The secret recipe of converting your passion into a career

There are countless people who are passionate about some activity. Activities that are done for pleasure are categorized as hobbies. People who pursue hobbies are called amateurs. People pursuing enjoyable activities for a reward are called professionals. Most professionals were amateurs at some point in their career.

There is a secret recipe to convert enjoyable activities into a career. The book by Malcolm Gladwell, The Tipping Point, has the clue. In the book, Malcolm Gladwell argues that it takes 10,000 hours of practice to become an expert in a field. He cited the example of Bill Gates who spent time after school to do programming. All talented professionals had 10,000 hours of practice time, before they became experts. Based on the Tipping Point, I offer three simple steps to convert your passion into a career:

  1. Identify your passion(s).
  2. Practice for 10,000 hours with an audience.
  3. Network with people to monetize talent.

Identify your passion(s)

A healthy individual is passionate about many activities. All passionate activities cannot be made into a career. For example, it is difficult to convert “watching movies” or “dining at restaurants” into a career. Programming, Public speaking, Playing cricket are some activities that can be converted into a career. Identify a passion that has one of the following attributes:

  1. Maximum rewards when converted into a career (Playing cricket).
  2. Relatively easy to convert to a career (Programming).
  3. Most passionate activity (Public speaking).

Practice to grow talent

As Gladwell put it, “Practice for 10,000 hours”. 10,000 hours is 2 years of intense effort or 5 years of moderate effort. 10,000 hours is 250 full-time weeks, which is about 5 years of work that any amateur has to put in, to become a professional. There are a few tips which make an effective practice session:

  1. Have a goal for each practice session.
  2. Identify mistakes and improve upon it.
  3. Improvise and try something new.
  4. Setup rewards which will reinforce good habits.

Network to monetize talent

Why Network? Digital Photography School (DPS) has identified four reasons to network with other professionals. As professionals, we do business with other people. Relationships are the foundation of any successful business. So, it makes sense to network with other professionals.

The objective of networking is to help others. By the reciprocal rule, others will return the favor. While networking with other professionals, the below tips are helpful:

  1. The goal of networking is to help other people.
  2. Do not expect anything in the relationship.
  3. Be friendly and helpful.
  4. Try to provide as much value as possible.
  5. Don’t leave networking to chance. Be purposeful.
  6. Ask if people want to be connected.
  7. Connect people with similar interests.
  8. Ask for permission to proceed, before asking a favor.

Career

Fermi Paradox explained by WBW!

Wait But Why is a really cool blog. The blog is added to the Blog Roll. Fermi Paradox is an article that tries to explain why we do not receive communication from other civilizations in our galaxy. Based on Fermi calculations, there should be 100,000 intelligent civilizations in our galaxy. Though we have detected cosmic radiation from Big Bang (which happened 13.7 billion years ago), we have not detected radiations from other life forms. Is intelligence a rare phenomenon?

For life to evolve on a planet, the planet should have Carbon. Carbon binds with atoms like Nitrogen, Oxygen, Hydrogen to form long chains of molecules which is the foundation of life. For Carbon to exist in a planet, the planet should be part of a second-generation star (a star that is formed by the remains of super-nova).

The temperature on the planet should be just about right. This can happen if the planet is within a certain distance from the star, also called Goldilocks zone. In the solar system, only three planets are within the Goldilocks zone – Venus, Earth, Mars.

The atmospheric pressure on the planet should be just right. If the planet has too much of atmosphere like Venus (100 times the earth’s pressure), the atmospheric pressure will snuff out life on the planet. If the planet has too less atmosphere like Mars, the liquid on the surface will vaporize. For example, the boiling point of water in Mt. Everest is 71 C (atmospheric pressure 0.34 times at the surface of earth). For more information, please read Armstrong limit.

The planet should have a magnetic pole. The magnetic pole protects the planet from cosmic radiation which will otherwise energize atmospheric gases and cause it to escape the planet’s gravitational pull.

With the above ingredients, life should evolve on the planet. But, there are three other factors that requires intelligence to develop on the planet. These factors include the ability to replicate survival characteristics in the form of DNA, the ability to see light, and the ability to sense time.

We still do not know how life on earth developed DNA. But what we know is, DNA is a helix made up of 3 billion protein molecules. Every cell in our body contains the DNA helix. When a cell replicates, as part of normal growth, the DNA is replicated with a very high accuracy (one in billion). DNA encodes all the characteristics of the life form.

The second aspect of intelligence is the ability to sense light with our eyes. Light are photons that travel from the sun which travel at 300,000 km/s. Colors are frequencies of the light. Our ability to sense light within a certain frequency was developed 400 million years ago. This led to an exponential growth of life on earth. (An example of a life form which cannot sense light is a tree).

Time is the ability to understand the passage of events. As humans, we sense time through various recorded events. We accurately measure time. We understand how the space-time universe works in the form of General Relativity.

