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!

SCMM 17- Endurance Running- First Year

Last Sunday, January 15, I ran Standard Chartered Mumbai Marathon- my first “major” public Marathon. Awesome effort by the Organizers, Volunteers, Mumbai Police- truly world class event. Special call out to all the Mumbaikars who were out on the streets in swarms cheering the runners- You guys Rock!

I was targeting sub 4 finish; missed it by 3 minutes- clocked  4:03:27. This blog is about how I prepared for SCMM and why I missed the sub 4 finish.

Split 1: No New Years Day
Let me step back a bit and share why I took to endurance running.  In my earlier blog 10 commandments to Hack Your Health I shared how I got in shape- reduced from 98 to 68kg and ran my first half marathon on September 15, 2015. It took me 18 months. I continued my cycling, yoga, running routine remaining of 2015. By December 2015 I had started running about 25km and week, that included a 12-18km weekend run.

In the last week of December 2015, like every year, I was working on my resolution for 2016. I had done reasonably well with my 2014 and 2015 resolutions and wanted 2016 to be as good if not better. I thought why not run 3 half marathons every month? It sounded a crazy idea for some one who had just taken to running. After a few days of thinking I decided to set that as my 2016 Goal.

36 half marathons was a huge challenge for for someone who had just taken to running and I needed a start that would be super motivating. I thought why not do some unusual the new years eve? No party, sleep at 9, get up at 4:30 run 21 on January 1?

I did exactly that. Got up at 5:00, laced up and did 21. While I was running people were still returning home from NYE parties all very happy, all high! I was also high- a different high, though.

To my delight I ran 21 in 2 hr! My first! I was super excited and over beer that weekend I thought why not target 42 half marathons in 2016. Why 42? Couple of reasons-
1. I would turn 42 in 2017. 42 half marathons in a year would give me bragging rights
2. 42 = 2 x 21!

The goal was reset to 42 half marathons.

When I was over the 2hr half marathon hang over my first reaction was “what have  I signed up for?” No NYE Party was fine; 42 halfs mean no Friday night outs, no Saturday beer brunches! OMG!!

January 1, 2016 Bhaskar Thakur 21K Run

 

Split 2: You are Under Running
I continued my weekly 3 run schedule in the spring and summer. I fell sick in April and had to take 6 weeks off. By June 2016 I was consistemtly doing 21 under 2 and had completed 18 of the 42 committed half marathons. Pune had good Monsoon in 2016 and I chanced across Matheran Endurathon and Durshet Forest Marathons. I had heard runners go to different cities for races, however, I had never done that. I discussed the idea of running 2 half marathons with my wife Shweta. She does not like to run in the city, however she love trails.  We signed up for both half marathons.

Matheran was a beautiful yet challenging 25 km trail run. Beautiful? Ask anyone who lives in Pune or Mumbai how mesmerizing Matheran is in monsoon. Challenging because in was mud, muck, gravel and gradient.

To add to the challenge we had to hike up 5km to the start point- we did not get accommodation near the start point as we signed up late.

The race started at 7am and I was  completely drenched at at start line. We ran fully drenched for almost 3 hours across hills, muck and thick forest.  I finished strong that day. Hiked back 5Kms to the hotel and drove back to Pune. Awesome day! I had done 25km run and 10km hike and the beautiful drive! Not bad.

 

Durshet was a different story. The trail description goes like ” Durshet Forest Marathon is in the Sahyadri range beside the river Amba. The rough terrain and the soothing rain makes it an experience to cherish. 
Tough terrains, a track mixed with steep uphills and downhills and the rain to make the running trickier.
The final part to the higher areas of the forest and grasslands begins with a rocky uphill climb, which after almost 7 kilometers of run proves tough for the most, again the rewards of the toil are laid out in abundance by nature. The uphill trail leads to open grasslands and the overwhelming beauty of Sahyadri mountain ranges around the valley. The efforts is more than worth it.

I was all pepped up after Matheran to take on the Rocky uphill climb of Durshet. Packed my gear August 7 and started driving to the hotel around 9:00am.  The roads were flooded and the drive from Pune to Lonavala was more like riding a speed boat. Few minutes after Lonavala my car broke at the hairpin turn- we were going down hill and car had no acceleration or break. I somehow manage to park the car with the gear and called up the support. Rescue came in an hour or so however that’s a story for a different blog.

