Our Baby

I was chatting with Gharpay’s city manager in Pune who is a Christian, about his Christmas plans. This month is a busy month for us and I felt terrible when he told me that he can’t take any holidays this week because of the load. And then he goes on to say “I think our company is a just born baby…and no parents can think of taking rest,while our baby is crying…”.

I was touched by such passion and commitment. Every hardship seems worth it when you are working with such amazingly dedicated people. And how could we possibly fail if everybody cared this much about the company?

Dreampop

Discovered a new genre of music called Dreampop. Perfect music to passively listen to:

http://www.youtube.com/watch?v=s2YiUTh9dj4

Profits=Power

Last week I heard Mike Morritz, a Sequoia veteran speak about Steve Jobs and Apple. Mike Morritz was a journalist for TIME when Apple was doing incredibly well and he wrote a book on Apple back in the 80′s. So he had the fortune of knowing Steve Jobs closely.

One thing he mentioned about how Jobs operated differently after returning to Apple in 1997 was that he believed profits=power and focused on increasing cash reserves to do amazing stuff like buy out all machines in the world to create Macbook casings so as to stop any competitor from being able to use the same technology.

Here’s an article talking a bit more on how Apple manages supply chain operations. http://www.businessweek.com/magazine/apples-supplychain-secret-hoard-lasers-11032011.html

I’ve been thinking about this philosophy and I think it makes a lot of sense to run a business where your profits over your competitors gives you a significant long term competitive advantage instead of operating for years with single digit margins by undercutting competition on price.

Thoughts on this?

Picking a winning startup idea

I realized a long time ago that ideas were dime a dozen, worthless unless you pick the right one which targets the right market, complements your skills or knowledge and has the right timing, which over a period of time turns into something valuable.

I look at myself a year back when I was crashing a generous friend’s place in Bangalore. With a semester left before graduation, I was doing ‘research’ for the startup I wanted to found right out of college. I was working on multiple ideas, talking to numerous people to figure out which would be the winner. Its hard to evaluate your own ideas without bias, so I had two parameters to judge them on:
1. What market insight did I have that most people didn’t?
2. What execution insight did I have that people who knew point #1 didn’t?

GharPay scored high on both, which I now realize made me confident enough to start this. My years of obsession with internet businesses and microcredit industry paid off. I knew what ecommerce industry lacked and I knew how microcredit companies manage cash. I obviously had no experience in running a company but I knew how our biggest problems could be solved.

So if you are a young founder, be honest with yourself and figure out what is it that gives you an information advantage to start a successful business. Don’t be daunted by the fact that you have no experience in execution, you’ll figure it out. But if you have neither information nor skill advantage, then you just might be gambling.

I learnt this by looking at my father’s experience with the stock markets. He could never ever predict his winning stocks, because he simply didn’t know more about one company than anybody else out there. So how could he possibly win?

Start a company when you are young

I met a partner at a top VC firm in India who told me that I should get a job instead of starting up because according to him average age of the founding team of funded startup was 34-37 and thus I would never be able to raise investment. I think about this now and laugh because I think GharPay’s team has beaten the average by 10-12 years. The odds are definitely stacked against a young Indian entrepreneur but there are some tremendous advantages of being young.

1. You and your team doesn’t have kids to feed or a loan to pay off. GharPay’s entire top team of five people take as much as an average 27-28 year old would be earning after working up the corporate ladder. And these are very best people that I know. I doubt I would have been able to recruit only the best from my friends had I been 30, when most of them would never be able to take a serious pay cut.

2. You are on the path to success very early. The best musicians, dancers and scientists started off really early. To really build a blockbuster company, you need to be really good at starting and running companies, which comes from real world experience only. Better to start early.

3.  You are foolish enough to tackle a big hairy complex problem because you have no clue about the real world. And you become seriously successful only if you solve a big hairy complex problem. When it comes to entrepreneurship the only experience you need is the experience of having run a business previously. Domain knowledge helps but you can always spend a few months to a year understanding everything you need to run your business.

These are some serious advantages young people have, and its upto you to exploit these and fast!

Its tough

Its been a few months since I started working full-time on Gharpay. Its been some ride so far. I think every terrible thing they say that can happen at an early stage, has happened. Co-founders leaving, investors backing out, employees leaving, etc. Unfortunately there’s a list of terrible things that happen to growing company which haven’t happened to us yet, but I’m certain it is going to happen, no doubts there.

Entrepreneurs always tell you how hard it is, but I don’t think you ever really fathom what they mean until you go through that yourself. There are just so many days when nothing goes right until one day changes it all. Being persistent while being flexible to modify the business as you access new information is critical. I advise people to be committed to the process of starting up instead of being committed to the idea itself.

