After reading this book, I started seeing the patterns about Israel being high tech hotspot, for example consider just two pieces of news in the last 3-4 days: Apple buying Anobit, an Israeli company, for $500 million as well as building a research center in Israel and Cornell won the bid to build a university in New York city… in collaboration with Technion university of Israel.

What is important

This book taught me the importance and inter-play of:

• Entrepreneurism
• Venture capital
• Being committed to own business and country at same time
• When people are pushed for survival, only then do they show the zeal for entrepreneurism and trade – otherwise nation becomes lazy
• Size of country does matter
• Government policies
  • For example, the world’s richest man has to go to a different country to develop new nuclear energy technology.
• Immigration
• Technology as future growth
• Multiple fields learning
• Defense Forces
• Liberalization and freedom of speech

To highlight in a bit more detail, I have picked a few quotes and insights from each chapter:

0. Introduction

• Story of Shimon Peres and Shai Agassi pitching Better Place to auto manufacturers – Better Place is re-thinking electric vehicles by making fuel stations swap out your battery with a charged one instead of pumping petrol or diesel into the car, highly ambitious, executed first in Israel, now in China, etc.

1. Persistence

• Story of "Fraud Sciences" company pitching to Paypal to use their fraud detection service – Paypal ended up buying them so that the competition doesn’t get them – idea came from founders who were soldiers in the Israeli army hunting down terrorists – they found hunting frauds easier.
• Chutzpah
• Israeli attitude and informality flow also from a cultural tolerance for what some Israelis call "constructive failure" or "intelligent failures." Most local investors believe that without tolerating a large number of failures, it is impossible to achieve true innovation. In the Israeli military, there is a tendency to treat all performance – both successful and unsuccessful – in training and simulations, and sometimes even in battle, as value-neutral. So long as the risk was taken intelligently, and not recklessly, there is something to be learned.
• Story of how Intel’s chip design vision changed purely because of doggedness of the Israeli Intel office to convince higher-ups and how that eventually saved the company

2. Battlefield Entrepreneurs

• As usual in the Israeli military, the tactical innovation came from bottom up – from individual tank commanders and their officers. It probably never occurred to these soldiers that they should ask their higher-ups to solve the problem, or that they might not have the authority to act on their own. Nor did they see anything strange in their taking responsibility for inventing, adopting, and disseminating new tactics in real time, on the fly. Yet what these soldiers were doing was strange. If they had been working in a multinational company…
• Company commander is also the lowest rank that must take responsibility for a territory. As Farhi puts it, "If a terrorist infiltrates that area, there’s a company commander whose name is on it. Tell me how many twenty-three-year-olds elsewhere in the world live with that kind of pressure… How many of their peers in their junior colleges have been tested in such a way? How do you train and mature a twenty-year-old to shoulder such responsibility?
• In the Israel Defence Forces (IDF), there are even extremely unconventional ways to challenge senior officers. "I was in Israeli army units where we threw out the officers," Oren told us, "where people just got together and voted them out. I witnessed this twice personally. I actually liked the guy, but I was outvoted. They voted out a colonel." When we asked Oren in disbelief how this worked, he explained, "You go and say, ‘We don’t want you. You’re not good.’ I mean, everyone’s ona first-name basis… You go to the person above him and say, ‘That guy’s got to go.’… It’s much more performance-oriented than it is about rank.

3. The People of The Book

• Almost every Israeli trekker in Bolivia is likely to come through El Lobo (restaurant), but not just to get food that tastes like it’s from home, to speak Hebrew, and to meet other Israelis. They know they will find something else there, something even more valuable: the Book. Though spoken of in singular, the Book is not one book but an amorphous and evolving collection of journals, dispersed throughout some of the most remote locations in the world. Each journal is a handwritten "Bible" of advice from one traveler to another. And while the Book is no longer exclusively Israeli, its authors and readers tend to be from Israel.
• Israeli wanderlust is not only about seeing the world; its sources are deeper… there is another psychological factor at work – a reaction to the physical and diplomatic isolation. Until recently, Israelis could not travel to a single neighbouring country…
• For the same reason, it was natural for Israelis to embrace the Internet, software, computer, and telecommunications arenas. In these industries, borders, distances, and shipping costs are practically irrelevant. As Israeli venture capitalist Orna Berry told us, "High-tech telecommunications became a national sport to help us defend against the claustrophobia that is life in a small country surrounded by enemies." … "Today, Israeli companies are firmly integrated into the economies of China, India, and Latin America. Because, as Orna Berry says, telecommunications became an early priority for Israel, every major telephone company in China relies on Israeli telecom equipment and software…

4. Harvard, Princeton and Yale

• Innovation often depends on having a different perspective. Perspective comes from experience. Real experience also typically comes with age or maturity. But in Israel, you get experience, perspective, and maturity at a younger age, because the society jams so many transformative experiences into Israelis when they’re barely out of high school. By the time they get to college, their heads are in a different place than those of their American counterparts… In the military, you’re in an environment when you have to think on your feet. You have to make life-and-death decisions. You learn about discipline. You learn about training your mind to do things, especially if you’re frontline or you’re doing something operational. And that can only be good and useful in the business world… This maturity is especially powerful when mixed with an almost childish impatience.
• When an Israeli man wants to date a woman, he asks her out that night. When an Israeli entrepreneur has a business idea, he will start it that week. The notion that one should accumulate credentials before launching a venture simply does not exist. This is actually good in business. Too much time can only teach you what can go wrong, not what could be transformative.
• The military gets you at a young age and teaches you that when you are in charge of something, you are responsible for everything that happens… and everything that does not happen," Lowry told us. "The phrase ‘It was not my fault’ does not exist in the military culture.

