My Proficorn Way (Part 4)

Living in the Future

One of my defining memories is reading CK Prahalad and Gary Hamel’s book, “Competing for the Future,” when it was published in 1994. That was a very difficult time for me. I had failed multiple times in various ventures that I had tried over the past two-and-a-half years. The realisation had dawned on me that my most recent foray into creating an image processing solution was headed the same way and had to be shut down. I was staring at an abyss.

It was at that time that I picked up the Prahalad-Hamel book and started reading it. The book transformed me. I made notes on Post-Its through the book – these notes became the eventual business plan for IndiaWorld. There is one particular passage that struck a chord and has stayed with me through the years:

There is not one future but hundreds. There is no law that says most companies must be followers. Getting to the future first is not just about outrunning competitors bent on reaching the same prize. It is also about having one’s own view of what the prize is. There can be as many prizes as runners; imagination is the only limiting factor. Renoir, Picasso, Calder, Serat, and Chagall were all enormously successful artists, but each had an original and distinctive style. In no way did the success of one preordain the failure of another. Yet each artist spawned a host of imitators. In business, as in art, what distinguishes leaders from laggards, and greatness from mediocrity, is the ability to uniquely imagine what could be.

To build a proficorn, an entrepreneur must imagine the future and get there first. One is not building just for the next few months – one has to imagine tomorrow’s world and create that future. If you get there first, you win. This journey is what makes entrepreneurship so exciting. It is a race – where there are many competitors, known and unknown. But there is a second race – in the entrepreneur’s mind, to create and craft a future that isn’t yet unknown. The entrepreneur then also has to persuade others (employees, partners and customers) about that future. It is the ultimate reality game!

Even now, as I sit at home, I am trying to imagine the new future – one where every offline business needs an online business, where hundreds and thousands of new online-only brands will get created. All of them will need help with their customer relationships – identifying their best customers and ensuring they reach their full spending threshold. What kind of tech solutions will they need? How can I as an entrepreneur fill this gap? The future beckons, and that’s where proficorn entrepreneurs live.

Tomorrow: My Proficorn Way (Part 5)

My Proficorn Way (Part 3)

Open-sourcing Ideas

One of the approaches I have followed in life is to be very open with my ideas. Whether it was IndiaWorld in 1994 or Velvet Rope Marketing in 2020, I have always been of the view that sharing and discussing ideas with others improves the ideas. I go into meetings thinking that if there is one new thing I can learn then the meeting will have served its purpose. And since I will never know until I do a meeting whether I will have learnt something or not, I tend to be open to doing meetings. And in these meetings, I talk about my ideas and thinking – even though they may not be fully baked. The feedback I get from others helps me refine the ideas. The more the inputs, the better the idea becomes.

In the fall of 1994 when I first thought up the idea of how an Internet portal could bridge the news and information for NRIs, I discussed the idea with dozens of people. I had a Visit-USA ticket on Delta – which allowed me to fly standby for a period of two months for a fixed price. It was an entrepreneur’s dream! I would talk to people and anyone who agreed to meet, I would tell them, “How about I meet you at your office tomorrow so we can discuss this in depth?” (That was, of course in the pre-Zoom days!) Go the airport, take the first available flight, and do the meeting. No cost-benefit analysis; just meet. The travel time would allow me to read and think. The different settings would trigger new ideas. And the meetings themselves were link hyperlinks which opened up new windows. I became better each day – one meeting at a time.

I find too many entrepreneurs now are very cagey about sharing their ideas. What they don’t realise is that someone somewhere is likely to have the same idea anyway. The idea is just the starting point. It is a key that opens a door. After that, it’s all about the way one executes and creates the new world. And in execution, a million things have to go right for eventual success.

So, to build a proficorn, start by sharing ideas – every person you meet and discuss it with will add value and make the idea better. Open your mind, open-source your idea and learn from the wisdom of others.

Tomorrow: My Proficorn Way (Part 4)

My Proficorn Way (Part 2)

Journey not Money

My wife, Bhavana, once told me, “The more you chase money, the further it runs away from you.” As an entrepreneur, I have never obsessed about money. I have done things because I saw a problem and gap in the market, and I tried to solve it. At times, it has worked. At other times, it has failed. The journey of discovering the opportunity, thinking through the solution and taking it to customers is what has been the driver. It cannot be about the valuation and exit one will get – focusing on these will distract and make for short-termism which will necessarily hurt the growth and profitability of the business.

