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Dave's Mostly Tinkering, Occasionally Reporting

The Rise of New Markets: Bitcoin In The Middle East

April 9, 2014 · 3 min read

This post was written for ArabNet, and first appeared on their website.

In an earlier post, I introduced Bitcoin through storytelling, and briefly highlighted its benefits over conventional money and payment services. This time, let’s look at a few revolutionary applications of Bitcoin in The Middle East and the world. Read through until the end to hear about an exciting update.

The Rise of New Markets

Bitcoin is a technology that has the potential to redesign our global financial landscape from the ground-up, to better serve an increasingly digital and globally connected world. Here are only a few ways in which Bitcoin’s attributes can lead to major improvements.

Unlocking Billions

Bitcoin in the Middle East
According to the world bank, there is more than $500 billion that circles the globe through remittances (e.g., sending money back home to support your family). The average cost of these payments is more than 8%, and significantly worse in less developed countries–the countries that need it the most. That’s $40 billion that’s lost to fees in order to move the money around. And the Middle East is no stranger to these flows of money. The MENA region accounts for as much as 15% of that share.

A shift towards using Bitcoin for international money transfer could potentially unlock billions of dollars for the people who need it the most. This is achieved thanks to Bitcoin’s extremely low cost of money transfer.

Banking the Unbanked

Bitcoin in the Middle East
There are 2.5 billion people around the world today that are either unbanked or under-banked. That’s almost 50% of the planet’s adult population that is left out by our current financial system, and forced to live in a cash-based society. These individuals cannot benefit from all the financial products that contribute to their prosperity, and in return cannot contribute to growing their economy.

The Middle East, unfortunately, ranks among the lowest in terms of financial inclusion (access to basic financial services). The regional average barely stands at around 20% of the adult population (with accounts at a formal financial institution).

Mobile penetration, in contrast, is quite high across the world (90%) and especially so in the Middle East (110%; including people with multiple mobile subscriptions). The inclusiveness of the Bitcoin protocol has the potential to bring all of these individuals, regardless of their financial situation, into the digital economy!

Bitcoin is a global and open network, that only requires access to a phone or an Internet connection. This means that, as more mobile-based Bitcoin services are built and made available, millions of unbanked individuals may soon have access to easy and affordable financial services.

Getting Rid Of The Ads

Bitcoin in the Middle East
Bitcoin also introduces a new category of payments that was previously impossible: micro-payments; payments of less than 1 Dollar, Dinar, Dirham, Lira, etc.. Because of the high transaction costs, these micro-payments were only possible in cash (but still remained impractical). Bitcoin makes this possible and even attractive, since the transaction cost is negligible. This has the potential to reshape many industries and even create new ones.

Let’s look at the world of online content monetization (e.g., articles, news, videos). It has been dominated by advertising. Any time you access content on the Internet you are forced to watch an ad placement (or pay a subscription fee). Imagine if, instead, you could pay pennies for each nugget of information you consumed, or even tip the person that has produced it. Bitcoin allows you to pay cents or even less for each article, video, news source, etc. and only when you want it. This is the pay-per-x model (pay-per-article, pay-per-video, etc.).

But, We Still Have Work To Do

Bitcoin is still in its early stages of development. There is no doubt that all of the above is great. But for it to become a reality soon, we (Bitcoin entrepreneurs and advocates) still have work to do before Bitcoin’s full potential is reached.

For example, there aren’t nearly enough products and services built to make Bitcoin as useful as described above (e.g., remittance product); it still isn’t easily accessible in most regions because of limited infrastructure (e.g., local exchanges); it remains a complex technology that needs UX (user experience) improvements before it can reach mass adoption, etc.

However, none of these are insurmountable problems. And many ambitious entrepreneurs are already working on these issues in different corners of the world. I believe it’s a matter of when–not if–all of this happens.

What’s Next For Bitcoin In The Middle East?

This is only a small selection of the innovative ways in which Bitcoin can reshape industries. And for these reasons and many more, the Middle East is gearing up to join the Bitcoin economy. There have been many events popping up across the region, in Lebanon, Jordan, Dubai, and more.

Bitcoin In The Middle East
The most exciting event so far–one you won’t want to miss–is #CoinTalksDubai on April 21st! This event will be bringing regional and international Bitcoin experts to introduce Bitcoin and talk about the latest developments. So if you’re curious, want to learn more, or want to engage with digital currency enthusiasts, entrepreneurs, and investors, I’ll see you there. (Full disclosure: I am helping organize this event.)

