The impact of open source on business and social good

I vividly remember that my early opinions about open source software were built around certain questions that made most natural (and perfect) sense to me at that point of time in my life. The questions like “why would someone sell a software product for free” or “Why should anyone participate in a project that does …

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Resolutions and 2013 reading list…

Resolutions are here to stay I have a consistent track record of “not” following all my new year resolutions through to successful completion. Since 2009, when I first initiated this annual review of the elapsed year and setting goals for the year ahead, there has not been a single year when this resolution strategy has worked to …

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Harvard Business Review’s 10 Must Reads: On Managing Yourself

Forests have fallen by writing books on topics centered around personal management and self improvement. A significant majority of them, especially the ones with gawky titles do not make much rational sense to me. I believe that one can learn and grow more by reading auto/biographies of business and political leaders than by reading the …

View full post

A political moral lapse…

In 1956, Lal Bahadur shastri, one of the most remarkable lives of the twentieth century, resigned from his post following a train accident that killed around 150 passengers in the Indian state of Tamil Nadu. Such was the integrity and ethical standards of leaders of those times. Since those times, our political “class” has deteriorated so much that  it …

View full post

Dr. John Hennessy’s lecture

A couple of weeks back in my leadership class, we were asked to journal 3 gratitides to “kick off” our day on a positive note. Here is one of the most important experiences I am truly grateful for. Since I have a vested interest in the world of education and academics (and I beleive we all do), what better …

View full post
The impact of open source on business and social goodResolutions and 2013 reading list…Harvard Business Review’s 10 Must Reads: On Managing YourselfA political moral lapse…Dr. John Hennessy’s lecture

Jan 22

The impact of open source on business and social good

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Education, Entreprenuership, Insights, Management, Open Source, Random thoughts, Society, Technology

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I vividly remember that my early opinions about open source software were built around certain questions that made most natural (and perfect) sense to me at that point of time in my life. The questions like “why would someone sell a software product for free” or “Why should anyone participate in a project that does not reaps any financial rewards” formed the basis of my rationale . That was the time when I had not embarked on my professional journey and as a consequence not experienced organizational life. My myopic view towards the open source methodology of developing projects and the profound impact this methodology has on the business world in general and the organizational structure in particular began to broaden after my first intense exposure to the Linux operating system in Bank of America Merrill Lynch. My understanding about the magnificence of this operating system and the  the process by which it is constantly iterated made a 180 degrees transformation. This  consequently cultivated appreciation for the entire process of peer production and the impact it has on today’s businesses, both big and small.

Today, mass collaboration is changing the foundational structure of businesses and reshaping the way these entities operate in our highly competitive environment. Collaboration, fuelled by open methodologies and peer production is forcing management to rethink their strategies. Organizations that have previously created walled cities are breaking the barriers and creating public spaces where all can grow and contribute to push forward the boundaries of their businesses as well as the boundaries of industries they operate in.

In his excellent article “The nature of the firm” (1937), Ronald Harry Coase, the great British economist made a strong argument that one of the reasons for the structure of vertically integrated organizations is the “cost of transaction”. Perform a transaction inside your firm only if it is cheaper than performing it externally or in the marketplace.  The internet boom and the development of open source software and pooled infrastructure has made it possible for the web based businesses to keep these transaction costs low. Don Tapscot, the author of Wikinomics, dissects by saying “Transaction costs still exists, but now they’re often more onerous in corporations than in the marketplace.”

Despite of all the benefits in terms of quality, speed and wealth that open source and the collaborative mode of undertaking projects have generated, there is still some misunderstanding and gap in the appreciation of these significant changes. Some people and business still restrict their comprehension of open source as free software that sucks up the wealth of a healthy capitalist society. These people and businesses do not see the forest for the trees. They see the free software as a threat to the enterprise but miss the multi billion dollar ecosystem that this free software has created from which businesses of all sizes and types are benefiting.

Following are two cases which reflect the impact of “open source way of doing things” on the businesses:

The rise of collaborative organizations:

The digital revolution, also called the third revolution, has changed the entire landscape of the business world. After the industrial revolution, no other revolution has changed the fabric of the society as the Internet revolution has changed it. It has given rise to organizations that thrive on volunteers, peer production, and collaboration. Wikipedia, the Mozilla Foundation, WordPress, Red Hat, and many more are competing today with some of the best financed and resourceful enterprises across the globe. The parameters of this competition are not only governed by cost but defined by quality as well. In 2005, the British Journal Nature conducted a comparative study and found that Wikipedia is as accurate as Encyclopedia Britanica. A Wikimedia trafic analysis report in 2012 shows that Google Chrome has a larger market than Internet Explorer and my second  favorite brower Mozilla Firefox has a significant market share. Likewise, Red Hat Enterprise Linux is widely implemented in almost all the big financial corporations not only because of the cost but also because of the stability it adds to the complex technology infrastructures in financial companies.

