8 thought provokers – Part (2/3): Arena & Operations

As we continue our surge to identify the right mix of success factors, there is always a common thread that stitches them all. It is not to do with just the ability to dream but also the willingness to do and determination to complete what has been started.

This all started with the blog I wrote in response to a question – What is the a Brilliantly New Idea that no one has thought?

A deeper research into this question led to identifying the 8 thought provokers that eventually lead to first blog in this three part series. To learn about the first blog (and for continuity sake), please go to my earlier blog named – Study and Plan forward: 8 Thought provokers.

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With this 2nd blog, I am going to explore the next three Thought Provokers:

  1. Whats my arena?
  2. What kind of operations are required? What can I NOT do?

Whats my arena?

The arena defines what kind of market competition you are entering. This is one of the most important and complex activity but is most overlooked. Reason being impatience and urgency to jump. This impatience is very much visible in mushrooming online businesses – as its easy to start a website. Any business that is easy to start by you, CAN BE EASILY STARTED BY SOMEBODY ELSE.

And this should be a significant red flag for you.

Arena definition can be done very easily –

  • What does it take to start this business? In our MBA employment skills example, one would require first to be an MBA or a significantly accomplished professional who can guide the MBAs. An MBA for all the investment s/he has done in their career will not pay attention to what somebody who they think is inferior in education tells them. This is harsh but real.
  • What are other players in the market already? In the world of internet, this should be fairly easier to find out. With good keyword searches, you should be able to nail down this. For our example of services to MBAs for employment skills, we see that there are numerous examples but hardly any proper services that come in the results.

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So Research on competition is very important. I find the various Landscape diagrams published by leading VCs and consulting firms as very useful for any research.

What kind of operations are required? What can I NOT do?

It is always fascinating to look at success of others and mimic it. This is typical human behaviour and there is no surprise. After all, the iconic iPod was a ultra improved version of all the music players out there in the market.

Years 2013 to 2016 saw a significant spike in number of e-commerce and internet based startups in India.

Check out the list of E-commerce sites in March 2012 compiled by Amrita Kriplani.

From this list more grew and many or most are closed now. One of the key reasons why many/most of these startups failed is because they underestimated the operations involved in shipping goods from one place to another and then return in case it was not accepted by the customer. Here is a quote from A. T. Kearney report on E-Commerce in India:

“India currently doesn’t make it into  the top ten of A.T. Kearney’s eCommerce Index because its infrastructure  is underdeveloped, and there are still cultural reservations that keep  it from leaping ahead.  India is a big market (1.2 Bn people) but  infrastructure—technology, finance, logistics—still needs a lot of work,  and only 8% of the population uses the Internet.

The proliferation of Indian IT industry was primarily attributed to simplicity of the local operations. On the other side manufacturing and e-commerce are complex in operations.

I use a simple formula to understand the complexity of a particular operation. Based on number of touch points, the complexity of processes can be determined.

COMPLEXITY OF OPERATION = 2^n

where n is the number of touch points

Any operation with Complexity > 64 is a highly complex one and one must think on how to simplify it or outsource it to the right people.

In case of IT industry, any project has following touch points:

  1.  Getting requirements
  2. Development of software
  3. Testing of Software
  4. Deployment

Complexity of this is 2^4 = 16. So this is simple and is easy to start business.

The complexity for E-Commerce operation is below:

  1. Getting customer to the website
  2. Give them the right product that they need
  3. Make them to do the payment
  4. Identify the right logistics partner to dispatch the product
  5. Dispatch the product
  6. Get the product delivered to the right customer and confirm delivery
  7. Reconcile payments with the payment partner and with the logistics partner

Complexity of this is 2 ^ 7 = 128. So this is highly complex operation.

I have found this as a good rule of thumb to help and identify the nature of operations. Complexity when combined with arena helps to be a good combination to determine competitive advantage.

I shall conclude this blog here. In next blog we shall explore all the open questions remaining for this series.

Thanks for reading!

