Archive for the ‘Business’ Category

Yesterday I was filling out the registration form for the TiE Summit in Mumbai, coming up this December, and where I needed to describe my entrepreneurial status. Of the many options offered there (e.g. early stage entrepreneur, growth stage entrepreneur etc.), there was the one that seemed most correct for me, viz. Serial Entrepreneur. Yeah, I guess I qualify for that! Having co-founded and ran from 1998 to 2007, before divesting our stake and exiting, now this new venture, Social Wavelength, started in April of this year, is certainly a “serial” venture!

So how is it different the second time around? Is there still the same passion? The madness to think that you can make the world different? Or is it all tampered with time?

I thought about it, and realized that for me, this second time is certainly different. But for all the right reasons! Well, except the age. Really, I wish I could have started my entrepreneurial career at least 10 years before I did. Oh well. (Maybe this last bit of thought is the direct consequence of having just passed the 46th birthday. Part of that philosophical churn that accompanies the passing of a birthday, especially in the 40s age bracket!)

Coming back to the differences between being a first time entrepreneur and a serial one, I would pick the following key factors:

  1. There is more fire in the belly. I must qualify this. I remember a talk by Kanwal Rekhi at IIT Mumbai, earlier this year. Where he clearly contrasted second ventures of very successful first time entrepreneurs (and how they were not doing that well, as comfort zone had set in) and how he valued the not-so-successful-first-time-entrepreneur’s second venture. Because if the first time had meant lesser success due to a myriad of circumstances, but not for want of trying, then the entrepreneur has a bigger motive this time. To show others but most importantly to himself that he is no less, and he can be successful. That brings in more hunger and more determination.
  2. When an employee walks away without giving adequate time, you are upset but not shocked. And words like ‘betrayal’ do not exactly come in the head. You have seen enough and more. That there are all kinds of people. After doing all that you can, to make life good for your team, and more importantly, give them the freedom to speak candidly to you about leaving etc., people may still behave peculiarly. Suddenly the ‘father may get seriously ill’ or ‘the family may get transferred’ or they may ‘develop a disease that requires hospitalization’ and due to which reasons, they have to leave the job right away. You almost want to tell them that ‘do away with the charade’. But you don’t. And accept this as one of those things that happen. In spite of everything that you do. And you go ahead and look for replacements and life goes on!
  3. There is excitement and enthusiasm but celebrations don’t start before the cheque actually clears in the bank! You have seen enough near-misses to know that being almost there is not good enough. A great client contract, an investment or any other such good news is only true and worth celebrating, after the deal is done or the contract signed. Or whatever.
  4. In my case, specifically, there is a lower dependence on the valuation story and more focus on making and running a good, profitable business. The first time around, we actually stopped a profit making activity after we raised venture money, and pursued only a valuation game. This time around, there is clarity that profits and cash are king, and must be nurtured and protected and grown. And valuation, if it happens (and it will!), it is good, but it should not be made the be-all-and-end-all of the business activity.

Well, so here I am, serial entrepreneur. On this second journey. More exciting than the first in many ways.

What’s your story? Are you on your first? Second? Fifth? Done and retired in Bahamas..? What??

I caught this news early on Thursday morning, on a tweet from Guy Kawasaki. That Techcrunch was reporting about late stage talks of Google acquiring Twitter. I checked to ensure that it was not an April 1 story, and that these were indeed “truemors”!

If this were to happen, I believe it would be a good move for all parties concerned.

Let’s understand first, who are the parties directly  involved:

1. Google

2. Twitter

3. We, the users of both!

Well, there is also Facebook which went after Twitter, failed to acquire it, then started aping Twitter. And then there is Microsoft, an investor in Twitter, still trying to catch up in the social space. And other such.

But really, the main three constituents of the deal are the ones enumerated above.

So why would it be good for all of them.

Google has been struggling to find the next wave of growth. Ad revenues have been down, many of the new projects it invested in, have not delivered. There is constant pressure, at least from media and analysts, that its losing its way. And that Twitter is a big threat on account of its ability to offer real time search results.

So it would be a good boost for Google at this time, to get Twitter.

