From the category archives:

Entrepreneurship

It has been epic…

by faraz on December 17, 2009

faraz khalid startup journey

I’ve been working on a slide deck for a presentation that I have to make before the MBA class of a rather credible business school. I’m quite excited about this- I pitch for a living but I’ve never spoken about my startup journey before. The dean has generously given me ‘a hundred and fifty minutes’, and I’ve been told not to wing it. So, I sat down to think about the decisions that landed me here.

Turns out this is a lot harder than I thought it would be. I can’t remember any Eureka moments. I remember writing code and selling software back in high school, I ran a software consulting practice during my engineering undergrad days, and somehow I’ve always been this hallucinogenically optimistic about my destiny as an entrepreneur. I had a bunch of ideas that I wanted to pursue so I was never very interested in the college job fair. I was finding furniture for our office when Adobe was looking for talent on the campus. I could not wait to get out of college for my shot at changing the world. On my own.

The earliest I ever spoke about my wish to be at a startup was in grade 10. I remember we had gone away for leadership training course and we had to answer a formal ‘career-goals’ question, I guess that’s when I first consciously thought about it, I told this girl- very pretty and a year senior to me- that my life’s aim was to build a company that could make a reasonable dent in my universe… I don’t know if she remembers this, I hope she does.  Would it make her happy that I’m even attempting to do it?

I was lucky in getting an opportunity to help start QuadLabs. Gaurav is a brilliant hard-knocks entrepreneur who had already tasted both the fruits of victory and the tribulations of failure. That makes him the perfect partner and teacher. Tempered, yet unjaded. A kindred soul, if you like. And how has it worked out?

Well, I’ve loved it thus far.The feverish adrenalin rush of conceiving and executing ideas, meeting unreal deadlines and building products that people love. Sometimes falling, then dusting-off,  getting up and then getting hit on the nose again. Yes, we have had our days when noone knew where the next paycheck was coming from, and we’ve had our days where we thought we ruled the world. We’ve been shaken up and euphoric, beaten down and charged up, but we’re still at it, still fighting and still dreaming, and that’s what counts. There is no Gulfstream V. Not yet. But there might be, just around the next corner, the next deal, the next great idea. And that’s why this is all I ever want to do. And for the students hopefully hanging on my every word, or at least awake, I can only offer this. A man’s reach must always exceed his grasp. Or else what’s Heaven for?
Some dreams take longer than others to come true. But they always do, and they’re worth waiting for.

Now, if I could only remember that girl’s name…..

Here's a bunch of images from the early days...!!

Here's a bunch of images from the early days...!!

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Do you cheat?

by faraz on November 17, 2009

As someone still grappling with ‘Binge-install Syndrome’, I find my computers loaded with tons of applications that I rarely use. Wordweb is one such application. I hadn’t noticed it around till the day I saw this-

Software pricing criterion

This is definitely not a generic software licensing prompt where we always go for the least annoying option: Ignore, Later, Don’t Register or Cancel.

The Wordweb free licensing prerequisite stands out- this might well be the most ingenious bit of license copywriting that you’ll ever see. It’s interesting how an innocuous dialog box plays on the user’s principal moral obligation- honesty- to achieve a deeply commercial end.

Contrast this with conventional ’shareware’ agreements that people routinely ignore, circumvent, or under-license without feeling a little badly at the dinner table?

The key difference here is that you’re offered a choice, a measurable context in which you make your decision; you have an option to cheat and keep using the software for free, or to be honest and pay up. It gives you a benchmark to judge yourself. It isn’t ‘did you find it useful?’, it’s ‘did you lie?’, and that’s the big difference: the economic decision is preempted by a morality test.

What choice did I make? Well, I might be average at spellings, but I’m not a software thief! :-)

For fellow entrepreneurs and folks who are curious about software pricing theory, Wordweb is a great example of the Freemium licensing model where a bunch of paying-users subsidize a service for free-riders. I’m told this company makes money which means this unique moral incentive actually works!

Chris Anderson gave a great talk at Startup School 2009 where he argued that free (for some) is indeed a viable pricing model for products and services, particularly those delivered through the internet.

