Category Archives: Learning

When private emails are made public, everyone loses

There are 2 news items that came up consistently yesterday in my facebook feed. One was the tweet that Evan, the CEO of Snapchat shared, in which he showed the private email exchange between Mark Zuckerberg and himself.

Snapchat tweet

Evan Tweet

This was a private email sent from Mark to Evan, which he made public.

Another one was from the founder of Zomato, Deepinder who also shared a private email (now deleted) from Satyan of Times of India.

Some thoughts:

First I always assume that every email I send, will be made public. So I write like I am speaking to the person in a public forum.

That said, I am disappointed that they chose to make the emails public. I think a paraphrase would have sufficed.

Second, I am actually glad that both Mark and Satyan reached out instead of the other way around. Shows that both these folks are aggressive, not willing to wait for things to come to them, even though the run large, established businesses.

Finally even if they did choose to make their emails public, it would have been better to have gotten approval from the sender before doing so.

What do you think? Are emails sent from one person to another private or available for everyone else to view?

A most poignant story of why the world is round and not flat

This story made me cry. Not tears of sorrow, but tears of goodness. There is a lot of that in this world.

I want to tell this story, because I want more people to know about the way the world works and why you have to pay it forward. I have asked all 3 of the folks who are part of this story to see if I could share their real names and organizations. Have not heard back yet.

A few years ago, a young man, about 21-22 years of age, from the not-so-upscale, Tenderloin neighborhood of San Francisco, wanted to do something. Not anything in particular, but something. Inspired by a story he read online about the lack of education resources for the poorest of the poor, in India, he thought about making a trip here to find out how he could help.

His sister (older, married) and family were understandably apprehensive. India is not the most comfortable place for a young person. Still, they supported his trip to India to “find out what’s going on”.

Upon his arrival, the young man met lots of people, hung out at the not-so-desirable parts of Delhi and learned first-hand, about the children of migrant workers, day laborers & the underemployed and their inability to have a basic education. Knowing how poorly staffed government school were, these parents chose to have their kids with them during the day. Most of the kids ended up “helping” the parents at work.

He decided to start a low-cost school to educate them.

Think about that. A low-cost school in Delhi taught and run by a young man from San Francisco.

Fast-forward a couple of years, the school’s running, growing, albeit slowly and our young man matures into a school administrator, and runs his non-profit in India, making few trips to San Francisco during holidays and life moments. During this time, our young man, has grown a staff of 12, trained a few local teachers and helped make a difference in over 200 children’s lives.

One of the teachers, a rather exceptional young woman herself, after a year and a half of being at the school, leaves after she’s married and our protagonist does not end up keeping in touch with her after that.

Last year, his sister’s daughter was diagnosed with Autism.

Autism is a disorder of neural development characterized by impaired social interaction and verbal and non-verbal communication, and by restricted, repetitive or stereotyped.

Autistic kids are expensive to educate in the US. They need a personal trainer, coach and therapist (or one of them) to help grow the child’s confidence.

Our young man’s sister was unable to afford the resources to put her daughter in therapy, but US laws for learning disabilities (I dont know the details, but have been told this) ensure that if your child has a disability and wants help to learn, a good amount of money will be provided to help the child do so.

Unable to afford a therapist, she apparently put an ad on craigslist seeking help. She gets no response for weeks. Our protagonist meets her and the family on one of his trips to San Francisco and posts his anguish on a social networking site.

After 3 days, the young woman he helped, become a teacher in Delhi, calls him (after 3+ years of not being in touch at all) in San Francisco. She offers to meet him for coffee and suggests she could find a way to help. She also just “wanted to catch up” and explain the mysterious lack of communication.

Turns out this young woman, married wrong, went through a divorce and was picking up the pieces. She had a job to keep food on the table, but that was it.

She offered to tutor and be the child’s therapist – for free. She has been doing that for 6 months now.

