Rick Segal writes about the ultimate VC nightmare:
An EBF happens when a founder wakes up one day and ‘flips’ into employee mode. To me, nothing is scarier then a founder saying “It’s just a job.”
This can happen for a number of reasons but the signs are pretty clear.
When you are closing a deal and the entrepreneur negotiates for his/her pay like it’s a job, that’s trouble.
If you don’t feel like you are the owner, jezz, don’t take the money; don’t close the deal. If you feel the need to fight over severance in your employment agreement and it runs 30 pages, bad start to the game. If you worry about ‘ getting fired ‘ and aren’t thinking about the business, who is right for the business, etc, etc, don’t close the deal.
WSJ writes: “The fundamental question Microsoft faces is whether the PC will continue to play a central role in tasks people now use it for, from storing music to watching videos and writing documents. In recent years, the spread of high-speed broadband Internet access and a host of new technologies have made it easier than in the past for people to use the Internet for such tasks. Consumers tap services like Flickr, an online photo site, and YouTube, the huge online video-sharing site, to store pictures and videos online — not on their PCs. Increasingly, applications such as email and word-processing are offered as Internet services that don’t require much, if any, software running on a PC. They also don’t require the companies to release whole new versions of software as Microsoft does in its Windows and its Office line of programs. Google regularly updates its search and email services with little fanfare.”
As ideas started forming in my mind, I started to make some decisions about what to do in the future. I realised that the ideas that I had were too many for a single company to execute. Also, these ideas would take time and given the nature of ideas, many were bound to fail. I then decided that I would follow a twin track approach. In Netcore, I’d focus on a specific set of ideas around mobiles and their potential going ahead. This would be my one and only direct entrepreneurial venture. I would also make investments in a select set of companies which help bring to life the future that I was envisioning. For this, there were three companies that I helped co-found, and seven other investments that I have done so far. I guess the two phrases that helped define what I am doing are the parallel entrepreneur (from a New York Times article on Bill Gross) and thesis-based investing (from a blog post via Bill Burnham).
In Netcore, this time around, I am trying to do things differently. The breadth and scope of our ideas means that this cannot be done by 15-20 people. We needed to build an organisation and scale up operations over time. On both counts, I had limited experience. To counter that, I have tried to build a team in Netcore of talented and experienced people who can serve as the foundation for the organisation going ahead. This also meant, that I had to learn to work with others in a structured way. It was very different from IndiaWorld. But that is perhaps the only way we will build something which will last. Because it is not my intention to sell the company ever.
We have, over the past 12-15 months, built a deep set of ideas around the mobile future. This is what we are now seeking to implement with services which we will start rolling out soon. Not being too involved in day-to-day operations, which is not my strength anyway, gives me the time to read and think deeply about what tomorrow’s world is going to be. The only thing I regret is that we do not have a user base this is something we will have to build from scratch. There are such moments when I wish I had the platform that IndiaWorld was but that’s the past now. The flip side is also that we have no legacy and no existing business to protect. So, we can think completely from scratch about how things should be done.
Mine has always been a build-it-and-they-will-come approach. I know no other way. I go by my instinct and belief in the evolution of technology and what will be possible in the future. In the past, I have been mostly wrong. But that doesn’t deter me. The failures help in refining the view of tomorrow’s world. Only time will tell whether I am right or wrong.
International Herald Tribune writes:
he Indian educational system is locking millions of students in the bottom berth of a two-tier economy, critics argue, depriving the country of the fullest expression of their talents and denying students a chance to share in the fruits of reform.
The problem, experts say, is in a classroom environment that infantilizes students well into their mid-20s, emphasizing silent note-taking and discipline at the expense of analysis, debate and persuasion.
Students at second- and third-tier colleges suffer not because of a dearth of technical ability or intelligence, critics note. Most simply lack the “soft skills” sought by a new generation of employers but still not taught by change-resistant colleges: the ability to speak crisp English with a placeless accent, to design and give PowerPoint presentations, to write in logically ordered paragraphs, to work collegially in teams, to grasp the nuances of leadership.
Paul Kedrosky points to a post on what Sequoia Capital looks for in startups.
