This topic is very unusual, but it's something I've been speaking about for two years and To any group to any lecture to any class that I teach I talk about the opioid epidemic So if it's a church group or real estate group or principles of macroeconomics I always give a little introduction to this issue and this is the first time I've really talked about it at length It's the first time this lecture has been given at Mises University and I think it's important for the fact that it's a matter of life and death and it's a matter of a short term immediate term problem and It's a problem that now faces all Americans and Indeed a lot of people around the world in European countries. This is also having a big impact And so the best view I think of the opioid epidemic will start off with some statistics to give you some flavor for What this epidemic has become? Okay, so in this chart It shows the overdose deaths from opioid use from 2000 to 2015 Okay, and obviously if we add up all the opioids the number is quite substantial We're talking in far in excess of 30,000 Americans dying each year from this Back when I did my dissertation at Auburn University on the economics of prohibition the number of deaths from opioids was Just a couple of thousand people so the numbers have increased dramatically and the impact is spreading Widely and so when you look at the overall opioid deaths That is a combination of prescription opiates Oxy-cotton, Vicodin things like that things that are routinely prescribed by doctors and Then heroin and synthetic opioids particularly fentanyl Which you've probably all heard of it was involved with the death of Michael Jackson Prince It's his name Seymour Hoffman Just first name Philip Seymour Hoffman and a lot of other celebrities, but also a lot of everyday ordinary Americans So the numbers are quite staggering and the number for 2016 Is expected once it finally comes in to be far in excess of the figure in 2015? But Before we get into this in detail, I want to just mention to you the pain epidemic in the United States in 2003 there was a study of European countries and The number here is that 10 to 55 percent of adult Europeans suffer from chronic pain That's a staggering number The fact that looked at 13 different reports means that they're measuring pain differently and they're measuring populations differently So it's it's not a hard and fast number, but It is indicative of what we're facing in 2006 study similarly looked at European countries and found that the average amount of chronic pain was 20 percent of adults 2011 Study found that 116 million Americans suffered from chronic pain and this is really Staggering when I was a child a teenager it chronic pain was Not much of a major issue and there's no studies recently But what I did was I looked at the number of Google hits for chronic pain in 2011 2012 2013 and so on and I found that the number of Hits for chronic pain in 2011 jumped doubled in 2016 from 13 million hits in 2011 to 26 million hits in 2016 so far in 2017 we've exceeded the 26 million hits on Google so this is something that is kind of exploding but off the radar map and I have no answer for The idea of what's causing all this chronic pain, but it's something that is very unusual Opioid prescriptions, this is data from 2012 The yellow states There are 52 to 71 prescriptions written for 100 for every 100 people That's an enormous amount even if an individual is only is responsible for 12 monthly prescriptions. It's a huge figure The dark states in the center of the country the number of prescriptions written for opioids for per 100 people was 96 to 143 I saw a report earlier this year that the state of Alabama last year Was 149 prescriptions written for every 100 individuals So there's a lot of pain out there and there's a lot of opioids being prescribed and there's a lot of people dying from that Fentanyl which I mentioned earlier. It's a synthetic opioid The number of mentions in law enforcement circles for fentanyl usually an overdose Situations was very very small just a matter of a few hundred prior to 2010 and then in 2013 we saw the number jump tremendously and It is widely known now that a lot of fentanyl is being illegally imported into the United States by China by Pharmaceutical and chemical companies in China the face of the heroin addiction problem has changed dramatically in the 1960s when the heroin problem first emerged in the United States became public notice The face or the image of the heroin addict was that of the inner city urban junkie Or Vietnam vets who took up the habit Fighting the Vietnam War and brought it back and when that's when we saw an explosion of heroin addiction in the United States So in the early years it was mostly inner city minority minorities and Vietnam vets Later that has changed so that older African-American men was a big group More suburban use But the statistics are still dominated by young minority men today the fastest growing component of this problem is Quite unlike what it has been historically now the problem has moved out into rural areas To places like little cities that are coal mining cities or fishing villages in Maine very unusual places and locations for The heroin epidemic to sort of explode in unusual ways as you saw the opioid prescriptions Were heavily concentrated in the central part of the United States So what's the cause? Well, if you read the media about this epidemic They'll trot out the usual suspects The suppliers on the supply side the drug dealers the smugglers the cocaine cartels and all that that they're Responsible for it and that we need to squash the supply side of this market There's also the demand side. It's these drug addicts. It's the addictive Capacity of these drugs that is responsible for the problem Of course, we have the gateway theory of drugs Which is important to know about which suggests that if you try marijuana You're ultimately going to end up dying from a heroin overdose Now this theory has been completely debunked by about four or five different disciplines That there's no physiological reason why you'd Suspect that marijuana use would lead to heroin overdose. There's no sociological reason That marijuana use would lead to heroin addiction There's no chemical reason There's real there's really not an economic reason why in a free market Marijuana consumption would lead to heroin Use and addiction and so forth So the gateway theory has been completely debunked although it's still Very popular in the media Crack babies totally debunked just recently on Mises dot org Is totally a fabricated story in order to sell copies But nonetheless law enforcement criminal justice the media they all point to this gateway theory as A way of explaining away the problem Of course, the free market is blamed even though the free market isn't in play here experts will You know just say oh well, it's the free markets fault just like they do on so many other occasions They don't have a real explanation. So they resort to these types of Explanation China and our enemies are the evil, you know Central American dictators and Chinese and so on and so forth. They're responsible for the problem They're the ones that are bringing in in particular the fentanyl and Because the media Tends to sell this story most people if they hear these types of ex explanations will accept those types of explanations and As a result, they argue for yet more prohibition more penalties more law enforcement more snooping more power to the DEA and so forth and Of course Drug or addiction treatment programs other types of government intervention Attorney General Jeff Sessions who used to be our US senator is trying to revive this war on drugs. He's trotting out The the old drug awareness programs and so on and so forth which have already been proven Dare what's there? drug awareness Whatever that the program for schools the studies of that program found that the program actually encouraged students to try drugs and Yet, it's still thought of as A way to solve the problem now the real reasons. I'll just list them here and then we'll come back and Flesh them out a little bit And I'm hoping to leave plenty of time here For questions and answers Because this is a topic that is not talked about and written about in a Scientific way, so I would really appreciate all of your input into this discussion as well Okay opioids opiates They are dangerous. They are addictive There is a reason to be very cautious and to avoid these things if it all possible even the prescription Versions the prescription versions on their own kill a lot of people government in an intervention in the economy is Also very important a major source of drug addiction is government intervention in the economy Most notably war. So a lot of people became the first American addicts were veterans of the American Civil War For example, they had injuries. They had amputations. They had real pain And not to mention the horrors of war that they suffered through You can imagine going into battle back then With everybody your age from your county back home whether you were north or south and In a particular battle you may be the only one out of a hundred who survives intact as a result But government intervention in the economy You'll learn this in some of your other classes every time government creates a monopoly position in the economy No matter if it's for doctors or lawyers It doesn't really matter. They're creating monopolies all over the place, right? Most industries in the US Have some kind of monopoly power built into the structure of their industry That means there's fewer of them and that means people who otherwise would have been in those industries Producing goods and services in the economy. They don't have a place in that industry That means that they have to go to a less desirable Occupation a less desirable space in