And to stay up to date on all things Bitcoin in the Middle East, be sure to check out ShuBitcoin.com.

 

Sources:
Financial Inclusion Data, World Bank
Migration, Remittances, and Diaspora, World Bank
Mobility Report, Ericsson, 2013

Bitcoin or How To Avoid A Series Of Unfortunate Events

March 20, 2014 · 6 min read

This post was written for ArabNet, and first appeared on their website.

A Tale Of Money and Misfortune

Let me start off by sharing a story with you.

I just arrived in Dubai, on a business trip from Beirut. I’m excited to be here as it’s my first time back in 10 years, and I’ve heard many great things about its transformation.

As I hop into a cab out of the airport, I realize I forgot to exchange cash for local Dirhams. I only have a single 50Dhs bill on me. I ask the driver about accepting credit cards, but no luck. At my destination, I reluctantly give the driver my only bill, and get a 20Dhs in change.

As I walk away, my mouth starts feeling dry. I always get dehydrated on flights, it’s time to get a drink. I stop in front of a small hole-in-the-wall shop to get water. I hand over my 20Dhs. The owner looks at it, folds it, scratches it, places it in front of sunlight, makes a weird noise, then hands it back to me.

“It’s fake.”

“What do you mean it’s fake? I only just got this. From the cab. It can’t be.”

“It’s fake.”

Damn. Well, I hand over my credit card, the owner takes it reluctantly, and charges me 1.5Dhs. We’ve now unintentionally annoyed each other.

Just as I walk away, I get a call from my sister. I’m excited for her, she took some time off from work to travel and relax. But, she sounds very panicked.

“What? you lost your purse on the train? … All your cash and your credit cards were lost? … Sure, I can wire you some money. I’ll head to the bank right away. Talk to you soon.”

Change of plans, I need to find a bank ASAP. I start running while keeping an eye out for a bank. As soon as I spot one, I head for it, run towards the entrance, and BAM. Slam face first into the glass door.

It’s 7pm, of course banks are closed. I should have realized. Fine, no time to dwell on this, I’ll just head over to a Western Union. I’m really not looking forward to getting charged those crazy high fees…

After getting that out of the way, I text my sister the transfer details. Now, I’m really looking forward to relaxing over a good movie at the hotel. My phone rings, I just got a text. “My sister replied quickly!” I think to myself. I take out my phone, and read the text.

“A transaction on your card ending 6964 is accepted for USD 6,216.75 at THAIMAZON.CO in THAILAND” (I subscribe for credit card payment notifications by SMS)

I guess I’ll be spending the evening with VISA customer support to get my card cancelled and reimbursed…

Bitcoin Makes Tales Boring

Did you notice what happened? I don’t mean how poorly my day went, but how inefficient our whole financial infrastructure is.

Today, I can hold a live video call with anyone around the world for free, but I can’t send them my money without getting stuck waiting in line and getting charged hefty fees for the privilege. And it doesn’t end with money transfers, from the credit card fees that shop owners pay to the constant stream of identity theft stories, people everywhere are struggling to bring cash online.

Let’s rewind this nonsense, and replay this scenario the way it should happen in our technologically advanced civilization.

Out of DXB, I hop into a cab that drops me off at my destination. I take out my phone, scan his Bitcoin account QR-code (similar to a barcode) displayed on the dashboard, and transfer the amount owed with a click of a button.

I then walk over to the shop to order a bottle of water. I transfer 1.5Dhs (the QR-code is printed in front of the cashier). The owner instantly receives a text on his old Nokia phone confirming the transaction.

As I walk away, I get that unfortunate call from my sister. But wait, she sounds all nice; too nice. Oh right, you can’t physically lose your digital wallet, you can always store a backup. So what does she want?

“Dave, I didn’t budget enough money for my trip, could you please send me some?”

I sit on the side of street, and open up my laptop. (I don’t like to store large sums of money on my phone wallet.) I access my larger account, then transfer 10,000Dhs as easily as I had done with 1.5Dhs. One click and done.

“I just got it, thank you so much!”

So What Is This Bitcoin You Are Talking About?

That’s it. Now that makes for a much more boring story, but at least my cortisol levels haven’t gone through the roof.

In fact, the simplicity of the second story belies the powerful innovation happening behind the scenes. I’m talking about Bitcoin. A technology that enables a decentralized digital currency, a fast and secure payment network, and a disruptive payment protocol. That’s a mouthful, so let me break it down.