At this point, it is useful to understand what an entrepreneur does. Israel Kirzner has this to say:

We have to recognize that when the entrepreneur discovers the automobile, he is not simply disrupting the calm. He is identifying what was in fact waiting to be introduced. Technological knowledge was being misapplied. Resources were being wasted on trains, carriages, and bicycles, when, in fact, what was waiting to be put together was this new gadget called the automobile. A person who recognizes this is responding to a preexisting, gaping hole in the market.

[I]n a more fundamental sense, he is correcting an already existing discoordination. He is redirecting resources that are already misplaced. People do not have to go on for years and years behaving in ways that are socially inefficient. The person who abruptly draws their attention to this inefficiency is assisting in the process of economic coordination.

While entrepreneurs may not know it, it is exactly what they do. This journey of filling in gaps in the market is what has to create the excitement. The financial reward that lies in store for success is just icing on the cake.

For me, when I launched IndiaWorld, the gap was in the flow of information from India to NRIs globally and the recognition that the Internet could play an instrumental role. The excitement was in making this happen – and not that one day I would sell the business and make a lot of money. It was this desire to make lives better that drove me – starting with news, then cricket scores, recipes and much more. The thrill lay in solving one problem and then the next and so on. Proficorns are built thus – one solution at a time.

Tomorrow: My Proficorn Way (Part 3)

My Proficorn Way (Part 1)

In my previous two essays on proficorns, I wrote about building a proficorn and compared proficorns and unicorns. In this series, I want to share some of my learnings through my 28 years as an entrepreneur who has focused on profitability, never raised external capital and yet created significant value through two successful enterprises – IndiaWorld and Netcore.

Even though I coined the word ‘proficorn’ a few months ago, I realised that there are many common threads in my approach to doing business. The need for profit was drilled into me early on by my father – because without profits one has to either shut down or be dependent on a continuous inflow of external capital which would mean sacrificing decision-making freedom at some point of time. To be profitable and maintain a track record of profitable growth in a business is never easy, especially in the world of technology where obsolescence and disruption are never too far away.

As I have been thinking about proficorns, I have realised that there is a mindset which defines one’s approach to business. For me, getting to cash flow profitability on a monthly basis was the most important requirement – the spectre of continuing cash burn was too horrific to contemplate. As such, the decisions I made were driven by the desire to get to profitability and keep it that way. It also meant creating a cash reserve during the good times which could serve one well during difficult times – like the present times where most businesses are facing declining revenues.

Like the Feeling

An entrepreneur’s life is never easy. There is no switching off Friday evening. The business and its future consumes you because failure is just one mistake away. It is also a lonely perch because no one else can fully understand today’s challenges and tomorrow’s uncertainties. Decisions made cannot be easily unmade; the rear view mirror exists only for post-mortems. And through all these times, one must always maintain a positive outlook because pessimism can create a negative spiral.

These words from Dan Bricklin that I read a long time ago have stayed with me through the years and beautifully capture the essence of being an entrepreneur:

Being a successful entrepreneur is tricky. You have to live with having control and not having control at the same time. It’s like this: In big business, when you need to cross a river, you simply design a bridge, build it, and march right across.

But in a small venture, you must climb the rocks. You don’t know where each step will take you, but you do know the general direction you are moving in. If you make a mistake, you get wet. If your calculations are wrong, you have to inch your way back to safety and find a different route.

And, as you jump from rock to slippery rock, you have to like the feeling.

That is the feeling I have liked and lived through for 28 years.

Tomorrow: My Proficorn Way (Part 2)

India needs War Cabinets (Part 8)

How can India’s political leaders go about creating their war cabinets? To start with, they need to be humble and set aside their ego. These are not qualities that get a person to the top of the political ladder. And yet, the war-like crisis that the nation faces calls for humility. Only when the leaders are willing to accept that they (or their surrounding bureaucrats) do not have the answers will they open their minds to inputs from the outside. Only when the leaders are willing to start trusting people from the outside will they be able to attract the best talent. Only when they are willing to listen and give freedom to this new team will our nation transform.

The alternative is too depressing to even contemplate. The healthcare and economic crises will get compounded by government actions which worsen the problem – as we have seen in the past two months. Indians will be set back many years in their slow walk forward to prosperity. Indian businesses (especially the small and medium enterprises) will take many years to recover – if they can survive.

