Translating different styles of management into a successful team and work culture doesn't necessarily always happen fluidly. And figuring out how you can transition, or being on the ground yourself for some amount of time so you understand those management nuances, can absolutely make or break the venture. - Ashwin Purushottam
As General Manager of Lime and Deliveroo Special Projects, Ashwin oversaw operations, government relations, marketing, business development, and recruiting. He previously also led the Business Insights team at Shopee. Having built cloud kitchens in Singapore and set up warehouses in Germany, his role is constantly evolving.
Jeremy Au: [00:00:00] Good to see you.
Ashwin Purushottam: [00:00:00] Good to be here, Jeremy, thank you.
Jeremy Au: [00:00:00] Well I'm excited to share your experience. I think I've really respected the number of geographies and markets that you've launched with various businesses, and I'm excited to share your experience with everybody.
Ashwin Purushottam: [00:00:16] Absolutely, yeah. Please, go ahead. Whatever I can add value to it, I'd love to.
Jeremy Au: [00:00:22] Tell us more by yourself for those who don't know you.
Ashwin Purushottam: [00:00:24] Yeah, sure. I'm the son of a diplomat, so my mother, basically moved around every three years of my life since I was five years old. So I went to Belgium at the age of five and China, and came back to India which was ironically the toughest transition for me, and then went straight to Canada afterwards for my undergrad. So I spent my entire life just hopping between geographies, understanding different cultures and just figuring out how to blend in. I think that's a quick introduction of this my earlier years. And then of course, afterwards, I ended up going into McKinsey, spent a very fruitful three years there, started in the India office. Did some time in San Francisco as well, and ended up in Latin America and Costa Rica for a year, which was a fantastic life changing experience. Just the kind of people I met and the experiences I had there. And then took the typical MBA route with INSEAD, and ended up in Southeast Asia, which has had its own set of challenges and rewards as well. I think we'll talk more about that over the next 30 minutes.
Jeremy Au: [00:01:23] So tell us more about what you did after INSEAD MBA.
Ashwin Purushottam: [00:01:28] Yeah, so INSEAD is the kind of business school where you're in and you're out in one year, it gives you a great amount of flexibility, especially if you're a consultant to transition careers. For somebody like me who was very keen on sampling Southeast Asia, being closer to home, but not necessarily be back in India, where there's multiple personal and professional benefits of being in Singapore. Which is a five hour flight away from home, but at the same time, has unparalleled job options. We're talking about 2014, which is when I graduated. Kimberly Clark was my first jump, and I've had plenty of that afterwards, which I embrace. But Kimberly Clark was a leadership program, very structured, at least on surface. It gave me tremendous exposure to Vietnam, Indonesia, Singapore, and even Taiwan to some extent, and Korea. And reporting into the head of strategy and also the CEO of Asia Pacific.
So there's a tremendous learning curve, but like with most consumer packaged goods or fast moving consumer goods jobs, it is very slow paced. Because it's nine to five, and it suits some people. And for others, if you're looking for a fast learning trajectory and being part of a more happening industry which you can relate to, such as e-commerce or tech, such as myself, it was not the right place to be. So I'll be honest, it helped pay off loans for anybody who's out of business school that's on top of mine, but afterwards I was very keen to try tech. And that's sort of what led me to Shopee, which was an entrepreneur in residence role, they were plugging and playing me in to the Taiwan business, their Jakarta business, their Vietnam business. So it was a fantastic, very rapid exposure to a company which now is part of an IPO, under the Garena or Sea group. And has basically done what Amazon did in its first 10 years, which was already so quick, in a span of three or four.
That's tremendous exposure, very unique culture, it's very geography specific. And I always joke that I was the only diversity there, when you have an Indian male as your diversity, it's something you need to be looking into. But it was a fantastic experience and I learned a tremendous amount from it. That also led me to Deliveroo afterwards. Deliveroo was something which came knocking on the door, and I think it's probably one of the most fruitful learnings I've had throughout my entire life. Two amazing years just working in Singapore, working a little bit in Hong Kong as well, and focusing on just the Cloud Kitchen business. That was my main thing. We launched 17 different kitchens across the three different locations in Singapore, before it was even called Cloud kitchens. I was the first hire of a team . So that's where I really got the first taste of the general manager role, where you're managing something from scratch. You're building up a team, you're starting your own culture within sort of the rules of the overarching business, but you're still reporting into the country manager.