Bitcoin is a decentralized digital currency. You can think of it like cash, but designed, from the ground up, for an increasingly digital and globalized world. A world where paper money and its associated products (e.g., credit cards) are becoming very inefficient. My story already highlights (only) a few of these problems: identity theft, the need for money conversion, and counterfeiting.

Bitcoin is a fast and free payment network. It is similar to the email network, but for sending money instead of messages. On the Bitcoin network, you can move any amount of money, anywhere in the world, instantaneously and close to free. Just like email, you put in the recipient’s address, the content (or in Bitcoin’s case, the amount) and click send. done.

Bitcoin is a disruptive payment protocol. This is one of the more advanced aspects of Bitcoin: programmable money. Since Bitcoin is built with code—at a very basic level, it is a computer program—anyone can actually add new features. Just like apps on the Appstore, if someone can think of a new feature they can build it on top of the Bitcoin protocol.

And This is Why Bitcoin Matters

Whether or not the above appeals to you, in the end, what truly matters is Why. Why should anyone consider Bitcoin? Why should individuals start using Bitcoin? Why should merchants accept Bitcoin? etc.

Few of us understand how TCP/IP and HTML work, how a jet engine works, or even how the credit card network works; but that doesn’t stop us from surfing the web, boarding a plane, or using our credit cards . Similarly, we don’t need to understand how Bitcoin works to appreciate its benefits and applications, and ultimately adopt it. It’s the why that matters.

Here’s why Bitcoin matters—briefly.

It’s open. Anyone who has access to a phone or an internet connection has access to Bitcoin, as well as all the services built on it—like apps on your iPhone.

That’s a big deal for the un-banked or under-banked, who account for the majority of the world population. They are left behind by our financial sector, and forced to live in a cash-only society. But since most of them have mobile phones, this may no longer be a problem.

That’s also a big deal for anyone that wants to get a business started but can’t afford the complexity and cost of doing so (e.g., opening a merchant bank account, acquiring credit card equipment, absorbing high transaction fees, etc.)

It’s fast, and (nearly) free. Whether you’re sending $1 to a person in front of you, or $1,000,000 to someone halfway across the planet, the transfer is near instantaneous and the cost is negligible. You’re sending bits of data, after all.

It’s secure. You simply can’t counterfeit military-grade encryption, the technology behind Bitcoin.

It’s decentralized or peer-to-peer. Bitcoin does not depend on any central authority to operate, rather it is supported by everyone on the network—as is the case with the Internet.

This matters for simple issues, like being subject to banking working hours (the Bitcoin network never sleeps); as well as more serious ones, like the hyperinflation that has destroyed some currencies in the past (Bitcoin supply cannot be manipulated).

It’s borderless. It lives on the Internet, and can move freely on the Internet. Your bitcoins are not confined within physical borders (e.g., a country) or digital borders (e.g., the Paypal network).

It’s private. When you make a payment, you never share any compromising information. Contrast that with credit cards: every time you use it, you are essentially revealing all your supposedly secret information (i.e., name, number, expiry date, CCV), and hoping that the person on the other side of the transaction doesn’t steal it.

And much more…

Doesn’t this make more sense? I’d like to think this is how we would design a currency and payment system if we had to start from scratch today.

Well we are—somewhat—starting from scratch. It’s only recently that we’ve been able to accomplish the above and more, thanks to Bitcoin. However, Bitcoin is still an early experiment, adopted by a few (million) across the world. But it’s growing very fast, and proving to be a very robust system.

Give it a try!

If you want to stay up to date, check out ShuBitcoin.com, an upcoming resource for all things Bitcoin in the Middle East. And If you liked this article, you can tip me—with Bitcoin of course:

Our Brains (Mostly) Suck At Decision-Making

February 6, 2014 · 3 min read

My earlier post on the paradox of choice sparked interesting conversations with several people. I got inspired by these conversations to write this follow-up post.

Breaking Down Decision-Making

When we struggle to make a decision (i.e., selecting between different options) we are struggling to find the superior choice among alternatives.  In other words, we are choosing between similarly good options with no clear winner (“good” in different ways, but “good” nonetheless). Were one option clearly superior, there would be no struggle.

Then, if options are “similarly good”, why is it so difficult to take a step in any direction? Why is decision-making paralyzing? What is the cause of this inertia?

Well, for one, we are not rational robots. Our minds inevitably factor in many variables rooted in our emotions: we tend to focus on the missed opportunities and undesirable outcomes inherent to decision-making. Said differently, these are the upsides of forgone options and the downsides of the selected option—driven by fear and regret, respectively.

