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BusinessSense — Cyntax Labs

Entries Tagged 'BusinessSense' ↓

Just Do It

David Hieatt is a co-founder at Do. He just penned this masterpiece. I am so tempted to take a print out and put this on my wall. Except - I dont have a printer. And I dont have a wall.

The path of a Doer.

Set yourself a goal.

Set yourself a deadline.

Define success at the start.

Make a plan to make it happen.

Build a team to help you.

Get the team to sign up, head and heart, to the plan.

Understand there will be hurdles, barriers. Accept them. But defeat them.

Work each day toward getting things done. A little can do a lot.

Keep the end goal in your mind at all times.

Understand the importance of your energy. Your stubbornness. Your persistence.

Half way through a project is always the lowest point. You are neither at the start, nor at the end. Energy dips, morale is low. Have a day off.

The next day remind yourself why you started it in the first place.

Focus. Focus. Focus. But focus on the most important thing.

Tell the world what you are doing.

Tell the world your deadline.

Celebrate progress. Any progress.

Never give up.

Look back at how far you have traveled. It will surprise you.

It will also tell you that you are closer to your goal than ever before.

Keep going.

Then one day, after many, many days, you will complete your goal.

You got there in the end.

Your words and your deeds are one. Most people in life are just talkers. But you are a doer. Well done.

by David Hieatt

Very very pertinent. Found on Thoughtful. Please share this with more people if you believe in this.

We made a mistake

We made mistake.  Just two months in business, we made a huge blunder. We accepted a client who we shouldn’t have. Lets call them X for sake of this blogpost ;P.

X is a pain to work with.

  1. For starters, they are closed to feedback.
  2. Then what they want sucks. So much so that my team refuses to work on it. It simply does not motivate them to.
  3. Then, the client does not know what they want. Most clients don’t but these people are adamant on not letting us help them figure out what they want. We want to tell them that we should take the design thinking approach and figure out what our problem is and how to go about solving it. They do not want that.
  4. Specifications change every time we meet them. Despite documentation.
  5. Apart from these smaller issues, biggest problem is that this project eats us most of our time. So much so that we aint getting no sleep. We loosing our peace of mind. The work is leading to arguments. And the tough part is that since we have accepted them, there is no way we can say no right now. We will have to complete the project. And put in our best effort.

Why did we accept them in first place? We accepted them because they are one of the better known “brands” in the country. If Cyntax could be associated with them, we would be in reckoning for lot more business. We in fact are working for them on cost. We are not going to make a single paisa on this client. We accepted them hoping for a better future.

So here are the lessons/rules of client engagement at Cyntax from now on.

  • Never ever work for cheap. Not even at the lure/prospect of “business development”. In fact Raj always says that when he started CLA he dint want it to be just a sweat shop. He wanted CLA to be a big company that does good work and takes pride in work. I understood the words back then but dint not realize the true meaning. Now I know what he meant. Awesome advice. Thanks Raj.
  • Equals. Being a service provider, does not mean that you are pushed against a wall. Its a marriage. The client chooses you over other service providers. And you choose to work with the client. Both are equals. They pay us for work we do. We expect to be paid for what we do. And like in all relationships, there are going to be ups and downs, times where we will have to hand-hold them, times where they would have to confide in us and stand by us, times when things would look as if they are falling apart and times we enjoy each other’s company.
  • Accept work that excites us. Motivates us to put in sleepless nights (not force us to).
  • Accept work that we would be proud of. That we can show around. It might be simplest of jobs, smallest of work, most insignificant thing ever but we should be proud of it.

Glad that we realized this this soon. In an ideal world, we would want to have the luxury of dumping a client.

Image Credits: Hulk4598. Check out his/her brilliant designs on Zazzle. Would have ordered this, this, and this if I had money :)

Friends of Cyntax

So next thing on agenda, is creating something called The Friends of Cyntax. Here is the W5H …

What?

A closed forum where we bounce-off our (premature) ideas, discuss issues (and seek resolutions), flaunt our achievements (and throw parties) and share our lessons (and seek feedback) . We plan to make it as interactive as possible and may be even “coerce”" our “friends” to participate in.

Who?

A group of friends, family, adversaries, clients, leads, teachers, mentors, ex-employers, partners, prospective hires, all those interesting people we meet on networking events etc. (referred collectively as “friends” henceforth :)). Closed. By recommendation OR invitation.

Why?

Because we need a guardian angel. We need help. With our endeavors. With this large and diverse set of people, most of them mature and experienced enough to take on the world by themselves, we will feel safe. Their experience will help us avoid pitfalls and most common mistakes that businesses make. Also since many “friends” are domain experts, we will approach them for data, insights and operations.

When?

The compilation has already started. We have some seven names now. The youngest of the lot is 21. Or is he 20? And the oldest is around 50. Anyone in particular you think we should approach and beg/plead/bribe/pay to be a friend?

How? Where?

We are still debating. It could be a FB group, a mailing list, a Google/Yahoo group, a regular meeting event or a combination of any of these. Each has its merits and demerits. Someone with an idea?

