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The Blue Screen of Death

A Desis Misadventure in the Land of Opportunity

Jawwad Ahmed Farid

MBA, Columbia Business School Fellow Society of Actuaries BCS, FAST ICS

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Published by Alchemy Technologies, 103 104 Amber Estate, Main Shahrae-Faisal, Karachi, Pakistan. http://www.alchemya.com In the US: Alchemy Technologies, 21650 Steatite Court, Ashburn VA 20147. http://www.alchemya.com

Copyright @ 2006, Jawwad Ahmed Farid and Fawzia Salahuddin First Edition, April 2006 Revised Edition, July 2006 All rights reserved. Except for brief passages quoted for purposes of review or scholarly comment, no part of this publication may be reproduced, stored in a retrieval system, or transmitted by any means, electronic, electrical, chemical, mechanical, optical, photocopying, recording or otherwise, without the prior written permission of the copyright owner. Inquiries should be addressed to the publisher at the above mentioned address.

This book is sold subject to the condition that it shall not by way of trade or otherwise, be resold, or circulated in any form of binding or cover other than that in which it is published.

ISBN 0-9785060-0-6

Cover Design: Mohtashim Ahmed Text Design: Uzma Salahuddin Editors: Adnan Haider, Kris Sherer Book website: http://bluescreen.alchemya.com

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Behind every successful man is a penniless wife.

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Dedications
To loser husbands and loving wives; To Fawzia for saying yes; To my Ammi(s) for their support and prayers; To Abba for believing in us despite our

failures; To Whitney, Biggadike and Ken for asking Why

not? To Sarwar and Denise for Avicena.

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Table of Contents

Foreword .................................... 7 Author Note ................................ 11 Chapter Zero ............................... 18 Chapter One Who am I ..................... 21 Avicena Timelines .......................... 28 Book One ..................................... 29 Chapter Two - Memories ..................... 31 Chapter Three - Before the Beginning ....... 36 Chapter Four Aleph on the Scene .......... 48 Chapter Five California .................. 63 Chapter Six Hiring ....................... 74 Chapter Seven - Pre Launch ................. 83 Chapter Eight Process ................... 103 Chapter Nine Launch ..................... 111 Chapter Ten Business Development ........ 119 Chapter Eleven The Silver Lining ........ 128 Chapter Twelve The End .................. 152 Book Two The Blue Screen of Death......... 161 The blue screen of death .................. 162 Hindsight ................................. 164 Epilogue - Reboot ......................... 206 Why failure? .............................. 211 Appendix A - Cast of Characters ........... 237 Appendix B - Avicena Timelines ........... 247 Appendix C - The original list of myths ... 260

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Foreword

Entrepreneurs There an to They and They are invention meet build a or the

seem close very for it a to

to to

come begin home,

in

two

varieties. with for a product

those

that

smallperhaps building need, another on a and either

specific friend their in

themselves

business. customer. sell the

first

iteration

shoestring,

deliver

inaugural

experience

some

success,

product to other customers. Before rigorous they know The business it, they have grows of of any a fledgling without the a directors, other

business. disciplined

business plan, or

board

marketing,

accoutrements of mature firms. These where manage point, hitting and businesses the every most the grow of easily can the no up to the At point this

entrepreneur facet of wall make A

longer

personally struggle, processes of these mature to

business. endeavors

these without small of the Many

disciplined percentage

procedures.

businesses management and staying

transition planning, remain small comfort

processes the

implementing, businesses, zone. And

measuring. within

founders

many die. Ive need. always They called create are a this business They to founder driven a love the by for

accidental problem, but

entrepreneur. product rarely

are by a

solve

focused

driven

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business form. success, soon taking fail

in

the

abstract, are begun role the role either

or

business at

as

an

art own They very Most

Often find on

they

surprised with of of modest the

their

having that the than they

goals. is

building

first

product,

inventor, or wont

different when

businessman.

cant

transition

from building a product to building a business. This book is not It big is The problem, From about about Not but the the the the very Accidental purposeful Entrepreneur solution with beginning building think to to a larger the a

Entrepreneur. entrepreneur. begins small, scope with and a focused

Purposeful an idea on

idea.

impact. with

Purposeful business ahead. are driven

Entrepreneur impact. have

plans They of want

further They their

They by

visions They

greatness. change

scale.

piece of the world. But that most I of all, known every loves As Purposeful business. an of art the Entrepreneur Business As most for the

have

business highest

sake.

form.

expression

complex

strategic games that humans play. So on what plan does on the They plan. They They Purposeful from on They or the put meet plan Entrepreneur start. the the They right They Blue success. do? plan But team

They

bigness

success. they

rapid

mostly

together. quickly. of Death.

raise

capital.

execute Screen

succeed

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The

world

is high

littered success. profile But most out

with failures

books Even begin to do

about books with end in create not end

entrepreneurial documenting wild with significant anguish. When by the success.

attempts of dust

businesses

entrepreneurial

success.

They

Accidental thing, event we but is are

Entrepreneur the sphere by of the a

fails people scope

it of

is

painful the startup.

touched the hole

limited the left

When

Purposeful with much

Entrepreneur bigger

failswell,

in the ground. Why common walk When core. write wounds a is there so For and it the to Most it little with one, it written this takes the a about more of to lot

entrepreneurial courage, the

failure,

experience? confidence, path of

borderline shakes about to A one it,

audacity to the

Purposeful talk

Entrepreneur. very alone of yet their let lick Fewer

failure Few

happens, want

book. and give

retreat another

the

safety

traditional

employment.

few go.

eventually succeed. The book. from that is now Blue It Screen captures effort of the And it Death very to is an of a important the it gutis company

essence

wrenching

takes

create though will you

nothing. about small the a a difference few

even

fundamentally but

failure, between

recognize success Farid, from

failure

and

decisions. entrepreneur,

Jawwad emerged

successful

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failure He and took about

more

valuable

than points is

if

he

had

succeeded. much that it failure greatly gave

learned the

the

process, Jawwad

but one

also that of

learned the and few

inflection of the

define

success. stock his

lessons

learned,

expanded

personal

capital,

another go. In the end, if you hunger success, it is most

important to study failure.

Shane A. Chalke CEO Finetre Corporation www.finetre.com

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Author Note

During life that or I destined that

my in

earlier Pakistan, an take earn MBA

academic I at never an

and Ivy

professional I was Land, of a school,

thought League at a Startup

for I

would to

the fail a

plunge by

into

would

miserably

number myself

attempts check. To an two him a

living

cutting

significant reinforced strong mind. a but by

extent, my His choice

these of

thoughts experiences

had as my and the left

been

fathers

entrepreneur.

livelihood himself

conflicting working of personal, that of with to the

impressions

on

young

First,

for

afforded envied. stream whether and a first self-

degree

professional, everyone was income his

financial

flexibility schedule left my off

Unfortunately, unpredictable that we As at an times be would

downside family

wondering regular

better

paychecks. earning my

adult, signed by

putting someone

my use else pay

academic in became

professional paycheck goal; risking

training

guaranteed

through

employment just wasnt kosher. After rising way ASA to from paying the my college I in dues I for and a was successfully young well on With and and my a an of

handling

challenges that of

facing

consultant, securing degree the

thought goal

life. science

bachelors

computer

Society

Actuaries

(Associate

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Society still my were of 13 a

of

Actuaries) of calendar, right. track and

under but I the was my

my

belt, to be

there the a

were on pace team times a

number

milestones

reached

career both

path on

and the

coveted

partnership their kept happy gross

with

firm,

managed three and

professionals of few eight back years

generating

overhead with out with

expenses, repeat

ran

portfolio someone a

international of school,

clients business. I was my

that For quite life

coming and

satisfied

the

direction

was taking. In all my and March that. 1997, The a combination was to her A of the MIT, high in up down the of events changed of Nida, of and to Caltech, MIT

first

acceptance Harvard, school). Boston. at by

younger Cornell

sister, after her one all up equivalent

levels

(University offers My 4:00 an

Cambridge Harvard complete and when doors our I Nida and

gave out

fully degrees fine of us been was shared with the and

funded

four-year woke

family a.m., on our in of that to in

found

morning

banging

jumping had This

with

athletic before hint

ability

that in an a

not

witnessed first gene right

family.

something suggested attending

our

pool

intellectual school

profile

suitable pedigree

the United States. Soon armed higher after with path on Nidas an Ivy which multiple a League the could acceptances who one be MBA, there that explored came was I a a was even

chance

meeting

with

friend

thought

that

way

above

currently

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though

planned

to

return

to

Pakistan

after

graduation. As was it happens by with and I a was and I destiny, bit of this greed bit from The MBA to of two

inspiration followed elderly person open denied When it. first exists I

(Nida)

(friend) first would in my

conflicting that I

advice

individuals confirmed that

respected. top-ranked not the of think privy second any the

doors the look a tell on

sheltered

existence back him now,

vehemently rumors. sealed male, tell

possibility 26-year-old, that side other

such denial

Take

driven, of the

alpha then

professional door,

paradise

the

him there is no door and then watch. The door that I opened and to one not It I took beyond. dont questions there way of about doesnt or story of of me to Did know. and were no Columbia I I found find went more easy this sureor it that to the the over burying as quick, a rich

Business looking answers. bookthis easy, fire or way It a

School for answers is is

professional difficult

paradise?

questions; Which book to

presenting answers, document get my life years a

otherwise. tells circa full family, for

succeed the circle and

fail, Seven

famous. marked London; MBA at short

happened, paycheck,

19992006.

dumping Sachs; campus blast

sizable

familiarity; on a

moving two

working

Goldman

starting writing

Columbia; of Harlem; plan;

living having to

streets

business routine;

picking

uncertainty California;

escaping

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ventures to too family

number and

one, deep,

two, or

and and

three; repeat.

returning Nothing just the

familiarity;

profound,

insightful,

stuff life, not dreams, is made of. Why he the or book? who she has is and Well, an every to to the family, other in have my a start handing spot, and week past I meet of a

someone

interest love than on in

because or

planning would Rather

something roadmap out I

their own cheat advice insights sleep,

sheet.

informal thought from would

distilled collected work,

moments

snatched boredom

travel,

be far more reliable. I didnt to a want follow at. to write never chose a did prescriptive me is next any best such good. I thing tomes teams one focuses something text You am and are of on

since have wrote

instructions So I to who

them,

which the one.

not good dedicated

descriptive and

Many

success, could.

money, This

networks,

connections, professionals

ambitious

one who couldnt. Just as in the died to held tell first and the book I read not where the Marathon Not like of hero

actually resurrected I wanted B movie

was real by

miraculously M a n 1) , a bad

(William together

Goldmans story. a

collage

borrowed

William Goldman sold out and did just that in Brothers, the sequel to Marathon Man in which Scylla is whisked off the scene of his death and given a new life.

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and

unlikely

plots,

but

like

old

love

letters

drawn from forgotten recesses of our lives. The five The do done love letters had were a problem. toll Five in the and I moves form in of

years only love in

taken

their storage data I

misplaced

diaries, constant letters,

boxes, backup. could

lives. do in a to but hope help which

was but

couldnt backups northern of

certainly moves help in

emails; London, little tell in is

emails the New and

extracted last days

from of With used

computer rushed the these

York, I

southern have my

California,

Virginia, the that

Karachi. story

context, Avicena these in

emails words My in will

waynot morsels the

bitssome

random, your

some mind

deliberate. setting

choice

reconstruct

they were originally written. That I go a is just and Book mix One. In Book it to of Two, not you I to I take dos. One up ever the the the that If and find with emails lesson book

material have you hate

and my feel Book

match list free Two. and head hate

with do skip

lessons Book came

learned, emails, to Book

straight lesson try Excel in to or

If where back

yourself and was in

wondering figure If

how Two, out

exactly

where hunts,

learned.

you

circular

references2 this

oblique

treasure

is probably not for you.

A refers to B, B refers out A and Bs value.

to

A,

you

need

both

to

find

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If end

you of

are the

truly book to

lost, help

the you

appendices get your

at

the and

will

bearings

with

respect

characters,

timelines

lessons. Penning finally personal past and with this tale has me been great to me for to a therapy. with of review new It my days eyes,

helped a more out

come allowed path

terms pair

failure,

disinterested the

chalked

adventure

that has now become Alchemy (www.alchemya.com). Alchemy that and in has is our on percent is an Enterprise annually for to beat
3

Risk more the

advisory than a three

firm years again failed

grown track never

by

hundred

year-on-year fourth year .

last my

that

performance earlier nor

Where has

ventures customers, annualized rupees, employs the

reached run two and the the

revenues already of the and

paying an million awards, its 35

Alchemy revenue up people life

crossed peer of the of

rate in

eighteen list

picked 25

industry central largest dollar of

customers brokerage three well In of as

counts house, the

bank

Pakistan, largest as exchange, banks. 80% of

largest

insurance largest

company, bank

stock

five

treasuries regional and

two of

ten

billion than in that 75%

terms

market

share

Alchemy banking

customers putting earlier

represent insurance to work

more

assets

Pakistan. were

Without from

lessons

learned

Yearly gross revenue growth 123% year 3, 216% year 4.

rates

1000%

year

2,

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failures

and

reinforced

while

writing

this

book, this would not be possible. A number never over than to to of paid be people, for this to enough last friends joyride. thank and to I and Simple for family words their and would who and die

primarily, will generosity, support Rather just have asked

them a

understanding, the say me step three you was when naming when them I one

sacrifices half one, of to set by I

decades. you quit to

like me

thank back

all was

pushed

ready

trying. Jawwad Ahmed Farid Karachi, Pakistan. www.alchemya.com

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Chapter Zero

Is a

that few

what

they To

are

teaching away for

at a

business shot at thousand

school

these

days?

walk

from

hundred

million

seventy

after taxes? You SM have to never Direct a few and tell met and and Sarwar. curt of you the Sarwar Mr. You now, the stood right to friends, to and you Take eye, and

partners

clients, later.

Mushtaq

others. charming high could an moods,

attentive could moon, with mix but him. of

seconds phases where in

predict

tides never artist,

throw

controversy,

awkwardness,

conflict,

color and you will have Sarwar. With in an aura of mystique he loved and The a hint of mischief at am the we that been walked I or

his

voice, the of less if

throwing took to the

challenges ones bait.

unsuspecting away; not had the sure just book

audiences. it was that

wiser the

fortunate led

wisdom,

fortune, I

absence

both that

conversation know have never

finished.

Looking

back,

follows

would

written if either had prevailed. The and shot put at plan aside. a few My hundred been had million written, gotten a was a

business

that

had group

tested, decent

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grade

on

the

class In

project, a that as had

which

was

the

first than a

warning C should

sign. any be

world a

of

contrarian more it In who our had over Ken

successes, infinite every touched ambition. to Jun Hudson to

project we the had off

garners shelved

interpreted of plan was and

failure. team in BCG

wisdom, the

because

member Arno

original chosen to CSFB to the to Kamar

certainty London, in

River

Inlay,

Boston, policy

Korea,

Daniel

public

school down the street. As for me, in the seventy one my in thousand New I the who after had guy always taxes the a the to the of

were other to

two

offers, Tampa, most be and of

York

City, been who did

Florida. life, and The us on is, across in the us an and

conformist belong, thing. truth his safe play with the

wanted

liked, dare. took us put

Until,

that

Sarwar odyssey the the the the

decided that

began

words and

Pacific, boardrooms most same me and day

Atlantic, third and automobile Yahoo outside much both apartment

back;

largest Reuters owner door. kingdoms

bank call placed It in

admired made my

manufacturer

planet; eviction of

notice away, each

my

also our

taught minds

something from

more from

importantthe

wisdom

walking and

other. They and bye. a say half I left was God which later one fashioned is where for it thing I paradise left time had Sarwar $68,400 to say taught a after year after goodat

California, taxes.

exactly was they

because

This

well

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Columbia: send cherry at few had the a

firm

handshake note I I

and

dont There or it

forget were swam over.

to no a I

thank-you trees, last and sunny rites. when

later. to back the

afternoons, went came of

old gym, was

friends

the

laps, washed

myself

clean

spirit,

doubts,

and heartbreak. Only debts remained. An out awkward the Dana A and to conversation disengagement Point we were than to just on the hop down a the with the SM and He at was Denise me Laguna just in. a We the us had It he was not,

started Nigel. stairs shade walked, silently faith, put on didnt needed;

process. steep, beach mess we

drove

past

Ritz

short

creeper-lined were

that

lighter and as hold help. he our

listened we

sea The

breeze, Pacific

enjoyed watched why we sky. I that

sunshine, and

talked. place I

chatted in the

about the have the

why,

lives the

beneath didnt

Californian questions

didnt know

answers

answering. This at is our end of story. this There book. are no happy was endings long

the

Avicena

dead;

live Avicena!

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Chapter One Who am I and why did I write this book?

was

born in

in

Karachi4 two I

but

spent of the to my

every twin

other cities of as and my a a to

summer could loving

Bombay.

Neither still from Bombay, from

survive

consecutive refer after

summers first

attention. second. desist,

myself

Bombaywala Karachiite cease and

(meaning

Bombay) this

refusal

using

unsanctioned

affiliation, switched to the name Mumbai. At the impressionable as Next on up an intern it the more Apple Hardware with the it age in was name so of a 14, I found was who myself startup active Jobs Next both then should

working named debate who sue sold Nexts

high-tech There or and in

Shop.

whether All

Sarwar first because

Steve

came whom. and

Sarwars since and

repaired

computers

P a k i s t a n 5.

Before

long, first

really

didnt into

matter

slipped

disrepair

obscurity.

The commercial capital of Pakistan, Karachi boasts a population of 15 million and a cosmopolitan mix of souls who are at each others throats more often than not. 5 In the mid eighties, with the bleeding edge defined by 4.7 Mhz personal computers, repairing Macs off Zamzama in Karachi was as hightech as hightech could get.

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It

was

at

Next

that

set the up and

precedent rare my

for

the and I

rest

of

my off

lifeblowing expensive Within from family Ziploc a the and and few

power of

supplies

writing was and

(then)

portable workshop next to two this

computers. all

days

arrival,

banished my

organizations Over the added friends the

things

electrical. list driving,

decades

c a n t - t o u c h - t h i s 6 wrappers, kind), plumbing,

plastic spending baby

(bags, friendly real

sitting,

work, and the ability to earn a living. Years choice actuarial in time of sloth and an inability me to make a quick career or one to sell

decisions

ultimately between sciences. had led really by equally an FSA one Somewhere and an in to I

presented failed for a to

with

software opt to bad along MBA New

engineering pick either both. This

and

profound software, to I managed Business to

combination building followed the to same. pick up

calling actuarial this

devoted

disastrous

attempts path, of

(Fellow

Society York)

Actuaries) decided

designation School (the

from

Columbia and

step out into the real world on my own. My and international lost in Washington career London D.C. began with on a talent and for wet

getting

(first),

Boston cold

(next),

(last)

Immediate family members on my ability to deal with plastic: You cant ask Jawwad to do anything with plastic since he is hopeless with it. We cant even understand what Columbia saw in him or how he even survived London, New York, California and Virginia.

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winter talent Dubai humid I budget speed crises, family, known I also

evenings. for summer (next),

This

was lost

balanced in (last) with my late

by on

similar (first), hot and

getting and nights.

Jeddah

Riyadh Along

adventures, deliveries, personality Seger, 10with all midlife and

discovered

mismanagement, Dew,

over-runs, Mountain bikes, and lost

all-nighters, nachos, credit defied Highway, biology, of in Bob

conflicts,

Costco, Coast that

cards,

Pacific bugs of the this and

working and

pesticides my less

laws

physics,

chemistry. than by a year

equivalent earnings dubious within

forefathers quickly shorter

combined and borrowing enormous

lifetime then

topped

distinction losing

repeatedly

similarly

amounts

progressively

intervals. In the hope that my and children parents and may may someday and forgive just up learn my for me

from my bad

their displays manners, I and

fathers of I

misadventure

that

friends,

family,

greed, this them.

ignorance, quite often In to book.

arrogance, plain my few are a step with

selfishness, character, copies excluded

anger, wrote for expect

everyone

pick

pay from

Random

strangers but

this

condition

their

compliance would still be appreciated.

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And now for the official reasons:

Ideas others the cause, that

for

new us

venture Some of years new

arrive start

with as

moment to of

of gel the of

blinding real

insight. concept most is into

accidents;

take for

wandering ventures, by a

effort the It

into

shape.

Regardless downhill is and

flash a

inspiration fades venture

followed

journey rare are

insignificance. vision

whose

original

potential

fully realized. Why and is that? Unlike young pattern parenthood, guides us businesses. instinct, of failure repeated is there in Beyond is is no the an well

paternal missing

instinct paternal that

that

nurturing

growing

there

observable behavior

fatalistic neither

indicates

documented nor well understood. My fascination years or with spent be or failure with it as has now spanned in 15

years shape

new

ventures intern, owner,

some

form, mentor, same

employee, investor, And I risk

consultant, student, found the

customer,

vendor, innocent in

bystander. domain:

parallels

every

management, offshore building, services. that I came hard-pressed

insurance,

counseling,

consulting, capacity financial literature I have on been Donts.

outsourcing, training, Yet to across most find

e-education, and contemporary on Dos.

technology, focused good

material

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Attitudes, impractical customers, took the doing it. What down follow Post have about in

helpful advice to

hints, about about name

practical money, it the and right

and

products, someone way of

employeesyou write

time

the along

wrong I in the

way? would lines

Every have of of an

time

went and

flames,

appreciated this emergency." about I life I would After and I didnt the one. was a

something

"break

instructions failures, as to a

case

rather about that I

than other didnt ones ones I

reading exercise of who who my have, got the failures.

successes, loved and to who burning savings want to wanted losers Even regular on

therapeutic three the the years

read

through money read read the would among

about about

away.

didnt, only I

proved

that

wasnt years plain pick up stacked

during wage

in-between just me make

when simple the with

earner,

morbid book secrets

fascination failure

lone

shelves

of business success at the local Borders store. On a personal the to one on and religious we level, need to the I believe is good Our cause nonof every good. the are down, or you

that desire of

thing and with do

sorely ways is

commentary all evil in it

sure-fire this

fail. root in a

compete tone the is

succeed just A of

(imagine eyes). far

delivered the of us a to when

evangelical madness For one, and

right

hint

dash

failure world of God are you

now and then will equivalent lost,

all

easier deity as

find to

spiritual confused

compared

when

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busy with is a

celebrating the if great time this an

victory. to is

For

another, that your good out it

failure, brings, and it. to A

comparative

isolation you also of

re-examine what is a

life of

decide total to

want your

system

reboot

opportunity your

take

inventory

resolve,

commitment, and your drive to succeed. For most in this first of the us, What bank How the fees failure will represents happen If I I when I the my stuff is of no

nightmares. money card rent the

there or

account? will do and When natural What

miss my

crediteven on the

payments? of

make tell Who day will gas

payroll will care, they and

month?

employees cover

month?

bills?

School

insurance cutoff How w a t e r 8?

premiums, electricity,

m i l k 7? phone,

bad is that eviction notice?

Somehow caffeine, shouldnt

there is always a way to pawn sources of nicotine and other satanic vices, so you worry about those.

Just for the record, if you are short on cash, pay your telephone bills because the Bells (PTCL in Pakistan) are a real pain in cutting off your phone. They are not super efficient; they can just do it electronically. Electricity, water and natural gas you can skip. The last three utilities are far more polite than your local telco provider. The politer ones will first show an outstanding balance in your bill (one months grace, no rude reminders), then show another outstanding in your bill (two months grace, still no rude reminders) and then finally send a pay up or we will disconnect notice. You might be able to stretch the notice for a few more days or weeks depending on the size of your city and state. I have only tried this in California, Virginia and Karachi, but I would hazard a guess that you should see similar patterns elsewhere. The only exception to the above would be if the Mafia (Italian, Russian or Chechen) is running utilities in your town.

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Is it really that bad? With apologies to Emilio Estevez, Billy the kid, Bob Seger and Warner Brothers, Why dont you turn the page and find out?

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Avicena Timelines

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Book One The Story

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Avicena Snapshot Business Name: Avicena LLC State of Incorporation: California Nature of Business: Online education Subject Focus: Corporate Finance education Customer Focus: Banking and Insurance industry Positioning: Knowledge acceleration Business license Number of employees/consultants: 6 Rounds of funding: Two Years in business: Two Total capital raised: 300,000 US$ Total capital deployed: 820,000 US$ Technology status at termination: Interface, website, content and content tools live in Production Number of courses produced: Five Beta customers: Three Business plan 1.0 date: April 1999 Go live date: October 2000 Date of death: June 2001 Business plan edition on date of death: 57A Famous last words: This valuation is too low Reason for Failure: Read attached 250 page book model: Per course, per seat, per year

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Chapter Two - Memories

Broadway 1999.

and

Amsterdam. trees in Sundays.

New full Thats

York, how I

the

year sunny

Cherry and

blossom,

afternoons,

remember

the beginning. Sunday between Church diagonal sprinkled holes, Walk from old a and is the only day as and it to a experience with of on shops, on come midst the wide. elegant, Columbias Tucked on one Riverside a the street watering other. away an on John will 20th-

Riverside and

campus the end, with

first-timer. School down Music

Broadway

Amsterdam

Manhattan delis, farther and

looks

corner towards you in will the and

ethnic

restaurants

little

downtown, of church St. Both

the

campus,

across

church is

squatting sleek, flat,

century Riverside the

construction. is

Where and

tall,

Divine

broad,

catch your eye. When first right and I Saboor, look next it to Fawzias was the a cousin, We of the looked road took us for our

Sunday. of

parked

on

120th, Fawzia into were of and and

School and a

Engineering. heated deserted around. by forest blue

stepped A wide us

out empty

Camry We made

chilled here! welcomed

December to

traffic

brownstone schools, clear with

multistoried walkways,

dorms,

apartments, skies

topped

served with an ice cold breeze.

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Our

personal

tour

of of

the past the for we the us

campus bare two believe the had

led trees

us

across the off all

cobbled imposing College ours in to

pavements, faade Walk. I

and was

libraries this 18 gone guard next

couldnt what and let

experience after The weeks

9

months, through for the but at

especially London . two another entrance

just

business

school in. We

was were

closed early

security

wouldnt

I had seen enough. It was love at first sight. Inception A classroom The was off Broadway is of as was and a breakout Avicena pain-free werent plan. its were stillborn from an room was and sure class Then peak, set than overlooking born. for if it the Amsterdam birth couple where we

relatively days, than a a

first

anything was

more a

project again, venture for MBA a with

masquerading NASDAQ capital a

business away

year

returns plan

and got

inflows and more

record-breaking business

year,

in-progress mileage

one with no plans at all. The the hour room classroom last class a before forming in on U question Thursday There on would were 15 be of booked us in for an the Some

evening

scheduled chairs.

sunset.

comfortable

The US embassy decided application for the MBA twice. The week before I the MBA program and head on Columbia intervention

to decline my F1 student visa program at Columbia University was all set to say goodbye to back to Karachi, they relented and issued me a visa.

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from with

S I P A 10, more

some than

from a

the

business

school, in

all the

passing

interest

subject Don Sexton taught. Don start filled handouts Hopkins his hours, focused would time, with for arrive pulling a the five his minutes black before of his class tapes, Anthony once few that a from

roll-on and

suitcase

30-year days room weave best VW from took TV The

collection would a fill For

session,

smile. he on

quickly the next show made, soft

presence

became

known.

would global of the (The

majestic spots ever to coffee

marketing.

Beginning

with

selection (Mountain Choice) learned brand subject

automobiles to what for

Bug/Beetle) instant to delivery

drinks we a the hold

Dew), it

(Tasters grow to

overnight

(FedEx), and how taught

establish Don and had knew

internationally. three decades

his audience. One was, the would after weekend. softly expect all, for attendance the last with to the be of
11

thin; the Deli hour

this week, and and below

class from

competing would

attention Party sneak in

happy

sounds

Uris

through

window

frames

10 11

School of International and Public Affairs is the public policy school at Columbia. Uris Hall sits snugly between the entrance to the gym and Columbias School of Engineering and houses the business school. With Uris came Uris Deli, Uris Library, three floors of classroom, faculty offices and Room 303the Columbia Business School Auditorium, witness and host to orientations, presentations, prime ministers, presidents, kings, and student body meetings. Uris is now complemented by Warren Hall, the shared business and law school building on Amsterdam.

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vents us

in

the step

room. out

The

more

adventurous with

among

would

and

come

back

salvation

in plastic cups and on paper plates. For I over would dying would days the of I the duration passed side out On the of the Dons cherry on of the and a Earl class trees Hall, trek for me, and much later, guard

walked the

standing white Room

entrance in my

Broadway. haze to be the

Canvassed blossoms by the I Most bloom the the and our 310,

against

faade

stand sun. step

reddish they

cast

short look

inside of

would

there. first

would

sneak before of the the our

signs

announcing out with name with

arrival blossoms, draft with

spring. always

For be

the

leaves

filled The

contrast, first bloom demise. Things There much on

would

associated plan. our final for

business and

second

search third

incubation;

moved was

slowly both in its on be

for that were

the had

next to be

six done on

months. and as

research stairs In plan

thinking; the

carried of was a

out

willingly sunny the need; be the all

front

Uris stages,

afternoons. business it was product chosen, content, questions and then Whiskey), corner unending

initial how the what it, it,

had

defined built, build buy

possible

silent would who who

ultimate platform would a who

finished would write

would would

and

thousand (Bates

other and the an fish

that asked

were and of

asked, I

answered, Ken

debated, in

again.

Arno, became the on

Kamar, supply

fixtures that rye,

room

overlooking

deli

served

tuna

fried

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fillet, white

iced

tea,

and as

rice our

pudding.

The

lone the

board

serving

battleground,

business plan our empire.

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Chapter Three - Before the Beginning

An to by

Ivy get 700

League your plus

business GMAT you

school In a

is

great

place

bearing.

world and

characterized college a daily a one-in-ten on

scores, end up

outstanding competing

grades, entrance

fast-paced rate,

careers,

basis with the best and the brightest. One would of think the to too out Who one that in the no to presence concept or handle; vacation choice and due the of of such be no it in

masters

universe, understand difficult with would had a a

would and

difficult assignment would you your be walked future

decipher;

extended paycheck

two-year and a

before plum just or next after? or

substantial stumble measly final

increase panic the day

positions. because corporate morning Who or

they a

statistics

finance With of a

assignment few to

macroeconomic their

indeed?

exceptions, being

everyone, with

regardless experience,

background,

education,

admitted

overwhelmed

the course load of the first term. My an course load was no for the think exam, of different. core you pass with Columbia of and Due had

exemption that

policy formed You

coursesmandatory secondsubject, advance to the could know it, the the

courses year take to the the

foundation

electives. next

exemption level students

elective.

policy,

familiar

core

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move

on

to

higher-level

topics

without

being

held back by the structure of the program. In of a temporary fit of insanity, and Time took I I a exempted PhD (CTF from about who out for prior warned the had were I of end and first their

corporate a

finance I of

elective

titled short), me with on

Continuous subject Maria of in day the her all

Finance knew the

thought

exposure. complexity wandered assumption alike. undertook ignorance of term my confused as

Vassalou,

professor, her the

the

registration and under finance her MBA

subject class PhD

experience mistaken advice, the lost the

previous that a and and

ambitious

students

electives journey as

After

ignoring 12-week term, worried I

friendly

torturous was about else just was

self-discovery.

Towards

first

flunking

everyone

about

particular demons. For now, help where I turned Google h i t s 12, useful but pass by none my in to turns Alta 1999. included CTF and indicated a search up You Vista got An that engines. plus didnt several that I was Unlike of yield pages would survey being on

200

pages

relevant anything of of the hits me other help kept

materials if of

final.

informal

students CTF

awake

paucity were

material

subject, with

others

facing

similar

nightmares

accounting,

microeconomics,

12

Thank

you

Google

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statistics,

corporate

finance,

operations

management and capital markets. Two options to were the has my teaching was finer been assistants limited) points Both master to of or the and tutors at out my a

(access hours hand it

either

spending topic were

arguing with as a by

classmates. dignity

options of this or publicly

because was

universe declare inside

below

ignorance

being

caught

outside

tutorial session with ordinary mortals. The structure of To of this problem balance the and The blown stay lay and with the pool the right came or from arts the and Of had in had

composition population. chemistry, from financial liberal majors numbers struggled the the the math but right (or

the

typical of

business student from

school

maintain

one-third

consulting, arts

one-third

banking liberal away by term school. half well do

institutions, poets) were in their

one-third

backgrounds. the

required and a

first in to probably

throughout background only combination

consultants

bankers, small of

necessary select

school

percentage

experience,

studies,

grades, and mindset necessary to thrive. The in rest had to led sheltered, functions. work, when they said own comfortable At ease were A of and a in they lives areas as to of for

narrowly as the

defined their poets

similar lost venture 800

just

were that

forced pool pay

onto

unfamiliar calculation 70%

territory. look

back-of-

the-envelope

students,

would

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assistance

if

they

could

get

it

discreetly,

conveniently, and cost effectively. Why? Because everyone banking and only wanted jobs guaranteed was bad wanted careers the consulting with first the grade and and year top 5

investment reimbursements bonuses. grades. deflate The All

tuition respectable would bonus

prerequisite a single

interviewers even ambitions,

percentile prospects. If you a Columbia when were month

13

and

dreams,

had you

more added at

than the

600 other to

lost top

souls 50 US$

every in 30

year,

schools, 20 a US$ to

looking fix for and all

another

15,000 spend

students

a similar

willing

personal answers. which hope students

tutorials, Thirty added was to a up to over

guidance, month 4.5 than next

assistance, from 15,000 a I million anything

dollars lot

year, could

more the

earn

decade of my professional life. It the took Don of Sexton, to very school the our International framework plan Of for Marketing became The to get need in

professor, basis was pitch in. some

provide simple: every with

the

that

business

Avicena. apply 30%

120,000 year. at

adults those, 70% two

business Of

the

admitted

candidates, least

will

assistance

subjects

13

Private tutorial sessions ran at 15 20 dollars an hour. Student focus groups had indicated a willingness to spend as much as 100 150 dollars a month for assistance with the entire course load.

