Am super-pumped to welcome Nishant Gairola to the Operators Studio team, as a Student Associate. He is currently pursuing his MBA at IESE Business School in Barcelona, and has been a serial founder for a decade, building multiple companies from grounds-up.
Nishant will support me across core investing tracks for Operators Studio, including ramping-up deal flow, evaluating interesting investment opportunities and supporting current portfolio companies on their most pressing challenges. Nishant and I will also work together to further refine OS positioning, value proposition & differentiation in the global angel/ seed investing space, including cross-border themes. Finally, with his presence in Spain, OS will now have access to the European market, in addition to my deep US-China-India networks. I am particularly excited to explore Eastern European markets, as I have met some special engineering & founder talent from there over the last year.
Excited to be adding such high-quality young talent to the Operators Studio journey. If you are a founder, investor or any professional from the venture ecosystem looking to collaborate with Operators Studio, especially in Europe, please feel free to reach out to Nishant!
This happens everytime!! I have been “pitching” India since 2006 — raising money for it, investing in it, acquiring companies in it, creating jobs for it, getting foreign capital into it. Everytime you sense that the India story is finally coming together (around 2004 under AB Vajpayee when infra finally started improving; in 2007–08 when bunch of NRIs returned to their motherland; in 2014–16 when Modi got a strong mandate for change etc. etc.), the govt. and its policy-makers shoot themselves in the foot? It makes me frustrated, angry, disappointed…even sad.
Over last decade, I have worked to bring several large overseas companies and institutional investors into India — selling the classic “rising up to the top-right” Internet users slide, the “demographic dividend” story that never goes out of style, the “largest democracy in the world” jingoism. For anyone who has grown up in the country, studied in the country, operated in the country and essentially come up the ranks in the country, we know that this high-level analysis completely glosses over massive structural complexities and weaknesses in the Indian economy and legal justice system. In my heart, as an Indian, I want all of this to be not true, but as a global citizen, professional and custodian of capital (which is fungible), it’s hard to not be affected by these developments. At the end of the day, emotions can’t hide the wide potholes in the India story.
I want to be a problem-solver, not a problem-identifier or a jingoistic reactionary. But I don’t know how! I have rarely reacted to such issues on public platforms in the past. But seeing this story truly made my blood boil today morning. Founders are the most giving stake-holders in any society — they take massive risks, put their comforts on the line to build something, create value, technology, products and jobs, generate wealth for everyone (and themselves) but with huge professional and personal sacrifice. Grounds-up founders don’t inherit family businesses or Millions of $$ in a trust or estate — they start-up to build better lives for themselves and in process, improve all our lives as well! This kind of one-sided #angeltax activism and freezing bank accounts just disrespects entrepreneurship and true human enterprise that moves our species forward.
I am, and will always be, a big believer in Indian talent, and will continue to back it all my life. But unfortunately, I am not a believer in the Indian govt., policy and legal systems.
Note 1: I felt the same anger & helplessness when Nirbhaya and 2G scams happened during my last years as an Indian resident.
Note 2: today, as Indian founders battle the tax authorities and essentially the Indian govt., I am for the first time truly internalizing the use case for a decentralized world and crypto.
Note 3: my personal experience with Indian real estate has been similar (non-transparent, corrupt, no way to enforce rules, full of outrightly fraudulent and criminal behavior). Couple of years back, I vowed to not invest any $$ in Indian real estate going forward.
Note 4: it’s unlikely that I will ever invest again in Indian legal entities of startups via Operators Studio.
Recently, I came across two talks by Ruchir Sharma (Head of Emerging Markets and Chief Global Strategist at Morgan Stanley), where he outlined some key geo-economic themes for 2019 & the upcoming decade (Asia Society, NDTV). While I am a big Nassim Nicholas Taleb fan and as a result, don’t care much for macro-predictions or extrapolations by economists, I do like to follow Ruchir’s work mainly because: 1) he presents really interesting data sets, which I can use to draw my own conclusions/ implications, and 2) he is someone who deeply covers both the East and the West. I do think it’s important for both founders and early-stage investors to at least keep an eye on global geo-politico-economic themes as they do impact tech businesses over the long term.
Here are the top 10 themes as presented by Ruchir. I find the supporting datasets particularly fascinating and therefore, have included their snapshots from the NDTV video. Am also including ‘MY TAKE’ for each theme, at least wherever I have a strong view.
Peak America — Is America’s Decade Coming to an End?
This decade has clearly been America’s — as per Ruchir, while the US economy is ~25% of global GDP, its stock market cap is ~55% of global stock market value. Over last decade, while most major stock markets globally have given flat or minimal returns, the US stock market has tripled in value and is at a 100 year high compared to rest of the world.
Interestingly, Ruchir has identified a trend wherein every decade has some sort of a global economic theme that dominates investor interest. However, that theme never gets repeated in the following decade. As per his analysis, the US has ‘peaked’ in both economic and financial terms, and therefore, could see a slowdown starting 2019 and spilling over to the next decade.
MY TAKE: Clarifying the time frame being considered for this analysis is really important. In the short-term — yes, I would agree with Ruchir. With what one sees on the ground (excess liquidity all over, over-optimism at large, tech stocks bull run), it does seem like we are near or at the peak of the economic cycle and over next 24 months, various indicators will definitely tighten. However, over the long term (10yrs+), I continue to be extremely bullish on the US, mainly because of my belief in its inherently-entrepreneurial & innovation-driven economic and social fabric. My personal view is — US will continue to attract global knowledge talent for several decades to come (irrespective of political cyclicality), will lead in IP-driven innovation & deep-tech, and will surely be one of the leaders of whatever wave(s) that happen next (crypto, blockchain, AI & beyond).
