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2019: Looking back at the year that went by

Tis the Season of Reflection.

As the year draws to an end it is the perfect time to reflect on the learnings and share them. Here are my key learnings turned guiding principles from the year that went by

Guiding Principles of 2019

  • Live in the present
  • Become Better Everyday
  • Make Concentrated Bets
  • Increase Optionality

Live in the Present

A friend once told me “Unhappiness comes from Conflict“, simply put, when you desire X but are stuck with Y. While we all want multiple things to happen/get better simultaneously, the only way to stay peaceful is to accept your present situation and adjust your life around it.

Our lives are made up of multiple phases across dimensions of family & friends, career and personal life that are ever changing. Each phase would have a few key events that would lead to highs/lows across different dimensions.

All phases of life give you an opportunity to focus on some aspect/dimension of your life and it’s best if we use that time to do just that, focus on what’s right in front of us (and not fret too much about the rest).

A good question to often ask yourself, “What should I be optimizing for?”

I cut down on reading, movies, travel, socializing etc and 2019 for me was about mostly focusing on the new baby and the new job.

Become Better Everyday

Successfully Implemented by Dave Brailsford & popularized by James Clear, the idea that tiny changes sustained over a period of time compound massively.

The whole principle came from the idea that if you broke down everything you could think of that goes into riding a bike, and then improved it by 1%, you will get a significant increase when you put them all together – Dave Brailsford

The power of compounding married with the fact that there’s as much (if not more) life ahead of us as is behind builds a really strong case to become a much better version of yourself. Bonus, being better improves lives of others around you.

I tried to follow this rule and ensure that I make almost every day count by exercising (Cult, Ahoy!) / writing / learning something new.

Make Concentrated Bets

While conventional wisdom says that diversification is the key to investing success, some of the best investors, like Warren Buffett & George Soros have spoken about the virtues of making concentrated bets.

Wide diversification is only required when investors do not understand what they are doing – Charlie Munger

Be it investing, career or relationships, most gains are to be made by focusing on few things and giving them all the effort (think Power Law). I’ve seen quite a few people trying to spread out too thin and not achieving anything substantial. I feel it makes sense to focus your energies on limited ideas & people and double down on them

Caveat: Avoid Ruin

PS: It’s quite likely that investing more time/effort on your career/startup will yield bigger returns than stocks/mutual funds etc.

Increase Optionality

Optionality in investments refers to the right to do something, but not necessarily the obligation to do so. Just like in investing you can build optionality into your life and exercise them for better outcomes. Collecting high-quality options is the equivalent of unlocking doors that open up to new possibilities.

While on the surface this might look conflicting to the above mentioned point of being concentrated, in reality they work best together. Optionality in asymmetric bets (limited downside, high potential upside) across domains can be built with just small % of resources (time/money etc).

Naval Ravikant on building Asymmetry

Few things I did to increase optionality

  • Meet New People & reconnect with old acquaintances – Increases Serendipity that opens up opportunities
  • Take up chances to expose myself to new ideas & experiences – Gives you new perspectives that might have a big impact
  • Watch my Spends & Avoid Debt – Better personal financial management enables risk taking/bigger bets
  • Being conscious about & working on my health/fitness – Better health allows you more freedom of choices in certain areas of life.

Wishing you all a wonderful and enriching 2020 🙂

Capital ROI of various Indian Startups

The tide has been trying to change for sometime now, from Growth at all costs to Profitability & Sustainability. Recent Tech IPOs in US reflected the same and made things pretty clear.

While Uber & Lyft’s abysmal IPO sustained the push to margins and profitability, explosion of WeWork was the final nail on the coffin.

Since the relatively nascent Indian startup ecosystem is a reflection of US & China (in some aspects), one can expect to see a stronger push for Margins/Profitability in India as well.

I tried to collate a view from all publicly available data on revenue and losses for various Indian Startups to get a view of what’s happening. Hope you’ll find it useful too.

Source: Paper VC, Entracker, Mint, ET etc


As more Indian Startups file their earnings for Financial Year 2019, more data will emerge. I’ll try to update this view.

