TechExec 13: Vertical Integration, Growth Mindset, and NFC

Hey there,

Welcome to the 13th edition of TechExec - the newsletter that turbocharges your growth to become a Tech Executive!

This weekend, my wife and I finished watching the last season of “The Marvelous Mrs. Maisel” on Amazon Prime. Despite all its flaws, like some storylines left hanging, such as what happened to Benjamin (played by Zachary Levi), it was a great source of entertainment for us for many years. It featured some of the most terrific acting performances you would see on a TV show. Obviously, Midge (Rachel Brosnahan) and Susie (Alex Bornstein) were incredible, but the supporting cast was great too.

The last episode ended with a short standup from Midge featuring this incredible quote. I am just going to leave it here …

Every week, I share a new set of BLTs, where BLTs stand for:

• 💼 B - a Business concept / theory / story

• 💝 L - a lifestyle advice

• 🤖 T - a Tech explainer

This week’s BLTs are:

💼 B - Vertical Integration

💝 L - Growth Mindset

🤖 T - NFC

💼 B - Vertical Integration

Most people have heard of Vertical Integration. The overly simplified but prevalent view of vertical integration is acquiring either up or down your supply chain to cut down on costs or capture more value, respectively. It can take your company closer to the end customer (upstream integration) or closer to the raw materials (downstream integration). For example, a farmer may acquire the local fertilizer manufacturer or get into distribution themselves. But whether they should do so is a lot more nuanced.

When considering vertical integration, there are several key factors to keep in mind. First, analyze whether you're dealing with an oligopoly, where a few dominant players hold the reins. If you have limited purchasing power, high transaction costs, or an imbalanced relationship, vertical integration might be the way to level the playing field. Another reason could be the unreliability of the suppliers, which may disrupt your business. Vertical integration might be a good idea here if you want to be the masters of your destiny.

Next, think about the value it brings to your customers. A successful vertical integration should enhance their experience and create meaningful benefits. Surprisingly, many mergers and acquisitions fail to deliver the anticipated synergies, leaving shareholders disappointed. So, before jumping into the integration frenzy, prioritize the customer and ensure that their needs are at the core of your decision-making.

Furthermore, assess whether the activity or acquisition you want to integrate aligns with your core competencies. It's tempting to expand beyond your limits, but stretching yourself too thin can lead to diminishing returns. For example, the farmer in our example may not know anything about fertilizers, and thus can’t make better or cheaper fertilizer.

Ask yourself if vertical integration will give you a competitive edge. Will it reduce lead times, provide faster access to markets for research and development efforts, or enhance the quality of your products? In our example, the farmer can connect directly with the customer, gaining valuable feedback on which kinds of produce are being favored in the market. However, be cautious— this vertical integration might inflate the farmer’s top line while neglecting the bottom line. Make sure your financials align with your strategic goals.

💝 L - Growth Mindset

In her incredibly popular book Mindset, Carol Dweck introduced the concepts of fixed and growth mindsets.

She discovered that the way individuals think about their abilities and intelligence significantly influences their motivation, productivity, and love for learning. A Growth Mindset is the belief that skills and intelligence can be developed and improved through dedication, hard work, and the right strategies, unlike a fixed mindset that assumes that our intelligence and talents are fixed traits.

So how does one develop this growth mindset?

Firstly, understand that intelligence is not fixed. Embrace the fact that the brain is capable of learning and evolving constantly. Don't shy away from challenges; they are opportunities for growth. Recognize that effort is a crucial part of the growth process. Without effort, there can be no development or improvement.

Secondly, learn to embrace failures as learning opportunities instead of seeing them as setbacks. Remember, every successful person has faced failures; it's how they learned and grew. When you fail, instead of criticizing yourself, try to understand what went wrong and how you can do better next time. This approach will not only help you improve but also build resilience.

Lastly, be patient with yourself. Changing one's mindset is not an overnight process. It requires time, consistency, and commitment. Encourage yourself on this journey of growth, celebrate small victories along the way and keep reminding yourself of your potential for growth.

🤖 T - NFC

NFC, or Near Field Communication, is a form of wireless data transfer that allows a user to send information over a small distance without the need for an internet connection. It's the technology behind many of the conveniences that we take for granted today, from contactless payments to boarding passes. But how exactly does it work, and what are its applications?

NFC operates by creating a wireless connection between two devices and then using this connection to exchange data. This is done by bringing the devices within a few centimeters of each other. The technology uses radio waves to communicate, and there's no need for the user to manually pair the devices. This makes NFC a very user-friendly technology that’s easy to implement in various settings.

NFC is used in various applications that require secure yet convenient data transfers. One of the most popular applications is in contactless payment systems like Apple Pay and Google Wallet. These systems allow users to make payments with just a tap of their phone, making transactions quick and hassle-free. NFC is also used in ticketing systems for public transport, allowing travelers to simply tap their card or phone to pay for a ride. Additionally, it's used in access control systems for buildings, where an NFC-enabled device can replace traditional keys or access cards.

Furthermore, NFC has found its way into the world of social media, with features like 'touch to share' enabling users to share photos, contacts, websites, and much more by simply bringing their devices close together. It’s also becoming increasingly common in home automation systems, where it can be used to connect smart devices and create a seamless home automation experience.

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Until next time!

Gaurav