Hemang Subramanian

www.hemangcs.com

Superbowl – The adman’s oscar

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It has been 2 weeks, since SuperBowl concluded. In addition to the actual game- Advertisements were the most interesting things. They were original, creative, theme based and sometimes outrageous too.. A 30 second spot on NBC, during the superbowl costed Advertisers between 3.75 m$ and 4.5 m$ according to this estimate. This is the most expensive TV spot ever..

Given the costs, sould a company advertise during Superbowl given these expenses?

This Bloomberg articlepredicts using historical information, the rise in Superbowl advertising costs and viewership. It states that for the price, the costs are in line with Prime time television.

Another article – critical of Superbowl advertising argues that firms could achieve better ROI and actual conversions through alternative means. A combination of online advertising campaigns including( i.e.youtube, banner placements and CPC keyword bids) are cited as better alternatives.The argument is that the targeting is much more precise using the digital channel and firms could predict their RoI using these targeting platforms..

My opinion on why firms would advertise during Superbowl is based on two different reasons.

I.Firstly, Superbowl is the OSCAR equivalent for the Advertisement world..

  • For the advertising industry,  the Superbowl is the most prestigious event. Firms try to create a most expensive classic advertisements for this event . These ads are then played during other prime time TV spots.
  • This is a chance for the CXO’s to get their sales act in shape, by creating their best possible Ad viewed by 100 million people. These ads have a real chance at winning Golden Lion award at Cannes (or the ADDY’s). Many Superbowl ads have won these awards in the past.
  • Superbowl is a branding launchpad for newer businesses trying to break into the big league. These businesses have a chance to create a mind-share amongst the general public about who they are. The David’s rub shoulders with the Goliaths.. For eg. the wix.com’s get a slot in the same event as that of Apple or Coke. Here’s an article discussing this.
  • Success during Superbowl is sweeter- In the biography of Steve Jobs – Walter Isaccson describes in a how the iconic 1984 ad was made and notes the personal contribution of Jobs to the creatives. This book was launched  30 years after original advertisement. The ad continued to win awards – including a notable Hall of Fame award – full 23 years after its original preview. It has an iconic following, including a wikipedia page dedicated to it..

Secondly, Superbowl has a Ripple effect, which far outlasts the 30 second ad-spot in which it appears. The Ripple effect is a term used by Maketers to indicate an effect on the brand/image of the product, which far outlasts the actual advertising event.

  • Digital vs. TV ads  – The regular digital advertisement has an effect which mostly expires the moment the ad is displayed. Very few advertisements are worth sharing. (Most video ads  on youtube are skipped after 3 sconds or go unnoticed, due to ad blocking plugins on Firefox or Chrome ).  Remember the last digital ad on google.com that you saw or shared?
  • Cross channel Social  share  – Many days after the actual ad is displayed on live TV, other video bloggers, documentaries, and commentators on radio, TV or internet spend time and effort discussing the ad. This Superbowl – a radio channel in Atlanta dedicated to sports had successive commentators  discussing the pros and cons of various ads during Superbowl  for atleast 3 days after the actual bowl.
  • Ad search complementing the TV ad-spot – Google search Trends for keywords “Mircosft Superbowl ad” shows a full 100 score on the days surrounding Superbowl, indicating  search traffic which complemented  the TV advertisement. A random search on youtube for the keyword “Superbowl 2015 ads” returns more than 0.5 M  results. The first few 1000 results are actual re-shares of the  advertisement run or video mashups of actual ads. These “re-posts” are mostly due to regular youtube users sharing the same.There are also some funny analyses created by youtube users like this one which tries to discuss the best and worst superbowl ads of 2015. The combined viewership of these ads are so much more.
  • Measurement of RoI – The Superbowl ad, given its premier standing amongst all branding events, provides a  different conversion funnel, extending well into the future. It is very difficult to compare this conversion to a typical digital advertisement where the results are almost instantaneous..

The possibility of *Failure* during Superbowl  is large.  Just as with any mega event which is associated with Prestige and with mindshare, there is an increased chance of failure….with the Superbowl. Ofcourse, only a few actors or movies really win an OSCAR. But there are many good movies.

