realization more than of markets, technology or customers

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Over my career spanning 15+ years, I have started companies, sold successfully and also failed and shut down companies. I have also started over 25+ side projects that have largely failed. I can claim I have learned a lot from both my successes and failures to write multiple books. What I have figured out though is that the act of solving a new problem and the ideas that flow have more taught more about myself than the markets I was operating in, the customer segments I was targeting, or the technologies I was working on.

There are multiple things you want to learn about yourself. Introspection is a good thing for most parts. There are multiple ways to learn about yourself. As long as you live every day you tend to learn about yourself, but all of the major milestones at your startup provide you an opportunity to learn more about your likes, dislikes, your fears, things that make you happy and those that make you sad. You also learn about the kinds of people you like to work with and those you’d rather avoid.

The key part is to document all your learning. I recommend the question bank approach to learning from your failures.

One of my side projects many years ago was a crowdsourced solution to price transparency for *everything*. I called the project “pricearoo” and started it exactly a year before “Priceonomics”.

The key difference was to allow users to “check in” their price for any item. I have the initial screen shots as well. It was a simple “I paid XX for YY” at “automatic location”

Then you can see how much other people paid for the same thing, or where you can get it cheaper. The idea was pretty broad, and I could price anything from oranges to cars.

There were a lot of things wrong with the project. I launched it for Windows Phone (2012, pretty lame, I know) and it was pretty generic, instead of focused on one vertical. I also did a poor job getting the word out. So, while the prototype and the mockup were very well received by the initial users, the project failed miserably.

I learnt a lot about consumer applications, the launch process, how to build a Windows phone app and build a back-end system with Ruby on Rails. All that was great learning, and something I will keep for a long time.

There’s one thing though about these things I learned. Most have of the items about market, customer segments and product have a shelf life of less than 3,6 or sometimes a max of 12 months.

The most important flaw in my personality that I learned through this project was I like shiny new things more than the discipline and diligence to follow through one thing.

That one piece of learning has stayed with me ever since. I have written much about discipline vs. intellect since, but since that project, I focused on building my muscle memory around being a lot more disciplined. The “I am smart enough to figure things out” has been replaced by the “grin and bear it through the worst and best of times”.