proto.in Edition 4 at Delhi

I attended the proto.in 4 conference last week (held at the beautiful IIT Delhi campus) and had a very productive and thought-provoking time.

Day 1 was the fastrack “startup school” sessions.

The keynote session was Kiran Karnik, ex-President of NASSCOM, who pointed out that this “recession” is not a bad thing. Just like the BPO and Outsourcing outfits reinvented themselves in the last dotcom bust, this is a great opportunity to reinvent ourselves again during this phase. Why? Because when things are going good, nobody is willing to change or tinker with the processes. And when things are not going well, people are willing to take more chances and bet on newer/different things so that they can survive, such as big companies working with startups or risking new ideas.

The story of BharatMatrimony.com by the founder Murugavel Janakiram was inspiring. The concept maybe so simple and maybe even creating such a website maybe simple, but the kind of business model, customer understanding and outreach, and constant trial of new ideas that they went through was simply amazing. For example, sticking to his gumption that the site should be a paid one and that was the only viable business model, to things like collection of payment at the doorstep. After this talk, I had new-found admiration of his matrimonial site.

The third session was a talk on “Business is a Game” by Bhavin Turakhia, of Directi. I had never known about Bhavin until this day, and after this talk, most of the audience were his new fans, including me. The first audience question was “Do you have an opening in your company? I want to join.”

The talk was about the lessons we should learn from games and sports, and how to apply it to business. And it made so much sense. Sometimes it is the basics that we overlook that make all the difference. This was pretty much in line with my off-late philosophy of “Enough Fundas. Back to Fundamentals.”

Bhavin said that he has read many books and stories about successful companies, and trying to distill why they succeeded, he came down to just two things to run a successful company:

1. Gather the right players
2. Empower them to make the right decisions, most of the time.

He said the first point is fairly obvious but hard to do. In this talk, he concentrated on the second point, and gave 7 principles on how to do achieve this:

1. Teach the Game
   • When you play a game, say cricket, all the team players need to know how to play the game – the rules, the strategies, the howtos. If only few of them know it, and the rest don’t, the team collectively will suffer, right? Same for business.
2. Share the macrovision
   • What is the final objective? Why are you playing this game?
3. Near-term targets.
   • A team usually plays for a season or a championship. That consists of multiple games, which means there are milestones and targets to achieve. Same for business.
4. Keep score
   • Bhavin says he likes games like cricket where every kind of statistic possible is analyzed, right from the average score of the batsman on this particular ground to the average scores of the teams overseas, etc.
   • In a game, the score is always visible on a public scoreboard, which drives the team in achieving real scores.
   • Recommends reading a book by John Hayes called “Open Book Management”
   • Measure everything. Don’t focus on more than 2-3 critical numbers. This reminded me of a quote by Bob Parsons (of GoDaddy fame): “Anything that is measured and watched, improves.”
   • Keep changing critical numbers.
   • Explain why these critical numbers are critical.
   • Statistics are fun, make it a game, have real targets, because no one wants to fail a target.
   • Bhavin explained that most of Directi employees have 3-4 monitors at their desk – 1-2 for work, the other 1-2 for monitoring live statistics. People love to watch scoreboards and feel joy when they achieve their targets whether they are number of downloads or response times.
5. Line of sight
   • Each player should be able to link their actions to the outcome of a game i.e. how they contributed to the outcome directly.
   • This makes the player feel he/she is contributing to the team and feel he/she is a part of the team.
6. Celebrate your victories
   • Celebrate the small milestones, especially achieving targets.
   • Have a Victory Party
   • The act of recognizing > how you recognize

7. Align everyone’s interests

   • To the victor(s), belong the spoils
   • In a game, everyone’s equal and aligned, no separate us vs management, because success of each other is interlinked
   • Linden Labs has an internal website to “give love” to other employees who have done good work
   • How direct is the co-relation?
   • Company performs best when its people see themselves as partners in the business
   • American universities are run mostly by student communities and the knowledge is passed on to each new batch. And there’s this feeling that “I belong to my alma mater” vs “I belong to my organization” which people hardly say.

8. When asked if these ideas put a constraint on the size of the company, Bhavin said this is the only way that you can scale a company. To specifically note, if everybody is not able to take the same decision as you, you become the bottleneck ⇒ size constraint on the company.

Bhavin briefly mentioned about Ricardo Semler and his book Maverick):

Semler went to work for his father’s company, originally called Semler & Company, then a shipbuilding supplier in São Paulo. Semler clashed with his father, Antonio Semler, who supported a traditional autocratic style of management while the younger Semler favoured a decentralised, participatory style. Further, Ricardo favored diversification away from the struggling shipbuilding industry, which his father opposed.

After heated clashes, the son threatened to leave the company. Rather than see this happen, Antonio Semler resigned as CEO and vested majority ownership in his son in 1980 when Ricardo was 21 years old. On his first day as CEO, Ricardo Semler fired sixty percent of all top managers. He began work on a diversification program and to rescue the company.