Competition (or lack off) amongst  “open source” Mobile Platforms

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This week, Microsoft invested in a company called Cyanogen. The CEO of Cyanogen claimed in a press conference that his company’s goal was “to take Android away from Google”. Cyanogen is a new -entrant into the mobile operating system industry which is monopolized by  Google’s Android.

Last year Samsung and Intel released and launched the Tizen mobile operating system. Samsung  adopted the same onto its Galaxy Wear devices and showcased a HDTV. The sole competing point for Tizen is its claim to be a secure mobile operating system which prevents mobile malware. Similarly, Tizen claims to differentiate itself from Android in its ability to support telematics and infotainment systems manufactured by Samsung.

Open Source Platform competition (or the lack of it)

Tizen, CyanogenMod and Android are all built on top of the GNU/Linux kernel. They differ significantly in their architecture and application interface. The other mobile operating systems namely Windows Mobile, Blackberry OS, Nokia’s Symbian are proprietary.

The  Original Android source code base is on github at (https://github.com/github/android) The CyanogenMod source code base is on github at  (https://github.com/CyanogenMod). Similarly the Tizen source code base is on the tizen site (https://review.tizen.org/git/).Tizen is built on GNU/Linux  using GNU/C/C++. However the application development SDK is not Open source. The reason cited by manufactures is to prevent patent litigations in the mobile community – where firms hire trolls to sue other firms.   The figure below shows the lawsuits filed by manufacturers against each other in the mobile devices space.

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Platform Ecosystems

Each mobile operating system can be considered a platform with a multi-sided network.

Multi-sided networks

The first side of the network consists of  manufacturers who manufacture mobile devices and components.The second side of the network- app developers- consists of Application Developers who build applications for the mobile operating system. The third side of the network – core-developers- consist of specialists who develop and maintain the mobile operating system stack. These developers contribute to the development of the base operating system (mostly within  a sponsoring firm  e.g. Google for Andorid, Samsung / Intel  for Network).The fourth side of the network consists of mobile phone consumers who purchase devices and applications. (  Ofcourse, there are other sides of the network like platform evangelists, textbook writers, fan clubs, technology media, etc.).

 Platform success and network effects

For an Platform to be successful, each side of the network should consist of large number of loyal members who actively engage with each other. For example OpenhandsetAlliance.org, an alliance consists of handset manufacturers and developers who use android. Similarly http://androidforums.com/ consists of forums for supporting android development. Members of each side of the network  affect the work and revenue of  the other sides of the network. For example, Handset manufacturers can lobby with the core developers to release a version that supports these devices. In this context, Google recently released Android One to support hardware which enabled the release of sub-100$ smart phones in India.

Recently, the Android platform recorded about 1.3 million global activations per day. The graph below from an analyst here shows the growth curve of android activations and predicts the growth till August 2015. ie. about 4.0 daily million activations till August 2015.

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Such massive growth shows that all sides of the network. i.e. core-developers, manufacturers, app-developers and consumers are significantly entrenched in the eco-system. The platform eco-system now operates like a well-oiled machine giving economic benefits to all its participants. The network participants have reached a level of specialization in their behaviors with respect to the Product.   Switching becomes extremely difficult, considering both the opportunity cost (- ie. time and effort spent in adopting their behaviors to android ) and the learning cost( ie. time and effort spent on learning a brand new system).

Here’s what happens when an Android user tries to switch his phone to Apple’s Iphone. Read this user’s experience of switching over here>>. Similarly, an Android  application developer would find it very hard to rewrite his application for Apple’s iOS and maintain it for ever.

The inter-dependencies amongst various sides of Android’s platform eco-system have reached a level of maturity over the years. This level of maturity in the platform’s ecosystem benefits any newer adopter, who finds it so much more easier to adopt.  These inter-dependencies between the various *networked* sides of the platform become impossible either replace or recreate.

Unless…Google decides to deprioritize the platform – it is highly unlikely that anyone in the near future can replace Android or garner any significant market share from them. Such a fight does not even exist at an open source platform OS level

Health Apps in Wearables and the miniaturization of health data stacks

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At the recently held CES- 2015 many companies showcased their hardware based technology solutions. Amongst all different categories of hardware showcased, wearable technology probably had the most variants. Here’s one enthusiast wearing 56 different wearables.

