Innovate Or Die: The Cost Of Doing NOTHING !

 

 

 

 

 

 

 

 

Life is full of magical times, but do you wait for that special ‘Kodak Moment‘ any more? When you turn on the television, do you expect the ‘Blackberry Boys‘ strutting their stuff in a commercial? While catching the latest movies or TV show on Netflix or Amazon Prime, do you come across a slogan that proclaims ‘Be Kind, Please Rewind‘? Have you seen the words ‘The Document Company‘ anywhere lately?

The answer to all of these questions would be a resounding ‘no‘ – for the companies behind these once-popular slogans have either given up their market-leadership positions, declared bankruptcy, shut up shop – or are still present, but in a considerably weakened position. According a report, a measly ~12% of the companies from 1955 Fortune 500 list managed to make it to the same list in 2014 (only 61 companies were present in both the lists). One of the very few constants in the domain of business is ‘creative destruction’ – with old players struggling to keep up as new technologies arrive and markets change, and new companies taking up their positions.

The ability and willingness to innovate play big roles in determining whether a company or a brand – no matter how strong it might be at a given point in time – will be able to survive in the long-run. The basic business models and way of operations in practically every industry keep evolving – and there are many instance of big companies not being able to keep up with the changes, and consequently, going out of business. ‘Innovate or die’ has become the watchword for businesses across the globe. Many famous companies from earlier decades have failed to integrate that elusive ‘innovation culture’ in their working, and have ceased to be relevant at present. Interestingly, the importance of ‘innovation‘ is not limited to IT companies only – and several governmental and social projects have also failed, simply because the brains behind them were not proactive enough. Here are some classic case studies of companies that had ‘ignored innovation’, chosen ‘not to do anything’, and suffered as a result:

  • Mistakes-on-demand from Blockbuster – The two main factors for sustained success in any field of business are: a) identifying future trends, and b) grabbing present opportunities. Blockbuster LLC – once the undisputed leader in the video rental industry – failed spectacularly in both. The company had 9000+ stores across the world, and well over 84000 people on its payroll in 2004 – with hardly any competition in sight. What’s more, it had the chance to acquire Netflix (the company which is most often referred to as the principal cause of Blockbuster’s demise) in 2007, with CEO Reed Hastings practically imploring Blockbuster to take over his company. A mix of complacency, myopic vision and internal board squabbles led to Blockbuster doing nothing at the time. As internet became more and more mainstream, and Netflix started offering online video-streaming options (no more ‘late fees’, no burgeoning costs on physical stores/retail locations) – Blockbuster was unable to cope up, lost customers, and collapsed in a big way. The growth of Netflix ushered in disruptive innovation, and Blockbuster was caught like a deer in headlights.

Note: John Antioco was the CEO of Blockbuster at the time it passed over the opportunity to acquire Netflix.

  • Flight nosedives for Pan Am – With not enough proactiveness and more than little nudges from unforeseen external factors – Pan American Airlines was forced to shut down operations in 1991. The company had its proverbial time under the sun for 64 years (having been started in 1927) – and at its peak, was easily the biggest player in the commercial aviation sector globally. To be fair, Pan Am was innovative enough (upto a certain point) – having overseen the flight of powerful jumbo jets and computerized reservations. However, the terrorist bombing of Flight 103 (in Scotland) resulted in considerable negative publicity for the company – which had already started to bleed as a result of the early-70s oil crisis, dwindling passenger demands, and serious overcapacity problems. The invasion of Kuwait in 1990 was probably the final death knell in the flight path of Pan Am (as oil prices rose sharply). Once the biggest name in the business, Pan American Airlines simply could not adapt to the changes in its operating environment.

Note: Apart from Pan Am, two other major airline companies – Midway Airlines and Eastern Airlines – also shut up shop in 1991.

  • Picture-not-perfect for Eastman Kodak – One of the classic cases of how years of inaction can kill off a perfectly good business. Founded in September 1888, Kodak went from strength to strength right through the previous century – as the popularity of its cameras and films spiked. Remarkably, the company had the chance to move into digital photography as well – with an employee (Steve Sasson) having created the world’s first digital camera way back in 1975. Instead of jumping on the opportunity, those up top at Kodak totally ignored it – due to their failure to understand that digital photography was the future, and a reluctance to ‘cannibalise’ the sales of their existing lineup of cameras. To further complicate matters, Fuji started to undercut Kodak with its lower-price films – while Polaroid started taking away the market with ‘instant photos’. Kodak tried its bit to stay in the game with the Advantix Preview camera system (>$500 million was spent), but the results were disastrous. Remarkably, the company simply chose to stay in denial for many years – as film cameras grew obsolete, and digital imaging became mainstream. The struggles continued, and Kodak was left with no options other than to file for bankruptcy in 2012.

Note: Photography is not just about films and cameras – and that’s the biggest thing that Kodak could not understand. If the company had managed to position itself as a player in the ‘visual storytelling’ business, it might well have been still flourishing. As it were, the digital age just passed Kodak by.

  • (Dis)Connecting People: The fall of Nokia – Last year’s Nokia smartphones have done reasonably well – but the company is nowhere near replicating its halcyon days in the late-90s and the early-’00s. At the time, no one made better mobile phone hardware than Nokia – and the Finnish company had almost no competition to be worried about. What’s more, the company had been surprisingly agile right through its history – having moved in and out of several lines of business, identifying telecom as the focal point, and even bringing out the first smartphones in the world (the Symbian Series 60 handsets) in 2002. In fact, the Nokia Communicator was launched as early as 1996. However, the company dithered while deciding whether to join the Windows Phone platform – and more importantly, it continued to believe that hardware was the most important element in a mobile device – while software wasn’t something worth too much thinking. This short-sightedness is precisely what that led Nokia to the brink – with newer players like Apple and Android showcasing the value of mobile applications, and how a handset can do much more that only send/receive calls and text messages. In essence, Nokia was not quite in favour of doing the necessary transition – and was sadly mistaken in its belief of being able to catch up with smartphone vendors later. Microsoft acquired Nokia in September 2013 (a ‘monumental mistake’), and sold the mobile assets in 2016. The belated attempts to use the Android platform cannot mask over the heavy price that Nokia had to pay for not innovating – properly and in time.

