Let’s do something about poverty.
Opportunity cost is a deceptively simple principle of economics, that is taught in ECON 101. But, most entrepreneurs and business leaders often ignore or ignore tangibly measuring it. After writing a blog post on Indian business process outsourcing(BPO) companies and their focus on delivering low-cost services, I received several mails and messages. One of the most interesting messages was from a Harvard-graduated entrepreneur – Arijit Sengupta, who is focusing in helping companies measure the total cost of errors (TCE) and reduce it.
I like the idea of measuring all obvious and not-so obvious costs and then optimize/re-engineer operations to eradicate these costs. In my brief experience with BPOs, I’ve found that entrepreneurs and managers running these BPOs are often reluctant to proactively invest in measuring the total cost of errors and apply mitigations. They’ve been great at solving the problems/fixing the errors once they’ve been identified. But, they often (partially) ignore the waterfall impact of the errors on other business processes. So far due to the considerable (although shrinking) wage differential between India and the US, the BPOs have been able to employ extra people immediately if needed to solve a fire drill. But, once India and US reach a wage-parity, it won’t be cost-effective for the BPO firms to immediately increase the number of people working on a particular project.
I’ve been focusing on measuring the total-cost of errors and how to dramatically reduce it, with a hope that it will act as a unique differentiating factor..
I’ve been to six conferences in the past year and have organized a few mini-conferences here and there in the past. I’ve been always fascinated to learn about people’s motivations for doing any particular activity or making a specific decision.
"Attending a conference" may turn out to be an expensive ordeal, especially if you have to travel to a different city (or a country), take out the time from your daily planned work, pay for transportation, accomodation and other compulsive costs associated to going to a new place, in addition to paying the conference fees. But people still go to conferences.
When I was in school, I got lucky to be part of the school’s engineering magazine’s staff (which entitled me to a free pass to all major conferences in the country), and I selectively attended many. Currently I go to a conference either to present, to demo my product to learn more about a new industry/technology. But, the common and the highest order bit for me to attend any conference has always been and will always be "to meet new people", with similar or different interests.
Despite being the single-most motivating factor, I haven’t been able to optimally meet all the right people I can potentially meet at any such conference, and I’m often frustrated. After every conference, I do a tally of business cards that I have collected (obviously in return of sharing my business card), and I always feel that I could have met more people with specific interests.
Few sites like Confabb (supported by Dave Winer, started by Salim Ismail) and Pubshub are attempting to create some kind of social community around conferences, but it hasn’t worked out for me yet (although I’ve always yearned for something like this for years)..Confabb recently acquired assets of a Seattle startup from Ben Curtis – Conferencemeetup, which claims to have some social features. It will be interesting to see them integrated into confabb.
I did a quick Facebook poll to learn about people’s motivations for attending conferences and here are the results:
Question: Why do you go to a conference?
1. To view demos from exhibitors (7%)
2. To meet new people with similar interests. (24%)
3. To listen to speakers/presentations.(34%)
4. To get away from work.(36%)
Today, with prolific blogging about all events worth attending and the generous conference organizers, who share content (even videos, see examples at www.ted.com and www.allthingsd.com) of the conference for free (in return of advertising), it becomes hard to justify paying the fees for listening to speakers/presentations. There is an interesting debate on value of such services on Techcrunch.
Why do/would you go to a conference?
As a bootstrapping entrepreneur, if you have $100, you would first give them to your lawyer, then to your accountant, and then lastly to your market researcher. Facebook launched polls recently, which enables the users to quickly and cheaply($5 basic insertion fee plus $0.10 per answer) set up a poll (a question with multiple possible answers) and target it to the Facebook community (based on some very high level criteria – age, sex, profile keyword, etc.)
I am impressed by the simple design of workflow of poll-creation, implementation and analysis. But, the most exciting part was the speed. Facebook claims that they can get answers as quick as within 30 minutes (if you pay $1 per answer), but even when I chose the cheapest option ($0.10), I got the answers fairly quickly (I set up the poll, went to sleep and the answers were ready by the time I woke up — and I didn’t oversleep!!)
I set up a sample poll with a simple question?
Why do you go to a conference?
I was happy with the answers that I received, but I am not confident about the statistical significance of the data. If I were to make a critical product design decision, could I rely blindly on results of Facebook polls? I don’t know. Probably not, at least now.
Overall, I do believe that Facebook will become a major cultural and economic force, leading up to a huge value creation for its founders and investors. If you’ve tried their polls, please share your experience. My friend Robert Scoble had doubts about facebook’s appeal earlier in December 2006, but he’s expressed positive notes about Facebook recently. Facebook is rapidly creating a tightly bound network/community and it is intelligently leveraging its vibrant community for lucrative applications, besides advertising.