2. Rise of Anti-Bubbles
Ruchir defines ‘Anti-Bubbles’ as countries where, despite healthy economic indicators, their GDP is surprisingly, lesser than the market cap of some of the top US tech companies. This, to him, doesn’t make sense. He feels that once the current tech wave slows down, the Anti-Bubble markets that have been unfairly neglected in favor of US tech stocks, will start seeing huge capital inflows.
Just to give a sense of how much global investors have been prioritizing US tech stocks over entire countries — India’s total GDP is less than the FAANG combined market cap.
MY TAKE: ‘Anti-Bubbles’ is a very interesting concept. While I understand where Ruchir is coming from in macro-economic terms, I think there is a larger point here — to me, technology is changing the very nature of the way our world operates & is segmented. Concepts like defined nation-states, insular GDPs, trade borders etc. are being disrupted right in front of us. To keep pace, traditional economic metrics and analysis methods also need to evolve to correctly reflect the updated realities of how markets, economies and societies are going to operate going forward. That’s where the gap is right now!
3. Why Global Interest Rates Can’t Rise Much
Global debt has risen from ~2x GDP in 2000 to >3x in 2018, with China borrowing the most since the 2008 crisis. Given these high debt levels, global interest rates can’t rise beyond a certain level, as central banks need to avoid large-scale repayment failures.
MY TAKE: No particular comments.
4. De-globalization
Trade as a % of global GDP has come down from ~60% in 2008 to ~55% in 2018. There has been a backlash against globalization all across the world this past decade, with protectionism on the rise across countries. Most notable example is the ongoing trade war between US & China.
Interestingly, there are a bunch of Asian countries that are benefiting from this trade war, including Vietnam & Bangladesh. US companies are now shifting their backend supply chains from 100% China, to diversified across multiple manufacturing centers, especially in SE Asia.
MY TAKE: I have a few specific inputs on this theme:
A) Globalization is beyond the control of politicians. Beyond creating short-medium term barriers, they can’t fight the power of technology (the Internet) and stop global citizens from interacting & trading with each other. The real issue is — how do governments create policies to ensure that all sections of society benefit from globalization. Stopping globalization is not the answer, ensuring equitable distribution of its fruits definitely is!
B) The geo-political trend of countries standing up to China is going to get even stronger in coming years. Given China has an openly aggressive international posture politically, economically and militarily, I expect its disputes with rivals such as US, India, Japan, Korea & certain countries in SE Asia to continue.
C) As China transforms its economy from manufacturing-based to consumption-based, countries such as Vietnam, Thailand, Bangladesh and India really stand to benefit from global companies diversifying-out their procurement from China.
5. The Anti-Establishment Wave
There is a clear trend of right-wing political parties coming to power across multiple countries. Interestingly, the average age of world leaders has also steadily been going up.
MY TAKE: No particular comments.
6. Fiscal Indiscipline Rising Everywhere
Global avg. Fiscal Deficit as % of GDP has gone up from ~2.25% in 2013 to ~3% in 2019(P). Case in point is India, where farm loan waivers have increased massively since 2016.
China spends 3x of India in terms of capital investments. While India has focused on waivers & subsidies at the cost of govt. spending on infrastructure, China has doubled down on investments & capital spending to drive growth.
MY TAKE: No particular comments.
7. India Still a One-Engine Economy
India’s growth is primarily driven by domestic consumption. As per Ruchir, it’s hard to consistently grow at 8%+ just with a consumption-based economic engine. Like China, India needs an investment-based engine as well, to complement consumption.
Another concern related to India— with rising consumption, household debt is also rising significantly.
MY TAKE: India’s consumer story is probably one of the most attractive investment areas in the world. Most startup activity is also in this space, be it eCommerce, payments, entertainment or food delivery.
Personally, I wouldn’t worry too much about the household debt situation as current debt levels are still far below developed markets and also, India has a strong savings culture that counter-balances the debt issue.
As a tech founder & investor, I would like other sectors of India such as enterprise software, manufacturing, agri etc. to also catch up with consumption, in terms of growth & investment attractiveness.
8. Growing ‘Tech-lash’
Tech has been the least regulated space across the globe, particularly in the US. This is changing now, as lawmakers realize the impact of these technologies and the need to study & better regulate them.
MY TAKE: Personally, I welcome constructive regulations that make tech companies more responsible towards consumers on issues such as privacy, harassment, data security, financial scams etc. The power of tech in our lives is only going to grow; it would be foolish to assume that it can be left unbridled. In fact, clear, non-ambiguous and forward-looking regulations will create a more sustainable environment for emerging technologies such as blockchain & crypto, AR, VR etc. to flourish.
9. Next US-China battle Will be All About Tech
MY TAKE: Frankly, the only country giving serious competition to the US in new-tech is China. Having developed a walled-garden Internet ecosystem that has spawned local giants (Alibaba, Tencent, Baidu etc.) rivaling the likes of Google & Facebook in scale & market cap, China is now focused on becoming an AI leader. I believe issues such as weak IP protection, outrageous data control and walled-off ecosystems, combined with an aggressive international political stance at a country level, will lead to significant headwinds for Chinese companies looking to expand globally. This is where US tech companies will continue to have an edge, followed by players from the EU, India and SE Asia.
