Things to know before starting a startup #zerotoone #business #peterthiel

Category- Business Reading time – 5 minutes

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A startup should focus on vertical growth in which new technology is produced. This is called zero to one concept. This happens in great startups. You don’t just increase a bit but you add a whole unit.

Hence startups work on modern rules

1. Sales matters alongwith product.

2. Take risks

3. Try to capture small niche and try monopoly.

Incremental improvement in existing technology is horizontal progress. As happens when we copy or slightly improve existing technology. This is seen during globalisation. Whatever new comes you can see a Chinese made copy of that.

Competition is two types

1. Perfect-

It depends on demand supply. Competitors wipe out profits of each other. Like most of the commodities. But paradoxically little successful players here show themselves as greatly positioned. Competition creates losses for both parties and opportunities for new disrupter like Apple against microsoft and Google.

2. Monopoly– Provides such service that no one can compete like Google in search engine business. But these companies generally hide the fact that they have monopoly. They show themselves being small part of big market.

So focus on monopoly by solving a unique problem. This drives progress and create profits.

See what is future cash flow of an Idea. Most of tech companies become profitable after 10-15 years. Like PayPal, LinkedIn, twitter are still to become profitable. But they provide value.

Ask if this business will be around after 10 years.

How to get monopoly in a sector

1 . Proprietary technology– At least 10 times better than closest competition. Otherwise it will be hard to attract customers.

Like books on Amazon were many folds better due to large inventory and ease of selecting. ipad was ten times better than hand held computers before it.

2. Network effect– It helps in rapid spread of a new idea. It also makes products of company available universally. Like Facebook has everyone we know on its list hence we stay with it..

3. Scalability– When fixed costs lead to exponential sales. Like Twitter, softwares. See if your business is scalable.

4. Brand– Brands attract premium from customers. Like Apple

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So little bit about steps of doing it- Getting your Idea above the floor.

1.Start in a small market. Like PayPal connected with ebay sellers before it spread elsewhere.

2. After successful start expand your market laterally. add new categories and products.

3. Don’t disrupt. Stay humble and work on improvement. Don’t try to hunt down big players When Napster wanted to disrupt music industry single handedly, it was destined to fail.

4. Be last mover or create last improvement in a specific market.

5. Be indefinite optimist who believes future will be better but not sure how.

Always keep Power law in mind. Few things are more important than others and these should not be missed.

6. Look for secrets that are still to be discovered. Don’t loose faith in secrets like HP who instead of focusing on innovation; focused on affordable printers and lost its future growth in tge process.

If Andrew Wiles could solve Fermat’s theorem, 358 years of its creation; more things are possible.

Look how world works like Airbnb. Uber saw unmet opportunities. See where no-one is looking.

7. Good foundation is must as it can’t be changed later.partners should be happy to work with each other and it’s better if they have complimentary skills.

Ownership should be specified.

Possession means who runs day to day.

Control means normally a board. These things should be clear.

All should be full time.CEO should not overpay himself. Give equity to staff.

Specify work of everyone.

8. Customer life time value must be more than customer acquisition cost. See type of sales you need.

Personal sales or traditional advertising. Refferal program for existing customers helps.

Green tech companies like solar failed in 2012 because they didn’t see these basics.

Tesla succeed because it got these basics right.

Summary-

Before you start up ask these questions-

1. Engineering – can you get next breakthrough technology which is 10 times better.

2. Timing– Is time right for your product.

3. Monopoly– Can you get big share of a small market.

4. Do you have right team.

5. Your delivery system is ok.

6. Can you last 10 to 20 years.

7. Have you identified a unique problem to solve.

One side note- Founders are at extremes of normality.

Inspiration- Zero to one by Peter Thiel.

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Currently Peter Thiel is heading Planatir which studies big data to find patterns and hence helps in identifying frauds, terror attracts, Infections etc.

How innovation works- part 4 – structure of innovation #business #money

Reading time – 3 minutes
Category – Business

It is last part of series of four posts about innovation and it’s inner life.

Part 1-3 can be read here –

1. Innovation and it’s inner workings part 1

2. innovation and it’s inner workings part 2

3. innovation and it’s inner workings part 3

When ever somebody decides to do something, it is a daunting task.

If he can workout a plan then it’s better.

It is easier for brain to act, if it has a plan to act upon, instead of wriggling blindly in the universe

So if you are convinced that innovation is necessary, then dear you need to make a blueprint, a structure which can facilitate innovation.

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Here is a rough idea.

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1. Ask why innovate?

well if you want your company to grow white beard someday and grow wrinkled old, you need to innovate regularly.

2. Set precise vision

What you want to do in future?

3. your mission

What you want to do now?

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Define- what you want.

A service or a product or both.

Prepare pipeline of products.

That depends on what your company does

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Assess readiness….

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Train people

Tell them about innovation.

Invite new ideas from everyone in company.

Your people act as spark generator.

Promote cross department sharing of ideas.

Hire risk taking young talent.

Give them space to fail.

In short, be the non irritating sober boss.