Michael Arrington from Techcrunch describes Facebook polls as a marketer’s paradise and I agree.
get on Facebook.
Late last year, he had launched a deceptively simple, but powerful online application – InstaCalc, that enables users to design, use and share calculators on the web. I plan to design a few calculators for my other websites and in fact for Microsoft as well, using InstaCalc. This embodies entrepreneurial, design and technical genius..
Check out this sample calculator by typing sample numbers in the text-boxes below to see your salary converted into hourly wages, (simple app, just for illustration)..
Let’s create more of such beautiful products.
Often times markets across the world mature or adopt new products/services chronologically. In the past two decades, I’ve observed that things/products that are trends in Japan have become trends in the US after six months and things that have been trends in the US have become trends in India after years. With technological advance, free information and access to resources, the time taken for a trend to migrate from one market to another is constantly shrinking.
In the past several years since I’ve been in the US, I’ve pondered and even attempted to just copy successful business models of the US in India, but nothing substantial materialized as I stayed in the US and the business plans ended up remaining mere bytes on my external hard disk. For most of the business models, the entrepreneur need to be physically present in India (or whatever the target market is..)
The thought crossed my mind, when an enterprising student from Stanford, Rahul Thathoo sent me a note earlier today. He’s working to create a community-based classified service – rakoFi (similar to craigslist) for key Indian markets, alon with his entrepreneurial friends.
We’ve seen several successful attempts, where an entrepreneur has copied a successful business model in one part of the world and has implemented it successfully in another market. Most notably, we’ve Baazi (an online auction service focused on the Indian market – India’s eBay) was in fact acquired by eBay itself. Besides e-commerce, successful implementations of proven business models have created significant value to the society and economy. For instance, Air Deccan (India’s "no frills") airlines could have been inspired from Southwest. Kingfisher airlines could very well have been inspired from Virgin Atlantic.
A quick disclaimer – my intent is not to undermine the innovation of these successful businesses, but to point the reader’s attention towards trends.
What other similar "inspired" businesses do yo know of?
I am not the first one to realize and state that the wage differentials between the workforce in India and the US will continue to shrink and reach an equilibrium in the next decade. It is become more and more certain that the primary advantage of outsourcing to India is the core expertise of the Indian workforce and not necessarily lower wages. Although I’ve dabbled here and there by outsourcing some projects to India and as well during my earlier startup days, I hadn’t grappled the actual gist of entrepreneurial opportunities in the much-cliched "business process outsourcing" (BPO) market.
It is common sense that there are lucrative entrepreneurial opportunities in the BPO space. I don’t want my grandchildren to read Thomas Friedman’s book (The World is Flat) after fifty years or so and ask me, "what was I doing, when there was so much action happening?" So, I decided to dedicate a considerable portion (more than 90%) of my time during my last trip to India (January 2007) on learning about the BPO industry with an intent to start a company that can make a significant impact to the economy.
As with any new thing, after reading three books, multiple blogposts and several other magazine articles (espcecially in Business India/Business World), I met with 18 founders/CEOs, from leading and emerging BPO companies in India and get their perspective on the industry and consider potential partnership opportunities. I also visited the NASSCOM headquarters in Mumbai and met with their staff to understand the market dynamics.
It is not news that the market for software and services (official term for the BPO sector) has increased exponentially in the last five years in India. But, as a passive observer of these trends I had seen Indian firms as providing "intellectual" services to a product company in the US/UK. I believe firmly that the market semantics in India have been favorable (in fact ideal) in the last 18 months, to cultivate more "product" companies. Access to capital, experienced workforce and the overall entrepreneurial spirit have led to the growth of such favorable conditions.
We’ve seen that more and more entrepreneurs in India are seeing value in creating intellectual property, by developing core processes and products, as compared to renting their IQ/talent to provide outsourced services to companies in the west. This is also reflected in the type of work that is being done in the Indian operations of large corporations. For instance, Microsoft India develops several high impact projects/products, as opposed to serving as a test center/research center.
It is inspiring to see the sleuth of product startups by Sabeer Bhatia in India and upstarts like Tekriti by Ashish Kumar, who are focusing on creating intellectual property by developing products. I would love to see more product-based or core service-based (with IP) startups emerging in India.
I’m in the process of helping start a healthcare services company to provide key services to physicians, based on my previous experience in healthcare through Securamed (I’ll keep you posted, as the venture progresses, currently keeping it under covers until the official launch.)
Net-net, it is exciting to see more and more Indian start-ups focusing on creating IP.
Let’s create IP.
If you are going to read only one book on design during your lifetime, my recommendation will be to read – The Design of Everyday Things by Donald Norman. This book has been instrumental in shaping some of my own approaches to design and I’m sure it has influenced several thousands of designers across the world. I would highly recommend this book for anyone applying for a Program Manager position at Microsoft.
Below is a list of my notes (both interpretations and highlighted from the book). I may have taken some sentences directly from the book, to ensure that the message is communicated optimally. The copyright remains with the author – Donald Norman.
Here’s what I found important and interesting from the book:
- The appearance of the device must provide the critical clues required for its proper operation – knowledge has to be both in the head and in the world.
- What makes design a highly challenging and rewarding discipline is that it grapples with the need to accommodate apparently conflicting requirements. All great designs have an appropriate balance and harmony of aesthetic beauty, reliability and safety, usability, cost and functionality.
- Art and beauty play essential roles in our lives. Technology changes rapidly, people change slowly.
- Humans do not always err, but they do when the things they use are badly conceived and designed.
- The psychology of everyday things demonstrate the importance of visibility, appropriate clues and feedback of one’s actions.
- Affordance refers to the perceived and actual properties of the thing, primarily those fundamental properties that determine just how the thing could possibly be used. For instance, a round object is assumed to have an affordance of a ball.
Something that happens right after an action appears to be caused by that action.
Two fundamental principles of designing for people are : 1. provide a good conceptual model and 2. make things visible.
- Good designs have good mappings between the controls and the things controlled by them. For instance, the "next" button on a screen/wizard should be either on the right or bottom of the screen and not on the top left.
- Errors should be easy to detect, they should have minimal consequences, and, if possible, their effects should be reversible. Errors can sometimes be prevented by using forcing functions.
- Designers can use three methods to prevent users get into an erroneous state:
1. Intelocks – by forcing operations to occur in a particular order
2. Lockin – by keeping an operation active, preventing someone from prematurely stopping it
3. Lockout – by preventing someone from entering an erroneous state
- Ask the following seven design questions while designing – How easily can one:
1. Determine the function of the device?
2. Tell what actions are possible?
3. Determine mapping from intention to physical movement?
4. Perform the action?
5. Tell if system is in desired state?
6. Determine mapping from system state to interpretation?
7. Tell what state the system is in?
These principles have worked for me and I’m certain that they’ll work for you.
Let’s design something extraordinary.
I’ve slacked at blogging, but Google Analytics show a consistent repeated readership from friends all over the world. Now that I’m trying to blog regularly, I want to take a moment to sincerely thank all my friends who subscribe to this blog and share their ideas. Here are some demographic details about you..
I’m sure that every one has had some defining moments in life and everyone most certainly remembers the experiences when they’ve come closest to death. I’ve had my share and the most striking aspect of those moments have been the thoughts that flashed through my mind in those moments. In almost all accounts, when I’ve come closer to death (not that there have been more than one or two..), I’ve thought of the things that I did not do, as opposed to the things that I did do. This has been an important enough datapoint for me to fearlessly pursue my dreams/passions and make "risk-taking" a way of life.
The single-most unique characteristic of an entrepreneur is his/her risk-taking aptitude. I’ve been fortunate to meet several exceptionally talented individuals throughout my life/career and I’ve often wondered – "Why aren’t they all starting companies?" – because they are all super capable of starting and sustaining high-impact organizations. All my conversations and thoughts end up with a common hypothesis – "They are risk-averse." There is nothing wrong in being risk-averse, but the risky side is just so much more exciting and I want that excitement for all of them.
In no way am I implying that one should always take mad risks (althought seemingly mad risks have often changed the world positively.) In fact the entire profession of venture capital is geared around "minimizing risk" and that is true for every startup as well. Every milestone in a startup’s life is aimed at minimizing one risk or the other – risk of technology, risk of market, risk of talent, risk of survival, etc. Investors love entrepreneurs who can clearly quantify the risk that they are taking and have a plan to minimize risk in a logical fashion.
I’ve observed that several smart people are reluctant to break out of their comfort zone and take a risk to do new things, due to one fear or another. When I see this, I feel that they are letting their fears come in the way of their dreams. My only intent for sharing this risk-taking "philosophy" is to inspire my friends to take more risk. This is the only way entrepreneurs are born.
When I’ve had concerns about taking a particular risk, I’ve simply asked myself – "What’s the worst that can happen?" and the answers have been often manageable. Scientifically, when a person takes risk, there is a solid adrenaline rush, which pushes the person to perform at a much optimal level than otherwise.
I’ve actually liked some of the points on risk-taking from this video..
Risk-taking has always worked for me as a way of life.
Let’s risk it.