A couple of weeks ago, I wrote about the work of Donald Norman and his seminal book “The Design of Everyday Things” (the title itself was in true design fashion improved from the original “The Psychology of Everyday Things” or POET.)  I was also bemoaning that people seem to be far more familiar with Jonathan Ive, the much heralded (and recently knighted) designer of many things Apple, than with Don Norman and his now business partner Jakob Nielsen, who’ve been evangelizing human-centered design longer than most.

Of course reading The Design of Everyday Things has once again made me sensitive to good and bad design decisions that surround us and I wanted to share a couple of instances of poor design (or poor affordances, as Don terms them). Just the other day I swung by an ATM machine, tucked in next to a Food World store. And here’s what the greeted me at the door.

A sign that said PUSH but a handle that said pull. This is one of the first examples Don cites for cognitive dissonance – a fancy term for when what the sign says (push) doesn’t gel with what your brain says you should do (pull). Alas Don wrote his book more than 20 years ago and we are still grappling with this one.

Another favorite one of his is figuring out which switch (on a bank of switches) controls what light or electrical equipment in a room. Just this last weekend we sneaked away to Yercaud (an largely unspoilt hill station near Salem, Tamil Nadu). The hotel we stayed in was relatively new and the first thing that greeted me, as I tried to turn on the lights was this bank of switches.

The housekeeping staff, had to put a small sticker with a sign that read Fan. Given that there are only five switches, sure we can run through them quickly – however you’d have an irate spouse in the middle of the light if you turned a light on rather than the fan In this particular bank of switches, you can see the set up is a pair of switches (neither of which controls the fan) and the regulator in one block while three other switches in another block (one of which controls the fan). Ideally pairing the regulator and the switch into a single standalone block would have worked or having them at the very least on the same block would have provided a clear affordance.

The good news is that good design shows up in most unexpected places. The office provided me with a Tata Photon 3G broadband USB dongle. Most of us who’ve used any sort of USB dongles, whether memory sticks, Bluetooth, WiFi or broadband, have experienced the bother of losing the caps that come with them. Invariably once I’m done using the stick and remove it from the computer, I am constantly searching for the cap and usually end up just doing without it. The Tata Photon previous generation dongles suffered from this same short coming as I saw with my colleagues. However the latest dongle that I was provided, had a most ingenious solution – a wrist band that was strung through the cap – so not only was carrying the darn thing easier, but the cap even when removed stayed attached (and conveniently) out of the way, so that when it was time to stow away the stick, I don’t have to begin searching for the cap. Good design, like god is in the details.

Referrals If you have [a] customer[s], start with them and ask for references. Any time an existing customer refers you, either to someone else within their company or others outside, it makes closing that deal a whole lot easier. Even when someone declines your services, you should ask them if they can refer you to others who may be able to use your services

Leads If you are a raw startup without a single client, then I’d start by making a list of every working adult you know – and reach out to them – with a one pager (if in print) or a single email, briefly explaining your offering in plain English, and asking them to introduce you to potential customers. As Esther Dyson, angel investor & writer suggests, ideally in your email, you’d write a brief email, that your recipient can forward after only having to add the name to the Dear [...] at the beginning and put their name at the bottom. Don’t forget to add every person you went to school, college or rock show with to this list.

Cold calling Despite claims that the world has changed and sales (& marketing) are not what they were, for a raw startup cold calling is a good way to both get a sense of what’s out there, what issues you will face when you try to sell (even with referrals) and refine your own pitching – of what problem you address and how what you offer is the right thing for folks. Best thing to do with cold calling is to have a fixed time each day (or n days a week), when you’d send emails or make phone calls to reach prospects. Cold calling is one of the hardest things to do and has low conversion rates, yet will serve you well in the years ahead. Check out The Complete Idiot’s Guide to Cold Calling by Keith Rosen

Networking/speaking/free services Offering advice, giving talks and a free hand out, such as a tip sheet at industry forums, to business groups or other networking forums is a great way to build leads. For instance if you offer services in network security, you’d talk about “Top 5 Security Risks to your Business” and provide a free checklist that people could use to audit their network security. This can of course be done on online forums as well such as LinkedIn answers or your own blog.