Note: The squeeze from the high-end smartphone models and the low-end developing markets (with brands like Huawei and HTC joining the fold) well and truly stifled Nokia.

  • Yahoo! The fall of the mighty – For a company that survived the big dot com bust in 2000 and had ~10X increase in sales in the 2001-2008 period, the fall was – let’s just say – unforeseen. The tale of Yahoo! Is one of a series of missed opportunities, and a futile determination to stick to being a web portal – at a time when its principal rivals were turning to search, or becoming social media giants (or, for that matter, better news aggregators). Unbelievable as it might seem now, Yahoo! messed up chances to acquire Google (Terry Semel, the CEO at the time refused to agree with the $3 billion price) in 2002, and Facebook (the deal would have gone through if the offer had been even $0.1 billion higher) – while a great takeover offer from Microsoft was also scorned at (the bid of $44.6 billion was deemed as too low). The inputs from a string of CEOs ill-equipped to save the sinking ship did not help matters – and Marissa Mayer’s ill-advised (and outrageously overvalued) acquisition of Tumblr was yet another gross mistake. At one point of time, Yahoo! released 24 different company descriptions in 24 years – clearly indicating a lack of focus. A failure to make it big as a search engine (a deal was struck with Bing in 2009), poor performance as a social media site, and the general drop in popularity of web portals ensured that Yahoo! had little chances of a comeback.

Note: With Flickr, Yahoo also had the opening to make a Instagram-like photo sharing portal (well before Instagram!). That opportunity was glossed over too.

Taking A Break…

Even half a decade back, a ‘family lunch’ meant just that – everyone stepping out together to a nice restaurant. With the growth of food tech in general, and food delivery apps in particular – it has become easier than ever for the average Joe to order food without leaving his comfy couch. Restaurants, irrespective of their size, have also realized that they need to be a member of these services (Swiggy, Foodpanda, Zomato, etc.) to remain profitable. By April 2016, the number of active users of the Swiggy app had crossed the 1 million mark.

And Back…

  • Unused innovations at Xerox – If you do not innovate, you die. If you do innovate but then take no tangible action on your innovations, you die too. Xerox – the once-immensely popular print and document processing service provider – is one of the best examples of the latter. Its ‘914 photocopier’ was a roaring success, there were no dearth of resources, and ‘scientific excellence’ was something that the company became renowned for. Established in 1970, Xerox’s Palo Alto Research Center (PARC) threw up a series of top-notch innovations – right from graphical user interfaces and laser printing, to PC prototypes, LANs and mouse – over the next three decades. Sadly though, Xerox never grasped the fact that it could move out of the ‘office photocopier’ business, and become a name to reckon with in the overall computing industry. The company just sat on its valuable innovations, and gave them away to competitors (Microsoft, HP and Apple were some of the companies that benefited from Xerox’s technologies). In 2000, the share price of Xerox had dropped to below $4 – and many short-term debts and other problems had piled up. Another tragic tale of lost opportunities.

Note: According to recent reports, Xerox will be taken over by Fujifilm. The deal will be worth $6.1 billion.

  • Blackberry fell off a cliff – The rise and fall of Blackberry (Research-in-Motion) has a lot in common with that of Nokia. Once considered the ‘ultimate smartphone’, Blackberry simply got too comfortable with its heady success – and failed to look out for the technological disruptions heading towards the mobile platform. Company co-founder Michael Lazaridis once famously said ‘I don’t get this’, while pointing at an all-touchscreen handset – a quote indicative of the tunnel vision that the company suffered from. Indeed, the management could never think of a smartphone as anything more than a mobile phone with a QWERTY keypad, decent network connectivity, options for push email (a USP of Blackberry phones) and robust security features. The world had, however, moved on – and by the later years of last decade, both Apple and Google had started to churn out handsets that qualified as ‘all-round smart devices’. The biggest point of difference was the third-party app support – with the Blackberry App World remaining a pathetic distant cousin of the App Store and the Play Store. Odd product choices damaged the situation further – with the weird Blackberry Passport having few takers. The first Blackberry touch-based smartphone (running on Blackberry 10) came out six years after the launch of the first-generation iPhone. Blackberry Messenger (BBM) was, on the other hand, replaced by WhatsApp by most users. Innovation and implementation have to be fast – and Blackberry missed out in a big way. From being the undisputed market leader, the brand is presently flirting with irrelevancy (0.0482% market share last year).

Note: In late-2016, Blackberry handed over its hardware-making licenses to TCL. To be fair, last year’s TCL Blackberry KeyOne did fairly well in terms of sales.

  • Enron ran out of energy – A mixture of innovation shortcomings and unethical financial practices spelt doom for Enron (founded in 1985) – which had once been listed as one of the top 6 energy companies in the world. By 2000, Enron was in the list of top Fortune 500 companies (peaking at number 7) – and was widely viewed as the most ‘innovative’ company in the United States. Soon after though, things started to go pear-shaped for the company – firstly with the broadband telecom networks that caused big losses, and then with the rapidly falling market capitalization figures following the recession at the turn of the century. Instead of coming up with solid plans to tide over the problems and make a smooth transition, all that Enron did at the time was hide/overstate its actual earnings – all under the watch of the then-CEO Jeffrey Skilling. It later came to light that the company had been inflating its income since 1997 (by close to $600 million). From a high of $90.56 in 2000, Enron’s share price tumbled to $0.26 in December 2001. The company had the base and the resources to tackle the problems and stay innovative – but chose to go with underhand practices. The infamous ‘Enron Scandal’ was the final nail in the company’s coffin.