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their could the

first

term a term, terms

and

with

more them on

later of

on.

If

you in a to

capture

reasonable retain at to

share and

these

first

throughout coming

their

remaining smaller the their up to site a

school, keep to

convince back queries quickly

percentage for

answers lives,

their numbers

over added

working

the

fairly

substantial

gross

revenue

figure. And this was just business school: and got group was could a When you

added

other

professional numbers question serve the find in, it to to

education, just

continuing bigger and costbase. the of is sure-

professional markets, better. content If you the The and

development, was build

certification you in generate a

this

effective taking. fire faith, As

fashion with to

profitable yours the a only

could,

opportunity out was to it

for leap

everything and give

else, a

way

take

jump

shot;

which

what we did.

From : Kenn eth R. B a te s T o : A r n o Go b o y an ; J aw w ad @C ol u mb i a , Cl u s t er X S e n t : W ed n e s da y , J u l y 1 4 , 1 9 99 9:3 8 A M S u b j e c t : Me s s a g e s e n t o u t

This is a message to a select group of classmates from Ken Bates, Jawwad Farid, and Arno Goboyan. We're asking for about two hours of your time on Friday morning to get your opinion on a new product that we are developing. We'll supply the pizza. It's an internet based supplemental

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learning product targeted to current or former students in an MBA curriculum. We are learning about this from a new products class, but we're developing it for real, as in start-up, entrepreneur, etc. We have only sent this note to about ten classmates who we thought might be interested both in how we're doing this focus group and in helping us out. Those receiving an invitation are: Grunther, Mike Beckerman, Ria Jacqueline, Shannon, and Tim Kelly. The specifics on the schedule are as follows: Time: Friday 7/16/99 from 10:00 am to about noon (hopefully a little shorter) Place: New building, Room TBA 14 Activities: Brief explanation of the product (15 minutes) Access to a product sample on your laptop (BRING YOUR COMPUTER) and chance to use the product sample briefly (30 minutes) Questionnaire regarding your experience with the product sample (15 minutes) Questions and comments while you eat your 2.3 pieces of pizza, With the inevitable questions, delays, and shooting the breeze, we're hoping the entire process will be finished in a little over 90 minutes. We hope that it will be informative and interesting for you as well as us. Please reply now with your confirmation about attending, so that we can plan accordingly. Otherwise, one (or all) of us will talk to you on Wednesday or Thursday. Thanx! Kamar, Jason Brown, Liz Kuhse, Scott Spencer, Nicholas, Stephanie, Alain,

14

To

Be

Announced

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From : Kenn eth R. B a te s T o : A r n o Gob o y an ; J aw w ad C ol u mb i a ; K a ma r B ak i n ; R i a Sp enc er ; T i m K el l y S e n t : Fri d ay , J u l y 1 6, 1 9 9 9 3 : 42 A M S u b j e c t : Y ou 'r e th e B e s t ! !

Thanks for agreeing to come to our Focus group tomorrow morning! We're totally committed to making it fun and interesting, as well as educational. Here's the specifics: TIME: 10:00 PLACE: WARREN (NEW BLDG.) 209 AGENDA: Coffee and Donuts from We'll tell you all about the product 9:45 to 10:10 10:10 - 10:30

You'll get to test-drive the product and give feedback (rest of the time) Pizza is planned during the wrap-up at around 11:30 - 12:00 See you there... KB 15

15

1. You would be surprised at how willing your network is in sharing insights, feedback and ideas when it comes to testing a new product. Make sure that you make full use of it. 2. Creating the right transcript for a focus group session is part art, part science. The transcript design is a function of what you want from the focus group new ideas, validation of product concept, attractiveness of specific product attributes or insights into product pricing and distribution. That determines how a question is asked and how it should be answered by participants. 3. The feedback from our session was very positive. We received indicative price ranges for how much students would pay for learning online, what attributes on the product platform attracted them and what were some areas where presentation of materials could be improved. What we learned from this focus group formed the basis of platform design, product strategy and Avicenas eventual architecture.

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From : Jawwad T o : G ary Tr av ni ce k S e n t : M o nda y, N ov emb er 22, 1 99 9 9 : 5 8 P M S u b j e c t : Re: J a ww ad

Hi Gary. After Amin, I just went under for six months. It was such a tremendous mind shift for both of us but we are really enjoying the experience. He will turn seven months (Insha Allah) this weekend and he has started standing up. I am more or less through with my third term at BSchool. I am graduating in May (hopefully) and it has been a great experience. Learned a lot, met some really good people, brushed up on a quite a few weak spots in my education. I even like to think that I am a better person now. (Always helps to know the limits of one's knowledge) Fawzia and I are planning to stay in the US for the next two years if everything works out at home. I took out a personal loan for BSchool and I need to pay that back. On a Pakistani salary that would be difficult to manage hence the two year delay in our return home. I have been working on an education venture with a few friends for the past six months and we are trying to decide if we want to do it on a full time basis. Decision point would most probably be in Feb-March 2000. yet. We are also thinking about visiting Florida in March. Its a maybe but if we do I would definitely like to come over and see you. How are things with the new firm? Was the transition smooth or did you hit any rough spots... Also spoke to a few companies in the New York area but nothing is confirmed as

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Well that is all from me, for now. I will stay in touch and keep you posted on how things go. I am planning to visit home (Pakistan) in the winter break for three or four weeks. Would be back by mid of January. Take care Jawwad

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On Takeaways
Y o u couldnt possibly hig h l i g h t t h e t a kea w a y s l is t e d h er e with the innocuous emails included in the prec e ding s e c tion. A nd no there i s n t en o ug h m ea n in g h id d en b e tw e en t h e lines for you t o p ick t he s e u p as s ub l i mi n al m e ss a ges . When at it came to putt ing wa s and d ow n the t a k ea w ays , ha n d fu l of I c he a t ed . I I

d i d nt stop at the emai ls b u t a ls o t h ou gh t a b ou t t h e p h as e which Avicena t h in g s s t ill r e m ember and woul d lik e t o p as s o n . h a n dfuls. He re i s m y l i s t o f

Takeaway
Team: really Brilliance successful can in only life, take you you need so far. To be more than just

yourself which means you will reach a stage where you will need others. Ultimately deadline, its books a the team that win, delivers, and pays meets a

customer

the

bills.

Without a team, you - the entrepreneur, are nothing. Its the team that gives you the confidence to take the plunge And and yes carries it is you the through team in your makes weakest winning wins. that

worthwhile. Yes the comfort of company will cost you a sizeable share of your future net worth. Is it worth it? Only you can decide.

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Running

business cost. as a an few

while

at

school: cost If not is

Your the

single size of six your

biggest obstacle when it comes to entrepreneurship is opportunity stepped struggle out for Opportunity your current pay check that you would forgo, if you entrepreneur. years may you fit earn in figure per annum today, letting it go to starve and definition of moving up in society. At school you have already given up the paycheck (and the opportunity cost problem) in your quest for self improvement. Can you actually do it? Graduate school is a walk i n the park if you tackle the problem of mixing business with studies correctly. and same Thursdays, day, and wrapped was free In my last term at school I up to my assignments on by 9pm for the the structured my classes from 8 am to 6 pm on Tuesdays work Avicena

remaining five days of the week. In that term I made the deans list, competed in two business plan competitions, finished the proof of concept, marketing, strategy and financial projection documents, closed the Aleph and Appsys deals, managed an introduction with a recently retired head of a big five accounting firm and moved to California. School is also interesting in that you have access to a unique and fund a microcosm give you of society that may open future My doors hedge valuable a of fund feedback raiser for free.

social network at Columbia had a Bankers Trust MD, a analyst, member for the Clinton team in campaign, Reuters management

North America, the son of IBMs CEO, four actuaries,

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an F-14 pilot, two nuclear submariners, two engineers from Qualcom and Intel, a popup video editor, a fair mix of Indians, Pakistanis, Portuguese, French, and Englishmen, Miss Universe Australians, title. Peruvian, was just Italian my

exactly one Venezuelan (potential) contender for the This network; imagine what the other 700 students looked like. Customer Validation: Liking the product or believing in it yourself is not is not enough. limited You to need to get sets, more The you of you make the feedback from people who will use the product. feedback product purchase. expect. the If presentation concept just feature

need to ask question about pricing, purchasing power, appeal, that or work presentation the happens strategy or and is likelihood not what to whether tweaked Sometime feedback determine should rare be

product,

(in

cases)

should

difference in opinion be ignored completely. Set personal and family expectations: Three years of hard back breaking labor and then we will get used to it.

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Chapter Four Aleph on the Scene

Ken, they to

Arno, were

and In

Q a m a r 16 back and the risk I

had to

made of any to as U.S.

it

clear jobs

that after of an

going the had, MBA of

regular the in of

graduation. share I offers pill. Ivy the

absence was was and do

real take the in

partners the safe

given

handful U.S.,

ready just the and

Beyond

what East,

available rest

League Middle cost

could

well

Europe, With you

Asia.

Asian

living

salaries,

could make your dollar go a fair distance. The I a I conversation it Before invested hadnt would Internet executed had were a with be and Sarwar it had was been to the to first time that

thought shot. had I

would in

possible wanted

give take how

Avicena further exactly the on and that for and

then, really

something

but that the had They they

thought

about been

happen. Aleph front had for

Sarwar already the last

forced working years three in

connection.

reasonably of had we could to to

sophisticated Karachi

work.

team

developers offices could in the ensure tap

willing that we

partially in use, into,

allocate Pakistan had and a

Avicena network sector funds

work, of that

California

decent make that

clients

financial that

services

would work

available

16

Please

see

the

appendix

on

cast

of

characters

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couldnt

be

done

by

the

internal

team

could

be

outsourced to Appsys. We and a had two and detailed shook we of a conversations They two of to get over get of and to 48 hours of

then handful

hands. would

would years access Sarwar

15%

Avicena

support, Aleph and, to Denises

programmers, fat chunk they exposure engine

facilities, time, as a build final the

adequate

their

clients, which

kicker, core

would around

fund

Appsys

Avicena

would stand. Fawzia was a fund human work even taking bigger and a our families and was a werent real personal how I sure loan for a where and this with to to was the and full

heading. the out. I MBA,

Without it

any

capital

wife,

kid, to My

taken it I

impossible (and that at just from a

thinking was that

being

understand strength thought one step was viewed

expected out. bleak but

weakness) far time too sane

hadnt things when picture

because

depressing

eyes,

of opportunity and promise when seen from mine. Then about the came it the and and it trip a made to California The to two of sense and us to Aleph talked take up

offered

Fawzia

job. move

perfect

offer

just

southern

California.

After all, this was destiny at work.

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From : Jawwad 17 To: SM S e n t : S a t ur d a y , D ec em b er 2 5 , 1 9 9 9 5 :24 PM Sub je c t : Bpl an: J a wwa d

BPCG is the Business Plan (40 pages) Exec Summary is the first two pages of BPCG (2 pages) EFinFinal is the Valuation. (10+ pages) You may want to print these out first. You can take a look at the proof of concept at http://www.columbia.edu/~jaf71/GuideHome.htm . need to use Explorer since it won't work on Netscape. months we have changed the design a lot. You would This was done in

June, but captures the essence of what we were thinking. Over the past six Think amazon.com, except replace books with concepts. Let me know what you think. Take care Jawwad

From : SM T o : J a ww ad Se nt: Th ur sd ay, D ecemb er 30, 1999 7:47 PM S u b j e c t : Re: B pl an : J aw wa d

When would you like to meet???

17

Sent immediately after the Hundred Million conversation with Sarwar on Christmas Eve.

dollar

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From : Jawwad 18 T o : D eni se D a vi e s C c : S M; Fa ha d ; S e n t : S un d ay , J a n u ary 1 6 , 2 0 00 1 :4 8 P M S u b j e c t : Re: C on ce p t s . c o m : E a r l y S u n d a y mo r ni n g

Okay made it to NYC in one piece. Its close to 4a.m. here and I am finally done with unpacking and cleaning. Off to sleep in a little while Fahad and I worked on Friday to further firm up the scope document. I did some more work in the air. It's all on paper and I will try to get it down in word/excel and mail it out latest by Monday evening. Once I have this out, finalizing the database design should not be a major issue. Denise I will call you up on Tuesday, after I have taken care of the above two items. Jawwad
From : Jawwad T o : A l e ph Ka r a c h i; A p ps y s K a r a c h i ; S M; De ni se ; Se nt: W ednesday, Jan uary 1 9, 2000 2:55 A M S u b j e c t : Re: C on ce p t.c o m : S p ec D o c um en t

Take care

Good evening everyone. Here is the document that describes the discussion Fahad and I had on Friday. There is also a screen definition portion that

18

Within ten days, Sarwar and I had agreed on a term sheet for Alephs incubation of the new venture, roped in Fahad and Appsys to do the core programming engine work, reviewed the initial design document, the architecture and signed off on the initial project plan. The urgency was necessary since I had to leave for New York by mid January and didnt know when I would have a chance to sit down with Fahad next.

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describes what we think would happen on each individual screen. The excel document includes the screen shots. As I have mentioned in the attachments, please review this thoroughly and raise as many points/questions as possible. For analysis and design we are not limiting the scope to just the pilot. The Pilot is still limited but it would be useful to get an idea of what would be expected from the whole system. I still owe you the relational data base design and process flows. Two more days. Meanwhile this should keep you busy. Fahad see if you have enough to start talking with Faisal. As I said the DB design in its existing format is around 80% done. With these two documents you should be able to identify any missing parts. I would also appreciate if you and Faisal can start talking about the partitioning between the Front end and the back end. Look forward to your comments. I may drop off to sleep but would be online again in 7 hours. I would be really happy if I can have some (any) feedback on these by then. BTW you need winzip to unzip the files. Take care Jawwad 19

19

Even though in principle, I had decided to stay away from technology, in reality architecture was still dependent on what I wanted from the platform, not just now but also a few years down the road. If we got the architecture right, everything else would follow. Fahad the lead designer from Appsys and I spent our first few days working together to map architecture in a document that could later be used as a reference by any team member.

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From : Jawwad To: Karach i; Ale phKarachi ; SM; Deni se: Fr iends; Bo ar dOfDirector s; S e n t : S un d ay , F eb r u ar y 0 6, 2 0 0 0 1 1 :1 8 P M Sub j e c t : We Fi nal l y h a ve a na m e. . ..

Finally we have a name... I am at peace. I have registered the .com and .net addresses I like it a lot... Its what I was looking for. We are named after Ibn Sina an Arab scholar of some fame who did a lot of work across different fields. In the western world he is known as Avicenna and for his contributions to medicine. But a little known fact that actually stood out for me was that his biggest contribution was synthesis / compilation of existing knowledge. Sina added a lot of value by his insights and his systematic approach to his work. So the name ...... drum rolls... is... Avicena.com 20 (Avicenna was already taken and most of the original Arab variations were also gone. I thought since we are naming the thing after him, he wouldn't mind one missing n.)

20

The sequence of names settled on Avicena: a. b. c. d. e. Cookaracha Guides Concepts.com QuickConcepts.com QConcepts.com Avicena.com

that

we

went

through

before

we

Concepts was nice but didnt have any buzz or zing to it. Quick Concepts and QConcepts were both functional names. We wanted a name with a story, a bit of mystique, class and the ability to brand not at a functional (attribute driven) but psychological level (image driven). Avicena delivered on all of the above.

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Finally since our primary customer base is in North America and Western Europe, Avicena would probably be easier on their tongues than Ibn Sina or Sina or Bin Sina. As I said, I am at peace. I have found what I was looking for. Will look

forward to your feedback. And I mean feedback. FROM ALL OF YOU. Jawwad
From : Jawwad T o : J oh n G. M ur th a S e n t : M onda y, F eb r uar y 07, 2 0 0 0 4 :1 9 A M S u b j e c t : H i th er e

John Hi. Thank you very much for the baby snaps. I got back home on the 15 th and have been busy with one thing after another. We actually found a very good tech subcontractor in Pakistan. Sold 15% of the firm to them and in return got 2 years of software development, execution & implementation support. (Read: Five Web developers & one core manager for our management team). Also picked up a name for the business. Planning to do a market test in March followed by a bigger one in May. If things move along as predicted will be open for business in August 1, 2000 What about you? How is the healthcare business & fatherhood treating you? I hope everything is fine at home & work. Keep me posted. Take care Jawwad

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From : Jawwad To: SM S e n t : W ed n e s d a y , F eb r u ar y 0 9, 2 0 0 0 2 :5 0 P M Sub jec t : Busi ness Pl an and Con tr ac t Issu es

SM. As mentioned earlier, I am meeting one potential source of funding on Friday. Also setup a time with another potential source on Monday morning. I need to make a couple of major changes in the business plan reflecting the progress that has been made since 18 th December (last update). One of the big things that have happened is the contract with Aleph. Its probably the biggest asset Avicena has on its books. However, once I put the details of the contract in the plan, it would go beyond an understanding between you and me to a relationship between two firms. I understand that for all practical purposes its already at that level, but we would be introducing a formal structure that did not exist on paper before. Is it possible for both of us to agree on a one page statement of understanding that could then be included in the business plan? The statement would form a basis for valuing the contract and the firm. It's important to get this done before the next week is over. I need the initial value so that when I actually walk into a room with these people I can say, this is what the firm was worth before the contract, this is what its worth now, this is what it will be worth after the market test. And since I need x million dollars, this is the portion of equity the new investors can get for their contributions. So far I have thrown about a figure of 1.5 Million dollars for the Fair Market value of the services provided by Aleph to Avicena over the next two year period. The basis that I used was the following

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1.

Thirty percent (30%) of Sarwar Mushtaq's time subject to availability

spread over the next two years = 1,000* hrs @ 450$** an hour = 450,000 2. Web Development Team (1 Graphic Designer, 3 Web Developers, 1 Tester) 5 People - available on demand for Avicena related work at a charge out rate of $300,000 per year for two years for the team = $600,000

3. Technical execution & consulting support in Karachi and California= ??? (the remaining amount) 4. In return Avicena sold 15% of its equity to Alephinc. Sarwar Mushtaq joined Avicena core management team and will represent Aleph's interest in the firm * (30% * 150 hrs a month * 24 months = 1080 hrs) ** ( (250,000 per annum * 3 )/ (150 * 12)) I need to get a feel for your level of comfort with the above. The important issue here is what happens if the contract is formalized and I lose control of the firm or its management. What kind of safeguards Aleph would like to place in the contract to protect its position and its interests. On the other side the issue is that our understanding is worth a lot of money to a lot of people. We need to put a market value to it in order for us to reap the full financial benefits. As long as we understand how much its worth, we can ensure that its reflected in the value of the firm and that new investors pay a fair price for the equity they buy. That is we don't give away any discounts to people who have come on board at a later stage. These are things that both of us have to think about. The issue is also important because we are now moving to a phase where outside investors may get in a position to exploit our understanding and relationship. Please feel free to bring out any concerns / reservations / issues / problems / ideas that you have about anything discussed above.

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If you agree with the overall assessment above, I will raise the figure to 2 Million dollars for fair value of the contract. Which would put the (ball park) value of the firm at 13.3 Million $. Million $. Take care Jawwad Which means that if we sell an additional 10% stake in the firm to VC's we should be able to raise 1.3

From : Jawwad T o : J oh n C u si c k 21 Da te: 27 t h M a r ch 2 0 00

Dear John We met at Columbia Business School Mentoring for Entrepreneurs Program in November 1999 and February 2000 (Tom McKnights class). We spoke about our online education venture and the possibility of getting in touch again when we were ready. Things have progressed significantly since our last discussion. We now have a name, a committed management team, a proven technology, dedicated and reliable contractors and a very focused business plan. One of the first things you had appreciated about us in our earlier meetings was our focus on Finance and how that would allow us to exploit marketing, advertising and execution efficiencies.

21

Within the Venture Capital and Investor networks, it is not about what you have or what you can build, but who you know and who referred you. In Johns case it was another Professor at Columbia and a fairly long chat at a Columbia Mentors Network event. The bad news was that with a few exceptions, no one would return your calls or emails, irrespective of their relationship with the Columbia network. It would take a personal reference to ensure that you received any attention. The one shinning exception was Vinod Khosla at KPCB who wrote a week later saying he had looked at the executive summary and wasnt interested.

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I have enclosed a copy of our business plan for your reference and will look forward to receiving your comments and advice. If you have any questions please feel free to contact either me or Sarwar at our given numbers. I will call you in the second week of April to follow up on our conversation. Best Regards Jawwad Ahmed Farid Avicena Inc

From : Jawwad T o : S ar w ar Da te: 1 5 Feb 2000

Vision I keep coming back to the statement you made when we were speaking about how the Internet is going to change the world (mid Jan, 2000). Both of us agree that the net implies a fundamental shift, across the board, in how things will be done in our day to day lives. But such fundamental shifts require financing. Irrespective of who benefits from the shift, one definite beneficiary of shifts through out the history of shifts is the Financial Services industry. Look at railroad, automobiles, pcs, wireless and now the net. Look at how the Financial services industry transformed in response to each of these shifts. Individual companys may come and go, but financial services will always extract its pound of flesh. What are the implications for us? As I have said in the modified biz-plan, the industry may change shape or form, but at its core it would remain a process driven business (relationship management, portfolio construction & management, risk assessment, financial underwriting, asset liability management, etc). This implies a number of things. First as the industry

grows, it will need new blood and resources. Second since the industrys core processes are complicated there would be a steep learning curve. Third

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since the fundamental shift will change some of the core processes, there would also be a need for continuous learning training, lots of continual education content) professional development program. What is out there right now. On the web, its just personal finance. If you are finance professional, you get material that updates you about what is happening in the market, but that is it. If you want to grow professionally, you are on your own. How do we make money from this opportunity? Lots of new hires, lots of Need for a flexible (geographic, time,

Actually this new direction makes more sense for us. There is a big interest within financial services in trained man-power (experience, education or certification). Certification normally has a continuing education program attached to it. At present continuing

education is only through seminars and symposiums. If we offer a flexible and credible alternative, there is definitely enough demand out there. a. It allows us to charge a premium for our content, since the content with the CPE credits is worth a tangible amount of money to these people b. It also solves the motivation problem that we have struggled with c. It also addresses the desire / ability / capacity to pay issues Beyond all of the above, the space is wide open. There is no one out there. (as of yesterday). So we are definitely ahead of the wave. As the industry grows and demand begins to rise, the wave would get bigger and bigger and we would still be way ahead. Because the industry has so many complicated processes, it wont be easy to generate the content. You would need some very specific skills and resources

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and substantial effort on standardizing content generation.

Possibly

indicating that competition in the future would also be limited. Not every second person we know would be able to replicate what we would be trying to do. Since hardly anyone we know really gets finance. Bottom Line. First mover, ahead of the wave, lots of growth, empty space, below average competition, complicated content profits How do we get there? Higher margins and

My multi-stage plan: First six month total focus on getting the professional certification bodies on board. Our niche is still financial courses but we should get chartered accountants, CPAs, CFAs and Actuaries on board about our continuing professional education offerings. Next one year we expand our offerings to Insurance and Re-insurance companies. Year two onwards we become THE Financial Services choice for professional development and continuing education. Let me make myself clear here. The focus is still Finance. The courses we offer are still focused on Finance. But we would be selling the same content with minimal changes to the whole financial services industry. It will just be wrapped differently. This is on the marketing side. On the execution side, we have already outsourced technology. End of the first six months if it looks as if our over all strategy is on the mark, we set up an offshore content generation facility. Either Dubai or Karachi. There is solid talent in terms of MBAs, Actuaries, Chartered Accountants, CPA, etc that is based in PK / Middle East. We can harness this pool for generating top quality content for our customers. Would need to put in effort for standardizing the generation process and our products but once that is done. We are there. Obviously this revises the financial projections and our revenues targets. Hence my total rewrites. I have done the financial projections. I will include

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the excel worksheet with this document and the changes that I have so far made in the biz-pan. But there is work that needs to be done to bring everything upto date. The good thing is that there are no major changes in the technology plan. Or atleast none that I can see. For now. Jawwad

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Takeaway
Support network: More people quit and fail because they dont have the right person to talk to than you would imagine. You are not alone in the world. Look Just ask for it. around and you will find help. On deals: 1. A one pager is good enough. Sometimes even a little less will also do. 2. Funding decisions happen in less than 30 seconds. The rest is just logistics. 3. You have no hope without a reference or a prior link. The best references are customers, individuals

who share your profession, or people who have worked with you before. 4. There are times when getting what you need and raising capital are two completely different things. Naming the venture: Mystique, class, story and style. Avoid functional names or functional branding. A fast car sold as a fast car is functional branding. A fast car sold as a throw used back it to to younger sell days, same passion, concept spirit, freedom and individuality is such a powerful brand that Ford the (Mustang) to two separate generations.

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Chapter Five California

When

our

plane with knew John

started pools, heading Wayne

descending blocks, roads, had been

over and a

low giant smart in after

warehouses, complexes malls, move. Orange bearing in the brighter I The

landscaped

office open west

apartment

International pleasant is even

Airport at

County the on

was

surprise the sun than

madness

that

LaGuardia

6:00am shined it had

morning.

Somehow, and

Sunflower

McArthur

on Broadway and Amsterdam. Our as with new our apartment two-bedroom air had a We 24 we a had in the New a same York square but a was far a a footage newer, better that that

central around

conditioning pool, Two manmade lake, days

and and

layout. curved was open

walking later

path gym on

hours. thanks to

Amins Persian just a

birthday, restaurant,

discovered Sarwar

Darya, and

Denise,

short hop away. Dont Kph2 West and

22

get off 122nd on

me

wrong.

New a you

York Drive hefty

wasnt compared

bad, to in the the the

but 540 our lake mist

South Street Here

Plaza was our

upgrade see and

lifestyle. rising

balcony

overlooked could

cold from

nights the

heated

pool

stars

22

Versailles Santa Ana.

on

the

Lake,

opposite

South

Coast

Plaza,

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alight break study, the

in and I

the saw and

sky.

In

New

York, the of

when

I needed of by was a

a my

looked the In

outside kitchen sunny by

window stained it

another

windowsill

bird on the dark

droppings other sparkling green trees.

the

apartment

side. blue

California, a canopy

pool

enclosed

within of

hedge,

shaded

carefree

From : Jawwad To : c lu s t e r x0 0 S e n t : S un d ay , M a y 21 , 2 0 0 0 8 :1 3 A M S ub j e c t : Up d a te f r o m L A L A L and

X'ers I owe most of my friends and clustermates an explanation of where I have been hiding myself for the past six months. As some of you are already aware that I started something in January of this year. on It's still a very small venture focusing on online education. generation processes & distribution technologies With a for the team of four people in the US (and another 6 in Pakistan) we are working content education industry. (Not as complicated as it sounds) Since my technology and marketing team (represented by two very sharp people) are based in Orange County, we (me and Fawzia) decided to move in early March. I have been traveling back and forth on almost a weekly Hence, my basis to get the venture off the ground and finish school.

absences from most cluster events. With two new ventures (remember Amin

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Farid from last year), moving, commuting to school and remaining sane, I have had a very interesting schedule. On the financing side, one of our key suppliers agreed to cover our technology related expenses for the next two years. They took a % of equity in exchange. Our next round is now planned for September / October when we officially plan to roll out some of our products. It has been a pleasure knowing all of you. you have to do is ask. Best of luck in your efforts to change the world. Stay in touch. Jawwad
From : Jawwad T o : B o a rdO fDi r e c tors Se nt: Sunday , May 30, 20 00 8:1 3 A M S ub j e c t : Up d a te f r o m L A L A L and

If you are ever in southern

California, please feel to drop in. And if there is anything that I can do, all

Please see copy of attached update post meeting with Sarwar 23 and answers to his queries on current status across a few crucial areas.

23

Five months into our relationship, Sarwar was quite concerned about our momentum and direction. Part of his concern was driven by the fact that after a demonstration of the core technology engine, in March, not much had happened on the technology front. We had been busy with submitting business plans and projections and hadnt had the time to make progress on the content side. Even though part of the technology solution was ready, without content to play with, there was no visibility for customers, investors or Aleph. This note was the first update that went out to Sarwar and our Board, describing where we were on numerous fronts. This was followed by a Board meeting in New York in August and periodic updates via phone calls and

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Jawwad [Sarwar] After our meeting at the office and the follow up meeting at Souplantation, there has been no update on what the progress has been and where we stand on timelines and milestones. [JAF] I think the best way to address this would be to set up a regular time for a weekly meeting between us. We can do it physically when we are in the same city or over AOL Instant Messanger when we are not. For starters I suggest Friday (evenings or mornings depending on our respective schedules). As long as we stick to these weekly sessions, the paranoia should not recur. [Sarwar] I sense that we are losing direction, but hope that its just paranoia. I am assuming that you are the helm of the ship and steering. [JAF] You assume correctly as far as me being at the helm but not about losing direction. For me the direction is fairly simple 1. Find a customer 2. Get the product out 3. Get some money, either from the customer or on the basis of 1 or 2. 4. The amount of money we need would depend on how desperate we are, and how far we have reached with respect to 1 and 2 above.

email exchanges after that. In September we added one more member to our Board and had multiple one on one meetings on direction, strategy, presentation and pitch in Newport Beach. An active, easily accessible, aggressive board added a lot more value than a passive one.

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For the next three months this is my direction and as per our last meeting at soup plantation this is the direction we agreed on as a company. The only thing new in direction is the training on the Internet side for corporate customers. Its a related business that can be used to pay our bills and refine our product. At the same time it helps us build credibility, starts the inflow of revenues (if only for investors sake) and is a step in the direction that we want to go in. This occurred on Friday during the meeting with MB when Ping was talking about training loan officers. I dont know how you feel about it, but I think if we get it right we have a good shot at getting MB as our first customer and we can build on that. [Sarwar] Progress tracking mechanism, some clear deadlines, and measurable milestones. [JAF] Programming We now have close to 90% of the functionality covered. Some changes have to be made because some of the processes are confusing and need to be modified. Also we underestimated the power of the search engine required. So work needs to be done on that end also. A new related project is the data entry, index generation side of Avicena. I have asked Fahad to generate a scope document. It is not a very complicated application but would be separate from the site and the original scope. Apparently Fahad needs your or Denises approval and a resource to move forward on this. No progress has been made on this item for the past one month. Although it is not urgent right now by mid June it will become a high priority item. My objective is to have the process and search engine work wrapped up before the 15 th of June. [JAF] First course offerings

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I am working with three courses now: 1. A dummy basic finance course that would serve as an introductory course for users, investors, employees, customers and contractors 2. A credit assessment course that could be easily modified and licensed to Manufacturers Bank. Please see comments above 3. A course on interest rate models and dynamic valuation techniques for actuaries. The idea is to have an outline and some content ready for review by Society of Actuaries and our technical consultants. The deadline for the first two courses is 15 th June. The deadline for the last course is early August. These two items are critical. Accountants, Lawyers, Customers, Employees, Investors; for all of them we need to have a site that works, that has a course that can be sold in real life and a process that is down to earth and really easy to use. If we can get these done and finished with by 15th of June it would be relatively easier to meet the rest of our mile stones. For me the only direction right now is hitting my target of 15 th June with both of the above objective met and crossed out. [JAF] Hiring I am now going to work with a number of people on a consulting basis. The three ways that I can work is equity, per hour charge or a combination. My preference is equity because its a very powerful tool for retaining interest. And it also allows me to keep the cash needs to a minimum. The three people I have in mind are people that I met at CBS and may or may not be interested in this arrangement. I will know for sure by the time you get here. [JAF] Deloitte and Touche I would like to stay in touch with Fred and follow up with him. However as per our soup plantation meeting, the business plan and raising money in the short term now has a slightly lower priority. I plan on having one or two

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meetings with him and keep him updated about the strategy that we are following and the success that we have had. I expect him to be on the top of my list again in early July. [JAF] Lawyers Azra (Akilas sister) has been in touch with a few of her friends and I am waiting for her references. On more immediate legal issues I can count on her support. And if we need to speak to a lawyer in a hurry, she is a resource that we can use. [JAF] University of Phoenix I have some of the information that we had asked for. Getting a meeting with UOP will not be a problem. But we need to have something that will blow them away. They become top priority after June 15th or as soon as we have the course and the site in respectable shape. I have a list of names that I can contact and follow up as soon as we are ready. But as I have said I need to have something that I can show. [JAF] Other universities or institutions The other key prospects are Strayer University, New Horizon, Unext, Pensare, Digital Think and Smart Force in that order. Follow up with them is scheduled in late July and would be shaped by how discussions proceed with UOP. [JAF] Professional Bodies (Actuaries and Finance professionals) Society of Actuaries on top of our list. To be followed up in parallel with UOP in mid June. [JAF] Board members, advisors I have two more people on my list that I would like to contact but that would be after June 15th.

