Mobile, Tablet Computing

The Microsoft Surface: Why I’d buy it

12 Comments

Microsoft announced a new device today called the Surface. I’d buy it immediately if it were available. Why?

1. I dont believe it is a tablet, although it can be used as one. I believe it falls into the same line as the Mac Book Air. Its a really thin notebook with a Z-height that’s simply awesome. Light and yet fully functional. I use my iPad purely for leisure – reading mostly and the kids use it for gaming. To get work done, I need a notebook. My current notebook’s pretty heavy and I’d love the ability to add a keyboard (which is what the surface does very well). So, out goes my notebook and its going to be replaced by the Surface.

2. I dont think the partners (HP, Dell, etc.) are going to get happy with Microsoft, because they’d now be competing with the device, but I also think MSFT is borrowing a leaf from the Google Android playbook. The Galaxy nexus was by far the best Android device I have used (Got it as a gift from my brother at Google), but Samsung Galaxy S II and S III (and the others like HTC) are pretty good as well. I think MSFT is creating a benchmark for what a great device running their software will look like.

3. My primary use of computing on the go is my mobile device. I tried the iPad, but its not suited for my style of intense use of documents, spreadsheets, presentations and some development. I need a notebook, but one that’s a lot less heavy and if I dont need the keyboard I want the option of using it as a leisure device as well – (as an iPad if you like).

I’d buy it and give away my notebook if it were available today.

Entrepreneurship, India

What happens when your co-founder decides “Its time to move on”

6 Comments

Its that dreaded 6 month itch. Or the 12 month itch, or 18th – whatever. Its an itch all right. Your cofounder and you have been toiling away at your startup for what seems like ages now. Its not going all that well (if you compare yourself to others) and you both know it. You both get a sense that something’s missing. Or something’s not just right. Then she drops the bomb “I’m thinking of going to look for something else to do”. Or she’s going to pursue her MBA instead of working. Or worse, work at a big company with a large paycheck and some “stability”. Or his mom wants him to get married and his prospective father-in-law does not like the idea of a “startup” – “Go and get a real job at a big company, if you wish to marry my daughter”, he says.

I am going to assume you are both equal partners in all things (i.e. you both own the same amount of the company, and came up with the idea together).

So what happens next? Let me tell you the emotions I went though.

First, its okay to cry. I have personally done that a couple of times.

Then I dreamt revenge. Its okay if he leaves, I will make this so big, he’ll regret he left me in the first place. He’ll come begging back to me in 1 year asking for a job as a programmer in my company and I’ll ask him to come to interview with people who work for the people who work for me. I’ll claim we are a “big” company now and decisions to hire programmers are left to lower level people. “I only focus on strategy and vision and having lunch with my investors”, would be my email back to him.

Then I woke up.

I questioned everything. Why was I starting this company? What was the vision? Was it still valid? I started to create my own FUD. Was I a good co founder? Was the idea bad? Will customers now trust me? Will anyone else want to work with me? Is a startup even worth all the pain and suffering?

I spoke with most of the people involved with our startup – potential investors, some people we had interviewed, some customers, seeking their advice.

My first reaction was to tell them that my cofounder left for some bizarre reason. I told them he had to move out of town (which he did, but not for the reasons I mentioned) and so we decided to part (I did not want to leave Silicon Valley, you see). Most everyone saw through that.

Then all I said was “He thought this was not worth doing and it was hard on him and his family”. Which was the truth.

What I got back was surprising – “Get back on the saddle, and start to ride”. Or as some say “This too shall pass”.

Everyone pitched in with new ideas, different ways to solve the problem we initially set to solve. One prospect even gave me a consulting agreement, because he knew I was going through a rough patch.

So what happens when you co-founder decides to leave?

Lots, and then again nothing much. Many things change and most things remain the same.

If you really want to succeed with your startup, most external events will not matter. Most successful startups were born during periods of recession.

Regardless of whether you have a co-founder or not, the fundamentals remain – Is this a big pain / problem? Is there a better way that you can solve it? Are lots of people willing to give you lots of money to solve that problem? Is there a way you can take small steps towards solving that problem?

Go on, be a force of good.

Other

How to build a framework for decisions that you have to make daily at your startup

6 Comments

There are two types of decisions – big life altering ones and innocuous ones. The tough part is I dont know which decisions fall into either category. Like Steve Jobs said, you can only connect the dots in hindsight. The amazing part is these decisions are to be taken in every aspect of your startup – engineering, marketing, sales, finance etc.