To cut the long story short the day before race day I got drenched in torrential rain for about 5 hours had no lunch and reached hotel at 6pm. I was shivering and in no condition to run. I couldn’t resist a couple of drinks with dinner.  Back in the room I set my gear and discussed with my wife plan for the run. We agreed to take a call in the morning.

I got up at 4 with a little cramp and had a hangover. Took a hot shower and decided to give Durshet a shot.  As I lacing up the thought of  rocky uphill was giving me chills. we hitched a ride and got to the start line.

The race was flagged off at 7am. First 2Kms was killing- I was running like a zombie (note to my self- Drinking the day before Race is a BIG NO!). I was almost about to give up however, I thought lets run for a few more.

Around the 3km mark there were villagers playing Dhol Tasha. The  drum beats did some magic and I got my rhythm back and was running the mucky trail gliding over small streams . I did a sprint of 2km and managed to get close to my 5km time target. It was business as usual after that.

Durshet is a unique trail. After running 7km there is a 3.5km steep hill and half marathoners have to do 2 loops of the hill.  It was tough, however I throughly enjoyed the 2 loops. I finished in 2:08:35– good time considering the trail and what I had gone through the previous day.

Back in the hotel, Shweta and I joined Sanjay (a runner from Delhi I first met at Matheran) for breakfast. Sanjay has done all credible marathons in India and is now doing the ultras. He did 50 in Matheran and 42 in Durshet.

Sanjay shared his plan for the next few months that included Goa Beach Ultra and Rann of Kutch. His advise to me was “You are UNDER RUNNING. You should have done the 50 and 42.That hit me.

On the way back to Pune I thought, I managed finishing Durshet in top 10{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} finishers after such an awful day, maybe I’m UNDER RUNNING. Before I reached home I had changed my resolution for the year from “running 42 half marathons” to “running 42 times 21km or more“. Call it taking Stretch Goals.

The following weekend (August 14) I did 30km solo in 3 hours and applied for SCMM17 (Standard Chartered Mumbai Marathon), I was ready to shift gears. Thank You Shweta and Sanjay!

Split 3: The Training
After a few weeks I received conformation from team SCMM. I was super happy! This was my first marathon that had a qualifier and getting accepted was almost like winning the race. 🙂

I had 3 months to train for SCMM so I started looking up blogs on running marathon. I was consistently doing half in under 2 so most blogs suggested I was ready. After reading 25-30 articles and blogs I created a very simple training calendar for myself:

September:
Run 3 days: 45 to 50km/ week that should include one 25- 32km every weekend
Yoga 3 days.
Did that all of September. No events to report. No trophies. Sweet.

October
In October I decided to Run 30- 38 Km once a week. The training plan changed to:
Run 3 days: 50 to 55km/ week that should include one 32-38km run every weekend
Yoga 3 days.
Did that all of October. Signed up for PRBM- Pune running Beyond Myself (42km) to test if I was marathon ready.
PRBM 42 was on October 16. I reached Shaniwarwada around 5:30am and the race started at 6:00. I was cursing first 21. Was on target at 21 (1:52) feeling strong. At 30km after doing the Baner- University gradient my legs started feeling like logs- I could not move. I limped, I stopped and crawled for the next 4km. I knew I had hit the wall.

In plain English, “hitting the wall” in endurance sports is a condition of sudden fatigue caused by depletion of glycogen in the muscles. This was my first experience in a marathon. Finished the race limping in 4 hours 47.

The silver lining- I knew I could run marathon.

November
November was month to deal with the dreaded “wall“. After spending hours reading about “avoid hitting the wall” I knew I had to work on Nutrition and Hydration. Until October 16 I thought eating on the run would slow me down. I was so wrong. I also chanced across this article to run marathon sub 4.

I thought if I could do a marathon sub 5 without any food why not stretch the stretch goal? That day I decided I wanted to train for sub 4 for SCMM.

Again did a lot of reading. the final plan for November was no different from October. I augmented my existing plan with focus on nutrition. I started having breakfast before all weekend runs and started experimenting with nutrition and hydration on the run. I tried it all- Ragi Laddu, Bananas, Sweet Potato, Snickers, Yoga Bar, Gatorade, Salts.