the economy and As they go into those spaces which are don't have monopoly power Wages and returns in those industries are depressed. They're decreased and so there's a natural part of our economy due to government intervention where the returns and the wages and the incomes are artificially suppressed Due to government intervention and then there's the iron the iron law of prohibition The iron law of prohibition which will will get more to Is basically whenever you prohibit something such as drugs and alcohol you make them more potent and more dangerous Okay, so that's a very real reason why this is a very big problem But most importantly What's causing the epidemic today is That drug companies and the American Medical Association have changed the prescription guidelines for pain medication so only in the last few years Has it typically been the case that? Normal average ordinary People who go into the to the doctor's office for a medical problem Their routinely prescribed opiates such as Oxy-Cotin and Vicodin Whereas ten years ago. They wouldn't have been prescribed addictive opiates. They would have been prescribed ordinary painkillers like prescription strength Motrin for example. I had a A minor medical problem about ten years ago. I went into the doctor and they prescribed me prescription strength Motrin not in not a problem about five years ago. I went into a different doctor's office a doc-in-the-box type thing and I was seen by a physician's assistant and I Wasn't surprised by the fact that they wrote me a prescription They called it into the pharmacy. I picked it up on my way home and When I got home, I took one of them and about 30 minutes later I was getting kind of woozy and I stood up and I almost fell over and As soon as I studied studied myself. I Went into the bathroom and looked at the prescription and it was Oxy-Cotin. I couldn't believe it. I Could not believe it So the guidelines for prescribing pain medication have been changed So that an enormous number of people now are routinely given prescriptions for opiates instead of normal painkillers Okay, so the first one heroin is addictive and heroin is dangerous basically heroin is a form of morphine and In terms of reducing pain it also Suppresses your metabolism and if you take too much of it It'll basically Make you fall asleep and stop breathing and die It was introduced in the market by the Bayer pharmaceutical company in 1898 or 97 It was marketed as a non addictive Substitute for morphine Little bit of misleading advertising, of course, they didn't really do all the testing like we do today Back then So they really didn't know but it was very effective product particularly for lung related problems bronchitis and things like that where you're constantly coughing So it was marketed by Bayer from 1898 to 1910 Bayer Realized that the evidence was building up that people were becoming addictive to this new product and so they took it off the market in 1910 and they Introduced during that period an alternative painkiller called aspirin Which is still not completely harmless, but not it's non addictive and doesn't Have nearly the medical consequences of an opiate and then shortly thereafter in 1914 the Harrison narcotic act came into play and Made heroin morphine cocaine In a variety of other drugs and similar substitutes illegal So that's that sets in motion the economics of prohibition Second reason that I mentioned is government intervention in the economy War is a big cause. I mentioned the Civil War. I also mentioned the fact that Vietnam vets came home Smoking pot and taking heroin basically And the more recently wars in Afghanistan in Iraq have again big cause of prescribing opiates using heroin marijuana and so forth As a result of their injuries Which are very severe in many cases as well as the post traumatic stress syndrome And then government intervention in general all sorts of monopoly privileges Creating restrictions in some industries Transferring resources to other industries and suppressing wages and returns in those industries Okay, so if you're on the outside of Having a the positive benefits of government intervention and you're on the negative side of that that means you're an individual who is paying the higher prices To the professionals in the privileged industry and your income is much lower Okay, so it it Benefits some people but that means the other people get lower incomes and they have higher prices to pay the worst off in that second category of people find themselves in A position where they need some kind of release they need some kind of relief They need some kind of escape and so drugs in general provide that release that escape from The terrible rigors of being in that kind of position in the economy where you're on the outside paying higher prices and getting lower incomes and so we find the opioid Traditionally we find the opioid addicts Coming from those circles of society the iron law prohibition now. I've tagged this PowerPoint presentation on to my old Presentation on the war on drugs, which I'm not giving this year So if you want to look at some of the more technical aspects of it all my slides are attached to this lecture on the opioid Epidemic, okay, so I'm not going to go through the technical Analysis of the iron law of prohibition Suffice it to say is that when you prohibit something You make it more potent and more dangerous and in many cases more addictive Okay, and what I show in my book the economics of prohibition is that during alcohol prohibition the type of alcohol that was produced for the black market was much different than the type of alcohol that was Previously produced in the free market or subsequently to the end of alcohol prohibition so Prior to alcohol prohibition in 1920 Americans spent about 50 cents of every dollar on Whiskey or whiskies, you know vodka rum and that sort of thing and 50 cents on beer and wine during alcohol prohibition about 90 to 95 cents out of the dollar went for whiskies and spirits things of that nature and the type of whiskies that were produced Bathtub gin for example were approximately a hundred and forty to a hundred and 60 proof where in the market. It's typically 80 proof So in the free market, we almost never see that kind of stuff being sold in the stores Except for Saturday morning here in Auburn during the fall football games And why is that the case? There's only like one brand of this stuff in the ABC stores in town I said you ever sell any that stuff. She goes no except for football games Now, why would that be the case? You can't drink in the stadium. It's prohibited unless you pay 75,000 for one of those skyboxes Then for some magical reason it's okay, so they sell, you know That stuff only very rarely and only because of prohibitions So it's produced in a much more concentrated form As enforcement efforts increase so if you increase the penalties if you increase the number of law enforcement officials if you make it easier for law enforcement to find detect apprehend and convict Someone for illegal smuggling of this stuff Then what happens is these producers these smugglers these dealers will switch From bulky low potency drugs to concentrated high potency drugs So what I'm talking about here is for example Switching from producing smuggling and selling marijuana to producing smuggling and selling things like cocaine Which is highly concentrated when it's produced It's highly concentrated when it's produced in its 100 nearly 100% form Okay, so that Any particular container such as this Cover for this thing if you were smuggling something like this in and you were smuggling marijuana You may be able to get in say 15,000 single doses If you were smuggling in cocaine in something this size you may be able to get in 500 600,000 individual doses So it makes more economic sense during prohibitions to especially if they're intensely enforced To switch your business from something like marijuana to something like cocaine or heroin or crystal meth and This movement of going from marijuana to cocaine to heroin It makes it all but it almost makes the gateway theory seem plausible because Americans have gone from the marijuana Which was big in the 60s 70s and early 80s and then in 1984 they really cracked down on marijuana in Florida during the Reagan administration and marijuana did disappear temporarily from the black market and in Florida Because the dealers and the smugglers switched from doing marijuana to Bringing in cocaine and things have only gotten worse Now legal opiates are the real key here to the epidemic That we've been experiencing in the last few years Again, it's things like oxycott and Vicodin and others.  