Right now it is too loose a thought but it has great potential. It could become serious networking tool, a job board, a not for profit start-up in its own right and so many other things. All with the objective of helping other people start up.

And why would someone want to be a part of “friends”? Because you guys love us :D. And then some other tangibles are learning from other intelligent people like you, networking with them and may be, explore opportunities.

BTW, do YOU want in?

Image Credits: popartdks@Flickr.

Tools of the Trade

Warning. Verbose post ahead.

We started small. We will be big. Hopefully sooner than later. And while we are growing up, we need to be stingy with our resources. Here are few things that we did, once we decided that we are going to start. Each tip (if you may), is accompanied by an example from Cyntax.

  1. Work out of Home vs Work out of Office. This was probably the most important call that we had to take. Both of us stay close by (another reason I moved to Delhi - to be as close to Kunal as possible) and know each other’s families well enough to work out of either one’s home. We had to decide on the trade-off between dedicated office space and home. Office space would give us flexibility, freedom and a place to get away from all the comfort (and madness) of home. And for these conveniences, we would have to pay rent, maintenance etc. Home, on the other hand, would be comfortable, intrusive and interfering with personal lives. We would have saved cash if we worked out of home, but we would have remained small (no odd hours, no client meetings, no dedicated space for thinking, talking, arguing etc etc). Weighing pros and cons, we decided to rent a place. We were lucky enough to find space close to our homes for cheap. And we moved into our first office about a week back. And trust me, things couldn’t have gotten better. We work, play (Q3A), read, brainstorm, abuse, sleep, dream, tweet and there is no one to bother us. Or tell us to stop.
  2. Divide and Rule. If you have more than one founders, divide work. Make each founder responsible for a particular task. Designate him the CEO for that task. Everyone in the team contributes towards it and reports into that person. He says, do it, you do it. He says, don’t, you don’t. Helps with accountability, deadlines, planning and team building. Here at Cyntax, we are two of us (and looking for expansion already) and both of are responsible for certain things and we make sure that the “owner” pushes the other for “his” task.
  3. Make some cash. Fast. Cash flow is very important. At times, people argue that they want to focus on their product/service and will invest their savings in building it. And that they are not looking at “making” money right now and once they reach a critical mass, they will make money. Business wisdom. Sounds nice. But in the process they run the risk of running out of cash. Agreed that your product is miles away from monetization, look at other avenues of generating cash. Munger once said, a bird in hand is worth two in the bush. Teach at MBA institutes, make websites (and compete with us ;)), freelance, work with a BPO, click photographs, do something and earn enough to pay your bills.
  4. Don’t overdo Rule No. 3. And then, don’t overdo things. Don’t “waste” a lot of time in making this petty cash. Listen to Pareto. Cash generating activity should take just 20% of your time. Rest of the time need to go towards your core business idea. This is where we made a mistake. We put in a lot of time on money making schemes and dint focus on other ideas in the first month. From September on, this would change.
  5. Cash IS the king. This has been said ever since people started building businesses. Cash is king. Having the luxury of cash is nice but avoid over-saving it. You need to invest. At the right place. At the right time. There is no magic formula to know what the right time for a person/business is, but you NEED to invest at the right time. For us, investing in the office space seemed like a good idea when we were beginning, we did it. For some, it could be investing into people. For some it could be investing into server space. For some, it is investing in business development. If you have cash, DO use it. Do invest. Do make it work for you. Dont hoard it.
  6. Processes. Put processes in place. Very very important. Probably more important than cash management. We have an option of taking up every job that comes our way and getting it done. But we don’t. We ask every new client to fill in some 25 questions for us. So that we understand their business better. We know what exactly are they looking at. Setup up processes for handling clients, taking requests, meetings etc. We are right now investing time to work on a contact management system. Its a simple shared spreadsheet on Google Docs but it gets work done. We are debating what fields to keep and what to ignore. We will refine it. But we are making sure that it is in place. If you need help, ask us. We will gladly share our templates. May be someone can point at mistakes in there.
  7. Free. Our email (google), calendar (google), ideas wiki (pbworks), documents (google), blog server (wordpress), mind mapping software (xmind.net), mock-up software (balsamiq) etc. are all free services/tools. Even hosting was donated by Akshay Surve (of SocialSync.org fame). Use free software liberally. There are million of options available. Choose one that you are comfortable with (we chose Google over Zoho because we were more conformable with Google). We dint want to invest money on things that are non-core or are “support”. Once we are big, we will invest money in either buying upgrades or we will build the tools. But right now, these suffice.
  8. Fast and Nimble. Do things fast. We had an option of designing a real cool website. We would have invested precious time and effort into it. Some day, we will have to. However, we chose to pick a template and mod it to suit our requirements. And put it out. In one hour. For the time being, it was important to have the website up and running and we did it.
  9. People. Last, but not the least. People. Very very important. Since we are small, we work with a lot of freelancers. Designers, coders and writers. These freelancers are very talented and are looking for some extra money in spare time. In my experience, most businesses that work with freelancers, dismiss them as just a resource. At Cyntax, they are a part of us. The inner circle. We make sure that they are compensated adequately. AND we try and contribute to their learning. We share best practices, links, resources, lessons, mistakes, everything with them and enrich the way they work. Simple. Spread happiness and it will come back to you. And if they are happy, they come back to work for you, give priority to your work and you are rewarded with quality and satisfaction.
  10. And, have fun. If you aren’t having fun, you need to rethink. Apart from work (whatever we do), we make sure we have enough fun. I am trying to learn a guitar. Kunal tolerates it. Kunal plans to get a doggy to office. I don’t know if I can live with it. Both of us want to learn poker. WE play Q3, Pocket Tanks, talk about life, politics, world and pesky neighbors. We crack jokes, invite friends over to office. Stare at the moon and stars. Its a good life. So far :)