Having breakfast at 4:00am is no fun, you almost have to force the food, however it worked. I started running 35- 38 every weekend. It worked and a month after disastrous PRBM I managed to do a Sub 4 full marathon. I did this one solo.

There was no medal at the finish line, no finishers certificate, however I felt like a winner!

Every Sunday when I go out for my run I wake up Shweta and let her know I’m going for my run. When I come back she invariably asks me “how was your run?” and my answer is “Good”

When I reached home that morning Shweta asked me the regular “how was your run?” However, my answer was not usual. I said.. Mumbai here I come!

 

I took a break from training first 3 weeks of December due to other commitments. Started training on December 18.

December 25 was a big day for me. The day I was to run my 42nd 21 or More. That meant no Christmas Party, no wine! However, I was high after 41 runs so did not miss celebration a bit. I thought of doing another 42 however SCMM was due in 20 days so I thought to stick to the SCMM plan.

I did 32km on the 25th and celebrated with Oban Single Malt!

2016 resolution Done and Dusted. 7 days ahead of Schedule! 2016 was a horrible year for work. I believe Running kept me going. I had earned my bragging rights!

My last long run before SCMM was on January 1, 2017 ( 37 KM in 3:28). I was feeling all set for the Race day!

Next week I prepared my Race Day plan. It had 3 components Nutrition and Hydration, Timing Targets and Note to Myself-

Nutrition and Hydration
Breakfast: Ragi Laddu, Dates, Pre Run Mix
During Run:
1. 250 ml hydration every 30 minutes for the first three hours, alternate between water and energy drink available
2. Half Snickers bar every hour
3. Salt and Orange every 30 minutes after 15 Km

Timing Target:
Distance Time Pace
5 00:26:00 00:05:12
10 00:52:00 00:05:12
15 01:19:00 00:05:24
21 01:52:00 00:05:30
25 02:15:00 00:05:45
32 02:56:00 00:05:51
37 03:26:00 00:06:00
42 03:57:00 00:06:12

Note to Myself: Training is Done. Go Out & Enjoy!

 

Split 4: Race Day and why I missed Sub 4.
I reached Mumbai on January 14, collected my BIB, set up my gear, wished my fellow runners Rohan, Nikhil and Sareen luck and signed off early. The weather seemed perfect.

Got up 4:00AM, laced up, had my breakfast and reached the holding area. I was in lineup B as I had submitted my Matheran (25km) timing instead of Durshet (21km)- SCMM has lineup A thru D. I thought proof of having run 25 is better than better pace in 21 for lineup- maybe, I was wrong.

The weather had changed overnight- it was hot and humid at 5am – and I had trained in Pune’s chill. Chhatrapati Shivaji Terminus was all lighted up and mesmerizing and the energy of the other 5ooo fellow runners electrifying. I thought to myself Mumbai could have been worse, this is my first big Marathon, let’s just Run.

After the first couple of km one I reached Marine Drive I could the feel  of Mumbai. People cheering at 6am was simply amazing for a solo runner like me. I specially liked the Navy Band, their music was so peppy that I ended up doing a sub 4 minute km in the first 5- I avoid doing busts early in the race.

I was meeting my time targets till 28km when a mini cramp hit me (check out the blip in the pace chart below) however, I recovered and and made up for the time lost in the next 2km. Mumbaikars were cheering to go for sub 4 and that really helped. I was crusing at the 33Km mark all smiles and very satisfied. Then came Peddar Road section and my pace dropped to 8. Full 3 minute over my planned pace. I knew I was in for trouble. I even had another mini cramp. I grabbed some oranges and salt (many thanks to the Mumbaikars) an started to steady my run.

It was hot and humid by 8:45, I was trying to make up for the time lost.

By that time elites started to come in. It was some sight to see them run with that pace and stride. Simbu and Kipkorir were neck to neck and Kheta Ram was not far behind.

We were directed run on the side of the road and kept bumping into the last of 21k finishers. I felt like a car on Pune roads where few elites (BRTS) have half the road and bike riders have the right of way on the other half. Could never make up for Peddar Road time loss.