But you have a large amount of flexibility on your marketing, your operations, the way you launch new ideas within that same business because it's so unformed. So that was an amazing experience, I'm happy to talk more about that later, as well. And then of course, Lime, San Francisco based. Everyone's heard of it. Everyone has an opinion, you either love it or hate it. In Singapore, we had a lot of challenges, I saw the news on that, with the EMDs. We did unfortunately, along with the entire industry, get banned by the Land Transport Authority here. But I got transitioned to Munich afterwards, where I was the GM for that business. That was a fantastic experience that just seeing the government's in both locations working with them so closely, launching those scooters and just seeing the immediate traction that you get, because it's a fundamentally very likable product, depending on the location you're in. So I think long story long, that's effectively what I did in South Asia.
Jeremy Au: [00:05:08] There's amazing. You've really done something that's quite remarkable, which is doubled down and do multiple times what I call, the market launch and the business unit launch. Especially in the Southeast Asia context as well, which is a rare skill to have. And I mean, most people only do one rep of it, but you've effectively then three reps of it with enough progress attraction, all the way from effectively day one. So I guess I'm kind of curious, when you look at those roles, you've obviously done a mixture of business unit launch, market launch, and GM. How would you look at them and say how they're similar, for someone like you, and how they're also different in terms of scope?
Ashwin Purushottam: [00:05:53] First of all I'll highlight one massive difference between, say a launcher and a general manager. And I'll focus on those two rules because, the business launcher, that's always your business. Whether you're a GM or Market Launcher, you're always sort of working on new businesses, growing them, etc. These are such new industries. Whether it's food delivery or E-Scooters, or even e-commerce. So, GM versus launcher. First of all as a launcher, you are focusing on very binary KPIs. You launch or you don't launch, you have a date, you meet it or you don't meet it. And I think here in lies a huge problem for businesses, because you have to do a transition, and you have to randomly or very quickly move to your next business. And what I saw very often happening, especially Lime, is the launchers incentives don't align with the long term benefit. For example, renting a warehouse, you need to rent it by a certain date, it doesn't matter if it's within 10 kilometers or 50 kilometers off your most traversed area with your scooters. You just need to have the scooter there.
And then you effectively end up putting somebody else in hot soup. So having nuanced KPIs versus very binary KPIs is a huge difference between a launcher and a GM. And of course the GM has a ladder, which is nuanced KPIs. But to give an example, once you're a GM you're looking at the marketing, you're looking at your cost per acquisition, you're looking at operational efficiency, you're looking at your government relations, and of course, you're looking at your sales KPIs. So that's one immediate difference, the second is just the gravity of the role. With the GM, the buck stops with you. So whether you succeed or fail as a business, you're responsible for that. You're responsible for all the hiring, whereas with market launchers, there's still a sense of, Okay, I did the binary launch, and then somebody else's problem. And I've done that as well. I did the launch in Munich to some extent, and I hope I didn't create somebody else's problem, because I was very sensitive about the fact that I've been in that person's shoes before, trying to create a sustainable business. But that's one huge difference and that leads me sort of to the final point, which is profitability.
Especially with COVID, even before COVID with the big bust, with a lot of the SoftBank related issues, VCs have become more conservative. Now it's all about unit economics, you raise funds as well, Jeremy. Within the first conversation you will start hearing, when you plan to become that positive or before you even hear it's positive. And that is something as a GM, you have to focus on from day one. You cannot just use all the company's resources to launch and then expect to get your bonus, or create a profitable business, whichever one you're gunning for. You need to be considerate from day one, that you are putting in processes and SOPs which will stand the test of time as well, and be profitable over time. I think those are the three big things, KPI's, the overall mentality of long term success, and also profitability.
Jeremy Au: [00:08:42] That's so true. I think it's interesting because the type of people that hire for market launchers and GMs tend to look relatively similar. I'll say, GM's maybe look like they're more experienced at a city level, few more years experience. Do you feel like the recruiters, looking for market launches and GMs, are looking for the same bucket of people?
Ashwin Purushottam: [00:09:07] No, actually. Very often when I get approached for a GM role, which is more often than not now. People are looking for tenure, and they're looking for experienced having managed teams under chaos. So they want you to not only have had direct reports and have ideally scale the business to some extent, but really have shown that you can do it under vague goalposts, which is very often the case with tech. Because very often the company itself is building itself, recreating itself every six months, but also with complete chaos, whether its budget or direction, or leadership change, which is so frequent in these companies.
So I think that is something that recruiters are really looking, for GM's. Whereas for market launchers it's more just look, Do you have that consultant, or Goldman Sachs, or investment banker, or straight out of business school background? Are you a hustler? Are you able to even meet those same by the binary KPIs, which I spoke about, and just get shit done? In a sense. And excuse the language. And you actually hear that in the mission statement, that very line, very often of companies, especially for launchers. So I think there's a big difference between the two.
