Posts Tagged ‘Random Thoughts’

Follow Your Passion

I am returning from a very productive business trip and as usual my plane ride is spurring ideas to write. It might sound strange but the plane take-off reminded me of a topic that I was thinking about earlier in the week – passion in life. It is amazing how much force is needed for a plane to break the inertia and build the momentum to take off.  I was wondering if it is same with big initiatives in our lives. We need to put in lot of focused effort to accomplish big things in life. Gas propels planes; what propels us? Passion!

I remember the time when I was preparing for my entrance exam for under-grad school. I wanted to get into the best school in the country but the competition was brutal. One in hundred used to make into the school of my choice. I hear it is even worse now! What were the chances of a student from a small town with no guidance succeeding while many bright candidates were preparing for the same exam from almost four years in advance? Well, I was determined and passionate to get into that school. So for next two years, I never slept more than two hours and studied almost 19 hours daily. Everybody, including my parents thought I had gone mad. While everybody was sympathizing with me for all the hard-work, I never even once felt like it. I was having fun and was in a totally different world. Waking up after two hours of sleep was a piece of cake because I was so eager to go back to my books. It was a sheer pleasure to spend every minute studying. Those were the best two years of my life. The icing on the cake was passing the test with a good rank. In those two years, I learned many things in math and science, but I learned an important lesson of life: if you are passionate about something, you can always achieve it.

There is no greater pleasure than following your passion. It is even better when your passion becomes your livelihood or way of living. I am convinced that one can scale great heights in career or personal life by pursuing one’s passion. I grew up in India, where kids are not [at least when I was a kid] exposed to arts, sports, and  other activities unlike   kids in the West. Studies are the way of life and a good student is expected to pursue engineering or medicine. Many bright students end up being successful doctors, engineers, and managers but it doesn’t surprise me to learn how many of them are still seeking that one thing they are passionate about. Even though the western education system is not perfect, I like the aspect of exposing kids to many different things early on. I hope my five year old will find that one or maybe more things that he is passionate about and will pursue them for life. There is no greater pleasure than living your passion.

What Motivates You: Money or Recognition

A few days ago, a member of the employee committee asked me how would I like the management to appreciate my good work. The options were – monetary bonus, a gift card for dinner for two at a nice restaurant, recognition for my work in employee meeting or others. My choice was very clear – recognition in all employee meeting. I don’t know why but they were surprised!

 Not that I don’t want money, most of us mere mortals would like some extra cash in our bank and so do I. Still I chose recognition because I believe it is the best way for acknowledging my efforts. Well another reason is that I knew they were not talking of big money. Nothing like notorious investment banking bonuses; software companies are generally stingy on cash. I was wondering that even if I was offered big money, would I have still opted for recognition as the most valuable employee? I think I would have.

I recently read a survey of Harvard MBAs about what will they choose between money or respect from fellow employees. As surprising it may seem but more than half chose the latter option.  Aren’t we driven by appreciation right from the beginning? My five-year old will read, switch off the TV, or do many otherwise boring things for a small reward such as a candy, toy or a sleepover at a friend’s place. However, I have seen him pushing himself to limit for appreciation. Last night, he played his first piano streak without looking at his book. We clapped and praised him for his efforts and today he was eager to go to his piano class. Moreover, he practiced many times last night on his own, a routine that otherwise is an ordeal for my wife. I am sure no candy or toy could motivate him as much.

I guess schools have already mastered this act. Class toppers are recognized and made into heroes. That is a great motivation for them to continue to do well. The corporate world also has learned the trick and hence instituted titles and employee recognition programs. Of course, employees like me validate their policiesJ. Hopefully I am not alone to fall for it but I still wonder why the employee committee was surprised by my choice. Well, they never disclosed the bonus!

Maximize Your Efforts: Set, Measure, Correct

We make so much effort to do better in every sphere of life – be it giving the best to our kids, improving our personal lives, or proving our worth at work. I wonder why so often we work hard but get disappointing results. There are many reasons for it but one that happens often is that we lack setting, tracking and improving our efforts towards a goal. Goal setting and tracking is a best practice in corporate world and that’s why there are sales quotas, management objectives, appraisals and not to forget notorious quarterly targets for public companies. Then why don’t we follow the same in personal life?

I have been trying to play golf from almost a decade. Hope you notice the word ‘trying’! But when I look back, I most improved my game when I had a target in mind. My first goal was to score in 90s and then 80s.  I could pretty much do it in the first year with regular practice and coaching. Next eight years were a wash because I never set a goal for myself. It was more of a walk in the park with friends, enjoying beer and an occasional great shot. Setting goals is important.

