Fix your flow, not the stock

I have been taking some interest in sports recently. This got triggered by the significant capital overlay for new shoes and rackets to support my sons’ style over substance pursuit of tennis coaching. I am indulging my children nevertheless, having seen the wisom levels of those who play sports in their childhood being far greater than the ones who did not. Like so facets of life I am late starter.
So I jumped up to notice when Boris Becker filed for bankruptcy. How could some one with significant wealth, talent and fame go bankrupt?

I turned to a concept from systems thinking – stock and flow – to make sense of this.

Stock is anything that is accumulated (water level, bank balance, inventory, good will) and flow either increments or decrements (monthly salary, expenses, sales). Any system can be understood as an interplay of stocks, flows and the feedback loops among those.

bathtub-stock-flow-diagram500px-Principle_feedback_loops.svg

Most people gravitate towards measuring the stock levels (no wonder most startups over index on valuation). It is more tangible and easier to compare. It often dulls us to ignore the critical role played by flow (or even more so feedback loops and delays).

If I were to ask you how fill a water tub, you are more likely to say the tap should be turned up and not think about stopping the leakage. Even if flow is understood, most of us are biased towards overestimating impact of incoming flows and underestimating outgoing flows.

No one wonder anyone will understand their salaries much more precisely than expenses. There is a lot of truth in the age old wisdom of  ‘it’s not how much u earn, but how much u save is what matters’.

Unless one understands and actively manages the flows, to in turn affect the stock levels, you are just clutching at an effect than the cause of a stock level.

Another trap related to flows is role of delay. Most of us tend to be very poor in estimating the time it takes replenish stock levels by not understanding the flow levels and the time to naturally modify them.

If your savings are off or health levels are down – do you understand that while temporary measures change the stock levels, sustainable solutions need to take into account how the flow levels are to be permanently improved.

So getting back to the sad story about Boris Becker. He didn’t become a world champion in a day nor did he go bankrupt.

Ten traps for entrepreneurs …

Here are some traps I saw other entrepreneurs fall into (Of course, some of these I fell into myself multiple times !).

Watch out when you hear these lines.

# 10. “Let’s add Social Networking features and use AJAX. It’s the hottest trend around. Will help with valuations”

# 9. “He has 30 years experience in the Industry and can open doors for you with Whos-Who. Rest is easy for you. He wants to be on a retainer and not on sales commission”

# 8. “When Infosys and Wipro started there was no competition. They had all the time to grow. Now time is money. It’s a VC funded world.”

#7. “Small companies cannot sell. We need to be much larger to be taken seriously”

#6. “Let’s not to worry about profitability. Let us grab market share and scale”

#5. “They are old school, brick&mortar … won’t get it right on the web”

#4. “I am unable to sell because there is no marketing investment here. We need customers who call us, not other way around”

#3. “Just build the traffic, you can sell it Google or Microsoft or Facebook”

#2. “Just getting 0.5% of people in India as our customers … just 0.5% … means we will blow our revenue plan out of the water”

#1. A VC saying “I want you to raise more money sufficient for the next round as well now … so you can focus on building the business and not waste any time fund raising”

What do you think … did you hear these any time before? What else would you add to your top 10 list?

Power of boring execution

How did Obama win so easily in what was predicted to be a close election? Some fascinating lessons for any business

#1. Overnight success built over 8 years

Obama’s victory is a lot to do with the power of execution than with vision and great speeches like last time. Democrats out organised and out reached their supporters. In a way their over night success was 8 years in the making. The databases, the demographic analytics and on the field volunteers.

#2. Customer segmentation and targetting

If the strategy was to focus on the poor / middle class voters and certain segments of likely voters based on race – everything about the first term presidency now looks like targeting that segment. In the end no one can be all things to all people (not with standing the 47% remarks)

#3. Pace yourself

There are good days and bad days. But it’s a fascinating lesson in pacing yourself (keep in mind Obama had a day job all thru the campaign)

#4. Strike good partnerships

Who can question the credibility and connect Bill Clinton brought to the campaign?

No big speeches or tag lines this time. Boring boring. The power of boring execution is here to see !!

Still in Awe

I am still in Awe of the World Trade Center twin towers that used to be. The twin towers.

My job at Deloitte got me the opportunity to live next to, near and work by them. I went up the elevator reaching the top of the 105 floors in 59 seconds. I even worked in the towers for 2 months. (My old passport has a security stamp at the back which I will cherish.)

There was never a walk by the twin towers when I did not stare up into the sky in sheer awe. They were just like how Ayn Rand wrote about building tall steel and concrete sky scrapers functional like the human body – without appendages.

I know today is a tragic anniversary, a reminder of a barbaric cowardly act. My prayers are with those who lost loved ones.

But today I choose to remember the awe the twin towers evoked in me and the American spirit – to be the biggest in the world for everything they do (not that being the biggest is everything in my part of the philosophical world) that inspired me.

Like Wordsworth said … I choose to “find strength in what remains“.

