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A Couple of Rules for Startups

Original Article by Mark Cuban Blogger @ CNET.Com

Here “My” and/or “IRefers to Author Mark Cuban.

My buddy Jason had a GREAT post about rules for startups. Read it, love it learn it.

Of course, anyone who has started a company has their own rules and guidelines, so I thought i would add to the meme with my own. My “rules” below aren’t just for those founding the companies, but for those who are considering going to work for them as well.

1. Don’t start a company unless its an obsession and something you love.

2. If you have an exit strategy, its not an obsession.

3. Hire people who you think will love working there.

4. Sales Cures All. Know how your company will make money and how you will actually make sales.

5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but are cheap

6. An expresso machine ? Are you kidding me ? Shoot yourself before you spend money on an expresso machine. Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.

7. No offices. Open offices keeps everyone in tune with what is going on and keeps the energy up. If an employee is about privacy, show them how to use the lock on the john. There is nothing private in a start up. This is also a good way to keep from hiring execs who can not operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over their secretary, run away. If an exec wont go on salescalls, run away. They are empire builders and will pollute your company.

8. As far as technology, go with what you know. That is always the cheapest way. If you know Apple, use it. If you know Vista… ask yourself why, then use it. Its a startup, there are just a few employees. Let people use what they know.

9. Keep the organization flat. If you have managers reporting to managers in a startup, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.

10. NEVER EVER EVER buy swag. A sure sign of failure for a startup is when someone sends me logo polo shirts. If your people are at shows and in public, its ok to buy for your own folks, but if you really think someone is going to wear your Yobaby.com polo you sent them in public, you are mistaken and have no idea how to spend your money

11. NEVER EVER EVER hire a PR firm. A PR firm will call or email people in the publications, shows and websites you already watch, listen to and read. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them an email introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communications with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.

12. Make the job fun for employees. Keep a pulse on the stress levels and accomplishments of your people and reward them. My first company, MicroSolutions, when we had a record sales month, or someone did something special, I would walk around handing out 100 dollar bills to salespeople. At Broadcast.com and MicroSolutions, we had a company shot. Kamikaze. We would take people to a bar every now and then and buy one or 10 for everyone. At MicroSolutions, more often than not we had vendors cover the tab. Vendors always love a good party :0

These are all off the top of my head. But they have worked for me so far. Source

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How a New CEO Re-energized Intuit

11/10/2003
Steve Bennett took over Intuit in 2000, quickly diagnosing an underperforming company. This excerpt from the new book Inside Intuit shows how the GE veteran took command.

After the analyst meeting, Bennett reflected, “When I came in and said the company was underperforming, employees thought I was on drugs, everybody in that room—you could tell from the faces. But I knew people could perform. After that, we set very aggressive goals.” His listening period over, Bennett moved to combine the best of what he had learned at GE with the values that defined Intuit.

During Bennett’s twenty-three years at GE, he had embraced many of Jack Welch’s imperatives. Those that he had internalized included set a tone (leader’s personal intensity determines organization’s intensity), maximize an organization’s intellect (take everyone’s best ideas and transfer them to others), put people first and strategy second (getting the right people in the right jobs is crucial to the success of any strategy), foster passion (all winners share this characteristic; they care more than anyone else. No detail is too small to sweat or too large to dream), and reach for more than what seems possible (when the leader stretches, the whole organization does). Over the next months, Bennett exemplified these values to Intuit.

The continued presence and support of Scott Cook and Bill Campbell made Bennett’s job easier. Together, Cook, Campbell, and Bennett fell into a complementary work style that enabled each man to contribute his best to Intuit. Meeting, at a minimum, every two weeks in the hours before Bennett’s Monday morning staff meeting, Cook, Campbell, and Bennett worked together to ensure Intuit’s best direction. Both Cook and Campbell kept onsite offices at Intuit. Cook contributed vision, and worked with specific product groups on product innovation and strategy, while Campbell added operational experience, exceptional people skills, and his broad perspectives to the company’s function. As CEO, Bennett led, but all three worked together to help facilitate change.

Leaders are paid to make decisions. Everybody gets a voice, but leaders make the decisions.
— Steve Bennett

Bennett had reviewed the company’s Operating Values. After pondering each value’s relevance, he suggested only one change: Instead of “Think fast, move fast,” Bennett preferred “Think smart, move fast.” Cook and Campbell agreed to the change, and announced it to employees. Thereafter, Bennett embraced Intuit’s values and worked to ensure the company walked its talk.