Even some of the organizations that have a history of opposing and harpooning open source developments are now opening up to collaborations to create win-win situations. Microsoft is the biggest example. Its wholly owned subsidiary, Microsoft open technologies group, follows a community driven approach to create innovative solutions. One of its recent announcement was the launch of VM Depot, a community driven catalog of open source virtual machine images for Windows Azure. IBM, a company that became a giant by selling everything proprietary, is another big example and its engagement with the Apache web server project and Linux are well known. In 1999, IBM announced its support to the Open source Linux project and since then has contributed consederable financial and technical resources to the Linux comunity. It played an instrumental role in establishing the Apache software foundation and the Linux development group. Not only did the “big blue” save millions that would have gone into developing its own operating system, it learned and mastered the workings of a new type of business model that was set to change the software industry forever.

Organizations and institutions across sectors are opening up for new partnerships and utilizing the vast amount of “unique skilled talents” not available within the confines of their companies. Initiatives like InnoCentive, Human Genome project, MIT and Harvard University’s edX, offer platforms and opportunties for world changing innovations.

The big boost to entrepreneurship:

The internet is one of the best things that have ever happened to humanity. Not only it has opened the world to an individual (and vice versa), it has become a nucleus of global economic activity. More and more people today are making their living by selling bits and bytes. The cost of starting a web based business is extremely low relative to starting businesses that relies on physical channels. This low cost of bootstrapping a business combined with the creative nature of the internet has encouraged millions to launch their own ventures. The low cost of starting a web based business has become possible primarily because of the availability open source software and infrastructure. The free LAMP software stack, which constitutes Linux, Apache, MySQL and PHP, have made it possible for creative and thoughtful people with ideas to start businesses on the internet which are playing a positive role in pushing forward human race.

Open source movement and methodologies have contributed significantly to the business world and created ecosystems that have positively impacted all the industries and billions of people across the globe. This movement has largely been fueled by thousands of volunteers. These volunteers contribute to these projects for a wide range of reasons which include growing their networks, enhancing  their resumes, refining their skills and just for doing social good. In the words of Jimmy Wales, the founder of Wikipedia, “We are gathering together to build this resource that will be made available to all the people of the world for free. That’s the goal that people can get behind”. What struck me as I finished the last sentence was a quote from the movie Pearl Harbour, “There is nothing stronger than the heart of a volunteer”.

This article of mine is also published here on opensource.com.

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Jan 07

Resolutions and 2013 reading list…

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Books, Education, Management, Open Source, Philosophy, Random thoughts, Reviews, Technology

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Resolutions are here to stay

I have a consistent track record of “not” following all my new year resolutions through to successful completion. Since 2009, when I first initiated this annual review of the elapsed year and setting goals for the year ahead, there has not been a single year when this resolution strategy has worked to my satisfaction. One of the most gratifying feelings of this year came last weekend when a consultant friend of mine in Toronto told me that he shares the same story too and that I am not alone.

In hindsight, I find that despite of these failed attempts, making resolutions and setting targets is an important “starter” for the new year. It increases productivity, boosts morale and most importantly, it structures the thought process. In fact, I am experiencing that year after year, my resolutions are becoming more rational reflecting increased levels of self-awareness. Out of all the stranded resolutions, there have been a few successful ones too. In 2009, back when I was working as an engineer in India, I vividly remember that two of my resolves were to actively look for an international opportunity in software industry and read 15 books by the end of that year. The international opportunity to work in Singapore didn’t come around the time I had planned. But it did come and brought rich professional and personal experiences with it. I did not read 15 books by the end of 2009. In fact, the count was somewhere around 7 or 8. But I wonder if I had been able to read even 5 books had I not set a target for myself.

A few days back, while reading an article authored by Peter Drucker, I came across the idea of feedback analysis. Peter discusses how constructive it can be to write down the goals and evaluate those at the end of the year to see the progress. This kind of an exercise can give a clear picture of what “not” to pursue.

2013 must reads

Like last year, here I am again with my reading goals for 2013. Out of books that I have shortlisted to read by 1st January 2014, here are 7 that are on top of my list and the reasons for picking them:

Wikinomics: I started this book yesterday and it seems to be one of the most persuasive and finest books on collaborative innovation I have ever come across.

The age of unreason: I have always aspired to read this great work by Charles Handy. Charles is rated among the Thinkers50, a list of most influential management thinkers in the world. What attracts me to this masterpiece is that it grew in reputation decades after it was published after the ubiquitous virtual world, internet and outsourcing proved his vision to be provident.

The Essential Drucker: TIME magazine last year wrote that “over a career that spanned 60 years, Peter Drucker single-handedly invented the field of management”. The insights of this “superstar CEO’s go to guru” are generations ahead of their time. The Essential Drucker is one of the finest representation of his works and thoughts.

My years with General Motors: Alfred P. Sloan Jr. has been one of the most inspiring business leaders. The book, as per the reviews and recommendations of friends, is full of shrewd lessons from managing a giant corporation to product development to corporate structure.

Ubuntu unleashed 2013: I love everything open source and everything built around collaboration strategies. Ubuntu is one of the finest operating systems out there and its been some time now since I explored Linux Fedora.

The four steps to epiphany: I have been ardently reading Steve Blank’s blog since the last 6 months now. Steve is one of the most sought after entrepreneur cum thinkers based out of Silicon valley. As an engineer in a graduate level business program, I believe this book will provide an enriching experience.

The Origin of species: This scientific literature by Charles Darwin, is the foundation of evolution. The book is a carry forward from my reading list for 2012.