10. King USD No More
The dollar has had a fantastic ride over last few years, backed by solid economic & financial performance from the US. Ruchir feels that the USD has peaked and will get weaker going forward.
MY TAKE: am no currency expert so have no comments :).
To Conclude:
My big takeaway from Ruchir Sharma’s top 10 themes for 2019 is that we are at or near the top of the economic cycle in the US. Excess liquidity & tech has been the main driver of this decade-long bull cycle, and given natural cyclicality, could see a cool-down period over next 12–36 months (which would be good for everyone, I think). In the short term, makes sense to proactively manage for this potential upcoming volatility by diversifying, both from a career and personal finance perspective. Personally, I continue to be a long-term bull on the US, primarily because of my confidence in its inherent entrepreneurial innovation engine & continued ability to attract the best global talent.
China has had a fantastic last decade domestically; however, I see major headwinds for it from a globalization perspective. Having seen its tech prowess, talent pool and national focus from close quarters, I wouldn’t discount China’s ability to pull another growth rabbit out of its hat (similar to manufacturing in the 90s and Internet-consumption in the 2000s). Maybe AI?
India continues to have a strong domestic consumption story, and will continue to chug along. It’s a democratic and highly heterogenous country — given fragmentation & high degree of local complexity across multiple elements, it’s hard to see it growing at China-like levels (which can only result from a China-like centralized political system). Which is fine, as India will continue to grow sustainably & by-consensus. Ideally, would like to see the Indian economy unlock one more major engine of growth — enterprise software for the world? Domestic manufacturing? Commercial use of space?
Overall, looks like we are in for an interesting 2019, and the decade ahead!
Source: all data snapshots are from Ruchir Sharma’s NDTV interview.
I am really excited to kick-off 2019 by introducing ‘Operators Studio’ — my endeavor to invest in & support founders globally, by being with them in the trenches right from a really early stage. As you will see on the website, Operators Studio is all about “Backing gritty founders who are solving real problems “ — supporting innovative technology startups through early capital, deep operating expertise, global networks and a personal sounding board.
The Genesis
While I left my Venture Capital career 5 years back to become a full-time operator, I still wanted to keep that one element that I most enjoyed as a VC, in my life — partnering with entrepreneurs to solve really interesting problems and build innovation-driven companies that move the needle for the world. As I transformed myself from an ‘investor’ to a ‘builder’, I also started investing in startups in their angel/ seed rounds, supporting founders at a deep operating level, working with them through their biggest tactical & strategic challenges, as well as most importantly, being a friend & sounding board to them.
Over last 5 years, I ended up investing in & supporting >15 startups across the world, along with my full-time operating stints. As I travel on the path to discovering my own differentiated world-view, investing style and what really excites me both as an operator & investor, I thought this is the perfect time to institutionalize my efforts. Hence, Operators Studio was born!
2. How is the Operators Studio Mandate Unique?
In my experience as a VC, angel and tech operator across US, China and India over last decade, a key gap I have observed is that the entire business & venture environment leans towards only a certain kind of business — that which is attractive to institutional investors. This means characteristics such as potential ‘moonshots’, going after humongous market sizes (as per guesswork), exit potential that moves the needle for institutional funds, and aligning with trends in-vogue (AI, ML, AR, VR, Crypto etc.).
Due to these filters, an entire gamut of tech businesses that are solving true ‘operating’ problems for customers/ users, which are often unsexy and lag behind latest trends, get completely overlooked. By the way, in majority of cases, these customer-centric businesses are highly innovative in their own right, and can often be built to be economically-viable without overt dependence on external capital. And in the process, generate solid financial returns and entrepreneurial gratification for all stakeholders over the long term.
The Mission of Operators Studio is to back exactly these kind of companies — those that put the customer’s problems first, leverage practical tech innovation to solve them, and are founded by tech warriors — entrepreneurs who are visionary, humble, resourceful and believers in deep execution. It doesn’t matter if a space or product is considered unsexy, unattractive or out-of-trend by the financial ecosystem or media — as long as the company is solving a problem that matters for the world, customers/ users are vouching for it, and founders are willing to be in it for the long haul and build the company in a way that’s most suited for realizing their vision, Operators Studio will be a believer in it!
3. How does Operators Studio Add Value to Founders?
a) Early & “patient” capital — will mostly invest in friends & family/ formal angel/ seed rounds; will be flexible from a stage perspective (‘Day 0’ co-founders coming together, pre-PMF, post-PMF to even Series A and beyond).
It takes at least a decade for a business to realize its true potential. We take an “evergreen” approach, supporting founders for whatever time it takes for them to realize their vision.
b) Operating guidance — deep-dive product sessions, go-to-market strategy, hiring, user acquisition, customer introductions, pitch decks, investor connects, exit discussions.
c) Global networks — helping companies go global via access to market knowledge, business expertise and networks across the “tripod” — USA, India and China.
Operators Studio will be flexible from a mode-of-involvement perspective, as long as its Mission is being fulfilled — in addition to investing directly in companies, this could involve direct ‘Day 0’ incubation, becoming an LP in other funds to get access to the most-promising companies, partnering with high-quality accelerators/ incubators, collaborating with established tech companies to unlock synergies etc.