Wearable technology, mostly in the form of watches  use either Linux, Android  or custom Real Time operating systems. They host multiple applications, many of which cater to sensor based data analytics. For example, by using accelerometers and  parameters such as height, weight and age some applications can calculate the amount of calories spent. Similarly, using other sensors these devices can in real time calculate heart rates, run distance, calories spent, Body Mass Index, etc.

Not only in the wearable technology industry but also in smart phone accessory industry there are significant applications evolving. For example, smart blood sugar monitoring accessories such as this, this and this provide increasingly smarter, miniaturized  and inexpensive results. These devices provide affordable and convenient health measurements to the masses which originally needed a visit to the hospital. Health sensors based applications use miniaturized versions of data (and analytics) stacks. tweet this

These specialized software stacks can run mathematical models on data from sensors, in real time. Often, these stacks can run accurate predictions on any physical activity. For example, imagine a wearable that can predict the additional time you need to run in order for you to meet your calorie burn target. Over a period of time, complex mathematical software which can perform statistical analysis would migrate onto chips and to the hardware layer from the current application layer . Such powerful miniaturization – driven by the market need in the health space will give rise to increasing “ machine learning”, “deep-learning” and other AI based applications which will lead to drastic improvements to the quality of life.

Theranos, a medical diagnostics company is revolutionizing medical diagnostics. They use a small  fraction of the blood needed for traditional pathological tests. They  provide about 250 tests for a fraction of the cost of regular hospital based tests. Theranos also claims increased accuracy for these tests, by providing  statistical variance of these measurements. Imagine a world where someone is able to build smart sensors which can perform multiple tests either on a mobile accessory or on a wearable and provide the end user accurate measurements. This will significantly transform the way medical diagnosis is done today, which needs a visit to the hospital or a clinic.

I forsee a bright future for medical devices  –  where Data Analytics  and Artificial Intelligence will create conditions for intelligent self-prognosis, monitoring and prediction of health conditions.

Enterprise Social Networks and “hooked”

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Last week, Facebook launched its “Facebook at Work” platform, targeting corporates. Salesforce already sells the widely popular enterprise social network called “Chatter”. Similarly, other corporates such as IBM have used SocialBlue for connecting employees within the corporation.

In today’s workplace, in almost all industrial sectors – desk jobs allow employees to connect to the internet 24X7. This trend is bound to increase over a period of time. Policies to artificially restrict internet access will not work effectively anymore, because of the ease with which people can get online using mobile devices and cheap subscription plans.

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In this recent book called Hooked – Nir Eyal – describes how social media websites engineer consumer behavior. Nir Eyal explains that social media websites alter consumer behavior sublty, and over a period of time these changes make the user “addicted”.

Users who spend a lot of time online, increase advertising dollar based revenue of these websites. Also, once people start actively using  a particular social network, it becomes increasingly difficult for them to migrate. A term “Switching cost” is used by economists describes this phenomenon.

Unless, ofcourse another social networking website manages to replicate the incumbents functionality and/or a user manages to move his entire network to the other website. This is almost impossible to achieve by a single user.

Orkut and Myspace are exceptions. Both these popular social network websites were acquired by larger companies, in whose plans they were not prioritized. Software if not maintained – dies…like any machine, and forces users/customers to move on. Tweet this

Many firms that need employees to be connected online, have realized that social networks, while being addictive can also be used productively – to increase collaboration,  communication and to develop a work culture of informality.

Enterprise social networks are the way to go in today’s connected workplace. They serve a dual purpose – help employees to satisfy their emotional needs, and, enable firms to productively engage employees.

However, a lot is yet to be understood about how internal – enterprise social networks can repurpose productive office time. Tweet: A lot is yet to be understood about how enterprise social networks can repurpose productive office time. http://ctt.ec/3y139+ A question remains – are enterprise networks another productivity killer? Only time will tell.