Jeremy Au: [00:10:12] Yeah, I think that makes sense. I think oftentimes you see market launchers as being a stepping stone to potentially becoming a GM. If you're able to add on those additional wisdom around the additional KPIs and a new geography knowledge. So let's zoom in for those who are looking at your first ever market launcher role and looking at a JD and says, launch the market for a US company, a Chinese company, a European company, in any part of the world, for example, Southeast Asia or Singapore and Thailand. How should they think about a role, how would they know whether it's a good role to take on or not?
Ashwin Purushottam: [00:10:51] I always say that it's very difficult to look at a JD and figure out what is expected from you. If that's something which requires a bit of introspection as well, are you okay with ambiguity, number one? Because chances are if you're the first person on the ground, it's going to be very ambiguous. You don't know the government relations, you don't know what the sales process is, you don't even know if the customer likes your product. You're making a guess on all these things. So, number one, can you deal with ambiguity, and that's something not everyone can. So let's assume you can, number two is, look into the KPIs. And by that I don't mean what the company is handing over to you, because as I mentioned, they can be very black or white. Are you expected to run the business over the longer term? If yes, you need to be asking questions like, What is my success defined over six and 12 months, not just launch and figure out who the government relations stakeholders are.
So look beyond just what's being given to you from day one, because chances are the company's not thought about it and that will come back to sort of bite you in your rear, in the future when you realize that neither one of you has given it any thought and now it's here. And number three, as I found out the hard way, is the regulations. And whether you're in Micro mobility or FinTech, or Reg tech, the majority of industries in developed markets are highly regulated, which means that if you're a disrupter, you're going to be butting heads against the government officials on a monthly basis. And it can become a huge blocker to your success. So do your homework before you even join. Look at the JD, figure out is it completely legal, or is there some massive barrier to success which your American or your British headquartered recruiters have not looked into.
These are the things you should be looking into while considering the JD, and whether you're a fit or not, or you jumped ship.
Jeremy Au: [00:12:39] So let's just say that someone says, go to a JD and says, I like the company, I like the product, I see the future. And I think the regulations are fuzzy right now around this category of product, or is still in policymaking mode across the world. Because this company did not exist or this category did not fully exist two years ago, which is so true for so many startups Blitz scaling across the world. So how should a market launcher approach a role, and we've talked the preparation phase, but how would you prep them or give them tips on how to succeed in that role? Especially I think we talked about launching that market itself and the mechanics, and then we'll talk about government relations in following question.
Ashwin Purushottam: [00:13:25] Sure. First of all, the pins are never going to be all lined up the way you also put it. So there's always going to be something slightly off, and that's also the final thing. If it was a playbook all the time, there would be no fun, no learning for you. But number one, definitely leverage from the knowledge of others, don't try to reinvent the wheel. There's already definitely launchers in place in your company, most likely, speak to them, figure out where they screwed up, and that's more important than where they succeeded. Because that's going to be part of the playbook that's handed to you. So, figure out where they tripped over and try to avoid those mistakes, because chances are you'll make the same mistakes, you don't see them coming. To learning from those around you is such an understated thing in startups and it doesn't happen enough. You have Slack, you have so many tools, you should be able to call at least once or twice a day for the first month, with people who are doing exactly what you're doing, trying to figure out what you should be avoiding or doing more often, etc.
So that is one huge thing you should be focusing on once all those other factors are in place. The number two, I mean it's also the thrill of learning on a daily basis, something new and every single market you launch will have a new learning for you, no matter how many play books you read or how many people you speak to. And that's just part of the journey, and you sort of go along and you learn as you traverse between the geographies. So yeah I think that's a pretty short answer from me which is, learn from those around you have already done it, definitely. And number two, just sort of enjoy the journey because you're going to keep making mistakes and that's part of the process. And you want to just sort of take the blows and pick yourself up quickly and move on to the next role, because most startups will be forgiving as well for that role, because it's a very ambiguous place to be.
Jeremy Au: [00:15:01] How do people think about cutting through the ambiguity? So, a lot of people freeze up when in a market launcher role, because there's so much ambiguity. It's a new product for yourself , it's a new geography for a company, and you're supposed to, all of you have missing pieces of the puzzle. So how does that meeting go or that kind of conversation, where one side doesn't know the geography and looking at you for direction, and you aren't fully understanding the product and the mechanics of the company, or you knowing the geography. How should that meeting be done in terms of agenda or prep, or conversation on a decision?