There's a committee that's in charge of setting prescription guidelines and The pharmaceutical companies have been Gaining favor with the individuals on this panel and They do that in a very typical way that they do everything else they provide grant money to these doctors they provide travel money to for them to go to conferences and Give their papers their research findings to other doctors And other ways in which the pharmaceutical companies can gain favor With doctors in general, but in this case a select number of doctors who are in charge of writing and rewriting These prescription guidelines It's legal what they're doing, but it's unethical in my judgment Okay, so physicians are encouraged to follow these guidelines the DEA Overseas the prescribing practices of doctors To try to identify people who are just writing, you know prescriptions for opiates for money so that they found certain doctors Have been prescribing a hundred times more of these opiate prescriptions than the average doctor and so because The DEA is overlooking this whole process Doctors know that they're being scrutinized and therefore that encourages them to follow these guidelines Even if they don't like it even if they don't think it's the right thing to do So that typically painful injuries are now treated with these opiates So if you break your arm or you separate your shoulder, you're given a 30 or 60 day prescription for these things to take them multiple times a day But when the injury heals when the arm is fixed when the shoulder is fixed Of course, the doctors can't continue writing these prescriptions so it's you only get these prescriptions in the short run typically and As a result a certain percentage of these people become addicted now when the original when the guidelines were announced We found that so far There have been over 250 citations within this Area of research to a letter to the editor to the Journal of the American Medical Association This letter was written by a research assistant Who was involved with a study of 40,000 people who went into a hospital and were given at some point opioid pain medications and They found only four out of the 40,000 became addicted And so this was a one paragraph letter to the editor written by a non-phd non-md research assistant About the findings they found for short term I mean how long you're gonna be in a hospital after all two three four days Maybe a week typically So with medical supervision Short-term very few people become addicted But if you're taking opioids three or four times a day for 30 or 60 days The percentage of people who become addicted apparently is much higher much higher than one one hundredth of one percent So with legal opiates alone 15,000 people died in 2015 we think the figure is going to be much higher for 2016 and 17 non-legal opiates or illegal opiates So as we throw Thousands and thousands of people through this new pain regime meta pain medicine regime a Certain percentage are going to become addicted But after 30 days if you still feel like you need these drugs and you go and want to refill the doctors not going to give it to you That would get the doctor in trouble So if you've become if you're one of the people who becomes addicted During the 30 days of your prescription What are you supposed to do at that point go cold turkey It's dangerous, and it's extremely hard to do People have actually died from trying to go cold turkey from heroin addiction You almost need to be under medical supervision to do that kind of thing So it's not a great option in other words Could go into an addiction treatment program The problems with that are many. They're very expensive not necessarily covered by insurance You have to go without your job and your income for 30 days Unless your company is going to cover that and they're not all that successful Because typically drug addicts Whether legal or illegal Face a lot of problems simultaneously. They have an economic problem. They have a sociological problem They have family problems They have psychological problems It's really hard to cure that whole mess in 30 days of drug treatment So one option is to go and get black market opiates you can buy Oxycontin and Vicodin on the black market. So if you find an illegal drug dealer you can buy Additional Oxycontin and Vicodin's the problem with this is That sometimes an Oxycontin pill will be five dollars sometimes it'll be twenty five dollars so Very high prices The supply of these things are uncertain The market is very thin And so the market may totally dry up in an area within driving distance for yourself And as a result there's price spikes in this market for illegal black market Oxycontin and Vicodin and So this leads us down this path to Black market heroin Which very often is actually cheaper than black market Oxycontin and Vicodin And you already know a dealer because you've been buying these illegal Oxycontin and Vicodin's so you're already locked into this black market And as a result a lot of ordinary people like coal miners and school teachers and Fisher people Find themselves these are people who would never ever ever consider buying black market heroin people like preachers people like Grocery store owners, so black market heroin Okay, black market heroin is not commercially or pharmaceutically made It's made in the black market. That means there's a lot of problems with it It very often has a lot of impurities Impurities that might make you sick or impurities or substitutes which may kill you Black market heroin is has an unknown and highly variable variable Potency there's black tar Heroin, which is very crudely produced That is has a relatively relatively stable potency, but the Stuff that mimics the pharmaceutical heroin is highly variable potency and That that's a problem because if you're used to taking a certain amount and then all of a sudden you get Something that looks exactly like what you were taking but is four times more potent then it can kill you and It also has unknown fillers Which are used to enhance the potency and this is where the fentanyl comes in so a lot of people who are heroin addicts They're used to the heroin. They know the dose. They know the dealer all of a sudden something comes through with fentanyl in it Which is considered by some to be as much as a hundred times more potent That can also kill you and we're getting literally tons of fentanyl coming into the country from China now Okay, black the black market versions of these products kill 2015 21,000 people so that's 36,000 people That's a lot of people solutions well people from the right wing Side of the political spectrum have a recommendation. They essentially want to lock these people up for their own good Of course that usually doesn't help very much People on the left Also recommend locking people up Okay, neither one of those approaches really works You may You know if you put somebody in a prison Or a secure treatment facility you may temporarily break their addiction But you haven't really solved the problems all those other sociological psychological physiological Problems that these people have Economic problems that they have if you don't solve all of those problems Drug and drug treatment Very often fails It fails in both in the short run in the long run because you haven't really solved the issue My recommendation is to legalize drugs to legalize heroin to legalize cannabis to allow somebody who Comes into a doctor's office and says I'm addicted to this stuff I want to get off of it to allow the doctor to write a prescription for a drug maintenance For the for the drug addict In order to give them time To figure out their other problems to get themselves studied economically sociologically psychologically so that the Breaking of the addiction becomes a permanent feature of their being rather than just a temporary Fixture because if you temporarily solve the problem and the drug addict gets completely clean and Then something happens that what makes them want to reintroduce the drug into their body into their life like it did with Philip Seymour Hoffman when family problems and Professional problems caused him to want to go out and get some heroin that ultimately killed himself so if you give Maintenance if you legalize maintenance so that doctors can do that kind of thing and actually Cannabis is considered by heroin addicts to be one of the best things To help break an addiction because of course cannabis relieves pain it relieves anxiety most of the time It encourages sleeping and eating which heroin addicts don't do a lot of and is important for curing everything so if you Introduce cannabis into the treatment. I think it actually facilitates the cure Okay, why does that work? Well? Drug addicts in the black market. They're more or less constantly working and worried about feeding their habit Okay, so it's it's almost a full-time job To to get and maintain the money and the drugs necessary to maintain the addiction So legalization would would Exit that out. Okay, there's no time and worrying about it if you have maintenance So they can get a job and improve themselves in other areas and They can solve their problems over the long run There are a lot of people who are heroin addicts that eventually grow out of their addiction They become sick and tired of going through that process So people who are wealthy and can afford their addiction very often Maintain their addiction for a number of years and eventually simply grow out of heroin addiction usually with the help of cannabis So in conclusion, this is a real and deadly epidemic It's largely caused by Prohibition the black market and the pharmaceutical companies Legalization I think would be of great help in reducing these problems You can look at the decriminalization in Portugal in 2011 It wasn't a big step as big as it sounds, but basically law enforcement Cut back on its conviction of dealers they were all already kind of lenient towards consumers and The prices of these drugs fell addicts became more normal citizens and the sociological problems associated with illegal Drug use in Portugal dropped significantly Thank you very much Thank you very much We've only got two minutes for questions, but I've got office hours this afternoon and I'll be out there at lunch too in the back Conscription The fact that you have to have a prescription Well Most of my relatives are pharmacists, so I'm actually against the doctor's monopoly. I was brought up that way We would materially benefit if pharmacists could write the prescriptions which they once did Yes I Know Yeah, that's that's very true. It's it's a result of ignorance They're doing the same thing in the Philippines right now. They do the same thing in Iran and in other places And it's a result of ignorance. They think that Like on my one of my original slides that the supply side is responsible and that somehow you can smash the supply side And that gets rid of the problem That's never ever really worked anywhere You because the because of the profit motive and the profits in illegal drugs You can eliminate all the suppliers you want and more people will come in to flood that market And I think traditionally the Chinese have been Much more accepting and caring for the addicts themselves And they want to see Everybody being productive and contributing so they want they want to get those addicts back on their feet last one My medical friends often they confirm from your issue whether being a supply push Yes Yes That's right. That's absolutely correct. That's why I put in that unusual slide right up front about the pain epidemic because Americans are in Enormous numbers suffering from chronic pain, which is in my mind very Poorly understood People I Agree with you 100% it's there's something phantom about this pain epidemic in my mind. Thank you very much