They say last 5km in a marathon is mind game. Your body has done what it could. In the last 4, I decided to go for negative splits and managed a mini dash in the last 2. I could see Shweta cheering at 40km mark and that helped!

Thank You Mumbai. Look forward to 2017 Marathons and More!


10 Life Hacks from The Rickshaw Challenge-2016

Last week  I was part of a super awesome road trip with Mukesh Jha , Janardan Prasad, 19 other teams and the support staff & team of The Travel Scientists. What is Rickshaw Challenge – Malabar Rampage?  You can read all about Rickshaw Challenge here, however very simply put an incredible ~1200KM ride on 3 wheels ( Rickshaw/ Tuk Tuk) on Indian Roads.

Loads of Fun, Lots of Challenges and Humbling Experiences. Here are the top 10 Life Hacks I learnt in this trip and credits to people, event, places for the learnings.

1. What’s in a name that which we call a rose by any other name would smell as sweet

Read: It Takes a bad ass to run the show. Call him Luke, John or Aravind 🙂

Credit: Aravind, Princely and The Travel Scientists- Don’t reason with Indians, smile 🙂

2. Junk the Manual.  Ride, Break, Fix. Repeat!

Credit: Chennai Garage Team- you are amazing clockwork!

3. Journey of 1000 mile begins with a single.. Crank

Credit: Practice Run. Go Mukesh Go! Thanks for taking the lead, revving and doing the donut moves for The Autowale.

4. when in Rome do as the Romans do and in Kerela do the Malayali 

Credit: Team Autowale.

 

5. what the heck Rome! Sumos are Sumos, Rome, Sydney, Japan or Mars

Credit: Butt, Sweat and Tears ( Chris, Mark, Hugo). Chris, Mark, Hugo you deserve the Bonkers Award. Who else would put up the Sumo costume for every event when it’s 40 degrees?

6. Life is a Journey! Live the Moment

Credit: India’s Coastline.

7. Share the Little Joys

Credit: Round Table and  Goan Places (Sheila and Nic.) Sheila and Nic raised over $20K sharing their journey with friends to support Schools and Education in India.

8. When life gives lemon, make lemon mint iced tea.

Credit: Awesome Food of India

9. Consistent and Persistent Win!

Credit: Stairway (Paul and Alex).  Paul and Alex were always consistent, very friendly and never too loud. Cheers!

10. Work Harder, Party Harder

Credit:Flying Birds (Thomas and Waltraud)- While we took turns to ride the rickshaw, typically doing 60- 80 Km/ day/ person. Thomas did 200-270KM everyday on his own. We ordered 1 beer in the evening Thomas ordered 3!

 

 

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!!

10 Commandments to decide your Mobile App is ready for Growth.

 

-Bhaskar Thakur

To sum it up here are 10 Commandments to decide your Mobile App is ready for Growth.

You have identified the Core Product Value (CPV)- The dominant benefit the customer expects from the app.

You have the Minimum Viable Product (MVP)- Smallest feature set that delivers core value.

You have Product/ Market Fit (PMF)- Product satisfies Market’s needs.

You have defined your Growth Goal e.g. 5 Million Installs and 50{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} actives in next 12 months.

You have Attribution Tracking (ability to ascribe installs to source/ campaign) setup and tested.

You have Google Analytics configured and tested- Features for apps like Speed, Tag Manager, A/B tests.

You have tested and identified channels for app installs- start with a few channels.

You have initial idea of Customer Lifetime Value (CLTV)- Net value of entire future relationship with a customer.

Your app’s  K factor is >0. If every Visitor that converts to member/ customer gets 1 or more person.= Product is Viral!

You have funds for the growth.

 

 

 

 

 

 

10 Commandments for Push Notification

To summarize,

Report from Kahuna suggest 60{b533f414762ff80097ee09d177cb5141b2a13e37c77cdd72580da9125ed6123c} users opt out of Push Notifications, and the opt out rate varies across industries. Here are 10 Commandments to reduce Push Notification opt-outs.

  1. You shall remember Push Notifications is not SMS or Email or Tweet.

  2. You acknowledge Notifications and NO-Application is one tap away.

  3. You shall Personalize Notifications.

  4. You shall write Compelling Copy.

  5. On Sabbath Day phones are silent, motivation gotta be bigger.

  6. Image is worth a thousand words; You shall include Images and Audio.

  7. Every dog has his day- every app their Hour.

  8. Android’s Food is iPhone’s Poison.

  9. In data we trust. Test, Measure, Tweak.. Repeat

  10. If it’s done it’s no fun, try some new.

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.