We are intelligent life forms. But, we are not alone in the universe. According to Fermi, there are 100 billion stars in our galaxy. And so, with certain assumptions, Fermi concluded that there are 100,000 civilizations (like us) in our galaxy. Yet, we have not received any communication from other intelligent life forms. The article from What but Why provides an alternate explanation.

Using Facebook to predict the demand for the product

Every successful product should have a Facebook page to engage with customers. The business managing the product should have a social media expert who sends regular status updates to prospective customers. Social Media Engagement increases visibility of the product and boost sales.

Facebook is also an useful tool for start-ups to evaluate whether the product has demand. The post outlines a three step process to predict demand.

Step 1: Create a Facebook advertising campaign

Set aside a budget for marketing your product. Build a Facebook page. Use the budget to get more likes for the page. The number of likes per dollar spent on advertising is an useful indicator to determine whether the product has demand.

Step 2: Engage with the prospective (customer) with regular status updates

Hire a social media expert. Engage with prospective customers (people who have liked the page) using Facebook status updates on the product page. An example of status update for a Facebook page promoting new start-ups is shown below:

Startups

The number of likes on the status update per number of page likes is an useful indicator whether the product has any demand.

Step 3: Promote the Minimum Viable Product

Build a Minimum Viable Product (MVP). Announce the launch of MVP using a status update. Promote the status update with a specific budget. The number of likes of the product launch (status update) per dollar spent on promoting is an useful indicator to determine the demand of the product.

To make the Facebook evaluation useful, a few best practices should be followed.

  1. Hire a social media expert and a graphics designer for Facebook marketing.
  2. The Facebook page should have professional graphics.
  3. The Facebook status updates should be sticky.

IT services is an example of pure competition

As reported by NDTV, Infosys is beefing up its sales staff. Infosys is making this move so that it can move up the value chain and compete with the likes of Accenture and IBM. IT services is marked by intense competition. Moving up the value chain will ensure that Infosys operates in a high-talent industry with lesser competition.

To understand this better, a background of Market structures and MicroEconomics is essential.

MicroEconomics

The price of a product is discovered when supply meets demand. When there is an excessive supply of commodity, the price drops, causing more demand. When there is a lot of demand for a commodity, the price of the commodity increases, causing the demand to drop enough for the demand to meet supply. There are four popular market structures that affect the supply of commodity or products in the market place.

Monopoly

Monopoly is when there is a single provider for a product. Microsoft Windows is a monopoly in the Desktop OS Market. To ensure that monopolies do not make excessive profits, government regulates the price of the product.

Oligarchy

Oligarchy is when there are few providers for a product. Oil producers belonging to the OPEC countries are an example of oligarchy. Since the number of suppliers are limited, there can be pricing or supply agreements that exist within the oligarchy. Most governments regulate oligarchy by penalizing cartels or other forms of anti-competitive behavior.

Monopolistic competition

In monopolistic competition, there is a single monopoly that determines the price. The other suppliers supply a small quantity of the product or have lower market share. A lower price from other suppliers will not alter the price of the product. Diamond industry is an example of monopolistic competition. The price of diamonds is decided  by De Beers in South Africa.

Pure competition

Pure competition is when the price of a product is determined by market forces. Gold is an example of commodity where the prices are discovered by market forces. In pure competition, several suppliers form the market and the price is not decided by any single supplier. Customers benefit from a competitive market structure.

IT Services is an example of Pure Competition

IT services can be performed remotely in India or in other parts of the world. IT service is more labor intensive. Hourly Billing Rate is one of the factors that determine the winner of a bid. Over the past decade, India has been a destination for IT services because of the lower wage rate. With increasing wage rates, India is losing its competitive edge to other countries.

New IT service providers in China and even in Western economies can compete with Indian companies on Fixed Price bids. This is because the overhead of running a business in India is considerably high. This opens up Indian IT service providers to more competition.

Traditional IT services – packaged solutions development, infrastructure management suffers from less differentiation. If a bank wants to manage its IT infrastructure, technical competence matters less. Price matters more. In addition, IT consumers have become more price sensitive due to recessionary business trends.

In the next decade, IT services will be driven by more competition. In such a market structure, there is lesser differentiation. The role of Marketing is less. Intense competition requires more operational efficiency.

Tough times at ArcelorMittal due to uncertain demand

arcelormittal-logoThe article in New York Times talks about the reasons behind the decline of ArcelorMittal. According to the article, there are three factors contributing to the decline:

  1. Uncertain demand due to the Global Economic Crisis (post 2009).
  2. Cheaper steel from China.
  3. Higher cost of closing down plants in Europe.

The demand for steel has also reduced after the Global Economic Crisis. We live in times of uncertain demand. It is almost impossible to plan.  In addition to uncertain demand, China poses a competition in every industry by providing goods and labor at inexpensive rates.

ArcelorMittal has chosen to contain costs by closing down plants. Some of the plants in Europe have to be closed temporarily to adjust supply with demand. Europe, like India, is averse to closing down plants. The cost of closing down plants in Europe is quite high.

