Entrepreneurship lessons from Biking and Running!

The idea for this blog was seeded on my high school WhatsApp group- a bunch of fellows doing various things in their professional lives, connected by experiences shared in the late 1980’s and early 1990’s. In this WhatsApp Group (like any other) we share and debate everything under the sun. There are arguments- with data at times and with emotions at other times. Let me put it this way, it is a typical group of “men” in their 40‘s.  

One of the topics we keep going back to is ‘Health’. Most times when it comes to health, there are no arguments in the group, it is pure sharing. However, last week started different, we bantered on health, and the topic was  cycling vs running.  It was a long thread of arguments and finally, we agreed to disagree; to each their own poison. Good Fun!

Fast forward to the weekend (March 19), I competed and finished duathlon, Olympic Distance- 10Km run, followed by 40Km biking, followed by 5Km run. I have run many half marathons, a few marathons and biked maximum 120K in a day. However, had never done duathlon earlier.

2017- Pune International Duathlon

2017 Pune International Duathlon

It was an amazing first experience! Different from what biking or running. I think  the exciting and wierd parts were transitions- from running to biking and from biking to running. At the start of the finish run (transitioning from biking to running) for about a kilometer I felt like a penguin- hopping more than running.

In this blog I have tried to capture the similarities and differences of these 2 endurance sports and how biking and running have made me me a better entrepreneur and a better person.

Lesson 1. The definition of ‘inertia’ needs a relook.

Inertia is defined as “a property of matter by which it continues in its existing state of rest or uniform motion in a straight line, unless that state is changed by an external force”.

Learning from endurance sports : In my experience there is no external force strong enough to make a person jump off the bed at 3:30AM every sunday and say to themselves let’s burn 3K calories. There’s no external force strong enough to make one run the last mile in a marathon with cramps. For good 10 years there were people around me running marathons, eating healthy. However, these external forces did not change my state of inertia.

The force is ‘internal’, perhaps the definition of inertia should be “a property of people by which they continue in their existing state of rest, unless that state is changed by an INTERNAL force”

Entrepreneurship Lesson: Do not jump on the entrepreneurship boat inspired by the success stories. Look at the sacrifices and years these entrepreneurs put  in to be successful. Speak with entrepreneurs who failed. The calling should be from within because there is a psychological price of entrepreneurship.

Lesson 2. Understand the game before making your ‘move’.

The one big difference I find between biking and running is how one deals with elevation- both gain and loss. In plain english, while biking going uphill is super exhausting and coming down is super relaxing. In running going uphill is less exhausting however running downhill is a skill hard to master.

Learning from endurance sports : Descending feels easy aerobically, but each step triggers muscle-damaging eccentric contractions in the quadriceps and lower legs. On level ground, these muscles shorten as they fire; on declines, they elongate while under tension as they work to control your speed. This creates more micro-tears in each fiber, which stimulates muscle growth but leaves you fatigued and sore.

While biking get in the right gear while approaching elevation, maintaining posture and pace your ride. While running do not give in to gravity, tread with caution, try other techniques like shorter strides.

Entrepreneurship Lesson: Evaluate the opportunity, understand the macro environment, follow your competition before you venture out. Copy pasting business models is a recipe for disaster.

Lesson 3.  Everyone is alone alone, in their special timelines.

This is where biking, running and all endurance sports are similar. For athletes every race is about “Personal Best”. When one (amateur athletes) laces up or takes to the saddle of the bike it is not about beating others, it is about giving ones personal best.

Learning from endurance sports : The experience in the holding area could be daunting. Thousands of atheletes all lined up waiting for the gun. Some warming up, some meditating, few joking and singing. However, few minutes into the race everyone is running alone. Similarly, even in our lives we have many  many people around us- friends, family, acquaintances and the unknown. However, if one really thinks about it, they are alone in their timeline from womb to tomb.

Entrepreneurship Lesson: There’s no right age to start and you could fail any number of times in this journey. The best time to start a business depends on the maturity of the industry and more importantly maturity of the entrepreneur.

Lesson 4. There’s opportunity when things are “Going Downhill”

Normally the phrase “going downhill” means declinining and growing worse. It is not very uncommon to hear this phrase in organizations and life, for example-“2016 was bad year for startups, everything went downhill”. However, in biking and running going downhill presents an opportunity.