Scaling up is very important for any business. This is not a choice. You need to really scale the business and today in the session I will split the discussion I'll do a quick summary of what we did discussion the last Addition of scaling up so that people who not intended the last one really get some Understanding of what we really covered and then we'll go on to the next topic for today That how do you really use scale and what you need to do and how do you bring some kind of a structure in your scaling so Especially in these times, you know Scale has become a little bit of a back burner for a lot of companies and they're thinking of more sustainability and controlling their enterprises and so But I think a little differently I always think that when market shrink you have to really think through that how you improve your market share And I feel that the good strong companies and strong entrepreneurs would always find a way to really see through That there is an opportunity for doing it like I was in discussion with one of our companies which are aggregating Banquets now on one side They look like the business is now on a very very bad stage Banquets are not working operational in so on the other side I see this would be a huge consolidation opportunity because a lot of independent operators who were running their own independent Banquets would not be able to sustain So if there was somebody who's able to really put a framework together There would be a much larger consolidation opportunity and I see that very clearly Both on the organic and the inorganic framework. I think there are many opportunities which would emerge especially 2021-2022 Would be a great time for companies to really scale up and find different opportunities Not only home markets, but a lot of other markets Indian companies can skate and I I feel that the scaling up But while it has to done very very consciously because you need to really forecast your your financial performance much better Then we ever did in whenever we plan this game So let's revisit what we did last week and we first defined, you know I've done my own definition of what I call the scale and I define the scale by You know S stands for what I call the strategy strategy has to be whatever I will short term and a lot long term Both has to marry between them, you know, unless you have a very especially in these times You have it to have a short term strategy, but you have to have a bigger Long-term strategy. So how do you really define your strategy? How do your strategies? What your business model is clearly differentiated and how do you really? Go deep down into your your business model to make it more sustainable So to say for next four or five years. So what is your brought them a strategy? And I would say that this is a good time to redraw your your strategy for the business That's S stands for strategy C stands for three different things one.  How do your culture is moving now and how the culture and how what is your competitive advantage and third is your core competence? Whenever you're scaling up, you cannot take everything along find your strong core competence and focus on that That's where the real value lies and I think a lot of companies have let go a lot of other performing assets around them Just because whenever they look at scale, you know, for example, Gillett As a company a long time back the people don't know they used to also own Parker pens It's a big big company They used to have a lot of writing instruments and they let go these businesses Because they wanted to really focus on their core product, which was their shaving products and the grooming products So fundamentally a lot of companies at a given point in time left their profitable businesses Because they want to really focus on their core whenever you think about scaling think on core competence Think on how do you really create culture and how do you really integrate culture because whenever you scale? integration of culture becomes a very big problem and stay honest to your competitive advantage third which stays for a a comes from Actionable plan and setting accountability. They both has to marry together. You need to have a very strong actionable plan You know, which can be really put to work and also need to set accountability to really see that how your plan is working out And how it is progressing and all the stakeholders whatever be responsible for Executing that actionable plan are set to accountability and the expectation is aligned and what is expected from For so another area, which is very important for you to really think through is what I call the liquidity which is The L stands for the liquidity liquidity is that the company when you scaling up and we'll talk about today's session Also, I would need capital and how do your liquidity is stacking up and what is your current state of liquidity? what is your current, you know, you're sort of say liabilities and and You know profits are stacked up and and and how it is going to look like in next three to six months and these equations have realistically changed in last Four or five months in companies companies Which were very healthy at one point I'm from a balance sheet are not so healthy at this moment So you really have to carefully understand what what your library side looks like and what can be the future library? Because another three to four months six months. We still don't have that kind of a clear predictability But how does it stack up? But if some companies either have strong liquidity or can have Ability to raise liquidity. I would say they are in a golden era They would get into a golden era from a scalability viewpoint this time around it will be all driven from liquidity I think a lot of companies which would shine in this time would sit I mean companies Which would have ability to organize liquidity and and one of the companies we clearly saw was reliance industries Which was quickly able to raise a lot of liquidity and I can clearly see what is a three to five year plan because Almost every good asset would come their way And they would have ability to choose the right asset if they don't make the mistakes on picking up some wrong assets But I think this would be the perfect time for them because they quickly turn around unlock their value Raise their start sitting on a big chest on reading liquidity And now they're ready to go and create that and so multiple news would continue to come from their group I think over next three to four because It's not only just liquidity It's also to quickly deploy that cash because you're unless it you sweat out that capital You will not be able to deliver the promise to the the investors and stakeholders you've gotten So it works hand in hand You need to know when to raise and where to deploy and that cycle has to done with very very quickly Because neither the money can sit anywhere Money has to be sweat out and then only it creates and that and so it's very clear Ideation When to raise and we'll talk about in the next section and finally is the execution execution has to be seamless And it needs to create experience. It needs to create impact. So how does it your your overall execution is shaping up? So scale is defined by a strategy. It's signed by culture culture Competitive run and also for confidence. It talks about actionable plan and accountability It talks about liquidity and finally is the execution. That's what to me scale is on and scaling up we talked about last week Last plus week also on on three P's which I call are very important to get alignment When you start thinking on scalability and these three people is once people your people alignment has to come in Your process alignment has to come in and your performance has to be some kind of a performance management Capabilities have to come in if these three P's are aligned which means there are people aligned Processes aligned and your performance management is aligned. Then I think the scaling would be very interesting So this is what we covered the last time So we talked about a lot of things in terms of the strategy and and all the five elements Which we talked about a principle definition of what houses scale could work but today we talk a little differently in terms of how Companies look at scale in and I call it different cycles of scaling and you need to really by design put different cycles I call the hallmark of a successful scaling is knowing when to hit the brakes and then only you can get to the next Orbit, so that's where the value lies You don't need to really go scale take a hold take put your brakes redefine your strategy redefine your position of liquidity redefine your Integrate your culture and then start scaling up. You need to do this cycle Multiple times to find different orbit change and so on so now today We will discuss about the five things which you need if you are thinking on getting into scalability Then what are the five things which you would need to really bring in the business? One I think let's understand scale and growth really comes from my own experience says only from three