5. Where Order Meets Chaos

• Although Singapore’s military is modeled after the IDF – the testing ground for many of Israel’s entrepreneurs – the "Asian Tiger" has failed to incubate start-ups. Why?
• There is a can-do, responsible attitude that Israelis refer to as rosh gadol. In the Israeli army, soldiers are divided into those who think with a "rosh gadol" – literally, a "big head" – and those who operate with a rosh katan, or "little head." Rosh katan behavior , which is shunned, means interpreting orders as narrowly as possible to avoid taking on responsibility or extra work. Rosh gadol thinking means following orders but doing so in the best possible way, using judgment, and investing whatever effort is necessary. It emphasizes improvisation over discipline, and challenging the chief over respect for hierarchy. Indeed, "challenge the chief" is an injunction issued to junior Israeli soldiers, one that comes directly from a postwar military commission that we’ll look at later. But everything about Singapore runs counter to a rosh gadol mentality.
• In Israeli’s elite military units, each day is an experiment. And each day ends with a grueling session whereby everyone in the unit – of all ranks – sits down to deconstruct the day, no matter what else is happening on the battlefield or around the world. "The debrief is important as the drill or live battle," he told us. Each flight exercise, simulation, and real operation is treated like laboratory work "to be examined and reexamined, and reexamined again, open to new information, and subjected to rich – and heated debate. That’s how we are trained." In these group debriefs, emphasis is put not only on unrestrained candor but on self-criticism as a means of having everyone – peers, subordinates, and superiors – learn from every mistake. "It’s usually ninety minutes. It’s with everybody. It’s very personal. It’s a very tough experience," Dotan said, recalling the most sweat-inducing debriefings of his military career. "The guys that got ‘killed’ [in the simulations], for them it’s very tough. But for those who survive a battle – even a daily training exercise – the next-toughest part is the debriefing." …
• Finally, Eiland leveled a criticism that is perhaps quintessentially Israeli and hardly imaginable within any other military apparatus: "One of the problems of the Second Lebanon War was the exaggerated adherence of senior officers to the chief of staff’s decisions. There is no question that the final word rests with the chief of staff, and once decisions have been made, all must demonstrate cmplete commitment to their implementation. However, it is the senior officer’s job to argue with the chief of staff when they feel he is wrong, and this should be done assertively on the basis of professional truth as they see it.
• Large organizations, whether military or corporate, must be constantly wary of kowtowing and groupthink, or the entire apparatus can rush headlong into terrible mistakes. Yet most militaries, and many corporations, seem willing to sacrifice flexibility for discipline, initiative for organization, and innovation for predictability. This, at least in principle, is not the Israeli way.

6. An Industrial Policy That Worked

• The history of Israel’s economy is one of two great leaps, separated by a period of stagnation and hyperflation. The government’s macroeconomic policies have played an important role in speeding the country’s growth, then reversing it, and then unleashing it in ways that even the government never expected.

7. Immigration

• Israel’s economic miracle is due as much to immigration as to anything. At Israel’s founding in 1948, its population was 806,000. Today numbering 7.1 million people, the country has grown almost ninefold in sixty years. The population doubled in the first three years alone, completely overwhelming the new government. As one parliament member said at the time, if they had been working with a plan, they never would have absorbed so many people. Foreign-born citizens of Israel currently account for over one-third of the nation’s population, almost three times the ratio of foreigners to natives inthe United States… Israel is now home to more than seventy different nationalities and cultures.
• Ask yourself, why is it happening here?" he said of the Israeli tech boom. We were sitting in a trendy Jerusalem restaurant he owns, next to a complex he built that houses his venture fund and a stable of start-ups. "Why is it happening on the East Coast or the West Coast of the United States?" A lot of it has to do with immigrant societies. In France, if you are from a very established family, and you work in an established pharmaceutical company, for example, and you have a big office and perks and a secretary and all that, would you get up and leave and risk everything to create something new? You wouldn’t. You’re too comfortable. But if you’re an immigrant in a new place, and you’re poor," Margalit continued, "or you were once rich and your family was stripped of its wealth – then you have drive. You don’t see what you’ve got to lose; you see what you could win. That’s the attitude we have here – across the entire population.
• Crucially, Israel maybe the only country that seeks to increase immigration, not just of people of narrowly defined origins or economic status… the job of welcoming and encouraging immigration is a cabinet position with a dedicated ministry behind it. Unlike the U.S. Citizenship and Immigration Service, which maintains as one of its primary responsibilities keeping immigrants out, the Israeli Immigration and Absorption Ministry is solely focused on bringing them in.
• In the beginning of the 1960s, Romanian dictator Nicolae Ceausescu demanded hard cash to allow Jews to leave the country. Between 1968 and 1989, the Israeli government paid Ceausescu $112,498,800 for the freedom of 40,577 Jews. That comes out to $2,772 per person.