What though the radiance which was once so bright; Be now for ever taken from my sight, 
    Though nothing can bring back the hour  
Of splendour in the grass, of glory in the flower;  
      We will grieve not, rather find  
      Strength in what remains behind;

 

Immortals of Meluha – A Review

I recently read “The Immortals of Meluha”. Kept me entertained adequately on a long road trip. It’s written by a 35 Yr old IIM-C MBA marketing executive from an MNC in the process of trying express his true passion. More than the book itself, that author’s scenario fascinated me – being one such 35 Yr old (36 actually :)) IIM-C MBA constantly trying to express my true calling, myself. So here goes my review of the book.

The author writes the story of Shiva – the Man evolving into a leader, GOD like and eventually into a Mahadev (GOD of GODs). Set in 1,900 BC it talks of the Land of Meluha … of a Suryavanshi tribe the followers of GOD-like King Ram, the Chandravanshi’s, the half human Nagas, Himalayan kingdoms and people whom we now view as divine – Nandi, Bhadra and Sati. It is first part of a trilogy.

Firstly I want to congratulate the author for writing about what they don’t teach in the IIMs – which with every passing year you learn is a lot (that matters :()

The basic premise is not unfounded. In the Yogic system, Shiva is revered as the “Adi Yogi” – the first or the foremost Yogi. GOD like … but not GOD. Shiva makes a very interesting Hero in general. Smoking pot, meditating, ready to burst into a dance or a fight, above impressions, revered by the most conscious sages/yogis … such range !!

In this book, like Aragon in Lord of the Rings, he is chosen one … as the legend goes. He denies any special status and resists the role of the Lord … but the warring tribes believe HE is the one … and the story is about how he starts fulfilling that belief with each passing battle.

The basic plot is very innovative and quite reverting. Shiva makes quite a very multi-dimensional Hero. I look forward to he other parts of the trilogy, as it is undoubtedly an interesting read.

Some problems though.

The style is too colloquial to the point of being pedestrian … colloquial is ok with me. But, the “license” is really stretched when Shiva screams “Bast**d” or courts Sati thinking “Say yes Dammit” or the when the Chandravanshi’s stage “terrorist attacks”. I think such pedestrian writing can be avoided in trying to be colloquial.

Fantasy must be fantastic not absurd … The book portrays many unknown secrets of the ancient Indians, the wisdom of the sages and knowledge of those times. I’ll buy the power of the Somras in turning every one immortal or magical power of Astras … but absurd claims like how the conducted “pressing the chest 5 times followed by blowing in the mouth to revive a drowned person” that sounds exactly like CPR … “Chief Scientist Brihaspathy explaining how Somras is basically anti-oxidants and how it is linked to absorbing oxygen into our blood ” … “chief immigration office” … all take away the balance required in sustaining the fantasy portion of a story like this. I understand we’ll feel proud that Indian’s already knew about oxygen, anti-oxidants and CRP in 1,900 BC but feels too cheeky to read it in print !!

Overall a interesting product. It’s not the Lord of the Rings from India, for sure. I wish an experienced writer can complement the original and creative instincts of the author … to help give more depth and gravity to the writing.

I congratulate the author for his originality and ambition … and wish him all the best to write even better in Part II and III. Shiva deserves it !!!

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Views expressed are solely personal opinions of the author; and do not represent the views of the organizations/institutions he is associated in any form. The author has no responsibility for actions taken based on ideas expressed here.

(Sridhar Turaga’s Blog: An Indian Entrepreneur)

Great speech … so what?

Great speech by US President Obama receiving the nobel prize. Something like … “I believe in peace, but need to wage war when it is just” “I closed Guantanamo to uphold values” “Reducing n-arms is center piece of my foreign policy” “US will lead the way for climate change”

YAWN. YAWN !!

Except for the part when he said “compared to some of the giants of history who have received this prize,” his accomplishments “are slight” and suggested that he had been chosen not so much for what he had done but for what he is expected to do. … rest was an attempt to fit into shoes he hasn’t grown up yet to wear.

Also, as usual it’s a speech that makes those who oppose as well as those who support him nod in agreement … hey I said that !!

“Talk is cheap” as the Americans say. So why doesn’t he just do it …

What do you think? Does Obama deserve the Nobel prize? Vote here


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Views expressed are solely personal opinions of the author; and do not represent the views of the organizations/institutions he is associated in any form. The author has no responsibility for actions taken based on ideas expressed here.

(Sridhar Turaga’s Blog: An Indian Entrepreneur)

Two minute proof of human evolution

I am sure you have encountered the “creationist” argument in different ways in every culture / religion. (I believe in GOD, but that’s another point). The arguments vary in their subtlety … but mostly rise from the argument “How can such a complex creation occur by chance”.  Read The Blind Watch Maker for one of the best books on Theory of Evolution and the argument for what Richard Dawkins says

“I want to persuade the reader, not just that the Darwinian world-view happens to be true, but that it is the only known theory that could, in principle, solve the mystery of our existence.”

If you don’t plan to read the book, here’s a two minute proof … a post in NYTimes on the mistakes that argue for evolution

Evolution and Creation Cartoon


Views expressed are solely personal opinions of the author; and do not represent the views organizations/institutions he is associated in any form. The author has no responsibility for actions taken based on ideas expressed here. (Sridhar Turaga’s Blog: An Indian Entrepreuner)