things If you if you just don't concentrate, I mean leave aside all the other things and only focus on these three things Then you will be able to get all your answers of scalability or growth or market share Three things which really can create a scalability is one I call new markets, which new markets you can go You know who's your new customer which you can address Where is this coming from and so on so new market really clears very clearly One definition second is new products What are the new products which can come in and address the same audience which you currently have and third is a new channel Which means that what other channel you can use for for your growth between these three things I think your answers of growth really comes and that's where the scaling up really starts on So now I call it up whenever you are looking to get into Scaling then first step which you need to start is what I call evaluate your current position and create a bigger road map So, how do you create evaluate and plan your larger structure? So let's do I mean we call it assessment map You know, how do you put your assessment map with the current capability and organization and draw? How their plan would look like and put out on that so the assessment map I divide that into three parts One is predictability and predictability comes from you assessing how we would be able to gauge the performance of your organization and Also the priorities of the consumer So how the organization is going to perform and how the priorities of consumer is going to change and Unless and until these two are married, you never be able to come down to firm predictability Sometimes we lack on the performance of the organization itself. There is a clear opportunity There is a clear business model out there, but we lack performance Your teams were not ready to pick up that opportunity and we have seen it many many times Almost three or four companies. I know started when they aggregated hotels or almost every aggregation happened in this country They would every time there would be six seven eight nine players Simultaneously would come in they all saw the same kind of an opportunity. They probably had the same kind of technology They all had the same vision instructor, but very few were able to go to the next level The only companies which went to the next scaling up cycle were very clearly Marrying the performance and also they were having the strong predictability or priorities of consumer So how like like a flip card flip card Essentially was a very very close copy of Amazon Amazon was a platform for selling books And they were also selling books in India Quickly they understood that the priorities of consumer is changing very very fast and they continue to evolve and they also obviously they had The similar kind of structure which was happening, but there are many other names I would know which were also there in the same structure But they were not able to evolve as the priorities of consumer Now look at what play card is doing now selling groceries selling other things But original plan of the business model was very very different and very structured I think the founders never thought that they would be doing this what they do You know as a business model, they were not designed even the brand was not kept to do what they're doing now so Eventually the very clear mindset as a founders were that they need to continue to scale and as the scale within them I think they continue to build their performance and also to continue to gauge the priorities of customers and how the Brighties are changing and sometimes I think your performance is excellent Top-class performer, but you're not able to see how consumer is changing like look at lens cut lens cut is another example pure play online company a strong online play for a few years But they realize that whenever people buy opticals, they need to get their eye testing and this was impossible They did almost everything they created online tools They started even doing going to people's home and trying to test that but eventually they realize there is a only one way To run this business is is running an offline a retail outfit now being a pure play online company Has now a very large retailer in the country because they understood and adapted to the privacy of the store So while their technology they married, but they understood where the customer is and they became very loyal to one What they wanted to they continue to ramp up their performance capability from a being a very technology Now I think they've become a very strong retail experience organization and Within all that happened in 10 years where you have evolved as a technology company and now you become a most experienced retailer Also in the country where a lot of other players I should not mention a forum, but they a lot of other players bigger companies were not able to gauge that So so this this company these companies are like because this that's why they're able to scale so much because they are able to marry these two things the first thing in your assessment map should come how do you bring predictability from performance and also from the priority of a customer second is your gestation cycles Another area which I have seen in scaling up is whenever you start scaling up you under estimate in some forms the you know the market how it is evolving and sometimes overestimate your capabilities. So both are wrong You know you are under the estimate from how the market is going to Go on to accept you. So I call it a very clearly the gestation cycles again has to have two things very clearly How how what is your go-to-market strategy? What what time it would take you to go to market? What kind of gestation you see there and second which is also very important Sometimes we design that we will be ready in three months to hit the market We will be out there with the customer and so on but we don't understand that there is another component Which is there which is how the market would shift to you So the market is consuming. Whatever they're consuming out there, you know say you are a new product in I think you obviously have Your own product differentiation, whatever you have But there is somebody using something from somewhere already, which means that they need to also shift So gestation cycles should always come and marry these two things together one What is your go-to-market strategy and what is the market shift cycle?  But somebody is using some salon in the same neighborhood The people are not waiting for you that you will just come in and do that. So sometimes this this structure is not very well defined and companies are not able to sustain and They start collapsing very fast because they they are not able to put this a right number in mind So even in our consulting practice now we really go down and say what is a go-to-market time and also what is a time frame we require To shift that market and how that compelling the shift is going to be done over four quarters or five quarters And by the time we reach to our optimum performance or a peak performance and so so those things are important The second point is your gestation cycle third is your organizational capability development You know, so when you scale up how soon you will be able to build your capability and what are those capabilities You need to really define and build and these capabilities are both at the at the entrepreneur or a leadership level and also your organization sometimes Organization lacks capability, but entrepreneur has a right vision and right structure Doesn't marry sometimes organization is pretty ready But the entrepreneur or leadership team doesn't have that future and this creates a huge clash and understand these two also Married it doesn't work. So whenever you starting to think on scaling You need to evaluate and plan and create your assessment map in your assessment map Go by these three things bring predictability, which is performance and priority go by gestation cycle Which is go-to-market and your market share you know shift and Third is your organizational capability development and entrepreneurial capability development developing together. So that's how it would create results Now the second point after once you've done your your Evaluation and and planning the second point which would become is obviously capitalization You know and capitalization is also a life cycle. You know, it's it's a continuous capitalization For it's another directly proportional to your scaling So if if you feel that next five to ten years is your scale time and you need to reach to a different benchmarks similarly your capitalization capital base also need to scale now The difference is that scale and capital raise work on a different timelines So it needs to have at least 12 months to 18 months kind of a life cycle for the next scaling up cycle Which means that if you are today thinking of scaling up and you feel that you will reach to a certain level For your next orbit working. You might have to start now because the 18 months from now you would again need capital So it works absolutely different. I think now intelligent companies on one side They have a team which continues to work to fill the their number guidelines and their scaling guidelines and so on So they continue to chase that and there is a separate team and sometimes founders divide these roles You know, if there are two founders one founder was continue to work on the on the capitalization scale And someone found that is chasing numbers whatever the market guidelines you give so you need to really see how do you? Position that I always say that put a separate team Which should we should not really be involved so much in that that thing and they continue to think through how this Capitalization would be done and the answer for capital raise is today. Absolutely equity