2 characteristics of systems that work in the long run

1. Built-in flexibility. Sometimes, once you plunge into a project, you realize that the original plans don’t work. And, every once in a while, even if the original plans work, they need to be de-prioritized. Openness to change is critical. To take a personal example, a rigid exercise regime that offers no break will fail.

2. Predictable tracking. Predictable tracking is how we ensure if we are taking executing as per plan and, if we are, if our actions are still contributing to progress. No tracking -> no accountability -> no progress. And, going back to the exercise example, whether you make progress or not, check in with yourself every week. What gets measured gets done.

The B2C2B era and its implications for us

Tom Tunguz had a great post introducing B2C2B (business-to-consumer-to-business) companies. The image below explains the idea –

B2C2BThe best way to understand this is to see what happened with the iPhone. In the 80s and 90s, all B2B productivity applications needed to be approved by 1 central corporate gatekeeper – the head of IT. IBM’s initial success in making Windows the corporate standard was attributed to that all powerful line – “No one ever got fired for buying an IBM.” This was a time when computing was necessarily expensive.

Over time, however, thanks to advances in technology and the Moore’s law, personal computing became inexpensive. So, consumers were soon able to crunch spreadsheets and store data at home. By the mid 2000s, enterprise apps weren’t better than consumer apps. In fact, in many cases, they were worse.

The iPhone flipped the old model of B2B sales completely. The product was so good that consumers who fell in love with it began badgering their IT departments to allow them to plug into the official network (that had become easier too). And, soon, the iPhone became a corporate standard across leading companies without Apple having to negotiate with any IT department. The iPhone as just the beginning – we’ve seen this across the board with companies who’ve had tremendous success with B2C2B.

There are a few interesting implications of this shift –
1. Every consumer facing enterprise productivity company in the future will need to grasp this concept and design applications that appeal to customers. The only companies that can escape this effect, for now, are companies that work on the back end.

2. That said, Amazon Web Services, AWS, is a prime (apt word when referring to Amazon) example of the B2C2B phenomenon and a role model for companies working on back end infrastructure. A cornerstone of AWS’ success has been customer love. It has made the lives of startups and entrepreneurs so much better. And, it has been rewarded with more trust as these startups and entrepreneurs have become successful. It, in turn, has proved itself worthy of that trust by providing the back end for companies such as Netflix and Dropbox.

3. Speaking of Dropbox, Dropbox’s move to Enterprise was inevitable. There’s a lot of money to be made selling to companies. And, Dropbox’s success was definitely an illustration of the B2C2B idea. Users loved Dropbox and found ways to use it within their teams at work. Over time, it made sense for corporate IT to embrace Dropbox. However, it is in that step that Dropbox had a few teething troubles. Corporate IT managers wanted more admin and security controls. This, in turn, underscores the challenges with B2C2B. Previously, you could just build products that kept corporate IT managers happy. Now, they have to feel in control AND the users have to love it, too.

4. Companies like Uber are experiencing this effect, too. Uber is already expensed more than taxi cabs. How long before companies strike enterprise level deals with Uber without Uber having to go seek them out?

5. For every positive story, there are companies that have experienced the pain caused by this shift. Microsoft Exchange is a prime example. Too many Exchange users complained about their unhappiness with having to manually archive their Microsoft email every 2 months because space limits on Exchange were outdated. So, there’s been a continuous shift to Gmail. Again, users love it. Companies follow.

6. Speaking of Microsoft, I wouldn’t extrapolate Microsoft Exchange’s troubles to Office. Despite advances made by all Office competitors, including Google Docs, Microsoft Excel and OneNote are still outstanding. And, PowerPoint does its job. (Word, however, is a travesty – can someone fix that?) It is great that Microsoft is proactively figuring out how to make using Office easier in the cloud. They are still the leaders here and the lead is theirs to lose.

7. As cool as “B2C2B” sounds, this isn’t a new world shift. Investment banks and management consulting firms have pursued this strategy for a very long time. There’s a reason that the Goldman’s and McKinsey’s of the world have “client first” written all over their walls. User satisfaction has led to company adoption in all of professional services. Aside from the fact that treating people well is simply the right thing to do, for professional service firms, treating people well is source of competitive advantage. Most of these alumni become future clients.

That said, there is a crucial point of difference. In the case of the internet, aside from the fact that network effects are more powerful (professional services have network effects, too), marginal cost is zero.

8. Google, Facebook, LinkedIn and Twitter are probably the 4 most influential B2C2B companies of the internet era. Their success is built on the same blueprint – build products that users engage on and customers (advertisers in all cases and others like recruiters in the case of LinkedIn) will follow. It makes sense that media was among the first industries to feel the power of the B2C2B shift. The first sign of customer love is their attention. Companies that do well to capture attention will continue to drive the online advertising market size upward. And, this, in turn, illustrates why valuations for consumer internet companies are off the roof. They are, after all, no longer “consumer” internet companies.