Here is a 10-point war cabinet plan for India’s political leaders to take India forward:

  1. Create two primary missions – for healthcare and the economy
  2. Identify a leader for each of these missions – a leader who is not a politician or a present or past bureaucrat
  3. Give freedom to the leaders to build their teams
  4. Meet with the team every few days initially so there is a complete alignment in objectives
  5. Have a daily 15-minute review with the leaders – the equivalent of a ‘stand-up meeting’
  6. Ask the teams to deliver an action plan within 30 days – not difficult because the good ideas are already out there
  7. Create a mechanism inside government to ensure execution of these plans – without bureaucratic roadblocks
  8. Create public dashboards to ensure transparency on outcomes
  9. Speak to the people weekly to keep them updated on the thinking and actions taken
  10. Keep the team in place for the next two years

India needs a new beginning. Business as usual will not work in the wake of the devastation caused by the virus. Creating war cabinets is a way to convert the crisis into an opportunity, and put Indians on an irreversible path to prosperity.

Additional Reading (from the past two months):

India needs War Cabinets (Part 7)

India’s politicians and bureaucrats represent the institution of government of the nation. It is very instructive to know what Lee Kuan Yew said about them. I have excerpted these quotes from the book “Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World.” Lee Kuan Yew said this many decades ago – and yet, the words ring so true even now.

India has wasted decades in state planning and controls that have bogged it down in bureaucracy and corruption. A decentralized system would have allowed more centers like Bangalore and Bombay to grow and prosper…The caste system has been the enemy of meritocracy…India is a nation of unfulfilled greatness. Its potential has lain fallow, underused.

There are limitations in the Indian constitutional system and the Indian political system that prevent it from going at high speed…Whatever the political leadership may want to do, it must go through a very complex system at the center, and then even a more complex system in the various states…Indians will go at a tempo which is decided by their constitution, by their ethnic mix, by their voting patterns, and the resulting coalition governments, which makes for very difficult decision-making.

The average Indian civil servant still sees himself primarily as a regulator and not as a facilitator. The average Indian bureaucrat has not yet accepted that it is not a sin to make profits and become rich. The average Indian bureaucrat has little trust in India’s business community. They view Indian business people as money-grabbing opportunists who do not have the welfare of the country at heart, and all the more so if they are foreign.

More from Lee Kuan Yew on leadership and societal transformation:

Civilizations emerge because human societies in a given condition respond to the challenge. Where the challenge is just about right…the human being flourishes.

There are three basic essentials for [the] successful transformation of any society. First, a determined leadership…two, an administration which is efficient; and three, social discipline.

It is a very tough job, especially in political leadership. Being a CEO or the general of an army is different. You do not have to persuade people who can say “boo” to you to get them on your side. When campaigning, no one has to listen to you at all. And when the campaign is over, people have to believe that you have got something for them that you can do that will make them cast their vote for you. It requires a totally different set of skills. Those skills can only be developed if you have a natural urge, a natural interest in people, in wanting to do something for them, which they can sense and feel. If you have not got that and you just want to be a great leader, try some other profession.

I have spent 40 years trying to select people for big jobs…I have gone through many systems, spoken to many CEOs…I decided that Shell had the best system of them all, and the government switched from 40 attributes to three, which they called “helicopter qualities”…What are they? Powers of analysis; logical grasp of the facts; concentration on the basic points, extracting the principles. You score high marks in mathematics, you have got it. But that is not enough…They must have a sense of reality of what is possible. But if you are just realistic, you become pedestrian, plebeian, you will fail. Therefore, you must be able to soar above the reality and say, “This is also possible”—a sense of imagination.

How many in India’s present political leadership and bureaucracy fit what Lee Kuan Yew has outlined? Yet, they are the ones we have got. And that is why it is important for us to get in the best talent from the outside – people who can imagine and create a new India. These are the war cabinets India needs – at every level.

Tomorrow: India needs War Cabinets (Part 8)

India needs War Cabinets (Part 6)

Doris Kearns Goodwin’s book “Leadership: Lessons from the Presidents for Turbulent Times” chronicles the lives, times and decisions of four American Presidents (Abraham Lincoln, Theodore Roosevelt, Franklin Roosevelt, Lyndon Johnson) – each of who lives through great challenges during their tenures. In the words of Goodwin:

[In the White House], at their formidable best, when guided by a sense of moral purpose, they were able to channel their ambitions and summon their talents to enlarge the opportunities and lives of others. Specific stories of how they led will explore the riddle: Do leaders shape the times or do the times summon their leaders?