equity is the best way to You know raise your capital base and that's where Intelligent companies are doing that even the largest companies who have phenomenal balance it again I come back to reliance because a lot of examples Really are coming from them in terms of what they do and how they are thinking process is working and and unlike what we have seen Reliance industries in last four decades They have either used capital market or they've used debt to really do that But they're very near you would heard that they would off loaded their own equity to raise capital This is the first time in probably in the openness They've done and they have all started rather be started last year when they started inviting oil companies to become partner They've gone larger, you know Company out of Saudi Arabia to invest with their refining business and a lot of that Thinking process has started because they understand now for them to grow This business would need a strong Unlocking of their equity and one of the areas where Indian businesses are sometimes not able to do that because they keep their equity Too close to themselves. They don't unlock it and I feel that the best form of Going forward and capitalizing your business is unlocking your equity So that's where so think over it that what is your what is your growth need and how much capital at what stages you need And who's working on that piece for you now? Let's go into the third part of it, which is also very important and Very very critical when you look at the scaling up is actually predicting your consumer demand side Now consumer demand I further divided into four different parts One is overall defining the market. How big is the market and what is what is happening in that market? Is there any risk of any kind of a surprise product substitute? Which is coming in the market because these days destruction has become the biggest problem for businesses Almost every business suddenly become irrelevant because there is unseen Competitor who's just shows up and he has a phenomenal substitute of whatever you're producing on that You know, so Ola is actually over is a substitute for automobile companies to sell cars to end users Because they don't need it now because they would use public transfer. So any kind of a destruction today Can create a big problem in terms of how you need to do so you need to really see that what is a big picture What is your market and define your complete market and go to the core of your business and define the market and don't limit by Geographical spaces, you know And this is one of the areas which we struggle with a lot of Indian companies great companies because sometimes they limit themselves by Geographical presences, they don't they don't really they have phobia of just limit themselves And I feel that this is a time where companies have to start thinking a little more wider and say Wherever that customer is that's my marketplace and how do I reach that market place or define your market place and define the structure Then second is break your marketplace into smaller components Understand the smaller components. Hey, I was a tire. Now my market place is everywhere and But now I would like to divide my components and components would be passenger car vehicle car Public transport a lot of other thing industrial Requirements of multiple other smaller components would start coming So I will need to define smaller components in a structure that where are these demands are are going to do that Then I will go third point which is I will drive forecasting the driver for each of the component Which is what are the key drivers? What is happening on on each of the drivers? Sometimes we take a broad marketplace doesn't make sense because we need to first divide into a smaller components And then then components twice also drive that are key drivers for each of the fun So I will if I want I have manufactured I will go very clearly Understand where is a demand coming in this dry this component? What is the amount coming in this? What is happening here? What is happening? And I'm surprisingly you will find that When you start breaking it up even in these times. I have realized and worked with a lot of companies in last 120 odd days and I found some part of their business is still very interesting to scale You know while this looks like from a broad viewpoint It doesn't make sense But there was a component in their business model which was very promising and had an opportunity to grow So and that's where we start looking at it if I look at from a broad viewpoint Maybe I would not touch that business But when I look at a smaller part of the business it might be and I think like for example I was doing one food brand and the food brand is a restaurant and a delivery brand But they also had a FMCG line between their business model and that to me on other side The food is not doing well But this particular line of FMCG which they had some packed products Which which can become a very very large market place rather they would they would be Able to get a shelf space very very fast on that space So one has to really understand What is the smaller components in your business while your major business might be at a certain risk But there might be another component which would come through For everybody and now companies are now intelligently looking at you know even hotels have started delivery To giving that I think almost every hotel you go. They found Deliveries which are working while it will not fetch the from a corporate viewpoint might not make a Financial sense so much in terms of what they do But they are trying to sweat out some of their components where they see there can be a positive impact of whatever they do So divide that and third point is Forecasting the drivers of that that demand in each of the component and then do what I call periodic Sensitivity analysis on each of the component performance to keep every quarter Understand that component that how that's changed now and what is going to happen in the next quarter Unless or until you start breaking this up They are consumer demand and go from a complete understanding a full market then go to a little bit of smaller components Then understand the key drivers on the each component and then continue to do every quarter Sensitivity analysis of how this demand might change or has changed and so on so third part would be very very clearly that you need to really Understand that how the consumer demand is behaving and how it is changing going forward Now the fourth element, which is very important is how your leadership Organizing their team is designed in your organization and leadership is just not limited to the management rather I think management sometimes itself is a limiting answer on the scaling of companies and a lot of private equity companies these days at a certain point time really take a call to move the founder out and And sometimes work very well It sometimes does not work well because I feel that sometimes the leadership itself becomes a very big roadblock for companies to really think Through and leadership at all levels. It can be at a department levels and so on so forth So a lot of these challenges are very important So you need to really see What needs to be done and I think the purpose of hierarchy is actually to destroy the Bureaucracy, you know companies when they come start scaling up They have a lot of bureaucracy coming and the whole purpose of having some form of leadership and trading this hierarchy Is to actually destroy this bureaucracy because I feel that the biggest problem in scaling up Organizationaly is that the organization stops behaving in a similar manner and they create a lot of unwanted bureaucracy within the organization and that's how the companies are not able to grow so one of the purposes which you have for that creating this whole hierarchy itself is that you break that If you feel that that some form of leadership sitting at the top is actually not doing that purpose then it's as lost as point in that structure So you need to sometimes also I say that what I said we need to really slow down to one of the areas which I say that companies when they're scaling up They need to sometimes take the breaks and and then give back how they can bring the the whole culture which comes from the behavior and the beliefs And the culture of behave your organizational behavior and the beliefs you have set for organization Sometimes you need to reinvest back and you need to really invest back and that's very clearly Which needs to be done. I always feel that at a certain level Maybe the the you know the the founding team might not change but you need to invite future leaders in the organization and sometimes leaders come within the organization sometimes you have to bring from outside because You know, I say this that the leadership is about moving people's attention from away from what is happening in the present and They actually give them to thinking that what is the future holds for them So that's where the leadership is to be leaders should really take people's attention from the current things going on What is presently happening and give them a little bit understanding of what future is holding for them And unless at a particular level the same leader is not able to do that You need to really change the leadership and this is one of the areas which I feel the mid and small companies are not able to grow because they They are not able to get those kind of leaders who can really bring that kind of an excitement that what it holds for us And sometimes they need to really do that and sometimes you hire consultants and other people they can give you So to say a mood board they can give you a Perspective but somebody has to run the ship So I feel that one of the reason areas which especially mid and small companies really