8. The Diaspora

• AnnaLee Saxenian is an economic geographer at U.C.Berkeley and author of The New Argonauts. "Like the Greeks who sailed with Jason in search of the Golden Fleece," Saxenian writes, "the new Argonauts [are] foreign-born, technically skilled entrepreneurs who travel back and forth between Silicon Valley and their home countries." She points out that the growing tech sectors in China, India, Taiwan, and Israel – particularly the last two countries – have emerged as "important global centers of innovation" whose output "exceeded that of larger and wealthier nations like Germany and France." She contends that the pioneers of these profound transformations are people who "marinated in the Silicon Valley culture and learned it. This really begain in the late ’80s for the Israelis and Taiwanese, and not unil the late ’90s or even the beginning of the ’00s for the Indians and Chinese.
• The new Argonaut, or "brain circulation," model of Israelis going abroad and returning to Israel is one important part of the innovation ecosystem linking Israel and the Diaspora.
• Peres (in the Israeli Defense Ministry) had tried to buy thirty surplus Mustang aircraft for the Israeli Air Force, but the United States had decided to destroy the planes instead. Their wings were sliced off and their fuselages cut in two. So Schwimmer (one of the non-Israeli Jewish Diaspora)’s team bought the cut-up planes at cost from a Texas junk dealer, reconstructed them, and made sure they had all their parts and were operational. Then the team disassembled the planes again, packed them in crates marked "Irrigation Equipment," and shipped them to Israel.

9. The Buffett Test

• No sooner did the richest man in the world leave Israel than the second-richest, Warren Buffett, showed up. The most revered investor in America had arrived to visit the first company he’d bought outside the United States… Iscar, the Israeli company Buffett bought, has its main factory and R&D facilities in the northern part of Israel and was twice threatened by missile attacks – in 1991, when the whole country was targeted by Iraq’s Saddam Hussein during the Gulf War, and during the 2006 Lebanon War, when Hezbollah fired thousands of missiles at Israel’s northern towns. "Doesn’t this constitute catastrophic risk?" we asked Alice Schroeder, the only authorized biographer of Warren Buffett. Buffett’s view, she told us, is that if Iscar’s facilities are bombed, it can go build another plant. The plant does not represent the value of the company. It is the talent of the employees and management, the international base of loyal customers, and the brand that constitute Iscar’s value. So missiles, even if they can destroy factories, do not, in Buffett’s eyes, represent catastrophic risk.
• During the 2006 Lebanon War, just two months after Buffett acquired Iscar, 4228 miles landed in Israel’s north. Located less than eight miles from the Lebanese border, Iscar was a prime target for rocket fire… One rocket did slam into Tefen Industrial Park and a slew of rockets landed nearby. And though, during the war, many workers did temporarily relocate, with their families, to the southern part of the country, Iscar’s customers would never have known it. "It took us a brief time to adjust, but we didn’t miss a single shipment," Wertheimer said. "For our customers around the world, there was no war.

10. Yozma

• Every year when I tried to review the success of these small companies, it was disappointing," said Erlich. "While they may have succeeded in R&D, we didn’t see them succeed in growing companies." He became convinced that a private venture capital industry was the only antidote. But he also knew that in order to succeed, an Israeli VC industry would need strong ties with foreign financial markets. The international connections were not just about raising funds; aspiring Israeli VCs needed to be mentored in the art of business mentoring. There were thousands of venture capital firms in the United States that were involved in the nuts and bolts of successful tech start-ups in Silicon Valley. They had experience building companies, understood the technology and the funding process, and could guide first-time entrepreneurs. That’s what Erlich wanted to bring to Israel.
• That’s when a band of young bureaucrats at the Ministry of Finance came up with the idea for a program they called Yozma, which in Hebrew means "initiative." The idea was for the government to invest $100 million to create ten new venture capital funds. Each fund had to be represented by three parties: Israeli venture capitalists in training, a foreign venture capital firm, and an Israeli investment company or bank.
• The real allure for foreign VCs, however, was the potential upside built into this program. The government would retain a 40 percent equity stake in the new fund but would offer the partners the option to cheaply buy out the quity stake – plus annual interest – after five years, if the fund was successful. This meant that while the government shared the risk, it offered investors all of the reward. From an investor’s perspective, it was an unusually good deal.
• The ten Yozma funds created between 1992 and 1997 raised just over $200 million with the help of government funding. Those funds were bought out or privatized within five years, and today they manage nearly $3 billion of capital and support hundreds of new Israeli companies. The results were clear. AS Erel Margalit put it, "Venture capital was the match that sparked the fire."

11. Betrayal and Opportunity

• Like many small states, Israel preferred to buy large weapon systems from other countries, rather than devote the tremendous resources needed to produce them. [Especially from France. In 1969, France changed loyalties opting for rapprochement with the Arab world.] The Israelis quickly pursued stopgap measures. Israel decided that it must move quickly to produce major weapons systems, such as tanks and fighter aircraft, even though no other small country had successfully done so.
• The most ambitious project of all was the Lavi fighter jet, using American-made engines. [Even though the project was eventually cancelled], the Israelis had made an important psychological breakthrough: they had demonstrated to themselves, their allies and their adversaries that they were not dependent on anyone else to provide one of the most basic elements for national survival – an advanced fighter aircraft program. Second, in 1988 Israel joined a club of only about a dozen nations that had launched satellites into space – an achievement that would have been unlikely without the technological know-how accumulated during the Lavi’s development. And third, it helped jump-start the high-tech boom to come. Yossi Gross, one of the Lavi’s engineers, went on to found seventeen start-ups and develop over three hundred patents.