Note: Arthur Andersen, the firm that had famously tried to destroy Enron’s audit documents to cover up losses, made a comeback in 2014, with ‘Andersen Tax’.

  • Posts stop for USPS – The United States Postal Service presents yet another case of business inertia. It has been in existence since 1775 – and has witnessed huge volumes of posts and document transfers in the previous century. Over the years, USPS has been innovative enough – taking the American postal system to higher efficiency and convenience. However, it has not been able to keep up with the current age of digital, paperless communications and smarter service providers – as rivals like UPS and DHL have have grown and consolidated their positions. USPS, meanwhile, have hardly done anything to retain its competitiveness – and the unfavourable government regulations have not helped either. Postal services as a whole are falling behind – USPS, with its outdated services, are, expectedly, suffering. Faxes, emails, text messages have all combined to bring down the dependence of people on snail mails drastically.

Note: In a bid to cut down on costs, many locations of the USPS have been closed down in recent years.

  • Fading of Borders – Bookstores are good. And there was a time, when there were none better than the Borders Group – which started out from Ann Arbor (Michigan) in 1971. Throughout the US, there were superstores – and the company went for international expansion, with stores in Canada, Singapore, Australia, New Zealand and the United States. Sometime in the 90s though, the popularity of the Borders bookstores started falling – and ironically, the ‘size advantage’ that it had was what that turned against them. In other words, the huge bookstores – established on prime real estate locations at hefty charges – were no longer viable, simply because there were not enough sales. The need of the hour was prompt innovation – which, in this case, meant moving on to online sales of books (just like principal rival Barnes & Noble did). Borders did not consider the fact that the ‘traditional way of buying books’ was fast going out of fashion – and curiously, invested more on expanding their physical stores. No heed was paid to the opportunity of creating an ebook reader like Nook or Kindle either. The idea of moving to CD/DVD sales just as the world was warming up to digital music did not make much sense – while outsourcing book-selling rights to Amazon did not benefit the company. The widespread economic recession in 2008-09 was a big blow, and a couple of years later, the company was liquidated (with almost 11000 employees laid off).

Note: When Borders belatedly turned its attentions to ebooks, Cruz and Kobo were some of the devices it created ebooks for. The attempt was half-baked, the readers were not popular, and the Border ebooks failed.

Time for another break…

Unwillingness to innovate – or a failure to innovate ‘correctly’ – is a problem that bugs the public sector as well. There are many instances of governmental bodies planning perfectly good projects – which flop due to inadequate or improper innovations (i.e., poor execution). There are two broad reasons behind the failure of government-initiated innovations:

  1. Fear of failure – While the margins for error in the private sector are also decreasing, entrepreneurs still feel that they can take the occasional risks to take their companies forward. In the public sector though, a single mistake can lead to huge losses and probable firing. Staying ‘safe’, and well away from (potentially rewarding) risks is viewed as the better option.
  2. Detached from reality – The greater the bureaucracy in a government, the more is the chance of senior-level decision-makers being detached of the actual situations at the grassroot levels. As such, they can greenlight innovative drives that might have worked well in an ‘ideal’ economy – but fall flat due to the many existing bottlenecks. Unless the person/group of people have updated, real-world knowledge, innovations – however well-intentioned – will fail.

Back again..

  • Tower Records come tumbling down – Another flourishing company that was brought to its knees by the typical ‘big company syndrome’. From Elton John to Colin Hanks (who made the ‘All Things Must Pass’ documentary as a tribute to Tower Records) – celebrities and general public alike were big fans of these physical music stores. The collections and variety were impressive – and music could also be ordered through the stores. Founded by Russ Solomon, Tower breezed through the 80s and the 90s with high sales and very impressive revenues. However, no one from the company realized in time that Tower Records was becoming too big for its own good – with its aggressive expansion plans. As internet grew and digital music became the go-to option for more and more people, the large retail stores grew non-viable. In addition, the competition with big players like Walmart and Best Buy (who started giving out hefty discounts on music records) hastened the end for Tower Records. A combination of digital platforms like iTunes and Napster, along with indiscriminate expansions, killed off what was – at one time – a market leader in the music industry. Tower Records filed for bankruptcy in 2004 and 2006.

Note: Illegal music downloads are causing heavy damages to the music stores. For Tower Records, an inability and an accompanying unwillingness to adapt to the changing environment, made the difference.

  • General Motors stutters – From being top of the class to going bankrupt (in 2009) – the 101-year old journey of General Motors (‘old GM’) makes for an interesting read. By 1954, the company had a whopping 54% share in vehicle market of North America (in 2009, that figure had dropped to <20%). The need to innovate and improve was completely bypassed by GM – with the changing customer needs & preferences, and the latest automotive technologies being reduced to footnotes. Over time, the vehicles that GM turned out came to be viewed as outdated and uncompetitive (the time to make them was also inordinately high). Upstart competitors started to eat away at the market – and the financial policies taken by the company (particularly since 2006) were mostly poor. Moreover, the infrastructure involved huge amounts of fixed costs (unlike many of its rivals) – and as demands slackened, the company still had to bear heavy expenses. The acquisition of Fiat was poorly handled. However, the standout ‘failure to innovate’ factor for GM would be the killing of the EV1 electric car. There is a lot of buzz over autonomous cars at present – and GM could have had a huge headstart if it had persisted with the EV1.

