Zoomo – The beauty of PR

Standard

Have you ever heard how the PR folks are excellent spin doctors, this is precisely the story of Zoomo. The PR guys made martyrs out of a suicidal group.

In India, they wanted to create a platform for used car sales. Selling used cars is probably a staple business in most countries. You have to have really poor business acumen to not be able to sell used cars. Hell, if Olx can have used underwear being sold on their website, used cars should be a cinch.

Instead, the protagonists here failed to find sufficient traction and returned the money to the VC fund. Good for the fund. Bad for entrepreneurship.

The fundamental tenet of entrepreneurship is to keep trying. No company would have ever pivoted, had they given up and returned the money because ‘data did not support them’.

These guys built something, expected it to be a walk in the park, which it was not. They gave up.

This kind of entrepreneurship should not be idolized.

They gave up!

Don’t. Keep trying.

Transportation is being disrupted

Standard

Shots fired – Transportation is about to be disrupted and millions are about to loose their jobs.

I have maintained for a long time that the next big wave from the perspective of making money is going to be transportation. Or as I more broadly like to call it #MovingAtoms (things and people; on earth and beyond). I had spoken about the same during my TEDx talk as well.

Startups are businesses that possess an asymmetry between business growth and human resources.

The reason for the same in simple. When you buy a product and want large numbers of it, economies of scale kicks in making the price go down. Human resource, is finite and as you seek more of a kind of skilled resource, the cost of hiring the resource goes up. To make matters worse, they unionise and create more problems and use their negotiating power to undermine margins.

Most startups that have been active in the movement segment have suffered from the lack thereof. A food delivery startup is forced to recruit large numbers of delivery boys as the business scales. This makes the business financially unviable as cost goes up. Cab hailing companies have found a way around this problem by treating drivers as contractors. It would only be fair to argue that although this has helped the companies scale up quickly it has not been free of its own set of challenges.

In order to truly create a startup you need to automate the most critical task in the operations of the business

Travis Kalanick is painfully aware of the same and hence self-driving vehicles.

Legal Troubles

The legal issues that Uber has been facing across the world are unlike any that any other company has ever faced. Why?

Do you know any company that went from zero to having a MILLION people working for them in 7 years flat??

Uber operates in 76 countries and in a total of 473 cities across the world. This is the kind of scale that no business has ever been able to achieve in such a short period of time in business history. This has disruption written all over it already. The map below shows the geographical spread of Uber.

Startups Club Post

Unfortunately for Uber, transportation is a segment that employs and serves a lot of people. These people have not been very happy with a new kid showing up and dictating the rules. Not only that, taxi services are highly regulated across most of the western countries. People who were at the top of this industry had lobbied for years and held that position. They suddenly found themselves losing their grip.

They were bound to mark their territories and fight for it.

At its heart Uber is nothing more than a ‘Demand-Supply’ platform. It connects the demand for transportation with the supply of cabs that are available in the city. They try to maintain a minimum quality of service on the supply side.

Angry people protest and sue in the civilized world. Hence, Uber has been protested against and has been sued. A lot. It has been sued so much that there is Wikipedia page on the number of countries and the number of issues that they have been sued over. Uber has cases running in 30 different countries and they have multiple issues to deal with in countries like India, Australia and USA. Everyone wishes to draw the boundaries inside which Uber must operate and the company has been openly defiant about obeying.

Why?

Because Travis Kalanick knows that these issues are temporary and in the long run, Uber will be a perfect startup. A business that scale asymmetrically with relation to manpower.

Technically, Uber can be called a startup even today; but the sheer volume of drivers working with the company has resulted in a myriad set of issues that the company must deal with. Although these drivers are contractors and not employees, their volumes mean that they can demand to be treated as such.

Self-Driving

Uber knew that in order to be able to automate their operations, they need to be able to get rid of the drivers who are the heart of the operations today. In order to do that, the move towards self-driving cars was imperative.

