K Srikrishna

The Entrepreneur Life

Month: November 2012

3 Steps to Create a Culture of Innovation

November 22, 2012 / / 0 Comments

InnovationYesterday I was part of a panel discussion on innovation and entrepreneurship at the opening of the Innovation and Entrepreneurship Development Center (IEDC) at the Dayanand Sagar College of Engineering. One of the first questions the moderator posed was “How does one create a culture of innovation and what role does leadership play?”

To me this is not that different from the question, How does one create a culture of ______ (fill in the blank) – for instance courtesy and consideration. You start by being polite – kind and courteous. Similarly creating a culture of innovation within our companies, divisions or teams is to start by being innovative. What does that mean?

To me it means three things

a] INSPIRE Talk about, share and celebrate innovation – set aside time, whether a Friday lunch or before your weekly team meeting to show what you mean by innovation. Bring in a mechanical water sprinkler and share with your team why you think it is innovative or better yet ask them what is innovative about it. A clasp on someone’s chain, a pain-free blood sugar measurement tool – in other words – “the ordinary” and the extraordinary that’s around us every day. Allows you to discuss and develop a shared sense of what is innovation and over the common misconception that only a cure for cancer can be innovation. Over time this can be things that your own team or company are innovated, but don’t wait for it to be done in-house

b] MEASURE Put in a process, where the team can spend time focusing on problems – which allow scope for innovation – could be in technology, internal processes or methods or any other function within your business. Intuit for instance created a process for employees to share ideas and seek inputs which has eventually become a product they now offer their customers. And most importantly put in measures — only that which gets measured will get done. So when you talk about it, ask about it, measure it, everyone begins to pay attention to it and that’s how a culture of caring about innovation gets slowly built up.

c] REWARD & RECOGNIZE Nothing works like recognizing the work people are doing and rewarding innovative behavior. A critical element here is not to celebrate success alone or what is commonly perceived as success – ie a new product that launches or a new idea that’s implemented, but to recognize and reward risk taking. Unless we create a culture within our companies of tolerating mistakes and viewing them as a way to learn and do better, it will be very hard to create a culture of innovation. As Gordon Moore, founder of Intel put it “I view this year’s failure as next year’s opportunity to try it again. Failures are not something to be avoided. You want to have them happen as quickly as you can so you can make progress rapidly.”

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5 Reasons Why You Need a Founders’ Agreement

November 15, 2012 / / 5 Comments

About Cervantes

Just this last year, two founders in two different startups that I’ve invested in quit. Back in 2000, when one of the co-founders of my first startup quit (on religious grounds) we were quite taken aback and ill-prepared to handle it. However that parting was amicable and all the founders involved — there were five of us — are still on talking terms. Despite this first-hand experience, I did not foresee founders in either of these startups leaving. To make matters difficult interesting one of the founders left in a rather acrimonious manner, which proved quite a bit of challenge not just financially but emotionally. Sure, eventually things get to a new normal and while neither of these startups is still completely out of the woods, they’ve survived, evolved and even grown. Ever since this happened, I’ve been informally talking to folks, both boot-strapped as well as those with angel funding, about founders’ agreement. And usually I’m greeted with a blank stare, when I pose the question, do you have a founders’ agreement? Occasionally to keep things interesting I ask them “Do you know what an inter se agreement is? Do you have one?

Here are five reasons why you need a founders agreement

  1.  Self knowledge As I found in my second startup, even when you start a business with people you’ve worked with for a long time, your stated and unstated expectations can be very different. As each founder may be in a different stage of their lives – be it with parents, spouses or girlfriends, kids or even personal aspirations. Many times, we don’t know what we don’t know or or thing we’re making implicit assumptions about. A founders’ agreement helps flush these out – especially when your other partners state their own concerns, desires or expectations. This could be from the profound – of what happens if a founder dies to the mundane of how equity will be evaluated if a founder wants to cash out.
  2. Relationships As my father used to say, businesses can fail and often do fail. Most young people enter into business with friends as co-founders and even in the case where a founder was not a friend before, the heat of a startup certainly will meld the relationships into one of friendship, if you are lucky. So when things begin to go south, the inter se agreement acts as an impartial or at least a mutually agreed manner to resolve differences. Founders can leave not just for professional reasons, but because their spouses want to go overseas, or they are going through a divorce or loss of a parent or child – all events that are traumatic enough without having to deal with a business relationship coming apart.
  3. Values A founders’ agreement in many ways makes you confront your own stated values for your business and yourself. With multiple founders, the creation and negotiation of a founders’ agreement is fraught with unearthing people’s deepest fears and concerns. The disagreements and discussions in creating an inter se agreement at a time when the founders are in a good relationships at the beginning of the journey, are some of the surest ways of unearthing and cementing core values. So how you handle a senior employees restricted stock or options in the event of an exit or their early departure may tell more about your co-founders values than any amount of values workshops.
  4. Reality check Whether you are a first time entrepreneur or working on your fourth startup, there is an inherent level of reality-distortion or self denial that’s needed to even get started let alone keep going. As one of my co-founders asked me two years into our latest startup “Have you retired or are you serious about this business?” An inter se agreement is a great way to remind and re-iterate to yourself that you are a realbusiness and not a fun (technology) project and that you have obligations to yourself and others
  5. Success As Miguel Cervantes put it so eloquently (in Spanish) the secret to success is preparation. (He actually said “The man who is prepared has his battle half fought.” When you embark on a startup the only certainty is that everything is going to change. Knowing, or at least discussing what such change, especially in the founding team would mean for the company and other founders is a good way to make sure that you, at the very least don’t fail but improve the chances of success of your enterprise. Being prepared and the sanity of knowing your values, relationships and aspirations are all likely to be preserved will enhance the chances of your success.

