Amrutash Misra

Those who survive drink from the Golden Cup.

I recently read this and I think it’s worth sharing. I must also add that I can’t remember where I read it. I think I read it in Ladakh. But my wife disagrees and she was with me all along. If I did read it in Ladakh, then it’s probably an ancient Buddhist saying that survived many Ladakhi winters, in a self-referential way.

Ask Google to define survival, and it spurts, “The state or fact of continuing to live or exist, typically in spite of an accident, ordeal, or difficult circumstances.” Survival is a basic corporate instinct. For instance, if a company is forced off the edge, then it’ll put up a fight and get right back. If it is threatened, it’ll back off. Some entrepreneurs argue that survival is the raison d’être for companies. The survival instinct is stronger in some companies (think GE, Ford and Hoshi Ryokan) and weaker in a few. At the end of the day, those who survive, they continue. We respect companies who’ve lived to be healthy at 90 and alive at 110. We forget the ones who die.

At iloveread.in, we believe that survival is so important that we make it the centre piece of our existence. In past recruitment interviews, we’ve asked applicants to research on what it is about some companies that enables them to survive for so long. One applicant came back with a host of ideas from authors who had written about the GE way. There is much literature you can read in these books – link, link and link. A short summary of that email would be – 100 year old companies like GE focus on strong leadership, adaptability, talent and culture, brand influence and networking.

But this article isn’t about companies like GE. It is about start-ups. What do start-ups need to survive? For starters, start-ups need to survive the first 1000 days. Gujarati traders, for instance, have a saying, that a shop that survives the first 1000 days will survive through. My optimistic cheat sheet of things that must survive the first 1000 days of a start-up –

1. Money.
   That’s a sitter. If you’re out of money, then the game is over. If your bank account survived the first 1000 days and your balance sheet shows some current assets, then there is promise, if not something better. For non-entrepreneurs: money in the bank is like the health of your character. Once the health is over, game is over. My recommendation: Count, everyday.
2. Self-belief.
   Starting-up can be an assault on your self-belief. There will be clients and customers who reject you, who don’t pay – which is a milder form of saying “NO”. Holding on to one’s self-belief, in all the ups and downs, is probably the biggest test of an entrepreneur. My recommendation: Buy a pair of good sun-glasses. It’ll make it easier in the Sun.
3. Your moral compass. In business, even in a start-up or a young company, your moral and ethical compass will always be under pressure to give way for profits. My recommendation: Sit straight. Keep your hands above the table.
4. Your family.
   A start-up is an entrepreneur’s baby. But many families don’t understand this now, do they? My recommendation: Take the time out and explain it to them.
5. Your friendships.
   Where was the time to take out for friends? My recommendation: Involve your friends. While starting up, har ek friend zaroori hota hai.

Ah, so back to the point. Those who survive drink from the Golden Cup. Either literally. Or figuratively. Or monetarily. Oh, and apparently, intelligence has nothing to do with long-term survival.

Then new employees join us, we often ask them this:

Assume that you are bloody brilliant at your job. You’ve exceeded all your targets for 8 quarters in a row. You are being fast-tracked to a greater management role. Not only that, everyone loves you. Your peers love you, your bosses love you, and your juniors love you. Now, assume that your area is flooded and you are stuck at home. Further, your net connection is not working. You are effectively forced to take leave and stay at home. Question: choose one of the following:

a) Your team misses you a lot; they call you often. With your superior understanding of business, you are able to answer every query. You save the day even in spite of all the constraints.
b) Your team has just forgotten about you and doesn’t even realise that you were missing. Towards the end of the day, they call to check if you are all right.

Do you remember Avnish Bajaj? Currently MD, Matrix partners India, Bajaj was the founder of Baazee.com, which he sold to Ebay for $55m in 2004. But, that is of lesser concern to us. What is of concern is that in Dec 2004 — a DPS Delhi student filmed his girlfriend on his cellphone in what is now a fairly famous video (to the point that it was cross-referenced in the movie Dev D); The male student then sent the video to his friends and soon it viral-ed on the internet. Enter Ravi Raj, a 4^th year student at IIT Kharagpur – he put it up for sale on Ebay. It sold 8 times in 2 days and in the general chaos that followed, Avnish Bajaj was put in jail. [He was subsequently released – and why not – Arun Jaitely and Sidharth Luthra argued on his behalf.] Here’s a quick summary of the case.

Remember Warren Anderson? Certainly more famous than Bajaj, Anderson (currently senile and deaf) was the CEO of Union Carbide when UC’s almost-defunct Bhopal plant blew up in what is still regarded as one of the worst industrial disaster. The plant was badly maintained. Had it been well maintained, disaster might have been prevented. The exact cause of the accident is still under debate. Or better still – Remember Tony Hayward, the CEO of BP who was forced to resign in the aftermath of the BP Gulf of Mexico oil spill?

I am not defending Anderson or Bajaj or Hayward, but I am merely pointing out something important here – the lack of real “control”. What is common between Bajaj, Anderson, Hayward, you and me is that we really don’t have “full control” on everything that happens in our organisations. Just like Anderson, et all above, we don’t do everything we are responsible for by ourselves. We get it done. We delegate. And then we hope and pray that nothing goes wrong. We put checks and balances in place so that things work. We build systems and processes and standard operating procedures. We demonstrate “demonstrable behaviour” and we evaluate our balance scorecards. [Clearly Anderson, et all went wrong in the systems they built and were on the wrong side of law.]