Bennett met with Intuit customers and the company’s front-line customer representatives as well as with his sixteen direct reports and other senior managers. He took the company’s temperature while communicating his increased performance expectations. “I learned from Jack [Welch] to manage top-down and go to the customer at the same time. He’d drive top-down via expectations, process, and strategy and he’d also find out what customers want.” His method allowed him to avoid the woolliness that can pervade a large organization. “The layers in an organization are like sweaters,” he explained. “If you have seven sweaters on you don’t know the real temperature.”

Believing the company lacked functional depth, Bennett also worked with Cook and Campbell to recruit senior executives to Intuit. Bennett hired Denms Adsit, a process excellence expert, from Rath & Strong Management Consultants in Boston to instill operational rigor, and he added Sherry Whiteley from Silicon Graphics in Mountain View to improve the company’s human resources. He hired Bill Ihrie as chief technical officer from ADP of Roseland, New Jersey, and Tom Allanson from GE as VP of tax strategy. Bennett also added Dan Manack, who ran the professional accountants group. Later, in 2001, he recruited Lorrie Norrington from GE as senior VP of small business. These new recruits delighted Cook, who had wanted to improve Intuit’s senior-level staffing.

Bennett also created a plan to develop and train Intuit’s management staff. He authored a course on leadership that outlined the expectations of leaders at Intuit. “Leaders are paid to make decisions. Everybody gets a voice, but leaders make the decisions. That’s what they’re evaluated on.” Bennett trained senior managers to deliver the class to employees in their groups, instilling a greater sense of responsibility in the company’s managers. The training swept away the slow collaborative decision-making process that had both characterized and paralyzed Intuit. Developing new and stronger leaders across the company also enabled Intuit to tackle and achieve more of its initiatives.

Next Bennett began to reapply rigor to processes and innovation at Intuit. He told employees, “At Intuit we need to put process and culture together to deliver results. As you get bigger and more complex, process and scalability become more important. Bringing some of the big company process to small company customer innovation is our biggest challenge. Innovation isn’t just ideas, because ideas without operational rigor just fall apart .” This language delighted Cook. He knew that deep, one-on-one listening drove insight into customers’ needs. This insight, coupled with consistent business rigor—data-driven decision making, appropriate metrics, and process improvement—had laid the foundation for the company.

Following this rhetoric, Bennett began applying rigor throughout the budgeting and performance evaluation process. In April 2000, as he met with every functional leader in the company to hear their budget projections, he made his increased expectations known by asking carefully targeted questions. “Asking good questions is a part of strategic rigor,” he said. “One of the most powerful tools leaders have is the questions they ask.”

As functional leaders presented their budgets to him, some managers were not able to answer these queries, including questions about exactly what they had spent money on the previous year. So Bennett made everyone restart the budgeting process from an initial budget of zero. “You can’t,” he told them, “increment off bad foundations.” He knew the managers could not improve performance without a fundamental understanding of how they had previously fared—and why.

One of those who faced Bennett’s grilling was Steve Grey, general manager for online services. Grey recalled:

When Steve [Bennett] came he started an annual fiscal year planning process with three year planning and financials. At one meeting, some managers presented a forecast for increasing page views. He said, “Let me understand something: If you get more page views do you get more revenues?” Not exactly. “So what drives revenues?” Page views times advertising cost per thousand views times pages sold. “So if page views go down you can still get more revenues.” Yes. “So, what are the key drivers? What are the things that will make you better or worse, the few things that make the most difference?”

Steve taught us you can have hundreds of measures but if you’re not measuring the right things or if they’re too hard to measure you can really mess up. His approach is methodical, straightforward—but revolutionary.

Coupled with this new accountability in budgeting, Bennett worked to overhaul Intuit’s performance evaluation system. Instead of a fairly egalitarian rating system, where most people received the same rating and similar salary increases, Bennett asked managers to create clear and measurable objectives with their direct reports and then evaluate systematically against these measurements. More employees began to receive lesser ratings, and salary adjustments for the highest-rated employees far outstripped those for average performers. This more critical evaluation system shocked Intuit’s camaraderie-driven groups but rewarded the measurable achievements Bennett thought critical. Employee surveys later revealed that the camaraderie had masked hunger for individual recognition.