The next step is to measure performance against those goals. It was easy to measure a three-digit round against a goal of being in 90s. However, many times it is not so black and white, or we don’t think deeply enough to set the right metrics. Moreover, there are times when we don’t want to measure to avoid that extra pressure. Come on, don’t we already have enough on our plate with work and family?  However, I felt the best when I met my goals. I still remember my first round of 81. A great feeling that stayed with me for months! It is great to savor small successes but only if we measure them.

Finally the most important – analyze and correct. Once you measure you know where to focus. While hitting long shots was sexy, I found I was losing most shots in the short game. It made me focus on pitching and putting. While practicing putting, we adjust every putt based on how the previous one did. If it falls short of the cup, then we hit the next one a little harder. If it broke too much to the left, we adjust the angle next time. Similarly, it is important to analyze and adjust our efforts based on results.

Now consider practice putting when you can’t see where your last putt landed.  No matter how many times one practices this way, one can never improve putting. If we don’t get feedback, how can we improve? Exactly that’s why it is important to get feedback to correct it.

Well, you got it. To improve you have to correct, to correct you have to measure, and to measure you have to set goals. Alright, it is time for action.


Build Wealth: Make, Save, Invest

There couldn’t have been a better start to Saturday morning than reading Warren Buffet’s 2010 annual letter to shareholders. Although my wife doesn’t endorse this as a perfect start or she might actually hate it because I dropped all the weekend chores for it. However, now that I have resumed the chores by taking my car for a wash, I have some time to reflect on Buffet’s letter and write this blog. As always there is plenty of wisdom in his letter but there is one thing that stood out for me – financial prudence and his grandfather’s letter about savings.

 I grew up in a culture of spending. Rich people show off their money by lavishly spending while middle class try to keep pace mostly through borrowing or mortgaging their future earnings and property. The rule is, if you can’t spend, you can’t get into the elite circle. Fortunately or maybe not, I grew up in a well-to-do family that deeply endorsed this culture. I grew up thinking spending on luxury is the way of life. It was only in my under-grad school that I started thinking about money and how to become rich. I was a Curious George looking for a formula for success. As weird as it may sound, but I got my first life-changing advice about money from a stranger on a train. He told me that it is not spending but savings and investments that make you rich. According to him the rule of thumb should be-a bachelor should save 75%, married couple 50%, and couple with kids 25% of their income. The second step is to invest it prudently to grow your asset base. First time in my life, I learned about the other side of the equation­-savings! Thanks to that man, I got interested in stocks, property and other investments and was keen to start working to make, save and invest money.

Buffet epitomizes the conventional wisdom of the man I met on the train. He is a testament that one can become the richest man and build one of the most prosperous companies in the world through simple financial prudence. However, I am surprised by how many smart people still don’t get it. No wonder in my hometown, many folks still see only the spending side of the equation and continue to get trapped in debt. If only they could meet the man on the train or read Buffet’s letter. Well, I don’t know the whereabouts of that man but you all can read Buffet’s letter here!

Life is Too Short!

“Life is too short” was the last comment from my CEO when we folded our entrepreneurial venture in 2008. Even though our original idea didn’t work out, we still had money in the bank and there were few options on the table but we decided to shut shop. Money alone didn’t justify investing our efforts and energies into a new idea. Why? Because life is too short!

The more smart people I meet the more often I hear this phrase. The idea is simple – time is a limited commodity! For smart people, the game is to use this scarce resource most optimally. A highly successful professional, who was recently promoted to a CEO position, once told me that he has maybe 20 years of working life left. If it takes 6-7 years to build a successful company, then at best he has three attempts to make it big. I was amazed by his thinking process and realized it was another way of saying–life is too short!

I have come across many life-changing philosophies in the past, but nothing as profound as this one. A realization that it doesn’t matter what I do, time will eventually run out on me, has tremendously influenced my attitude towards life. I spent seven years in a job and loved it. People were great and I was doing well. I realized that I wanted to grow in a different direction but couldn’t break the web of comfort, title, stock options and an established base. However, a realization that time is running out cleared the cobwebs around my thinking and I found a perfect opportunity aligned with my goals. Not only am I happy now but also believe that I am using my time optimally growing in the right direction.

The idea is not to break away from your current commitments but not to wait to follow your passion. Now that I look back, we made the best decision to shut shop and return the money in 2008. They say the best outcome for a startup is success, the second best is quick death, and the worst is an ongoing flat startup that sucks all the energy out of an entrepreneur. I am glad we came out of it in time to pursue bigger and better opportunities.  So what are you waiting for? Follow your passions because life is too short!

A Retail Stock Investor: Time is on Your Side

For a change, my fight from Chicago left on time, actually in a hurry due to an impending snow storm. I have been to O’Hare many times in the past but have never seen this urgency by the flight crew to take off. I love it as it gets me home in time! Well it reminds me about another thing I love, the return on my stock portfolio. Don’t we all like it? No wonder CNBC is such a profitable channel. However, sometimes I wonder if it is the real return that satisfies a common investor or the excitement to pick a successful stock to beat the market [read fellow investors].