Ashwin Purushottam: [00:15:37] Now that's a great question. This can be a great issue of frustration, especially when you're dealing with companies headquartered on the other side of the world. But chances are, they do not understand the business and the cultural nuances of running whatever they're doing, in Singapore, or in Southeast Asia, or India, or China. And I think that's led to some very high profile failures as well, whether you're talking about Uber in Southeast Asia or in China, or Amazon is still not really able to launch. And the reason I mentioned this is, it is critical for the launcher to give two way feedback. And I think what launchers will find, and what I saw happening a lot for example at Lime is, it is easier to just go with the flow. You've been given a binary KPI launch, but you're going to get your bonus as long as you do it. If anything, you might even get slapped on the wrist for giving upward feedback that things are not going according to plan, parts of the puzzle are missing, you're not getting the support that's required.
My personal take on this is, it's a very different approach than a lot of launchers, is you need to always be aligned with the long term success of your business. Which means that yes, you could just meet your binary KPI and be done with it, but either you or someone else is gonna have to pick up the slack. Your reputation gets around, it precedes you in your next role or within the same company in the next geography that you go to. So I would personally say, lay out your roadmap. So from day one, you're not going to have all the knowledge but figure out what you need to do. Depending on the interviewers you spoke to, as I mentioned, depending on the company's own playbook, depending on the stakeholders you spoke to during the first few weeks of your role, lay down that roadmap, and then figure out at a step wise journey, what you have and what you don't have.
Out of what you don't have, figure out whether it's something your company can provide you with and whether it's worth fighting for, if they can provide you with what you're asking for. And if they cannot provide it for you, who can provide it? And if it's even providable or you just need to work around it. So you need to break down the launch in the chunks and then from those chunks figure out where you can or cannot get support, and when you can get support, is it worth asking for it, because remember, you only have a couple of cards you can play. So is it a fight worth fighting for? And I think those are decisions you'll be making on a daily basis as a launcher and it's something which never really subsides, for that role because it's always constant chaos and hectic.
Jeremy Au: [00:17:53] Thanks for sharing the real reality behind that conference call, I can imagine. I think one of the big topics that obviously comes up, and I shared earlier that we will talk about, is government relations. Which is a big part of it. Market launch is already a binary KPIs timetable to hit, communication with HQ. And I think the elephant in the room is regulations, and how to approach that relationship. I wouldn't say it's a worksheet by itself, but it's definitely a huge variable by itself that can predicate the success or failure entirely independent of everything we just talked about, of good agenda setting work stream thinking long term. So how should people think about trying to understand the problem of Government Relations?
Ashwin Purushottam: [00:18:38] It is such a massive field, and I by no means am an expert. I was sort of thrust into this at Lime, and to some extent that at Deliveroo as well. But I'll sort of use the two experiences to highlight what I learned from it, and by no means again am I a lobbyist in any way. But in both roles, I was directly responsible for speaking to ministers and their various subordinates, in the different departments in the Singaporean and in the German government. And I'll just compare the two, so both Singapore and Germany are known for strictly implementing rules, and having a very careful playbook for any new specially new industry which is launched. You just cannot get around the government, and what Indians like me love to call a term called Jugaad, which is basically getting stuff done. And finding ways to get it done does not apply in these two to geographies, but you have to play by the book, or you get banned.
So that's one similarity between the two but where I saw a massive difference is, Germany embraces new technologies with very strict rules in place, whereas Singapore, there is a very clear way to get an answer but they are far more conservative in the final answer. And we saw this both with E-scooters and with Cloud Kitchens, and my wife is in FinTech. Very often, I won't speak on her behalf, but she's met some regulatory obstacles as well. And I'll give you a few examples, but very briefly. Singapore will tell you, these are the departments need to speak to and these are the tender processes or the applicants you need to make, but by the end the chances of you getting a successful answer are somewhat limited, because they will be very conservative in their approach. All the different stakeholders.
Germany will do the same, they'll lay that path out for you, but they want to embrace new technologies. They want to be ready, they're already positioning themselves against the London's, they want Berlin to be the next startup capital. And that fire is really there for them and you'll see them approving different laws, whether it's Cloud Kitchens or micro mobility, or FinTech faster, and even if there's some ambiguity in place. I think there's a difference in comfort for ambiguity between the two geographies, which I definitely noticed that my approach. So I think that's number one. I think number two is government relations is something where a huge amount of tact is required. These are individuals who still maintain a lot of rank in their file, and you need to be respectful of that.
It doesn't work like a startup, you can't go in there dressed a certain way, speaking a certain way. You still need to respect that way of doing business. And I think very often, depending on your cultural background, you'll see that breaking down in Southeast Asia, but you'll see certain cultures are just too casual about it, and that's a huge mistake to be making. Even in Germany, not just in Southeast Asia. So I think understanding cultural nuances and the fact that governments work a certain way is so critical to making or breaking their business from day one, and I cannot understate that as much. I think those are the two big things.