Weekly #AI Digest: Persona, Personal, Official

The virtual assistants are ‘virtually’ (meaning literally) are rocking the world with the endless possibilities they are opening. From a humble beginning with Apple’s Siri that was a novelty when it was launched, there are plenty of virtual assistants today that have come up in the market. We have spoken about them in the past multiple times. Be it Apple Siri, Microsoft Cortana, Amazon Alexa, Google Assistant, Sales Force Einstein (still in works), they have featured here.

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So while we see a lot of marketing coming out of these virtual assistants and chat bots, what if we start getting answers from Donald Trump on our phones about his plans for the nuclear war, or Elon Musk to talk about his view on the next big planet to explore after Mars or Justin Beiber on his next chart buster?

MIT Media Labs is working on this to make it a reality. They are working on something called ‘Augmented Eternity’. Its based on an idea of “swappable identities” based on question prompt. With a personality lens, you can swap the identity and then you can ask the relevant question to the persona and get your answer.

This will help in streamlining the overall asymmetry we see in expertise and consultative sharing. Plus,  we will get the right answers faster and that too from the horse’s mouth.

So while this is still in works, these virtual assistants remain dumb. A social comedy experiment by Brent Rose to squeeze a flick on comedy based on stupid answers from Siri, Cortana, Echo and Assistant went horribly wrong. Check out the video here.

Now this makes one scary.

Perhaps this is the reason why Google has found that since humans suck at making good AI so they have built AutoML that is better in building AI than the company engineers.  Through a mesh of neural networks, the controller neural net defines a ‘child’  model architecture that grows as more data is fed. Catch being the child grows faster than the human child.

While world is still bracing these advances and we are still away from the trade-off of the smart, over smart and dumb version of AI, one CEO has decided to give the dirty of job of on the spot reviews about his team members to a machine over himself.

One new member that has joined the team meetings hosted by Salesforce CEO Marc Benioff is ‘Einstein Guidance’. Einstein is the company’s AI assistant that assimilates information said by all the team members in the meeting and gives on the spot feedback about a team member who may not be performing so well.

Wait till this comes to our homes and when parents will leave this dirty job to many more Einsteins.

Hope you enjoyed reading this edition.

#Foolish is #foolish even if 50 million people say it is not

Nobody wants to sound foolish and nobody wants to be with foolish but we land up being foolish. Worse, since we are with foolish people around us, we consider the non-conformist as foolish. But still we are foolish. Does this sound foolish?

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It perhaps does, because being foolish has become quite popular these days. But I am sure you did smile or laugh reading it. It has a meaning though.

Everybody must be aware of the popular show starring Jennifer Aniston,  Courteney Cox, Lisa Kudrow, Matt LeBlanc, Matthew Perry and David Schwimmer – known together as ‘FRIENDS‘. It ran for over 10 years and is still among the most popular shows for college-going-20-somethings . The thing to note about the show is not Matt LeBlanc machoism and not even Schwimmer’s Ross flirting with Aniston’s Rachel. It is about the most humorously bullied characters in the show – Ross.

As per a recent theory, FRIENDS actually triggered the downfall of the western civilization as the show encouraged stupidity over intellectualism. You watch any episode with Ross in it and you can see how his friends groan when he speaks work. Ross was one of the most educated and professionally successful individual in the group.

Learn more about the theory here.

It is an interesting premise. And we do see similar shades in India here. One show that celebrates stupidity and foolishness to a great extent is ‘The Kapil Sharma Show‘. The show had (it has run into some issues with one of the lead comedians) so much of popularity that there was a time when no movie could be released without the actors promoting it in the show.

Interestingly, in closed conversations, you would find people disparaging the standards of the jokes in the show but openly no one would say it. Some even termed it intellectually damaging for the poor content it was propagating.

Similarly for FRIENDS, you go to any college and check out how the students like it, the

guiding-customers-social-proof-stansberry-open-forum-displayanswer is going to be a firm yes. Even though, some may argue against the hipness of the show in closed doors.

This phenomenon to follow all the crowd is called ‘The Social Proof’*.

Many years back there was a purported episode of statues of Lord Ganesha drinking milk from… well a glass. This was seen at multiple locations in India. This is social proof of capillary effect to be misread and propagated as ‘Hindu Milk Miracle‘.