12. From Nose Cones to Geysers

• The companies where mashups are most common in Israel are in the medical-device and biotech sectors, where you find wind tunnel engineers and doctors collaborating on a credit card-sized device that may make injections obsolete. Or you find a company that has created an implantable artificial pancreas to treat diabetes. And then there’s a start-up that’s built around a pill that can transmit images from inside your intestines using optics technology taken from a missile’s nose cone.
• Some of Gross’s companies combine such wildly diverse technologies that they border on science fiction. Beta-O₂, for example, is a startup working on implantable "bioreactor" to replace the defective pancreas in diabetes patients. Diabetics suffer from a disorder that causes their beta cells to cease producing insulin. Transplanted beta cells could do the trick, but even if the body didn’t reject them, they cannot survive without a supply of oxygen. Gross’s solution was to create a self-contained micro-environment that includes oxygen-producing algae from the geysers of Yellowstone Park. Since the algae need light to survive, a fiber-optic light source is included in the pacemaker-sized device. The beta cells consume oxygen and produce carbon dioxide; the algae does just the opposite, created a self-contained miniature ecosystem. The whole bioreactor is designed to be implanted under the skin in a fifteen-minute outpatient procedure and replaced once a year.

13. The Sheikh’s Dilemma

• Cultural commitment can be central to the success of economic clusters, of which Israel’s high-tech industry is a case in point. A cluster, as described by the author of the concept, Harvard Business School professor Michael Porter, is a unique model for economic development because it’s based on "geographic concentrations" of interconnected institutions – businesses, government agencies, universities – in a specific field. Clusters produce exponential growth for their communities because people living and working within the cluster are in some way connected to each other. As Porter says, the "social glue" that binds a cluster together also facilitates access to critical information. A cluster, he notes, must be built around "personal relationships, face-to-face contact, a sense of common interest and ‘inside’ status." Margalit would point out that Israel has just the right mix of conditions to produce a cluster of this kind – and that’s rare. After all, attempts to create clusters don’t always succeed. Take, for example, Dubai.
• Attracting new members to a cluster by offering a less expensive way to do business might be sufficient to create a cluster, but not to sustain it. If price is a cluster’s only competitive edge, some other country will always come along to do it more cheaply. The other qualitative elements – such as tight-knit communities whose members are committed to living and working and raising families in the cluster – are what contribute to sustainable growth. Crucially, a cluster’s sense of shared commitment and destiny, which transcends day-to-day business rivalries, is not easy to manufacture.

14. Threats to the Economic Miracle

• What if Israel’s economic miracle were simply built on a rare confluence of events and would disappear under less favorable circumstances? Even if Israel’s new economy is not just the product of happenstance, what are the real threats to Israel’s long-term economic success?
• A diminished supply of venture capital dollars [in view of the worldwide economic crisis] could mean less "innovation finance" for Israel’s economy.
• The problem according to Ben-David, is that while the tech sector has been surging ahead, and becoming more productive, the rest of the economy has not been keeping up.
• As the New York Times’ Thomas Friedman put it, "I would much rather have Israel’s problems, which are mostly financial, mostly about governance, and mostly about infrastructure, rather than Singapore’s problem because Singapore’s problem is culture-bound.

15. Conclusion

• In twenty-five years, Israel increased its agricultural yields seventeen times. This is amazing," Peres told us. "People don’t realize this," Peres said, "but agriculture is ninety-five percent science, five percent work."
• Peres seemed to see technology everywhere, and long before Israelis themselves thought in such terms. This may have beeno ne of the reasons Ben-Gurion backed Peres so strongly; the "Old Man" was also fascinated by technology, he told us. "Ben-Gurion thought the future was science. He would always say that in the army it’s not enough to be up to date; you have to be up to tomorrow," Peres recalled.
• What makes the current Israeli blend so powerful is that it is a mashup of the founders’ patriotism, drive and constant consciousness of scarcity and adversity and the curiosity and restlessness that have deep roots in Israeli and Jewish history. "The greatest contribution of the Jewish people in history is dissatisfaction," Peres explained. "That’s poor for politics but good for science."
• This theme can be traced to the very idea of Israel’s founding. The modern state’s founders – or national entrepreneurs – were building what might be called the first "start-up nation" in history.
• At eighty-five, Peres still has the chutzpah to think up and advocate new industries. As they do in Israeli society, the pioneering and innovative impulses merge into one. At the heart of this combined impulse is an instinctive understanding that the challenge facing every developed country in the twenty-first century is to become an idea factory, which includes both generating ideas at home and taking advantage of ideas generated elsewhere. Israel is one of the world’s foremost idea factories, and provides clues for the meta-ideas of the future. The most careful thing, as Peres told us, is to dare.

Summary

This book has been instrumental in illuminating my mind about nation-building, about why startups are essential to a nation’s survival going forward and how much of a role the ecosystem plays.

I have been liberal in taking quotes from the book, but believe me, I haven’t even covered half the book in these quotes, so please do go read the book now!

I have to mention a special thanks to Sameer Guglani for recommending this book to me. I can already see that the "Morpheus gang" has the seeds of a cluster.

Update on 29-Dec-2011: See this article on why one VC has the opinion that Chile is not a great startup place – the interesting part is how culture of the country plays a big role in the entrepreneurialism of its residents.

Update on 12-Jan-2012: Many more hubs being kickstarted and hope to thrive : Las Vegas ‘Downtown Project’, Startup Chile, Tech City in East London.

Update on 22-Jan-2012: A very interested article by New York Times titled “How U.S. Lost Out on iPhone Work – Apple, America and a Squeezed Middle Class”.

A founder has to do only two things right: invention and marketing. For the rest, he can attract/find people to fill the gaps.

Now, don’t jump the gun and start attacking me. Think about it for a minute (and then attack).

By invention, I mean making new things happen – whether it is product or process. Doing things differently to make new useful things. In the experimentation, eventually, there will be one idea that can go big.

