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[designthinkny]

Redesigning the Job Interview Experience

DTNY members were hard at work this past Wednesday redesigning the job interview experience. It was our first workshop, and for many, it was the first time they used design thinking to come up with creative solutions to a real problem in need of a human touch. Here is a quick recap of how things went:

Empathy Design thinking starts with building empathy for your user. We split up into teams of 4-5 people and had one person on each team play the role of “user” while others interviewed this person.

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[arjunbatra-blog]

Design thinking workshop

This past July I attended the executive design thinking boot camp @ Stanford. I wrote about my experience there in a previous post, but in a nutshell, I really enjoyed my time at Stanford learning about the human-centered process for innovation popularly known as design thinking. It is based on the fundamental principle that in order to be an effective designer, innovator, and problem solver, it's important to understand the people for whom you're designing and empathize with their needs. You can read a lot more about it on the Stanford website. 

When I returned to New York, I was looking to continue my learning and practice of design thinking, so I decided to start a meetup group to bring together people interested in design thinking. I'm proud (and pleasantly surprised) that our group, Design Think New York, has grown to over 300 members, and we're hosting our first design thinking workshop on Wednesday. 

We'll be redesigning the job interview, and I'll write about how it goes afterwards, but in the meantime I thought I'd share our workshop agenda and handout in case it's useful to others looking to do similar workshops. 

Note: We drew inspiration from some great resources already out there, in particular Stanford's virtual crash course guides. 

[arjunbatra-blog]

Why being a proactive acquiror matters

The other day, a candidate I was interviewing asked me how I go about sourcing M&A opportunities at BlackRock. I responded with the following:

"In a variety of ways. Sometimes we're pitched opportunities by investment bankers while other times we take a more proactive approach and scour the market for M&A targets that align with our strategic priorities." 

I had essentially described a "reactive" vs. "proactive" sourcing model, a topic of frequent debate in our team meetings. This interest is a result of the fact that we're heavily weighted toward the reactive side, and we need to migrate our model toward the latter instead. 

It occurred to me for the first time the other day that we've always assumed that being more proactive when it comes to sourcing M&A opportunities helps, but never really discussed why exactly.

So why?

I could make the argument that being reactive is good enough, especially as a big firm that commands the attention of most bankers on the street and is often one of the first calls they make. While there are merits to this strategy, such as increased focus on execution and a leaner staffing model, it's flawed for several reasons.

1) Bankers run competitive auction processes that lead to high transaction multiples or the buyer paying an unjustifiable premium relative to what the company is actually worth. High premiums become especially detrimental when a company is looking to acquire a business to fill functionality gaps with limited interest in continuing to run the business as is. 

2) If your focus is on tuck-in acquisitions (smaller deals that fill capability gaps) rather than transformational ones, then it behooves you to do your own work because the smaller deals often fly under the radar of most large investment banks. These deals are either run by smaller, boutique banks who are more difficult to cover well from a corporate development perspective or negotiated privately. 

3) Being proactive also means doing your homework, so that if an acquisition opportunity ultimately ends up in an auction, you will be more prepared to respond quickly having done the pre-work. This can be critical if you want the target to know that you're willing to move quickly and guarantee certainty of close. 

4) Only you truly understand your business model. An outsider will naturally have limited knowledge about what you're trying to accomplish and what your strategic priorities are. As a result, your corporate development team and business will end up wasting a lot of time responding to transactions that don't matter.

Would love to hear from others who've thought about this topic before.

[arjunbatra-blog]

What Creativity Feels Like

I feel so energized, full of life, more observant of my surroundings, ready to take on new challenges, inspire others, drive change...

I could continue, but I think you get the point. 

If you're wondering why I feel this way, it's because I just returned from a design thinking executive bootcamp at the Stanford d.school. If someone would have asked me before the bootcamp began how I think I would feel after it was over, I would have said "exhausted".

And righteously so. The bootcamp was an intense, 3-day, nonstop workshop where we worked in small teams to tackle a particular problem. It was 8am to 8pm every day, a lot of walking, standing, talking, and doing. 

But for some reason I feel the opposite of exhausted. I feel great. I feel happy and giddy, as a kid would after his first trip to Disneyland.

Truth be told, I wasn't really overcome with these feelings on the plane ride home to NYC. I think what changed my disposition was taking my wife through a design challenge this morning in our apartment, whose windows are now completely covered with multi-colored sticky notes.