Living Life in Single-Player Mode

I am a huge fan of Shane Parrish’s podcast and one of best episodes from it was with Naval Ravikant. Naval shared a lot of awesomeness in it and one of the things that stood out for me was the thought of looking at life as a ‘Single-Player’ Game

Life: A Single-Player Game

The reality is life is a single-player game. You’re born alone. You’re going to die alone. All of your interpretations are alone. All your memories are alone. You’re gone in three generations and nobody cares. Before you showed up, nobody cared. It’s all single-player. – Naval Ravikant

While talking about transitioning from anger/anxiety to calmness and how to control one’s responses or mental-state, Naval mentions how most people are conditioned to live life in a multi-player mode wherein the things that we chase are the visible social status and other such indicators.

Subsequently, the key to being happy is to get rid of yearnings for visible status indicators and focus on your internal state. 

Socially, we’re told, “Go work out. Go look good.” That’s a multi-player
competitive game. Other people can see if I’m doing a good job or not. We’re told, “Go make money. Go buy a big house.” Again, external monkey-player competitive game. When it comes to learn to be happy, train yourself to be happy, completely internal, no external progress, no external validation, 100% you’re competing against yourself, single-player game – Naval Ravikant

Naval drives home the point really well. Instead of chasing external progress, we’d be better of chasing internal progress. 

Life in Single-Player Mode

While, the points mentioned above, are mostly about taking care of your mental state, focusing on being happy and such, I’d like to extend the idea of life as a ‘Single-Player Game’ to living life in a ‘Single-Player Mode’

A single-player game is usually a game that can only be played by one person, while “single-player mode” is usually a game mode designed to be played by a single-player, though the game also contains multi-player modes – Wikipedia

Approaching life in a Single-Player Mode in essence means leading life in a way that assumes complete responsibility of own’s actions and their effects, and also encourages proactive self-improvement sans any dependancy on others.

What does Single-Player Mode Look Like?

Let me illustrate the point by taking some examples

Sports/Fitness:
Say you want to become better at a sport. There are two ways to go about it

1. Multi-Player Mode. In a multi-player mode, you’d try to find someone to play/work out with (or find a coach) and practice with them to improve your game. 
2. Single-Player Mode. In a single-player mode, you’d not limit your practice and improvement to finding & playing/working out with others. Either-ways, you’d find ways to practice and thereby improve your game/fitness.

Work/Skills: Say you want to become better at your job or pick up a new skill. Again, there are two ways to go about it.

1. Multi-Player Mode. In a multi-player mode, you’d try to find someone to learn from/with and depend on them for your learnings
2. Single-Player Mode. In a single-player mode, you’d not wait to find someone and instead try to learn and pick up skills on your own.

Self-Directed Learning  (via smu.edu.sg)


More often than not, whenever I’ve become good at something it’s because I approached it with a ‘Single-Player Mode’. Letting go of dependency on others for your learnings removes a lot of friction. Not only that, it shortens the feedback loop (and their-by improving the pace of learning) and lets you decide your own goals and metrics. 

To top it all, Operating in a Single-Player mode requires that one figures out ‘Learning How To Learn’. Finding out how to learn different stuff on your own is quite transformational or should I say life-changing.

‘Learning How To Learn’ is one of the most important Life Skills

Another way to live in ‘Single-Player Mode’ is to compete against yourself. Here again you have to look internally to get better. It might take a while to get this engine started but once it starts, it works marvellously 

Kanye West in an Interview with Rolling Stone Magazine

If you look around, almost all super successful people operate in Single-Player Mode. They don’t really depend on others for motivation, inspiration or figuring out how to learn/get things done. 

To conclude I’d say, if there’s something you’ve been trying to learn (coding, foreign language etc) or start doing (running, gymming, diet control) you’d be better off if you approach it in a Single-Player Mode

The Transportation Layer Protocol of Business

In his classic WSJ piece from 2011, Marc Andreessen declared that ‘Software is eating the world’.

Seven years hence, things are unfolding as Marc had prophesied. Industry after Industry, software is re-writing the rules of how the game is played.