By marketing, I actually mean “customer development” (as Manu pointed out in the comments). I mean the founder has to know how to sell. This means he/she should be eager to talk to customers, understand the real problems, understand whether his/her solution actually solves their problems or not, and simultaneously improve/talk/market/make happen whatever it takes to sell that product or service. ^[1]

When someone who can do these two things well, they eventually stumble upon a good useful idea, and it can take off.

Case in point, the cliched examples – Yahoo!, Google, Facebook, Twitter, etc. They all started as something interesting and eventually found or will find business models. The point is that the founders of Google knew they had something good, but they brought in Eric Schmidt as CEO because he knows how to run a tech company, i.e., they found someone who can help them fill in the missing parts.

On the extreme side, Airtel outsources most of its operations, but retains the core of maintaining a good network, and (1) coming up with new products and (2) marketing them.

Again, this is just a theory that has been developing in my head. Don’t know if it holds true. Thoughts?

^[1] I am also looking at this as a proxy for a person who understands that the business side of things is far more overwhelming than the technical side of things. As Manu would say quotes, don’t use coding as a procrastination tool.

Thanking the community

First and foremost, thanks to all who encouraged me, and offered support and help when I wrote about leaving my own company. Many people, without any personal benefit in mind, connected me to very interesting opportunities. And this is exactly how I got my next gig.[1]

What was specifically amazing to me was that folks were connecting me to opportunities that I would not have heard of otherwise, and enthusiastically vouching for me. Now that was really humbling. Within two weeks of my blog post, I had a job! And I didn’t even have to look for it, so thank you guys. As Seth Godin put it, who needs a resume indeed!

InfiBeam

So where am I joining? InfiBeam – which I can best describe as “Amazon of India.”[2]

So why am I excited about InfiBeam?

In my previous startup, I experienced the phase of starting from scratch till creating a product. Unfortunately, I did not get to see the second part, the business side of things, including the hard part of selling, the act of knowing the customer, the logistics and operations, etc. I was still yearning for that.

At the same time, getting to see this second phase a few years later would not have made sense because I would’ve lost the enthusiasm and momentum that I have at this point in time. So, in that sense, I’m really excited about InfiBeam because I’ll get to be part of this second phase.

Second, I was specifically looking for companies in “core” areas, in the sense, someone who makes consumer products and services in India for India, and specifically, either ecommerce or mobile. And, voila, the universe conspired.

Third, I was being cautious and really looking to understand the people in the company and not only what the company makes. After all, it’s only the people aspect which makes or breaks your experience and enthusiasm. And I spent quite a bit of time interacting with the people I would potentially work with, and I came out of the discussions very happy.

Fourth, what I especially liked most about the company was their customer focus as well as the focus of building the right culture inside the company. It’s very hard for startups to focus on these soft aspects, because it easily gets sidelined compared to the hectic everyday.

There were quite a few opportunities that I explored, but I intuitively felt that InfiBeam was the place to be. And I went ahead with that gut instinct.

Both Business and Tech

And, as an example of a great fit for me, my job description says that I have to take up any product or strategy and deliver it end-to-end from the business model to the technical implementation.

I had thoughts of shifting back to pure coding at first, but then decided a business focus is indeed a good thing, and something I wish I had taken seriously right at the start of my career (better late than never!). For example, quoting from a recent Deccan Herald article:
> It cites Nasscom study which states that India faces IT talent shortfall of between 8,00,000 and 1.2 million workers by 2012. It observes that, though many producers continue to work with universities, government and other firms to improve the quality of technology education, and Asian countries continue to produce large numbers of IT employees, they, however, lag in comparison with North America and Europe in providing well-rounded technology education. Among Asian economies, the concern is that education systems puts too much focus on pure IT skills and not enough on IT in the business context. Likewise, top schools in the US and Europe, which do better in this area, face long-term challenges in cultivating science and technical engineering skills of its younger students. Thus, globally, the study posits that investment in skills development remains long-term imperative.

If it feels scary…

I am positive about this gig because I will be forced to become good at what I do because of the quality of people I work with, and knowing that you’re in a good environment when you consider yourself the dumbest guy in the room.

In such situations, I keep quoting Jeff Atwood:

If it feels scary, it’s the right choice.

Wish me luck!

[1] Specifically, a shout of thanks to Nimish Adani of Workosaur.

[2] Yes, this was a way of skipping the topic that, yes, InfiBeam’s current web design looks similar to that of Amazon.com design. Yes, I don’t like it too. It is a distraction which prevents potential users to proceed to the next step of appreciating the amazing services provided by InfiBeam.

Update on Jan 31, 2010: InfiBeam has launched the first Indian ebook store and the first Indian ebook reader.

Getting people to use the staircase than the escalator

Getting people to throw into the garbage bin

Getting people to iron their clothes

“Ironing clothes can be a boring task and getting the creases removed from your clothes perfectly is next to impossible. Now all you need to do is place your shirt on a customized iron board with sensors. You need to define the task. What is to be ironed? Shirt, trouser etc. The board defines your play area with lights depending on your selection. Creases are highlighted. Place the mini road roller iron on the shirt, sit back and let the fun begin. With a remote control you need to guide the road roller around the highlighted creases. If you move out of your play area, you lose points. If you get all the creases sorted in quick time you gain points.”

Getting children to clean their rooms

So what?

I hope to keep this inspiration in mind whenever I’m building products for others to use.

P.S. Go vote for the best entries before January 15, 2010!

There was this guy who had come in for interviews for a technical role. He passed all the tech interviews with flying colors, the team liked his personality and felt he would fit in well, and the manager was all smiles. In the last HR-style round with the group head, he was informed that the team works on products that are completely owned by the Bangalore-based group and that there won’t be any travel to USA. The guy was taken aback. He told the group head “Sir, please let me go to USA for just one day. If I have a USA stamp in my passport, I will get one crore dowry.”