4. Why This Name?
I have consciously avoided names like ABC Ventures or XYZ Capital. Operators Studio stands for a fresh venture-building approach —to me, this name is very significant as it communicates key tenets of this approach:
Operators — looking for companies that are solving real operating problems for customers/ users, backing entrepreneurs that have a rigorous operating mind-set, supporting founders by adding operating value to companies, helping them work through on-ground operating challenges rather than giving theoretical advice.
Studio — rather than being a conventional investing entity or a personal asset allocator, the vision for Operators Studio is inspired from boutique movie studio models (the likes of Hello Sunshine founded by Reese Witherspoon; Blinding Edge Pictures by M. Night Shyamalan; or Color Yellow Productions by Aanand L Rai). Its ethos is based on how these studios operate — looking for a unique story (problem to be solved) to tell to a specific audience (target customer), assembling/ supporting a team that brings to the table diverse skillsets needed to tell this story most effectively (backing gritty, execution-focused founders) and executing at economics most optimized for the story to be delivered most efficiently (capital efficiency, driving optimal returns).
5. Active Portfolio
My entire portfolio of companies is now under the Operators Studio umbrella. Following are the companies (currently-active) we are proud to have backed so far (in alphabetical order):
1) Artifacia (Toronto/ Bangalore) — AI-powered platform that helps e-commerce brands create and manage shoppable photos
3) Hate2wait (Gurgaon) — queue management product for SMBs and large enterprises
4) Instashift (Estonia) — global peer-to-peer platform to buy/ sell cryptocurrencies
5) Lets Venture (Bangalore) — India’s most trusted platform for angel investing and startup fundraising
6) My Ally (San Francisco Bay Area) — world’s only AI Recruiting solution for fully Automated Interview Scheduling and Recruitment Coordination
7) Scandid (Pune) — eCommerce deals & price comparison platform, now offering omni-channel commerce solutions for the global travel retail market
8) 91Springboard (Delhi) — category-leading co-working space in India
9) Trailze (Tel Aviv/ San Francisco) — making tough-terrain outdoor navigation easy (hikes, trails etc.)
10) Tydy (Gurgaon) — global onboarding & training product suite for the distributed modern workforce, bite-sized+gamified
11) Widget (San Francisco Bay Area) — transforming images and documents into customer communication channels, all without apps, phone nos. or forms
12) Yulu (Bangalore) — re-defining urban mobility in India via smart dockless bike sharing system
6. The Future
Am super-psyched to grow Operators Studio as a passion-driven parallel track, along-side my main operating career. I see tremendous opportunities for using tech innovation to solve really interesting problems and build outstanding companies, in markets as diverse as US, India and China. At the same time, am excited at the growth prospects of the current set of portfolio companies, several of whom are already emerging as category leaders.
Whether you are a founder, startup employee, established tech exec, angel, VC or corp dev professional, am eager to connect with you — for feedback, to exchange notes, collaborate or just brainstorm. You can Email me, as well as connect with me on Twitter and LinkedIn.
I thank all the founders, startup teams, investors as well as other tech ecosystem professionals that I have had the privilege to work with over the past decade. Here’s to leveraging entrepreneurship + tech innovation to solve the world’s most pressing problems over the next 50 years.
PS: for more details on Operators Studio, check out our website.
Recently on Twitter, I came across one of the best academic papers I have ever read — “The Mundanity of Excellence: An Ethnographic Report on Stratification and Olympic Swimmers”. Published in 1989 and authored by Daniel F. Chambliss from Hamilton College, the paper is profound because its findings are so easy to understand, practically applicable and above all, give empirical answers to that important question we all keep asking — what’s the secret of excellence?
The paper studies the sport of competitive swimming (particularly in the Olympics) to better understand the nature of excellence. Why swimming? ‘Cos 1) success in swimming is clear and well-defined (medals, plaques etc.) and 2) the sport has clearly stratified ‘levels’ (Country Club, Junior Nationals, Senior Nationals, Olympics etc.) that allow the study of excellence via movement across levels. Between Jan’83 and Aug’84, the author studied a cross-section of non-Olympic and Olympic swimmers, with a specific objective of seeing how the eventual winners drove excellence, and consequently their Olympics success, prior to the actual competition itself.
Here are the key sections, and their respective insights, from the paper:
What DOESN’T create excellence?
Excellence meaning “consistent superiority of performance” over competitors. The Author found that the following, often-cited drivers of excellence, actually aren’t true:
1.1 “Excellence is NOT the product of socially-deviant personalities”— excellent swimmers weren’t oddballs, loners or possessing some other kinds of non-conventional personality traits.
1.2 “Excellence does NOT result from quantitative changes in behavior “— eg. putting more hours of the same swimming practice. Simply doing more won’t result in moving up a level in the sport.
1.3 “Excellence does NOT result from some special inner quality of the athlete” — usually referred to as “talent”, “gift” or “natural ability”.
2. What DOES create excellence?
The Author found that the single biggest driver of excellence in competitive swimming was achieving “qualitative differentiation”, and NOT purely quantitive increases in “doing more of the same” (eg. increasing daily practice time from 2 hrs to 4 hrs, or swimming 7 miles everyday instead of 4).
Now, am sure you are thinking — what exactly is qualitative differentiation? I love this line from the paper that neatly defines it:
“A qualitative change involves modifying what is actually being done, not simply doing more of it”.
