My Proficorn Way (Part 32)

A Compass, not a Map

Many years ago, I came across an idea from Warren Bennis that has stayed with me – the difference between working with a compass and having a map. He describes it in this interview in Ivey Business Journal: “[The idea] has to do with the difference between maps and compasses, that Karl Weick of the University of Michigan wrote about in The Legitimization of Doubt. The analogue world is one of maps. It’s like charted territory. Today, the best that one can have is a compass that can set a general direction and meaning. Because it seems to me that what leaders have to do is to create direction and meaning in a world that’s vertiginous and volatile. You’re always blinking. The best thing that leaders can do is to have a compass that will give general direction and meaning.”

Colin Lewis adds: “The guide metaphor that I believe works to navigate the future for leaders is ‘maps versus compasses’. Maps are only good in known worlds that have been charted. Compasses are perfect for when you’re not sure where you are going. Marketing leaders of the future will have to develop their own personal compass to gain their sense of direction, and forget the idea of a reliable map.”

As a manager, there is generally a clear path ahead. Market share needs to be grown by 5% and there is a playbook to do that. Or, new product features need to be added and engineering will provide a pathway to do it. There is a map of the battlefield and one has to navigate it like one drives to a destination using Google Maps.

But as an entrepreneur, you are imagining, living in and creating the future. You do not have the details laid out in front of you. All you have is a broad understanding of the direction you need to head in – a compass. There is no map which lays out the terrain and the markers. It is like you are standing in a forest and there are many paths leading out –you need to figure out the way ahead through unmarked territory.

When I started IndiaWorld in 1995, the Internet was still in its infancy – and not even commercially available in India. I had to imagine how we could use it to bridge distances and connect with Indians globally. Even now in Netcore, it is the same spirit that guides me. How we imagine what marketing in the future will look like? While there are competitors who have charted out some of the territory, a lot of what we do is still driven by a compass and not a map. And it is this uncertainty and lack of knowledge that entrepreneurs have to be comfortable with in their quest to create the future.

Tomorrow: My Proficorn Way (Part 33)

My Proficorn Way (Part 31)

Circle of Competence

I first came across this phrase when I was reading a book on Warren Buffett many years ago. This is from a 1996 letter Buffett wrote to his shareholders: “What an investor needs is the ability to correctly evaluate selected businesses. Note that word ‘selected’: You don’t have to be an expert on every company, or even many. You only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital.”

Coffee&Junk expands on the idea:

Each of us, through experience or study, has built up useful knowledge or a set of useful skills in certain areas of the world. I’m a designer, so my circle of competence is design. If you are a developer, your circle of competence would most likely be frontend or backend development.

Similarly, for Sachin Tendulkar, it would be cricket. For Roger Federer, tennis. For Amitabh Bachchan, it would be acting. And for Pandit Ravi Shankar, it would be Indian classical music.

Think of the circle of competence like a small circle within a big circle. The bigger circle is what you think you know—where you are not really an expert, and the smaller circle inside the bigger one is what you really know—where you are an expert, and where nobody can beat you.

Shane Parish adds: “If you want to improve your odds of success in life and business, then define the perimeter of your circle of competence, and operate inside. Over time, work to expand that circle but never fool yourself about where it stands today, and never be afraid to say “I don’t know.””

In my life, I have tried to stay within my circle of competence – which is primarily understanding and applying tech to solve problems. IndiaWorld used the Internet to deliver news and information to Indians globally. Netcore offers a martech stack for B2C companies to connect with their customers. Even in Niti Digital (my political venture for the 2014 Modi campaign), I leveraged tech in much of what we did. Even in tech, it is much narrower – software. That is the world I have known for the past 25 years.

Entrepreneurs need to work on identifying and then expanding their circle of competence. Which is the one area that you can be better in than most others? As a CEO managing a business, you will need to be a fox – good at many things. But as an entrepreneur setting up a new business, you will need to make sure you are a hedgehog – doing one thing better than everyone else.