If that felt like a mouthful, let me explain myself.

The Upsides Of Forgone Options, a.k.a Fear Of Missing Out

Decision-MakingLoss aversion—a well studied psychological concept— states that people have a stronger preference for avoiding losses over acquiring gains (some studies even suggest that this preference can be quantified as 2x). Decision making, by definition, involves selecting a single option and letting go of one or multiple others. It involves closing doors, eliminating possibilities. In other words, you are “losing” the future benefits of many options and “gaining” those of a single option.

Hence, our loss aversion tendencies will shift our focus towards these missed opportunities, and away from the benefits of the selected option. It is frustratingly easy to imagine all the benefits we are letting go of when making a decision, and to ask ourselves that dreadful question: “what if?”. The Fear Of Missing Out creeps in. It paralyses us. And for a while, our brain will mistake this lack of action (or decision-making) with a lack of losses. While delaying decision-making may seem comforting in the short-term, it will often lead to a rushed—hence, less effective—decision down the line.

The Fear Of Missing Out thus leads to inertia—an unwillingness to take a step in any direction to avoid letting go of possible future benefits.

The Downside of Selected Options, a.k.a Ancitipation Of Regret

In his book “Thinking Fast And Slow“, psychologist and behavioural economist Daniel Kahneman defines Regret as what you experience when you can most easily imagine yourself doing something other than what you did. It is one of the counterfactual emotions that are triggered by the availability of alternatives to reality. Alternatives we must, by default, consider when making decisions.

Decision-making

Our mind is a powerful imagination tool. It will easily wander into the future playing out multiple scenarios of possible futures, including, in most cases, what can go wrong. The anticipation of regret thus plays an important role in decision-making. Take the example Dan illustrates in his book.

Paul owns shares in company A. During the past year he considered switching to stock in company B, but decided against it. He now learns that he would have been better off by $1,200 if he had switched to the stock of company B.

George owns shares in company B. During the past year he switched to stock in company A. He now learns that he would have been better off by $1,200 if he had kept his stock in company B.

Who feels greater regret? The results of an experiment are clear: 8% of respondents say Paul, 92% say George. However, objectively the two situations are similar: both own stock A and would have been better off by $1,200 had they owned stock B. The difference is in how each individual got to where he is: George got there by taking action, whereas Paul got there by NOT doing so.

The point here is that people tend to have stronger emotional reactions to outcomes produced by an action, rather than those produced by inaction. And since decision-making is akin to taking action, it leads to similar emotional reactions—specifically, regret.

It is the anticipation of regret, brought on by our wandering minds, that leads to inertia—an unwillingness to take a step in any direction to avoid a feeling of regret down the line.

Fear, Regret, and Awareness?

There aren’t any quick fixes for these psychological pitfalls. Our gut reaction will often be to delay decision-making. The best I have done so far is arm myself with awareness.  An awareness and an understanding of these cognitive mistakes that helps uncover undesirable behaviours (like stalling) as they arise, and helps control emotional impulses (a.k.a. Fear and Regret). 

The mind remains a funny thing.

Event Recap: Amman Tech Tuesdays, Bitcoin Edition

February 6, 2014 · 1 min read

On February 4th, I gave an introductory talk on Bitcoin applications at an event held jointly by Amman Tech Tuesdays–Amman’s leading monthly event for techies–and the Amman Bitcoin Meetup Group.

I was impressed with the turnout–around 300 people. 50% of the room had already heard about the crypto-currency, and there were even a few that had bought/mined Bitcoins. Also in attendance, were a small number of individuals from the Jordanian Central Bank (2-5?)–They, however, explicitly mentioned attending as civilians.

Other than an incident that occurred towards the end (more on this below), I believe the event was well received. Attendees seemed pleased with the content, some even extremely enthusiastic and eager for follow-ups. The four speakers, Ola Doudin, Mohammed Saled, Zaid Amireh, and yours truly covered an introduction to Bitcoin, an overview of the technology, a discussion of wallets and security, and a review of existing applications, respectively.

On stage, after the Q&A, I offered to sell Bitcoins for cash to anyone that was interested. Unfortunately, and to my disappointment, no one took the offer. I was hoping the excitement around the topic would push some to “put their money where their mouth is” and get some Bitcoins.

As for the incident, some of the topics covered unfortunately led to a heated debate with individuals from the Jordanian Central Bank. A few of our speakers included political and ideological comments in their talk–A move I don’t agree with. I strongly believe these events should be an avenue to discuss the technology behind crypto-currencies, its benefits, and its practical applications (and, of course, shortcomings). Instead, a good part of the Q&A turned into the equivalent of a political debate and a clash of opinions rather than facts.