Jeremy Au: [00:21:29] At the end of the day, every country has specific differences about how they make decisions, and I think that if you're not aware of the map of how decisions flow, then it's better to be cautious and respectful. And open up with questions personally, start that conversation rolling and ask what the map is, and then see where it goes from there. Whereas I've sometimes seen, counterparts, parachute in a pile of bricks a little bit and say, Hey, it worked here before, and it's gonna work again. It doesn't end well often because that certain stakeholders that have to make sure are aligned. In any situation, I think sometimes people forget how much cultural context they're carrying. And just because they'd be successful in another geography doing it doesn't mean they're going to be successful again.
Unfortunately, I think that's where it comes down to a conversation that allows to have a view is, how you think people should get smart around policy government regulations across the geography. For example, the US obviously it's 300 million people, relatively consistent ruling at a federal level, or some state by state and locality differences. But Southeast Asia, it's a bunch of different countries, with very different cultures and laws. The laws are in different languages too. So, how should people get smart to the region if they've been parachuted in?
Ashwin Purushottam: [00:23:00] That's the question, actually also to add something to your previous question while I answer this, is you mentioned the US right now, and it's critical to highlight the difference. The US has lobby, that is a fundamentally critical aspect of all their businesses there. And I would hear from my seniors, why don't you go lobby the Singapore government at least once a week. Anybody who's set foot in Singapore knows you don't lobby the Singapore government, they have rules and you abide by them. If you want to create a new segment or a new business you can apply the tenders and the government will certainly consider it, but lobbying is just not a concept, unless you are a really really massive company. And then you can use VCs etc to have that lobbying arm. So number one is, when you are approaching Southeast Asia, whether it's Vietnam or Thailand or Singapore or Malaysia, you have to consider a completely different approach to getting stuff done.
That typical lobbying mentality is not the same, whether it's Singapore or any other country in Southeast Asia. So that's number one, huge difference for the bigger companies entering Southeast Asia, which just doesn't work the same. Number two is, there is no shortcut to spending time in that country and hiring locals who can advise you. And I think what happens very often is, a Western company will see a market, they'll think ASEAN or Southeast Asia, and they'll think one glove fits all. And they'll try to just launch with a blanket approach. And I think the E-Scooters is a good example, where various companies are like, hey, there's a critical density of population, and these many people can afford it. Why don't you just go and launch in Jakarta? And this was not lying, by the way, so this did not happen, but I heard it from my competitors.
And one of them did do exactly that, and within the span of weeks, there were fatalities in Jakarta. And that is a perfect example of, you need to not only look at the lobbying thing which I mentioned, but local nuances, like are there paths for E-Scooters, for example. Singapore has them, Malaysia has them to some extent. No other country has them. And that is something every single business, whether it's e-commerce or something, needs to be looking at. And there's no shortcuts, need to be hiring locals, maybe even speak to a local government, either lobbying, or agency like that which can advise you in the beginning, and help you, even if they charge you an expensive fee. They'll help you avoid those very critical time consuming PR destroying mistakes, which may be inevitable over the next six to 12 months, had you not consulted them.
So take the long approach to your country's specific approach and speak to locals, absolutely who know what they're talking about.
Jeremy Au: [00:25:40] I think that's where both of us agree is that, we're talking about much about taking that medium to long term view which is, instead of, how do we launch as fast as possible, versus, how do we make this a sustainable, value creating, even a better profitable arm of the company? Which is more of the GM mentality. I think a lot of new market launchers, they have that path open for them. They could eventually get promoted to become the GM of the geography they're launching, or they could see themselves growing the skills to become a GM in this unit or in a different geography .What things do they need to do explicitly differently in order to get into the GM role, or at least have the skill set to be a GM?
Ashwin Purushottam: [00:26:20] Sure. So I think one relatively intangible aspect is people management. when you're in the launch role, yes you may be managing certain people, but it's generally over a shorter extent of time. And as I mentioned, the KPIs are far simpler, like launch, hit a certain number of sales, etc. Number one is, Can you grow that team and also manage a wider variety of verticals, whether it's from operations of sales to marketing as I mentioned earlier. Can you really manage all those things and double, triple, quadruple that across different aspects of the business, as opposed to just focusing on seemingly operations and market sales. So that's number one, the team management aspect whether it's the culture you build or the KPIs that you're looking into is absolutely critical. And you have to prove in your previous role that you can do it very often. It's a bit like in consulting, before you get promoted to the project manager or the associate principal or whatever you want to call it, you have to be doing that role for a while with your current designation, or you get the formal motion.