In bound marketing In many ways this is like networking & free advice but done with content on your own website as a means to deliver value that would drive traffic to your website. In other words bring customers to your site, particularly self-selected prospects, ones looking for a solution. Companies such as http://hubspot.com/ do a great job of both educating you about inbound marketing and providing tools to make it happen.

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When this question was first posed to me, my immediate response would have been “At the very beginning.” However, upon a little reflection I realized that the answer needs to be a little more nuanced and is not nearly as self-evident as I reckoned. I’d still say  you should have a likely business model in mind, reasonably early in your startup’s life.

Of course, given the treacherous nature of the English language, it’s probably worth defining what a business model is.

Wikipedia defines it as

A business model describes the rationale of how an organization creates, delivers, and captures value

and in plain English, according to the fine folks at Walden University,

The term “business model” refers both to the way in which a business creates a product or service and sells it for a profit, and to any document that outlines the process. …The business model of a lemonade stand seems straightforward: make lemonade and sell it to passersby for profit.

Given all the talk of lean startups, I’ve met a number of folks who talk of figuring out their business model even as they roll out their product. Yet a number of sane heads seem to be be reminding us rightly, that a feature ain’t a product ain’t a business. To me fundamentally a business model is figuring out who is going to pay (& hopefully how much) for the service/product we offer. It could be the users, it could be their parents (in the case of children), their companies (for corporate/SMB), advertisers (for free consumer services) or the government – someone, somewhere is going to write a check or whip out a credit card or cash for your product or service.

Once you have a business model you can then figure out how much money you will actually make – your revenues. Done right, you hopefully know what is it going to cost you to deliver it and how long before you can get it to operational breakeven (making more than you spend on a quarterly/monthly/weekly basis.) Of course if the numbers don’t add up in your revenue model, you return to your business model to tweak your assumptions, targets etc., till you can iterate to something that looks like a practical (or at least realistic) business model.

“There’s not a single business model… There are really
a lot of opportunities and a lot of options and
we just have to discover all of them.” Tim O’Reilly

Back to the question of when do you need this? I’d still say start with something as simple as “We’ll provide P for Q, which {Q,R} will pay for in the form of S.

A couple of examples might help illustrate this.

We’ll

“enable consumers to discover relevant videos easily and we’ll make money through advertising” or
“answer academic questions over SMS for high-schoolers.  Parents will pay for the service through subscription.”
“help solar installations achieve higher ROI. OEMs will license our technology or purchase our blackbox.“

This is more a statement of intent than a full fledged business model. Before you go spend a lot of time, figure out whether the world (or at least your target customer group) actually has the problem you reckon you’re solving for them and is willing to pay for it. Once the market need and your product/service fit to that need is established you can return to working up a real business model, that will allow you to build a real business.

Related articles

• How to Develop a Business Model (thinkup.waldenu.edu)
• The Business Model Canvas

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One of the best kept secrets least discussed matters in the startup world is what power a CEO really wields. When you are one of the worker bees or even a vice president it seems that the CEO is this powerful fellow, who at times appears all-knowing. And even when he isn’t, he still seems to wield an unfair amount of power. It’s only when you get to be the CEO of your own startup — by accident, choice or default — you realize that the power of the CEO is all too illusory.

Sure you can TELL folks what they should do and you can mean NOW! but that doesn’t work too well nor get you too far. You’ll soon find out, what anyone who’s raised teens knows, that what you want and what you get can be two different things.

Recently as a friend and fellow entrepreneur and I discussed issues each of us were facing in our businesses, about getting things accomplished, it hit me suddenly. Ginger! There’s much leaders, especially new CEOs, can learn from good Asian chefs – especially in how they use Zingiber officinale – or ginger.