Note: ‘New GM’ came into being in 2009. It bought many of the assets (and the ‘General Motors’ brand name) from the now-defunct ‘old GM’.

Food For Thought…

Innovation is something that encompasses nearly every facet of our lives. It would be a folly to consider its scope limited to businesses. For instance, the importance of social innovation is steadily increasing – with equity, fairness, social inclusion and collective well-being being some of its key elements. Just like a company suffers if it is not proactive enough, a society stagnates if ‘social innovations’ are ignored.

The Buck Does Not Stop Here

There are many other instances of well-known brands getting caught up in a time-wrap, failing to innovate as per circumstances, and facing failure. From Napster, Abercrombie & Fitch and Polaroid (which, incidentally, was one of the ‘Kodak-killers’), to Radio Shack, Toys-R-Us, MySpace and Pets.com – there is no dearth of businesses that were flourishing – only to be overtaken by competitors later. Remember the Motorola RAZR? It was a breakthrough device at its time – but its popularity was short-lived.

The Lessons Learnt

So, why do companies stay away from the required innovations, even when they have the brains and the means to move with the changing times? The reasons can be multiple – right from a reluctance to make the necessary additional investments, an over-reliance on strategies/products that were successful earlier, and not being prepared for sweeping market changes (more often than not, caused by technological advances). There are cases of companies that are doing well getting into a comfort zone…a veritable ‘innovation blind spot’ – and failing to pay heed to warning signs.

The biggest mistake that all of the companies listed here (and many others) made was to try and find the ‘one best way’ to do business – a way that will stand the test of time. However, there is no such holy grail of operating. Unless a brand transitions itself over time and adopts innovations (i.e., embraces an ‘innovation culture’) – the act of not doing anything can prove to be very costly.

It has been proven time and time again that status quo does not work in the business field. Innovate or perish – after all, that’s the name of the game!

12 REASONS WHY MOBILE APP STARTUPS FAIL

It might be pretty unbelievable but most of the startups investing in mobile app development are not able to set foot in the market from the very outset. Though the number of mobile apps are growing at an increasing rate, but the revenue from each are falling gradually.

According to Gartner (An American Information Technology research and Advisory company) statistics reveal that:

“In 2009, worldwide mobile app downloads amounted to approximately 2.52 billion and are expected to reach 268.69 billion in 2017.”

Hence with such a vast user base and thousands of devices being in circulation, there are innumerable app developers who wish to create the next best mobile app in the market but are unable to do so. Most of the new apps that are developed gain no or very little attraction and the mobile app startups fail miserably.

Why?

It is important to understand the following factors which cause this to happen so that an app developer can keep it in mind before developing his next successful app.

1.Wrong business model:

According to Gartner, “Less Than 0.01 Percent of Consumer Mobile Apps Will Be Considered a Financial Success by Their Developers Through 2018.” This is a depressing data in the world where people are using apps as pulleys to lift themselves and their business up. Neither focusing too much on technology is good nor on marketing. There must be a clear line of separation between the technology organization and the product organization. The right pricing must also be determined to keep the product competitive.

2.Premature marketing strategy:

In case of any business, marketing plays a vital role in taking the business to great heights. Failing to own a strong and well-knit marketing strategy will automatically prevent the product or service to fail no matter how good it is. App developers often concentrate more in developing and executing the app overlooking the marketing process which in turn makes the app a failure. Often neglecting the market competition leads to slow adaptability with the market reality. Therefore people with the right skill-set and the right vision must be given the task to get the app enough promotion.

3.Research of already existing apps:

The owner must make sure of gathering as much information as possible about the competing/similar apps already available in the app market, and analyze their differences. Slowness in app launching or launching it too early without standard publicizing may also prove fatal. It is the owner’s responsibility to launch an app that is different from other existing apps in its own way which will mark its uniqueness. He must also pay attention to the fact that how much better his app is serving its users than the other apps. Along with an exclusive name an app must also be useful to its users to sustain in the market for a longer period. Name can be anything, but it should just be catchy enough for people to remember it.

4.Poor app design:

Statistics reveal that around 8 percent of all app submissions on various operating systems fail or are rejected only because they have a bad design. Bad designing basically means that the app is not user friendly. This results in the app not being able to create an impact as expected and the app gets discarded immediately and fails miserably. A successful and well-designed app must have a proper user interface, high resolution, perfect placing of buttons and must offer a good user experience.

5.Undefined target audience:

Any app is built for a specific audience of users. The better it’s specified, the fewer are the chances to make a half-baked product. Thus the developer must see the needs, the goals of the app, the problems it will solve – and thus the most needed features will be defined and implemented. A startup owner has to think of mobile customers in the first place.

6.Consistency of the app:

If an app does not perform equally well on various devices, operating systems or networks, users become frustrated and often the mobile app fails. An app developer should update and test his app from time to time and ensure that the app works on all spectrum smoothly. This will also ensure maximum performance and user satisfaction.

7.Too many co-founders :

Some times too many co-founders add a lot of confusion with too many suggestions and ideas which not only delays the process but also results in the app’s failure. Again on the other hand a single co-founder lacking leadership qualities, can act as a silent killer too. Thus it is better to have not more than two co-founders who must have mutual understanding as well as free will on each others’ ideas. And in case of a single co-founder he must possess all the qualities of a good leader who is capable of guiding his team to win success.

