Ideas for the world, FREE!
Alok Kejriwal
I am a serial entrepreneur whose focused approach is to fire up a great idea and then partner with the best people to make it come to life.My previous start up - Mobile2win was acquired by The Walt Disney Company (China division) and by Norwest Venture Partners (India division). My companies are owned by the CEO's who run them with an unbelievable passion. I actively mentor first generation entrepreneurs looking at starting out on their own and help them by VC contacts, negotiating funding, start up strategy, introduction to brand and media owners and all kinds of service providers. My ambition is to own a billion dollar company.
Homepage: http://www.rodinhood.com
Posts by Alok Kejriwal
The Al Dente Moment – What Pasta can teach Entrepreneurs!
May 7th
I am obsessed with Pasta. Ever since I traveled to Italy to get trained in the factories there (I used to work in my father’s socks factory), I cannot get Pasta, its permutations, shapes and sizes and of course how it is cooked – out of my mind.
In the context of Pasta, Al Dente in Italian literally means ‘To the tooth’. This refers to that ‘perfect’ moment when the Pasta is firm, strong, crisp and cooked – but not soft and supple. It’s just the way it should be. The best way to get your Pasta to be Al Dente is to keep nibbling on a piece of Penne or the Fettuccini while it is boiling. The very moment you can bite into the pasta and yet feel its firmness, it’s ‘Al Dente’. Immediately drain, add whatever you have to into your Pasta and enjoy (I like it with very little garlic and mushrooms sautéed in olive oil with mixed Italian herbs and top it with grated parmesan cheese). Buona Appetito!
Now, observing the ‘Al Dente’ method has inspired me to think of ‘perfect moments’ as they appear in an Entrepreneur’s life. As they say, you can never time anything to perfection, but just like Pasta, if you know when your best time is near, you can leverage it well.
Some of the instances when an Entrepreneur can enjoy her ‘Al Dente’ or perfect moment:
I can barely cook, but my cooking is better than yours.
Sometimes, knowing little of something absolutely new is better than knowing everything of something very old. To explain – in 2003, when we began working with Sony television in India on Mobile VAS, we were the only Company in India to understand ringtones, sms gateways etc. Just the fact that we could manage ‘mobile stuff’ won us the Indian Idol business in India and 50% revenue sharing across the board. Circa 2009, everybody knew how to do everything and the party was over. But in those 6 years, we managed to fund and exit the business!
Grow the Walnut – Don’t try to eat it if you can’t open it.
In 2006, Mobile2win China was in business since the last 5 years and the operational difficulties in China were increasingly hammering us. We had a great platform, operator connectivity across the length and breath of the PRC and very scalable technology. With all this, we were still struggling to make money. We had grown and ripened a beautiful walnut but couldn’t understand how to open it and enjoy it. If we waited too long, the fruit inside would rot. As we were wondering, the Walt Disney Company came along. They were keen to have a ready-made mobile platform with operator connectivity in China! They weren’t looking for revenues in a Company but an operation with employees and licenses and the knowhow. They bought out mobile2win from us in an all cash transaction that made us 6x on our original investment. Disney was the squirrel who was destined to eat the nut. We were fortunate to find them at just the perfect time!
Being the first item on the buffet table.
By 2007, lots of VCs who had made money in the MMOG (massive multiplayer online games) business in China and Korea were punting that India would be the next geographical bet for massive valuation businesses using these games. Their thinking was that China and India were similar in many ways, and if Shanda and The9 could become billion dollar plays in China, the same story could repeat itself in India. As part of this punt, VCs began looking at entrepreneurs in India who had gaming experience, and my name along with that of my co-founder – Mahesh Khambadkone popped up. A few meetings later, we had co-founded Games2win and were given a cheque of 5 million dollars by Clearstone Venture Partners to start up that business. It’s full credit to Clearstone that they quickly accepted our point that MMOG was not working and allowed us to change our business model to casual snacky browser games. But Games2win was started up because we were the first set of entrepreneurs that the VCs met when they came to the buffet table. I guess we were the right people, in the right place and at the right time.
‘When’ is a matter of personal taste..