Ginger when used in small amounts, whether to flavor a favorite curry dish or to create a zing in your tea, elevates the dish and the entire culinary experience. There are few delights greater than having sushi with some finely sliced and pickled ginger – a near out-of-body experience when accompanied by wasabi. At the other end, a well made ginger ale or even a ginger chutney, despite being all ginger can be immensely enjoyable.

The trouble however arises when too much ginger is used in the tea or too little in the ginger ale, making both undrinkable and worse yet leaving a nasty aftertaste. Despite the taste risks too much or too little ginger poses, you rarely find Asian cooks using physical measures of the quantum of ginger they use. It’s all a subjective call and a visual appraisal honed through apprenticeship and experience.

It is the same expertise that leaders, especially of startups need to cultivate of when and how to use what amount of cajoling, pressure, suasion or even the occasional threat to get their work accomplished.

Of course both the chefs and chiefs can benefit from sharp knives, but that’s a story for another day!

Now as an entrepreneur, founder or CEO why should this story be relevant to you? Basically, this is a lesson on discretion – or the lack thereof – and how it can come and bite you in the rear!

As an entrepreneur, founder and especially as a CEO, you are going to having some rough times out there – being plagued by self-doubts, or worse yet certainty that you are screwing up. You will also wonder why you are doing what you are doing (or not) and is this whole thing a mistake? You wouldn’t be the first one to have had these thoughts nor are they likely to occur only once.  The question is what should you do when you are thus assailed?

What you should NOT do is share it with your partners – immediately or without reflection. Usually it’s best shared with someone outside your founding team – a friend, an advisor and if you are lucky, with a spouse. This last can be tricky and deserves a whole another blog post.

I have worked in and with multiple startups and started two of my own, where the founders were friends, sometimes having known each other for many years and other times, been colleagues who’d worked with each other. Almost in all cases the co-founders had been friends before becoming business partners.

And in almost everyone of these instances, when one or more founders have been plagued by self doubts, voicing it without forethought to other founders or senior staff has caused immense grief. Not unlike arguing in front of the kids (or other 3rd parties) who have no context on my wife and our deep abiding love or other ongoing issues

In every case, talking about it with a non-stakeholder first would have done away with much thrashing and grief that otherwise ensued. Talking it out with a third party always worked better – in terms of achieving distance which helped in gaining clarity and perspective before looking for answers.

Many a times, our self doubts maybe no more than a fleeting moment of vulnerability – or the result of a bad day or week, a setback. We may bounce right back. At other times, they may be grounded in facts – in that we are operating at the limits of our ability or capabilities, personal life (or the lack of one) may be intruding into our professional lives or we may be avoiding a critical set of actions/decisions at work to avoid unpleasantness.

And if there are real issues at play that need to be brought up to your partners, it should not be done in a flippant comment or regrettable aside that can be misconstrued or worse. It can be presented with some distance and perspective that you’d have gained in discussing it with a non-stakeholder first. This alone is a good reason to seek out a mentor or advisor, but almost any friend, who’s not involved in your business and has no axe to grind will do.

So the next time you think of making a casual remark to the other founders, especially those who are your friends, bite your tongue. You are a parent – or at least need to behave as a responsible one – if you want to keep the job!

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A question “What books should Indian entrepreneurs read” on Quora set me thinking. The good news is that Indian entrepreneurs should read, for most part books that entrepreneurs anywhere would do well to read. The trick is picking the 10 or fewer, that would make reading (or starting) seem not so daunting and that you’d have a snowball’s chance of completing. My own recommendations (& favorites) include the following. Much like a travel guide that tells you what to see if you have only one day in Paris, a week, a month or more, I have attempted to bin them in an attempt to bring coherence and priority.

Plan to ready only ONE book

• The Effective Executive by Peter F. Drucker: Forty years after its first publication, this book, like good wine, has aged well. If you are going to read only one book, this should be it. Even if you are only contemplating to be an entrepreneur, you should read this. You’ll do better in any role with this one.

If you can squeeze in two more
Particularly for tech founders and any first time entrepreneurs, knowing about sales and design, particularly as it related to customers, these two books work.

