Published March 17-21, 2021
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I have excerpted this from a series I first wrote in 2004.
Crucible Experiences – 1
I first came across the term crucible experience when I was reading a book by Warren Bennis and Robert Thomas, Geeks and Geezers. I thought about it again recently when I was interviewing a candidate and asked him what his crucible experiences were. I also began to think about my own crucible experiences. More on that later. First, let us understand what a crucible experience is.
We probably encountered the word crucible in chemistry classes in college. A crucible is a vessel used for high temperature chemical reactions. It is made of material that does not melt easily. Write Bennis and Thomas in Harvard Business Review: “For the leaders we interviewed, the crucible experience was a trial and a test, a point of deep self-reflection that forced them to question who they were and what mattered to them. It required them to examine their values, question their assumptions, hone their judgment. And, invariably, they emerged from the crucible stronger and more sure of themselves and their purpose—changed in some fundamental way… Leadership crucibles can take many forms. Some are violent, life-threatening events. Others are more prosaic episodes of self-doubt. But whatever the crucible’s nature, the people we spoke with were able…to create a narrative around it, a story of how they were challenged, met the challenge, and became better leaders.”
That is the context for a crucible experience, something which transforms us, and shakes and shapes our lives. We have all gone through these experiences in our life. Some of these experiences last a short time, others much longer. Either way, they help change us in some way. More often than not, these are intense and deeply personal experiences, which we would rather not talk about. Even thinking about these experiences makes us want to purge them from our memories. But they leave an indelible mark on us for the rest of our life.
Crucible experiences have a way of testing us. They bring out aspects of our personality that we did not know existed. We can think of them in other words (for example, adversity). In each case, they help build our character, be it as an individual or in the workplace. These events can be voluntary for example, a difficult and dangerous trek we decided to take. At other times, they just happen leaving us rushing to react. It is also at times like these that we realise whom we are really close to. All in all, the crucible experiences are character-building. While we are going through these experiences, we may wonder why it is happening to us. But later (sometimes much, much later), on reflection we realise that there was definitely some good that came out of it.
Each of our lives is the sum of our experiences. As Albert Einstein said, “The only source of knowledge is experience.” Add to that Benjamin Disraeli’s quote, “There is no education like adversity.” Take them together and you can think of crucible experiences as life’s step functions: each taking us to a new, higher level, as long as we are willing to learn.
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Crucible Experiences – 2
I was in the ninth standard in school and contested the elections for the school captain. While there was competition, I hoped my academic record and being a favourite with the teachers would see me through. As part of the elections process, all candidates had to talk about their ideas and plans to the school general assembly. I still remember that day. I had written a nice two-and-half-page speech and memorised it because I didn’t want to be seen reading it. My turn to talk came.
I started my speech. And then, my mind went blank. Standing in front of a thousand students, suddenly, something gave way. I forgot my words. I rambled a little, and then walked off the stage. The elections were as good as over for me.
That was the time I realised the importance of public speaking. It didn’t matter how good one thought one was, or how good one’s ideas were. If one could not communicate them in public, it didn’t matter. My academic brilliance could not teach me how to speak on a stage. I had to change that.
During the summer vacation that followed, I enrolled at the Indo-American Public Speaking course. At just under 15 years, I was by far the youngest in the group of 25. As the days went by, my public speaking abilities improved. In the competition held at the end of the course, I came first, with a speech on Circles. The cup I won that day is still a treasure for me. More than anything, I had also set aside some internal ghosts. That was my first crucible experience.
My second crucible experience was in my first semester at IIT-Bombay. As a topper in school and college, I expected to do very well academically. I eschewed all other extra-curricular activities and just concentrated on my studies. As the semester ended and the grades came out, I realised that my best efforts were just not good enough to top in a world of equals. I had to confront the reality that I was not going to be in the top few, an experience I had not gone through my entire academic career so far.
It was time for some soul-searching during the December break. I diverted my mind by working as a volunteer for the youth festival, Mood Indigo. And in that, I came into my own. I discovered a side of my personality that I hadn’t thought existed: doing something beyond academics and excelling at it. My work was appreciated. I stood for elections in my hostel (for Literary Secretary) and against all odds, won. I had found my calling. Academics took somewhat of a back seat, as I played an increasing role in student activities. In my final year, I was elected unopposed to one of the highest posts: General Secretary (Cultural).
The first semester experience helped me develop a more well-rounded personality by the time I graduated. I discovered a world beyond the classroom. It was then that I learned that an infectious enthusiasm can more than make up for lack of deep knowledge. Much of my entrepreneurial passion has its birth in the four years that I spent at IIT.
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Crucible Experiences – 3
I returned from the US to India in May 1992, thinking of myself as God’s gift to the country. I had great dreams of building a software company that would be among the best in the world in 5 years. After all, I had great credentials: an IIT and Columbia education, work experience at one of the foremost telecom companies in the world, and some wonderful ideas. All I had to do was conquer. Or so it seemed.
Two years later, all the dreams lay in shambles as I experienced failure after failure in all that I tried. Nothing it seemed could go right. I withdrew into a shell. Each day, I had to force myself to wake up and go to work. Anything I did seemed to make matters worse. I had let down my staff and family. I wallowed in self-pity. I could not see a way out of the hole that I had dug. I was a failure as an entrepreneur and that was almost impossible for me to accept, as I thought of myself brighter, even superior, than everyone else I saw around me. Something had gone wrong big time, and I just couldn’t figure out what. My pride prevented me from talking to others, even my family. I began to realise in that summer that the company I had wanted to build was all but dead. I would have to restart.