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Now when you have got few ideas.

It’s time to filter them.

Do it fast.

Take into consideration future technology advances and public behaviour.

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Possible incremental innovation may be possible in your already available products.

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You can see these opportunities in your existing business and your new ventures

1. Plus –

Add one feature to your already successful product.

Like roof window in a car or new component in tooth paste or new colors in a device.

2. Digitalise it

Make a magazine available digitally.

E book of a paperback.

Online services of a bank.

Shop physical to online.

Library online from college.

Classess online by good teachers like Udemy, byjus.

3. Dynamic

New flavours of a good product.

New additions to already available services like Amazon started as online store. Now it has business in online payment, music, content streaming and Amazon Web services.

4. Minus-

reduce size and parts of a or complexities.

Like reduces size of recent hard disks and pen drives by SanDisk.

Thinner computer and tv monitors by computer makers.

Ear pods which are free of wires.

There are many opportunities available.

5. Connect-

One business is connected to other.

Like after a successful film earnings from merchandise and toys. I love those avengers merchandise.

Movie and games.

Cricket and virtual games.

Footballers and t-shirts.

6. Collobrative:-

It is quite common when two businesses coollobrate.

Like free bowl with Maggie noodles.

Free Paytm cash with commodities.

New product with already famous product.

Book authors generally promote each other by giving assertive statements on new book’s covers.

After all this research try to prepare a final plan.

There is a lot of space for tinkering and experimenting.

Inspiration- Innovation mandate by Nicholas Webb.

get your copy here

How innovation works- part 3 – Things needed to encourage innovation in your business #money #business

Reading time – 2 minutes

Category – Business

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You know that innovation is cool.

You and your boss both know it.

You even discuss it in your meetings.

You have read about it.

Then what to do next?

How to get started.

What are raw ingredients as we try to achieve some new innovation.

With eye in your next year promotion and to halt the fall in performance of your department in company, you should try to invest these things on your quest.

1. Time –

Dedicated time simplifies and accelerates chances of innovation.

During your routine which we circumvent using only automatic part of our brain, dedicated time hastens productivity for seeking innovation.

Big companies give time for working on new ideas. It is called self time.

3 M and Google give time for self projects each week.

This has lead to great benefits.

Gmail, Adsense and Google Earth started as side projects!

There should be area in company where employees should be squeezing brain to generate new ideas.

2. Finances

If innovations do arrive; they need money to feed them to survive.

Drug companies invest large part of revenues to search for next products.

Volkswagen invests 6% of its revenues on research.

All big companies dedicate large sums for research.

3. Managerial support-

Commonly even if big idea comes, it is not supported by authorities. It may be due to lack of clarity or idea may be ahead of time.

A strong leader at top with promot decisive approach, helps in increasing output of ideas.

Failures should not be ostracized.

Successful ideas should be appreciated and rewarded.

A visionary manager like Steve jobs could see potential and future in a new idea.

Managers at kodak could not see use of digital camera invented by their engineer Steven Sesson.

General motors started working on electric car in 1996, but killed it’s idea.

GE delayed it’s exit from incandescent bulb business leading to losses.

Similarly Nokia could not see future of smartphones.

Traditional news media could not see power of internet news.

4. Spirit-

Some companies are innovation dependent. They must innovate or have to die.

Like drug manufacturers.

Spacex needs to innovate regularly or it would have fizzle out.

Smartphone makers have to produce ever improving products to keep customers engaged.

Movie makers have to improve with time.

This is both scary as well as liberating.

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One criteria with which companies can judge their innovation success.

Innovation scale rate ( ISR) – It denotes percentage of sales made by new product.

3 M has 30% of its sales in new products.

Similar data is there for Gillette.

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There should be an innovation pipeline for big companies.

Inspiration – The Innovation mandate by Nicholas Webb

Get your copy

#innovation

#business

#money

#personalgrowth

How innovation works- part 2- Sources of innovation #business #startup #personalgrowth

Reading time- 3 minutes.

Category – Business

Innovation is elixir of life of any business.

It keeps organization young and kicking.

What is innovation?

It is anything that adds value to organisation in terms of money or services.

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So where does it arise.

Does it arise after efforts or spontaneously.

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1. Lab –

R and D labs are the places supposed to churn out frequent innovations. Big corporations have dedicated labs with significant financial inputs. They are not very highly productive but they produce great things sometimes.

All important drugs for treating diseases come out of these labs.

Rockets out of Spacex lab.

New LED from Cree laboratory.

Vaccines from Pasteur institute.

2. Accidents

Hit and trial is the mother of significant number of inventions. It happens everywhere, all the time. It happens even in highly sophisticated labs. Trick is to catch idea flowing out of these mistakes.

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There are so many accidental discoveries.

Pfizer company made drug for heart which dilated heart vessels. But it prolonged erections as a side effect. This was noted and used with great success to treat erectile dysfunction.

Spencer Silver worked at 3 M lab. He made glue that was less sticky and of no use at first glance. His boss didn’t like it and asked him to tidy up.