• Selling the Wheel by Jeff Cox and Howard Stevens: Most entrepreneurs are surprised when they build something and the world does not beat a path to their door on its own. This novel is the gentlest way to get acquainted with selling.
• Design of Everyday Things by Donald Norman: How many times have you had to re-print your document to get the two-sided printing working? Or needed to paste instructions on your copier or building door. Before we build it – anything – it would be nice to understand what folks are trying to get done.

Now you are on a roll, here are three more
Now its time to hear others’ stories and to see what part of it is relevant to you.

• Growing a Business by Paul Hawken: The first person conversational tone of the book speaks from the heart and is as applicable today as when it was written more than a decade ago.

• Founders at Work: Stories of Startups’ Early Days by Jessica Livingston: this is probably the newest book in this list – and one that I am still working my way through. The breadth of entrepreneurs covered alone would make it worthwhile.
• Made in Japan – Sony’s story by Akio Morita, Edwin M. Reingold and Mitsuko Shimomura is a timeless story of innovation, perseverance – that’s particularly relevant from Indian entrepreneurs trying to enter global markets

If you are still with the program, these can help you round it off

• What the CEO Wants You to Know by Ram Charan: The author’s Indian origins and his experiences with the family shoe store make this book easy to relate to and important for business acumen
• Marketing Myopia by Theodore Levitt – if you were going to read only one book about marketing this should be it. Insights that seem self evident in hindsight will bite all of us in the rear. This tells you how to avoid some of it.
• Eat That Frog!: 21 Great Ways to Stop Procrastinating and Get More Done in Less Time by Brian Tracy – being an entrepreneur is all about getting things done – and nothing stops you as procrastination can. A simple, yet hard hitting book on getting things done.

Bonus number ten
If you got this far, you need to read a darn good yarn of how a set of engineers got a new machine built.

• Soul of a New Machine by Tracy Kidder – this book helped the author land a Pulitzer prize – a non-technical journalist covering the story of how Data General went about trying to beat Digital at the microcomputer game. Human drama and much that goes on in the name of startup success.

It is hard to pick a finite list and any such list if likely to be highly subjective. You will notice I have not picked any Indian entrepreneurial stories – its just that they don’t figure in the top 10 – in which itself only one book younger than 5 year old figures. This is in a sense a foundational reading course rather than here’s how some specific company has done it, in India or overseas. It is important in the first instance to read – which I am still surprised how many tech folks in India don’t seem to read and freely admit to not doing so .

Happy reading!

Related articles

• 11 Recommendations for the Entrepreneur’s Bookshelf (mashable.com)
• What books should young entrepreneurs read? (compassioninpolitics.wordpress.com)

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In the last two months of 2010, I participated in a number of meetings with founders of startups – as an adviser, reviewer or investor. Interestingly in nearly every one of these meetings the same questions kept coming up.

In particular four different companies  -  two nascent startups and a couple in their early tweens – were facing eerily similar issues. Despite the startups being in very different spaces,  the varying ages of their endeavors and having  smart and motivated founders – they were all trying to come to grips with the lack of market traction. This despite a great deal of time spent talking to prospective customers, partners, building and launching working prototypes.

I must admit after the first couple of meetings it appeared they were having different problems. In one, a marketplace that was not getting suppliers nor buyers off the starting block, in another focusing on the technology to the exclusion of all else, and yet another having a solution looking for a problem. However by the time the fourth meeting rolled around it was plenty clear, that all of them required a sharp focus on answering the question

“Who is your target customer?”

and more importantly,

“What pain are you trying to solve for them?”

Two years into our own start up, we find ourselves returning to this question with reasonable – some would say troubling – frequency. When we got started on dog-earz, the newsletter tool for the rest of us, we defined our target customers as “marketing & sales folks in SMBs” and the pain we were trying to solve for them was How to keep in meaningful touch with everyone in your Rolodex, even if there wasn’t a deal on the horizon.

