Archive for January, 2015

More Explorations into the Startup Culture by Frontier Team

 

As a part of our continuous learning on the ‘startup scene’ two of us from Frontier visited Singapore in August 2014. Among the few events we selected to attend was the ‘Start up Grind Singapore’ which gave us insights into some real life experiences faced by entrepreneurs in startup ventures.

The Start Up Grind event series was initiated in April 2012 by Son Le Thanh, a professional software developer with more than 10 years experience in the field of IT. Son launched this event series, which gathers a consistent crowd, to share startup experiences and foster new networks. The event we went to in August was attended by many who shared the same passion and interest in pursuing their innovative ideas into startup businesses and faced similar problems.

This time the event was hosted by Julian Lee, CEO and Founder of Ambi Labs. Ambi Climate is the flagship product of Ambi Labs, and it was the winner at Echelon Hong Kong Satellite 2014.  Ambi Climate is a smart air-conditioning system that aims to deliver personalized indoor comfort through the smart phone.

Lee in his insightful discussion stressed on the fact that when going forward with a new idea one must always keep in mind that original ideas have to and will keep on changing. Hanging on to the original ideas may sometimes not push a business forward. Furthermore, the best ideas don’t always seem realistic at first. Careful molding and refining it to see what people actually like will drive the idea to a success. This we found was very much in line with what we experience inside the startup culture at Frontier, where we too follow a pattern of constantly changing and updating of our strategies in the direction of the client requirements.

Lee emphasized on the use of a lean startup structure to support the constantly changing focus and warned to avoid too much investment in a particular direction or decision and ensure flexibility among the team.

Accordingly one of the important things we took out of Lee’s discussion was the importance of having a solid team for a startup. He stated that it was normal to experience phases equivalent to the early stages of a married life where hardships are experiences that help match the expectations of the parties involved.

He also talked of how pricing for a startup should always start from the point of what the customer perceives the cost of the service is rather than from our internal point of cost. Another point was the importance of first creating a good online presence before focusing on promoting the product individually from one client to another. . The event was conducted in a way which allowed us as the participants an opportunity to talk and network with individuals who inspired us with insights that we could relate to.

Another opportunity we got during our short stay in Singapore was to explore ‘Block 71’, a renowned area in the Ayer Rajah industrial estate. This is an initiative by the Singapore government to foster startup businesses. Currently, the area operates with close to 250 startups and participants got an opportunity to see first-hand how a few of them worked.

The Global Economy in January

In late December, the Japanese Government approved a $29 billion stimulus package in an effort to help the regions of the economy left out by Abenomics. However, economists questioned the potency of such a move, arguing that it would be unlikely to spur consumer spending.

In January, the Swiss National Bank (SNB) unexpectedly let go of its policy to cap the Swiss Franc at 1.20 euros, causing it to appreciate by nearly 30% against the euro. The SNB cut interest rates into negative territory in an effort to curb the rise. Economists say this will hurt Swiss exports, while aiding imports, which could potentially reduce its inflation rate further.

The Euro fell to its lowest since 2003, reaching $1.1098 after it was announced that Greece’s anti-austerity party, Syriza, had won parliamentary elections. The Euro was $1.1241 at the time of writing.

Gold prices found some solace during the month with increased safe haven demand, edging above $1,300, gold currently stands at $1,278.60 at the time of writing. Analysts were, however, still split on their outlook on gold – some predicted that prices would fall even further than before, while others expected further gains.

Oil prices fell to their lowest since May 2009, falling below $50 a barrel, due to speculation of higher US inventories, deepening the global supply glut. Analysts also say that oil prices are likely to continue their decent due to slower growth in China. Brent stands at $48.28 per barrel, at the time of writing.

Data released in early January indicated that the Eurozone fell into deflation in the month of December, adding to expectations that the ECB would initiate QE at its next meeting. In keeping with those expectations, at its meeting on the 22nd of January, the ECB announced it would begin buying 60 billion euros a month, from March 2015 until September 2016, in an effort to prop up its balance sheet by 1.1 trillion euros. The announcement beat analysts’ expectations of 50 billion euros a month.

In Asia, China’s stock market tumbled 8%, its highest fall in a single day in six years, when authorities cracked down on margin trading, wherein traders buy stocks with money borrowed from brokers. India surprised markets when the Reserve Bank of India (RBI) cut rates by 0.25 percentage points to 7.75%, the first rate cut in 2 years, due to the fall in oil and food prices positively affecting India’s inflation rate. Economists expect more cuts to follow over the course of the year.

Globally, sovereign bonds rallied in early January, reducing yields to an all-time low of 1.28%, according to Bank of America Merrill Lynch’s Global Broad Market Sovereign Plus Index. The rally began due to the prospect that lower inflation would help preserve the value of fixed payments on bonds, as well as due to speculation of ECB QE and declines in stocks. The IMF lowered its forecast for global growth in 2015 and 2016, projecting it to be 3.5% in 2015 and 3.7% in 2016, while urging governments to pursue structural reforms to support growth. An FOMC meeting is scheduled to be held on the 27th and 28th of January, wherein expectations are tilted toward the Fed maintaining its decision to be “patient” about rate increases.