And that’s about it right now. May be you have an opinion on our approach? And yes, though we are a startup, we do work with other businesses, share what we know and learn what they know. Please write in and lets talk :)

Value Add - Price Premium

While creating a philosophy for Cyntax, I have been thinking what kind of businesses can command a price premium. I think the businesses in the value chain that add “unique” value to the end product are the ones where you can ask for money. This is probably as old and as commonsensical as Michael Porter’s work on value chains, but realizing it myself, was an achievement.

Let me take an example. The tee shirts business. Three most important components are the supplier, the designer and the retailer. The supplier can not ask for a premium. Simply because he is manufacturing a commodity. There are bound to be many suppliers with similar or near similar offerings and only thing that all suppliers can compete on is the price. A retailer, might command premium if he is a large player and has a ready set of customers. Someone like, say Big Bazaar. But over a period of time, with Internet eliminating all kinds of middle men, a marketer would no longer need a retailer to sell his products. Cases in point being zappos (ok, zappos is a retailer), threadless and cafepress.
On the other hand, if you are someone like Tantra or People Tree or Play Clan, you add value to a basic white tee shirt. You add a unique design and print that design. You dont sell just a tee shirt. You sell this design that no one else can do. And you thus ask for a premium. To compete with a Tantra, I wont need the supplier, I wont need the retailer but I would need a designer. Obviously I am assuming that I would be able to squeeze the suppliers and command terms to the retailers and create a fantastic online community (and a shop).
Tee shirt business is ok. What about travel business? Who will command a premium?

Travel chain has two components - service providers (airlines, railways) and agents (Traditional, OTA). Off the two, agents can only sell the inventory that service providers make available. And its a simple business where you add zilch value (online agents add value in the sense that they make available the inventory real time) and hence they cant command a premium. Moment an agent asks for a premium, the user would move on to the next agent. You compete on mindshare and again, cost!

What about HR consultancies? Petrol pumps? FMCG companies? Who do you think commands a premium? What to you guys think?

[update: 21 May 2009] Today in my reading list I saw two posts, from two very different people, talking about roughly the same idea. I reposted this on Saurabh Garg blog.

  • One is from Scott Goodson, StrawberryFrog. The post is here. He says “In the future, suppliers will be valued less and less and squeezed more and more. It is idea generators who will be most valued – because “ideaspeople” create the greatest value, across every industry sector, not just our own.
  • Other is from KK, editor at Dare. The post is here. BTW his blog needs to be made more readable. Bad formatting et al.

Both these posts bring me back to that philosophical discussion on value add and price premium a business can command. Will update this as and when I can think of more.

Pricing and Demand

Lets say I am selling shoes. These shoes are not meant for the entire world, but for a select few. Lets say shoes for computer gamers. Something that all gamers would want for sure.

Once I have a product to sell, I have a few options of creating a pseudo demand (and inflate prices). Let me call them models.

Model 1
I create 500 pairs and sell each at say Rs. 100. Like a typical sales process happen.

Model 2
I create 500 pairs. Sell them in lots of 50 at Rs. 50 each. Once each lot gets over, I jack up the price by Rs. 25. I create that “rush” where everyone would want to buy the shoe when its still 50. If lot 1, gets over, everyone knows that if they dint buy it for 75 (and miss this lot), the price would go up at 100. So on and so forth. Also, since these shoes are limited in number, by raising the “price”, I raise the “value” of the shoes that have been earlier purchased. I theoretically sell faster and make more money.

Model 3
Reverse of Model 2. Lets say I want at least Rs. 100 per pair. I create lots. I sell the first lot for Rs. 200. Every incremental lot, I reduce the price. I think this is the worst of all. This is infact the winners curse. The price for other users falls as a result of actions of the winners. But there is something interesting. Moment I slash the prices from Rs. 200 to Rs. 100, I think a lot of people would compare the two prices and use models like contrast and grounding to buy in herds.

Is there a merit in thinking about pricing and economics before you create a business? Which of the three is advisable in the long run if your product is not a commodity? Is there a fourth, fifth, sixth .. way to think about pricing and generate demand.

Thoughts?