Leadership – Page 2 – An Operator's Blog

Using the Focus Canvas to Cut Burn

As the fundraising environment continues to get harder in 2023, founders & investors are deep into rationalizing business plans & finding ways to cut burn. The first temptation is to follow what I call an “excel sheet” approach – starting with the largest expense items without enough strategic thinking around the revised set of goals, business constraints in this new environment, what is working well right now, & how capital should be most efficiently allocated going-forward.

As opposed to big companies, startups operate with a finite runway, trying to address significant customer problems that remain unaddressed by large incumbents. This requires constant innovation – essentially doing hard, non-consensus things across the stack, everything from technology & design to customer experience & business model, that incumbents aren’t doing.

While big companies can afford to be relatively unscientific in cutting costs & still tide through tough macros with the help of their existing PMF, startups unfortunately, have no option but to play offense at all times in order to continue innovating & thereby, give themselves a chance to survive & succeed. In financial terms, this implies investing incremental $$ into innovation that drives more revenue (& profit), which is what will ultimately save a startup, not investor cash sitting in the bank.

So how should founders think about playing offense while being capital-constrained? I would like to propose a thinking tool called the “Focus Canvas“:

As a first step, rather than focusing on P&L line items, break down your business into specific buckets. These could include customer segments (eg. Individual, SMB, Enterprise etc.), product lines (eg. shrink-wrapped, custom deployment, pure services etc.), platforms (eg. desktop app, iOS, Android, browser extensions etc.), distribution channels (eg. self-serve, inside sales, direct sales, channel partners etc.), geographies (eg. US, EU, India etc.), teams by function/ type (eg. engg., product, design, sales, marketing, offshore contractors, agencies etc.) & other buckets that are relevant for your business.
Arrange all the relevant buckets & their constituent elements on a single page. This is your “Focus Canvas“.
On the top-left corner, list the most updated business goals for this year that all stakeholders in the company have aligned on. These could be things like “hit $1Mn ARR”, “show x% retention”, “start fundraising in Q4” etc.
On the top-right corner, list all the business constraints you expect to face this year. These could be things like “12 months runway left”, “only 2 backend engineers”, “sales cycle taking 6+ months to close” etc.
Now, as you are looking at this Focus Canvas, try and answer the question “what is working well right now?”*. You need to define “working well” for each bucket as per your specific context, also taking into account the above goals & constraints. It could be driven by one or more of revenue growth, most profitable, highest ROI, generating the most valuable feedback, creating the most differentiation, highest team productivity etc. *Note: this step is well-suited for a team workshop/ brainstorming session.
The most important step – for each bucket, put a ✅ in front of the element(s) you believe is your best bet to achieve this year’s business goals while navigating expected constraints. Then, ❌ out all other elements in the bucket. This is where ruthless focus is extremely important for the Canvas to do its job well – ideally, force yourself to ✅ only your #1 focus element. In the case of most startups, that’s probably all you can afford to execute anyway.
Finally, take the ✅ element from each bucket & weave them into a simple, 1-2 paragraph Focus Narrative. An example to illustrate this – “In 2023, we will focus on the Enterprise customer segment & offer them the standard product suite with a billable custom deployment services wrapper. The product roadmap will focus on the desktop app. We will double down on the internal sales model for distribution, with founders pitching in for strategic logos. To increase our team’s efficiency, we will significantly reduce contractor headcount & re-allocate them to full-time hires in engineering & internal sales.”

This Focus Canvas now provides a clear & strategic view of opportunities to both cut burn & re-allocate resources, while staying on track to achieve business goals & making progress toward PMF. The Focus Narrative can be used to socialize the going-forward strategy across teams in an easy-to-remember way. If used well (read: with ruthless focus), this approach can help startups in playing offense even in a tough economic environment.

PS: sharing a Focus Canvas template that you can use as a starting point. Feel free to download a copy & modify it as per your requirements.

