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Entrepreneur..rise..fail..resolve..rise..fail..resolve..rise

The life of an entrepreneur is really interesting and very challenging. It is interesting because they are trying radical ideas and something which has possibly been never tried before. Challenging because they are walking along unchartered territories and there is joy, disappointment, surprise, shock, failure and success lurking around every corner. It really tests your persistence, patience and steadfastness as you keep discovering your path amidst this uncertainty.

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The question is – what keeps him/her going? What is that single most important trait which gives strength to the individual to beat all odds and deliver something which is valued manifolds as time progresses?

I think that the single most important talent is to use every challenge he faces to his advantage, by resolving to fix it for the betterment of the product, team and overall venture.

Now contrast this to the corporate world. When majority of the employees in a corporate run into a problem which they couldn’t foresee or have no clue about, they usually resort to one of these standard options (i) find an excuse which can convince their manager (ii) present data or polish a ppt in a manner that the problem is under wraps (iii) find a scapegoat to take the blame. In the end, when faced with a challenge which has disrupted all their planning, the recourse is to save their skin one way or the other. Nothing wrong here; as this is the inane tendency of all living beings!

The entrepreneurs also do exactly that, i.e. save their skin in the startup game. It’s just that they know that the only way to do this is to get a handle on the problem and find a fix or a workaround so that the venture can still make progress. Actually, they have no other option. There is no boss to think of a convincing excuse, no scapegoats to take the blame and any data-dressing to swipe the problem under the carpet will tantamount to fooling no one else but themselves!

So, the entrepreneur does what they must – take the bull by his horns! Roll-up their sleeves and get down to fixing the problem. What could it be – is it because the customer does not understand the true value proposition of the offering? Is the UI confusing and not good enough? Are people gaming the system? Or is he targeting the wrong segment altogether. Could it be that their go-to-market is not really helping him to reach their target group? This analysis starts and one by one, every single proposition is ruled out with the data available at hand; and accordingly the solutions are deciphered. By the time they have fixed the problem, either the product has improved or the go-to-market strategy has become more laser-focused. Whatever the case may be, the venture has moved one step closer to success!!

But then the dawn of the very next day brings with it new challenges and the entrepreneur gets into this never ending problem-solving mode. With every fix you rise, create a new set of challenges and fail a little, solve them and then rise again. The cycle just keeps going…

Agree?

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Entrepreneurship : Is Your Temperament Inclined For It?

Entrepreneurship is the buzz word right now. Everyone seems to have that next disruptive idea which will create the next unicorn. Now, if you are the founder of a startup, you are looked upon as a role model and the society, in general, puts you on a high pedestal. It is amazing how things have changed in the last decade or so. When I completed my engineering and joined Philips as a graduate apprentice, my family and folks felt I had made it big in life. Working in a prestigious MNC, the expectation was that I would have a steady and secure job and retire from the same company. Not any more. Neither are there any MNCs (or for that matter any company) which can promise you a steady secure job till retirement, and nor the youth has the temperament, patience and attitude to grow steadily along the origanizational hierarchy. So, everyone must try their hands at entrepreneurship and make it rather big very very quickly.

This is great… as there is no harm in being ambitious (can we say the same for over-ambitious?) but you better know what it takes to be an entrepreneur and whether you will enjoy the startup journey or not. I would like to make one thing crystal clear – running a startup is 99% hardwork and 1% luck. Apart from hardwork, there is no magic sauce to success. And If you get de-motivated and stop enjoying swimming against the current mid-stream, well…you know well that you are destined to sink.

So here are some traits you must either have, or inculcate if you want to be a successful entrepreneur:

Your brain doesn’t need time off from work!

Don’t get me wrong. I am not suggesting that you need to be a workaholic working 16-18 hours a day. What I am saying is that when you run into a problem, you can’t switch off your brain from thinking about it unless you have found a way out. This is a 24×7 thing.. and it doesn’t matter what environment you operate in. Subconsciously, you are always observing and picking clues to find a way out. If you are the kind who usually switches off while trying to solve a problem after some time, you will not enjoy the startup journey.

You live in neither the past, nor the future but the present and only the present!

While every startup has a goal and a grandiose vision that they are working towards, the founding team is deep rooted in the present. The entrepreneur has to have the mindset of “this is where I am now and this is what needs to be done next.”

Often entrepreneurs, especially the ones who have spent a lot of time in the corporate world, start to compare their lifestyle before and after doing the startup. All the corporate highs of delegation, power, influence, travel and meetings are suddenly gone. If you are the kind who can’t let go of the past, you will not enjoy the startup journey.

Then there is another breed of people who spend more time in dreaming about large funding, valuations, million $ buyouts, front page news and a glorified future; instead of focusing to solve the problem at hand. If you like day dreaming about the future more than the action, you will not enjoy a startup journey.