8.Expecting too much:

It is very obvious as well as positive to have expectations. But expectations shall never be great. Especially in case of Gaming apps the app owners must not have too much of expectations. It is necessary for the owner to keep in mind that people will not play a game lifelong, they will gradually get bored of it at one point. Whereas Games launched for any series or movie promotion are nothing other than gimmick. Such apps tend to fade away in the competitive market in no time. Hence it is better not to invest in such short term ventures.

9.Updates:

The App market is changing at a constant pace. As per customer requirements the app trend too keeps changing. That is why the developer must be quick and resolute to make a decision that will push the startup higher, react and adapt efficiently and quickly, be ready for changes in the plan. If apps are not tested frequently, not marketed rapidly and and not continuously delivered it will not be able to reach the desired success.These changes may not be that radical; but it’s never bad to be prepared. A good app developer shall not prolong the next release and instead focus on frequent updates and bug fixes making the app reliable and favorable.

10.Flawed customer support:

To figure out the reasons behind the failure of an app, it is important to pay attention to the user’s comments. The feedback that a developer gets from its app users explains it all. Genuine users are particular to leave comments which can help a developer realize what is truly wrong with the app and how it can be saved from drowning. User’s point of view can also help revive a drowning app and make it a favorite among the users if only the comments and feedback received are taken into proper consideration.

11.Security (Too Much or Too Less):

Even in case of a highly attractive app if there are too many layers that the user has to pass through to access his/her data then chances of that app to survive automatically diminishes and probably soon it gets replaced by another one. Whereas if on the other hand there are no security protocols followed, then the users may not be able to trust the app and the data feed in the app at all. As in case of Banking apps there are usually a number of security checkpoints which generally irritates the user. Hence it is important for the app makers to strike a balance in the security systems, instead of hyping it up or completely neglecting it.

12.Not every idea is that great, and not every failed idea means failure:

The development and execution of an app is vital and forms the app’s basis come what may. Ideas which are inferior and fails an app to create an effect on the users are the ones that the developer should instantly be done away with. As the developer will only end up wasting both time and money on developing a useless app. The startup owner must be sure to gather as much information as possible about the competing/similar products, and analyze their differences. Slowness in app launching or launching it too early without standard publicizing may prove fatal. The idea needs to be closely scrutinized and checked for actual potential before one starts working on it.

Wrapping Up:

These are twelve reasons why a mobile app startup may fail in the app market. Following only these notions does not guarantee success – there are many other factors that may tip the scales against you. And the percentage of failed startups is high. As for instance sometimes it is sheer luck which changes the destiny of a single app. A lot of it is affected by unfortunate timing. If an app is launched on a Monday morning, during a period when there is a money crunch prevailing in the country’s economy or in case of a gaming app if it is launched during the exam seasons in such cases the app does not meet the expected target. In such situations it is found no matter how nicely the app is done it never picks up, it just gets lost in between the millions of other apps.

But this is business, and moving on, keeping these things in mind, will increase your chances for success in the mobile market. Ignorance of even a single issue can be the reason for the failure of a startup business and mobile strategy.
What are your personal experiences? Do put them in the comments below – I would love to hear them !

Slow and steady wins the race.

The Amazing Chinese Bamboo Tree

Recently I came across a small story which is quite famous. The Chinese Bamboo seed is planted in the mud. Constant watering the seed is essential. Fertilizers are put in, but no matter what, very little seems to happen the first year. Despite your efforts, only a tiny shoot pokes out of the ground.

You do the same for 2nd year. Nothing happens. You feel perhaps two years of effort are lost.

3rd year, nothing happens.

4th year, nothing as well.

5th year, nothing. You seem to lose patience.

This continues to 8th year.

Then, suddenly after 8 years of fertilizing & watering, the bamboo tree sprouts & grows 30 ft in just 3 months!

Did the little tree lie dormant for years only to grow exponentially in the 8th year? Or, was the little tree growing underground, developing a root system strong enough to support its potential for outward growth in the fifth year and beyond? The answer is, of course, obvious. Had the tree not developed a strong unseen foundation it could not have sustained its life as it grew.

These days most people don’t have the capacity to focus on something long enough to make it work. If it’s easy, it won’t last. How big are your dreams? Are you willing to do what it takes?

Had the Chinese bamboo farmer dug up his little seed every year to see if it was growing, he would have stunted the tree’s growth.

Here is a poem by Henry Wadsworth Longfellow that is as true today as it was when he wrote it over 100 years ago:

“The heights by great men reached and kept
Were not attained by sudden flight,
But they, while their companions slept,
Were toiling upward through the night.”

Live from Ballarat

Today’s my last day in Ballarat out of my 3 day visit here and I just love the city. Its one of those cities where one could think of settling in after retirement.

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Ballarat is a small city about an hour and a half from Melbourne. Its a historic city which got up during the gold rush. Its very Victorian with all the heritage buildings reminding me of UK.

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The best part of Ballarat is that its got everything you’d need for your daily living – Food, Entertainment, Business along with the peacefulness of the much needed break from the city rush and hustle.

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The roads are large and concrete with a good traffic management system. There are a few uphills and downhills but nothing unpleasant.

I also couldn’t find a 3 storied building in Ballarat, perhaps there isn’t any need for it. I personally stayed at an AirBnB accommodation near Strut street in Ballarat and the house was just lovely. Below are some pictures:

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Myself being a fully vegetarian was not at all a problem. There’s a subway, a Chinese 100% veggie restaurant and plenty of other Indian restaurants where I could fatten myself. I am sure I must have gained a few kgs in these 3 days.

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You don’t need a car in Ballarat – you could go almost anywhere walking within 15-20 minutes or so.

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The roadside shops are mostly glass and no shutters. You just lock your front gates and everything is just fine. I hardly saw a police officer – Not sure if they need the police 🙂

I was in Ballarat on a short business trip. I came to the city to meet a client and am heading back with lovely friends. The people are just so very friendly.