A little more than a year ago, Uber announced a strategic partnership with Carnegie Mellon University. The company lured away most of the researchers from CMU to head the self-driving car initiative. Some went on to describe the deal as an agreement between the fox and the henhouse.

Uber made two very interesting announcements yesterday which prompted me to write this piece. The acquisition of a company called Otto, engaged in making self-driving trucks. Not only that, they appointed the CEO of the company head of Self-driving vehicles at Uber.

Uber also announced that they are going to start providing service through self-driving cars! The service will be piloted in Pittsburgh and they will provide Volvo SUVs to cater to the customers. Uber has signed a $300 Million deal with Volvo for these cars.

Obviously self-driving technology has not reached perfection and hence one engineer will be always present in the car. The car will also hand over control to the human when crossing bridges since those are hard for the software for now.

So what now?

On the surface it seems like Uber is going for the kill and planning to leave no stone unturned as far as bringing self-driving technology to the real world is concerned.  The undercurrents though are even more interesting.

Cab rides are but one part of what Uber is going after. They are actually going after all kinds of movement. One of the key points in the Bloomberg article which broke the story and also what has been a part of the vision statement released at the 5 year anniversary of Uber is the reduction of parking requirements. These cars will not stop at all.

They are not just going after cab rides; they are going after everything.

  • Transporting people
  • Transporting products
  • Transporting food
  • Transporting goods (autonomous trucks)
  • Inter-city buses!?

Uber wants to dominate all kinds of movement. So what?

Change

We are at the precipice of a huge change. Autonomous mobility is coming and it will change the way businesses work; once again. The paradigm of how things and people get from place to place is going to change altogether. The degree of change that is going to be introduced will be comparable to the introduction of smartphones.

While Uber wants to dominate all of the segments of #movingAtoms as I like to call it, this change introduces opportunities.

If Uber is going to have autonomous vehicles on its app, I am certain all of these vehicles are not going to be under the ownership of Uber. There will be a huge fleet management business which will arise, who will buy these cars and deploy them on Uber.

There are also going to be a lot of other companies including Ford, GM, Mercedes, BMW and the likes who would like to bring their own platforms. The platforms will be necessitated by the fact that individual buyers are going to vanish quickly in a world of autonomous vehicles. The pride of owning a car will no longer exist.

Aggregation of these platforms will become an interesting play.

The same kind of play would be interesting from an inter-city trip perspective as well as from the perspective of goods movement.

It is one thing to source demand for cabs and its another thing sourcing demand for trucks. You could buy entire truck load or you could choose to buy a portion of it. Uber will get into this space but since they do not have a platform which is currently undertaking this, any startup which is able to build a viable product in space would be a prime acquisition target.

The way I see it, transportation is going to undergo a paradigm shift in how it functions. I think in the future the transport industry will resemble the film distribution space that we have today. Uber will be akin to the movie producers and fleet owners will be like the theaters that finally play the movie. The revenue share will be similar as well.

Can you think of business models you might be able to build on top of this?

What will happen to all of the drivers who currently drive for Uber?

Speed is exaggerated

Standard

There is an excessive amount of focus on speed, when it comes to building startups. One of the advices that is often provided to startups is to get out of the blocks really fast.

The #FailFast philosophy has probably pushed more startups towards failure than towards success.

If you were building a house, would you want the foundation to be laid really fast? Or might you prefer that time is taken to ensure that the foundation is really solid?

A business is a marathon, not a sprint.

You can get out of the blocks fast; but then, what is going to keep the customers coming back to you? Continuously making yourself better is critical; that is what keeps them coming back. Customers will stay with you when you delight them, keep offering them something better and better to look forward to.

You get paid for showing up and making the product/experience better everyday.

A fast start is like a spark, continuous improvement and delivery is the fire.

Keep the fire burning.

Optimism

Standard

Disappointment and Optimism are two sides of the same coin. Disappointment is a result of expectation not being met and expectations are a result of positivity.

Children cry often because they are optimistic. They have a sense of loss when they don’t get something. As we grow older this unbounded optimism dies; we just call it becoming an adult.