The problem of many Social Networks

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On the internet there are many social “media” networks where one can participate. Twitter, Facebook, LinkedIn, Tumblr, WordPress, Pinterest, Google plus, and Whatsapp are a few in which I participate. Each one  serves some particular purpose and provides a unique value proposition to me.

With Facebook, I keep in touch with my friends and family and a few professional contacts. With LinkedIn, I connect with my professional contacts. With Twitter, I keep in touch with influencers in areas such as Economics, Finance, Technology and Entrepreneurship, and , I try to build an audience for my work. On google plus, there is no particular preference. Anyone whom I choose to email using gmail, or, anyone who happens to be in my adddress book automatically connects to me on google plus. With Tumblr, I try to maintain an active blog on technology, products and entrepreneurism.

While social media participation can be a big time and productivity killer, it is also possible to use this powerful technology to promote to one’s ideas (or business). On social networks, it is possible to actively and passively solicit feedback for your work. Tweet: Some of these thoughts and ideas, which could be converted into

For example, your blog post about a book – could help someone make a purchase decision. A photo that you share on Facebook could inspire someone to visit the gymnasium. An article you write and share via tumblr, could influence others to read it.Some of these thoughts and ideas, which could be converted into “posts”,“comments” or “tweets” could help other people to make real life decisions of economic value. With whatever action you take on social media, the reach is so much more, and the impact is so much higher – given the time you spend to make the impactTweet: With whatever action you take on social media, the reach is so much more, and the impact is so much higher - given the time you spend to make the impact. http://ctt.ec/8eRdV+.

Social networks give ordinary voices the “Power”, if used properly. That is why technology is so empowering. Ofcourse, as with any *fair use* technology, there are also negatives to this, which I shall post in  a later article.

One problem I see with maintaining an active status on multiple networks, is the ability to update myself of happenings on all of these networks at once. I have to login to each one separately and use different UI flows to get to updates on my networks.

It may be time to have a service that enables a user to track one’s activity across networks, and, be able to optimally promote one’s work – virtually free of cost. No single service exists today to do this. Is it time for a “ Network of networks” which could give users seamless visibility into their networks?

Today, there are services which accomplish parts of  such a grand plan.For example IFTTT.com – an acronym for “If This Then That”  creates a mechanism for users to share their posts across networks. Another service Klout.com (which was recently acquired for 200 m$) tries to create an “Influence” score for each individual based on social media activity across networks.

I find these efforts interesting – since they are baby steps attempting to unify one’s network identity on the internet. There might be more *unifying services* that  I am unaware off too.

Industries Transform Using Technology

My Wishlist for 2015

The year 2014 has ended with  several developments in the sharing economy, sustainability  economy and the data economy. Last week I posted an article about the progress made in 2014 on all three fronts.This year will see many of these firms become publicly traded entities.

Given below is my wishlist for progress this year:

1. Applications in Deep Learning – i.e. Artifical Intelligence combined with Predictive Analytics.

a)Natural Language and Speech Processing combined with the power of big data analytics create possibilities in a many fields.

Tweet: Natural Language and Speech Processing combined with the power of big data analytics create possibilities in a many fields.

Though deep learning has been around for at least 50 years – the availability of computing power and advanced software analytic tools in today’s age has made business applications viable. Several applications of this field include autonomic computing, self healing systems, information search and retrieval, robotics, drug discovery, disease prediction and manufacturing.

b)  Machine Intelligence –  Business Intelligence could aid human intelligence by enabling real time decision making, reducing wastage and optimizing business processes. Imagine speaking into your predictive system and asking it to predict demand conditions at a particular location in the future OR  predicting molecular structure for a medicine that could help cure a particular disease. Deep learning could accelerate innovation across industries and has seen extensive development in university labs. Imagine, using 1 billion parameters on inexpensive GPU harware to create a system, created by Andrew NG’s group at Stanford or to  make robots learn and mimic human behavior based on changing environmental conditions as shown in this demo at Georgia Tech. It is time for the industry to adopt the same.

c) The full power of AI + big data analytics will be realized once the internet of things  in which devices communicate with other devices become very common. The internet of things creates large volumes of data.It is possible that such large volumes of data are stored and processed using extremely powerful computing systems in real time.

