The Last Straw

This one’s for all those people who’ve found their goal, and work towards it like nothing else matters, like there is no tomorrow. And for all those who know the true meaning of rules, the sensible rules at least.

Reading Time: 4 minutes

The Last Straw

Have you ever been in a state where you’re head is filled with the purest rage? Where you think, ‘once more someone messes with me regarding (whatever), and they’re really gonna get it?

Have a look at this article. Just an average, or in my view, above average employee, who just got pushed way over the edge, for apparently no fault of his. (Fed-Up Flight Attendant Makes Sliding Exit)

What happened was, that an airline attendant, Steven Slater, who probably had his share of responsibilities and troubles, got pushed a little too much when a passenger stood up to fetch his luggage on the aircraft before the crew had given permission. When Slater instructed the man over the PAS to remain seated, the passenger goes ahead with removing his luggage. And when Slater reaches the passenger, he accidentally gets hit on the head by the luggage the passenger was trying to remove. Now this, in itself, is a random accident that could happen to anyone. But when Slater asked for an apology, the passenger proceeds to curse him. So that’s two mistakes by one moron of a passenger. Firstly, not following rules, and then throwing his weight on someone trying to enforce those rules.

Slater, who apparently has served 20 years in the industry, (20 whole years is a bloody long time eh!), was a regular chap, who had been recently caring for his dying mother, who happened to be a retired flight attendant. His father too was a pilot in his day. Slater happened to be the leader of the airline’s uniform redesign committee apart from being a member of the airline’s in-flight values committee.

So I guess that does speak for his character, abilities and his work.

There’s something that the average consumer, customer or colleague often doesn’t understand. That different industries and businesses have rules for the purpose of the very meaning of the word, rule = that which is prescribed or laid down as a guide for conduct or action. So obviously, being aware of the risks, or to maintain an orderly way of doing things, rules are laid down.

But most beings, thinking themselves the wiser, feel that they can merely bend the rules a bit to accommodate their holiness. It’s easy when the average self-centered soul thinks that way. But what happens when everyone starts thinking that way. We get chaos. We get three lines at a counter where there’s supposed to be only one, we get five lines of cars on a road with three lanes, we get the ‘everyone’s doing it so why cant I?’ question staring you in the face. We get herd mentality. We also get more fights, more abusing, more punches, etc. Because they are not the only self-centered one around, there are more like them always around, many more.

And then what happens. The last straw. What’s worse, is that oftentimes, the one pushed off the edge for no fault of theirs, gets punished too.

Like Slater, who after letting out a string of expletives at the passenger over the PAS, grabbed a beer, activated the emergency-evacuation chute, and slid down and drove home, only to have his home surrounded by police officers, detectives and port authorities, and him, arrested.

Normal people don’t do such crazy things. Grab a beer and jump out of a plane. As ridiculous as that sounds, bloody cool even. But no, normal people wouldn’t take their job that seriously either. Most of the kind of staff I have seen on airlines or even with some people I’ve had the (dis)pleasure of working with, they wouldn’t have bothered too hard in trying to enforce rules and regulations to that extent. They try a bit, and then don’t bother. So it’s usually the most hard working, the most driven and most dedicated of employees who usually end up reacting in such extreme ways when they are constantly pushed against the wall for their efforts and dedication.

It’s because, on a scale from 0 to 100, the average expectation of, say quality, or enforceability of a rule for a normal person is, say 50. The normal chap or gal would expect something in the 45-55 range under most circumstances. So when the weird folk bend the rules to say a 40 or even 30, they think they’re just doing something that’s 10-20 units off the normal. Not too big a deal.

But to that crazy dedicated worker, the normal delivery expectation he or she provides is nothing less that a 95. When someone’s screwing about with rules (pushing it to the 30’s or 40’s), regular employees think they’re 10-20 below average. From the dedicated fellow’s point of view however, they’re way below the 95 average. Which is why you then get the extreme reaction to situations like this.

Reminds me of the movie ‘The Rock’. Am pretty sure most of you who watched it, ‘wowed’ at the story, the action, and then forgot about it. But give it some more thought. The story of a Brigadier who takes tourists hostage as a final desperate attempt. An effort to get the government to open its eyes to a cause he’s fighting for. The deaths of fellow marines killed in action, who have been denied even the honour for their ultimate sacrifice.

But somehow, that fight of the Brigadier General is never addressed during the rest of the movie. Or realized even by most people who watched the movie. So, through most of the movie, the Brigadier General is viewed as the bad guy.

