Tuesday, March 13, 2012

Mark of a great idea

In my opinion, the mark of an idea is that it seems obvious once someone has done it/mentioned it. A great example is this - whenever I have gone to a Yoga class, I have always felt that I was one of the handful of guys in a class dominated by women. Did I really belong here?

Enter Broga Yoga - a Yoga class designed specifically for men. Now that I think of it - its an obvious way to solve this problem. But only now is it obvious - not before it was created.

Another similar idea is Hipmunk - why should flights not be displayed in a calendar format? I want to quickly see which flight will match the times I want to fly? But it took over a decade after online ticketing had gone mainstream before such a concept appears.

Great ideas are obvious in hindsight, but it takes a flash of brilliance to get the idea.

Wednesday, March 7, 2012

Lessons I learned in Business School


I recently read a blog post by Rob Go of Next View Ventures called My Top 3 Lessons learned in Business School. The post inspired me to reflect and write about my own top 3 B-School lessons.

Lesson 1: What Strategy is

Before Business school, strategy was this buzzword that I saw used around me all the time. The phrase "What's your strategy for getting the Milk from the fridge?" might be an exaggeration, but not a big exaggeration. At Kellogg, I learned a lot of tools that help understand industries dynamics and judge whether a firm strategy would be successful or not. Most of all, it helped me get a simplified, clear cut definition of strategy. Strategy, according to me, has 3 steps:

1. Decide what you will stand out for? What will you differentiate in?

2. Validate that customers value your point of differentiation

3. Allocate resources to achieving the point of differentiation

Let's take an example. Zappos - known for customer service, not shoes. So their resource allocation is in culture and in giving people in the call centers leeway to make customers very happy. Do they have the lowest prices always? Not quite - if you look hard enough, you can find the same shoe for cheaper elsewhere. But while buying something like a shoe, which you can't make a decision on until you wear it, would you rather find the cheapest upfront price, or rely on a retailer like Zappos, that will take your shoes back, no questions asked?

Another example is Apple - known for innovation and design, not low cost and operational efficiency. They do happen to have a very efficient supply chain, but key decisions are not made with Supply Chain being the determining factor. Case in point - when Steve Jobs decided to make iMacs of different colors, it created havoc for their supply chain. What if you wanted your iMac in pink, and the store had it only in blue? Now the store had to carry multiple colors per iMac. But it didn't matter - Steve realized that your computer was becoming a fashion statement; having colors was more important than supply chain efficiency.

Lesson 2: The "Soft stuff" can be learned

Before Business School , my vision of an ideal leader was charismatic, outgoing, and visionary. Through case studies, class exercises and observing speakers and my classmates, I realized that the "soft stuff" can be learned. This includes leadership, teamwork, negotiation, influencing others etc.

The fact of the matter is that the soft stuff was the most valuable part of Business School. I began to understand what were my leaderships strengths and weaknesses, what company culture actually meant, and how simple things such as where you sit in a room mattered. 

A simple story - one of the first classes we had in Business School was called Leadership in Organizations. Shortly after this class ended, I went to compete in the MIT Sloan Sales Competition. My first case was individual - selling investment services to a rich individual. I prepared hard, established rapport, listened to the client etc., but I think the one thing I did mattered more than anything was choosing where to sit. You see, when you sit on the opposite sides of the table from each other, its like you are having a face-off. If you sit on the same side of the table, it's like you are solving a problem jointly. In order to be able to sit on the same side, I actually made sure that the proposal I was presenting was not printed. Instead I had to drag my chair over on to the same side, sit next to the person who I was selling to, and walk him through the proposal on the laptop. The result - 2nd place in that round :)

That was one example. Another major leadership lesson was on leadership styles. We all think that we have one leadership style, but the fact is that we all have a combination of multiple leadership styles inherent within us, and we can change how much of each we use depending on the situation. 