Dell terminates some employees

Dell has terminated some employees over the week. It is sad that Dell has terminated employees in India.

Going Private

Michael bought Dell for a value of $24 Billion. The company had $8 Billion of cash reserves in its balance sheets. Michael was funded by Venture capitalists and Microsoft for the additional $16 Billion.

When Dell last reported financial statements, the profits were $5 Billion on sales of $56 Billion. The profits will ensure that the entire loan will be paid back in a period of 4 years.

The interest rates in the US and the rest of the world is less than 2%. So, the margins that companies expect from cash is also low, around 10%. Dell is already making a good margin of nearly 10%.

Why Dell IT is better than Infosys

If Dell decides to outsource work to a pure-play IT company like Infosys, the costs will be more. Though Infosys charges $25/hour only, the contractors in Infosys do more documentation than software development. Infosys contractors spend more than 30% of the time doing documentation and writing unit test cases. Dell IT does less of documentation and automates unit testing. So, it is more cost-effective compared to Infosys. It is sad that Dell has terminated software developers from the IT department in Bangalore.

Random Notes on Lean Startup – Part 4

Software product development has significant challenges. It takes time to build a decent product. It takes time to identify a need which has an immediate market.

To ease the challenges involved in developing a software product, I have some guidance for the Lean Startup:

  1. Do not bet heavily on a single product.
  2. Bet heavily on a product, if there is early success.

Do not bet heavily on a single product

A software product exists to fulfil a need. Most software developers fulfil a need where there is no immediate demand for the need. Adding more features to a product for which there is no immediate need is a good exercise. But, there is no immediate payoff.

Bet heavily on a product, if there is early success

If a software product has early success, then there is an immediate demand for the product. In this scenario, it makes sense to invest heavily on the product, add  more features, hire more developers, if required. After an early lead is secured, the product will remain a cash cow for a few years till a better product comes to the market.

Posts in the Lean Startup Series

  1. Part 1: Choosing the most viable project.
  2. Part 2: Realizing a vision.
  3. Part 3: Funding a product using a hybrid of Crowd-funding and Bond model.

Software engineering involves Minimalism, Design, and Agile

Wiki defines Engineering as

Engineering is the application of scientific, economic, social, and practical knowledge in order to design, build, maintain, and improve structures, machines, devices, systems, materials and processes. It may encompass using insights to conceive, model and scale an appropriate solution to a problem or objective.

An important aspect of the above definition is that Engineering should take care of the economic aspects of building a product.

Software engineering is different from traditional engineering. Traditional engineering comprises of mostly design. The design of any new model is released to Manufacturing. Manufacturing a physical part requires finite amount of time. Software engineering is different from Traditional engineering. In software engineering, manufacturing and distribution does not require time. Software engineering is more about the creative collaboration between people.

Software engineering, like any Traditional engineering, should consider three aspects to build a product within a certain budget:

  1. Minimalism
  2. Design
  3. Agile

Minimalism

Minimalism is about choosing the minimum set of features that the product must have. Most packaged products have many features. As the number of features in the product rises, the product becomes less maintainable and less flexible. New features require more engineering effort. The performance of the product with fully loaded features is slow.

Minimalism is the reason why many IT departments in Fortune 500 companies prefer custom application development to packaged software products.

Design

Design has two parts: Architecture and Style.

Architecture is developing the framework for the product:

  1. Authentication
  2. Authorization
  3. Caching
  4. Internationalization
  5. Storage
  6. Dependency injection
  7. Automated Testing

Styling is about setting conventions for implementing design. Some examples include

  1. Choosing frameworks / components
  2. Re-usability
  3. Layering
  4. Avoiding certain features

Agile

Software engineering is about people collaborating to produce a product. Agile techniques optimizes the engineering effort to implement the product feature economically.

Role of engineers

Other than design, engineers should aid the management team in managing costs. Lean Startup is a framework that aids software engineers to build relevant features in the product. Agile techniques ensures that engineers are involved in delivering product features within a specific time. By ensuring that only relevant features are built (Minimalism) and building those features efficiently (Agile), software engineers can aid the management team in managing costs.

Become a Big Fish in a Small Pond

David and Goliath by Malcolm Gladwell is worth reading. In the book, Gladwell explains the concept of “Big Fish in Small Pond” vs “Small Fish in Big Pond”. Big Pond refers to elite institutions which provide world-class product or service. Small Pond refers to institutions formed by misfits and underdogs.

Big Fish in Small Pond

An employee in a big company such as Infosys or Microsoft is a small fish. Infosys has several talented people. If an employee stopped working at Infosys, there will be no impact on the balance sheet.

It may appear that Big pond offers the maximum job security. This is very untrue. In big companies, senior managers make decisions over which they have very less control. Most of the work is performed by people several levels down the corporate ladder. The senior management indulge in motivational talks and being a cheer-leader. When each person does a small bit of actual work, the group is collectively responsible for success or failure. Individuals have less control over the results. There are occasions when people in a group are laid-off or fired. The reasons for  being selected for getting laid-off (or fired) is usually fictitious. So, there is lesser job security in the big pond.