Tomorrow: My Proficorn Way (Part 32)

My Proficorn Way (Part 30)

Just Get Started

There is a famous quote by Jim Collins: “Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great. We don’t have great schools, principally because we have good schools. We don’t have great government, principally because we have good government. Few people attain great lives, in large part because it is just so easy to settle for a good life.”

This is a very valid point and can apply to a lot of what we do. At the same time, taken to its logical extreme, it can also paralyse us. “I will not publish my blog post because it is merely good and not great. I will not launch the website because it is not perfect. I will not go public with my ideas because they are still half-baked.” This is the type of thinking that can cause more harm than good. At times, great can be the enemy of good. As with every good quote, context matters.

For a startup, it is important to get the product out there. Of course, it cannot be bad, but at the same time, one cannot wait for it to be great. When I launched IndiaWorld in March 1995, it was good. I had a certain pricing for a year’s subscription. I had many sections. I had a decent design. I had also delayed the launch a few weeks – working to make it better every day. One fine day, I decided – enough is enough. And just like that, I launched it.

In the next 3 weeks, I made many changes. I changed pricing twice, I tweaked the design. I changed which sections were free and which were available as part of the subscription. I improvised on the fly based on feedback I got. Unless I had launched, I would never have got the inputs – I was just playing mental games trying to figure out what the perfect (great) product should be.

I have done this many times. Once things are good enough, get started. I did this with my blog in April. I had waited many years to re-start. And then one day, I just started. I told myself, “I am writing for myself. If I keep thinking about what others want, I will never get started. Instead, if I think of my writing as being to help me clarify my own mental models, there is no reason for me to delay.” As I write on different topics, ideas become better. And then I can write more – a second series and a third.

The same is true of the Velvet Rope Marketing ideas. These have evolved over the past few months. I was very hesitant to do the first CMO presentation – I wanted the ideas to be perfect. And then, I said – let’s start, and we will improve as we go along. Because the feedback from others was more important than achieving perfection with my own thinking. And the presentation now is in its fifth revision and much better – but it would not have been had I not started.

So, if you have an idea or a new venture, just get started. Work on improving it. Don’t wait for the perfect idea – because there never will be one. The end goal is to achieve greatness, but the path starts with being merely good, and then working one step at a time to becoming better. When you look back a few months or a year later, you will see a huge body of work – which would never have happened had you not made the decision to begin the journey, however imperfect that start may be.

Will be continued soon.

My Proficorn Way (Part 29)

Delta Dollar Decision Rule

One of the big mistakes we make when buying products or services is to compare absolute prices. Look, that product is $100 and this is $130. There is no way one can pay $130. All things being equal, of course, one cannot pay $130 for the same product. The way to look at it is what are the extras you get for the $30 difference. But this idea of the “delta” is lost out in decision-making.

I explained this to my son a few years ago when we were on vacation. I had booked a room for our vacation where the daily tariff was $250. Of course, there were other hotels where I could get a room for $150-175. I told my son that considering the costs of the overall trip, the additional $1000 spend for the two weeks was a small increase – a small delta. But the additional spend brought a lot of convenience – a bigger room, free breakfast, a more convenient location, and so on. By itself, $1000 was a large sum, but when taken on the base of the spend on the vacation, it was perhaps less than a 20% delta.

These decisions happen a lot in life. We look at products and baulk at their price. We may be prepared to pay Rs 40,000 for a laptop, but suddenly step back when asked to pay Rs 55,000 for much better. The sticker shock of Rs 55,000 hits us. But if we just look at the delta of Rs 15,000 and think about the benefits, then perhaps we will make a better decision.

That is why I think we all need a “delta dollar decision rule.” Set a threshold below which one will not waste thinking time – the answer should be a Yes. For me, that threshold is $100 (Rs 7,500). This simplifies decisions like buying a book, booking a better seat on a flight, going to a better restaurant for a business meeting – the answer is always Yes. The same applies in business also – the decision threshold can be higher. Always look at the benefits and the delta, rather than the absolute.

