Philosophy is politics

I used to wonder why questions in philosophy never get resolved. For example, take the question of whether we have free will or not. From Socrates to Kant and to modern day philosophers (such as Daniel Dennett), everyone seems to have an opinion on free will. Free will is also a favorite topic of many twenty something bloggers, including myself. Thousands of years have passed by since the first time this question was asked and people are still debating on it.

Why is that so? Why, unlike science, where all scientists agree that energy can neither be created, nor be destroyed, every philosopher has his/her personal answer to philosophical questions...  Read the entire post →

Your first sales hire should be two sales reps, and other tips

Recently someone asked me a question about hiring and structuring sales team in India.

Incidentally, someone asked a very similar question in our Inverted Passion slack group (now we’re 271 people). I shared my experience of growing an inside sales team at Wingify in India. In this post, I’m copy-pasting my answer from the Slack group and adding some more tips. ...  Read the entire post →

The Motivation, Emotion and Repetition (MER) framework for marketing

Our collective understanding of marketing has a massive hangover from the pre-Internet days. If you ask most people to define marketing, they’d go with definitions like “to inform about the product”, “to create brand awareness” or “to spread the word”. All these definitions are wrong because of the same reason: they serve company’s goals, not customers’.

This error of thinking in which the entrepreneur assumes customers have same motivations as s/he has is called the mind projection fallacy. This error is very common and hard to cure. I’ve written about how it affects entrepreneurs when they design products, get excited about new technology or seek new startup ideas.  ...  Read the entire post →

The (de)centralization continuum

Internet visionaries are worrying about the increased centralization of the Internet. They worry about centralization of power as most of the value on the Internet is flowing to four big companies that go by the acronym FANG (Facebook, Amazon, Netflix and Google). Apple isn’t on the list because they make money by selling good ol’ hardware. (Moreover, FAANG doesn’t sound so cool).

Voices encouraging decentralization are strongest in Berlin, home to the majority of upcoming blockchain projects. Last week I was there attending the BlockStack Summit. If you go through my notes, you’ll know that almost all speakers believed how decentralization is the future of humanity. ...  Read the entire post →

Businesses get killed by non-competitors

Entrepreneurs worry about competition all the time. And they’re correct in doing so. I think the “focus on customers, ignore competition” is a terrible business advice. Customers will never ask you to introduce switching costs, yet that’s precisely what businesses should do in order to be profitable for a non-trivial amount of time.

In my last article, I wrote about how an entrepreneur should go about creating a legal monopoly via network effects and economic moats. In this article, I’ll talk about how even legal monopolies get killed.  ...  Read the entire post →

How to create legal monopolies via network effects and economic moats

If there’s one thing that customers dislike, it’s the barriers in switching between competitive products. As customers, we want to retain our freedom. However, as entrepreneurs, we are incentivized to curtail that freedom. As I wrote earlier, head to head competition in a market pushes profits to zero. To make a profit, an entrepreneur needs to find a way to keep customers and competition away from each other.

There are two ways this separation can happen:

  • Prevent competition from entering into your market
  • Prevent customers from switching to a competitor

Obviously, these tasks are hard in a free market (and that is why market pays through the roof for companies with a sustainable competitive advantage). Unless you sell drugs, you can’t (and shouldn’t) hire an assassin to prevent competition. Nor, can you (and should you) threaten your customers with dire consequences if they switch. ...  Read the entire post →

Bitcoin is mother of all network effects

Bitcoin is such a strange beast that it’s hard to really understand what it really is. Some people call it the biggest Ponzi scheme ever invented, while others see it as the currency that’ll power a decentralized, libertarian utopia. Whatever it is in reality (and whatever “reality” really means), there is no question that network effects are playing a central role in making it the most hotly debated idea of recent times.

I’m a big fan of the power of network effects and have previously written about different types of network effects. In this post, I want to talk about what network effects are at play in bitcoin. This post assumes you know what bitcoin is and how it works at a high level. In case you don’t, go through my introductory post on basics of bitcoin first...  Read the entire post →

What fidget spinners teach about making hit products

Chances are that you know what fidget spinners are. I’m willing to take the risk of not linking to its Wikipedia page because I know almost everyone on the Internet either had one or seen one. (I had two!)

If you are a regular reader of InvertedPassion, you would know that I like going into rabbit holes. Previously, I wrote about Singapore’s foundation and lessons for entrepreneurs and also analyzed reasons for Facebook’s adoption in 2004 despite Myspace and Friendster having millions of users then. In this article, I’m spinning my way (no fun intended) into learning what made these little toys a global phenomenon and what entrepreneurs can learn to make their products grow like wildfire. ...  Read the entire post →

The winner takes all fallacy and the structure of network effects

The winner-takes-all phenomenon in business is appealing. All entrepreneurs dream of their products being used by everyone in the market. Large tech companies such as Microsoft, Facebook, Uber, Amazon, and Netflix derive their massive valuations by dominating their respective markets. How did they achieve this dominance, and do new startups have a chance against them?

The primary cause of this massive growth of large tech companies in a short period is network effects. Many tech products grow more useful as more users use them, so larger the user base gets the more benefit each user is able to derive. This kicks in a positive feedback cycle whereby the tech product’s value increases exponentially (and becomes hard to dislodge by competitors). This increase in benefits with numbers of users is unprecedented in history. In the non-tech products world, if you use a particular brand of toothpaste, you do not make it more likely for a random stranger to pick up that brand of toothpaste. (Yes, word of mouth exists for non-tech products but that’s about it.)  ...  Read the entire post →

What food delivery companies can learn from Netflix

It’s in the news today. Ola, India’s largest on-demand taxi service, has acquired FoodPanda India (from its parent company Delivery Hero) in a stock-swap transaction. FoodPanda is in food delivery business (like GrubHub in US or Delivery Hero in Europe).

Ola’s Founder and CEO said the usual acquisition-related things in a press release.

I’m excited about our partnership with Delivery Hero as we team up to take Foodpanda India to the next level. As one of India’s pioneers in the food delivery space, Foodpanda has come to be a very efficient and profit focused business over the last couple of years. Our commitment to invest $200mn in Foodpanda India will help the business be focused on growth by creating value for customers and partners. With Delivery Hero’s global leadership and Ola’s platform capabilities with unique local insights, this partnership is born out of strength.  ...  Read the entire post →