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!

 

 

10 Commandments for Success at Outsourcing

Across the world organizations have taken to outsourcing for competitive advantage. Are there still organizations out there that question outsourcing? Here’ why you should consider outsourcing:

My main focus is on my game- Tiger Woods

One reason so few of us achieve what we truly want is that we never direct our focus; we never concentrate our power. Most people dabble their way through life, never deciding to master anything in particular.- Tony Robbins

I have spent more than 12 years managing the complexities of outsourcing. I have seen successes and failures. Here are my 10 Commandments for Success at Outsourcing for the business leaders exploring the strategic relationships.

Commandment 1: Get you Reasons Right

One needs to be slow to form convictions, but once formed they must be defended against the heaviest odds.- Mahatma Gandhi

Answer to the question “why outsource???? is the first and the most critical element of the game. Do not outsource because everyone does. Outsource for your reasons; cost control, quality control, risk mitigation, geographic expansion, Human resources etc. Take your time to figure out the reasons.

Commandment 2: Plan the Route, Be Detailed

Failing to plan is planning to fail. – Alan Lakein

Plan the route, set the milestones and define the responsibilities. It is important to set the goals and expectations before you start to minimize surprises.

Commandment 3: Lead the change

Leadership involves finding a parade and getting in front of it.- John Naisbitt

Outsourcing is too important to implement Bottom Up in and organization. Outsourcing is a strategic move and is successful only when the Leader is convinced and committed to the cause.

Commandment 4: Build your Team, Get Process Champions

I suppose leadership at one time meant muscles; but today it means getting along with people. – Mahatma Gandhi

A leader is as effective as his trusted lieutenants.  Identify and nurture process champions in your organization and encourage them to spread the knowledge and build grow and motivate their teams.

Commandment 5: It’s all about people

You don’t lead by hitting people over the head – that’s assault, not leadership. – Dwight D. Eisenhower

Outsourcing will impact the lives of your employees and they will certainly be apprehensive about Job Loss. Address your people concerns. Involve your people in the process.

Commandment 6: Date, Court, get Married

Don’t marry the person you think you can live with; marry only the individual you think you can’t live without. – James C. Dobson

Outsourcing relationships are like marriages built on trust, compatibility empathy and flexibility. Spend time analyzing your partner organization’s culture, their vision and plan. Ask the right questions to find your match. Remember that the cheapest is not necessarily the best.

Commandment 7: Practice what you Preach

I try to keep in touch with the details… I also look at the product daily. That doesn’t mean you interfere, but it’s important occasionally to show the ability to be involved. It shows you understand what’s happening. – Rupert Murdoch

Your outsourcing plan will be put to test only when implemented. Lead the implementation process; get involved in the details initially. Empower the process champions with tools to take the vision forward.

Commandment 8: Process, Process, Process

We do not learn; and what we call learning is only a process of recollection. – Plato

Document your successes and failures. This documentation will be the reference points for the future. Organizations can benefit the economies of scale and outsourcing only by setting up the process and following in every time.

Commandment 9: Measure and Analyze

Round Numbers are always false. – Samuel Johnson

Measure the impact at every milestone, compare with organizational and industry benchmarks. Analyze the performance and tweak the process as needed. At times there may be no prior references, the Vision and strength of leadership is tested in such situations.

Commandment 10: Be prudent- Get the prenup in order.

Divorce is probably of nearly the same date as marriage. I believe, however, that marriage is some weeks the more ancient. – Voltaire

Relationships do go wrong. Give the Outsourcing relationship a chance however; you should have a Tactical Plan B ready if things do not produce desired results initially. On the strategy front, be wise to safe guard your interest and include an opt-out and other safeguard clauses in the contract. Change outsourcing partner, in case of cultural differences and insurmountable integration challenges.