Nelson Mandela, one of the greatest political leaders in human history, once said that “A saint is a sinner who keeps on trying”. Well, for me and many others like me, becoming a saint is neither possible nor desirable. What we can do is to make an earnest effort to bring down the count of these “sins” every year. Resolutions, irrespective of their success rate, seem to be one of the best tools at disposal.

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Jan 02

Harvard Business Review’s 10 Must Reads: On Managing Yourself

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Education, Management, Random thoughts, Reviews

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1422157997Forests have fallen by writing books on topics centered around personal management and self improvement. A significant majority of them, especially the ones with gawky titles do not make much rational sense to me. I believe that one can learn and grow more by reading auto/biographies of business and political leaders than by reading the kind of books that claim to teach an MBA in 10 days. I find them superficial and detached from the realities of life.

Things, however, take a 180 degree turn if two of the world’s most influential management thinkers talk about subjects like “managing yourself”. Management gurus like Clayton M. Christensen and Peter F. Drucker have defined the course of management and invented concepts that have not only pushed forward the boundaries of management theory but have profoundly influenced the way corporations operate.

The book HBR’s 10 must reads: On Managing Yourself, consists of 10 articles by top business thinkers. A quick surf on the names of authors who contributed to this splendid book was enough to fire my curiosity. The insights presented on self improvement and self management by Clayton Christensen and Peter Drucker are especially inspiring and worth sharing. I will discuss Clayton Christensen’s article in this post and Peter Drucker’s definitive article in one of my subsequent posts.

In How will you measure your life? , Clayton beautifully ties the successful principles and models implemented in organizations to the individual development.  He believes that innovation theories and models that help build strong companies can also help people lead better lives. The article uses management practices to answer three questions relevant to (almost) everyone’s life. How can I be happy in my career? How can I be sure that my relationship with my family is an enduring source of happiness? and How can I live my life with integrity?

The great american psychologist, Frederick Herzberg, who gave the world “The dual structure theory”, asserted that money isn’t the most powerful motivational factor in a person’s career. It is primarily the opportunity to grow in responsibility, contribute and be recognized.  I think money is a consequence of these prime motivational factors. People who have the most gratifying carriers in their lives are usually the ones who pursue their passions and have a hunger for taking ownership and responsibility. In the words of Clayton, “More and more MBA students come to school thinking that a career in business means buying, selling and investing in companies. Doing deals doesn’t reap the rewards that come from building up people”. These are powerful and thought provoking words.

The organizational theory that answers the second question deals with how strategy for resource allocation is defined and implemented. There are thousands of organizations that mismanage the critical resources at their disposal and shortchange their investments in initiatives that are vital for a long term gain and sustainability of their businesses. The consequence of this mismanagement of resources is usually very different from the strategy the organizational management intends to follow. Likewise, in life too, if there is no sense of purpose or a strategy defined, people will fritter away the limited and critical resources (time and energy) they have at their disposal. The author talks about how, many of his HBS classmates lived fractured personal lives primarily due to a lack of a definite purpose. Like organizations, it is important for individuals to think about a metric by which their lives will be judged.

One of the most reflective sections of this articles discusses the authors own experience in cultivating a clear sense purpose in his life. As a Rhodes scholar in Oxford university, Clayton had very demanding academic commitments. Since having a clear sense of purpose was essential for him, he devoted one hour every night reading and thinking about why God put him on Earth. He further discusses, how he was conflicted about weather he could take an hour off from his academic life but instead stuck with it and ultimately figured out the purpose of his life. Based on my limited readings about lives of other great people like Steve Jobs, Abraham Lincoln, Nelson Mandela, Bill Clinton, etc, this is not an aberration. People who go on to achieve great feats  align all their activities and short term goals to the ultimate purpose they defined for themselves.

The section that discusses integrity and the related question makes an interesting read as well. The financial theory that states that ignoring the sunk and fixed costs and instead base decisions on marginal costs and marginal revenues when considering alternative investments can have implications for corporations. It many times causes bad decisions. Similarly, this marginal cost doctrine gives birth to  mentality that allures people to do wrong “just this once” . This consequently, can lead people astray. Both in the business world and the personal world of many individuals, disasters happen because of lack of integrity that usually gets ignited by “Just this once”  thought. Justification for dishonesty in all its manifestations lies in the marginal cost economics of “Just this once”. Having principles and sticking to those principles builds conviction and plays a positive role in the long term. In the resounding words of Clayton Christensen, “Its easier to hold to your principles 100 % of the time than it is to hold to them 98 % of the time”.

As someone with a keen interest in management theory, I found this book in general, and the articles by Clayton Christensen and Peter Drucker in particular, engaging. The way Clayton connects different dots and relates seemingly unrelated concepts provides a thought stimulating experience.

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Dec 24

A political moral lapse…

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Random thoughts, Society

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In 1956, Lal Bahadur shastri, one of the most remarkable lives of the twentieth century, resigned from his post following a train accident that killed around 150 passengers in the Indian state of Tamil Nadu. Such was the integrity and ethical standards of leaders of those times.

Since those times, our political “class” has deteriorated so much that  it has become a completely morally bankrupt segment. Today, I made my best efforts to think of politicians (they don’t deserve to be called political “leaders”) who had some integrity and deserved to be called leaders. Sadly, I could not think of many. A significant majority of them do not have the grits to take the ownership of all the unfortunate mishappenings in our so called “culturally rich society”.

