Everyone’s interested in money. No one denies it’s importance. But how many really understand it’s significance and replaceability? Or it’s origin?
Paul Graham, in his fantastic set of essays, talks about Creation of Wealth and not money. In it is a short history course on the significance that I’m highlighting here today.
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The definition of Wealth
The advantage of a medium of exchange is that it makes trade work. The disadvantage is that it tends to obscure what trade really means. People think that what a business does is make money. But money is just the intermediate stage– just a shorthand– for whatever people want. What most businesses really do is make wealth. They do something people want.
From Barter to two trade exchange
Money is a side effect of specialization. In a specialized society, most of the things you need, you can’t make for yourself. If you want a potato or a pencil or a place to live, you have to get it from someone else.
How do you get the person who grows the potatoes to give you some? By giving him something he wants in return. But you can’t get very far by trading things directly with the people who need them. If you make violins, and none of the local farmers wants one, how will you eat?
The solution societies find, as they get more specialized, is to make the trade into a two-step process. Instead of trading violins directly for potatoes, you trade violins for, say, silver, which you can then trade again for anything else you need. The intermediate stuff– the medium of exchange– can be anything that’s rare and portable.
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Metals are considered both rare and portable. Hence they became the medium of exchange. We have dollars now as the medium but it’s not a “physical” thing. It’s just another medium. Concentrate on the commodity not on the medium.
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I always thought taking notes were important. I’m a overdrive note taker. I believe it reinforces your thought and drills down the basics when you read it. It also helps that you can often reflect back on the single most important point. Over the years I have gotten better at taking notes and I’m currently compiling a post to give you my best practices. Here Caterina Fake, the co founder of Flickr, gives some wisdom into her productivity and thinking.
On the importance of notes.
I think it’s a sickness in business to always try to do more things in less time. I try to spend more time. People read all this information and think they’ve accomplished something, but what have they really taken in? What can you take in that’s important in 140 characters? I read books and articles, and I take a lot of notes. I put stickies in passages I find interesting, and later I write them into my notes, because that reinforces them in my memory. And I’ll make a point of going back and rereading them. Otherwise it’s like cramming for a test in high school where you don’t retain any of the material.
On prioritizing tasks
I have a to-do list so I don’t forget things. But I don’t prioritize tasks. I just know what needs to be done, and I check tasks off in the order I do them. Sometimes I feel like checking off all the little things. Mail this letter. Respond to this e-mail. Sometimes I want to figure out the entire strategy for 2010. As long as everything gets done, it doesn’t matter in what order.
On innovative meetings.
Interaction should be constant, not crammed into meetings once a week. You just turn around in your chair and bounce an idea off one of the other 10 people in your office. Keep the floor plan open so people can talk to each other. As the company gets bigger, keep dividing it into smaller and smaller groups. Follow Jeff Bezos’ two-pizza rule: Project teams should be small enough to feed with two pizzas. At Hunch, we don’t have meetings unless absolutely necessary. When I used to have meetings, though, this is how I would do it: There would be an agenda distributed before the meeting. Everybody would stand. At the beginning of the meeting, everyone would drink 16 ounces of water. We would discuss everything on the agenda, make all the decisions that needed to be made, and the meeting would be over when the first person had to go to the bathroom.
In a commencement address to the students of Princeton, Jeff Bezos, the CEO of Amazon, had some very interesting things to say. I have written about him before here, but I urge you to read the full transcript. Here are my takeaways.
1. What I want to talk to you about today is the difference between gifts and choices. Cleverness is a gift, kindness is a choice. Gifts are easy — they’re given after all. Choices can be hard. You can seduce yourself with your gifts if you’re not careful, and if you do, it’ll probably be to the detriment of your choices.
2. I got the idea to start Amazon 16 years ago. I came across the fact that Web usage was growing at 2,300 percent per year. I’d never seen or heard of anything that grew that fast, and the idea of building an online bookstore with millions of titles — something that simply couldn’t exist in the physical world — was very exciting to me. I had just turned 30 years old, and I’d been married for a year. I told my wife MacKenzie that I wanted to quit my job and go do this crazy thing that probably wouldn’t work since most startups don’t, and I wasn’t sure what would happen after that
3. I didn’t think I’d regret trying and failing. And I suspected I would always be haunted by a decision to not try at all. After much consideration, I took the less safe path to follow my passion, and I’m proud of that choice. Tomorrow, in a very real sense, your life — the life you author from scratch on your own — begins.