Here are the video and slides from my talk on Bitcoin applications, covering six existing practical uses. (Skip to 16:05 for my part, it lasts just under 8 minutes.)

(This talk was inspired by multiple sources, including Andreas M. Antonopoulos, Marc Andreessen, Gavin Andresen, and more. I don’t claim any original content)

2013 In Snippets

January 11, 2014 · 1 min read

The best moment in 2013 was switching to working for myself. Although, I have yet to make a sustainable income.

The biggest letdown in 2013 was 47 Ronin. Keanu, I still have hope.

The best non-fiction book I read in 2013 was “The Antidote” by Oliver Burkeman. It discusses what I believe to be several essential philosophies in a very approachable way. (stoicism, buddhism, etc.)

The best fiction book I read in 2013 was “Ender’s Game” by Orson Scott Card. I just love the a-ha moment.

The biggest tech trend in 2013 was the rise of Bitcoin and distributed applications (or decentralized technologies). More on this soon.

Another big tech trend in 2013 was the Internet of Things and the numerous companies innovating in this space ( NestSmartThingsMotherLockitron, etc.)

The best personal change in 2013 was getting rid of 90% of my belongings and limiting everything I own to fit into a carry-on and a backpack. Now, every time I travel, I literally take ALL my belongings with me.

The best new follows in 2013 were Scott Adams, the creator of Dilbert, for his provocative and refreshing short blog posts, and Ze Frank for his humour, absurdity, and creative projects.

My favorite podcast of 2013 was Radiolab. A combination of fascinating content, captivating narration, and great production and editing.

The most exciting moment in 2013 was giving my first public talks at both the Quantified Self Global Conference and the Silicon Valley meetup.

Your turn.

Thanks to David Lee for the format used above, borrowed from his post “My 2013 Listicle”.

My QSSV Meetup Talk on Lifelogging

December 8, 2013 · 0 min read

This is the second talk I give on the topic of my lifelog (you can find the earlier version here). This time it was at the QS Silicon Valley meetup held at the Evernote offices.

It’s a slightly updated version with some new material. The talk is approximately 8 minutes long followed by 8 minutes of Q&A. In the first half, I explain my Lifelog experiment and the setup. In the second half, I talk about some of the insights gained.

The slides are embedded below, and make it easier to follow.

Let me know what you think, and how I could improve!


Check out the Life Log page for the latest updates and posts on this experiment.

My Quantified Self Conference Talk on Lifelogging

December 8, 2013 · 0 min read

This is the talk I gave at the 2013 Quantified Self Global Conference on October 10th.

It’s 7.5 minutes long followed by a short Q&A period. There was a small tech glitch midway that led to a couple slides disappearing. I’ve embedded the slides below which make it easier to follow.

I’ve since given an updated version of this talk here.


This talk was originally posted on the Quantified Self main website.

Let me know what you think, and how I could improve!


Check out the Life Log page for the latest updates and posts on this experiment.

From Suits & Ties to Shorts & Flip-Flops (part 2)

How 2 Years in Consulting Both Helped and Hindered My Startup Adventure

November 26, 2013 · 4 min read

In response to a request from my good friend Khaled Kteily over at the Management Consultants Network, I am writing about the impact my consulting background has had on my startup endeavours. This is the second post in a two-part write-up. Here, I focus on the disadvantages of moving from consulting to startups.

 

Now that I’ve mentioned the benefits of moving from consulting to startups, it’s time to talk about the flip side, how consulting made things more difficult.

How Consulting Hindered My Startup Progress

A Large Company Once Said: Just do it!

consulting to startupsA common criticism of consulting is that it’s all strategy and no implementation. Consultants come in, analyze from 10,000 feet above, hand over slides with recommendations, and move on. This isn’t entirely true, but when I compare the work of a consultant to that of an entrepreneur, this exaggeration helps highlight how different the roles of each are.

My experience in consulting has taught me to be very meticulous and thorough when evaluating decisions—sometimes to a fault. On several occasions, I catch myself over-analyzing to the point of paralysis. This can prove to be a dangerous habit in the startup world.

The cost of an error in early stage companies is low. The underlying reason is that small size and nimbleness allows for quick detection of errors and rapid course-correction where needed. Hence, in a startup, I am better off quickly executing on decisions rather than cautiously over analyzing and vetting them. The insights I gain from evaluating actual outcomes are significantly greater than those gained from evaluating hypothetical scenarios. Often times, the best and only way forward is to just get your hands dirty.

