The set of slides Ashok Korwar and I used at the TiECON Pune workshop on scaling

1. 1
Scaling Your Business
Anand Deshpande and Ashok Korwar

2. Anand Deshpande and Ashok Korwar
A workshop to help
companies grow
TieCON Pune
April 12, 2019

3. This workshop has
evolved since it was first
developed in 2009 for the
NASSCOM Emerge Forum

4. Know our biases…
Our view from the
fish tank.
4

5. Ashok Korwar
ashok@yourgrowthcatalyst.com
• Independent management
consultant based in Pune
• Professor at IIM-A, 1990-2000
• Strategic Advisor to Chairman of
Polaris Software, 2000 – 2007
• Division VP at EDS, Dallas
• Ph.D., UCLA
• B. Tech, IIT Bombay
5

6. 6

7. Believe in nothing, no matter where
you read it, or who said it, no matter if
I said it, unless it agrees with your own
reason and your own common sense.
- Gautam Buddha
DISCLAIMER
7

8. You are here because you believe you
want to significantly grow the business
you have planted!
8

9. What works in one
orbit does not work in
the next one!
9
₹
time
Growth in Companies is not Linear

10. Visualize
to realize
Theory of
Constraints
It is all about
Positioning
Getting Customers
to buy
Building a
Winning Team
Setting up mentors
and a Board
Moving from the first orbit to the second orbit
10

11. First Orbit Second Orbit
Objective
Survival. Prove that this is not just
a project but a business.
Growth. How to build a sustainable
growing business?
Business Strategy
Be responsive. Respond to the market
requirements. Follow the money.
Focus. Define what you do well and do
more of that.
Team
The founding team,
their band of followers and their dog.
Founding team +
professional executives.
Money First few customers, friends and family. Professional funding
Governance Basic Institutionalise
Processes Ad-hoc Time to implement them
Board Founders Time to add Independents
What is different between the first and the second orbit?
12

12. Visualize
to realize
Theory of
Constraints
It is all about
Positioning
Getting Customers
to buy
Building a
Winning Team
Setting up mentors
and a Board
Moving from the first orbit to the second orbit
13

13. Visualize to realize
What do you want your business
to look like?
14

14. ₹
TimeToday
Where do you
want to be?
Visualize the end-state and reflect back on how to get there
15

15. How many units sold?
How many people?
How many customers?
How many projects?
How many managers?
How many sales people?
How does my balance sheet look?
What would my business at 5X look like?
16

16. What would my business @ 5 X look like?
17

17. 18
My Hobby: Extrapolating

18. Visualize
to realize
Theory of
Constraints
It is all about
Positioning
Getting Customers
to buy
Building a
Winning Team
Setting up mentors
and a Board
Moving from the first orbit to the second orbit
19

19. Eliyahu M. Goldratt
Applying Goldratt’s
Theory of Constraints
http://www.goldratt.com/
20

20. • Has one constraint
• That chokes throughput
• The ‘Bottleneck’
Every System...
21

21. What determines the
strength of a chain?
22

22. • Who prevents the bonsai
from growing?
Internal Constraint?
• The market?
• Do you have 50% market share?
• If not…
External Constraint?
23

23. Internal Constraints
• 3 kinds
– Mindset
– Policy constraints
– Real constraints (in your business, organization)
24

24. 25
I am not ..
How can I build…

25. • Mental blinders
we put on ourselves...
• But also the most common
dominant constraint...
Policy Constraints...
26

26. • …I will hire only people from IIT?
• …every project must earn 40% margin?
• …I can trust only Indians in the field?
• …I can’t pay more than...
• …CEO must see every customer
communication
• …people must be kept busy all the time
Policies as Constraints...
27

27. • Depends on the business model…
• Use common-sense;
it does not take statistical analysis!
• Thought experiment: if throughput goes
up by an order of magnitude (10x)
where will my system break down first?
• If I strengthen x-function,
will throughput go up?
Identifying Constraints...
28

28. Ok, so I found the constraint...
How does it help…?
29

29. Constraint is also a Lever
30

30. Eliyahu M. Goldratt
1. Identify the constraint
2. Squeeze the most out of the constraint
3. Subordinate everything else to
the constraint
4. Elevate the capability of the constraint
5. Go back to step 1!!
Goldratt’s 5 step process
31

31. 32
For Growing
Businesses
Management
Bandwidth is
a Constraint

32. What should the CEO focus on?
33

33. The ONE constraint for my business is:
34

34. Visualize
to realize
Theory of
Constraints
It is all about
Positioning
Getting Customers
to buy
Building a
Winning Team
Setting up mentors
and a Board
Moving from the first orbit to the second orbit
35

35. Positioning helps
establish trust.
36

36. Niche Players
focus successfully on a small
segment, or are unfocused
and do not out-innovate or
outperform others.
ABILITYOFEXECUTE
COMPLETENESS OF VISION
Challengers
execute well today or may
dominate a large segment,
but do not demonstrate an
understanding of market
direction.
Visionaries
understand where the market
is going or have a vision for
changing market rules, but do
not yet execute well.
Leaders
execute well against their
current vision and are well
positioned for tomorrowMAGIC QUADRANTS
Positioning Technology Players
Within a Specific Market
How do you position your business/product?
37

