Epic Failures and Rent Seekers

Sixty years ago, when Nehru spoke about socialism in India, he said socialism was about sharing wealth, but in India, he said, we can only share poverty. He went on to explain that the need of the hour was creating wealth - not gold and silver, but goods and services. His way of creating wealth was planning. Five-year plans. Unemployment will end in ten years, two plans sir.

In the 1950's India's power generation was one 1/10th of France. Today it is one and a half times. Its not enough, but we did some progress. Maybe the problem was that we did not take Nehru's dream to its full conclusion. We got lost in the politics. 5 IITs was not enough, we should have made 20. Though I am not fully aware of how the government lost grip of the situation but I assume they started fairly strongly with an army of nation builders. Progress ended by the time the rent-seekers came in.

Probably India's first rent seeker was Indira Gandhi, or rather the spineless Congress men and women who hoisted her to power. My guess is that is the time when we lost the focus. When former Indian Prime Minister, was woken from his sleep, right in the middle of a conference on power generation, (you know whom I am talking about, Shri H.D. Deve Gowda) he blurted, "Aai yem thinking of giving them power", he smirked with half open eyes at T.V. cameras, "not yelectrical power, but powlitical power".

Today, we are primarily a nation of rent-seekers. We have no technology of our own to speak of. Only servicing the multinationals, sir. How many products has Infosys created, or TCS? No sir no products. Barring a few examples, there is a shocking lack of any risk taken by Indian firms. Why take the risk when cronyism is so easy? Not only rent-seekers corrode that national frame with corruption, they also ensure that there is no need for hard work. Rent-seekers procreate rent-seekers. The second and third generation business and political leaders mostly distinguish themselves by their taste of foreign luxury goods.

The problem is so deeply entrenched, that people have think that rent seekers are smart and should be emulated. Be practical, son. Advertising money ensures IPL players don't need to earn their revenue. Note their humiliating performance in the Champions' League. Even our cricketers are starting to become rent-seekers. What happend to the work ethic? Did it retire with Rahul Dravid?

If you want more evidence, look at the media. Baring a small minority, our media has become the biggest rent-seeker. Want coverage during election? Sorry sir, but editorial is sold out. These were the exact words told to a friend who stood for elections. And let's not even talk about the NGO sector. If there is any sector that contains mostly rent-seekers its the NGOs. NGOs are the biggest scam in this country. Did you know, 50% of your donations to CRY go towards "fund-raising expenses". Less than 20% of it is actually utilized for their stated goals. Next time you make a donation, do take a moment to study the NGO's financials.

Kejriwal wants us to believe that the current crop of rent seekers should be trashed. Power to him! But replaced by whom? Who do you freaking trust? The epic problem in India is not corruption, but incompetence. Incompetence that emanates from this rent-seeking culture. It is epic and it is bringing us down. Along with incompetence, our political and business leaders are also delusional. They think they are doing a fairly good job.

But there must be hope and there is. There are many people who are doing phenomenal work on the ground so that the wheels keep moving. These people need to get together and maybe with Kejriwal and throw out the parasitic rent-seekers. I hope there is a secret society that is being formed of people who believe in risk taking, hard work and meritocracy that will eventually take over.

Things are not as bad as they were when we began our "tryst" with destiny. Today India has a lot of wealth to be distributed. And thankfully, nation building is back on the agenda. The time has come for the rent-seekers to decide if they want to wilfully step aside, or they need a push. We don't trust them to be in charge of our administration or wealth anymore. Its only a matter of time.

The Mercenary and the Nice Guy

Last week, one of the all time greats Rahul Dravid of Indian cricket, called it a day. Rahul Dravid was a favorite of the intellectuals and glowing tributes were written on blogs and newspapers. In those tributes, I sensed a feeling of resentment towards another great of Indian cricket, the little master, Sachin Tendulkar.

Maybe they were resentful of the fact that had it not been for Tendulkar, Dravid would have ended his career on the top of the batters list. Or maybe they were resentful because Dravid, who was a key part of famous wins, never got his due under the shadow of the master. Or maybe they were resentful of Tendulkar's prodigious talent, while Dravid, a zen master with arguably half the talent reached so near him.

Tendulkar though has a great flaw (in the eyes of the pundits) that his famous performances came in losing causes. Dravid, on the other hand, was the reason why India won famous victories in Australia, England, Pakistan, the West Indies. The reason why Indian cricket was ranked number one for a brief period. Rahul, they say, who has scored better in tougher overseas conditions, has been denied his glory.

