Jul

13

iPhone 3G MS Exchange sync pricing strategy

Filed Under business, entrepreneurship, marketing, mobile, product management, strategy | Leave a Comment

Unless someone knocked you out in a hockey fight last Friday and your consciousness has just returned, chances are that you have heard of this thing called the iPhone 3G launch. I’ve been going back and forth on my decision on whether to get it or not. There are 2 things that are holding me back from getting an iPhone 3G:

  1. MS Exchange synchronization pricing
  2. No tethering option

It’s a classic pricing strategy–their (AT&T’s) attempt to extract more value from the wireless consumer segment that well .. has more money to dispose. Not only have they hiked the price of the unlimited data plan by $10/month from $20 to $30, but they charge you an additional $15/mo if you want to synchronize with an Exchange Server.

I’m a price-sensitive customer *and* I’m a techie at heart, thus I simply balk at having to guarantee AT&T’s revenue for 2 whopping years merely to transfer a sequence of low and high electrical signals to some proprietary email server, as opposed to any other email server, or as opposed to just casually serving the web.

The techie in me knows that they’re simply charging more by discriminating against MS Exchange data from casual web surfing, or any non-Exchange email data.

From Wikipedia’s entry on Net Neutrality: Neutrality proponents also claim that telecom companies seek to impose the tiered service model more for the purpose of profiting from their control of the pipeline rather than for any demand for their content or services.

The entrepreneur in me knows that they are just playing it by the pricing strategy books. To that end, I say, all the more power to them. Maybe I won’t buy the phone, but seeing that they are so savvy and nickel and diming the segment I am in (the “tough” crowd), I’m considering buying their stock instead.

My second gripe is the inability to tether the iPhone 3G to a laptop (without hacking it). This point is important to me because when I travel with my laptop, and if I’m in a spot where I don’t have wifi access, I just need that option to tether my laptop to my mobile phone.

Maybe AT&T is worried about people starting to use the iPhone as a modem and thus cannibalizing revenues from their existing wifi hotspot sales. To that end, I feel like if I’m already putting up with the hike in price for monthly unlimited data, putting up with the extra monthly charge for their discriminating against MS Exchange data, it’s just simply un-polite to ding me again by forcing me to cough up even more for a separate wifi hotspot plan. Come on.

And I quote Bruce Scheier:

Anyone with wireless capability who can see my network can use it to access the internet. To me, it’s basic politeness. Providing internet access to guests is kind of like providing heat and electricity, or a hot cup of tea.

I can see how they might have justified this impoliteness though. Corporate users probably have their companies paying for the bills anyway, and corporations have much deeper pockets and can easily justify such a cost as a business expensive. However, this pricing model obviously neglects the average work-for-a-corporation-joe-but-this-is-an-out-of-pocket-expense.

All said, here’s a message from a randomly-selected passionate early-adopting techie from the price-sensitive “tough crowd” segment, to whoever green-lighted this pricing strategy. You guys suck, and I hope you enjoy this video.


How to Get Broke by Buying an iPhone

Jul

3

Hidden flaws in strategy (part un)

Filed Under business, entrepreneurship, product management, self improvement, strategy, things to remind myself, winds of change | Leave a Comment

The McKinsey Quarterly has an interesting piece titled “Hidden Flaws in Strategy”, authored by Charles Roxburgh. What I like about this article is that it forces one to think about your blind spot, and provide solutions on how to overcome your own bias. A blind spot is well, very self-explanatory, which is why I think that’s just all the more reason why people, especially those who do any kind of strategy, should read this well put together article.

I’ll sum up some of the key takeaways to me, but reading the original piece of McKinsey is highly recommended.

Here are the common strategy flaws.

Flaw 1: Overconfidence

Our brains are naturally wired to make us overconfidence. This can be a good thing, because otherwise no one in their right mind would want to launch a new startup. However, we hurt ourselves when we try to make accurate estimates. Given a test question like “How heavy is a fully laden 747?” where participants are asked to give an answer where they were 90% confident, most people would rather be precisely wrong than be vaguely right.

Lesson learned: Be skeptical of strategies premised on certainty, and (duh) give yourself some wiggle room.

Flaw 2: Mental Accounting

Richard Thaler, a theorist in behavioural finance named the concept of mental accounting, defined as “the inclination to categorize and treat money differently depending on where it comes from, where it is kept, and how it is spent.” Some examples of mental accounting in the boardroom:

  • imposing caps on core business while throwing money at a startup
  • writing off money spent with conveniently created categories such as “revenue-investment spend” or “strategic investment”

Lesson learned: Don’t be so quick to throw away “so what if we throw it away” money. Eval potential investment through the standard scrutiny process, regardless of how the money fell into your lap.

Flaw 3: Status quo bias

An experiment conducted by Samuelson and Zeckhauser discovered that when students were asked how they would invest a hypothetical inheritance of millions of dollars, they adopted a “let’s leave things where they are” approach. That is, if the inheritance was already in high-risk high-yield stocks, it would be left as is. If the inheritence was already in low-risk low-return bonds, it would also be left as is. They opted not to rebalance the allocation in this hypothetical portfolio, even if it wasn’t in accordance to their risk preference.

The explanation is that people are more concerned about the fear of loss more than they are excited by the prospect of getting more. That’s the status quo. That’s what makes entrepreneurs special–they are not the status quo.