Let me give some examples:

For BuzzGain, I had a good friend recommend a lawyer who he had worked with. Jim (Cooley) was a smart, very well connected and personable individual. Daniel and he helped me put together our initial structure, complete my 83B election. Being a tech and a sales guy I did not care too much about the 83B election. I was loathe to spend too much money speaking to Jim and Daniel (they are good, but charge by the hour) so I dismissed the paperwork as needless “waste of time”. 3 days after sending me the paperwork, Daniel called me to remind me to send it in. There was a decision I had to make – spend a few thousand dollars today or punt to a later day. Since I was bootstrapping, I was inclined to punt. A couple of days later, Daniels’ paralegal called me and reminded me again to file the paperwork. I did it and it turned out to be the best decision I made on exit.

When our alpha version was out in Sep, I had 15 pre-release customers who were trying out the initial version. The feedback from most was to continue to build the initial database of key reporters and bloggers with a focus on specific markets. I.e. to continue on our original vision and value proposition. Paul though was the only person with an alternative opinion. He asked me to look at his most recent blog posts and compare them to his posts from 6 months before. His focus had dramatically changed from finding and building blogger relationships to engaging on social media. He mentioned that although it would be a dramatic change in our product, it was where things were headed. The decision was rather scary at that point – continue down our path (based on 14 folks feedback) or change course (based on 1 person’s feedback). We chose the latter. Again, the best decision I have ever made.

Now, these decisions were not made in a vacuum. Both alternatives to the decisions had a ton of pros and cons. I needed to build a framework to think about how to think.

My first piece of learning was its always better to see the options and decision criteria in writing. Somehow I have found that writing it in paper (or on your computer) and hence being able to see it (with your eyes) brings a level of clarity that doing it in your mind (hence being unable to see it) does not.

My second piece of learning was that my framework was a tree. The depth of the tree would be the level that was needed to get to two states – Worst case situation and Best case situation. The rest were if-then-else statements.

The third part of my learning was to map out how to undo my decision if I figured out later I had made the wrong decision. If I spent as much time figuring out how to recover from a bad decision as opposed feeling good about a well made decision, I’d be okay.

Try it out. Let me know if it works. If you have learned something else, drop me a note.

Entrepreneurship, Learning

The difficulty in giving honest feedback to entrepreneurs

18 Comments

I met a cofounder-team last week at the Microsoft BizSpark event. They were fairly young, and were working on their first startup, after 5+ years of working in a large corporate environment. They were both a year into their startup and were looking to raise funds (seed round). They were focused on the consumer Internet space (are now considering pivoting to B2B instead) and have been building a version of their webservice.

They definitely caught me at a “not so opportune time”. Actually, a friend pulled me in adhoc after a bad call (bugs in our software, customers complaining, etc. you get the point) to introduce me to them and ask me for feedback.

The next 30 min was painful for us all is the best way to say it. After the 5th time of me asking what problem they were trying to solve and if that was a real problem, I think I had a breakdown.

I tore into them for the next 15 min with both my friend and another individual sitting next to them. I claimed they had no idea what problem they were trying to solve, who their target audience was, what their product actually did that any of 20 other startups did not do already and why I would not use the product even though it was meant for folks like me.

They were patient, gave me a hearing, but I you could cut the tension with a knife. I felt awful 2 hours later. I had forgotten the cardinal sin I kept repeating to others they should avoid doing.

If you cant give constructive feedback, you are a moron, not an investor. If an “investor” does not help you with a next step, he is a moron. Period.

I had become a moron. The very thing I had detested in many other investors (not all, there are several exceptions).

You know the type. They kill every idea and suck your soul dry. They dont think your idea is good, they dont think you can pull it of, they dont believe you have what it takes.

I used to believe this was necessary tough love. It is absolute B.S.

What I did was inexcusable. It bordered on killing the spirit of another individual, which no person has the right to do. Even if they are an investor.

So, what should you as an entrepreneur do when you meet this type of investor?

First off, try some mind-relaxation techniques.

Second, give them the benefit of doubt. You probably got them on a bad day/week/month.

Third, ask the question:

“How would you go about trying to solve this”?

Put the ball on their court to give you a SINGLE next step that they (the smarter ones) would take to get you further along on your path.

One last point. Being an investor, you meet many smart, talented individuals daily and its difficult to not do some form of “pattern matching”. So, if anyone tears into your idea, remember at that back of your mind, you are likely doing something (either right or wrong) and its worth doing some more digging.

