>Startup to Massive Companies

>I ran across this interesting blog post by Reid Hoffman, (Linkedin co-founder) that talks about how to take your startup big.

http://greylockvc.com/2011/03/22/ten-entrepreneurship-rules-for-building-massive-companies/

Keeping a startup as startup for more than five years can be a drag. In worst case scenario, your competitors will catch up and grow beyond you. Or someone with deeper pockets might under cut you. Hence, taking it to the next level, and making it big is the key. So plan ahead and plan well.

>The Art of Managing

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As an technology entrepreneur, you will need to manage a lot of things. This will include, not only the technology (programming and software development), but also administration, management of team, Human resource, sales and even writing business plans/marketing plans and what not. Yes, not only this but a lot more.
This will not be easy and who said entrepreneurship is easy. It will test your endurance and will push you to your physical limits. But in the end, you are responsible for everything.
So here is my guide of what one needs to do to manage his/her time while launching their enterprise.
  • Short Meetings
    • Schedule project meeting with staff. It should not last more than 10 minutes and at max 20 minutes. Discuss what needs to be done. Make quick minutes. Schedule and set deadline to the team. Use a collaborative project management tool and assign them to the team. 
    • Keep these meetings short and regular. Even meeting daily will be great.
  • Use Technology
    • Information Technology is not there to build solutions for your clients, it is there as the best tool for you to make yourself and team more productive. Use technology to the maximum. Here are a few recommendations
      • Redmine for Collaborative Project Management
      • Google Apps:  for email, document sharing and intranet based services
      • GoogleTalk Chat: Collaborate more online. You can ask a lot of questions through google chat than in person. Do it regularly and Google will even keep track of your chat in your email account.
      • WordPress: For a quick way to make and manage your company website. And do not forget to use its plug-ins. You will be surprised by the power it offers.
      • GNUCash: For maintaining your financial accounting. Its a great alternative to paid accounting packages.

  • Hiring
    • Do not hire too many folks. Hire only the essential. That will keep your enterprise cash flow positive. And if someone is badly needed, see if you can do with a part time individual rather than a full time resource.

  • Seek a Mentor
    • As an entrepreneur, you WILL make mistakes. No doubt about it. So get yourself a senior and experienced person to assist you. Ask him a lot of questions and take his advice. I am sure you will grow much faster than without him/her.

  • Office Space
    • Scott McNealy (former Sun Microsystems CEO) once commented after the 1990s bubble burst that they acquired too much retail office space in too short a time. It’s always good to show off a big office and a big team. But can you really afford them? So start off by sharing office space. Find other small enterprises and see if they can give you office space. Do not spend your precious little money on renting/leasing/buying big offices in anticipation of new hirees.

  • Work Hard/Play Hard
    • You will be expected to work 70 hours a week or more. You will also be expected to lead by example. You will be needing to be there for everything. But dont take work to your head. Go and have some fun as well. Take up some physical activity. Like hiking, playing cricket, racquet ball/squash, jogging. Anything. It is the secret for a healthy lifestyle. Without it, you will inevitably run into many health problems as you advance in life. So avoid the obvious health hazards and do the right thing. Get yourself in physical health.
So if you can do the above, you have a better chance to succeed.

>Impediments to Development of Entrepreneurship in Developing Economies

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Countries that have overcome some basic barriers to growth have succeeded dramatically on the world scene. Growth in economies is always directly proportional to the startups and entrepreneurs who make it big. The entrepreneurs, by definition, revitalize an economy. They are at the forefront in jobs creation, intellectual property ownership, industrial output and overall productivity gains for the country. They pay taxes and usually bring in lots of foreign direct investment as well.

In the past 50 years, countries like India, China, South Korea and Malaysia have leap frogged ahead of the fledging and often unstable neighbors to become one of the economic giants. Each one of these countries have many self made billionaires, who many decades ago were struggling entrepreneurs with big dreams. But what made them succeed while equally good entrepreneurs from other countries are still struggling to make their ends meet? Surely, these and other countries still have unemployment, very large rural population, rampant corruption and very high cost of doing business. But what is it that has made them break out of the pack and get ahead.

Here we list some major impediments to entrepreneurship development.