This includes things like changing your arm-pull technique in a breaststroke, competing in regional meets instead of local ones, eating complex carbs and veggies instead of fats and sugars etc. (PS: for cricket fans, I think the Indian captain Virat Kohli has pretty much done qualitative changes on multiple fronts to take his game to the next level. Same is the case with Novak Djokovic in tennis; see this awesome article on his regimen, published a few years back).
3. How do Olympic swimmers manifest qualitative differentiation?
This para from the paper captures the difference between Olympic swimmers and country-club swimmers really well:
“…they don’t just swim more hours, or move their arms faster, or attend more workouts…….Instead, they do things differently. Their strokes are different, their attitudes are different, their group of friends are different; their parents treat the sport differently; the swimmers prepare differently for their races, and they enter different kinds of meets and events”.
Three specific elements where qualitative differentiation gets manifested in competitive swimming:
3.1 Technique — “not only are the strokes different, they are so different that the ‘C’ swimmer may be amazed to see how the ‘AAAA’ swimmer looks while swimming”.
3.2 Discipline — “…(Olympics swimmer) is never sloppy in practice, so is never sloppy in meets”.
3.3 Attitude — “what others see as boring — swimming back-and-forth over a black line for 2 hours, say — they find peaceful, even meditative”.
4. Stratification in the sport is discrete, not continuous
Few key ideas from the paper on this concept:
4.1 “A rather small quantitative difference produces a huge qualitative difference”
4.2 “…certain teams are easily seen to be stuck at the same level”
4.3 Athletes don’t “work their way up” through levels; instead they move to higher levels via “qualitative jumps” created via a change in settings
5. Calling out our collective blindspot on “hard-work”
The paper argues that just achieving quantitative change does bring success, but only within the level of sport the swimmer is currently at. There is a behavioral bias at play here around extrapolating value of hard-work using only your own limited, visible and localized experience (“If I worked this hard to get to my level, how hard must Olympic swimmers work?”).
6. Not everyone is running the same “excellence” race anyway
The paper argues that not all competitive swimmers are running the same proverbial race of winning the Olympic gold. Some are just looking to exercise, or have fun with friends, or escape their parents. The Author calls it “horizontal differentiation — of separate worlds in competitive swimming, rather than a hierarchy”, and asks for top performers to be seen as “different”, rather than “better”.
7. Why talent doesn’t lead to success
I am preferring to just give you this takeaway here as I believe that’s more important to know, than the ‘why’ of it. However, the paper does present some fascinating arguments on it.
8. THE MOST IMPORTANT TAKEAWAY — Excellence is mundane
This para really captures the essence of this paper:
“Superlative performance is really a confluence of dozens of small skills or activities, each one learned or stumbled upon, which have been carefully drilled into habit and then are fitted together in a synthesized whole. There is nothing extraordinary or super-human in any one of these actions; only the fact that they are done consistently and correctly, and all together, produce excellence”.
Related point: motivation is mundane too, and focusing on “small wins” — more than the long-term goal of an Olympics gold medal, champion swimmers divided this into small daily tasks, and focused on motivating themselves towards these daily goals and achieving these “small wins”, which eventually combine together to create the long-term win.
MY LEARNING FROM A BUSINESS/ PROFESSIONAL/ PERSONAL PERSPECTIVE:
A. Focus on ‘qualitative change’ — don’t do dumb hard work, relook at the way you are doing things, change your “settings”, do things differently.
B. Check what ‘excellence race’ you are running — very often, there is no alignment between 1) what we want out of our careers and life, 2) what race we choose to run (should flow from point 1) and 3) what prep we put in to win the race (should flow from point 2). Proactively create this alignment. PS: to manage the human tendency of benchmarking against peers, first check what excellence race is each person running and whether they are even comparable.
C. Do the small things correctly and consistently — true competitive advantage comes from creating a mesh of habits that are just impossible to replicate as a group by other individuals/ organizations. Focus on the “boring, small, daily wins” and you will win long term.
A few months back, my better-half Mahak Sharma shared this podcast by Cal Newport (computer science Professor at Georgetown University) with me. The topic was “Deep Work” — Prof. Newport defines it as “focusing, without distraction, on a cognitively demanding task”. The concept immediately resonated with me, as I have been following Robin Sharma for a while now and he always talks about creating “Tight Bubbles of Total Focus” (TBTF) as key to creating game-changing value. When done well, you enter into what is called a “Flow” state, where you get fully immersed in solving whatever problem you are working on, so much so that you lose the concept of time and few hours seem to go by like minutes.
New addendum: got some comments on LinkedIn, requesting for a clearer definition of Deep Work. It’s something that I too, have been trying to get a hang of.
Personally, I see the following characteristics of Deep Work:
Focus on problem-solving, rather than straight forward logistical stuff like con-calls, emailing, paper-pushing, social media etc.
Has to be demanding on the brain, maybe something new to you that requires real learning & causes cognitive strain.
Due to the above 2 points, will typically require intense focus & concentration.
Will typically be an “alone” task, requiring you to step back, think, analyze and process individually, rather than participating/ discussing in groups where energy gets dissipated and mental free-riding happens frequently.
(This one I love) more often than not, Deep Work should result in some sort of tangible output or deliverable like a note, piece of analysis, requirements doc, assumptions list, maybe even just a powerful enough insight that you document and use as a stepping stone for further problem solving.