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I didn’t get time for any sight seeing at all, but I wish to come back again with my family for just a small holiday!

Dear Startups, What are you actually selling?

A question comes to my mind which I always want to ask to all startups.

Dear Startups,

What are you really selling? Is it a product or a service? Or your own company ?!

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When I was a child, I never knew what a start up was. I only new business, businessman, customer, buy, sell, expenses, income.

Today’s jazzy world has come up with fancy names for everything. To start with, some of them are: Entrepreneur, Startups, Meetups, B2B, B2C, VC, Angel Investors etc and what not! A mere Google would reveal hundreds of them. Look for yourself : http://www.forbes.com/sites/kateharrison/2014/08/29/40-start-up-jargon-words-you-need-to-know-to-raise-money/

I said to myself: wow, People have so much energy to bash around the jargon lingo, I wonder if they put the same into customer relationships and better service!

Honestly, until a few years ago, I didn’t know what was B2B and B2C – I guess I am only a third generation businessman ( My father being second and grandfather being the first generation ). I am yet to learn the tricks of 4th gen kids!

Almost all big companies in today’s world have a customer care. We as a consumer just hate their template based replies, don’t we ? Why not focus your energy on building something beautiful and substantial. There’s no marketing better than word of mouth. Look at Google, do they need to market their search engine ? Any kid learning the internet goes to Google as his first website! Word of mouth peeps!

“Many business people focus on what is static, black and white. Yet great algorithms can be rewritten. A business process can be defined better. A business model can be copied. But the speed of execution is dynamic within you and can never be copied. When you have an idea, figure out the pieces you need quickly, go to the market, believe in it, and continue to iterate.”

Wise words from Gurbaksh Chahal, the founder of Radium One – but sadly, I do not find many startups paying much heed to it. People sit on perfectly good business ideas for too long, and are then in a mad, mad rat race to outsmart its ‘perceived’ rivals. And then, when their startups start moving south, they wonder – “Where did we go wrong?” Well, Sir and Madam, plenty of points.

Today’s startups are more about fundraising than actual work. What’s the big hullabaloo over ‘raising X million dollars’ via IPO?

Why as a customer I should worry about how much money you make. This is a false psychology built up in the mind of the customer. New reports like X company raised Y million dollars makes the public think “wow, they raised so much money, they might be a good idea”.

Rather focus on your core strengths. I don’t say marketing is wrong, but excess marketing without a firm backbone will leave you in a lurch.

Get this – you are not Jack Ma (you might become one day, but that day is not now), and no one is interested in knowing how much your startup has managed to raise. Stop showing off with such flaky announcements – and instead, try to focus on building a stronger base first. You may ask me that for building a stronger base – You need investment – Well, you’re right – You do need investment, but now a days where is most of the investment going? Not all funding are bad or should be avoided but its just that the hype now a days is just overrated!

“You need to know where you stand in a business at all times. Measure everything, because everything that is measured and watched improves.”

                                                                                — Bob Parsons (Founder, Go Daddy)

But, dear startup owners, most of you are too fond of over-analyzing things. As unpleasant as it sounds, for a company in its nascent stage – advanced accounting concepts like ‘valuation’ and ‘payback period’ and ‘MVP’ and ‘discounted payoff’ really do not matter. Even if you spend (read: waste) your time and resources to calculate them, the figures would be a fraction of that of the market-leaders. Why bother?

There is a simple saying – Don’t count your chicken’s before they hatch. Right now you not only count your chickens, but also count the chickens from the chickens! You’re just overdoing it guys!

I am not suggesting that business figures and metrics need not be monitored though. When you are gradually building up a company from scratch, estimate the following two figures:

  • Cost of Acquisition (COA)
  • Lifetime Value of Acquisition (LVA)

(And yes, put all the other complex calculations on the back-burner).

Accept projects for which LVA > COA, and run a mile from those for which the reverse is true. Bit by bit, your profit figures will grow, and after a few years, you can turn your attentions to more in-depth indicators of your company’s accounting health.

Next up, what’s with the overwhelming urge to go out of your way to please customers? Don’t for a minute think that I am saying customer-satisfaction is not important (it is THE most critical factor), but do not go about providing free service to everyone under the sun. As a startup, you simply cannot afford to spend time, money and man-hours on a project, and not get paid in return. If a client does not ‘show you the money’, do not be at pains to show him/her your expertise.

Case in point: Xmarks, which offered free service for four years, and then went kaput – because it could no longer pay for its hosting expenses, and even failed to pay out salaries to employees. Don’t get into such a sticky mess.

Another example: There was a company called “Caltiger” which offered free internet in Calcutta in 1999-2000. Went for a toss when the model failed. What do we have to say about all the money lost?

Why I personally hate VCs ?

I simply hate VCs – Sorry but I do, but not all of them, there is a cattle class of VCs whom I dislike particularly. In my story, I once approached a VC who failed to look beyond. Honestly, VCs are bunch of people who don’t bother about anything than money. It doesn’t matter to them if the product / service is right or wrong. VCs are not businessmen, they are just opportunists. They have no interest in your company to nurture them. In my honest opinion, they are guys with lot of extra cash and have no plan what to do with it and hence look out for ideas of others and slowly suck everything out from it.

About 8 years ago, I was presenting my company to a bunch of investors/VCs. There were 100 other companies in that event doing the same. The VCs present there had immediate funding options. My pitch was rejected outright because they didn’t understand what I was doing! A blessing in disguise. About 5 companies were chosen for funding that day. I didn’t have any reactions at that time but now when I search for those company which got funded are all shut down and  have no presence. And about 5 odd companies are still alive from those 100 companies and I’m proud to say our company is one of them. Now when I look back, I think to myself – Those VCs weren’t actually smart enough.

