Eventually rising!

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Last quarter, I took a Marketing class at Stanford called Global Entrepreneurial Marketing (GEM – MS&E 271). The first exam was a strategic thinking paper (STP) that required students to analyze themselves as a startup using a marketing toolkit called DEDART which stands for:

  • Diagnosis Where is this market in its life cycle? How attractive is the market opportunity?
  • Experience How will customers experience the benefits of the new product?
  • Decisions What is your marketing (or business) plan?
  • Analysis Why is your plan the best way to go?
  • Reality Test What are the risks of your plan, and how can we manage those risks?

It was an awesome class and I learned a lot of valuable entrepreneurial lessons from great teachers and professionals while working with a talented team of students.

As part of my STP for the GEM class, I wrote about a mathematical model that I have been thinking about as a bonus exhibit. This post is about that model which I called “Eventually Rising“. Here goes:

Bonus Exhibit I: Eventually Rising 

Given my engineering background, I often like to use mathematical concepts to illustrate my life view. I view constant change in life like a sinusoidal function that keeps falling and rising over time. A lot of people hate change and try to prevent it from happening, or they deny it or try to stop it once it happens. However, as John C. Maxwell once said “Change is inevitable. Growth is optional.” Success and failure are two examples of change, but unlike change, success and failure are not constant and they are not inevitable.

While change is inevitable, it’s not always forced upon us. Most of the time, we are the primary change inducers in our own lives. The sine and cosine functions are two functions that alternate between a peak positive value equals 1 (maxima – ultimate positive change) and a bottom negative value equaling -1 (minima – ultimate negative change). We all want more successes (maximas) and less failures (minimas) through our actions.

Our actions cause change to the world around us for better or for worse. In an ideal world, we could ensure that change is always positive and all outcomes of our actions are desirable. The world of mathematics offers a great function that represents this ideal world and that is the tangent function. The tangent function is a strictly monotonically increasing function over the period [-π/2, π/2] or [-180°, 180°]. Check Bonus Exhibit III for the definition of monotonic and non-monotonic functions.

Source: http://goo.gl/erVwO

I especially like the fact that the tangent function is the result of dividing two constantly changing functions that results in two exaggerated values -∞ and +∞ on the edges . We often hear, someone changed a 180 degrees and turned his or her life around. That’s exactly what the tangent function does, it goes from the absolute infinite bottom (-∞) to the absolute unattainable maximum (+∞) over a 180 degrees.

In Reid Hoffman and Ben Casanocha’s book, “The Startup of YOU“, they talk about introducing small risks to one’s life on regular basis to build up more resilience and achieve stability through low levels of volatility. That is the division of two changing functions to achieve growth 🙂 Its exactly like dividing the sine function by the cosine function. If we introduce changes to our lives at the right frequency and at the right magnitude, we will get a net positive constant growth. In reality, getting it right every single time is probably impossible. But if you if we introduce small changes to your life as a habit, you will see a lot of benefit.

We have to be careful though. Simply changing sin(x) into sin(-x) will result in a monotonically decreasing function (the exact opposite of what we want):

sin(-x)_div_cos(x)

* sin(-x) / cos(x) using http://www.onlinefunctiongrapher.com/

Or if you change the frequency of the changes, for example by dividing sin(-2x) by cos(0.2x), you will get a very bumpy ride:

sin(-2x)_div_cos(0.2x)

* sin(-2x) / cos(0.2x) using http://www.onlinefunctiongrapher.com/

We don’t live in an ideal world and we are never really at -∞ and we will never reach +∞. However, the lesson that I do take from that ideal model is that we should always strive to be growing. Its hard to be monotonically increasing, its probably impossible to be strictly monotonically increasing, but we can be eventually increasing. We are not always able to induce the right amount of change at the right time. Sometimes, change is induced upon us in ways that we have no control over. By investing in yourself, learning new things, gaining new skills, and making new connections as a habit, you maximize the chances of introducing the right change at the right time. When undesirable changes happen, you will take a fall. Those undesirable changes can be external (an earthquake for example) or internal (we all make mistakes).

That’s the math and philosophy behind the term “Eventually Rising“. The following image is a good visual representation of an eventually rising plot:

GoogleStock

* Source: this site was tracking Google share value since inception

By focusing on our own constant growth, we may be able to neutralize the undesirable change around us and turn it around to be rising just like the tangent function. By constantly taking any potential failure and flipping it a 180 degrees and making a success out of it.

Every company, large, medium or small, publicly traded or a private startup has its ups and downs. The same applies to people. No one is always winning or always losing. You want the net average over time to be heading up.

Bonus Exhibit II: Functions of constant change (sine, cosine, and tangent)

The Sine and Cosine functions represent the inevitable and constant changes in our lives.

Source: http://goo.gl/erVwO

The tangent function = Sin(x) / Cos(x) over the period [-π/2, π/2] or [-180°, 180°] is a strictly monotonically increasing function.