So that's number one. Number two is always have humility, and I think a lot of project launchers who go into the GM field that it's going to come with a lot of entitlements, and all sudden you won't need to get your hands dirty. And I see this happen more than once, where it's like wait, you still expect me to be doing XYZ task when I'm a GM? And I think understanding your customer, being on the ground is something which is even more important, when you're a GM. And maintaining that level of connect across both roles is critical. So you need to constantly be in touch with your customer as a project launcher, and make sure you're bringing those insights into your work, and you can transition to a larger team doing that as a GM. That's number two. Yeah I think finally to really make that leap, you need to be able to prove that you're able to understand both, it sounds like a bit of a cliché, but you're both the 20,000 foot view and also the 20 foot view. Which is where you can be looking at the overarching business metrics, the profitability, the EBIT etc, but also the actual day to day operational.
What is your throughput, what is happening at a relatively delivery level if you're in food business, or E-commerce at a delivery level point, where the operations breaking down, and also delegation? Which is part of that third point, but you're at the 20,000 foot view you can't be involved in anything. Whereas in the market launcher, you need to be involved with everything. But that switch is a bit challenging for a lot of people, it was challenging for me as well, because I had to do it the other way around, going from the 20,000 foot view into being very hands on. I think not everyone is able to make that successful transition, some people still tend to micromanage and they lose a bigger picture, others tend to be too hands off and they don't understand what the customers doing. So yeah, I think those three things are very critical when making the jump from a launcher to a GM role.
Jeremy Au: [00:29:06] Yeah I think that's so true because there are so many things that moving, like the intangibles are there, the scope is changing, and the state of play is changing, during this transition. I'd love to hear a little bit more as we, the nuts and bolts. You mentioned earlier about also like the drive towards profitability, which is the changing of the KPIs from the binary to the sustainability, viability, profitability of the city. And for example, you mentioned launches get up, but they're not thinking about fatalities or safety, or not yourself but head competitors. But because it's implied as broken because of the KPIs, which is like Let's rush to launch versus the other way, which is how do we make, say Indonesia or Singapore like a viable piece of the puzzle for the company? How should people be thinking about that profitability and viability, I think you started mentioning some of those things, like nurturing government relations, building other team, thinking through profitability. So, how should they go about going through those mechanics of thinking about what those KPIs are?
Ashwin Purushottam: [00:30:13] I'll try to sum this up as briefly as I can because such a long question. Number one is, your fundamental product or service itself, is it highly commoditized, in which case profitability is a very long term aspect. You need to be focusing on customer acquisition, and for that you require discounts. The harsh reality, whether you're in Singapore where the per capita is higher or in Vietnam, people love discounts. And they love discounts more than another job, and maybe the only other competitors are India. They're not even China. So how defensible is your product and how high are the barriers? That's number one. That's definitely going to affect your, your breakeven. Number two is your initial investment and this applies to any business. It's a generic point, but at the same time it's so understated right now. If you're building a cloud kitchen, you need to invest, upfront for example, into a lot of assets, where your capex is very heavy, your breakeven is postponed to a much later date, and that's expectation you need to be setting.
And maybe the first KPIs will ever break even or just your day to day variable costs, if it does much further down the line. But if you're investing in something like say e-scooters, yes, that production or purchase of the scooter is your cost, but that's effectively your only cost. Afterwards a little bit of day to day running operations, a lot of it is outsourced, to bringing the scooters back and charging them. And those are the KPIs you really need to focus on, so your business model itself greatly will decide on the EBITA level, or you know whatever sort of profitability you're going for. I think those are the major ones, and I think one thing which I would really want to stress when it comes to profitability, is understanding how your company just does the accounting. And this is something which I think anybody who's worked in a tech company, any tech company. This is from all the way from IPO to Ubers, whichever have to disclose their financials, to recently started companies.
The metrics are so vague, you don't really know what's going into like is this my overheads, is the warehouse costs even measure, you have no idea. But just understanding and taking the time to really sit with your finance team, and know what you're being measured on is critical. And I'll give an example, in one of my tech companies, nobody and literally on this continent, knew what that metric for profitability actually included. And until actually had a call with the CFO, and the person mentioned, Oh actually, that line item is not a part of it and that is, everyone in the room was like, oh. It was like a moment of Halo light dawning on us. Just know what you mean when you're told to focus on profitability, because chances are your seniors don't. So understanding what's part of that is so critical and so understated as well.