The point being- Startups now a days aren’t selling anything like a service or a product really. The end product or service is just a bait to actually sell their own company. The commodity is their own company rather than a product. The name of the product is just a sham and this I simply cannot approve it! Not in my business ethics. A company is like your child and it makes no sense for me to sell it if its already doing good business. Dear startups, would you sell your child? Or is it that you’ve started a new business of producing children and selling them ?

Business is not just about making money. Its about who is making it and how dedicated and how passionate they are about it.

Startups like Nouncer whine about how ‘Twitter/Facebook stole their thunder’. Strangely though, there is no dearth of startup companies which do not think beyond getting acquired by a big, well-established company. They will, in all probability, lose their identity (sigh, Nokia, sigh!) – and disturbingly, they are not bothered about it at all. Dear startups, if you lose your brand name…you lose everything!

About a year back, the world of business was all abuzz about the $19 billion acquisition of  WhatsApp by Facebook. With all due respect to Mark Zuckerberg and his tremendous business acumen – was this acquisition a good thing for WhatsApp? On a personal front, I do not think so, since being viewed as ‘a Facebook product’ would hardly do WhatsApp any favor (except, perhaps, expand its reach globally).

The ease with which Yahoo’s Marissa Mayer is snapping up startups left, right and center seems even more weird. I mean, Ms. Mayer is strengthening the base of her company, but why are so many startups readily agreeing for the acquisitions? The fat paychecks from these deals have started a new trend – entrepreneurs are launching startups SOLELY TO COME TO THE NOTICE OF THE BIG PLAYERS – and selling them off for a nice, big sum. If this continues, that day won’t be far when the entire concept of ‘startups’ will get obliterated. Totally.

So, what is the right way to go about? For starters, resist the temptation (and the shortcut) of creating a company only for the sake of selling it. No one in the world can become a millionaire at 30 years of age, and remain so, only by selling his/her company to a big fish. Do not make products that impress the big-shot in your industry – and focus on customer preferences instead. The initial years will be difficult for a small fish in a big pond, but if you stick to your guns, your company can emerge as one of the big fishes.

“Do you want to be a small fish in a BIG POND, or a BIG FISH in a small pond?” – take a stand on this very, very carefully.

Although Coca Cola is one of the biggest companies in the world, there is a lot to learn for startups from it too. Just think – if the much-hyped and universally-hated ‘New Coke’ had not been withdrawn within 90-odd days – the company probably would not have survived till now. The key takeaway from this is, the makers were flexible and clever enough to understand that they had made an error. Coke Classic returned, and all was hunky-dory again.

“A good idea is not enough. Business aren’t just about ideas, businesses are about execution. Don’t get too enamored with your own idea.”

— Brian Sharples (Co-founder, HomeAway).

Strangely, this willingness to accept an error is lacking in many startup owners. Most newfangled entrepreneurs feel that their ideas are the best on earth – even when the chinks and cracks become apparent. Money is spent, resources are wasted, and employees are heckled, to run after impractical, unfeasible dreams. Every corporate leader makes mistakes – but only those who are smart enough to own up to them survive. Got my point?

As a startup owner, you can also face a myriad of other problems – ranging right from incompetent employees, lethargic partners and workplace conflicts, to unforeseen cash outflows, unfulfilled sales projections and competition from already well-established rivals. I would love to see you guys put up a fight, stay committed to your startup company – and you never know when you will be standing at the cusp of success.

“If you are doing something that has a universal, timeless need, then you need to think of the company in a timeless way.”

— Scott Heiferman (Co-founder, Meetup)

Bottom line? Any good act gets recognized, no matter how small it is. Keep doing your good work, focus on the things you really have to rather than getting attracted to do something large start with something small and one day you will definitely be rewarded !

Keep going, folks!

Open letter to Didi Mamata Banerjee

Dear Didi,

My response is to your Facebook post about “The Ease of Doing Business in Bengal reaches a new level.”.

I don’t think its easy to do business in West Bengal. Specially when TMC License department and WB sales tax department officers never bother to entertain commoners without bribe. If Bengal has to progress, first you must remove all the co
rruption in the very first step of starting a business. Each Trade License is charged at Rs 1000-2000 bribe. WB tax registrations cost about the same. The Babus never talk to anyone except the so called agents. Dear madam, first you must analyze the ground reality of Kolkata and then take necessary action to improve it and make everything online. I bring to your notice that it takes almost one month to register a new business which is not only a problem to the owners but a loss to the government. If the government removes corruption, more owners will be welcomed when the middleman is cut off.

West Bengal is the land of agriculture, but when it comes to the ground reality, the poor man is not earning anything even after working the hardest in the sun. The prices of Potatoes are lower than cost of producing it. Why no farmer wants to product potatoes anymore? Why so many farmers committed suicide? This is all linked to corruption. Do you think the news is not going to the investors about corruption in Bengal?

As a commoner, any government work which can be done by individual is given to the agent. Without agents the work doesn’t progress. Why this Agent-Babu relation is encouraged? Does the government pay less to the Babus for which they ask more bribe ? If they don’t ask for bribe, they start troubling. Didi, I think you know all this very well, I just wanted to re-iterate the facts for your reminder.

Dear Didi, If we, your own countrymen are facing problem, what will the foreigners face? How can you promote brand Bengal with so much corruption at every stage?

In so many interior parts of Bengal, there is no business. Do you think Business is only about cities? What about villagers? They have no hope. Again, rich becomes richer and poor is becoming poorer. In many areas, farmers are selling off their land as Agriculture is no more profitable. Why? Bengal has 97% cultivable land and yet this is the sad state of Agriculture.