The worst feedback to get when you are pitching your idea/product/startup is no feedback.

P.S. I did meet the team this week and offered some (my version of the story) constructive ideas they could possibly work on, and was trying to help as much as I could. That does not make me feel better about what I did last week, but its good karma to erase the bad.

Entrepreneurship

How to deal with startup failure. A personal story

38 Comments

I have failed in as many startups as I have been successful.

Since I tend to tinker a lot, I have also failed at many of my side projects. In fact I have the distinction of not having succeeded in any of my side projects in the last 4 years (4 side projects).

If however, you count the lessons learned, I have been enriched.

The first project was an idea that was going to provide “price transparency”. The site was registered as pricearoo.com. I had a team of 2 build it, got a prototype ready, did a lot of leg work to understand the products the site should give your pricing information about. But I never launched it. I realized that building stuff is rather easy, but I feared it was too small a feature for people to take notice. 6 months later Priceonomics was launched. I am not privy to how they are doing but its a good start.

Ship early. Your product will have a lot of bugs. Ship early. It wont be perfect. Just ship the product. You will feel miserable about the fact that its not “quite ready”. Ship it already. Get people to use it or at least give you feedback. Ship.

I also failed at an eCommerce company. Technically it is still going, but I was a miserable failure at it. I just was not prepared for the rough and tumble of both managing real “inventory” or lots of blue collar suppliers. I hired too quick, did not manage expectations well, and had negotiated a very poor deal with the investors. The capitalization table was so messed up, that no new investor was willing to fork up money for the company. There were way too many lessons I learned but the most important was work with people you like and trust.

These are recent (last 1 year). Let me tell you about my first failure.

I left Univ of Maryland, (Baltimore County) in 1994 to head to California for a startup. Fresh out of college, I was not quite a rockstar programmer that I thought I was. The first project required me to get up to speed on a language (Visual C++) that I was unfamiliar with and a functional area (procurement) which I did not comprehend. 4 months into a “delivered” prototype, the client kicked us out. The entire project had to be rewritten because we built a very buggy prototype. The company failed. I was not even sure what I learned at that point. Except maybe I needed more experience and I needed to be a better developer. That experience colored my judgment on services companies though. I never wanted to build a consulting company after that.

For all the young, newly minted graduates who are going down the entrepreneurial journey – Celebrate your first failure. Take your friends out for a lunch or drinks. Share what you learned. After that dinner / lunch forget about that failure but write down what you learned. Email it to yourself but leave it unread. Archive it. Open it after 2 years. If you dont laugh at that email you sent to yourself, I will send you a free t-shirt. Get a job at a startup where you can learn from someone else making mistakes.

If I could tell you one thing I wish I knew now that I did not know when I failed at those things, it would be: I am happier I failed. Not when I failed, but much later. I felt awful after each failure, but moved on.

Nobody cares that you failed. Except you.

Think about the last time anyone at an interview asked you if you got an F in school.

Other

A closed letter to all open letter writers

2 Comments

After seeing many open letters, I have a few questions of open letter writers (including me).

1. If you did not publish it on your blog, was your intent to send your communication via a handwritten Inland letter?

2. Has anyone ever responded to the open letter? If so, has anyone ever sent a closed reply to an open letter?

3. At what point did you decide to name the title “An open letter to …”? Before or after you wrote the letter?

4. When did you come to the realization that its was harder to come up with a more catchy title?

5. If closed letter’s became a meme would you jump on that bandwagon as well?

Links.

1. one

2. two

3. three

Before the usual flame throwers barge in, yes this is my attempt at humor.

Entrepreneurship, Learning

Are incubators really necessary?

ReadwriteWeb had a relevant post about incubators.

As the infrastructure costs of “starting up” become lower, the barrier to get “funded” gets higher. Used to be you could get away with prototype. These days every investor wants traction. Traction is easier when you have help from an incubator.

You need not go to college to get a job, but there’s a correlation between higher degrees and higher pay. Similarly in 5-10 years

I can totally see a situation where 70% or greater of startups go through an incubator rather than go it alone.

It will increase the chances of getting funded and highly increase the chances of success.

I do think most companies will go through an incubator even if the founders are experienced folks in a few years. The current batch of incubators favor (either by design or natural fit) younger, fresh out of college grads.

The key part of this equation is that not all incubators are equal. If your incubator does not provide value (raising funding, getting customers or helping hire key employees), then its not worth wasting your time with them.

