Many tech entrepreneurs and investors feel that remote is not the way to go. That the physical presence within the Silicon Valley is a very important pre-requisite to success. They back this with statistics that over 70% unicorns are born in the bay area, and that less than 10% are born in NYC or LA. With only 3% or so coming out of India or China and 5% from rest of the world.
Their case is strong as far as the statistics are concerned. I’m the numbers guy so there’s no basis for me to refute what they are saying. Despite that, I believe remote work is the way to go. Silicon Valley could be the present, but remote is the future. The statistics that are thrown around only reflect what is happening today, and not what could be happening in the future.
As with the COVID-19 emergency, many tech companies have decided to go remote. The list is a bit too long but here are the ones I’m aware of; Amazon, Facebook, Google, Linkedin, FourSquare, Twitter, Uber, Lyft, Zillow, Bitly, Digital Currency Group, IBM, MongoDB, Airbnb, Grammarly, PostMates, SalesForce, ShutterStock, KickStarter, Silicon Valley Bank, WeWork, Yelp etc. I think when all of this is over, some of these companies, and many other companies will have a part of their work force hired to work remotely.
Remote work is to HR what CloudFlare is to the internet. Remote employees ensure higher uptime, load balancing, no single point of failure. Remote employment means you can hire better talent for cheaper costs. Forget cheaper costs, remote employment ensures you can hire better talent from the talent pool that was previously unavailable to you, even if you want to pay identical salaries as you pay in the SV. For the employees, it’s the ability to get a serious bang for the buck by being in a high quality low cost area.
After the COVID19 is over, the world will retrospect. The world will question the ability of the US to handle health crisis. The world will question if China should be the sole manufacturer of the global goods. The world will question the open borders of the EU and the lack of systems in place to protect against a pandemic. And a small part of the world will also question how can we leverage remote work to build more durable companies.
I’ve a proven history time and again that when I go through an extremely negative experience which is negative enough to push me down for weeks, I bounce back the hardest and put out my best self at work.
While this may not work every time or with all kinds of setbacks, I believe negative energy isn’t bad in most cases.
When we go through a bad relationship or a breakup, financial setbacks, fraud, partnership dissolution etc, it can be overwhelming. Some setbacks would make you incredibly sad, while others may leave you angry or disappointed. While all of these energies could be used to make serious progress at work, anger, in my opinion has worked out the best for me.
With all that aggression that cooks under you, all it takes is the right approach to hit a home run. You’re already aggressive, all you have to do is channel that and use it against your competition, or for your growth. Let your anger flow into driving sales and results for you. Let your success be the answer to the people who made you angry or sad.
While this may sound a load of BS from a self-help textbook, I can’t stress enough how real this is. I can remember at least 2 memories when I used serious setbacks in life and accumulated a large amount of wealth and success in the coming weeks or months.
You could use all that negative energy to hurt yourself and the people who hurt you or you could just aggressively make progress. It’s a simple decision for me. What about you?
It is often statistically reported that women are paid lesser than men in most lines of work. In tech, specifically, it is said that women are paid 5-40% lesser than their male counterparts.
Another striking statistic that is often highlighted is that women make up only about 25% of the tech workers. This particular statistic doesn’t bother me because in comparison, healthcare industry employees 77% women. One gender could be more inclined towards working in a particular industry than the other and there shouldn’t be anything wrong with that.
Coming back to salaries, Fiverr, a freelance platform reported that on their platform women at average earn $96 against their male counterparts who earn $100. This represents a 4% difference and is by far one of the best reported figures I’ve read regarding the gender equality.
I’ve often written on this blog that freelancing, remote jobs or distributed companies have many advantages. I’ve often highlighted the location and time independence as the most major advantages. You could be anywhere at any time living the millionaire lifestyle.
But the data published by Fiverr has given me new reasons to celebrate the digital nomad lifestyle. You could be a man or a women. You could be a Muslim or Jew. You could be in Syria or Romania. You’ll get the equal opportunities and wages as everyone else on the platform.
Distributed companies, remote employment and freelancing is the answer to gender inequality. Not just gender inequality, it is also the answer to racial inequality or any other kind of inequality. Obviously in addition to granting you freedom and wealth.
Two days ago, I wrote about the reason why I got introduced to PHPMailer. I finished my blog saying that I ended up using PHPMailer for a completely different reason. This blog is a continuation of that.
The Rocketship
In 2011, my music blog Koolmuzone was seeing growth faster than it had seen before. It was burning all the rocket fuel, breaking all its previous records. The kind of growth that made certain people uncomfortable.