4. In the end, we are our choices. Build yourself a great story.
3 days back I signed up for the advanced copy of Delivering Happiness by Tony Hsieh. Who? What?
Tony Hsieh is the CEO of Zappos.com. This is an online shoe company that has set new standards on customer service. They were recently acquired by Amazon.com for 1.2 Billion dollars.
My interest piqued in them when I read about about Tony attending Ted India and giving a speech. I watched the speech intently and took notes. Becoming a CEO someday is part of the plan, but more importantly building a company that has great culture is the goal.
When I walked in today at work, I saw a copy of Delivering Happiness [Amazon Link] on the table. I was astounded. We have celebrity bloggers at work and while the main chief had left I asked around and found out that no one saw it or knew who had gotten it.
Carpe Diem.
I HAD to read it and I spent a day sifting through it. I think the last time I did it this religiously was a game guide to Starcraft. Not even my exams had seen such dedication. Noted here are my thoughts on the book.
The Review.
High average prices. High selling margins.
This was the first lesson Tony learns when he starts to sell newspapers and buttons. Tony’s book is a semi autobiographical account of his life. From the time he’s a toddler he has had interesting experiences to share. A good early part of the book devotes its time to Profits. The middle half is Passion and Profits and the finale is Profits, Passion and Purpose.
College years are next and this part had it going on really well, it reminded me of all the reasonswe bunked college classes when in IIT. He was at Harvard, the equivalent in the States. Here’s a quote on his logic,
“On class days, my 8 am alarm was the most unwelcome sound in the world. I would hit the snooze button repeatedly. I would tell my self I could skip the first class of teh day and get the notes from someone else later. Then an hour later, I would convince myself that since that logic worked so well for the first class I could apply it to the second class, so I missed that class as well. By the time I was getting ready to go to my third class, I reasoned that I missed 2 classes so missing one more wasn’t that big a deal. And finally by the time I was supposed to be headed for my last class, I figured there was no point attending only one class when I skipped all others”.
Oh how I relate to this. The only difference, he had classes three days a week between 9 am and 1 pm.
It’s here that Tony’s life gets really interesting. It’s almost a mirror reflection of mine in the start. Which means I have an exciting future to look forward to. He starts in a deadbeat technical job (hi) and then goes on to web design (hi again) but finds out that he’s not really passionate about it even if the money trickles in.
He mentions an important point that I have been wrestling with, “We didn’t know what we wanted to do. We did however know what we didn’t want to do”. That’s not where the comparison stops. He’s a fan of RedBull! For 10 years!
It almost seems like he’s an Asian alter ego of mine. Sans the size probably. Oh and he plays poker. Score three.
The first half is an entertaining read. The second half talks about setting the company up, going almost broke, being a party playa and climbing Mount Kilimanjaro. All fun stuff.
The real meat of the book lies in the third part where he talks about Passion, Purpose and what you want your life to mean and how to “find happiness”. He’s no Dalai Lama in this, but this book has more practical advice than most self help books out there. It is, however, nothing ground breaking if you have seen his talks (or 4 of his talks like I have).
Since this was a read only unedited copy, there’s weird formatting and indentation. There’s a nice chipping in by various employees and co founders on their view of things. This is a format that Sam Walton had made famous where people would talk about him in their own words. Here people talk about the company and it’s values. This book was an easy read and an enjoyable one. If you want to pick up tips on how to go about setting up a company and it’s culture and focusing on the most important thing: People and growth, then grab your copy when it comes out in June.
It will give you a good light hearted introduction into the world of business, culture, entrepreneurship and building up of a billion dollar company. It is however, not a cook book or not one that would have many reads (or dog tags) to understand.
Who should read this book?
Anyone who wants to know about Zappos, Tony and one of the greatest companies to work for.
Who should not read this book?