As a small fish in a big pond, an employee has lesser control over the results. In addition, the employee is guided by several bureaucratic processes. This gives lesser job satisfaction. What is the alternative? – Become a Big Fish in a Small Pond. What does a small pond mean? Is it a smaller company? Not necessarily. A small pond refers to any company that provides (outstanding) value to a smaller customer base. As a big fish in a small pond, an employee has more accountability within the company. In addition, the actions performed by the employee matters.

Small pond offers the maximum scope of career growth, and is more fulfilling. As a big fish in the small pond, an employee plays a functional role. The employee is empowered to do more stuff. The job that he does directly impacts the customer. There is a direct correlation between the work performed and the business results. This ensures that the career is more rewarding.

Enforcement of Labor Laws and Abolition of Slavery

For the first time, the extent of slavery is measured. The Global Slavery Index 2013 report is published. It is based on three factors – bonded labor, child marriage, and human trafficking. Walk Free Foundation has excellent resources to combat modern slavery.

Slavery in India

India has the highest number of slaves. There are 14 million slaves in India. China follows India with 3 million slaves. Pakistan is third with 2 million slaves. Over the last decade, I have found slavery growing more rampant in India. Examples of Slavery are:

  1. Slavery of construction workers – Every day, 100′s of construction workers are carried in open lorries to construction sites.
  2. Bonded Labor – Many companies expect workers to sign a 2 year bond before giving a job offer.
  3. IT Slavery – Managers in IT companies harm the career of employees, if the employee refuses to work in a specific project.

Cause of Slavery

Most citizens have good values

  1. Most people want to help each other out.
  2. Most people want to spend time with their families, especially kids.
  3. Most people want to be ethical.

In India, most people are helpful. As a result, they do not value each other’s time and effort. When plenty of time is available to do various activities, labor is cheap. With cheap labor, the only way to become rich is to manage a large number of workers. Leadership qualities are essential to become rich. If workers do not exhibit leadership qualities, they are forced into hard and involuntary work. The primary cause of slavery is the general acceptance of the view that leadership qualities is the only way to become rich in India.

Labor Laws

Labor laws in India should act to combat slavery. A standard work week should have only 40 hours of work. Beyond 40 hours of work in a week, the employees should be paid overtime pay (double the standard hourly wage rate). The number of overtime hours should be limited to 200 hours in a year. Capping the overtime hours to 200 hours for a year will ensure that employees are not abused by the employer.

The minimum hourly wage rate should be at-least Rs.25/hour. Wage rates are subjected to the laws of demand and supply. In India, the supply of labor is high. To prevent the wage rates from falling to very low levels, the hourly wage rate should be capped.

There is no clear guidance on how labor laws will be enforced. There should be stiff fines for companies violating labor laws. Companies can aid in enforcing labor laws. There should be internal teams within companies which are empowered to enforce labor laws.

Using customer feedback to provide incentives to IT service engineers

A key takeaway from the book, “The  6 Hour MBA” by Louis A. Coutts, is the chapter on Marketing. According to Coutts, a company needs at least one of the three below factors to survive:

  1. Niche Market.
  2. Differentiation.
  3. Cost Leadership.

Niche market is created by disruptive innovation or innovation. Differentiation is created by sustaining innovation or improvement. Coutts argues that Niche market exists only for a very short time. So, every company should have a strategy to differentiate itself from competitors and maintain cost leadership.

 Differentiation and Cost Leadership in an IT company

The key cost in any IT (Information Technology) company is the pay of the engineer. One third of the costs of the IT company is the annual compensation given out to engineers. In the post, I have formulated a strategy for managing the pay of the IT employee.

The current situation

Most IT companies hire fresh engineers from college at a starting pay of Rs.3 Lacs per annum. The engineers receive annual pay hike of around 7%-20% based on the inflation and the demand of IT engineers. The career span of an IT engineer is roughly around 10 years. With ten years of work experience, the pay of an IT engineer raises to around Rs.15 Lacs per annum. An IT engineer with 10 years of experience usually becomes a project manager or product manager and earns Rs.20 Lacs per annum.

The problem

The problem with the current model is that we have less IT engineers who have more than 10 years of experience in the industry. To solve complex problems requires talent. We do not have talented engineers available in India. Most of the talented engineers move outside of India to pursue a career in engineering. Very few talented engineers remain in India and they work for companies like Microsoft, Google and Yahoo.

The proposed solution

The solution that I am proposing is aimed at addressing the problem: To have talented IT engineers with more than 10 years of experience work for your company. By having talented engineers in the IT company, the company differentiates itself from the competitors. Such differentiation will not work unless the solution manages to maintain cost leadership over the competitors. The solution that I am proposing deals with adjusting the incentives given to an IT engineer based on customer feedback.

