Why your low moments are your biggest blessings in disguise

There are no certainties in an Entrepreneurs path, apart from one: you are bound to have a roller coaster ride. No matter how successful you end up being. It’s never a straight line to success or failure. Along the way, the true test of whether you have what it takes to make it is what you do in your lowest of low moments. When you are most vulnerable.  For make no mistake – they will come!

 

In my experience you can almost bucket people into two: those who stay down when they’re down or drift sideways, wither and die. And those who jump back up stronger.  My biggest successes, leanings and adventures always followed from such low moments. When I was weakest and most vulnerable. I’m one of those people who performs much better when things aren’t going my way. It’s like a slap in the face, it wakes me up, makes me more stubborn and determined to hit back even harder. Ben Horowitz put it perfectly in his last book ‘The Hard Thing About Hard Things’. He said ” there are two kinds of CEOs: peacetime CEOs and wartime CEOs”.  Peacetime CEOs are those who do well when things are doing well. They are typically the people who you hire to take a business from B to C and scale it up. They are smooth, political and great at blowing the trumpet. But the journey from A to B is definitely a wartime situation. You need to thrive in the gutter.

 

My first moment of vulnerability was when my first business – essentially a ‘brick n mortar’ version of PeoplePerHour.com - wasn’t scaling.  I was in my mid-twenties with no experience at all, no co-founder, partner or other senior member of the team, running what’s probably the hardest type of business to run – a service business.  I was essentially the head of sales, delivery, quality assurance, and the person everyone called when things went wrong. Which they did! Often! And in weird hours.
Exhausted and demoralized, with employees and clients jumping ship at an accelerating pace, I had to figure a way out.  Failure was not an option – I had friend’s and family money in the business and countless hours of sweat and anxiety. This being 2006 and in London where there is much more taboo around failure (decreasing no doubt but still much more than the US) I was petrified.  To make it all worse my then long-term girlfriend decided to split up with me because I was working too hard, so the one person I had close to me jumped ship too.

 

I felt like a brick had hit me on the head.  Fortunately my cost base was quite low  (and getting lower as more people were jumping ship) so going bust would take a while, but that’s like dying a  slow and painful death. It’s almost better if it’s a short sharp blow.  I kept racking my brain constantly  ‘how on earth will I scale this business up”. I decided to go away for a few days  (in the beautiful Cannes I recall) steam off and think it through (and in the mean time try and forget this ex girlfriend who ditched me at the worst possible time!). It was in that trip that the idea hit me. Why don’t I turn the business on its head, circumvent my own self by turning a service provider to a platform business that connects service providers (like myself) with customers and take a cut instead of delivering the service myself? That way it can scale. It was the eureka moment I was waiting for. PeoplePerHour.com was hence born.

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The Future of Work: the evolution of labor marketplaces

Operating in the labor / outsourcing space for almost 10 years now (first with an offline business and then online) this is something I’ve spent a lot of time thinking about and in many ways have been part of its evolution. What does the Future of Work look like? In this post my aim is to highlight the trends that I think will shape it versus the applications and solutions it will manifest itself in.

  1. The West-East playing field will level out

The outsourcing industry has its origin in the labor rate arbitrage between developed and developing economies. The first labor marketplaces like Elance & Odesk were in essence online versions of the Wipros & Infosys’ of this world, connecting businesses in the more developed Western economies with cheaper labor where it was abundant in the East, mainly in IT services. They emerged to piggy back on the newly minted IT industries in India in the 90s.

That rate arbitrage is narrowing today as the economies of India & China and other emerging markets are growing faster than the West inflating prices (including that of labor) and hence closing the gap.

Secondly, as these economies mature they start developing a middle class and an SMB (Small & Medium Sized Businesses) sector – the backbone in any economy that’s the essential channel for distribution of wealth downward from the gorillas at the top of the food chain – the big corporations and national institutions.

Much like those gorillas, these SMBs turn to the west to adopt some of the best practices that have matured over decades. The ‘freelance consultant’ is to those SMBs what the McKinseys of this world and the Harvard MBA franchise has been to the gorrilas at the top. They hire them to help with the things they are weakest in, from basics  like writing sales and marketing collateral, design & UI, to business management advice social media marketing and so on.

PeoplePerHour.com was founded largely on this premise. From the start we focused on nurturing a freelance workforce in the West which is still over 70% of our total. Most of hiring happens ‘semi-locally’ (i.e. not onsite , the work sill gets done remotely, but in same geographic region) or from companies in the emerging economies  hiring talent in Europe or the US.

As I argued in a previous post I also believe that this may well be the rebirth or the once might export economy of Western nations.  With manufacturing on the decline and unable to compete with lower cost economies in the East, the next wave of exports may well be skills and services that are more in abundance in the West and scarcer in emerging markets, the gap being bridged by the emergence and growth of online labor marketplaces.

  1. Marketplaces 3.0: the rise of End-to-End (e2e) solutions

We are entering what I believe is the third generation of marketplaces. The ‘1.0’ era was all about liquidity (Craiglist). ‘2.0’ was about building trust via reputation systems, social validation (eBay, Airbnb, Etsy) to help in the discovery process as inventory exploded making discovery more challenging. Now, ‘3.0’ is making discovery redundant or unnecessary altogether (you don’t interview your taxi driver on Uber or Lyft and equally you don’t select your tasker on SuperTasker). These are what have been termed e2e solutions, going deeper at both ends – supply & demand – to remove friction in the experience.