If you look at the cases of Yahoo passing Microsoft, Groupon saying no to Google, it’s the chef saying, ‘I don’t want perfect Al Dente. I’m happy to serve the pasta maybe soft, maybe supple but at the time I want to serve it’. Nothing wrong with that! Yahoo and Groupon continue to march on. On the other hand, Sabeer Bhatia sold Hotmail much earlier than the Al Dente moment. Given the way valuations have soared, Hotmail could have fetched 4 Billion, not 400 million? Who knows?
If there was ever a perfect ‘Al Dente’ moment, it was when Steve Case sold AOL to Time Warner. A small fledgling company positioned itself so cleverly to an old media behemoth and the values that it extracted are now historical and soul shattering. Unfortunately, in the case of Time Warner, what they thought was ‘Al Dente’ Internet Pasta turned out to be Al Dente Rotting Garbage. Billions of dollars of value were destroyed cleaning up that horrible stinking kitchen (AOL+Time Warner).
Chef’s tip: Be your own Chef. Taste your Pasta at all times. When you think the time is right, just serve it – ‘Al Dente’ or not.
[via Rodinood]
Are you happily married?
Apr 26th
They say that happily married couples begin to look like each other as they age and grow older. I don’t know how far that is true, but I do know for sure that getting the right co-founder(s) for your business can be as rewarding as the soul mate you may have found or may still be searching for.
It takes two to tango
Hewlett Packard, Google, Microsoft, Yahoo, Larsen and Toubro – look around and will be stunned by the number of legendary firms that have been built by two or more partners. There is a magic that comes alive when like-minded people come together to create an enterprise. Sure, there are businesses like Facebook or Apple that are one man armies, but if you speak to Marc Zuckerberg or Steve Jobs, I am sure they would agree to some of these concepts:
Ownership:
The Soul of a Company rests with its founders. Sure, the heart lies with key executives and senior management but there is that critical heartbeat that only founders can emit. Pain is what founders feel whereas discomfort is what employees feel.
Ask any start up entrepreneur and she will understand. Hired folks who seem so dedicated and committed to your business suddenly become cold and unattached when it is appraisal time or even the weekend. It’s co-founders who have 2 hearts that beat simultaneously.
Race Tactics:
I often say that a start up is like a relay race. You run your course and then hand over the baton (Company) to the next runner (acquirer) who runs his lap. In reality, after the first lap, when the entrepreneur looks around for the acquirer, there isn’t anybody there. That’s when you need your partner to really take the lead so that you can slow down for a couple of laps at least.
I remember what Gaurav Deepak of Avendus Capital told me once. He said ‘Alok, when I get beaten down and am completely dispirited, I look forward to my partners to take over from me’. It’s similar to professional bicycle racing. The lead racer takes on the headwinds for a few laps and then slowly slips behind for the next biker to take the lead in rotation, always making sure that their team is leading.
I meet so many older generation and very successful entrepreneurs who run small and medium businesses. They have no co-founders and lead very sad lifestyles. They rarely take holidays, work almost all days in a year and seem so distanced from their families. They just haven’t understood the concept of co-owners.
Ditch the Horoscopes:
In the arranged marriage circuit, the easy way to drop the discussion for either the boy or the girl being matched together is to inform the mediator that ‘the horoscopes didn’t match’.
In my humble start up experience, my belief is that the similarity of the mindsets (more than training and skills) is what actually makes the value creation happen.
If your co-founders have the same set of principles, goals and dos and don’ts, then everything falls into place. It’s not about ‘I am the marketing guy and my co-founder is the tech guy’. It’s about a couple that THINKS in the same manner, even before doing.
Try this test – take Co-founders of a great Company into separate rooms and ask them ethically challenging questions – you will notice that their answers will be identical.
Role Playing:
There is a fine balance of role-playing in a relationship that works well. In the highly complex business world of today, you need clear demarcations of who is the aggressor- the person who fires and screams, the mild mannered founder – who should always be in front of the investors, the motivator – the leader and sure enough the partner who can call you in the middle of the night without any hesitation.
Study successful marriages carefully and you will see how beautifully role-playing is carved out. Couples quickly figure out their strengths and weaknesses and then distribute who does what as they start and raise their families.
In my businesses, I am the bad guy. The maniac, who loses his patience and just blows up like a fuse. But how do I get away with it? All thanks to my co-founders who balance my destructive behavior beautifully.