Today, I make a special effort to overcome the urge to overthink my decisions, and try to cultivate a bias for action.

The Apples and Oranges of CEO Concerns

consulting to startups
Here’s a shocking revelation: the concerns of a Fortune 500 CEO have little in common with those of a two-person startup. Where the former will worry about how to improve the bottom line by a couple of percentage points, the latter will struggle to get a single customer in the door.

The intuition I developed about what is top of mind for a consulting client is simply not very useful to me as the founder of a startup. A lot of the challenges I had to solve in my previous job aren’t even considered in this one. For example, consulting required a lot of planning, continuous vetting of the content by various stakeholders, almost artful navigation of established bureaucracy, etc.

Startups, in contrast, are astonishingly simple. The only stakeholders I need to worry about are the handful of people I can proudly call customers—if any. I find that thought liberating. My mind is significantly less cluttered, and I now have more time and attention to dedicate to core challenges.

Becoming Averse to Risk Aversion

consulting to startups
Progress is slow in large corporations. Proposed changes have to go through several levels of approval, and even then the roll-out is cautious and tepid. A large corporation can’t afford to take big risks often. That culture in turn defines the consultant’s work.

Expectations were clear: deliverables had to be polished with little room for error. This unfortunately leads to a lot of internal iterations prior to presentation. And sometimes—frustratingly—a week’s worth of work would be thrown out because the client simply wasn’t interested, and we—the consulting team—didn’t bother to vet the work before polishing it.

As mentioned earlier, the cost of a mistake in a startup is much lower. The better course of action then is to try, fail, repeat, until you hit the right stride. It’s a numbers game after all. The more potential solutions you try, the higher the likelihood you are of finding a suitable one.

“The master has failed more times than the beginner has tried.”
– Stephen McCranie

As an aside, I don’t believe startups are inherently riskier than more established companies. Rather, they are better equipped—almost by design—at coping with small failures. Large corporations, however, put millions of dollars at stake every time they make small changes in their business as usual. Marcelo Calbucci puts it nicely:

“Great entrepreneurs are not risk-seekers. They are risk-mitigators.”

Managing your brand

Management consulting branding is a double-edged sword. In general, most professions will recognize that consulting “graduates” are reliable and high performing individuals. It’s not so much the case in the startup world. Consulting occasionally has a negative perception among entrepreneurs, especially in the eyes of the more technical crowd. They will get stuck on some of the negative points mentioned above as well as many of the consultant stereotypes (e.g., only concerned with high-level strategy, have poor execution skills, are too corporate, conventional, and risk averse.)

These perceptions are not entirely unfounded, but like all stereotypes they are applied sweepingly. Unfortunately, it’s a branding problem that is almost inevitable. And ex-consultant entrepreneurs will have to work hard to dispel it.

This wraps up my early thoughts on consulting and startups. I have only been at this for 6 months and expect to continue doing so for a while. I’ll make sure to revisit this topic once I get deeper into it. In return, I’d love to hear your thoughts whether you are considering consulting, have already done so, or never intend to.

 

This is the second post in a two-part write-up. In the first post, I looked at the flipside, how consulting has benefited me in my current entrepreneurial adventure.

From Suits & Ties to Shorts & Flip-Flops

How 2 Years in Consulting Both Helped and Hindered My Startup Adventure

November 13, 2013 · 4 min read

In response to a request from my good friend Khaled Kteily over at the Management Consultants Network, I am writing about the impact my consulting background has had on my startup endeavours. This is the first post in a two part write-up. Here, I focus on the benefits of moving from consulting to startups.

 

After two years spent as a management consultant at McKinsey, serving mega-companies, on mega-company issues, interacting with conservative executives, and otherwise leading a corporate life, I decided to take a 180 degree turn and join the startup world.

I’ll take this opportunity to share early insights and thoughts on the impact my consulting background has had on my current endeavours, and how it has shaped my thinking. In this first post, I will highlight how consulting prepared me to start a business. In the next post, I’ll look at how it made things more difficult, and I will wrap up with some thoughts on managing the transition.

How Consulting Helped me Start a Company

Three years ago, I accepted an offer to join McKinsey as a Business Analyst. Of course, I was thrilled and grateful for this opportunity. But I would only be saying half the truth if I didn’t mention that a part of me was worried; worried that I would brand myself solely as a business/strategy guy. I knew early on that I ultimately wanted to follow an entrepreneurial path. The engineer in me always wanted to keep tinkering and building stuff. I took the job, worked hard for two years, learned a ton, grew professionally, and came out the other end even more determined.