You like to dirty your hands, each and every time!

In the initial phase of a startup, the founding team has to get their hands dirty in tackling every problem faced -take the bull by its horns. There is no one to delegate to and even if you find someone to delegate, the results can be disastrous. If you delegate too soon, you will never experience the challenges of your own business and just forget about guiding someone else to fix them. You’ll be taken for a ride.

Now there are some among us who don’t like to get their hands dirty. They prefer delegating instead of tackling or look for some god-sent help to fix the issue. This could be due to multiple reasons but the most common being an over-protected upbringing where you had your parents fix every problem for you instead of them encouraging you to find your own solutions. Whatever is the reason, if you don’t relish “jumping right-in and I’ll find a way to swim”, then you will not enjoy entrepreneurship.

As you live life, you are looking beyond money!

Entrepreneurship is possibly the highest risk career you can endow upon yourself. 90% of the startups fail due to one or the other reason. Also, I fundamentally believe that money is always incidental . Money has its own ways to meander and criss-cross your life. Sometimes, it comes out of no-where and other times you lose it for reasons totally beyond your control. Mankind has still not found the algorithm which can guarantee you assured returns in all times, throughout the span of your lifetime.

So if you are someone obsessed with money, you will not enjoy the startup journey because you have set a goal for your venture which is beyond its limits to deliver consistently. You will stay motivated till the going is good. The instant you hit the first valley, which is a given thing during the startup journey, your interest will start to wane out.

You need to be obsessed.

Carrie Layne – “Entrepreneurship is not a part-time job, its not even a half-time one… It is a lifestyle.”

This article was originally published in Inc42.

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Can e-commerce be price competitive…always?

While everyone is talking about the lower price points on online stores, people in the business understand that a lot of that price competitiveness is coming due to venture capital (VC) money, which is being used to offer further discounts on the purchase price of the e-tailers. The question to ask is – whether e-tailing, which is based on a marketplace model, can be truly price competitive vis-a-vis physical retail.

By the very nature of the marketplace model, which is being driven due to regulatory conditions, etailers can’t directly buy the goods from the manufacturers’ store and sell them. So, they have adopted the marketplace model, wherein, some wholesalers or retailers are the actual sellers using etail portal to complete the transaction with the buyer. In the accounting books, the goods stay under the individual sellers name, until the transaction is completed; while the etailer may provide logistic support in terms of warehousing, delivery and payment collection.

So you could have a situation, wherein, you ordered something on Amazon/Flipkart, which is actually being shipped by your neighbourhood retailer! The products do the round trip from retailer to some remote warehouse and back to you. This is like catching your nose by placing your arm around the neck!! How can this chain of product delivery be more price-competitive than you visiting the shop and buying the goods directly from the local seller!!

People will argue that it is the wholesalers/distributors that are selling online and, thereby, cutting out the local retailer margins and passing the cost savings to the end consumer. While it sounds convincing on paper, but the reality is very different. In the evening, if you visit the local market area in any city, you can see the courier boys of the e-tailers picking up goods from retailers in the same market. I see this regularly when visiting my local market once or twice a week. These are the very same shops from where I buy that are now selling on e-tail portals.

Also, the current effort from the likes of Flipkart, Snapdeal, Paytm, and Shopclues etc., to increase their seller base, clearly shows that they want to engage all mom-and-pop stores (and not just wholesalers/distributors) to sell online. If they were to work on the model of selling by wholesalers only and passing the cost benefit to the end consumer by cutting out the end retailer, simple maths will show you that their seller count can’t exceed 40k-50k sellers.

If the end product is coming from a retailer in your local city market, where are the additional margins to pay for the logistics of product pick-up, delivery, payment collection, payouts and handle returns? Who is coughing up that money? The retailer can do it partially, incentivised by increased volumes and being able to ship to remote corners of the country. But factually, even they don’t know where they are shipping! Also, a small cut in retailer margins can’t lead to the steep double digit discounting, which we see on almost all etail portals.

Fundamentally, the marketplace model works for shipping into remote areas, where physical stores for many brands don’t even exist, but there is a definite demand. However, for such services, the etailers should ideally be charging a premium and not discounts. In the metropolitan cities, the numbers just don’t up. And, buying from a local retailer will always be more cost-effective than buying from e-tailers, especially after the VC money-based subsidizing phase is over.

Our view has been validated by PriceMap customers, who are able to find local retailers offering the same product at lesser prices, which they were contemplating buying online.

This is a healthy debate and I look forward to your comments and views.

Guest Post by Suresh Kabra, Founder of PriceMap

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Is the Hyperlocal Model Fundamentally Flawed?

