Raj Shankar's Blog, page 35

Business Opportunities are Outcomes!

Any entrepreneurship course teaches opportunity identification and evaluation. While evaluation seems right to do so that risk of failure is reduced, searching for opportunities seems to always end up superficially. During the last few sessions I have been attempting to go the root of opportunity identification. This has resulted in exposing number of deeper challenges as well as lots more of opportunities too. In entrepreneurship, especially at the beginning – the more is always merrier!

So what leads to opportunities? What is the source of opportunities? What creates opportunities? The answer is the simple word – ‘change’. If there is no change, everything is as usual, and then there won’t be need for anything more than what exists! But sadly that is not true and is not going to be true at all. Let me repeat the cliché ‘Change is the only constant’ – how I wish we get to the depths of that simple statement. It gets scary and also ironically makes one who reaches the depth experience ‘freedom’ of a certain kind.

Whenever anyone wants to explore opportunities, find them; the best way is to search for fundamental changes; changes at all levels: demographic, social, cultural, industry, market, behavior, actions, etc and there is no dearth to where change can happen. If you can learn to watch for changes, you have acquired one of the most entrepreneurial skills. But it is easier said than done!

As one learns the skill to listen and discover changes, all potential repercussions become possible opportunities. Once we are able to see many of these repercussions, we may be able to select a few of them as potentially commercial opportunities worth solving. Finding them requires a methodical approach to evaluate opportunities. While there are frameworks to evaluate opportunities, the approach to looking up for changes to locate opportunities is still nascent.  Hence the need to look at this challenge is in my opinion an important aspect of entrepreneurship research!

Happy Thinking!

Interesting Links This Week: 27-October-2013

“20 Things 20 year olds don’t get” – I was simply excited by the title! Why? Because I spend a lot of time teaching Entrepreneurship to 20-somethings and I was keen to know what the author had written. I am so happy to share this on my list of interesting links this week since it resonates with a lot of what I have been sharing in classes. It is simply too important, not to ignore. Read all of the 20 pieces of advice here – Link: http://www.forbes.com/sites/jasonnazar/2013/07/23/20-things-20-year-olds-dont-get/

The little 90 second clip embedded in the post is worth every second invested for every entrepreneur. The lesson – “Getting out during business venture creation helps” While the advise may seem banal, very few entrepreneurs truly practice it religiously. No wonder then that few succeed beyond imagination. Read and Listen more here – Link: http://steveblank.com/2013/10/11/this-will-save-us-years-lean-launchpad-for-life-science/

I never imagined stories could be expressed this way. In fact strength of good stories is because they are seemingly built this way! For a person who reads very little to no fiction, this article was an eye opener. Due to my recent interest in building content on story-telling for entrepreneurs and business owners, I was attracted to this post. I have definitely taken away from the messages, suggestions and also from the visuals embedded in the article – they are brilliant and thought provoking. Read more here – Link: http://www.fastcocreate.com/3019333/8-tips-for-creating-great-stories-from-george-rr-martin-junot-diaz-and-more-of-the-worlds-to

Books and Me: The One Thing

Book Title: The One Thing

Author: Gary Keller and Jay Papasan

Building focus is a theme that has always attracted my attention. In recent times, I have been working hard on the power of narrowing down initiatives as an approach to enhancing focus. So, when I found this little book during one of my weekly trips to the local book store, I naturally picked it up and was excited at the subject under consideration. The moment I open the book to scan a few pages, I promptly put the book back on the shelf to pick a second copy. To my surprise, there were pencil marks under sentences across pages. I was surprised! Why would multiple copies of a new book have pencil marks in them? On closer examination, I found that it was a new feature used by the authors and the publisher to highlight what they consider important. I must congratulate wholeheartedly the publishers John Murray for the lovely production of the book. A well made book adds tremendous incremental joy to the reading. With a well made book in my hand on a topic that was close to my heart I read it while making loads of notes.

The book dives right into the subject with a quote that captures the essence of the subject: “If you chase two rabbits you will not catch either one” – Russian Proverb

There are innumerable quotations as powerful as the above and more, sprinkled all across the book. The book builds a strong case to narrowing down our focus to one thing and using it as the path to achieve extraordinary success.  This goes right against the popular philosophy of “doing more to achieve more”. The authors use Part I of the book to showcase how the widely held belief is a myth. They shatter what are used as reasons supporting the “doing more achieve more” philosophy with both research back references as well as practice oriented experiences.