When one is in a difficult situation, it is very hard to think straight. One encounters, what I call, paralysis by analysis. Because one is smart (too smart for one’s own good), there is a tendency to keep analysing the situation replaying events and getting lost in an infinite maze of what-if scenarios. The need of the hour is for tough decisions and surgical actions, but that’s the last thing one does, because of the belief that there has to be a logical way to remove the bugs one-by-one from the system. This inaction compounds the problem. I went through such a phase for many months. Outwardly, I had to act normal and optimistic because of the other people who looked up at me for direction and guidance. Inwardly, I was coming apart.
It took me many months to act. I spent two months in the US at a friend’s place. It was only then that I started coming to terms with the reality and the monster that I had created. I came to grips with the situation, built out a business plan for a new venture (what later became IndiaWorld), returned to India, laid off most of the staff, decided to focus on a single business with the aim of making it profitable as quickly as I could, and got started with gusto. The crucible experience had made me even more determined. I had seen failure first-hand. There was little else to lose. There was a life to be lived. If I didn’t conquer my own inner self, I would be a nervous wreck. I figured that it couldn’t get worse than what it was. From where I was, one could only make things better. As so it turned out.
These three experiences in their own way shaped part of me. As I went through these experiences, it was very hard to imagine why God was making me go through it. But, as someone once told me, there is always some good which comes out of every experience. One does not know it then, and it may take a long time to see that good. At some stage, we will all be grateful for our crucible experiences for it is these that come together to make up Life.
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Markets as Menaka
In one of our reviews in Netcore after we had failed to show progress in our international foray, one of our Advisory Board members asked: “Why are you chasing Menaka?” Seeing my puzzled look, he said, “Are you really serious about your international efforts? Or are they just so some of you can travel abroad periodically? Right now, you are chasing Menaka – it’s an attractive distraction.” Since that day, the phrase “Menaka – attractive distraction” has stuck with me.
I was reminded of that recently when I got a call from an investment banker saying that the markets are very hot and it would be a good time to do an IPO soon. Listed stocks were rising rapidly and trading at very high multiples. So, we should also take advantage of that. I listened to him and I thought to myself – our business fundamentals have not changed. We still need to deliver consistent growth. A PE of 50 or 100 would be very difficult to justify for the growth we had. Instead, they would probably distract us from the core task of building a solid business with long-term growth.
Public markets are a very different ballgame. They can create their own dynamic – as the stock rises, the temptation is then to do acquisitions or a QIP issue to raise more capital to justify the high price and accelerate growth. While some companies have pulled it off and built their model around continuous acquisitions, I did not think we were ready for that. In that sense, what the public markets do were a distraction – seeing the ups and downs of the stock prices daily would create undue pressure on us and also possibly push us down a path we were not fully ready for.
What the Nasdaq and BSE Sensex do is irrelevant to your business. Technology makes it so much easier for us to be aware of what is happening worldwide. Awareness is good, and in fact important. But entrepreneurs should not become obsessed with the markets. Focus should be on the business. Even if one wants to list on the public markets, it is an event which is likely to be a few years away. What the market will be then one does not know (or care about) at this point of time.
Too often entrepreneurs think of exit strategies (IPOs and MAs) even as the business is being built. This is the wrong approach. Build a business to keep, to manage forever. The business has to be something which makes you wake up every morning with excitement. One has to feel that the business can provide that joy – only then should one consider starting up. Exit strategies and wealth creation are incidental and not controllable by the entrepreneur. An IPO when it happens is just another milestone – it should not become an obsession. Once an entrepreneur takes in external capital, the increase – so that should be only done once there is clear visibility for future growth irrespective of circumstances.
So, watch the markets as one would watch a cricket match. Build the business right. There are no shortcuts to creating an institution that will last forever.
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100X Disasters
We see them every so often in business (and perhaps in personal life): disasters which we could have avoided had we made a decision to spend 1% of the time or money sooner.
I had one such 100X disaster in the company in my early years as an entrepreneur when one of our persons in the billing team took suddenly ill. She used to single-handedly manage the billing for our mailing renewals. And as it happens, there was no backup or written process — there were just so many things in her head! She was amazingly efficient at things, so until she had to take leave for an extended period, we didn’t wake up to the extent of the flaw in the internal system. It would have taken little for us to have an understudy associated with her, but we had not even thought about it — one of these things that slipped through the cracks.
It boils down to “no backup” — either of a person, or of a process. The question to really ask every so often is: which one thing are we doing (or not doing) which could cause a blow-up that can hurt? Of course, one cannot take it to an extreme, and duplicate every person or process. But there will be a few such things that we can do (insurance, Plan B – call it whatever) which can save embarrassment at a future point of time.
For example, a data leak can be a 100X disaster. Many times, businesses optimise on security checks. All it takes is a single error to create irreparable damage. A small investment in cybersecurity systems can go a long way to alleviating such disasters. Some other examples are: underinvestment in IT infrastructure (having a single point of failure), overdependence on a single large customer, lack of adequate backups of key software or systems.
For a growing business, it can be very difficult to recover from 100X disasters. So, entrepreneurs should make sure they are avoided at all costs. Looking ahead, planning and thinking of worst case scenarios can help ensure that such disasters never happen.