Cofounders and the dating analogy

This article is the third in the Startup Series on FirstPost’s Tech2 section and first appeared on Oct the 3rd, 2016.

The search for a cofounder is analogous to dating. There is an ideal checklist of attributes — skills, qualities and more as you will see — and then there is the ineffable chemistry check.

Since no two people are alike, we will naturally encounter both similarities and differences. Over the years of working with startups, I have developed a framework which can help you think through the dilemma.

Values of cofounders should ideally be the same or similar. A key value to consider is the importance of control. Extensive research by Noam Wasserman of Stanford finds that there are people, who want complete control and ownership, and there are people, who understand that some control may need to be given up to build and grow the venture’s reach and value. This understanding is pretty fundamental to building a venture, especially if you plan to raise external investment to do so. A fundamental disagreement here would not make for a a good cofounder relationship.

Goals, needless to say, have to be similar not different, although one can work with  the possibility of changing mind later. For instance, a cofounder may commit today to work on the venture till an exit event but a few years down, agree to give up an active role in running the venture. Such possibilities are hard to predict but if all else is working, they are negotiable.

Skills are best if different or complementary. It helps if the cofounders bring different domain expertise to building the startup. If you are a techie who does not have experience in speaking to early adopters and customers, and your cofounder is the customer facing person essential to driving adoption and bringing customer feedback on board, you have brought together two essential skill sets.

Work ethic is best if similar. Some people emphasise hard work, others outcomes. A startup needs both but it needs outcomes and growth milestones more than anything else. If a founder thinks hard work is substitute for results, it is not going to work. It is therefore best if cofounders are on the same page as to the purposiveness of the work ethic. It is worth noting that work hours are not the same thing as work ethic. Work hours are often negotiated with the needs of the start-up in mind. While a developer can work late into the night coding, a customer facing cofounder has to work the hours when she can meet customers and partners.

Networks serve a startup best if different, or complementary. This would help the start-up maximise reach into customers as well as investors. The eagle-eyed among you may note this may not work when your cofounder is your former classmate from University, as mentioned in an earlier column. In such a case, look for the contacts you need in another cofounder or an advisor. Ask yourself “what things are you definitely not good at?” and go from there.

If this framework is lulling you into a false sense of security, don’t let it. Being able to judge these essential qualities is not simple or quick. Don’t rush the decision. Spend time talking through things and listening carefully, how they see failure and success, how they talk about disappointment, how they treat people over whom they have any kind of power, how they talk about people they have relationships with.

Occasionally someone may tick all the boxes and yet make you uncomfortable. Judging someone’s character is hard, and a lot more personal than judging their skills and experience. In such moments, listen to yourself, I say. Do not dismiss your instincts and do not dismiss your gut.

However as any person in a long term commitment or relationship will tell you, the marriage begins once the wedding is over. Committing to the relationship requires the commitment to work with all that comes with it. It helps to lay down early ground rules for all to adhere. That is the scaffold of your organisation’s culture, more on which a little later in this column series.

It is worth remembering that the advertised product may be quite different from what is delivered. In other words, people may disappoint you. They may demonstrate different behaviours in an organised and predictable environment than they do in a start-up. A start-up is a high stress, demanding environment where decisions are not hedged by a large team and wrong decisions can actually waste valuable money and time.You cannot predict all this but you can deal with it. More on conflicts arising and how to deal with those will be discussed later in this series.

(Note: a version of this framework appears in “Dear Female Founder” edited by Lu Li, who has kindly permitted the publication of this piece.)

The design challenge called Indian traffic [2]

An earlier, admittedly ranty post documented the weirdness that is Indian traffic. Though it focused more on vehicular traffic than on pedestrians, any good traffic system design should enable peaceful co-existence of both vehicles and pedestrians.

I have spent some time thinking about traffic systems since I have been able to observe traffic in several countries outside India, especially the UK, for a few years now. I’d say it largely works well in the UK. Except when it does not, say, when we have the wrong type of snow. Roads don’t work, trains don’t work, almost nothing works.

Yet, some sincerely wonder if traffic in India can be improved to the level it is in developed countries.

Jokes apart, traffic in developed countries, when it flows, has mainly three component parts, although not all developed countries are created equal in their traffic discipline. These component parts exist in a Nash Equilibrium, which keeps the traffic flowing.

Rules

Unlike India — where most people with driving licences have done few, if any, lessons, and most driving licence owners have never been subjected to a rigorous examination of car knowledge and driving skills — it is near impossible to get a driving licence in most developed countries without passing multistage tests of road rules, car knowledge, and driving skills.

As far as I know, road rules — that would cover speed limits, lane discipline, overtaking procedures, use of indicators and other functioning lights on the vehicles, driving behaviour during egregious weather or road conditions, prioritisation of emergency vehicles, required civic behaviour during emergencies — aren’t even fully documented in India. Documenting them and then making them available in the many Indian languages would have to be the step that precedes training and testing for licensing purposes.

Licensed trainers and an incorruptible testing procedure would be the next essentials.

Then the state of the roads. It shouldn’t be down to a High Court to pronounce that citizens have a right to good roads. Because, so what?

Rule followers aka the social contract

Then comes the harder part. Of making a citizenry — of whom many are accustomed to saying “do you know who I am?” and “ok, do my work first, here is the cash!” — follow the process of learning and being tested to obtain a licence, with knowledge and humility, and not by sending someone else to get the paperwork done.

Some positive change, led by citizens themselves, is in evidence so there is hope on this count.

Enforcement and punitive measures

The third crucial part of a functioning traffic system is a traffic police force that catches, penalises and prosecutes if necessary the violations, no matter how minor, of road rules. This is helped by clear rules, along side specification of punitive measures for breaking them. This is further supported by a judicial system that lets traffic violation cases be tried swiftly instead of dragging them on for years, as Indian courts often do with many court cases.

So to return to the question, whether road traffic in India ever be improved to the level it is in developed countries, the answer is both Yes and No.

Yes, if India can arrive collectively at a new Nash Equilibrium of the above-mentioned factors.

No, if any of the above is missing.

The challenge for India is where to start.

The design challenge called Indian traffic [1]

India’s traffic problem is real. No, seriously. Indian drivers makes Italians look tame and Londoners look like novice drivers.

(C) Image from the Hindustan Times

India also has the dubious superlative distinction of having the highest number of deaths in road accidents in the world. The government of India publishes data on road accidents which will make the most hardened person’s eyes water.

I suspect Thaler and Sunstein may weep if they saw how spectacularly any design nudge fails on Indian roads.

Lanes, what lanes? Where available at all, a three-lane main road commonly will have been made into five or six or seven chopping and changing lanes.

Traffic dividers are an easily ignored suggestion, not a design element to separate streams of traffic by direction. Most dividers sooner or later find themselves broken to create illegitimate U-turns for vehicles. No prizes for guessing what this does to vehicular traffic flow! But hey, don’t get upset. Keep your hair on — that car or truck coming at you in the opposite direction is on the wrong side of the road indeed. You need to act and save your vehicle and yourself.

Then there are roundabouts. In normal circumstances, in areas with higher vehicular than pedestrian traffic, roundabouts are more efficient than traffic lights, in keeping traffic moving. Not in India. There seems to be no priority for anyone. Everyone enters it as and when and the space is negotiated (sometimes not). And pedestrians try and cross junctions in the middle of that traffic.

Since I mentioned traffic lights, I feel duty-bound to point out that almost nobody respects traffic lights, especially red lights. It would appear red lights are mere suggestions! Indeed a friend stopped at a red light only to be told off by a driver: “You stopped at a red light? Why?”. One morning, at 7am, a state transport corporation bus nearly rammed into my car because it was trying to turn right on a red light, while my car was turning right on a green light. There but for the grace of who-knows-what go I!

The corollary to that behaviour at traffic lights is this shorthand used by many:

Green – Go. Amber – Go Faster. Red – Go if you like.

Many traffic lights now use timers. Contrary to the design intent, the times serve as an excuse for speeding or revving. Putting timers on lights to show how many seconds to red or to green has only had the effect of turning everyone into Mad Max, either speeding through or revving, depending on whether the light is about to turn red or green.

Then there is the non-use — perhaps non-awareness — of car features.

Hardly anyone uses car indicators to indicate whether they intend to turn or intend to move left or bright. Particularly if you see a driver/ rider on your left, revving while you are waiting at a red light as is customary, you can be certain even before the light changes fully he/ she will cut across in front of you to turn, of course, right! Or not. But the trick is you will not know till you start to move.

Many cars have their side mirrors either absent, or permanently folded to prevent them from breaking. Cars often move past each other at a distance smaller than the width of a side mirror so there is a finite chance of the side mirror breaking. But the effect of no-side-mirror on driving is anyone’s guess.

How about flashing lights? People driving from opposite directions in a narrow street flash their lights at each another. The translation? “I am here, make way for me”. People also flash lights at the drivers ahead of them. Same translation.

People honk constantly — not to draw attention to their presence in case another driver makes a sudden move. But to indicate “I am here, make way for me”. Sometimes people honk in stand-still traffic. That is totally incomprehensible, but then again, what about the list so far is comprehensible?

Lax laws mean seat belts are compulsory only in the front. At the back therefore, most car makers oblige by hanging seat belt straps, but no plugs to plug them into. Not good for passengers in the back seat.

Finally there is this.

The driving chaos does make one’s heart stop for a moment, when an ambulance with flashing lights and sirens is waiting to be given way. Nobody does — indeed can, for where does the traffic move after making three lanes into five or six or seven — give way. I was told that there are many, who paint fake ambulance signage and use flashing lights and sirens to get ahead. The result is that now nobody believes it is a real ambulance. Such “enterprise” and non-standard signage means you really can’t tell if a vehicle is in non-ambulance use or for real.

The distrust of the fellow citizen, whether driver or pedestrian, is evident wherever we look. Combined with a poverty mindset, that makes zero-sum thinking the default and that imbues every action with selfishness with no regard whatsoever for the larger societal impact of one person’s choices, this distrust makes for a lethal combination on Indian roads.

How, if at all, can design address the great Indian traffic conundrum?

Short, flippant answer would say, with difficulty, and over a very long period of time.

Why? Well, that is the next post.

Satyam, corporate governance and emerging markets

Perhaps the most tragic thing about the Satyam saga is the name of the company.

Satyam means ‘the truth’ and the company’s fortunes have fallen on the sword of anything-but-the-truth. India’s first IT company to list on the NASDAQ and also trading on several Indian stock exchanges is being described as India’s Enron.

The Satyam saga is a complex case that raises many questions. On the one hand, these questions are about the role of board directors, the possible complicity of auditors, and the efficacy of regulator oversight. On the other hand, the case raises profound doubts about the basis of growth in emerging markets. On yet another level, one has to wonder if companies from countries with less advanced corporate governance frameworks should really engage in the masochistic exercise of going public and raising money in markets which hold them to tougher standards of growth and profitability, and then watch them like hawks to ensure those expectations are delivered upon.

There is inevitable collateral damage within India. Institutional investors are hardly likely to be happy about the lead-balloon like drop in the share price although some, like Sundaram BNP Paribas, offloaded their stake, ‘before the event’ as they naively point out. I say ‘naively’ because the timing appears highly suspicious to onlookers and the offloading will hardly spare them possible enquiries about alleged charges of insider dealing, for instance. The auditors, PwC, may also find themselves in some hot water.

But there is a silver lining in all this.

Corruption and infrastructure are often cited as India’s twin Achilles’ heels. But the Satyam case is not about systemic corruption and bribery which concern institutional investors aiming to invest in India. It is a more contained crisis, a failure of governance within a company.

That is where the silver lining ends.

Because one wonders if there are other such ‘contained crises’ brewing elsewhere. Because this failure of corporate governance raises a red flag for businesses seeking partnerships and joint ventures in India. There is a systemic angle to it, of course, in terms of regulatory oversight or the role of auditors as I mention earlier. But that can happen in the best regulated, stable, ‘developed’ economies as evidenced by the CDO crisis, the Madoff crisis and of course, Enron. The solutions will have to take into account all the various possible weak links.

Meanwhile, what do you do, if you are a business seeking to enter India or another emerging market, with a strategic partnership or alliance?

Of course, you persist with robust due diligence on companies, which are potential partners. Then there are the wrongly-described ‘soft’ aspects of a deal.

An outstanding strategy consultant will not just deliver the numbers, the hard due diligence, but also guide you on the major issue of executive reputation and articulate the tacit knowledge essential to your success in your target emerging market. Choosing the right person to be on your side in your global growth plans therefore is your first step in partnership, and in your quest for success in emerging markets.

Related readings:

Corruption is the greatest stumbling block to infrastructure development in India, says Nita Kulkarni