Bonus Exhibit III: Monotonic and nonmonotonic functions 

“A function  is called monotonically increasing if for all  and  such that  one has , so  preserves the order (see the left figure below). Likewise, a function is called monotonically decreasing if, whenever , then , so it reverses the order (see the right figure). If the order  in the definition of monotonicity is replaced by the strict order , then one obtains a stronger requirement. A function with this property is called strictly increasing. Again, by inverting the order symbol, one finds a corresponding concept called strictly decreasing. Functions that are strictly increasing or decreasing are one-to-one (because for  not equal to , either  or  and so, by monotonicity, either  or , thus  is not equal to .)” *Source: this Wikipedia page 

The following figure is a monotonically increasing function. It is strictly increasing on the left and right while just non-decreasing in the middle.

*Source: this Wikipedia page 

The following figure is a monotonically decreasing function. It is strictly decreasing on the left and right while just non-increasing in the middle.

* Source: this Wikipedia page 

The following plot compares a nonmonotonic function to a monotonic function:

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A job matching startup in Jordan

ShababJobs.com is the first online job-matching portal in the Arab World to specialize in part-time & shift-based jobs. Shabab means youth in Arabic. I met with the founder Fadi Sawaqedy and talked to him in detail about his experience founding and leading a technology based startup in Amman.

In the US, job sites like Monster.com have a dedicated section for part time jobs. SimplyHired.com just uses search filters to enable users to look for part time jobs. Only Snagajob has a differentiated focus on part time and shift-based jobs.

ShababJobs understands the unique recruitment  needs of companies in industries that are highly dependent on shift-based and part time employees. They focus on empowering employers to find qualified candidates that are a 100% fit. They enable recruiters in industries such as Retail, Fast Food, Apparel, Customer Service and many others to effectively target job seekers when they subscribe to Shababjobs.

ShababJobs has built tailored screening and assessment tools to enable employers to filter and evaluate hundreds of applications with ease. It also offers Facebook integration so that job seekers can search and apply for jobs directly from employer’s Facebook page.

Business model:

Unlike traditional job boards, ShababJobs does not charge per job posting (PPP – pay per post approach). The business model is tailored to meet the specific needs of the employers who need part-time/shift-based workers. Employers have unlimited job postings. They can announce when the need arises. They only pay for applicants that match the job requirements, this model gives those employers a much higher return on their job advertising costs.

Market size & description:

In Jordan around 70% of the population between the ages of 15 to 24 use the Internet, a number that continues to grow rapidly.

* http://www.insightsmena.com/

The number of job seekers applying for positions online is also growing. It may come as a surprise but actually, employees with LESS than a Bachelor’s degree represent 74% of the total Jordanian workforce. 68% of these haven’t completed high school!!

* Jordan Ministry of Labor annual report 2011

  • Workers under the age of 24 filled around 209,000 jobs in Jordan in 2011.

  • 26% of newly created jobs are from the Services Sector, a total of 17,160 jobs in 2011.

I love this startup and feel that they are actually making a difference. Fadi looked at the market figures and did something that makes sense, adds value, and solves a real problem. Things are not all rosy as its commonly the case with startups.

Challenges:

Despite a clear focus on the local market and securing paying customers including employers like Ikea, Subway, and Pepsi, ShababJobs is still facing many challenges:

  1. Limited number of mature investors (Angel and VCs). Many investors have unrealistic expectations of startup investments. They expect the startup to reach profitability and get a positive return on their investment in a short amount of time without taking too much risk. ShababJobs has paying customers and a proven business model but still its hard for Fadi to secure a series A venture round. This is mainly due to the fact that most VCs here are finance/accounting guys that care about ROIs and fund performance. Unlike Silicon Valley, where the VCs are usually serial entrepreneurs or seasoned industry executives with strong technical/business backgrounds.

  2. Within the few Angels and VCs in the market, only a couple focus on early stage technology startups. Yet there is a large number of technology startups spawning in the region. Many startups, few sources of capital, lots of competition.

  3. The current economic situation makes people more resistant to change and less likely to adopt new solutions. Fadi has seen this in both the public and private sectors.

  4. There is a lot of hype and buzz around startups and entrepreneurship in the MENA region. However, there is no real metrics to differentiate good startups from bad ones. Feels a lot like Silicon Valley during the dot com era (lots of activity and hype but no real game changers). I wish the focus shifts into actually solving real problems, problems that people do care about, that add value to society and creates jobs.

  5. Closing an investment round takes 6-12 months. That’s like 6-12 years for a startup.

  6. Finally, government regulations around e-commerce and online payments are still unclear and that introduces an unknown risk that can be a huge blocker in the near future.

I hope that entrepreneurs in Jordan can start focusing more on actual problems that people are facing everyday instead of trying to copy international successes and replicating them in the region. I wish Fadi and ShababJobs the best in taking their company to the next stage. If you anyone is interested in talking to Fadi, contact me and I can make the intro.

By Moh Posted in Tech