There are about 50+ startups in India, which are offering hyperlocal services (or what is being called Offline to Online O2O) – connecting online shoppers to brick and mortar retailers. They vary in the segments that they are addressing, with grocery and daily needs being the most popular ones.

One thing which is common across all these hyperlocal startups is the process followed – they put your inventory online; make the purchase happen from their portal or app; pick-up goods from the retailers shop; and deliver to the end customer. The retailer doesn’t have any visibility on the end customer. They just receive a blind order, the packaged goods are thereafter picked up by the delivery boy, to be delivered to the right customer.

Is this model good for brick-and-mortar retail? In the short run, it may seem so as you can get some additional orders from people who shop online, but what about the long run? If you are not interested in providing a customer experience, gaining trust via human interaction and building loyalty, why are you running a retail outlet in the first place? Why are you paying rentals for a premium location and spending zillions on interior decor and training sales staff? You should pack-up and set-up a warehouse in some dingy godown and just package goods as per orders received online!

I hope you can see where it is heading. With no relationship with the customer, you have lost all your identity and differentiation. Your business gets totally commoditized. You can play only on margins and the person who has scale or is capable of running a sweat shop, to cut costs, wins. You relegate yourself and your children to the bottom of the retail pyramid, with a constant struggle for margins and playing at the mercy of the on-line aggregator. If this online partners turns into a foe and demands a piece of your cake, you are left with no option but to shell it as you have lost all capability to secure a customer based on your strengths.

If the retailers want to get business from online shoppers, they have to offer something that pulls these online shoppers to their store. Create more footfalls by adding the online community to your regular shoppers. Not the other way round, wherein you lose your regular customers also to the faceless online world! This is what is happening with the hyperlocal offering today.

One of the alternatives could be a situation where the offline retailer may try and pull the online customer. The customer then, gets the best of both worlds. There are certain applications running in the market which connects an online shopper to the store and generates additional footfalls. It helps in retaining store’s identity and build upon the existing customer loyalty, instead of taking away the loyal customer.

You can share your views in the comments below.

Guest Post contributed by Suresh Kabra, Founder, PriceMap

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Startups!! Do You Know Your Customers Well?

A business exists only till the time it has paying customers. The day your customers cease to exist, or have no reason to pay you for your products or services, your business is in deep trouble. So, if we consider all the stake holders in a corporate, an i.e. employee, executive management, investors and customers, the customer is the most important. Now the chances are that you know all other stake holders reasonably well due to daily interactions in the office or board meetings. The question is that do you know your customer well? If not, what can you do to know them well?

Especially important for a startup to know, as his starting up, sustainability and scaling up are directly dependant on the customer !

There are several stages of knowing one’s customer. What business they are in and which industry they belong to are the easier ones. The more challenging aspects are:

  • Who are your customer’s competitors in the industry? What are the competitor’s differentiators vis-a-vis what your customer is offering?
  • What is their vision of the industry that they are a part of? Where do they think the industry will be in 2 years and 5 years from now?
  • What is preventing your customer to secure a larger market share in their industry?
  • Who is your customer selling to, i.e. your customer’s customer. (By the way, this is the end customer from your perspective). What is his ask? In which industry is he sitting and how’s that evolving?
  • How is your customer’s roadmap evolving with respect to the developments in the end customer’s industry? Are the two aligned or are they diverging? If they are aligned, you are in good shape but if they are diverging, you may go out of business because your customer will go out of business.

To summarize, knowing your customer is a three-tier process: I) knowing the immediate (paying) customer, II) knowing your customer’s industry and its trends and III) knowing the end customer’s (your customer’s customer) industry and how it is evolving?

The problem is that in most of the organizations sales owns the customer and acts as a heavy-handed gatekeeper for any and all customer interactions. Since sales is transactional by its very nature, knowing the customer stops at the very first step of knowing who is making the purchase decision, who will issue the purchase order and release payment. Mostly knowing the customer stops here! Unfortunately, none of these guys can give you long term visibility into the customer’s business which is so essential for long term sustainability of your own organization.

What you need is a three-tier customer relationship, each focusing on one aspect of knowing the customer.

Starts with sales at step (I) where a relationship is built around a transaction and customer organization is mapped.

Then your product manager (for products) or domain expert (for services) has to focus on step (II), i.e. reach-out to its peer at customer’s end and engage him on a product and industry-centric discussion.

The common pitfall here is that product managers tend to get far more engineering (inside) focused in delivery. Their external interaction is mostly limited conferences and exhibitions to collect generic inputs about the industry. They really don’t spend enough face time with their customers directly to get to know customer’s industry, competitors and the customers’ customer industry. Most of the time they depend upon sales to provide the inputs against questions (a)-(c) above, but that’s a wrong expectation. It will never happen.