You look around businesses, you would there is a drift to “A” particular phenomenon whether it is technology or it is services or it is anything else.  No one wants to stand out of the herd.  If the leader is on acquisition spree, you would see all in line for that. If some companies are entering a new market, all will follow without realizing their capabilities and product-market fit. This, as you would realize runs across all ranks of the organisation – irrespective of the size.

Lower computing costs coupled with social proof of not getting missed out on, is the reason for so much of popularity of Artificial Intelligence in the world. At one point, it was the Internet boom. There was a website of everything. Now AI is the new electricity. Rightly so.

The Indian startup story hit a road bump as there were too many investors wanting to board the ship to glory in India. Due diligence was left lurking in the dark and money inflow was plain mindless.

Similarly, being on whatsapp is a real thing for people even if 99% of time is wasted on reading meaningless forwards. Same is the case with watching Television. However, can we imagine lives without them. One who shuns these products is looked upon as some kind of an outcast. This is social proof.

It is important to be aware of this, as you may be wasting time on something that does not add any value to you. Whether it is watching an intellectually damaging show like Friends or The Kapil Sharma Show; or it is watching news for some incident in a remote corner of the world that doesnt make sense in your life.

Ask yourself this question, does this help me or I am doing it under my compulsion to follow the rest of the people in my surrounding. 

Typically, the one who stands out of the crowd is the one who is worshiped later. Think about it!

*The Social Proof is carefully adopted from the book ‘The Art of Thinking Clearly’.

Context Matters: Survivorship Bias and Dislike Euphoria

‘I don’t want to work under an idiot.’ – Declared a close associate’s younger cousin who wanted to go for his own business and did not want to take up a job he got immediately after his engineering graduation.

The idiot he meant was his potential boss. Problem is the guy had never met him but judged the person. He was determined to start on his own. Start he did.

Cemetery

18 months later he started applying for jobs again. Apparently, he was ready to work under an idiot. Its not his fault.

The winner takes all, at least the eyeballs.

Any realm, any mode, any sphere we see – people get impressed, motivated and eulogize the successful. So much so, that they start believing that if the winner did it, then they can also do it. Its inspiring!

They start imitating the winner – be it individual, be it businesses, be it teams.

We get inspired by real life heroes who solve a problem we relate to.

We chase successful businesses, operating in industries we dont even understand.

We love teams, that demonstrate winning streak and are well marketed.

What we forget is that winner is not the true reflection of the reality. Winner is truly the survivor of the circumstances. We should pay more attention to the one’s who did not survive and perished in the process. They would have a heavier tale to tell. They would tell how the survivor survived as they were in the same sea as the survivor. They saw what happened. Survivor may have not even known what s/he or it was doing.

This is the Survivorship Bias*. 

Behind every successful company, there are 100s that did not have enough capital to survive, then there are 100s that had potential founders who could never muster courage to start.

But, being an entrepreneur is a sexy vocation these days.

Its important that we look at the other side. Ignore the survivors and look at the debris in the cemetery. Thats where the real picture is being painted.

Similarly, there is a ‘Dislike Euphoria’, especially in the social media. We ‘like’ the content that is worth to be disliked. Any story filled with hate or instigating with remorse get more ‘like’ as they have the most dislike element in them.

A politician loses a hard fought battle. Social media commentators berate him and get most likes for dislike.

An incident in a day like today that may have gone unnoticed goes viral when posted online with heavy dislike element in it. It gets maximum ‘likes’.

So much is the ‘Dislike Euphoria’ that it is becoming hard to differentiate fake from reality. Like online currencies are blurring the shadow lines between the real and the shadows of lie.

People post their suicide videos, women’s modesty is snatched in live videos, hooligans go at large in a regular discussion on live video. They get most liked for the dislikes.

While there is a drift in the society, its sliding down.

Facebook has a genuine human problem with its live videos.

Facebook is a strong epitome of Survivorship Bias with a 20 something pushing the boundaries of the society to make something so big, and has the Dislike Euphoria for all the wrong reasons.

Something must change now!

*Survivorship Bias context is carefully crafted from the book ‘The Art of Thinking Clearly’ by Rolf Dobelli.