I first got interested in stocks when I was a sophomore at IIT. The dot-com bubble had markets in a secular bull run and I was cultivating ambitions to get rich, quickly. After devouring most of the top-selling stock analysis books, and regularly reading “The Economic Times”, I started thinking of myself as a stock market expert. I didn’t have any money to invest but I was advising people on stocks. Thanks to the booming market, many of my predictions came true, further strengthening my confidence as a stock picker. I didn’t even wait for my first paycheck to start investing and some early successes further led me down that path. The dot-com crash was the first real blow to my portfolio and confidence. I lost 70% of my investment in a few weeks. In next eight years, I endured three stock market booms, two crashes, and two failed attempts at creating investment management companies with some very smart people in the trade. Not that I have done and seen everything but I believe I have gained slightly more exposure to stock market investing than a typical retail investor. I learned some lessons the hard way but I am glad I learned them early.

This blog is not about rules of investing, although I can probably write a thesis on my experience in this subject. My objective is to highlight two key points, which I believe every common investor should know while investing in stocks. First, a common investor has no advantage in the market except for being patient. By the time CNBC runs a story, smart money has already acted on it. Experts outdo retail investors on research, access to information and trading tools by a wide margin. However, everything is not lost for retail investors. Time is on our side and it is a big advantage. Not having to report returns every day, week, month and quarter is a great advantage that no professional investor has in the market. The mantra is to buy good companies when they are selling cheap and sit on it. Trust me that is the only way for us minnows to make money in the market. Second, don’t fall for multi-bagger or trading stories. I know for sure, if someone can consistently make money in the stock market, I will probably see his picture in Forbes before meeting him in person. Look around, even the savviest investors couldn’t make money forever. Warren Buffet is an exception but even he had his down years, albeit I will make a case that he made money by following a common investor’s  “buy and hold” strategy. So next time you hear somebody consistently beating the market by trading or flipping stocks – acknowledge, congratulate and carry on with your boring buy and hold strategy.

The stewardess has already told me thrice to shut down my computer so I will end my post here. Finally my rocky plane ride is coming to an end. Unfortunately a rocky stock market is here to stay but there is a hope for all of us to make stable returns.  Buy cheap, hold for long and sell for profit. Make some money folks!

Part-Time Entrepreneurship: Is It For Real?

The great American economy runs on entrepreneurship. It is heartening to see that this spirit is still vibrant in our society. Being a software engineer and an MBA living in NYC, my social group is a typical mix of technology and finance professionals. All of them are well educated, bright and quite successful in their careers. I am very fortunate to be in a group of talented people with diverse interests such as sports, music, travel and reading. However, they all have one thing in common–a desire to do something of their own! The entrepreneurial spirit runs deep in this group and I have all the reasons to believe that it represents atypical of professional American society. However, what baffles me the most is that such passionate and bold over achievers think of pursuing entrepreneurship on the side! Is it worth their time and energy?

A typical persona is a post graduate from a top school working as a senior manager in a successful startup or well-established company with significant responsibility, needless to say making a six figure salary. While he is doing well in his career and enjoying life, there is a strong desire to do something of his own. However, the plan is to do it part time till he builds a good enough business to smoothly transition over from his full-time job. The reason is obvious–he doesn’t want to let go his six-figure salary for an uncertain future. Moreover, why take such a risk when he can stretch himself to build a business on the side. I have heard this argument several times from various people in different settings. Well, I do understand and respect it.

However, my novice entrepreneurial alter ego questions the rationale of part-time entrepreneurship. One can certainly build a decent side income by working on part-time projects but building a viable company with a partial effort is almost unheard of.  I am sure my accomplished friends are not aiming for a few thousand dollars more per year by burning mid night oil and dipping into their already scarce family time. They are talking about serious business. How can one build a serious business by putting 3-4 hours in the evening, when they know the companies they work for demand a 70-hour work week to keep the lights on? A start-up needs even more effort and investment to succeed. Why would a serious venture capitalist invest in a part-time entrepreneur with a cushion of his day job? What will take a backseat when both, the full-time job and the part-time venture, demand more attention and time? No wonder, I have heard so many stories of companies, great ideas and partial projects in limbo for years. “I want to do it but there is no time” or “I started doing it on the side a few years ago but it never went anywhere.” Have you ever heard this from extremely talented and hard working part-time entrepreneurs?

I know many smart people with great ideas who want to build great businesses. They have the ability to do it but only if they have the confidence to go all out for it. I understand we all have responsibilities and circumstances that hold us back but let’s face it–there is nothing called part-time entrepreneurship. Go all out for the glory!

%d bloggers like this: