Category Archives: Learning

Entrepreneurship, Learning

The mystery of success and the articulation of failure

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Yesterday a comment was made about why I dont interview successful founding teams instead of focusing on why founding teams split. Actually I did. I spoke at length with Sachin from Flipkart a few weeks ago as I have done several times with Amit Gupta of InMobi and Phani of Redbus and Vivek of Interview street.

Successful people are loathe to describe their success, often talking about “luck” and most often calling themselves “not yet successful”.

Those that failed, however, at anything are often able to point to 1-3 things that they believe were the reasons they did not take off.

I think its relatively easy to assume that 100 things need to go right to be successful, whereas only a few things (or in some cases 1 thing) needs to go right to be a failure.

That directly contradicts my core hypothesis that in any given startup its never one thing that causes failure but a series of things that are not executed well – back to Mark Suster’s comment about lines not dots.

I also think most people analyze failure a lot more since it hurts. That’s a contradiction as well. I  would think most people would not like to think about things that are not “fond memories”. Turns out we remember bad things better because they affect our memory systems more. There’s research that suggests this to be true.

Still that does not explain why people cant articulate success as well as failure. Or am I just asking the wrong questions of the wrong people?

Entrepreneurship, Learning, Personal

Why do founders split? 1. Differing visions

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Over the last 4 months, I have heard of or at least 8 companies closing down because of “founder issues”. Overall this number of companies that I have been tracking personally where the company closed was 14. So relatively speaking the number of companies that closed because the founders split is larger than “lack of funding”. The only other reason I have heard have been lack of traction. These are companies in the valley and India BTW.

Why do we have so many companies which close because of founder issues?

I tried calling and talking to many of the founders separately to understand what the issues were and its not clear that there are the same that plague most “marriages”.

Most married couples split because of financial issues, compatibility issues or “cheating”.

With most founders, I cannot point to the 3 main causes yet, since I have limited data, but I can share what happened in some of these cases, based on my understanding of their situation. Sometimes, my understanding was colored by my impression of one of the founders, but I tried to remain objective about the situation.

Differing vision of where to take the company. This was cited by most of the founders.

“We  used to talk about where we wanted to take the product. We had a general direction and were fairly aligned. Then it started with a few features that we had different opinions on. In a matter of weeks we would constantly fight about every feature. The constant fighting drove our team mad and we decided to split”.

“We started with targeting large enterprise customers, since my co-founder had a few relationships there. We found that many had a long time frame to get us on board as a vendor. Then we decided to change our target to mid-sized companies. That changed the vision of our product and some key features, which the developers could not deliver on. I still thought we could focus on larger customers, but my co-founder did not and we decided to split”.

Many times, the vision of the company is considered very sacred by the founders. Which is a good thing. Alignment of vision is hugely important. I can also see how the vision changes at times, since the initial assumptions made, usually change as you go to market and meet customers.

Some founders are flexible about that change and are willing to be patient about finding that vision, whereas others want to stick to a vision they originally came up with.

If you are a solo founder and are looking for a co founder, it is hard to determine flexibility of your co-founder since most people seem reasonable and fairly flexible during the first few months. I tried to formulate a list of questions to ask – largely scenario based, such as what would happen if this were to occur, or how would you react if this happened?

Most times when I asked those questions of people I got fairly good answers which I consider are reasonable.

These questions did not help very much though, since as we talked about before, vision’s change and so do people’s impressions.

When you ask the objective question in a non threatening situation, it is easy to be collected, objective and composed.

That’s rarely the case when product shipments are behind, payroll is delayed and a customer contract is taking longer than anticipated.

What takeaway do I have from this main reason for founder’s splitting?

If you have not worked together for a “significant period” of time, its very difficult to find out if your co-founder is flexible to change.

So what do I now do as a result of this learning?