you have to see that what is your leadership design And how the leadership is able to pass this message and bring that culture of you know all the You know belief system in the organization so that the organization start thinking in the same line so Couple of things which one has to really juggle with your team structure when you are a leadership one evolve your leadership second, you need to balance between what I call process champions and business guardians now process champions are people who Always very good at understanding that particular process and they run that and I think but sometime They are not the most invested or more committed to the organization and you have these business guardians Which are always protective of the organization They've they run like their own company. They sometimes are not so much of a process Lead sensitivity or they're not champions of that. So in this case you lack confidence use you know and And that's very important, you know under the rate You need to bring a lot of confidence if you want to really scale up You need to have a top guy in your every of us department but you also need to guard your business because your business can go out of control and a lot of Times I've seen scaling up has actually lost control of the business itself And that's something which is which is very very dangerous even including my company at a one point time for five years back I I just suddenly scaled the company to a very different level in multiple countries and so on foot and I lost control on many many markets Myself and I felt that I was also struggling with these two points How do I really get process champions who understand the process?  So this struggle could always go down But this is a very careful answer is that how do you really able to define that in the business? Another area which you need to really balance is what we call the pure thinkers your think tanks and your executors Again a big difference in both of their and that I think sometimes thinkers are not the greatest executors and executors Are not somebody who really think how do you marry that also? So three things I always say just do balancing of evolve your leadership balance between your process champions and business guardians thinkers and executors Understand and define your team by that spin point your team members and say who's your thinker? Who's your executor? Who's your process champion? Who's in that thing and define them on the roles which are what I call very critical and important roles and define these very clearly And your organization structure, but it all would start from the leadership If your leadership is not able to take people from their mindset from what they are currently doing and what the future holds It would never happen Fifth point which is the final point is how do you embrace technology technology is no more a choice Every company has to really bring in technology in their system and technology only technology Well implemented can now help companies scale no company I would know at any level Without having a strong technology base could not be different to scale that now technology further has to be divided within the organization At three component level one is called the business intelligence side business intelligence is very very important and today I think the one of the government Guiding force for a growth of any organization or scaling up an organization would be how strong they have the business intelligence Even your future investors if you want to really Compel companies to invest with you You need to really show a very strong business intelligence on that and that's where I like companies like with these technology companies Which have now Technology based even retail organization because they understand every single customer why they purchase what they purchase What they didn't like what they like every single detail and that creates a very strong capability So how does your your investment in technology going to understand your business better? What are the data points every single day you get to yourself which tells you how your organization matrix is working? That's what we call the building the intelligence second is very easy where every person is already I think Indian businesses have come down almost every business. I know Would have some form of you know process management where technology is implemented. It can be a purchase inventory sales You know any kind of marketing function shipping HR Accounting all these are having different technological tools and all that I think is every company is doing a lot of companies are not investing on business intelligence But but process management everybody is doing and third which is also very important Is that how do you create a consumer interface through technology? So I feel the middle part almost every company is trying to invest But they're not investing on the business intelligence and they also not investing on the consumer interface.  How do you capitalize the company? Understand your consumer demand break that into four different components Then go to your defining your team structures Especially start with leadership out the leadership is stacked up and and be honest on that. I mean sometimes I see You know, you have your son leading the business And sometimes children come in we all love them and they're fine, but they might lack Capability of scaling up they can do another role They can also participate as a active shareholder and a board member and things of that nature and and run from it And that thing but they might need some strong leader alongside and that's something which Intelligent promoters are always done. They've always understood that There is always the right time for somebody to be at the chair of leadership And that's something which is very important for companies to do and finally Invest into technology divided that into three parts of business intelligence performance management and a consumer interface. So this is what today's Section is and and answer for us to really talk about how the scaling can work with you So I would now invite Sonali if there is some question which I can answer Thank you so much sir for sharing your practical insights and for a wonderful session Yes, we would just jump up to the Q&A Now Yeah, so the first question that we have is which is the best market globally to venture into for scaling up a technology business according to you It's very difficult to say, you know every market is Is a good market for technology technology is not a anymore of Limited to anything the market and depends on you know What product and what services you offer and I think technology is just a enabler It would depend on what industry you are in and then you can classify your fruity markets and not so fruity market and some emerging markets So it's always about industry technology and tools are just the enabler technology and if you are just a technology product itself then I think you have a global market then technology is not limited by any form of geographical space so you can you can be a global play and From a development viewpoint, I think obviously attractive markets are developing nations India and other places where obviously development is very good but marketability and distribution is global and today what we look at, you know Look at what now is coming in the press where Chinese apps have been banned in India And now if you look at people didn't know that how many apps they were using which were actually Chinese They've blocked about 100 of them and they're still hundreds of them out there So so never nobody really thought and we've always to settle that Chinese the manufacturer company and and they had No investment on the and we are a very strong technology company And now suddenly we realize that almost every third app which everybody was using is those a Chinese app So so it's a it's You know companies have no limitation, you know when they understand that there's a global market So they would go out and use the global markets and penetrate to the world markets so Right, so the next question we have is what is the right time to start thinking about franchising a business Is there any specific milestone that should be achieved before the scalar process begins? So franchising, you know, I always say that franchising is Best done when you are able to one assess yourself that you have two things in your in your business model one adequate margins which you can share with the franchisee and the business is still You know sustainable for everybody and second part is equally that you have adaptability of your business model Wherever you want to franchise So if the product is adaptable to that market, then I think franchising is is good and now when you think about putting into franchising there is a pre franchising plan which means that you need to invest into systems and processes And and then venture out into that don't just venture out first develop your internal capabilities and then I think it'll be easy for you to scale it up So the next question we have is while scaling up how to face the challenge of your employees copying your idea And starting off his own and selling to your current or future customers So all I mean they've always the last time I also spoke about this that how does internal competition and external competition Both are have to be looked at and I think You know, you need to really You know Be safeguarding your intellectual property in one sense But there would be obviously there there would be somebody knowing Not as much as you know, but somebody knowing as much in I think it's but it should not bother you It should not bother you because I think competition for success Is a is a is not a bad idea Almost everything which is successful would find a competition and competition Also gives the companies to be always