Learning from endurance sports : Most people learn to ride bike downhill because it is so much easier and natural. Even for experienced bikers going down slope seems such a bliss. Looking at the course gradient is integral part of race planning for any athlete. For runners, hill runs are initially a challenge, specially going downhill. However, after training for a few months on long hills, short hills, hill sprints, hill endurance, one barely notices these hills and starts gliding downhill. Looking back at 2016, Matheran hill endurathon was one of the most enjoyable events for me that year.

Entrepreneurship Lesson: There are 2 lessons here, an entrepreneur must cherish failures as much as success. There’s more learning in failure than in success. The second lesson is that it may be the best time to start when the economy and industry is going “downhill”- there are opportunities and resources are available.

Keep running, biking, walking, hiking and creating awesome stuff by starting again after every failure!

Template for the perfect 5 minute Pitch

I have been working with/ mentoring some very interesting startups at ET Power of Ideas, helping them with their pitch and also working on raising funds for my startup.

Pitching is a magic, more than anything else, you have 3-5 minutes to convince  investors. Here’s the template for 3-5 minute pitch. You may want to use it, if that helps. 


Please note- team slide (the last one) has details of exec team- founders, advisors, investors. I usually begin the pitch with my/ my cofounders introduction.

  • Slide 1 (Pain/ Pleasure- Causes )
  • Slide 2 (Need/ Gap)
  • Slide 3 (Solution)
  • Slide 4 (Secret Sauce)
  • Slide 5 (Competition)
  • Slide 6 (Current User Traction)
  • Slide 7 (Success Stories/ Press)
  • Slide 8 (Business Model)
  • Slide 9 (Unit Economics)
  • Slide 10 (Revenue Traction)
  • Slide 11 (Market Sizing)
  • Slide 12 (Product/ Revenue Road Map)
  • Slide 13 (Fund Needed)
  • Slide 14 (Fund Deployment)
  • Slide 15 (Team)
Happy Pitching and All the best!!

The Growth Hacking Academy

I was part of the founding team of 3 startups between 1999 – 2012. I also helped 4 other startups with marketing  in that period. Between 2012- and today I have been advising startups and product teams of enterprises in US and India. I have worked with 12 great teams in this period and Customer Acquisition and Growth seems to be one of the top 2 challenges for these teams- perhaps for all startups.

For the last 12 months I have been mulling over the question “ Is growth an accident or method ? I tend believe that Growth is a method and am trying to put together a 6 month program based on the A2R2 (Attract, Activate, Retain, Reap) Growth Hacking process to help Entrepreneurs and teams acquire customers and grow. Here’s the outline of the program:

Who is the Growth Hacking program for?

This 6 months program is designed for Product Teams and requires minimum 2  members to own the following processes:

1. Product Development

2. Customer Development

Month 1: Growth Hacking Basics

 Session 1: What the heck is Growth Hacking

– What, How, Who of Growth?

– Growth Hacking Hall of Fame.

– Growth Hacking Funnel: Introduction to  A2R2 Growth Framework ( Attract, Activate,   Retain Reap)

 Session 2: You cannot fill a bucket that has a hole

– How to Identify the holes and develop plan to plug the holes before thinking growth.

– Identify the holes in your product and develop plan to plug the holes before thinking growth.

 Session 3: Cut the Umbilical Cord

– How to look at your product from your customer’s perspective.

– Customer Segmentation

– Product Virality

 Session 4: Think Unreasonable, Plan Practical.

– Everyone wants to ‘Disrupt’, few do

– Think where you could be in 18/24 months, Plan for next 3

– Set your Goals for the Program

Month 2:  Laws of Attraction- From Leads to Qualified Leads

Session 5: Laws of Attraction- Introduction

– Channels to attract: Real World, Digital ; Paid, Earned

– Things You should have done yesterday.

–  We often forget the real world.

Session 6: Expert SEO

Session 7: Expert SEM

Session 8: One-on-One

– Follow up on Month 1- Holes in your Bucket?

– Create plans to Attract Customers

Month 3:  Activate Customers- Get them to the Aha moment

Session 9: Aha Moment

– What is Aha Moment?

– Tools to get customers to Aha Moment

– How to discover Your products Aha Moment

Session 10: Basics of Web/ Mobile design and UX

– For Apps- Think Mobile First

Session 11: Channels FAQs, Videos, Community, Emails

Session 12: One-on-One

– Follow up on Month 2- Attracting Customers

– Create Plan to get to Aha Moment

Month 4:  Retain Customers- Get them hooked on.

Session 13: Core Product Value

– What is Core Product Value?

