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Monthly Archives: September 2015

Love vs Lust

Once in a while, we get attracted to different things including cause, person or a vision. It is difficult to differentiate between lust and love at first because they both have the same passion and sentiments. With the passage of time, it becomes difficult to keep the same sentiments over an extended period of time. We all are humans and sentiments make or break us. We have to invest resources such as time, money and emotions for a better future but mostly we are unsure if this is the right use of our time. No one can predict the future accurately however it is fairly easy to assess the present.

Love increases with time and lust decreases with time

This is a good parameter to measure if it’s love or lust. If you are more excited about your product on daily basis then you are heading in the right direction and if it’s the other way around, it’s time to rethink if this is what you want to do in your life. There are rough patches in everything, but during rough patches it should bring you closer to the things you love rather than creating distances.

In tough times, you want to be with your loved one and far from lust

It’s never a good move to follow lust but love. You have to be passionate about what you do, else with the passage of time, you will get drained. If you are getting drained, you are not in due to the passion for some other reason.It’s fine as long as you know that!

 

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2016-03-06T15:48:12+00:00September 27th, 2015|

Increasing profits under limited resources

TL;DR decreasing expenses by even slight margin can increase profits exponentially as opposed to increasing price.

 

At times it gets very expensive or hard to grow due to multiple restrictions. Example could be running a hotel which has limited number of rooms. There are 2 very obvious ways to increase profits

#1 Increase the revenues

#2 Decrease expenses

Mostly people will prefer to go with #1 to grown profits. #1 looks like an easy option where you just increase the rents by 5% and boom, you have grown by 5% but we ignore that there are extra cost associated with this increase & wont result into 5% growth.

Now consider #2, where if you are able to decrease the expenses by just 1% of the total revenue, profits will grow by 10%.

*  Supposing gross margins = 10%

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2016-03-06T15:47:39+00:00September 24th, 2015|

Don’t look at the wrong Score Card to define Growth

It is easy to be trapped into the illusion of growth by looking at the wrong score card. Growing burn rate doesn’t correlate to customers. While spending money is easy, getting it is far difficult.

Here is a simple formula to calculate growth

CCA – Cost of customer acquisition = X

LTV – Life time value of customer = Y

COG – Cost of delivering value to customer over Y period = Z*

Here are the two goals to achieve growth

#1 Make this happen   Y > X + Z

#2 Increase the delta in above equation, either by increasing the LTV or decreasing the CCA and/or COG. 

If #2 is increasing then you are growing, if not then you are throwing away the money

*For simplicity and understanding X, Y & Z are considered constant here while in real life they are not.

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2016-03-06T15:47:47+00:00September 13th, 2015|