Anyone who wants to miss out on Zappos, Tony and one of the greatest companies to work for.
If there is but one passionate evangelist of the Microsoft company, it’s GOT to be Steve Ballmer. Current CEO of perhaps the largest company in technology.
An interesting thing is Steve Ballmer was employee number 24 for Microsoft. And his birthdate? March 24th. Seems like an astrological connection there. In 2009 he took over the reigns as CEO from Bill Gates.
The most visible thing about Steve Ballmer is his spirited energy. He’s not a quiet guy. He’s not a small guy either at 6′ 4″. Thus makes for fascinating stuff. If you haven’t seen his developers talk or the interview with Guy Kawasaki I’d urge you to have a look.
This post however talks about the wisdom he imparts to the students of Stanford, a school which he dropped out of in the 2nd year, on the stages of Business a company goes through. He began with saying that Microsoft is a two trick pony. They have mastered Desktops and Servers. Google, on the other hand, is a one trick pony -Search and Advertising. What most companies do is to get that one trick right and then have development areas around that. Ballmer calls these “cute things” that businesses do.
1st is the Idea and its implementation Get an idea, implement and execute it. Get it to ship-it ready.
2nd is is the scaling of the idea (getting it to critical mass) Taking the business from 0 to 100 (million dollars). That’s the sort of idea you start with.
3rd is milking the idea for all it’s worth (cashing in on the idea). This is where you cash in on the idea which is at the stage Google is at according to Ballmer.
4th is fostering a culture to get new ideas (exploration) Build on other ideas. Which to Microsoft was Server Enterprise after Desktop.
I thought those were great insights. Watch the full talk here.
One of the things that sickness does is give you much time to think about when you are in the bed. There was only one constant though reoccuring in my head.
This was inspired by the Mark Pincus’ (who has a nice new blog redesign here), CEO of Zynga, video where he talks about how he started Zynga and what he did for revenue amongst other things. But the most important line that hit my head was (paraphrased here).
“You have to take control of your life. You can’t wait for the next big thing to happen. What are the three macro trends you are betting on? You have to choose those three early on and then do everything in your work and career to progress/read and work on those three things”.
For some reason, besides the rest of the talk. Those few lines have been imprinted on to my head. And I did some serious thinking on the macro trends of the future. I pretty much have a rough idea on what they are going to be. There will be a lot of Social in it for sure and somevery smartpeople are thinking a lot about it. I’m also heavily invested time wise into technology and it’s rapid progress so that’s an area I see developing a lot.
Everyone’s talking about Energy as the next best thing. I can’t quite say that’s my thing though, but if Bill Gates, Al Gore and Vinod Khosla have their eye on it, you know it’s going to get big.
There’s another important part of it from another interview that Mark gave on the reason why you would want to do something,
You weren’t trying to go out and make money. There was something else. When you achieve things, you start to realize those weren’t your real goals. Then I thought I wanted to build a great company. So I spent a whole bunch of time and I accidentally built this company Support.com. I won’t bore you how I got there. We created this service that nobody wanted. We luckily figured out that no one wanted it. John Doerr talks about this idea of failing fast. And that’s important.
So here’s my question to you. What trends are you betting on? Why?
For most of us who have been brought up in India, there are certain hardships we face. Daily rigours of life, not having/seeing a lot of wealth, constantly facing the hardships of weather, lack of electricity and water. Yet we strive.
What a lot of us don’t face are racial abuse, slurs and physical and emotional trauma. I’m not saying it’s non existant, I’m asking how racist can you get with another Indian? But the real question is how many of us have used this to fuel ourselves? How many have taken this and used it as positive determination? I haven’t. I’m pretty sure that’s the average crowd.
So it comes as a great surprise when an Indian, fostered by a family that had $25 dollars as savings wins a lottery ticket and heads to America and 12 years later has a son that bears them millions of dollars.
That family is the Chahals and that son is Gurbaksh Chahal. He was a sardar who was constantly ridiculed for his appearance and is now one of the youngest millionaires (guys a year younger than me) “on the planet” as Oprah puts it. He started 2 companies the first selling for 40 million dollars at the age of 18. The other BlueLithium selling for 300 million dollars. He’s written a book called ”The Dream” which you can order at Flipkart here.
