Thoughts on Start-up Hiring

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Hiring is undoubtedly one of the hardest part of doing a start-up.  Getting the right set of people to work for you is easier said than done and almost every start-up  founder is  in ‘always hiring’ mode.

Despite the fact that there are a lot of cool(and many funded/profitable) startups  run by some really smart folks with a vision, they are unable to attract/find the right kind of talent and end up with mediocre to bad hires.

leoniadas

Given the dynamic nature of a start-up the last thing founders want is to hire somebody who isn’t sharing the same vision, thinking on the same frequency(macro level) and walking the same path. Not only are bad hires bad for the roles they are hired for, they are terrible for the company culture in general and set the barrier low for other/potential hires and might just end up setting the company back instead of moving it forward.

Traits of BAD Start-up Hires

  1. Slow/Non learners  They are hardly interested in spending time and effort in learning how to do their jobs better
  2. Reactive –   They will only do (a % of) what their bosses tell them to do. They will never be proactive and do things on their own
  3. Micro – They will never be able to think beyond their immediate task list and think about the bigger picture, or even how what they are doing/can do can impact the company in general
  4. Laid Back – Nothing for them is an urgency. They will crawl while they are expected to fly. Most things that will annoy the hell out of founder/core team will not cause them an itch.

As an entrepreneur you must always be thinking about iterating the hiring process and make sure that even if you move to other bigger things, the people who take hiring calls must be on the exact wavelength as you and should not hire people just to fill roles. You MUST make sure that the person who is in charge of hiring should be A class her/himself and is always thinking on how to get incredible people on board and also how to make the workplace best suitable for brilliant people.

I’m particularly rigid about hiring great people and feel very strongly about it as I believe a bad hire can actually undermine the speed and efficiency of one(or more) good hires. Not only will they take up time, they will leave you with bad aftertaste which will last for a while, so it is best to hire people who will not just be at par with your expectations and company culture but are likely to take things to the next level.

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Formula for a Great Hire

Great Start-up Hire =  Smart + Passionate + Committed to your cause

So you should evaluate your hires for these 3 parameters, the ways you choose could be different but it is critical to evaluate them on all these parameters. A fancy yet apt term for some such hires is “Entrepreneurial Lieutenants”. These guys are what I call “Mini-CEOs” who take complete ownership of their respective divisions and run the show mostly on their own. A major thing that I look for is “compliance”, it is very important to make sure that people start following what you tell them almost immediately. Anybody who doesn’t take this seriously won’t last for me.

Some of the ways which I use while hiring are

    1. Smart – Asking them a puzzle or two/Testing their problem solving skills by giving them a situation and asking for a solution/Asking them to do a mental calculation or something which involves logic and requires them to think on their feet.
    2. Passionate – Asking about what they do in their spare time, stuff which they are really into (Anything in which I can ask them anything or stuff about which they feel they’d know more than me) or stuff on which they have strong perspectives (design, visual, usability, scalability or just about anything in the relevant context). Passionate people are inherently curious to figure out how stuff works and how to improve thing around. Asking them to share if they have ever built something is another key question
    3. Committed – I’m particularly keen to learn why would anyone like to join your start-up. What do they really like so much about the small limited resource set up which not many people have heard about or has a certain amount of uncertainty or air of oblivion attached to it. Basically you’d like to find out if the person is really excited about what you are doing or they want to join you because your office is quite close to their home and they expect a job here won’t be as demanding as that in a corporate which is located at the other end of the town or something equally lame.I try to learn what is the real motivation. Some of the best reasons could be

      a) Love for product/service – It’s best to find someone who’s a happy customer and wants to spread your message
      b) Love for domain – Next best is to find someone who is passionate about the domain in which your start-up works. Someone who believes in better healthcare deep inside will come out with a lot of creativity and empathy for your customers
      c) Love for founding/core team – Someone who is in awe of the founders or core team and wants to work with them is another reason.