– Identifying your Core Value

– Delivering Core Product Value as early as often

Session 14: Behavior Segmentation and Automating Lead Curation

– A/B Testing

Session 15: The Science and Art of Email Marketing

Session 16: One-on-One

– Follow up on month 3- Get to the Aha Moment

– Create Plan to Retain

Month 5:  Reap their Network

Session 17: From users to Brand Ambassadors

– Why people love some products

– Identifying your Brand Ambassadors

Session 18: Advanced Social Media Engagement Techniques


Session 19: Customer Loyalty and Brand Ambassador Program

Session 20: One-on-One

– Follow up on month 4- Retaining Customers

– Create Plan to Reap their Network

Month 6:  Getting Lean- Learn and Iterate

Session 21: List and Analyze Product Learnings

– Group Session

Session 22: List and Analyze Customer Learnings

– Group Session

Session 23: Iterating Lean

Session 24: One-on-One

– Plan the next 6 Months.

– Feedback

Would love to get feedback on the program and the content. Do you think this program is needed and will work?

Hiring for Startups- Cash vs. Equity Compensation

I help startups with growth- and my job revolves around product, customer acquisition, creating and automating marketing process. The job is challenging, exciting and stimulating.

Over the last couple of years I have started seeing a pattern in the startup madness.  Startup founders have similar challenges and question and the opportunities and answers also have a pattern.  In the last 15 years of my startup life I have been asked same question multiple times by different entrepreneurs. These days, at times it feels like Deja-vu.

However, every once in a while founders pitch a question that puts me on back foot. Last week, in a routine growth strategy meeting, one of my advisee founders hurled one such question. This startup is addressing the urban commute problem in India.  They have raised the seed round and are preparing for Series- A. It is a 2 founder startup with a 20 people operations and they are now looking to hire a Head of Operations- a person who will be No. 3 in the organization matrix.  The question was- How much equity and cash compensation should be offered to the head of  operation they are planning to hire.

Hiring for startups is different as startups pay less than the market and compensate with non-listed (non-liquid) equity with a lock in period. I have hired for my startups in the past. However, to be honest, I have not figured out the formula to compensation structure, most of the times the compensation structure was based on ‘hunch’.

In this article I have tried to put a template for the cash vs equity decision. The numbers you arrive at with this formula are guidelines and subject the stage of the startup.

Let’s  assume you are trying to hire a person who is drawing  $ 40,000 per annum however, she is due for increments and her market value is $ 50,000 per Annum. You want to lock in  the new employee for 3 years and can pay $30,000 per Annum in year 1 with a 15{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} increment every year.

Step 1: Calculate the potential loss of  earnings:

(Here I’m assuming star performers get a 25{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} hike Year on Year in India.)

Loss of Pay year 1:  $20,000
Add
Loss of Pay year 2:  1.25 * 50,000 – 1.15 *  30,000 = $ 28,000
Add
Loss of Pay year 3:  1.25 * 62,500 – 1.15 *  34,500 = $43,625
Total Loss of Earnings: $91,625

Step 2: Calculate the cost of raising  capital  (equivalent to total loss of earnings) .

What percentage equity did you part with for $91,625 in the previous fund raising round. Say you are valued at $4 million in the previous ( angel) round, then $91,625 is equivalent to  3.05{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c}

Step 3: Compensate for the risk the employee is taking.

I do not have a foolproof formula for calculating the risk. However, you could try the probability of  raising next round method. Try to answer the question – what is the likelihood  of  you raising the next round before you burn the cash reserves. If you think it is 60{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} ( you are in advanced discussions with 3-4 VCs) then the risk is 40{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c}
Step 4: Compensate for complementary skill the new employee brings to the team.

This is another judgement. Try to answer the question-  what is the likelihood  of  you raising the next round without the new employee. If the answer is 30{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} then the compensation for complementary skill is 70{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c}.

Step 5: Calculate the Equity.

In this case- 3.05{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} + 20{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} (3.05{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c}) + 70{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} (3.05{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c}) = 5.79{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c}

The above formula is just a guideline. The key to startup hiring is “Great Teams makes Great  Products and Great companies.

Measuring Social Media ROI

Love it, hate it, you can’t ignore it. Social Media is here to stay. Facebook, Twitter, YouTube, G+ are the primary channels for traffic and growth for most  online businesses today.

Startups and businesses get attracted by the large and fancy numbers that are floating around (  e.g. 1.26 billion users500 Million Tweets per day)

and start projecting their hockey stick growth based on these numbers. To add to the the pain most online marketers over commit and under deliver.

According to BusinessInsider “Many brands are moving away from metrics that purport to measure ROI on social media.