Customer feedback decides Bonus

I am against giving annual pay hike to engineers based on inflation and demand of engineers. IT engineers should receive an annual base pay of Rs.8 Lacs. The maximum annual bonus that an IT engineer receives could be an additional Rs.12 Lacs.

For this to work, the minimum billing rate of the IT engineer should be $28/hour. I am assuming that the IT engineer is utilized for 1200 hours (60% of 2000 hours) while determining the minimum billing rate.

The customer feedback that the engineer receives for a project will be in the  range of 1-4:

  1. 1 – Not satisfied.
  2. 2 – Partially satisfied.
  3. 3 – Completely satisfied.
  4. 4- Delighted.

If the engineer receives a rating of 1, he gets the base pay of Rs.8 Lacs / year. If the engineer receives the rating of 4, he receives the base pay of Rs.20 Lacs / year.

Example

An engineer receives a feedback of 3.2 from the customer. The bonus that he will receive is:

Bonus = (3.2 – 1) /(4-1)*1200000 = Rs.8.8 Lacs

The annual pay of the  engineer is:

Annual Pay = Base Pay (8.0) + Bonus (8.8) = Rs.16.8 Lacs

In the example, the engineer has received a feedback of 3.2 from the customer. The feedback is a weighted feedback of several parameters from the customer.

 Feedback parameters

The parameters for  which feedback is collected is important. Suggested parameter are:

  1. Schedule.
  2. Cost.
  3. Quality (Number of defects).
  4. Product requirements.
  5. User experience.
  6. Performance.
  7. Customer service.

Each of the above parameter is rated between 1 and 4. The final feedback is a weighted average of the  individual feedback from the customer.

Example

Feedback

Customer Feedback Example

Assumptions

The assumptions made in the post are:

  1. Minimum Billing rate is $28/hour.
  2. IT engineers are utilized at least 60% in a year.
  3. No managers or additional resources are involved in the project.
  4. The feedback is given to all the project team members, and not the individuals.
  5. The cost of marketing is kept minimum (almost zero, less than 1%).

Rebooting economy: 5 Things the next government should do

Times of India has published an article on the 5 things that the next government should do. The article compiles the list from eminent business leaders and gurus around the world. As an employee and an ordinary citizen, I have my list of 5 things that the next government should do.

Maximum Working Hours

The working hours per week should be capped to a maximum of 40 hours. Overtime pay should be double of normal pay. The maximum overtime hours per year should be capped to a maximum of 200 hours. This will ensure that more jobs are created. Employees in India will have more time to spend with family. Enforcing this regulation will ensure that more citizens are available for public work.

No PotHoles in the Road

India should become a No-PotHoles country by 2019. The roads in most cities have lot of potholes. Road with potholes will slow down commute to office. This decreases the effective productivity of employees. Roads with No PotHoles will make India more inviting for tourists. More tourists will create more jobs in the tourism sector.

Promote more transparency in Government contracts

The bidding for government contracts is not transparent enough. The MCA website is managed by Infosys. The IT projects of the government is best handled by smaller companies, and not a big company like Infosys. The reason why only big companies win government contracts is because the bidding process is not transparent enough. The government can encourage smaller companies with capability to win contracts.

Faster Registration of companies

Registering a company in India involves the following steps:

  1. Company Name Approval
  2. Company Incorporation
  3. PAN / TAN Registration

The government should automate all the three process. Any business owner should do the formalities within 15 minutes using government websites. Approval from Chartered Accountant should not be necessary for company registration. All transactions with the government website should be digital. There should be no manual paperwork. Faster registration of companies will ensure that more companies are started by productive people. Productive companies will improve the economy.

Explanation of Laws to Citizens

The laws of our country are available in different websites owned by the respective Ministry. The written laws are difficult to understand. The government should provide a layman interpretation of the law. The IRS Website is an example of good government website which provides explanation about taxes for different groups – Employees, Self-Employed, International Tax-Payers, Parents, Senior Citizens and Students.

Too careful with Spoken words?

Myer Briggs Type Indicator (MBTI) is used by many companies to assess the personality type of employees. According to MBTI, there are 4 personality traits characterized by the colors – Blue, Green, Orange, and Gold. People who are Gold personality type exhibit the following characters:

  1. Respect authority and rules.
  2. Loyal and dependable.
  3. A right way to do everything.

Gold members follow rules and are loyal. In India, most people exhibit Gold personality type. For most part, Gold members are dependable people to interact with. However, some Gold members go to the extreme of being very careful with spoken words. The extreme Gold members have the following additional characters:

  1. Very careful with what they speak.
  2. Absolutely honest when they speak.
  3. Stick to spoken opinions, even if such opinions are wrong.

Extreme Gold members are a tough lot. They get offended when somebody talks casually. They punish people who lie. Even if what they have spoken is absolutely wrong, they will stick to their opinion. This makes it very difficult for normal people to interact with Extreme Gold members.

In India, the extreme Gold members are a powerful community. They police people’s actions.  Such people fail to understand modernity.  The world has changed. And so has Modern India. It is fashionable to talk casually. Giving excuses (lies) is considered witty. Based on unexplained logic, people can go back on spoken statements. Extreme Gold members have failed to appreciate the change in social trends.

