Sunday, March 28, 2010

The Distribution of Intention

On one of the networks 'India Leadership' on linkedIn, I did come across a interesting question as follows: "Tens and thousands of millionaires and millions of hungry/poor people in India!! How can this contradiction exist?"

My thoughts: The "distribution" of "Intention" needs to be fixed. If 'rice' is an intention, then we need to fix the distribution problems which amounts to 45% of wastage as per stats. If 'positive thought' is an intention, we need to enable effective distribution of this to reach to enough people who can make this actionable (Lynch pins). If 'money' is an intention, then we need to hold the distribution of it accountable, that, they have done enough research to economize and invest in important problems (as against urgent problems as well). if 'leadership' is an intention, we need to hold the democracy as a collective system of distribution to elect and hold these leaders accountable. Why? because, hunger, pain and suffering are viral. Their efficiency to distribute and replicate by far outweigh the positive systems that are in place in the eco-system.

Can this hold true for the "product start-up" debate as well ? I think so. The distribution of Intention is the biggest problem we as a country are facing now to enable positive sustainable eco-systems. Here is a link on those thoughts.

Misery loves company.

Thursday, March 25, 2010

What does it take to create successful IT product companies in India?

This thought keeps bothering me off late. Many have beaten this debate to death. I am still not at peace. What does it take to create more 'successful, innovative' indigenous IT product companies in India ?

Approximate guess says that we have less than 1% 'successful, innovative' IT product companies in India. Enough hypothesis, conjunctures and theories have proven that product based solutions (due to replication of effort and automation) provides significantly higher bang per dollar invested than services based solutions. Scaling of services is resource intensive and puts strain on economies of scale and scope. Why are we not there yet? What happened ?

Are we genetically at a disadvantage ? Are we less risk prone ? Is it a geo-political conspiracy ? Are we capital averse ? Is service mentality ingrained in our culture ? Argumentative Indians, by virtue of our intellectual pluralism have wisely concluded that Services-for-Life leads to Nirvana ?

I admit I am naive. Yes, it was beneficial to apply economies of scale and cost arbitrage creating large amount of wealth for the nation. Yes we are moving towards value arbitrage (premium services) and upping the ante. But, this just cannot be 99% of what we do in IT.

Through and through, we have been both perceptually and conceptually primed through our success in services, so much so, that we are unable to (even if we desire) embrace the paradigm shift towards products mindset.

Successful products model is R&D intensive, bets on disruptive innovation (serendipitous), is technology intensive, utilitarian and demonstrates high tolerance to creativity. Yes, "tolerance to creativity". Creativity puts focus on the individual as against focus on the group. Services model benefits from focus-on-the-group as it creates uniformity and conformance. There is a world of difference culturally in these models. You can see the culture shock and pain one goes through when a person moves from a product company to a services company and vice versa.

We need to reverse this priming. We have to focus on Indian product startups (Big companies are hard to change) and foster a eco-system which benefits product startups. We have to glorify the product model to 'exaggerated' proportions. We need to 'invent' heroes to win quick sub-conscious battles and influence the psyche. We need war veterans 'imported' to teach us the trade. We need 'real' angel investors and significant hand-holding for new startups. We need favorable business incubation centers through a Govt. endorsed PPP (Public-Private-Participation). We need to fix our priorities.

We may lack many things but cannot afford to lack priorities. If we are presented with a deaf and a blind, then, a deaf leading a blind is always better (than other way around). Vision needs to be higher in priority than the ability to hear (to the potential market). Market vision comes from innate ability to identify latent demands. How does one harness that ability ? How can we identify and nurture Visionaries ? Do We need a Revolution ?

Addendum: The definition of a services company in this post is any company providing solutions which are labour intensive similar to the big 3 IT success stories in India. Not to be confused with software as a service or social networking services or b2b/b2c services which are driven by platforms/products.

Friday, March 12, 2010

What will you do ?

"What would you do if your were the last person on earth?" - A simple question.

Most of the people whom I interacted with on this question, responded with the following set of emotions: Despair, Attachment, Experience, Learning from the past... Deep brow, Thoughtful, Effort to reinstate the past.

Now I asked a different question to different set of people

"What will you do if you were the first person on earth?" - Simple again

This time around, the answers portrayed Desire, Hope, Passion, Trying things... Open, Thoughtful, Willingness to create the new.

Try this your self. Ask a few.

Its perplexing and amazing how much of a difference a change in the worldview makes. In both cases you were alone in the world. The thought of end-of-the-world or beginning-of-the-new made such a vast difference in the way people perceived how they would behave.

What will you do if its your first-job or last ? your first assignment or last? Your first start-up, will this be your last ?

Tuesday, March 09, 2010

Right Casting your Core

If you are a startup and looking out to build a core team, think through on what type of people you need. Being part of several start-ups in the past and also currently being a founder of a new one, I understand the constant pressure you might go through to find the team. My personal opinion and observations on this (more of a philosophy) is not to hurry or compromise.

Do not fall into the valuation trap to bring in high-fliers and experts in their respective fields. On one side, even if the chemistry works and the people you are bringing in are experts, if they do not have enough important work to do, then, you land up diluting the interests and morale apart from the equity anyway. It is OK if you pass on great people. Make it 'equitable' for the organization and the people you bring in.

On the contrary, keep the focus on getting people with passion and who are willing to take up work beyond their capability. This has magical effects on the productivity of the team as well as the morale. I have first hand experience of this effect in the recent past. A sense of camaraderie is what makes a winning team. I have seen and heard of teams with real high fliers and the CEOs fulltime job in managing egos and fire fights.

Of course, promote the strengths and augment the weakness with advisors to the board and external help from the network. You would not want to set your core team up for failure if they absolutely lack capabilities and are just full of passion.

In short, Keep the focus on the core, promoting people with passion and assign accountability and responsibility greater than their current ability. Reduce the bling effect. You do not need big guys for valuation. This philosophy works at all levels apart from the core. Try it. Let me know.