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My other strong feeling is that if any of the bigger players sign up with us, we would need to ramp up in a hurry and have some pool of investment ready for immediate use. I think it would be beneficial to keep the July meetings as an internal deadline for a review of our strategy based on our performance till then. I am keeping the financing provided by Aleph for the next three months as a backup and a lender of last resort if we have any immediate cash expenses. Since Joe fell through and we have switched over to the consulting model, its possible that some of the requirements would be delayed. Beyond that I would like to line up 150,000 250,000 in potential

financing from other sources for mid July, early August. This is where Fred and some of the resources in New York may come in to play. If you have sources that you can access, its time that you start spreading the word. For the bigger chunk (the 3 4 mill) we will wait till October. [JAF] What do I need from you A couple of things. I need to get the look and feel done and finished by 15 th June. I can take care of the programming side but I need help on the look feel. I agree with you that the site is really dull and dead. But I need to see something that I am comfortable before I can write the existing version off. If we are thinking about going live in mid June, there is not enough time to wait till the programming side is finished. Both of these have to run in parallel. Given the number of iterations we had to get where we are now, I think we need to start sooner. Can you give me something that is really earth shattering by that date? I will give you trouble since I know what I want but I still dont have it. Once again my key words are Creative Chaos, Life, Vibrance, Originality and Creativity. I see all of that in the first page on www.avicena.com. But as soon as I go inside it goes away. So one word HELP.

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From : Jawwad@avi cena Se nt: 07 Jun e 2 000 12 :08 pm T o : T MPGr o up ; Frie nds ; Profes sor s ; S u b j e c t : Up d a t e f r o m L A L A L an d

Hi there. Thought you would appreciate an update from LA LA Land. Three weeks since commencement and I am putting my b-school education to good use. We have settled down in Orange County, signed the lease, found a day care, bought some furniture, moved in to the new apartment, got DSL installed, got consensus on strategy going forward, got sign off on the implementation action plan, became a member of Costco and saved (or spent) a fortune (depends on how you look at it) at their warehouse in Fountain Valley. You know that you have completely shifted to the mindset of an entrepreneur when your bedside reading comprises solely of office supplies catalogs. I even put some money in Staples stock (outstanding year selling red ink to startups). The day begins at six or sooner if Amin (our son) wakes up and ends at midnight. 90% of my time goes in managing the relationship with Aleph (our incubator) and ensuring that we stay on schedule for the roll out in July. When I started working I thought I would have the time to focus on product development, but that has now been relegated to late nights and early mornings. Important lesson: take yourself out of any sensitive schedules and primary responsibility for serious deliverables. Building and/or running a business is a full time job and you simply don't have the time to do anything else The hunt for lawyers continues. Still processing references but don't have the same level of comfort that we have with Deloitte (they agreed to work with us for a while and are now waiting for the next version of the business plan and the site). Private placement is still on schedule for mid/late July. Two

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serious angels lined up, plus family and friends, plus Aleph. Any advice on the execution / legal side of placements would be highly appreciated. Have identified the first customer and started talking. Found them hidden away in Aleph's list of clients. Important lesson number two: Look around your existing relationships and you will find what you are looking for. Important Lesson number three: Keep your mind open to unthinkable applications of your product: You would be surprised at some of the thing people are willing to pay for. Another interesting thing happened. I am not sure how you would react to this. As a group we decided to take our last 15K out of the bank and into the market. We did this in school as Moral Hazard: When you have I manage the money and spend four hours a nothing to lose, you are willing to take bigger and bigger risks". Interesting to experience it first hand. week ensuring that it stays liquid and doesn't evaporate. So far it has been a thrilling experience. (I don't need caffeine any more, just the opening half an hour at six thirty and I have had my full days quota) Every day the opportunity gets bigger and better. The only problem is that I have two hands and 24 hours in a day. Desperately looking for hired help, willing to work for options and/or minimum wage, relocate to Santa Ana and live on sunshine and faith. Let me know if you find some. Take care, Jawwad

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Takeaway
Partnerships: irrespective has a right and a strategy will have of to to An the equity size of ask partner his his to is be a partner stake. on a He on ownership opinion create

questions,

briefed

express with

your model

decisions. You must respect that. problem respect,

If you think you

where you can work without capital partners More on expectation management: If you dont manage

expectations some one else will. Bottlenecks: to be a unless needed you and As fix an owner and As / founder owners us goal your you are a destined being a is are

bottleneck it. it because useful. with or

will

remain we to

bottleneck important,

enjoy feel

bottleneck

allows your

But

state

(Nirvana) You

when nothing depends on you and everything works like clockwork without presence. ready to grow up as business when that happens.

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Chapter Six Hiring

In job the first six months with after Aleph, signing we made Prior the six to

incubation offers. I for Avicena, talent tight people offers

agreement All had my were been team firm it was at

turned

down.

responsible at in Andersen Pakistan. once

for World

hiring Wides in find out This to put

representative markets you they

Though we

always generally

difficult

liked, were

Andersen,

accepted.

rejection business was new. In most In small people a to businesses who gauge in our and would the any or make new ventures, dream it you was or you see term You me I be that

wanted own. dream could, an

your of

their

short

30-minute

interview,

difficult

success to

transfer When it to

adoption money on Most

candidate. raise wisely

ability table

became

issue.

candidates the

asked

something sheets, before else a up took (meaning was while they

(commitments, bank taker; ride. until could to committing. It I It

funding, would were there we) just to

financing, think the this demon a for a very few about risk paid and out

balances) everybody took did,

figure a

every

rejection by raising

personally. million

ended

becoming

that wanted

only

exorcised

dollars see

prospective

employees

before

their leap of faith. Our first one. break Didnt came want with to work Ashar. with us Employee because

number

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of

the it

dream. he was and he me was

He bored

just with and

wanted what wanted with me a he

to was do of be his to to

move doing life. mine, fair, they that was and to a find

over and It had and were his few For and

because where helped worked had make an him

leading had

something

different

meaningful been of it on was before, sense others join of outline code another knew

that with opt

student adventure

impish To to an just

that

would

for

challenges

whenever seemed that death paper a

offered. more him it than was

willingness thousand

something

little

lines

wish.

opportunity

define himself. Quickly restless Sharleen would eye on ensure after MBA and Ashar a firm Ashar and content came job in formed for Sharleen, at a Karachi. the our core another Together, team team, that an and and keep

with

desk

multinational

pharmaceutical produce Aleph that

courses,

Appsys

technology

priorities

were

communicated

managed between California and Karachi. Because defined Karachi. three he both and of our prior for had relationship, except and to to I had be mind think help that no the in sync over and of kept seven

role We a

Ashar a

designated connection would of

troubleshooter also that make half allowed it and us

problem-solver Vulcan be I would the effective

strong

continents. a work 20

happenwith hours

instant

messaging us up

schedule

and running

a day,

days a week.

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From : Jawwad T o : Ash ar Z ai d i S e n t : S un d ay , J u n e 1 5 , 2 0 0 0 4 : 08 A M Subject: Mo re moti vation

As always its great to hear from you. Send me your home phone / cell phone number. give you a call. Things are pretty good at this end of the planet. So far I have lived in three continents and on the shores of three oceans. The other two (oceans) are just too cold for my taste. Work is slow as I told you. It is tough working with just me. Glad to hear that you finally made the move to Arooj's team. How are things? Had an exchange of emails with Ammar and heard that as always things are not good. No debt just equity. But I am probably risking the remaining percentage of my friends and family who are still on speaking terms with me by putting their money at risk Costco is a big retailer in US and Europe. You have to become a member and shop at their warehouse and you get whole sale price for top level brands. So 24 cans of Mountain Dew / Pepsi cost 3 dollars which is 150 rupees. Which is 6 Rupees per can (330 ml). Van Heusen dress shirts are 12 dollars (which is like damn cheap) and so on so forth. The complete deal is content generation, processes, technology and distribution for the education and professional development market. Last time I checked it was worth 700 billion a year. I would settle for .1% of that. One of these days when I am rich enough I may actually

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Don't go any place. How would you like to work with me NOW. I will even pay you in dollars or better yet in options? Of course this means that you are staking your livelihood on your ex boss and teacher. At the end of three years you will either never speak to me for the rest of our lives or will have enough to pay for b-school out of your own pocket. Or both. Let me know if you are interested in giving it a shot. If you are then we have to work out a really long term strategy of getting you here. Jawwad The quote indicates that you now have a much more positive Take care outlook on life.

From : j a wwad@ avi cena T o : Ash ar Z ai d i S e n t : S un d ay , J u n e 1 6 , 2 0 0 0 4 : 0 0 P M Subject: Mo re moti vation

Give me a time when I can reach you at home.

We should talk on the

phone. I think the plan will answer most of your questions. 1. It would but not to a great extent since changing the course outline will also change the CPE's you receive for it. This segment is only our first target market. At a later stage we would be looking at additional markets. And then CPE would not be a binding constraint 2. Me, Fawzia, Sarwar Mushtaq (Aleph Inc), Denise Davies (Aleph Inc). We are planning to raise additional money in the next two - three months and the picture will change again. Also negotiating with two prospective employees to join us. For all practical purposes you will be employee number one. For the moment I and Fawzia are the majority owners

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3. Don't get too hung up on the job description.

Within a startup setting

they change every minute. Although I see your primarily role in that capacity in the next six months or so and even later you would probably have your hands in everything (all the way from cleaning the closets and running errands, testing the interface, to hiring and firing people) 4. This is the most important point. If you do decide to take this mission, there is a 90% chance that it will self destruct in less than three months. Then you, me and every body else will be on the road. There is a 10% chance that we will all be around in the next six months and there is less a 1% chance that will go public in the next 4 years. You need to have the flexibility, the profile and the mindset to handle this risk. 5. When can I get you to the US? Once again a lot will be determined in the next six to eight months. There is a chance that I may ask to stay back and help us in building the organization in Pakistan. There is also a chance that we may ask you to move to Dubai and spend anywhere between six months to a few years over there. If things work out there would obviously be a number of trips to the US. There is a really small chance that I will ask you to come to the US in the first year. But second year onwards. who knows... So think of it like that. 6. The safest thing to do would be to work on a part time basis till things are ready to fly and you can then leave SHMA. When I say part time, I am thinking 10 - 15 hours a week till we get things moving and then it will be 18 - 20 hours a day. Time frame will probably be 2 - 4 months. This would also give you a deeper idea of what is it that we are and what is it that we are upto. How volatile I am on a day to day basis and if the work is as exciting as I made it sound... 7. You would primarily be an Avicena employee. But on the interfacing side, you would be talking to Fahad and Aleph in Pakistan...

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8. Yes for the time being we are all working from home. 9. One of the first things you should do is get a US visitor Visa on your passport while you are still a SHMA employee. The ability to move quickly to the US even for short periods of time is valued a lot. 10. If there is a move to Dubai or the US the rates would be revised. If we get significant funding the rates would be revised again. In the first six months think of it as investing yourself and your time in an opportunity. Beyond that think of it as believing in me to pull it off. Its like a vote of confidence. Jawwad, I am jumping in the fire for you, don't screw up my life. Don't think of the amount as reflective of your abilities. You are obviously worth a lot more and I know that... 11. Here is the interesting part. If you do join and do decide to stay and do come on board full time and stay on for three years (and the magical number again) you start with owning .5% of the firm Doesn't sound much but if you consider our current valuation of 10 - 30 million dollars it could be worth anywhere from 50K to 150K 2 - 3 years from now (in US dollars do your own numbers) 12. Yes I do need your resume... but you are hired the minute you say yes. No interviews, just commitment & faith. 13. Next step. Go over the business plan in minute details and send me your comments. I had to take the numbers out since it adds up the size. 14. This is very hush hush. Not a word to a soul. Just talk to your parents and may be your friends but not a word beyond that. And if anybody tells you, you are out of mind on taking this up tell them they are absolutely on the mark. Take care... happy thinking.

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From : A shar Zaidi T o : J a ww ad S e n t : S un d ay , J u n e 1 7 , 2 0 0 0 1 :0 0 P M Subject: Mo re moti vation

It is amazing how slow life can be for a couple of months and then suddenly take off to the 7the moon. 1. My answer is 'yes'. I'm ready to join. 2. The money sounds fine. I'll start work now and if you have cash flow

problems, pay me later when they are sorted out. I know you'll be fair, so thats OK. But you'll have nothing but my word to determine how much time Im putting in and how much I'm billing you!!! The .5% of share of the company sounds exciting. Is this something you plan on offering to all employees and will I become a share holder immediately after joining permanently or after 3 years?? 3. Your description of the job makes it 'versatile' hmm cleaning cup-boards to hiring and firing. Interesting. I understand that things are fluid and will take time to stabilize and that is when 'roles' within the organization will become concrete. Ashar
From : j a wwad@ avi cena T o : Ash ar Z ai d i S e n t : S un d ay , J u n e 1 7 , 2 0 0 0 3 : 0 0 A M Subject: Mo re moti vation

Take a look at the job description I think you will find it interesting to know that I have waited (stayed up) all night for your email to arrive.

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Congratulations. Welcome on board. Now I really have to make it work. On the equity side, half of the half is yours immediately. The remainder will vest over the next two years. The vesting period starts immediately. The only problem is that there would be restrictions on selling it to external parties and caps on the maximum price you would get from the firm if you decide to leave before the three year period is over. Let me know if you have any other questions. Things will once again slow down till I figure out what should I ask you to do as your first assignment. Thanks for the vote of confidence. Together we will make it work. For the time being don't let the news out. Have a chat with Fahad about what is it that we are trying to do but ask him to keep it to himself. I am just going to inform the management team here but will tell them the same thing. Brace yourself, it will inshah Allah be a very exciting ride. Last question is. Would you prefer emp1@avicena.com or

azaidi@avicena.com? Think six hundred people in three years. It will take a few days to get that up and running but we are working on it. Let me know... Jawwad

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Takeaway
The honest truth: No one wants to work for a small Deal company with no money and possibly no future. touch, starting with employees. If you

with it. In a new venture you sell to every one you havent already, learn to sell. Hiring it sources: of Your you network need is and your be single patient. do not best Job work

source of leads, referrals and future employees. Let know what and advertisements recruiting agencies

for young businesses. Hiring Motivators: change and People switch jobs Not because money of or Hunt

boredom,

desperation.

opportunity or the chance to change the world. for passion in boring places. Ask the right questions. Listen. Be honest and say be so; fair: if you If will to you not work work pay with

old on

technology so. And if

salaries you,

time say so; if you want them to clean cupboards say they still want with hire them and take care of them.

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Chapter Seven - Pre Launch

It

took

us

eight was it

months built

from a

the

point

that to it

the the in for not

technology time alpha shared that functional internal it

and But had

demonstrated commercially once rolled but we it had we had

became we the

viable, out

solution.

(meaning quality with

assurance outside

still

world),

started

showing our stuff around. Pre launch in 2000, and was also the one of the most was was the logo and protracted from with with of to plan made a

stages March site work Fahads

Avicenas when

short first

life. demo engine there done: for

Starting working business move

knowledge-manager front-end had to design, be

lot

that

revisions, California, site business recruiting, purchases. responsible the above. end not their would easier done. Identity spent a and

executive sample cards I for Aleph and my add

summaries, letters,

courses and

initial

testing, design, hardware army all of of printing,

content,

marketing hiring,

stationery hosting, the and good to out

became tracking and did any them

one-man completing took work

Appsys

ownership tech

initially, in-house It to was be

reinforcing

view

that value sort

keeping what

Avicena.

letting

needed

image of

design time. I

was

one

area

where a

we

lot

had

been

strong

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believer I got to had

in

the

power and

of the

brand two We

identity had we to

before Don the not get

school right

courses

with would

further

reinforced up-front

it.

branding

because

get the opportunity to revisit it later. I never expected There it to be a fairytale bouts shouting and I were of and it

wasnt. irritated and well the three as a of

were Sarwar, and in to

hiccups, systems, Denise, though our

acne, very at All that

digestive team factor us went

matches, issues

tantrums. a project

gelled they

there level, pains

management great

didnt

become

personal

chemistry. to ensure

our mutual relationships stayed positive. Every would the know time write to that it I a would short them was blow note in a fuse to the SM on and and in Karachi, Davies let I on

side

keep

loop

them

raining

brimstone

Karachi

but clear skies prevailed in Santa Ana.

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From : Jawwad To: SM; D avi es; fahad; mk; fawz ia Se nt: Th ur sd ay, July 17 , 2000 1 0:2 4 PM Subject: www.avicena.com

1. Please sort out the login issue. It has been more than four weeks since I originally pointed it out and recently informed Denise as well as Fahad about it. We cannot get past the first security screen whose official user id and password is (Avicenna, avi2000).

FIX IT 24

2. Please do whatever is required to sort out the server issues. Its becoming a joke now. I have been hearing about server issues ever since we installed the Servelet Engines. If there is something that needs to be done, do it or get it done. Don't keep on sending emails back and forth.

Use the PHONE .

24

Building technology and commercializing it are two different dimensions. Now that we had content and friends and family looking at our offering, there was a steady stream of errors, bugs and feedback coming in. From a marketing point of view the last thing you wanted was the application to crash during a customer demonstration. From a quality assurance point of view we had been working with the technology since January 2000. Six months later it should have worked but it didnt. You could live with that, what you couldnt live with were bugs that were fixed but would show up again, that werent fixed despite being identified months earlier and show stoppers that would stop users at the front page (e.g. login errors) and not let them do anything at all with the site. One of the problems being faced in Karachi was the absence of a dedicated Project Manager (PM) on Avicena who could track what was happening. Aleph assigned two separate PM one after another but their non-Avicena workload made them ineffective. It was only after Ashar (see the hiring chapter) joined full time that this picture started improving.

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3. My understanding is that the site

WILL BE

up and running (New

version, look and feel and bug fixes) by this Friday. Please confirm that this is the case. If its not then give me a final date. 4. If there are any issues with any of the above, I would appreciate if I am informed immediately. 5. So far I took a backseat since I assumed that technical management of the project will be taken care of in Aleph Pakistan. I am extremely dis-satisfied with performance on that side. The only result of that move is that we have seen no progress at all in Avicena's work. If you feel that this statement is incorrect, please feel free to correct me by pointing me towards a link that works and has implemented all of the changes that have been suggested since early May. 7. If you have work that Fawzia needs to do, please send very very detailed instructions and follow up on a regular basis. Fawzia's speciality is not NT configuration. If you can manage it from Pakistan, terrific, if you can't, call her up and walk her through whatever it is that needs to be done. 8. As you can obviously tell, I am really upset. So for a change, do something to pacify me. I am not at all interested in a conversation. Show me some action and show me the site. Jawwad

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S i d ebar: Email Effe cti ven e s s D e s pite the role techn o lo g y ha s p l a ye d in m y li fe a n d t he tech focus of my is jobs to for and my use c o m p a ni e s, the y ou r p h o ne p o in t is E ma i l my or humble a m o re or f or r e c ommendation p e r sonal e n s uring that al w a ys g e ts

me chanism

g e t t i ng

a c ro s s fine

some th i ng

do n e .

s h a ring information, c on n e c ti n g, a n d s tay i n g i n t h e l o op . F o r real work use the p ho n e or us e y ou r f e e t a n d h a v e a o n e -on-one meeting.

Fr om : Aq eel Kh a n To: Jawwad ; SM; Nadeem Ah med ; Moh sin Kh waj a ; D eni se Davi es Se n t : Fri d ay , J ul y 2 1 , 2 0 0 0 3 : 04 A M Sub je c t : Avic en a

Please Check Welcome Page For Avicena (With New Mouse Overs) http://www.alephinc.net/avicenanewlook/welcome.htm Aqeel Khan
From : Jawwad To: SM; D avi es; fahad; mk; fawz ia Se n t : Th ur sd a y, J ul y 27 , 2 0 00 1 0 : 2 4 P M Subject: www.avicena.com

Fahad can you please take a look at why www.avicena.com throws a Directory Listing Denied. This Virtual Directory does not allow contents to be listed error. And let me know when and how it will be resolved. Apparently NOBODY else gives a shit. Let me know if you need access to any resources.

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From : Sarwar Mu sh taq T o : Te a m In Ka ra ch i S e n t : Fri d ay , J u ly 28 , 2 0 0 0 9 : 2 6 A M S u b j e c t : Re: A v i c en a

AM

REALLY

NOT

IN

THE

MOOD

TO

START

MAKING

MORE

UNPLEASANT CALLS TO KARACHI. CAN WE PLEASE GET OUR ACT TOGETHER???????????????????? 25

From : Jawwad To: SM Se n t : Th ur sd a y, J ul y 20 , 2 0 00 1 2 : 5 0 A M S u b j e c t : Re: a v i c en a l o g o f i n a l

I am really big on symbolism. To my untrained eyes it looks and feels like a typical Ayn Rand-ish character's bid to reach the star (albeit a red one). Can't help the romantic tendencies 26. BTW I am talking about AV3.gif where you start thick and end thin. Nadeem just called and asked about look and feel. Did you guys connect?

25

When Sarwar threw a fit, he threw a fit. Mercifully for us, the brunt of these raging storms was borne by Alephs Karachi team since Sarwar took great pains to ensure that Avicena team hosted in Alephs Karachi premises always felt at home. 26 As with names, we went through numerous iterations on the logo front. The problem with design is that irrespective of how you express it, you can only tell what you like when you see it. This means you end up doing three to fifteen iterations before you hit something that works. And then you tweak it.

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From : Dyl an Steeg T o : ja wwa d f@ ale phi nc . com Se nt: Tuesday, August 08 , 2 000 6:21 PM Sub jec t: Re: SA MO

Jawwad, Yes, I started @ Intel Capital last month. Learning lots, have no time, but having fun. I look forward to the launch email and hopefully {like all great start-ups} you will have an enormous launch party in order to squander 33% of your VC's invested capital in one swoop. Sorry. Fatigue setting in. I hope that all is well with your family.

From : Jawwad T o : Fr ed Posk a D a t e : A u g us t 2 6 , 2 0 00

Dear Fred In our last discussion you had asked us to give you a plan for tackling the actuarial segment for our online education business. The material in the next two pages gives an outline of that plan.

SOA

Survey

The Society of Actuaries recently published a membership survey. The most relevant results and implications are presented below: 49% of sample supported an effort to establish an online university that supported professional development and continuing education activities under Society of Actuaries banner.

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Members indicated a preference for Employer and Society of Actuaries sponsored events compared to events conducted by third parties and for profit companies. 21% of the sample expressed a definite desire to use online courses for professional development and continuing education efforts. 40% of sample expressed a desire to mix online courses and conferences to support their continuing education activities. Employers generally underwrite professional and continuing education expenses. As a result the target segment is relatively price insensitive between the price range of 600 1500 dollars. A price tag beyond that level would have an impact on demand for courses. 73% of the profession has access to the Internet at home as well as at work. 50% of the sample felt that continuing education courseware should focus on new and emerging issues in the practice area. 74% of the members also agreed that the choice of subject was the key decision factor in their selection of a seminar or conference. For us this has the following implications: One of the largest membership organizations in the profession has validated the need for an Internet based professional development workplace for Actuaries. A significant percentage of members have validated the need for online courses. We can increase our chances of acceptance by the profession if the course ware is co-branded by Society of Actuaries and is offered as an Employer Sponsored program.

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The choice of subjects can have a tremendous impact on the popularity and acceptance of a course. Strategy going forward 27 The drivers for the strategy are credibility and acceptance. The results of the survey have already set a direction for us. Our objective now is to enroll the full support of Society of Actuaries for our course development efforts and to get as many employers onboard as possible. Although the ultimate end users are still individual actuaries, we feel that the right distribution channel is the employers and the Society of Actuaries. The following steps will allow us to move in that direction. Conduct an additional survey. The objective is to determine membership The survey has

preference for subject areas that we are working with. step is to roll out the survey over the next four to six weeks.

already been developed and tested with a sample of eight actuaries. Next

27

This email marks a key transition in the Avicena story. Before I wrote the strategy paper for Fred Poska, I was sure that the market for our product was membership of professional bodies - defining us as a Business to Consumer (B2C) venture. Point (3) of this note marks the transition that changed our focus from a Business to Consumer model to a Business to Business (B2B) one. Just as Adrians note later on in Chapter 12 marked the end of Avicena for me, the transition from B2C to B2B marked the beginning of the end for us. From a distribution point, it would have been simpler and easier to launch what we had with Society of Actuaries and their 16,000 strong pool of members than to go after individual insurance companies, selling them on the need for training and professional services for their actuarial employees. In the end, the debate boiled down to choice of distribution channel and medium used to capture and attract customers. We dumped simplicity and added a layer of complexity that would move our time to market by another six months. More on this later. To Freds credit, being the sharp professional he he pointed out that this transition would dilute focus and harm our chances for raising money and ability to execute. is, our our

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Meet with the Society of Actuaries and present options for developing cobranded courseware. We would also discuss opportunities to use Avicenas platform and technology to leverage existing content developed by the Society of Actuaries. Follow up would include approaching additional international membership organizations in United Kingdom, Australia and Canada. We have already established contact with the Society and are in the process of arranging the first meeting. Meet with mid size reinsurance companies and present options for developing courseware for in-house training programs and clients. In case a program does not exist, we propose the establishment of a virtual training center to leverage existing content and training programs. Client Actuaries and Underwriter training is a significant value added service provided by reinsurance companies and the virtual training program is a very costeffective way of providing that service. Reinsurance firms are the most efficient distribution channel for rolling out our product to the insurance industry. A mid size reinsurer has a portfolio of 100 500 insurance companies who would get exposed to Avicena technology and courseware, when the reinsurer signs up with Avicena. Create visibility for Avicena by attending seminars targeted at Valuation actuaries and Reinsurance actuaries. We are now covering all the seminars offered before the Society of Actuaries annual exhibition in October 2000. We feel that the events are an excellent networking opportunity as well as a chance to show off and get feedback on our products. Use the Society of Actuaries annual Exhibition in October this year as the official launch date for our course offering. I hope this answers some of the questions you have had in your mind. look forward to seeing you on Tuesday, the 29 .
th

Best

Regards.

Jawwad Farid

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From : Jawwad T o : Bar b ar a @ s o a. or g 28 Da te: 27 August 200 0

Dear Barbara Thank you very much for your email. As requested I am enclosing some

additional information about Avicena LLC. We are a year old online education startup that teaches Applied Finance on the Internet. Over the past twelve months, we have developed and refined our teaching methodology, our online learning environment, our course generation processes and our technology that allows our customers to generate customized courses on the fly. divided in four major tracks: a. Derivative securities and applications b. Stochastic Models c. Asset Liability Management d. Intersections (A compilation of selected courses that build on principles of Financial Economics, Investment & General Management. Examples include Applied Strategy, Value investing & Fundamental analysis) We founded this company because we believe that: Our planned course offering are

28

In August 2000, three months after our move to California we made contact with Barbara who was more than receptive to taking a look at what we had to offer. Our response we will get back to you later. If fate is kind enough to give dont slam the door in its face. you a chance, please

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As the paths of banking and insurance industries merge, there will be an increasing need for course ware that transfers the ability to apply new knowledge and skills to practical problems in convenient, self controlled and self directed environments. For professions responsible for the design of financial products, there will be a need for a broader in-depth understanding of complex financial securities and transactions. Professionals within the banking and insurance industry only have a superficial understanding of derivative instruments, stochastic models and asset liability management. There is strong and definite interest on part of the same professionals to educate themselves, but the technicality of current literature in these fields prevents them for taking any corrective action. We feel that an opportunity exists where we can create valuable options for professional development and continuing education for Society of Actuaries membership. One such option is the development of co-branded educational courseware on the Internet for continuing education and professional development needs of Society members. I would very much like to meet with you and the continuing education department to present some of the ideas that we are working with as well as discuss scenarios where immediate cooperation between the Society of Actuaries and Avicena LLC is possible. I will call you on Friday afternoon (August the 23 rd ) to setup a mutually convenient time. Best Regards Jawwad Farid

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Fr om : Ja ww a d@ Sch oo l T o : D yl a n S te e g 29 Sub jec t: Re: SA MO Da te: Fr i, 8 Sep 2000 17:02 :37 0700

Dylan Here comes the awkward moment. We are still trying to go live in 10-15 days (yes, it never ends.) But at least the site is at a level where we can start showing it to people without undue embarrassment. Three favors 1. Its still in Alpha (beta to follow in 10 - 14 days) but you will get a link emailed to you sometime in the next one week 2. I will also send you a 2 page exec summary. 3. I need an introduction within Intel Capital. Would you be in any position to help out on that side? 4. Is there anybody else within the institutional VC side that you think would be interested? D&T has agreed to accept us as a formal client. They need to do their regular due diligence before the process is completed but they have agreed in principle to do it. They have also introduced us to a law firm they work

29

Dylan and I had already worked together on the strategic positioning and benchmarking paper for Avicena with respect to its competitors. This was our last class project in the strategic management course taught by Ralph Biggadike. Besides strategy, we had also shared a group in Turnarounds with Laura Resnikoff and had become good friends. Given his role at Intel Capital, he was a natural choice as a peer reviewer for business plans, projections, and investment memorandums.

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with (Paul Hastings) and have agreed to shop the biz plan around within the angel community in Southern California. I am in NYC these days checking out competition and talking to some potential customers but I should be back by the 19 th of Sep. Let me know if you need any additional information. The business by the way is online education and we are targeting finance for professionals and practitioners. It would be nice to get Intel onboard as a customer also. Take care Jawwad
From : Dyl an Steeg T o : J aw w ad Se n t : Fri d ay , S e p te mber 0 8 , 2 0 00 2 : 20 P M Sub jec t: Re: SA MO

Jawwad, Good to hear from you. There are two areas of focus within Intel Capital which I believe you may or may not fit within. The first is Services, and the second is E-Business. I'm leaning towards the latter, but am not sure. Let's talk this weekend. be right in looking at this. The tricky thing is, Intel Capital typically wants to see a new technology, ability to increase the demand for chips, or a high-chance of return. I know that you were working on a new way to aggregate and provide content. Perhaps we should focus in on this ability, and use the education focus as its first application. {Writing while thinking}. I'll call you. I'd like to see your latest executive summary and

proforma. I can start looking @ the org chart here and find out who would

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Dylan
From : Jawwad@avi cena T o : D yl a n S te e g S e n t : S a t ur d a y , S e pt emb e r 0 9 , 2 0 0 0 6 :51 A M Sub je c t : Avic en a

Dylan This is where its gets confusing. Even I am not sure where we would fit in with this classification... May some background info will help How do we see our selves? We see ourselves as a business that produces courses on applied finance (How to do Proforma Projections to Asset Liability Management to Portfolio Construction to Interest Rate Models and Derivative Instruments). There are two sides to this business. The first is content generation where we feel we have an edge due to the non-traditional and unconventional approach to teaching that we are taking. Our learning experience is a four step process. a. Introduce terminology and notation (break the code, understand the language), b. Introduce basic principles, c. Walk through applications and d. Provide feedback on performance. e. Add an additional layer that allows customers to generate custom courses to learn what they want and you have a powerful combination The second side is marketing the stuff. The first target market (proof of

concept) that we have selected to work with are actuaries and corporations with structured and unstructured training programs. If the program exists we are a supplement, if it doesn't we are a very powerful alternative to existing

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options.

Once the product has been tested and refined, we scale it up to

universities and distance learning programs (think of all the junior colleges with dreadful finance professors and the processors they would have to buy to support this venture). The key thing is to position this as a supplemental choice rather than a competitive threat or alternative How does it fit with Intel chip making business? I primarily see this as another application that pushes more people to spend more time with their computers and on the internet -demand for servers & hosting services Are we services businesses? I am not sure since traditional definition of service implies fixed costs and overheads and manpower and labor. Yes there is an aspect of all these within our venture, but once the content is up and running, you can recombine it, repackage it and resell it as many times as you want. Which is one reason why we believe that this will be a very profitable venture once we get beyond a critical mass of courses that can be licensed on an annual, per seat basis. The exec summary is ready and available but the numbers are all out of date. I would need to spend some time on that before I can send that you. But the link should be with you before the end of next week. In the mean time if you have any questions at all, please feel free to email me. Take care and thanks Jawwad Broad based Internet Application --

From : Jawwad@avi cena To: SM; Deni se Davi es; Fawz i a ; A sh ar ; N ad ee m; N a u sha d S e n t : W ed n e s da y , S e p te m b e r 06 , 2 0 0 0 5 :28 A M Sub je c t : Avic en a

Ladies and Gents...

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The site is up at www.avicena.com. The user id is denise, the password is denise1. Please go through the first course called corporate finance We have all put in a tremendous effort into this between January and now and have made really outstanding progress almost on all fronts and have also learned a lot about how this would come together. All the stuff is out there. But ... Notice there is always a but. There is still a lot to be done. Naushad is facing a resource crunch and needs more people to meet the deadline, I had a long conversation with him and his initial need is two developers with Java experience and expertise. According to him the resources do not exist within Aleph. I have asked him about the COCO team and he is not sure if there is anybody there that he can use. We now have two questions. We have the site. We have the first course. There are some packaging issues and some stuff left over that is being taken care of by Naushad. Between Ashar and Sharleen and Mohsin (employee number four), these will be worked out over the next two weeks. The big problems for us are the following issues: 1. Since this is the first time the site is working with a full course we are getting a lot of feedback on User Iterface issues. 2. Course input has been a total nightmare without an automated way of entering stuff inside and that brings us back to the backend question 3. Testing engine / part is also critical for moving forward and getting customers on board.

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How do we want to work with these issues? I know that the answer in our minds is to lets get funding and then sort it out but it will probably create more problems in this case. We have created a lot of momentum in the last two months and putting a hold on the project, may just as well kill it. There is a time to market issue here also and an urgency to get more customers on board. direction. Please let me know how we want to proceed on this. I will look forward to your comments. Take care I also feel that we are now within an arms reach of something really big and stopping short will just push us in the wrong

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Takeaway
Inspiration: journey. unexciting. is no beef. Anger Management: There has not been a single Inspiration follows Without the is just is and the beginning boring part of a What later dull dull, boring and there

occasion in my life where I have looked back and said losing my temper was exactly the right move at that time. DO NOT LOSE YOUR TEMPER. Sales long. cycles: There is Business a big to business in sales buying cycle is

difference

something

for yourself and buying something for which you need corporate and official approvals. You need to start selling long before your product is ready. reduces Ideally yours pre-selling and his and he a product You has an to a customer one to to risk. have some

underwrite

expenses

opportunity

preview things before they are set in stone. Validation: Pre-sales also provides an opportunity to validate your idea at a concept stage. Ideally look for market validation for your core selling points. For the e.g., email the Society of Actuaries us a few survey quoted in

above

saved

thousand

dollars

because it delved deep into the minds of our initial target audience, asked and answered questions that we wanted to get answered, as well as created credibility in front of investors.

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Strategic shift: Do not change a simple strategy with a more complex one. Do not let go of a quick win that will get you in front for of customers and closer complex to or generating revenues something more

longer term. Small wins first. Touch a customer: (no the An opportunity how small) to work with a be or

customer perfecting

matter

should your

always strategy

preferred over an opportunity to work by yourself on product, perfecting improving your valuation.

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Chapter Eight Process

: Product Development Team US Identifies courses for target segments Draws out course outline Market Tests outline

Quality Assurance Team US Approves outline for submission to offshore content development teams. Quality Assurance Team: Offshore Approve content for submission to knowledge base.

Standards Team: Offshore Ensures that content generated follows guidelines for copy rights, flow, ease of use, applications, formats, etc

Content Development Team: US Generate objectives for the course Identifies resources with relevant backgrounds Generates course definition Set atandards for the outsourcing team

Feedback to Offshore and US Teams

Content Development Team: Offshore Fills in course definition

Direct customers and relationship partners

Knowledge base of concepts and courses

Distributors and alliances

At

the

heart in

of

our and

business we to QA

model had work

were to put

the in

content place

generation Karachi we & and we QA were

processes set U.S., only up &

California. Content afford

Under with U.S.,

ideal four In in

conditions, Offshore, reality,

teamsProduct

Content here

Standards

Offshore. twome

could

the U.S. and Ashar and Sharleen in Karachi.

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Since out time teams

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still it making

had

to

do

everything to we then got even

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worked,

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hopeless

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we could still deliver something. The only was emails for hint section different for components needs This that on and at the published
30

included a at few in one from and in the of

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30

The design and Sloan Management Zack, H Z.

development of information products, Review, Spring, 1996, Meyer, M H &

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From : j a wwad@ avi cena To: Avi cenaKar achi ; Aleph K ar ach i ; SM; De nise; S e n t : S un d ay , S e p t e m b er 1 0 , 20 00 8 :1 3 P M S u b j e c t : C ou r s e G en era ti o n A s h ar a n d S h ar l e e n

Please work within this process for all future work on the courses side. Let's take a step back from the course on ratio analysis and see how we can proceed using the following process. Once we have done that, we can go back to the text and use sections and chunks of it in the concepts that we decide to teach. These are just guidelines that I had developed working on the first course. They need to be formalized and improved and if anyone has any suggestions about what needs to be done, please feel free to let me know. Jawwad Process for generating courses 1. Create outline in the standard definition format. The standard definition format is a. Notation and Terminology b. Basic Principles c. Applications Feedback (Questions & Answers, MCQ's, Examples, Additional Cases) 2. Pass the outline back to the course generators for initial review and feedback. Add more questions, materials, comments, items, etc to the outline and the standard definition document. Take care

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3. The outline serves a key purpose. It is a blue print of what we want to teach. What is it that we want the customer to walk away with when he is finished with the course? What is it that he will retain when he is done? 4. The key is to remember the objectives behind each section of the standard definition format. 5. Notation and Terminology are only meant as introducing base definition and material. These items are generally too basic to warrant a full course or too simple to be covered as a standalone concept 6. Basic Principles is what you want to teach. What are the six things you want the person to remember, retain, and learn at the end of the course. In the first few iteration the focus should not be on generating content, but more on identifying and designing the course objectives and figuring out what is the best way of covering that material. As the course outline get more defined and we are able to identify even smaller concepts that we would like to teach, we start focusing on what is the best way of teaching the material 7. Our objective should be that courses should always be taught by example. Avoid long unbroken chains of text that elaborate on definitions and concepts. Always engage the customer with an example that he can related to and follow in his head. This is the best way of teaching. People tend to get lost in the abstract 8. Application. Application will always be a comprehensive walk through case that lays out what needs to be done and brings together the material covered in Notation and Terminology and Basic Principles. This is really important. If it didn't warrant an inclusion in the case, it should not be there in the first place. On the other hand if its important enough to be included in the preceding material, it has to be illustrated in the case.

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9. Sometime we may need two separate cases to cover all the concepts covered in a course. When this happens, we need to be more careful about how the course is structured. The best possible solution in such a situation would be to break the course in two parts 10. Finally remember that the customer has to have a sense that he walked away with something. That he achieved something and learned something. This has important implications for motivation as well as the optimal course length. Once the standard outline has taken shape, we can go ahead and start filling in the content. However it may be advisable to repeat the same exercise for the concepts at a lower level.

From : j a wwad@ avi cena T o : Avi ce na K ar achi , Al e ph K ar ach i, Da vi e s, SM; S e n t : S un d ay , S e p t e m b er 1 0, 20 00 5 : 4 2 A M Subject: Re: cour se 2

Sharleen I read the material once again. More suggestions. 1. First, please don't look at this as criticism. These are just point of views that I have developed over the past six - eight months and Ashar has also experienced them on a first hand basis. This is not a reflection on your work, just guidelines for all of us. (have some free time now since one of my appointments got cancelled.) 2. Before any of us write content we have to imagine who is the ultimate end user of our products and under what environment will he be using our courses. Our ultimate end user is someone between the ages of 25 - 50 years, who wants to learn something new and different and would like to

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use the net to do that. There are a few scenarios that you can play with to put things in perspective a. He is probably working late at night or early in the morning, is probably working with a lamp light in a dark room that is forcing him to go to sleep. So you have two enemies. He is tired and he is sleepy and he is somewhere that is literally screaming at him to drop this and go to sleep. How do you keep him up? You can only keep him up if you keep him engaged. If you talk to him and ask him to do things or throw things at him that are interesting or relevant and that he can associate with. So we post questions about what is the right price and how can you figure it out. Or here is a puzzle; try and solve it. Or even present things at an intuitive level (Stop reading. Try and think this through before you move forward.) b. Scenario b is even more complicated. Now the same guy is working from office and needs to learn something in a hurry either for a meeting or a conference call or simply because he has to understand this before he leaves for home. In this scenario its important that we use a different approach. What are the seven key things he needs to know about ratio analysis. Why is it important? How does it make sense at an intuitive level? What is the shortest and easiest route for him to understand these? Once again engagement is important because it gives him a sense that he is picking up something. It also allows him to focus on doing something rather than reading it. What is the bottom line? 1. Think of yourself when you are tired, sleepy or in a rush and then think. How would I react to what I just wrote if I was in that state of mind? What can I do to make it more attractive for myself? 2. Don't use definitions. Use creative ways of showing people what you mean. If you have to use a definition don't go beyond a couple of words (one short sentence is all that you can play with)

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3. Use lots of examples and opportunities for engaging and interacting with your customers 4. Use real life brand name exciting examples and real data. God knows there is enough out there 5. Keep it simple, concise to the point and attractive 6. Be very very very careful of copy rights issues. Let me know if you have any comments or suggestions. Take care Jawwad

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Takeaway
On Process: Whether it is quality assurance, productivity, or a decision to scale up, there is one common denominator that determines how good a job you could possibly do. That denominator is process. the process and everything else will fly. process and thou shall wilt, wither away and die. Do not fall in love with your process. Fix Ignore the

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Chapter Nine Launch

The a

ides

of pump

launch. me full to a

Take of

me

away I

from

sleep

for

a week, jet

Mountain

Dew, put never

me on been, my

plane

city

where my

have

dent my luggage, book me a room in a lousy 19thcentury cards, decline and The then only I hotel, crash my my key I overdraw server, me. That left account, my or visa are to the cancel ignore more out instructions, application, less sums its it. obscenities PG-13

presenters

call thing want

because rating. Doesnt launch, you Aleph where Sarwar from will

this

book

retain

matter when the take

how the

much whole Karachi have

you to

prepare push down got out was no no that

for with

your you. point if very Just demo. that

time

comes

the to on

switch, a

block team warm it were and an walked

and they my

Appsys would end. no

me

hadnt

buffered But There system a the be but

the

winds

blowing venture

then

all money.

anticlimactic. c a p i t a l i s t s 31, a We I really did neat up get

customers, and few

even

neater we the check

quite would

leads

started corner

following thought

million-dollar waiting around

31

People with money who write big checks for small companies so that they can make even more money for the people with money.

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when Had I would least

it

all

came

together it

was

nowhere end and

in

sight. I at a

foreseen have a few

this

disappointing easier two the that

result,

taken in

salvaged were weeks. You you the At

relationships the level to years post

damaged

beyond more was a

repair counter able two

pre-launch launch

personal

depression were had world

intuitive show to the

phenomenon. world what but

finally slaved

produce

wasnt interested. In a pacing on sense, to your to to to launch is the and buy first to dont your left and give will threw rounds of get many it

milestones right You for or customers need you the figure right boxer out and with

come. first swarm

Dont launch and be

expect

expect over (get it be in to it all the the

over to

product. tweaked

have what

enough needs these

reserves fixed If you you who

reach

important all, nose

customers takes the

swarm). it

launch

broken

towel and couldnt make it past round three.

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From : Jawwad@avi cena To: N ad ee m Ah med ; D en i se D a vi es; SM; A l ep hK ar achi ; A le ph Bo s t on; A v i c en a K ara c h i S e n t : T u e sd a y , S ep t emb e r 1 2, 2 0 0 0 3 : 0 4 A M Sub jec t: Avic en a New C o ur se and Si te

Davies, SM, Nadeem, Fawzia, Mohsin, Naushad, Asif, Saif, Waseem, Sabeel, Ashar, Sharleen, Fahad Zubair, Fahad Shameem Thanks a lot. I cannot express my gratitude for what you have done. You have all done a tremendous job in getting us where we are today... I can't apologize for keeping all of us awake (since it is still not over) at all time of day, night, family quality time, personal time and other unreasonable demands that I have made since January but I can assure you that together we have built something that has no parallel in the world. The technology, the interface, the content and the quality of everything that has gone into Avicena has been just world class. Of course this doesn't mean that the work by any chance is over. We are almost there. Its the last 3% - 4% that will drive some of us into nervous breakdowns and burn outs. But it is the last 3% or 4% that will get us beyond and better than anything anyone has to offer anywhere in this world. We don't want to be world class. We want to be in a class of our own, a class that is good enough to change the world. Once again gratitude on the part of the team at Avicena for the support and commitment shown by everyone involved in making it happen. Bear with me for a few more years (ok... ok... months... just a few more months) and the world will come knocking on our doors. Take care Jawwad

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For those of you who are wondering what is this about it. Check out (www.avicena.com) Click on courses, click on corporate finance, and behold, We are live and kicking. Naushad can you pls make sure that everyone associated with Avicena get a copy of this email. SM please make sure that Saif and Sabeel get this. Ashar confirm that Sharleen gets a copy of this message. BTW between all of us... registration still

doesn't work

From : Bates, Ken T o : J a ww ad A h me d F a r i d Se nt: Tuesday, October 24, 2000 1 2:5 0 A M Sub je c t : S ur f ' s up

If you pull your nose away from the monitor screen once in a while, you'll find that REAL Californian's gotta know how to SURF! (not the "web", the waves!!) Haven't heard from you and miss our chats. Did you give me an Avicena password? I try to check the site, but don't have a password. Let me know, so I can take some of your finance courses or give you some feedback. Love to Fawzia and Amin (no others yet, right?)

From : Jawwad@avi cena T o : B a t es , K e n Se nt: Tuesday, October 24, 2000 8:4 7 PM Sub je c t : Re: S ur f ' s up

Hello there... I have kind of been living in an alternate reality version of the real world where there is no sleep just caffeine and servers crashing right left and center. One last minute esoteric bug has now delayed the launch of Avicena

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for more than two weeks. We finally figured out what was wrong and are working on it. Chicago went very well. Four demos lined up for sometime around this

week. Speaking to another group on the banking side of business that has customers we need. And we have the tech that they are looking for. Looks like that we may actually have that half a million in revenues before the year is out. Insha Allah... Everything else is pure madness. The user id is denise. The password is denise1. It goes up and down as we update it and test it and crash it. But its normally around. If you cant get in at all, try half an hour later, or call me. Unfortunately to become a real Californian would require that I switch from my very healthy lifestyle of going to office, working, sleeping at office, working, coming home, changing clothes, working, sleeping at home, working... going to office... working... eating at office...working............. I miss Harvey... Was in Chicago the other day 32....

32

What are exhibitions really good for? In real terms the Society of Actuaries (SOA) Annual Exhibition, the launching pad for Avicena, didnt do that much for us. It set a deadline that we had to meet, which we didnt. It gave us an opportunity to talk to a group of customers and see how they would react to our product concept. Which they did. It generated a handful of leads that we tracked down and followed up after the exhibition. Did we close any major deal? No. Did we sign up any customers? No. Did we rock the world with our cutting edge technology? Not really. Did we follow up with Barbara? Ouch. Was it worth it? Yes. Participating in exhibitions is something that you have to do to create visibility, traction, keep an eye on competition as well as solicit customer feedback in a cost effective fashion. You get better at it with time and practice. Focused events like the SOA affair are recommended because they bring your target market to your stall. The rest is up to you.

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Fr om : Ja ww a d@ Sch ool T o : c l u ster x 0 0 Se nt : Mo nda y, N ov emb er 06, 2000 1 0:02 PM S u b j e c t : Up d a t e f r o m L A L A L an d : J a ww ad Fa r i d

Remember me... We are now live. The team has spent a tremendous amount of time and energy in rolling out the site. www.avicena.com has been up from 27 th October and moved into Beta 33 Testing on 1 st November. Avicena LLC, the business, was officially launched at the Society of Actuaries annual exhibition in Chicago on 15 th October. We have been on the road talking to potential customers and industry professional, eliciting feedback on the product, the technology and positioning. I wanted to share the work we have done on the technology, processes and content fronts with you. So here goes (preceded with a shameless self promotional plug)... For those of you who survive the plug, there is a Beta User Instruction Sheet at the end.

33

Quality assurance on software at programming teams happens in five key stages. A programmer writes code and tests it on his computer (also known as unit testing). When he is satisfied with the overall quality he moves it to an environment where the project team code resides. This environment is known as dev (short for development). Once the quality assurance team is satisfied with the code residing in dev and wants to target it for release, the code is moved to alpha. Within alpha code undergoes more testing but is still not visible to customers. From alpha the code migrates to beta, a customer visible testing environment where external users also become part of the quality assurance team. From beta the codes graduates to production, marking release or live environments.

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Shameless self promotional plug 34 Avicena is a knowledge management company, in formation for a year. We teach Applied Finance online and our focus is on functional knowledge what is it that you have to know to excel at work. The target market is small businesses and corporate customers that need scalable learning solutions for employees, customers and stakeholders. Please feel free to contact me if you have any problems, comments, suggestions and feedback. Looking forward to hearing from all of you. Jawwad Farid Avicena LLC

34

Notice the switch No longer actuaries professional bodies B2B language that was expected lead to a higher valuation.

or to

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Takeaway
Mind your manners: how Say many thank times you. you Say say sorry. it It doesnt matter it, will

never be enough. Disappointment: Be prepared for the launch event to

fail and disappoint you. If you feel the need to savor your disappointments, I recommend country music, nachos with cheese and a bottle of non-alcoholic sparkling apple cider. Self Pity: Do not let the wallowing period last for more than a day.

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Chapter Ten Business Development

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From : Jawwad@avi cena Se nt : 25 Febr ua r y 2001 00:31 T o : J a ww ad Li s t S u b j e c t : Up d a t e f r o m L A L A L an d

Well its time for one of those warm and mushy emails from LA LA Land. Its been a long time since I sent one of those out. Got something in the email today from my incubator that I really really really wanted to share with you. You know its that engineering / Dilbert thing look what a cool toy I bought so bear with me. Things have been moving at kind of hectic pace. I have been all over the world since late November and finally landed in LA two weeks ago. Its 2a.m. right now on the pacific coast and on a whim decided to take time out and tell all of you that New York was never as bad as I made it sound and that I miss you, the school and the city. We have finally managed to wrap up all the technology issues. Considering that I told my partners this will not take more than three months, the fact that it took just over a year is very humbling. Also found some money in the most unlikely of all places. Well technically speaking, I still havent But as a result the found it, just found a group of people willing to listen to our presentation, read our business plan and make encouraging noises. business plan is back to being the bane of my existence. We are now all the way upto version 35a. When I look at the projections in version 1.0 and the projections in 35a, I am quite surprised that the SEC is not knocking on my door. The relationship with the incubator is still very warm and encouraging. They havent started blaming me for all the evil in the world, NASDAQs current problems, the dried up funding market as well as the rains in southern California. But I guess if I keep on going at my current rate, that too will change.

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On the learning side, learned that your first most obvious and most cherished market segment is not the one that generates the most revenues first. We have gone from being a professional development service targeted at finance professionals to a professional development service targeted at the insurance industry to a company that develops courses for banking professionals. And guess its the bankers who are willing to write the check. Not the finance professionals, nor the insurance companies. Well anyhow the good news is that we are currently working with atleast three banking leads, the product is our most recent offering, a course for credit & loan officers that is equally valuable to the guys in the back office and the management committee. No, I am still not managing oodles of people. Just a two member really really dedicated team in Karachi, one really devoted and faithful CPA in LA, two down to earth interns and the relationship people at the incubator. Apparently you need serious money to pay people and besides the group above, I have had major difficulty in finding young, driven, talented professionals willing to work on faith and sunshine. If you find some, please send them my way. Now for that cool toy bit I was talking about earlier. There are two files attached to this email. The first is a plain html file; the other is a flash shockwave object. Save both of them in the same directory (any directory will do). Then open the html file (Internet Explorer will be just fine). You should see a 30 second flash presentation about Avicena. We are using this to market our product as well investor presentation. Let me know what you think. address. Oh and one more thing. If you are looking for really serious punishment, I converted our two brochures to pdf files. They are 1.8 Meg zipped - each. Send me an email if you would like to see those and our creative juices at The contact details are still the same Pacific Time and this email

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work or your mailing address and I will mail you copy. If you want you can also download the brochure from the following link http://www.alephinc.net/thi/AvicenaBrochure.zip. That is all folks. For now. Time to crash and burn. Take care Jawwad

From : Dyl an Steeg T o : j a w w ad @a v i c en a Se nt: Saturday, March 03, 2001 11 :07 PM S u b j e c t : Re: Up d a t e f r o m L A L A L a nd

Jawwad, Hey there. Gave the attachments a try, but only got a purple screen 35. Dunno. I'm running a PII so the computer shouldn't be the issue. All the best with the changing b-plan. Dylan

35

What will go wrong will go wrong. We bombed on this email. I have already written a bit about how the Quality Assurance (QA) process works in technology companies in earlier foot notes. What I have not written about is how difficult it is to find good QA resources and get a good quality assurance team up and running. Unlike programming talent, QA talent comes from a different stock and back ground and is in far shorter supply. Which leads to QA functions that are barely adequate when faced with the needs of a rapidly evolving product.

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From : Jawwad@avi cena T o : D yl a n S te e g S u b j e c t : Re: Up d a t e f r o m L A L A L a nd Da te: Sun, 4 Mar 2001 01 :25 :52 0800

Dylan My apologies. I goofed up. There is some issue of a shockwave object not downloading and I have received other complaints also. Anyhow we have now put the link on the web and you can try it from this link http://www.alephinc.net/avicena/demo.html Take care Jawwad

From : Dyl an Steeg T o : j a w w ad @a v i c en a S e n t : S un d ay , M ar ch 04 , 2 0 01 1 0 :5 5 P M S u b j e c t : Re: Up d a t e f r o m L A L A L a nd

No prob. Better to beta test with friends than prospective funders ... :-)

From : Jawwad@avi cena T o : D yl a n S te e g S u b j e c t : Re: Up d a t e f r o m L A L A L a nd Da te: Sun, 4 Mar 2001 15:04 :31 -08 00

You know the funny part is that we did test it internally before we sent out the email, but apparently we failed to cater to the fact that different people have different security settings on their machines and that the shockwave

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object will fail to load. Luckily we found out pretty quickly when some one in the first group reported not being able to run the animation. You learn a new thing every day. I hope things are going well at Intel. Did you catch the red herring coverage on e-learning. Take care. Jawwad

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Takeaway
More on branding: You can only educate the customer when you understand what you are selling. What that pace tool. things 80% of were you we selling? learn with really the The essence and of in a our pitch was

could

smarter right

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focused

online that

learning the 20%

acceleration that covered at an d

You could further leverage this by focusing on mattered practical covered functional, was baring knowledge in required

work. And you could do this in an area (Finance) that traditionally complications, its door. Yes we were web based, than were yes we were online, yes we mystique audiences traditional outside

where and

cheaper pace. These

traditional all replicable

educational functional

opportunities and yes you could learn at our own time attributes that could very easily be mimicked by our competition. What differentiated us was how we stored information (the Zack and Meyer paper), how we made the process of acquiring the right material flexible and how we generated that content. You could a make change a in case our that even this (our

differentiating factor) could be replicated but that required stream competitions years later architecture that mindset that was not supported by industry tools or even main thinking. Seven still hasnt changed.

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What

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Chapter Eleven The Silver Lining or Biz Dev II

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36

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From : Jawwad Farid To: Jason Kubic a ; SM ; De ni se Davi es C c : C ar l o s Se nt : Th ur sd a y, Febr ua ry 22, 2001 4:1 7 P M Sub je c t : E -E du ca ti on ve n tur e

Jason Carlos Desmaras, Class of '00 mentioned his conversation with you about Reuter's interest in e-education. I work for Avicena LLC, an online education venture in Orange County. Our focus is only on the financial services segment and I am sure there are areas of mutual interest that we can talk about. I would like to schedule a telephone conversation and if you can let me know when would be a good time for you next week. I am on Pacific Time but still keep New York hours. Look forward to our conversation. Warm Regards Jawwad Farid Avicena LLC

From : Jawwad@avi cena To: Jawwad Farid ; Jason Kubi c a ; SM; D eni se D avi es C c : C ar l o s Se nt: W ednesday, March 07, 2001 12:2 3 PM Sub je c t : Re: E -E du ca tion ve n t ur e

Jason It was a pleasure talking to you this morning.

I sincerely hope that

over the next few months, we will get a chance to work together. As promised I have enclosed the Avicena materials with this message. I think the best place to start is our very short flash presentation that gives a quick overview of who we are and what we do. Please click on the following link to see the online presentation.

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http://www.alephinc.net/avicena/demo.html I have also attached a short executive summary followed by the Beta user instruction sheet that will provide you with the passwords needed to access the website. At the end of this email are two additional links to our most recent product brochure (pdf file) and the recent coverage in Red Herring on e-learning. Additional materials, including a detailed business plan, are also available on request. We work at with corporate customers needs to address by specific its knowledge, The

application and skills gap. targeted specific

Avicena develops standard and custom courses identified customers.

learning

environment also generates feedback on individual learning and areas requiring further training support. The courses are instructor-less and webbased (online, Internet) allowing for scalability, 24 x 7 access and instantaneous, standardized, global rollouts of new training curriculum. Content drives this business and for us the important piece was getting the production processes right. We now believe that we have a very good grip on those. Beyond that, certain key product features determine how successful & popular an e-learning solution is with customers. Flexibility, fit, emphasis on learning, availability on demand and depth and impact of content are some of the issues that we identified earlier on and have emphasized in product design, technology and production. What I would really like to do is setup a time for a 30 minute demo after your trip to Europe. We can also use it as a detailed Q/A session on the best way to move forward on this. convenient time to arrange this. forward to our conversation. Jawwad Farid Avicena LLC Let me know when would be the most Meanwhile if you have any questions or

comments that I can answer, please feel free to contact me. I will look

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From : Jawwad@avi cena Se nt : Mo nda y, Mar ch 0 5, 2 001 4:1 0 A M To: Pear son Con tac t ; SM; Re ema Cc: Denise Davies Sub jec t: Hel l o th er e. . .

Hello there. Remember me. I do disappearing acts - getting very good at them. Life has been quite crazy since the last time we spoke but I am happy, busy, putting on weight, having the time of my life, getting my innocent cousins (Reema just joined us last week) and friends and family involved in my .com misadventures. I have a few things that I wanted to show you. The first is a flash presentation that we have been showing to investors and customers. http://www.alephinc.net/avicena/demo.html Second is the executive summary, which is also attached. Third is a 1.4 Meg zip file with the latest Avicena brochure targeted at banking customers - http://www.alephinc.net/thi/AvicenaBrochure.zip We are trying to start a conversation with Sylvan ventures to explore the possibility of them coming on board as a strategic investor. Then I thought of you and Pearson and wanted to pass this by you. Pearson actually has quite a few ventures in place / on the ground with some of the b-schools (Michigan and Wharton). There is also FT knowledge.com that leverages FT's content and its relationships. However there is nothing visible as yet and certainly no venture focusing on the Financial services segment or Finance in the e-learning. Couple of questions:

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1. Is this worth exploring? 2. Would Pearson be interested - especially now that they own all major respectable publishers? 3. Who would be the best people to talk to and what would be the best way of getting an introduction? That is all for now at least on the business front. Work is cool. Difficult for me to imagine if I would ever be fit for a regular job after this gets over. I am seriously thinking of retiring and just staying home, raising kids, cooking and watching x-file reruns. Take care Jawwad

From : Jawwad@avi cena T o : D yl a n S te e g ; n y er i n ca Se nt: Monda y, Mar ch 0 5, 2 001 4:23 AM S u b j e c t : Re: Up d a t e f r o m L A L A L a nd

I had been on the road since late November - Canada, Tokyo, home (as in Pakistan), Middle East, and finally got here mid Feb. On the money front we have now moved our focus to some of the larger groups - Sylvan, Pearson Education, New Horizon, etc organizations that have been big before and are now looking to throw chump change (for them, but not for us) at fresh new ideas (like ours). Take care Jawwad
From : Jawwad@avi cena To: Ralph ; Jawwad Li st ; TMP Gr ou p; Se nt: W ednesday, March 07, 2001 6:13 AM S u b j e c t : S to p Pr e s s ! Upd a te f r o m LA LA L an d

18 long months and today we receive our first phone call from a very serious customer...

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Not that its money in the bank (btw it is a bank), but we are meeting them on Monday and after a 4 week beta, there is a good chance that they will come on board permanently with 50 licenses and two of our courses. Pricing is still a question mark but we will work that out Inshah Allah 37. After I stopped screaming and jumping (yup guys do that too), the first group I thought of were you guys and gals. Just thought you would like to know. Take care Jawwad Farid Avicena LLC Afterthoughts Quite a few people had a problem with the flash animation that went out. We have now put it on the web http://www.alephinc.net/avicena/demo.html and the brochure that made the sale (this is a 1.4 meg zip file) http://www.alephinc.net/thi/AvicenaBrochure.zip

Fr om : Pe ars o nC ont a ct To: Jawwad @avi c ena; SM; Reema Se nt : Mo nda y, Mar ch 0 5, 2 001 4:1 6 A M S u b j e c t : RE: H el l o the r e . . .

Jawwad,

37

When meeting with first-time contacts, customers, and partners, Sarwar always introduced this phrase by If we do establish a working relationship you will hear us invoking two words on a regular basis. The first is Inshah Allah (God Willing) and the second is Mashallah (by the Grace of God).

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Thank you for your note and the information. I have not looked at the attachments and probably will not get to them before the end of the week. However, here are some initial comments about Pearson in general: - Pearson purchased NCS for its strength and richness of applications in the education market. The type of stuff you are talking about fits best with NCS Pearson. So, I think you would want to get in touch with someone at NCS Pearson, rather than Pearson plc. - If you are looking for interest in your product, then yes it is worth pursuing. If you are looking for investment, I think it will be a long stretch. However, it does not hurt to try. - Take a look at vue.com (part of NCS Pearson). They do a considerable amount of electronic testing business. I will take a look at the information and get back to you with a more complete response. All the best

From : Jawwad@avi cena To: Pear son Con tac t ; Reema C c : S M; De ni se Da vi e s; J a ww ad @a vic en a Se n t : Fri d ay , M arch 1 6 , 2 0 0 1 2 :1 3 A M S u b j e c t : Re: H el l o th ere . . .

Hello... Just following up on the note from last week. Did you get a chance to look through the material? We have done a reasonable amount of research on what companies like Sylvan, Tribune, Pearson, News Corp and Knowledge Universe (KU) are

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doing in the e-learning space in general and the corporate training segment in particular. With the exception of KU, there is no focused or directed attempt to service the learning needs of the financial services sector. It is not that there is nobody present in that space. There are a number of players in the offline training business, a few in the assessment and custom and exec. education programs but only a handful in e-financial training for financial services. What little exists in the online space is focused on technology related training programs. Given that a. Banks, commercial lenders and insurance companies have the highest budgets per employee for on-the-job training, b. There is tremendous pressure on this segment to improve its bottom line and use technology as a driving force to cut costs and improve employee productivity, c. The increasing awareness about e-learning, its applicability and relevance to these businesses We very strongly believe that an opportunity exists for the right players with the right products. Reema is working on a memo that puts that opportunity in perspective. Its also elaborates on our desire to work with a strategic partner (or investor) who sees the opportunity and is interested in exploring it. NCS Pearson is extremely active on the assessment side, but todate there are no ventures that fit our profile. K-12, Assessment, Training, Technology - Yes; Finance, Financial Services, Corporate training - No. Pearson itself has executive education business by the name of FTknowledge that is leveraged off FT's brand. The problem there also is reliance on an offline model to compete in an online world.

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Please let me know what would be next appropriate step for us. Will look forward to your feedback. Take care

Fr om : Pe ars o nC ont a ct T o : J a ww ad @ a vi c en a Se n t : M o nda y, Mar ch 1 9 , 2 0 01 7 :0 4 A M S u b j e c t : RE: H el l o the r e . . .

Jawwad, I got some initial (positive) feedback from one of our controllers. He and I both feel that Pearson Education (of which NCS Pearson is a part) would be interested in something like this. We see it as an educational tool for professionals who do not have a financial background, but need to have an understanding of accounting/finance basics (the scope of your curriculum maybe much broader, this is just based on the courses that we have seen). Pearson Ed. is a huge organization, and I have only met the CEO and the CTO, but that is about as much as I know of the organization. I will try and get some information on who you should contact. In the

meantime I would encourage you to look at the Pearson Education Website and get a better feel for who they are and what they do. Also, put together a memo about Avicena and its offerings, and why you think Pearson Education should be talking to you (Avicena). Send it to me when you think it is ready for a review. I can then get you the address of the CEO and you can send it directly to him. He will then forward it to the rightfolks in his organization. Good Luck
From : Jawwad@avi cena T o : S M; R e e ma ; A sh ar Se n t : M o nda y, Mar ch 1 9 , 2 0 01 9 :0 0 P M S u b j e c t : F w: H el l o the r e . . .

I think this is as big as it gets.

The one that we have all been waiting for.

Outstanding job everyone. Take care

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PEARSON EDUCATION & AVICENA LLC S T R A T E G I C I N V E S T M E N T P R O P O S A L 38

Jawwad Farid, jawwad@avicena.com Reema Rahman, reema@avicena.com

Avicena LLC, 2740, South Harbor Boulevard, Suite J, Santa Ana, CA 92704 Phone: 714-540-5933 Fax: 209-821-9174

March 25, 2001 All pages of this document contain information proprietary to Avicena LLC. All data furnished concerning this document shall not be duplicated, transmitted, used, or otherwise disclosed to anyone without the express written permission from Avicena LLC. This restriction is applicable to all sheets of this proposal.

38

Included the proposal here to provide context for the discussion that happens between Dylan and me as well as the email exchange between us and Pearson contact.

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Preface We are a 15 month old, seven-person startup. In the past eight months, with just over a million dollars in capital and sweat equity, we: a. Defined a new corporate learning platform from our exposure and understanding of adult learning. The platform integrates processes, usage, application & content in one seamless environment b. Marketed and beta tested the need, the product and the fit between the two c. Developed, tested, positioned and launched the new corporate learning platform d. Defined & implemented digital course generation processes e. Tested the processes and created four full length (10 - 16 hours each) live courses (Corporate Finance, Ratio Analysis, Leverage, Breakeven & Credit Analysis) How we accomplished this is the reason why we should talk. Market Snapshot The U.S. corporate training and development markets estimated size is $62.5 billion. (Source: Training Magazine, October 1999) Corporate training -- E-learnings fastest growing segment generated $200 million in 1997 and is estimated to reach $23 billion by 2005. (Source: International Data Corp and Red Herring, February 2001) Finance, banking and insurance sectors are the leading users of technology-based training with 16% to 17% of total training delivered by computers for each respective market. (Source: Training Magazine, October 1999) Financial services industry employs 7 million people with an estimated 1.5 million in the management cadre (Source: Bureau of Labor Statistics, Department of Labor) Avicena LLC (Avicena) Avicena is a knowledge accelerator that provides online (web based) learning solutions to the financial services industry (FSI). Our product is a set of tools, processes and methodologies that allows corporate customers to address specific knowledge, application and skill gaps under the domain of Finance (risk, pricing, underwriting, financial performance measurement & reporting). Strategic fit For Pearson Education (Pearson), we bring: 1. 2. 3. 4. 5. 6. A fresh and non-traditional perspective on content generation, applications and learning processes A developed corporate learning platform with scalable offshore content & technology development facilities, related protocol and expertise Growth and development of a maturing, explosive market which ties in with Pearsons focus on content, application and connections Synergies, technologies & processes that strengthen Pearsons existing e-learning initiatives in FT Knowledge, NYIF, Learning Network & CCC. Opportunities for cross-selling financial content from FT and related publishing units A core and growing group of people driven by everything-is-possible, startup, mindset

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Pearson is an enviable partner for any firm in the education business. For Avicena, the noncash value added of a strategic investment from Pearson translates into: 1. 2. 3. 4. Instant credibility with corporate customers as a partner (or part) of the largest education company in the world Access to a well established, powerful, global distribution network Incorporation of existing assessment, diagnostics, testing and reporting expertise Benefit from current editorial, presentation and communication processes

Market need Training is no longer an option. It is an essential ingredient in improving employee productivity as businesses struggle to improve their cost structure in a rapidly changing competitive environment. The economics of web-based training are compelling, leading to a decisive shift to technology as the preferred medium of training content and delivery. The financial services sector is a highly process-oriented sector with the steepest learning curve for people working in back-office functions as well as those selling financial products at the front. This sector has the highest budgets per employee for on-the-job training. Given the current macro economic scenario, banks, insurance companies and related financial institutions are under tremendous pressure to improve their bottom-line and deploy scalable technology solutions to cut costs and improve employee productivity. The problem is that very few players in the e-learning space offer products that: Use focused, comprehensive, practical & relevant content Create an optimal adult learning environment Allow on-the-run (real time) customization, instantaneous fulfillment & close fit with organizational and individual learning objectives Solve the cost of content generation/acquisition problems Simplify pricing models and reduce cost of ownership Provide 24 x 7 x 365, anytime, anywhere, available on demand access

Avicena -- the Company Avicenas edge is its learning environment and infrastructure. The emphasis is high quality, relevant & practical content in an environment that supports adult learning processes, customization technology, standardized rollouts, user & information interfaces, retention, and real time assessment. Avicena competes on processes: Our process generates higher quality content quicker & faster in a scalable fashion. An important element of this advantage is our reliance on offshore resources for content generation and outsourced technology support. Courses are customizable by specific needs of students. Modules can be added, dropped and completely new courses tailor-made on the fly. Customers can select and build what they need using Avicenas knowledge base of financial concepts & its fulfillment engine. Course structure emphasizes learning, application, and retention. Interaction is adopted at each stage, (diagnostic assessment, retention exercises, case studies & feed back) for continuous evaluation and improvement of users and products. The content generation engine deploys teams of professionals (finance, education, technology) who together develop high quality content that transforms complex financial topics into simple practical concepts, emphasizing process, skill & applicability.

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Focus and pricing issues are resolved by concentrating energies on the financial services segment and finance professionals.

Customers Our target market is the corporate training segment for financial education. This includes retail, commercial, and investment banks, insurance and reinsurance companies, small and medium sized businesses and learning institutions. At present, our beta customers include Hudson River Inlays from New York and a number of individuals working within the financial services industry. Discussions with two re-insurance companies -- Swiss Re and ERC Frankona, a mid-size California bank and two consulting organizations working with mid size banks are underway. In later business development stages, Avicena plans to scale up and offer its financial content, delivery technology & knowledge generation processes to academic institutions, distance learning firms and finance portals. Revenue sources Content, technology and processes are priced on per course, per user, per year basis with multi-year contracts. Level of pricing is set depending on depth of course and number of users per customer. Investment Funds sought: Valuation sought: Round: Timeline: Next Round: Timeline: Application Of the first round, $2.3 million will be applied to startup and capital expenses. Expenses include computer hardware and software licenses, office space and office furnishing, and build up of Avicenas knowledge base, content consultant relationships, offshore resources and facilities. The remaining $2.7 million will be used for recurring expenses that cover salaries, sales, marketing, recruiting, general and administrative expenses over the next twelve months. First stage financing will carry the firm from March 2001 to February 2002. We expect the firm to become cash flow positive thirty months after launch in the third quarter of 2003. 5 million dollars 54 million dollars Series A May 2001 9 million dollars (Series B) February 2002

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From : Jawwad@avi cena T o : D yl a n S te e g C c : R e e m a ; S M; D e n i s e D a v i e s Se nt: Th ur sd ay, Ma rch 29, 2001 12:59 PM S u b j e c t : Re: S tr a t egic In v e st m en t P r o p o sal

Dylan Thank you very much for the comments. All of us really appreciate the time you took out to review the proposal and in helping us out in refining the outline. Your support means a lot to me and I hope I would be able to return the favor some day (Inshah allah). My comments are attached just after yours 39:

39

Dylans email (that follows this footnote) and my response to his questions show that while in some areas we had thought things through, in others we were nave and unprepared. The comments on the structure of financing, about growth projections and net worth show an MBA-ish reality dysfunction that would have killed most funding conversations in mid sentence. We were just as clueless on pricing because we had been so busy with building technology and content that we hadnt actually gotten around to asking customers if they would pay anything for what we had. The parts that we did get right were questions that had been asked before in conversations with counterparties who were evaluating us seriously. On good days we would get the answers wrong the first time, kick ourselves, and try and get our act together before the next potential investor showed up. On bad days we did appalling impressions of clueless kids in a sandbox and blew conversations before they even started. The only way to beat the odds was to have as many customer-facing exchanges as possible in the hope that when the guy with the checkbook finally showed up, you had all the right answers practiced and ready.

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From : Dyl an Steeg T o : j a w w ad @a v i c en a.c o m Se nt: W ednesday, March 28, 20 01 1 0:4 4 PM S u b j e c t : Re: S tr a t egic In v e st m en t P r o p o sal

Jawwad, I really like the proposal. the deal. My humble inputs: 1) Page 2, I'd change "why we should talk" to "why we believe we should discuss strategic opportunities". The former statement brought images of someone bubble gum chewing with mouth open to me. Dunno. [JAF Comments] Reema was actually quite upset with me on sending the proposal out with "we should talk". We couldn't get closure on the sentence and we ended sending it out just as it is at 3a.m. in the morning. But your suggestion is exactly the wording we were looking for 2) Page 2, under strategic fit, # 4 and 5. Are FT, NYIF, and CCC standard terms or do they need to be defined? I don't know them. Dunno if Pearson will. [JAF Comments] In Pearson's case the acronyms stand for Financial Times, New York Institute of Finance and Curriculum Communication Corp (FT, NYIF and CCC are standard references used on Pearson's site and in their annual report for these three ventures) 3) #6, I'd add a sentence listing the tangible skills of the core and growing group: finance, stats, insurance, IT, programming, tech development management to list a few. It gives a good overview of the history, the market, why you want to speak with Pearson, and the financial structure of

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[JAF Comments] Will work on this. 4) Page 3, I really like the statement "This sector has the highest budget per employee for on-the-job training". I might think about underlining and or italicizing. It made me think that you had your market segmentation DOWN solid! [JAF Comments] Thank you. 5) Page 4: financial structure: are you issuing Series A preferred, common, warrants, and if the latter, warrants on preferred or common? How many shares to issue total? Start thinking about putting the cap table together. They'll want to see who else has their money in the ring. Also make sure that the asset purchase agreement and investor rights agreement is developed by YOUR attorney. Do not take the boiler plate of the investor. First to bring documents sets the Iyengar anchor. This is big. [JAF Comments] Series A common. Between 8 - 15% of the business. Prefer not to do debt, convertible structures or options. Do you have any comments on how to handle this issue. On the legal side, planning to work with Paul Hastings rep firm in Orange County on the law side. Had an initial meeting with them just before I left and they are interested. We still have to approve the engagement structure they suggested 6) The financial forecasts incorporate huge growth: ~ 500% in 2001 and 2002, 150% thereafter. Just make sure you can justify. E.g., that's the same growth as the market as a whole, or we will grow faster than the market because of reasons X, Y, and Z. [JAF Comments] Couple of reasons. Big growth spurt within the market itself not just within Avicena. The growth is a little skewed because of the initial jumps but by the time we hit 2006 - 2005 we would probably be looking at

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10 - 15% for the next 7 - 10 years and then stabilize around 600 - 750 Million in annual revenues and maybe 3% - 6% per year 7) How do you define net worth? Retained earnings or contributed capital? I'm assuming the latter since you have negative earnings right now [JAF Comments] Asset - Liabilities. Assets are directly linked to the value of systems, processes and content. Facilities, infrastructure obviously contributes, but as we grow older bulk of the asset side is intellectual property. It is primarily a lot of CAPEX going in as equity (contributed capital for the first three years), added on by the big difference of content generation costs and the value of the content generated (Fixed asset additions - depreciation - capex). Nice job brother. Keep me posted

From : Jawwad@avi cena T o : Pe ar son Co n tac t C c : S M ; Re e m a ; D en i s e D a v i e s Se nt: Monda y, Mar ch 2 6, 2001 4:48 PM Sub je c t : Avic en a L L C

Dear PearsonContact I have attached a four page investment proposal with this email. The

proposal covers current status, strategic fit with Pearson Edu, markets, products, investment needs, applications, financial summary and people overview. A full business plan (50 pages), additional information, review of existing solution and future course and technology development plans are available on request.

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If its possible, I would like to schedule a short phone conversation on what would be the best way to move with this. Please let me know when would be a good time to plan for that. We did a fair amount of research on Pearson Edu and were very fortunate to get hold of the webcast coverage of Peter Jovanovich & Marjorie Scardino's presentations (Dave Smith and a number of other senior executives also spoke at the same session) at the Analyst conference in January 2001. Given Pearson's existing ventures, the content of the last two annual reports and the presentations at the Analyst conference, we are very comfortable with the strategic & marketing fit between Avicena and Pearson Edu. One of the key themes in Marjorie's comments was her emphasis on combining content with applications & customers and how Pearson has accepted that "content is not the only thing". We believe Avicena represents one such opportunity where applications, processes & content come together to create tremendous value for all stakeholders. On a side note, we are in the process of building foundational material on the courses front. Once the foundations are complete, our next objective is to build application courses and follow that by advance professional courses. We are starting with courses with a mass market appeal (bottoms up approach) but the material will start getting technical after the first 20 - 30 courses are on the site. If you have any additional questions or comments, please feel free to call or email me. I will look forward to your feedback. Warm Regards Jawwad Farid Avicena LLC

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From : Jawwad@avi cena T o : S M; Ale phL i s t ; A vic en aLi s t; Bo ar d Of Di rec t or s ; Fri e nd s; Se n t : Fri d ay , M arch 30 , 2 0 0 1 1 0 :2 3 A M S u b j e c t : F un di ng U pda t e

Ladies & Gents We started the week with the Pearson Proposal plc. Thank's to Reema's unbelievable speed in doing research, coming up with pitch and putting a package together, strategic investment proposals have now been submitted to 1. Reuters Greenhouse ventures 2. McGraw Hill Ventures 3. Kaplan Ventures (subsidiary of Washington Post) 4. Reed Elsevier 5. Oracle Tomorrow is follow up day. The conference call with Chescor went reasonably well. For all practical purposes they now have all the information they need and the decision now lies with Moez. Keep your fingers crossed. Take care Jawwad

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F r om : D a ne s c u A d r i a n T o : j a w w ad @a v i c en a.c o m C c : K en ny C h ar l e s Se n t : Fri d ay , A pri l 0 6, 2 0 01 5 : 1 0 P M S u b j e c t : A v i c en a B e t a te s ti n g a t M B

Jawwad, First of all, I must apologize for the delay in responding to your note but due to staffing changes at MB as well as the conversion efforts we are going thru as I am writing this note, we were not ready to confirm our commitment to your training. As per Charlie's request, I am pleased to let you know that we are committed to use your product for internal training to start with in the credit area and, as we move forward, we would like to explore other opportunities. Since I wasn't directly involved in any of your prior conversations, I would appreciate you letting me know the terms of the proposed use of your product at Manufacturers Bank. Upon reviewing the terms of the Agreement with the specific organizations and the Legal group, I would like to start the program ASAP. Please be aware that probably I will not in a position to work with you and the Credit Division next week but I can at least make arrangements of reviewing the Agreement and setting up the meetings with the right senior managers in our organization. The sooner you can put together the Agreement, the faster I can help you and your staff get things moving. As part of the Agreement, I would like to information such as the duration of the Beta training program at no costs to recommendation on using Avicena for internal

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MB, what would be your expectations from us, if any, how do you intend to set up the training program. You might also start creating the procedures to be used by our staff as they will be needed when they will commence the training. 40 I am looking forward to hearing from you. Sincerely, Adrian Danescu Manufacturers Bank SVP/CIO

40

With five years behind me, Adrians email still breaks my heart. It came a few days before I shut the door on Avicena and nothing Sarwar, Denise, or Reema could do or say would make me open it again. We had been working with Adrian at the Sakura Bank subsidiary in Los Angeles for close to a year and he had tremendous respect for what we had achieved on the technology front. The MB beta contract a year earlier would have jacked up our valuation, given us feedback on friendly terms, and sealed the one funding offer we needed. A year later, it represented a commitment to spend money we didnt have, supporting a customer that would not generate revenues in the next quarter, using a team that no longer believed that they had a future. Customers take time to make up their mind and return phone calls. You can not tie them to your schedule. Given a more mature pitch, a few more reference sites, and a bucketful of time, we would have signed a revenue deal. If not Reuters, then Yahoo; if not Yahoo, then Pearson; if not Pearson, then University of Phoenix. But we had shortchanged ourselves by starting this process when we were already broke and hurting. We also set ourselves up by expecting timely, positive, lifesaving responses with some of our more qualified leads. Yes even though business development (biz dev) lives off optimism, the successful biz dev professional lives off zero expectations. What you dont expect will not disappoint you, what doesnt disappoint you will not kill you. Unfortunately for us it was death by a thousand nos.

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Takeaway
Easier close: It is easier to get a partner to sign up as a customer for a small contract then to start off the conversation with a strategic investment proposal. Given a choice between the two, go for the

easier and simpler close. Omit needless words 41. one page. are doing. Stop selling: to When Just you like know and the the decision happen has momentum sale to invest, a you the few shu t to If it is worth buying, worth

selling or worth investing in, pitch it in less than If it takes longer you dont know what you

decision seconds. up, stop

purchase

can let

also the

within happened, carry

selling

the close. Learn to say no: up When and you go know home you cant service a

customer,

wrap

empty

handed

rather

than take on work you will not be able to deliver on. Sales Cycle revisited: Remember and respect the sales cycle. for the venture You must to have provide run a for few enough (time time and If capital a ne w save cycle you iterations. nor in

neither

capital)

yourself the heartache, close shop and go home.

41

Elements of Style, William Longman, January 2000

Strunk

Jr

and

E.B.

White,

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On

preparation: or your

Whether an

you

are pitch

having you

a must

sales walk and

conversation through

investor

presentation,

expected

questions

your answers to the same till you sound coherent and professional. Part of this practice happens within your own room,

but for it to be effective it needs to happen across partners, The more customers you talk and with investors conference who tables. may not professionals,

have an incentive to listen to you, the better your act will become. One reason why small wins are better is because they allow you to refine your act. Even if you blow a sales conversation what you leave on the table is of small consequence. With a small customer, sometimes, that too can be recovered because small customers are more forgiving than others.

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Chapter Twelve The End

Surprisingly wasnt wasnt expected reasons ceased reasons forty their cards, without potential chat date even right in in to that easy it for why

enough, bad. but to It it be.

when wasnt One by

the the

end

came, and of

it it I the of

wasnt

pleasant one, bare few all

nightmare

Avicenas leaving and bank own we

continued me a

existence infront years and a with under credit funding expired down and that

exist;

shouldnt:

Competition

million belt, Aleph

dollars on its had a who

overdrawn

balances bed,

death

strategy

that naming

inconveniently suitable couldnt call the at sit

replacement, some only unnamed ignore

partners now but the

would and you

future,

realization

California

could

reality for so long. But life the fact as we knew it went was paid other on. To still some extent, and our

that

Fawzia and

working Then

occasionally parents,

getting

helped.

siblings,

relatives

chipped

in again to tide us over our rough patch. I an to slowed down, walking him we I and up started in to interviewing, and day care on picked up and first Sunday on

interest pick

cooking Amins to every

swimming, For the

started time

Sunflower

evening. to the

since

moved took

California,

every play

Fawzia

Amin

area

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Laguna rich,

Beach, we

short and to

drive grab San

away. a

When

we at

felt or the took Route

would Kitchen off and

order Coast

food

from movie We

Darya even via

Jamilas Cineplex time One. As long off

South drove

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didnt had of my

look

back up With on

too my

often room to a

it and the

didnt darkest I

hurt. all much I corner

cleaned closet. focused between the

consigned became next,

Avicena-related more and lived and

material some one getting From

effort, job, to day

the the the the up,

economy,

interviews.

prospecting calls. I had effort the

leads, Between to picked from

interview job it

prep, at

conference

network took

school, the months

devoted offer

hunt,

and

credentials before

three

Shane came along. It was still out over do how that the carry boxes a too soon we for had be in with had me lost the just to or get if down there Aleph that it up we a and was had they would few had. or

figure taken could have Given

much

anything

could on, and but we

salvaged. hope

venture

hindsight, picked everything

been better if choice

storage

fire-saled over

lingering

good-byes

sudden death, pick the latter anytime.

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From : Jawwad@avi cena T o : J o e R oo n e y Se nt: Saturday, Apri l 0 7, 2 001 3:31 A M S u b j e c t : Re: Up da t e f r o m NY C

Hey Joe.... It was great seeing your name on the alumni list with the new 42 nd street project and really happy to hear from you about how its turning out. Thing have gone quite well but there is still no money in the bank. Both I and the bank are getting quite used to the fact. I think we have accomplished a lot in such a short time with such limited resources but have not been very successful in getting investors on board. My cutoff date to start looking at other options was day before yesterday 42 and I am now on the market again. Talking to a few firms here and there and there may be a chance that my warm California days maybe coming to an end. How is the rest of the gang? Are you in touch with Liz and our friend Ken (Craddock) at school? Say hi to both the next time you see them. Take care Old Friend Jawwad

42

At what point did I decide to walk away from Avicena? There is no easy or short way to answer this question that too within a footnote. Hence the reason to write Book Two as well as the hindsight and conclusion sections where I promise to revisit this question.

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From : Jawwad@avi cena T o : Pa ul J Ki m S e n t : M o nda y, Ma y 2 1 , 2 0 01 5 :3 4 P M S u b j e c t : Re: Up d a t e f r o m L A L A L a nd

Hey Paul... Every now and then I wonder what you are up to and its a great way to begin a day with an email like yours. I finally decided to give up on the yellow brick road to startup land. Couple of things happened at once. The incubator went down in a big way as their business dried up, we went looking for money too late and as a result didn't get any. After operating without cash for the close to 4 months, I finally opted to do something less stressful with my life. The job market is pretty tight. I have had a few interviews but nothing substantial as yet. Waiting it out and spending a lot of time on monster.com. In the mean time I have gone back to my day trading days. It gives me something to do and pays the rent. Fawzia and Amin are doing very well. One beneficial side effect of the

above decision is that now I get to spend a lot of time with them. First time in the past two years we are finally getting good quality time on weekends. Both of us started Dr. Atkin's protein diet to shed our second skin of fat day before and are still in the Carbohydrate withdrawal cycle. Expect things to improve in the next few days. It was really great to hear from you. Do stay in touch. Take care Jawwad

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From : Jawwad@avi cena Se nt : S und ay , S e p te mber 23, 2 001 5 :52 PM T o : J a ww ad @ a vi c en a S u b j e c t : Up d a t e f r o m L A L A L an d . . .

Just thought I would send out a short and sweet note to all of my friends & family about the latest in my life. Its been some time since I got round to sending one of these out. For those of you who don't know as yet, Avicena, the e-education venture was claimed by the down turn in late May. It was a labor of love for all the team members and made it very difficult to step away. There are a thousand ways to leave your lover, but the sages are silent when it comes to bringing down the shutter. But step away I did. The two piece of advice that did help tremendously were the words of Andersen partners I used to work for "Never make mistakes alone" and "Charge it to the experience account". I was fortunate to have the unconditional support of my family, friends as well as people who are close enough to be both. The past three months have been nothing short of amazing. When I started, there were a number of outstanding "to do's" in my life including losing 30 pounds of excess weight, learning how to drive a car and getting a drivers license, completing my Fellowship requirements for the Society of Actuaries, getting a job with a regular paycheck, balancing, work, family and health and taking out a an uninterrupted chunk of time for Amin and Fawzia. By the grace of God (and His generosity and benevolence), three months later, my personal to do list is now a lot smaller. We also got a couple of bonus items along the way like driving twice on Route 1 to San Francisco, relocating to Northern Virginia (right next to DC & Dulles Airport), finding a position that allowed me to be an Actuary, an MBA and a computer scientist (all) at the same time, earning the rights to the three letters (FSA, Fellow Society of Actuaries), getting a really cool apartment in a really cool

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neighborhood.

I still have another 15 lbs to go on the weight front, but

whatever little progress I have made on that front will do for now. On the work front, it's been a week and I have finally managed to get my old address book installed on my new machine...Hence the mass email (my apologies, will write to all of you individually over the next few weeks). In case you are wondering, work so far is very good. AnnuityNet sells

technology platforms for managing, servicing and selling financial services products for financial institutions (www.annuitynet.com 43 for more details). I am working with 1. One Mathematical Genius (ex Chaos Theory Professor) 2. One extremely well respected Actuary (Three companies, 1 IPO and a handful of millionaires to his credit) 3. A really laid back, well oiled, ultra competent technology team 4. A converted 200 hundred year old barn right next to a converted bike/jogging trail that goes all the way to DC 5. Next to a well stocked kitchen and vending machine that everyday threatens to put the 15 lbs back That is all for now. It will be really good to hear from you again so send me a line or two (or more - definitely more). Take care Jawwad

43

Coming immediately after Avicena, AnnuityNet provided a great opportunity to appreciate all the things we had gotten wrong and AnnuityNet had gotten right. From funding to technology, from hiring to service level agreement, from business development to closing deals, Shane and his team provided a frame of reference that put the mistakes we had made in even sharper contrast.

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Takeaway
Endurance: depth of of your Your endurance in what is you a balance and doing. between In the your personal check book are the intensity plain

belief

English, either have more capital than you would ever need or enroll in Zealots 101. I survived because I had my Ideally do both. family with me. When

every one else walks out on you (or you walk out on every one else) they are the ones who will carry you through, irrespective of how mean, rude and arrogant you have been. So be nice to them. Timeout: what you Take could Focus timeout have on to recover done physically to save do and your things

psychologically. business.

Dont ponder too much on why me or possibly how you would

differently next time. There is no space for regrets or missed opportunities on this page. Failure is a badge of courage, acknowledge it, and wear it with pride. Taxes: your Sort out your This to tax is your related where paperwork forming as a and save

receipts.

Limited of your

Liability Company (LLC) helps since it allows you to distribute losses members, part yearly distribution, not just on winding up. fat paycheck in the year of your failure or If you after,

have had other sources of income or start receiving a the tax break will help. California LLC: A California LLC in 2000 came with a

minimum tax of 800 dollars a year even if you did no

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business in that year. It didnt sound like much at the time of incorporation but when you are broke and over leveraged, every additional dollar hurts like a root canal. Be nice to people on your way up. your backup options disappear: the time I was done with Be prepared to see

My two six figure job Avicena. Markets and

offers (Viant and the one in Florida) disappeared by economic conditions change and this change is part of your bet. The first post Avicena job interview happened within two days of my initial I am on the market mail shot. averaged generous ideas. me who to a The source of that interview was a classmate an and firm me interview supportive of to every with fortnight leads, and that and

from Columbia. I was lucky that in a down economy I strangers, who had no reason to be nice to me, were references in San An insurance broker I had never met pointed consulting another actuaries Diego, came a eminent actuary, that who I

pointed at

back with four references, one of which led to Mark Abraham Transamerica who suggested have word with Shane. It was the actuarial network mixed

with acts of random kindness and patience that traced the path from Orange County, southern California to a two hundred year old converted barn in Leesburg, northern Virginia. Did the Entrepreneurship experience help? No, Shane

and the first interview were the only exceptions. I was trying to transition back into smaller roles at larger firm and taking crazy bets with your career

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and

your

life

are

not

the

ideal

recruiting

strategy

in those quarters. As with business, a laser sharp focus in a job search also delivers. It is a question of time, practice, patience and luck.

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Book Two The Blue Screen of Death

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The blue screen of death

In the beginning, was new there age was Microsoft Freedom A Windows. from the For unisized stuff blue a some one coming from the dark ages of character based DOS, this stuff. dimensional the There blinking cursor. like portable most it new thumb age obtuse had less even

MP3 player with digital quality sound in the age of gramophone 44. across kinks, With on just a a were But human introduced screens unstable. decade using a history, black your that wasnt perfect. become than younger, the blue

bizarre

holes; system was was

that old,

announced

technology platform

that

released

operating

system,

screen caused sheer panic. What should I do? Douse my computer with water for it may burst into flames any minute? Call the techno geeks equivalent of 911? The three finger salute press CTRL-ALT-DELETE? and voila; an instant reboot. And when that didnt work, you did what you did with everything else in life; pull the plug out and plug it in again. In all the it first took Like few a editions single to food, copies key of Windows, on the an of blue blue

screens were as common as Windows was rare. At times was bad stroke the already the and blue low stretched screen. quality computer invoke would wrath

untested
45

software shock.

pirated

produce

screens

with the severity of anaphylactic

44

Well Windows 1.0 wasnt really that good, but the picture 45 Fancy medical name for allergic reactions.

you

get

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As the personal computer, subcomponents, software and Windows today that that I itself up I a do improved, blue blue once at the a took screens in a started year. And a becoming rarer. throws too am when not My IBM Thinkpad and Windows XP combo screen to. It something hardware decade level and

supposed

half after Windows original launch for this universal icon of electronic instability to be hunted down into extinction. What is the relevance to entrepreneurship? You may

ask. One word Reboot. The concept that you can flex three fingers (or one, as I have done at times) at a specific instance of your life and restart with what is left and salvageable a few seconds (or years) later. With to a Just like the initial version of Windows, for iteration where they are become rarer. with
46

first time entrepreneurs, blue screens are expected. each Till the you get stage you endowed touch.

You become the entrepreneurial Sufi

turning every

thing you bless, with your presence, into gold.

46

See

http://en.wikipedia.org/wiki/Sufi

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Hindsight

How an

did

an

MBA

from a end

Columbia decade and a up like

Business of

School, computer karma?

actuary

with

international

consulting science Greed?

experience,

top-notch Fate?

graduate Destiny?
48

t h i s ? 47 B a d

Stupidity?

Arrogance?

Quantum physics ? All of the above? In like so but I my religion, so fate the On predestination be I an easy was is way accepted out. to It is fail, maybe; you you that It is ask are has not its give

wisdom,

would a

taking in a

fifth.

destined

failed.

metaphysical answer at

level,

more later

down-to-earth midnight of a

dimension, when

predestination yourself writing been that just your that years the

doesnt

questions book

closing

chapter bedside destiny

constant faulting

companion. doesnt

finding

answers

changes

anything; really

me the closure I have been looking for. When this I first I started a list thinking of about writing want

book,

had

questions

I did

to answer. They were:

47

Couldnt you just get a halfway decent job and not be an entrepreneur? Werent the six-figure offers good enough for you? And since we are on the subject, who exactly was your career counselor? 48 Just checking to see if you are still paying attention.

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a. Why did Avicena fail? b. When did I decide it was time to walk away into the sunset? c. How did I know it was really over? d. Was it worth it? e. Would I do it again? The odd core of And a funny pages, fable, from the appears thing I is I that still have the of a be even put the after writing evade 140 the

have with to

managed story last drafts

to

questions.

together

fragments untold. closure Freudian

real few

still read, away.

looks

still

slip? Perhaps. Lets take a final and shot try at to answering put the this

midnight

questions

finally

adventure to rest. Second since me the question we were in real first. It was east came the the more to same This trips Yahoo, edges, were I What if by like I was to and out sunrise For of sort I

moving pool just

back point (yes after I

Virginia. one

turning the about the

when

drowned February and the for out? legacy credit eviction

waxed early

poetically Dubai, pool,

earlier). call After its life, from tiled What Forty

2001,

Karachi the of God it my in

notices. kissed my They my

dragged what

myself my would

thanked made be

saving

first

thoughts? to

were

hadnt

followed card

immediately a hundred

family? debt,

thousand and

dollars

twenty

thousand

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dollars

in

personal

loans,

and

half-broken

startup to pay it all off with! With in had had to it springs would the business arrival, carry plan so us funding through relied on didnt also for before leads the on the that model we we We

thought our

next

stage

fell on it

through;

built sold go that on.

company it,

funding.

ourselves without The hurt

heavily

other seem to a

peoples rational look few at that more

money

mind just even a

shift as

required

alternatives would months, maybe

without

funding badly year,

implied the

current

crisis would bottom out. When the my all you cared about not I and the been I was a quick way to or end an of

pain,

this for

was

welcome had in near one wasnt the more

news

acceptable cash more to or debt

alternative. debt in

already future, step willing

crossed adding closer to run

threshold

absence

revenues would

have

personal

bankruptcy.

that far for my hundred-million-dollar dreams. Aleph us. was in deep them, a trouble a and couldnt was and no a expensive, salty health support the unreal ocean pay It

Without

California very on You dry desert short with

longer

Promised oasis that had

Land, caught and

just me

between

insurance, dollars.

supplies, Consolidated

cash.

couldnt

Edison

sunshine

was time to blink. How did I by know for an it was really to over? us Arno out. He

dropped

evening

check

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took

short

detour

from

t e l e c o m m u n i c a t i o n 49hosting chats, evening whatever it on in the food, our the little

industry cigarette balcony, he had if summer. I slept I on

event smoke, he it

CSFB Between and to help a

was long hazy

neighborhood.

offered would

invest us make

through

the

offer and want

for yet

two

nights, and then

once

again it as blood me Arnos it

spoke down. on it my

with

Qamar There I was I it

Ken,

turned on

didnt If my with

another already

friends enough to on take

shirt. why on

was okay Why

was.

wasnt

willing to I was

money, money on by

carry still comes

borrowing in? Side Lose

name? had

throwing faith.

something side

stopped

believing

predestination

it and you lose it all. For last such so Sarwar drive he a it kept faith I simply didnt heading his compute. back how The and faith longer signs and On our Dana with have about or was at on out

together, belief in in

from could

Point,

questioning himself. lost no the

someone debate in

strong

religion

little on. I

dogma, raged Sarwar, obvious work.

practice, had could or I

hypocrisy, just a was turn

belief where and

systems it

hadnt this could

myself

reached ignore

crossroad

that

destiny carry figure

blindly

around

49

A catch all category for mama bell, baby bells, wireless, broadband, infrastructure and technology companies dedicated to transporting the spoken word from one end of the globe to the other.

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where again.

the

nearest

exit

was

and

start

over

Was it worth it? Yes. market with enough Nothing about three The really the years led on to of of of a fact led and list goes later that the those my other I to was was offer around waste. and put to What to we work at an at my the by by dumb) as learned online training education

instructor to take

interactive faltering

training (or

Alchemy.

brave from me
50

economy

entrepreneur AnnuityNet expectations strongest side with a

Shane became side taught

(www.annuitynet.com). pillar personal

Managing credo,

lessons ,

Avicena but put to work at Alchemy. This April of course I had doesnt all was change of the fact was had that in and and the

2001,

when

this I

actually loved have

happening, cared for

heartbroken, that I and

miserable

inconsolable.

Something died

didnt

strength to mourn for it. With doing this context, a all given over the again, choice from what between and I would

accepting

six-figure

offer

Viant

Avicena

choose? You would be surprised. Would I do it again? like In a heartbeat, will come yes. along Why? and

Perhaps

someone

Sarwar

50

Startup Roulette: unpublished paper.

Ten

Myths

That

Kill,

Jawwad

Farid,

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dare would like

me my

again. the other

Perhaps plunge varied

wont by

need

dare

and will

take

all

myself. fate

Perhaps,

vices,

itself

tempt me to sin one more time. The and many perhaps aside, is at and is little ones who heart I the that cash, make I am am a builder to do doesnt enough a lot of to the

making The

companies reasoning

what

wired

best. matter, lives, heart, figure

logic given and it

what enough most it

matters time, The a

entrepreneurs

finally

manage are

out.

ones who keep trying until they do. So yes, once store and I up have on had Fawzia personal only with world his bare he a chance repay tag to to along catch of for for in my my one an is

breath, debts, Because the else one is

reserves,

some

convince on a the

more ride, I am destined to do this again. level, worth and has hands; entrepreneur a of living a

crafted

everything painful

cheap how

imitation vainly

reminder himself. Why Is did there help I

shortchanged

have an

to

blink on that my

or

Why

did to,

we not

fail? I.) that

(Asked will

with a

emphasis avoid

have you

checklist you

can

follow

fate?

Sidestep

failure?

Another book, another time? I would of make us a lousy walk novelistlet is no a different me give away my

the Each

climax

again. will

There

real

checklist. and

path

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maps,

legends,

and

convictions

would

be

worthless on yours. Still, over Not time hope be a thought with and that midnight of has been and that or a I a great do to my companion pillows head I and have in the left

creaking

beds

sleepless would desire out the of

things my next

differently. back in
51

regrets save my

bleeding start than

business; ones I

more

blocks

would

classier

act

have

behind. Here is a little more detail on my list of

crucial problems, the myths that sunk Avicena. The funding mindset capital and partners The the fundamental mindset in that this mistake the that was sunk to to Avicena succeed get was and only way

compete capital be easy. This Fund grant part would US$

business and that

venture would

funding

getting

funding

mindset at of of be

was

reinforced early to as if 2000. test much Business

by

the

easy Eugene

money Lang a as

available

circa US$ the

The School

Columbia

offered ideas

10,000 by

product as an

greenhouse investment

incubator your

course. made

This the

followed

additional

250,000

venture

final cut.

51

As

in

athletics

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Within the

two

months on and we the the US$ and and of

of basis the

landing of the team of an had

in we our

southern plan, put offer of the stand to had

California, together, referees, valued firm. behind over two

business

credentials

support 23 we
52

earlier

received Sarwar the

indicative for at 30% to at US$ agreed valued

between Aleph a years

million priced market

commitment

250,000 four

five times that amount . With only sell aim 8% an the for as MBA and get and a decent way with first it funding, depart The but business to do build your the plan, was the to

socially plan, exit, the fist

acceptable

this

business, a we venture had me a long

conventional

ex-CEO. fight,

time this,

capital verbal

associate

suggested

didnt

take

to come around to his point of view. What were and did we a we do? on Our only first share get stake delay in and a for slice reaction large in really and this was that we

sitting if we

something

substantial bounty price The a with and only where maybe few term calls

should

others retain way we sheets to

could a to

great get a

majority keep was

ourselves. and to

larger

better

valuation had in

funding the lots

stage a

customers, cash hands, our

revenues, bank, of VC phone

profitability,

to return. That was the general idea.

52

Our internal pricing reflected Alephs cost structure out of Pakistan. The market priced our deal in terms of replacement cost onsite in California.

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The

resulting get so

focus the we that so so

then write could we that we a that on

from a

day plan better

one so

was that

on we

funding. could summary attract hire Get own and able generate and

Update that so so

business get

funding;

executive build funding; funding; funding; funding. of its this we how be to

funding; get get get get mind

technology talent

could we we could could and could life we only and

customers revenues became

that

funding raison to

took the

primary Once goal,

driver, had then figure

motivation, would out

dtre. a

achieved

nearly

impossible take

breather

build the planned business with our new cash. How was by and read our did the the the Get funding in plan fought, of from that There else the and model get died, the the and work? The piece

fundamental summary. You

component business lived, In 56 and

funding

executive survived we wrote on had new when the to based who to time on prior a

plan.

Avicenas editions

lifetime, plan investors amounted came at to a all a work

updated it. Over every

commentary edition business

feedback two two and a years, weeks.

four-man plan of

team

would

only

nothing

submission

revised

edition

promising

funding or strategic investment lead. Half was plan. spent of the year to the before few the move a in to California business were board feedback

dedicated The first from revising

building months plan

better with

California and

in-line investors

received

angel

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members. search executive

The for to

last

few

months were

spent

in and

frantic almost

money summaries,

allocated

completely

updating,

editing, strategic

modifying investment

proposals, and the business plan. When it the I look back at the effort a now, had I wonder waste. gone if If

was

nothing

more

than

great

big

same

effort leads,

and or

intensity more

into

business marketing generating

development activities,

discussions, productive may Avicena

pursuing revenuehave been

looked back on with kinder eyes. If the hire it was any consolation, and model create own, and founders above: the your any most were Build M B A e s q u e 53 driven the and in and If by the your or you may to set,

plans,

startups, actors, burn nest a that your eggs you good of

get-funding the

stage,

process familys credit put up

friends, other easy hands with money

money

can

get

your show and real

on. the

enough colors the and

right

combination actually turn into angel cash Once would since the a and the

fire,

someone needed

underwrite theatrical real-life arrive had just plan

make-believe before you ran

attempt this of one them years if party. by of out

production. just been was over to your

Hopefully

would

after

post-launch underwritten a bunch left

investor, no

expectation through would one

that the be

follow

next

few

wish

behind

53

As

in

traceable

to

some

one

with

freshly

minted

MBA

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your

production

actually

became

the

hit

of

the

season. Unfortunately, businesses Businesses resolve, was not was no had that to are that or built is from and you not the The how you up for build with the was was were quest was had

sustainable values figured over. no even you to out

franchises. ground and

commitment, with the the minute funding; to

businessnot likely, get

funding. game was

biggest Your if that

downside business

funding there you the you there

with

funding funding, franchise

business. consumed left

Sometimes so to much give of the

fortunate nothing

enough

receive

wanted to build. When Chescore, it would on. We Himalaya, that had get and it Hiteck would there to get was passed be a no and

Pearson before to carry

indicated

while reason and

back,

failed

funding

the game was over. Moral you do of a the fine story: job, Build funding a business will find first. you. If You

are better off not looking for it from day one. Lessons learned: a. If how it, fund you know until the what you idea. you you get If a is is are it. doing If you money and cant will know move get not the much drop capital need, dont

forward

smart

you,

there have

reason. seen in

Either the your

investors before

already

model space;

(somebody

already

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the they

investors and up have add

have at a or

invested money the you a for

in or

something prestige; and they in a what

similar dont it and a

have to to

lost

looked time)

dynamics are it.

reasonable

payoff lacking

reasonable will

take

execute play

Sure, but

network will

references

role

ultimately

venture

destined

profitability

find funding one way or another. b. If venture capital if neighborhood enough, but wont fund wont, may funding it, your will. be is

customers friendly

will;

customers it

banker

Interestingly counterintuitive,

finding

no guarantee of success. c. For most or the entrepreneurs, ongoing equal case. profit deferred and to capital of cash That or in payments is and is the is not into family the on

initial always equity, savings,

infusion equity. Debt

generally

convertible personal to

straight

debt,

reinvested payments customer down

business, and

employees

vendors,

work in progress are all sources of cash. d. The last to four easier sources to In the of are internal, and and control have no and or have years

relatively compared strings they seen

generate sources, the most cash I

external been sources and

attached.

last

15

have

reliable have used sources

dependable information

used.

External

credibility

problems

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attached for When

which do the is team will same plans include capital of

are or

difficult fresh to the

to solve

address these and A with

first-time they

entrepreneurs. effort

attempt fatal for

problems, distraction four-man limited customers than the business formal sources venture

resulting fresh

business. on flows on

entrepreneurs cash

credentials team or of

focusing working loan capital.

signing faster to pitching formal and

generate

applications (Here angel

sources

lenders, funds,

investors,

incubators,

similar institutions.) e. When fortunate term the enough sheet, of an to what equity the receive the a

financing generally sheet Equity alive need is value second well, focus between control funding Who you outcome and and to only

entrepreneurs term is you twoby fair the do represent. venture

misunderstand concept has a value As if

solvent. solve to your need both one two. get

entrepreneur, maximizing first represented value or and control; To the Most

riddle The owner

dimensional value of is you of on the and and percentage

equations. ownership, probability to or

dimension

market of

stake,

survival.

maximize the can

combined founders but have

dimensions. the

other retain or

difficulty

tracking You no

interaction majority can get what control. and you to

funding

ultimately

relinquish

relinquish

control

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value to or

they

bring of

to a

the

table as

in a and

addition on you the can business

their its a or

cash

has your

direct survival the a of

impact

probability have exit your small a is

owner.

Combine slice of by to end pie

two

fairly

substantial Capital and a the wins. bet on In has

full

nothing. capital. whoever to I will

pricing

driven

market

conditions

access

lender/borrower, relationship upper (If I hand was a in

investor/entrepreneur game, man, access capital, not

betting

the entrepreneur.) f. Capital, form, is partners; allocation allocation contribution services, In failed not often back, are late. Business developmenttoo little, too late How them do you of generate How do you their revenues? get and the By selling By to you customers! aware customers? making irrespective not with of free. partners ownership on implied of of With its shape or of The of cash. is held

capital

comes

come and the

questions equity. basis or are

occurs network,

capitalideas, capital

relationships, implied Ideas

ventures, are or not cash

contributed: away,

services locked

delivered, infusions

networks come too

relationships

disintegrate,

needs

solutions

provide to fulfill those needs.

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Welcome probably and

to get

sales, (biz a of

marketing, dev these for lecture three for a but The

and on the

business We could from a on when be the nuances lets

development

short). terms

day-long dev guru, three

subtleties that

marketing/biz assume revenue but the generating

second frame may will

all

activities time occurs result

focus

revenues.

generation ultimate

actually long-term

differ,

same in all three cases. At in Avicena, with the biz amount else dev dev of happened limited I at had the time in left firm. when I retired short over Our took head firm and tied with very the of in

infrequent everything first time a April The as the big biz to

episodes

with

follow-up

happening the

activity with New

happened recently and just out

meet five in

accounting York, came our firm that into the

consulting before of that

2000 leads

graduation. meeting offer from our

translated well big as

first to

angel

investor indication us as

initial

informal

five

represent

accountants. Then with took gauge very nothing for four In 40 months August and as and I went under and I in to

technology, commitments. time to the

hiring,

operational, customers D.C. as well

content Tampa,

September,

meet our came for In

potential as

New

York, pricing leads

Boston, ranges

Washington

interest strong

in

product out two from

test Four but I

possible

before

launch. trip and we

this

disappeared follow

again

months 2000,

didnt did the

through.

October

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formal received follow January tour was on of again,

launch an up, and and

at

an

industry did went blank I did and

exhibition, a lukewarm In whirlwind then This of Dubai tour highagain. a

acceptable then Dubai, clients two February

response, 2001, and

Tokyo, by

Karachi,

meeting

investors. months legwork legwork

followed

dedicated

intensity partners.

business By the

development time the

focusing started

strategic

investors

and

relationship

yielding results, we had shut down. Somewhere insanity, high-end of my I recover in I biz some between, also dev of out in a to moment hire so that of temporary additional my had moments we very is hire track could by a in the and as The a end, them lost not best

decided could the a be

two

resources leads biz their when on dev

that we

blanking

rectified Toward You own.

and the

inconsistent realized leave of that them

follow-up. missile. on you

resource cant They and

fire-and-forget and wire-guided focus performance bottom-line or the well this burn fact mode their

work

direct and

queries

evaluate feedback the you

their

based

customer Without are us

improvement. the and cash it in take you took the

direction might them. put

performance months dent

measurement, to

paying

missing sizable

finally action

accept limited

corrective

incubators

resources. Moral and, of the do a story: choice, Do biz as dev as as soon as

possible, given

technology

late

possible, control

never

relinquish

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of

biz

dev an

and

cash-generating and consistent

activities performance

without

objective

evaluation mechanism. Lessons learned: You may have a great you are product, out of but and without out of paying customers cash

luck. Answer these questions first: 1. Who are you selling to? 2. Why will they buy it from you? 3. Whats in it for them? 4. Who will sell it? 5. Can you sell it? 6. 7. Do Do you you know know a anyone who can be a fund ready this customer today? customer who will from day one and buy it when its ready? More you hard Who be you from questions find cash will able him? dont to a to find to pay ponder for before who you diving will have in: part to Can with he it or

paying

customer what

offer? Will buy

these your

customers product? to at answers

for Will

you? they

sell have a

Without

these

questions, revenues

shot

generating

surviving. Next truly question: delegate Can you really outsource or for or that

business

development

matter any other crucial function? When save was your the last that time you the were your part who of an

organization

found

rainmaker

would

soul,

your

startup,

investment,

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your your

clients, life? In from on or this

and When real the your the

bring was life on

some the you the

sense last can

of time

sanity such of a

to a his

rainmaker arrival? yourself impact on to valuation

delivered

promise never have

divorce direct your Hold

drivers of we

that your get

immediate growth until

survival, business. to the

thought

lessons

on leadership and heroes. My love affair geeks that with are technology with to a technology chip of I 20 in as

a competitive advantage Techno heads and value buying born them should for their or forces I worship since last technology need have been

acquire

trinkets toys

irrespective know the

addition. techno

years.

Avicena was no different. During toy and have time, was the initial XML, but just since tools research and a as and was to ASP JSP phase, pages. the techno of
54

Java,

Outstanding time would the on and

technical

complete from well with up, on as my by

waste

resources performed

Microsoft we

one-tenth spent debugging,

resources, working, Java. I wanted

capital also

learning, deploying binge from and any

picking stay

anti-Microsoft as the possible firm in

far

standards

sprouted

Redmond.

54

I know I will be shot, discredited, burned at a stake, and spurned for saying this since I did the same to Sarwar when he first suggested this. Sarwar as always, was right, I was wrong.

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In

the

next became T-1

phase, the we to two bought and

Avicenas toy. to show up failed a We put

web had in to

and a

database to of
55

server shared machine tried street.

next

access beast but across at with

a a I

decided could one a

that

off

clients .

picking After I

on

eBay typist

lost the online enough

magnificently austerity,

faster

attempts box

loaded

power to serve five Avicenas. I of could have gotten the to an wasnt server RAM only never or our on got by just I as As well if this out with bit and a (OS) site five and

spending upgraded gigabyte that Since visits, times pretty. Just and we

one-fourth the of

amount. a dual a OS

stupidity

enough,

went

processor system

and

operating single to or

could

support the

p r o c e s s o r 56. to

around size,

customer grew the

upgraded original sat

additional

investment

there

looking

pristine

before didnt it

the get

end, we But we

the to we

toy

became need,

corporate use, the and some our on

functionality production built of the

that

didnt

didnt out ahead by

around

rolling still it be to

server.

went

because

thought

addressed raised

questions

likely

corporate customers.

55 56

What clients? That is the power of better even if you dont is better part.

Intels advertising. More is have the parts to do the more

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Moral measure Ask am

of of it

the your or to

story: tech long for answer the

Where

is If

the you for I a pay you dont

value cant do do it. I it what

addition

investment? question, it itself? Is a will

yourself buying and $250 $70

How pay

take

Can Why

sooner or and just phone? PTCL

cheaper? no-cash to set up a

there

cheaper, PacBell line do cell can a

preferably then as

alternate? month

commercial when better)

phone

dollars

well

(perhaps

with

Lessons learned: Few of people understand Very few technology how have IT creates the to the and art a delivers static train value. mastered

restraining and they

projects versus To

remain mix

achievable normally languages, between factor the and

target become.

runaway add in

this from

business different sets the of gulf

technology and

teams not

speaking to

working Not to in the rein the

different bridge the the the

expectations,

willing

them. leads to cost, from

understanding understating and the timelines, impact?

technology commitment, effort demon. future. Who

required suffers

technology Deadlines, and

deliveries,

customer

perception,

survival,

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With

this

list

of

complex

conditions, earn profits?

shouldnt r e n t s 57 right Shouldnt

technology rather the than

investments just in

economic technology

accounting getting

difficulties

represent a substantial barrier to entry? I think n o t 58. Yet businesses makes I see as a done uses time overemphasize in a business business crutch its or for I the or a a plan

contribution product for value the a

technology Any that a

success. venture

technology advantage,

technology-related driver or management team

factor has

competitive not

know

homework

and has taken the easy way out. Technology intellectual facilitator, not a advantage is an not a competitive (IP) is. a advantage; is a but is

property

Technology requirement, fields.

accelerator, level

competitive un-levels

advantage. playing

Competitive It

57 Accounting profits exclude the cost of capital before determining the profitability of a venture. Economic profits or rents are profits calculated after considering all costs, including the cost of capital. Economic rents (fancy economic term for profits) indicate the existence of a competitive advantage. Just because technology is difficult to get right or because everyone does technology badly does not imply that it bestows such advantages on its users. 58 See IT doesnt matter (HBR May 2003, Carr, Nicholas) and What is Strategy (HBR, Porter, Michael). In the latter Porter argues that Operational Excellence (one form of which is technology execution) is no longer a competitive advantage. Carr updates the debate in his controversial piece and suggests that technology is now part of the infrastructure dimension, hence common, ubiquitous and no longer a competitive advantage

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available restricted everyone

to can

small it,

set buy

of it,

players the store

and it,

the Not

access build

represents

edge.

steal

it, use it, or license it. Technology allows store, playing latest as most you without to do all is with use, It IP, of an it or you on the the above other (build, levels Without at as only Not hand, buy, the the a good the

steal, field.

license) are you at

and

enabler. are

technology but of or your

certainly

disadvantage, faster,

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cheaperjust

par

benchmark. A it of competitive stays the 800 how at advantage way the and breaks for 1500 the meters the benchmark. ensures life god, over or never The In in a a and with no and of A

sustainable advantage. sustainable matter threw up. field outrun them; gifted the

competitive that T a r i q 59, meters much

advantage Pathan Greek

that the had a No I it and of of of and field

master me. heart make

events,

competitive effort, gift; was an all I difference, a

advantage time, I could

money,

Tariq

had my

didnt. showed

track field I field most

training and in

enabler. of them; up with I

beginners,

training I could

could

outpace an event like is

professionals, runners

keep

filled Tariq,

talented

stood

chance.

Technology

like

thattrack

59

See the reference to Tariq the chapter Why Failure?

and

my

athletic

past

in

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training 2008. It

in will

the get

800 you

meters there;

heat it

at

Beijing, help you

wont

win the race. What happens is when a you misjudge the as the technology that to build true, not you part. or leads can Not is was, economic

dimension? technology a mistaken you it,

First, belief once miss that

assumption advantage as you rents. if it long

competitive economic Even on

will

earn

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again, out to

technology the

intellectual still is

property. earn

execution

required

any

rents,

otherwise, than just building. Confusion, Evolutionary On a new is to perfection, product and direction and

development the were to Was

solving thing or you what

the wrong problem, problem venture be we timeline, We was. were trying last not need what our confused. market clear it about

problem target

solve

content

generation, continuing development programs? all of focused solution,

technology, professional needs, In the In one, the or long

process education,

outsourcing, individual training to solve have then

corporate we run wanted we a

run

these. on hit

short

should and

developed

reasonable

revenue

milestones,

moved on to the next big problem. In our infinite to the had that we an wisdom in we jumped of talk to from one

problem thinking until

next

search

perfection, customers product

couldnt absolutely

we

polished

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that from

would one

blow

them to the

away. the ideas, value of

We and of

jumped new the that

around

milestone monetizing

next,

incorporating concepts work we done had

feedback, without on

suggestions, editions

previous

problems

already solved. Lessons learned: Do markets accept for is imperfect a case in side Not is a bad are products? point. Yes. is The the demand Scud pills Star market curve for with Trek set highly inaccurate North So Korean b o o k s 60, treadand just work the

missiles

badly tires,

written Star

self-help effects,

unpleasant sequels. There that curve

separating imperfect feature with.

Wars

prequels, products, willing higher to on

ones.

minimal

acceptable

customers than

Failed

ventures

climb their that

perfection ignoring and

successful product get to

peers, revenue

financially

viable
61

development

rollout

strategies

generation more quickly . Is perfection if of done necessarily it is perfection better with earlier a bad thing? or a It not. new on while

depends

evolutionary delivers by products

Evolutionary generation the work

building

generations

60

Such as the one you are holding in your hands right now 61 No concrete academic evidence but see Dealing with Darwin, Geoffrey A. Moore, Penguin Group, 2005 as well as Block Busters, Gary S Lynn and Richard R. Reilly, Harper Business, 2002.

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those

earlier Each that

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choice The

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different Band-Aid deal. It

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You you is a

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to

market

ahead
62

of

competition A is more is

and

clear

it

in a

economic generating Lexus. Getting small

terms . product is out is

market-visible, important than the an important more of merit

revenuethan features. than on a idea

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perfection. pilot

Testing more

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important

than

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and expensive rollout. Dont you Lexus. ready buys that wins them. get You home; you that allows me just wrong. as aim between that you can to be customers, for a Try a shipping as you solution and the and when break time, a later a lemon with a that bank; money; of you and the

are

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short You you end. The

diversification borrowed cash is time. a day

fourthat the

letter word are living Each dont generate closer

new-venture and the route

lifestyle financially known stress to

burns faster mankind. the

you than The

out any hours

personally professional are longer,

higher,

baggage

62

There

is

no

inventory

left.

Buyers

equal

sellers.

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heavier, sacrifices suffering and basis, choice. stable the support you

the is

money start novel

rarely calling. noble, your

enough. but the or as

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The answer to all three questions is no. When game the and pick we was Aleph with up (Aleph with obvious. that Sakura our of the and Avicenas Mitsui, the your the you the Sakura cut bank had throw to team) started end on and Who the to with

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Mitsui

showed earn or

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Avicena

because

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generation there and

was you

key. buy

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10

days one

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borrowed activities postpone get to freelance certainly the your end own.

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trading project. to you stand to

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comes, percent

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should

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something doing you are Dont

else.

started

distractions after

way.

suitably

armed and dangerous. Lessons learned: Should revenues you really into a add term From the care the comes in about company? word? and all many value what Why brings is forms which called vendors close that were Because of

diversification diversification none of a which short on solve cash getting take

four-letter any

distracting problem to to areas they

logistical owners to pay get the

flow. into new

doing bills, into path services

freelance

consulting contracts, them

side

ancillary ventures from

farther

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expected to

to

follow. you between

As

Geoffrey first and

M o o r e 63 p u t s understand and

it, the then

succeed

must core

difference

context

focus on the core. Models products Profits earlier, Growth Growth or that and work stay growth. Growth is model the are on those track Product Sustainable used to distorts Profits variations that that until start they Revenue Growth. to When generate revenues with hit

sustainable

diversification

Revenue Sustainable push the

Product other

product further down the road. The have it. game is not and just in the a have you about line to you revenues. of to venture of It out is you of and that

about To

succeeding chosen do that

business Product from

making you

viable get run

Profitability mission.

before

out away

capital.

Diversification

leads

Hitting it big The paradox of large customers Is new to there any correlation executing I failure? rare between large believe lack and targeting and New depth bad so. the large customers, venture with handle orders,

ventures, Without

exception, new

large calls

assignments depth, on pricing,

contracts. make terms,

sufficient

ventures

short-term

delivery

63

Crossing the Business, 2002

Chasm,

Geoffrey

A.

Moore,

Harper

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hiring, agreements failure. Its wins your safe case about allow mode. and

concessions, that put them

and on track

service-level for eventual

evolution. of small to test large base you A the

Success not

is big

built hits.

on

collection

wins, build and

Small refine in

credibility, your base for with your you

product,

fix

processes

customer from

smaller business grow

orders higher.

provides

validation

which

can

Although projects in a depth, done,

the

numbers and and

look

good

on every

paper,

big

challenge

stretch

dimension stamina, you not are the

startupresources, execution, stretch marks and

processes, When are bloating

capacity.

only side effects. Big large like deals also imply and may they least in these doing and business and prefer with a

organization, certainty They but at who or

large

organizations dislike mature The with the the

permanence favor also mature the and

mistakes. companies burden the upstart startup. of

earth-shattering management. lies or for startup selling does not

technologies

proof

instances

upstart When

introduced managing,

running,

this

credibility

exist,

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the

venture
64

ends

up

negotiating

from

position

of weakness .

The I

search believed

for

gods that

and we one

generals needed for I us

Leadership

and Greco-Roman tragedies. high-potency to attract We was wrong. Call leadership talent, wasted air bills U.S. should many during and from hours day and

money,

and

customers. MCI of to

expensive World

international phone effort) in when the we

time

(four-figure months and been

recruitment candidates to same us, time talk the

interviewing have

convincing spending

elsewhere

chasing

customers. To the most be fair, this I belief was how We me build skills was primarily about of in a and the but of was driven of by the

fact

that

clueless to had

one

essential knowing to to how their to

required attract money

business convert bank money and to getting something

owner: I knew

customers strangers solve

cash. give

technology large sums problems

education

alien. I didnt know where to begin. In my prior had consulting been O m e r s 65 experience, domain. All I lead did,

generation

64

If you still end up taking on bigger customers and need help with negotiation skills, the absolutely best book on the subject ever written is Jim Camps Start with No, Crown Business, 2002. 65 Omer runs Sidat Hyder Morshed Associates (SHMA). It is now one of the leading financial, capacity

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really,

was

take and

already convert and did lead I

pre-sold them loyal my

(by

Omer) large Omer the be I

customers consulting opened deal. built, someone was the At

into clients. closed had could the the

engagements doors, show, the sales it

technology-guruOmer piece we prospect to hire getgetit worth

slash-wunderkind Avicena, and I make again. a conversion, but and

and closure

generation, that

always

assumed his In one

problem, sense,

not

mine.

wrong was

leadership-in-place-before-its-really-needed mindset funding simple and it the from extension had a only of mindset us similar result;

distracted

constituent

our focusthe customer. Here about in the about is how the rhetoric own well went. your bad. Leadership team Leadership sacrifice, a call chosen and is is and when

holding times to is of

your as

and as

together

good

difficult else in

choices, stand the about out room

selfand has

courage

make

everyone that is a

silence. accepting direction not

Leadership sign

listening or and

modifying

behavior

changing

adaptability

strength,

weakness. Hence with the to name do all The of the in above place, that I the we need the leaders sooner, to

recognition If

and was

better.

question

supposed

ask but

didnt:

you are

only

person in

development, in Pakistan.

actuarial,

and

technology

consulting

shops

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the all

room, of

do

you

still Why

need

leadership you do

to it

do by

the

above?

cant

yourself? Perception because because enough, succeed venture and the grow of of the is that any more new at ventures the top fail than dont newfeed as you an and in a need and onlychiefs

leadership converse of with

issues is just not a to

other

reason. true. few

Interesting They In a to

because setting,

leadership. time

mouths is

reducing ultimate and beyond

travel goal, a and the of a

profitability Once at as

leadership few can be

incidental, achieve

marginal,

sometimes

irrelevant. mouths, looked increases. you seen

profitability, organization, contribution garage with l e a d e r s 66; managers.

value-adding of souls, havent

potential But dont the

leadership need then

handful

you But

doers, you

followers,

have-leaders-in-place

phenomenonseven

of x title in a seven-man organization. Moral of the story: Build a business first, and then go looking for leadership. Lessons learned: John Whitney, did the an turnaround at interesting, specialist and management School, professor Columbia Business

inward-looking

66

See Bhide,

Boot Strap Finance, The Art HBR on Entrepreneurship, 1999

of

Startup,

Amar

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exercise Prince at their they when

67

in

his He and a

In pick

Search one a to is

of to

Perfect look back of a to to of each and

course. lives were The than that this

asked

students

instance teach the

follower, was a leader

manager,

leader. important recognize become to handle

objective being all and

that

more

ability have

leaders

sometimes Their is a

followers

managers.

ability

transformation

measure

their effectiveness as a professional. I If am not get make and denying are you that leadership to fail, quickly. has bad an impact.

you

destined there an for

leadership leadership emotionally but the

will will

Great

interesting, longer, rewarding

educational, ride,

insightful, moving,

entertaining, personally

final destination remains the same. The With point a goes great will great a is If the on you back be to a competitive handicap a be on the will advantage. bad not but

competitive Without caught man, we

advantage,

leadership necessarily advantage, chemo we to Leadership blame blame.

fatal. tumor

competitive ineffective too what late. that else be

leadership boogey when dig deep

against

tape know you

X-factor

things

dont enough,

should

able to blame it on competitive disadvantage.

67

Also Packer,

see Power Plays, John Simon & Shuster, 2000

O.

Whitney

and

Tina

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Closely

related

to

the

concept

of

marginal

leadership is hero worship. Where must are else do be a heroes clean that of of my come from? to From the see in models, in a owners that problems and some and they one and

investors facing can.

optimism they

and

insecurity

there

solution come be

cant

Heroes can

bewildering colors, (please

combination upgrades. take (you that for (I care are you me have

makes,

They

found for ( I of am am (I

vendors this

technology members

issues), am

employees function, hoping doors demons to fail cash have for from was (you next you

responsible board open your some I I

right?),

really locked going so you of the personal

could failed lenders this

these not sure line

through

network), running

before, (after

again), through no a me),

much will credit fit (I

account, extending partners are that until you

problems mile away, on

that

strategic

can

see and me

blind?), with this

friends for

counting said three that

contract), bear get we

family the do

you

would

years

rightwhat

mean you cant take this anymore?). There is no is life is after no Shakespearean bullet that will that owner, to if do he for you a but scalable, tragedies success. hire do an a

because Heroism or

there not who an job you

silver is

portable, Reality you by As expect even think

sustainable, good will a job,

profitable. is by

individual there one reasonable investor,

chance his an

standards them

crappy and the on

yours.

founder, deliver

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vision that

(sometimes have lain

articulated, before

sometimes

not) is

you

yourself;

reality

that they may or may not get it at all. Why do heroes they fail? too much, They long, do and dont they too they that Heroes know carry often fail where too to

begin, excess notice

wait too

much they to power only and with and

baggage, subtle

they

little, the

compromise structure when they on

fail

transitions them. beyond and grow by

change

around

because

organizations individuals; reliance who you a are,

institutions definition, army. as If may well

succeed hero that

personalities fits now

implies

one-man you

go

home

cut your losses. Closure All costs costs considered, a neat in US cash, Avicena
68

cost Of this ran

its cash about

stakeholders

$820,000 . not

(incurred

accrued)

one-fourth of the overall tab. The the big financial hits, he cost with was his just team one at dimension. I both me Aleph, On took with

credibility

front,

Sarwar

and

myself, my family, Sarwar and my investors.

68

Approximately $200,000 in cash debt and equity combined. 28% in services contributed by Aleph and the rest as sweat equity-undrawn salaries by founders and employees. Of the cash component, $80,000 was contributed by Fawzia and me over three years, the rest by investors and Aleph. Despite the MBA, because of lax accounting practices, only half of this amount was deductible for tax purposes.

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On and had

personal A my

front,

it was withered one It and

like

a was

death in that Something after lay

the we our To with in I

family.

related from

side

effect but

Sarwar

relationship happened. as Sarwar our 2001, a point he

away.

feared email During June made

day

thought south burden on few once

wouldnt

happen, angry be me. early have fair,

headed the a

exchanges final of

never

recovered. Avicena that every

said, wrote

exchange reading

lines

year.

In his words:

My problem was and remains a huge burden of disappointment, not because of Avicena, money, investment, losses etc. I had a business relationship with you, independent of anything else and anyone else It was a relationship based on love, faith, and blind trust. The minimum expectation of that relationship for me was an open line of communication, in which you would talk to me all the time and discuss your thoughts, ideas, and fears, just as you had once discussed plans and ambitions. First of all, whatever you were doing or going to do, should have been shared with me, consulted, talked, and more. I should not have been "informed", post facto, and certainly not the way I was. All it said to me was that I was no longer relevant, the folks who had worked with you, trusted you, lined up behind you, were no longer relevant, and if they were being adversely affected it was just too bad. No one, least of all me would have wanted or would want your family to suffer or be on the street God forbid. The second thing that was extremely important was that you should have informed me about your decision making processes as far as business goes, on day one, regardless of what they were. If your decisions were going to be guided by Fawzia, your parents, a mentor, an istekhara, or anything else, I should have been alerted to all of these on day one. I object to none of them, but if they were to affect me and the people lining up behind you, it

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should have been shared. I have already come to terms with all of this, and in some way have adjusted. These are the only two matters that troubled me. Nothing else. I do not think you owe me anything at all anymore. I have no quarrel with your decision or even with your reasoning. My only grief comes from the way you handled me. We in is havent Orange on it what him neither find met 10 or
th

spoken

since my by

our
69

last I

meeting to it and we the with

County,

before nor to

family design. each busy; Aleph hands and

moved suspect We other what me from

Virginia just lost.

September painful had we in

2001 . face been

intentional too we with

would

remember Alchemy,

our

Officially

have

resurrecting

technology downturn that followed 9/11. Post minute Avicena in (vendor as my I have become an bills even at firmer the last flow living for being and

believer invoices within flexible sharing not

destiny, and soon taking means and

settling as

supplier

credit),

collecting

possible

(cash paying p a y 70) , of

management) performance

time-outs (felt

(family), fair

(budgets), (ides with

talent

around

deadlines

launch),

information future

(managing ventures

expectations)

funding

credit-card

debt (good bye to teaser rates and 0% APRs).

69 70

Another book? Elliot Jaques, Requisite Organization. See Craddock, Kenneth, ROBiblio, Third Edition http://www.canadiancentre.com/ejbiblio/ejbiblio.htm#bio

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What not in or not

Avicena something

and

Sarwar you or of off It

together pick

taught up at by

me

was

that book,

could

school, reading It was were it Sarwar

the

greenhouse a school was living way).

incubator hard the

course, knocks

writing exactly it

anywhere knocks street

else. since till (he

believed in a good

not

hard added

you

physically

meant

one more

dimension to

my definition of who I am. Priceless or expensive? Only the next

adventure will tell.

THE END.

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Epilogue - Reboot

Working Mothers, Actuaries and Basel II: Alchemy Associates at MEFTEC 06 10th February 2006 Imagine: a. A group of working mothers with kids and highly coveted degrees in computer science from top notch local schools looking for challenging work and flexi timings b. A non traditional actuarial consulting firm c. A regulatory standard built around risk management practices for an industry that uses mathematics as old as time d. Beach chairs, loyal customers and a Nobel Prize winning differential equation e. Foreign competition with cutting edge technology, unlimited marketing budgets and an already established international track record Take (a) to (d), throw them in a salad bowl called Alchemy and pit it against the multinational players with unlimited budget in (e). Sounds like a cross between Erin Brockovich and a Disney movie playing the underdog against big bad corporate giants. You know, you have seen the movie; in a nail biting finish the under dog wins. But is that so in real life? Read on Jawwad Ahmed Farid headed back home to Pakistan from Northern Virginia, in January 2003, with a desire to do something that was different and meaningful and yet went against conventional wisdom. An actuary by profession with an MBA from a Columbia Business School, Jawwads meaningful version 1.0 was a traditional actuarial practice with a twist. Its first actuarial valuation engine, the core of the practice, was not written by an actuary or an actuarial student but a part time working mother. Erum Khalid, employee number one, with a bachelors and masters in computer science from Pakistans top rated and well respected FAST Institute of Computer Science, worked a couple of hours every day while her children went to school. Their first office was a beach chair and a laptop; their first assignment review of capital adequacy rules for a financial services free zone in the Middle East. The firm that rose from such a humble beginning, three short years later, employs 23 professionals, 6 of them women, 4 of them working mothers; counts 35 of the 50 odd financial institutions in Pakistan amongst its customers including the Pakistani central bank, the largest life insurance company, the largest bank treasury and the largest brokerage house; implements a home grown, cutting edge Basel II solution for Market, Credit and Operational risk that has won multiple industry awards; and stands tall, shoulder to shoulder with competition that has a few hundred million dollars more in market capitalization and balance sheet foot print. When we first started thinking about what we stood for as a firm, says Mujtaba Iqbal, Director of the Enterprise Analytics practice, We agreed that we had to make a difference in both our client and our employees lives. Not one before the other but a balance that ensured that our people

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and our customers did not have the same issue we had in our earlier careers. It has not been easy holding true to that vision but if there is one thing that has helped us get where we are, it is that balance. The most common term used by employees to describe the team fun to work with. The most common words used by the same group to describe the nature of our work fast paced, invigorating, on the edge. Noor Ali, Analyst and Project Manager describes working at Alchemy as An ever evolving strategy game, where every triumph is rewarded by an even bigger challenge What about customers? The one word customers use to describe Alchemy Partner. Commenting on this choice, Jawwad Farid, Chief Executive and Director responsible for the Enterprise Risk and Basel II practice says, We know what we went through when we had to decipher the Black Scholes equation. We take great pains to spare our customers that agony. Having said that, the process and the underlying equation are essential to how Risk Management works. We spend a lot of quality time with our users ensuring that they understand not only how to use the system but also how to break it. When we break it together, its the customers who come up with fixes and suggestions first. It is their solution; they own it as much as we do. After exhibiting at GITEX in September 05 and the Pakistan Single Country exhibition in Malaysia in October 05, Alchemy will now be exhibiting its flagship Enterprise Risk product, Alchemy Risk Manager at MEFTEC 06 from 13th February to 15th February 2006 at the Pakistan Pavilion (EC-03). For more details on this release, the firm or our work, please contact: Jawwad Farid/Uzma Salahuddin 103 104 Amber Estate, Main Shahrae-Faisal Karachi, 75350, Pakistan www.alchemya.com jawwad@alchemya.com uzma@alchemya.com

Alchemy picks up first prize at PASHA ICT Awards for Alchemy Risk Manager 06 December 2005, Karachi. Alchemy Technologies today announced that it won the best financial application award today at the PASHA ICT Awards 2005. Judged by an independent panel of technology and business professionals, the winners of the PASHA ICT Awards will now go on and represent Pakistan at Asia Pacific ICT Awards in Thailand in February 2006. PASHA (Pakistan Software Houses Association) was formed with a mind to promote and develop the fast growing software and services industry in Pakistan, and to provide them with national and international exposure, and recognition. The PASHA ICT Awards serve to recognize and promote locally developed software applications and services. The applications are judged in terms of creativity, innovation and excellence. Participants include leading software houses, technology shops, ISVs and consulting firms in Pakistan. Alchemy Risk Manager is a Basel II compliant market, credit and operational risk management solution targeted at Risk Management groups within financial service institutions. The solution is under implementation at two client sites within Pakistan, and has already picked up other prestigious technology awards and nominations in the business and professional categories earlier this year.

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Jawwad Farid, Chief Executive at Alchemy, on the occasion said, A good product has a great number of contributors and our thanks go out to our team members, customers, user groups, well wishers and industry sponsors who have all played a key role in helping us get where we are today. The PASHA ICT Award is an honour and testament to the hard work that has been put into this product over the last three years by all of us. -end-

Alchemy signs Implementation

up

Union

Bank

for

Basel

II

and

Alchemy

Risk

Manager

25th October 2005 Karachi, Pakistan - Alchemy Associates / Alchemy Technologies signed up with Union Bank today for the implementation of Alchemy Risk Manager as a middle office solution. Jawwad Farid, Chief Executive & Actuary at Alchemy Technologies commenting on the signing said, In a market like Pakistan building traction in the relatively nascent field of risk management is only possible with the continuous support of our customers and our dedicated and talented team. This is as much a win for them as it is for us. Union Bank is a 1.5 billion dollar bank that has been providing financial services since 1991, with 42 branches in 19 cities and a correspondent banking network of over 300 banks in 85 countries. -end-

PSEB selects Alchemy for GITEX and Pakistan Single Country Exhibition in Malaysia. 30th August 2005, Karachi, Pakistan. Alchemy Technologies / Associates today announced that it has been chosen by PSEB (Pakistan Software Export Board www.pseb.org.pk), along side 12 other companies, to demonstrate the groups signature product, Alchemy Risk Manager, at GITEX. Alchemy Risk Manager is a Basel II compliant market, credit and operational risk management solution offering additional features such as treasury and risk adjusted return calculators, derivative pricing engine, derivative risk management module, interest rate simulation models, Value at risk estimators, portfolio benchmarking and back testing tool kits. Jawwad Farid, Chief Executive & Actuary at Alchemy said After completion of our recent implementation and industry award, selection for GITEX and the Single country exhibition in Malaysia is yet another validation milestone for our product and technology. It is also a first step at exploring the Middle Eastern Risk Management solutions market. GITEX is the largest international IT exhibition of its kind held in the Middle East that will be held in Dubai from September 25th to September 29th, at the Dubai World Trade Centre. You can visit the GITEX website at www.gitex.com. -end-

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Alchemy Risk Manager Goes Live at MCB 21st August 2005, Karachi, Pakistan. Alchemy associates today announced that its Alchemy Risk Manager implementation went live at MCB on August 20th, 2005. MCB signed up Alchemy Associates for a review of Middle Office function and implementation of Alchemy Risk Manager on May 11th, 2005. Alchemy delivered 4 incremental releases starting 10th June 2005 and went live within 3 months of contract signing. Jawwad Farid, Chief Executive of Alchemy Associates, commented on the event. I believe with MCBs continuing and ongoing support we have a delivered a solution meeting international standards and flexible enough to handle eccentricities embedded in domestic and regional markets. This is one more important milestone for us in a relationship with one of our most valued customers. MCB has always been on the forefront of technology and system initiators and have stayed true to that legacy in choosing Alchemy as their Middle Office provider. MCB Bank Limited (formerly Muslim Commercial Bank Limited) with a balance sheet foot print approaching 5 billion dollars has been providing banking services in Pakistan for over 50 years, with above 900 branches, 750 of which are automated. -end-

Alchemy Wins First Prize at Software Competition held by KRL 26th July 2005, Karachi, Pakistan. Alchemy associates today won first prize in the commercial and professional software category at the All Pakistan Software Competition and Exhibition organised by Khuta Research Laboratories. The competition commenced on July 23, 2005 and concluded on July 25, 2005. It was divided into three categories: professional and commercial category, student category and, the under-16 category. Alchemy presented its flagship product, the Alchemy Risk Manager, and picked the first prize amongst 12 other participating firms. The All Pakistan Software Competition & Exhibition (SC&E) is a more than 15 year old industry exhibition that show cases locally developed solutions, judged by a blue ribbon panel of academic and industry representatives. Awais Ahmed Khan Leghari, Federal Minister for Information Technology, was present at the prize distribution ceremony, where he addressed the gathering and distributed prizes amongst the winners. He remarked that the aim is to bring the best out of the best and our country has scores of high-calibre professionals capable of developing and producing world-class IT products and services. -end-

Alchemy launches ALCHEMY RISK MANAGER Product line. 28th November 2004, Karachi, Pakistan - Alchemy Associates has launched a new technology solution aimed at financial risk management groups in domestic and regional banks.

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Alchemy Risk Manager allows senior, middle & functional executives to track and monitor volatility by highlighting, monitoring and reporting portfolio & balance sheet risk profiles on a daily basis. This application has been specifically developed specially for regional countries with illiquid secondary debt and equity markets facing sparse data problems, modeling issues and regulatory requirements. The solution conforms to both the State Bank of Pakistan and Basel II regulatory requirements with cutting edge enterprise risk management paradigms and sophisticated simulation, calculation, projection and stress testing capabilities. -end-

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Why failure?

Before

my

fascination Dated with a new

with little

failure earlier it

came than

my my a

initiation. involvement

ventures,

requires

substantial detour down memory lane. When at a I was 16, fate handed field a the that sci-fi his would touch frame, between be the was from me over to My
71

a a

coach true

local

track Tariq, Coming

and

club.

training air of

partner, highlander. the between capacity shorten notice the feet stand Moses, country is

Pathan, rarefied dot the

mountain was and and his his I an

ranges and a like

borders lung could way a to to a He

Pakistan

Afghanistan, stride fight over he

Tariqs at a

Ramjet. all

lengthen heart A small line.

seconds half Edwin who line

the and and

finish with tall

five was poor for a the Coe

destined kid from

somewhere would late

Seb

while with

Izhikistan in

prefix finish

fashionably

crossing

in the qualifiers.

71

The grail and the gospel in middle distance running is altitude. It is all about lung capacity. Training at higher altitude, with less oxygen in the atmosphere our lungs become used to working with what is available. Take that training and bring it down to the plains and the same lungs used to breathing in oxygen starved air, start getting regular air. For a high altitude lung the effect is the same as adding nitrous to your fuel mix, using high octane instead of regular.

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During

our

training gliding last out is of

sessions, the 50 coach yards, fashion, breath.

Tariq doled while half A from a

went out I dead 5000 with was a

on in

to an and

complete across

everything the

effortless completely endurance (yes that miles) second personal matching over join than we air When and be

flopped days meters over a 3 40your hell, roads, could less time logs, track alive would Our our or in the

typical little It

training equal to a of

would to in a you 5

start KM or

down

30-meter

sprint

walk-jog edition pace with

between. portable at to ran 3

four-wheel paved that a By you mile

minutes and

kilometer

dirt the a

tracks, for

inclines who

punishment

daring and the

think half

immortals to

minute down us

three thick

quarters. in our with Tariq for the to as sauce

got

low 100s a TV

event the be I

would the well, the

become looked end ready

and bad would

around

like and

reception. and

finally child meets lucky, I

came, asking for used Tariq I not,

more living

poster

dead. of with

professional training When I silver. was

be up I

reruns with

sessions. When

finished went

gold. empty-

ended

bronze

was

home

handed and tired. The credo to you we so stay it long at in the the field you was simple: group, your If burial For aptly no If you matter die want how and

training

takes, the die take and

finish line. the honor. of

assignment you

cross will run

finish care at in with the

trying, I at died and the

arrangements, years, built Training

with

honors

National

Coaching

Center

Karachi,

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junction point to

between the on

National on

Stadium our one say,

and side

Aga and

Khan would the your

University hospital

Hospital. the

Naeem, and

coach, Its

stadium other

choice which way you go out. For other and athletes daily that runner me. (who Tariq than of the bold as On later was I how way hard a as became and a he What better tried, of good it and he a

friends didnt more was

pall

bearers) was.

Naeem,

matter

gifted that

mattered

irrespective lose located with fail day to

couldnt soccer and it a was

oval edges,

boundaries cricket I you learned crossed up for

field okay line,

between long and I a

stadium that the more and with

hospital

finish myself

went

home,

showed found cinder

punishment

the

after. around

religion track

running

laps

a l e f t - b e h i n d G r e e k 72 g o d . Startup roulette: A framework for failure The it need was of for a framework for when which if me my arose to when an I realized objective cross of it of I difficult view between have refer I retain cycles. things had and what to first fix been had

point fading would common could and

ventures

were

economic there out do

Instead worse, a list that Page

troubleshooting, helped to diseases,

made

symptoms, to

cures it.

figure

gone

wrong 69, your

what

needed

Expectation

Management:

shoot

72

The Pathans, the ethnic race Tariq came from, trace their lineage directly to Alexanders Army when it came through the Khyber Pass to invade India.

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partner talks

in about

the

knee

and on

then to

tell

him

if

he

moving

something

better

again, you will cap the other one, too. When was bad The used on the framework that failure. viral of of after the was I Is first needed it or just fullput to a to runny work, nose, it a

obvious of cold,

think

about

degrees

flue,

blown The took

pneumonia? the I back was loss non-

severity was the feet on by

illness treatment. of time it At of failure. magnitude while such

determined to get this

aggressiveness your

benchmark

amount

times

dependent caused financial promises, determined The

financial

failure, factors and the the length fell

occasionally as

attachments, mindset period. following

relationships,

credibility, of in the one

self-confidence, recovery of the

psychological

recoveries

three broad categories: Type I, up

a.k.a. an the

the any idea;

no

commitment financial throw do and Your of not a get

date, costs. the as and little out

is

failure come at as is it, you

without with test get

major you

You

money right soon less

waters, plug, wet. weeks feet

response, limited

pull your to

the 4-12

step

total

investment

your

time

than 5% of your net worth. Type failure Moving testing find II,

the

fair-priced significant with you too the

joy

ride, theme,

is

with forward the

financial above get go for a

costs. after swim, by a

waters

actually strong,

the

current

stung

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jellyfish, almost losses your Timeframes

pull could a

muscle, heading run into

get back

a to

cramp, the of

and

drown claim from you your

before

shore. and and over ride into, your

years, net is

personal your

substantial and this

portion

friends years.

families misadventure the you your it

worth, spread joy

recovery multiple because you shot had and

Called what and

fair-priced were to chance, the

knew fun

getting took

missed.

Charge

experience

account. Type III,

the

tailspin, costs.

is You

failure go for a

with swim

substantial

financial

and are never seen again. Type III failures strain. and generally and Recovery requires and result from in complete personal failures I I have could

financial emotional is by very a

wipeouts

tremendous such serious only

rare

intervention thing

friends,

family,

well-wishers.

seen

few Type IIIs

and the

do to help was turn and walk away.

Sidebar one Serial entrepreneurs

S e r ial They s u c cess entreprene urs keep a or fo ll o w the S o c ia l a ve r y g am e an d i nt er e s ti n g life e co n om i c p a t te r n. t h em th a t will pl ayi n g u nt i l de a l s

tailspin .

sy s te m s

m a k e it easier to rec o ver f r o m ta i l s p i ns h a ve a t h r iv i n g a n d growing entreprene uri a l c o m mu n i ty . Fa i l ur e vi e w ed a s a b a d ge l a w s, and a of courage and n ot and and t a b oo , l o ss p r o t ec ti v e r e co g nit i o n for b an k r u p tc y p ro v i s io n s , ri s k a ll liberal healthy write-o f f app eti t e

u n d er s t an d in g

h e l p. Social and econ o mic s ys t ems t ha t do n t m iss o ut o n t h e economic boost ent rep r e ne u ria l st e r oi d s p r ov i d e .

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The blue screen of death The in I to marked-for-death firstmy and venture was The MBAs syndrome two to is as quite well as common a Type second-time number and idea and and little minimal was bank done ventures. finished give Cookaracha with paid the with within advice school original give The status overall there in cards our in at invest

Guides, three

failure, aspiring

months.

was

business after Attract

school

students

before, content, advice, as a

during, process. a sell part cost full-time anything in

application

them

advertising, charged. due and small for me and working off school our to the since to credit my

free, was

part

opportunity financial wasnt the then). expenses Manhattan Columbia the his mint a

student the not

investment (had

business were and at

discovered and me

Employee student the

headcount apartment business Even Amin, by than

operating from Broadway library (fresh had

Fawzia

subsidized

University.

from made us to one the Inc.

Roosevelt

Hospital)

son a

significant of which

contribution rather of was

allowing usurped

claim global

two-bedroom

single, as

bedroom Internet and

immediately faxes, were

headquarters access, email, rooms

Cookaracha also

photocopying, provided

conference

courtesy of the business school. The downside and and I I up took was limited on to the on the I unpaid the hours web

Fawzia together server.

spent and it on

getting

content there

running

student

because

thought

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was while dozen

an I

opportunity. the was few busy who

was didnt things

wrong; want to

it pay

died and with do to a the next three

because

came had

getting There

together, mushroomed I could site the

other

sites the where

already was from are no

similar door. crowded

themes. Lesson space

little

differentiate

Guides there

number

onedont

walk screens

into on

windows and no doors at the entrance. Avicena, southern lasted multiples education complicated $70,000 for in incubation facilities. production broadband capital venture California, all a my this I of of net number circa two three, mid loss it was we Things location 2001, it in best in an and a

1999mid Although

years.

represented

financial worth, had. time and

measurable also had the a were

ever

little and

because bartering

taken of

friends agreement We had

familys in

money

20% and

equity

approximately

$250,000

services

employees beta

payroll,

website, connections,

servers, maxed-out

dedicated venture cards,

customers, credit

commitments,

but no revenues. The that are business got business most model around was to to and fairly far simple. it, easier and the most the to are When we we

finally

implementing are execute, to the

found write, rarely

models

difficult Realizing is a can for be

simple.

accepting

this

for loss

an of

entrepreneur innocence lesson and never that

equivalent teenager only be One

important hard way arbitrage,

learned part

taught.

labor

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one

part do

technology, sounds all it

and neat

one on cash

part paper runs

branding but out, if lo

and you you

distribution cant

before

have a shot at writing a book. In the of short span that we were around, we took lead Bank, Pearson I

care

technology and ERC Mitsui, in Boston, much food in

execution,

content, of

offshore

outsourcing, generation, Swiss Re, Sumitomo New York, as

business engaged Frankona, Reuters, Chicago, missed

processes, Society Yahoo, D.C. Manufacturers and

Actuaries,

Publishing learned and the for and

business about as I the

development

discussions. Tokyo. airports, red-eyes, Despite screen true may were then with greedy, we

and

flights, taxis, selling. hit

unplanned hotel

transits,

layovers, did knows in out a about we were no idea,

promise greed and been

the

because

stupidity

bounds.

Also order, and

arrogancewe which, such made a and

stupid, If We only

arrogant, first,

different kings,

not have greedy turned

bad thing. like stupid.

arrogant

began

arrogance. When would in to go a we be row pulled a out had for down on my and Why the own me I a shutters, I would again. little didnt just so I thought think it

while left cash

before

about and back could back

venturing strapped broke

Three to that to

ventures get I come

breathless so

want

working

140-hour

weeks work

again.

hard

full circle when you were already there?

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In

less of

than three during I

18

months, without had

I a

went off

back of

to and

the in I in a the

grind another had going

working years the was ask A and

paycheck most to keep 30, meals or as a

paid

what

begged,

borrowed,

and

stolen to

things with on

final lucky put

dark be three

months

California. supportive table, me for of hand didnt rent.

family

who

difficult it could

questions and have just

charge easily

different

dealer

different

cards

been a Type III tailspin. The last set of lessons that I learned from the

Guides and Avicena boiled down to: a) out run up Failure leaner, with for more is a more discerning Ounce the for wiser. finish day the and As forgiving you as and you come you show will

teacher

than

success. meaner, cross

ounce, line, after,

and

long

honor,

punishment

be at peace with yourself and the world. b) As a first-timer enough the take of your you of are odds to around pick tires, the the circuit, car, right of you the

dont right or and a you

know to

the

right

deals,

right the

team, turns.

how

tightest to its

Regardless blue

intelligence, doomed and are

commitment, There to is get you going

capital, screen because

fail.

death

the

stacked

against

from day one. c) and Best no to one do is this when the It stakes helps are if small are

watching.

you

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young

and

strong

or

have

the

heart

and

stamina

to recover and take another shot later on. The real question once it asked all? then, me, It and as is, is and a If going member failure to it? of is an so why so sit

audience grand, worry why

common, about

inevitable

honorable, happen Just

bother

studying

analyzing

back and enjoy the ride, right? Ten to years change have ago the when with world I was and At a warm-blooded in my party I a

animal would

brimming

confidence 35,

abilities I have

survive

adversity,

agreed.

though,

slightly different view. I I think would entrepreneurs than even that by definition human forth, or of a 40
73

burn In

out

lot

sooner

ordinary venture the is get

beings.

fact, any

without

scientific, validation, business you slow personal, much less you

statistical, half-life riled around

academic typical After 40 more family are your risk make this egg in on you nest

founder down,

years. and

easily,

have

financial, and, a reckless In want you to than field play or put it you that

responsibilities, earlier taking, it cut-off years.

generally

speaking, were

thrives If

safe.

financially date,

before can

somewhere aside

around

your

73

This book is filled with assertion like these that should have been backed up with solid academic research but are not. If and when I enroll in a PhD program, I promise to do better.

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and safe vary you

go

back a I

to

being chance

reckless. that you final that

If will

you

dont, to will that that 17 be 80-

there

is

good

switch age

mode.

believe Having window it

the

cut-off and

across have you to been a make to

cultures, said of working

regions, and you

social 23,

boundaries. gives years

assuming of at

since

turned will

opportunity There a look

about always the

happen.

exceptions year-old cookies hitting on

this or

analysis; making

grandmothers eBay jackpots with

fortune fat

selling reducers

middle-aged best-selling

first-timers

and crispy bacon toasters.

Sidebar Two Spirit

E n t repreneurial b e l ieve and that spiri t woul d the n bet , bet be is s car c e r to t ha n be c ap it a l . G iv e n certainty, opportunity, res ources, and choice , mo st p eople they and the c h o os e see e v en as the owners, T hro w in i n v e s t ors , a l i tt l e th e h el d of Ab se n t e lse of is em ployers rather t han e m p l oye e s . wh at if you

p r o bability a c t ually c o n stant. will man s tay

h a pp en s .

c e r tainty, a very s mal l p e r ce n tag e of t he s am e gr o u p w i l l take An with e ve r yth i n g i n cr e as e increasi ngl y the would sm a lle r pe r c en t a ge t he t a ke r s

el e m en t who

c h a nce, reduce choi ce , an d s t ri p o u t r e s o u r ce s . T h e l as t standing ra r e in di v i du a l wi ll a c t ually make it wo rk, ir r e sp e cti v e o f wh a t y o u t a k e a w a y f r o m him. That is the ess e n c e of a n e n tr e p r en e ur a s r a r e a n d honorable as tr ue lov e , c o ura g e , a n d s e lf - sac r i fi c e.

If you

you

assume of

for If

moment average to pan

that new out

the

17

year would takes

window four three

opportunity an six and years rolls

exists,

then

how and

proceed? to to

venture you the

reward just fourth

investors

founders, of

that

gives On

four

the

dice.

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roll,

you

are

out

of

the

game.

Is

there

anything that you can do to improve the odds? I can think cut six a lot of sure down is two. that the that to You you a can will new roll have time when a per you to you are or

absolutely you The four is the per can to

winner will for

average

venture. take your There The one time

problem

venture and for is

years of

compensate there you down

original not time

belief, taken you

commitment, room before

effort. you even. fail

compress

break simply,

thing

that

can Put

cut

the

average

failure.

rather

quickly

or not at all. Avicena had afford parents those the came that to to shook health in The But that a assumed me up. Amin, and In more off it our we a in two-year-old, no longer I had my off my that could left It had two was with I 40. year, debt me to their penance and that of hit

allergy

indications gathering and

could

insurance. paid years a also took pool as

succeeded lifetimes. behavior. years from

than pay for

entire

four they it I

took

obligations

were

welcome made me to of the or

very sink time roll clock to

clear I

recover

reducing had soon as one

never refill. expired this a was also make my clear

one more if

dice

that

I decided say dreams.

roll, a

count on

goodbye With

forever

entrepreneurial third that time you and

wife, some

kids, and about more

the way, woke up

Mr.

Farid, it did rewarding

and

thing

productive

financially

your life.

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In

my

mind, test each see screen and

the that of if

question can death you was it tell is

became, you going

Is to to

there if

litmus blue test Before

upfront get

the the the

you?

roll,

could

simply

apply roll

worthwhile

dice or pass. To why will design the test, you a you have to list power, few dig deeper into

entrepreneurs give

fail.

Traditional of discipline, among pages stuff; good

literature factors: markets, others; would lists A

long

environment, business fraud, quick luck, greed. are work read fate, But

personal pricing and last all ethic of this

models,

competition, add and that

execution stupidity, macro No

the is

destiny, that,

arrogance for

exactly

lists.

authors,

users, readers, or entrepreneurs. When about and cant I go beyond meta the who macro in fail, and me and factors my do mind so and think they Any all look three a

the

dimension,

businesses

entrepreneurs solve three you

because faith. include the take

simultaneous define, needs we

c h a l l e n g e s 74 to what can

selection, screening three factors

execution test to Let me

balancing define

factors. mean

then

at the tests. Selection The selection idea. problem The is picking to up the right to business ability decipher when

74

No

academic

basis

caveat

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roll you

and have The you

when this seen right and have,

to is the

pass. movie

Like

all you
75

selection If it the the how

problems, ends. movie edge

basic

pattern once, like

recognition. know seeing plot still the and

ideas again when

are and

same

again

again . the is

Imagine

you

know

ending,

while

the

competition

trying

to figure out who, why, where, when and why? Execution Execution idea. business. in course is In delivering idea, real you on bad life past it GO the promise of the dead the Great in gets execution, is staying

contemporary

literature

execution faster

clichd, that

cheaper,

and sooner. Balancing Balancing and when you when you ever you can Faith is recognizing It is cutting plug your In the on when you the can when win you Have of a cant. and again the going distance

faith

losses real

cant.

Once

clichd.

life:

pulled

ventilator

dying loved one? Now that we

(I havent and never want to) what take a each look of at these the

understand lets

factors

signify,

tests. Selection and execution first:

75

Andy Kessler, Running Money, Harper Business, 2004 is where I first saw the I have already seen this movie analogy. The analogy and the book are both worth reading.

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Bruce

G r e e n w a l d 76, franchise Behavior are

a and

professor in his Value School, forces is

who

defines of classes barrier a

business Strategic at to five

Economics says,

Investing too many;

Columbia forces entry

Business four

P o r t e r 77 s creates

for

competition edge and

what

competitive

ensures

sustainable

profits. Everything else is irrelevant. In you plain for have English you to is to pick not for a a Bruces kick a butt law of states your in now is to or that in the will time. enter That and each

order

competition which but of

business limited long it you very

competition remain This your is AMD a can

just

limited only for or

period

happen new compete Coke one

when with and

exceedingly either both. against

difficult true and the

entrant franchise. else;

market against

business Intel; every

Transmitta Any

Pepsi

other Within State

regulated players: banking insurance

monopoly

against

recently

de-regulated Life PTCL;

Pakistani

market,

Life;

telecommunication

National Bank. We few it fail we as entrepreneurs we are aware of but the because of law (we in may to our not first At know

rounds, are by that

unaware either

Bruces

Law.

times

name)

refuse

believe

76

See Value Investing, Bruce Greenwald, et.al, John Wiley & Sons, 2001 as well as Competition Demystified, Bruce Greenwald, et.al, Penguin Group, 2005. 77 Porters five forces are Supplier Power, Buyer Power, Threat of Rivalry, Threat of Substitutes and Barrier to Entry. See Porter, Michael E., Competitive Strategy.

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it

or

find

it

difficult

to

acknowledge

that

it

applies to the opportunity we are evaluating. Bruces the with have Law or the business franchise If odds franchise your test test is you

first

selection the

requirement.

you

begin

passing already

business

improved

against

failure. Unwavering however, success. You no very But can discover restricted then you need to before an opportunity future due that and run the you to your keep out of ability a to where there will is be is belief not in the the only franchise requirement test, for

competition

or

competition venture it

sustainable enjoys. this way, Which convert that

competitive opportunity preferably

advantage cash

capital.

i s e x e c u t i o n 78. Entrepreneurs or got and that bills, they both yet pay and cant the look hard fail because or will the they find pick a bad if idea you that wrong today their for

execute you and as make idea

both.

However part

enough function rent,

79

businesses

execution

viable a

businesses settle

payroll,

generate

reasonable

profit

their owners .

78

See Execution, Larry Bossidy and Ram Charan, Random House Business Books, 2002. 79 See earlier footnote on the difference between economic and accounting profits

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How test

do

you as

reconcile put and You indicates

the it, two

truth the

with

the

facts? of you on some train and well break or we how above

Well,

Bruce

business

franchise level of if count that

above

thingsthe make

profitability profitability. fail making test it or last

sustainability can one, will still just On the carry a dont you how run that when fight one of other is any

money

number inertia

forever. you trains does real not

execution much away

front, trouble

momentum distance you are passes driven. inertia, hit just a tests at

through

before in. other it The

realize because on mean

Just

tracks it is you the

stations,

test Throw

change the so

directions, called and

momentum businesses will see

hard

stop. about

profitable yourself

spoke

you

well run they are. Balance And quit now Faith balancing The faith. The winners-neverwhenkeep Dana faith can How a I do bad time I at of a how-can-you-walk-awaydefense. last it comment but bad shortage a

for

question! back I to can

we-are-so-close-to-the-end coming Point: of or you bout faith Sarwars accept you. deeper? that pity? Was what How

anything Given

shortage

from Is

something quit? tell of true self

day from

just

Sarwar do you

meant? know

catastrophic

failure

its

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to

walk

away

and

do

something

else

with

your

life? Us, the entrepreneurs remain that Call or pray in a lows we it higher and it the and to are a religious given to destiny, being; will do you not It is what when a lot. we we few only after our allows what us the bet. that We face just and a as it, in to

cant

agnostic sink

abandon rounds find faith us

project. guidance, an you at our will

karma,

divine

entrepreneur yourself

every

morning that take

looking

mirror. destiny and or that

abilities regular as an the

leave also

paychecks faith it is

world It is

may view adversity

irrational also

insane helps faith

same and

survive holds

our

us back long after the wake is over. How its the rely faith do you know for open its to over? turn and faith the can How your is leave? not Is to do you You know up and an the cant

time key, on

you the

back,

pick

door

faith

because pay

rational there start

will

not

bills. use

objective

measure

you

self-destruct sequence? I only have The for and the one its good take test of that a I have Even to What that that if tried is to over make on is as as is

time. money

objective

business money

stakeholders. make work they do.

not-forcarry in out

profits with this an

charities Take out the and

exactly comes goes

money?

everything everything

revenue,

expense,

difference,

positive,

cash in the bank (more or less).