Part of it is true. What they ignore is that Indian cricket is a key part of the narrative of new India and though the phrase has been used often, it was Tendulkar who had to carry the burden of the billion dreams. A burden, he carried with courage and full awareness. Dravid was probably lucky to have been kept under "lesser"scrutiny to an extent. To his credit, he kept pace with Tendulkar all the way. It was not unlike Frodo (Tendulkar), who had to carry the burden of the ring all through the journey, and Samwise (Dravid) who had to get in action in the final act and snatch the ring to bury it in the inferno.

In a world where winning is everything, what they also forget is that we watched the losses as well. The losses where Tendulkar performed were heartbreaking, but they gave us honour. And I would argue were every bit as dramatic as the wins. Whether it was the league match in the 96 World Cup in Mumbai against Australia or the Test match in Chennai against Pakistan, we were there till the very end. They were honourable defeats. More often than not, it was one man vs the rest. The performances were so stupendous that I can imagine other team members would have been in awe, losing their bearings and not performing themselves. (Something I have begun to notice happening with AR Rahman's soundtracks, they are so amazing but the movies are nowhere close, like Rang de Basanti, Raavan and Rockstar).

To me, Tendulkar was the ultimate mercenary, the ultimate zen master, the ultimate gladiator. His defiance brought the team closer to those famous wins. We may have lost those matches, but we believed we could win. Dravid was the perfect counter foil. The opposition who would have concentrated bulk of their energy on Tendulkar (atleast in the first half of their careers) would have to contend with the Dravid once Tendulkar would have been dismissed. Though Dravid is no doubt in his own league, the intellectuals are doing a disservice to both by underplaying Tendulkar's role in Dravid's success.

As this dramatic phase of Indian cricket comes towards its sunset, there will no doubt be a lot of discussion on this. Powerful stuff that binds the nation together.

My thoughts on the Anna Hazare Crusade

Since I have had so many interesting discussions over the last couple of days. I thought I will put all my points in one place.

1. My Question to Arvind Kejriwal. Who is "civil society" and who appointed you to represent it.

I am sure Kejriwal has the best of intentions but I have seen him on TV shouting "civil society" and claiming to act on its behalf. To me this is a subversion of the democratic process. Candidates elected by a due process represent civil society, not self proclaimed individuals. Just because the credibility of one set of representatives is poor, the other set cannot usurp the process on basis of morality. They are wrong because if they seek decision making power, they have to join the heat and dust of elections. There is a brilliant piece on this by Ambedkar.

2. Lok Pal will not change the abuse of power by politicians.

The recent scams that were exposed were a combination of whistle blowers, RTI and action by Supreme Court (via PILs). This process needs to continue. We need many more people filing RTI and PILs. The problem is that the law enforcement and investigative bodies are not independent enough and the Lok Pal cannot solve this. The other huge problem is that elections are won on money power and hence politicians need money to get elected. This has to be fixed via police, electoral and judicial reforms.

3. The elite and middle class are participants and beneficiaries of a corrupt system.

Most business, and I know this for a fact, give bribes at various levels. They do this to pay less tax, get more business and abuse rights. From the tea vendor who employs underage children to the big corporate that pay crores to corner national resources, everyone is involved. The salaried class that is involved too. If a salaried manager is on target to achieve x results and if the target is too ambitious, most likely that person will do "whatever" it takes to get the result. To overcome the moral discomfort, they blame the "system" and use euphemisms like "manage" instead of bribe. Ambitious people - business owners or salaried managers - bend laws to reach their goal without fear of punishment.

4. The "rang-de-basanti" crowd if fickle and represents only 0.1%. 

I really hope to be proved wrong on this one and this is not a culmination of some World Cup euphoria. But the media and celebrity circus around this has credibility that is only a fraction more than the politicians. For many of them its an opportunity to grab some more lime light by becoming "experts" on TV. None of them can come close to winning an election.

5. The positivity is a good sign.

The only good part about this campaign that it has a lot of positive energy. It is ideology based and also a non violent movement. This is truly India's first Facebook movement. The upper-middle class has reached a critical number to be counted and they have found the tools to get connected too. I hope this results in more local engagement, volunteerism and giving.

Large Company Sales Tips for Founders

Steve Blank has one message for startup founders - Get out of the building

So what happens when founders go out of the building and have to do sales with no previous experience? This is what happened to me. I had no experience of how large companies work.

Here are a few lessons I picked up from my experience of selling to large companies.