Based on my own experience, Deep Work is becoming so much more important in this era of increasing automation and changing economic paradigms. However, interestingly enough, people are finding it much harder than before to do Deep Work. This is mainly due to increasing levels of “noise” & distractions around us — buzzing phone notifications, dopamine-inducing short form content, multi-tasking across email, chat, meetings etc. I feel another reason is easy access to online info & content, which doesn’t make doing Deep Work obvious enough to all. When I was growing up, learning a new concept in Math or Physics required sitting in libraries for hours, submerged in numerous books. Unless you went deep, there were little other ways to become even conversationally-knowledgeable about a new topic. Now, with content, videos and social media discourse at everyone’s fingertips, it’s easy to get skimming-knowledge and talking points on any topic, in probably under an hour. While it’s good for increasing our breadth of knowledge, it decreases our ability to go deep, and persist with hard problems.
Whether we like it or not, even today, it still requires doing Deep Work to solve truly hard problems and consequently, create differentiated value that the market will richly reward. Over last few months, I have been trying to consciously train myself to do Deep Work. Luckily, it’s like a muscle that gets stronger with more training.
Here are some of the approaches that have worked well for me so far:
Focusing Deep Work sessions only on tangible problem solving & creating actual solutions — logistical work like routine ops, communication activities like responding to emails & chats, grabbing a coffee with someone, brown bag lunch sessions etc. aren’t Deep Work. Prof. Newport calls them “Shallow Work”. It’s not to say that these activities aren’t required. But let’s be clear that if we focus too much on them, they might consume 80% of our time and yet, impede our ability to create value. Good examples of Deep Work would be new product development, design, writing on new subjects, figuring out fresh ways to drive growth, thinking through new competitive positioning for your company etc.
Doing “Shallow Work” only later in the day — I have started devoting my peak hours (early morning till late afternoon) to doing as much Deep Work as possible, and reserving time in late afternoon/ early evening & even late night, to do Shallow Work. This really works, as issues that require Deep Work are hard and don’t have obvious solutions or playbooks. You need to be at your best levels of concentration to be able to tackle them.
Logging out from social apps on the phone — at least in my case, compulsively going to Twitter and LinkedIn was a big distraction. So, I have logged out of them on my phone. Having to enter a password everytime creates an inertia that breaks the compulsive tapping/ scrolling behavior. If I truly need to tweet, post or read, I can enter the password & access the app during downtimes eg. while in taxi or train or waiting for a meeting.
Creating Deep Work “blocks” — instead of blocking out entire days, what has worked well for me is creating time blocks of 2–3 hours each, where the focus is to only do Deep Work. Even if one such block can be executed everyday, it’s a big win. Doing 2 such blocks creates an outstandingly productive day.
Doing a 60 sec retrospective end-of-day — typically after dinner, I do a 60 sec retrospective with myself, trying to quickly evaluate whether I ended up doing any true Deep Work or not during the day. A way of keeping myself honest is focusing on whether I created any tangible deliverable of Deep Work value during the day. It could be a piece of analysis, a mock-up, a pitch document, a PRD, even a blog!
Deep Work is both a process and a journey. When I see so many people around “being busy just for the sake of being busy” and working for 10–12 hours but mostly doing Shallow Work, I feel the ability to do Deep Work over many years will give anyone an unbeatable competitive advantage in today’s world. A friend recently told me “I find reading a book really hard”, and my mind immediately went to “people who have the patience & concentration to work their way through books will have a natural advantage over the rest”. As all great leaders & companies have shown time and again, doing hard things over many, many years is the key to winning. ‘Cos 95% of people out there can’t do it.
What is your view on Deep Work? What rituals have worked for you in implementing it? Would love to learn from you.
Bonus Idea: here’s another great talk by Prof. Newport on “Why following your passion is bad advice”. A topic for another blog someday 🙂
Ah…the end of an era! Alibaba officially announced that one year from today, Jack Ma will hand over Chairmanship of the Group to current CEO Daniel Zhang. Am sure it’s a surreal moment for all Aliren (Alibaba ‘citizens’) — it’s almost impossible to imagine Alibaba without Jack. Everyone is so used to his inspirational speeches, his grand entries in the Annual Party, even his magic tricks at the event :). Xixi campus in Hangzhou (Alibaba HQ) reverberates with Jack’s vibe. His vision, leadership, persistence, sacrifice & personal charm has built Alibaba into a $500Bn digital behemoth over last 18 years, and as he says, the company has only just turned an adult :).
As a Founding Team member of Alibaba’s Globalization Team, I have had the privilege of working closely with Alibaba senior management at the Group level and through this experience, had the opportunity to directly & indirectly, imbibe Jack’s values. As Jack puts his 12 month succession plan into motion, here are some of the things I have learned from him:
Embrace change — one of the key corporate values of Alibaba, Jack completely personifies it. The way he has maneuvered Alibaba from a B2B marketplace in the late 90s, to going D2C via Taobao (which eventually killed eBay in China), then launching Tmall as a branded marketplace, building an ‘enabler’ stack of Payments (Ant Financial), Logistics (Cainiao) & Cloud (Alibaba Cloud), taking Alibaba global over last 5 years — Jack stands for ‘change’. He always says that one needs to be constantly learning. And that in the age of rapidly evolving tech, no one can be a domain expert for long; everyone needs to keep continuously learning & evolving.
Today is tough, tomorrow will be tougher, but day after tomorrow will be beautiful. The problem is, most people will die tomorrow — an evergreen quote that has always resonated with me. Building a disruptive company and creating true value takes time. In this era of dramatic distraction, grit & perseverance will separate the great companies, teams and professionals from the rest. Through this elegant quote, Jack keeps reminding us of this amazing competitive advantage that each of us can practice.