37. The top 3-4 leaders dominate the
market (> 20% market share each).
The rest get pushed on margins.
Is there room for a #5 in online
retail space?!
Position to be Leader
38

38. You are ₹ 10 Crore
business.
What does it mean to be a
leader?
39

39. Chattrapati Shivaji defined the
Battlefield …to his advantage
40

40. The Lion defines his territory
If you are building a Twenty Million Dollar
business, you must define your Hundred
Million Dollar Market.
41

41. Vertical ..
• An independent testing
company in Mumbaï
• Now repositioned as customer
experience guardian for Banks,
• Growing at 60% p.a. from 100
crore
• Polaris Software: grew from
100 crore to 1,000 crore only after
focus on BFSI
42

42. Horizontal: focus on a single need,
experience across industries
• MuSigma
• Zuora: billing for subscription
• Nest: smart homes
43

43. Who
grows the
fastest?
• Inc’s list:
– BounceX: behavioural automation
tools for digital advertisers,
growth from 2012 of 14,500%
– ThriveFarmers: platform for coffee
farmers to bypass middlemen,
growth 8,577%
– Scientist.com – online
marketplace for pharma and
biotech to outsource research..
Growth 15,000%
– GForceLifeSciences – staffing for
Pharma and Medical only. Growth
16,000%
44

44. Closer
home..
• FirstCry.com – babies and small
children
• ManakWaste - platform to manage
electronic waste
• Razorpay – complete payments for
websites, apps
Commonality: platforms BUT highly
focused
45

45. 46
• SUN workstations
• LOTUSnotes
• Exception that
‘proves’ the rule: Microsoft!!
Other examples…

46. Blue Ocean Strategy : How to Create Uncontested
Market Space and Make Competition Irrelevant
- W. Chan Kim and Renee Mauborgne
Defining entirely new markets. Blue Ocean Strategy.
47

47. Blue Ocean Strategy Map
48

48. 49

49. Can you disrupt…
• Consider customers for life…
• Subscription model
– Kanye West’s new album!
50

50. Some examples
• Adobe
– 2011, announced that management would try to reduce revenue!
– Replace with a subscription model..
– Valuation fell more than 20% to $25
– 3 years later, 70% revenue from subscriptions,
– Share price $190
• Asian Paints: not selling paint…

51. Focus:
For services companies,
embrace ONE Customer
52

52. 54
• Serving the same need as…
(in some other industry)
• Like...Established Competitor,
only better because…
• Competitors are extremely
useful for FRAMING!
Your elevator pitch:
Framing is key...

53. My 30-second elevator pitch
56

54. Visualize
to realize
Theory of
Constraints
It is all about
Positioning
Getting Customers
to buy
Building a
Winning Team
Setting up mentors
and a Board
Moving from the first orbit to the second orbit
57

55. Sales is about getting
the customer to buy
58

56. You make money when your customer buys what you build
What do you
have to offer?
Engagement
model that
works
Who is the
buyer?
CEO? CIO?
Purchase?
Value of your
product to
the customer
Delivering
what the
customer
wants
59

57. The salesman is the hero.
Treat him like one.
60

58. It is the CEO’s job…
61

59. TimelineAuthorityBudgetNeed
62

60. We do business with
people we trust!
63

61. Is there a
compelling
reason for the
CEO to meet
with you?
Can you make
the meeting
worthwhile?
CEOs think differently
64
They are relationship-oriented and not just
transaction-oriented.
They have a long-term view and want to
network and want to provide their customers
value not just their product.
They focus on a few items everything else is
delegated. If you are not part of this list, the
CEO is not interested.
They are interested in top-line growth.
Cost containment are important but typically
not the CEO’s main priority.

62. Conversation openers and takeaways!
66
I believe that you are more likely to remember someone if they leave something behind…
Some challenging, crazy,
stimulating idea
Point of
View
Pointers about people
you both know
Hobbies and
interests
Book Family
People remember stories, bullet-lists, theories and other anecdotes better than they remember
prose and text. You want to be careful that you are not remembered for the wrong reasons!

63. Engage in a thoughtful discussion…
67

64. What do I like to do before the meeting?
68
Want the CEO to be
aware of the meeting
and the context?
• Send a ‘I look forward to the
meeting’ mail message
• Suggest an agenda
Do they know Persistent?
How well?
• Send information about
Persistent
• Send a presentation deck
– (> 80% probability) will
not be opened
• Send 3 paragraph intro
Want them to aware
and know about me?
• Send a LinkedIn
Invitation in advance
of the meeting

65. • CEO must remember you
• CEO must remember Persistent Systems
• CEO must remember this meeting
• CEO must feel excited about taking on the
asks and must deliver on them!
69
Reminder:
What is the objective
of the meeting?