Sometimes it’s time to let go:
Sure, the best of relationships drift apart. Sometimes the departure can be ugly and sometimes just smooth and easy. The real challenge is to accept it and move on. I see folks clinging on to partnerships and co-founders who have stopped creating value and are actually destroying equity. It’s your role to step up and actually have the heart to tell your partner to move on.
Trust me, when you put on that Armor of Steel and let go, you will be so relieved by the burden that was crushing you and in a few months or years, your co-founder will thank you for the move.
Partners are what make life successful. Don’t ignore them.
[via Rodinhood]
Which floor are you on?
Apr 19th
I consciously notice the floors of the buildings that I visit and try to indentify the people who occupy these floors.
That’s where I see interesting patterns between management styles and the floors of buildings:
The Ground Floor
The people on the ground floor are ‘hands on’.
Mop in the hand, doing the dirty work. Sitting in an office that has no cabins. Talking to the people around them while trying to manage the crowds that come in. Quickly getting hot and tired. Blowing their fuse while trying to be civil. Just wanting to do everything themselves.
The challenge being on the ground floor is that it’s easy to lose perspective. You can’t elevate yourself and peep outside – to get a chance to view what’s new & happening in the big wide world outside or spot encroachments that appear dangerously near you. Your life begins and ends on the ground floor.
All the firms I work with and respect in my personal capacity – my PR & Travel agencies, Tax and Investment Consultants, etc. neatly fall in this category. The more the business leans towards ‘service’, the more it seems rooted on the ground floor. The owners of these ground floor shops are busy running their businesses while personally attending to demanding customers like myself. They rarely get a break to do ‘bigger’ things.
They are martyrs who are happy the way they are.
The 5th Floor
It’s that in-between, hanging, middle floor. Stuck between the ground floor and the top floors. If you operate from the 5th floor, you are involved in day-to-day ops and once in a while manage to get out and lean forward. You can leave your job or work unattended for say a week, before things go crazy.
It takes hard working people a while to reach the 5th floor. So it’s not even easy to abandon.
This also seems to be the ‘inflection’ floor for lots of entrepreneurs. You can get a view of the world outside and can really see where you stand in your current position and where you can reach.
In early 2008, I met an entrepreneur in San Francisco who ran a Photo Sharing website (piczo.com) for teen and tween girls. The business was fully funded by Sierra Venture Partners. Clearly, this Company and the entrepreneur were on the 5th Floor. The CEO could see the Facebook Tsunami hurtling towards him and yet could do very little to escape. He was so patient during our girls’ games discussion while silently acknowledging the death by drowning that awaited him.
My humble advise to those on the 5th floor is to stand on your window ledge and try to climb upwards. Do whatever you can to ascend that building even if it means using your bare hands & feet like Spiderman – with lots of hard work, prayers and hope thrown in. In the end, if you stumble and fall, it will be worth it because it’s better to launch again and aim for the to once again rather than getting stuck on the 5th floor.
The Club Floor (One below the top).
It’s the floor that belongs to those who have arrived. The kind of floor that’s always granted a special status. It’s the floor everyone wants to visit and check out. The occupants have the world at their feet, silently comfortable with the fact that they are living with one more floor above them.
Unfortunately, heights make some people nauseous. You have to have a strong demeanor to enjoy the height – while not falling sick.
I place Jerry Yang and Yahoo! at the Club Level. Both are cult brands and have attained a very lofty status. However the height of success made Yahoo dizzy. It fumbled. The mist surrounding that floor made Jerry Yang miss the big revolution of Search and Social and he along with his Company now remain humbled forever.
Say what you may, Yahoo will always remain an iconic media brand worth billions of dollars. They have their name etched in Gold on the ‘floor plan’ in the building lobby forever.
The Penthouse (with high speed elevators)
Google occupies the Penthouse. So does Facebook. Twitter and Linkedin will join them soon. These Penthouses come with special elevators, which are only meant for the owners of that floor.
The promoters of all these Companies have one amazing similarity – they ride their Penthouse’s high-speed elevators with a vengeance! One moment they are on the ground floor starting up new features and businesses from scratch – the next they are on the 5th floor reviewing what’s happened within the business and then, kaboom – they are back in their Penthouse doing mega deals.
Just look at the way Google monopolized search, bought Youtube, Admob and routinely buys businesses almost every week.
