Month: October 2013

Adventures In Entrepreneurship Of An Asocial Person

For someone who would rather not interact with anyone at all, if I could help it, trying my hand at entrepreneurship was probably the most illogical thing to do. See, the thing with taking risks, for smart people, is to take manageable risks. And for an asocial person to attempt being an entrepreneur is akin to trusting an addict with the keys to the contraband store. The end results are not often pretty and quite predictable. And that is as bad as it gets when it comes to taking manageable risks and getting it miserably wrong.
It, honestly, is not fun to face the end of the year (well, yet another year) with the same conclusion — that you need to try harder and that for all the effort, results are just not there — at what is effectively the fifth year of trying out entrepreneurship as a means to make a living. As the opportunity costs mount, derision is abundant and faith — from yourself and from close ones in yourself — is non-existent, the logical choice is to be logical (and smart) and bail while you still can.
I have read probably hundreds of accounts of where I find myself right now. Yet, living it feels like nothing I have read before. Yes, I know the drill. You should reach out and find the support in people around you and it will all become bearable, if not a whole lot better. That is the theory, real life is quite a bit different. Since the choices that led to now have been only mine, the failure exclusively belongs to me and me alone. Success — well, that finds many owners.
The dull, dark and dreary stuff aside what I can tell you is that entrepreneurship is the best test of who you really are. And I don’t mean, by entrepreneurship, freelance gigs. Actual entrepreneurship tests you like nothing else. Everything begins and ends with you. And, should you fail, it will all exclusively belong to you. Considered as a coin toss series, in this game, the odds are loaded against you. Lose — it is all yours. Win — it is a collective effort.
In short, it is not for the faint of heart. Those who have succeeded, you have my greatest respect. Those who have failed, you have even more of my respect. Those who have failed and outlived the failure, I respect you the most.
At an earlier phase in my working life, I have really held it against the talkers in the business. I mean, how could you, without anything to back it up, talk your way into a fine deal? It looked unjust, much on the lines of a lot of successful managers being good only at managing people with no other core skill of their own.
And, as always, life becomes the greatest teacher. Business, is the best social activity out there. It is all about people. You need to be able to read people well. You need to be able to read people well to understand what they are looking for and appeal to the part of them that needs appealing to. That, is the primary enabler of a deal and not any other ability of yours. Thus exists the baffling bias towards who can paint a pretty picture better without having a clue about how to bring that picture to life.
Business is all about the persona, it is all about the narrative, it is all about being able to trust, just on a hunch. The longer you survive trying to do this, the more you realize that the overbearing bias towards a positive narrative and the persona is not an aberration, but a reasonably reliable social signal that is valid within a particular context. The popular exposition of this extends from not being fired for having Microsoft or Oracle as a vendor to understanding why that four figure (in dollars) tux is well worth the price you have paid for it.
If you are smart enough, you will realize that value is not what you perceive as value, but value is what the key players in the game perceive as value. There are probable instances of overlap there — between what you think as value and what the crucial players think of as value — but it is a rare overlap to find, should it be the case that you are asocial by nature.
For me, it is a journey that has taken five years too long. I wish I could have seen and known all of that I know right now, when I started out in 2008. But, as life will make it amply clear to you, there are things you learn by thinking and imagining and there are things you learn from experience. This is something that took me five long years to come to understand. It is frustrating as hell, and I won’t lie about it. But there is no other way I could have learnt all of this.
But, for all the losses, I am not giving this up. This is what I will sink or swim with.
Onward and upward!

