The startup laws and effects

 

This time, it will be only safe to begin with a disclaimer: Starting up knows no laws and effects. I’m just trying to put some observations together to make some sense and purpose out of it.

 

I believe each one of us has his or her favorite laws of life. Keep it in a book and you may call it your personal bible and live it everyday, everywhere. I have one and I live it.

 

As you will see, it’s obvious to note these laws are common to men, market and nature.

 

3 decades into a life and living, I believe I will startup. The question is will these favorite laws and effects still work? Are they of any use as I start up?

 

I introspected each of them, one by one:

 

1. Law of ‘X’ – Here, the letter X denotes what it commonly stands for i.e. to multiply. Say, if I start up and such a company is to exist in large numbers, what will be the net effect on my family, people and planet? Similarly, if I be an entrepreneur and if my kind of a professional happens to exist in large numbers, what will be the net effect?

 

Apply:

 

Think of individuals like Alok existing in large numbers across countries. Net effect =? (Imagine)

 

Think of a hopeless Govt. servant existing in large number across departments. Net effect = you know it.

 

It’s this law, which makes me like or dislike people and companies alike.

 

This law answers for the why or purpose part of the startup. (Watch a very nice TEDx video on the why thing in a different context but with the same essence)

 

Case – Apple, they clearly know their ‘why’. Well purposed and hence well loved. (Not just wanted or needed)

 

[Start up Q1 – Why should I start up? – Apply Law of X. Think and feel too]

 

 

2. Maslow’s law/Peak effect – In times such as ours a talented team is everything. Google, Facebook, Amazon these are all Talent Holding Incs. People first, process next, profit follows. I understand that and sure, I can build a team but can I retain them long enough?

 

I found an answer in what may be called as the Peak effect. It’s a take on Maslow’s law which we are fairly aware of. (There was an article on it in TOI/ET few weeks ago, which I just can’t trace anymore for a ref.)

 

Quote: Peak experiences are transient moments of self-actualization. (Maslow, 1971, p.48)

 

Today, capable people learn faster and climb up to max out the Maslowian hierarchy sooner than ever. Devising work or process which helps them continuously Peak up is the only way to go. The startup DNA must be designed in such a manner that the peak effect period is the highest of all.

 

Highest period of Peak effect answers for a highest team life.

 

Case – Google, they have dedicated peak hours, 20 % of the working week where you work at the peak level – your dream project and not at any lower level of Maslow’s pyramid.(G-mail is a famous 20% product from Google)

 

[Start up Q2 – How do I stay blessed with talent for the longest, if not forever? – Apply Law of Peak effect,peak them up]

 

 

3. 80:20 law/ Pareto effect – 20 % of the total bugs are the cause for 80 % of the problems on windows system, 20 % of the tweeple tweet 80 % of the total tweets, 80% of the complaints come from 20 % of consumer or complaint types. Why? This law has always fascinated me. It seems to exist as a natural phenomenon just like Fibonacci number.

 

If, I infer this law correctly that would mean 20 % of my actions (decisions/products) are going to be the cause of 80% of my consequences (success/profit).

 

Identifying the Golden 20 in people, product and process becomes mission critical.

 

Pareto analysis for start ups after few FYs should be a must do along with the well known SWOT analysis which one usually starts with.

 

This law can help pre-empt death by Scale. (When you scale, it usually dilutes the setup and generates chaos)

 

Case – Fashion &You, They did bleed badly while scaling up and still trying to recover.

 

[Start up Q3 – How do I scale up smoothly? – Use Pareto analysis, it just might work for good]

 

 

4.Peter principle/Peter effect – You start at level 1, do better and move up. You keep moving up till one day when your board and your peeps say you are a good for nothing CXO. You know you are doing your best, so what the heck?

 

Well, it’s not you. If you have to, blame it on peter effect.

 

It says: “In a hierarchy every employee tends to rise to his level of incompetence OR employees tend to be given increasing responsibility and authority until they cannot continue to work competently”.

 

Peter kills people and companies.

 

The average life of an incorporated company in the US is 18 years, which means they die by the time they are just adults. They mostly peter out.

 

Must be done whatever it takes – innovate, train, buy-sell, hedgehog but one must not PETER OUT.

 

This law can help pre-empt death by Stagnation.

 

[Start up Q1 – How do stay big and still be the quickest? – Help your employees Kill Peter and let them leap again and again and again]

 

Case – Nokia, BB – Big, very big but slow, very slow. They petered out.

 

 

5.Matthew Effect:  “The rich get richer and the poor get poorer. In the context of capitalism, it’s called the Law of Increasing Poverty”.

 

Never allow Mathew in your life and office. He is an outlaw from the evergreen land of beautiful success.

 

With Matthew, you get rich but you stink. (Like hell)

 

Companies sans Mathew earn by value and care to give back genuinely. They own a perpetual currency called Goodwill. Law of Karma blesses them.

 

Everything being taken care of, this law possibly is an answer to being a never dying company.

 

Case – Rel***ce eats and sleeps with Matthew. TATA’s, I guess they don’t even know who Matthew is. Even if they do, they prefer to stay away.

 

Here’s a Startup law Cloud 🙂

 

 

 

A Kind Notice

 

I wish to keep this post open to unlimited edits to help create one of the best and probably the first “Crowd sourced start-up post” on TheRodinhoods. (Unlimited edits subject to our dear Ed Asha’s views and technical feasibility of the platform)