Thinking really long term…like ‘102 years’ long term — one of Alibaba’s vision elements is to be a company that is around for 102 years. Why 102? ‘Cos from inception, that means lasting across 3 centuries or to put it in another way, impacting the lives of 3 generations of users. What an outstanding way of looking at business…and life! How many of us actually think like this, when conceptualizing a new product or launching a fresh BU. This is the ultimate benchmark for a b-plan approval :).
‘Building’ talent is more important than ‘hiring’ talent — Jack’s philosophy on talent is simple. Instead of hiring the most-pedigreed, the most proven talent, hire talent that is hungry and build them into stellar leaders. A very different way of looking at people that turns the problem on its head, from a hiring lens to a people development lens.
Fighting for the ‘small guy’ — riding on the back of China’s manufacturing revolution, Jack started Alibaba with the aim of leveraging the Internet to connect Chinese sellers to the world. Since then, the SMB has always been a key focus area in Alibaba’s strategy, be it helping them reach consumers directly via Taobao, access loans via Alipay, or cost-effective cloud services via Alibaba Cloud. Jack has always fought for the ‘small guy’ and whatever his new adventure will be, I am sure he will continue this fight.
Globalization — while China has always remained close-walled and insular, surprisingly, Jack has always thought global. Probably because he was an English teacher in the years when the language was extremely rare in China. He got his inspiration to start an Internet company when he visited the US on a trip. Alibaba.com, the first Alibaba product, was a global B2B marketplace. While still running essentially a Chinese company in the mid-2000s, he had the vision and audacity to try and raise money from Silicon Valley (ultimately getting a strategic investment from Yahoo, which turned out to be pivotal for the company). Post the IPO in 2014, Jack pushed for Globalization as a key pillar of Alibaba’s operating strategy, resulting in investments like Lazada in SEA, Paytm in India, getting brands from EU and N.A. into China via Tmall Global etc. Having been a part of these initiatives, every day I have felt amazed and enamored by Jack’s global thinking. As he says “Alibaba is a global digital company that just happened to be born in China”. Personally, I find his vision to enable buyers and sellers from anywhere in the world to transact with each other (via what he calls the Electronic World Trade Platform or eWTP) extremely compelling and inspiring!
Culture & Ethics over KPIs — Chinese Internet companies are known to be extremely KPI focused and driving ruthless execution to achieve them. At Alibaba, Jack has always emphasized putting integrity, ethics and culture over KPIs. The company is by no means perfect, but having a leader who continuously puts values above just getting results at any cost, is a breath of fresh air in the tech business.
Believing in the power of Women + Youngsters — Jack has spoken about this a lot at public forums. Having grown up in India and now working in Silicon Valley, it’s so heartening for me to see an extremely high proportion of women colleagues in our HQ. Also, few people might know this, but Alibaba has a very high number of women in senior leadership levels across BUs. Something that other venture ecosystems across the world can learn from.
Keeping the team together — Jack started Alibaba with 18 other co-founders. Most of them were nobodies at that time, doing simple jobs, no fancy qualifications, no stellar pedigrees. Yet, Jack saw something in them. Most of them went on to start multiple BUs within Alibaba, lead thousands of people and play key exec roles. Most of them stuck around with Jack for many, many years (a few have retired in last few years) and even today, co-founders like Lucy, Jane and Trudy continue to function as operating CXOs. I don’t know how Jack did it but keeping the band together over so many ups-and-downs is to me, one of the defining reasons behind Alibaba’s success.
Do the right thing — the most powerful mantra given by Jack. One that makes even the most complicated decisions, look much simpler. A mantra that can break any deadlock, guide any strategy, & help win over markets…and people. Always…do the right thing. This is Jack’s legacy that will stay with me forever!
Thanks, Jack, for all you have done and keep doing for the world. For starting Alibaba and for using the power of the Internet to connect Asia to the world. For making entrepreneurship ‘noble’, rather than just ‘cool’. And…for being a sage, a believer in these crazy, cynical times. Wishing you the very best for your next Chapter!
Apart from the sheer size of this debt obligation (which, like any type of debt, will obviously be a great source of emotional and financial strain on an entire generation), what worries me most is that the end-product that people have leveraged themselves for, will end up continuously declining in value over coming decades.
For the foreseeable future (say next 5-10 years), a good-quality university degree will still, broadly speaking, continue to be a relevant filter for majority of jobs out there. However, once you start looking beyond next 10 years, it’s hard to believe that this will continue to be the case.
Students are taking on debt, essentially to get the following 3 elements from a university:
‘Foundation’ knowledge & skills — given the pace at which the working machinery of this world is changing, essentially driven by technologies whose future impact is hard to predict even for the most informed and privileged (VCs, large tech company execs, policy makers etc.), it’s hard to see a university curriculum keeping pace with these rapid changes. Perhaps, it will require almost a Just-In-Time approach from both the skill givers and receivers, which a static education paradigm like the present university system will struggle with. Continuous training, perpetually-upgraded skilling methods and a vocational approach will become vastly more important. While I am painting this in broad strokes, you get the drift!