Techcrunch writes about six new, big ideas:
2. In-Browser Chat
3. Location Based Chat
4. Flexible Identities
5. Contextual Chat
6. Rich Media Chat
The next four years after I sold IndiaWorld were very disappointing from a results point of view. I spent a year at Sify and after that went back to managing Netcore, a company that had been set up in 1998 to focus on enterprise messaging solutions. I tried many different things as I have documented on my blog over this period. From our thin client software solution (Emergic Freedom) to an all-in-one open-source based small business software (Pragatee) to an IMAP-based RSS Aggregator to a Digital Dashboard to a blog search and analytics site (BlogStreet) to trying a create Lego blocks for business software (Visual Biz-ic) to grid computing to rural infrastructure and services, there was very limited market success for each of them. Some products did not even go beyond the development stage. It was a tough period.
There was one promise I had made to myself after the sale of IndiaWorld. The past was history, and I had to look ahead. I did not want to sit on the laurels of that single success. I happened to then be at the right time at the right place (benefiting from some smart foresight). I could not take that one success to mean that everything I tried would necessarily work. In fact, the initial failures had chastened me and made me realise that success and failure are two sides of the same coin.
For a brief period, I toyed with the idea of not being an entrepreneur, but instead setting up a venture capital and investing in other people’s businesses. A few months later, I decided that it was not what I liked at all. I actually liked the challenges of managing a business that was part of being an entrepreneur. Experience had taught me that bad times don’t necessarily last and good times are few and far between. But it is the daily thrill of facing up to challenges and finding paths around them that I liked. Failure was not alien to me. But I did not want it to be my constant companion!
Many people remark to me that it must be wonderful to have all that money (which I got from selling IndiaWorld). For me, money never was an end goal. Money has to be an instrument to bring about change, or more specifically, make the future come alive. For me, money gave me the freedom to experiment and live even more in the future. If I start thinking about money, I’ll probably never end up doing anything else in life. For me, ideas matters more than money. I don’t like businesses which need lots of capital. I like to look at blue oceans and think up things that haven’t been thought of before. The single success of the past gave me the freedom to do all this without having to worry about criticism of my business capability from the extended family (as my father had to in the period after I returned from the US).
The four years from 2000 to 2004 were tough. Almost nothing that I tried worked. But I never stopped trying and reading, thinking and writing. It was in November 2000 that I started the Tech Talk series first on Samachar.com, and then also on my blog. It gave me a reason to sustain my reading, broaden the thinking, and share my thoughts through my writing. It also helped me build a framework for the opportunities in the future.
Fred Wilson has some suggestions:
1 – Have at least one founder on the board. Many VCs like to move the founders out of the way. They think they will be difficult and meddle. That’s always a risk, but the benefit of having founders on the board vastly outweighs any downside in my mind. Having too many founders on the board is bad too. You want a diverse set of people on your board, not any one concentrated group.
2 – Keep the number of VCs on the board to two or three. The number of VCs on the board is in inverse proportion to the success of the deal.
3 – Local board members are better. They will come to the meetings. Avoid too many board members who live elsewhere. They’ll call into the meetings. Trust me. And that sucks.
4 – Have at least one and ideally two industry insiders on the board who are independent of the founders and the VCs. They should bring operating experience. They should be mentors to the CEO. They should be local so they come to the meetings.
Business Week has an interview with British Telecom’s resident futurologist Robin Mannings:
Welcome to the so-called ‘internet of things’ which will replace today’s internet of people and data. Everyday items from TVs to toothbrushes, sports equipment and even buildings will have in-built computing power and wireless that will allow them to communicate and share information.
Current rollouts of RFID tagging will be dwarfed by the future development of sensor networks, according to Robin Mannings, BT futurologist and research foresight manager.
He told silicon.com: “RFID is just the tip of the iceberg and the iceberg is ubiquitous computing – more or less everything being a computer.”
The World In 2007 (from the Economist) writes:
As a result, firms that used to be in separate industriestelephone operators, internet service providers and cable-TV companieshave all suddenly found themselves in the same business. Cable companies now offer broadband internet and voice services over networks that used to carry just television; telecoms firms have responded by upgrading their networks to carry television signals; and internet service providers have branched out into telephone and video services. In the new converged world, any firm that can deliver high-speed data to customers over its network can offer any or all of these services. And offering all of them together in a bundle is thought to be a winning strategy. The ultimate bundle is called the quadruple playthe combination of fixed and mobile telephony, broadband internet access and multichannel television. If your telephone company and a host of rivals are not already offering you such a bundle, you can be sure that they will start to do so in 2007.
Wired writes that TV advertising is broken, putting $67 billion up for grabs.
