Difference between sales at a Startup vs Largeco
Mark Suster has written an absolute gem of a post which highlights the differences between sales at a startup and a large company. Many startups try to “scale up” sales too quickly by making some of the mistakes that Mark points out.
The post reminded me of another gem of a book which talks a lot of the same things through the story of invention of the wheel and selling it.
While the approach to the customer changes as the product and the startup evolves, what does not change is the purchase process and the organisation at the customer’s end. Understanding these can mean the difference between success and failure. More on that in later post.
Understanding adoption difficulty
The most difficult challenge for a consumer focused product lies in its adoption. Even on the enterprise side, the biggest challenge post purchase is adoption. But exactly how difficult is it?
An answer is available if one rephrases the question to: how long does it take for a habit to form or in other words complete adoption to happen. A team of psychologists at University College of London have answered the question for simple tasks and it stands at a staggering 66 repetitions. This is an average across several kinds of activities and thus only an indicative number when it comes to a specific activity. Furthermore, its for complete adoption – most of us would settle for partial adoption to a level that repeat usage happens.
The most interesting bit is that we now have a number to look at whenever we look at a product or service that forces a change in the user’s routine. We need to ask ourselves – what should we do that the user would use our product 66 times. Most products and service wouldn’t be able to come up to this benchmark and that explains why products requiring deep changes in habits almost always fail.
Read the paper here or a more layman description here.
Jack Ma of Alibaba on Entrepreneurship
Image via Wikipedia
Indian internet entrepreneurs usually follow the US market and are usually very well acquainted with the key players. However, Chinese market is seldom followed and rarely understood. Its a pity given that it is the single largest market on Internet. Its also a market where the US majors have failed to make inroads and the indigenous companies dominate. Initially it had to do with language difficulties but now it seems more and more about understanding of the market. I am very interested in the Chinese market for two reasons. First, in terms of stage of evolution and historical background, China has similarities with the Indian market. Thus, there are perhaps lessons one can learn. Second, its a large market and therefore offers opportunities.
One of the greatest successful internet entrepreneurs from China is Jack Ma who founded Alibaba. Alibaba started out as a B2B exchange but today includes online retailer Taobao (190 Million users) and online payment service Alipay (300 million users compared to PayPal’s 223 million accounts) amongst other businesses. In spite of such success, very little is known about Alibaba or Jack Ma outside of China.
Here are some interesting quotes form Jack’s interview by Charlie Rose. I’ve selected the ones which show a marked difference in opinion. Do watch/read the whole interview. Quite instructive for Indian entrepreneurs.
(Our core competence is) culture. It’s not the technology. I think technology is a tool.
We believe customer number one, employee number two, shareholder three.
it still takes a long time for China to catch up (with US) — the technology is easy, but to catch up with the culture, the innovation, the system takes some time.
We have a couple of million, you’re a rich guy. We have 10 to 20 million, it’s a capital. We have over a hundred million, that’s the social resources.
Its also interesting that he characterizes the China opportunity as new solutions and not as just the sheer size of consumer class. I think the same holds true for the Indian opportunity too. Yet another remarkable aspect is that he wants to use his wealth to create 200 Million more jobs and “create hope”. This is quite different from the stance taken by people such as Bill Gates and Warren Buffet. Jack says that he can do a better job of it than the Chinese Govt. If an entrepreneur can say that in China, why not India!
Recommended: Delhi Durbar
I finally picked up Krishan Partap Singh’s Delhi Durbar. Its the second book on my South Asian authors challenge. Once picked, it was difficult to put it down and I devoured the book late into a night in spite of a hectic schedule the next day. KPS (Krishan Partap Singh is such an mouthful of a name) again spins a very well paced yarn. The story again seems very authentic and again draws upon real life persona. However, unlike the last book Young Turks, there seem to be some small holes. Or maybe, I’m getting used to KPS’ craft and starting to see beyond what he wants a reader to see.
Read the book for a a very credible story of a behind the scene “fixer” who does the high value deals for India’s PM. The fixer is good and has the good fortune of inheriting from his father who was the best of the fixers. However, he is faced with situations and people that even he can’t stomach. Also, he has personal problems to deal with. This is his story of navigating the maze of India’s political sleaze and managing to win against the odds.
The protagonists from Young Turks also make an appearance here and there seems to be an implicit promise of everyone getting together in the last book of series.
Interesting Reads – 25 June 2010
Economics and Finance
The Long Now of Finance update. An ongoing attempt to see what the world of finance be in 10,000 years from now.
Making it fun to save. A very interesting idea to enable savings products on top of the usual no frills account that financial inclusion typically provides.
The average credit rating for corporation has fallen in last 30 years. This mirrors the rise of Private equity, Hedge funds and LBOs. This also means that premium for a higher credit rating should be higher than before. In other words, while the average has worsened, the standards for good vs bad haven’t.
IT
Bank in a Box. A very good summary of the business and operations models on offer in today’s core banking software market
Startup
Celent’s selection of Financial Technology Start ups.
Start ups from the Mobile Breakfast event
Mobile
Social Media
How many times should one tweet one’s post. Good post and discussion
Science
A more reliable invisibility cloak. Remember Harry Potter?
Research shows that memory improves while walking.