Published December 11-15, 2020
- Pre-IndiaWorld (1992-1994)
- Multimedia Database
- Electronic Parts Catalogue software
- Image WorkBench – image processing
- IndiaWorld (1997-1999; all these were portals)
- Dhan – India Investments
- Indialine – The Internet in India
- Nagar – Build your home (page)
- Man Pasand – Indian Favourites
- India Travelog – Destinations in India
- IndiaVotes – Opinion Polls
- Itihaas – 5,000 years of Indian History
- News Asia – Asian News
- Netcore early years (2001-2005)
- Blogstreet – blog search engine (one of the world’s first)
- RSS IMAP Aggregator – mailbox for RSS feeds
- Pragatee – one-stop software for small businesses
- Visual Biz-ic – enterprise software
- Digital Dashboard
- Emergic Freedom – Thin Client, Thick Server
- Netcore B2C (2005-2010)
- MyToday SMS – free subscriptions
- MyToday Mobs – SMS groups
- MyToday mobile portal
- NayaNaya – latest news
- MyToday Store – paid SMS subscriptions
- Phone.cc – dedicated portal for every mobile
- Politics (2009)
- Friends of BJP
- Free A Billion (2015-2018)
- New Constitution for India
- Swatantra Mumbai
- Nayi Disha and Dhan Vapasi
- Investing in Startups (2007-10)
- Seraja – Event Web
- Novatium – $100 Computer
- About 10 other companies
28 years. 30 failures. And 3 big successes.
- IndiaWorld (1995-99): sold for $115 million in 1999
- Niti Digital (2012-14): helped Narendra Modi get a majority in 2014 Lok Sabha
- Netcore (1998-): going strong; a “proficorn”
None of the successes were guaranteed. Success is inevitably built on top of failures. We forget our failures. But the failures are the stepping stones – the pathways that lead to the ultimate destination. If I had not had the courage to experiment as an entrepreneur (and accept repeated failures), there probably would have been no success.
There were long periods of serial failures. But I did not give up. I kept trying new things. That is how I live life even today. In every new idea that I am working on, I wake up every morning to work hard to reduce the risk of failure.
Strategy as Choices
In a recent hippoBrain conversation, Ramesh Mangaleswaran explained strategy very well. He described it as a set of choices that a business needs to make, and then decide on the resources (human, capital). Strategy needs a combination of big bets and not so big bets (options). The big bets need to be counterbalanced with a safety net if things go wrong. Strategy also needs to be thought at two levels – like looking through a telescopic (long-term, directional) and microscope (near-term, specific actions).
One exercise that Ramesh had suggested for Netcore was the following: start with a From-To (where we are today, and what do we want to become), list out 3-4 Must-Dos and 6-8 Choices. For the Choices, if the decision is to be made now, then they need to be backed up with resources; if the decision is to be made later, then a date needs to be set by when the decision will be made.
Too often, we do not understand what strategy is, and apply the term to any forward-looking thinking that we do.
Business World had an interview with Michael Porter where he builds on the “Strategy as Choices” thinking:
Porter also warned about the overuse of the word strategy. He simplified the definition in business as a set of choices that are long term and articulate the competitive advantage that companies will seek to create, in order to win.
The strategy also should not be confused for goal and aspirations. It is more than just particular actions – it is holistic. At the same time, it is not a mission statement or values. It is not vague, it is specific.
…“Strategy cannot be a popularity contest where everyone gets a vote because the essence of strategy is about choices,” he concluded.
Farnam Street had this to add: “Really, strategy is about making specific choices to win in the marketplace. According to Mike Porter, author of Competitive Strategy, perhaps the most widely respected book on strategy ever written, a firm creates a sustainable competitive advantage over its rivals by “deliberately choosing a different set of activities to deliver unique value.” Strategy therefore requires making explicit choices— to do some things and not others— and building a business around those choices. In short, strategy is choice. More specifically, strategy is an integrated set of choices that uniquely positions the firm in its industry so as to create sustainable advantage and superior value relative to the competition.”
So, going back to what Ramesh said, here are three questions to answer: what is your From-To, what are your 3-4 Must-Dos, and what are the 6-8 Choices that you need to make. Take some time with your senior management colleagues and answer them, and you will hopefully have a better view of your own business and its future.
I had spoken about pivots briefly in “The Sub-broker Moment.” The idea of a pivot in a business needs a fuller explanation.
Here is an article from Founder Institute:
While pivoting in the startup world means to shift to a new strategy, it is often believed to entail drastically changing the whole company. But this is not always the case. Oftentimes, a company only has one important problem that needs to be addressed, and only requires one aspect of the company to change. Below are some examples of pivoting that you might not have guessed are considered a “pivot”:
Turning one feature of a product into the product itself, resulting in a simpler, more streamlined offering.
The opposite of the previous point is also considered a pivot, in which one product is turned into a feature of a larger suite of features as part of another product.
Focusing on a different set of customers by positioning a company into a new market or vertical.
