The location proxy: Stop thinking of ‘nations’

It’s commonplace to be asked why anyone would quit a ‘fancy’ lifestyle to go build something in the so-called developing world? It’s a wrong question.

An effective way to think about the world is to reject the idea of ‘nations’ and replace them with sets of problems. India, then, appears not like the next economic superpower, but a country with less toilets than cellphones. Kenya is not a third world nation, but the global leader in mobile payments. Delusional? Sure. You can’t separate politics, demography and macro economy from startups. But it’s a zone startups deliberately live in.

We have no time to think of our careers in relation to national GDP growth rates. Let’s pick hard, valuable problems and solve them.

Death by detail: When data is dangerous

We live in a time when building a startup is increasingly becoming a science. The world is awash with ‘lean’ methodologies, ruthless A/B and multivariate testing and communities where ‘talking to customers’ is known as ‘customer discovery’. Is that signalling goodbye to the good ol’ ways of building a company? I’d argue not.

Data, of course, is a great leveler. Suddenly, every idea is an opinion that needs to be proved or disproved. It keeps the team on one page without hierarchical bias. Warm and fuzzy feelings of anecdotal growth are irrelevant.

In its most extreme, anal and obsessive avatars however, this culture can be fatal. 

  • You talk to 25 customers and ‘measure’ what they don’t like? That’s wrong - in all matters of science and arts.
  • You change the color of a signup button after 10 days of your website launch to see conversion rates? Nope, you can’t optimize before building.
  • You dive into five levels of detail before attacking obvious problems and die a death by detail?

A better way to understand data is that it helps you get comfortable with your counter intuition. To arrive at a mental state where the exact opposite of your expected result is equally obvious. Go beyond just objectivity and start telling your intuition that it’s ignored brother named counter-intuition is also important. It’s almost a deep, philosophical level where useful contrarians exist.

Let the science underpin your art. Not the other way round.

What can cows teach mobile money?

Over a recent dinner with a mobile money guru, we waxed eloquent on how cows are a great savings tool and its analogies with mobile money.

  1. Indivisibility - The value of a cow is more than sum of its parts. Think of gold jewels - a common savings tool in India. It won’t make sense to take out parts of the jewel and sell them. Read (2) for what’s wrong with mobile money.
  2. Exposure - You don’t need to sell the entire cow to sell milk. Most modern electronic tools expose your entire savings account to a merchant, to process even a minuscule Rs. 50 transaction. That would seem incredulous to a housewife saving money in a jar. 
  3. Prestige - A cow is as much a matter of prestige as it is a saving tool. Most regulatory regimes and nations portray mobile as a tool for the excluded with stripped down features.
  4. Escalation of value over time - A calf is nearly not as valuable as a cow in her prime age. With money lost in transaction fees, most mobile money systems provide little incentive for escalation of savings value.

 

Competition as a proxy for value.

Too often in the race to compete, we learn to confuse what is hard with what is valuable. Intense competition makes things hard because you just beat heads with other people. The intensity of competition becomes a proxy for value. But value is a different question entirely. And to the extent it’s not there, you’re competing just for the sake of competition. Henry Kissinger’s anti-academic line aptly describes the conflation of difficulty and value: in academia at least, the battles are so fierce because the stakes are so small.

That seems true, but it also seems odd. If the stakes are so small, why don’t people stop fighting so hard and do something else instead? We can only speculate. Maybe those people just don’t know how to tell what’s valuable. Maybe all they can understand is the difficulty proxy. Maybe they’ve bought into the romanticization of competition. But it’s important to ask at what point it makes sense to get away from competition and shift your life trajectory towards monopoly. 

Source: Peter Thiel’s Startup Class: Chapter 4

Why Indian Universities should abolish ‘placements’.

It should be obvious, but it isn’t. Placements are killing Indian education.
Every year, families, friends, neighbours and marriage bureaus go frantic about the size of ‘packages’ in Indian universities. 

What do we lose?

  • Work and fun become disjoint - It was Noel Coward who said, “Work is more than fun”. Thanks to the perceived safety blanket of mass recruitment we produce millions of engineers graduates who work at a bad job five days a week, just to have ‘fun’ on weekends. Beyond the indignity of labor, it signals a complete commoditization of a nation’s talent — like toothpaste or detergent. 
  • A throttled campus experience - Right from day 0 of college, there’s an inclination to do things that supposedly ‘help your profile’. While that is a good goal in itself, it loses meaning when all activities on campus are somehow meant to score brownie points for placements. In the process, most of us lose curiosity towards truly remarkable things. Undergraduate education, perhaps the best place to experiment and fail at things, becomes a throttled assembly line.
  • Contagious to management education - A bunch of extremely talented students pivot to CAT - entrance test for India’s prestigious institutes of management. For the most part, it is merely a great way to defer placements by two years. With lucrative salaries at offer, it makes intuitive sense for almost everyone. That compromises however, our ability as a nation to push frontiers of thinking. I’d argue that there are far, far better ways to leverage such talent than placements.

Imagine a world without mass recruitment

  • More serendipity, better jobs - Without the safety blanket, undergraduates will be pushed to pursue opportunities right from their sophomore year. In the process, they will build relationships with interesting people across industries. They will understand their true likes and dislikes. A job that is not determined by a 3 hour interview. A job where you are irreplaceable. A job that goes beyond a standard employer-employee pact.
  • Relaxed teenagers -  Somehow, all of this placement paranoia starts after high school. Subconsciously, parents are investing in an insurance policy that yields returns after college. With this insurance policy removed, teenagers will deeply engage with their ‘hobbies’. We won’t be a nation full of teenagers whose passions never go beyond being ‘hobbies’ at footnote of resumes.
  • Attack bigger problems - India’s IT services revolution is what Foxconn is to China. Not of all us are BPO workers, but the minuscule number of new solutions emerging out of India is alarming. Do we really want to be a nation with 1.3 billion people writing code at the lowest price for rest of the world? Can it be the only way to achieve 10% GDP growth?

    The argument isn’t against jobs, it’s against mass recruitment. It’s about finding our true aspirations beyond a salary cushion. Humanity’s greatest leaps are made by people who had only two choices - to succeed or die. How many of us are deliberately willing to position ourselves?

Effectual versus Causal: ‘Research’ in startups

It’s a critical balance, often debated among entrepreneurs. 

  • What amount of time and effort should be invested before launch?
  • Is granular research proportional to an entrepreneur’s understanding of risk?
  • At what level of detail can research start to stifle speed?

Professor D.Sarasvathy draws a clear line through a nuanced rendition of the famous Alan Kay quote - “The best way to predict the future is to invent it.” 

In Prof. Sarasvathy’s words, entrepreneurs think Effectually - “To the extent that we can control the future, we do not need to predict it.” Managing uncertainty and chaos.

Causal thinking, on the other hand, says “To the extent that we can predict the future, we can control it.” Prediction dictates, while control takes a backseat.

The ‘control’ bit in Effectual thinking doesn’t imply total ignorance of research/data/evidence. It’s like being an airplane pilot. Before taking off, you’d at least ask the Air Traffic Control if there are planes on the same runway, won’t you?  That’s the bare minimum to fly.

P.S: If you have a moment, please read the Paper by Prof. Sarasvathy, delightfully sprinkled with annotations.

Back to Top