Weekend Reading

This week’s links:

  • Startups, not Bailouts: by Thomas Friedman (NYT). “Good-paying jobs don’t come from bailouts. They come from start-ups. And where do start-ups come from? They come from smart, creative, inspired risk-takers.”
  • Four ways to get more value from digital marketing: from McKinsey Quarterly. “Companies that make the deep strategic, organizational, and operational shifts required to become effective digital marketers can become more agile, more productive, and accelerate revenue growth.”
  • The Unbearably Sad Reality of India: by Atanu Dey. “Those who made India poor did not just condemn hundreds of millions of Indians to lives of extreme deprivation and premature deaths, but they also weakened India externally and internally.”
  • Analyzing Financial Statements: by Fred Wilson. “I am most comfortable when the monthly operating income (or losses) of a business are roughly equal to its cash flow (or cash burn). This does not have to be the case for the business to be healthy but it means the business has a relatively simple economic architecture, which is always comforting.”
  • Why the time for Mobile is Now: by David Hornik. “Given the power of the devices, the simplicity of developing for them, and the proliferation of amazing applications, it is not surprising that the mobile revolution is finally upon us.”

Bus Rides in Mumbai

Thanks to Abhishek, I have been doing my fair share of bus rides in Mumbai! Like last Sunday. He was up and about at 4:45 am since we had decided to go for a bus ride in the morning. It took some doing to keep him in bed for another hour. We finally left home shortly after 6:30 am, and went where he wanted to go. Four bus rides and two-and-a-half hours later, we finally reached back home.

Taking the bus around Mumbai always brings back memories of my childhood and school/college days. All travel was almost entirely by bus.The double decker buses were the norm on most routes. Going up and sitting right in the front to experience the view and the breeze was what I liked most. Now, most buses are single decker, and there are a lot more routes. 25 years on, a love for Mumbai’s buses has been rediscovered, courtesy Abhishek!

Airport Bookshop Surprises

I like to browse through airport bookshops in different cities. They offer a selection that ends up quite different from the ones that I end up visiting normally. Every once in a while, I came across a title that is very intriguing and just right to read on the flight back. At the end of a long day of travel and meetings, I am always game for something different and surprising.

One such book that I picked up recently was “To Uphold the World: The Message of Ashoka and Kautilya for the 21st Century” by Bruce Rich. The theme of the book was very intriguing. I read parts of the book on the flight back to Mumbai, and found it interesting enough to mention here. Here’s a bit about the book:

[Bruce Rich’s] search to found a civil and international order on principles that transcend the goals of pure economic efficiency and amoral realpolitik is inspired by the writings and lives of two of the greatest figures of ancient India—Ashoka and Kautilya. Ashoka provides a unique example of a world ruler—his empire at the time was arguably the world’s largest, richest and most powerful multi-ethnic state—who tried to put into practice a secular state ethic of non-violence and reverence for life, which he also extended to international relations. Kautilya, one of history’s greatest political geniuses, wrote the world’s first treatise on political economy, the Arthasastra, which proclaims accumulation of material riches as the chief underpinning of human society. Both addressed the questions of political realism and idealism, the role of force and violence in international relations, and the tension between economics and ethics. Through the retelling of mythical and historical accounts, Bruce Rich distils the message of Ashoka and Kautilya to help us uphold our world in the twenty-first century.

I Wish I Knew Then – Part 2

Continuing from yesterday’s post:

Numbers Disciple:  Every company, however small, must develop a “numbers discipline” when it comes to revenues and costs. For much of my business life, this is not something I never bothered to do. I used to think that (a) small companies could not estimate accurately about what numbers they do each month or quarter since business is generally unpredictable, and (b) it didn’t really matter whether we met whatever targets we set or not. I was wrong on both counts. Also, habits once formed become hard to change. Over time, missing numbers becomes an acceptable thing, and that culture then sets in – both on the sales front and on the expenses side. That is why there is need to instill the discipline of meeting numbers early in companies.

Quarterly Reviews: Linked with the discipline of numbers is the need to make everyone accountable to numbers that are committed. This forces the management team to review itself every three months (ideally, with external Board Advisors), and it also gets inputs which sometimes may get missed in the daily bustle of business. These reviews thus can be a useful and essential part of the process of ensuring that even as the team thinks long-term, there needs to be a recognition of the importance of keeping on delivering in the short-term also.

I Wish I Knew Then

Inc Magazine India asked me to write a short column entitled “I Wish I Knew Then.” This is what I wrote. (Some of the points have been mentioned on the blog in the past.)