…

Among many ‘radical’ policies, Semler let his employees set their own hours, design their workplace, choose their own IT, share all information and have no secrets. Every six months bosses are evaluated by their subordinates and the results are posted. Semco has a policy of complete internal financial openness, even teaching factory workers how to read accounts so they can understand the company’s books. Salaries are public information unless the employee requests they not be published. In addition, all employees can set their own salary. In doing so they must consider what they think they can make elsewhere; what others with similar skills and responsibilities make in the company; what friends with similar backgrounds make and how much they need to live on. Semco doesn’t have receptionists, secretaries or personal assistants, regarding them as unnecessary.

Each business unit is small enough so that those involved understand everything that is going on and can influence the outcomes. Starting out as a manufacturing company, Semco allowed it’s workers to set their own production quotas and found that employees would voluntarily work overtime to meet them. Profit sharing is practiced right down to factory floor level, instead of large bonuses only for senior management. Semler eventually retired from all executive positions at age 33.

The next interesting session was Mahesh Murthy on the art of marketing your startup.

• His list of exploits is impressive – an advertising and marketing maverick, O’Gilvy & Mather, revived Channel V from closing down, helped launches of Amazon (Earth’s Biggest Bookstore campaign) and Yahoo! (first commercial version of Yahoo), Co-Founder of Geodesic, CEO/Founder of Pinstorm pay-for-performance SEO/SEM, Managing Partner of Seedfund (Google as investor)
• Make the product insanely great so that first customer recommends it to others.
• If you have a product, and you need to advertise to sell it, you’re doing something wrong.
• Satisfied customer more important than advertising.
• The usual suspects (G, Y, M, A) don’t advertise, do they?
• Pricing – Charge super-premium at the start. Competition worry if it is more expensive, not cheaper. Make it a positioning weapon.
• Price NOT calculated as cost + profit, but it is a differentiation strategy. Make it a premium product. Price is not the way to win, you’ll NEVER win by being cheaper.
• Market at conferences by being a speaker. Be outrageous. You can even trash the competition if you know what you’re talking about.
• Be a thought leader in your market / niche area, even if it is left-handed hockey sticks. Be a global expert. Journalists and audience will talk to you then because you have credibility. ⇒ Be a trend setter.
• Good PR is very important, talk to journalists. Tell them what they want to know, what they want to hear, give them trends, not “I’m great” funda.
• If something is already a trend, it’s the “end”. You have to set the trend. Be 1st, 2nd or 3rd, not the 10th guy.
• If you need money for marketing ⇒ worry sign i.e. More budget ⇒ Smaller brains ⇒ Poorer product
• Market research is crap. It can give what 5 people think, not how to change what those 5 people think. Nobody can predict the future.
• More notes at MediaNama.

The next session was by Kiruba on the topic of business blogging and why startups should blog. People had the same traditional apprehensions that I have heard before. For example, people said they don’t know how to get an audience. Although it is difficult to convince people, my personal view is that it is exactly like marketing your startup – who is going to buy your product? Just like you have to put in effort to gain customers for your product, you have to put in effort to gain an audience for your blog. And the same goes for the product i.e. the content – if the articles are not good, don’t complain that nobody is reading/talking about it. However, I don’t think most people grokked this.

Amit Ranjan (SlideShare) talked about virality. And amazingly, I again missed catching him in a conference, damn. His formula of putting a virality ratio made it more realistic to think about it. Simplistically, if people who are subscribing are referring more people, then the growth is high, otherwise it will reach a plateau.

Sanjay Anandaram’s talk about reconciling entrepreneurs and investors was a big hit with the audience, especially with his wit and dry humor. The most laughs were at the “Open your kimono, let the investor look into your financial details. If the investor likes what he sees, then you are in business.” There were many important points like learning the basics of how term sheets work, etc. Namitha Jagadeesh has a detailed writeup in her livemint blog.

Shashank Ghosh, a film maker, talked about how creative people are like startups – they have to focus on convincing the producer (VC) about the story (product) and that it will be a hit (profit). He was very humorous and showcased a trailer of the upcoming “Quick Gun Murugan” movie, which seems like a promising movie. Shah Rukh Khan’s role-playing in ‘Om Shanti Om’ of a South Indian cowboy hero saying “Rascal, Mind It” was a teaser about this movie.

Day 2 was the demo sessions.

The blogosphere has covered this topic in detail, especially this post at the VC Circle. My favorite demos/startup products were Lipikaar – an impressive easy way to write native language, Soliton doing error detection in factory products, Storrz social shopping portal, one-stop shop recruitment portals created by tiriyo and thehiringtool, the intelligent OOH displays by NextBiT Computing and the mobile banking by Eko. More details at the WATBlog. Very impressive ideas and execution! People should stop the talk that India is just a IT services country, there are some serious kick-ass products being done here.

The most important part of any conference is not what happens inside the halls, but what happens out in the corridors. And proto.in proved itself to be a remarkable gathering because of the amount of non-stop networking that happened. At the end of the two days, I was totally deprived of energy and had a big stack of business cards in my hand. Surprisingly, people were more open to talk to each other here than at unconferences like BarCamp, etc.

It was a fantastic couple of days, and it was totally worth the flight tickets to Delhi.

Kudos and thanks to all the organizers for hosting such a fantastic event, right from Vijay Anand and Kiruba and the rest of The Knowledge Foundation who are the pillars behind proto.in, to Sudhir and Divya who compéred the show, and all the volunteers behind the scenes.