Tweet: It is possible that such large volumes of data are stored and processed using extremely powerful computing systems in real time

Such processing could lead to variety of insights, affecting all facets of human life – for example driving autonomous vehicles, remote surgical systems used in tele-medicine.

2. Human Transportation

a) Personal transportation despite the ever increasing advances in avionics, space and fuel technologies has remained two-dimensional for over a 1000 years now, except for the aeroplane. I hope that this year will mark the beginning of three dimensional personal transportation, which is technically feasible. It has to be seen whether this is economically feasible. This should significantly ease traffic woes and problems of pollution and overuse of fossil fuel.

Small  beginnings are being made in the form of the Hendo Hoverboard for short distance travel and  the aeromobil for long distance transportation.

Similarly, jetpack technology is about to get its largest push this year when Martin Jetpack goes public. Affordable Mass transportation, is potentially going to see significant prototyping in the form of high speed mass transit systems due to the efforts of Hyperloop Transportation Inc.

3. Sustainable living (and business):

  1. Zero Waste Living – Any consumerist society is waste-producing society. Harmful toxins are commonplace is such societies and chemicals in the form of preservatives, fertilizers and plastics cause much harm to the average health of the individual. Harmful industrial byproducts  are released into the natural habitat also. The true impact of some of these are not fully known or researched, but known effects include cancer and various incurable diseases. Strides are being made to consciously shift toward this form of living. The retail industry is slowly embracing this change, and hopefully over a period of time will see accelerated adoption.
  1. Social Plastic  and metal extraction-  “All the plastic that was ever created is still existing on planet earth somewhere”. Mining from waste plastic using technology has been around. However, arriving at a financial model which makes business sense  (i.e.profitability for firms engaging in it,)  has only recently started seeing traction. Organizations such as socialplastic.org and a profitable business mbapolymers.com have a headstart in this field. Below is an interview with the founders of Socialplastic.org

Similar ventures include mining precious metals from electronic waste. Last year saw the beginning of Venture Capital and private investment into these initiatives. Over a period of time sustainable businesses would make as much financial profits and value to society while making the earth a greener place to live in. I  am hopeful that sustainable use of plastics is here to stay.

  1. Smart Cities and Green Homes – These concepts would get more attention this year, due to the onset of the energy revolution. Many individual houses are slowly becoming energy surplus homes which means these houses would generate more energy than they consume. A good example is GE’s ecoImagination home. Several established industry vendors including Schneider Electric, IBM, Accenture, GE  are creating technologies supporting such projects on the city scale – making cities more liveable and self contained.

Overall, I am hopeful that this year  will see many  more industries transform using technology. This is what makes sustainable living interesting.

Technology enabled transformations in 2014

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We’re ending 2014 on a very positive note. Many industries have been affected by disruptive technology. Societies, Markets and Individuals are seeing this impact of disruption in a variety of ways. A few highlights of these important changes that interested me in the past year are described below. I will be post a follow up post in the first week of 2015, with my wish list of major trans-formative changes that I would love to see this new year.