Almost two-thirds of companies currently face high levels of disruption – Accenture


Transportation has been one of the few industries that have already seen a lot of Schumpeterian “Creative Destruction”.

From being ‘Limo service for wealthy people in SF’ to ‘Ride sharing for commoners in Bangladesh’, Uber and many other software based transportation services have come a long way. Goldman Sachs estimates the ride-hailing industry ballooning to $285 billion by 2030.

A host of startups around the world are working in the transportation space with Uber, Lyft and Didi being the bigger players. The Indian Market is also seeing a lot of action in this space.

Popular Transportation Startups In India

3.5 Million Daily Rides across Ola and Uber (via ET)


While the pure transportation market is huge, there’s an sizeable adjacent market (roughly 1/3rd the size in terms of orders) growing at a faster pace. The market in question is ‘Food Delivery’

Food Delivery Market In US & China

Food Delivery Market in India via Mint


Apart from Swiggy and Zomato, there’s Foodpanda, Uber Eats and two more big players starting Food Delivery over the next 3-6 months.

Challenges for Ride-Sharing & Food Delivery Startups

Both Ride-sharing and Food Delivery startups are the epitomes of gig economy and have unlocked huge markets that were previously untapped.
However, to make some economic sense for both types of companies have to make sure that their delivery staff runs at highest utilisation possible.

But, because of the inherent nature of both ride-sharing and food delivery markets, the orders are concentrated at certain peak hours of the day. 

 I am assuming the graph would be similar in India (via http://toddwschneider.com)

Hourly Delivery Orders for a Fast Food Cafe


Ride Sharing Peak Hours*:  8AM – 12 PM, 5 – 9 PM
Food Delivery Peak Hours*: 12PM – 4 PM, 8 – 11 PM

*Rough Estimate

This cyclicality in demand means there are upper limits to optimisation during peak hours and there are long windows of low demand

These long windows of low demand are a huge problem as they lead to 

1. Poor Unit Economics (To cover fixed costs the delivery boy should be utilised fully)
2. Weaker Driver Retention (Part time gig workers will gravitate towards a service that guarantees opportunities to earn more)
3. Scaling Challenges (Uneven/Skewed demand during certain hours makes it difficult to scale delivery ops in an optimised way)

On The Flip Side
Less Demand => Poor Driver Utilisation => Poor Driver Retention => Poor Experience => Less Demand


These problems are pronounced for and particularly hurt the food delivery services, that’s also one reason why most of the ‘stand-alone food delivery’ startups found it difficult to get off the ground and ended up folding. While most startups offering logistics services in Hyperlocal/Food-Delivery space trying defeating gravity and failed, Delhivery (with benefit of hindsight) was able to identify the challenges well in-advance and did a pivot into e-commerce deliveries that offered better fleet utilisation opportunity among other benefits.

The Case for a Transportation Layer Protocol

Both Ride-Sharing and Food-Delivery startups not only share common challenges around fleet capacity utilisation, they also to varying degree share some strengths 

  1. Huge Captive Customer Base
  2. Network of Drivers across cities
  3. Scalable Technology Stack for Managing Logistics 
  4. Proprietary Data about People, Businesses, Routes, Traffic etc
  5. Operations Infrastructure 

Protocol: A set of rules and guidelines for communicating data

Value Capture on The Web – Joel Monegro


The Internet Protocol Stack enabled various web applications to be built on top of it and a handful of them grew up to become today’s Internet Giants (Facebook, Google, Amazon).

Just like the internet protocol layer enabled various apps to be built for the web, we can see a bunch of startups trying to build what can be called ‘Transportation Layer Protocol’ or ‘Transportation Layer’


The Transportation Layer implies having a base infrastructure to build various consumer (B2C) or business (B2B) offerings on.

‘Transportation Layer’ Composition (Building Blocks)


Most companies in this space end up building different variants of Transportation Layer Infra for internal consumption. But to leverage it and attain a dominant market position (with a sustainable business model) the startups should/would try to become the ‘Transportation Layer’ for the country.