The digital revolution is equally terrifying to Madison Avenue, which has been footing the bill for Gilligan’s Island, The New Republic, The Family Circus, Rush Limbaugh, TRL, and The Wall Street Journal forever. Until now, advertisers have underwritten mass media to reach mass audiences. Indeed, they’ve paid increasing premiums for the opportunity as audiences have shrunk, because even in a fragmented media world, the largest fragment network TV is the most valuable. But now they realize that they are losing not only mass but critical mass.
They see the old model collapsing before them, and they have $67 billion to spend and no idea where to spend it. Because, at least until recently, the Internet has lacked both the riveting content and ad space inventory to absorb it. But what if there were a means to approximate the reach and mesmerizing power of television online? What if there were a medium with not only the grip of TV but the vast scale to absorb all those ad dollars? And what if, as a bonus, the medium were able not merely to command eyeballs for marketers but to target content especially relevant to what the marketer is selling?
Venture Beat has a column by Auren Hoffman who writes that the big high-tech companies are losing the talent war:
Big companies are losing their A players and theyre struggling to attract B players. In an industry where everything is about people, large tech companies are in trouble because they are losing the talent war. And keep in mind, an A player in an organization can usually produce the same results as three B players.
At a big company youre stuck with corporate politics, paralysis decision making, and a lack of getting things done. At a small company youre having fun, pursuing your dream, and actually getting things done.
It was in November 1994 that I made the decision to switch tracks from trying to build a software services company to one which could create content and a marketplace for Indians globally on the Internet. My confidence was low, but I had little to lose. I had to pick up the pieces from a failed past and look ahead to the future. I saw in the Internet an opportunity to do something different. During those rough and tough months, I did not once think of giving up being an entrepreneur. It was that initial period which taught me that one has to be focused on the journey, not just the destination. Things rarely go according to plan, but that doesn’t mean one must stop dreaming and doing.
The IndiaWorld journey lasted five years. During that period, with help from my wife and a committed staff, we built up India’s first and largest Internet portal. The portal was launched in March 1995. This time around, I was careful to ensure that we also had a source of revenue which came from doing websites for various companies. We kept costs low and very soon, we were profitable.
When I look back at those five years now, it was an amazing ride. We did a lot with limited resources. We made more right decisions than wrong ones. We were also lucky on numerous occasions. For small businesses, any decision can be fatal and a bit of luck is needed to ensure that the scales tip on the right side. The learnings from the past definitely helped in the right decisions that I made.
There were two things which I did not succeed in during that period raising external capital for growth, and building an organisation capable of scaling up. In November 1999, when I sold the business to Sify (then Satyam Infoway), we were 20 people with a revenue run rate of about Rs 5 crore ($1 million). It was an organisation still largely driven by me with limited delegation of authority. Getting in new people would have meant raising capital the profits in the business were not enough to scale up. In fact, there is almost a chasm between the ‘seed’ stage of a business and a ‘scaled business.’ It requires capital and organisational bandwidth to cross the chasm. I did not succeed in doing that in IndiaWorld. It is a weakness that persists to this day and one I can hopefully overcome going ahead.
In the end, when I made the decision to sell IndiaWorld in November 1999, it was not an easy one. I had not created the business with an intention to cash out. For five years, IndiaWorld was the only life I ever had. But as I spoke to a few close friends, two things become clear. In business, it is important to know not just when to enter, but also when to exit. Also, by nature, my strength lay in taking new ideas and building new businesses, rather than sustaining existing ones. With this in mind, I decided to sell. That was my first (and to date only) entrepreneurial success.
Ed Sim writes: “I don’t believe that television advertising will go away but that it must be reinvented quickly and that advertisers must embrace rather than fear new technology. And as we move into the future, rather than focus on broadband vs. television (digital vs. analog), I also see a world where both sides can work with each other to effectively deliver better results for advertisers. As video becomes increasingly more fragmented and viewed on various systems and devices (television, VOD, broadband, gaming systems, cable, mobile, iPods), it will be imperative for advertisers to have an easy way to manage and optimize their video advertising campaigns wherever the audience is. In addition, the more progressive advertisers will try to figure out how to marry online ad optimization with the offline world. For example, let’s say you are an advertiser and your online ad for a specific mortgage product for ARMs is getting more clicks in a certain geography versus one for fixed rate mortgages. Using that data from the Internet, wouldn’t it be great if you could change your television commercial so that the next airing has an updated offer for ARMs instead of for fixed rates?”