Another great thing about committed people is that they think “Long Term” which is a huge differentiator. The sheer fact that someone is thinking of spending the next 3-5 years (yes, it’s as long term as it gets in most startups) or more implies that they’ll be motivated enough not only to do their job well but also go out of the way to do things that’ll help the startup become better in various other aspects for which they might not be directly responsible/accountable just like we all do things for our family or friends where we are emotionally invested.

It is painful to see start-up’s not thinking about hiring hard enough and making sure the right hires are given all the freedom and autonomy to weave their own stories. I like how @tarunmatta puts it, if someone would to write a story on your start-up who do you think would be the key characters (except you) ?

If the answer is none or 1-2, you have a huge task at hand. You need people to build upon the vision and spread it along with you. These people are the ones who would be almost as sensitive or paranoid about the big and small things alike and would spend endless hours obsessing about problems your startup is trying to solve and how to come up with beautiful solutions.

I know enough founders who are brilliant but someone haven’t been able to manage to build a great middle level management (for the lack of a better/startupy word). You need driven people who will manage various aspects of the business and relieve you of your routine tasks so that you can solve higher order problems. They will also help in making sure your vision/company culture is embedded in the team at large. Do all you can to hire these folks

If you can get someone who is smart, passionate and committed to your cause, give them enough salary to keep money out of the table for now and next few years to come. Also, whenever possible offer them ESOPs. Incidentally I haven’t heard many start-up founders talk about ESOPs but I am a big believer is offering ESOPs to folks who you think would be instrumental in charting the course of your company. ESOPs in many cases will get you more loyalty than $$ which any other company could offer and with ESOPs (however small) the employee has another reason to push the envelope harder and make sure that the company makes it big for them to benefit.

Recommended Read – The Mechanics of Mafia (Peter Theiel’s Startup Class Notes by Blake Masters)

So, what do you think about ‘Start-up’ Hiring?

 

Book Review: How To Lie With Statistics by Darrell Huff

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Stumbled upon this book while searching for a basic level book on ‘Statistics’ and the blurb and reviews caught my attention so I decided to pick it up.

How to lie with statistics

(How To Lie With Statistics – Darrel Huff)

It’s a petite book with less than 150 pages. It’s not really a book on ‘Statistics’ but on how Statistics are used and abused both consciously and unconsciously by advertisers, surveyors, sales people and others alike or ‘Statisculation’ (Statistical Manipulation)

Here’s a little summary/review of the book:

  1. Many a times the surveys/findings that we read/hear about are bound to be incorrect because of the bias while collecting samples. Either the sample chosen for doing survey isn’t well defined or doesn’t reflect well on the overall set.
  2. Averages – Mean/Median/Mode . Choosing an average to depict some statistics is very important and for the layman’s eye it is very easy to draw wrong inference in some cases by mean or average without knowing about the range. Average salary alone for example doesn’t reflect the information correctly so its important to know the range and also the median.
  3. Missing little figures: Using a very small group to draw a trend, not providing enough information about a particular % in question to even as much as not labeling an axis in a graph. Often one needs to question the completeness of the statistic provided.
  4. Keep an eye on Probable and Standard errors with measurements in question for ex: IQ of 101 and 98 could just be 101 and 98
  5. A difference is only a difference if it makes a difference
  6. Graphs can be manipulated in various ways namely cutting the graph from bottom(to reduce the visible area), changing the measures of axis to make the graph looks better or worse
  7. In charts with more than 1 D, using double the area to show double dimension is misleading. Varying size of objects to show increased number often gives an impression of the change in actual size of object in question over time.
  8. Semi-attached figures, post hoc and many more

How to talk back to a statistic ?

Ask the following questions

  1. Who says so ? (To understand biases)
  2. How does he know? (Source and reliability of information presented
  3. What’s missing? (Actual numbers in case of %s, base in case of index or other things)
  4. Did somebody change the subject? (Switch between raw figures and their conclusion)
  5. Does it make sense? (Apply commonsense on the data, and try extrapolating the trends to check sanity)

A quick read for the initiated which will change how you see statistics used around and hopefully save you from deriving false conclusions

Assocham-Comscore State of eCommerce in India – Report

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In Sep 2012 Assocham together with Comscore came out with a report on the Indian ecommerce Scene. It had some known and some new stats/key points. You can download the report here