Now coming to step (III), i.e. knowing your customers’ customer industry. This is where a free exchange of ideas at the executive level starts to matter. The CTO/CEO of your company has to engage his peers at the customer’s end (could be CTO/CEO or BU head) and understand the industry trends. Your executive management needs to collect this information from threads picked across all of their key customers and then make a sound call on how they expect the very end customer (customers’ customer) to evolve. It has to be more than a gut feeling or some internet-based research. Their assessment has to be based on hard data collected from discussions done with your customers.

Once you have a sense of changes in end customer’s industry, address the question (e) above, i.e. is your customer helping to shape the industry or is he trying hard to catch-up? Once you know which customer is sitting in which bucket, you know what to do for your own long term growth and survivability.

Unfortunately, what happens in CXO-CXO meetings is that it gets limited to resolution of tactical issues which couldn’t be resolved at lower levels like price, contract legality, delivery issues etc. It rarely goes outside of this sphere, of never-ending business issues and any discussion to get a deep understanding of their future gets sidelined. In turn, your future gets compromised as it is directly dependent on your customer’s future!

Everything starts with the customer – June Martin

Gues post by Suresh Kabra – Founder, PriceMap

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‘I initiate therefore I am’ – Success mantra for the 21st century

If you don’t have a high degree of initiative, you don’t have much of a future in the corporate world. 

17th century philosopher Rene Descartes said – ‘I think therefore I am’. With all due respect to him, I am inclined to revise this for the 21st century as – ‘I initiate therefore I am’.

For me the world is truly binary, people who take initiatives and people who don’t and that pretty much decides who survives the marathon and who doesn’t. Don’t get me wrong here. I don’t want to discount the value of thought because the very act of doing has its roots in a thought. However, in the modern world, taking the initiative to execute matters much more than just penning a thought on – is what needs to be done.

Before we delve deeper, let’s be clear on the definition of initiative. If you look on the net, you will find many interpretations, but for this write-up, I define initiative as not accepting status-quo and exploring ways to make things better. People who take an initiative are always working for the betterment of their own self, their family, their organization and the society at large. People who don’t are on the receiving end and perpetually complaining about the state of affairs.

If you don’t have a high degree of initiative, you don’t have much of a future in the corporate world. At the very base level, a manager expects you to take an initiative and think of possible solutions, rather than just report the problem to him.

If you are someone who has tried potential solutions, in whatever limited manner, and made an assessment on the impact, you are sure to stand out and win your manager’s trust. On the other hand, if you are very reluctant to stretch yourself and believe that you have done the needful by reporting the problem, believe me – you are the problem and your manager is better off without you. Think of it this way – the problem will anyway get reported to the manager, sooner or later…why does he need you for reporting only?

You can’t rise in the corporate hierarchy, if you haven’t demonstrated a very high level of initiative all along your career, essentially in each and every role you played. I am not saying that taking initiatives is enough to reach the corner office, you will need many more qualities, but initiative is the key ingredient here. If you are in an organization, where people are recognized more for politics played than the initiatives taken, trust me that you are falling into a pit. Neither the organization will go anywhere and nor will your career!

If you are an entrepreneur who lacks initiatives and is in the habit of procrastination, you are really a day dreamer! You can only dream of making it big because entrepreneurship, by its very nature, is all about taking initiatives at a neck breaking pace. As a founder, you are solving some industry problem which has never been solved, or even thought of before you. In the process, you are treading zillions of parallel paths, always ascertaining what works and what doesn’t work for you.

Every start-up begins with a great idea but a large majority fail. Why? Because the venture didn’t took enough initiatives to reach the sweet spot – where your product offerings, customer requirement and go-to-market converge. The founding team gets fixated with success from early adopters and gets into an execution mode, trying to do the same thing better and better hoping for repeat success. They don’t realise that the reasons for which the masses adopt a product are radically different from the reasons for which early adopters try the product. Initiatives, which should have been taken right after initial few successes to nail down the strategy for mass adoption, take a back seat.

Here’s an important observation before I close. I have seen people having a high level of initiative in the early years and then the drive tapers down. A few initiatives leading to a dead end, others which didn’t deliver as you expected and some others which were laughed at by the peers…and all this takes a toll on your motivation.You prefer to go down the beaten path now as it appears predictable and gives you that false sense of security.

But that’s exactly what it is – false.

I am a staunch believer – Nothing ventured, nothing gained.

“There comes a moment when you have to stop revving up the car and shove it into gear.” — David Mahoney

Guest Post by Suresh Kabra, a leadership and business development professional with a proven track record in driving new initiatives. Kabra is a technopreneur and a MIT- Sloan and BITS Pilani alumni. He has a patent on flexible display design.