One late February night became one of the most miserable nights for me. Days became weeks, and weeks became months, but the misery didn’t end. Someone clearly didn’t like me and so he found a way to take Koolmuzone’s Facebook page down.
The Crash
My page was taken down by a fake DMCA report. It took me many weeks to understand what happened, and I’m going to explain that below as clearly as I possibly can.
Most of the times when you get a DMCA report, it is for copyright infringement. But this one was different. It wasn’t a copyright report. You can see the copy of the claim below
Hello,
We have removed or disabled access to the following content that you have posted on Facebook because we received a notice from a third party that the content infringes or otherwise violates their rights:
[Page: www.koolmuzone.com]
We strongly encourage you to review the content you have posted to Facebook to make sure that you have not posted any other infringing content, as it is our policy to terminate the accounts of repeat infringers when appropriate.
If you believe that we have made a mistake in removing this content, then please visit http://www.facebook.com/help/?page=1108 for more information.
The Facebook Team
The fine line here was that the person who sent this report to Facebook didn’t say I was violating anyone’s copyrights. That there wasn’t any particular piece of content on my page that infringed someone else’s right. The report rather claimed that the ‘page name’ itself is infringing someone’s rights; a trademark claim.
I read that email everyday for many weeks until I found out what happened when I read the following line
[Page: www.koolmuzone.com]
This line made me realize that the content that infringes someone’s rights is the page name itself.
After I realized this is a bogus TM claim, I started seeking for the legal ways to acquire trademark for my brand which wasn’t trademarked at that time, neither by me nor by someone else. The TM didn’t exist in any country or jurisdiction. It was a bogus TM claim that Facebook asked me to resolve directly with the other party by providing his (fake) email address that no one responded to.
First Attempt of Recovery
So I went ahead and locally registered my company, acquired the relevant tax number for my business and obtained the relevant trademark. However, in the end I was still asked by Facebook that it doesn’t resolve any DMCA claims, instead I should directly resolve the matter with the claiming party or in a court of law. A party with a pseudonym and a fake email. I was stuck, and I was still devastated.
Second Attempt
After spending a few more weeks, sometime in April, I thought of something. I thought if Facebook can be as stupid as this with a fake trademark claim, it could be even more stupid than that.
I realized that there could be a potential solution to this problem and the solution could be PHPMailer. The thing about PHPMailer, or any mailer for that matter, is that you can send email “from” anyone’s email address “to” anyone’s email address. This might be difficult for some people to understand but the way the email protocol works is that you can send an email from an email address that you don’t own or have no access to.
The only thing different about such emails are the “email headers” that are commonly used to verify the real origin of such an email. The email headers mention the real domain name / server IP from where the email originated from and can be helpful in detecting spoof emails.
Because Facebook took a page down on a fake TM claim, I wondered if it would restore the page if the fake email address took the fake TM claim back, without verifying the email headers. And so I sent out that email.
The next morning, my page was restored.
I was hurt, very very hurt. I buckled up and got back to work. I had wasted over 2 months because someone wasn’t happy with the progress we were making.
Looking Back
Over the years, I’ve tried to understand the psychology of people who do that. They think there are two ways to win the race. The first way is to run faster, so you can really get ahead. This, in my opinion, is the only way to actually win and make progress. The second way, however, is to hurt your competition, so you can get ahead of him.
The problem with the second approach is that although you get ahead of your competition, you don’t really move farther in the true sense. You’re still standing right there, only with weapons. And if you think about it; what good does it do to you? If you win a race by eliminating your competition, how does that benefit you?
Sure, you’ll get the winner’s medal but without actually moving forward. You’re not going to have any more visitors coming in or you won’t be generating any more revenue. Why would you do all of this for a fucking medal. If, the person who hurt me, is reading this; think about it.
Since then, in the past 7 years, I’ve never worked in the Pakistani industry. It was toxic and I wonder if anything has changed so far. Even if things have changed, I’ve never really mustered courage to ever work here again.
To all the people who have stood by me during this tough time, I owe everything to all of you. To everyone who were the reason for my pain, I forgive you, although I’ll be surprised if you were seeking forgiveness at all.
When I was in college, I didn’t do too well. I always thought this isn’t for me and education scared me. I read too many subjects with no interest or aptitude in, and I didn’t study enough of what I loved. Of course, due to lack of options of subjects in traditional college education in Pakistan.
I also think that I didn’t do too well because the education system made me study 350 days, and then examined me in 15 days. I think the reward feedback loop was broken to the core and there was no reason for me to concentrate basically through out the year. In summary, the system didn’t break down the problems for me into smaller pieces.
