News : Don’t compete

Saturday, August 26, 2023

Don’t compete

Sunday, 27 August 2023

Good Morning edwardlorilla1986.paxforex@blogger.com,

“I don’t like the idea of competition,” says Tarun Mehta, the co-founder and CEO of Ather Energy, makers of sleek and premium electric scooters.

It’s an odd answer to my question about his favourite mental models or First Principles. We were speaking on the phone earlier this week.

I first met Tarun last December for episode 10 of the First Principles podcast. But before that, he had shared with me four internal blogs he had written on Ather’s evolution for his colleagues. The theme of his posts was “Building a company”. Written between August 2020 and October 2022, the blogs were titled “The Matrix”, “Sales”, “Going Public?”, and “Build”.

They offered me a window into the mind of a young (he was 33, and had started Ather nearly a decade ago) founder-CEO as he worked to proverbially “build an engine while flying the plane”. Tarun came across as intensely First Principles-driven, even for small details most would overlook. He was also a contrarian, prone to doing things that were harder, less obvious, and often risky.

“I don’t like the idea of competition. It’s a terrible idea. Because the way it works is that some competitor launches a product, and your reaction is to compete and do the same thing but better,” he said on Wednesday morning as we spoke.

Instead, he told me, his framework was to double down on your own and innate strengths, instead of fixing weaknesses. “Such a framework forces you to think differently. Because it’s unlikely your competitor is playing a game built around your strengths.”

I ask Tarun for an example.

“In the early days of Ather, as we were trying to figure out what kind of product we wanted to build, it was obvious to me that we shouldn’t solve for our weaknesses. Meaning, we wouldn’t win any battles with rivals who had the largest manufacturing, best distribution, quality (Honda has been working on quality for decades), or price (the Hero group are the hardest negotiators). Instead, we decided to build the largest R&D setup and focus on product. While everyone else thinks automobiles is about scale, we focused on product,” he says.

“Focusing on product may look commonplace in 2023, but in 2013 it was hard to sell, even to investors,” he adds.

It takes a lot of conviction as a leader to resist the urge to respond to competition. We live in an era where every other day, a product is branded “disruptive”, “game changing” and “definitive”. From journalists to employees to investors, everyone wants to know how a company will respond to a rival’s move.

But responding means taking the bait. Like Tarun says, it's rarely that a competitor launches a salvo where the rules of the game allow you to play to your strengths. Instead, the rules are defined around the competitor’s strengths.

Playing to your strengths isn’t just about companies, but individuals too. Sadly, much of corporate career development and appraisal formats are devised around identifying the things that you are not good at, and then presenting them back to you at the end of a year so you can “work on your gaps”. Few conversations are about playing back the things that you’re good at, and helping you do more tasks that play to those strengths.

This is also the premise behind the long-running Gallup assessment called CliftonStrengths (formerly called Clifton StrengthsFinder).

The global strengths movement started six decades ago when Don Clifton posed a simple question:

"What would happen if we studied what was right with people versus what's wrong with people?"

When Clifton returned from World War II—after flying B-24s as a navigator and bombardier, for which he received a Distinguished Flying Cross for his heroism during his 25 successful bombing sorties—he felt that he had seen enough of war and wanted to spend the rest of his life doing good for humankind.

This led to an intense interest in studying human development.

Clifton started his research at the University of Nebraska-Lincoln library. But he was struck that all of the psychology books he could find were about what is wrong with people—he couldn't find a single one about what might be right with people.

At The Ken, we get every single colleague to take the assessment and then post their personal Strengths profiles (here’s a sample from the Gallup site) on an open Slack channel. Because why wouldn’t you want your colleagues to know what you’re good at? What your strengths are?

When I mention this to Tarun, he agrees. “Sometimes in reviews, someone will say, “If only this person could change so-and-so trait”, and I’m like, they’re 30 years old, that’s not happening. We should be trying to identify people’s sharp spikes and making them more useful, instead of trying to turn everyone into a management consultant!”

We switch to the present and India’s crowded electric two-wheeler market.

“Today, the Indian market is heated up. There are too many EV companies. There’s talk of killing the market by launching the cheapest product. That can’t ever be a strength for me. I can’t compete on price with someone who has US$1 billion in funding, or another who may have US$2.5 billion in cash. It’s guaranteed death!”

“Instead, we found success as a brand in upgrading the market and found enough customers who are willing to migrate. For us, the question is how much of the market we can migrate up,” he says.

If you want to listen to more of Tarun’s thoughts, here’s a link to episode 10:

Tarun Mehta of Ather Energy talks about doing hard things, going down multi-year rabbit holes, building companies over 30-40 years, and being chief storyteller | Episode 10, First Principles, 22 December, 2022

The CEO of Ather Energy talks about his journey to convince investors of his vision, building an organisation over decades, and why it takes at least three years to make a true impact at work

Listen on:

Spotify

Apple Podcasts

Other Platforms

And here’s the most recent one I did, with Archit Gupta, the co-founder and CEO of tax platform Clear. Like Tarun, Archit too is a founder-CEO who started young and learnt a lot through persevering on a better product, even if it took him longer. There’s a lot of valuable insight in episode 24 too.

Archit Gupta of Clear on anti-patterns and being misunderstood | Episode 24, First Principles, 17 August, 2023

The co-founder of Clear talks about charging customers to file taxes, turning from a "business-focused" to a "product-focused" CEO, expanding to Saudi Arabia, and much more.