Larry Page, Sergey Brin and Marc Zuckerberg actually own not just the Penthouse but also THE Building. Each and every floor belongs to them and they are comfortable being on whichever floor the situation demands.
The Terrace (with the Helipad)
Rupert Murdoch and Steve Ballmer come to my mind when I think of Terraces with Helipads.
They have the Capital to ‘land’ anywhere, arrive on top of any building as they please and then buy it if they want. ‘Hey – the MySpace building looks interesting; let’s just buy the damn thing. I like this tower called ‘Search’. Let’s just call it Bing.com and party like never before.’
The guys on terraces with helipads fly out when they feel like. One building more or less doesn’t mean anything for them. Observe how MySpace is crumbling and Bing.com is going nowhere. Now look carefully and see that the party is getting wound up as the helicopter’s pilot is whipping up his blades to fly the owners to the terrace of another building.
The Murdochs and Ballmers of the world can never repeat the glory of starting at the Ground Floor and climbing to the Penthouse. They are too spoilt and old.
The Terrace (without a Helipad)
ADAG and the Sahara Group are on terraces, which, unfortunately, don’t have a Helipad.
Their buildings are on fire (ADAG earned the distinction of being the ultimate wealth destroyer last year).
All the floors (see the businesses of these groups) have major problems on them. There are leaks, foul smells and a general rot in their buildings. Sure, from the outside they still look attractive, but those are pretty looking scaffoldings that will soon unravel.
ADAG ‘inherited’ the building with all the floors which is surrounded by crooks and sycophants whose interest is only in looting the furniture and valuables of the building and then take off (Career plan for the unambitious – join ADAG for few years, make a salary of a lifetime and then quit happily ever after).
Such buildings are not only self-destructive but also dangerous – they will ruin the buildings around them when they fall.
Finally, given that we have traveled from the Ground Floor to the Terrace, the point to ponder is not to get stuck on the floor that you are on but to make sure you carefully move UP from whichever floor you are on.
[via Rodinhood]
Eleven Learnings I swear by!
Apr 13th
It’s been some fun filled years as a ‘digital’ entrepreneur. With a couple of good hits, some misses and a few big bets, I have chuckled, cried and framed these 11 learnings to carry with me all my life.
1. Just an ‘Idea’ is worth a ‘dropped cricket catch’
An idea by itself, despite its greatness, is worthless. Nada. Zilch. It’s all about massive and backbreaking execution. When I founded Contests2win in 1998 (first ever brand contesting site in the world), I thought that my idea would take the world by storm. Nothing of the sort happened. It took me a good 2 years just to convince people to meet me so that I could explain the idea!
I purposely say ‘dropped cricked catch’ because not executing a great idea can be as painful as dropping a cricket catch – you will not be able to forgive yourself. Example – the Winklevoss twins who had the original ‘facebook’ idea and innocently assigned someone else (hmmm…we know who) to execute it.
2. Don’t be a textbook.
Even God would be confused if she examined the crazy and unpredictable entrepreneurial world carefully. No one understands how some concepts become such global hits and neither can one analyze why the most brilliant ideas and execution failed. For example, I used to ‘check in’ once in 2 months in a hotel room on my travels. So, if you told me to ‘check in’ to my own house on an Internet map twice a day, via my mobile phone in return for virtual ‘ownership’ of my own home, I would have laughed at you like a jackass. Today I check into my home address like a fiend on Foursquare and fight like a marine to preserve my ‘mayorship’.
Don’t go by theories and textbook case methodologies while planning your business. Just take your best shot at your great idea and execute like hell. Then whether it snows or shines, it won’t matter.
3. Be ready to build the Suez Canal
It took 10 years to build the Suez Canal and it takes the same time to build a business from scratch. Even the biggest stars in the Galaxy – Yahoo, Facebook and Google were built painstakingly. Makemytrip.com (a star Indian travel portal) took 12 years to IPO. If you have the misconception that you can build a great idea into a huge business and then hope to exit in a couple of years and buy an island, I suggest you take a boat trip to the island and buy a shack. It will be the faster way of getting there and owning something on it.