Needless to say, the guy was not offered a job.

I’m sure you can draw your own lessons and observations from this incident, because it will come into context below, about a discussion we’ve been having on Twitter. It all started with @debabrata who read my previous blog post on the magic of foss.in and asked:

why this ’5 years limit’ applies to Indian software pro ? In other countries people are happy being programmer after 20 years .

I asked the tweeps for their opinions, and it got very interesting.

@cruisemaniac said: society defined age to get married and settle down = ~27 = 22+5 failing which u’re an outcast!
and: also, post that age, ur risk apetite goes down due to family and other commitments…

to which:

@HJ91 said: True. Very true. Outcast is the right word, and its sad. Outcast. Insulting, hurting and pathetic.

Wow, this feeling runs deep.

so I asked:

You mean risk appetite or time commitment? … how does risk appetite relate to interest in coding?

And the replies came pouring in:

@mixdev: One of the reasons why brilliant people end up being (just) tell-me-whatto-do-n-leave-me-alone software engineers

@cruisemaniac: I’d say both… U cant risk a new tech and venture 4 fear of financial security… U want tat cozy safe zone and pay packet.

@cruisemaniac: time is a big costly commodity 4 us… we indians cant afford to spend it at our will with spouses and children at home…

@mallipeddi: It’s very hard to keep getting bigger paychecks yr after yr if you’re a 30 yr old coder. You’re expected to become a mgr/MBA

@abhinav: I believe the reason is our society. We tie success to degrees, and later, more ppl you manage more successful you are.

@abhinav: Where in western societies your idea fails, here it is you who have failed! Our society doesnt appreciate risk takers

@abhinav: Yes, more money, higher status, easy life. And most importantly, more dowry!

@mixdev: Because our goals are set by the society & achieving them also in their control. You get bored faster.

@debabrata: I guess to the great extent our society dictates us what we want to be unlike the west

I found it surprising that the situation why people cannot remain coders in India is almost the same as why people want to become entrepreneurs! It’s like this: The passion for coding will remain only when you’re doing cool and interesting stuff. But big companies (at least in India) want only stability which implies boring tedious jobs with standard languages and libraries. There is no room for experimentation. So the coder will have to move to a smaller company or a startup if he/she wants to continue to like coding (I’m ignoring the case of research laboratories for obvious reasons of numbers).

But moving to a smaller company or startup is, by definition, not encouraged. As @abhinav mentioned, there is societal pressure for more money, higher status, fancier cars and bigger houses. There is nothing wrong with wanting this, but don’t force it on other people! Alas, it is hard to reason regarding this. I remember having a long argument with an uncle of mine, he was, hmm, “strongly” suggesting that I buy a car and I reasoned out why it makes no sense (after all, most peers of mine use the car only for weekend drives, not for everyday commute) but it fell on deaf ears.

So I’m conflicted here: Are there not enough people who are actually interested in coding, or is it that the interested people are being peer-pressurized into “moving up” into managerial roles and hence lose touch with coding? Or are we completely off the mark here?

Update 1: As suggested by Peter, read this entry tited “Stuck in Code” by Ravi Mohan for his tale on this topic.

Update 2: A related article in NYTimes recently titled “In India, Anxiety Over the Slow Pace of Innovation”

We have been well-supported in our experience, right from a Govt. of India grant to being one of the few to be selected as a TiE Entrepreneurship Acceleration Program mentee. We owe special gratitude for the people who made that happen and supported us.

But as any been-there-done-that startupper would expect, we delivered on technology, but we sorely lacked in maturity of management skills.

Simply put:

“Shipping is a feature. A really important feature. Your product must have it.” — JWZ

I can’t explain more because it would then amount to washing dirty linen in public.

Anyway, time to move on. Hopefully second time will be better!

I have been reflecting on many of the experiences I’ve had. So I thought I’d jot down the biggest lessons I learned as a startupper:

Stop reading. Start doing.

For every hour that you read, you must gain 3 hours of experience.

I read so much about entrepreneurship, although only after jumping into the startup. One and a half year later, we had made all the mistakes that those articles warned us about. The problem is not in the reading or understanding, the problem is in internalizing what you read. Wannabe startuppers read all the Paul Graham essays and say “Nah, that’s not going to happen to me, I’m going to be awesome and successful”, but when I read his latest essay What Startups Are Really Like, it felt like he crept into my head at night, stole my experiences and wrote a letter to me. Yes, really, it felt like that. But, of course, you won’t believe me. Until it happens to you.

What was the most common response from the YCombinator startups to Paul Graham?

When I look at the responses, the common theme is that starting a startup was like I said, but way more so.

Read those last few words repeatedly 6 times.

And I repeat, my warning to you is that simply reading A-Z of books and essays is not important, you have to internalize the learnings by testing it out on the field and realizing the value for yourself instead of saying “that makes sense” and forgetting about it a few minutes later.

Empathy matters

It is funny how most people will discourage you from doing a startup, and, today, perhaps because things have changed now because of all the media hype, most of my friends were discouraging me from leaving it now!

There are two aspects to this. First, read The Dip and you will know why I decided to quit. As Seth Godin says in the book, “The old saying is wrong – winners do quit, and quitters do win. Winners quit fast, quit often, and quit without guilt – until they commit to beating the right Dip for the right reasons.”