When I started university, I started to do well instantly. I feel I can give credit to two things that I’ve already mentioned above. Firstly, 80% of the time, I was studying what I was really interested in and had aptitude for. Secondly, I was getting assessed for quizes, presentations, assignments, mid-terms, and eventually finals. I was rewarded for studying daily, and my problems were broken down into pieces. I could solve smaller problems that led to solving a larger problem in the end, and I was rewarded through-out the process. I graduated with cum laude.
I understood that for me to do well, I’ve to break down my problems and also create sequential reward system where possible. So I started doing that in my life and my business from that point on.
When you think about creating a content website that will have 50 million pageviews everyday, your brain would likely not allow you to feel that this can be done. If you’re struggling with the first 50 views, how can 50 million views ever happen? When you think about running an e-commerce store handling 10,000 orders per day, you probably want to give up, before you even begin. And when you think about wanting to make a million dollars, a million sounds a bit too much for you to make.
But breaking everything down to smaller pieces makes it easier, at least for me.
When I and Saad assess potential business opportunities we tear the business apart, and break it into pieces. We identify the small contributions that we can make, and small problems that we can solve, that could eventually result in this large-scale business that we are assessing at the time.
To give you an example, if our goal is to create a YouTube channel with 100,000 subscribers, we would identify the average view count of many YouTube channels with 100K subs. Suppose that number is 10 million views. This means, we can get 1 subscriber for every 100 views we deliver. Next we’ll identify various combinations of getting 10 million views. For example it can be 10 videos with 1 million views (highly unlikely) or it can be 100 videos with 100K views (still quite unlikely) or it could be 300 videos with 33K views each (possible).
Next we identify ways to deliver up to 30K views to a video. How much can we bring through external websites. How much can we bring by embedding on our blogs, or on 3rd party blogs by creating relevant visual content for someone’s textual content. What volume can be be driven by Facebook, Twitter, Instagram, Whatsapp etc.
How many views can we do inside Youtube through search. What kind of search volume will our content have and various combinations of that for example videos with low searches but low competition and videos with high searches and high competition etc. How can we create a chain of views from one video to another through interactive video cards in the end etc and what percentage of views could come from there.
In the end we want to break things down to pieces so small, that literally anyone could do the simple tasks that need to be done on an on-going basis to create something much larger.
I learnt something unique in the past few weeks. The size of the recycled clothing industry is mind-boggling and Pakistan get’s the lion’s share of this market.
Zari originally introduced this to us, but my curiosity was further fueled by my long-time friend Saad who filled me in with complete details. I’m left speechless by the sheer size of this industry.
Since 80 billion pieces of clothing are produced every year, more than 10 times the number of human beings in the world, it is obvious that every year there’s a lot of clothing waste. Since I buy roughly 5 pieces of clothes and hope them to last 5 years, I must admit I was shocked with the amount of production and could obviously imagine the wastage. But what happens to all this wastage? It’s sent to emerging economies like Pakistan for nearly free.
The west gets rid of their “waste” instead of using it to fill lands, or decompose in environmentally hazardous manner. Pakistan then puts a new soul in what is termed as a waste.
This wastage that comes to Pakistan is approximately about 1.5 billion pieces per year. This is 125 million pieces per month or 12.5 crore pieces of clothing.
After sorting, nearly 50% of this clothing is marked unfit for wearing and eventually goes into fiber extraction. The other half, which roughly comes down to 60 million pieces of fashion, are restored and made fit for wearing. But what surprised me the most is this fun part; a large chunk of what is restored as fit for wearing is then exported out of Pakistan.
Now I’ve given you the size of industry in terms of number of units, but not in terms of revenue. Pakistan as a country generates nearly $200 million out of export proceeds from these products.
I haven’t frequently hosted properties on Airbnb in Pakistan but I listed one property in 2018 that I rented to sublet just for learning purposes and found success with it.
While there could be many tricks and hacks you may use to find success on Airbnb, my personal favorite is simply a pricing hack that I’ll share later in this post.
I think everyone agrees that the core success of any property comes from how good the property is, and what is the value for money. So you certainly cant discount that advice. Your property photography needs to be really good for the whole thing to look good and your pricing needs to be competitive with what others are offering in the neighborhood.
The second most important thing for your Airbnb listing is your landing page. It should be super informative. There’s little need for you to get creative, just look at the highest rated properties, and try to copy everything that they’ve done on their landing pages. Try to provide as much information as other top properties have done. If you don’t find anything extra ordinary in the neighborhood, explore properties in other countries such as US and UK and find the best parts for your sales pitch.