on the toes To continue to understand how they can better their product and better their product by that time You are on the innovation side you're thinking in the front and and continue to focus on your part of innovation and understanding your customer well I think Competition would always be marginalized. I don't see any successful business which is out there Which doesn't have a competition and it's good to have you know, and sometimes like my own company for first So many years. I didn't have a so to say a franchise competition And I used to joke and either the main industry is not so much interesting that nobody wants to come in this industry and Because otherwise if the business was good, then they would there would be a lot of people who would Like to be your competition and by the time you have your own way of innovation and and your own Structure you will you will always kept the leadership. So I think keep leadership in mind And keep your market share in mind Don't bother too much on the competition competition is good competition should have be there Almost every business should have a strong competition and but you should have leadership and and your control over your market share Absolutely And lastly, I would like to ask the question which we get in almost all of our Sessions with you and the question is so is it the right time to borrow loans? Or should I wait for the market to get normalized and And or if should I just look for funding in order to scale up? So equity, uh, so as I said if you if you need capital for for Your scaling up now there is a different Stages of scaling up somebody who needs to scale up is current manufacturing capabilities. The order book is very strong Uh, you already have a very strong order book like these days What happened in fmcg and a couple of other companies? They there was a huge demand came in health care Huge demand came in for some categories So if you have a situation where you clearly have a three to four five year Demand being already there with you and you have a good order book And there is a predictability of what we need to do Then debt is not bad And I think that also comes at that stage much easier because bankers are also able to see through that Where is the entire can say you've got a order from government of india or you are supplier to railways? Or are you doing a metro project or you're doing a large infrastructure project of things of nature? There is a clear predictability of of your Revenues which are earmarked. Uh, then I think debt makes sense Uh, and I I feel that debt can be developed but if you if you are a business which has gestation cycles and you have You know, not so clear at this stage answers of your revenue cycles This is dependent on a lot of what I call Variables available, which means that you're how your performance comes in how the markets behave how the customers shift that happens So if these are variables, then I would say don't take debt And and go for equity and look at a good equity partner who sees your vision And also comes with sharing your risk. So then equity becomes more more, uh, right Structure to do that and I feel that companies which are not determined by a very clearly strong Books available for future sales should always look at equity Right. So with this, we'll just wrap up the q&a round. So thank you so much once again for your wonderful session It's a pleasure Having you every time anything you would like to say in the end Thank you very much. I was taking one question Yes, Arriban. I think your question is that uh, this question is sometimes scaling up past comes at a cost of Compromising unit economics and margins. What is that advice on that? Absolutely The first thing it hits when you start scaling up is is your Efficiencies your efficiencies start going down which sometimes disturb your unit economics and also disturb your margins Say for example, you were doing x now you do x minus this from a throughput from a unit viewpoint While you continue to multiply the units, but your performance is not there. So when you are under your own one store I'm giving from a retailer's simple example You are sitting there your family is sitting there. You obviously would get the best But then you open up a next door. It's not as good as the first one Then the third one and fourth then we can start averaging out. So your unit economics get into that So you need to really balance it out So that you need to really see that you don't erode your margins And this is one of the areas which I found that companies which started good from a scale viewpoint The name in the rush of just scaling up They finished their margins and they didn't know where the economics have completely turned around And and then they start taking the burden of debt to sustain that growth Which you have they've committed and hence they get into a very vicious cycle to do that and then It becomes a very very difficult cycle to come to So scale is a is a very very sensitive You know thing to handle you that's why I keep saying Go scale a little bit take a break consolidate scale consolidate scale So that's how it should be done And and continue to find answers to improve your margins because I I feel that unit economics and margins very very good question is very very important to to continue to keep eye on scaling up otherwise And I've seen so many examples including one of my companies which I invested has disastrous because you know answer for people in scaling up is Throw the product cheap And and then we get into scale. I mean this idea Apple doesn't need from anybody right if apple says You make a phone for 15,000 rupees. You will be able to sell more I don't think anybody needs to hire any strategist for doing it, right? so idea is that What apple did was that every time they had a bigger market share they increased the price Because they they continue to Upgrade their margins and that's why they became the most valuable companies because you know if this was a old strategy of a conventional You know Businesses then idea was let's make it a little more cheaper or get a cheaper phone out there, which is also apple And we will be able to sell more. It will be out selling the chinese But this is this is a business call and they took a call on margins than the Then the you know market share Just picking running My madness on a market share. It doesn't make any sense to me Oh my answer all the questions. There are still a lot of questions available, but I think we've already Passed our time so Hope you like our Are these sessions we do every saturday at three o'clock Every week we take one topic of one time how to invest scale and value Next week would be value again How do you value businesses and how you take them to I think we'll continue to do that And then we'll be giving some examples and structures It to make it more interactive if you can bring in Some questions of yours which you want I can share with you give you some ideas As I say always that in my journey has been I've been fortunate that I've worked with about 4,000 plus plus companies in advisory role And I've seen a lot of success, but I've seen more failures So I can tell you a lot of things not to do then actually to do So if you have questions for me and my own company has also seen ups and downs So every businesses has own own life cycles So we we need to really share and these times every entrepreneur should Really encourage to how much we can share with each other And more we share with each other we have collective learning and we can learn from each other and And do good to our enterprises Thank you very much. Thanks for your time today and thanks for joining in for today's webinar Thank you so much, sir


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Hugo, it's the owl, but it was a full figure standing on a pencil with a lightning underneath. Most people really liked it and fell in love with it. When I joined Super Office, one of the first things that really caught my attention was Hugo. And I know I'm not alone in that, because when I told people that I was going to be starting at Super Office, several said to me, oh, it's a company with the owl. Why an owl? Because the owls, they're sitting in the treetops. They are definitely hunters. They see everything which is going on in the forest, and they have a fantastic overview, and that's also exactly what Super Office still gives. It's a different logo, but it's also positively different, and people notice it and remember it. He's always been something that sets us apart, and that people notice. But I think there's an opportunity to do so much more. We have been very loyal to it, but we have developed it also over time to match the time and to evolve also with the company. The original version of Hugo, he was very difficult to use in advertising. In 2015, at our 25-year anniversary, he said, you know, it's time to modernize again. And we have made a very much more minimalistic, but also modern version. So that's when the current logo was introduced. Super Office has always had a legacy of thinking outside the box, but also acting outside the box, of not being afraid to have fun, do something different, do something which might be even considered a little strange or a little silly. And I think that's huge, because that means that we have a goldmine of opportunity here to really differentiate ourselves and build our brand, and Hugo is going to help us do that. How can we bring the owl into our storytelling? We have a very, very nice logo. It will stay with us. We're not going to change it. By using or introducing a mascot, I think we will be easier to remember. It will make us stand out in a positive way. He really is a part of our DNA. It feels like a very natural next step to just welcome him back to the spotlight. So welcome back, Hugo, and happy Independence Day, everyone.