Lesson 3: Mindset, not skill-set


This was not a lesson per se, but a revelation. People often ask me what skills I picked up during my MBA that is useful in my consulting job, in startups etc. I can hardly point to one or two skills that are super crucial; instead, it is more of a change in mindset; in how I analyze any issue, business or otherwise. Things such as approaching problems with a hypothesis, quickly figuring out how the hypothesis can be proven or disproven, digging deep into understanding the root cause of most issues, and being able to take a much broader view of the different aspects of the issue.

If this sounds vague, it probably is; I do feel that there has been a marked change in the way I think about things.
The ROI

Now let me tack on to the post and answer this very important question that I get asked all the time - what is the ROI of an MBA? Is it worth the financial trouble? Is there a ROI analysis that shows that?

If you take on a job that pays more than your pre-MBA job, and stick there for a while, you will have a clear justification; especially if you intended to just stick in your old job if you did not go to school. If you have a zig-zag career path - which is the norm, not the exception - you might never be able to clearly explain with an excel model how your career path would have been different. What if you had quit your job and started a company which sold for a billion dollars? There are so many options, and too much variability.

But if you come out a changed person, and think and act differently - now we're talking. That might be more than worth the financial trouble. Of course, the tons of fun and the number of friendships you build during Business School helps :) I had an amazing time at Kellogg, and would not give up the experience for anything.

Monday, March 5, 2012

The diaper shift blog post

Ideas come to us in the craziest places. And the craziest times. Most of my ideas occur to me between 4 and 5 AM. What I am doing up at that time? Doing my duty on the diaper shift.

Every night, our daughter Simran gets up at this time from her first shift of sleep, to eat. Now I cannot feed her; what I can do is the 'diaper changing and putting her to sleep' part. She is awake some of the time; but then gets very sleepy, and as I rock her to sleep, my mind wanders.

For some reason, this is when thoughts start occurring to me - thoughts related to ideas that I was thinking about the day before. And its not just disjointed thoughts - thoughts often come in as a coherent whole. I try to jot down these thoughts in my notebook before I go back to sleep, as I can often translate them directly into a blog post. There is a blog post that I will write soon titled Skillshare vs. Sidetour - I have the entire outline, with all major points ready. And that thought came to be - on the diaper shift.

Amazing TED talk by Susan Cain

If you are an introverts, or know any introverts (all of you!), this is a must see talk! After watching this, I realize that I am an ambivert - actually love social gatherings, love to take the limelight in Public Speaking and Improv, but after a few hours, want to retreat back to my shelf.

Wednesday, February 29, 2012

Scarcity

There was a time when information are scarce. News took forever to travel. Now with a a few clicks and keystrokes, you can know a lot.

Information is no longer scarce. Ability to apply the information and change habits is still scarce. Really 'grokking' concepts is still scarce. Initiative to act on the information is still scarce.

Sunday, February 26, 2012

The rise of the subscription model

It seems like there there is a new E-Commerce website with a subscription model on Tech Crunch every week! Just one week ago, Lost Crates expanded their subscription model to includes verticals other than what they had started with first: boutique stationery goods. There is a pretty good list of subscription services here. I started wondering: what is behind this new trend?

Let's first consider what job customers hire these websites to do? In one word - curation. Consider the example of Bespoke Post, launched by my Kellogg classmates, Rishi and Steve.

Bespoke Post sends you hand-picked goods, which enable you to 'Turn into a gentleman. One box at a time.'  And they send you a new box of 'Awesome'. Their marketing message is simple and brilliant. Their persona seems to be - wait for it - 'Barney Stinson.' For people who do not watch the show 'How I met your mother,' Barney is his early thirties and almost always wears a suit. He picks up women - all the time. And always has an opinion. And uses the word Awesome and Legendary a lot! Hence Bespoke Post's marketing message reads (at least to me) if you are a classy gentleman who like the fine things in life, subscribe to our service, and we will send you products that help you maintain your classiness. And it's all curated by us, so there is no effort on your part. And by the way, their products are super awesome!

Next let's consider, what is behind the rise of so many subscription model E-Commerce businesses?

1. Subscription models have been around forever; these businesses are online versions of traditional subscription businesses.Wine of the month club comes to mind.

