Find partners who can grow their business by building on top of your business

No business delivers value to the end customer all by itself. In reality, a business does very few things within its boundaries. Everything else must come from other businesses: from renting servers on AWS to leasing offices, and from advertising on Google to buying laptops from Dell. Most of the time, such dependencies emerge naturally and evolve without any conscious effort. However, sometimes some business dependencies can (and should) be deepened explicitly through partnerships.

To grow your business, first help grow a partner’s business

If nurtured well, business partnerships create positive feedback loops that help rapidly grow a business. Consider the case of Apple, a famously vertically integrated company that makes its own OS, processor, and many other phone components that other companies typically purchase from vendors. However, their iPhone App Store is proof that even Apple realizes that it can’t thrive without partners. Apple supports many thousands of 3rd party software developers who create millions of amazing app for the iPhone. These apps wouldn’t have been possible without the underlying technology supplied by the iPhone. Similarly, the iPhone wouldn’t have been as successful as it, if it didn’t provide the multitude of functionality that its users have now come to expect because of all the 3rd party apps available on the platform. So, the iPhone helped the developer community build a business on top of it, and with that, iPhone benefitted massively...  Read the entire post →

My moral code

Lately, I've been feeling a lack of a well-deliberated, explicit moral code. The world is changing really fast - we have Elon Musk trying to set up a human colony on Mars while Earth's bio-ecosystem is degrading by the day. So, should I support the investment of resources into making Mars habitable while Earth is gradually becoming unhabitable?

This, obviously, isn't the only question. Every day, I feel like I need to decide which way to swing on controversial topics. People have strong opinions about things like genetically engineered babies, bitcoin, nuclear power and other new technologies. I know enough about cognitive biases to know that I shouldn't trust my gut fully on these questions. My gut simply doesn't know enough to have a good opinion on complex societal issues. Instead of relying on my gut, I need to rely on deliberate thinking to make moral choices.

Crypto is the future of our society

Balaji is a deep thinker on crypto and its implications. Formerly the CTO of Coinbase and General Partner at Andreessen Horowitz, he's seen how technologies evolve over time, which ones change the world and which ones fizzle out as a fad.

He believes crypto technologies such as bitcoin represent the former. To him, crypto will emerge as something that's as important as the Internet and influence our society for decades to come.

All startups belong to an ecosystem that makes or breaks them

All startups live in an ecosystem where different businesses directly or indirectly support one another. For example, in the case of the automotive industry, the ecosystem consists of car manufacturers, car parts manufacturers, petrol stations, car service centers, car insurance companies, and government regulators.

All of them mutually support the entire ecosystem, which means growth or decline of one business will directly impact all other businesses.

Steal successful ideas from everywhere

Entrepreneurs are irrationally attached to innovation. In some cases, fresh ideas are absolutely required but an attachment to originality and the corresponding aversion to exploring ideas pioneered by others can often lead to a significant delay in success (or even failure).

Startups can fail for many reasons. Even if an entrepreneur gets everything right but errs on a specific aspect (say distribution, pricing, onboarding, or even the choice of technology), it’s possible that her entire project fails.

The week rule to prevent failure

Entrepreneurs are always in a hurry. They want the product to be out so that they can get customer feedback sooner.

This hurry is understandable yet misguided because it prioritizes getting the idea out in front of customers over everything else. The initial excitement about an idea can easily lead to months of wasted development effort. Imagine discovering major flaws in pricing, distribution, design, or market after all that effort. Isn’t it much better to flesh out ideas with a few weeks of research than to spend months developing them?

Habits prevent people from switching from the familiar to the new

People have busy lives and they usually don’t think much about the products and services they use in their lives. It’s a myth that people are on a constant lookout to (marginally) improve their lives. The reality is that unless the value delivered by a new product or service is substantially higher, most people will not change how they live their life and by virtue of that, they won’t change what they buy or use.

How we do science determines what we discover

Ever heard of meta-science?

It’s the science of science. In this episode, I interview the meta-scientist James A. Evans who explains how science happens, why smaller teams do big scientific breakthroughs, similarities between startups and scientific endeavors, and what research shows about the path to success.

His research shows how science is not an automatic machine that keeps on generating truth, but is rather a system where social dynamics of how scientists interact with each other determine what they end up discovering. ...  Read the entire post →

Deliver value only on dimensions that customers care about

Most markets are like the car market. Some people like bigger cars, others like efficient cars and then there are some who like premium cars. That is, markets aren’t homogeneous. They consist of different sets of people who value different aspects in a solution.

Because different segments value different aspects, an improvement in one aspect will only be appreciated by that segment and get ignored by everyone else in the market. For example, if the customers in a particular segment are price-insensitive, your discounts won’t work on them. In your mind, a discount should clearly work but for a certain segment of customers, it may actually decrease the appeal of your product for them. But, if a customer segment is price-sensitive, and you give them a clearly higher quality product at slightly higher prices, they may not care enough about the quality to make a switch from what they usually use.