“If there is not the war,” Theodore Roosevelt mused, “you don’t get the great general; if there is not a great occasion, you don’t get the great statesman; if Lincoln had lived in times of peace, no one would have known his name now.” Roosevelt’s debatable notions voice opinions heard from the beginning of our country. “It is not in the still calm of life, or the repose of a pacific station, that great characters are formed,” Abigail Adams wrote to her son John Quincy Adams in the midst of the American Revolution, suggesting that “the habits of a vigorous mind are formed in contending with difficulties. Great necessities call out great virtues.”

The four leaders presented in this book confronted “great necessities.” All took office at moments of uncertainty and dislocation in extremis. Abraham Lincoln entered the presidency at the gravest moment of dissolution in American history. Franklin Roosevelt encountered a decisive crisis of confidence in our country’s economic survival and the viability of democracy itself. Though neither Theodore Roosevelt nor Lyndon Johnson faced a national crisis on the scale of secession or devastating economic depression, they both assumed office as a result of an assassination, a violent rupture of the democratic mode of succession at a time when seismic tremors had begun to rattle the social order.

While the nature of the era a leader chances to occupy profoundly influences the nature of the leadership opportunity, the leader must be ready when that opportunity presents itself. One leader’s skills, strengths, and style may be suited for the times; those of another, less so.

…Four case studies…reveal these vastly different men in action during defining events of their times and presidencies. These four extended examples show how their leadership fit the historical moment as a key fits a lock. No key is exactly the same; each has a different line of ridges and notches along its blade. While there is neither a master key to leadership nor a common lock of historical circumstance, we can detect a certain family resemblance of leadership traits as we trace the alignment of leadership capacity within its historical context.

All our leaders in India occupy their positions at the hour of the country’s greatest crises in the past 70+ years. They need to summon that same courage, confidence and wisdom to lead India to prosperity. India’s politicians have been singularly responsible for our lack of prosperity. This is a moment when they can together redeem their ilk and put the nation on a path of glory. But for that, they will need to rise above ego, mistrust and small-minded thinking. It is a journey they cannot do alone. Like Frodo Baggins in “The Lord of the Rings”, each of them needs to create a “Fellowship” – their own war cabinets.

Tomorrow: India needs War Cabinets (Part 7)

India needs War Cabinets (Part 5)

Here is an excerpt from Pawel Motyl’s book, “Labyrinth: The Art of Decision-Making”:

The traditional approach to decision-making rested on a simple assumption that both the quality and the accuracy of decisions were based on the competence and experience of the decision-maker in tandem with the quality and completeness of the information at their disposal. That approach was highly effective for many years. If a decision was made by a professional acting in good faith and drawing on information from trusted sources, the decision was pretty likely to be the correct one. All you had to do was develop good systems for gathering and analyzing data and entrust key decisions to the most competent personnel to be guaranteed relative peace of mind. Recent years, though, have turned the situation on its head. During the crisis, it was precisely those people who were most experienced, with the greatest successes behind them, relying on tried and tested, reliable sources of information who made the most dramatically awful decisions.

As Motyl puts it: “Great leaders are distinguished by their awareness that greatness is no guarantee of infallibility.”

Motyl goes on to outline the four roles of a leader in decision-making. While these are in a corporate setting, they apply equally well to leaders in government.

  • Visionary and strategist. As a leader, you decide in what direction the entire organization will go, and you ultimately choose the strategy. Be led by solid data and logic, and don’t allow yourself to be seduced by past successes and a sense of invincibility…Authentic leaders constantly question the status quo, even if they created it.
  • Agent of change. You are responsible for shaping reality. If you are able to carry out the first task of a leader, and you set out a bold vision, taking strategic decisions for the organization, make sure the system is going in the same direction.
  • Architect of organizational culture. As a leader, you are the driving force behind the organizational culture, and your actions have an enormous influence on the attitudes and behavior of others. Encourage others to make decisions that support your vision.
  • Creator of the decision-making infrastructure. Remember that in the new normal, “loneliness at the top” is both outdated and ineffective. You need allies, as you won’t be able to analyze the gigantic amount of information and impulses flowing from the exponentially unraveling world of the new normal without help. Build courageous, competent teams whose members understand and support the vision and values you want to promote.

India’s political leaders at all levels of government are faced with a situation they were not trained for. This is the first war they are living through. They need to rise to great heights if they are to fulfil the expectations that people have of them. They cannot do it alone or through conventional leadership. They each need to create a war cabinet that will help guide them and the nation through these turbulent times.