Here are the main points 

Demographics
  1. 75% of online audience between the age group of 15-34 years
  2. Female population is about 40% of total users (July 2012)
Travel
  • The penetration in India is about 44% which is higher than the world average for travel
  • IRCTC get about 19.2% of all Indian online traffic (highest – 12mn uniques/month) followed by Makemytrip
  • Redbus gets about 2%
  • Surprise: Content type sites for ex: indiarailinfo (3.2%) and mustseeindia (2.3%)
  • Travelyaari and Makemytrip (2.3 mn uniques a month)
Retail
  • The penetration in India is about 60% which is lower than the world average for retail (72%)
  • Amazon gets about 15.4%, Flipkart (11.5% – 7.4 mn uniques/month), Snapdeal (11.1% – 6.9 mn uniques/month) of all India online traffic
  • Apparel is the most growing subsegment in retail
  • Flowers/gifts/greetings is the only subsegment with negative growth – 33% (Our coupons??)
Breakup of Payment Methods in India
  1. Direct Debit – 58% with avg transaction of 20$ (lowest)
  2. Visa – 21% with avg transaction of 48$
  3. Master card – 12% with avg transaction of 47$
  4. Cash on Delivery – 7% with avg transaction of 33$
  5. Others – 2% with avg transaction of 43$
  6. American Express cards apparently have the highest avg transaction size of 110$
IRCTC Specific Info 
  • SBI and SBI Direct – 29 +26 = 55% of all transactions
  • ICICI (17%), HDFC (14%)
  • Do a revenue of about 38 Cr
 Future 
  • Car rentals and bus booking online should go further up
  • home furnishing and lifestyle goods to contribute more
  • comparison shopping sites/apps to get more popularity

Difficult Conversations and How we avoid them?

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Conversations, how we love and hate them(at times). Our lives are filled with conversations of sorts, some meaningful bust mostly meaningless. Even the most introvert people can’t do without engaging in conversations and there’s little chance that one can do away with not having any conversations at all.

Conversations, like money matter more in certain places than others. So much so that in certain situations conversations are the most crucial element. Running a business is one such case in which having conversations is one of the core aspects of operation.

Day in and day out, an entrepreneur needs to engage in conversations of all sorts with their fellow co-founders, investors, employees, partners, vendors and others. From the vision of the company, its direction, targets to execution plans these conversations not only discuss the functioning of the company for also decide how even the smallest of peg in the machine called a company will run. Since these conversations are that important one needs be really good at handling them (kinda like story telling).

It’s fair to assume that all great entrepreneurs must be great and doing conversations across the wide spectrum of their stake holders.

Over the last few months I’ve noticed that certain people (including business owners and well to do professionals) are noticeably bad at handling *difficult conversations*. By a difficult conversation here I mean a conversation which involves either saying “NO” to something or “to negotiate” its details. I’m excluding the cases where one has people below them in the ladder to play the bad cop or do detailing/negotiation.

Certain conversations by their nature or the nature/situation of people involved can be difficult. Think a girl wanting to break the news of ending her relationship with a guy because she feels she doesn’t love him (anymore?) or a manager who has to tell his subordinate that he’ll have his paycut or worse be fired from the organization. The examples of difficult conversations are abound, they vary across the personal and professional lives.

From saying No to something/someone, breaking bad news or negotiating terms for a deal, difficult conversations often find very few takers. People’s response when faced with a difficult conversation could range from avoidance till limit or experiencing emotional turmoil and more. Many a times, people’s response catches many by surprise and keeps them wondering what happened.

To keep things succinct, we’ll limit the scope of the post to that of ‘Difficult conversations’ related to work/business.

Consider This: A guy from a services company approaches a business owner to offer their services and after a couple meetings and deliberation for whatever reason the business owner decides against the deal. Quite a few people which I know (including myself sometimes) would stop answering the calls/emails from the services guy.  This I feel is totally weird and uncalled for. The most obvious and the best way to go about this is to simply communicate the reason (briefly maybe) on why you have decided against their offer/proposal and clear the air instead of leaving them guessing and needless to say feeling treated badly. There are many more cases like these and I feel having a lack of confidence in breaking the bad news or the fear of someone forming a different impression about you could be the reasons.