It is only a few people who follow the rules to that level, work towards something with everything they’ve got, and the least they expect, or rather deserve; is respect for their efforts. And when finally, their efforts aren’t leading to anything, they sometimes end up getting frustrated and taking a drastic step in a final attempt at bringing out the flaw in the system…only to be rewarded with punishment.

Rather than look at the final action, it would do some help if people were to even look at the situations and all the causative factors which eventually culminate in that one drastic or so-called stupid career-killing step.

I guess the world expects people to merely reconcile themselves with things that happen. To not complain, challenge, nor question it.

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Herd Capital

Everyone’s aware of the herd mentality. Be it iPods, bigger and bigger cars, or even a Twitter account.
I’ve noticed similar mentalities in the VC industry. Why do we seek the safety of the herd?
Here are a few examples of it, and also the effects of the same on industries.

Reading Time: 3 minutes

Herd Capital

Everyone’s aware of the herd mentality. Be it iPods, bigger and bigger cars or houses. Or even a Twitter account (which doesn’t really make sense if you’re not actually gonna use it). Hell, even I got a Twitter account that I don’t use.

And many a times, it takes a while before a smart management guru finds the method behind some of the madness.

I’ve come across a few similar instances of herd mentality in the Venture Capital industry too in the past few years.

Before I mention them, I’d just like to state here, that the views below are only mine, and I don’t, in any way mean to undermine or insult the knowledge and strategies of my fellow members of the VC community. I’m merely expressing my concern about something I’ve observed.

Herd Mentality. Hmm.

Here’s one such example that comes to mind. The textile/ garment manufacturing and associated retail industry back from 2006 through most of 2008. Companies saw several Million $ of investment, and were doubling and tripling their manufacturing capacities – spinning, weaving, dyeing, printing, stitching; you name it… not to mention the number of retail outlets, adding customers (read big brands in apparel) with demands going into astronomical numbers of pieces of clothing.

And obviously all of this took the valuations of these companies pretty high. Just to give some perspective to the quantum of investing, this sector saw around 3% of the total $5.6 billion of VC investment in just the first six months of 2007. That’s roughly a whopping Rs.750 crore.!!

And then, with the collapse of the US economy, textile exporters suddenly lost one of their prime markets. What followed, quite instinctively, is that many of them came back home and focused their energies and capacities on the domestic market. A domestic market that was beyond saturated with all the domestic expansions that were funded.

That led to more n’ more discount malls springing up, running on wafer thin margins.

Then, there was the mad rush after clean n’ green businesses. Of course, there’s nothing bad about investing in technology that’ll help conserve the limited resources of the globe. But from a VC’s point of view, it’s about making money too, right? The focus on making those returns should be a fine filter through which great companies and amazing business models must pass.

However, here’s what happens with the herd mentality. Some companies with limited knowledge or capability, get invested into. And that’s only because some VC was probably not approached by the best companies in the sector yet. Or the VC did not want to miss out on the ‘gold rush’. And so they end up investing in the 20th company in the sunrise sector at a ridiculous valuation. The VC seeks the safety of the herd. Everyone’s doing it, so maybe I should too. This makes the top team at the company over-confident of their supposed capabilities. What’s worse, it makes it tougher to raise its next round of investment. Because of the already sky-high valuation it got its first round investment at.

So, we end up with:

  • Just a handful of the numerous funded companies actually adding reasonable value, globally
  • Several overconfident funded companies that just trudge along, finding it difficult to raise additional money
  • The sector very quickly becoming over-invested and going out of flavor with the VCs. This is due to high valuation expectations by other companies. This is resulting in less investment happening in creating more effective and widespread clean and green technologies and applications; something that was needed by the world on an urgent basis, to begin with

It would help if VCs invested after a well thought-out strategy rather than almost on impulse. Irrespective of whether it means missing the bus on a fad investment sector. This would result in the VC not making losses on a bad investment. At the same time, she or he could focus on understanding the sector quickly and perhaps support young companies with innovative products or solutions that they feel might significantly help preserve the planet. Instead of dumping money into just another solar-cell manufacturer. Or another wind turbine manufacturer, or something like that.

In the end, all this could be herd mentality, or perhaps even the wisdom of the crowds.

Only time and lots of investing will tell.

[Again, these are just my views on it, being strongly based on my belief that known and stable businesses or mass producing of products should be funded more by debt; and the risk investing in paradigm-shifting technologies and solutions should be left to VCs. I would like to get the views of promoters and fellow VCs on this. In the end, it’s all a part of our learning process.]

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