Bennett made everyone restart the budgeting process from an initial budget of zero.

By now, employees could identify a key element of Bennett’s managerial approach: focusing on the critical few. Throughout Intuit, Bennett exhorted managers to ruthlessly prioritize their time and attention around the critical few issues that most affected their areas of responsibility. Bennett strongly encouraged the Intuit leaders to identify their critical few drivers and set up consistent, accurate measurements to track them. This relentless narrowing in on those business levers that could most shape success for each manager helped to eliminate the “management by committee” approach that had dogged Intuit decision making.

Focusing on the key drivers, measuring the critical few, asking the right questions, and rewarding top performers were some of the new mantras that Bennett brought to Intuit. New senior VP Dennis Adsit recalled: “Steve brought a new focus to Intuit on accountability of performance. We’ve seen a big change in the managers. Some didn’t like the focus—it was too intense and they couldn’t answer the questions. On the other hand, some said, `Oh my God, I’m finally getting a chance to answer these questions with upper management in the room!’ The real leaders are stepping up, getting a chance to show us how good they are. When we create this kind of forum for talking about results and improvements, things get better.”

Source Harvard Business School Press

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BANGALORE, India (AFP) — An Indian rocket launched a record 10 satellites into orbit in a single mission Monday, underlining the nation’s emergence as a major competitor in the multi-billion-dollar space market.

Cartosat-2A, the main satellite launched Monday to an altitude of 630 kilometres (391 miles) above earth, also has a domestic economic dimension and can be used for intelligence gathering as well, officials say.

After a gap of 100 seconds, all the babies on board were sequentially dropped off one by one, with a gap of 20 seconds each with the mission ending almost 20 minutes after lift-off.

The launch vehicle took off from Sriharikota in Andhra Pradesh and has launched 10 satellites – a feat which has created a world record.

The high-resolution mapping satellite CARTOSAT 2-A, which, while placed at a height of over 600 kilometres, can identify objects as small as a car.

Source: NDTV, AFP

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Shai Agassi [above pic]

What can be made free? A better question is what can’t be? My friend Shai Agassi, who until recently ran technology at SAP, got a load of press this week about his new venture, which aims to create the largest electric car company in the world. Details won’t be announced until December, but the basic concept is that you’ll pay for the electricity, not the car. Think razors and blades, or companies giving away free cellphones to lock you into a monthly contract of minutes.

He’s got a blog, cheekily called The Long Tailpipe, and here’s one mind-blowing fact from his most recent post on the effect of current oil prices:

The cost of the average used car in Europe is now cheaper than the cost of gasoline to drive it for a year.

That’s why “free” cars make sense: because the purchase price is now a small fraction of their lifetime costs. Shai’s company is taking a bigger view of the business they’re in–rather than selling cars, they’re selling personal transportation, and charging a rate proportional to use. When fuel seemed nearly free compared to price of the car, companies sold cars. Now cars seem nearly free compared to the cost of the fuel. Thus an opportunity for a car company that thinks different.

(Picture taken by me on a tour Shai and I [Chris Anderson] took earlier this year of the Sacramento Municipal Utility District electricity control center, part of our ongoing effort to understand the economics of electricity better.)

Above Article is from the author, Chris Anderson, of famous Book The Long Tail.

Why Electric?. The following pic will depict better.

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[Click on the image for better view]

Source

Three Deutsche Bank analysts took a hard look at Project Better Place’s business plan for an electric-car recharging grid in Israel and Denmark, and they drew this unexpected conclusion:

The electric car scheme is viable in America, too. The assumption that it would make a cost-effective investment only in tiny nations with sky-high taxes and outrageous prices at the pump is dead wrong. Continue [Source]

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In the last 2.5 years, Google has conducted the largest corporate experiment with prediction markets we are aware of. Here, we illustrate how markets can be used to study how an organization processes information. We document a number of biases in Google’s markets, most notably an optimistic bias.

Newly hired employees are on the optimistic side of these markets, and optimistic biases are significantly more pronounced on days when Google stock is appreciating. We find strong correlations in trading for those who sit within a few feet of one another; social networks and work relationships also play a secondary explanatory role. The results are interesting in light of recent research on the role of optimism in entrepreneurial firms, as well as recent work on the importance of geographical and social proximity in explaining information flows in firms and markets.