Knaves and Divas: Google’s secrets to recruitment

Recruitment is integral to any firm. It is arguably the most important duty vested unto any manager. This means that a manager can’t go out hiring the first person he sees just because a post needs filling. A manager should strive to find the best employee for the job. But who exactly is “the best employee for the job”? Yes, they should have the proper knowledge for the post and experience will help, but there are other, less looked upon, characteristics that are as important (or even more important) than qualifications and experience. We can get a clue into what exactly these characteristics are by looking at those who seem to constantly hire the best talent there is – in this case, Google.

Eric Schmidt and Jonathan Rosenberg recently penned a book by the name “How Google works”, which gives us some insights into the search giant’s structure and processes. We’ll stick to the part that we’re most interested in – how Google recruits its talent.

In a Google+ post describing their book, Schmidt and Rosenberg state that “Great people are often unusual and difficult” and go on to classify them into two categories, namely Knaves and Divas. Knaves are ill-witted employees that, according to Rosenberg, are devoid of integrity, sloppy, selfish and arrogant. They are also often jealous and take credit for other peoples work. Divas, on the other hand, are employees who are extremely talented and see themselves as better than the rest of the team. However, they still work for the victory of the team and their achievements in the team either match or outweigh their egos. Rosenberg states:

“Not all difficult employees are knaves. In fact, some of most difficult are exactly the people you should fight to keep. I call them the divas. So exile knaves, but fight for divas!

Whereas knaves act the way they do because of low integrity, divas do it because of high exceptionalism. They’re extraordinarily talented and think they’re better than the team (and they usually are!), but they still want the team to win. What’s important is that their contributions match or exceed their egos.”

According to Schmidt,

“Cultural factors can conspire to sweep out the divas along with the knaves, as culture is often about social norms and divas often refuse to be normal.”

Being a Diva isn’t the only thing that defines the best employees though. This article from Fortune magazine shares some more of Google’s secrets to recruitment, with the first being the “LAX test”.

The LAX test (named after the Los Angeles International Airport’s nickname “LAX”) tests a person’s passion for a subject, as well as how interesting he/she may be (known at Google as a person’s Googleyness). In the words of Schmidt and Rosenberg,

“Passion is crucial in a potential hire, as is intelligence and a learning animal mindset. Another crucial quality is character. We mean not only someone who treats others well and can be trusted, but who is also well-rounded and engaged with the world. Someone who is interesting.”

“Imagine being stuck at an airport for six hours with a colleague; Eric always chooses LAX for maximum discomfort (although Atlanta or London will do in a pinch). Would you be able to pass the time in a good conversation with him? Would it be time well spent, or would you quickly find yourself rummaging through your carry-on for your tablet so you can read your latest email or the news or anything to avoid having to talk to this dull person?”

“This includes ambition and drive, team orientation, service orientation, listening & communication skills, bias to action, effectiveness, interpersonal skills, creativity, and integrity.”

The pair, however, stress that being interesting doesn’t necessarily mean that you have to like that person. You don’t even need to share the same viewpoints, in fact, it’s even better if you have different viewpoints altogether.

“Imagine that person with whom you are stuck at LAX has nothing in common with you, and in fact represents the polar opposite of wherever you stand on the political spectrum. Yet if this person is your equal (or more) in intellect, creativity, and these factors we call Googleyness, the two of you would still have a provocative conversation, and your company will be better off having the both of you on the same team.”

This difference in opinions is important as it creates diversity. The diversity they speak about points to the different ways in which people from different backgrounds see the world and the different perspectives they can bring.

“You must work with people you don’t like, because a workforce comprised of people who are all “best office buddies” can be homogeneous, and homogeneity in an organization breeds failure. A multiplicity of viewpoints— aka diversity— is your best defense against myopia.”

“People from different backgrounds see the world differently. […]These differences of perspective generate insights that can’t be taught. When you bring them together in a work environment, they integrate to create a broader perspective that is priceless.

Great talent often doesn’t look and act like you. When you go into that interview, check your biases at the door and focus on whether or not the person has the passion, intellect, and character to succeed and excel.”

At Frontier we follow a similar mindset. When hiring new talent, we run candidates through a series of rigorous tests and interviews in an attempt to judge whether they not only have the knowledge for the posts they are applying for, but also (and more importantly) to make sure they are able to integrate with our culture. Since most people leave their respective universities/institutions vying for a “traditional” firm with its processes, structures, corporate ladders etc. (which we don’t offer), this “culture-fit” is very important. Despite the strictness of our recruitment process, we have seen a steady influx of great talent into our company over the years  and we keep evolving in order to make sure that influx doesn’t abate.