I recently made a decision to subscribe to a $500 online course on decision-making. By itself, it’s a lot of money. Most people would baulk at doing it. But then as I thought about it, the delta spend on myself is a small fraction versus the benefits that I can derive. From the series of lessons, even if there are a few good ideas I can get, the investment would have been worth it. That is why I do not hesitate attending conferences, buying books, and subscribing to online publications. A year later, one will not even notice these expenditures. Of course, every small spend adds up – but there are some categories where the delta needs to be seen on the large spend base, rather than as an integer by itself.

So: think about your delta dollar decision threshold – and start applying it to build a better you, which will lead to a better business.

Tomorrow: My Proficorn Way (Part 30)

My Proficorn Way (Part 28)

Imitate First, Innovate Later

When I was running IndiaWorld, I did my best to copy the good ideas out there. It gets things going faster. I was sitting in India. I had a small team. I did not have the luxury to experiment. So, when I wanted to launch a search engine for India, I started by looking at what Yahoo was then (a directory of websites) and replicated that for India. I then added keyword search in crawled pages similar to what Excite and Altavista offered. That became Khoj. During those days, I would always look for good features and sites that I could replicate for India.

For a startup, it is difficult to do A/B testing and run multiple experiments. The Internet is itself the laboratory. So, pick up good ideas that are working elsewhere and get started. Over time, to thrive, one has to innovate. But innovation itself is not a precondition to get started. This applies to product features also. Too often, a lot of time is spent coming up with ‘innovative’ ideas – at the cost of time. In the early stages, speed trumps everything else. The innovation journey has a high cost – in time and money.

The problem is that we are all taught from early days that copying is a bad idea. That is the right approach in education. But in the real-world, that means starting from scratch rather than building on the body of work that already exists. That simply takes too long and is very risky. Some will innovate – good for them. But that path has more failures than success stories. Let others run the evolutionary race for ideas and features. As a proficorn entrepreneur, you should simply choose from the best out there.

Imitation will not help you win the race – it is merely a ticket to play the game. After that, innovation needs to kick in – either in the product, pricing or business model. The sequencing is important. Starting off with innovation needs time and a large R&D budget which is not practical at the early stages of a venture. A good way to start therefore is to clone first to become competitive, and then work on the incremental innovations.

Tomorrow: My Proficorn Way (Part 29)

My Proficorn Way (Part 27)

Avoid Equal Co-founders

One lesson I have learnt through the years is that a new venture must avoid having equal co-founders. The emphasis is on the word “equal.” Whenever there is more than one founder, the temptation is to ensure that everyone is treated equally – and thus equity and powers should be also divided equally. I used to think the same way in my early days as an entrepreneur. What I realised over time is that this doesn’t work well in reality. The solution is to have one person who is the dominant leader and the final arbiter in decisions.

Businesses are not about democracy. There has to be one person in charge – the leader. That leader can have multiple deputies, but the buck stops with the leader. What is true for countries also applies to companies. In the absence of a single leader, decision-making becomes slow in the search for consensus and accountability disappears. No single person can be held to account. That is why countries have “Prime Minister” and “President”, not co-Prime Ministers and co-Presidents. And that is why companies must have a single CEO at the top.

For startups, agility is important. In the early days of a venture, there are many uncertainties to be grappled with. Each decision is about reducing the risk of failure. Every day survived brings one a step closer to success. As an entrepreneur one is flying blind in the early days. Decisions need to be made quickly, and course corrections need to be applied frequently. During this process, it becomes very difficult to sit and debate every decision in a group. All that will do is to get the team to the lowest common denominator in decision-making and that too after delays.