Recruiting a Technical Co-Founder

Most countries require a Co-Founder for starting an innovative business. Innovative Startups require capital which banks will not fund. Innovative Startups require a limited liability so that the founders do not suffer financial losses, in case of bankruptcy.

GeekWire.com provides valuable insights on recruiting a technical co-founder. I agree with most of the recommendations made by the author.

The values of both you (founder) and your co-founder should match. One of my core values is “Coding is fun”. I want to build a company hands-on. If my co-founder is going to be an idea-monkey or just a good delegator, then it is very difficult to agree on the path forward.

The author of the post also recommends to find a complementary partner. I am a software developer and execution-focussed. Complementary skills will involve marketing skills. So, should I hire a co-founder who has good marketing skills? My answer is No. Most marketing or sales professionals tend to think highly of their profession, and think lowly of software developers. So, I prefer to work with a technical co-founder.

I have two simple tips for recruiting a technical co-founder:

  1. A technical co-founder should be able to identify potential problems, propose alternate solutions, and make priorities.
  2. A technical co-founder should be a good developer with amazing productivity while building systems.

It is very difficult to find a technical co-founder, even in a country like India. To identify such a co-founder, you will have to go through a portfolio of his work. If he has no portfolio, but you believe he has talent, your interview should be a day long coding session with two 1-hour QnA breaks. The objective for both the interviewer and interviewee should be to build something within eight hours, and evaluate the interviewee on his ability to analyze the problem and build software.

Random Notes on Lean Startup – Part 3

I am a huge fan of KickStarter. KickStarter is a novel way to fund creative projects. KickStarter operates on the crowdfunding model where donors give away small amounts of money for a gift. There is no obligation of the person accepting donations to give back the money.

Most of the projects funded by KickStarter are not related to software product development. Software product development requires more capital than traditional industries. KickStarter model needs to be modified for crowd-funding software product development. The Part 3 of the Lean Startup Series explains how.

Lean Startup as a series of Projects

A Lean Startup should make products for which the MVP (Minimum Viable Product) can be developed within a three month duration. The MVP should be a project for the Lean Startup with a set budget. The budget should include the development costs plus the operational costs for running the product for a year. Usually, the yearly operational costs for a project will be about 25% of the development cost. Every year, the project will be subjected to survival gates. In the project survival gate, a project can be moved into any of the five states:

  1. Invest hard
  2. Invest
  3. Sustain
  4. Kill soft
  5. Kill

Criteria for killing a Project

Ideally, the annual sales from the MVP should be more than:

  1. Operational costs.
  2. 10% interest on the Initial Budget.
  3. An additional 15% return on investment on the Initial Budget.

In India, the banks offer 9% interest on savings. The line item 2 applies to the Startup operating in India.

If the annual sales from the MVP is less than the operational costs, then do not enhance or extend the product. Cut down the operational costs below the projected annual sales. I call this phase – “Kill soft” phase where there is no benefit in working on the product.

If the MVP requires additional investments for generating sales, and there is a minimum operational cost that cannot be recovered from the product sales, kill the project / product completely.

In this way, we can model a Lean Startup company as a series of projects fighting for survival.

Raising capital through Crowd-funding / Bond hybrid model

KickStarter offers an excellent way to validate markets. When you pitch your product idea in KickStarter, you get crowd-funded. A lot of people donate a little bit of money, and in return, get a free product or discounts off the product. When you pitch your idea to the market and are able to get people to donate money, you get instant validation for your product idea.

As explained by Mathew Ingram for an article in GigaOm, all crowd-funding is based on transparency and trust. The budget for making a software product is high. Investors who invest in software products expect returns for the large amount of money that is invested. To raise money, companies have the option to issue bonds. Companies are liable to pay the bonds. The company is under pressure to pay off the debt. Most Lean Startups are expected to fail.

A good idea is to combine the benefits of crowd-funding model and the bond model. Allow many investors to contribute to software product development by allowing them to donate a small amount. Assure returns to the investor if the product sales meets certain success criteria. 

Customer Service Defined

Having a great product is not enough. A killer customer service is required to win in the market place. The article in Times discusses four keys to a killer customer service. According to the article, the four keys are

  1. A great product
  2. Stellar appreciation of customer needs
  3. Quick service
  4. Handling customer complaints.

To me, customer service is the heart of the business. A business exists to fulfill a customer need. Accordingly, there are three aspects to customer service:

  1. Respecting customer preferences.
  2. Providing valuable advise.
  3. Listening to customer feedback.

I will explain each of the above aspects in greater detail.

Respecting customer preferences

A product fulfills customer needs. Most customers in the 21st century will expect the product tailored to their specific needs. Every customer who buys a car needs specific features in the car. Customer service is about respecting the individual preferences of the customer.