The other explanation is the endowment bias. Thaler discovered in an experiment with Cornell students that they wouldn’t pay more than $2.75 for mug with a Cornell imprint, but if they were given one, they wouldn’t sell the same mug away for less than $5.25–did the free market suddenly decide that the same mug has more value when it was already in someone’s possession when the same mug (a brand new one available for purchase) would be worth less? I think not.

While conservatism can be a strategic asset, it is important to distinguish between a status-quo option that is genuinely the right thing to do vs. one that just “feels safe” because of our innate bias.
Read more

Apr

24

SDSIC Integrated Product Management and Development - A Case Study

Filed Under business, entrepreneurship, marketing, people i like, product management, project management, san diego, startup, strategy | Leave a Comment

Recently, I’ve been really fortunate to have met so many amazing people, that I can just learn from through osmosis, merely by just hanging around them (the converse is also true, which is why I am careful to stay way from people I don’t want to model myself after). Two days ago, I attended a San Diego Software Industry Council (SDSIC) event on Product Management where a real world case study was presented by Alan Kiraly, CEO of Enterprise Informatics.

When I last took Rod Whitson’s class on product management at UCSD, I particularly liked the real world case studies that we went over. It was definitely a plus that Rod actually had real world experience to draw from. Likewise with Alan, who is also an industry veteran. The other thing I like about an actual face-to-face event is the people interaction, the stuff that you learn that nobody will actually write in a book.

Here’s a couple of things I picked up from Alan’s presentation.

A solidified and well defined business processes can be quite the competitive advantage. Alan talked about how Enterprise Informatics use their own product for their SOWs “lifecycle” management (eating your own dogfood == awesome!). What I particularly liked about this really manages decision making. Once an SOW is defined, if the time is not right, it can be thrown out in the “parking lot”. At a later time, if the opportunity arrises, the SOW can be picked up, dusted off a little, tweaked and be reused by putting it on the development cycle train.

The obvious value here is in saving time and resource in planning. Planning and strategizing stuff takes time and .. well, brain power! Too many times have I figured a whole plan for something, shelved it, and then later when I want to revisit it, I have to redefine the entire plan from scratch again.

Transparency is good. Ok, so nothing really ground shattering here, but it’s nice to hear about real world problems when transparency is not advocated. In a global and diverse organization, with people working across various continents and different timezones, synchronizing work and expectations can be a challenge. I can surely relate to that–my team at work, consist of folks in California, Australia, Israel, China, France, and the UK.
Read more

Mar

29

Technology and Changing the World: Trends roundup - March 29, 2008

Filed Under business, changing the world, entrepreneurship, microfinance, mobile, passion, poverty, regular reads, startup, technology, things to ponder about | Leave a Comment

This post consists of my “value-added” thoughts on David Kirkpatrick’s article on Fortune here.

Since I love all things technology and passionately believe that it wields the power to change the world, these numbers are just plain interesting to me. I’ve overlayed on the data some general technology trends on Web 2.0 startups, venture capital, microfinance and poverty, all cleverly slapped into one big fat blog post. Why? Because they’re all inter-connected, and I haven’t written anything all this week (been so darn busy lately!) Off we go.

Indonesia:
- 1 in 100 owns a PC
- 1 in 1,000 has broadband Internet
- 63 million cell phone subscribers, representing 27% of the population (of 234 million)
- Annual cell phone subscription growth rate: 36%

India:
- 166 million cell phone users
- Last year’s cell phone subscription growth rate was 84.5%

Switzerland:
- The Swiss have 85.1 PCs per 100 persons, beating the United States at 80.3 PCs per 100 persons

Global PC penetration is 12.9 for every 100 people. Room for growth? You bet. Many of PC owners are obviously in well developed countries, and not poor countries with lots of people. OLPC’s efforts to reach the billions at the BoP will move the needle here, if they succeed. Not forgetting the “middle” market, more of those who are neither rich nor poor will also buy computers and get on the internet. (Better start loading up on some PC stocks!) But wait, am I sure that the middle-class is not going to get poorer and not buy computers? Well the stats from Hans Rosling’s TED talk show that the overall trend here is that the world is slowly digging itself out of poverty, and I take comfort in that. Actually, read on below as I describe another trend that supports that.

Now, for some cell phone stats:

United States:
- 77.4 subscribers per 100 people
- Everywhere in Europe (except Turkey) exceeds penetration in US. Italy is at a whopping 135.1 cellphone subscribers per 100 persons.
- Hong Kong beats the US in penetration too, at 135.3

The global average is 41.6 per 100 people.

Cellphone usage growth in fast growing markets last year*:
- Peru: 57%
- Vietnam: 114%
- Pakistan: 170%
- Ukraine: 185%

*numbers might be fuzzy, but they show a general trend

What’s also important to note about this upward trend in adoption is that mobile phones were the crucial piece that first enabled the poor in Bangladesh to get out of poverty (see section on Village Phone). Women built business models around it and turned it into a source of income. These days, mobile phones are also playing another role in microfinance: enabling the transfer of money and information over, well, mobile phones! In poor countries, a brick-and-mortar bank branches with ATMs are hard to come by (ditto for computers and broadband), so mobile phones are serving this unmet need, facilitating microfinance and thus helping reduce poverty.