In my early days as an entrepreneur, I had many 50:50 ventures. All failed. The search for equality resulted in failure. Too much time was spent debating pros and cons, and us getting each other to see the other person’s point of view. I would have been served better had one of us taken charge and moved ahead. Ever since, I have eschewed equal partnerships at the founding level. One can be liberal in granting equity, but at the end of the day, there must always be a single person in-charge to make the key decisions.

Tomorrow: My Proficorn Way (Part 28)

My Proficorn Way (Part 26)

Optimising Costs

As a proficorn, one always has to look at controlling costs. The question always is how far to take the focus on costs. I remember what my uncle, who runs a hospital in Pune, once told me many years ago. He said, “Accept that there will 2-3% chori (theft) in the business. Factor that into your costs. Don’t try and focus on that. If you keep trying to find the chor (thief), you will put so many control points in the business that it will become unmanageable.”

In most businesses, theft is perhaps too strong a word. I like to think of it as costs that are wrong but difficult to identify. It could be as simple as vouchers filled by sales people for meetings that did not happen. It could be some items bought at prices higher than they should have been. There are many ways such costs happen. The key point my uncle was trying to make is that accept that there will be a small percentage of such spends and get on with life. In the effort to control each and every spend, the entrepreneur will be so bogged down that the bigger focus and perspective will be lost. Keeping a tab on costs is very critical, but one cannot make it an obsession.

I have always been cautious on big bets – especially when it comes to marketing spends. The focus needs to be more on the product. In IndiaWorld, I put a press release and an ad when we launched – and that was it. My belief was that if the product (in this case, the content service) was good, word-of-mouth will help us grow. Ads could get someone in for the first time, but after that it was the product that had to bring them back the second and third time. I was confident of our product. And that worked out well – sites like Samachar, Khoj, Khel and Bawarchi grew because of the strong word-of-mouth marketing by happy visitors.

Even as one tracks revenues and cashflows, an entrepreneur needs to keep a check on the costs – up to a point. Don’t try and optimise every cost. Else the functioning of the business will be paralysed. Eventually, most costs can be justified if there is strong business growth. Until then, trust – and verify.

Tomorrow: My Proficorn Way (Part 27)

My Proficorn Way (Part 25)

Giving Up

One of the hardest parts about being an entrepreneur is the decision to end a venture – the act of giving up. This is different from just failing. My view is that every entrepreneur is actually starting off with a high probability of failing and then goes to work to reduce the risks. Giving up is different – it is about the decision to end the venture. It is never an easy decision because it means firing the people who have been part of the journey and also separating oneself from the idea that one has lived through for the past few years.

The first time I “gave up” was in November 1994. I had come back from a 2-month trip to the US. I had gone with the recognition that I was failing in what I was doing and I needed to re-start, but did not know what exactly to do. It was during that visit that the IndiaWorld idea was born. When I came back, I knew I had to “give up” on my old idea of building an image processing software product. I had to reduce staff and start a new journey into a new and unknown future.

Asking people to leave was the hardest thing I had done in life till then. I still remember that afternoon as I sat on my desk, met with the few employees that I was letting go, and telling them that they will have no job in a few weeks. The shared dream was over. They were on their own. And in some ways, so was I.

I had to do this again in February 2019 when I shut down Nayi Disha. We had almost 40 people working on the idea of creating a movement for prosperity in India. But as the elections got closer, I realised that we would have no impact on the outcome. I could keep doing my videos but I was broadcasting them into the ether. No one was listening. I called my entire team and told them we were shutting down completely. There would be no Nayi Disha. I had failed.

It was one of the hardest things I did. For the preceding few years, I had dreamt of how we could create a pathway to prosperity in India by persuading people to create an independent voters movement. But I had made far too many mistakes. I did not listen to many who told me that I would fail. I thought I was invincible. Until, I was not. I realised that no course correction was possible. I was too far away from the destination. On a long flight back from San Francisco to Mumbai, I “gave up” – Nayi Disha was dead. And the sooner I recognised it, the better it would be for everyone.