So there you have it. A young man, from San Francisco, making a difference in Delhi. And a young woman from Delhi, making a difference in San Francisco.

I met the young man at an entrepreneur event a few weeks ago and then upon his insistence, met the woman in San Francisco a few weeks ago as well.

They are both normal, young, 23-25 year old kids. They are though, a lot wiser and more awesome than I will ever be.

The world is round. It is not flat, Mr. Friedman. What goes around, comes around, twice as much and twice as fast.

Among the Indian elite (and I am as much a part of of the elite), the world remains full of opportunities thanks to “globalization”. The rest of the world depends on these two and other such young minds to uplift us.

The world is round, Mr. Friedman. It is round.

The pretender and the contender wear the same clothes

In the last year I have talked to over 800 entrepreneurs. About 200+ were discussions over 15 minutes. That roughly equates to about 1/2 my work time. This time was split between listening and learning from them and the rest was spent sharing some “gyaan“. For what it was worth, most of them were very nice to me and politely nodded when I dispensed my 2 minutes of “framework advice”.

What I have learned is that it is very hard to give an answer that’s cogent, well thought out and precise. In an era where there are enough advisors, mentors and other folks giving lots of advice, there’s a cottage industry sprung up around trying to “help” entrepreneurs and “grow” the ecosystem.

Here’s the challenge for us as entrepreneurs. The pretender and the contender both wear the same clothes, speak the same language and likely use the same words. We have to discern who’s who.

So what’s the framework to use to determine who you should listen to and who you should ignore?

There are enough folks suggesting that peer learning is the way to go. After all, what better than someone “like you” who has just been through the same path before. The pros of peer learning are usually – practical advice, “here’s what I did and it worked for me” and knowledge dished out without airs and graces. The cons are lack of context, the inability to give you a framework to think and providing answers to questions that you might never encounter.

There are other folks suggesting that “successful entrepreneurs” should provide you with the right advice. Meaning, folks who have seen relative measure of success and would be likely able to share more refined nuances of their journey. The pros are well thought out arguments, balanced perspective on what works and does not. The cons are that success comes over a long period of time. The things that worked a few years ago are rarely going to work as effectively.

Still others say the best advice is from “failed” entrepreneurs. They can possibly tell you everything you should not do, but not all the things you most likely should do. The pros are that you get to really understand that the rose colored glasses that are worn tend to be tinted anyway. The cons? – What should you do? Opposite of all the things the failed entrepreneur did?

At the end of the day it will become obvious that to have some modicum of success, you will have to blaze your own trail. Else someone who has done the “exact” same thing that you did, will likely “clean up” before him, leaving nothing but crumbs for others to “feast” on.

The only way to know who the pretender is and who the player is to watch them in action.

Which is why I highly recommend that you work with the advisor and mentor for a few weeks or a month before you actually bring them on board. For the first month, if they truly believe in what you are doing, they would offer their time for free, then you can overcompensate them for their work post that effort.

A/B testing your email messages

I have about 30,000 friends who follow my blog on email, and the open rate is about 8% (which according to Mailchimp is very low) on each blog post. Besides this I have another 9,500 friends and acquaintances that I send an email update to once a month on key blog posts I have written during that month. That has an open rate of 17%. Roughly about 5000 of my friends read a blog post, which gives me a fairly good sample size to do some serious A/B testing on my blog post titles.

My email friends are about 61% from India, and 25% from the US (largely the valley). This was inverse just 5 years ago in terms of %, but the number was about 3200. So a nearly 10 times growth in 5 years. 

Since wordpress does not allow me to segment the email by friends, everyone gets the same blog post and title as soon as it is published. But the email acquaintances is where I have a lot fun.

Here’s what I found last week in 3 sets of 2000+ subscribers.

I had the same body of the message but changed the Subject of the email.