Are there more reasons for this? Why do you think people avoid difficult conversations?

Adopt A Pothole: A Refreshing Yet Impactful Social Media Campaign from Apollo

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While browing my twitter timeline, I stumbled upon a link about ‘Adopt a Pothole’ Clicking the link was totally worth it. “Adopt a Pothole“, is just as it sounds. Simple, Impactful and Social.

What is Adopt a Pothole?

Know of the potholes around? Want to fix them?

1. Start clicking pictures and upload them on http://adoptapothole.in/.

2. Get your friends (25 at least) to support/vote for them

3. Apollo Tyres will fix all the potholes with 25+ supports

adoptapothole

 

 

Adopt a Pothole is a refreshing example of using Social Media for creating connections,increasing brand recall/awareness and having an impact.

The Good

  1. Simple Idea
  2. Addressing a relevant pain point (apt for the brand and meaningful for the consumers)
  3. Low hanging fruit for qualification (just 25 supports)
  4. Inherently Social and Viral (Invite your friends to get your adopted pothole fixed, they can then invite you and others to get their adopted potholes fixed)

The Bad

  1. The site design/usability isn’t all that great. Lots of scope of improvement here
  2. Social Pluggins etc could be used better to leave more imprints on facebook/twitter etc.
  3. Very little engagement on the website. Despite checking it after gaps of 12+ hours, looks like nothings changed and all the data is static

 

From the looks of it, there isn’t much planned to spread the word about the campaign. I assume that the agency in question would be plastering the web with banner ads but a lot more could be done to increase the reach. Basic stuff like having a blog, sharing videos of work being done, user testimonials could be done.

How do you find this campaign? Let me know if you know of another interesting campaign using Social Media

The Rise of the Indian Online Marketplace

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If you are part of/related to the Indian e-commerce scene in any manner or read desi start-up blogs, chances are you might be familiar with the concept of Marketplace.

A “Marketplace” connects buyers and sellers who otherwise have trouble finding each other.

Marketplace(think eBay), is simply a model which has multiple sellers providing various goods/services through a platform. In the context of this discussion, an e-commerce website instead of sourcing and fulfilling the orders just manages the listing of products and passes on the order details to the sellers who then handles them.

Recently, India’s biggest online retailer (Flipkart) made their first move as a part of shift towards the marketplace set up.

To start with, Flipkart has on-board 50 sellers that will sell books, media, and consumer electronics.

Other Indian online retailers on scaled up marketplace model are Snapdeal(which recently raised $ 50 mn from ebay and others), Tradus, Infibeam and Shopclues. Let’s understand how the marketplace model and inventory led model compare in execution

The key components of an e-commerce set up are

  1. Customer Acquisition
  2. Catalog
  3. Technology (Customer facing/related and backend)
  4. Inventory
  5. Fulfillment (Sourcing, Packaging and Delivery)
  6. Payment Processing
  7. Customer Service/Support

Setting everything up for a rookie is quite demanding (capital and effort wise) and will take months to get off the ground, however to signup as a seller on a marketplace and/or opening a shop using SaaS based ecommerce store building platforms like Zepo, Buildabazaar or Martjack is a quickie. So for a newbie it makes perfect sense to open up their own shop (SaaS) and list on various marketplaces as a seller

Based on one’s expertise and priorities there are various ways of building the e-commerce store set up. For eg: while someone will prefer to control the last mile delivery experience, someone would rather let logistics companies take care of that.

The most common model is mix of Inventory led and Marketplace both (think Amazon). Here’s how it works

  1. Inventory Led – Short Tail (Fast moving, Commodity products, Easy to warehouse for ex: best selling books/movies/pendrives etc)
  2. Marketplace – Long Tail (Slow moving, Niche products, Difficult to warehouse for ex: medical books published in hindi/very old foreign language films/Furniture etc)

While it might not very clear from the examples but Inventory led model makes sense for products which aren’t perishable(both utility and demand/vogue), are easily available offline too and move fast enough while the Marketplace model makes sense for products which one doesn’t know exist or even if one knows they don’t have any clue on how to stock them, how to source them etc.