The poet J. B. Rittenhouse’s poem, “My wage” was a brilliant way to set the context for Part II of the book which houses the proposed simple path to productivity. While my thoughts at the philosophical level about balancing different facets of life by choosing one thing across each of them are still under reflection, I do not subscribe to the authors views, though a large part of the approach seems practical. The “productivity-priority- purpose” pyramid provides an interesting basis for discussions around unblocking the possibilities within an individual. Time blocking is a powerful concept that goes hand in hand with the approach of choosing one big thing in life. It seems to have worked for a lot of successful people from Stephen King to Peter Drucker. Protecting the time block should be done at any cost to achieve extraordinary results.

The three suggested commitments that one who wants to achieve success in life using the one thing approach should attempt are: adopting the mindset of seeking mastery, constantly finding the best ways of doing things and holding oneself accountable to doing everything to achieve the one thing.

This handy, well made volume is an interesting read that provides big questions while also suggesting quick tips for anyone seeking to live a successful life. You can also read and listen to more about the book and the authors at: www.the1thing.com

Finance for Entrepreneurs: The Three Financial Statements

Whenever discussions come up with regards to finance in a start-up, there is no reference to any financial statement. Decisions are always based on opinions / perceptions. But during my research on small businesses in India, I have found all successful small business owners closely monitor their financials. In fact most of their decisions are based on numbers / facts. This has kept them in business over long periods of time, some spanning multiple generations. So what are these financial statements that these small business owners use in decisions that entrepreneurs miss?

Let me share with you an analogy first from the real world. We as individuals are born and grow up. There is nothing new about it. As we grow up, we go to school, college, work, etc and live life doing something that we enjoy (or at least in the hope) doing. There are three things that seem to capture the essence of life – being alive, being healthy and performing. In any aspect of life, be it personal or professional, all people want to know these three things. This is because they form the basis (or at least at a worldly level we assume that it forms the basis) for success and happiness. While philosophically it may be untrue, at the worldly level it is widely agreed.

Note: If you are interested in philosophy, read my weekly posts on ‘Vedanta’ here: http://rajshankar.wordpress.com/category/vedanta-and-me/

How do we know we are alive? How do we know we are healthy? How do we know we are performing? These become the questions that need an answer. If you are breathing today, you are alive! If you are having a bunch of health metrics within prescribed range, then you are healthy! If you are able to do your job above the average or to your own expectations, then you are performing! If you are a person who wants to live a successful live, you will constantly track all three.

In a similar fashion, every venture is born and turns into an organization as it grows. During the course of the journey, it also needs to be monitored for the same set of three parameters, namely: Is it alive? Is it healthy? Is it performing?

In order to understand the above three aspects in every organization, three statements are often generated and tracked. Let us go in the same order:

To know if an organization is alive or is facing any fundamental challenges of life, one refers to a ‘Cash Flow Statement’. As you can see, a cash flow statement should be tracked all the time. It is like breathing and cash is like oxygen. Just as how we keep breathing in and out all the time one needs to always keep a tab on whether the organization has enough cash to stay alive.
To know if the enterprise is healthy or unhealthy, we refer to a ‘Balance Sheet’. Since health is can always be known at a point in time, it is discovered at a point in time. We can know how healthy we are now or a year ago. So the health of an organization is always assessed at a point in time. Hence balance sheets are generally created on any particular date.
To check if an enterprise is performing, one refers to a ‘Profit/Loss Statement’ or an ‘Income Statement’. Performance is always measured between two points in time. Someone would want to know your performance in graduation or matriculation; in a similar manner, one would want to assess how the enterprise performed in a particular year or period of time. Hence ‘Income’ or ‘Profit/Loss’ statements are always drawn between two dates.

If you have got the essence of what the three statements are and why they are needed, then you are ready to begin going through each of them in greater detail, which we will start next Friday!

How should entrepreneurs search for needs / wants?

Entrepreneurs normally start with an idea and this is the predominant reason for the high failure rate of start-ups. This is primarily because the ideas are not linked to any particular needs or wants of potential customers. So when I conduct workshops for entrepreneurs and entrepreneurship faculty I always urge them to find an opportunity in the market / industry and then come up with ideas to satisfy them. Though it seems fairly straightforward, it is quite rare to be seen in practice. The major reason for this is the success stories of exceptions.

But how to look for opportunities in the market place and in what forms do they appear? Here are some triggers to get you searching for them in the right way:

A necessity to lead a comfortable life
A want (good to have) to lead life better
A problem that they are facing in living their personal / professional lives
A product / service that they are tired of using, for lack of alternatives
A challenge that they are facing which is not allowing them to grow (personally / professionally)

The above needs could be experienced at the individual level in their personal or professional lives. At the same time these can also be experienced by organizations (both profit and non-profit). So, irrespective of whether you intend to serve the individual customer or an enterprise, the above categories are a simple way to start searching for opportunities.