9. That, in turn, is why Facebook’s acquisition of Instagram could be among the best tech acquisition deals ever. Photos and messaging dominate attention in the mobile era. While Whatsapp has a few global competitors, Instagram helps Facebook dominate the world of photos. That’s incredible value of 1 billion dollars.

10. In “How Google Works” by Jonathan Rosenberg and Eric Schmidt, Jonathan and Eric share examples of many decisions Google made that resulted in a loss of revenue for Google but were still executes as they agreed it would be great for the user. I think those examples don’t share the complete picture. Sure, it might have lost revenue in the short run. But, in the long run, B2C2B dictates that the user’s love is far more important for long term revenue. So, keeping the user first isn’t a competitive advantage, it is a competitive necessity.

11. We are in an era where “customer is king” is, for the first time in history, very close to being true. We have more B2C2B companies than ever before and more will be created in the coming decade. Thus, it follows that the B2C2B companies will likely experience most success under leadership that cares about. Now, it isn’t just about what the product can do. It, truly is, about how the product makes the user feel.

12. I’ll finish up with a provocative point. There was a rush of people flocking towards entrepreneurship in the last decade as everyone seemed to be vying to be the next Facebook. For the many who were working for large corporations shipping products to nameless and faceless organizations, building products for human beings they could see, touch and feel felt really empowering. We are social animals after all. And, we want our work to count. Change enough people’s lives and you will change the world, after all. This has resulted in a chain reaction of schools and politicians emphasizing the importance of entrepreneurship. All of this is good. With the advent of B2C2B, however, I would assert that a few of those assumptions will, and should, be challenged. While the gains of creating a startup that goes on to become the next Facebook are, indeed, outsized, I would argue that there are more opportunities than ever before to touch the lives of real customers. That’s what the B2C2B era has done for us.

What makes this all interesting is that the rules of engagement in this era are shifting really quickly. This is why “preferred qualifications” list in technology jobs read like a description for superwomen/men. Entrepreneurship and innovation are mentioned as required traits too often in too many job descriptions. It shouldn’t be surprising, though. With all these shifts, being able to learn, empathize with customers and build products and services that resonate are more important than ever before. And, that’s why I believe schools need to spend time on discussions around “being entrepreneurial” vs. “being an entrepreneur.” We don’t need more companies. We need better companies.

B2C2B, to me, is among the most profound shifts we’ve seen in the past few years. What makes this all incredibly exciting is that this is all just the beginning…

Redirecting focus

I find myself in a near constant battle with my mind to keep it focused on things I control. Granted, I’m probably more attention deficit than the average person. But, my mind’s desire to seek out and dwell on situations, relationships and possible future scenarios over which I have no control and which always take me down an unhappy path never ceases to amaze me.

I have only found one way to solve this – constantly work to redirect focus to myself.

Self centeredness is a dirty word in our time. I understand that. I’m in search for a new term – maybe “self focus” – to describe my workaround. The idea is simple – the more time I spend on thinking about stuff outside myself, the more helpless, discontent and unhappy I become. I see my role as that of a driver steering my mind towards thinking about what my priorities are, what I need to get done and how I can do them better.

My mind control program simply reads – when in doubt, redirect focus to self and spend time visualizing and thinking about things you control. Our actions, then, follow these thoughts.

And, that’s where the good stuff lies.

Or, at least, that’s been my limited experience.

Warmth and Competence – MBA Learnings

Source: HBR

We discussed the tension between “Warmth and Competence” in the first week of classes at school. The HBR article that this chart is taken from has an apt title – “Connect, then Lead.” The thesis is – start with warmth and prioritize demonstrating warmth over competence. High warmth and high competence inspires admiration while low warmth and high competence inspires envy and other negative emotions.

Academics have since applied this concept in various ways to apply these findings to how various cultural/demographic/occupational groups are perceived in various parts of the world. As usual, I’m going to gloss over all that and focus on the implications for you and me.

I’ve been retrospectively examining myself on how I’ve been doing on warmth vs. competence. And, I’ve found that I’ve failed a lot more than I’ve succeeded. As you’ve probably realized, the point here is not “admiration” – being warm is just the right thing to do in most cases. However, I’ve realized I fail at this simply because behaving this way isn’t just a matter of wanting to (the fakers might disagree but there’s always a fake-your-way-to solution to most problems in the short run). In the long run, I believe getting to warmth is a journey that accurately represents our progress in our journey to true self confidence.

My thesis, and I gave this away in the previous line, is that it takes true self confidence to begin with warmth. Observing myself, I see a clear trend – I become myself as time passes by in an interaction. However, in the early stages (e.g. the first 10 minutes), I subconsciously choose to lead with competence. That’s definitely because leading with competence placates my insecurities and makes me feel at easy. As momentum builds and a sense of ease builds up, I get over those insecurities and move into confidence zone. Sometimes, it only takes a minute to make this switch. Other times, it takes up to ten. But, the pattern is there to see.

The only good piece of progress I can report is that I am becoming increasingly aware of it. And, as I become aware of it, I find that it becomes easier to get to that state of ease.