1. Network - There is only one way to break into large companies independently, that is via your contacts and network. Go back to your alumni association, your family, your school and college buddies. Start working on your networking skills. Networking is all about first finding a common interest (say Open Source or you went to the same school) with someone and then getting to personally know them - their family, interests, goals etc.

2. Find the right audience - If you are selling a business product, find business users who may benefit from the solution, if you are selling a technical product, go to the technical users. If you are not sure, go to the business users - they are likely to find a use for your product.

3. Be patient and consistent - Large companies are usually bureaucratic and paranoid about startups. But even within large enterprises there are early adopters. Once you get someone interested in your service, keep them in the loop. Remember if someone takes interest in you, they will give you a pilot or refer you to someone

4. Dress and present well - Large companies are used to smart (power) dressing and glitzy presentations. Make a good presentation, polish your shoes, wear neat formal clothes and talk confidently and clearly. Be prepared to flash a knowing smile as often as you can. Everyone likes people who look and behave like them. So try and mirror your contact.

5. Blend in the culture of the company - This may be difficult if you are not too experienced, but try and look for signs. Are your prospects specific or vague? Do they act important or humble? Are they paranoid or risk-taking? Are they formal or casual? Tailor your pitch accordingly and try to fit into their culture.

6. Communicate and be serious about commitments - Once your foot is in the door, keep your contact in loop. Startups usually fail to grasp or estimate the true costs of executing a project. So it is best to under-promise and over-deliver. If you think you are going to run over deadlines, keep communicating. By communicating, you will get valuable feedback about how your project / pilot is progressing and if you need to make any changes to your solution or approach.

If all this is not for you, then you do not have the temperament to do large company sales... like me :-) All of this is usually time consuming and expensive. This is why enterprise products are so expensive!

Finding the ideal team structure for Startups

A lot of what is written about managing teams is a discussion of the two basic classes of teams, centralized and decentralized teams. Both have their pros and cons and are best suited to different situations.

Centralized teams also give rise to a top-down structure of an organization. Top down teams can get a lot of work done as all members work in tandem. Independent and creative thinking can jeopardize the entire organization. The scope of work is divided into two classes, thinkers and doers. Thinkers do medium/long range planning, anticipate issues, allocate resources, manage motivation and doers execute the activities that the thinkers have identified on a transaction basis. Centralized teams are usually stable and provide security to all its members. Large companies and governments usually fall into this category.

De-centralized teams on the other hand are much more fluid and depend on creative and independent thinking members. These teams are usually upstarts and their objective is to find a niche that has not been exploited by others. Every member is a thinker and doer. The tasks are not stable and the position of each member is not secure if they are not willing to change their roles or learn new skills.

Truly decentralized teams are a much more rear phenomenon in business than centralized teams. Hence most people would have never experienced working in decentralized teams or even heard of anyone who worked in one. This also includes founders of start-up companies

A one to three person start-up does not face this problem, but when a start-up takes more risk than usual, the centralization / decentralization problem comes up. This is because most people have no experience / understanding of de-centralized way of working. As Steve Blank rightly points out, a start-up is a "search" for a scalable business model and hence what it requires is a de-centralized team. This is exactly what Jason Fried and company write about in "Rework"

Or the other option is to become ambidextrous. Be centralized and de-centralized at the same time. Let the need drive the structure. Say if you need to do extensive testing before a new feature release, make a centralized team and split planning and doing. If you need to build 10 new features in a month, keep it de-centralized. The catch here is that all the team members also have to be ambidextrous.

Frugal Engineering: Jugaad is the new Kaizen

The rise of Japanese manufacturing in the 80s gave rise to "Lean Manufacturing". Lean is based on core values that are a part of the Japanese culture of minimalism, automation and elimination of waste. As Industrial Engineers, we even learned these concepts with their Japanese terms like "Kaizen" (continuous improvement), "Jidoka" (automation), "Poka-yoke" (full-proof) in school. Using the Japanese versions of these terms forces us to create a new meaning to the concepts keeping with the spirit in which the Japanese companies applied.

With the turn of the century, the recession and the rise of Indian companies in the eyes of the world, a new paradigm shift is just beginning to take place, "Frugal Engineering". C.K. Prahlad's book "Bottom of the Pyramid", Tata Motors new $2500 car the "Nano" and Bharti Airtel's telecom business model are the main stories around this new concept of Frugal Engineering. With billions of people from developing countries around the world, joining the "mainstream" market, companies need new thinking on how to succeed with this big opportunity.

