Crossing the 10 crore chasm - Presentation by Dr. Ashok Korwar

Crossing the 10 Crore Chasm

Krishnakumar Natarajan and Ashok KorwarAugust 2011

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Know our biases …Our view from the fish tank.

Krishnakumar Natarajan

• CEO, MindTree Ltd.

Ashok Korwar

• Independent management consultant based in Pune

[email protected]• Professor at IIMA, 1990-2000• Strategic Advisor to Chairman of Polaris Software,

2000 – 2007• Division VP at EDS, Dallas• Ph.D. – UCLA• B. Tech, IIT Bombay

Believe in nothing, no matter where you read it, or who said it, no matter if I said it, unless it agrees

with your own reason and your own

common sense.

Gautam Buddha

Discontinuities…

• Rs. 0 – 5 Crore: fledgling• Rs. 5 – 10 Crore: becoming viable• Rs. 10 – 100 Crore: growing• Rs. 100 – 1000 Crore: segment leader• Rs. 1000 Crore + : Global Force

Growing a business is a matter of choice. Before deciding to grow, be sure you know why you’re doing it.

When you visualize,

you materialize!

What is Rs. 10 Crores?

So.. What is Rs. 10 Crore?100,000,000 INR

2,211,904 USD

1,550,363 Euro

170,912,123 Japanese Yen

14,223,809 Chinese Yuan

1,642,456 Swiss Franc

850,477 Omani Rial

• Infosys started in 1981Rs. 5 Crore in 1990-91 and passed Rs. 10 Crore in 1992-93

• Persistent started in 1990 Rs. 10 Crores in 1999-00 and Rs. 50 Crores in 2002-03

Visualize your business at Rs. 10 Crores

Visualize your Rs. 10 Crore Business

How many units sold?

How many people?

How many customers?

How many projects?

How many managers?

How many sales people?

How does my balance sheet look?

• How many customers?• How many people?• How many sales execs?

My business at Rs. 10 Crores

Small Companies have limited management

bandwidth.

Applying Goldratt’s Theory of

Constraints

http://www.goldratt.com/

Eliyahu M. Goldratt

What determines your speed on the road?

Every System..

• Has one constraint• That chokes throughput• The ‘Bottleneck’

What determines the strength of a chain?

External Constraint?• The market?– Do you have 50% market

share?– If not…

Internal Constraint?• Who will bell the cat?

Constraints …What prevents a bonsai tree from growing?

Policy Constraints ...

Mental blinders we put on ourselves ...

But also the most common dominant constraint..

Policies as Constraints..

• .. I will hire only people from IIT ?• .. every project must earn 40% margin?• .. I can trust only Indians in the field?• .. I can’t pay more than..• …CEO must see every customer

communication• …people must be kept busy all the time..

Identifying Constraints..

• Depends on the business model..

• Use common-sense, it does not take statistical analysis!

• Thought experiment: if throughput goes up by an order of magnitude (10x) where will my system break down first?

• If I strengthen x-function, will throughput go up?

What is holding you back? What’s your constraint?

Identify your constraint

HOW DOES IT HELP..?Ok, so I found the constraint..

Constraint Is also Lever

What should the CEO focus on?

Goldratt’s 5 step process

1. Identify the constraint2. Squeeze the most out of the constraint3. Subordinate everything else to the constraint4. Elevate the capability of the constraint5. Go back to step 1!!

The constraint for my business is:

Win that first big deal ..

Systems and Processes will get aligned to win it, to execute it..

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• The mountain does not give a damn about your resume.

• Without hunger, both skill and experience will remain in the base camp.

• There is nothing more dangerous than a moderate mountain.

• Only an ultimate mountain can forge an ultimate team.

• The only guidebook to your mountain is the one you will write.

• The best plan is the one that works.

The mountain will teach you

what you need to know

to climb it..

Failure defeats losers, failure inspires winners.

– Robert T. Kiyosaki, author, entrepreneur, investor

Go for it!

POSITIONING

Define the Battlefield.. To YOUR advantage

A small company HAS to committo jumping across…

Even for a platform product/service

• Vertical is better than Horizontal for entry

• Sun Workstations• Apple MacIntosh• LOTUSNOTES• Documentum

• Start with one vertical and COMMIT to it..• OWN IT !!!

Your elevator pitch: Framing is key..

• Serving the same need as.. (in some other industry)

• Like.. Established Competitor, only better because..

• Competitors are extremely useful for FRAMING!

Home in on the differentiation..eg

• Market alternative: BPOs who are struggling to handle complexity

• Product alternative: like XYZ, the market leader in workflow

• Except that we are optimized for PPP pain area

• And we have the entire package ready

The Complete Package

• Is important to CIOs

CIO is Gatekeeper

What will he keep out?

• Anything that disrupts his infrastructure– Needs work to make it work– Support may not be available– Risks stalling something else

Don’t under-estimate..

Example: Intuit

• For the bill-paying member of the family• Who is tired of filling out the same old checks

month after month• It is a home finance program on your PC• Unlike ‘managing your Money’ which is a

financial analysis package• We are optimized for home bill-paying(from Geoffrey Moore, Crossing the Chasm)

My 30 second elevator pitch