Providing valuable advise

Every product has variations. If a customer loves a car from Toyota, the customer still has different models to choose from. Within each model, there are several variants, having optional features. Customer service should provide advise to the customer after listening to their preferences. If customers get what they want, it is a Win-Win for both the business and the  customer.

Listening to customer feedback

After a product is sold, customer feedback will help evaluate whether the needs of the customer is met. If the needs of the customer is not met, then the feedback goes to the team that designs the product. If a customer does not get a Blue Toyota, then the design team will include Blue as one of the colors that is offered to the customer.

Customer service is a great way to differentiate a product. The three aspects discussed above provides a good framework to providing Customer service.

International Business for a Freelancer in India

Sandeep Chandalia, from HSBC, has outlined the regulations concerning exports business in India. Any freelancer who is receiving payments from companies outside India should register with the Directorate General of Foreign Trade, India (DGFT). Registering with DGFT gives an IEC code (Import Export Code).

All export transactions should be registered with RBI and DGFT. This involves some paperwork. The below process diagram explains the steps involved in realizing a bank payment associated with an export transaction.

Export Payment Realization

  1. After the customer receives the invoice, a payment is made to the exporter’s bank account.
  2. To realize the payment into the bank account, the exporter must declare the exports using SOFTEX form. For transactions less than $25,000, the declaration is not required.
  3. The Bank needs to intimate the RBI. The RBI acknowledges the transaction with a Bank Realization Certificate (BRC). Getting a BRC involves a few steps.
  4. The Bank issues a FIRC (Foreign Income Remittance Certificate). In the FIRC, the exporter’s IEC code is quoted.
  5. The FIRC is exchanged for a BRC using the e-BRC module.
  6. After the bank receives the BRC, the payment is credited to the exporter’s account.

Fortunately, for freelancers, the RBI allows transactions of upto $10,000 to happen via Paypal. The bank account is linked to the Paypal account. Paypal also auto-withdraws the transaction immediately to the bank account.

The auto-withdrawal deserves some analysis. The auto-withdrawal to the bank account is done so that banks can use their existing infrastructure to get a BRC. Getting a BRC requires an IEC code. I wonder if banks are using the exporter’s IEC code for getting the BRC.

Paypal transactions are legally accepted for export payments in India. But, to be on the safer side, the freelancer should get an IEC code, and ensure that the banks get a BRC before crediting the payment.

What do employees want more than a raise?

Geoffrey James published a great article in Inc.com about what employees want more than a raise? I cannot agree more with the 10 things that has been cited in the article.

To me, the top 2 things that I like to see in the place where I work are:

  1. See employees who “don’t add value” get fired.
  2. Have my voice heard by my boss.

I work in the tech sector. It is hard to evaluate the employees who “add value” and those who “don’t add value” . But, I will appreciate if we have an annual headcount reduction in the tech sector where employees who “don’t add value” get fired. This will keep the costs down and will also help us have a great workplace.

It is a pity that my boss does not even hear me out. As the article suggests, I can safely assume that my boss does not care about me. And who wants to work for a boss who does not even care about people? Certainly, not me.

The article uses strong words to describe people who should be fired: “To see the assh*les get fired.” The term “assh*les” leaves the readers to a lot of interpretation. To a reader who belongs to the HR community, techies who are a bit rude may look like “assh*les”. To a reader who belongs to the Tech community (like me), people who add meaningless chores to my work day may look like “assh*les”.

firedPersonally, I am affected by colleagues who work more than 8 hours. Most software professionals who are based in India work more than 10 hours daily. Working with them gives me less time to spend with family. To me, colleagues who work more than 12 hours consistently are “assh*les”.

But, I certainly agree that it is nice to see some employees (assh*les) leave the organization. It definitely makes the place where we work cleaner.

Why is the quality of leadership in the Indian IT industry bad?

The quality of leadership in the Indian IT industry is deteriorating. Most of the modern concepts about leadership comes from two management consultants: Peter Drucker and Edward Deming. Edward Deming defined 14 principles which will aid organisations in managing change. According to Deming, the aim of leadership is to help people do a better job. This is where the Indian IT industry is failing miserably.

After reading several management books, there are three important ways that leaders help people to do a better job:

  1. Resolve conflicts between teams and within teams.
  2. Remove barriers to doing a better job.
  3. Remove undesirable traits from the workplace.

Resolve conflicts between teams and within teams

In 1990′s, there was great talent. The IT industry provided with many opportunities. The technology savvy moved faster into various leadership roles. During the 1990′s, the leaders did not have to work with conflicts between team members. The growth was plenty and the conflicts between team members were less. Most of the IT leaders shun away from conflicts causing psychological damage in the work place.

There are ways to handle conflicts. The PMBOK has outlined the 3Ps for conflict management. Prevention, Passiveness, and Persistence are the 3Ps for conflict management. 42% of an employees’ time is spent in resolving conflicts. Conflicts are usually a symptom of a deeper problem. The five ways to resolve conflicts after they have surfaced are:

  1. Problem Solving – Identifying the root cause and solving the root cause.
  2. Compromise – A lose-lose solution or a win-win solution depending on where it is practiced.
  3. Forcing – Forcing a resolution through authority, usually a win-lose situation.
  4. Smoothing – Playing down the issue.
  5. Withdrawal – Avoid the problem altogether.