Filed under: Misc

About The Imminent Online Future Of Indian Media

NYT’s India Ink takes a swipe at that contentious topic of the future of media in India, seen through the eyes of an emerging online media scene in India. The post covers interesting aspects of the problem and is well worth a read, but it also misses a few key points.
For one, niche, experimental new media websites are hardly a new thing in India. In some ways, we have been ahead of even the western markets on that front. There used to be this fantastic (but way too costly to run) product called The Newspaper Today from the India Today Group and the first incarnation Tehelka was another of these experiments. Now, if you consider that, both were products from the 2000 – 2003 period, you will realize that our experiments in the space go that long back.
I was involved with both products for very short periods of time early in my career and I went on to work at digital operations of many other media companies after that. The idea that good content, somehow, will change the game was a popularly held misconception then and it remains the same even now and someone is bound to revisit that theme every couple of years, only to go home pretty singed by the whole experience.
Secondly, it is not the quality, but the cost that makes the proposition rather untenable in India. It costs way too much to create even less-than-average content here (points tackled in a bit more detail in an earlier post here), creating good quality content, on the lines of a daily, is even harder and costlier. The concept has been a first love of sorts for me, since content and journalism is where I started my career, and every now and then I wonder if I should try doing a venture there. By the time I am done with even the most basic financial models on it, the stark reality always holds me back.
Thirdly, the myth of the booming class of novueau-riche Indians who are dying for quality English content is something that is created by people like me who want to read more of this type of content and imagine ourselves as a growing tribe. Let me break it to everyone, we are not a growing tribe. We are a vocal, somewhat visible group given to group-think and internal amplification like any other group. Unfortunately, the group is so tiny that most niche online publications in India consider even half-a-million page views in a month as an excellent month.
Lastly, it is not impossible to have a growing, scaleable online content business in India. It will be in a non-English language, with content that probably won’t appeal to the upper class and it will need the backing of some really good investors who are patient enough to put money into a team and a business that will take 3-5 years to bootstrap properly.
P.S: Ironically, one of the people interviewed in the post, P V Sahad of VCCircle, was a colleague at The Newspaper Today. He’s one of the smarter guys in the business who realized early enough in the game that there is no money in doing content if you want to do a lot of it.

Filed under: India, Internet, Media

How Not To Build Software For SMBs: SAP's 3 Billion Euro Story

Tucked away in the story about SAP closing down its SMB suite is one significant detail: It cost the company about 3 billion euros to develop.

SAP, one of the world’s biggest makers of business management software, originally projected that Business by Design – which was launched in 2010 – would reach 10,000 customers and generate $1 billion of revenue.
The magazine reported, however, that the product, which cost roughly 3 billion euros to develop, currently has only 785 customers and is expected to generate no more than 23 million euros in sales this year.
By comparison, in the second quarter, SAP’s software and software-related service revenue stood at 3.35 billion euros.

I am astonished by how on earth can you spend 3 billion to develop almost any software, leave alone one that is aimed at small and medium-sized businesses. The ERP/CRM/PLM landscape these days is an ocean of riches for companies looking for an implementation; be it customization of a generic or product or niche, extremely vertical ones. When anything costs as much as that to develop, it is hamstrung from the word go. I am just surprised that they have managed o keep it going for ten-years. For some perspective, three billion is still considerably north of what most successful software companies are valued at with revenue in the hundreds of millions.
Looking at the pricing for the product (link) it makes no sense at all. If you have to price a product/service like that and yet spend even a billion euros on developing it is nothing short of suicidal. They were hopeful of doing a billion dollars in revenue (annual, I assume); which is astounding considering that their main offerings brought in under 4 billion euros in the second quarter. Normal SAP implementations are long-winded expensive affairs, which plays a key factor in how the company makes most of its money. When big companies lose their way, they tend to do it a spectacular manner like this.
The SMB marketplace is extremely price sensitive and resistance to any change is fairly common place. The newer crop of companies who provide similar services also operate on lower pricing, have no contracts and don’t have many other nice bits companies like SAP are used to. Not surprisingly, the revenue is not expected to top 23 million euros this year, which puts in only in the league of a successful newer SaaS companies.
The upside to all of this is that it makes acquisitions a better option companies like SAP. Three billion euros could easily have been spent on 300 million every year on acquisitions and it would not be a stupid bet to assume that they could have had at least a couple of winners or more in that pick. That said, the conflicts in the business models of the newer crop of software companies and the older mammoth-sized companies is far from a resolution. Companies that are acquired this way have to often force fit themselves into the larger picture, which can be a huge drag. But, that’s a different story altogether, for some other time.

Filed under: Business