66. 70
• Ensure you are within the allocated time
for the meeting
• Summarize the meeting… we agreed to…
my asks and gives
• Summarize next steps
- I will introduce you to…
- You will introduce me to…
- I will send you… etc.
• Ensure that you have set up a pointer for
a follow-up call/meeting in say 30 days
Ending the meeting

67. Entrepreneurs connect
with Entrepreneurs
71

68. Summary
72
When you see news about them or stories of interest to them, send
them pointers, introduce them to others in the network. They want
to be networked.
Don’t forget … what is the objective of the meeting.
Drive conversation to weave
- Messages you want to share
- Asks you need
- Way to keep the conversation threads alive

69. What would your sales organization look like?
73

70. Visualize
to realize
Theory of
Constraints
It is all about
Positioning
Getting Customers
to buy
Building a
Winning Team
Setting up mentors
and a Board
Moving from the first orbit to the second orbit
74

71. Building your team
75

72. Ability to hire peers is
critical to the success
of small Companies.
76

73. My Company … or … Our Company
77

74. Why should someone join you?
78

75. Growing a business
can be thrilling!
80

76. 81
You must use your passion
to attract talent!

77. Wealth in the future?
82

78. Your Company’s
culture is the most powerful
tool for finding and keeping
great employees.
Don’t miss opportunities
to reinforce it.
83

79. What do you really need?
You need a small and a hungry team
that wants to go for it!

80. How you think is more
important than what
you know.
Pick teammates for what
they will do, not for what
they have already done.
88

81. • The mountain does not give a damn
about your resume.
• Without hunger, both skill and experience
will remain in the base camp.
• There is nothing more dangerous than
a moderate mountain.
• Only an ultimate mountain can forge
an ultimate team.
• The only guidebook to your mountain is
the one you will write.
• The best plan is the one that works.
89
The Mountain will Select the team..!

82. Employee Stock Options is a
useful incentive for attracting
and retaining employees.
90

83. Getting the
Organization Structure
right is very important
but rather difficult.
92

84. Difficult Decision:
When is it a good time
to step down as CEO?
Should you hire a CEO?
93

85. Why should someone join our team?
94

86. Why are they hesitating?
95

87. Visualize
to realize
Theory of
Constraints
It is all about
Positioning
Getting Customers
to buy
Building a
Winning Team
Setting up mentors
and a Board
Moving from the first orbit to the second orbit
96

88. Establish a network of
mentors you trust.
97

89. Where are the mentors?
98
Showing 3,536,579 resultsmentor
startup mentor
Business coach
Showing 107,699 results
Showing 2,611,535 results
Showing 1,907,312 resultscoach
Numbers when searched on April 2, 2019

90. Four Kinds of Mentors
Eklavya model Domain Specialist
Advisory Board Krishna
99
https://www.hindustantimes.com/pune-news/four-kinds-of-mentors-can-help-your-startup-journey-anand-deshpande/story-
bhNkcXsct0gmGC9kIy6fVJ.html
Eklavya Domain
Specialist
Advisory
Board
Krishna

91. Leverage Your Board.
Independent Directors:
your advisors and critics!
100

92. Select Independent Directors effectively
Who can
✓ Commit time
✓ Have expertise that aligns with
the needs of the business
✓ Are passionate about your business
Not just because they are
X Famous
X Relatives, friends
X Customers
101

93. 102
• Where do I find Independent
Directors?
• Why would they join my board?
• What do they expect?
Board Composition and
Balance is Important

94. 103
Provide time
Be available
Be the sounding board for
management discussion
Regularly review strategy
and business parameters
Protect stakeholder
interests
Ensure that the Company is not
signing up to unreasonable risks
Succession planning and
contingencies
Resolve disputes
among leaders
What are Board Member’s responsibilities?

95. • Meet at least once a quarter.
• Look at what was planned
(at least 2 quarters ahead) and
what was achieved.
• Engage. Share your hardest questions with
the Board – they are your sounding board.
• Plan at least 2 quarters ahead.
• Make meetings data driven.
• Get them to help with introductions.
104
Your Board is your
sounding board

96. 105
The Board Member
must avoid the
temptation of running
the business.
That is the CEO’s job.

97. Publish quarterly results within
four weeks every quarter.
Share them with the Board and
internally.
106

98. Ensure that you have the right
Capital Structure to scale.
107

99. Think long-term.
Run a clean business.
108

100. Make your contribution to
society. Commit to Corporate
Social Responsibility
109

101. Reflecting on some of the recent Board decisions
110

102. Setting up my Board of Directors and my Advisors
111

103. Failure defeats losers,
failure inspires winners.
- Robert T. Kiyosaki,
Author, entrepreneur, investor
112

104. Ashok Korwar
ashok@yourgrowthcatalyst.com
Anand Deshpande
anand@persistent.co.in
Visit our blog
https://wordpress.com/view/secondorbit.blog
113

105. THE END
114