Give it a try! Chances are you will be bought much earlier than what most entrepreneurs’ wish they experienced in their venture creation journey.

Vedantic Wednesday: “Who will cry when you cry?” – Part 1

I know there is a popular book by the title ‘Who will cry when you die?’ by Robin Sharma. His success as an author is undeniable. His books and related products selling in millions! Since I have not read the book yet and I do not know what it contains. While the title of the book triggers in me numerous thoughts for reflection and introspection, this blog has nothing to do with that book in particular. Will someone cry at your death is something that you will never know! But a deeper question arose in me during the course of some experiences last week – ‘will someone cry when you cry?’

It is a question that led me to a series of thoughts about how we lead our lives. In our busy lives we have limited face-to-face interactions with people. Most of the communication is with and through devices. So whether it is stress, anger, fear, or any strong emotion, the immediate reaction is to use the phone to tweet, message, or post an update! If you are not so mobile yet, you get to the computer and play games or do the same as the above – communicate! Very often most people are preoccupied with their own problems and challenges. Hence when we reach out to them, they don’t have the time or the space (physical or emotional) to lend an ear. Due to the lack of building enough relationships most of us have turned to one-way communication channels to vent our emotions. This has led to a lot more cases of loneliness, depression, and numerous other mental ailments. It is widely stated that many of our workers (especially white collar) and people with whom we spend time could actually be struggling with the new age lifestyle diseases.

What is the root cause of all this? It is because as social animals we are dependent on networks in the world for our existence. When these networks are strong, it gives us the confidence to face challenges, setbacks, problems, etc and get back home. It makes us share our emotions with those closely networked members and who in turn provide us empathetic responses. These empathetic messages, a shoulder to cry on, a chance to discuss challenges, a reassurance that there is someone to fight it out with us and to know that we are not alone helps us get out of these mental imbalances (though minor) quickly. But if these support systems are poor, one tends to decline and fall prey to these illnesses.

The question posed ‘who will cry when you cry?’ actually is asking if you have this network which will stand by you when you face a problem or challenge in life? Will you have people who will be concerned about your concerns? Will there be people who will give up their priorities temporarily and have the time and space to provide you comfort as well as support? Are there people who will go beyond their call of duty to ensure you are fine? Do you have such people? What are you doing to find such people? What are you doing to keep them with you?

Think!

‘Needs’ – Learn to listen to them, entrepreneurs!

The winter is just starting off in Srinagar and the valley is seeing the first sights of people pulling out their winter wear for the season. The cold is only going to get severe, but the weather is just lovely during the day now. I had the amazing opportunity to moderate discussion amongst a panel of entrepreneurs and intrapreneurs at EDI, Srinagar. It was a great experience.

One of them had risen to an entrepreneurial role within a large corporate house while the other was an example of the start from scratch entrepreneur who had made it big in the valley. While both of them shared a lot of tips for the practice of entrepreneurship to budding and aspiring entrepreneurs from Jammu & Kashmir, they kept harping on the importance of keeping a focus on the needs of the customer. Without needs there cannot be products / services. So true! But many entrepreneurs miss it totally in their love for what they are creating. The panelists also emphasized on importance of acknowledging the fact that many (if not most) customers may not be able to clearly describe the solutions to their wants. But the needs and wants that they have within them are real and almost all of them can clearly articulate it. But to listen to it, the entrepreneur needs to learn the art of listening to both what is stated and unstated.

The clear message to every budding entrepreneur in the room was:

Always keep an eye on the needs and wants of the customers
Always ensure your products / services solve one of the above
Always listen to your customer / market needs

I am sharing this important thought with the larger forum on our blog because the aspect of learning the skill of listening is not something that you hear often. I will share some tips and techniques on how to master the art and science of listening in future blogs. And before we reach there, here is my take on the learning in the form of a short snippet “Listen and you will hear opportunities”

Happy Listening!

Small Business Owners Love more Voice than Data

In a recent exploratory research with successful small business owners in India, I found most of them telling me that speaking to people has been the way they have found success. Seemed too banal to be a strategy for growth! But many of them were pretty successful by number of measures. I probed to see if technology had created the difference?

They had all made investments into technology. They all had iPads, iPhones or equivalent ones in cost, style, and technical prowess; they had invested in interesting websites, social media marketing, and enterprise software for their businesses. This was rather surprising considering the fact that many small business owners even recently used to consider technology cost, a spending rather than an investment! The trend seems to be towards utilizing technology in places where it can make money or save money. But when it came to sales, the singular success tip that they were sharing is – pick the phone and speak or otherwise get out of your office and meet potential customers face to face.