10 Commandments for B2B Search Engine Optimization

How different is B2B Search Engine Optimization compared to B2C Search Engine Optimization?  What are the Best Practices for B2B Search Marketers?
The basics of SEO like Keyword Research, Targeted Content and Meta Data is no different for B2B SEO. The major difference is in Target Audience and Intent of Search Queries. B2B Marketers address an audience that is mature, not impulsive and follow a purchase process. B2B search queries clearly reflect the searchers status in the purchase cycle (Exploring, Considering, Ready to Purchase)

B2B Decision Cycle
B2B Decision Cycle

The ultimate goal of most B2B Search Marketing programs is Generating Inquiries.  This article lists the 10 Commandments for B2B Search Engine Optimization; The Best Practice for B2B Search Engine Optimization.

Commandment 1: Know Your Customer / Target Audience.
Clearly define your Target Audience. You should know who you are targeting. Audience Definitions like “CXOs of Automobile Corporations in United States??? or “Middle Management in Advertising Agencies in Europe??? is a must for a successful B2B SEO campaign.
Difference from B2C
: B2C Target audience is far wider and generally segmented on Socio-Economic and Demographic parameters.

Commandment 2: Design the website for your Target Audience.
Most B2B site address multiple target audience; Prospects, Existing Customers, Investors, Job Seekers. It is very important to focus the SEO for Prospects and Existing Customers. Investors, Job seekers may not be targeted in the B2B SEO program. Design a website that the prospects and customers can relate with. Include Industry Solution, Technology Solutions, Product Application in the main navigation or otherwise prominently on the website.
Test website’s usability frequently and keep the design and content fresh. It is advisable to make minor updates every quarter and major design change once a year. A professional Site Audit helps improve usability and conversion.
Difference from B2C: B2C websites are broader in their appeal and target multiple groups for every product/ service.

Commandment 3: Keyword Research: Forget your Terminology, Forget Google’s Traffic Prediction, and Optimize for Industry Lingo.
Optimize for the search terms the target audience uses and this may vary by industry. Let your organizations internal definitions and Search Engines Traffic Predictions take the backseat.
Difference from B2C: In most B2C scenarios Search Engine’s Search Volume and Predict data gives accurate information about the search terms target audience uses to find a product/ service.

Commandment 4: Keyword Targeting: 1 Keyword per page.
Do not target too many Keywords in a page. Remember you are targeting matured audience that is not impulsive. Limit to 1-2 Keywords per page. The keywords targeted should be related and relevant to one industry, product or solution.
Difference from B2C: Recommend Targeting 2-3 keywords per page on B2C websites.

Commandment 5: Link Strategy: Go for the Hubs; do not bother about the Spokes.
Target links form Industry Hubs and Authority pages. Few links will do the job (get your website visibility and traffic). Get Links from customer and vendor websites. Use variation of your product/ service as link text.
Difference from B2C: Spread out the links over more number of Link text.

B2B Search Engine Optimization
B2B Search Engine Optimization

Commandment 6: Leverage Paid Search Data.
Analyze the paid search data to identify converting keywords, include broader variations / Generic Variations of these keywords in your SEO Program.

Commandment 7: Industry Strategy: Sub-domain/ Multiple Domains.
At times the target audience across industries is very different and it may be a good idea to have sub-domain or multiple domains. You may not be able to address concerns of multiple industries on one website. If your ERP solution is targeted for Manufacturing and retail industries, you must consider and analyze sub-domain/ multiple domain strategy.
Difference from B2C: B2C websites are generally designed to up-sell, cross-sell. Consolidating products on one domain is the preferred strategy.

Commandment 8: Competition: Track Your Competition.
Identify and track your competition. Monitor the changes in the Keywords competition is targeting to track the industry trends and Optimization Strategy.
Difference from B2C: B2C websites are generally track competition for tactics

Commandment 9: Reputation: Monitor and Defend your Brand.
Your Brand is your biggest asset on the web. Defend your brand with all your might. Optimize your website for misspellings and phonetic variations. Set up alerts to monitor copyright violations.

Commandment 10: Get Social: Blog /Network: Be Thought Leader and Follow Thought Leaders.
Blogs allow informal, interactive communication with your audience. Create thought leadership blogs and run opinion polls and reviews to understand your customer better. Also, follow Thought leaders to understand the pulse and the trends of the industry. Recruiting a CBO (Chief Blogging Officer) may be a good idea.