Lack of access to Finance:   
Without money and investment at critical times, any startup will fail. Entrepreneurs need money to grow just like any major enterprise in the world needs money to grow. Usually developing economies have very poor and archaic financial systems that do not work in favor of startups. And banks, they charge interest rate of almost 20% and above which to a startup is impossible to pay off. Thus they never succeed.

Human Capital:  
Having trained man power and a large knowledge workforce is essential for growth for any economy. Usually, developing economies have a very small and poor quality workforce. The education system, particularly, the higher education system is weak and produces very few high quality engineers, doctors and many other professionals. Hence, the startups that they work in never go beyond a startup as they are unable to expand beyond a certain size and complexity.
 
Access to Information and Markets: 
Many startups still lack access to markets to sell their goods and technical information to keep abreast with latest developments around the world. Usually, these fledging economies are closed to the outside world and with little direct access to buyers of their products not only locally but internationally. Therefore, living in isolation, they never really work to their full potential.
 
Political Instability: 
Malaysia, China, India never seem to have any political upheavels. They never seem to go to war with anyone either. Yes, there are border tensions, but nothing that would destabilize their country. On the other hand, many Latin American, African and Asian nations still have military coups, unstable political democratic structures and corrupt and inept leaders. Together, this is a recipe for disaster. These political think tanks with highly polarized and biased military junta are more concerned to make money for themselves than build a better nation. Hence, their policies are usually not beneficial towards fledging entrepreneurs.
 
Short Term Thinking over Long Term Objectives: 
Political instability causes many entrepreneurs to think short term and rarely do they make long term plans. They theory goes, that the country would be turned upside down within the next 5 years, so why make plans beyond two years? Hence, if you dont think long term, you cannot grow. And if you cannot grow, you cannot succeed. And so the startups never get out of this vicious circle and die out.
 
Unstable Currency and High Inflation: Most of these countries have currencies that depreciate in value in double digits annually. The inflation is above 20% annually. So unless the startup is growing faster than the rate of inflation, it will actually be a loss making enterprise. Since, these economies never stabilize, hence, the entrepreneurs are swept away during any major upheaval.

>Ignore the Nay Sayers

>If someone calls your idea “crazy” then you are onto something. If they declare you “insane” then you are moving in the right direction. And if they “write you off” then you are half way there to achieving your goals and successes.

Whether you agree or not, but history shows that almost all great men (and women) were declared “crazy”, “insane” and were “written off” while they were in the midst of their greatest adventure.

Einstein’s theory of relativity was not only controversial but was deemed “crazy” at the time of its publishing. Thomas Edison first phonograph was considered an “insane” idea. New York times wrote off Goddard, the father of rocket science, as someone who had an insane idea of going to the moon using some crazy rockets.

The list goes on and on. Steve Jobs defied the naysayers with his “insanely great” products for the past thirty years. Google was advised to let Yahoo acquire them as the search market was already saturated and their product would never take off. Ebay was considered a wacky and unprofitable idea when it was originally launched in 1995.

In my personal life, I have been advised dozens of times that my ideas are unsound and I cannot make money and am crazy to attempt them. But each time, I have ignored the naysayers and then gone ahead and done something that I always wanted. And, by Grace of God, succeeded each time.

In 2001, I was told that it was crazy to expect Pakistanis to use the internet to do recruitment and job search. But we believed that such a market not only existed but will be the only way recruitment will be done in Pakistan. We launched, BrightSpyre, Pakistan’s first online Job Search portal. Within two years, we were the first Pakistani company to be profitable from online business and were also the first to register 100,000 unique users online. Today, BrightSpyre has over half a million unique users and receives millions of job applications annually. Our model is copied and replicated by numerous copycat job sites in Pakistan and who owe their existence to BrightSpyre as we created the original market.

In 2004, when we decided to build a rural Tele-health network in Pakistan, we were told once again by all our peers and friends that it will not work and such an idea is outright crazy. Today, under UM Healthcare Trust, we run probably the only sustainable tele-health project in the country. Our services are available at near zero cost to the poor and needy in rural Mardan. Once again, we defied the odds to achieve our goals. I was also recently advised that my healthcare facility will not be successful and no one will ever use it. Today, we treat over 3,000 patients/month in rural Mardan and yes, we are probably the most successful rural clinic in the whole district of Mardan with a population exceeding 1.6 million people. Now, we are planning to take this project national and expand to other districts of the country.