They’ve realized that social media isn’t a transactional engine or sales machine, so they’re dropping half-baked indicators that gauge secondary effects, such as financial return.???

Large brands and advertisers look at monetization over long term and tangible and intangible goals. They measure ROI of social media strategies in terms of audience-building, brand awareness, and customer relations.

I work with startups and startups are a different beast. They need to run quick experiments, decide what works for them and ROI is a simple arithmetic:

ROI = (All Returns- All Costs)/ All Costs.

I feel responsible for every $ that startups trust me with to hack growth  and hate BS-ing when it comes to program performance. I want to evaluate programs in real time and make quick decisions. I use the following spreadsheet to measure the ROI of the programs built around the simple arithmetic definition of ROI.

Download BhaskarThakur-Social-Media-ROI   (Right click and save)

Give it a spin and let me know if  it works. Big Brands you may also want to try this simple tool.

10 Questions that help identify startup opportunities

2013 has been a year of questions for me. Questions about business models, about pivots, about change of plan. The year started with a big question persist, pivot or perish WorldWithourMe? and then there were at least 4 major question every month.

It’s befitting that the last post of the year be about questions. So here’s my pick of 10 questions that have helped me evaluate startup ideas.

Questions to identifying Problem/ opportunity

  • What experiences( good or bad), have you had with the [current solution/ product]?
  • What is the frequency of purchase [current solution/ product]?
  • other products/ solutions did you consider?
  • Has [current solution/ product] worked well for you? How/how not?
  • Top 3 changes you would make to the [current solution/ product]?

Questions to probe/ validate

  • Can you give an example?
  • Tell me more.
  • What would you change?
  • Can you be more specific?
  • How did that impact?

Happy Starting Up 2014!

 

 

My 5 Favorite Gmail Plugins and Tricks for Growth Hacks.

‘Agility’ is one word that is core to the idea of Growth Hacking. While classic Marketers rely on long term data and user behavior for decisions, Growth Hackers often work with smaller sample size and act in ‘real time’ to convert visitors to customers.

In my experience, email is one of the most powerful tools for converting visitors to customers. For example we improve conversions for an edutech startup by almost 100{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} within weeks, through an email campaign.

However, for email ninjas- life is inboxed. They live, eat, breathe emails. I use Plugins, Tools and simple tricks to help me manage my inbox. Here’s 5 favorite Gmail Plugins and tricks for Growth Hacking.

Gmail Tabs and Inbox Zero:
The New tabs help to focus on what matters and reduces my inbox size by ~30{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} -50{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} . I let Google’s technology take care of the spams, social updates and promotions and focus on emails that really matter.

GMail- Tabs

Further, I Live by Inbox Zero, which means I either Delete, Delegate, Respond, Defer or Act on the emails in my Inbox. Thanks! Merlin Mann.

Google Alerts and Labels
I use a combination of Google Alerts and email filtering + labels extensively. Google Alerts are email updates of the latest relevant Google results (web, news, etc.) based on one’s interest. If you are following 50-100 keywords on Google be sure Alerts will swamp your inbox. I have configures email filtering rules and labels to keep the clutter off my inbox.

Rappotive
Rappotive shows you everything about your contacts right inside your inbox- what people look like, where they’re based, and what they do. It also helps grow one’s network on LinkedIn, Twitter, Facebook without leaving the inbox. Rappotive is more like a mini CRM married to LinkedIn.

Rappotive

Yesware
If you rely on emails for growth you want to know who opens your email and clicks on your link and Yesware does exactly that. It also let’s users track prospects and has some ready to use email templates.

Yesware

Boomerang Calendar
Boomerang Calendar helps schedule meetings from within the emails. It highlights the date and time in email ( both absolute and relative i.e 5PM 10/18 or 5PM Tomorrow) to make scheduling meetings a breeze.

Go on Startup Ninjas install your arsenals and win the Growth Hacking war.

Growth Hack- outrageous, unscalable and low tech.

More often than not technology entrepreneurs are advised and conditioned to look at the larger opportunity, scalability and technology to solve a problem. Silicon Valley folklore is full of stories of Google’s simplicity, Facebook’s singular focus, Twitter’s scalability. We tend to believe that all growth hacks are technology solutions that seem scalable when they are conceived.

However, reality is much different, most Growth Hacks sound outrageous and unscalable initially and there is little or no tech. involved.

For example Airbnb was a dying idea in 2009. Here’s the story of their hack, quoted from First Round Capital’s Blog.