I have been an entrepreneur for nearly 18 years. My first company was acquired five years after I started it. It was a small company – there were just about 20 employees, and we had about Rs 3 crore in revenue. So, I never got to learn how to build a business which is, to borrow a phrase from a Jim Collins book, Built to Last. This time around, the business I am building is much bigger – we are already 180 people and many times in revenue of the previous company that I had built. I have learnt that the way I was used to doing business then is not going to help me this time to scale. I want to share some of those learnings which will be especially useful for early-stage companies. If I knew a few years ago what I know now, I would have done a much better job in building my present business.

Watching the Cashflow: It has been rightly said that the one of biggest reason for failure small businesses is (deteriorating) Cashflow. If billings take time to convert into cash, then it can lead to a difficult predicament – expenses continue to happen on schedule, and incoming cash slows down (even though sales numbers may hit their targets). So, keep a watch out for collections in the business, and monitor aging reports of debtors (especially those over 60 days) closely.

Thinking Multi-Monetisation: A friend once asked me a seemingly innocuous question: What is the one thing that can cause us to fail? I thought for a minute and replied: Reliance on a single revenue stream. He argued that a business must have focus. My counter-point: At the early stage of a new industry, it is not obvious where the value creation will happen and what will be the dominant business model or revenue stream. In that scenario, one needs to be able to try out multiple different options and get quick learnings as to what will work and what will not. At that stage, it would be suicidal for a business to just bet on a single revenue stream assuming that is the only one which will work.

Continued tomorrow.

In Singapore for MMA Forum Next Week

I will be in Singapore next week to give a keynote at the Mobile Marketing Association’s event on April 14. My talk will be on “Mobile – One-to-One and One to a Billion.” Here is a brief abstract:

The mobile the only medium that is simultaneously mass and personal. It is increasingly emerging as the most important medium for brands and agencies in the coming years. By combining the 3Ps (profiles, push and permission), brands can build deeper relationships with their existing customers, turn them into brand advocates, and acquire newer customers more cost-effectively than any other medium. The mobile is driving the shift from Advertising evolves to Invertising and CRM to Customer Relationship Monetisation. What strategies do brands and agencies need to adopt in a world of mobiles that are becoming computing devices, high-speed networks that are driving increasing mobile data usage, and operators and handset players who are causing a proliferation of appstores? What will tomorrow’s Mirror World look like? What are the new ideas you can start implementing Monday morning?

Blog Past: Mobile Microcontent

From a post written a year ago:

One of the ideas I have been thinking about is paid microcontent subscriptions delivered to the mobile — via SMS or mail. The key word is “paid” — will people pay, or will it have to be free forever? The mobile is different — see the success of Blackberry and push mail, and also mobile operator-promoted VAS services. The question is: is it possible to build a direct-to-consumer model for content subscriptions, a sort-of iTunes for microcontent.

Weekend Reading

This week’s links:

  • Why South Korea has the fastest Internet connections: from CNN.”In the 1990s, South Korea set a priority that it would be a highly connected country with a high degree of Internet literacy.” Talk of vision!
  • Why bring your child doesn’t work: from Slate. “The difference between bribing your child and rewarding your child.”
  • Developing countries and non-linear Innovation: from Forbes. “In developing nations, where investment is scarce and markets are smaller, we don’t have the luxury of innovating at every turn.”
  • The ongoing data revolution: by Ed Sim. “The question is who will create the next great back-end technologies and new web services that drive a whole new conversation and new way of thinking about what we do with the data that is around everywhere.”
  • Cashflow: A Fred Wilson tutorial. “Cash flow is the amount of cash your business either produces or consumes in a given period, typically a month, quarter, or year. You might think that is the same as the profit of the business, but that is not correct for a bunch of reasons.”

India’s Silent Majority

Looking at the mess that India’s politics is (and this is across all political parties) and an era of quotocracy (as Pratap Bhanu Mehta put it in an Indian Express article recently), I cannot help feeling that at some point of time Middle India will need to stop sitting back quietly and actually do want to do something about it. This will happen soon – probably before the next Lok Sabha elections.

Parties are pandering to their respective votebanks. The small numbers who band together are getting more than the large numbers who are divided. We need to think of a way how we in Middle India can come together to create India’s biggest votebank – and get solutions and money to improve daily life in the urban sprawls that we live in. The Silent Majority cannot and will not be for much longer.

Money for India

Let’s take the thinking from yesterday further. If the next 5-7 years can create wealth of $25-50 billion in India’s digital space, much of that will accrue to Indian entrepreneurs and employees in their companies, along with their investors. This can in itself be a game-changer for the country because a significant part of this money will make its way back into the ecosystem – either as investment into early-stage companies or as philanthropy.

That is why we need to encourage entrepreneurship – and celebrate failure.  Only out of the failures will emerge the big successes. Unfortunately, investors across the board have become too cautious and an ill-thought government policy almost discourages employee stock options. If Indian entrepreneurs can lead the generation of billions of dollars of wealth in the next decade, it can create a very different environment for the future.