Other interesting stats:
- 1.3 billion of global population connected to the Internet, compound annual growth of 20.3% for past 8 years.
- Internet ad spending of $40 billion is only 6.6% of global total of $605 billion and is growing at 33%. (Ha, I should double down on this little company while I can!)

Data from 2008 Global Internet Snapshot compiled by Imran Khan, senior analyst at JP Morgan. (hmm, can anyone get me access to that full report?)

That’s why medium and big tech companies can weather the unfavorable US economy trend by going abroad. Fruit trees in your backyard not yielding? Then go after the greener pastures outside of your backyard too. It’s called diversifying. That’s the other thing I love about software is that it’s not a physical object–a computer scientist can create value with merely a laptop (and some coffee!) The cost of making that first software copy is the most expensive, then every other subsequent copy ad infinitum is basically free. This is just the nature of information economics, and has obviously served Microsoft very well. Actually, tiny tech startups can do this too — by leveraging the distribution power of this thing they call the internets.
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Mar

14

Pricing information itself as a product

Filed Under business, did you know, marketing, product management | Leave a Comment

Have you ever tried looking up stock prices online? Let’s say we look up the ticker symbol GOOG on Yahoo! Finance:

yhooticker

Hmm. It says, “Quotes delayed for <ticker symbol>. Get streaming real-time quotes - FREE TRIAL”. And this is the same ticker symbol on MSN Money:

msnticker

Quotes on MSN Money are delayed 15 minutes. Now how about we just look up Google’s stock price on well, Google themselves! This is Google Finance:

googticker

15 minute stock quote delay. Ever wonder why that is?

It’s a pricing strategy. The product here is information–the price of the stock quote. They segmented their customers into those who are casual surfers (who may or may not care about investing) from those who are serious stock traders (stock prices accurate up to the nearest millisecond is critical!). The perceived value of the same piece of information is different to each consumer.

If you suffered from some life-threatening disease and have a week left to live, how much you would pay for information of a possible cure? (note: I said “possible” cure) I’m sure you would sell off everything you have for that information, maybe even taking on a loan. Now if I told you that I have information for a verified cure, but you don’t have the disease, how much would you pay for the information now? None.

This is pretty much the same thing. Companies that are in the business of selling information, are always looking for ways to generate a bigger return from their “product”, and this is one of them — by extracting more money from people who are willing to pay the price.
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Feb

22

The Daily Wrap from VentureWire, 22 Feb 08

Filed Under business | Leave a Comment

My favourite Silicon Valley tech reporter has been taking jabs at techies and VC’s alike about lofty valuations or anything that even remotely spells b-u-b-b-l-e — which although it may seem like she is constantly crying wolf, I think she serves as a good check in place to remind us of why the tech bubble happened, lest we get all sugar high and repeat our mistakes again.

Needless to say, I was grinned when I read this on VentureWire this morning.

Valuations of start-up companies in 2007 dipped for the first time in several years, suggesting that a correction may be in the works amid an economic slowdown.The median pre-money valuation for start-ups across all sectors was $16 million, down from $18 million in 2006, according to data released today from Dow Jones VentureSource.

The sagging numbers weren’t pinned to one industry, as valuations fell across the board. Information technology start-ups saw pre-money valuations fall to $15 million from $18.8 million. Health-care valuations dropped slightly to $19 million from $20 million, while the retail and consumer group showed the biggest decline, with valuations ringing in at $10.5 million versus $15 million in 2006.

“2007 was a year of caution,” said Sandy Miller, a general partner at late-stage firm Institutional Venture Partners. “The first half of the year was bullish, but the second half was cautious. [Venture capital] may be the least impacted part of the [current downturn in] the economy, but nobody leaves unscathed.”

Several investors said that certain sectors of the VC landscape - such as Web 2.0 and clean technology - remain overheated, and the downturn in valuations is more of a natural correction than a sign of impending doom.

No tech bubble, hurray :) It’s ok, Kara. You can put your pitchfork down now.

Or maybe not :D

Feb

14

The 3 kinds of (competitive advantage) data

Filed Under business, career, did you know, things to ponder about | Leave a Comment

I learned some interesting financial jargon today.

Competitive advantage, referred to in financial markets as alpha, only comes when you have information that others do not. (An earlier speaker, Eric Christiansen of Barclay Global Investors, made clear that people like him think of three types of data: data that everyone has that gives you no advantage, data that you need to know because it gives you no advantage but not knowing can really hurt you, and finally, data that only you have, and can (briefly) take advantage of.)

Interesting food for thought. I’m going to chew on this for a while, especially #2. What about me that I don’t know about, that other people can see, that can hurt me? (a.k.a. your blind spot)

Feb

9

Randy Komisar

Filed Under business, career, changing the world, innovation, mentoring, passion, people i like, quotes, self improvement, stanford, startup, things to ponder about, things to remind myself, values | Leave a Comment

Randy Komisar, when asked in an interview about how he would ever make his mark at VC firm like Kleiner Perkins Caufield & Byers when they have a track record of investment home runs like Google says,

It’s a high bar, there’s no question about it. But I don’t feel competitive against that. I mean I think that the goal for me is to help create great talent in great companies, and what I’m hoping that in the process, they create wealth and opportunities for others. That being said, trying to measure up against something like Google as an investment return, that would just make you anxious. I don’t feel very competitive with that. I just hope that I continue to do good work and contribute.