Second, as one of my friends observed, I talked to about 7 people (both acquaintances and friends) whose judgment I trusted. 3 of them sympathized and agreed with my decision and 4 of them admonished me and asked me to “hang in there.” You know what was the clincher? The first 3 had done startups themselves and the latter 4 had not. The latter 4 did not really understand the context, even though they meant well and are intelligent folks.

Imagine that a decision like this was so hard for friends-who-know-you to understand. Imagine how much empathy you should have for the motivations and work life of your customers!

Business is not a big deal, it’s only a mindset

The day I realized that I had started to think in terms of business was this conversation:

Friend: Hey, I wanted to talk to you about a gadget idea. Most phones have large storage space and bluetooth facility. Most cameras have small storage space. I have both of them on trips. I usually run out of space on the camera. So can there be a gadget similar to a bluetooth dongle that can move photos from the camera to the phone?

Me: Interesting… there is much to evaluate there (for example, I want to understand how much battery power it would eat up, which is the major concern when on a trip). But if you’re thinking about such a product, I think we should skip bluetooth and talk about peer to peer WiFi^*.

Friend: What? Bluetooth is there on every freakin’ phone out there!

Me: Yes, but by the time you build this new gadget, all the devices would have moved to p2p wifi because it means supporting only one standard. Right now, phones have to support two standards – both wifi and bluetooth which is additional hardware and headache for the manufacturers. Since p2p wifi builds on top of the existing wifi standard, it makes business sense for them to standardize on that. Comparatively, the only advantage of bluetooth, AFAIK, is low power consumption, and that factor will reduce with increasing battery life. So, in 1 or 2 years, bluetooth won’t be the in-thing, and that is when the product will be ready if you start now.

Friend: stunned silence

Me: Did I say something wrong??

Friend: You really are a businessman now.

Me: Heh

See? It’s not a big deal, you just have to learn the right mindset. Note that I didn’t say it was easy, I’m simply pointing out it’s simply a different mode of thinking, and it is doable.

I realized that doing a tech business means you should know both tech and business really well (duh). And since I’m not there yet w.r.t. tech, I’m going to stick to that as my core for the next decade. Or at least, that’s the plan. Coding is still my first love. Update: After some thought and discussions with close friends, perhaps I can contribute in additional responsibilities such as product manager-type responsibilities as well.

^* Also see What’s next for Wi-Fi?

Focus matters

A great advice I got from Muki, an entrepreneur was: “Start focusing on three things from day one – relationships, cash flow, balance sheet. You already know how to handle the rest.”

Notice he doesn’t talk about innovation, technology or all those other things. On the same note, the best explanation I’ve seen is that “Innovation is the by-product of a well-executed product”, which brings me to my next point.

“Focus” in the context of startups can be interpreted as good product management skills, which I strongly referred to in my StartupDunia guest post on the recent NASSCOM Product Conclave.

Maintain good relationships with partners, vendors, mentors, and all other folks that you meet in the course of your business. Don’t look at these relationships as opportunistic, look at it as an opportunity to co-create and learn.

Track your cash flow. Yes, you will earn millions later, but if you don’t have money now, you’ll die. You may not realize that the single highest factor why startups die is because of bad cash flow.

Don’t trivialize any aspect

Anything that is not managed will deteriorate, said Bob Parsons.

And it’s very true in this case, whether it is your legal company paperwork (yes, those stuff that you don’t want to be bothered with) or your project timelines (yes, tracking what’s on the critical path is very important, but you already knew that, didn’t you?) or thinking long-term as well as short-term, or networking with similar folks.

We, as tech people, think technology is everything and other people have it easy. I was like that. I learned it the hard way that “Easy is a term you use to define other people’s jobs.” I have a lot of respect for marketing and sales folks now. They have a really tough job, because it is about tenacity and psychology, compared to tech work which is write-once and scalable. Pop quiz: Did you really understand the signifance of that last sentence? If not, go back to my first point.

Have a sense of urgency

For every decision (and you will have a lot more of them than you realize), make sure that you do due diligence but at the same time, have a sense of urgency.

As Tecumseh Sherman said: “A good plan violently executed today is far and away better than a perfect plan tomorrow.”

Bottom-up always wins

This is the single most important learning, if I had to pick one.

Time and again, I’ve observed that bottom-up always beats top-down approach to problems. Note that I’m not discouraging you from planning, but I’m discouraging you from focusing purely on the plan. The plan is a guide to your actions, you should not spend more time on the plan vs. the actions and results!

And you can observe the power of bottom-up thinking time and again, whether it is in terms of societal change or productivity paradigms like GTD or the reason why Wikipedia and open source software are successful. As Linus Torvalds says “Software is grown, not built.” Mull that!

How does this apply to startups? Let us take one specific example: You have a new idea to solve a problem and you want to test if your idea works. If the prototype takes a couple of weeks, then you should go for the prototype. If it will take longer, how do you know that it is worth investing the time? Simple, use Adwords to assess demand for your new product/service. Same thing for doing market research.

Notice that in this example, we first start top-down by ideating and brainstorming, but then switch to bottom-up thinking once the initial plan is done – immediately jump to action by a real evaluation about the need that you are trying to solve. Then decide the second action based on the results of the first action.

How to define failure

This is how I explained failure to a friend: You walk into a new restaurant, and try the food. It can be good or bad. But you still have to pay the bill! You don’t know whether your effort is going to succeed or not, but you still have to put in the effort.

And the friend replied: The problem with most people is, they don’t want to risk eating bad food, that’s why they keep going to the same restaurant, even if they are bored of it!