I have ordered the book and I plan to check out more on him as well. But here’s the show that I found very inspiring (Oprah always inspires) in which he’s featured and talks about his stuff. Well played G. Well played.
Incidentally, I got another link (mp3) that was very educational from Andrew Warners website, Mixergy (which is a must follow for entrepreneurs or those dreaming to be). You can follow Gurbaksh’s blog here and say hi to him on twitter. Notice how great men use the first letter of their name and then the family name (like kgopal? gchahal) etc.
Here’s Gchal’s take on his journey.
Twenty-Three years ago when my parents first came to America – they had a strict agenda in mind for me. No surprise here, but they wanted for me to either be a doctor or engineer. They arrived with $25 in their pockets but their hearts were full of dreams. “Education is the key that opens all the locks to all the doors in the world. My four children will become doctors and engineers. Maybe even both!” my father would say. That didn’t necessarily happen – but with God’s blessings– we all became very successful.
When I was 10 – my Dad even made a “janampatri” (astrological life story) of my life. And when he had it read, he wasn’t too happy. The first question he had asked was, what will my son be when he grows up? The reply wasn’t what he hoped for. The person reading it said, “He’s not really an academic so he won’t do well in school. His options will be limited but he can always just start a business” Shortly after that reading, my dad stopped believing in this form of astrology.
As many of you know, I dropped out of high school at 16 to embark on my journey as an entrepreneur. And the rest, as you know is history.
Mike Taber, over at The Single Founder, examines what it takes to be successful. The single answer is that there is no one thing. Being successful takes many things to get right but more importantly focusing on the most important things to get right. He explains in this post and sums it up nicely. The sum of your successes should be greater than the sum of your failures. Quoted here.
“Running a small business is like flying an airplane. There’s not a single thing that keeps you in the air. It’s doing a lot of things right. But the truth is that whether it’s landing a plane or running your business, you can screw some things up and still be successful. You can recover from most mistakes, while others are going to be catastrophic. Forgot to refuel the plane before heading overseas? Probably catastrophic. Didn’t do the best SEO for your website? It will probably cost you more to acquire customers by using AdWords, but ultimately is probably not going to kill your business unless you screw that up as well.
If you compound your mistakes, your chances of failure increase dramatically. But each success will reduce the consequences of the mistakes. This is why large companies can have such a shoddy product and still make money off of it. They have so many things going on that the law of averages ultimately weighs in their favor. Does the product manager suck? No big deal. The engineering team will probably pull his weight. The code is riddled with bugs? No problem. The support team is there to help with workarounds.
So the secret to success is to realize that there isn’t a secret. Everywhere you look, you will find something that needs to be done competently. For everything you do that doesn’t measure up, you will have to make up ground in other places, keeping in mind that one success is less than or equal to one failure and that the sum of your successes must be greater than or equal to the sum of your failures.”
When you spend half of your time reading up on business, entrepreneurs and successful billionaires you inevitably either dream about the billions or you start putting together ideas of what you could do as a business man. Mostly you realise that you can only get headway somewhere by actually seeing what people are doing and talking to them. In one word experience is better than theory ever will be.
I used to be a big fan of this zen online -self help thing. Till I realised the whole thing is great for about some time. Then the so called masters keep expounding the same bullshit. That’s why I gave away most of my books on that topic.
Self help begins with the self. Help yourself first then take advice from others on helping the “ideal” self. And all this faff talk is great for the ears, but gets you no where (As I am constantly reminded by a very smart and successful friend).
So as today, I’m not going to give you self help bullshit, because I can’t be fake. I will however continue to keep giving you quality (;-)) stuff to read about people who have made it successful and why. I have a couple of special interviews planned too !
Anyone can start a business.
Anyone can run a business. Anyone can also strike it rich by being lucky. That doesn’t make them an entrepreneur.
(By the way, that E word has been so overused that I want to puke every time someone who started a website puts Entrepreneur in his linkedin profile. Let me get that out of the way, a guy who takes a risk at the throw of a dice NOT for the sake of risking it (daredevils can be idiots too) but is willing to shake the system up is the only one that can bear that title).
