ARUNKUMAR KRISHNAKUMAR is a partner at Delphos International, where he leads emerging markets technology investments. He holds a Master’s degree in Finance from the London School of Economics and a postgraduate Diploma in Global Business from Said Business School, University of Oxford. He is also a podcast host.

MAXSON J.Y. TEE is Associate Vice President of Corporate Strategy and Digital Development at Barclays. He is also an investor and research analyst at Green Shores Capital.

FOREWORD ix

PREFACE xi

ACKNOWLEDGEMENTS xxi

ABOUT THE AUTHOR xxiii

1 Even Shit Floats in High Tide 1

Introduction 1

The Macros Matter 3

Capitalism: The Pyramid Scheme 5

Tier 0 5

Tier 1 5

Tier 2 5

Tier 3 7

Tier 4 7

Tier 5 8

Role of the Central Banks and Regulators 8

Virtuous Cycles 10

Wealth Effect 14

An Interplay of Incentives 14

Investor Dilemma 17

Conclusion 20

2 Hindsight’s 2020 23

Introduction 23

Structural versus Event-Driven Crisis 24

Structural Crisis 25

Event-Driven Crisis 25

The Crisis Timeline 26

Black Monday 1987 27

Dot-Com Bubble 1999–2000 29

The Great Recession of 2008 31

The Year of Crises – 2020 35

If It Smells Like Funk 38

Greed Is Good, or Is It? 38

Consistent Overvaluation 39

Failed Funding Rounds 39

Down Rounds 40

Funding Gaps 40

Krishnakumar754404_ftoc.indd 5 19-12-2020 01:14:28

vi Contents

Data Collection 42

Ecosystem Pulse 43

Team 44

Product 45

Competition 47

Funding 48

Conclusion 49

3 Be Your Own Shrink 53

Introduction 53

Crisis Is Here 54

Put on Your Seat Belt First 54

The Emotional Gym 56

Organisational Emotional Fitness 60

You and Your Business: A 3D Model 61

Passion 62

Skills 63

Demand 64

Step Away 64

Switch Off or Snooze 65

Mentoring 67

Executive Coaching 68

Connect and Inspire 69

Conclusion 71

4 The Surgical Strike 75

Introduction 75

The Startup Bell Curve 77

A 3D Plan of Action 79

Survival: First-Order Optimisation 79

Normalisation: Second-Order Optimisation 79

Explode into the Future: Third-Order Optimisation 80

First-Order Optimisation 81

Cash Flow Is Oxygen 82

Soul Searching 83

What’s the Heart of Your Business? 84

Where Are You Relevant? 86

Is Your Cost Structure Optimal? 87

Scenario Planning 89

The Soul versus Value Quadrant 90

Cold Decisions, Humane Execution 93

Communication Architecture 94

Clients: Increase Incoming 97

Krishnakumar754404_ftoc.indd 6 19-12-2020 01:14:28

Contents vii

Suppliers and Vendors: Decrease Outgoing 99

The Firm: Align Culture 100

Team: Handle with Care 101

What Next? 105

Conclusion 106

5 Check Your Mirrors 107

Introduction 107

Second-Order Optimisation 108

The Who 110

The Why 112

The How Much 115

The How 118

Ask Them 119

Get Them 120

Understand Them 121

Behaviour versus Value 124

Conclusion 127

6 Map the Trip 129

Introduction 129

Infrastructure 130

Policy Infrastructure 130

Payment Services Directive (PSD 2) 132

Blockchain and Cryptocurrencies 133

India’s Aadhaar 134

Drug Discovery 136

Technology Infrastructure 136

Rise of the Machines 137

AWS and Innovation 138

Broadband and Video Genre 139

Ecosystem Infrastructure 141

Talent Infrastructure 141

Funding Infrastructure 143

The Missing Link 147

Conclusion 149

7 From Fiats to Ferraris 151

Introduction 151

The 4D Lens 152

Time: Longevity 153

Time: Velocity 153

Space: Scale 154

Space: Weight 154

Krishnakumar754404_ftoc.indd 7 19-12-2020 01:14:28

viii Contents

The Business Model Barometer 155

Contractually Predictable 157

Enterprise Software 157

Software as a Service (SaaS) 158

Subscription 159

Behaviourally Predictable 160

Advertising 162

Transactional 163

Hybrid 164

Marketplace 164

Mix, Match and Moonshot 166

Conclusion 168

8 Hit Refresh 171

Introduction 171

Third-Order Optimisation 172

The Pirate Metrics 173

Shades of Grey 174

Preserve the Soul 177

Continue Experimentation 178

Build for a Crisis 180

Tip 1: Values Make or Break Firms 181

Tip 2: It’s the Team, Idiot 182

Tip 3: Decentralising Decision-Making 183

Tip 4: Data-Driven Accountability 184

Tip 5: Embracing Cost Consciousness 184

Tip 6: Growing Responsibly 185

Tip 7: Tapping into a Support Network 186

Tip 8: Mind the Mind 186

Conclusion 189

9 Winner Winner Chicken Dinner 191

Introduction 191

The Macro Environment 192

What History Tells Us 193

Wear Your Mask First 196

Cold Decisions and Humane Execution 198

Consumer Is King 201

Infrastructure Catalysts 203

Business Model Evaluation 206

All Change 208

Conclusion 212

The New copy of this book will include any supplemental materials advertised. Please check the title of the book to determine if it should include any access cards, study guides, lab manuals, CDs, etc.

The Used, Rental and eBook copies of this book are not guaranteed to include any supplemental materials. Typically, only the book itself is included. This is true even if the title states it includes any access cards, study guides, lab manuals, CDs, etc.