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Top 15 insights on how to operate as a startup leader

Recently came across a great conversation between Keith Rabois and AngelList, back from Aug’18. So many tactical insights for operators, founders, big co./ startup teams, or anyone who is interested in understanding how leaders should operate on-the-ground. My key takeaways below:

Talent can be classified into “Barrels” (can independently execute end-to-end, from idea to product-in-market) and “Ammunition” (require supervision, execute only specific elements well). The number of Barrels in your team governs how many parallel things you can do.
Every business can be ultimately distilled into an “equation”, with key revenue & cost variables that ultimately drive profit. Founders need to understand their business’s equation really well, which is what drives strategic insights that lead to better decisions.
A key job of a founder or CXO is to compress “time” for the business, via a communication strategy of “simplify” and “clarify”.
In the majority of cases, larger engineering teams tend to slow execution down. Paraphrasing a quote by Eric Schmidt — “one of the most powerful things is 2 engineers working together”.
Put your best people on the most challenging problems, irrespective of what it does to your org. chart.
The more transparency around data and information that the CEO can create, the better everyone else can make day-to-day operating decisions that align with the company goals and strategy.
There is a saying in sports that a particular team has been “coached to play fast”. This is what startup leaders need to do to increase the speed of execution — coach their teams in a way that they can take fast decisions & react instantly, and in high fidelity to company goals.
As a leader, it’s important to speak in “Whys?”, and not “What we are doing?”.
As a leader, it’s important to change your management style as per the kind of individuals or teams you are working with at a particular point in time.
The CEO is the “Chief Editor” of the company. You aren’t actually doing a lot of the functional work yourself but your key job is to a) simplify things for others, 2) create consistency across teams, and 3) create a coherent narrative & voice, internally & externally.
As a founder, it’s important to understand the difference between a “bad” team and an “incomplete” team. Both require very different strategies.
Best way to onboard talent (from intern to exec) -> start with as narrow a scope as possible, let them succeed at it, and then keep expanding their scope & pushing their range.
Hiring is a muscle — you get stronger as you do more of it.
An important question to answer while hiring: are you hiring for upside creation (is there a spark?) or downside protection (rigorous value creation role)?
A simple best practice to improve hiring is to borrow your network to vet candidates and do comprehensive reference checks.

I already started implementing a bunch of these at my startup Workomo. Would love to know if you have used some of these tenets in the past, and your experience/ key learnings from it.

Decision-making learnings from India’s James Bond

I have always been fascinated by Ajit Doval, current National Security Advisor (NSA) to Prime Minister of India. At least from what I have been able to research, he is India’s first NSA to have also previously been an intelligence agent & ground operative behind enemy lines for decades. This makes his talks on defense strategies & decision making really fascinating, as he speaks from his experience on the ground, dealing with extremely high-pressure, high stakes situations.

I recently came across Mr. Doval’s interview called Talking Point. Similar to the Art of War by Sun Tzu, which has fascinating leadership & decision-making insights from ancient Chinese military knowledge & strategies, Mr. Doval gives some interesting insights from his intelligence & military operating experience, particularly around tough decision-making.

Here are some key takeaways from this interview:

What makes a decision tough? — a decision is tough when its consequences are “large” —quantum of impact is large, or impacting large number of people, or consequences remaining for a long period of time.
Objectives (why)→Decision (direction) →Option (how to execute) →Execution — this is the full-stack framework for tough decisions.
Clearly articulate your objectives for taking a decision — take out all adjectives and adverbs, only have nouns and verbs. Make it as simple and crisp as possible. eg. “ I am taking a decision to [ACTION] on [SUBJECT] on [SCHEDULE]”.
Do an objective analysis of your capabilities before taking a decision & choosing optimal execution option — what resources are at your disposal? What is your level of understanding of the subject?
Do an objective analysis of your state-of-mind before taking a decision & choosing option— am I angry? Am I fearful for my life? Am I fearful for my family? It’s almost impossible to take objective decisions under any sort of heightened emotional state.
Each decision option has a cost, associated time and probability of achieving your objectives — you need to choose the option which is most effective on cost and time, while having sufficient chances of achieving your objectives outlined earlier.
Frequently, decisions are right but option chosen is wrong — important to differentiate between the two (my interpretation is that decision is more about direction while option is more about executing on the direction). Wrong options typically get chosen due to lack of experience, knowledge or sufficient preparation.
Manage your fears by articulating them clearly — once you do this, in most cases, you realize that the fear isn’t as big or binary as you thought. Then, mitigate the specificities of this fear via hard-work, preparation and using your knowledge/ expertise.
More important than obsessing over how to take a decision, is being prepared to cope with what happens after a decision has been taken — human brain has limited capabilities and we aren’t crystal gazers. In most cases, vital decisions are taken under stress, anxiety and uncertainty. Given nobody really knows whether a decision is right or wrong, it’s more important to think about how you will cope with the aftermath, in case the decision doesn’t pan out the way you expected.
Assume that the “as-is” situation will unexpectedly change after your decision — be mentally prepared to cope with a new set of reactions, externalities and realities. Trust your capabilities and resources.
While taking vital decisions, work out a “worst-case scenario” and prepare for it — first, figure out if you can survive the worst-case scenario. Second, work on bringing down the cost of this scenario, to bring it to an “affordable” level where the risk becomes worth-taking. Doing this requires time, preparation and knowledge.
More important than making the right decision is making the decision right — you need to use your commitment & hard-work to ensure that once the decision is taken, it delivers positive results.
For decisions with potentially massive impact, always have a “fallback position” — having a contingency plan is crucial.