Of course it helps, if your target customers actually exist (ours did) and are accessible (a little more difficult) and truly felt this as a problem (not clear). Our solution seemed more a nice-to-have vitamin rather than make-my-pain-go-away Aspirin. We hung in there, as we felt we were target users ourselves. With time it was clear that we’d better solve their pain rather than imagine that they will behave the way we’d. Seems obvious in hindsight, doesn’t it?

Things are not always as evident as we’d like them.  I once had an opportunity to talk to Phanindra Sama, founder of redBus.in about his understanding of what pain they are solving for their customers.  Phanindra shared his view that the pain his customers felt was not in purchasing bus tickets – as I’d have thought. In fact it might still be more convenient for a traveler to call someone to hold a ticket and pay for it at time of boarding – only one phone call needed, but it is the absence of reliable information – as in how many buses, when and at what price or location will leave from Bangalore to Chennai (or better yet from Jalandhar to New Delhi?) that was the customers’ pain point.

Ask yourself these two questions, repeatedly and validate them by getting out of the office and asking your target customers about their pain points. Once you nail this down it makes, at the very least, decision making a whole lot easier. Knowing this is of course only a good start, but not knowing can kill your business.

Seth Godin recently wrote a post titled “Is this noise inside my head bothering you? ” about the many voices that operate inside our head. Seth characterized the voices in roles varying from an artist to a zombie. Terri Lonier, author of the Working Solo newsletter, added a time component of the past, present and the future in her response “Who’s inside your head?”

This naturally lead me to think, “Who else is inside our heads?” Here are a few characters you are likely to encounter daily, mostly from your past.

Your parents A great deal of how we think about things, has been formulated at the parental knee, the family dinner table through all those years you spent at home. So when you find yourself agonizing over “I’ll never be able to get it done” or “I’m just going to have to hold firm, if I am to get what I want” this may be the voice of your parents (or teachers). As with all humans, they were likely right, about as often as they were wrong. So recognizing when you are playing a parental script versus when you are consciously thinking things through is important.

Your managers Most of us have had the good fortune of having worked for one or more great managers. And all of us at one time had that manager from hell – maybe not pointy-haired – but close enough. So when we deal with people particularly and problems that arise with the powers-that-be, its likely our managers turn up in our heads.

Your hereos We’ve all been faced with tough choices. Be it walking away from an ethically challenging situation or having to make a hard choice between work and personal life or letting go of a co-founder. The more honest among us ask out loud “What would ____ do?” fill in with your favorite hero – Jack, Steve, Gandhi or Jesus.

As entrepreneurs we’d like to believe we are smart, motivated  go-getters and we likely are. But knowing that many a times we come up with an answer, it’s worth reflecting who’s voice it is we are hearing.

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Is work-life balance an oxymoron for startups?

Many people would suggest – Jack Welch comes to mind – that you are either successful or have work-life balance – and he wasn’t even talking about a startup!. So does this mean as a cash-strapped, competitor-chasing, crew-challenged startup you have no option but to give up your life till you reach some major milestone? To make matters worse, said milestone may each quarter either appear to change or move further away.

Yet others – such as the crew at 37signals and FogCreek software – strongly advocate fewer working hours and working smart. For many of us struggling in the trenches this may sound like Warren Buffett telling us “Money doesn’t buy you happiness.” Yeah right! We’ll believe it once we’ve have made some money!

An equally important question to ask is can you afford to not have work-life balance?

So can startups and entrepreneurs achieve work-life balance? And if so how do they do it?

My own experience is that it depends. It depends on what we mean by work-life balance and the choices we make. The extremes are easy to identify and agree upon.

• You haven’t let your office for four nights, can’t remember when you last had a non-pizza meal and can’t recall the name of your first born, or if single, when you last called your girlfriend | mom ][pick your loved one]. And this is when there isn’t a crisis at work. You probably have only work (and likely no girlfriend).
• If you clock in by 10AM (you have “flex” hours) – are out each evening by 455PM, take your lunch diligently between 12PM-1PM, and turn off your phones on Friday at 6PM, you are in the wrong place, working in a startup or even in a job!