In 2006, when we launched our international office in United States, we were told, no Pakistani company has ever been successful abroad without seeking investment and partners. We defied the odds and today, as a Pakistani startup we have customers in four continents with thousands of recruiters worldwide using our system to find the best talent.

All this time, I am told that there are no successful startups which do not have some source of financing. I remind them that none of my enterprises ever raised funds. We generated our revenues from our own products and services. We are profitable without the need to raise funds.

So my advice to all entrepreneurs out there. Never say Never. Do not listen to nay sayers. Believe in yourself and in your idea and just do it. The rest will be history.

What happens when Google goes bust!

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With the US economy tanking and its ill effects being felt right across the globe, many silicon valley startups and stars of today may not see the light at the end of the gloomy dark tunnel. And one of the biggest shining stars coming out of the rubble of the bubble bust has been Google. What if it tanked? Already its stock options crashed over 60% in recent days, what if it cannot see through the tough times ahead. Techcrunch, the foremost authority on the technology based enterprises, is predicting the death of web 2.0 and the related startups.
Today, we rely upon Google for almost about everything. Google Search, Youtube, Picasa Blogger, and Gmail are some common ones, but corporate world is increasingly switching to Google Apps which provides us with in integrated space for email, docs, collaborative calendar, company specific chat, collaborative wiki and even web hosting (for static sites). Ah heck, how would we feel without Google Analytics, or Adsense?

Now consider this, what if Google goes out of business and closes its doors during the current downturn. What happens to many blogs hosted on blogger (including this one) or the photos that we upload and share using picasaweb or our gmail that we use to store and send thousands of messages since whenever. What happens to search and other cool things that we take for granted from Google?

Well, maybe I am exaggerating a little by foretelling their downfall, even though Microsoft has been predicting and planning it for years. Having said that, still many startups would be shaken up by the current bust in the US economy and Wall Street excesses. No matter how great the idea, or how successful the company, many are likely to breath their last in the coming months. And hence the need for the alarm. We need to be careful of where we store our critical and personal data and use those snazzy online services. Many Software As a Service (SaaS) companies may not survive nor would web 2.0 social networking portals.

So how would we feel when the likes of Google, Facebook, Flickr, or Youtube disappear from the horizon?

>It’s the Team, Stupid!

>Great companies always have a great team behind it.

If you are starting out, make sure you form a strong and well balanced team. Choosing a room mate or a good friend is never good criteria to form a startup team. Evaluate the strengths of each before making the final decision.

Most of us out there believe that having a great product is enough and the team does not matter. It may seem like that for people starting out, but in reality, only those companies go the distance which have an exceptional team behind them. The others just simply fizzle out. Investors understand this phenomenon and therefore, make it a point to always meet up with the team and do a thorough evaluation of individuals behind the idea. They understand the power of a strong team which can even make a mediocre products become sensational.

Employees tend to look at their managers as role models. Having a weak leader would mean dissatisfied employees or even worse creating a culture of under performance. Just like investors, even customers tend to shy away from companies with weak team players. No one likes to do business with companies that may not be strong enough to work with them. Therefore, make sure you do not let the weak linger on for too long. The longer you have them in your team, the more it will hurt you.

Intel, Microsoft, Apple, Oracle, Cisco, Sun Microsystems are just some of the examples of companies with a great team starting out. The stories of their founders are told and retold all over the world, not because they were exceptional individuals, but that they worked together as a great team to deliver on ideas and innovation which were far ahead of their time. All of them had competitors starting out and companies that mimicked their design and philosophy. But decades later, they have survived as market leaders in their areas of expertise while others with mediocre teams have fizzled out.

So when starting out or hiring individuals, make sure you have the right mix of the team. That is one important decision that you will make to lengthen the time of your company. Remember, you are as strong as your weakest member.

Startup Insiders Session in PC Pindi

Yes, the 10th edition of Startup Insiders is going to be held this Saturday in Pearl Continental, Rawalpindi. It is hosted by PASHA in collaboration with BrightSpyre.

This is an ideal platform for entrepreneurs and young startups to meet and collaborate. I encourage all to come and attend this session. I will be there as well. The event will be held during the PASHA career expo at Pearl Continental, Rawalpindi on August 2, 2008.

Date & Time: August 2, 2008 (3-5pm)
Location: Pearl Continental, Rawalpindi
Theme: Transitioning from salaried life to Entrepreneurship

Please visit the event website at for more information.