Startups with different business models for ‘Transportation Layer’


Ekart Way*: Just like Flipkart’s logistics arm also handles logistics for other companies such as Adidas, in future some of the B2C companies discussed here might also start doing deliveries for other restaurants (managing the delivery orders a restaurant gets directly).

A startup can run multiple lines of businesses on top of the common infrastructure & generate adequate customer demand for their offerings

— A Successful Transportation Layer at Play

Becoming the default app for any transportation related services is the ‘Holy Grail’ as you get both more transactions and revenue per user and it costs you less to service each request. Also, the bigger you become the network effects ensure that less likely you are to get displaced.

This, I believe is what’s unfolding in India and startups from both sides (ride-sharing and food-delivery) are vying to become the ‘Transportation Layer’ to services various consumer offerings.

Indian B2C Startups atop Transportation Layer


Expansion to Adjacent Markets:

  1. Ride sharing Startups – Both Uber and Ola (Foodpanda) have been doing food delivery for around an year now. 
  2. Food Delivery Startups – Swiggy has shared their plans of expanding into Grocery and Medicine Delivery.
  3. Grocery & Medicine Delivery Startups – I Don’t think the grocery delivery startups have shared any plans for other categories.
  4. Concierge Startups – Dunzo, has started doing bike taxis, food delivery and grocery
“Transportation Layer’: A Work-In-Progress


The image above you should give you some sense of what the fruits of becoming the default transportation/logistics layer would look like with different B2C/B2B offerings stacking up atop shared demand and infra.

However, while getting there might be possible it’s gonna be incredibly difficult. Moreover, despite the number of startups aiming, only a few market players are strongly positioned to get a good crack at it. I’ll try to explore more in another post

Best of the Web 102

Toy Markets, EU is Furious with Malta, Decision Making, Instagram Story ,Where’s Larry Page, Malls 2.0 & More

US Venture Capital Returns (2004-2013)

While Alphabet faces existential challenges, its co-founder is exercising his right to be forgotten. Read more in Bloomberg’s “Where in the World Is Larry Page?

Dated but very interesting. “Why I would never want to compete with Travis Kalanick” by Chris Sacca. Read here

Founders often don’t innovate because they can’t quite figure out the answer to “How big could this get?” Read more on how to think and navigate the market size aspect here #YCombinator

The union’s least-populous member nation has become a cryptocurrency and online gambling hub plagued by allegations of corruption and money laundering.Read more in “Why the EU Is Furious With Malta

Rewind (Best of newsletter #68)
“As they re-invent themselves, malls in India are trying to become community spaces and not remain just shopping centres.” Read more in “The mall story 2.0” 

“‘The Ultimate Guide to Making Smart Decisions” by Farnam Street. Read here

Two Years Ago, India Lacked Fast, Cheap Internet—One Billionaire Changed All That. This WSJ article digs deeper into Jio. Read here #paywall

Podcast Episode of the Week: Instagram
“You can scale big with a simple idea (and a tiny team!) — but only if you catch the prevailing winds. That’s what Kevin Systrom did when he co-founded Instagram”. In this episode of ‘Masters of Scale’, Reid Hoffman goes into the history of Instagram and their journey to acquisition by Facebook.

Listen here

Startup Trivia of the Week: Google 
In 1999, Page and Brin wanted to raise investment from KPCB and Sequoia. They also wanted to firms to split the round to retain controlling stake of the firm. During the process, they gave the ultimatum for a take it or leave it offer to invest $12.5mn each. VCs took the deal and rest as they say is history.

Feel free to forward this newsletter to anyone who might appreciate it. If you’re getting this email from a friend, you can subscribe here.

Startup Jobs

I’ve got tons of friends/acquaintances who are running startup and the only thing common to each one of them is that they are looking to hire smart talent. Despite 100 job sites, a lot of match making takes forever. Here’s a little effort from my side to fill this gap.