Customer Acquisition,Technology,Payment Processing and Customer Support are done by the e-commerce company.

Here’s how various models are implemented in some of the biggest Indian e-commerce companies.

break_up

A couple questions come to the the curious mind.

  1. Why sudden rush towards Marketplace all across?
  2. Is Marketplace the future of e-commerce in India?

1. Why sudden rush towards Marketplace all across?

The answer to that question (from what I’ve heard) lies in the deep VC pockets. With the Govt of India dillydallying around the FDI regulations for e-commerce, apparently Marketplace is the only way to get external funding needed to sustain the business.

Also, it could be because the bigger e-commerce companies have figured out that

a) they can’t possibly go that strong on increasing the  quality/quantity of the catalog on their own
b) they ran sick and tired of doing everything on their own.

To get a sense, compare how Flipkart was managing these functions in it’s previous avatar and compare it to say Snapdeal

 

break_up1

2. Is that the future of e-commerce in India?

On doing some rough calculations based on the information available Flipkart, Infibeam, Snapdeal, Jabong, Bookadda and Homeshop together would be doing around 1,15,000 orders a day (Flipkart and Snapdeal contributing about 60-70 %).

There are a lot more sites (ending with kart and otherwise) who just might be doing another (20-30,000 transactions or more a day)

As per my guesstimate all independent smaller e-commerce websites and platform powered online shops selling long tail products would be doing not more than 5-10,000 orders a day.These numbers could be significantly different from the mark for all we know but based on these numbers before marketplace became the buzzword, top 5-6 established players were doing about 90,000-95,000 orders a day in total while the others in long tail were about 5-10% of their size.

The balance has started to shift towards the marketplace model transactions. For now their share could be 10-15% of the overall e-commerce transactions.  Going forward we’ll a lot more smaller businesses and niche startups coming online and by 2013 end their share could be upwards of 20-25%(going by the fact that between Flipkart and Snapdeal they are the biggest online retailers).

A couple of factors to speed this up would be

  1. More platforms like Buildabazaar and Zepo
  2. Better payment gateway/cash collection mechanisms (Ghar pay etc)
  3. Better logistics (for end to end fulfillment)
  4. Third party SaaS services for other components like (Catalog, Warehousing, Customer Support)
  5. Some VC investment in 1-2 marketplace companies

The sooner we get to see the above mentioned things rolling the faster we’ll get to the long tail moving online. At some time in the  mid term future(5-7 years) the demand for long tail items (Niche/scarcely available/custom made) products could become comparable if not more than the demand for short tail products.

So the marketplace model and independent shops powered by various sites are here to stay and the current biggies like Flipkart, or maybe Snapdeal will evolve into a mix of (Short tail – Inventory led – Self Fulfilled and Long tail – marketplace – Logistics company) models.

Your thoughts?

Perspective is Everything

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For some time now I’ve started thinking more about ‘Perspectives’, particularly about my Perspectives.

Everybody has a way of viewing things and mostly your views about various things would be different than mine. Perspective to me is a deep and thought out opinion about something. The more you think about something, chances are the better you understand them and the more you understand things, the more you like and enjoy them.

I believe most people tend to have perspectives on only a handful things, particularly things that impact them. For ex: Not everyone will have a strong opinion on the design of things or  internet freedom or climate control or the way cities should be planned etc. I strongly feel that it is very important to have a perspective on a few things if not a lot. Having a perspective on certain things opens up your mind about them, it helps you deconstruct the current state of things, particularly what’s wrong and also on how they can *possibly* be fixed.

You need to deliberate deeply about something and be emotional about it to be able to have a perspective on it and to me having a perspective on something is why/how most innovations and disruptions happen. You feel passionately about healthcare for the poor, you feel motivated enough to change things around, you figure out a way to get things moving and bang your idea becomes a reality and ends up changing someone’s life for better.