Tomorrow: India needs War Cabinets (Part 6)

India needs War Cabinets (Part 4)

Governance needs vision, will and expertise. Politicians are good at winning elections because they are able to gauge the pulse of the people and offer promises to a minority (termed as the “selectorate” by Bruce Bueno de Mesquita) that is good enough in a first-past-the-post system. But that does not prepare the winning leaders for good governance. That ends up in the hands of the bureaucrats. All one has to do is to watch “Yes, Minister” and “Yes, Prime Minister” to know how the bureaucrats play the stalling game.

In the US, the elected President comes with thousands of new staff – many sourced from think tanks and the private sector. They bring in a fresh outlook and new ideas. Many come with experience from having built and run large organisations. In India, we have no such luck. We have career politicians – many of them second- and third-generation. The only way they know how to get things done is by either fear or favour.

The politician-bureaucrat jugalbandi is ill-suited for this moment in time. What India needs is transformational leadership – and that needs new talent, which in turn requires trust.

Trust is a very important attribute for management. If I don’t trust others, I will not delegate and will constantly second-guess the intentions of those working with or for me. The result becomes extreme centralisation. Those around me will soon understand this – and therefore hesitate to volunteer their own opinion, and eventually I will end up being surrounded by yes-men. Those with independent opinions will either keep their counsel to themselves or quit.

We see this form of extreme centralisation in governments at all levels in India. Strong leaders win elections, but they do not necessarily trust others. In politics, trust is not important to rise to the top. But governance necessarily needs trust. Else one ends up with single-person autocracies (or dictatorships) with everyone else simply endorsing decisions made by the Supreme Leader.

That may work fine when things are going fine, but falls apart when crises happen. It is at those times when the leaders have to reach out to the best minds and heed their counsel. The pandemic has created just such a crisis in India. If the past two months are any indication, we have a serious vacuum in good decision-making across most governments in India. India needs the trust-talent-transformation chain. That is why there is a need for a “war cabinet” – a team formed by the best experts so decision-making can be done right through the war we are all living through and for making the big changes that India so desperately needs in the near future.

Tomorrow: India needs War Cabinets (Part 5)

India needs War Cabinets (Part 3)

What is a war cabinet? Here is a definition from Wikipedia: “A war cabinet is a committee formed by a government in a time of war. It is usually a subset of the full executive cabinet of ministers. It is also quite common for a war cabinet to have senior military officers and opposition politicians as members.”

The most famous war cabinet was the one created by Churchill during World War 2. From Wikipedia again: “The Churchill war ministry was the United Kingdom’s coalition government for most of the Second World War from 10 May 1940 to 23 May 1945. It was led by Winston Churchill, who was appointed Prime Minister by King George VI following the resignation of Neville Chamberlain in the aftermath of the Norway Debate. At the outset, Churchill formed a five-man War Cabinet which included Chamberlain as Lord President of the Council, Clement Attlee as Lord Privy Seal and later as Deputy Prime Minister, Viscount Halifax as Foreign Secretary and Arthur Greenwood as a minister without portfolio. Although the original war cabinet was limited to five members, in practice they were augmented by the service chiefs and ministers who attended the majority of meetings.”

The Australian Prime Minister Scott Morrison set up a war cabinet as early as March 15 to tackle the impact from the coronavirus. From The Saturday Paper (March 21): “The newly convened wartime-style national cabinet – with Morrison, the state premiers and the territory chief ministers – met for the second time in four days. The group includes five Labor members and four Liberals… The national cabinet now meets by teleconference every Friday, and more often as required… “Whatever we do, we’ve got to do for at least six months,” Morrison said. “Six months.””

At this time when India faces two (and perhaps a third) crises, India needs to put together war cabinets at all levels – and not just with people from across political parties, but staffed with experts. The healthcare crisis will persist for the next few years – India will need a huge augmentation in hospital beds and medical care at every level. The economic crisis will set India back many years. The government response has been woefully inadequate. And a third crisis may be emerging – the Chinese incursions into Indian territory in Ladakh.

Each of these crises requires expertise to tackle. Politicians and bureaucrats in India have been found wanting even during peacetime. The situation we now face is unprecedented and war-like – the concomitant interplay between the medical and the economic, between lives and livelihoods, between fear and hope. Extraordinary times call for extraordinary decisions – and these will not be made by Indian politicians and bureaucrats whose decision-making has been singularly flawed for the most part since Independence.

Tomorrow: India needs War Cabinets (Part 4)