First subject (Sent on a Thursday at 10:30 IST): Where is analytics headed in 2020? An insight gathered from 25 top #startups – 14% open rate

Second subject (Send on a Friday at 10:30 IST): The future of analytics is in offerings based on derived insights – 11% open rate

Third subject (Sent on a Saturdaya at 10:30 IST): How analytics companies are making 92% margins compared to software companies – 21% open rate

I am shocked that the Saturday message had best open rates, since weekends have been consistently low on my open rates.

The message though was one of margin – which I think appeals to Indian entrepreneurs a lot.

What do you think is the reason that the first subject got a better open rate than the second? Is it more specific?

The most admirable part of Amazon’s culture that #startups can benefit from

I am a big fan of Amazon. I read Jeff Bezos first “letter to investors” back in 1998 (a year after they went IPO) and was super impressed by his focus on customers above all else. I paraphrase, but he said, we are a one trick pony – our trick is to keep customers happy.

The most amazing part of their culture is the way it permeates and allows each and every employee to be a part of the experience. I dont know how they do it.

There’s another part of the culture that amazes me. How can a company that’s 100,000 people able to get all its employees to sing off the same hymn book? I know companies that are 10+ people that struggle with this. At 100,000 employees (not including contractors), Amazon is humongous.

Let me give you an example. There are many people in the Bangalore office in India, who are part of Amazon’s foray into eCommerce who I know well. Most, if not over 90% of them are not related to AWS in any way at all. Well, they may be users of it for their applications, but not evangelists by role or title.

The previous weekend we had 2 events, which I happened to be at. One was at our accelerator and another at a location in a local college.

I know the key evangelists from AWS fairly well and expected to see them at these events in full force. Except I saw more than 2 people and none of them from the AWS team.

I walked up and talked to them before the events and was surprised to hear that they were “all hands on deck” to support startups on AWS. Many of the folks in the Bangalore (and other offices as well) volunteered to be at these events to help startup developers understand AWS and be evangelists for it. And this was not part of their MBO or their job description. They were doing it because they liked it.

Try getting that from any other large company. Most large companies operate in “silos”, with each team focused on their own turf.

Startups as well for most parts have people “responsible” for certain roles. Getting a developer to support customers can be a challenge but that’s what you should as a startup founder aim to build as a culture. Similarly getting your marketing folks to help with testing should be par for the course.

This is possible to do when the company is 10 folks or so and even possible at 50 people. Beyond that is very rare.

At 100,000 that’s near impossible.

If Amazon’s done that, then it is something to learn from, admire and find a way to emulate that.

The age of “speed gauging”: how entrepreneurs are changing cognitive decision making

I have been on a long road trip to meet investors and entrepreneurs abroad including, Sri Lanka, the US and Switzerland (besides many in India) over the last month. The schedule does not get any better for the next few weeks, so I am very disappointed that I am not able to write as much as I would like, but nonetheless, this is an important point that’s been brewing in my mind for the last few weeks.

Entrepreneurs the world over are changing one very important aspect of decision making – the pace and speed of it.

I spoke to over 135 investors in 15 min to 1 hour conversations (some in a group of 5-8 over dinner) over the last month to figure out that investors the world over are now under immense pressure to make decisions quickly. That was not the case a few years ago.

(P.S. I did read the PG piece on startup trends, so if he’s asking investors to move even more quickly than they are, he’s asking for a LOT, which I suspect most individuals are not ready to sign up for).

A few years ago a typical angel investor (individual, investing their own money) took 1-3 meetings and a month to make a decision to invest in a company. A venture capital investor (professional, investing other people’s money) would take longer, 3-5 meetings and at least 2 months. Then the legal paperwork and negotiations began post the “verbal commitment”.

Now it is not unusual to hear investors in the US taking 1 meeting and 60 minutes to give a verbal commitment and 15 days to funding. In India, that number is changing to 3 meetings and 45 days to funding.