Afterwards, I had a chance to reflect on the time we spent together this morning. First of all, I was surprised by the fact that I spent Sunday morning doing a design challenge instead of watching TV, as I normally do. Secondly, I was overcome with excitement to realize that for the first time in a LONG time, my mind felt clear. I was bursting with ideas, both good and bad, but this juxtaposition lies at the core of what design thinking is all about. And perhaps most importantly, it was the look on my wife's face during and after the exercise that released a waterfall of new emotions in me. She was happy, excited, and jumping around like a little kid. 

And at that point it hit me. After 3 days at Stanford, I had unleashed a creative side in me that I never knew existed. I had unleashed a desire to be daring, a desire to explore new boundaries, a desire to make mistakes...

...and most of all, a desire to spread this creative possibility in everybody. 

[arjunbatra-blog]

How Financial Advice is Changing

I spend the vast majority of my time at BlackRock thinking about disruptive technologies relevant to our business. As a result, I often get asked about my views on an emerging new space -- online advisory. 

So I figured it was time to write a blog post on the topic. 

What are online advisors and what problem are they solving?

Online advisors provide financial advice over a web-based platform for a fee. These platforms come in various flavors (more below), but a common model is to construct optimal portfolios using low-cost ETFs based on a series of questions about your age, wealth band, risk tolerance, goals, etc.. The entire experience is virtual and ultra simple.

Online advisors (or robo-advisors as they're commonly referred to) are vying for a share of assets in the $16T retail investment market, growing quickly, and garnering a lot of hype. 

Why? Two main reasons...

1) The recent financial crisis and one of the worst stock market crashes in our history, spurred by excessive risk-taking by banks, has led to a widespread mistrust of banks and tremendous scrutiny of their business models by regulators and investors. Additionally, people have begun to question the value of traditional financial advice, its inherent conflicts, and high fees (advisors within banks can charge up to 2% of assets).

2) The general public, especially the millenials, have become more tech savvy and are increasingly reliant on online platforms for banking, payments, etc.. 

This has led to a rise in consumer self-service in the investment market and the growing adoption of low-effort, low-cost, web platforms. 

Who are the major players and what has adoption been like?

Betterment, Wealthfront, MarketRiders, Wise Banyan: These providers build basic, strategic ETF portfolios using an ultra simple front-end. Some of these providers have started migrating to more specialized services based on user demand -- Betterment recently launched a retirement solution for older investors and an institutional product for financial advisors to use its technology. 

Personal Capital, LearnVest, SigFig, FutureAdvisor, Jemstep: These providers started off in the business of aggregating user's brokerage accounts to create a household view, but are now migrating towards the business model of the firms mentioned above given limited avenues to make money in the original model. These platforms have seen a lot of interest both by users and smart money (top VC firms), but the fact of the matter is that they are still small relative to traditional competitors (banks and asset managers). Betterment for instance has ~$500M of assets and 33k users. Wealthfront claims to have $800M. The rest combined are another $500 - 700M. These seem like large numbers but they represent assets not fees, the latter being a small % of the former.

Who will win?

What these online platforms have done is set a high bar for self-service capabilities that will be emulated by established financial firms and advisors in the future.

Additionally, increased transparency has led to tremendous fee pressure. In fact, given the low barriers to entry and limited points of differentiation, these online platforms will have to keep lowering fees to attract users. Wise Banyan, for instance, launched with a free basic model. How will these platforms make money if fees basically goes to 0? They could develop proprietary products but then they're essentially competing with large firms that have established brand names and a wide following (i.e., BlackRock, Vanguard, PIMCO). 

Vanguard, recognizing the increasing demand for consumer self-service, recently launched its version of an online advisor called Vanguard Personal Advisor Services with a fee of 0.3% on assets and a $100k investment minimum. The service builds portfolios using Vanguard funds. If Vanguard decides to undercut the robo-advisors on fees, which it can given it owns the underlying products and earns money on those, how will the new platforms compete? I believe consumer self-service will continue to grow but there will be a migration of power from these new platforms to larger firms.

This is essentially what happened in the travel agency market, which was initially disrupted by online agents such as Expedia (the robo-advisors in our example) but then there was share transfer to the travel providers such as United (traditional financial firms) that launched their own direct online offerings. Today, travel providers make up 24% of the booking market vs. 14% for online travel agents. Interestingly, human travel agents still control ~60% of the market by focusing on HNW / corporate clients.

It will definitely be interesting to see what happens...

[arjunbatra-blog]

Idea: Fixing Job Transparency

PROBLEM:

Ever wonder what a job really is? What a typical day is like? What the requirements are? Or most importantly, will you enjoy the job?

Sure, companies post job descriptions that address some of these concerns, but most of them use a lot of buzz words that are confusing. Alternatively, you could reach out to people and ask them, but not everyone has that access nor do those people have time for everyone.

