If you don’t like how things are, change it! You’re not a tree.
-Jim Rohn

There’ll some been bigtime changes in the engine room, and I have some news to share. Shortly.

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...!!

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-

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 selling game titles. Anderson cited his company’s example to make the point: Wired magazine where a small portion of premium-subscribers help the company sustain the service for a vast majority of readers who don’t go for the premium offering.

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!

Product innovators dilemma: how do you build a 15 inch black tire that stands out?

If you worked in product engineering at Bridgestone, you would relate to the folks who work on the IE team at Microsoft. Internet browsers, like car tires, are a hard space to be in- it’s nearly impossible to build a truly differentiated product. Innovation is mostly centered around minute obscurities, or engineering hacks to play catch-up with competition.

You’d imagine this is not a market for insurgents, and then came Chrome.

A good example of Google’s re-imagination of the internet browser is my favorite new feature- bookmark-sync, now available on the dev-build channel.
Using the Google Docs service, Chrome now let’s you synchronize browser bookmarks across multiple computers (/devices). I think it’s a standout example of product improvement through a cloud based service (Software-backed-by-a-service?). Win7/Mesh is another great example. Give it a shot, I’m sure you’ll find it useful.

*Safari has had this feature for a while but you must pay a ransom for the MobileMe service. And, I don’t do Mac!

This post was originally a comment on a link shared by a friend. The original article can be found at The Economist.

Re-posted after a quick fact check/edit for the blog!

I got on a plane, and noticed a priest spread out on his First Class seat. At that point it struck me that I had an opinion on this  article.

I reckon our clergyman is an A-list guy in the church hierarchy (I’m assuming, he would know of the commitment to cut carbon emissions at our multi-faith League of Nations party). And yet, he didn’t seem like a very carbon-responsible person; I think Ban Ki-moon should be heartbroken over this, he got played!

In their attempts to stretch their carbon credits, CEO’s would try and fly commercial, sometimes even business! They would try and compensate for irresponsible behaviour by buying credits, etc.  Think about it- even our evil all-for-profit businesses are trying to be subtle about their carbon footprint. It’s shocking that on that ultra long-haul Boeing jet, Capitalism comes across looking a bit better than Catholicism in the climate change stakes!

To be fair, I’m convinced that if our A-list priest understood the gravity of climate change problem, he would care. He’d be setting an example by traveling economy and having a lower carbon signature, in line with his other extreme moral instincts, you know, like not getting married!

The ‘glorious system of greed’ understands it’s financial incentive in delaying the ’sinking of Maldives’ better than Deoband’s grasp of it’s moral imperative to act in this matter. This epic-fail is symptomatic of a larger problem of mediocrity that is gnawing at the soul of our religious leadership.

Leveraging our faith infrastructure to spread awareness on an important social cause is a compelling plan, I’m sold on it. However, I wonder if it’s a scalable (/deployable) solution? A system that has consistently pleaded ignorance to it’s social responsibilities, cannot suddenly be considered bankable.

Yes, we have had religious leadership come out and in support of social causes (HIV in middle Africa, female infanticide in India), but their coming out party is almost always a day after the epidemic’s tipping point. We need visionary leadership, not one that is merely reactive.

And then there’s the credibility question:

On most occasions, I have a severe believability problem whenever our faith leadership speaks out on matters other than doctrine- they are often dogmatic, sometimes simply out of their depth. A discredited sales force is definitely not the team you want to go to war with. The power to persuade comes from a deep rooted conviction in the idea you’re trying to sell. If you have no clue how Chlorofluorocarbons work, and you have an agenda that seeks the audience to give up material upside for an abstruse incentive, you’re starting out with a huge disadvantage.

The terminal mediocrity of our religious leaders has left them looking like the masters of a kitschy low-information-signal(often rhetorical issues that are much easier to grasp for folks with average ability) and nothing more. Rakhi Sawant and a majority of our faith leadership suffer from the same problem- they have the megaphone but no-one will believe either when they talk about climate change, or stem cells. The message might be right, but the messenger is broken!

I feel there might be a talent problem at the heart of the credibility conundrum. It might be innocent, below par IQ’s that cause these guys to misread, misguide and misinterpret; their wayward thinking sends mixed signals. Folks who take consequential decisions on climate change are going to base them on a tricky trade off between economic inducements and some of organic chemistry’s ugliest reactions. Smart money says that a vast majority of the religious leadership would not understand either. At today’s skill level, our priests, mullahs and clerics would end up losing a lot of debates, very quickly, when called to defend their(hypothetical) call for action (Big-oil has huge corporate-communication budgets!). It’s possible that a particularly passionate sermon may get factory-hands to demand responsible carbon emissions, but would such a call hold if the factory management has compelling financial incentive to keep polluting. Or would it be better if we focused on bringing about a balance of legislative checks and financial rewards for the folks who run these factories?

I have a plan to fix this (ahem!!). This will take time but I promise you it will give us a good shot chance of fixing the talent (and credibility) problem that cripples us. We can then engage these leaders who, are said to have ‘the largest, widest and deepest reach’.

Madrasas (and most other religious seminaries) have consistently shored up the back-end of the talent pool (my single person mental Gallup Poll results are overwhelmingly supportive of this conclusion). I think there should be a mandatory IQ test for folks who get into these schools, given the respect-capital(and it’s potential use) they have on graduation. Let’s try something with a fancy name- The MAT (Madarsa Aptitude Test), it should be designed to be an extremely annoying exercise (in the interest of fairness, it should be structured exactly like the SATs): let’s have a 4 hour computer adaptive test with 3 sections , 1 on moral science (and how un-cool it is to want to physically hurt other people!), 1 analytical section(puzzles and elementary math) and an open book exam essay: “Why I want to be a priest, and not Mark Zuckerberg?”. I think there’s promise in this thought, making the standardized MAT exam a mandatory prerequisite for all religious seminaries (common entrance exam for all religions, yes!!) would ensure we only get the best, of the rest! It is also a killer business model (/captive market) for ETS?!

This will also help us resolve the issue of the vast constituency of ‘believers’ who do not believe in the theological leadership just because they don’t trust them to be smart enough in some matters. Imagine if religious schools were a meritocratic system? Don’t we believe things that are said based who said them (I’d totally believe Feynman on Quantum Mechanics even if he was kidding!. Much like most of us believed the folks who claimed they had the Large Hadron Collider figured. Appears, they didn’t, and yet we thought they did. They had to, they had all the acronyms going for them SAT/GRE/PhD/CERN?). So let’s get our mullah’s an acronym too and let’s get them all to take an exam. And then they would be set to fight for the right causes. We’re sure to see them fighting harder for IPCC.
I think the religious leadership’s billing as Maldives soul savior is undeserved, it’s a bit like Obama and the Nobel; a compliment given in the hope that they will come good. I say they won’t, not unless they solved a few partial differential equations first.

Al Gore, might actually be Secretary Moon’s man if he’s looking for heroes. That man knows his CFCs. I wish he fought as hard as to be President, we would have had the world’s most passionate advocate for the climate change agenda at the helm of the world’s biggest polluter. That might have been game-changing.

And, we would not have had another ‘President’ Bush, which would have been a spectacular thing for our planet. Only if Gore fought harder. Imagine that?

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.

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

• Here’s Mark Bao’s wonderful dispatch from SUS’09. He’s done a great job of reducing the presentations to scholarly(and readable) notes: find it here. Mark, by the way, is a high school student who is already running a kickass startup!
• Justin.tv has all the talks in a a consumption friendly format.
• Check out my pictures from Startup School 2009

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!