Networks — while there is merit in having a common university bond that helps set up a base network, the reality is that as life goes on, other networks (the companies you work for, your neighborhood, the community initiatives you support etc.) continuously get added and their summation becomes far more important than just your university networks. Carrying forward the earlier thought of rapid tech-driven change, the ‘relevancy’ of your networks will also evolve quickly. For instance, as a design under-grad, you might know lot of other designers. However, you might end up eventually building your career designing digital healthcare products and therefore, might need more healthcare professionals in your network rather than just designers. Finally, with networking initiation, build-out & maintenance happening more online than offline, importance of campus relationships and old boys clubs is definitely going to decline. The point is simple — in the pecking order of networking elements, campus schmoozing & alumni events are going to be replaced by leveraging tech platforms, creating your personal brand in the digital world and good-ol’ hustling. PS: my belief is also that elitism in recruiting (eg. Company XYZ only goes to these 2–3 campuses for hiring) will reduce drastically. As the required skill-sets for all professions evolve dramatically in the 4th Industrial Revolution era, employers will become more open-minded and honestly, will have no option but to go where the skillset is (if US universities aren’t producing enough data scientists, companies will go and hire wherever they are available, be it Warsaw or Trivandrum).
Credentialing — the tech industry has already taken the lead in adopting alternate credentialing mechanisms such as hackathons, internships or in the blockchain & crypto world, publishing a solid white paper :). In a rapidly changing business environment, credentialing provided by relatively slow-moving and static university channels is frankly, declining in importance. Similar to the paradigm of continuous learning, credentialing will also become a continuous phenomenon that is driven by practical skillsets & real-life outcomes delivered on the job.
As the above scenarios play out, taking on an unrealistic amount of student debt that is decoupled with the real long-term value of the asset itself, doesn’t make much sense. Why does this delta exist and how can it be brought down going forward are of course, key questions that educational institutions and policy-makers face today.
Some life-strategy suggestions:
For Millennials with significant student loans: would be good to prepare a detailed and practical financial plan to pare down this debt. Have the discipline to stick with this plan, and make the necessary sacrifices of ‘living below your means’ to accomplish it ASAP. As the loans come down, create a fresh capital allocation for ‘continuous learning’ via online courses, certifications, networking events etc. In the long-run, this will be money well-spent and give you a massive ROI.
For students about to enter university soon: rather than taking a less-thoughtful approach that is driven by historical precedence and herd-mentality, be brave enough to take a fresh approach to evaluating your options. This is a massive investment of your time and money, so think like an investor. Deeply compare the long-term ROIs of public vs private universities. Be sensitive to tuition & overhead costs of specific courses, and compare them against the tangible post-graduation prospects they offer. Think about every angle — univ. brand vs the actual course, full-time vs part-time, location with associated living costs and career options. In a rapidly changing economic environment, things like financial freedom & employment flexibility are going to be very important in the long term. Include these aspects in your career math. It’s hard to think on these lines as an 18 year old, so the role of parents, teachers and other experienced stakeholders will be very important in guiding them through this process.
As a society, we have already made the mistake of burdening our newest generation with this student loan problem. Similar to issues like the environment, everyone needs to come together and start working on removing this albatross from the necks of our students.
Over last few months, I have been trying to install a few fundamentally-new habits for myself, mainly related to health, fitness and reading. And this has led to an important realization — willpower is a ‘reservoir’! What does this mean?
Installing a new habit depletes willpower — as you push yourself to learn a new skill, start a new ritual or basically do anything you aren’t used to, it requires a major dip into the willpower reservoir. And each such dip ends up depleting the reservoir…every single day you push yourself till the habit becomes second nature.
Focus is important to optimize willpower usage — given the reservoir is of finite capacity at any point in time, you can only take so many dips before depleting it to a critical level. This makes focus really important. Focusing on utilizing every ounce of this willpower just on a few, really important habits/ skills/ rituals/ initiatives, ensures you get maximum long term returns. So, if you are planning to start getting up early AND start working out AND start eating more greens AND start networking more aggressively AND start spending more quality time with family, you will exhaust your willpower reservoir very soon. Choose only 1–2 at a time, choose carefully and choose wisely!
Take rest to replenish — as your willpower reservoir gets depleted, take rest to replenish it. Our generation is almost programmed to keep pushing ourselves relentlessly and keep moving from one goal to the next. As you achieve a milestone, take a break. Give yourself a pat on the back for learning something new, and let the willpower reservoir fill up again before taking on the next goal.
Willpower capacity can be increased via practice — interestingly, the reservoir can be expanded. It’s like a muscle. As you install more new habits, while the contents get depleted, the reservoir capacity itself increases. So the next time you take a break after achieving your goal, you will end up with more willpower than before. Isn’t that cool?
Here’s wishing you an ever-expanding willpower reservoir!
Read an interesting WSJ article on how Goldman Sachs investment bankers moonlight as VCs.
Drawing on this article, one of my key observations over the last decade has been how the present global economic system drives the “rich keep getting richer” phenomenon. It’s most likely a by-product of capitalism and free markets the way they have been created & have subsequently evolved. The beneficiaries of these systems are obviously, not incented to complain.
With the way technology is penetrating our planet, and that too in a highly disruptive way, I see even more momentum in this “rich getting richer” phenomenon in coming years. Preferential access to 1) information, 2) knowledge & 3) networks will keep catalyzing this trend. Combine this with additional leverage generated via access to capital.
Have thought about how this can be broken — IMHO, a way is to provide as much “access” to education as possible, which in turn, will better setup citizens to create access for themselves to the aforementioned 3 elements.
Would love to discuss more thoughts on how else can this “rich keep getting richer” phenomenon be constructively broken globally.