Angel investing

Notes from the BCG Global Wealth report 2011

The BCG report on Global wealth came out a few days ago. This report (along with another from KPMG) usually gives you an early indicator of what’s to come in the HNI and is an early indicator to the angel investor market. Some highlights:

1. # of millionaire households (worldwide) is 12.5 million (increased 12.5%). The million is invest-able income not including home.

2. Top 5 countries with millionaires – US, Japan, China, UK and Germany.

a) US 5.2 Million households

b) Japan 1.5 M

c) China 1.1 M

d) UK 570K

e) Germany 400K

India is #11 at 190K households (seems low, since the number of businesses doing more than INR 10,000,000 in annual revenue in India itself is  about 150K). Add politicians (local & state), film and sports personalities and you might easily get a 250K – 350K number.

The Ultra High Net Worth households (over $100 Million in invested assets) is about 12,000 worldwide, with the US leading at 2600+ households.

Of these the number of investors willing to fund risky technology startups is a very small 500-1000 number. Its obvious that most HNI in the non-technology space invest mostly in real estate and offshore investment vehicles. The real fun starts when the number of technology investors goes up to about 5000 (10 times the current number).

Learning, Mobile

The Internet trends report by Mary Meeker – some key insights

I enjoy Mary Meeker’s annual trends  reports, which summarize key mobile and Internet stats and puts them in context to tell a compelling story. Below is a link to the report, which makes for a great iPad reading late in the day.

KPCB Internet Trends 2012http://www.scribd.com/embeds/95259089/content?start_page=1&view_mode=list

Some key takeaways for me.

1. Even though India is ranked #2 in the Internet users added in 2012 metric, (most of whom are thanks to the mobile phone) it “feels” like a comparison of apples to oranges. Most Indian users with mobile Internet access dont use it is my gut feeling.

2. 3G is dramatically changing the landscape. 1.1B subscribers is more than critical mass.

3. Smartphones are at little less than 1B. Again an amazing stat, but considering the number of feature phones is at 5 B, there’s a lot of room for growth. Most interesting is that this might happen in the next 5 years. Imagine every person (or most everyone) having a phone that has a camera, GPS and Internet. It has the potential to *change* the news media industry dramatically. The #1 thing people do (besides email and call) on the phone is get news and information (weather, stock, sports, news) and #2 is play games – this is by # of minutes spent.

4. Mobile traffic is 10% of all Internet traffic. For some websites its close to 30% of their visits. Mobile first seems like a very smart strategy for consumer apps / sites.

5. Mobile monetization is driven (71%) by app purchases, and very little <30% by ads.

6. India Internet traffic from mobile is reaching the same number as desktop Internet traffic (April 2012). Not surprisingly CPM’s are lower on mobile than notebooks.

7. Newspaper ad revenues was surpassed by Internet in 2012 and the trend is heading towards digital at a very fast clip.

Absolutely awesome read on the before and after pictures.

Other

Zig when everyone else Zags. Some thoughts on eCommerce in India

3 Comments

I dont buy into the prevailing wisdom that eCommerce in India is dying (dead). For venture investors the eCommerce category might be “been there, done that”, but smart entrepreneurs always see opportunity in being contrarian.

There are some very interesting eCommerce companies doing good work (growing revenues, making margin and excelling in service)  in India. While the mainstream companies are spending money on advertising, acquiring customers expensively and offering deep discounts, many niche sites are building their reputations with an excessive focus on service and unique (relatively) products.

While there are 1.4 million Internet retailers in the US, there are about 2000 in India (ones that are doing more than 5 transactions daily). Most of the smaller ones that are doing a good job in the US are focused on either niche segments or markets. That I believe is a key trick that most niche eCommerce sites in India are executing the best on.

I wanted to highlight a few that I consider are doing a good job.

1. Shopo: I wanted to invest in this company before they took a seed round from a few investors. They are a good example of focus on fairly unique products and a good team executing well.

2. Allthingscustomized Another fairly crowded market, but the marketing techniques have been tweaked to make a margin on every customer order in this very competitive market segment.

3. Greendust: Looks and feels like yet another ecommerce site, but sells refurbished goods, with a good markup.

If you have an eCommerce site and are doing well, your best strategy is to keep your head down, focus on metrics and operations and ignore all the news and pundit’s opinions.

Zig, when everyone else Zags.

The personal blog of Mukund Mohan