The gory details of what happened on 16th December in a moving bus in one of the most crowded capitals in the world “freezed” my mind and thoughts for a few minutes. What has shocked me more since then was the response of the top officials of the Delhi police force and the government. Each of these statements reflected how much they loved their chair and position and how indifferent they are to the pains of people they are supposed to protect. It reflects how inefficient and incompetent our government machinery is.

In one of his comments, the commissioner of the Delhi police said that the police should be appreciated for cracking the case in a very short period of time. Appreciated?? Despite of its tinted glasses (which is unlawful), the bus in which this horrific incident occurred was never stopped at any of the checkpoints. The police force stood ignorant of everything going around them.  Yet another time, the police force showcased its impotency by not preventing this horrendous accident from happening in the first place. The only time the police showed its “machismo” was when it opened water cannons and tear gas on the youth of this country demanding speedy justice. Shame on you Delhi police.

Then comes another surprising comment from the chief minister of Delhi that the girls should not go out at night. I have come across a lot of “dumb” political comments in my life and this one beats a vast majority of them. Instead of asking women to stay at home, why don’t you take some action and create an environment in which people can move around safely? Why doesn’t your government takes strict measures to prevent these kind of cases to occur? Why do you always have to work “inefficiently” on cure than on prevention?

Our prime minister broke all the records by first not coming out and connecting with the people and then by saying “Theek Hai (alright?)” at the end of his speech. May be the victim battling for her life spoke more words and stronger words than the PM did. I have always appreciated Dr. Manmohan singh for his scholastic abilities. Probably, he should have retired as a scholar and never taken up this position.

The debate over the punishment of the accused in this case is appalling in its own regards. If a beast becomes threat to a society, you usually have two solutions. The first is to make your best efforts to tame it. If multiple efforts fail, you take certain alternate measures that end the threat it poses to the innocent people in the society. I believe that punishment for any act of brutality and immorality against ordinary and innocent people should be harsh. The need of the hour is to send a strong message to those “beasts” that any uncivilized act in a civilized society will have zero tolerance. The people who inflict fear on others should experience fear themselves. To uphold humanity, government needs to have strict laws.

This entire incident also raises an important question in my mind. Do our social structures like schools and colleges teach us gender sensitization and tolerance?

I hope the girl gets well, the accused are “severely” punished and someone from the police or the government comes forward and takes the ownership.

 

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Oct 20

Dr. John Hennessy’s lecture

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Education, Random thoughts, Society, Technology

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A couple of weeks back in my leadership class, we were asked to journal 3 gratitides to “kick off” our day on a positive note. Here is one of the most important experiences I am truly grateful for. Since I have a vested interest in the world of education and academics (and I beleive we all do), what better opportunity can I get than listening to the tenth president of Stanford University. There were two primary reasons due to which I was excited about the lecture from the moment I got to know about it.

1. The lecture was delivered by a world leader in the field of academics, a thought leader, an authority in the “curiosity rich” field of education, and head of of one of the most prestigious institutes of higher learnings in the world.

2. The lecture centered around online education and its various implications on our society.

The entire lecture was enriching and enlightning and I made my best efforts to capture as many pearls of wisdom as I could on my iPhone. These are some of the highlights and insights that jumped out at me and now have become permanent residents in my mind.

1. Assesment fit in the class: No two students are equal. A better way to put it is – every student has a unique skill set. Since there is a dynamic range in students abilities, cultivating a utopian assesment system that challanges the best students while allowing the least capable to show some mastery at the same time is a point of concern for most centers of learnings these days.

2. Adieu to the lecture halls: Tehnology has transmogrified every industry it has touched. The next “Tsaunami”, as Dr. Hennessy suggests, will be experienced by the education industry. With sopisticated infrastructure in place in our “bits and bytes” world, success of online educational institutions like Khan Academy, and the massive efforts like edX by elite universities such as Harvard and MIT make it an incontestable point that higher learning is all set for a massive disruption. The time this transformation takes is, albeit, an open question.

3. Cost side of Online: Thanks to the knowledge intesive world we reside in, instructors and academicians have become an “elite group” in our society. A consequence of this is that the cost of traditional education has drastically increased. Online education can become a saviour in bringing down not only the operating costs but making education inclusive by expanding its reach.

4. “Some people will always cheat”: There are certain issues that are augmented because of the ”very nature” of the online world. Identification of cheating and plagiarism in the virtual world poses a major challenge that will need to be addressed. In my opinion, an unfortunate fact is that some people do not have a clear realization that everytime someone cheats, he or she murders not only originality but also eliminates his or her opportunity to cultivate and develop a depth in their thought process.

In addition to the learnings, it has strengthened my resolve to pursue a research-oriented career and play a role in the society through my chosen field of specialization. Overall, it was one of the most thought provoking lectures I have ever attended.

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Sep 14

Book review: The Business of Software by Michael A. Cusumano

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Entreprenuership, Random thoughts, Reviews, Technology

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A Sloan management review distinguished professor at MIT’s Sloan school of management, Michael A. Cusumano is a leading expert on software industry, director/adviser to more than a dozen software companies world wide, and a renowned author. He is author/co-author of seven books (besides The business of software) including the bestsellers Microsoft secrets and Japan’s software factories.