The third thing, that I was able to really make money from, is simply a pricing hack. When you search a property, Airbnb displays the base fare on the front-page. If you have ever booked a property, you may have noticed how your $50/night and 10 nights never add up to become $500. Instead, you’re always paying $750 or something. This happens because when you open the property, the pricing now includes price per number of guests staying, weekend pricing, cleaning fee, airbnb service fee etc.
Since I was only interested in rentals that were at least a week long, I set the minimum length as 7 days, and took advantage of the weekend pricing. I set the base pricing as $50 or about 20% lower than my competition. By doing so, Airbnb not only ranked me higher than my competition but I also looked more interesting and generated a higher clickthrough rate from my audience. My weekend pricing was twice as high ($100) as my base-fare and since the rentals were always week long, there was no way to avoid weekend pricing.
In the end, my pricing structure would sell 5 nights for $50/night, and 2 nights for $100/night cumulatively giving me $450/week or an average nightly rate of $65/night.
After taking the final pricing into account, I costed about the same as my competition, but appeared 20% cheaper, appeared higher in airbnb search ranks, and had a better click-through.
This is just one of the many ways you can take advantage of the Airbnb pricing system to generate higher revenue and occupancy rates than the rest of the neighborhood.
PS: This was only an experiment that I ran a couple of times and not something that I presently do.
As the ad costs to drive sales keep going higher, at some point you’ve to understand and work on the lifetime value of your customer. Otherwise, you’ll not stay competitive and will be crushed away.
You pay Facebook or other platforms a certain amount to display your ads to people who are interested in a certain “interest or a keyword”. At some point you realize that the cost per acquisition has gotten so high that after paying for acquisition cost, cost of goods sold, and other infrastructure costs such as fee for shopify/server and other plugins etc, you’re losing money.
Sometimes after optimizations of all kinds on the ad level as well as on the landing page, you’ll realize that you’re still losing money. How can that happen? How could your competitors by bidding so high? How can their business model work if they are spending higher than you to acquire customer. The simple answer lies in LTV: Lifetime value. And LTV should always be higher than CPA (cost per acquisition).
If your business model is designed such that you acquire a customer who would pay you once only, your revenue model is limiting you to compete. The reason why that happens is because your competitors are now betting on the lifetime value of a customer. They are interested in recurring purchases, subscriptions, and in summary to acquire user once, and monetize him again and again.
Other buyers of ads are bidding higher in order to purchase data that they can use later to either bring the bids lower, or use it elsewhere to generate revenue.
To conclude, in this day and age, if your business doesn’t account for the lifetime value of the customer, you’re simply not competitive.
A few months ago, I spoke with someone who is quite focused on buying and then selling subscription businesses, primarily SaaS.
The fun thing about subscription businesses is that with bit of a work, you can increase the valuation by a lot.
Let’s dig down a bit to see the valuation at play.
Suppose there’s a subscription business with $9.99 monthly ticket and 1000 users. This business would generate $119,880 ($9.99 x 12 x 1000) per year. Assuming that the business has 50% margins, the annual net profits come down to $59,940. Further assuming that the small-cap internet businesses are valued at 4x annual net profits, this business would be valued at $239,760 ($59,940 x 4).
My acquaintance would buy this business like this.
He would then focus on trying to improve the basics for the business: optimizing the sales funnel, getting the optimal value out of the user by offering additional membership plans and up-sells, offering better customer support etc.
By the end of the optimization process, he would try to push the average order value to $11.99 instead of $9.99 and the user-base to 1100, up from 1000.
Upon revaluation, the business would be worth a lot more. Annual gross revenues would be $158,268 (11.99 x 12 x 1100). Annual net profits would be $79,134. And the new valuation would be $316,536; an increase of $76,776 or 32%.
My co-founder cross-questions a lot and assumes very little. Every time he is having a discussion with a Pakistani startup founder, he likes to compare the situation with a similar and often better startup in India.
The reason is that between the two markets, there are many similarities, and India is often slightly ahead in almost all markets. For example, in e-commerce the primary mode of payment in India is also COD just like in Pakistan. The advertising rates in India are just as low as the advertising rates in Pakistan. COD stays as the primary mode of payment despite that there are many payment gateways available and the credit card penetration is much higher.
When a Pakistani founder says that when X will happen in Pakistan, the company will grow very quickly. This is obviously an assumption. Saad then compares the situation with a similar startup in India where often the X has already occurred and more often than not the growth wasn’t seen as predicted or assumed by the Pakistani founder. This analogy helps avoiding the wrong assumptions.
Since India is running 5-10 years ahead in tech albeit having many market similarities, this comparison can frequently be used as a tool to project the future more accurately.