  1. The “Sharing” economy:  While this economy is still in its infancy, several established industries in transportation services, financial services and travel services are already feeling the impact. Brand new markets are being created. Uber, Lyft, Hailo, Airbnb, HomeJoy, Indiegogo, Kickstarter, etc. have seen much traction this year. F!function(d,s,id)%7Bvar%20js,fjs=d.getElementsByTagName(s)%5B0%5D,p=/%5Ehttp:/.test(d.location)?’http’:’https’;if(!d.getElementById(id))%7Bjs=d.createElement(s);js.id=id;js.src=p+’://platform.twitter.com/widgets.js’;fjs.parentNode.insertBefore(js,fjs);%7D%7D(document,%20’script’,%20’twitter-wjs’);” title=”tweet this” target=”_blank”>irms in the sharing economy have effectively used information technology innovations in the form of mobile apps and web services as a means to convert economic surplus into tangible economic value.
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  2. The “Sustainable” economy:
    Natural resources such as sunlight, wind and tidal waves are becoming economically viable sources of energy. For example, Germany generates  more than 3/4th of  its energy from the Sun today. Very innovative business models such as the ones pioneered by SolarCity and SunRun makes installation of solar panels affordable. Smart grids  which make dynamic switching between generation sources, power distribution and power consumption more efficient have seen traction this year.The transition to green transportation gathered more steam this year and was led by Tesla Motors’ Model S. Every major car manufacturer – the likes of  BMW, Toyota, Honda, GM, Ford OR Mahindra has released least one mass market all-electric car this year.
  3. The “Data” economy:
    Accessible high power computing, storage and processing power has made data aided decision making possible at low costs. Because of this affordability, small and medium businesses face fewer entry barriers as far as their data operations are concerned. Such technology enables powerful commoditized data analytic toolsets to assist human intelligence in making important business decisions. 2014 was the year when many firms such as Jive, Hortonworks, Cloudera raised money from markets and private entities. Job titles such as “data scientists”, “data analysts” and “Business Analysts” became common place. Competition among Google, Amazon, Microsoft and the likes of Rackspace, Cloudera in the infrastructure and analytics spaces has seen prices drop significantly.!function(d,s,id)%7Bvar%20js,fjs=d.getElementsByTagName(s)%5B0%5D,p=/%5Ehttp:/.test(d.location)?’http’:’https’;if(!d.getElementById(id))%7Bjs=d.createElement(s);js.id=id;js.src=p+’://platform.twitter.com/widgets.js’;fjs.parentNode.insertBefore(js,fjs);%7D%7D(document,%20’script’,%20’twitter-wjs’);” title=”tweet this” target=”_blank”> Most traditional software (or apps) have moved onto these platforms, earning infrastructure firms recurring revenue, multiples of what software license based revenues could provide. Several data centric startups have seen success in the fields of Mobile analytics, Health Analytics and the Industrial Internet analytics spaces

It is really amazing to see the capability of technology products increase according to Moore’s law. The higher the capacity of processing, storage and connectivity (bandwidth), the more powerful the software (and hence human) applications that use this power are going to be. It is exciting to see what is in store in 2015.

The most important metrics in the internet business

In the internet economy – be it a web2.0 Or the App industry, one of the most important metrics determining a firm’s value is: “Customer Lifetime Value” (CLV).  CLV is the value generated by a customer while using the app (or website) that is in turn captured by the website or the app.  Another metric of importance is the customer acquisition cost  (CAC).  CAC is the cost of acquiring a customer through  either advertisements, referals or through regular sales cycle.

One of the ways to calculate the CLV is as follows:(A more detailed definition and formula for the same is given here.)

Customer Lifetime Value (CLV) = average  sale  value x number of repeat transactions x average retention time.

For example, Lets say that a Netflix customer uses the service for 5 years (average retention time) and pays 8$ per month (average sale value) and 12 times a year ( i.e. number of repeat transactions).The customer lifetime value for Netflix is 5 X 12 X 8 = 480$.

If Netflix spends 80$ to acquire one customer on average, the net realizable value from a customer is:

CLV – AC  ie. 480$ – 80$ = 400$ per customer per year

Obviously the more the number of customers the higher is the firm’s revenue. The net realizable revenue for netflix with 40 million customers is 16billion$ over 5 years. For services that are dependent on advertisements e.g. news sites or google, the average sale value is dependent on the average number of times a customer clicks on an advertisement (CPC ads) OR the number of times an advertisement can be displayed to the customer (Display/banner advertisements).

Most internet firms or apps try to increase their customer lifetime value by increasing either:

a)the number of repeat transactions:  This is achieved by increasing a customer’s time spent using the app (or the website) by making the site’s value proposition very compelling. In addition high repeat transactions are achieved by making customers engage in  actions such as clicking ads or browsing or purchasing digital goods.

b) the retention:  This is achieved by making it very difficult to leave the application or the platform AND by making the user return to the platform  over and over again.