The business of Software: What every manager, programmer, and entrepreneur must know to thrive and survive in good times and bad is a splendid book on the economics of building and managing a software oriented business. This enormously readable book adds the same value to the world of software business as ‘Zen and the art of motorcycle maintenance’  does to the world of literature and philosophy. As a consequence, the book should not (even if it is technically possible) be read in one day or one sitting. The reading will inspire entrepreneur’s/founder’s or product managers to think and analyze the current business model/s  of their respective organizations and will encourage them to take sound strategic decisions. On a personal front, as a beneficiary of software industry, I could relate a lot to the actual environment in a software based set up, both large and small.

The Author presents dozens of cases from his personal experiences to show how strategy is inseparable from technology and how the issues related to organization are irrevocably linked to the issues of managing technology.  In the (more than) $ 600 billion software industry, it is the business, not the technology, that determines the success or failure of an organization. The following seven sections of the book cover a comprehensive overview of software business:

  • The Business of Software: A personal view
  • Strategy for Software companies: What to think about
  • Services, Products, and More Services: How Software became a business
  • Best Practices in Software Development: Beyond the Software factory
  • Software Entrepreneurship: Essential elements of a successful Start-up
  • Start-up Case Studies: Software Products, Services, and Hybrid Solutions
  • Conclusion: The “Ideal” Versus “Realistic” Software Business

In the first section, Michael discusses how a software business is different from other business, especially the manufacturing and the services industry. How many businesses have up to 99 percent gross profit margins for their product sales? In how many business does making one copy or one million copies of a product cost about the same? In how many businesses do many product based companies eventually become services or hybrid companies (customizations, technical services, etc), whether they like it or not? And yes, the most interesting, how many businesses tolerate some 75 to 80 percent of their product development projects routinely being late and over budget, with “best practice” considered to be 20 percent on time? The answers to these vital questions add a distinction to the business of software. The uniqueness of any software business lies in the fact that a software becomes whatever function or application it addresses.

The second section is where the strategy takes control and becomes the nucleus of the discussion. For any software company to fire on all its cylinders, it needs to take good strategic decisions. Get the strategy and the management side right, and the software business can be like having a license to print money. Well, who can exemplify this better than Microsoft, Apple, IBM and Oracle. On the contrary, get the models wrong and the software company can resemble ” dinosaurs futilely trying to escape the grip of an ancient tar pit”. And in these cases, the more resources the leadership puts into the business, the more the problems become intricate and consequently, the quicker a firm dies. One idea that is a central theme throughout the book is that many software companies need to sell both the products and the services to become successful, at least to stay alive. A lot of software product companies fall unwittingly to the trap of service and hybrid based business models. A disciplined strategic approach is the most effective tool to keep an organization on its tracks. Two case studies in this context, Business Objects and i2 Technologies, are discussed in detail. In lifetime of many organizations, especially the enterprise software product firms, a majority (70 percent or more) of revenue can come from service and maintenance. From the perspective of sustainability and maintaining a good financial health of an organization, this transformation of generating a recurring revenue stream becomes indispensable. In fact, some of the start ups adopt this services based model initially to attain some financial security and once stability up to a certain level is attained, they make an effort to embed a product based model within their companies.

Another engaging part of this section discusses about markets. Software business , like any other business caters to either the mass-market or the niche market. Oracle was a market leader in database segment for many years. Over the period of time, the company has been slipping as competitors have flaked it from both sides. According to the Gartner group, IBM surpassed Oracle in database revenues in 2001. With an exception of large software companies, most of the small players target niche markets and complete in specific segments rather than all. Targeting the right market segment along with product lines (horizontal or vertical) is one of the most critical decisions for any organization. In author’s words, “Entrepreneurs and Intrapreneurs need to think about how to position their new businesses strategically and decide whether whether to emphasize products or services or to combine a hybrid solution. They need to think about the lessons from companies that have gone before them and try not to repeat the mistakes of the past in either strategy or technology management. They need to figure out who should be on the management team, what business model will be, what problems are likely to occur in bringing a product or service to market, and to attract paying customers. These and other elements are necessary to make a viable business that earns more than it spends.”

One of the most insightful sections discusses about Software Entrepreneurship. The chapter focuses on two broad topics -

  • Interpreting the odds of failure versus success
  • Some essential elements of a successful software start up

In the first topic, the book discusses some of the statistics and facts associated with start ups (and the ones that reflect that the odds are against entrepreneurs) and the various funding channels business owners can consider and evaluate. The second topic discusses elements of a successful start up. The points that constitute Michael’s checklist are:

  • A Strong management team: A modest idea with a string team with a proven record is better than a start up with a great idea and a weak team.
  • An Attractive market: The potential market should be large enough, growing fast enough and potentially profitable enough to get the attention of outside investors.
  • A compelling new product, service or a hybrid offering: The offering should be compelling to a specific type customer base.
  • Strong evidence of customer interest: Many entrepreneurs present customer’s letter of intent to purchase new product or service offering
  • A Plan to overcome “Credibility Gap”: Many customers fear that the start ups offering the new product/service will fail (as is the case for 90 percent of all start ups). This gap gives rise to another complexity called “Catch-22″ in which a start up firm cannot raise more money to become credible if it cannot line up some paying customers that can service as references. Getting the first reference customer (even if it means giving the product/service for free) and partnering with an established firm are two of the several ways to build credibility.
  • A business model showing early growth and profit potential: The plan should not only contain an interesting idea but a proposition for a profitable business.
  • Flexibility in Strategy and Product offerings: Companies should have agile strategies. Successful firms are those that can reinvent themselves in accordance with the contemporary business environment. Apple, Microsoft, IBM and RHEL are some of the companies that redefined their models from time to time.
  • The potential for large payoff to investors: Market size and the feasible business model can reflect on the prospects for a return on investment to the external stakeholders.

Overall, if you love software, especially the business side of it, and are keen in building one or engaging in one, you will love insights in the book. Final two words – Highly recommended.

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Sep 03

Book Review: The $100 Startup – Chris Guillebeau

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Education, Entreprenuership, Reviews, Society, Technology, Travells

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I have been following Chris Guillebeau’s The Art of Non-Conformity blog since a couple of months now as part of my interest and curiosity to study entrepreneurship and various business models. Most of the books I have come across discuss (and sometimes at painful lengths ) about the long business plans, formal training, huge capital, etc, a person needs in order to kick off his or her  business of dreams. In the $100 Startup,  Chris focuses on a business community that moves past all these barriers to achieve, what he describes as, freedom and value.  Freedom in the context of doing it all alone and running a successful business with minimum possible resources and value in the context of providing benefits to the customers. And most importantly, making money in the entire process.

Chris is a “solopreneur” himself and on the verge of completing a tour of every country on this planet (he is still in his early thirties). Host to the World domination summit attended by thousands across the globe and founder of Travel hacking cartel, he discusses some really unique ways  to achieve success in business. One doesn’t need to have huge stash of cash or need to employee an army of people to bootstrap a business. All is needed is skill set or passion and usefulness of this skill in other people lives (and ofcourse an internet connection these days). Convergence between what a person likes to do and what other people are also interested in is all that is required sometimes.

Personally, I would put aside a book if it becomes too subjective or generalizes things without digging in and bringing in numbers to the center stage. $100 Startup, however, is full of real time examples of people who have succeeded by following this “unconventional” lifestyle. The author provides lots of data (including the start up cost of each business case) and some really amazing templates of one page structured business plan, offer, a decision making matrix to decide on which project/idea to give priority to and  a 140 character mission statement. All these make perfect business sense.

The book contains lots of insights into the world of business in general and micro business in particular. Here are a few that jumped out at me:

  • Talk about benefits and not features: Features are descriptive whereas benefits provide an emotional connection. Business is all about people and people relate more to the benefits that they get from something and less to the features. This, in fact, is what some of the greatest technology companies like Apple and Google have been doing.
  • The rise of the roaming entrepreneur: This section of the book discusses some very interesting facts. Digital nomads are everywhere these days and many of them are building significant businesses (six figures or higher). There are many businesses that are location independent but the business of information publishing is especially profitable. Chris, however, also busts a few myths relating to location independence. “The classic image of a business owner in this case usually involves a guy or a girl sitting on the beach, drink nearby, with a laptop propped up against the backdrop of a sunset. My limited attempts at replicating such a scene usually involve worrying about the laptop and straining to see the screen against the glare of the sunset.”
  • The new demographics: This made perfect sense. A large number of businesses, irrespective of scale or type these days are built on new kind of demographics like interests, passions, skills, beliefs, lifestyles, etc rather than on traditional demographics like age, race/ethnicity,sex/gender.
  • If its not making money, don’t do it: There is nothing wrong in having a hobby but if one wants to make a business out of that hobby, then the primary goal should be money and the focus should be cash flow.
  • The art of hustling: One doesn’t have to hire an outside agency for advertisement every time. A hustler represents an ideal combination of talk and action in perfect fusion.

Final take:

The book can inspire anyone with a hobby or a skill set to start his own business. The focal point presented is micro businesses or those small businesses that do not require a lot of resources to start and can generate a decent and a recurring income while giving a sense of freedom to the business owners. It challenges the the traditional thought process that starting a business can be a complex task resulting in a definite failure. Many interesting and successful stories and cases are discussed throughout. However, from the perspective of reading about/experimenting business or entrepreneurship in an earnest fashion, one would certainly need to look beyond (Steve Blank, Guy Kawasaki, Seth Godin, Jason fried, etc).

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Aug 15

A few things to celebrate…

Categories:

Education, Random thoughts, Society

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Corruption, congestion, overpopulation, poverty, disorganization, pollution, double standards of politicians and an indifference towards the society,  we criticize the country for every flaw it has.  And as beneficiaries of this society, I believe everyone should not only harshly criticize these ills but should play his or her part in fixing these gigantic problems.  Self-criticism and honest introspection are two of the most fundamental requisites for making any transformation, be it at an individual level or at a societal level.  To find the solutions to these predicaments, we don’t have to go half way across the world or even leave the shores of the country.  These issues are well rooted within the country (especially within the thought process, living and working styles of the “common man”  ) and so are the solutions and remedies.