But is it all thorns? Absolutely not. Its fulfilling, exciting and fun(in a very weird way though). I especially enjoy working with smart people and executing what I believe is right. And when you hear clients telling you how important you are to their business, its a little like hearing people clap for you after you’ve performed on stage.

Traveling cheap in Europe

Traveling to Europe if you earn in rupees can be very daunting. Boy the euros can flow with little control, especially if you have credit card and towards the end of the journey you might seriously consider never returning back to India because at least you wouldn’t have to sell your kidney to pay off your credit card bills. But fear not with a little care and planning Europe is actually not that expensive to travel in for the brave and the open minded. I speak from my experience of being to Europe many times whilst still a poor undergraduate student.

1. Plan your countries well and try to include bordering countries which will save you money on rail passes (by far the cheapest way to travel). Italy is inexpensive as are Germany and France. Scandinavia is super expensive, Switzerland is comparable.

2. Book your tickets at least two months in advance to get the cheapest return ticket. If you are planning for multiple countries, pick a central European city to fly to and from. Flying out from the same airport will save you quite a bit of money. I suggest Zurich, which makes France, Germany, Italy and Austria accessible or Brussels, which is close to Netherlands, Germany, France and UK.

3. Stay in youth hostels, which are everywhere and very clean. Buying a youth hostel membership(INR 100 per year) will get you discounts and near guaranteed accommodation during peak seasons. I always couchsurfed and met a lot of interesting people.

4. Eat a monster breakfast and a light lunch and dinner. Healthier way to eat too.

5. And lastly walk or use public transport. Europe is tiny, so use a map to figure out where you got to go and you just might be able to walk instead of even using public transport.

Tesla and introspection.

I’m reading Nikola Tesla’s fascinating autobiography. Its a great insight into the mind of one of the greatest inventors the world has ever seen. The following quote caught my eye because of its timelessness.

The pressure of occupation and incessant stream of impressions pouring into our consciousness through all the gateways of knowledge make modern existence hazardous in many ways. Most persons are so absorbed in the contemplation of the outside world that they are wholly oblivious of what is passing on within themselves.

Its funny that people even in the early 1900′s suffered from an information deluge, something that definitely plagues the world today. I wonder what Tesla would have thought of Twitter and Facebook.

Every other autobiography I’ve read talks about the powers of introspection but Tesla takes it to a whole new level. He thoroughly understood himself and his brain with its quirks and problems. He suffered from a strong synesthesia (his brain involuntarily visualized words he heard or read and presented itself in his regular vision, which meant he couldn’t always differentiate the reality from the imaginary) which could debilitate normal life functions but he developed and controlled it to use it for his own gain. He writes that every machine or experiment he’s ever performed was first designed, prototyped and tested in his imagination before he actually built a working model in real life. And not once did the results or performance varied from what he imagined.

What an extraordinary man.

What life lessons go against common sense?

Great question on Quora, which is quickly becoming my favorite procrastination ally.

What life lessons are unintuitive or go against common sense / wisdom?

My favorite answers from the lot:

1. Better to ask for forgiveness than permission.
2. Money can buy happiness
3. Behavior is controlled more by your environment than your own willpower.
4. Laziness can be a very positive characteristic for a leader.

What life lessons are unintuitive or go against common sense / wisdom?

What life lessons are unintuitive or go against common sense / wisdom?

Pivoting

Pivoting means changing your business model when the older one isn’t working out. There are lots of successful examples of such.
Companies sometimes have to make a tough call to change their entire business instead of continuing with something that doesn’t work till they fade away.

This is a must read article and video on changing business models by an investor of Chegg/Twitter.

…Mike Maples gave a talk about what he calls “pivots” and “thunder lizards.” Thunder lizards are startups born from atomic eggs that “emerge with attitude” want to disrupt and chew up their competition– both new world and old. They are big, chaotic, relentless and when successful, become huge companies. What helps make a thunder lizard successful is something Maples calls the “pivot.”

This isn’t about product iteration– the pivot has to do with business model. Business model shouldn’t be confused with “business plan,” Maples says. A business plan is a static thing, a business model charts money flowing out to create a product and money flowing back in from that product. A startup’s entire reason to exist is to have  more arrows going back in than arrows going out, and it’s always changing…

Of course this doesn’t mean change willy nily at the slightest hint of failure but there needs to be a balance, which makes this decision is even difficult. And you should throw out the old model completely instead of trying to do more than one thing at the same time.

There’s a parallel in the real world of course: It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change. ~Charles Darwin