Twitter on the other hand, has been under pressure to get revenue flow started. Its clean interface without clutter of ads, is appealing, but it haunts them now, as they cannot suddenly be seen to fill it up with ads. They did raise more funds recently, but I am sure the investors were also looking for some revenue side action from Twitter. A feeble attempt to put a small ad on home pages and talk of a pro-version coming out soon, were starts  on to the revenue path. But when you start from zero, its always a LONG way to go!!

So being acquired by Google would not be bad for them either.

What does Google bring to the table then?

A working advertising model, with advertiser and publisher relationships like no other, in Adsense / Adwords.

A model of revenue sharing which is well established and which can be put in place on Twitter in some or the other way, in no time.

A huge understanding of contextual advertising model, and some ability to filter our spam from the same.

All this can be unleased on to Twitter, to generate revenues for Twitter, very quickly.

While we all like it clean and free, we also know that there is nothing like a free lunch. So rather than wait for Twitter to run out of money or get desperate, or have its service quality suffer, this may be just the right antidote.

And where does that leave the last constituent of the puzzle? We, the users of Google and of Twitter?

I think it benefits us as well.

For one, we can be sure that our favorite microblogging service is here to stay.

And our favorite search engine is more empowered now.

And that for our search, we can go to a single place, and pick up real time as well as historical data.

And can get amazing trending information, for now, and for the past.

Yes, it would be good.

I would say, its a real WIN-WIN-WIN for the three parties involved.

Where does that put Facebook? I don’t know. Maybe there would be one more interface revision of Facebook, with a Google like search (maybe powered by MS Live) to go with the Twitter like updates that they have already incorporated??!

A summary of few recent management learnings, unfortunately out of experience!

  1. An IIT tag does not assure a good manager or a good technologist or a good leader. Sad but true.
  2. An IIM tag does not assure a good manager or a good leader or a good business head. Sadder but true again.
  3. A good project manager does not necessarily graduate to becoming a good business head. Its truly shocking how clueless about business realities, cost heads, urgency on revenues, urgency on cash flow management, even a good project manager can be!
  4. A good sales and marketing person does not necessarily become a good business head. Here too, there may be an understanding of how to go and get new business. But managing P&L, managing a larger team, managing timelines.. all of these can be alien concepts to the person. Unbelievable, right? But it happens! Ask me!
  5. Boom times have generated some slick talkers, who are otherwise shallow in capabilities, to have added a lot of corporate tags on their CVs. Can you believe that one such person who had worked in some heavyweight corporations in India and outside India, and headed business development efforts in these organizations, could not put together a page of formal correspondence, lacked email etiquette, did not know how to create a decent spreadsheet?!
  6. Can someone with 20+ years of experience, including a few years in the Internet business, someone with management education background, not know how to use Excel? How in the world are you expected to evaluate this? Would you subject senior management candidates to such fundamental testing?? Okay, by the way, the Excel part was the ‘tip of the iceberg’ in the larger problem statement!
  7. That niceties are not guaranteed in this world, so don’t expect them. Someone with 5+ years of association, being treated as extended family, part of the innermost circle, can also walk out with 3 days notice and not feel an inch of guilt in doing so! That is the state of affairs of the day.

So there are the problems. Do I have any solutions? Any real answers? I guess, no easy ones.

Apart from the fact that I now appreciate the words of a couple of VCs. One of them had said that between the time that they meet an entrepreneur to the point when they actually make the investment, could be as long as a year’s time. And the other one had said that they would meet an entrepreneur, in formal and informal settings at least 15-20 times, before they take a call on investment.

I am seeing that hiring senior management is almost as critical for a company, as an investment is for a VC. Much as we are pressed with our growth ambitions and schedules, and which tempt us to go for a candidate over a few interactions, that is really not a good thing to do. The potential gain that we could get in getting a senior manager into the company sooner, is far offset by the risk of hiring a wrong person. The damage that a decision of that kind can do, takes up so much time and money for the company, to recover, not to speak of the opportunity cost that is lost! A senior hiring MUST go through long and extended interactions, whether the candidate likes it or not. That is the only way. Formally and informally, figure out if the person is really the one you want to take up a critical responsibility in your organization.