There are tons of books out there talking about positivity and the need to be positive for good things to happen. While that may be true, being positive comes with its share of being disappointed.

Most of us give up. The first failure; the first loss; the first heartbreak. Each of these takes a little bit of positivity out of us. The challenge as you are growing up is not to.

Yahoo! – The Upside

Standard

A lot of ink has been spilt on the many mistakes made by Yahoo. How the company refused to buy Google or Facebook when the opportunity existed. Yahoo might in fact be a story of many missed opportunities. But those misses did not really define the failure. Yahoo failed because of a series of poor decisions and a company culture that did not permit it to move forward.

The implicit assumption in all of the criticism is that Google would have certainly gone on to become the company that we know today. Yes, perhaps there would have been one less competitor to deal with.

Those of us who adopted and started using Google did so because its simplicity and precision. Do you really imagine that Yahoo! which was always a portal, would have purchased Google and retained a blank white page with a box?

Cultural Deceit

Yahoo failed because of the things that made it successful to begin with. It was launched as a directory service and then went on to adopt the portal model. For whatever it is worth, it worked very well for them in the late 90’s.

The linked post on stratechery which talks about the development of culture.

Culture does not beget success but it is the product of it

When a company does something and it works out for the company, it becomes a formula. The people who join the company hear the same stories and do the same things.

An employee who joins Marriott hears stories of awesome customer service which helped them retain customers, got someone promoted. The formula to get ahead becomes, providing awesome customer service.

Yahoo was a portal and wanted to continue to survive in that paradigm. It was just much easier to sell the idea to advertisers and generate revenues through multiple channels. Google went with income from ‘Search’ only. Honestly, the good boys at Google did not want to do even that! Eric Schmidt had to wrestled them into advertising.

Yahoo’s culture did not allow them to adjust to the changing nature of the web. Much like Google finds it hard to adjust ‘search’ to the demands of smartphones. Facebook by comparison found it extremely comfortable adapting to mobile.

Mergers and Acquisitions

Yahoo may not have bought Google or Facebook, but they bought often and bought a lot. Here is a list of all of the M&A that Yahoo has been engaged in over the years. You may notice that there are a list of 114 companies there. In the space of 18 years, that is an average of 6 per year; or one every alternate month! Number deceive in the absence of context; they made 23 off those in 2013 alone. An additional 19 were acquired in 2014.

Yahoo made big acquisitions in the 90’s that did not pay off. GeoCities, Broadcast.com (founded by Mark Cuban) and Overture Services were all multi-billion dollar acquisitions which went nowhere. Flickr still survives and could have easily been Instagram, but is not.

I am sure had they acquired Google and Facebook, they would have been equally lost in the quagmire that was Yahoo. Throwing everything into a portal and melding it into one was not what was needed, but Yahoo could not help but do that.

Marissa Mayer kept deflecting criticism by acquiring one company after another. She closed 5 deals in Jan 2014 alone. When Steve Jobs went back to Apple he figured out the soul of the company and let go of everything else. Marisa Mayer did exactly the reverse in the case of Yahoo, kept everything and added more garbage.

So what is the upside?

For starters thank Yahoo that they did not acquire Google for $1 Million, you would probably be using bing today! Also, you might have been using Google+ had they ended up acquiring Facebook.

Yahoo redistributed 10’s of Billions of dollars to many startup founders through acquisitions. These founders went on to invest in other startups and created the startup eco-system that exists today. This is by far the most critical contribution that Yahoo made. This alone contributed significantly towards changing the trajectory of investments in startups.

Yahoo by itself might not have been a hugely successful business. A combination of cultural undercurrent and poor leadership ran the company into the ground. Having said that, Yahoo has made contributions that are valuable.

Not buying Google and Facebook are one amongst them.

VR Vs AR, which way is the battle headed?