It is only when one door is closed that new ones can be opened. If there is one learning I have, it is that in all my failures, I have clung on to the past much longer than I should have. Giving up is not a bad thing – creation happens after destruction. That is the way the world of entrepreneurship and innovation works. Give up to start-up. Let not the past hold back the dawn of a new future. But first, let the past go.

Will be continued soon.

My Proficorn Way (Part 24)

Blogging

My first foray into writing started with a fortnightly column in Express Computer, thanks to the then-editor Venkatesh Hariharan. Those were the early days of the Internet – perhaps around 1996 or 1997. He approached me to write a long column on the Internet – 1500 words. That meant a full page in the tabloid-sized paper. Writing two columns a month meant that I had to think and explain ideas to others. It was the first time for me – and I agreed. It was perhaps the best decision I made – and one that has stood me in good stead through the years.

Around 1999-2000, I started my blog at emergic.org. I started a series “Tech Talk” wherein I would write a short new post daily – much like I do now. Then, I would also post links to other interesting readings. Over time, the “Tech Talk” phrase disappeared but the daily writing became a habit. I continued until August 2012 – when I stopped because I was getting too deeply involved in the political side of things, and I did not want to become the news because of something I wrote.

The blog format through those years is what I liked very much. I wrote for myself. To clarify my own thinking. Without worrying about who was going to read and what they would think. Without the need to be perfect. It was like I was speaking out my thoughts aloud and simply typing them out.

I never created a social media presence. I somehow did not like the short snappy comment format. I also did not want to write for others. If they read and benefited, that would be fine. But I wrote for myself.

When I look back on the years that I stopped writing, I realise that it was a mistake. I should never have let my writing cease, because that came at a cost of limiting my own thinking.

And so, I am happy now that I have started blogging again. The same format, the same mindset. The discipline of publishing a new post daily ensures that I have to keep the writing – and thinking – flow going.

For an entrepreneur, writing is a big positive because it helps clarify one’s own thinking and also communicate ideas to others. I don’t worry about whether the ideas are perfectly formed. My aim is to get them out there – because it ensures that I read and think about them. There will always be time for a new series later to improve on the initial ideas.

I think every entrepreneur should write a blog. Not just tweets or pithy LinkedIn posts. But write about one’s ideas and aspirations in real-time. Give people a glimpse into the world that you see. Because that is what you are really doing – creating a future ahead of others. And blogging is a great way to accelerate that future.

Tomorrow: My Proficorn Way (Part 25)

My Proficorn Way (Part 23)

One Meeting, One Idea

I am reasonably open to meetings. I don’t say Yes to every request that comes, but if there is a referral from a source I trust, I go ahead and do the meeting. When I go into a meeting, I have one key objective: to get one new idea.

When one meets with different people, we see the world through their eyes. They have constructed mental models of the world. These are different from ours. So, one has to understand how they view the world because that will give us a new frame of reference which can provide new ideas. That is why it is important to have conversations, read books, listen to different people and put ourselves in different situations.

Meetings are for me the best source of new ideas. While I always have plenty of things to talk about, I do try and listen to learn. Each meeting is unique and goes in many different directions. A typical 60-minute meeting means more than 10,000 spoken words. That is a lot! Do 6 meetings in a day, and it is almost like writing a book.

My approach to meetings is three-fold: to listen, to be alert when something different and interesting is said, and to walk away with at least one good new idea. To listen means ensuring that there are no visual distractions – no emails, no Whatsapp, and the likes. My approach is to make notes – so it keeps me from getting distracted with my own tangential thoughts. When I sense something interesting, I mark it in my notebook so I can come back to it later – especially if I have a continuous stream of meetings which limit thinking time between meetings. Finally, either after a meeting or at the end of the day, I will review my notes to see which ideas stood out and how I can link them and enhance my own mental models.

So, go into a meeting with a simple objective: can you learn one new thing that you did not know. If you can do this, the meeting will have served its objective, and you will be better for it.

Tomorrow: My Proficorn Way (Part 24)