Archive for the ‘lessons learned’ Category

How to find Principle of Big success for your Business?

I am very much interested in studying great entrepreneurs and learning from them; especially, how they make big decisions. Lately I have been studying Elon Musk and trying to find out his principle of BIG success. He doesnt blog much or write essays :), so I have been watching his interviews and getting more details from it.

So the question we are asking here is, How vision drives the crucial decisions (getting funding or hiring key people) on the ground? or what is the Big Principle of success for a business.Ideas in this article were triggered afte reading about Principle of Big success here*.

I would like to discover the factors which will drive design of entrepreneur’s principle of success. I think, three factors drive this design:

1. Why Factor –

Entrepreneur’s conviction of WHY he is doing the venture? What is the prime motivation? This determines the success criteria of the Vision.

Paul Grahm says; “we’re not doing YC mainly for financial reasons, the big winners aren’t all that matters to us” YC want to make a “a big effect on the world” and hence he justifies his investment in Reddit. He goes on to say that, “Reddit, introduced us to Steve Huffman and Alexis Ohanian, both of whom have become good friends.” So in essence, YC is in startup investing for making a big impact on the world and in process they want to get associated with great minds! I think this is what drives most of their critical decisions. That’s why they invested in Airbnb, even though they were reluctant. Once you have clear WHY then comes finding out how to grow your business to become successful. Why will define the strategy.

In Elon Musk‘s case**, as he says; He thought that, 3 things which are important for humanity’s progress are – internet, inter planetary space travel and having economy which is based on renewable sources of energy (source). He decided to do something in those areas and went on to create PayPalSpaceXTesla and SolarCity(partially). For him starting SpaceX was a failure mission, his success criteria for starting it was getting everyone excited about to go to the Mars! His focus was on achieving something important rather than the idea of making money.

That’s a great tactic, once you identify what’s the most important thing to you is and decide to do something about it, then success/failure doesn’t matter to you; as for you success is inherent in your decision of pursuing it. How you will pursue it, will be affected by your passion of Why you want to do it.

2. Key facts

Key Facts of your business will determine how you can achieve the Why. As Paul says: “The two most important things to understand about startup investing, as a business, are (1) that effectively all the returns are concentrated in a few big winners, and (2) that the best ideas look initially like bad ideas.”

Now once the fact #1 is known; as in Paul’s case its “all the returns are concentrated in a few big winners”; then that will drive the how part of the principle. He says “… the huge scale of the successes means we can afford to spread our net very widely. The big winners could generate 10,000x returns. …We can afford to take at least 10x as much risk as Demo Day investors. And since risk is usually proportionate to reward, if you can afford to take more risk you should.” All this is based on key fact #1 and how to identify Big winners has its roots in fact #2 “the best ideas look initially like bad ideas.” Which by the will help us understand if our idea is Big or not 🙂

3. Growth Factor

Once you know the Key facts then you need pick up your growth rate. I think another great article (http://www.paulgraham.com/growth.html) by Paul Grahm about growth of a startup will help us understand this. This growth rate will in turn determine the large number of decision you take i.e how much risk you are willing to take, what should be your team size. So deciding growth rate will determine if Paul can afford to take at least 10x risk or 30x risk as compared to Demo day investors. By the way, he doesn’t talk about this in his article where he is discussing his success principle. But I think growth rate (strategy) chosen by him is driving the tactic of choosing to take 10x risk. Does that makes sense?

I hope this article help us understand how we can come up with our principle Big success. Do let me know your thoughts on the same.

PS:

*  Thanks to Santosh for triggering my chain of thoughts which became this article.

** By the way Elon Musk is a great guy and he is onto something BIG called hyperloop, calling it the 5th mode of transport!

Anna, Fast is not Enough! – an open letter to Anna Hazare

Dear Anna,

We salute you for the courage and determination you have shown over last week.Through your movement you have made every Indian aware of his/her power. We have stood by you in our fight against corruption.