4. Don’t play Rambo.
Unlike Rambo, trying to beat the world alone would kill you. Find a team that not only compliments you but also is better than you. They will allow you to – get financing; sleep at night and also get acquired. And sure, if you are a brilliant hermit and just can’t stand people, then write haiku poetry. At least that will help you attain nirvana.
5. Go back to the Altar and Marry again – this time your co-founder.
A VC recently shared an interesting joke with me. He mentioned that since a start-up venture takes 7-10 years to build into a Company of significance and given the fact that an average American marriage lasts about 5 years, the co-founder becomes more important than the spouse!
Employees are those whom you hire and can fire.
A co-founder is someone who can hire and fire YOU.
6. VCs are like God Parents
VCs are good godparents. They are rich, experienced, and very well connected. They can get things done. They have ‘seen the world’. VCs have a method of working and sometimes can be rightfully conservative in matters of corporate responsibility and ethics. VCs also demand respect and are selfish for your ‘Company’ (pun intended). So, go to VCs, explain to them your needs and then choose them very carefully (yeah, unlike parents, you can actually choose these godparents).
Be more honest with them than you can be with your spouse or your parents. And be patient with them. Make your ‘Company’ work for them and win along the way.
7. Spend your money like it’s a debt from Don Corleone
Think of all the investments (your own and that borrowed from VCs) in your start-up as debts that need to be paid back to Don Coreleone (of Godfather fame). You know what he does when you don’t pay him back.
I am not suggesting not to spend money – I am saying spend cash with ‘returns’ in mind – calculated on everything you spend on. The returns may be revenue generating or for creating assets that can be valuable later. But don’t spend on vapor coz that is something Don Coreleone will cut your throat for.
8. Enjoy a slice of Cake. And let others eat it too.
Imagine hosting a birthday party, inviting lots of friends over, cutting a large cake and then refusing to share it!
Don’t fight over equity dilutions. Give enough to Investors, partners and especially your employees so that the party becomes meaningful. If you have a meaningful exit after a few years, the slice that you kept for yourself (oops ate) will be worth more than the effort you put in!
9. Be a mechanic. Dirty your hands
When I joined my father’s factory and asked him a technical question, he didn’t know the answer. He had to ask his ‘jobber’. I didn’t like that and I traveled to Italy to become a ‘jobber’ myself. That greasy, dirty, hands-on experience on knitting machines partially made me who I am today.
Learn the nitty gritty of your business before you hire people to run different aspects of the venture for you. That will help you to understand the moving parts of your business and fix things immediately when they break down.
10. Go to a movie everyday
Going to work should be like going to a movie everyday. And here I am not exaggerating the emotion. Even on the darkest days of all start-ups and businesses, there is a pleasure of having done ‘something’ that felt nice, worth it or just painful pleasure. No matter what the result. If you can’t enjoy your work and it’s become like some crappy job, then you need to press the reset button.
11. Don’t be Marc Zuckerberg. Be your ‘Ownbook’.
Businesses, like people, have a destiny of their own. So many factors working within and out of your control can create successes like you never dreamt of or will just bust you.
Emulating someone and hoping that you can be ‘as’ or ‘more’ successful than him or her is a complete waste of time and emotion. Do your utmost best, be humble to everyone, tackle every challenge that comes your way and respect your circumstances. Then, if it works – wow! If it doesn’t, try again.
You and I, and every entrepreneur will have our own book to write. Who cares what it’s called and how many pages are in it?
[via Rodinhood]
Which Train are you Riding?
Apr 7th
Often, when I ride a train, I look at my co-passengers and wonder where have they come from and where are they headed. The train is my metaphor of traveling – not distances but careers and lives, and how the decisions that we make may turn into the best or worst journeys ever!
The Subway
Recently I had the privilege to interview someone who had changed his jobs 13 times in 4 years. When I told him that in 48 months, changing 13 jobs meant that he had not even spent an average of 4 months in a job, he chuckled and said, ‘Yes Sir, I am in big demand’. Honestly, I felt like charging him for the coffee that my office had served him. How I wish I had read his resume before getting into the room. (He was one of those frivolous introductions one has to meet as an obligation).
This call center guy turned analyst turned telemarketer turned support service guy is the quintessential ‘subway rat’. Folks like him ride short distances; work nights more than days, nibble away loose food (quick moneys) and live in the world of dark underground, in the sewers of negative progress. I have to yet meet a subway rat that came out of the subway alive.