Some verysmartfriends have shown me that starting something the first time coupled with luck can help you strike it big. But doing it again and again and never giving up is where the thing is really at. So here are 4 tips from them.
Think Big but think in numbers.
I had a business plan. I saw most people making money out of blogging, some claiming to be experts at it, but in the end it was just a blog that depended on, what I now think, is a fail strategy of ad selling. As my friend says, putting it in numbers to make sense. But more important is thinking big. Let’s start with the numbers part. The friend here is CEO of Krawler, Shashank Dixit.
A business goes like this. If you are alone and you hire one guy. You’ll get overheads. To be in a decent range of financial independance you need to make minimum 5 Lakhs in your first year or min 10L if you want to re-invest and grow. That comes out to be 20k USD or 2K USD per month which is about 100 USD a day (that’s about 5000 ~ 6000 Rs per month). That’s when you have a zero investment business. Flipkart is not a zero investment business, but keep that in mind. If you have a eCPM rate of about 5 dollars then that means you need about 500k hits per day to make 100 USD.
Do you see the beauty of putting it in numbers? You suddenly have a target and goal to reach. Besides wanting to be Techcrunch to get those numbers, you clearly see why most people drop out of blogging. The original uncles keep at it because they had the first mover advantage, every other noob claiming to make money through blogging (if they do it at all ) has to reach those numbers. So blogging for money doesn’t cut it. Not anymore.
Thinking bigger therefore leads to a syndication network. That’s where the money is. Prime example:- Gawker media. I’m not saying you ape it, I’m saying that’s the sort of thinking we must have to become affluent.
The Love vs Need thing Hugh Macleod has this great Sex vs Cash Theory. I urge you to read it. I have been shown the Love vs Need theory. Which sort of derives from the Sex Cash theory but more important is more grounded. The love part is what we are brought up – Passion. This whole passion thing has been a sexy thing the Media has been jerking around us with. Few people live their passion. But everyone successful is MADE to be passionate about something.
Think DLF’s head was “passionate” about house building? Balls. He saw business opportunity in it. Decided to go ahead with it.
Think Azim Premji was “passionate” about IT services and infrastructure? Nonsense. That brings us to the most important thing that most of us don’t see. The Need thing. Indians need to get out of this passion thing. Till yesterday I was rosy glassed over by this passion become Steve Jobs thing. Today it hit my head that it’s about the needs thing. I’m sure this sounds like common sense, but few heed.
The needs thing dictates that to be in business you serve a need that people want. This doesn’t mean 10 percent better service. This means a new service or a well defined niche. Chocolate doughnuts are great. But selling icecream is another opportunity NOT selling chocolate doughnuts + nuts shop. But remember think big.
Quite some time back, the famous Seth Godin (whose blog title reads as Seth on Marketing, Respect and the way ideas spread), had posted a note on how he’s planning to offer a course on an Alternative MBA for 6 months. Over 4000 people applied (I did too but couldn’t clear the time for the customs and getting a Visa for the interview) out of which 27 finalists were picked. He then chose 9 of those people who worked for him for quite some time.
This was like the modern day Gurukul. Gurukul, in ancient India, was a type of school wherein the students stayed with the Guru (teacher) and learned from him. Derived from the words Guru (teacher) and Kulam (place/area/extended family).
So these students went and stayed at his office for 6 months. One of the students, Ishita Gupta, has posted some of the learnings (not for all 6 months but some pithy take aways) in the style that Seth always excels in. Here are my favourites. I think she has to be informed of Permalink URLs on her blog, but here is the original post.
Time is an illusion. Don’t measure it by the amount of hours/effort you put in, measure it by goals you accomplish
Doing things quickly and repetitively helps you get over anxiety about failure.
Making a decision is more important than doing things perfectly.
Doing things quickly and repetitively helps you get over anxiety about failure.
Making a decision is more important than doing things perfectly.
You just might waste your life away in idleness and bullshit if you’re not careful.
Taking initiative matters.
Being who you want to be and who you think you really are is largely a decision.
Learn the language of the people you wish to speak to and communicate with (French or analytics.)