Most investors have 3-5 top criteria and a subset of 5-7 sub criteria for every opportunity they evaluate. The criteria is usually entrepreneur, market, product, traction, exit potential etc. The sub criteria for market, as an example might be a) Size b) Speed of adoption c) Competitive landscape d) Pace of change in that market etc.

I am very intrigued by the sub criteria for entrepreneurs. Since I operate at the very earliest of early stages, putting money or resources when there’s just an idea, with very little or no traction, it becomes absolutely important to make sure you back the right folks.

Since I am on the plane a lot and have a new kindle I get to read a lot as well. I have been reading these books and research pieces to understand how to be a better judge of people when time is limited and the stakes are high.

a. How to read a person like a book

b. Cognitive decision making – a mathematical model

c. Thinking fast and slow

I have built a 21 criteria list for evaluating people quickly (well, quickly compared to the fact that I was not doing it at all before) and I am trying to figure out over the next year, which criteria matter and which ones dont.

Before you think this is too many criteria, let me tell you that most sophisticated investors have mentioned to me that they use between 35 and 50 verifiable and “soft” criteria” and keep tweaking their top 5. Some of these criteria can be a simple yes or no and others require you to ask specific questions. The most cultured investors, who bet lots of money have a cognitive sense of evaluating every word spoken by the entrepreneur and putting them into buckets while evaluating if the criteria they are looking for are met or not.

I am not ready to reveal the criteria since people will game the system, but I am now able to process those better. My evaluation takes now about 20-30 minutes to process each individual after I have a chance to meet them for 30 minutes. Usually I do this when I have some downtime – during commute, running, etc.

The most amazing revelation to me personally has been that nearly 30-40% of my “gut instinct” on people dont match my criteria. I used to pride my people selection based on gut feel a lot more before. Let me give you an example.

I met a really smart entrepreneur in Sri Lanka. who had thoughtful answers to nearly 7-8 very difficult questions that I had, and was articulate, concise and honest. When I went back to my evaluation checklist (which I have documented on my phone), I found that I had overlooked a few important questions and decided to talk to him the next day to ask him more questions. He stumbled on them all. Then I realized he had been asked by many folks the same 7-8 questions that I asked before, so he answered them with aplomb, but questions which he had not encountered before flustered him immensely. I dont have a problem with people not having answers to questions, but he seemed genuinely confused.

I think this field of rapid cognitive evaluation is going to see a lot more research and work being done.

The “meaning” metric for your #startup is more important than any other #entrepreneur

I often get questions from startups around the metrics they should track. While I am of the belief that many are immaterial, it is good to gather as many as you can, but only focus on ones that you believe will truly make an impact to your business. Which is hard, because it keeps changing.

Sometimes I do get an enlightened entrepreneur who asks me more existential questions – Why do you think we should exist? Which is the toughest question to ask and answer. It is not that they dont know the answer to that question. They are asking me so they can get a sense of their business and if they are focusing on the right things.

I spent all of yesterday, with 4 tremendous entrepreneurs who are shining examples of social entrepreneurship. I was at the Ashoka Innovators panel trying to see how we can help them scale their organizations.

I used to think that most social entrepreneurs were tree-hugging, not-for-profit, mission-over-business folks. I was also ignorant enough to think that they were all NGO’s.

One young entrepreneur in particular impressed me much.

Shashank, is the cofounder of FarmsnFarmers, a very impressive young entrepreneur, enough to put 90% of the technology startups that I work with to shame with his excellent metrics.

His revenue growth, maturity and the deep understanding of his business impressed me tremendously. I can confidently say he was in the top 5 of the list of entrepreneurs I have met this year, and I have met over 2000 this year alone, in the US, China and India.

In 2 years the business has gone from 0 to over 5 CR ($1 Million) in revenue and will do 15 CR ($3 Million) this year. He and his cofounders are both IIT alums and they are both under 27 years of age.

While the revenue metric is impressive in and of itself, the meaning metric is more mind-blowing.