In addition to these widely-applicable insights, Mr. Doval also talks about his execution style. I found these points interesting so also including them below:

Solo — prefers being a solo operator. In an intelligence mission, risks go up as dependencies on other people get added, especially due to potential Prisoner’s Dilemma in case the mission blows-up. He might totally believe in a mission, while someone else might be doubtful. Hard to achieve success in a doubtful state of mind, particular as an operative agent. He doesn’t like to expose other people to risks that he, personally, is willing to take.
Surprise — doesn’t use the same operating strategy/ style more than once. This forces him to articulate a fresh set of assumptions every-time, and validate them again. This takes out any historical bias from decisions.
Speed — if you are fast, even if the enemy knows about your mission, you can still beat it say even by a few secs, achieve your goals and escape out of the situation. Key is to strike fast and get out fast.
Secrecy — in any type of situation, being able to hold vital information and secrets within you is critical.

While we consume majority of our content from successful founders, investors and business gurus, it’s important to diversify sources of knowledge and refer to learnings from other disciplines. Personally, I have found 2 such diverse areas very useful for both professional and personal learning — 1) creative arts (movie directors, artists, authors etc.) and 2) military (navy seals, intelligence ops, historical warfare strategies etc.).

Let me know if you found this piece helpful, and what non-venture areas do you refer to for fresh insights.

Insights from “The Mundanity of Excellence” — learning from Olympic Swimmers

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.

Would love to hear your take on this paper.

Source: “The Mundanity of Excellence: An Ethnographic Report on Stratification and Olympic Swimmers”

Note: direct excerpts from the paper are presented in inverted quotes.

Moving one step a day towards true leadership….

Have been thinking a lot lately on what true leadership really means. Back in Jan 2014, I moved from doing Venture Capital in India to becoming a tech operator in Silicon Valley. Life has been a roller coaster since then…to say the least. Met people that willingly ‘punt’ on quality talent, as well as jacka**es that suck the life out of them. Worked with some awesome individuals, as well as shockingly dysfunctional teams. Experienced world changing visions, as well as weak products that did no justice to them. Each day has been fun, gut-wrenching and full of countless moments wherein I have questioned all my assumptions…and life choices.

In particular, one question, more than others, stares at my face daily — “What does true leadership mean”? No matter how many management books, expert blogs and leadership training you go through, none of them gives you solutions to the ambiguous problems that life throws at us — what to do when a team member who is well-intentioned and great at the job, is actually destroying team culture? How do you give feedback to a senior leader? How do you communicate in a different country’s culture where even the language isn’t shared? How do you react in a political work environment — do you participate or stay away from it?

To counter these situations, the advice always is “to do the right thing”. But what is the “right thing”? Isn’t the “right thing” always contextual? What if your “right thing” is different from my “right thing”, given our different personal compasses?

I have no answers to these questions — perhaps, navigating these challenges successfully day-after-day, year-after-year and decade-after-decade is what creates true leaders. Standing today, to me it seems true leadership is a path, a journey, a series of battles that need to be fought (not necessarily won!). You have to be brave enough to walk down this path, and keep walking. Even with all the business knowledge, models, frameworks and networks in the world, nothing can quite prepare you for this journey. You just have to experience it, fall down, cry, curse, get up, learn from it, move on and make the best of it. And maybe…just maybe…years later…you would have moved closer to becoming a true leader. After all, it took more than 25 years each for Mahatma Gandhi and Nelson Mandela. And they were still questioned!!

Personally, as I have started walking down this path over last few years, following Robin Sharma and Sadhguru has given me fundamental concepts and energy that has helped me tremendously. What has helped you as you walk down your own path? What is your idea of true leadership and doing the “right thing”? Would love to hear your thoughts.

Will leave you with this quote by Robin Sharma that has left a huge impact on me — “To lead is to serve”.

Tag: Leadership