Running a startup? Looking to hire people? Share Job details (140 character), company name and contact email id at (dhingra dot mayank at gmail dot com)

Technology 

Marketing

Sales

Account Management

HR

Others

Books I read in 2015

Here’s a list of all the books I read in 2015. If you’ve read any of them or would like to recommend some books to me drop a comment below

Jan 2015

    1. The Power of Habit: Why we do what we do and how to change (Rating: 4/5)

 

A very interesting read on how to recognise habits, how they are formed and how to amend them. Great way to understand personal as well as institutional/organisational habits. It has suggests some experiments to cut down addictions like Smoking

2. How football explains the world (Rating: 3.5/5)

A good primer for anyone interested in knowing about Football and Globalisation across different countries and continents. Football fans would find it interesting how various clubs across the world came into being and how violence b/w fans accompanied many of them. Non football or globalisation fans might not find it that great.

April 2015

3. Heart of Darkness (Rating: 3.5/5)

May 2015

4. Dogfight: How Apple and Google Went to War and Started a Revolution (Rating: 2.5/5)

 

 

The Rise of Mobile SDKs

The last 2 engineers I spoke to who had quit their jobs to do a startup are working on building 3rd party solutions for app developers. There is clearly a trend of more folks trying to build services for various apps. From Analytics to payments, ad networks to notifications, there our services for everything, even Emotion Tracking and Augmented Reality.

How these 3rd party services tend to be used across various apps is by integrating their SDKs (essentially including code libraries from other providers into your apps).
Let’s consider an example of an e-commerce mobile app. Here are some of the features/attributes
which might be needed

SDK

SDK

  1. Accepting Payments
  2. Analyzing usage (clicks, pageviews, conversion funnels etc)
  3. Sending notifications (push notifications about offers/promotions etc)
  4. Campaign Management (to track installs and their behaviour from various paid install campaigns)
  5. A/B testing
  6. User Engagement/Rewards
  7. Messenger/Chat and so on

This list would vary from app to app and the developers have two options, Build each one of these functionalities or integrate existing solutions (Mobile SDKs that provide one or more of these services).  While the benefit of integrating an SDK to do say user behaviour analysis is immense (and in most cases the only option and you can’t possible build this functionality on your own) it is where the problem starts and one wonders, “how will this scale?”

SDK overload

SDK overload (via @WahWhoWah)

 

How many SDKs can you possibly embed in your app? The performance and maintenance issues are plenty. While from app developers perspective the challenges are obvious (which ones to choose, how to migrate data from one to another in case of switching, how to attribute any problem to one SDK in case of multiple SDKs etc), what worries me is how upcoming start-ups with their business model built around offering SDKs to developers will come about.

Distribution, is possibly the most important thing for a startup and I foresee getting various app developers to use your SDK (and not building a cool service) as the biggest barrier to entry/success.

I’m sure you might have built a great user analytics/customer lifecycle management/campaign management etc SDK but how many SDKs can a developer possibly try and integrate?

Concluding Thoughts
1) Building an SDK that offers to replace an existing/prevalent one like Flurry or Mixpanel though comparatively easier to build will be extremely tricky to distribute/sell
2) Building an SDK that offers to replace multiple existing/prevalent ones (Flurry, Testflight, Admob etc) though extremely difficult to build will be comparatively easier to distribute/sell
3) Mobile platforms (Apple/Google etc) might improve their offerings around various fundamental needs and start including them into the platform APIs like iOS did with Facebook and Twitter. A native Analytics/campaign management service will be difficult to compete with
4) Some app developers might be privy to share their data (for say Customer Lifecycle Management SDK)

This space is quite exciting and I’m really interested to see how it shapes up. What do you think?

 

 

 

Newsletter – Best of the Web

I read a lot on the internet, and by a lot i really mean a good lot. The issue which I like most others face is, what to read and where to constantly get that good content to read from.

In a tiny effort to help others from this struggle I’ve started a weekly newsletter in which I share some 10 links, mostly interesting articles across various subjects (tech to literature, economics to biology) and any interesting website/app/video/book etc that I come across while surfing the internet.

I started the newsletter a couple months back and have sent some 9 newsletters so far. Here’s what one of the readers had to say

newsletter
If you too read a lot and need a source for good curated content, subscribe for the newsletter here

Best of the Web