All of them, who were successful to even some measure, were of the opinion that speaking to people helps them build considerable trust, credibility and familiarity – and this enables customers make choices in their favour. Secondly, they also said that doing this on a regular basis kept them on top of their customers’ minds which helped them be the first choice even to ask for opinions and solutions. All of this kept their business always ticking.

While this is more exploratory in nature – one big learning that I share with all budding and early stage entrepreneurs is ‘speak more than you email/tweet/update’ – it will make your business grow faster! Try it!

Interesting Links This Week: 20-October-2013

Libraries can do more good than we can imagine, that is enabling a love for books and reading. Here are some thoughts and ideas from the Impatient Optimists Blog run by the Bill and Melinda Gates Foundation network. I found the ideas for economic development in emerging areas by fueling digital consumption of information through local libraries very inspiring and practical. Read more here – Link: http://www.impatientoptimists.org/Posts/2013/10/Libraries-for-Social-Good

Interviews of leading thinkers are always interesting and inspiring – primarily because they stretch your thinking by providing some leading ideas. Prof Nirmalya Kumar’s interview in the Live Mint Business Newspaper is truly one such interview. I enjoyed reading it. The thoughts on how innovation has to be used by emerging country enterprises to build global brands is very useful not just for established companies, but will also serve as useful inputs for young and emerging entrepreneurial enterprises. Read more here – Link: http://www.livemint.com/Companies/f0pZ27i8jDURaPMJP0pl3J/The-next-big-agenda-of-corporate-India-will-be-innovation-N.html

Do you think words impact your thinking? Think about it! The power of words is highly underestimated. This article provides lovely examples to show how our thinking varies as we change the words we use and hear. It has triggered in me ideas of how this can be used in opportunity sighting for entrepreneurs – check what may be triggered in your head! Read more here – Link: http://blogs.hbr.org/2013/10/can-you-invent-something-new-if-your-words-are-old/

Books and Me: Playing to Win – How Strategy Really Works

Book Title: Playing to Win – How Strategy Really Works

Author: A. G. Lafley and Roger L. Martin

While there are number of books that proclaim to be on strategy, they are not! So when I came across one more title that spoke of the subject close to my heart, I decided to try it (eternal optimist). But to my surprise and happiness, the book was one interesting read on the practice of strategy. There are many aspects about the book that make it an exciting read:

A book by an advisor-practitioner duo (both individually celebrated in their own realm)
Great Packaging (Lovely title, cool cover, beautifully bound)
An easy over arching framework to keep at the back of the mind
Their common inspiration to the late Peter Drucker (who is also my inspiration)
Personal anecdotes sprinkled all over the book
Short personal experiences and suggestions from both a professor-advisor and a successful practitioner
A short but well written piece on the micro economic foundations of strategy
Written by professional friends after a long association

I am sure every reader will have his / her own list of unique points that make the book interesting, but for me the above are what come to mind. The one limitation (not really if you have experience to relate to) is that most of the primary references are from the authors work together at P&G.

The book rests on the premise – ‘Strategy is choice’, one that I firmly believe in; which is also the title of the first chapter. Can you imagine the pleasure, a strategy professional would experience even on reading that title? I did and it led me to spend an inordinate amount of time reading the book, making extensive notes. The only question on my mind as I went through the five choices cascade of the authors was if it would be applicable to early stage enterprises and small businesses. Since my work tends to be a lot with the above two groups I am always looking for ways in which this group can benefit from strategy. Both these groups (early stage enterprises & small businesses) almost never use strategy as a tool for growth at all. But the integrated cascade of choices, a set of five choices that organizations have to make for building a good strategy seem to be a useful and easy tool to apply. Here are the five choices to be made as part of strategy making:

What is our winning aspiration?
Where will we play?
How will we win?
What capabilities must we have in place?
What management systems are required to support our choices?

While the questions themselves seem too simple, they are deep and require a detailed, honest and bold set of answers with extreme commitment.  Without these, what seems easy could become excuses to skip developing strategy. There are beautiful reasons that you may give or hear within your firm that either results in no strategy or a worrisome strategy – but the authors have captured it succinctly as six strategy traps; just check to see if you are not caught by one of them!

While the five choices form the crux of strategy, the big question of how to go about creating strategy in an organized manner is addressed using the four dimensions (industry analysis, customer value analysis, relative position, competition) spread across a simple strategy logic flow which comprises of seven questions. By using this strategy logic flow as the basis and re-iterating through it a few times, one is bound to gain clarity on the big choices that organizations wanting to win, have to make. If you are playing to win then this is your cookbook for success in creating winning choices. If you make winning choices, you have created winning strategies!

Overall a great book on strategy that I have read in recent times and one with great practitioner insights, which many strategy books lack.