I think that’s great advice. It’s so easy to fall into the trap of benchmarking yourself against a rare one time astronomical success. It only makes you more anxious and cloud your judgement in decision making, spinning you into an uncontrolled perpetual fall downwards. The negative energy just feeds back into the system and snowballs.

I think I have fell into that trap of focusing on the wrong thing. I think the reason why I fell for that is because I am very competitive. It’s only natural that when I see someone doing better than me, that I only want to do even better–to win. I’m not a life-is-a-zero-sum game guy, but I am competitive.

I think the other reason is because sometimes I care too much about what other people think of me. And it is so easy for external parties to view you from the outside and say, “Why can’t he accomplish this feat? Someone else has already done it, and therefore it’s possible. If he can’t do it, then he must be a loser”. It’s easy to benchmark others against the best. Not so funny when others benchmark you the same way.

That’s exactly what happened in that interview. The interviewer asked Randy a question that same line of external judgement: “how do you think you are going to beat the record?” In my opinion, Randy’s answer was perfect, “Look, I know it’s difficult, but I don’t ask myself that every time I go to work, or in every investment decision I mae. I focus on what’s important really here: contributing, creating wealth and opportunities to the best I can” I think I would have bombed that test. I would have said something that displays my naivete like, “oh, that’s nothing–I’ll beat it.” Sounds Dilbert-ish.

Towards the end of the interview, Randy was asked what his recommendation was for people who starting out and looking for a profession. The interviewer asked if he would recommend his own career trajectory he took, for instance. Randy says,

You should question authority, question convention, question other people’s expectations. We live in a day and time when all things are possible for people who have the raw intelligence, energy, and dedication to reinvent things. And that includes reinventing themselves. The shame of it is when smart people conform to conventional expectations and miss out on the opportunities to live a creative life. Within that confine, almost anything can be a great profession and can be a good and purposeful life’s work. But first and foremost, it’s gotta be important to you.

Randy Komisar one of the mentors at the Stanford Technology Ventures Program.

Feb

4

Dominant Logic

Filed Under business, changing the world, did you know, poverty, startup, things to remind myself, wokai | Leave a Comment

C.K. Prahalad writes on the powers of Dominant Logic,

All of us are prisoners of our own socialization. The lenses through which we perceive the world are colored by our own ideology, experiences, and established management practices. Each one of the groups that is focused on poverty alleviation–the World Bank, rich countries providing aid, charitable organizations, national governments, and the private sector–is conditioned by its own dominant logic.

Makes sense to me. We’ve all had different paths, and each of our paths has shaped our thinking in different ways. This reminds me of something Paul Buchheit said some time ago about the limitation of our own thinking.

In his presentation at Startup School 2007, Paul reminded us that when someone tells you, “That’s impossible” it should be translated as “According to my very limed experience and narrow understanding of reality, that’s very unlikely.” Everyone continuously builds a different set of experiences in their respective lives, and therefore everyone’s understanding of reality is fundamentally different.

I covered that here. Back to the story on why for-profits are generally viewed and treated negatively in their genuine endeavors to do good (and inhibiting them from achieving real success). Prahalad continues,

The policies of the [Indian] government for the first 45 years since independence from Great Britain in 1947 were based on a set of basic assumptions. Independent India started with a deep suspicion of the private sector. The country’s interaction with the East India Company and colonialism played a major part in creating this mindset.

The dominant logic, built over 45 years, is difficult to give up for individuals, political parties, and sections of the bureaucracy. This is the reason why politicians and bureaucrats appear to be vacillating in their positions. Most thinking people know where they have to go, but letting go of their beliefs and abandoning their “zones of comfort” and familiarity are not easy

Read more

Feb

3

Steve Jurvetson: Failure is the magic sauce

Filed Under business, changing the world, failure, fear, innovation, people i like, perseverance, quotes, things to remind myself | Leave a Comment

Failure is the magic sauce in entrepreneurship, it’s the magic sauce in innovation.

In the venture business, we look at thousands of business plans every month. The majority of them will fail, the majority of them will go out of business, but its the few that succeed that really change the world.

And you have to be prepared for that, as an entrepreneur, that on average, you’re going to fail. And not to take that too deeply, to realize that that’s okay, and luckily at least in America, there’s a culture that welcomes that; that says its okay to fail, especially in an entrepreneurial endeavor.

Embracing failure and failing early enough are positive aspirational goals. As venture capitalists, we often argue that we should often fail early enough to learn about new industries and learn to do what we do.

From an interview with Steve Jurvetson

Jan

28

Unbundling production from delivery can change the world

Filed Under business, changing the world, did you know, innovation, mobile, product management | Leave a Comment

From this article from the McKinsey Quarterly,

Technology helps companies to utilize fixed assets more efficiently by disaggregating monolithic systems into reusable components, measuring and metering the use of each, and billing for that use in ever-smaller increments cost effectively. Amazon.com, for example, has expanded its business model to let other retailers use its logistics and distribution services. It also gives independent software developers opportunities to buy processing power on its IT infrastructure so that they don’t have to buy their own.