Changing a platform, say, from an app to software or vice versa.
Employing a new revenue model to increase monetization. For example, a company might find that an ad-based revenue model may be more profitable than freemium.
Using different technology to build a product, often to cut down on manufacturing costs or create a more reliable product.
Forbes writes about 14 famous business pivots. They write about Twitter and Flickr, among others.
Twitter: “The most legendary pivot in social media history is the transformation of Odeo into Twitter. Odeo began as a network where people could find and subscribe to podcasts, but the founders feared the company’s demise when iTunes began taking over the podcast niche. After giving the employees two weeks to come up with new ideas, the company decided to make a drastic change and run with the idea of a status-updating micro-blogging platform conceived by Jack Dorsey and Biz Stone.”
Flickr: “Flickr actually began as an online role-playing game called Game Neverending, where users would travel around a digital map, interact with other users and buy, sell and build items. The game also included a photo-sharing tool, which turned out to be one of the most popular aspects of the game. The company decided to leverage this photo popularity and pivot to Flickr, which was acquired by Yahoo! in 2005, and became one of its most beloved and successful acquisitions.”
Netcore began its life as a Linux-based mail server company. We stayed that way for almost 10 years (with many failed attempts at new ideas along the way). When SMS started growing in India, we made a pivot to offering enterprise SMS services. Over time, we added email to the mix, and then moved up to the stack to offering a full stack marketing automation platform. These were all shifts. If we had stayed in email servers, we would have been irrelevant by now.
Pivot links to strategy. As you think about the future opportunities, you have to make a choice – stay or shift. In the world of tech where collaborators can become competitors and every large company is working to expand its share of the customer wallet, deciding if and when to pivot is an important pillar of strategy.
Hiring a CEO
It was mid-2007. Netcore had been in business for almost 10 years. And all we had to show was a small business in mail servers, and a long list of failed efforts to the product mix. My passion lay in tinkering and coming up with new ideas. But we could not pass the ultimate test – converting ideas into sustainable businesses with paying customers.
I started thinking that the problem lay with me. I could create, but not sell. Which of course also meant that I was creating the wrong things. I had become Netcore’s biggest bottleneck. I began to think about the possibility of replacing myself as CEO. Till then, for 15 years, I had always led from the front. I had a big success in IndiaWorld, so at times I thought of myself as invincible. But the reality was stark. Netcore was flailing. Unless I did something different, we were headed to becoming a zombie company.
I spoke to a friend, Rajjat, about my dilemma. He suggested I meet a few people and explore the possibility of bringing in someone from the outside to lead Netcore. I decided to keep an open mind. He introduced me to Abhijit, who was leading the digital business for a large media company. Abhijit and I were as different as chalk and cheese – and that was perhaps what clicked. We met a few times and I grew comfortable with him. He had led businesses in the past and came with a strong sales and numbers mindset. That was what was missing at Netcore.
As we spoke, I became comfortable with him and the idea of a new leader for Netcore. It was not an easy decision, but I also knew that if Netcore had to grow, I had to get out of the way. And that is exactly what I did. Abhijit joined as Netcore CEO in July 2007.
The one decision I made then was that in a company there should only be one leader. So, I stepped back. Abhijit was the CEO and I did not want to create a second power centre. If I disagreed with anything, I would tell him in private. This strategy of letting the CEO lead has worked very well for Netcore through the years. Abhijit, followed by Girish, and now Kalpit – they have all led the company to 13 years of growth.
As I look back, the decision to bring in an external CEO and replace myself was perhaps the most important decision in Netcore’s history – and one that laid the foundation for us to become a proficorn.
25% of Netcore is owned by past and present employees – some as shareholders, and others as option holders. This is perhaps one of the most liberal ESOP programs any company has. It is a choice I made about 12 years ago.
Stock options have always been a good way to attract talent. In India, the rules governing options are not as simple, transparent and employee-friendly as they are in the US. But companies can still use stock options as a magnet for talent.
While Netcore has had an ESOP program for a long time, one of the challenges was that employees did not see any liquidity. We did not raise any external capital so a secondary offering of shares was not possible. We have also not sold or listed Netcore. So stock options have been illiquid for employees. And over time, they became a piece of paper that was not valued by recipients.
So, last year we decided to do partial buyback which provided liquidity to many past and present employees. We used the profits of the company to do the buyback. (I complemented that with some direct purchase from my family company.) Early employees saw extraordinary returns, and this reinforced the feeling among present employees that stock options did indeed have value.
Stock options are a very good way to align interests. They can be a good reward and motivation mechanism for employees. Each year, I set the price – based on what I think the business is worth, which in turn is driven by inputs I have had from conversations with potential external investors and market inputs. It may not be the most scientific way to do it, but it is still a good way to show people the value of what they have.
I have said it in company meetings that over the long-term, it is the stock options that will deliver huge financial gains for every one of the holders. I do hope I can do that in the years to come.