Standard

The paradigms of computing are changing. In the past 3 decades, computers changed the way in which we have been communicating and carrying out day to day activities. Over the past 10 years, the mobile revolution swept the world and has for better or for worse changed the way which we interact with the world around us and the way in which businesses have been functioning and business models have evolved.

A business like Uber would have just not been possible in a world where the smartphone did not exist.

We have witnessed path breaking changes over the past few years which have altered our way of life quite rapidly. Therefore, its important to understand where computing paradigms are headed and how this will affect the businesses of the future.

Based on the technologies that I have seen, VR and AR seem to be the next paradigms of computing.

What is Virtual Reality?

Virtual Reality is a technology that replicates or recreates the environment around you. Virtual reality takes advantage of both the visual and the auditory senses. This creates a much more immersive experience for the user and places them in an environment that they can interact with and manipulate.

Mark Zuckerburg Samsung VR

This picture is a perfect example of how immersive the environment is.

Since the entire environment is imagined or artificial, and disconnected from the real surroundings, the degree of movement that the user can be afforded is limited. Its essential that the space in which the user is allowed to move in, has no obstacles.

This implies that the applications for VR will be ‘motion limited’. A person would almost certainly be sitting when using VR. Even if they are allowed to move, the degree of freedom is going to be fairly limited. This leads us to a specific set of applications that are possible for VR.

Games will obviously be a huge draw and therefore a huge money spinner in this segment purely due to the immersive feel of the experience. It will also be used to create incredible content experience, audio and visual. Imagine a movie where you can be part of the decisions the protagonist makes. The avenues for movie-makers to make money will expand incredibly with the mainstream adoption of VR. Group VR experiences where 4 friends live the Point of View of various characters in the movies, the possibilities seem endless.

VR will also find a whole host of applications on the enterprise side. Hospital might use it to provide better visualisation for doctors to prepare for surgeries or conduct pinhole surgeries. VR can also be used in the area of engineering design, architecture and designing in general.

While all of these possibilities seem exciting, the constraint is in terms of moving beyond a defined space. It is possible to map your entire house and render spatial awareness so you can have the headset on and move about, but it does not seem like an appealing solution, which brings us around to AR.

What is Augmented Reality?

As the name suggests, it is a technology that allows you to interact with your surrounding environment with a variety of elements added to it. There are many ways in which this can be implemented, but the essence of it is to enhance your perception of reality using a computing device. Since AR only augments and does not recreate, it provides you the environmental and spatial context around you and enables movement.

Augmented reality adds elements to the reality that surrounds you. This can be in the form of content such as video that appears in your environmental context. All kinds of digital elements can be added to your surroundings using computing devices. The two ways in which this has been implemented is, either as an application on the phone working in conjunction with the camera or as a heads up display (HUD) which is worn on the eyes.

Google Glass was an attempt to create a face mounted HUD which one would be able to wear at all times. It did not succeed because of the price and the paradigm shift that it presented. I felt that the way in which the camera on the system was being used, made the entire things seem very creepy.

AR is many folds more powerful than VR due to the spatial awareness. It introduces a whole new paradigm for advertisers. For instance, it is possible to create an app that scans any movie poster and begins to play the trailer of the movie. The same application can be built around various brand names and this leaves the door open to undertake interesting advertising campaigns. It is also possible to use it as a visualisation and sales tool; imagine being able to see what a sofa would look like in your living room before buying it.

Pokemon Go has shown that is possible to build extremely immersive gaming using AR.

The application of AR as an add-on to existing solutions like e-commerce apps is way more interesting that building an app which one wishes to hawk directly to the consumer. Why would you download an app whose only purpose is to scan movie posters and play trailers? But if Bookmyshow was to integrate it into their app, it makes for an additional way to engage with the application.

Off the startups that I have seen, too many of them are building solutions that they wish to sell directly to consumer. It is going to be incredibly difficult to acquire customers. I am yet to come across any startup going with an HUD approach.

Computing paradigms

10 years ago, the computing paradigm moved from the laptop towards the smartphone. It changed, the way business was done and the kind of business models that were possible. More importantly it moved software consumption from being a B2B heavy business to one that is more skewed towards B2C.