Interesting, but that (Amazon Web Services) seem like an obvious application since IT assets are consumed remotely/virtually, i.e. one isn’t actually physical interacting with it. Does unbundling apply outside of the virtual world too?

Unbundling works in the physical world too. Today you can buy fractional time on a jet, in a high-end sports car, or even for designer handbags. Unbundling is attractive from the supply side because it lets asset-intensive businesses—factories, warehouses, truck fleets, office buildings, data centers, networks, and so on—raise their utilization rates and therefore their returns on invested capital. On the demand side, unbundling offers access to resources and assets that might otherwise require a large fixed investment or significant scale to achieve competitive marginal costs. For companies and entrepreneurs seeking capacity (or variable additional capacity), unbundling makes it possible to gain access to assets quickly, to scale up businesses yet keep their balance sheets asset light, and to use attractive consumption and contracting models that are easier on their income statements.

Read more

Dec

13

You must want a big success and then beat it into submission

Filed Under business, career, changing the world, goal setting, passion, people i like, perseverance, quotes, regular reads, things to remind myself | Leave a Comment

I love quotes! And here’s a good one I picked up today from Marc Andreessen’s blog post today:

Marcus Loew, founding father of the motion picture industry and founder of Loews Theatres and MGM:

Ambition!

You must want a big success and then beat it into submission; you must be as ravenous to reach it as the wolf who licks his teeth behind a fleeing rabbit; you must be as mad to win as the man who, with one hand growing cold on the revolver in his pocket, with the other hand pushes his last gold piece on the ‘Double-O’ at Monte Carlo.

As quoted in Neal Gabler’s outstanding An Empire of Their Own.

On another note, today I learned that OLPC’s Linux-based operating system was available for download, and so I wanted to check it out for myself. It’s pretty neat. Now I know what my blog looks like when rendered on an OLPC:

times-jliew-olpc
Also interestingly enough, when I uploaded the above screenshot on Flickr, the admin of a group (on Flickr) for the OLPC: One Laptop Per Child group asked if I could use this picture, to which I said yes. Do check out their gallery for more pictures of this laptop.

Sep

16

Continuously make conscious tough choices

Filed Under business, career, failure, fear, self improvement, things to remind myself, values | Leave a Comment

The world can shape you if you let it. To have a sense of yourself as you live, you must make conscious choices. Sometimes the choices are really hard, and you make a lot of mistakes.
– John Donahoe, President of eBay Marketplaces

Aug

25

Value creation by opportunity cost

Filed Under business, ideas, innovation, startup, strategy, technology, things to ponder about | Leave a Comment

I was thinking about Tivo earlier. While it’s no rocket science product, it certain has become a common standard in households in the US now. In fact, Tivo has achieved the status of Google in the sense that people now use it as a verb. How many times have you heard, “I tivo’d that show”, “I will tivo that movie tonight”, “wanna come over, I have that game tivo’d”?

Anyway, I just thought it was interesting to note that one of the ways Tivo creates value for its users, is by reducing/eliminating the opportunity cost for its users. Opportunity cost or economic cost, is the cost of something in terms of an opportunity forgone (and the benefits which could be received from that opportunity), or the most valuable forgone alternative (or highest-valued option forgone), i.e. the second best alternative.

For instance, if there were two shows on two different channels that will show at the exact same time. If you only had one TV, you must pick only 1 show to watch. Even if you had 2 TV’s, you can’t really watch both at the same time. So in the pre-Tivo and DVR days, you would pick the show you liked better. The opportunity cost for viewers would be that other show that they unfortunately could not watch. Tivo fixed that. And good for them, because this is a pain that customers were willing to pay in order to get rid of. Just as a contrast, there are plenty of problems that aren’t painful enough such that customers aren’t willing to pay for a solution.

I like problem solving, and am on the lookout for interesting ways to create value. This is one way, so from now on, I will keep my eyes peeled for opportunity cost problems that can be solved.

Aug

16

Points of responsibility

Filed Under business, execution, goal setting | Leave a Comment

Funny, I was reading this month’s Entrepreneur magazine, when I read about Guy Kawasaki’s column titled The Art of Execution — which when I googled, resulted in the same exact post on his blog a year and a half ago. Repackaging old content as new content, are we?

Anyway, the advice is still worth the entrepreneur’s time to read. My favorite was #6:

Establish a single point of responsibility. If you ask your employees who is responsible for a goal, and no one can answer you in ten seconds, then it means that there’s not enough accountability. If more than one person is responsible for the achievement of a goal, then no one is responsible. Good employees accept responsibility. Great employees seek responsibility. Lousy employees avoid responsibility.

Which kind of employee are you?

Aug

14

Don’t wish the ride was smoother and keep smiling

Filed Under business, career, failure, fear, passion, quotes, self improvement, things to remind myself, uncategorized, values | Leave a Comment

Corollary to the quote I posted yesterday, a Google search for that quote yielded this page with a priceless story and timeless advice:

Last week I had the pleasure of meeting a man who, despite a severe speech impediment, had become the top salesman at his company. It was such an unlikely story that I asked him how he’d done it. He joked, “with a lot of bruises and scars.” He went on to say, “Not surprisingly, the road was terribly tough for me. I was awful in the beginning — and it lit a fire under me. It made me work harder than everyone else. I resented it then, but I’ve come to realize it was a blessing in disguise.”