Despite my revulsion, I still resolved to be helpful and asked him – ‘So, think of yourself 5 years from now. What do you think you will be good at? How long do you think you can keep doing this?’ Mr. Rat had already switched off by then. Possibly the bright lights of my office and my fatherly questioning was not his poison. He quietly slipped away.
A lot of folks are entrapping themselves by riding very short career plans. Sure it’s the quick money, but what they don’t realize is that they ARE losing something very important – Experience in a domain & a normal lifestyle!
The Inter City Trains
I so loved this train that I rode from a Central station (got there via a Subway) that took me to a beautiful hillside resort for a day and then got me back.
The journey lasted for a couple of hours both ways. It went via the city, across the country and into the hills. It made me think of young folks I know who have taken similar career journeys. Dedicated to a job for at least 4-5 years, learning the business and the domain, weathering the seasons of change, understanding the ups and downs – just like this train would have encountered everyday when it made its journey, and across the year.
It’s fun to ride this train once and surely not every day. There is a difference between a fast rushing subway ride that makes you meet exciting new people versus this longish boring ride that always goes thru the same hills and trees.
But it’s the penance of the journey that takes you a long way head. The Inter City takes you out of the Subway and into a real City.
Our best folks of 2win, after having spent 5-7 years in our group Companies have taken up senior positions in companies like Yahoo, Disney, Turner etc. These are the folks who have ridden the Inter Cities, bore the brunt of long journeys and have come out shining like Gold. Similar stories abound with focused individuals who took on a tough and grueling job for a few years, only to come out on top of their race and then join the biggest companies of their Choice.
The Long-Haul Train.
Almost 20 years ago, I rode a train that took me from Mumbai to Bhubaneswar (in the State of Orissa in India). I remember it being almost a 3 nights and 4-day journey. After the excitement of the 1st night, the 2nd and part of the 3rd day were dreadful. The journey never seemed to end. Then interestingly, post lunch on the 3rd day, a certain calm and patience came over me. I knew that the train was moving and headed towards its destination. I had to wait. During that period, I read, played cards and even studied a bit (shucks – there was no iPad then).
When I compare my two entrepreneurial journeys so far (a decade with my father making socks for him in his factory) and another decade as a digital entrepreneur, that train journey constantly flashes before me.
I see so many similarities between that physical train and the career train that I have ridden:
- An immediate excitement when the journey starts that quickly turns into boredom.
- Sometimes just getting frustrated that this journey is never ending.
- The Highs and lows – the small breaks at small stations which seem to give you freedom from entrapment of the train and yet the whistle that makes you duck into the train again reminds me of the mini successes I had enjoyed in my business ventures, yet knowing that it’s not the end and I have to go back and do much more.
- A routine inside the train that becomes a habit. So working day to day, doing the mundane and unexciting jobs while remembering that it’s all part of a long journey.
- Fellow passengers who get on and get off between stops and cities remind me of fellow colleagues who joined us, stayed in the companies and then hopped off when they felt they had done their distance.
Even the longest train journeys finally end in happiness. The rush of completing a long journey is incomparable. In longer planned careers, this is exactly the feeling. Folks become masters of an industry, revered for their experience and are recognized as thought leaders who have demonstrated the fortitude of surviving long and arduous journeys.
The Cross Country Trains.
I hear of train journeys that take months and sometimes years to complete – trains like the Trans Siberian Railway (takes weeks).
I have never attempted such a journey and doubt I ever will.
Career wise, it seems that you are committing to a journey that you cant get out of, hop off mid way and quickly go back to where you started. Imagine riding the Trans Siberian and getting of mid way in Siberia!
A lot of ‘government’ job employed folks remind me of this type of train travelers. People who take up a job in a PSU assuming that it will last forever. Not really caring where the train is even going as long as they get the monthly stipend and yearly increment. Folks who increasingly become ‘isolated’ from the real world remaining cocooned in this train that chugs along without care.
An uncle of mine had proudly got his young son married a few years on the boast that he was employed by Air India and hence a job and salary was guaranteed. I was always intrigued how any Company in the world could generate a perpetual cash flow for itself and I felt worried for the girl and her family. A month ago my uncle was complaining that Air India was delaying salaries. And the tragedy is that his son will never be able to work for anyone else. If you sit in a train for 7 years and get fed and housed, you will never know what to do if you land up on a stationary platform.
