Wednesday, January 10, 2018

The Monk and The Riddle

I really enjoyed this book which talks about living life and making a living. This is book is part fictional narrative and part memoir. Randy Komisar is a partner at theVC firm KPCB

It talks about his experiences with the companies he was involved in, his experiences of working at a private law firm, at Apple, working with Bill Campbell, his experiences as an entrepreneur and an investor.

  • The Riddle : I have an egg and want to drop the egg three feet without breaking it. How do I do that ? 
    • (Later I googled the answer for the riddle and seems the egg touches the floor and breaks at 4 feet, so 3 dropping it 3 feet won't break it. I interpreted it as knowing the boundaries and breaking points).
    •  The author  concludes it with saying "When he first started the journey he wanted nothing more than to get to the destination but as the journey goes he has the slightest desire for the trip to end." Is he implying he is like the egg and didn't hit the breaking point ?and is enjoying  the journey ?
  • The Pitch : "We are going to put fun back into the funerals".  The tale of how startup founders pitch the VC's in the valley. Told through the fictional narrative.
  • The Rules of the Game : 
    • Not getting a No doesn't mean it's a Yes. VC's might not directly say no.  
    • Until the paper work is done and terms sheets signed it is not a done deal, so don't get carried way based on interest and excitement from VC's. Until you hear an Yes in writing it's not a Yes.
    • What VC's look for 
      • Market Size (TAM): How big is the market ? VC's like companies that have the potential to become the leader in a big market
      • Team : Can the team execute ? If you are a first mover can the team execute rapidly to become the leader in the market ? VC's look for co-founders and teams with track record and can keep going when the going gets tough.
      • USP and Competitive Positioning: What kind of competitive position will the idea/product/company have ? How is it unique ? Can someone easily copy  it ? Are you a leader  with good market share ?What is the competition ?
      • Marketing and Distribution Channels - How will people find you when they need you ?
    • What VC's expect
      • VC's get money from Limited Partners (LP) and they need to give back with great return. This means VC's are in the business of making money and it is in their best interest to pick winners and on an average come with great returns from their portfolio.
      • VC's don't necessarily have the time or bandwidth to be actively involved in their portfolio companies a.k.a the companies they have funded.
      • VC's do bring good connections and contacts
      • Valuation is all about risk and reward, the capital you raise is dependent on the traction and how much dilution the founders are ok with, a.k.a how much money for what equity. More money, more dilution. In the early stages take only the minimum required to execute and stay afloat.
  • The Virtual CEO : How Randy is an angel investor and not your typical VC. VC's come at the later stages of the company growth, angel's come in early stages and can be actively involved in the management of the company. Randy talks about how business isn't just a financial institution, it is a creative institution for him.
  • The Deferred Plan: Doing things you have to do in the hope that you can do things you want to do later. Why work on things we don't love or like in the hopes that we can get to what we want to, later. Paying the Dues is out dated way of thinking. Randy talks about how he chose a job at Apple leaving his private law firm practice
    • He poses the question "What would it take for you to be willing to spend the rest of your life on "the idea/company/product" ?", figure that out and do it.
    • I slightly disagree with this as, in the early days we don't know what excites us and we are in the process of figuring it out, as time progresses and we spend more time on it we might know. So it is hard to figure out what we are willing to spend the rest of our life on when we are young and in the early stages. My take away was do something that excites you which could change later but don't do things because you have to. 
    • Do things because you want to not because you have to.
  • The Romance, not The Finance. It's the romance not the finance that makes business worth pursuing.
    • Drive Vs passion : 
      • Passion pulls you toward something you cannot resist. Passion is a sense of connection you feel when the work you do expresses who you are. helps you express yourself
      • Drive pushes you toward something you feel compelled or obligated to do
      • In the Deferred life plan has two steps. In the first step drive pushes  us to do things hoping it will lead us to the second step, the deferred life itself where we can do things we are passionate about. 
      • What would you do today if it were your last day ? Don't confuse Drive and Passion.
      • Choose something that will inspire you and your team to keep going even in the face of big issues. The promise or hope of money by itself won't be enough to keep going. 
  • The Big Idea :  Stories of how Sculley when he was the CEO of Apple chose Business model over Big Idea and eventually lost the market. Business models can change but it is the big idea that keeps the team and everyone excited and will lead to the long term growth not just short term wins.
    • The Big idea is your compass that can show the path even if there are hurdles. The big idea should help you understand where the business is going and what it's becoming and not just where it is right now.
  • The Bottom line : Take care of people, do the intangible things, not just  quantifiable and tangible bottom line. Business is about the people you serve (market), the team you build (employees) and the partnerships. Define your culture, values and principles by which you will operate and connect with your customers, employees and partners.
  • The Art of Leadership - Leadership is art, inspiring people is art. Management on the other hand is operational and more tactical and goal oriented. For a startup in the early stages it needs a visionary and a Leader in the co-founder to inspire and lead others to do what needs to be done.
  • The gamble - Talking about how investing, starting companies can be a gamble and it involves luck.  To get lucky you need to know the importance of vision, passion and the big idea. VC's are looking for companies that make a big difference, not just small difference. Failures are part of the success story and essential.
    • Business Risks : Venture won't be a huge success or worst has to be shut down.
    • Personal Risks : Risk of working with people you don't respect, risk of working for a company whose values are inconsistent with yours, risk of something you don't care about, risk of doing something that fails to express or even contradicts who you are. The biggest risk of all spending your life not doing what you want on the bet you can buy yourself freedom to do it later.
    • Consider both business and personal risks. Time is the only resource matters. 
      • Do you want to be one of the many richest people or do you want to live life doing what you want to do ?
  • The Whole Life Plan : Doing what you want to do. Doing what satisfies and makes you feel content. 
  • The Road : The Journey is the Reward.
Overall a good read. I love the stories, the fictional narrative which reflects true scenarios even in the present day. The book was written in the early 2000's and even after almost 18 years the content is still relevant and relatable.  While most of the content I have read in self help books it was still refreshing to read about how things were back in the 80's and pre and post .com days. You will get to know the personal story of Randy as an employee, entrepreneur and an investor.

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