Consider this:

In life, it’s the rough patches that build your strength and character. They test you. They make you dig deeper, think harder, and risk more. Use them to your advantage. Don’t play the victim. Get up and get creative. It’s what you do when the going gets tough that defines you.

Try this:

When you hit a rough patch:
1. Don’t wish the ride was smoother - it’s not supposed to be.
2. Use the challenge to get smarter.
3. Tackle one thing at a time - don’t overwhelm yourself.
4. Keep smiling throughout.

Question: How have you used rough seas to your advantage?

Jul

6

How long can you ride the wave of a single good idea?

Filed Under business, innovation, people i like, regular reads, things to ponder about, things to remind myself | Leave a Comment

Ever since Shai Agassi left SAP AG (where he was in the running to be co-CEO), he has started a blog describing the many interesting things he is doing, to change the world. His posts are well thought out, requires research, due-diligence, careful observation, and just plain good-old business acumen. Shai is a technical guy (has a BS in computer science from Technion, a reputable educational institution in Israel), so he understands inherent intricacies of technical systems, yet he also has the ability to see the “big picture”, and knows what it takes to run a sustainable big tech company. Those two skills of his that I admire and hope to achieve.

Today, I just read a blog post of his, in his discussion of growth through innovation. He says,

[On Singapore’s leadership success, that comes from treating the island state as a large company] To a certain (much larger) degree, China applied the same model to create modern China over the last few years. Where most countries need one good idea every 5-10 years and can ride the wave of that idea for a generation, China needs to create one of those big ideas pretty much every 5-10 months at their scale. So what is the next big idea – because if you are a small country, like Israel or Singapore, you just can’t wait for the wave to hit the shore, you have to start paddling before the wave comes.

I’m musing over the similarities of running a big country vs. small country with running a big corporation vs. a small startup. If a startup can be built around a single good idea (and then ride that wave for say 5 years), it’s not too far fetched to say that a corporation 10X the size of the startup would have trouble competing in the marketplace if it was also churning out only 1 good idea every 5 years. I guess that’s why huge corporations churn out patents at the rate of a few per day? I remember Carly Fiorina using the number of patents filed by HP as one of the metrics to measure HP’s rate of innovation.

At any rate, reading this post by Shai just reminds me the importance of not falling into complacency. One good idea will only last so long, and in order to sustain a business, you better start thinking of your next good idea before the wave of the current good idea dies out. If you’re a big company, you will probably need a pipeline of good ideas. The process of building this pipeline should be formalized, with each idea vetted and tested out for soundness. In a startup, you can afford to be more ad-hoc and probably just yell over to the guy on the other side of your wall to bounce ideas, but in a big company, your “next-door” co-worker may be in Israel, Beijing, Dublin, or Paris (mine are) — I tried yelling really hard but apparently not hard enough. You can try but I wouldn’t recommend it.

So a question I would pose to my readers is, regardless of what type of business you are in, what is that next idea that you will come up with that will be the basis of that next wave, that your company can ride on for the next 5-10 years?

Shai is a good problem solver. He works by looking at the larger problem, and then breaking them up into smaller pieces, and solving those first. Then summing up those solutions to solve the bigger problem. That sounds a lot like the divide-and-conquer algorithm CS geeks learn.

Shai’s original blog post on this is here.

Jul

1

I will always do the right thing (core value of mine)

Filed Under business, career, self improvement, things to remind myself, uncategorized, values | Leave a Comment

Recently, a good friend of mine commented to me about how someone (let’s call him Mr. X) that I used to work with and I disliked, isn’t so bad of a person as long as one did not work with him. My friend said that because I had a bad experience with Mr. X, I’m not his friend today, but for those who have never been a colleague of Mr. X, they would be his friends. The point my friend was trying to make was that this guy was not a jerk outside of work, only at work, and that I would be Mr. X’s friend if I had never known him at work.

My reply to that was that, assuming that I never worked with Mr. X before, and became his friend, if I at a later date found out what a jerk he was at work, I would be lesser of a friend. Eventually becoming a non-friend. I rarely part ways like that with friends, but it has happened before. Relationships are two way streets. Last year I parted ways with a friend (in a less than desirable term), because I was giving up too much, and the relationship was just too lop-sided. That was someone else, not Mr. X.

Back to Mr. X. Why would I not be his friend, if he was only a bad person at work, and he wasn’t doing anything bad to me?

The answer was simple, and I didn’t even have to think hard. The values Mr. X stand for, and the actions that he exhibit, are against my personal core values.

I have a set of core values, and core values to me, are a standard that I will hold myself to, NO MATTER WHAT. My core values are carefully selected, and I will continue to practice my core values, even if the world shuns them. That’s an important test. When you build your set of core values, remember that they must pass the “popularity test”. If something you do suddenly becomes unpopular, and you decide to no longer do it, then that’s not a good core value. A core value is immutable, so carefully pick them.

One of my core values is: Doing The Right Thing

If that sounds vague to you, then what about Google’s core value of “Do No Evil”? Anyway, this value of mine basically means that, given a particular situation that I am in that requires my action, I will act according to what I think is the right thing to do. And this is something I will do, even if means that I have to make an unpopular choice. This is my standard that I have set for myself, feel free to bookmark this blog post and hold me accountable to what I have just said, should I future forget, and make a decision that’s not right.