Jeremy Au: [00:32:57] That makes me laugh, yet it's so true. You have to really always be aware that, I think knowing what I call the operational levers. Think about it from our raw materials, to our processing, to our management. I think it's very linear where we understand how costs are added in a process, but I think it's not intuitive for people to break it out into like these are my fixed expenses, versus my indirect expenses, and then your variable costs, and then whatever has been direct costs and indirect costs. And which of them are actually in play for this geography versus the broader company and this product line. I think if you're not able to think through those three layers of conversation around profitability, then that's where you lose track of where the metrics are, and then you lose track of where your KPIs are. And I think the most important thing, I think you have mentioned is, normally where it boils down to is, once that formula comes down it becomes pretty clear why the two or three operational measures that are really important for you to nail down.
Everybody drives the operating metrics. You're not going to change the amount of taxes that happening in the local geography, you're not going to change the fundamental cost of goods sold because it's something being done by the major HQ, but there are some levers in between that you actually have power over as the GM or as the market launcher. I think I would love to hear from you is, how should people manage their psychology around this role? There's so much ambiguity, there's so much movement, you're working across different time zones, how should they manage their, I wouldn't call it work life balance, but how they maintain the equilibrium in this process?
Ashwin Purushottam: [00:34:36] So I'll tell you something common which I noticed across all market launches, and I don't meet a lot of these criteria. I'd like to start off by saying, I'm married, we've just had a baby. But what you'll find in the quintessential market launcher is, they're single and they're in their mid to late 20s. And the reason I mentioned this is, it requires frequent geographical mobility, you're living out of a suitcase in a hotel. And I mean a, not two suitcases, because you don't have that luggage allowance. And that's critical, you'll realize once you're traveling, whether you're a consultant or a launcher. You need to be able to wake up at 3am in the morning for those weekly calls, which happened in San Francisco or when you're in Taipei.
You need to be flexible with that kind of lifestyle and that can wear down on a lot of people, especially if they're a bit older, if they have families, if they have commitments. That's something to ask yourself, are those sacrifices you're willing to make in your quality of life. And I feel like if you're in the right stage of your life, that experience is unmatched. Having that kind of exposure to different cultures, different business models and just so hands on learning from your successes and your failures, that is so difficult to get in any other industry, even in consulting. So I would say, ask yourself those questions, are you willing to make those sacrifices. If yes, it pays off handsomely, and is absolutely worth it.
Jeremy Au: [00:35:52] So be self aware of what kind of persona you are, what kind of travel lifestyle you're okay wait before going in?
Ashwin Purushottam: [00:35:59] Absolutely, and that can really make or break your experience. And also maybe just to talk a little bit about the stress, one of the biggest levers for stress is, I mentioned the GM is sort of the end of the line, in terms of responsibility, but the launcher is a one woman show. It's a one woman or one man show. That means that, though you have binary KPIs that are more straightforward, if you fail, it is quite dramatic, you don't launch, the entire business fails. And all that weight is on your shoulders, a lot of people don't necessarily deal with that so well. I've heard indirectly of launchers, it was too much for them and I completely understand I felt that at times as well. When the deadline was fast approaching, you don't have the elements in place, and you don't necessarily have anyone to blame at that point of time, it's all you. So, can you deal with that geographical pressure, the deadline pressure, and the fact that you are a one woman one man show? That is something again, a personal questions you need to just ask yourself.
Jeremy Au: [00:36:53] How do you think that there has been a trend obviously of always from day one, of multinational corporations moving to Southeast Asia, and now as tech startups moving to Southeast Asia, setting up offices. Obviously I think we see a division of roles between like say engineering teams often stick to HQ or their remote senior leadership's in one location, the satellite office. How should we think about the optimal arrangement for this kind of dynamic, or how should someone navigate a dynamic of being the equivalent of a satellite office? One example that we've heard is, the reason why Grab was able to out compete Uber, was because Grab was able to mobilize its engineering resources in a much more focus than Uber. So the icons would change, the language and localization, even just like rolling out, like you said features and promotions with this different dynamic. To some extent we've seen that conversation happened at Uber, at Rocket Internet as well, so how do you think about that?
Ashwin Purushottam: [00:37:56] Yeah, I'll pick up from a couple of points from what I mentioned earlier. Number one, and there's countless examples, maybe I can just stress upon them a bit just to show how universal this is here. Whether it's the eBay's of 2007 which lost to now gigantic, Alibaba. To Uber losing to Didi or Grab, to Uber Eats losing to Zomato in India and Sweden. The examples are countless, where far better funded and much more established American or European counterpart tried to launch in any of the Asian countries, and just flat out lost within three years. I feel like they don't seem to learn from it because you see the same mistakes being committed again and again. And it boils down to number one, localization. Localization is a large part about just engineering sources, because the engineers are your final bottleneck to between conceiving an idea or receiving a customer insight, and having it manifest itself in an actual tangible product change.