I prioritize teams where founders have not worked together for a significant period of time, much lower. If you have a co-founder you have met at a hackathon event, or a startup event, and have been working on your company for 4-6 months, then I would likely pass on your company.

Its not because I dont like your idea or product, its because of demand and supply. Right now, I get many more companies where co-founders have worked together for much longer and have recency of shared vision.

In the next post I will talk about another reason why founders split – performance and execution.

Learning, Management

Entrepreneurs keep you young – at heart and the mind

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Day after batch 1 finished their demo day resulted in some serious withdrawal symptoms for us at the Accelerator. It is not hard to imagine that having 45+ enthusiastic, energized and talented people will have a significant effect on your ability to stay young.

I learned from Rajesh and Prajwal at Amplyfy that everything can be hacked in under 12 hours. They’d scoff at the “develop it over the weekend” concept. “You don’t need an entire weekend” was their premise. Any idea I’d put forth would result in a 15 min “technical feasibility” discussion, which would result in a < 12 hour solution. It was done, not just discussed. Naresh would use every contact in his address book to get a meeting with any customer he desired. Keval just kept them all calm. While the others would hack, Keval would focus on the scale. Big things are destined for this team.

Melchi and Aditya from CloudInfra would start any project with a “lets solve the underlying problem” – usually that meant a mathematical formula which would have to be solved: to get anything from customer traction and SEO to lead generation and product roadmap. Aditya had the unique ability to also hack and make solutions for every problem we had. In fact he was the only one who helped us with a unique solution to our intermittent wifi issues. He actually put his own router in place.

Jiten from Ciphergraph was always on the move. Aggressive timelines were made even more aggressive with him. He has the unique ability to breakup a 1 hour meeting into a 11 minute product roadmap discussion, a 15 minute investor deck rant and a 19 minute sales pitch review.

Healthify taught me how I should build and hire awesome people and keep them engaged. They had the youngest team in the entire batch and still managed to get loads of stuff done right. They ate lunch every afternoon as a team, worked out together as a team and even sang as a team.

Prafull and Piplayan, founders of Hire Rabbit, are the masters of doing awesome with very little money. The ultimate bootstrappers, they got mentioned in all the top blogs and reviewed by many influencers with a shoestring budget and chutzpah. Most of their marketing was very high quality and I’d expect them to have paid significant sums of money for it, but they would end up telling me it cost them < Rs. 5000 by leveraging resources on Odesk.com

The NowFloats team were masters at execution with measured planning. Give them any system and they’d know how to work it. They used the customer and partner development effort and resources the best and had the best traction to prove it as well. They were best at figuring out how to get anything done in a system that prefers the status quo.

Nandan from Gameizon is the most patient and passionate person I worked with in this batch. He taught me more about how passion for solving a problem will help you focus on not giving up. Even though he had many hurdles ahead of him, the fact that he loved the game of cricket and wanted to solve a real problem that exists with gaming and cricket made him the most endearing.

Pratyush is the master of hustle. Having been through this problem before, PlusTxt was his second attempt to solve the problems that were prevalent with messaging the last time he did this. Thanks to his ability to strike up a conversation fairly easily with most people, he knows anyone and everyone in the ecosystem. Some days I’d get a sense that even if he did not have a product he’d get thousands of downloads based on his ability to hustle.

Deba and Kapil of Sparsha kept it simple. They are the best listeners of any of the folks I know. They taught me active listening, the ability to keep asking questions for which I rarely had good answers. They were also the most humble people I know. They had the most going for them of all the companies, but kept focusing on what they still needed to do.

Vinny and Devesh taught me that its always better to be in it to enjoy the game. Whiteshark faced more hurdles and opposition to their idea than anyone else did in the batch. They pivoted, changed, modified and kept going. They just loved the game that startups offered to founders. They’d be found in the accelerator until 5 pm DAILY brainstorming, talking, thinking and developing.