Back to Mr. X. In my opinion, he does a lot of things at work to other people, that are not the right thing to do. But it’s not exactly blatantly wrong either, so he continues with his behavior. But deep down inside of me, it’s not right by my books, and I’m glad I don’t work with Mr. X. anymore.

The great thing about bad experiences, is that you learn from them. Granted, I haven’t learned what to do from Mr. X, but I have learned what NOT to do. Lots of it. I’ll describe my thoughts of an ideal person that I strive to be, and the things that I don’t want to be (and strive NOT to do).

Authenticity, transparency, and consistency

I like people who are authentic. The reason why I rank backstabbers worse than serial killers, child rapists, etc. is because backstabbers do it behind your back, while pretending to be your friend. To me, this is kind of like the Sarin attacks on the Tokyo subway. Those poor victims never stood a chance. The Sarin liquid is colorless, tasteless and has no odor. If those bad guys had the balls, they should have used guns or something. If someone is to kill me, do it to my face. Don’t do it behind my back. You declare war on a country before attacking. You don’t attack before declaring war.

Anyway, Mr. X was not exactly a backstabber, but he was a two-face bastard (in my book, a two-face bastard is not a full-fledged backstabber, but is on the right track to becoming one). Mr. X’s relationship modus operandi at work could be summed up as: If you were higher ranking than him at work, or if he thinks that you could help him, or indirectly do something to help him, he would be nice to you. Maybe even kiss your ass. However, if you are lower ranking than him, or if he knows there’s no way you could help him, or indirectly help him, he treats you like a second-class citizen. He’s not outright rude or anything, but a tad dishonest, sometimes even doing something to prevent you from advancing faster than him.

If you’re going to be a dick, by all means be a dick to everyone. Be a dick to people who you know can’t ever help you, and also the people who you know can help you. If you’re going to be a nice person, then be nice to everyone. Be nice and kiss your boss’s ass if you must, but also be nice to those who you know cannot help you. In short, don’t be a two-face bastard. Be consistent.

Mr. X would sell you something he himself wouldn’t buy. I simply can’t trust Mr. X, even when gives me advice, because sometimes the advice he gives me, is really in his own interest, not so much for me. Sometimes the so-called advice for me, really has nothing in it for me. It’s kind of like when someone says to you, “Hey, would you like to wash my car? It’s a great work out, and you look like you need a tan.” But phrase that in such a way that it looks like it benefits the person washing the car, not the owner of the car. “Hey, seriously, if you don’t do as I advice you to do, it’s really just bad for you. You should do it for your own good.”

Please. I wasn’t born yesterday. How about you do it first, and I’ll do it after I see you do it?

Authenticity helps build trust. When we trust each other, we can move forward and get real work done. We don’t spend time second guessing each other for a hidden agenda. I was constantly second guessing Mr. X. I can’t describe what a pain it is, living such a life of having to constantly second guess the people around you. Just to contrast, my current VP of Security Research Dan Hubbard is an awesome guy — I don’t second guess what he says. He tells it like it is, no beating around the bush, no having to look for double meanings. The team moves forward faster, without distrust. How do you unify a team to tackle a challenge with each member not trusting each other, and looking out for themselves only? YOU CAN’T.

Helping others succeed

Mr. X played the corporate big company political game of “playing your cards close to the vest”. Matter of fact, he regularly stole my best cards to be played as his, and amazed everyone with his winning streak. He hoarded valuable information and disseminated them based on the importance of the recipient to him, arguably an unfair but effective method of gaining control. The only problem is, he couldn’t find any valuable information on his own, so the valuable information he disseminated to others, were basically cut-paste jobs from my emails I sent him. Oh, the cut-paste email job conveniently strips out all indications that it he got the information from someone else.

In my opinion, that era of information hording to be powerful in the corporate work place is over. Look at the Web 2.0 phenomenon. Everyone is sharing information. The person who shares the most to benefit society, is considered the more powerful. They help others succeed. The person perceived to be full of valuable information but could possibly be a phony, IS NOT AS VALUABLE as the person who can actually deliver some value to you. If I knew you need something to be successful, and if I could not personally deliver it to you for your success, but if I knew of someone who can, I would introduce you both. I will admit I can’t help you with my own two hands, but that doesn’t mean that I can’t help you by connecting you to someone I know who can.

Given the choice of being perceived as someone true but not, and actually being someone true, but not necessarily perceived as such — I would pick the latter. If you’re a fake, eventually people will find out.

Also, I rather help others by giving them the ability to help themselves, rather than to force them come to me every single time. This is the “teach a man how to fish” philosophy. I rather teach you how to fish, than you give you a fish. I’ll give you a fish if you want, but that’s only a short term immediate benefit, and not sustainable in the long run for either of us. To contrast this with Mr. X, he would give you a fish for today, because he knows you will have to come back to him tomorrow. And he will do his best to actively prevent you from learning how to fish on your own.

They say that the people around you rub off on you. If you surround yourself with successful people, you too, would be successful. If that is so, then if I make the people around me successful, I too would be successful. Mr. X saw it as a zero sum game (if you win, I lose; so if I see you moving faster than me, I will slow you down). I disagree with that.