Their goal is to try and get as many marginalized farmers from the “poverty” line to the “lower middle class” line. A difference of nearly Rs. 5000  - Rs. 8000 ($100 – $150) per month in rural Bihar, which arguably is among the poorest of states.

That metric – the # of farmers they bring out of poverty is their meaning metric. If they do that, then their business succeeds and their revenues will grow as well.

That’s something every startup should focus on, not just those who are social entrepreneurs.

The meaning metric answers the ultimate question – “So What”?

How have people’s lives changed because of what your are building?

Even if you are building a social network or an eCommerce site, I would highly encourage you to find and communicate your meaning metric.

P.S. The # of farmers Shashank & his team bring out of poverty directly correlates to their revenues. Just so you get a sense of ambition, if he tracks on his 3 year operating plan, or even misses by 30%, he will be in the top 50 of Indian startups in 3 years, by revenue growth, in any field, including eCommerce.

Above all, he is a force of good.

When and why should an Indian startup “move” to the Valley? #bangalore

Yesterday a friend who works at a large company and is experimenting with a side project had heard from several founders that given the type of product he wanted to build, he should relocate to the valley.

I have heard many variations of this advice so I wanted to give him a framework to think through this issue.

I initially thought the debate was very simple and based on customers alone. For cutting edge early adopter customers of any type – consumer or business, there’s no better place for a startup to be than where their customers are.

Then I also looked at the problem as one that has multiple dimensions.

The dimensions are:

1. Customers. Specifically type of customers – Cutting edge consumers on smart phones – Valley. Later stage consumers using SMS on feature phone – India, etc. You get the drift.

2. Financial situation of the founder. The valley is expensive. India, not so much. You can build a product and experiment until you get some initial version or product market fit at a far lower cost than the valley. Especially if you are a non-developer founder. Even if your customers are in the valley, you can have one founder in the valley or go to the valley every few months (its tough, but possible).

3. Stage of the company. Earlier stage, with rapid iteration it is better to be where your customers are, but honestly it can be done with remote customer meetings using web conferencing.

4. Product. Most founders tend to think what they are building is unique, but that’s never the case. There would be at least 10 other folks who are aware of the problem and possibly trying to solve the same problem. If the product is relatively simple from a technology standpoint and requires a lot more business development and sales execution, then its preferable to be in the valley would be my thinking.

5. The entrepreneurs network. Most entrepreneurs dont realize that it takes significant time to build a good network of partners, investors, customers and employees that are needed to support their venture. I have found (not statistically, but just my rule of thumb) that it takes me 2 years to build a network from scratch in any new area, location or domain. If you have a network in the valley, by all means, move there, but if you dont, getting legal help, hiring the first few employees or getting the first few customers will be hard.

As I follow up to getting funded by US or Indian investors post, I had many folks reach out to tell me that it was not a fair debate. While there were pros and cons, most felt that the valley was a much better place to be.

All things equal the valley is possibly the best place in the world to start a technology startup, but that does not mean you cannot start at other places and move to the valley later.

Given the type of your customersstage of the venture, the type of company (B2B, B2C, mobile apps, etc.), the product you are trying to build, financial situation of the founders and your “network”, you will find that going to the valley vs. staying in your home country is a very good debate and a hard decision, not a no-brainer.

I have removed the aspect of obtaining a US visa, which albeit a hard issue, is still a procedural and administrative one than strategic.

Delhi entrepreneurs will outsource technology, Bangalore will outsource sales, and Mumbai, everything but finance #startups #entrepreneurs

 

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I put a half serious tweet last week based on several conversations I have had with entrepreneurs in Delhi, Mumbai, Pune, Bangalore and Chennai. I have been to Hyderabad as well, but the numbers are low.

I have limited data, since I am not in Delhi often. My observations are based on looking at 51+ applications from Batch 1 and about 60+ applications from batch 2 of our accelerator from NCR.