At the heart of the Freemium model is the idea that you offer your base product for free and then build an incentive for users to pay for premium features. Offering a good product for free can attract a large user-base fairly quickly, and from there, it’s not hard to monetize a captive audience that already loves your product. One might imagine that Freemium works only if the material costs of the product are low( typically software, where the cost of delivering and scaling services is reducing every day)- this is incorrect. Look at how gaming consoles are priced, Microsoft and Sony barely break even on the hardware but make a killing on selling game titles. Anderson cited an example at Wired magazine where a small portion of premium-subscribers help the company sustain the service for a vast majority of readers who don’t have to pay.

It’s important to understand why a user might pay for the service:

  • Users pay to save time.
  • If risk is lowered.
  • If there’s a social (/status) incentive.
  • Users pay if they are made to pay. (Much like the Wordweb license which compels the user to pay, or cheat!)

Clearly, one cannot offer the kitchen sink in the free variant of the service, there have to be some restrictions which are to be applied to develop an incentive for the user to upgrade or go premium.

  • Feature Limited
    Restrict certain features in the base version and offer them as ‘paid-for options’.
  • Time Limited
     This is a legacy shareware software model where all the features are available for free for a certain duration, after which, the user must pay for the product. This model has a serious drawback whereby the user never really commits to the product as he knows that he might have to give up on it. Time limited licensing fails often as it has the least user engagement.
  • Capacity Limited
     This restriction is popular with most data intensive internet services (Flickr, Picasa, Box.net?) where free users are given a certain amount of free capacity beyond which they must pay.
  • Seat Limited
     Free for a certain number of users, beyond which you must pay.
  • User Class Limited
     Free for students and non-profits, corporate customers must pay.

Far from a mere buzzword, Freemium(the naming credit wrests with Fred Wilson!) model is the big mover, and by far the most interesting pricing model on the internet. This presents endless possibilities for savvy companies to bundle their products in a sweetened wrapping of free, and make a lot of money in the process.

Think about job sites showing teasers to potential (non paying) recruiters and charging per lead, or offering a free posting to non members. This might nicely compliment their generic all-you-can-eat(time limited) database access. I know a lot of ways this access can be, and is, abused. How about helping a small company get started and making some money doing it? It takes away the incentive to cheat, and develops some real goodwill (/love) for your product. And that, we know, goes a long way!

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Startup School Report

by faraz on November 7, 2009

I traveled to San Francisco last week to attend the Y Combinator’s Startup School. The blockbuster lineup of startup superstars was too hard to resist and on balance, the whole thing was well worth a 16hr30min non-stop flight from Dubai . I thought I’d share a couple of thoughts and point you to resources for a condensed dose SUS 2009.

I had wondered about the format of a conference meant exclusively for hackers (Y-Combinator restricts attendance through an application process which has questions like “What tools do you use?”. If your answer goes anywhere near Excel or SalesForce, then you can count yourself out).

‘Winging-it’ was the presentation style du-jour and and Paul Buchheit made that clear before he started. I believe him, here’s a picture of him working on his presentation right before he went on stage.

Paul Bucheit at Startup School

Buchheit was pithy, brutally honest and generally a lot of fun as he went over his experiences at Google and then at Friendfeed. Buchheit was given good fight for the best speaker stakes by Paul Graham, Mark Zuckerberg, Evan Williams, Biz Stone, Tony Hsieh and Greg McAdoo. Jason Fried was angry, passionate and awesome in equal measure. Mark Anderson was his scholarly self, Mitch Kapor played the sage to the hilt.

What distinguishes SUS from most other conference is its focus on ‘doers’, it is meant almost exclusively for folks who wish to ‘make something people want’, make being the key word. I came away impressed, Startup School is far from being an esoteric ‘hacker-conf’, it’s really ‘build-a-kickass-startup-conf’.

Here are my big three takeaways from the sessions-

There is more than one way to fund your startup.
The subtle sparring between Jason Fried and Greg McAdoo from Sequoia Capital reinforced that thought! As a preference, I like the idea of bootstrapping better(always!). If you truly believe in your idea then it’s always a good option to tighten your belt and last as long as possible without having to take in money from the outside. Getting funded early might make life comfortable but there are potential downsides that one be aware of (Jason did his best to remind the audience of what those risks/disadvantages are!!). The bottom line is that  if its a real business, it will make money so control your burn rates and look to last till the day you can get revenue positive. Get an alpha version of your product out, get real users and you would be in a great negotiating position should you then need funds to scale/deploy etc.