I observed that it’s mostly the little people who try to display their rank and power. The people with rank and power already know they have it, and don’t waste time proving it to their rank-and-files. Mr. X was slightly above rank-and-file, but he definitely made it known to others about whatever little power he had. I guess he forgot to check his ego at home before coming to work today. Again. Mr. X would be much more successful if we were back in the WWII era.

Keep away from people who try to belittle your ambitions. Small people always do that, but the really great make you feel that you, too, can become great.
– Mark Twain

To sum up, I knew about Mr. X’s two-face bastard attitude, my core values were mutually exclusive of his (some even conflicted), I could NOT operate autonomously, and our unfair lop-sided relationship resulted in my constant uncertainty and fear. He was impossible to read, was full of hidden agendas, and I had to constantly second guess him. That sealed the deal, my deal to resign, that is — and I left.

Hopefully I have not painted the picture that I am a saint — for I am not. I did have my naive moments, which I have since learned from. One of the great things about working with assholes, is that it builds character. I know that might sound cliche, but I speak for myself.

One of the reasons why I first started blogging, was to improve myself. I quickly found out that blogging provides transparency, as in, the internets will know what I’m about, and they can decide for themselves what they think of me (which I totally respect, good or bad). That reinforces that I need to be good, or else people would know that I’m actually bad, pretending to be good.

The other aspect I like about writing my blog, is that anybody reading my blog, can hold me accountable for what I say. Granted, I might sometimes write something when I’m half asleep, so that might not make much sense — but if you do the right thing, and judge me only by the well thought out articles that I really poured my full honest judgement into, .. then feel free to hold me accountable to what I say.

Jun

30

Cash Generation

Filed Under business | Leave a Comment

I see the term “cash generation” thrown around a lot, and today decided to look up and understand what it really means.

Basically, (all the cash flowing INTO the business) minus (all the cash flowing OUT of the business), in a given time period = cash generation.

Two other related terms are accounts receivable and accounts payable. Accounts receivable means money that will flow into the company but hasn’t yet (e.g. sometimes a company only sends a customer a bill once a month, instead one bill per order). In other words, this is money that customers owe the company.

Accounts payable means money that will flow out of the company, but hasn’t yet (e.g. the money your company owe your suppliers). So this is the opposite of accounts receivable. If you make iPhones, and got your internal components from China, then your Chinese supplier would send you a bill say once a month. So the point here is, you may place and order, and receive the goods, but you don’t pay immediately. But you will pay eventually.

And that concludes my first blog post on Business Terms 101 for Dummies series.

Jun

4

Return = Margin * Velocity

Filed Under business | Leave a Comment

I first read about Ram Charan (or originally just “Ramcharan”) from CNN.com and looked up more about this intriguing person. I’m reading a book authored by him to improve my business acumen, and thought about writing this interesting thing I read today.

The business equation is: Return = Margin * Velocity

As one can easily see, Return is increased when you increase Margin or Velocity. Margin is the net profit (including after tax), meaning this is the true profit. Velocity is basically how fast you are making that money. If you sell shoes, how long does it take for you to sell all of your shoes in a single shoe rack in your store? Is your shoe rack empty by the end of the day? Or does it take you a whole month to empty that rack? And that’s velocity, the measure of how fast you sell stuff. The faster you move your shoes off the racks, the better.

Interesting thought on selling software: If you sell shoes, what do you do when your rack is empty? You obviously have to order more from your supplier. That will take time (the time you place the order, the time it takes for the order to be processed, and the time the mail carrier delivers it to you). Maybe you say that you can pre-emptively place orders before the rack is empty, but that’s additional risk, because what if the stuff arrives and it doesn’t sell? Then your money is tied up in all those unsold shoes. Now imagine software. You obviously don’t have the same “inventory” problem, like a shoe seller does. How cool!

Ok, back to what I was saying. Dell is an interesting company because it basically assembles PCs with parts it gets from its suppliers. It doesn’t really make it’s own peripherals too much, so it doesn’t really keep inventory. Most of what you order online, are then built behind the scenes, on the demand, after you click that “place this order” button from their site. In the year ending Jan 28th, 2000, Dell only had 50 computers “left over” that wasn’t sold!

Another thing Ram talks about is cost of capital. Essentially, if you are borrowing money from someone else, you’re paying that someone for the borrowed money. This money, for most publicly traded corporations include those from shareholders. You’re essentially borrowing money from the shareholders. They are shareholders precisely because the bought your stock and paid in cash, the money that goes into a corporation’s pocket.

Even if you broke even, meaning even if you got paid $100 from a customer and it cost you $100 for that sale (for stuff including sales, marketing, manufacturing, taxes, etc.), you are still essentially losing money, destroying shareholder value, because you borrowed that money, with an interest rate. You have paid a small amount for that initial $100, in order to make that product. Wall St. would not be happy. This was one of the yard sticks the famed CEO of GE used in the late 80’s to decide whether or not to sell a business division of GE.

Ram also said it’s interesting to look at your industry in general, and see how well they are measuring up against this R = M * V equation. Or maybe in other industries. You may not have all the answers but asking the right question helps. Senior execs from companies such as Pratt & Whitney are learning from Dell on how to meet supply and yet not hold any inventory. Not having your money frozen in some unsold product is a great competitive advantage over your competitors. Now you can use that un-tied money to invest or do other things!

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