Overall, if an internet business increases the number of repeat transactions and increases the retention of customers while simultaneously increasing the number of  customers, their business  will get very valuable quickly – like Whatsapp…

Lessons from “The Shark Tank”

ABC network is telecasting a series called the Shark Tank, where entrepreneurs pitch their businesses to a panel of 5 Venture Capitalists (VC). The Venture Capitalists (VC) then choose to buy a stake in the entrepreneur’s firm. After acquiring the stake, the VCs  help to take the entrepreneur’s business to the next level by increasing sales, marketing reach, production capacity, etc.. Also, during the course of the show one Venture Capitalist will show you how his(or her) prior investments have performed. Several entrepreneurs get rejected (and nastily too) by the venture capitalists and fail to raise capital.

During the pitch, most entrepreneurs showcase new consumer products e.g. better winter wear,  packaging for wine, wipes for greasy hands, kids toys, etc. Very few of these products are software or hardware related which are valued very differently, and may not interest the audience of nationally broadcasted TV series.

While funding success is a great criterion to measure  the entreprenuer’s capability, there are also definitely several lessons learnt  from failed pitches. These learnings  could be applied  to any creative profession: be it scientific research, fine arts or even computer programming.  A few learnings that impressed upon me are as follows:

1) Build products which people buy in order to use.

2)Demonstrate 100% commitment to make the venture a success. You should be so convinced about your idea that you should be willing to do whatever it takes to make your idea  successful.

3) Plain Innovation ( in the form of patents) sometimes do have a value, even when there are no sales. [ you could either license or sell your patent.]

4) If you want a large valuation for your company – you should already have big sales or  should demonstrate a large market potential for your product.

5)Though prior money raised by your firm is not a criterion for additional funding, prior money from investors does help increase the value of your firm.

6) Know your idea very well, know your market very very  well and know how your customers think and act  with your product very very very well in that order.

7) Don’t go begging for funds with a half baked idea and a half baked product – you will never get funded irrespective of how much you are in debt. Be humble , patient and listen… these guys have done it over and over…

8) Once VC’s invest money, the value the entrepreneur derives from an investment is much larger and is significantly disproportionate to a monetary investment. For e.g. if a company is making a revenue of 1,00,000$ before VC investment then the company could see its revenue grow to 2 million$ after VC investment. The VC investment is a classic “Inflection point” for the entrepreneur.

9) Age and experience are never binding factors for innovation, entrepreneurship and funding. E.g. a 18 year old high school student raised 100,000$ and a 60 year old man raised more than 1 million$.

10)However, the older the firm the lower the investment raised (and the possibility for raising money)

11) The investment is mostly in the talent of the entrepreneur(s) and is rarely ONLY based on the technology.

Culture and its effects on the technology Firm.

Historically,  “culture” within an organization has been defined as a  value statement. e.g. IBM, HP, Google OR Yahoo.This is because “culture” drives the behavior and interactions of a firm’s representatives both within and outside.  A culture (or value) statement could be used by employees or other stakeholders as a “frame of reference” when they act on the firm’s behalf.

To make culture as a driver of technology disruption was unheard off, till the early 2000’s. One of the pioneers of the culture movement was Tony Hseih of Zappos. Tony Hseih, the founder differentiated himself from the rest using “Culture” as the pivot. Anyone could look at their awesome  “culture” here. Most employees think so well of their workplace, that it makes you feel jealous.. Read more about this in “Delivering Happiness”  – Tony’s book…

More recently firms such has Hubspot have released more detailed  manifestos (135 slide presentation) of the firm culture.

 In a high growth rate industry with a lucrative compensation structure and a competitive workforce, Culture plays the role of a guiding framework. Defining a culture early on and forcing a firm’s ecosystem – i.e. employee, customer, stakeholders, investors –  to adhere to it,  plays a very important role in increasing the amount of positive perception about the firm in a market.

In recent times several disruptive start-ups such as SnapchatUber, Zynga have been at the receiving side of  unwanted media attention because of incidents completely unrelated to their business  execution.

One of the large parameters everyone talks off while hiring is “cultural-fit” … Several distractions such as unwanted media attention or litigations or cases of dishonesty could be avoided if firms  clearly define their culture. And if these firms  followed up with enforcing a “cultural-fit”  along with a “skill-fit ” for the new employee.