At the time, Airbnb was in Y Combinator. One afternoon, the team was poring over their search results for New York City listings with Paul Graham, trying to figure out what wasn’t working, why they weren’t growing. After spending time on the site using the product, Gebbia had a realization. “We noticed a pattern. There’s some similarity between all these 40 listings. The similarity is that the photos sucked. The photos were not great photos. People were using their camera phones or using their images from classified sites. It actually wasn’t a surprise that people weren’t booking rooms because you couldn’t even really see what it is that you were paying for.???

Graham tossed out a completely non-scalable and non-technical solution to the problem: travel to New York, rent a camera, spend some time with customers listing properties, and replace the amateur photography with beautiful high-resolution pictures. The three-man team grabbed the next flight to New York and upgraded all the amateur photos to beautiful images. There wasn’t any data to back this decision originally. They just went and did it. A week later, the results were in: improving the pictures doubled the weekly revenue to $400 per week. This was the first financial improvement that the company had seen in over eight months. They knew they were onto something.

I see 5 Key Takeaways for Hackers from Airbnb’s story:

1. Hacks start with discovering patterns– It is worthwhile to look at Site usage, Entry Exit Pages, Shopping Carts, Landing Pages.

2. Hacking is not about Technology– Technology is growth hack enabler however, not the hack. Hacks are about identifying gaps in perception or value and plugging those gaps.

3. Hacks may seem non-scalable– Initially the growth hacks may seem non-scalable and that’s OK, One can iterate later to bring in scalability.

4. Experiment and Act fast– Outrageous as it may seem there’s no substitute to testing the hacks. Believe in yourself and your idea.

5. Seek help from Advisors/ Mentors– Entrepreneurs end up parenting their startups and at times fail to see things that are obvious. a seasoned Advisor/ Mentor helps bring in objectivity and fresh perspective.

Focus on the Hack that will help you grow to the next stage, do not bother too much about building the enterprise.

Startup Elevator Pitch

Over the last 10 days a couple of startups I’m working with and a bunch of students I mentor have asked for help with Elevator Pitch.

Here goes a simple 1 Slide Elevator Pitch Template:

Startup Name : Name of your Startup

Team : Include the Founding Team’s photos, Twitter Bios and photos.

1 Line Pitch: Short , Compelling message to convert  casual visitors to suspects.

High Level Concept: X for Y analogy for example Zappos is  Amazon for Shoes.

Customer Segments: List of Customer Segments.

Problem Statement: 2-3 problems you are trying to solve, of the format:

____<Customer Segment>_________ needs  ____<benefit>__ because | however ____________________

Existing Options: list how the problems are solved today.

Solution: outline your solution

Key Matrices: status of the startup as on date e.g. Product Alpha, 3 Beta Customers onboard.

Defensibility: something difficult to build or  buy.

Channels: How do you reach customers.

Cost Structure: Fixed and Variable.

Revenue: Sources of revenue.

 

 

Running Startup Experiments

One of the critical success factors for Startups is ability of the founding team to run quick experiments. The more adept a team is in running experiments the faster they are in iterating.

Experiments could be for Product Features or Markets. However, the goal of all experiments is to help define the problem statement. The following is a simple template to Plan, Run, Record and Manage experiments in a startup.

1. Start with a guess or  a hypothesis which is of the format: ____<Potential User>_________ needs  ____<benefit>__ because | however _____________________________________

For example,

1.1. HR Managers need qualified resumes because it saves them time and cost.
or
1.2.Single moms need a hyper local social network to help them manage their job and families.

2. The next step should be to reach out to Potential Users and bounce the idea off them. Let the discussion be unstructured however record what the potential users have to say. Make a note of their wishes and needs and record any deviation form your assumption.

There is a trade-off between the number of users you reach out to and time. One approach I have seen working is setting up targets and time frame. Set the targets based on the opportunity cost of the decision.

3.  Next step is to articulate the opportunities using the template from Step 1:

____<Potential User>_________ needs  ____<benefit>__ because | however _____________________________________

For example,

3.1. HR Managers need qualified resumes because it saves them time and cost however they are willing to pay only when they are successful in hiring a candidate.
or
3.2.Single moms need a hyper local social network however Facebook does a decent job.

4. Once you have the opportunities articulated, the next step is drafting the Problem Statement from these opportunities. Some factors to consider  at this stage include market size, time to implement, is the feature ‘nice to have’ or is the customer willing to pay (additional) for the feature? and A/B Testing.

A startup is defined by the experiments it makes and I hope this framework and template brings agility to the experiments.

Credit: This post is inspired by The Lean Startup: