Monday, October 18, 2010

the Social Network, Startups among other things

I watched "the Social Network", the Facebook movie, two weeks ago. It was a movie of particular interests to our generation because so many of us are hopelessly addicted to Facebook, especially since coming back to b-school. In addition, one of the characters, Divya Narendra (the partner of the Winklevoss brothers), is currently a JD/MBA student here at Kellogg. You can read an interview of him regarding this movie here.

The movie was executed beautifully and funny at the same time. It triggered a lot of discussion afterwards among my friends about how to successfully assemble a team to execute an idea. To me the biggest lesson learned was that it was crucial for a start-up team to have a trusted developer who has vested interest in the product and company. It is true that during the product development stage, you desperately need developer talent and sometimes you just don't have that talent in your circle. That's why you hire outside help, and unfortunately that put you in the risk of hiring the next Zuckerberg. You can certainly have them sign legal document, but as a starving entrepreneur, you probably don't really have the money and time to protect your idea with a wall of legal documents.

One of the recent trends that I have seen startups do (especially startups coming out of business school) is that they outsource development work to India and maintain "long distance relationship" throughout the product development and even post product launch period. I consider this even a worse idea than hiring outside developers, especially for products that are targeted for the US market. Just talk to anyone who have experience working with outsourced companies, then you will know why.

The bottom line is, developers are crucial for tech start-ups. They are the one that hold the biggest "added value" (what you bring to the table), to use the jargon I just learned in business strategy class. And rapid turn-around and proto typing is key (hence, outsourcing to India doesn't work).

One solution to this developer power problem is actually at the source of the idea. Use Divya Narendra as an example, the idea of Harvard Connection was copied because it was a replicable and simple idea. You only really need one good developer to copy an idea like Harvard Connection. Divya's latest venture, SumZero, is an online platform for hedge fund, mutual fund and private equity analysts to share propriety information. And that, is something that requires domain knowledge, and something that is hard to copy. It serves a smaller community and has a niche market. Therefore, the developer next door who is a computer geek probably would not really be interested in copying this site. I would say Divya had really applied his lesson learned from the failure of Harvard Connection.

On the topic of protecting your ideas. I also want to share another school of thought. We just had a guest speaker for my Operations class today. Sunil Hirani, the founder of Creditex (acquired by ICE for over $500 million) spoke to us about Process Innovation and Entrepreneurship. What I took away from his talk is that ideas are best shared. In reality, once you talked to the first customer, your idea is out anyway, so you might as well talk to as many people as possible, to hopefully 1) attract the best people to your team; 2) to refine your idea. I am definitely a strong supporter of idea sharing. After all, most successful entrepreneurs will tell you that "execution is more important than ideas". But I think what I said about "easily replicable ideas" vs. "niche ideas" still hold true here. In the end, Mr. Hirani's venture is a financial service company rather than another social network site.

Saturday, October 9, 2010

Back to Blogging

Sorry I ate my own words when I posted in my last post 5 months ago about being more motivated to blog....The reality was, I was too occupied with life disconnected with the real world during the summer and life became insanely busy the moment I landed back in America. I went on KWEST, met many people during CIM, found friends and non-friends in my section, transferred to the MMM program, had my first class at Kellogg, had my first final exam soon after, applied for a bunch of student positions, went to millions of study group meetings, got myself involved in too many things and found little personal time to even video chat with my fiance.

Yet, I decided to start blogging.

I am not sure how I am going to shape this blog. But I realized that I desperately need to take time out of the swirl of business school and reflect on life. It is the only way that you can escape the infamous "Kellogg atrium effect" and chart your own course in the right direction.

I don't know if people still read this blog, but I hope my reflection will also give you a glimpse of what life is like at Kellogg, albeit it's just from one person's perspective.