Think about it, if an entrepreneur doesn’t have a strong perspective about their new startup idea/product what are the odds that their product will be different(and maybe an improvement) from others, will add some value and end up becoming a sustainable business?

Unless you really want to change things around and have some idea on what the change should be, you can’t be good at it. Not only this, my perspective is that we as entrepreneurs need to have perspectives on not just one but a lot of things. Say as a start-up entrepreneur I should have perspectives on disruption/innovation that I want to bring to my industry, building a profitable and sustainable business, hiring, customer service etc etc. The number of these aspects I feel strongly about would determine to a large extent to how I fair in this journey.

Also, I feel that the person who has perspectives on more and possibly varied things the better positioned they are to change things and have an impact. I have certain perspective on usability, product design, health care, education, independent artists, social media, publishing/media among a few other things. I have spent fair amount of time analyzing some of this things and have some idea of how I can add value in these domains. Hopefully soon enough I’d get a chance to move things around in them.

Till then, what do you think about this? Do you Agree/Disagree with what I just said?

 

The Bucket List

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It’s one of those cheesy things that I try to stay away from but for some reason I felt like listing down things I would love to do. So here it is a collection of things I thought myself and a few I read elsewhere and liked

 

  1. Attend (and Dance) in Rio Carnival (Year 2014)
  2. Skinny Dip at midnight
  3. Fly a plane/helicopter
  4. Skydive/Basejump/Bungeejump
  5. Learn to read, speak and write urdu
  6. Learn a new/foreign language
  7. Write a book
  8. Make a documentary/movie
  9. Learn a form of fighting (Muay thai, Martial arts etc)
  10. Learn to play a musical instrument
  11. Invent something (that sells) *That’s a classic*
  12. Change someone’s life forever(for good)
  13. Swim with the dolphins
  14. Climb a mountain
  15. Scuba Dive
  16. Learn to cook
  17. Learn street magic
  18. Teach a course at a college or school
  19. Do something sexually taboo (to say the least)
  20. Repeat point 19 with a twist
  21. Get in crazy nasty shape. (Strong, Lean and Fast)
  22. Fall in bottomless pit of love
  23. Record a song
  24. Live minimally (For 2-3 months)
  25. Stay alone (For 2-3 months)
  26. Sell your startup
  27. Acquire a company
  28. Grow some plants/fruits/vegetables
  29. Date someone 10+ years younger or older than myself
  30. Learn to Meditate and Do it Regularly
  31. Attend Maha Kumbh or Kumbh mela
  32. Own a house with a water slide, tunnel, garden and bunch of other stuff
  33. ……..
  34. ……..

 

Books to read: http://guyspeed.com/10-books-every-man-should-read/

Songs to listen: https://opendata.socrata.com/Fun/Top-1-000-Songs-To-Hear-Before-You-Die/ed74-c6ni

The Power of Routine

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Getting into a routine of doing things is something I’ve seen a lot of people struggle with. Someone who is successful/achiever or great at something might have a tough time at doing something regularly say as *simple* as going for a 15 minute walk.

There is a lot more to the routine (doing things repeatedly over a period of time) than what meets the eye. So much so that you can judge someone to a fair extent but knowing if they follow any routines. If they follow a routine for anything (except watching TV, reading in the loo etc) they have

  1. Discipline/Will Power
  2. Will or Desire to learn/get better at something or help someone
  3. Comparatively better ability of plan/utilize their time
  4. Some level of resourcefulness

So, if you want to be better at the above mentioned things, you know what to do.

I’ve pondered a lot on how to improve an individual’s intellect or widen their horizon( especially about understanding how they and to an extent the world around them works) and I strongly believe that to get someone to improve or move to the next level in their personal or professional life, one of most effective and doable things is to make them get into a routine. This routine could be for anything. Anything they like or want to learn. Not only these, even if they are able to get up in the morning everyday and go for a walk/job I believe it would be of definite help.

Also, I feel if a person is in a habit of doing something regularly, and they add more items in their routine they can evolve and become better.

Want to start a new routine/habit? Check this presentation out

[slideshare id=6411687&doc=3stepstonewhabitsv2-101230181501-phpapp01]