Sure, all of us have run businesses, scaled them, sold them and in some cases buried them without inter se agreements. However if you can do it with greater peace of mind, sort of riding your Harley with a good helmet, why not!

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Culture, people & other imponderables

November 7, 2012 / / 0 Comments

Don’t worry that your kids don’t always listen to you, worry that they are always watching you.
— Robert Fulghum

taste [choices]Startups & founders have enough to worry about without adding culture to the mix. Or so it would seem. As Fulghum points out in his own inimitable style, culture is what is being built as you worry about execution, hiring or product market fit.

What most of us don’t realize is that we are actively, even if blindly building culture in our companies every waking moment. The trouble is when we do this without being mindful or engaged, we usually end up building a culture that we are surprised about as it invariably bites us in the rear.

Starting from the moment you step into the office, people see if you greet the security guard, whether you get your own cup of tea or put it away when done. Whether you text in meetings or worse yet when you answer the phone during a 1:1 meeting. Even if you answered yes, yes, yes and no & no, they see what you do or say when a senior team member flames another, or a team member screams at a vendor. When you are quiet about a white lie to a customer or don’t question why a payment is being withheld, you are communicating loudly and shaping culture – though not necessarily the way you want.

So culture in a startup is not an option – but what sort of culture you want is a choice you can make.

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Share the credit generously – Lessons from my dad

November 4, 2012 / / 0 Comments

Spotting someone you know in a movie’s end cre...

“That is what TTN has visualized.” I’d heard my dad say this so many times as I was growing up. TTN was TT Narasimhan, his boss – who relied heavily on my dad as his execution guy. In later years, my father took on the role of the CEO of two group companies and was left to call the shots in these and other businesses. Yet, in almost all public instances, my dad never did anything without indicating that he was only carrying out TTN’s vision. While not comfortable himself with any form of public praise, he was never failed to point out the contribution of TTN, when someone praised or credited him with any success. Even in the hierarchy and sycophancy-laden culture of India in the 70s, it was clear that it was something else that drove my dad.

I recall, once having a big argument (at least that’s how it seemed to me) with my dad, as to why he did not take credit for a lot of what were clearly his own ideas and doing. My dad gave me the indulgent smile he was wont to, when he felt I was being particularly childish or unreasonable. “Son, keep in mind, that all I’m able to do is because of the freedom and trust, not to mention the capital that TTN has provided. It’s in his name that we are borrowing money – that enables  us to do what we are doing.” He could see clearly that this did not cut much ice with me. “Even without all of that, there are two things to keep in mind son,” he continued. “It does take vision – not everyone can provide it. And giving credit to others does not take anything away from your own contribution.”

I can’t say that I was convinced that day. Several years later, when he had hired several PhDs in the research department of the pharmaceutical firm he was the CEO off, I saw this in action again. My dad had only graduated from high school, as his father’s death while he was still in 9th standard, and the family’s financial situation did not allow him to pursue a college degree. So here was a man, with no formal qualifications other than a high school diploma from a small town in  Tamil Nadu, who’d worked his way up from accounting apprentice through chief accountant to eventually CEO of two firms. “All credit has to go to our scientists for how well our firm is doing today,” was his constant refrain.

At my father’s funeral last year, many strangers came up to me and said “I was able to pursue college or go overseas only because of your dad.” So my dad’s exhortation to “Spread the credit” clearly had not undermined him in any way – his actions spoke loud enough.

This is a lesson that I’ve finally begun to appreciate and practice. Let me tell you about all that things that I’ve learned from Rajagopal….

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