Indian leaders are not good at problem solving. Whenever they have to resolve conflicts, they force a solution by authority.

Remove barriers

Leadership should focus on removing barriers to doing a better job. When barriers are removed, the productivity increases. Over the last several years, technology and tools have grown dramatically. But, the talent within the IT industry has failed to catch up with the latest trends. This has resulted in poor productivity. Leadership can remove the following barriers:

  1. Improve system performance by having better hardware and lesser network restrictions.
  2. More training or options for employees to refund their training.
  3. Usage of tools and frameworks to improve productivity.
  4. Doing more complex technology projects (improves capability).
  5. Lessen quality checks and process compliance (impediments to productivity).

Instead, the Indian leaders have resorted to making employees work overtime (without overtime pay) to improve productivity.

 Removing undesirable traits

Leaders have to deal with removing undesirable traits in the work force. There is always healthy policing within a team to remove undesirable traits. Policing among peers works when there is a defined threshold of an undesirable trait. In an agile product development team, an undesirable trait is to rely on excessive documentation to do coding. There is no way to measure the level of documentation which is deemed unhealthy. In some teams, an informal system can exist where each team member may do excessive documentation to show progress. A leader has to step in to remove such undesirable traits. The leader can have a review meeting and explain to the entire team that such extensive documentation is not necessary.

Most leaders in the Indian IT industry resort to performance reviews for removing undesirable traits. This is bad because the performance review happens once a year. The leader or manager does not do significant work throughout the year. Removing undesirable traits during performance reviews is unhealthy. It affects the morale of the employee. The compensation of the employee is penalised. The team does not benefit when a manager uses performance reviews to remove undesirable traits.

Conclusion

The leadership in the Indian IT industry is deteriorating because:

  1. The technology savvy leaders do not understand the importance of conflict resolution.
  2. The leaders engage in improving productivity by making employees work overtime (instead of removing barriers).
  3. The leaders use performance review as the only tool to remove undesirable traits.

Reforming Education in India

The worldwide standard for an educated professional is 16 years of education – 12 years in school, and 4 years of specialised education in a college. In India, we follow the same standards. The 16 year education is mandatory for any Indian professional to get VISA in the Western world.

There are less takers for the education system because many people do not understand the benefits of education. Apart from getting a job, education is required to improve the well-being of the society.

Problems in India

Our education system does not explain the problems that we have in India. The problems that we have are:

  1. Illiteracy.
  2. Poverty.
  3. Unemployment.
  4. Disrespect for one another.
  5. Health

Explaining the problems that we have is important. Only when people are aware of the problems, they can think of solutions.

Solution to Problems

Literacy can be improved by better education. When people can read and write, they do not need to rely on other people for getting information. First-hand information is absolutely required to survive in the world.

Poverty can be solved if poor people learn how to make money. In a globalised world, items are produced at a cheaper rate at the best possible location. Most of the electronic goods are produced in East Asia. It is economically viable to produce electronic items in those countries. Information Technology services are provided by India. Specialisation is required to make money.

Unemployment can be solved if more businesses are opened. India ranks 123 in the ease of operating a business. If we make India an easier place to do business, then more businesses are opened, and the unemployment problem can be solved.

Disrespect for one another is a problem in India. India is mired in a caste system with division of labour between various castes. In the caste system, members of one caste look down upon members of another caste. The new economy requires specialised labour – Marketing, HR, Engineering, etc. Collaboration and Trust is essential between the functional groups. Team work is essential to participate in the new global economy. If more people participate in the global economy, then they will develop appreciation and respect for one another.

Science and Technology as Tools

Problems in our society can be solved using Science and Technology. For example, to improve health and well-being of people, the following scientific improvements can be used:

  1. Medical advancements to cure diseases.
  2. Mechanical devices to control pollution.
  3. Internet to find medical specialist.

Science and Technology should be used as tools to solve other problems as well. There are 500 million employable people in India. The ideal ratio for a healthy community in India:

  1. 300 Million Engineering jobs which involve Science and Technology.
  2. 100 Million Service jobs including Government service.
  3. 100 Million Farming jobs.

The 300 Million engineering jobs are possible if the majority of labour is used in Industrializing farming and Automating service jobs. Industrialization of farming and Automation of service jobs will ensure that we have a technology bias to everything that we do in India. Education will play a big role in advancing the level of science and technology in our country.

Leadership to influence people

India has several millions of uneducated people. We need leadership to steer people in the right direction. Leadership is a tool to influence people. Leaders in India should have a scientific bias. The leaders should:

  1. Understand the Problems we have in India.
  2. Identify alternate Solutions available.
  3. Use Education as a vehicle to spread awareness.
  4. Use Science and Technology as tools to solve problems.