Bhaskar of World Without met taught me to take everything in my stride. Ever smiling, even when things were not peachy, he could be summarized in one sentence “this too shall pass”. Product has blocking bug, lets fix it by tomorrow, this too shall pass. Investor was more interested in B2B not B2C companies, no problems, lets talk to the next investor, this too shall pass.

I am more convinced that there is a serious need for awesome coworking space in India where such excellent teams could work together and make everyone around them younger.

Funding, Learning, Tips

Lessons from tennis – The one rookie mistake every entrepreneur looking for funding makes

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Admiring the shot instead of preparing for the return

Early this year I got a new tennis coach, since the one that was helping us left for Hyderabad. It was a big change for the entire family as we all got new coaches and the adjustments were tough. Most new coaches try to understand your game for a few weeks before they point out changes you need to make, but the new coach focused on only one aspect of my game.

Although the rest of my game is pretty average, I have a mean forehand cross court. I knew that it was good. So I’d never give up the chance to show how good it was. Play to my strengths has always been my motto. That still does not result in winning points, though. It just resulted in many people admiring my shot.

After about 15 minutes of playing with me, my coach stopped, asked me to come mid-court and said

The biggest reason you are losing more points, is because you are busy admiring your forehand cross court shot, instead of preparing for the return.

It took me a while to understand that. Having been told always I was good at that particular shot, I was expecting him to help me improve it. Instead, while he said it was good, he pointed out that I was too enamored by it to prepare for the return from opponent. That’s where I lost my points.

I see this also in many entrepreneurs who ask me to review their pitch deck before they seek funding from VC’s. Their pitch deck is awesome, super tight, glitzy and slick.

Their operating plan is an afterthought.

It’s almost as if they don’t expect the investor to take things forward, so they are unprepared.

Similar to my forehand cross court shot.

I expect most shots to be winners, so I am not prepared for the return, instead I am admiring the shot I just made. Trouble is over 50% of the shots were being returned.

Same with investors

In golf there’s an old saying.

Drive for show and putt for dough. (quote)

I am going to modify that for funding.

Pitch for show and plan for dough.

If you want to get funded, focus on getting your sales, marketing, hiring and financial plan in order, because that’s what investors value. Its showing them how you are going to use the money to create value for the company and a return on their investment.

Of course, without a good pitch deck you won’t get to the next step, but since most entrepreneurs do a fairly good job of focusing on the pitch deck, I’d recommend you spend enough time on the operating plan as well.

Learning

I am thankful for…

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My wife, who plays the role of mom, dad, friend, console-er, shoulder-to-cry-on, lead investor and moderator to all my tantrums, antics, and diva-like tendencies.

My oldest daughter, who despite being so much of an overachiever, compared to what I had achieved even 15 years after she’s achieved them, is still humble, personable and thoughtful.

My son, who is quite possibly among the nicest brother I know (than I was for sure), still finds enough time and energy to keep the family laughing all the time.

My twin girls, who despite being on the receiving end of 90+% of my discipline, rigor and hard-work have the tenacity to keep forgiving me and still wake up every morning at 530 am and remind me that they love my hugs.

My mom, who realized her son is not the superstar engineer she always wished for, and rarely finds time to call her and just ask how she’s doing, still finds time frequently to call me after lunch to ask if I have eaten well.

My dad, who has always trusted my gut and instinct more than I have trusted my own and has never questioned a single decision I have made of which a significant number affected him sometimes adversely.

My sister, who puts up with all my constant bragging, covers up for all my short comings and blatant-overstatements-of-the-fact, with “yeah I know, but if he wanted to do that he’s the only guy who could”.

My brother-in-law and nieces who having been forced to state that I am their best friend and uncle still humor me with their constant boosting of my ego.

My friends (all of my facebook, twitter and offline ones are included no exception) who make it easier for me to hang in there for another day.

Happy thanksgiving all.