Download the PDF.

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In a market where life has revolved around deep rooted community values, joint families, and social customs and taboos (women, for example, are not allowed to wear trousers), marketers realize that the traditional routes of market entry and brand building employed in urban India are often not feasible. As Adi Godrej, Chairman of the Godrej Group, says, “The challenge [for brands] is to understand the [psyche] of the rural consumer, create better distribution, and [appreciate] the heterogeneity.”In recent times, rural India has witnessed a wave of change. Dinesh Malhotra, general manager of Linterland (rural arm of Lintas), points out, “With media exposure and increasing literacy levels, people in rural India are now demanding a better lifestyle.” The educated “rural yuppie” (males in the 15-34 age group) is moving out to work in nearby towns and cities, and sending money home to his family. This has created an indirect increase in disposable incomes and a surge in demand for consumer goods. The rural youth are slowly evolving as “opinion leaders” in influencing brand and product decisions in a market that was swayed by village elders for centuries.When building a brand in rural India, word-of-mouth is a huge motivator. Focused brand-building initiatives—like participation at community events such as “melas” (village fairs), “haats” (markets), street theater, van campaigns, and puppet shows—generate positive word-of-mouth and influence buying decisions.Cholayil Ltd., a purveyor of the herbal soap “Medimix,” campaigned in mobile vans to promote its brand. “We run a van campaign which visits the interior villages where there are no distributors. We halt the van at specific points [where village folks congregate and watch videos shown on these vans] and give out product samples.” However, contrary to claims of Medimix’s success, Malhotra believes that “van campaigns can be very expensive. [Alternatively, promoting one’s brand] in large congregation points like village markets and fairs has a far wider reach, and is more cost effective.”

Direct media promotions have helped build knowledge of product categories and change long-entrenched living habits. Colgate-Palmolive, a leading oral hygiene product manufacturer, entered the rural market at a time when “Neem” twigs (the Neem tree has herbal properties) and non-dentifrice products like ash, charcoal, or salt were the norm for brushing teeth (in fact in some rural pockets, this tradition still continues). In 2001, Colgate-Palmolive launched “Operation Jagruti” to educate villagers about oral hygiene and its benefits vis-à-vis traditional products like “Neem.” Through product trials and free samples, the company was able to generate awareness in this new market. On a similar note, CK Ranganathan, managing director of Cavin Kare, notes, “When we entered the rural areas in South India, people used to wash their hair with soap. When we launched the ‘Chik’ brand of shampoo we educated the people on how to use it through live ‘touch and feel’ demonstrations and also distributed free sachets at fairs. This strategy worked wonders in the rural areas of Tamil Nadu and Andhra Pradesh—two important states in India.”

Colgate and Cavin Kare have shown that communication is key when it comes to building brands in rural markets. As R. V. Rajan, managing director of the Anugrah Advertising Agency, adds, “To communicate effectively, it is important to understand the fears, aspirations, and hopes of the rural consumer.” Not to mention the traditions and stereotypes that have governed their lives for centuries.

   
 
While communicating the brand message, marketers must realize that language plays a prime role. Though a large part of urban India is well versed in English (thanks to the British and modern television), in rural India, heritage plays a powerful role and regional languages are predominant. There are 15 regional languages, and 1600 dialects in India, and as one moves into the countryside, English is replaced with regional tongues. V. S. Sitaram, Dabur India executive director, explains, “Often people treat India as one big market, but the reality is that India is more like the European Union—a mix of different cultures, habits and languages.” Dabur is also considering the use of South Indian celebrities to propagate the brand message in South India. Marketing companies not only need to customize their communication, but in some cases they must also change their product names to match regional differences. Take toothpaste, for example: “Dabur’s Lal Dant Manjan” (red toothpowder in Hindi) was rechristened as “Dabur Sivappu Pal Podi” (red toothpowder in Tamil, the local language) for the South Indian market.

You can read some interesting insights here.

Article Credit: Preeti Khicha: currently lives in Chicago. She graduated from the University of Bath, UK, with a Master’s in Management, specializing in Marketing. She holds an undergraduate degree in Economics and Psychology from University of Virginia, USA.

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