There is more than one way to look at employees.
Option 1 is to work towards keeping your best people forever. Tony Hsieh and Zappos try to achieve this through relentless focus on building a ‘happy’ workplace. Happy employees make for happy customers so employees are encouraged to bring their personalities to office. ‘Creating fun and a little weirdness’ is an explicitly stated core value at Zappos, pets are welcome(normal these days?!), and agents can  send out flowers to customers if it makes them happy. Signature move is the ‘money test’- Zappos goes out and offers its fresh recruits a $1,000 bribe to turn-down their offer! Hsieh only wants people who love being at Zappos, and he wants them happy.

And there’s the Facebook model. Zuckerberg’s wants Facebook to be known as a place where engineers come to learn the skills needed to build a successful internet venture, sort of a Crotonville for for web startups. It might seem like an audacious value-aspiration but it makes a lot of sense; there is proven positive correlation between such a culture and the productivity of  teams working in a decentralized/independent environment. So, if you keep your part of the deal, and work your socks off for Facebook, Mark will not make a face when you leave to pursue an idea that you’re passionate about. In fact, he proposes to promote such a move, and that is a fantastic attitude for a company.

The Bay Area is a great place to base a web startup, Anywhere is great too.
Mitch Kapor built Lotus in Boston, we built ours in New Delhi(!!!) and my favorite ‘other-company’, 37Signals, is all over the place! Conventional wisdom is to be as close to your market as possible, but if you’re a web startup then you can pretty much be anywhere. And, we should really talk about the rents in Delhi?

My Favorite SUS Quotes (attributions are missing on some of these)

  • Overgeneralization + Limited Life Experience = Advice
  • Persistence is more important than intelligence.
  • Venture money is like crack – Jason Fried
  • Software has no edges, software is easy… and it tends to expand in time, it starts becoming less good. Founders have to be the edges for their software.
  • Founders need to build teams they would never trade in a game of ‘Fantasy Startup’.
  • Failure is not a rite of passage, failure is failure. The idea that failure is acceptable is a lie. Failure is definitely not the holy grail of entrepreneurship. (responding to the theory that founders who have failed are somehow more bankable?)
  • Is your product useful, or is it just handy?
  • Keep learning doing whatever you’re doing.
  • Have a hard dollar ROI, your client’s evaluator must fear losing his job for passing on your offer (be that good!).
  • Price forces you to be really good, really soon. And price is the best feedback system. If people are buying your product with real money, then you are for real. – Jason Fried
  • ‘Feigning certitude impressed investors’.
  • It surprises me how being a startup founder fails to impress women – from PG’s presentation

SUS Resources

So, attend startup school for great advice, do-it-yourself inspiration and stellar networking. And if you’ve been looking for someone to lead your Bigtable migration, he’ll be there too! Applications open July’10.

I’d tell you about the after-parties, if I remembered!!

Concluding over-generalization: Startup School was epic!

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Pictures from Startup School 2009

by faraz on November 7, 2009

Did you read my post on the Startup School 2009 yet? Find it here.

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Manager Fail - by Faraz Khalid

Manager Fail!

by faraz on September 15, 2009

Ever lost your best men to the shop next door?

Big News: Bad managers get bad results - under performing assets at the least and accelerated resource attrition at the worst.

A great manager has voodoo powers; he will keep and inspire his best men, help each guy get a bit better and use his team ably to get to his goals. This is not a post on how to be a great manager, I don’t know enough about the subject to attempt an exhaustive summary. However, I do have an opinion on things one would be, if he was not a good manager.

This is a self-diagnostic cheat-sheet to detect manager-fail.

You’re a bad manager if -

You’re dumb!

Don’t be dumb. If you don’t know enough about the function you’re handling, pass the ball or someone will call your bluff soon.

Your BS detector is broken

You have to be able to see BS from a mile or you’ll never be able to cultivate respect. A boss I can take for a ride is a boss I can’t respect, refer to rule 1.

You’re insecure

Leading a team full of people smarter than you is way better than leading a team full of laggards. Smart people will make you look great even if you’re not. So lose your fear of someone stealing your thunder, encourage your team, let them lose and they’ll make your life sweeter!

