My father used to say that about cheap shoes but I later discovered it applied to software too. When I took over as the CEO at Excelan, Our TCP/IP software was priced at $65 per copy. No matter what computer it was used on. It was buggy and our customer support was sucky to say the least. Math said that there was no wat we were ever going to make money at that price. Customers were frustrated, I was frustrated and our employees were frustrated. Overnight I decided to raise prices ten fold. I hired people to provide customer support and beefed up our QA/QC department. prices stuck, quality started to improve and customer service got much better. I was later able to raise prices ten fold again. Customers mumbled but they had no alternative and they needed the functionality we were providing. We came to be known for a good quality product and excellent service and became very profitable.

Every body is a loser when you provide cheap shoddy products. Market clearing prices are set by the competition. Customenr does not remember what he paid but he for sure remembers what he got.

Ratan Tata learnt that lesson with Nano. He was fixated on one lakh price when the cheapest alternative was six lakhs. One has to provide quality product at a reasonable price. Customers deserve that, but you need to be able to deliver that and make a reasonable profit.

Entreprenurial journey is like riding an emotional roller coaster. It has high highs and low lows in a rapid succession. One day, one is on the top of the world; everything is looking rosy, things couldn’t be better but the very next moment every things falls apart.

Entrepreneurs thrive on the ebb and flow of the adrenaline. They get tempered after a while and realize that highs and lows feel much better or worse at the time than they really are.

Just like at the amusement parks, not everybody enjoys the roller coaster rides. This weeds out the wannabe entreprenurs early on. They go get a steady job. Ability to handle uncertainity for sustained periods defines successful entreprenurs.

Silicon Valley startup culture was set when David Packard , an outgoing marketing guy teamed up Bill Hewlett, a quintessential nerd, to start HP in 1930s. That combination of marketing man and and a engineering guy has come to be seen as an ideal team. Marketing guy loudly wonders why somebody hasn’t come with this or that widget. There would be a huge market for them. Engineering guy responds by sayng really? He can design them in no time. Thus is born a startup.

Like a life’s journey, teming with someone makes entrenurial journey easier. It is imperative that they bring complimemtary skills and temperaments to the party. Optimist/pessimist, salesy/nerdy, dreamer/realist are some of the few combinations that work well. It is much better to have divergent perspectives to develop a three dimensional view of the problem.

Large teams do not not work well as they become unwieldy. Yaar/Dost (friends) teams are not very good as one is not objective about friends. There has to be strong mutual respect for eachother but also good protocol on how to resolve disagreements.

There should be a clear division of labor between the team. Typically Mr. Inside makes sure that trains run on time while Mr. Outside make sure that there is traffic to serve.

In my case, Mr. Outside turned to be a dud and I tolerated the lack of performance because we were family friends. We almost went under as a result. I had to assume both roles eventually.