Finally, what kind of train travelers are serial entrepreneurs?
Believe it or not – they ride the Subways, Inter City and Long Haul.
Not as passengers but as the train drivers. Never getting down.
Entrepreneur Advice: Madam, Are you Pregnant?
Mar 29th
We had established a 30 odd headcount office in Shanghai in early 2001 and were steadily ramping up our operations as Mobile2win, China. Contests2win and Softbank were the original investors and we were operating under strict Mainland China’s government’s guidelines.
As the paperwork increased, we began looking around to hire secretarial staff. As soon as we had spread the word, we intriguingly began receiving resumes of many women – all in their twenties, married and well settled. One afternoon, one of our rather talkative and assertive Sales Head took me in confidence and revealed something quite chilling – He said that all those women who had applied were actually pregnant and were applying for jobs, that they could lock into and then claim maternity benefits as per the dictated statutory guidelines. This was a standard ploy of gaining ‘free employment’ and we should be avoid falling into such traps.
Simultaneously, I was pavement pounding the streets & meeting clients in frozen China. I had a strange situation on my hands. Across Shanghai, Beijing and Guangzhou, large Chinese local Brands dominated the marketing scene and were big budget spenders. Sure, the Fortune 500 brands were around, but the Chinese brands made quick spend decisions on Internet marketing and were lucrative customers.
The only problem was that all these Chinese brand managers expected ‘gifts’ to be left behind for them. It was not money but surely enough a bribe in exchange for business. My local Chinese team members who accompanied me told me, ‘Sir, this is the way business is done in China’.
Both the cases above presented ethical dilemmas to me. They forced me to walk the tight rope of being ‘righteous’ vs. ‘practical’, ‘academic’ vs. ‘practical’ and most importantly a ‘rigid businessman’ vs. a ‘practical one’.
Was I supposed to ask the ladies who came for the interviews indirect questions leading to figuring out if they were indeed pregnant? Pretend that we needed men secretaries’ because they might be required to work the night shift?
In my meetings with the local Chinese firms, was I supposed to carry gifts bought in China and pretend they were from India and just hand them over as a token of friendship?
This blog post examines the challenges of ethics and principles in entrepreneurial and start up life.
Don’t become a cheat if someone cheats you.
Very recently, in one of the group Companies, my COO and I had vocally assured a newly recruited Business Development executive (21 years old, 15k monthly salary) that she would be compensated for the value of ‘barter’ deals that she bought into the company.
Just after a few television spots in return for a couple of web pages, she produced a commission statement of Rs 81,000 for just the first month!! I first thought she was confused but quickly understood she had the mind of a cheat.
All she had done was reproduced the top ‘rack rate’ (stated nominal value) of the media of the TV spots we had received as barter (Rs. 40 lacs), without considering that the value we had provided in exchange to the channel was actually only Rs 1 lac . This rack rate is the typical exorbitant rate you see at the back of a hotel room door (for statutory purposes) – despite you having paid less than half for it. I logically tried to explain to her that Companies exchange the ‘true’ value of goods in the end – so despite the printed rate of the media value being 40 lacs, since we had provided the channel value of just Rs 1 lac, the TV spots we had received were also worth 1 lac since that inventory was unsold by the channel! Simply explained, if I gave you a ball point pen and took another one in return from you, the real value exchanged was Rs. 10(actual value of buying the ball point pen). Sure, as a kid (or better as cheats), I can pretend that my ball point is worth Rs 400 by putting a sticker on it but I was still exchanging it with you for Rs 10! (And hence I am not a kid –just a fraudster).
She insisted that she be compensated on this ‘notional’ value of 40 lacs- given the commitment made to her.
We paid her without any more discussion and surely ‘relieved’ her of her post also.
The lesson here is that we DID not stoop down to cheating even though we were cheated upon. There was no written agreement we had with her for this payment and could have easily refused to pay but we did not.
Why did we pay her?
Because these situations test the principles and the moral fiber of a Company. There is no other way of ‘testing’ where you stand on ethics without such real situations!
In the evening, I chuckled and thought of the 80k paid as fees for an expensive GMAT test of Integrity – whose results thankfully were instantaneous and on which we had received a perfect score!
Being practical.
A couple of years ago, a labor inspector arrived in our office to check our provident fund records. To his utter disappointment, he found that everything was perfect and hence there was no scope for a bribe.
He still insisted on a ‘gift’. When we refused, he did the unthinkable – he sat down on the visitor’s sofa and refused to move. Not just the first day but 3 days in a row!
On the 4th day, tired of having an ugly, smelly owl in our pristine office, we paid him some cash and bid him a happy departure.
I found it practical to bend my ethics a bit in return for the sake of sanity and the healthy atmosphere of the office!
Taking a bullet
A few months ago, one of my ex co-founders ‘informally’ partnered with c2w (contests2win) to launch some niche vertical sports sites.
He came from a real world economy and had lost touch with the digital media world for over 5 years. He spent months in our office learning the ropes, getting lots of art and programming development work done and just leveraging the entire resources made available to him.
A few weeks before launch, this partner took me in a conference room and declared that he had new ‘views’ on the partnership %’s that were earlier agreed upon and that he was not happy to stick to the original commitment.
We had this meeting at 12:58 pm. I told him that I would think about it and revert. At 1:01 pm, I wrote a mail to him saying that there was a fracture in our business thinking and hence the deal would not be possible.
He offered to buy out what we had made in terms of the product, but we took a call and swallowed a Rs 25-lacs hit (actual cost of time and money) rather than selling out on our ethics and principles.
In this case, we made the gun & the bullet and trained the shooter – only to have him shoot us in the face.
The satisfaction was going home with the headline that we don’t SELL principles, but only our services. And they cannot be bartered!
So how did we deal with the China situation?
I did not heed my China Sales head’s warning and continued with our interviews. Amongst the 3 ladies short-listed, we finally selected a simple, homely (and possibly pregnant) lady.
9 months later, there was no baby.
I later found out that the Sales Head was trying to place a couple of his cousin brothers in the Company and hence had fabricated the entire story!
As far as the Chinese brands went, we did not work for them. Instead we focused on the Fortune 500 brands and won strong business from them – leading to Siemens investing into the Company in 2003 and the Walt Disney Company buying out Mobile2win China in 2006. Neither Siemens nor Disney would have touched us if we had started bribing our way into business.
Mao said – behind every great fortune, there is a great crime.
Rodinhood says – Inside every great entrepreneur throbs an ethical heart.
[via Rodinhood]
Cash is King. Long live the King.
Nov 19th
This post is dedicated to the longest living and unconquered King of all times – ‘Cash’.
Once you invite the King, you can’t cancel later.
In 2001, contests2win.com (my first Internet Company) had pioneered a very interesting concept called ‘Boomerang Marketing’. It involved creating a contest that sent visitors from c2w.com to the client’s website, getting them to register on that site and bringing them back (boomerang) to c2w.com and tell us their new userid on the client’s website. In return, some users (the lucky winners) received handsome prizes. This was probably the first of its kind ‘Cost per Acquisition’ business model on the web. And since c2w was heavily trafficked, this was a very lucrative business for us.
Read more after the break.
VC = Venture, Vapor, Vulture & Vampire Capital
Nov 1st
‘VC’ business in India celebrates 10 years in 2010 and I am inspired to write this column as tribute to the best form of Capital ever invented; to dive deep into the skin of this monster and present my mini learnings in this space.
Read on after the break.
Which Train are you Riding?
Oct 18th
Often, when I ride a train, I look at my co-passengers and wonder where have they come from and where are they headed. The train is my metaphor of travelling – not distances but careers and lives, and how the decisions that we make may turn into the best or worst journeys ever!
Read more after the break
Have you found your Queen of Hearts?
Sep 30th
If I ask you to randomly pick up one card from a well-shuffled deck of 52 cards, can you predict which one will you pick?
The ‘chance’ of you picking up a Queen is almost the same chance you take when you start up a business, become an entrepreneur or even take up a successful and satisfying job.
As educated and well-read professionals, we loathe the concept of luck and chance and always believe that hard work, determination, brains and passion will make us win. I say ‘most likely’. It is the unsaid and ‘swept under the carpet’ factor of LUCK that tips the balance one-way or the other. The combination of luck and effort is what makes the magic happen!
Read on after the break