Learning, Marketing

The liberating power of focus on the one thing for Marketing

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Most startup founders who are looking to launch their product or are figuring out ways to grow their usage / customer traction come with a plan that includes “a little bit of everything”. The assumption is that since they dont know which technique works best, (or in other words – gets the most customers with the least amount of effort or money) so, they tend to spread their bets among many techniques.

Typically this means, do some SEO, some Google ads, some blogging, and some outreach to the press.

I used to tell folks to make a list and focus on the top 3 techniques to market their product.

I was wrong.

You need to be awesome at one, rather than good at three.

Here’s the simple math (the irony that the math is easier than reality is not lost on me) to get to 10,000+ B2B users (not all paying) in < 12 months (which is a great metric to focus on)  for a SaaS company.

You try to double your users each month. So if you start with 5 users at the end of the first month, you will get to 10,000+ at the end of the 12th month.

If I were marketing a SaaS product and I need to get users there are multiple mechanisms I can use to generate awareness for my company / product without any out-of-pocket costs for advertising.

1. Guest blogging

2. Content marketing with blog posts / infographics

3. Engaging potential users on twitter

4. Search engine optimization

5. PR outreach with bloggers and key websites

6. You tube videos

7. Presentations on Slideshare

etc.

Now, my recommendation is to NOT do the top 3, but pick just one and be the best at it.

For most entrepreneurial teams that are comprised more of engineers, than marketing professionals, this is a very liberating process.

They no longer need to track multiple techniques and try to optimize them all. Their focus should be on experimenting within the one technique and be the best at it alone.

While focusing on the one technique you will discover more things you need to do better and be great at.

Lets take an example of guest blogging.

To the outsider, guest blogging might just be make a list of 10-20 top blogs, then write posts that are relevant about your company and that blog, find the blog writer’s email address and submit your post.

There is a more nuanced process than that.

Coming up with unique and interesting posts is hard. Very hard. Especially hard if you are trying to learn SEO at the same time, or experimenting on Google adwords at the same time.

So, free your mind.

Focus on the one thing that you believe will add value to your potential customers.

I know its hard to know which is the “one thing”.

Truth is being awesome at any one of these things is very hard and I have seen enough examples of companies meeting their customer acquisition goals picking ANY ONE of these techniques, without trying to experiment on several.

So go ahead and focus on the ONE thing.

Community, India, Learning

What makes a great conference? Thoughts on NASSCOM product conclave

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Fresh from the recently concluded NASSCOM product conclave, I was giving some thought to what makes a great conference. Having been at many over the years both at the US and India, there’s just one word that differentiates the approach and type of conference.

Production.

American conferences are produced.

Indian conferences (and events) are curated.

What is production?

The ability to define a delegate, speaker and sponsor experience that seeks to maximize the benefit to them all by defining a purpose of how they should feel post the event.

What is curation?

Putting together good content with great speakers, having enough attendees that are interested in the topic with sponsors that are willing to pay for their logo to be attached to the event.

NPC 2012 was a good event by most measures. Top notch ratings for over 50% of the session (80%+ Net promoter score), great camaraderie and networking and finally a packed set of sessions that were curated by a dedicated set of volunteers.

We need more produced events.

1. Production means getting speakers to have rehearsals before the event. If Steve Jobs can rehearse a presentation, everyone else can. No exceptions.

No rehearsals means people that take 45 minutes when they were allotted 15, non-engaging & dry content.

2. Production means understanding & setting aside enough time for both ad hoc and managed networking and fostering a “we’re all in this together” feeling.

No networking focus means many people trying to get some time with key speakers after and before the event, only to find that they (speakers) had allocated only 2 hours to be at the event.

3. Production means ensuring sponsors are actively adding value by looking to build content and engaging demos which benefits the attendees.

No engaging experiences means a 2 minute ad at the beginning of the event that 90% of people forget after day 1 of the session.

I think we need production quality experience so people feel wowed, get energized, learn lots, network to grow their business. Here’s looking forward to more produced events in India.