For today, I will keep the criticism, diagnostic and the damning part of the system on one side and congratulate the country for those few feats that are and should be laudable. I wont talk about individualistic or personal achievements like someone of an Indian origin going to space or some particular Indian born becoming a dean of an elite business school in U.S.A. Rather, I will highlight a few accomplishments as a society that have benefited (directly or indirectly) everyone who has lived in the country, especially in the last 15 years or so.  I believe the recognition of these “good things” is not based on any blind or illogical patriotism which I personally detest.  In fact, I think one of the easiest things in our country is to make people do dumb things in the name of religion, region or cast.  A spade should be called a spade and a bad stuff should be called a bad stuff. Period. But well, I will leave this discussion to some other day and come to the thoughts in context.

These are some of those “few good things”  on a larger level that I think are indicative of the ascendance of the country’s global image:

  •  There was a time when the world knew that the only people living in India were the snake charmers. Now, a lot of that charming stuff has been replaced by a young, globally minded, well educated, well connected, highly mobile, forward looking and an open workforce cladded in business suits (or formals) working in global technology hubs like Bangalore , Pune, Gurgaon and Hyderabad. Working in an office based out of a business park in Bangalore is not different from operating from an office based out in London or Singapore (Stepping out of that building or the business park and facing a messed up city in our country is a different story however).
  • There was a time when it took months to get a visa stamped on an Indian passport. Now, it is ( in many cases) just a matter of days.
  •  We have a morally corrupt “babudom”, inefficient public machinary and absolute idiots running the show but at the very minimum , they have been successful in providing political stability consistently and this stability is  indispensable for domestic businesses to boom and foreign firms to establish their bases. A lot of us have build our resume’s and profiles working in these multinationals and consequently reaped life long benefits.
  •  There was a time when any Indian travelling abroad was assumed to be a taxi/truck driver** or even an illegal immigrant. Today, that image has transformed into an image of a  software professional or an Information technology professional. From my own experience of working abroad for an extended period of time, I can vividly remember the first question one local person asked me after I told him that I have just landed from India – “Which I.T company do you work in?”
  • The country has a lousy education system and there is no doubt about it. Yet the system has  been successful in creating a few first class educational institutions renowned worldwide for their engineering and business excellence. Even outside of this elite group, products of this “not so efficient” educational systems can be found as professors, doctors, engineers, politicians, journalists and scientisits worldwide (with majority based in U.S.A). A quick look on statistics would reveal the percentage of Indians in organizations like Microsoft, NASA and places like Silicon Valley. The point here is not to highlight or read the demo-graphical statistics of these fine entities. Skills and professionalism are the only things that matter when it comes to business and not any demographics. The point in context here is that the stress on education (especially in the middle class families) has spawned a generation that has taken up intellectual positions worldwide and this intellect has subsequently and gradually overhauled the image of the entire nation.

Out of 365 days, we can dissect and criticize all kinds of flaws and hypocrisies that we observe and experience in our society and try to make an effort to correct the things (whenever possible) but I think for at least one day, we should just thank the society and the country for providing those platforms and opportunities that have build our capabilities (at least given a “good enough” starting point) to lambaste the same system.

Happy Independence day and I wish rationality and good sense prevails (both in India and the world) and wins over useless religious superstitions and senseless rituals that can cripple the fabrics of a society.

 

** I strongly believe that every job or a work profile has a dignity attached to it irrespective of the nature of the work. The opinion expressed with regards to job and work is just based on what used to happen and the general perception.

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Aug 10

Book Review: REWORK

Categories:

Entreprenuership, Reviews, Technology

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Truly unconventional. REWORK is in the league of those extraordinary books that blows away the traditional pillars of the business world. Written by Jason Fried, the co-founder of the web application company 37Signals and David Hansson, the creator of Ruby on Rails web framework (who is also partner at 37Signals), the book rewrites the rules of building a business and provides a fresh approach to various disciplines associated with business.

Rework is one of the most readable business books I have ever come across. Authors consciously avoid any kind of fancy business jargon and still offer powerful ideas and insights that can change the way you operate your business or the way you look at work forever. Most of these ideas and insights are based on the experiences of 37Signals, however, there are some examples culled from the outside world as well. The book is divided into the following 11 major sections :

  • Takedowns
  •  Go
  • Progress
  • Productivity
  • Competitors
  • Evolution
  • Promotion
  • Hiring
  • Damage Control
  • Culture
  • Conclusion

Although each section is sharp and concise in nature, the great suggestions in each of these sections can equate to a book twice (or even more) its size.  It is one of those books that can be read in a couple of hours and yet change your perception about various aspects of business. Who can say it better than Seth Godin – “This book will make you uncomfortable.”