VR and AR will move the computing paradigms again. The hardware side of the solution is undergoing the process of definition. While the VR form factor seems like a head mounted display; nobody is quite sure how the final form factor would look life for AR. Nevertheless, there are several examples including Google Glass, that we can draw inspiration from.

In 2008, if you were developing smartphone apps, you were on the verge of discovering el-dorado. I believe the same is true today of VR and AR.

Having said that, it is important to understand the breadth of the market and opportunity in each of the case. Considering the nature of VR, I feel the market size for VR would be comparable to that of desktop computers. They may sell in the hundreds of Millions but the volumes may not be in the Billions. In other words, I see the possibility that every household and several businesses might buy it. It does not seem like a solution that would be bought by every single individual.

I still do not know what paradigm or form factor might perfectly suite AR. It can be implemented using phones but I suppose a dedicated HUD device will find a way. The application and utilisation of AR would be similar to the mobile phone. I believe that it would find its way into the hands of every individual, it would certainly sell in volumes that are similar to the smartphone.

If Pokemon Go is an example of the things to come, there is going to be much excitement in the future.

Drawing the battle lines

These technologies are not new; they have been around for decades. There has been much work and research that has gone into bringing it to the state of maturity today. More importantly, computing speeds were not high enough a couple of decades ago. This has fundamentally changed allowing AR and VR to blossom. Even with the increased computing speeds today, Oculus Rift has said that it will be a couple of years before they would be able to deliver the quality that they would consider the gold standard as far as VR is concerned. Its like running two monitors simultaneously and rendering graphics simultaneously and in concert. Not only does it take a great deal of computing, by extension it chews through a lot of battery.

As far as the big boys are concerned, they seem to be throwing their hats into the ring, making their bets.

Apple CEO Tim Cook mentioned on the call with analysts during the Q3’16 earnings call that Apple was indeed working on AR. Apple is making a strategic decision that AR is going to be an interesting space in the future. As with most things Apple, we may not know much about what is happening till time comes to launch the product. Also, Apple tends to wait till some of the others have launched their offerings and tested the market.

Microsoft Hololens AR

Microsoft has gone the AR route and put its weight behind the Microsoft Hololens. It remains to be seen when and at what price this product is brought into the market. The company has been able to already provide some impressive demonstrations of the product and shows several potential applications. Minecraft is going to be unbelievably great on AR and so will many games that adopt the platform.

Oculus Rift Facebook VR

Facebook had made a Billion-dollar acquisition of Oculus Rift. VR possibly suites Facebook better since they are in the business of content distribution. Apart from connecting individuals, a great deal of content is consumed through Facebook including a lot of videos. This may have been the factor that influenced the strategic choice that Facebook has made.

Google VR

After the debacle of Google Glass, Google seems to have shut down the project and decided to go the VR way with Google VR. From a Youtube perspective, this makes a great deal of sense but not from a search perspective.

Companies such as Samsung and HTC have also been doing their own versions of VR. There is certainly a dearth of AR hardware play. For AR to be successfully deployed, an HUD is an important component to make the technology disappear. Having said that, Google Glass has shown that society might not be ready for this yet.

What form factor AR will take, is a question that still needs to be answered?

Are any of the startups up for the challenge?

Costs we incur without knowing

Standard

IMG_2614

This is an image I took today morning at ITPL, Whitefield. This security guard was protected by sand bags and all.

I have had the privilege of going to the ‘Madras Sappers’ campus in Bangalore which is a military establishment and there is no sentinel in place there once you pass the gate.

Truth be told, if terrorists were to storm the campus, he would shit his pants and run away.

I went into a mall in Bangalore once with a ‘Gas Cylinder’ in my boot; I was in the midst of shifting houses. They let me in! Honestly, there is no real security

Brings me to the cost of security. How much of time, energy and money are we wasting as a nation, in creating the illusion of security? There has to be a better way…