This is my account of how those years spent in consulting helps me today.

Taming The Unknown

consulting to startups
A typical consulting engagement consisted of spending 3 to 6 months at a client’s, in an industry in which I had little-to-no prior experience, and I was expected to deliver high-impact high-value work. The bar was high; the deadlines short; the client occasionally hostile. In short, the working conditions were difficult.

The only certainty is that I never had all the information I wanted to make the best decision. Whether due to time-constraints, non-collaborative clients, or poor-quality / nonexistent data. So I learned early on – almost by necessity – to become comfortable with the unknown, to make do with what’s available, move forward fast, and deal with consequences later.

The most important element of dealing with the unknown is harnessing the power of the mythical ‘structure’ – a concept that is drilled into your head before you even begin your first consulting engagement. It’s one of those essential ingredients that permeate the consulting life. Structure allows you to take a cascade of incoherent information and break it down into digestible chunks, prioritize it, then discard the superfluous. In other words, it allows you to create order from chaos.

Unsurprisingly, structuring the unknown is a skill that has returned dividends in the startup world. Every day, I’m faced with multiple, often complex and novel challenges. Instead of research teams that can help provide highly-relevant data, I have the Internet: a massive dump of information, most of which isn’t useful. It’s easy to get overwhelmed – and sometimes I still do. That said, retaining a strong structure amidst this sprawling mess of data helps me move forward and make the best decisions I can today.

Navigating The Human Element

consulting to startups
Consulting is not just about data; there is inevitably a powerful human element that can make or break an engagement, a relationship, or even a career. Learning to manage the ‘human element’ is a key skill that consulting firms help you develop – and it’s important that you do, because dealing with difficult people can lead to some of the most stressful situations in your career.

Compare that to facing a technical problem: in these situations, I can sit in front of my computer and labor away indefinitely. It’s just me, my computer, and time. I can undo errors, skip a few hours of sleep to gain more time, run my work by coworkers, etc. None of this is available when I face another individual in a negotiation for example.

Suddenly, there is such a thing as making an error I can’t undo; I only have this hour to get to an agreement; I can’t interrupt the meeting to phone-a-friend; etc. Simply reading about how to prepare for such situations is not tremendously helpful. I needed real world experience to improve. Luckily, consulting gave me more than enough occasions to do so. I’ve had the opportunity to sit across the table from C-level executives more than twice my age, and interview them one-on-one. This is important, because when a VC is grilling me on my startup for example, I feel infinitely more capable because I’ve dealt with similar situations before.

Re-Calibrating Priorities

consulting to startups
In consulting, stress is a daily companion as I’ve highlighted above. From tight deadlines to difficult clients. Long work hours lead to less sleep, which in turn make me less able of handling stress. And that stress inevitably leaches into my personal life. You can see how this can lead to a dangerous downward spiral.

I’ve been in and out of that spiral several times. My greatest takeaway has been recognizing the importance of investing in myself first. At its core, this means taking care of my body and mind. As work became more hectic, and without noticing it, I started neglecting both: sleeping less, eating poorly, and not being active. That left me functioning below my potential, to say the least. And it affected the quality of my personal, professional, and social life.

I realized then, that I had to be selfish before I could be selfless. I had to prioritize taking care of myself. And that in turn would return dividends in all other aspects of my life.  You can’t help others before you help yourself.

Today, I recognize when throwing more work hours at a problem may seem like the right choice at the moment, but is counter-productive in the long term. I continue to be faced with similar challenges but am now armed with a very different attitude thanks to my trials in consulting.

 

This is the first post in a two-part write-up. In the next post, I will look at the flipside, how consulting made things more difficult, and I will wrap up with some thoughts on managing the transition.

Upgrade to the Latest brainOS: Manufactured Awareness 2.0

October 23, 2013 · 4 min read

I recently gave a talk at the Quantified Self Global Conference about my life logging experiment. It sparked several interesting discussions. One of the insights that stood out is the sense of manufactured awareness I briefly highlighted in a previous post. So I’ve decided to elaborate on this point adding to it from these discussions as well as from the additional months experimenting.

Manufactured Awareness is…

First, let me expand on my definition of manufactured awareness. It manifests itself in two separate ways, externally and internally.