India, Learning

Why me? Or why every Indian startup founder thinks they are the only ones with “bad luck”?

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Its very hard to explain to an entrepreneur why another company got funded and they did not.

Or why they might not, even though they have “many boxes checked”.

It might seem fairly random. Correction – it is probably fairly random.

Raise your hand if you have read a techcrunch post that mentions a startup that raised an obscene amount of money and after reading the post 3 times you are still not sure why they got that much money?

Raise your other hand if you have read about a startup in the US Silicon Valley that is working on “pretty much” the “same idea” as your company is and you are schlepping code for 18 months and they have 45K daily users in less than 6 months (and funding to boot).

Now clap both your hands above your head. <Whatever>.

Most Indian entrepreneurs (in the technology space) consider themselves fairly unlucky.

They are baffled that Indian angel investors ask for revenue and monetization plans when the company is 3-6 months old.

The only comfort I have to offer is that its the same deal outside the valley.

Ask the Boston entrepreneur, or the New York entrepreneur. They also claim that companies there “suffocate” because the local investor ecosystem is fairly risk averse.

The second piece of knowledge I will share is that for every techcrunch post that mentions a funding for a startup, there are at least 25 failed funding stories that do not get published in the same space and general “idea”.

What then separates the funded versus the ones that did not get funded?

This is the point in the discussion when the entrepreneur blames their “luck”.

There are a few things I’d say that are easy to spot among the funded companies versus ones that dont get funding in the same “space”.

1. They usually tell a story dramatically different from that mentioned on TechCrunch or Pluggd.In or any other startup blog. The story the media publishes about dropbox is file sync across multiple devices. The story the VC’s bought is document virtualization.

“That’s just positioning” is your claim. I agree. It is. Storytelling is an art. Learn it well.

2. The founders are very credible, have a lot of background in the space and understand their customers / users very well.

3. They product shows the most amount of traction in the shortest period of time.

Thanks to angel list you can now target and get funded by Silicon Valley investors in India. If you have the same 3 elements – credibility, a great story and traction, you dont need to depend on luck any more.

Entrepreneurship, Focus, Learning, Management, Marketing

My discipline will beat your intellect

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I meet 4-5 new entrepreneurs every week as part of my office hours on Go-to-market help for young startups. Most are based in Bangalore, but surprisingly some are from other parts of the world (Chennai, Singapore and Estonia, even, via Skype).

I have an observation about work ethic that I wanted to highlight among startup entrepreneurs from various parts of the world.

Most every entrepreneur will tell you they work extremely long hours. That’s par for the course. Some “older” entrepreneurs (usually over 35 years of age) will share their ability to “strike a balance” between work and life. Practically speaking (I hate to break this to them) that does not exist in a startup. If you have that balance, you are not serious enough about your startup.

I understand they have families and kids, but I have come to the realization that both smart work and hard work are necessary (but not sufficient) to run a successful startup.

For purposes of this post lets define success as a company that’s growing significantly and rapidly, but does not have an exit yet.

The difference between a rapidly growing startup and one that’s growing “well” is productive (smart) hard work, not just long hours.

If you mistake activity (# of lines of code, # of code check-ins, # of customer discussions) with progress (shipping product, usable and must-have features, or # of active users) then you are just doing long hours.

If you mistake milestones (funding secured, new employee hired) for achievement (# of paying customers, churn rate of existing customers) then you are just doing smart hours.

What then makes smart and hard work such a potent combination? And what really is “smart work”? And how many hours make up “hard work”?

I define “smart work” as a combination of 3 things – asking the “right questions“, having a plan and maximizing the number of experiments in unit time.

I define “hard work” as the most amount of productive work time, with limited to no distractions and ability to do it consistently, for years (not bursts of weeks, not months and certainly not just for a few hours).

Lets look at both smart and hard in detail. Smart, first.