But reality each day rarely appears in one of these two extremes, but in a whole slew of gray areas.

In a startup context, to me, work-life balance can be achieved by moving the goal posts to a realistic settings with two simple steps. I can hear some of you saying that’s cheating, but aren’t all successful startups about changing rules and sometimes definitions themselves?

• 15-day to 30-day cycles Measuring and working towards a semblance of balance over a longer period such as a month or week (depends on whether you have kids, girlfriends or other commitments). Simply put, be they chores such as doing your laundry or paying your bills, even filing your expense reports (all stuff I continue to have problems with) or having a life such as calling Mom or going on a date (one that’s prepared to be flexible) set a frequency – I will do this once a month or twice a month. So rather than beat yourself up, that you haven’t called your mom (which you can never do enough of, according to her) or paid your bills, because you are so busy you know that at any time you are unlikely to be more than a month/week/fortnight behind.

• Emergencies - make the right call in emergencies – that means family/friend/life comes first in an emergency. As a startup you intuitively rush to a client, when they have a line down (or these days cloud down) situation, spend the four days/nights to get the application/system/production line back up or ship two guys to a small village in Japan. Similarly when the “done” deal seems to be slipping away at the last minute you spare no effort to get it back – regardless of the debasement required. Use the same judgement or gut call, when your spouse calls to say the kids running 102, or your best friend’s in a bad car accident or your dad’s having chest pains. Don’t Blackberry, multitask or manage – drop the other stuff and get  over there. Your startup will manage, your employees/partners would better appreciate you and your actions will speak louder than any number of TXT messages or emails to your family/friend/life!

Now quit reading this blog and get back to busting your rear – you are in a startup Joe!

“Son, businesses can succeed or fail. Because your business fails doesn’t mean you have failed!”

My father said this to me, one evening as the two of us sat down to discuss how the startup I headed was doing.

For a little over four years I had been running my startup. Months after we got started, the dot-com bubble peaked and burst. We had also chosen a technology, that everyone felt would not take off despite the initial hype. Our two nearest competitors where both American companies – one, also a startup, that had raised about 100 times more money than we had and the other a listed company with well over a 1000 customers. We’d over committed to the first three customers we’d acquired – miraculously in three different continents – and ultimately failed to deliver outright or were so late as to be not useful for the customers.

We had borrowed money from the bank (another of my father’s favorite piece of advice – debt is a good thing) and from family including my father. Just the previous year, we had to cut back on a rather ambitious – and poorly thought out – plan to design chips and keep our focus on software. We also had to let go nearly fifteen people, whom we’d hired in a burst, without much attention to culture fit, while persuading the people who remained to take 10-20% pay cuts with no commitments on when these cuts would be reversed.

This was also a time when I was commuting – spending two weeks every other six weeks in Bangalore, whilst my family lived in California. So between hotel rooms and my sister’s house, I spent many a night tossing and turning, worrying how we were going to make payroll that month and not sure if we’d ever turn the corner.

To add to the pressure, the senior staff, who’d been putting in 10-12 hours a day were buying first cars or homes incurring debt, getting married and now had spouses who now wondered what they really did. Once when we had to send a key engineer to a customer site overseas, we packed his new bride with him – so that they are not separated within weeks of their wedding! We’d had actually celebrated with a cake, when the company made its first million in revenue but ten minutes later had to dash off to dampen new fires.

This story did have a good ending. Despite ourselves we turned a small profit in year five and a real one in year six. We sharpened our business focus and were gaining traction.  Newer challenges emerged as pricing pressures drove deal sizes down, competitors were gobbled up by customers in some instances and the market adoption was slower than we anticipated, and the payroll bill continued to grow each year. Whilst my partners and our immensely committed employees along with some luck, brought us to a successful and profitable M&A conclusion, it was my father’s words that kept me going.

“Son, the failure of your company doesn’t mean you have failed.”