In a company of repute, this is well understood. Which is why, in a good company, most successful managers will reply (b) to my question above. If your team doesn’t realise you were missing for a day – it only goes to say that you’ve driven a good system into place and they don’t need you on an everyday basis. [If your team doesn’t realise you were missing for  month, then there is something definitely wrong.] If you answer (a) above, it will only go to show that you have a superhero-ego, i.e., you need to “save the day” everyday.

HOWEVER, in a start-up, things are different. Start-ups are young dynamic and everybody has to contribute. Systems are not in place – even if they are, they don’t work perfectly. The team HAS to be in control. If you are missing from office and not available on call, then you might be accused of “a lack of commitment”. Startups need people who say (a) to the above question – they need people who can “do the job”.

Or do they?

I think that at start-ups, one of the biggest mistakes we do (at iloveread.in, we did this everyday till we almost shut shop) is to do everything ourselves. We are poor at delegating work. We huddle on the smallest pre-text. Things that 1 person could do, or could even be outsourced – 3 people end up doing it. This is partly because we are forced to; but more because we love the feeling of doing everything to the last detail ourselves. We love being “super-heroes”. (Isn’t that partly why we started up in the first place?)

Here’s my point – if you are in a startup and you think that everything you are doing is under your control – then you are going to remain a startup, at best graduate to a small company.

Here’s what we’ve learnt – In order to grow, we have to let go the feeling of “full control”. The COO of a company, the man who is supposed to be responsible for the operations of a company, is really the Chief Optimism Office. The best use of his time would be to create brilliant (control) systems, hire awesome people, delegate all the work and then pray that everything works.

The glass, for him, is always half full.

YourStory, 2 Sep 2011: Link

I’ve heard in (book) trade circles that work on Amazon.co.in is on and that it might launch sometime soon.  If you’ve followed this story till now, then this is probably what you already know –

1. In Oct 2010, they announced free shipping to India from Amazon.co.uk. Here’s the interesting part — the free shipping “offer” ends on Sep 30, 2011.  At the time it seemed like a “testing-waters” move.

2. In June 2011,  Pluggd.in published a story about Amazon poaching Madhu M from Landmark-TATA.  He was heading Landmark buying and merchandising. In Chennai,  Landmark has done significant supply chain changes in the last 1-2 years, one of which includes placing the Landmark depot one floor above Westland’s depot.  Westland (also TATA owned)  is a major distribution house. This move (poaching of Madhu M) has fuelled rumours of an Amazon.co.in launch – which some people claim will be ”within 6 months”.

3. FDI in multi-brand retail is curtailed in India. On July 22, 2011, a govt CoS passed a proposal allowing for 51% FDI, but with major restrictions – a) investment has to be greater than 100m$ and b) half the investment amount goes into back-end supply chain investments. Cabinet approval is required for this to become a law. This clearly restricts Amazon.com to enter India as a wholly owned unit. However, it might buy out a local firm (like Groupon did).

While further developments are eagerly awaited by the book loving people of India, here’s my two pence –

1. Amazon’s entry into India will force the book trade in India to be more professional — structured and systematic. While the book trade in India is better than before, it still faces legacy issues and outdated ways of doing business. I am referring to warehousing, order taking, fulfilment, IT systems, etc.

2. Amazon’s entry into India will help every single Indian e-com business. Here’s how: Today, Indian e-com businesses sell 3 things — a) The idea of online purchase; b) the idea of internet payments; c) (finally) a product/service. The entry of a big player will mean that the onus of selling the first two is on the big player. Small companies like us, we can finally concentrate on only selling what we actually sell.

3. Amazon’s entry into India will also force (eventually) e-com service providers to improve their quality of service.  I am referring to PG companies, home delivery service providers, etc.

4. Amazon’s entry into India will mean that smaller physical retailers can sell via Amazon’s marketplace — these guys don’t have to build their own e-com platform. (Of course, e-bay already does that, but I think Amazon will do it better.)

Sahil and me had a lovely argument with the interns on risk and the perception of risk. Here are a few points everybody independently came up with:

• Our capacity to take risk is almost always just an increment on our parents’ capacity to take risk.
• We grossly over-estimate the risk that starting up in India is, i.e. the perceived risk of starting up in India is high, i.e. we think its very risky to start-up in India.
• We grossly under-estimate the risk that starting up in USA is, i.e. the perceived risk of starting up in USA is low, i.e. we think that it’s a piece of cake to start-up in the USA, anybody can do it.
• The perception of risk is markedly different from the real risk due to inherent biases and lack of data, i.e. we are often too biased and uninformed to calculate the real risk.

Ah, but, lucky is the person who can understand risk, and bet money on it. Like a smart poker player — if you can calculate the odds for every outcome, and you can bet your money on your calculation, then you will win in the long run. [BTW, do read the Zappos book: the smartest move in Poker is to choose your table well.]

I made a short Pecha-Kucha ppt as D+P at Joint Family invited me for a Chennai edition of the same. Unfortunately, my mom decided to drop by and do wedding shopping the same day. So, here it is, but with text and all.

This is my Hello World post.