Besides that I have interacted in 5 events in the last 6 months at Delhi – Think Next at Saif, Reverse Pitch at 91 spring board, one VCCircle event, one at Leela with people matters and an event of Media companies and startups at Le Meridian. In all at these events I met a cross section of about 120+ companies and founders.

The following are my observations, so use a grain of salt.

1. I met fewer than 5% of developers and technical architects in these events and fewer than 2% of founders from our applications at NCR. The deep technical people dont come to these events or apply to our accelerator. We prefer meeting and dealing with developers, technical folks than generalists such as domain experts, marketing or sales founders. In contrast to those numbers, developers make up 14% of Bangalore applications and Pune a close 10%.

2. Delhi founders dismiss strong technology plays as “engineers building solutions in search of a problem”. This statement is my interpretation of a “show of hands poll” that I did in 2 events.

3. In our internal database of 402 technology and software companies we track at Microsoft based in Delhi, our own biased, internal ranking of “technical” expertise at these companies, our average rating is at 2.9 on a scale of 5. Bangalore and Chennai top at 3.7 and 3.5, followed by Pune at 3.3. I cant share more details about the ratings yet, but will do so as we get more comfortable with sharing this data and not getting people flaming us for that.

While we are certainly not dismissing Delhi as a non-technology startup hub, we certainly dont see deep fundamental technology startups in storage, cloud infrastructure or networking from Delhi. Bangalore or Pune are likely better bets for those. This data was reconfirmed to me by both SAP and Intel who have startup engagement programs in those cities.

What should you expect from an accelerator?

I have written previously about how to evaluate accelerators and choosing the right accelerator since there are so many of them these days and also about what the goal of an accelerator is.

I wanted to share somethings that entrepreneurs should expect from an accelerator from a perspective of a startup founder. I think the best thing that has happened is that so many accelerators have opened in the last few years. Similar to eCommerce companies in 2010-11, I expect many to close or shut down within the next 2-3 years.

There are 3 top things an entrepreneur needs according to me:

1. Access to customers: Whether it is beta customers for feedback, early adopters for providing traction (paying customers) or larger customer for growth, startups thrive on customers. Depending on the stage of your company, if an accelerator does not help you get customers, they are not doing their job. That’s the first lens I would adopt to judge accelerators. If you have access to customers, you can practically write your own destiny. If all the accelerator does is provide advice on getting customers but does not provide introductions to customers, or have customers be ready to adopt and review your platform, you are not going to get much traction or be “accelerated”.

2. Access to talent: In India, for startups, good development talent is hard to get , marketing & sales talent is harder and design talent is extremely challenging to get on board. If your accelerator does not help you with talent sourcing or provide talent in house to help you tide these critical areas when you need them most, you should run away. I have heard the notion that the graduates of the accelerator will help you, but entrepreneurs helping other entrepreneurs by providing time  is not very sustainable. Most of the very successful startups and their executives are extremely busy. While a sense of pay-it-forward does exist, its just not sustainable is what I have found. There’s no substitute for dedicated people to help you with development issues, help you with User experience and design (mockups, wireframes, HTML/CSS development and information architecture) or marketing talent to roll up their sleeves and run campaigns.

3. Access to capital for growth: While I am personally not a big fan of funding as a metric for accelerators to gauge their success, capital is nonetheless needed to grow and thrive, especially in India, where most founders are not serial, successful entrepreneurs or those that come from a “rich family”. So look for an accelerator that provides you an extensive and wide set of investors from seed to early stage and from venture to growth. If all the accelerator does is “showcase you in front of several investors” but does not actively nudge investors to help take a closer look at your company, I dont think they are doing their job.

There are several other things that matter which include a support system of the existing entrepreneur network from their previous batches, access to meetings internationally that possibly help get some global exposure, and a great space to work from, besides other things. However if you dont have access to customers, talent and capital, there’s no value in joining an accelerator.