What's worse is that so many people I know end up taking jobs without fully knowing what they're getting into, ultimately quitting, bouncing from one job to the next, or in an absolute catastrophic turn of events, staying and being miserable for the rest of their lives. 

I want to solve this problem.

MY SOLUTION:

My approach is ambitious and probably not super scalable in its current form, but I believe this is what makes it effective, ensuring longer-term impact. 

Over the past few years, I've become fascinated with Khan Academy, its simplicity, power, and global reach. It's amazing to me that Sal Khan (founder of Khan Academy) has been able to produce thousands of videos in such a short amount of time, all with the simple mission of providing world-class education for anyone anywhere. 

That got me thinking…why not use the Khan Academy approach to improve job transparency and help people make smarter career decisions.

My idea is simple -- create short videos that educate people about different jobs -- what is corporate development and its intended purpose inside a company? What does a corp dev analyst / associate do day-to-day? What's a typical project? What skills does one develop on the job? Etc..

How do I plan to gather this information?

1) Independent research: There is often decent information available about different industries / jobs across the internet. Someone who has the patience and time can piece together a decent overview as a start.

2) Outreach: Once I've developed a decent understanding of the industry and job, I can reach out to people in that field to hone in on specifics and dig deeper. It would be great to also capture videos of people on the job.

3) Partner: As I do more and more of these, I hope the mission resonates with more and more people, as well as companies, which have the resources to help me disperse good information more quickly. 

Companies will also benefit from this given they will attract well-informed, more suitable talent for a particular job, thereby limiting turnover, which can be costly and strain existing resources / disrupt momentum.

I'll be blogging about this idea as I continue to flesh out the details and work towards creating my first video. 

I would love some feedback from you all so please start the discussion!

[arjunbatra-blog]

Creating a GitHub for Business Ideas

I recently read a blog post by Fred Wilson of Union Square Ventures, which gave me some further inspiration for my idea (GitHub for Business Ideas). 

In his post, Fred talks about how GitHub has inspired ideas in many fields, ranging from the open sourcing of music (Splice) to molecular biology (ZappyLab).

My idea is broader.

It involves taking ideas like Splice and ZappyLab, and putting them in a public repository as they are being iterated, tested, and developed. 

Just like ZappyLab enables scientists to share protocol improvements with the world so that other scientists can discover and benefit from them, my idea will enable entrepreneurs to share the evolution of their ideas with the world, allowing others to not only benefit from their discoveries (i.e., applicability of "freemium" business models in online education or how other companies have thought about and built successful freemium models), but also validate and market test their ideas. 

What do you think? Let's discuss.

(If you use hackpad, contribute your ideas and comments to mine).

[arjunbatra-blog]

Introduction

I started this blog to bring the concept of open source to business ideas. You can think of this as analogous to GitHub for code. The concept is simple, but its success depends on you. 

I'm going to start by blogging about my ideas (mostly what I consider big ideas in some way). I will try to be as descriptive as possible while maintaining some sort of method to the madness. My hope is that this will inspire you to do the same or at the very least contribute to my ideas. Together, we can arrive at unique solutions to the problems we see.

I'm sure a lot of you are going to be skeptical when you read this. Who would be crazy enough to reveal his or her idea to the general public? What if someone steals my idea and becomes a millionaire?

I address some of these concerns below.

WHY AM I WILLING TO SHARE ALL MY IDEAS PUBLICLY?

1) An idea is worth nothing. Think about it. You need to validate it, test it, prototype it, implement it, and repeat the process. I recently read a blog post by Daniel Solis who I think said it best (quote below). Daniel is a board game designer who blogs about his game design process and fully all prototypes.

“Your idea alone is not a game…ideas aren’t that special…if anyone cares as much about your game idea as you do, they’d already be spending the late nights and long hours it takes to playtest, develop, cry, revise, cry and playtest again until the idea is a proper game.”

2) Your idea is probably stolen. Do you really believe you're the only one with a particular idea? Chances are there are 100 others just like you who have the same idea. Most ideas aren't novel. Besides, all ideas stem from other ideas. It's the execution of an idea that determines if it's going to be successful. 

3) I truly believe in collaboration. This is how I live, work, and learn. 

4) I think the world is becoming increasingly collaborative and there are a lot of people who, if given the platform, would share their ideas and contribute to others. I want to serve as an inspiration to these people. 

5) I have way too many ideas that I could possibly work on in a lifetime. Why let them go to waste?

A QUICK FAVOR

If this is interesting to you, please help me spread the word. If you have suggestions, I would love to hear them -- you can email me (arjunbatra03 at gmail dot com) or leave a comment below.