I am really proud to say that we are fighting peacefully against corruption, but I also believe our fight should be very well thought out, we should solve the root of the problem. When we say, our goal is right, we should make sure that path we are taking is right as well.

I have few objections to the path which you have chosen.I am proud of myself because we are the second largest democracy in the World. You always have the right to go on indefinite fast, but saying that, “Government should PASS the bill, or I will die”, will not show Right path to the People of India. Anna, in this age of darkness, where we don’t have a strong political leader, we are looking towards you as our leader, who will show us the right path. If we want to pass any other good bills; are you suggesting we will have to go on fasting, till all the bills are passed? Is this how we want to run our country? I am aware of the frustration everyone has against the current system, but saying its system’s fault and going on fast till death to meet our demands,would be very naive and immature.

You and your team says, there have been lot of discussions on this bill, you have taken opinion of the people for it, which is great(simply because lot of people are supporting anything doesn’t mean that is right thing), but that doesn’t mean we should FORCE government to pass only OUR draft of the bill. This will do injustice to other people’s views (there are some other drafts by some other NGOs as well). Even if we succeed in this way it will set a trend to get anything done.

The long term solution I see is, you and your team should form a political party, face the elections, we will elect you as a majority in Parliament. This way we can get lot of other good bills passed. As they say, “To change the system we should become part of the system”. Lets become part of the democracy and fight in a systematic way. We always say, “Why we can not have Good politicians? Why cant WE, as Indians, elect Good People? Why Good people are not part of the system?”.

This movement is very good start, but in the long run India needs, Good people to join politics, you and your team can take a lead in doing that, you should start a political party! (Should I say “I will go on indefinite fast, until you start a political party?”).

Lets become part of the democratic system to make it strong and lets run our India more systematically.

Thanks,

An Indian.

Jason F. on failure, planning, productivity, inspitation

Jason Fried @ Big Omaha 2009 from Big Omaha on Vimeo.

Organizing Knowledge

To be effective, knowledge must be organized – they say

I have been reading ferociously for new ideas for last couple of years, apart from my daily studies. It was mostly related to philosophy, entrepreneurship, business, and some other stuff. And I have this huge pile of ideas which I have collected over the years. I have been documenting these in my diary but now I want to document them more precisely here. Today I have decided that I gona do start it.

i Shouldn’t Be Alive!

canyon100.jpg

This is the name of the great TV show that is aired on Discovery channel. It shows true stories of people, those who have survived a major mishap happened during their sea travels, treks, or others such incidents.

What makes show exciting is all are true stories, and the narration n presentation of discovery makes it even more exciting!!

One thing I have noticed is that those who survived have shown a great will power to live for some thing which was more important to them. That is obvious, you will say, but in order to survive they have done things for which they were NOT trained , they knew they can not do this, and they themselves were surprised how they did it!

What I learned from this is that we have great potential abilities to do things which, we might think we CAN’T DO, but unless we find ourselves in a situation where it’s a matter of life or death for us we dont tap into those abilities. We tend to be in our comfort zone of competence.

So the conclusion is, we will not know our limitations unless we DO great things, with a do or die attitude. But then a question comes to mind if everything reasonable is possible then, what we should do, that truly matters and makes a difference?

I think only a motivation for making a difference, excitement to do great deeds, or fighting for right cause, that is what inspires those great heroes who leave their marks on time.

I am gona test this hypothesis 🙂 ….

Here is a link to it’s episode guide:

http://dsc.discovery.com/fansites/alive/episode/episode.html

Have a thrilling experience…

Addition:

Recently I saw a movie ‘Seabiscuit’ in that there is a poem by

Emily Dickenson

it say:

“We never know how high we are Till we are called to rise;

And then, if we are true to plan,

Our statures touch the skies.

The heroism we recite

Would be a daily thing,

Did not ourselves the cubits warp

For fear to be a king.”

So it does sounds like we can do great many things when we find ourselves in particular situation, and then we rise to that situation to achieve great things.