And what you'll find in a lot of the American and the UK based tech companies, is their tech teams are located in those geographies and they focus solely on those geographies. And they don't have the insights and they don't have the product managers in the Southeast Asian or Indian or Chinese markets, to be giving those insights back or if they have the project manager, they don't have enough tech people dedicated to be converting that into. And I think everybody who's worked in this geography has felt that frustration at some point of time. So, localization in terms of lack of product managers or lack of tech engineers, or this lack of people conducting customer insights or customer surveys is one of the biggest barriers for success for Western companies coming to Southeast Asia, for that lack of localization. Number two, I won't stress about this too much, but regulations we already spoke about it.
You need to understand every single one, there's no shortcut. You need to just employ people on the ground or agencies to understand that, otherwise it'll be a make or break. As all the examples I mentioned earlier, I found out on their respective jobs. And finally, management. I think the Netflix CEO Reed Hastings touches upon this in his new book, and we've all experienced this in some form or the other. The American or the European style, and European is a big bucket. Germans are fundamentally very different from French, from UK after the British, translating those styles of management into a successful team and work culture doesn't necessarily always happen fluidly. And figuring out how you can transition, I wouldn't say the power, but that ability to manage to locals, or being on the ground yourself for amount of time so you understand those management nuances, can absolutely make or break the venture.
And I've seen this happen between Indians and Southeast Asians of different countries, I've seen this happen between Americans and Indians, Americans and Southeast Asians. There's a vast cultural rift between how you work at home and how you get things done, and how people receive feedback and how it works over here. It can absolutely make or break your business, and understanding that fast and adapting your ways, or finding somebody else who knows those ways better than you, is a huge make or break factor in localization for Western companies looking to move east.
Jeremy Au: [00:41:02] That's so true and I think the crux of those companies that do succeed, expanding regionally and globally versus those that don't. And I think a large multinational corporations like Shell, the oil & gas firms, they pretty much do all those things. They have engineers, they have HQ's, they have very rotational programs across geographies. So I think they have that DNA now to fight for that global slice. I think for tech startups, they're always rediscovering for the first time, launching a new market in your region, as part of a process. I guess last question I have for you is, now when we're thinking about life paths, in terms of saying, I've done consulting, I've done market launching, I've done the GM role. What would you say have been tremendously helpful books or resources that you think have been helpful for your journey thus far?
Ashwin Purushottam: [00:42:02] Oh, that's a tough one. I read a lot of books and very often I'll find a lot of common content between them, as anybody who reads a lot of books on whether it's management, or leadership, or tech startups. So it's difficult to pinpoint any two or three ones, but I would take a step back from diving straight into management books and maybe look at something which can help people starting their career, or even midway through the career such as myself, or early stages. Which focuses on your values or your principles, and I feel like once you have some idea and those will change with time as well. Some ideas where they'll stand, it sort of sets up a filter for your decision making. And that filter applies to both your personal and your professional life.
And one book which I found, which is very commonly available, a lot of people that read it, is Ray Dalio's Principles. He of course lists his own principles, and you don't necessarily have to agree with them, but it's more just understanding the thought process of how you can come up with a filter for making decisions, which is so critical, and fundamentally changed the way I approach problem solving, after reading that book. So that's one really big one. Apart from that, recently I read a very slightly disturbing actually book from the Netflix CEO called, No Rules, Rules. It's just come out. And the reason I mentioned this is of course, because it's fresh in my mind but because Netflix has such a drastic hands off approach to talent building. And it made me sweat just reading the book, thinking how the hell do you implement these changes?
For example, having no vacation policy, or allowing the most junior rung to make decisions on multimillion dollar deals without consulting your senior. All of this, of course boils down to high talent density, and I think building that kind of culture is a very active management style and it's something I would love to do, and I think reading that book is great. And then finally, Radical Candor. I actually only read the first half of Radical Candor, I didn't read the full book. It is a very cliché book, you'll find elements of it in every management book you pretty much read now. For some reason that one specific really stuck with me when I read it about four or five years ago, and I have personally tried to implement Radical Candor, or whatever you want to call it, Radical Transparency, in all of my teams. And it makes a lot of cultures very uncomfortable, a lot of people very uncomfortable, but I feel overall, it's for the benefit of personal and also professional growth. So I think, if I just had to rattle off two or three books, those were definitely all fine.
Jeremy Au: [00:44:23] Awesome, well thank you so much for sharing your thoughtful reflection and advice.
Ashwin Purushottam: [00:44:30] Thanks for having me here, Jeremy. Really appreciate it.