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An example of the worst possible service you can get – complements of Best Buy Inc.

I rarely slag of companies in public but this experience has been so appalling I feel the need to share it with the world

I recently move apartments so on September 4rd I duly commissioned GeekSquad (a subsidiary of BestBuy) for the second time (repeat customer no less!) to come and install my projector in my new place. I should mention this is a pretty heavy piece of kit, quite a high end spec that cost me over $4000

The GeekSquad team arrives. With ATTITUDE I should add. From the start one guy was constantly winging about how X or Y or Z was not mentioned in the work order. IT WAS. And I know that because I had the same issue last time so this time I itemized everything in granular detail. I even sent them the full spec, the amazon receipt and the whole shebang. They even mentioned that I had to move my own furniture around as they are prohibited to move other people’s stuff. Question: how the hell do you get a projector on the ceiling without moving something? Including the projector! Idiots. That’s already my equipment.

I left them to it and was unpacking other things to filter out their winging. A few minutes later I hear a loud BANG! One of the two idiots (they share a brain cell between them at best and that’s on a good day!) dropped the thing on the floor and smashed it.

Fair enough. Mistakes happen. I tried to keep upbeat as they reassured me I would soon get a call from their insurance to ‘sort it out’. Mean time their manager – another incompetent idiot called Miguel – called me to tell me the next steps. The only issue was – he didn’t know what they were! He told me he would find out and call me back

In the end they left me with an Insurance claim number and went their way.

The sequence of events that ensued is just a comedy. And this is just the summary:

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What to watch out for when raising funding

I was recently interviewed by Jonathan Mules at the FT on  what our key lessons have been in fundraising for PeoplePerHour. They are shared in this piece attached below which was published earlier this week. Entrepreneurs often embark on fundraising not realizing that there is a serious downside to raising too much capital or being too hyped. In fact there is an inverse correlation between the amount of money raised and the level of success  – refreshingly honest advice coming from one of the most prominent VC’s in New York, Fred Wilson. He also once said “if you want to be a hyped business you gotta live with the consequences” which I couldn’t agree more, yet most entrepreneurs in the heat of the moment will consistently ignore that advice. This can make or break a business depending on what the terms of the deal are, and how much grit and tenacity the entrepreneurs posses.  It’s a true test of a business and ones personality.  I share my lessons here.

The trouble with too much seed capital – FT

3 Defining qualities of great entrepreneurial leaders

http://upstart.bizjournals.com/resources/advice/2014/09/18/3-defining-qualities-of-great-entrepreneurial.html

Great leaders may possess a myriad of attributes, not the least of which are intelligence, charisma and natural charm. All of these things matter. However, you can be a great leader and not be naturally charming or very intelligent. In my time at PeoplePerHour I’ve learned a lot about leadership. I have come to the conclusion that there are three key attributes a great leader must have.

Vision

The ability to amass a great team, motivate and inspire them is plain useless if you don’t have a clear vision of where you need to go. Leadership is first about seeing the future and then about being able to figure out a feasiblepath to get there. It’s seeing the iceberg before the Titanic hits it and taking fast and decisive action.

It’s doing the one right thing rather than doing many things right. It’s being different, not following the herd, being controversial, and seeing what others don’t see. It’s having a nose for what’s coming and the eyes and ears to react before others do. Without vision, you can empower people all you like but you won’t get anywhere. You’ll have a following but no direction. You may make a great motivational coach, but not a leader. Every difficult situation needs a visionary leader to point the way and make a tough decision.

Influence

Once you have a clear vision (but only then), you need a sting following. That requires the power of influence. Whether you are in an existing leadership situation or the creator of a group, this is very hard thing to do. In either case, you are new to the situation and the odds are against you. Why should people trust someone new? The vast majority of people are resistant to change, no matter the odds. In order to fulfill any grand vision, you need to drive change. Otherwise you are just a puppet master holding the strings waiting for the show to end.

Influence people across the board — explain to employees the benefit of leaving secure jobs and come join you; convince investors to give you money at the very beginning, get customers and fans to support you, your bank manager to give you an overdraft, your landlord to give you a lease and rent-free period; and your wife to put up with sleepless nights, cold sweats and no pay. Carry that burden of influence with you. If you go down, you take more people with you than yesterday.

Courage

The third element is the most challenging. You’ve clarified a vision and built a following by charming, coercing, schmoozing…ultimately influencing enough people. After all this work, you realize that it’s only day one. Now you have your boat (more like a raft) and your compass. But you still need to cross the ocean. This is the final and true test of great leadership. It ultimately comes down to courage. Intelligence and knowledge are advantages of course, but without courage they are wasted.

Courage alone could and would get you there, albeit slower and with more pain. So the key question is: Do you have the courage to keep going when everyone tells you to turn back; to know you’re right when everyone says you’re wrong; to stick to your instincts when people call you crazy; to carry other people’s weight when they fall; to set the tempo and beat the drum despite how tired you may be? It’s your job to keep people together when they are drifting apart and losing faith, to give them courage but not false hope, to let go of some to save many, and to weather the storm but not bask in the sunlight when it ends — because it never does.

Vision and influence will make you a well equipped captain. But courage is what gets you there. On the other hand, courage alone makes you a fighter without a cause. You may be good at creating lots of noise, but to paraphrase Sun Tzu’s “Art of War”: that’s just “the noise before defeat.”

 

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