The smartest people I know have learned the art and science of asking the right questions. They usually start with asking a lot of questions, and having literally, no or very few answers. Each answer leads them to more questions. Asking the “right questions” is what they derive from experience.They have assumptions that need validation, hypothesis that need testing and results that need to be measured.

They are also willing to conduct a maximum of 2-3 experiments and have a DIY (Do it yourself) approach towards conducting those experiments to see if their assumptions and hypothesis were valid.

Finally they have a plan to approach their experiments. Not just a “lets try this and if not lets try that”. They rarely “wing it”.

Its very easy to spot smart teams. They have a sense and measurement of what “Continuous Visible Productivity” is. They come to me with a list of 2-3 questions that they want to address in a meeting. They dont just come to the meeting and pick up the whiteboard and start to “brainstorm”.

Now lets look at teams that work hard.

Hard working teams dont ever mention “how many hours they did put in last week or yesterday or that they hardly got “any sleep”. They realize and are aware of their physical limitations and are usually well within those limitations. Rarely do I hear from them “We work the hardest of all the teams” or “We have not slept for 2 days”. They keep looking for time they can cut away from unproductive work to do more questioning, experimenting and planning. In other words they dont brag about their long hours. They assume its a given.

Hardworking teams also tend to compartmentalize very well. Some people call this “bucketing” or “chunking”. Just because they work hard, does not mean they dont give their brains a rest and goof off for a while. Rather, they “compartmentalize” their goofing off or exercising to derive the benefits of a relaxed mind and body.

Finally hardworking teams are consistent. They show up day after day, week after week and go through questioning, experimenting and planning with rigor and consistency.

I realize a that being smart at work and working hard as I have laid out is extremely difficult. In fact its rare. That’s why successful startups are rare.

The combination is what I call startup discipline. Which is why I firmly believe one startups discipline will beat another’s pure intellect (given that hard work is assumed) any day.

India, Learning

What I learned in my first month of running a startup accelerator

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I have been the CEO of the Microsoft Accelerator for the past month. There are 11 companies as part of the batch and it has been an exciting ride. One of the things I focused on is trying to make the program a lot more structured than YCombinator and modeled it around a finishing school that I always wanted. Here are the top things I learned.

1. Dont try to change an entrepreneur’s idea. They have to come up with something they like themselves. This seems fairly trivial. There are many incubators and seed funds that believe if you dont have an idea, but are great entrepreneur material, they will “give you ideas”. That rarely works. Entrepreneurs have ownership and pride only for things they believe “they came up with on their own”. Anything borrowed (even if its a clone or knock-off idea from a US startup) is theirs. They will put more wood behind their idea than anything you ever propose.

2. Indian entrepreneurs have varied expectations from accelerators. One entrepreneur wanted “execution” help in actually doing the design (preferably a full time designer and user experience person for a few weeks to do it) and another wanted better quality food at the cafeteria. Some think the biggest value proposition of an accelerator is the “quality of the space” (i.e the physical location), while another thought the value was the other startups who would egg them to get better.

3. Regardless of what you offer, there’s always someone offering more or better, which I think is the “grass is greener on the other side syndrome”. If I had a penny for every time someone said “I have heard YCombinator founders get XYZ” or “500 startups gives more ABC”, I’d have enough money to fund all the startups for a year.

4. Indian companies need a lot more user experience and design help than any US company. I have invested in over 20+ companies in the US and about 11 here in India. Its extremely hard to find good user experience talent in India. This is a different person from someone that just does Photoshop and illustration. We interviewed 23 “highly recommended” designers and user experience professionals in India. Most were average and were still charging rates from $20 / hour to $100 / hour. No negotiation.

5. The Go-to-market challenge is largely under-appreciated in India among founders. Many need more help here than any other area, but tend to relegate the problem to “lets hire someone to do that”. Unless one founder is deeply involved in the customer development process, we largely build technology for the sake of it.