A new management jargon that is heard often these days is the Indian word "Jugaad" (to get a solution where there is a scarcity of resources). As with the Japanese terms, it is the spirit in which it is spoken in India that makes it unique. When you want to do a Jugaad, you look for an out-of-the-box solution using existing cheap resources and you want it quick

So if "Frugal Engineering" gets popular like "Lean" and managements around the world start looking for ideas on how to cater to developing countries, like Jugaad, what are the core cultural elements of Indian companies that will be talked about? Here is a proposal:

1. Cutting (micro-consumption): The concept of "Cutting" is you provide in the minimum possible serving size. Cutting is used in relating to tea, where a "Cutting" tea is half-a cup of tea, roughly 50ml. Huge majority of tea drunk in Mumbai is Cutting tea. The majority of mobile phone re-charges (in India most mobile-connections are pre-paid, i.e. you pay first and use later) are for Rs 10 (20 cent). What Cutting does is that it allows for mass consumption of a service or product at very low costs. Cutting is micro-consumption to services like micro-finance is to banking.

2. Zor-laga-kay (the-push): When there is a big problem that needs to be fixed quickly, a large number of people stop whatever they are doing put in effort to solve it. In India more people are likely to be a Jack-of-all-trades rather than specialists. Indian companies are also more chaotic where it is hard to put people into fixed roles and functions. There are obvious down-sides to this, but the upside is that when there is a major problem that threatens survival, everyone contributes. The team self-organizes itself around the problem and everyone puts in synchronized effort to "push" the problem out. A new team spirit and confidence emerges and seemingly impossible tasks get accomplished with Zor-laga-kay.

3. Chalta-hai (take-it-easy): This term is usually used by high-minded Indians as a self-critical symbol of laziness, fatalism and poor quality. But if taken in the right spirit, this concept has a great balancing and harmonizing effect. Indians are more likely to make a compromise rather than pick a fight. In my opinion, the west is too result oriented and sometimes forgets that the journey is as important as the destination. As you enter the developing world, the problems are plenty, your resources are limited, and most things are not in your control. So be prepared to suck it in, calm your mind and say "Chalta-hai".

4. Fat-a-fat (instantly): This means, what ever you want to do, do it NOW. Don't think too much, use your instinct and move on. Sometimes in the West, a lot of resources are used to strategize and plan. The Fat-a-fat principle says, that you don't have much resources or time to plan so just get on with it. Fat-a-fat brings a sense of urgency in an otherwise slack environment. In developing countries, things often seem to move very slowly, with people taking their own sweet time to get things done. Like Narayana Murthy of Infosys said "In India articulation is often mistaken for accomplishment". So if you are feeling interia, just do it - Fat-a-fat.

So next time, hear these words as management jargon, remember where your read them first. And I am sure you would have many suggestions, please write them in the comments!




Note 1: These are terms that are usually spoken in Hindi in Mumbai, every region of India is unique and has their own terms. But I am sure the spirit and culture is very similar.

Driving Traffic to your Site - The Real Story

There is tons of stuff on the net about driving traffic on your site - mostly by SEO/SEM marketers, but whats the real story?

An easy way to understand this is to imagine this - you are opening an restaurant - why do you think people would come to eat at your place? Here are common reasons:

1. Your restaurant is at a convenient location where people commute or work and don't prepare food
2. You have a cuisine that is unique and not offered anywhere around
3. You have healthy, tasty food at a good value - something that the overpriced restaurants around you are not fulfilling
4. You have a great atmosphere with live music where people can spend a happy evening.

and so on.

So what is it that you want people to know? Its your USP - what makes you stand apart. Your first target has to be to drive the "initial" customers, then if you believe you are doing a good job, they will come again and bring in their friends too!

So where would you start? If you are at a convenient location, you just need to put up a nice welcoming banner and people will start coming. If you have a unique cuisine, you can start targeting that clientele by showing a presence at community events or doing a targeted mailer. If you offer value, make sure your message covers it well.

Driving online traffic to your site works in the same way! Its all about people, place, product, price - Once you know your USP, it will be logical for you to find out who will be interested. Whats more, if you have an offering that is truly unique and benefits a particular community, people will WANT to talk about it.

The corollary is that if you can't figure where your offering fits, then you need to do that first. Driving traffic is not about some technical wizardry. Its about figuring your marketing USP and asking the basic question - "why would people be interested in visiting my site"

Then its a matter of contacting a few people who could help you and the rest will follow!