Manufactured Awareness
Externally, I now have a calendar that is an indisputable reflection of my life; a black and white picture of what I have done at any given moment, and more importantly what I haven’t done. It’s an extension of my brain that gives me instant access to cold hard data about my behaviour. Now I know. I can’t pretend. I can’t fool myself into thinking I’m being productive (or any other attribute I may be concerned about). I have found this to be tremendously helpful in “keeping me in check”. It also helps me answer the question I was curious/worried about 6 months ago: “what the hell did I do today? or yesterday? or this whole week?”.

… A Great New Brain App…

The second, more interesting change, is the internal one. I like to think of it as a new cognitive process – a simple analogy: think of downloading a brand new app on your smartphone that adds new functionality not previously available (like Instagram’s fancy photo filters). This neat new “feature” of mine comes from the act of logging my time and the anticipation of logging. I am now acutely aware of what I’m doing, when I’m doing it. This adds a lot of weight to every decision I make:

“Is this really what I should be doing right now?”
“Is there a better way I could be spending this time?”

It’s as if I am now two selves: the doing-self or Worker, performing activities, and the criticizing-self or Manager, overseeing my work to make sure I’m inline with my goals, values, etc.

Manufactured Awareness

Over time, this led to a gradual change in my behaviour. I’m able to quickly pick-up on my “knee-jerk” reactions to satisfy technological urges e.g., a reflex to switch to a Facebook tab and browse mindlessly, or the impulse to fill my time with “busy work” – activities of little or no value that create the illusion of making progress while keeping me busy. They also provide the satisfaction of thinking I’m being productive (e.g., that good feeling when crossing a task off my to-do list). Think of the times you’ve spent reorganizing your desk or computer folders just because you didn’t feel like starting that difficult task. More often than before, I am able to catch these impulses before they arise and redirect my attention where appropriate. Something I used to mostly realize after the fact.

… That Drains My Battery…

This comes at a price. The extra cycles my brain spends on playing the role of the manager on top of that of the worker are taxing. I’m reminded of Roy Baumeister’s work (author of Willpower: Rediscovering the Greatest Human Strength) on the concept of ego depletion (or willpower fatigue) – which I believe is at play here. He compares willpower to a muscle that gets exhausted from repeated use. The more you use it (to resist temptations, persist at difficult tasks, etc.) the less you’re left with for future activities. And decision making is one of the activities that contributes to this ego depletion.

It’s no wonder then that this recent change has been draining for a while. Being constantly worried about my current state and having to make repeated decisions to resist temptations isn’t trivial. As I write this post, I got even more curious about this phenomenon: If I did in fact have a limited daily source of willpower, then I should expect to fail at restraining myself more often later in the day as I depleted that source. So I dug into my data. And a clear pattern does emerge. I almost never procrastinate before noon (I wake up around 8am on average). 90% of my procrastination happens after lunch time (2pm), and a whopping 50% after 6pm.

Procrastination Distribution: Average Hourly Procrastination by Time of Day
Manufactured Awareness

This graph shows that my procrastination steadily increases until dinner time (7-8pm) and then decreases for the rest of day – reasonable given that I generally work much less on evenings. The two interesting anomalies are 2pm, likely because of the post lunch slump, and 8pm, the time at which I take a lengthy break from work to have dinner.

… But Can Now Run In The Background.

However, over time, I have seen an improvement in my ability to manage these distractions. I’ve started to incorporate, almost subconsciously, a set of rules or guidelines that automate the manager’s role. Rules like “no procrastination if less than 1 hour has passed since the start of the current work session”. Then every time the urge to stray surfaces, and as the manufactured awareness kicks in, I almost subconsciously defer any decision making to the now ingrained rules. I’ll ask myself “has it been an hour yet?” and the appropriate behaviour automatically follows.

There’s more to this than meets the eye, but I’ll leave that for another post.

“What if I Don’t Have OCD Like You?”

Manufactured AwarenessPeople are skeptical when I tell them all of this tracking is quick and seamless. Some even think I’m crazy when I recommend it (at least their facial expressions suggest so). So, I won’t outright recommend logging every minute of your life, but I’m convinced a sprinkle of added awareness as we march through our days is tremendously helpful.

A simple way of testing this out is with the help of a very primitive but effective tool: the notebook. It takes a couple seconds to write down tasks as they are completed (important, trivial, as well as useless ones), but the insights come at the end of the hour, day, or week when you take a step back and see the patterns start emerging. I’m almost convinced you’ll be surprised by what you see. But don’t take my word for it…


Check out the Life Log page for the latest updates and posts on this experiment.

Shout out to my friend Halim Madi for providing input on this post.