Here are a few of the highlights that particularly made me ponder and introspect:

  • Learning from mistakes in overrated: Authors make a rational point here. The only thing we learn from mistakes is what “not” to do again and not what should be done next. “Evolution doesn’t lingers on past failures, it’s always building upon what worked. So should you. “
  • Planning is guessing: I couldn’t agree more. Fortune tellers are fake and long term planning is a fantasy. Technology and business changes extremely fast and planning 10 years ahead is entering a danger zone.  Not many people (and I have not met any) are doing things exactly as per their plans they formulated even 5 years back. Plans should be short term and should not kill your ability to improvise.
  • Scratch your own itch:  The best way to create something of great value is to make something you want to use.  From Facebook to 37Signals to James Dyson to Vic Firth,  the world of business is full of such examples.
  • Building a flip is building a flop:  ”Would you go into a relationship planning the breakup? Would you meet with a divorce lawyer the morning of your wedding?”. Instead of an exit strategy, a business should have a commitment strategy. What we focus on goes a long way in deciding the future of our business. If the focus is to build something for acquisition, then the eye will be set on who is buying what instead of customers.
  • No time is no excuse: This is one of the “super points” that I really loved.  ”When you want something bad enough, you make the time – regardless of your other obligations. The truth is that most people just don’t want it bad enough.”  It, in fact, reminded me of a saying that I read somewhere – “A busy man has time for everything.”
  • Decommoditize your product: Your product or service should reflect your thought, your opinion. It should reflect you. “Inject what’s unique about the way you think into what you sell.” Competitors (or in some cases copycats) can steal a recipe but they cannot steal or copy the “you” in your recipe and this “unique you” is what matters at the end of the day.
  • Own your bad news: I can safely say from my own experience that this thing works for the good and goes a long way to build a strong relationship with customers. “People will respect you more if you are open, honest, public and responsive during a crises.”
  • Inspiration is perishable:  Do it now. Adrenaline rush that is experienced now might not flow in tommorrow. “Inspiration is a magical thing, a productivity multiplier, a motivator. But it wont wait for you. It is a now thing.” Ideas don’t die.  Inspiration does.

These are just a few of the ideas and the book is packed with similar cases and unconventional insights. I enjoyed reading it and I am sure any earnest student of business will enjoy it as well. Final two words – Highly recommended.

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Aug 02

Book review: Leaving Microsoft to change the world: An Entrepreneur’s Odyssey to Educate the World’s Children

Categories:

Education, Entreprenuership, Reviews, Society

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I usually do not read business books with gawky titles. The kind of titles that serve little more than just quenching an author’s ego. Leaving Microsoft to change the world, however, was an entirely different case. I knew about John Wood’s Room to Read organization and had strong recommendations from a couple of friends to make it on my “must read” list this vacation. The book is an inspiring and an absorbing story of building and growing an organization dedicated to eliminating illiteracy from the face of our planet.  John’s odyssey to educate the “not so privileged” children in the developing world is a fascinating tale of his transformation from an ambitious corporate executive in the hard charging Microsoft to the forward looking founder of Room to Read.

The book presents details of John Wood’s life as Microsoft’s director of business development for greater China region, his trip to Nepal that changed the course of his life forever,  his inner struggle to overcome all the insecurities and risks associated with a post-Microsoft life, the start up years of Room to Read and the ascendance of this great organization to become a globally recognized world class company.  Above all, it presents an honest dissection of impediments related to launching any initiative in life. It chronicles author’s struggle to find a meaningful outlet for his zeal to make a positive impact on the world. And this impact has been huge. Since its inception in 2000, Room to Read has pulled up more than 6 million children in the developing world from the darkness of illiteracy, constructed 1400 schools, established 12,000 libraries, distributed over 10 millions books and funded more than 13,000 girls scholarships.

The book is full of savvy insights on the best business practices. After completing MBA from the prestigious Kellogg school of management, John Wood worked for several years in the banking sector before joining Microsoft. John applies all the priceless leanings at Microsoft  and from the years he spent working with Steve Ballmer in his new venture.  Sleeping and breathing results, being data driven, being loyal to your employees and backing them in time of need are some of the fabrics that lay the foundation of Microsoft. John applies all these while booting up his own company, that many now call the “Microsoft of non-profits”. One gets to know how hard and frustrating it can sometimes become to build anything of value and one gets to know how pleasurable it can be to see the outcome of a successful venture.

One particular chapter that I  found engaging discusses about the importance of fund raising and why some organizations collapse only because they overlook this valuable skill of selling their vision and the business model effectively to the potential donors. “Many charities are cash flow negative, yet they keep their head buried in the sand, assuming a white knight will emerge to save them. This is a formula for disaster. ” This along with countless examples of dynamic people, including children, who came up with innovative fund raising ideas and strategies are discussed. The chapter in fact fortifies the adage that anything that cannot be expressed is useless.

Another key take away is the stress on “Just do it” attitude.  John discusses scenarios in which people go off the track or lose their motivation and momentum just because they spend too much time thinking and kick starting the things. The author provides examples from his own life about situations in which a lot of people made their best efforts to talk him out of his chosen path. Connecting with like minded people and avoiding naysayers is one of the vital factors determining how well one succeeds with his or her plans.

The last thing I liked about the book is the small section of “everyday heroes”. The section discusses examples of people who went out of their ways to play an important role in building the organization and making their mark to make this world a better place. A man wiring money to help in fund raising from his way to the top of Mt. Everest,  an entrepreneurial minded 10 years old kid from Maryland, U.S.A selling 70,000 wristbands to aid Tsunami-impacted regions of Sri Lanka (and later being honored by the congressional human rights committee), all these stories exemplify humanity at its best.

Overall, this is a good business book and I would highly recommend it.

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