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If to

it be

is

negative, and then your pockets.

it

is paid Your

like it on

bill

that from as of

has your an your deal the out. on

paid

get

does

personal pockets days it AND has and

survival the for depth the for working yourself. ultimately will and

entrepreneur

depends tolerance to cut

20-hour If

paying

the you

business the same,

sweet

allowed quo

with

status your When it

remains or you

either move

pocket does,

your

patience

run

abandon

rationale

to faith. Making finding product, It fashion money a is a a little finding buyer, do is some you more a all and of complicated closing these in left a than a a deal. such for you

need, finding that

market,

creating

requires that

there

margin

to take home at the end. Very right and goal, time few you businesses If it and you have can reach an on. of This capital out this to When objective goal that its is reach it

away. have to

remains linger run go home.

attainable

sufficient or

faith

becomes

unattainable lock

capital,

up and

in essence

test number two. Faith numbers reachable this are not is and add no commitment business up, a longer a and within are model where relevant is when the where is When are on

underlying

viable,

profitability timeframe. and or be tests viable

reasonable true,

faith

commitment

misplaced. static;

These business

conditions model may

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day down

one

but

irrelevant road. is again and New It and

or and is

unrealistic previously as better

two

weeks cross simple to

the

unknown

information major questions products, grade ideas

generated

ventures to about and ask

milestones.

again as we

capital, teams rather

customers, plans

economics, move

forward

than rely on initial or static analysis.

Sidebar current

Three: future

Assets cash

and has

Liabilities some value. As

For some, a going-concern venture, even with negative and flows, long as it is viewed as a going concern it is still an asset. The minute you turn the life support off, it turns into to blood are sink oath a liability you. to A with enough in strings ventures The highly attached is the common or theme die

funded with friends and familys effort and capital succeed most new trying. are stakes high since ventures

leveraged, speculative, risky exercises in the power of faith that stay that way for years. that creates the bias the for the high returns fail to or aim of stays for a (is whether natural costs. to ventures succeed, The leverage persistent) creating at a all is

owners

success

Sometimes even a small win that allows them appearance going concern

maintain

preferred over a declaration of all-out failure.

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Do Yes is

I I to

have do. fail on

list

of

questions for gather

and

m i l e s t o n e s 80? the objective and and time an the the a the baggage, questions every answer on and to at that has

But

remember, big

me, The

quickly, next are your

minimal tested you

take you

the

thing. and

milestones have on impact next

applied answers. If make at

additional

information Until dont get then

questions milestone; running cost of

satisfactorily, you no and/or on

move

milestone. short

stuck

progress; level

start

capital, that

consider versus

staying

trading

your current venture for a better one. Lets start with the list of questions. Milestone on how with you number a one to the idea. until it You you cant figure it move out will

just are

great

idea build

going

and

what

cost you. Five quick questions: 1. What are you building? 2. What do you need to build it? 3. Can you get it? 4. Can you build it? 5. How are you going to make money from it? You It and have may form, to be you build a what you of are a its going to sell. or a it shape

product, a

concept, physical wrapper

transaction.

Irrespective need

tangible

around

80

on

For a more traditional and deeper treatment, see HBR Entrepreneurship, Harvard University Press, 1999.

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for

customers For

to a

visualize services for a packaged, need a it. know be build you the

the

value

your you

idea need you

creates. need for a a

solution, and In by working In very

infra-structure; finished, concept, help to do

technology pilot.

product, most rare about partners

edition; cases, cases, you your and Beyond rents the

you

you need you may need product vendors? from of idea;

be able to to select How will who

build it

yourself. If

help,

enough

appropriate the You,

they

compensated? economic the

compensation, the or idea; the

captures need? the the

fulfilling

this they,

originator of distributor

manufacturer ultimate

channel,

that touches the customer? Milestone already chapter, number touched but I twothe on this think customer. in the the We have are

previous

questions

important enough to be reproduced here again: 1. Who are you selling to? 2. Why will they buy it from you? 3. Whats in it for them? 4. Who will sell it? 5. Can you sell it? 6. 7. Do Do you you know know a anyone who can be a fund ready this customer today? customer who will from day one and buy it when its ready? Milestone make money number while threeeconomics. doing all of Can you still Also

the

above?

consider these questions:

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1. 2.

How Is

long

will

it

take

the

business

to

reach or

profitability? profitability sustainable, seasonal, erratic? 3. Who do you need to run it? 4. Can you hire them? Will they work for you? 5. How sensitive are you to economic cycles? Milestone number fourthe end game. You have

made it work, now what? 1. What is it worth today? 2. What will it be worth tomorrow? 3. Do you want to sell it? How four end you do you monetize and Do the you the capital made on more who plan investment over until is the it the to holding valuable

(human, forever of or

financial, and time? more

other) your

milestones? Is

collecting valuable to

profits

business

someone

willing

to buy it from you? You make what need you your your to have an exit The strategy to the end game be. in mind and also have

before

commit first opening

yourself moves

venture It you

moves.

dictates

will

dictates

the

intermediate

milestones

to hit before you can reach your destination. Closure, reloaded Five points before we close. a. First, there are no right answers to the

questions above.

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b. Second, answer c. Third, check check do let sunk Before evaluate bring

you

need

to

be

realistic
81

when

you nor is a

themneither each point. point that that of is a the

conservative milestones prior not is to

optimistic, just realistic . above Investment milestone back. your in can the return. four: be made is It the that you to

s u n k 82 c o s t .

Whatever going gone. is

past that

money affect You if

Dont not a

decision. future still payoff will If it

However, it. that you to turn is

investment cost.

expected invest

salvage from allow doesnt, that

you

additional

capital,

additional earn d. Point built will the you can life, a

investment

decent number on a

in your faith and walk out. Remember of the point this safe view At take when is world. will during at Only call; All you to There break your you the the and move

always you

exceptions some the to risky safe make

that bets; which you.

framework. will opt will

others,

for

route.

determine

framework framework questions forward

cant does that and

help provide not

milestones

would

allow

make

additional

investments

unless you know what you are doing.

81

What is realism? With revenues money that you can take to the bank within a quarter, if not earlier; every thing else is optimism. 82 Sunk cost. Amount that has already been invested (spent or expensed) and should be ignored from a cash flow based decision making perspective.

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e. Finally of you I for need to will

point pray get. be

number for That a a

five: be miracle

on

the a

question would miracle praying year,

faith;

there

will is if

times and

you

acceptable you were times

behavior. a

would

worried

not

miracles

few

especially in your earlier days. But fork then in if the you Join Praying grows need you the and the and a miracle are in for your for miracle hoping as need at the every wrong

road,

business. industry. is of not part if a big matures God that of

pedaling miracles business acts is be it is and It not

distraction reduce

and

these

should divine your has need

dramatically. should strategy just your your why than

intervention business regularly with or out

certainly you something your

its place; it

remember that there prescription, s t r a t e g y 83 your

wrong

business to

model

you need to focus on fixing that instead of trying figure prayers arent being answered. Why stop up here? and ways ones out of why to that My Surely we this kill I there are your and on are the more ways be to why a

screw these are I

since

subject, may but

and

order? around my

There to

thousand the ran

business, took

these before my can I

got

trying and

cash

Fawzia

away

credit

cards.

bills,

debts,

83

Not

necessarily

in

that

order

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vouch mistake health.

for my had It you the

their personal on also and

effectiveness. biases and the and my business the either you find so or it dim

The

order the my

reflects

impact of

financial it it sneaks have is so it

reflects

likelihood because it to because hard to fall you

repeating up on taken that

this bait

mistake before and you be

realize

slipped;

elementary anyone

that

believe for

could

until you actually go out and do it yourself.

That

is

round as

about by

my

story. it

I as

hope I did

you by

learned

much

reading

putting it down on paper. My do last parting a words spin. for need of advice and if is Go a ahead break wait as and and with for much

give your your fun your like

destiny life. Sarwar as I sanity, writing

Give

yourself

something to

interesting show up. And to there

meaningful Dont have and if other you back no

Stand and a

something. step

did

recover therapy it takes

remember book

especially

five years.

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Appendix A The Cast of Characters

A quick note followed by long descriptions. The prea half volume mood a characters role in and described my cast the life days. of In a a at here More played and detailed timelines the spirit of an in the are of this As the need than

important

Columbia

post-Avicena and have A

traditional the to Avicena I them. have I cast come of

characters,

descriptions austerity, would

following

story. dedicated more in

quarter and separate

generous both if and

eloquent book.

resulted

reader and

would back

give later

sections when you

standard skip to.

character,

timeline

treatment

Kamar Bakrin on the on first day on day one basketball court to in school snow, fanatic,

Kamar broke he and and the

arrived a leg. his walked the

at

school on

and A the

Literally. ankle three two

twisted then for (CPA

blocks months A the in and if

crutches

next

sleet, of

sub-zero planet)

temperatures. from friend and

chartered British Kamar our was

accountant probably Ken, If we

equivalent turned driven were did I we

side

consultant, content well;

the

most and

batch.

Arno, did

easy-going.

well,

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we

didnt,

it

was

okaydisappointing,

but

still

okay. Kamar sense angry. could knew turn made prior that he the to had of vent down for to He the his make word, was We of anger an impact, hungry one had in to make a

difference.

wasnt

the

twentish Kamar where was he we to had good life just in

nor just and

ambitious. outlet the his gain

School

respect desire they not his did

deserved. an offer mistake their

joked

about him he

from

McKinsey

since was in and

telling He went

enough

domestic Boston later, of a

practice ahead is

B-school. joining years Five

before

Consulting he now telecom

Group

Boston. Managing

the

Deputy

Director

large

operator

in Nigeria. Arno Goboyan the and each at but the first I the it other took had he time a a needed some number Arno when he of fresh exam to and was times for evening happen. name look air. I had We really for had a run met into

dying

smoke

before, corporate by I is him. and our was for He Uris

including finance, Deli if for the That dark, of loyal

exemption

drizzly

introductions Bond would way

think Bond,

French Bond), is the a with

(The probably to

James

like a

Arno. Tall, as a

easiest slight packaged By the to

describe accent well

French very time we to was

touch

class, friend. paths his

together he

traveled be bored.

individual financially had made in something

business enough and and

school,

comfortable killing different

looking

exciting.

Superficiality

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ideas, liked as Boston

ideals, his in

and

people to be joined

irritated just as Credit

him

and

he

friends Arno London

sophisticated Suisse First and school

himself.

immediately

after

now runs an M&A advisory firm in Paris. Ken Bates stable kids at team. He with times the my 42 member a he Tall was and face of and forestry also slim Ken our was the A from Arno, most the Ken mature of of a and four the more eyes. not As few in of

group. major

father member had he

seventies,

the like

oldest deep

weathered related in

blessed

with of into I

smiling was

enjoyed to Arno,

telling Norman we had room for and he to

people run

that each took

Bates

Psycho It a a

fame. a moment draft

other

class

discussions. when was Bottom produce the and lack to us

printers article

passed Line,

him

our Then

school followed the Ken Mary was and

newspaper, numerous Ellen a rabbit, deeply us as our kept Inlay a Chase

hooked.

attempts play which

Harvey, six-foot closer. a great it, to of

about man or

invisible extent, after River of

brought

even

religious strength went together Ken its and

faith,

brought and Hudson

before, back

during, rejoin taking As on

Avicena. global

president run we of by

before

charge our him Over into

young

professionals his church. heavily now is small relied Ken with has and a

organization first as a a in the

sponsored beta last value second

customer, pair five as

well-grounded

eyes. turned busy

years a CEO

turnarounds Florida.

specialist

creating

business

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Syed Saboor who away has from actually They shared Saboors first up how and Saboor. Fawzias elder picked chose taught subway, and in Yorker. business sounding strategy Sadia, crashing us our us

I met

have

never gym

known Lopez a few

anyone besides streets for him,

Jennifer same in

the

office as we

lower Bhai off at

Manhattan. (Urdu called

cousin,

Saboor us

brother), and to

lovingly

dropped cross in one first the our

airports, leases, the New the used and and in catch a

apartments, take-out, live was and for of the

negotiated the shop, New of do

our

street, our first to York

order Saboor

groceries, investors see

walk

like

the

Avicena,

outsider most ideas, run of

plan, board his outside spot

frequently pitches, team. our our He

product still

management

wife,

favorite home

outside

Westchester County, New York.

Ralph Biggadike about class group needle With Ralph (short before for I Top from

had

heard into &

good my

things TMP A the born him. fluff power and

walked Becktin firm,

first

Management

Processes). Dickinson, was a TMP with been into

president We

manufacturing took else, he took was

Ralph and have 30

teacher. subjects. Tuesdays taught managers.

Strategy both a they group and also the to

anyone as them

would of one

With to to

Ralph, think

turned act

students like the board

general first the as a

Ralph who

of on

professors only

second

business come

plan,

teacher

agreed

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faculty received during inspires

advisor. a our standing future

He

went Award

on the from

to same his

win year He at

the and

Distinguished

Teaching

ovation

students still the

commencement general

ceremony. managers

business school in New York. Aleph Inc. company acted Ana and and be as based our Aleph both and in A Santa incubator provided offices, financing look technology Ana, as office and on well as solutions that Santa Fawzias in

California space

employer. and talent in

Karachi,

development

administrative expertise Coast, asa and book of the in was May an West

management the support them at fall the and six hard and on of on

customer funding an

introductions basis. to also Without back The and very

when-needed about. We

there a

wouldnt

Avicena

write

collaborated

number

non-Avicena technology California downsized 2001.

projects. meltdown, hit Aleph

Avicena, recession its team of months

dramatically

within

Denise Davies Responsible payroll, in technology Karachi out pace, as talents, churned inhuman our son, for marketing, project and Denise was

VP running

Operations the

at

Aleph offices, and many shake, at in an the for Amin, offices

California from Among her

business management Ana. a mean and

development, her

Santa made a as

morning (for

proposals great well

contracts

babysitter our

other and off

pseudo-adults the creek in

Avicena-Aleph early-morning

team) walks

shared

passion

Newport

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Beach.

Denise

recently

fell from

off our

the lives

map

and

disappeared

completely

except

for occasional email exchanges with Fawzia. Fahad & Appsys in my the from days. Aleph Karachi Aleph end, Karachi our hosting, took getting Front-end primary out. platform quality development did and the team. for front Karachi. computer of a Java the Fahad, science small owns Back-end a former teaching development star student that front days, shop still had team from an built end. it

became

owner Fahad

specialized behind Appsys and he

engine same

Avicenas

still

operates

premises

during

Avicena

responsibility They

assurance,

technology

integration with Fahads work. Ashar Zaidi and my right-hand Ashar from of of that to He a is a was Fahad, passion tenacity Pratt and package asked give Offshore man in also an Project ex days. and and Point the him Manager Just like and the the of a the I he

Pakistan.

student Combine mullah, drive in the him would let have

colleague

consulting pit bull,

fire-breathing engine Ashar. his his works you and a the

Whitney light

right go. and

direction, him the

fire,

dump now

permanent as

position shot and channel

startup

lifestyle

agreed.

sales

manager for Intel in Pakistan. Sharleen Ghauri first hire brought Content in to Editor. take over Ashars content

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responsibilities. development could team, after after move and on to

Sharleen content Where

took so

over that and

course Ashar for our and ever after

work

technology Ashar and now was the and

execution Two years

responsibilities. Sharleen Avicena got in

nitro

became

stabilizer. burned, live

crashed where

Ashar

Sharleen

married

happily looks

Lahore

Sharleen

Intels education initiative in Pakistan. Dylan Steeg, Joe Rooney, group and Whiskey mates Ken, Carlos

Desmaras, Ken Craddock Friends, Business northern an for after Tokyo. to the from a class, School and from in Dylan Joe from own Ken our Columbia York, from work from role and in now came the his year in back New We to came came Japan show is now working Japan. and west. a Ken came New back

California, VC firm and

engineering

background back up to took Whiskey back have roads End his He a

went

operations actually We Sakura CFO

not-for-profit his

school. went and

start during in in and,

crossed for

presentation Carlos me, used for a first is now in

stayed

touch. Japan. like with

Lands

investment to

banking

school personal before with York. clicked working to when

polish

business

plan it He

venture. joining and

stayed power

for

company

Louisiana his Ken

then

New was

Jersey. John day at

pre-business-school Craddock and a the history first the myself major

employer Whitneys at I we met

research Kens drift after

assistant

Columbia. and would long

from space I

became

shelter

found

school

graduation.

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Cluster X students and who terms. TMP Group Top Management course. Pearson Contact contact. subsidiary Senior we met with whom stayed

Friends. I started for together

Class business the

of first

60 two

school

Friends. Processes, the

Classmates Ralph

from

Biggadike

Business executive when we at wrote

Development a the Pearson Pearson

Strategic Investment proposal. Manufacturers Bank owned that idea subsidiary was by Aleph and of initially Beta Sakura pitched later customer. Bank on in the to A Los wholly Angeles Exchange a beta

Bank

agreed

become

customer for Avicena. Chescore Capital Dubai and opportunities managing person of same 2001. with He out time from we of VC UAE. for a firm on Moez operating Muzaffari and the out was the first around get of the key half the a to

focusing partner whom died he of

84

regional

investment

Chescore during we heart

dealt

attack

had

promised

would

decision

Chescore.

Chescore

continues

run the offset

fund out of Dubai.

84

Each defense contractor fortunate enough to receive an order is asked to contribute an amount to a fund maintained and operated by the government of UAE called the offset fund. The fund is then used to invest in

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Reema Faquih Bombay, of with when what a chartered business we we were had and With the she

My advisory dying effort created help, her, I the and

first
85

cousin with four

from years joined devoted to up save her much we most After for a Reema Public

accountant in a

assurance India. business two years. have two in

experience and

Andersen

Worldwide as and over

Reema hours

triage-style support sooner. pulled Avicena just

countless

Without before the work in

would last down to

given

months

shutters time went that we back

became to

productive non-profit

spent

California. children.

India

educates from

street

graduated

NYUs

Masters

Administration program. Professors and courses John Whitney a taught plays In as a Prince, leadership always Behavior about really black business funding, why self-awareness crisis. that some Bruce Search backdrop of for of my money into study that term a Perfect used the course that taught

Shakespearian

analyzing Strategic question without financial introduced of 12 on focused

Greenwald answered make turn a Hubbard

in-demand

Economics

finally

businesses others Glenn and new

trying holes. plans

while

Entrepreneurial

Finance, the

ventures

valuation,

investment

sheet,

local businesses and companies that can directly contribute to the economic growth of UAE. 85 A CPA equivalent professional designation but with a curriculum driven by British accounting practices.

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launches, Strategy, soup, from

and two

growth

challenges. and that

Don

Sexton the

led

International

Marketing courses

Advertising mental for assignments plan taught walked to save

provided and business

frameworks, which the emerged. the

inspiration, original Laura a skills

Avicena through

Resnikoff course that required

Turnaround

Management, essential

dying companies.

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Appendix B Avicena Timelines

Spring 1999 Decide hard The taken with save take force years. April 1999 Discuss Kamar, review draft and of business for is also a WSJ, plan FAST more returns and in the with Company or a big space Ken, check. and blank. two that Decide less Arno, Quick Wired empty. Fail firms had to Jaysong CNet, space search very raised reality to one on an F. to fold Cookaracha I of I took its my Guides in own use for and days my while trying has not PhD a to for life that to flunk course life Figured class of work. Continuous Time first Finance. term

and the

continuously transcript guides course decides is sloth the as a to and

threatens template on me

disfigure

pristine Dons also by

could

project own

some

Class its

project inspired

Avicena for

born. could two

Amazing

something work

20-hour

next

indicates Altavista to already already

discover

Quisic active

Zoologic, funding.

substantial

forge full steam ahead with the venture. The Day After Columbia alliance focusing Business with on selling School the announces Mike school strategic venture to courses UNext, Miliken

business

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268

the

unsuspecting about and the we Quick

world. size visit of to

WSJ the

follow-up online site do

article that on team steam

talks it

education shows better. singing

universe. sucks Lowly Only members ahead. June 1999 Enroll Jadidi group and in to held

UNext

could

certainly with Check Tim to

much

international financier America. shows in

student with forge

takes McGraw other full

billionaire

still

desire

new firm in

product up business

development offering. with school in from

course First

by

product

focus

classmates confirms and other group and school points of for early and

friends.

Strong

positive

feedback UNext

distinct identified also consistent

differentiation attributes in toward which the with at a in ventures this

functional Focus stable price a

psychological points

space.

fairly the

marketplace

business

environment could years. in the

reasonable for are

sustain

business Columbia to

number out

Unfortunately, game due

opportunities ruled UNexts

collaboration provisions. August 1999 Research completed. design, account. possible on

exclusivity

Java, First

XML,

ASP,

JSP, and

and

Linux site limited student and get

prototype style, out rolled

highlighting on Columbia

content is Start

functionality

thinking

about

partners to

profit-sharing

arrangements

business on the road.

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Fall 1999 Initial as up well design as document as and up part upgrade with long as could course chose for of core functionality complete. work to Wrap in with next taking with (A) a in in architectural Finance marketing Don. one get get to review

financials Hubbard Firm as one and

course plan

Entrepreneurial Glenn edition. another figure

(E-Finance) business After with the H strategy could away After by

course that

E-Finance, murder Hs
86

justify

precedent, financials both of Glenn.

valuations.

Dons Again

another ignore

(A)

from

contrarian

indicators and carry on with forward momentum. December 1999 Ken the is on up and board David On a full Biem whim what time. and Pitch Glenn to jointly as is sexy up for greenhouse incubation Business decide I am cool workshop plan and after faculty coming Viants and by I not

signing sponsors along career would

advisors. they

nicely. day love to

visit

since

sound

see

passing

interviewing. Viant like white rather I office turns do, that boards than out dress I and to be a I map dream do, to and fit. and have. have on They think an use

like mind

even

have They

would

like

real

desks

cubicles.

Carry

interviewing

86

Columbia Business School grading system started with H(Honors A equivalent), HP (High Pass - B), P (Pass C), LP (Low Pass - D) and Fail (F).

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with

them

and

make

it

all

the

way

to

the

final

round with ease. Post Finals 1999 Ken from shade the load on while Leaning the gets an offer They of the from like his me a at 100 employer. but the to Decide I get one is a over debt show Viant. under insanity during offer think

expectations. passing a break and before

six-figure home in out

salary

maintaining towards side

close-to-six-figure sorting the

Karachi. dollar

Viant

million

conversation with Sarwar occurs. January 2000 First Aleph. Appsys side. to US and of pass also an week. With on The us We reach for the at The flesh the a firm hand we shake able on to the and get incubation offer board Course up. to the Avicena from are Sarwar

Alephs Eugene

support, Lang course out

application Funds offered business

development Greenhouse decides grant in of idea front as a

Incubator

school

$10,000 put

entrepreneurial candidates panel as well

short-list funding

internal

external venture capitalists. End January 2000 Come back on and and are turn class now Viant schedule and to in from work deli down. as on a Structure full day of Remaining Take in rooms coursework classes five days

Tuesdays free residence for food

Thursdays. breakout while

Avicena.

permanent Warren. Pay

everything

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else

(Internet,

white

boards,

and

fixtures)

is

pseudo free (paid for by the tuition). Spring 2000 Business design, trading, rush. night in and when as it plans, funding, hiring, to and Dew I start to content, financing, relocation. two coordinating Orange all-nighters, together and roll. Aleph work and We There technology, graduation, Its to more a mad, with Find than three Aleph day mad a relationships, website, logos, incorporation,

Down

sleeping Aleph

hours

Fahad that sex,

Karachi

County. better is a Appsys up on

comes and and

techno,

nachos,

Mountain

drugs, office and to

rock a

nine-hour offshore us go they between

difference Aleph sleep

between in

three-hour California. the sun

difference wake sets

and the

and

never

Avicena

empire. Spring Break 2000 Take visit before Airport. polite. assault guy good actually day. me a quick Sarwar, we trip to southern and Love is Aleph at Wayne clean, terminal doing the and Kmart California and look sight green, ready NYC, at wishes of in to at Denise, at to her

incubation

facilities. land California

first

even and to the me a

John the POS I am to

International clerk

Compared with the am

manning asks I

checkout

counter point

Vons

me how

shocked

mumbling

meaningless gibberish in response. Sarwars heated apartment open is right next and to a the gym, a

pool

year-round,

stream

that

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provides a bed of have

soothing rocks study and to

sounds day. their

of

running

water his

over wife a

all

Sarwar

and

converted

lounge/kitchen print-outs, business flight that our magazines. as a the agree on a Fawzia back SoCal to

to

workable hardware, an offer in site York, in NYC

filled them us be

with

backups, gets on New

industry Ana. of On

join two

analyst to

Santa be

the and

would raise

certainly

an

upgrade

gritty place

lifestyle

would

great

Amin, who will turn one next month. April 2000 Fawzia while and for one The & I and stay Amin off to to to for southern finish and interview sunshine program California projects that no a candidates and of faith. behind Continue in leave with on NYC the the class find

finals. positions wants to

California

executive-in-residence meeting the lead big meeting the

arranges

first first and

ex-chairman actually West Coast.

Deloitte our up next

Touche;

generates Packing the

cleaning

apartment

becomes

looming nightmare. May 2000 Good am bye here New and and is fish to York, I DSL. in hello am the in southern California. Move year not to the I control. major the how use learn water. into round float joys

apartment decision heated like dead pool

first Also

purchasing

finally the

Discover

of takeout Persian and regional Chinese food.

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Second

meeting The us me to to

with partner the and go

D&T we

contact meet an

is offers

very to and a to with the first allto Sarwar take

positive. introduce introduces angel seat board on

local we Two

angel invite more I

network. him get to

Ariu

Levi,

entrepreneur invitations busy desk, our an

investor, our members

board. out Avicena printer, lifestyle

while LLC. and by Soup bar. to

incorporating supplies, Californian management you-can-eat blessings, fill Find up

Buy

office

celebrate having With more roles and MCI at Plantation,

meeting salad start

at

Sarwars Avicena. hours starts our

talking

candidates spend bill during

senior them

management talent on to the

promising closer

overseas phone. four

interviewing getting

digits

recruiting drive. JuneJuly 2000 More number offer. friends raise Not bank I less the out we a and US$ hiring one Start and lot more the round buy well roll to to conversations. the family with money of startup ground a laying Convert cause work for with employee a firm

first-round Successfully valuation. nor in of a an the lot our do Go

investment. US$ to but than it go the

70,000

700,000 is

around money piece

outstanding have been

valuation tangible a US$ on as out calling

paper

business us at

plan. Id on and

Its

than first and as

89 my

million but than web

valuation rather theirs.

advisors

were

pricing

terms

long-awaited software

database licenses of our

server need

component

functional

versions

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site. plan

Money of the

also

allows

us

to

reserve in trip,

booth and

at

Society

Actuaries

exhibition

Chicago, start

business

development

paying salaries for resources in Pakistan. August 2000 Business D.C. development to and on ERC course about to a Kens trips to NYC, Re, and one. within Boston, Society leads. from and of Good an lead strong Swiss

Actuaries, validation Start beta

87

Frankona material corporate firms

approach. Launch VP-level Kens

thinking focus at at trial

switching targeting

individual resources

group,

subsidiary

group for a refresher course in finance. SeptemberOctober 2000 Ashar and Sharleen notice Start Launch at in work finally at of on join their after previous (SOA) port Old acts demos and the ready from the D&T completing employers. processes. annual to new server even and period Society badly

content-generating Actuaries Technology launch. and licenses

exhibition server is still on is

Chicago. trial Defer pitch, The first

fails

during

running verbal

more rely

unpredictably.

exhibition brochures, day course after is leads

PowerPoint exhibition for SOA as

presentations. over, Good as the

unveiling. well

international our

reasonable Update

validation contact

for at

corporate

switch.

87

At each of the above stages, always remain undiscovered.

some

bugs

and

errors

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about

new

development

and

direction

and

he

is

not sure if its a smart move to lose focus. Early November 2000 Fairly River and have feedback the successful Inlay about best with beta very completed strong Ken it and environment, of an at Hudson positive interface, that day we for Ivy our League

content, content

learning

experience. course;

comments makes

outside

corporate

finance

the remaining week. NovemberDecember 2000 Aleph else the of and on bank the LA Sakura at exchange Agency on to edge and conversations Aleph and in within us out in an LA out to put ASP and for everything We present to his chairman to delegates in return. on a me Management planned invests asks exchange concept the lunch hold Avicena.

Sakura private from and the idea chunk to the

Agency club

Management takes CIO the new the and Board at

(Wilshire). Sakura bank new

We

take

Tokyo Sakura being of

the

dinner Agency are

Presentations cutting

Mitsui

Tokyo

electronic Aleph venture and

incubated in they

Aleph. domain

equity until to pass to We

lead bank

technical take

discussions with the

with right Also new at have two tie ends.

find

someone of

profile agrees project Avicena. solved years. Prop up

over

the

relationship. revenues and the from we next to expenses

to

portion this trip team by

fund close funding

development contract for to and problems

our

Planned local

Pakistan content adding more

operational,

process,

lose

content

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resources. Karachi. launch as

Aleph Leads well

distraction generated by the

takes before

its and

toll

in

after

business

development

trips in September get dropped and fizzle out. JanuaryFebruary 2001 Introduced Capital Moez agrees complete Eastern According unmet online they for plan work door, There the the and to looks to at fund Moez the it Muzzaffari in Dubai on a Avicena plan and is with a barren only economy fits and as Fly at by Chescore Sarwar. and the the Iran. with the Our Ana as up. Eyad Shahbi

presentation seeing more in on

contingent

business

Middle

orientation to him, that allow invest to in Iran the

focus

professional demand and

development will model in. revise

market

territory to open the to

increase well

conservatives want major given on to

regional effort Moezs

sector

back

Santa as

update well

business wrap-up and the day. pay and on to

feedback

courses

development. notice in arrives money the

Eviction that

utilities is

disconnection email enough settle our more not or of

waiting later the bank to

Reuters

rent last

utility from

bill. and

Convert cash family

travelers money

checks friends

borrow

even

to tide us over for the next two months. FebruaryMarch 2001 Reema takes out life wonder joins over if the all this Avicena drown is would in team the I in California work. out with do I Come and go and my and business-plan-related pool. want to to Amin, what

and and

almost what

happen

Fawzia,

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our die

parents because

if of

were one

to

fall too

off

my

chair of of

and the and

night morbid needs

many

stress,

Mountain business focus to their thinks on meet

Dew, plan.

and Put and

endless

revisions thoughts even

aside more

raising

borrowing while is quite

money on two he 10 as two and a

short-term

Chescore bullish Ship as

ponders who out well

decision. can help

Sarwar us of

high-flying strategic numerous capital new

Pakistani investment

professionals cash. to proposals plan

raise

copies leads get on

the

referred flow of and

venture credit Pearson and

and two back

Sarwars more with the on

contacts. cash cost

Launch capital

courses

leverage, into

analysis, economic contact promise

value-added comes to forward

development. to

positive proposal

feedback

Pearsons

president with the appropriate recommendations. April 2001 The sky has and start Hi Tek a finally same couple on fallen. of to for be Discover Quisic with to to a and few Zoologic years head and the daycompetition million Moez decides decided revised and while and a

dollars 2001.

funding defer Himalay take a

us.

investment pass. and will

decision venture asks it to

October a look down

partners

Pearson with time

investment changes they business before

proposal have

cosmetic will get

feel talk

indicates

with us. I am out as of leads and of good news. Money looks is gone as my

too. bad

Personal the

financial

situation debris

just under

mountain

growing

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desk. now

Dont is

know also

where are

to

begin without Chat my

the maxed pay. with

clean-up out We in Ken and have debt says Kamar losses awkward

process. started every Call think says and up

Credit to Arno you add

cards five to Ken Arno

already

Fawzia month about dude heed

working

thousand survive. for more says

dollars advice. to

just and it, are

Fawzia.

take

money, cut

screwed.

Decide

Kamars

advice.

Begin

conversation with Sarwar. Mid April 2000 Sakura the subsidiary beta or Great Reema call comes timing. a beta and packs back Do site up with not or and acceptance their have the flies to cash heart back tell of to to to limited them I testing offer for loan

officers. support carry Austin. on.

Ashar

Sharleen

them

its over. May 2001 Transition Rediscover kitchen, order). copies Industry bear world read later, about enough airline to at of look about and Lang class to in the a of and First control family clean in up to Aleph gym, (not my and departure. pool, that all and cant the to day found an heads in dump I apartment, swimming exactly study Fast and

Inc, at

Wired, smiling The was

Company, office. with needed A

Standard their

Denises last

entrepreneurs thing I

feet. now

multimillion-dollar funding. me an email who update

valuations

first-round center of buy sends an 2001 Aleph

graduates Airbus and

money

start

London.

relationship

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south fail

as to

we

reach

agreement

on

transition and I until

but

reach

closure. awkward

Sarwar emails

exchange silence

increasingly prevails.

18 months later November returns, send a 2002. paying to of After back Sarwar finding two taxes and and a reliable of file as state tax I a of for accountant, note completing years and

penalties,

Denise in

cancellation Limited

Avicenas Company

registration the

Liability

California. There are no regrets.

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Appendix C The original list of myths

1. The curse of technology The mythical value driver. 2. Big projects and big sales deals The price of credibility. 3. The perfect product The allure of perfection. 4. Heroes The Hamlet syndrome. 5. Solving the wrong problem Prescription glasses. 6. Leadership Gods and generals. 7. Faith, commitment and the inability to fail Who will cast the first stone. 8. Capital and Partners The equity paradox. 9. Expectations management The undersold dimension. 10. Diversification Any which way you can.

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As

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