Monday, March 18, 2013

Perspectives on starting up - 1 year on

Earlier last year, I had written my perspectives on starting up - one month into the game. Continuing with my pensieve, these are my views one year on. For a bit of context, to people who do not know me and reading this, I started up a consumer internet firm last year after spending nearly seven years in a business consulting role with largish firms.

The below are in no particular order, but of how I thought of them.

#1. Starting up is brutal. Particularly in the early days.

In consulting firms, there is a saying that the early days of working in consulting are the equivalent of being thrown into a sea of sharks to learn swimming. This is usually meant to refer to the manner in which young, inexperienced, fresh-out-of-school analysts or associates are pushed out in front of client senior executives early and are expected to learn the ropes the hard way.

Entrepreneurship is no less brutal in its early days.

There is too much to do. Too few people. Too little time. Too little money. And a general lack of structure around. Also, since the start-up feels like your child, you are deeply and emotionally involved - which means that you can wish any thoughts about work-life balance away.

People often ask entrepreneurs: how does it feel to not have a boss? Well I tell you, it ain't that easy being the boss either. Plus, there is always a boss. From customers, to investors, to your own self, there is always someone you feel answerable to.

#2. Do not underestimate technology

A lot of people who do not have a background in the tech industry underestimate the complexity in technology, particularly in the internet space. 

The common view is: "bunches of college kids have been starting up multi-million dollar internet startups. So what can be complex about it? I will learn how to code in html, javascript, php and maybe photoshop in a couple of weeks and voila! I will have my own internet services or eCommerce firm soon."

This may have been true in the early days of the internet ten years back. Today, nothing can be farther from the truth. Yes, one can build a simple website in a couple of weeks (or days even), but that will get you nowhere near the quality standards in product design, user experience design and technology architectures that are absolutely required for building good businesses. Businesses that users will feel comfortable to visit, transact on and become loyal customers of.

By all means get your hands dirty with code and technology if you love to tinker, there is awesome fun in that. But, if you would like to build a scaled business, you are better off giving tech the respect that is due to it, and getting in experienced tech hands to build and manage a professional setup.

#3. Firms are efforts of individuals, magnified.

When one works in large firms, it is often easy to get lost in the maze of organizational constructs: processes, systems, hierarchies, titles, roles, responsibilities and even compensations. It is often easy to wonder: why am I doing this seemingly worthless role?, why am I being a mere cog in a slowly moving wheel? This sense of purposeless motion is a common experience.

Starting a new firm helps you realize what in essence firms are. Firms are large teams of people working in a directed manner in initiatives that seek to create benefit. If that seems like gobbledygook, I merely meant: firms at their very core are just people and their unified efforts. Nothing else.

Processes and systems are just aspects put in place so that everyone can work in a coordinated manner, rather than running helter-skelter. These are essential to magnify the efforts of the team, otherwise it is quite easy to work at cross purposes. 

Starting up helps one realize the importance of seemingly painful elements in big firms. It is only when you run around managing your firm's finances and file a seemingly infinite number of papers with the authorities that you realize the importance of those painful time and expense reports you had to file regularly. It is only when you search, recruit and grow talent for your own firm do you realize the value of those multifarious HR processes.

In consulting, I spent quite a bit of time doing due-diligence assignments for acquisitions. In these sort of things, one often tends to focus on financial numbers, markets and customers, real assets, IP, etc. with the review of people relegated as the last aspect to consider.

I now realize that one should do these possibly the other way around. Nothing is more important in a firm that its people and their potential to deliver. Everything else can be built up (or conversely destroyed) with relative ease. Of course, this may be the least quantifiable aspect, but people are definitely the most important component of the firm. 

#4. Talk to your customers. Go sell.

There is no equivalent uplifting experience in all of the start-up jig than in meeting potential customers, listening and understanding them, and selling your proposition to them. Nothing else has so many highs and lows. Nothing else gives you that level of brutally deep insight that is required for every business manager.

Working in large firms, in B2B or B2C industries alike, the function of sales is not often thought of in glamorous terms. Even in consumer-led industries (such as FMCG), it is often the area new recruits are put through to learn the ropes, before moving on to 'cleaner' areas like marketing. In the technology industry in particular, sales is often the last refuge.

True, sales is the wild-west. Particularly in the harsh environment of India. But starting up makes one realize the importance of being in front of the customer and selling, before everything else. If there was one advise I would give to myself in retrospect, and to any others who chance to read this article, it would be to sell before you build.

There is another aspect to this. A number of firms in the internet industry are increasingly moving towards the whole paradigm of using large amounts of data in learning about customers. As means to collect, store and analyze large volume data in real-time become common-place, there seems to be a move to substitute data for customer interactions. A large internet firm I know of has product managers launching and managing new products without having talked to a single customer, all by looking at voluminous, real-time data dashboards of customer interactions. 

I am quite wary of this. Yes, having some data is better that not having any. But it is very easy to confuse noise for signal when there is too much data. Plus, all the quantified data in the world can never substitute the qualitative interactions of a customer interaction. 

So get out of your cubicles and meet the customer. It teaches more than all those excel sheets and datasets.

...

That's it for now folks. God speed and hallelujah!