Compare it with Denmark. Bengal is as big as Denmark in area ( Slightly less). But look at their transparency and process of work – It has made a name in the world as the country for most high tech agriculture. Why this cannot be in Bengal ? Why more focus is given to outside investment when we can be self sufficient. Bengal is very rich in its soil. Why then middlemen are making most money ?

Its my humble request to improve the internal policies to build a non corrupt system and then the investments will come by its own by looking. You have to set an example of how friendly the businesses are in Bengal. Only seminars will not help. If any foreign company will inquire about Bengal, they will only get a report about corruption – Who will invest ? Dear Didi, imagine yourself as a business owner, will you ever invest in a country where without corruption, nothing works. The simple answer is no.

Yours Sincerely,
A Common Young Entrepreneur in Kolkata.

Back!

After almost a break of 4 years I’m finally back. I must apologize to my readers for taking the time off. I am honest enough to admit that I was focusing on minting money and that I had lost interest in writing anymore. Suddenly, I felt like writing today which has not only broken my writer’s block but also given me an opportunity to talk directly to my readers.

I remember one of my employee who was an avid reader of my blog come to me and ask about why I stopped writing. I hope he’s reading this as I still remember his words while I am starting to write again.

Over the last 9 odd years, I have been blogging continuously and except for the last few years. I have blogged from technology to religion to politics to personalities. Almost anything which came in my mind.

So why was I away?

Just two reasons and nothing else.

– I was busy in expanding and focusing on business
– I had a writer’s block – Just didn’t feel like writing at all.

So what’s changed over the last four years?

– I have been catching up with few of my childhood friends. I took a trip to Leh/Ladakh in Kashmir which was quite a memorable one.
– I am still a vegetarian – Going strong.
– I am married and have a little baby girl now.
– My skin is growing old and I have started to realize that I’ve lost the evergreen look – I am working on it to get it back soon.
– I have grown all the more spiritual in my research. Performed Hajj in 2014.
– I have stopped listening to Mr. Jagjit Singh after he died. I do listen to him sometimes, but I feel as if the sparkle has gone. Sometimes I listen to old Rabindra sangeet songs and Pankaj Udhas when I feel like, but with him gone, the music’s gone too.
– My patience level has increased exponentially. I have become very calm and tolerant
– My talks have become more logical and convincing.
– Felt almost 4 earthquakes in last 4 years.
– I have moved to a larger office wherein I feel like home – Only thing missing is a bed.
– Expansion operations at office have started for Australia and Sweden.
– I miss conferences and events as I’ve not been quite social these years.
– And many more things..
– The most important thing is that I am happy and content with everything around me and I am thankful for everything.

I don’t know if I’d continue writing or not. I make no promises but I do promise to try.

Why Indians should stop buying GOLD?

Why are we Indians fascinated about Gold so much?

Having a friend’s or relative’s marriage in future? Mere 1 gm of gold coin costing about <3k INR would sound mightier than a washing machine costing about 8k INR. Over the last 5-6 years, Gold has been the most promising investment. Giving about 25% returns in a year. However, there is a problem. Gold is just a shiny metal which is over-hyped. I remember I attended a workshop in Bombay stock exchange where in the ex-president of the BSE just ridiculed Gold as an investment.

Some of my thoughts:

1. Gold is very trustworthy metal. It has a proven record in the history of mankind to bring them out of trouble in times of need – Be it marriage, Be it war, Be it a big loan repayment – Gold comes in handy. About 6-8% of human mind in India revolves around Gold. Whenever they want to go for ‘shopping’ when they have large amount save, they would buy GOLD. I know many people who would spend their entire savings only to buy GOLD. There are Gold schemes in India which encourages everyone to invest a part of their salary in GOLD every month!

2. Fact: Gold is not mined in India so much. Gold has to be imported. Like OIL, Gold is very less in India but the increasing demand has created a lot of Gold imports in India.

3. Gold is nothing but a stagnant yellow metal:  You practically can’t use Gold to do anything. Just sit back and relax while its locked in your locker. Its just a useless metal which has blocked minds of innocent Indians with its glittering sparkle! Btw, over the years, I’ve found one great use of gold. You can make Gold wires in your homes electrical cabling. Gold is a very good conductor with a very low power loss in transmission! I.e if you care for electricity bills and I.e if you’re super duper filthily richie rich!
But hey, for an average Indian, a locked asset in their locker – which they take a look at only to see that its safe, gives them mental peace and a feeling of superiority over others which is far more satisfying than a good meal – So yes, Gold does bring mental peace to Indians which is an Irony understated.

4. What next: Once you have all this Gold which is already imported into India by millions of buyers, what next? Since Gold has no other practical use, no one wants to trade gold with one another unless something important comes up like financial crisis or war. What’s the probability of such happening and to how much percentage of the general public? So basically it becomes a lumpy piece of metal lying in your locker giving you mental peace ONLY without any economic growth.

5. India doesn’t sell Gold. May be it does but the percentage is very less. Why would someone want to buy gold from India. Yes, Iran would get gold from India because India cannot pay them for the imported Oil – Due to the dollar problem (Not that Indian cannot pay)

In Conclusion: What can you do as an Indian ?
Its practically impossible to tell any Indian “Stop buying gold”. It would be like telling an Indian “Be there on time – Sharp”. What’s recommended is that do not buy Gold if you have excess cash. Invest in something else – in may be a business! Or something else..! Give a percentage of it as charity..

Mark my words when I say this: The more Gold India imports, the more liability will it add in the future. So its my very humble request to all you super duper richie rich fellas reading this blog – Invest wisely. All that glitters is not gold!