2. Such businesses can start producing revenue quicker than let's say a marketplace. What do you need to get started? A cool concept, a good website and some amount of inventory and a clear value proposition. Layer on the marketing on top.

3. There is a good amount of predictability. Only order a little more than you think you need for that month - since you are seeing numbers month to month, you can predict the demand for next month to a reasonable degree. If you under order - back order the goods, please the order with the supplier, and have them shipped out a little later.

4. Most of them are buying from small suppliers, so they have enough negotiating power to get good margins, and also shift some of the risk over to the suppliers

5. The cost of customer acquisition is lower in this new era of social media marketing. And then there is affiliate marketing - just offer your customers $10 off for very friend that signs up, and you have another channel going

6.  As the number of such businesses will show, there are enough number of niches to be filled

7. On the customer side, another value proposition is surprise. As an example, Birchbox sends 4-5 samples/month for $10. What the samples would be? That's a surprise that's eagerly awaited by customers

8. The perceived price from a customer's perspective is lower; Psychologically speaking, $19.95/month seems much lower than $240/year.

9. I think the biggest factor is that these businesses give the founders a chance to share something they are passionate about. For example another friend Gautam, from the same Startup Leadership Program batch as I, launched Naturebox, which sends healthy Snacks daily. He passionate about healthy food, and the startup enables him to share this with his customers.Read this excerpt from his blog:

"As a co-founder of NatureBox, I’m especially pleased to introduce you to our company and thank you for your visit. The NatureBox mission of helping you eat healthier without changing your daily routine, has great personal meaning to me. I grew up overweight – weighing more than 200 pounds at the age of 12 – and struggled with obesity for most of my life. As a child, I would come home from school and spend hours eating junk food. My weight struggles were preventable if I had healthier options and better eating habits. Through hard work and dedication, I lost weight by focusing on healthy foods. Now I am dedicating my life to helping others discover a healthier you."


But as the number of these business rise, what will enable each one to be successful?

1. Scale - is the market big enough? Probably boutique stationary goods is not!

2. A clear marketing message - as in what do you provide, and who do you provide it for? Can the customer easily recognize that the service is ideal for them?

2. Trust - do your customers trust that you will send high quality items? Startups often prove this by showcasing examples of things they have sent before

4. Additional revenue sources - even with a large number of customers, the business model might not support a large company. Additional revenue sources come in handy here. A prime example is Birchbox's marketplace - if you like the samples they send, you can purchase a full size version of the product right from their website.

So go on, find the subscription service right for you now!




Wednesday, February 22, 2012

Alice.com - great concept, terrible design!

I recently came across a new e-commerce site called Alice.com. This is how Alice.com describes itself "Alice.com will be an open, online retail platform for consumer packaged goods, focused primarily on linking manufacturers of essential household stuff like tooth brushes, toilet paper, trash bags etc. to end consumers directly." - Crunchbase.

I was intrigued - why Alice.com? Why not Amazon.com - doesn't has the same variety of goods? What do you gain Alice.com, rather than drugstore.com or amazon.com? Then I saw Alice.com's crunchbase page.

"Consumers currently lack a convenient way to shop for household essentials on the web, while manufacturers of consumer packaged goods are in the market for a fresh alternative to the large bricks-and-mortar retailing services. The Alice.com model will be unique both in terms of how goods are ordered/distributed and how consumer packaged goods companies can target, incentivize and personalize offers to consumers"

Once I explored the website I did begin to understand the merits. See for example the page for the Cat litter deodorizer. It clearly lays out how long the product typically lasts, reviews from customers etc. Some other pages also laid out the green rank of products etc. The bottom line - the site is custom designed for household products, and so gains a significant advantage over other sites like amazon.

Thinking of Alice.com in a jobs to be done framework, the site is enabling users to shop for household products online rather than go to the store. Quoting from a HBS working knowledge paper, there are a few dimensions to this framework:

"With few exceptions, every job people need or want to do has a social, a functional, and an emotional dimension. If marketers understand each of these dimensions, then they can design a product that's precisely targeted to the job. In other words, the job, not the customer, is the fundamental unit of analysis for a marketer who hopes to develop products that customers will buy."