When to call yourself an entrepreneur

I have this personal demarcation that I will call myself an entrepreneur when I have (1) created something new (2) made money. Until then, I’m a startupper (someone who has done or been in a startup).

This is the End

Hope these reflections are useful for future startuppers and entrepreneurs. All the best! (also see 10 things I wish I was serious about before starting a startup)

As for me, I’m cash-strapped (Didn’t I say lessons learned?), and hence looking for a job (product manager or senior technical role). Do let me know if there are any interesting opportunities out there.

Update on January 15, 2010: I joined Infibeam.

Update on July 04, 2011: Interestingly, Splitterbug is a YCombinator 2011 Summer Batch startup that is pursuing the very same idea. Just goes to show that the idea had and still has potential.

⇒ Read more at our event coverage at StartupDunia.com.

Update: This has been cross-posted to the official NASSCOM Emerge blog.

From an individual perspective:

• If you want to make money, you need to already have money.
• To get a job, you need to be one-year experienced and not a fresher.
• If you’re experienced and want to apply for a job that you really want to work on, you should already have the background of working in that area, and you should already know how to do all that the job entails.
• If you want to write a book, publisher expects you to have already written a book before.
• To be listened to, you need to be an expert, not an amateur, but how do you eventually become an expert if you’re never listened to?

From a startup perspective:

• If you want to get funding, your startup should be in a position to not need funding.
• If you want to stock your product in ezone, you should not be a 1-product company, but a 5-product company.

And on and on.

To get somewhere, you already have to be there.

P.S. I’m not condemning, condoning or approving of the situation. Just making an observation.

All the successful apps that are making money are transaction-based. For example, ngpay takes a cut from every movie ticket you buy through it. This is only possible for entertainment-oriented apps. The only other successful ones that I see are, of course, communication apps such as Gmail app. I see almost nobody using utility applications on their phones.

Things can improve only if internet-on-mobile was affordable! I think we need 3G for mobile app market to grow in India, but it is delayed yet again (Apparently, the government is not satisfied with the expected 250 billion rupees).

Let’s take a look at few numbers:

• 93.2% of Vodafone India subscribers are prepaid customers, which means it is unlikely they subscribe to monthly fees for internet-on-mobile. Right?
• 96% of Urban Indian mobile users are not accessing the Internet and 48% of Urban India mobile users accessed the Internet on their mobile only 1-3 times a month, on average!

Of course, there is no denying that there is growth year-over-year, but for an entrepreneur, it is not enough yet. Because you can’t build yet-another-social-network nor can you build content unless you have tie-ups with the big movie/music companies. The top websites in India for internet-on-mobile conform to the core needs list that I wrote about earlier, especially entertainment. The free wallpapers from zedge.net seems to be the hottest thing right now. Or as Rajesh Jain keeps stressing (and practises), focus on SMS and Voice for now.

Let’s hope the IAMAI will help things move forward.

Even when we get affordable internet-on-mobile, I wonder if ad-supported free applications will be the only popular ones always. Where’s the money?

Maybe I completely mistaken or I’m just whiny, because MediaNama paints a much brighter picture, from comics to unlimited music for Rs. 99/month to movie rental and chocolates. Hah! There is a gotcha there — all those announcements are from big guys. Where are the mobile app startups?

I am planning to attend Silicon India’s Mobile Conference this month to gain more perspective on this.

To round things up, here are some rough notes that I jotted down when Karthee Madasamy of Qualcomm Ventures talked about How to make a winning mobile startup at an OCC Meet on Aug 15. It was probably the only time I felt hopeful that a mobile app startup is possible today.

• Understand the status quo. Don’t do the status quo.
• If there are hurdles, that’s your opportunity. Otherwise, others would’ve taken advantage already.
• India 400 million mobile phone users.
• Segment the customer. Otherwise, big companies will be already on it.
• Don’t aim for 1% of ocean. Go for 50% of a small market that you undertand well.
• Don’t do today’s technology. Go for future. Don’t be 10% better, be significantly better.
• Do you have something unique that gives you strengths? Have a honest discussion on the problems and future competitors and your strengths.
• Can you partner with others in the ecosystem, support their weaknesses, and together be more strong.
• Ecosystem problems – operators, heterogenity of platforms and mobile phone capabilities, difficulty in educating customers, no Internet on mobile, etc.
• Only way a startup will succeed is by discovering a latent demand or latent technology.
• If operators are critical to the ecosystem, obviously they will charge more money! Why is that a problem because they are giving value back. Get the first million customers yourself and the operators will put red carpet for you. Startups’ strength is to turn the tables!
• Find a mechanism of educating customer about value of the product and that will obviate the need for operators.
• If only 40 million mobile Internet users, you only need half a million users to break through the barriers! People will come after you.
• Assume cost of building product or app is zero. Only building half a million customers is something.
• 120 million capable phones today. India is a fast market. Imagine 2 years later.
• Startups should change the game to their advantage. At the same time, it is NOT a zero-sum game. Make a win-win partnership. Both people should profit.
• Don’t complain about market research. Ultimately, you HAVE to understand the market better than anybody. Be resourceful. Also, accuracy is not important, the direction of the market growth is more important.
• Don’t go to VCs without 20,000-30,000 users.
• Can you scale up to 20 million dollars revenue? Then you’ll get your pay-off.
• Startups need to think how to beat the big guys.
• Make a state-of-the-art technology or business model and ask people to pay premium for it.
• First step for product management is segmentation.
• Make it clear to yourself about how you’re reaching your target customers. Don’t do it in a haphazard manner.
• Read about Ron Coase economist why companies exist.
• Read about Teece theory on who captures value in technology.