Path-sharers

How many of your kindergarten classmates are currently your colleagues? What about secondary school or high school classmates?

If you are in your 30s, the chances are that the answer is 0.

We are wired to compete. Our schools exacerbate this instinct. The truth, however, is that we’ve got this completely wrong. Just because someone is on the same path as us doesn’t mean they’re heading to the same destination. And, just because someone is further along the path doesn’t mean they’re at the same point in their journey.

We’re always going to have people like us – fellow executives, fellow entrepreneurs, and so on. It is tempting to compare notes – salaries, funding rounds, education, grades, and so on. It is, however, useless.

We’re all on journeys to unknown destinations. Every once a while, we have others join us on that path for a little while. Instead of competing with them, trying to push them out of the path or looking at them with envy, what we must really do is be happy for their presence and continue working on making progress on our path. The more we focus on them, the more we detract from asking the important questions – “am I on the right path in the first place?”, “am I doing the best I can?”

There’s a secret that all incredible companies share – they don’t make decisions based on their competition. They keep doing things that build off their strengths and they always end up doing better than the rest. It is the same idea at play in our lives. We are on our own unique journey. Let’s celebrate and help the occasional “path-sharer” – they make the journey meaningful and fulfilling.

Axiata and Amazon press releases – The 200 words project

Axiata Group is one of the largest Asian telecommunication companies. Its CEO, Jamaludin Ibrahim, who has overseen a period of hyper growth, had a big challenge when he took office – to bring together all the operating companies in the group and make them work in unison.

So, he invited all his business leaders to a leadership summit in Tokyo. And, rather than concentrate on organizational issues, he asked each participant to pretend they had his job and write a fictional press release dated in the future explaining how they had accomplished the company’s growth objectives. This approach forced them to begin with the end in mind, rethink the way things were done and paved the way for cooperation among them on various fronts.

Similarly, Amazon.com requires product teams to write a press release before they begin developing a product so they visualize the end and align everyone involved to achieve it.  And, these press releases are written in “Oprah-speak” (how would you explain your product on Oprah?) rather than “geek speak.” After all, iterating on a press release is a lot quicker and less expensive than iterating on the product/problem itself.

Source and thanks to: IBM CEO study, The Everything Store by Brad Stone

Growing pains

After 5 years or so of not going 24 hours without a post, I missed one yesterday. And, that’s thanks to my blog being down for over a day. I tried to work with my hosting providers to fix it and not call a dear friend of mine who has helped solve most of my problems over the past years. I figured it is time my hosting providers earned their fees. What followed was a bad 24 hour experience during which about 40 emails were exchanged with nothing done.

It all started with a member of this community emailing with a note about some spam links he spotted on a google search. There were links that basically looked like Alearningaday.com/free-cheap-software. My hosting support recommended I removed plugins I don’t use. I did. The site went down. The prognosis was that this was my fault and that it would require them to retrieve files. The retrieval would apparently cost me $60. Since $60 is as much as it would cost for a year of hosting, I was shocked. But, I needed the job done.

24 hours later and 40 emails later, nothing was done. This experience was a perfect illustration of a couple of concepts at work –

1. I’ve been experiencing growing pains on ALearningaDay. Over the past couple of years, the blog has moved from a very very small blog to a very small blog. In the process of losing the “very,” we’ve moved to just over 250-300 regular daily unique visits, ~1000 readers on RSS and just over a 1000 email subscribers. While this is miniscule by most standards, the site became interesting enough for hackers and bots to try and redirect traffic. WordPress also has some known vulnerabilities here and I’d switched over to WordPress a year or so ago. So, after a few trysts with a persistent Russian hacker who tried redirecting all mobile traffic on Android to his/her auction site, I’ve seen an ever increasing number of spammy trackback links . And, despite a clean up by my hosting providers when this happened, it is evident that the clean up job wasn’t very thorough.

Ever since my first growing pain issues, it has become apparent to me that I need to find a hosting provider that is better equipped to deal with this. A big part of the issue is likely that my hosting provider just didn’t have the capability to handle these sorts of problems. While these are good problems to have, they are problems nevertheless. Growth comes with growing pains and this was a good reminder.

2. The second lesson here is that it is vital we keep upgrading our infrastructure. What got us here won’t get us there. I started with my current hosting provider 8 years ago and had a decent experience. However, they got expensive over time, got bought over by another company and changed policies left, right and center. A change has felt overdue. However, being human, I’ve been resisting that change. That’s never a good idea.

And, here’s the amazing part – I finally called my friend and asked for help. He solved the problem in 5 minutes. He explained that he faced the same issue a couple of times on another website and had his web hosts solve it.

I’m a big believer in focusing energy on customers that matter. It is very likely that, post restructuring, I’ve been identified as a customer at my web host that is more trouble than value. Either way, the service experience was disappointing. And, my letting it go unsolved for a day was a statement to myself – time to take my business elsewhere and make those much needed upgrades to my infrastructure.

Here’s to making the shift and here’s to no more downtime.