In terms of functional dimension, the site does well in terms of how it enables viewing of various aspects of household products important to the user e.g., how long they last, how green they are etc. There is also a product rank section that lets you see how other products in the same category are handled. This is something that amazon is likely going to find hard to do, given that they have a much larger variety of products, and products can be listed by merchants in the marketplace. So far, so good.

The social element is well handled - in terms of reviews appearing instantly on the tight, letting you see what the other users think of the product. Another aspect of both social and emotional element is the budget; the question is there on a lot of people's minds - am I paying more than others for the same stuff? The site shows a tab called My Budget which compares your expenses to the average household.



There are two things that the site does badly. One is design
. See the following screen shots: in the first one I hover over one of the category icons. As I go to select a subcategory, I move the mouse left - and the category to the left gets selected. I had seen such issues with websites designed in 2000 - it seems that they did hire a designer from that era!



The second thing that seems to be forced is social networking. There is a section called MyFriends - where you can share activity related to your favorite products in the neighborhood. The web is full of places where people highlight products that they love - but these products carry a lot more emotional value for them. Whether it is music, movies, books - sharing these highlights an aspect of the user's personality.  I completely understand reviews - but social sharing of toilet paper and detergent is unlikely to excite anyone. I might be proven wrong, but I doubt it.


It would be certainly interesting to see how Alice.com does. I haven't made my first purchase yet, but do plan to soon, and post more thoughts on the site.

Tuesday, February 21, 2012

GTD rediscovered

I have always been a pretty organized person when it comes to by Todo list is concerned; I know exactly what I need to accomplish each day, how much time I need etc. But recently I re-read the classic book 'Getting Things Done' by David Allen. I discovered some key aspects of GTD I had been neglecting:

1. The main purpose of GTD is to free you of thoughts about the small tasks that still need to be accomplished, so that you can focus on the one thing you are doing right then. That can be only done if you know that the other small things are captured, and will be reviewed and taken care of according to priority. That means - pick a task, and keep going till you get it done. Don't look at your task list to optimize every single moment of life. If you are reviewing a presentation say, and it takes a minute to save, don't open the task list to see if you can get anything done within that one minute. Breathe, chill and continue to work on the task. Actually closing the browser tab that shows my Todo list (I use toodledo) helps me take my mind off other tasks as well.

2. Another big change I have made is organizing tasks by context. So if I am at an airport waiting for my flight, I can look up my context called 'Phone Call,' and make the phone calls that I have been neglecting. This also hides all the tasks that cannot be done at that moment; so my task for 'Pick up Dry Cleaning,' which has a context of 'Tasks near Home' does not show up at work.

3. I also stopped using due dates unless absolutely necessary. Before this, I would 'guess' a due date for a task, then be disappointed if I did not completely finish the task. Now I just set start dates - dates before which I will not begin working on the task. Then I make a decision on what task to do based on what context I am in, how much energy I have etc. This has helped me get the unnecessary pressure off me, and allowed me to focus on just doing whatever I can during the day. And paradoxically, I am getting more done!

4. I also have 75 odd tasks in the 'Someday/Maybe' list. Things that I would love to do, but cannot do so at the current time. These include 'Write a Book.' Just knowing that I am capturing this information, and review it periodically to see if I can bring them into the active task list keeps them off my mind.

5. Most importantly, I have started focusing on the Next Action. Let's take an example of a task from my task list below, which said 'File taxes.' And then I will wait till close to the deadline before even getting started. Why? Well there are a substantial number of moving parts. Now File taxes is a project, which has a sequence of tasks that includes 'Find W-2s', 'Collect 1099 forms', 'Enter tax data', 'Review' etc. They key is that the Next Action in a project should be the next physical action you are going to take, and not a fuzzy goal with several tasks yet to be figured out.


So GTD is great; but I do want to mention a major pitfall. GTD has the potential of making you a task completing machine. Have a few minutes while walking from the bus stop to home? Find some task to do! But slightly changing what  William Henry Davies said, "We must make time to stand and stare."