You over-manage

You delegate but you get impatient like a bride. Learn to wait for your turn, let your team come back to you when they have a result or they need help.

You don’t know everything about everything

No part of being a manager means you get to be lazy. Don’t over-manage but be aware and never take your eye off the ball.

You’re not inspirational

An inspired, motivated team generally scores better than the sum of its parts(refer to the motion picture, 300!). A great manager makes his team believe in his goals, he builds coalitions that think collectively and act synchronously.

You inspire people by being very good at the subject matter, caring a lot and trusting others to come good for you. Get these three right and you’ll have a team that punches way over its weight.

You’re a wimp!

Loyalty works both ways and you must pay it back. To earn respect you need to fight for your boys, a bit!

You don’t care enough

If you dated in high school you’d appreciate the fairness of -  ‘you care, I care. If you don’t, you’re dumped!’

You need to care about you team, and it needs to come through. Or, most of your best people will leave for Google. Working for someone who doesn’t give a damn is no fun, not if there aren’t any free gourmet meals!

You are ‘Staller’

You just can’t get around to saying yes, or no!

‘Analyst-A’ wants leave, you think his reasons are invalid but you can’t refuse. ‘Analyst-B’ wants a new printer for his office in Lagos, you know you should say ‘yes’ but you don’t. You want to sit on it hoping someone else will take the call, or the Lagos office is shut-down.

Stallers definitely need to move over and let the men do the job.

You’re a perfectionist

Great! But don’t demand perfection from the untalented, that is just bad strategy.

You can’t pipeline work

Define your objectives and communicate them in a plan that covers your expectations. Have play-by-play task lists for your team, obsess about monitoring progress. Start using Project(if you’re in software) or Basecamp(if you wear jeans to work).

When you get to manage other people’s time, it’s your responsibility to do a cracking job. Time is perishable  and everyone deserves good value for having theirs managed by you!

You’re a dragon lady

You swear, you shout and you think verbal aggression gets work done. The short of it is that it doesn’t; being shouted-at gets people sad and distracted  in the short run, it gets them angry, frustrated and de-motivated in the long run. If you need high decibels to get heard then your communication skills could certainly go further. I assure you, calm and considered is always better than loud and disgraceful.

If you’re convinced that the resources at hand can’t execute and can’t be trained, you need to get the folks who can, do that without shouting please!

You lie!

President Obama agrees, “that’s not correct!”

You think you’re Churchill!

Even if you have epic letter-writing skills, never ever, EVER communicate your frustrations or disappointments through email because once you do, you will not have a chance to recant your tirade. If you’re really unlucky, your victim might read it immediately after he brought you flowers, cake and a card with the promise that he’ll work harder.

A better option would be to pull Jr. to the side and talk to him in the hush-room. You may get a chance to balance your outburst and leave an opening for reconciliation. Remember, there is no ‘un-send’ button in Outlook, or Notes!

You’re not Churchill!

Being a great public speaker can cover for an unfair number of flaws in your managerial toolkit. If you can talk like this guy, you can ignore most of this post and you’ll be fine! Learn to respect your adversaries and never forget what the English teacher told you in elementary school, don’t mumble!

You don’t carry cookies in your pocket!

Failure to appreciate sincere effort, irrespective of the outcome causes people to lose heart. Learn to appreciate great work and give lots of compliments. The appreciation-dopamine relationship has always been a linear function! Animal psychologists are certain that even horses understand the nuances of the performance-incentives trade-off.

Don’t stroke your peers on their necks though, its improper and may cause legal problems.

You haven’t read ISBN-978-0671723651, yet!

Dale Carnegie is your new hero. Please get the book here, or walk to a bookstore right now. You’ll be much better for it.

You’re not awesome!

Being awesome is important! If you’re not awesome, you’re mediocre.

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How David Beats Goliath: The New Yorker

by faraz on September 13, 2009

Here’s a master storyteller at work. I think this might be Gladwell’s finest piece, recommended reading for anyone trying to take on a bully.

This was Lawrence’s great insight. David can beat Goliath by substituting effort for ability—and substituting effort for ability turns out to be a winning formula for underdogs in all walks of life.

via Annals of Innovation: How David Beats Goliath: Reporting & Essays: The New Yorker.

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