But after few years he realised it’s possible use and made highly successful stick it notes.

Story of accidental discovery of Penicillin is widely known. In contaminated culture plates fungus grew and it inhibited growth of bacteria. This was picked up by Sir Alexander Fleming. And this started new era in medicine.

3. Customer

Sometimes companies innovate to fit their product into the comfort level of customer.

IKEA built big business of home furniture which was based on cheaper furniture which was to be assembled by buyer. It gave customer feeling of accomplishment, when they joined furniture parts. It saved costs for IKEA and made furniture more affordable.

Readymade cake mixtures, noodles voluntarily leave few steps on customers end, to increase interest in the process and final product.

4. Complimentary collaboration-

A business needs many small ones to complete it. Big company cannot make everything. Somebody has to made accessories, apps, decorations and protection in form of covers and product Insurance.

Examples are Car and phone accessories.

Apps for Google Play Store and Apple store.

Bluetooth speakers for music apps and movies.

Ebooks for kindle readers.

Phone damage protection insurance covers.

5. Community-

Sometimes whole community can participate in innovative ideas.

Example is Wikipedia which is open platform where common people can contribute articles. It is very useful and very big.

Tiktok video maker. Anybody can make and edit small videos on tiktok app. This has led to production of many videos ( mostly irritating) but people love it. ( Before Covid lead to widespread backlash on Chinese products

Similar thing happens on Instagram and wordpress blogs. Company provides a platform where massess innovate and contribute.

6. Open end –

When many organisations work together to furthur enhance a discovery.

Like outsourcing or buying patents from others.

Tesla recently made its electric car patents available for other car makers, so that non polluted future can be accelerated.

Open source softwares which anybody can modify and code like twitter and APIs – Application programming interface.

Finnish student Todvalds started building Linux as s project in 1991, which is general public accessible and programmable computer language. It became very large by contributing coders from all over the world.

So, what are you looking for.

Innovation can occur anywhere.

Inspiration – Innovation mandate by Nicholas Webb

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How innovation works – part 1- Basics #business #disrupt #startup #innovation

Reading time- 2 minutes

Category – Business

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As we progress further; average life of a corporation is decreasing.

In last century it was 50 years, now it is roughly 10-15 years.

Disruption is speeding up. Big guns fail fast.

Why.

This happens ?

One big reason is lack of innovation.

Companies that don’t innovate fall behind.

Whenever a disruptive innovative idea surfaces in market, it kills many behemoths.

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When Amazon came, it killed bookstores.

When iphone came, it disrupted camera and music industry.

So innovation keeps organization healthy and long lasting.

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What is innovation actually ?

“Innovation is anything that adds value to organisation and solves problems.”

It is not same as invention.

Not same as discovery.

Types of innovation-

1. Empty – Not very useful. Adds very less value or no value.

Like Segway which was presented as revolutionary transport device. But still it is struggling to make a mark.

2. Incremental

It is small improvement in already useful technology or process.

It adds value over long time. It is also called horizontal progress.

Like improvements in delivery and storage services by Amazon over time.

Improvement in smartphones in each subsequent model.

3. Breakthrough –

It is significant improvement or addition but not disruptive to other existing companies or businesses.

Like Face ID of apple.

Falcon rocket of Spacex as it created reusable technology for space travel.

Wandy Parker online glassess company which changed the way glasses are bought by customers.

4. Disruptive-

It is rare.

It is genre killer. It kills many businesses.

Uber for taxi business.

Netflix for cable tv.

So, in few articles I will try to share internal workings and intestines of innovation.

In the process let’s try to gather few important insights.

I will share what I have learnt by reading some great Books about ideas and innovation.

Inspiration – Innovation mandate by Nicholas Webb
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Why it is not always a great idea to throw your job away! #entrepraneur #linkedin #business #money.

Category- Business

Reading time- 2 minutes

We commonly hear succes stories.

Hero of our story is a badass. He kicks away ( metaphorically) his college professor or his old boss and goes to do his own business.

He leaves suddenly one day and bravely survives inspite of constrained finances.

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But we should be sceptical about it.

Studies show 90% of new businesses fail within three years.

Reason may be anything but such massacre happens.

Either you are immature, or you have non accepting market , wrong niche, wrong product or insufficient finances.

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Then if you have a job, however ugly it may be you should not throw it away suddenly.

You should cling to it a little longer. Let it suck your soul a little longer.

And you should leave when you have one foot stable in new arena.

Studies have shown that people who keep their jobs while starting business have little more chance of succeding in their effort.

Don’t gamble bro.

Assess, polish, judge, secure and then raise the curtains. Wait before you scold your boss.

We have got proof from real life also.

Steve Wozniak co founder of Apple, kept working in hp for one more year after tinkering for Apple.

Google founders waited to complete their PhD before starting internet search engine.

Queen guitarist Brain May kept his studies going while performing at band.

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Scott Adams who made Dilbert comic, jet working on his job.

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Stephan King didn’t become Full time writer for seven years after he started writing.

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eBay fonder Pierre kept his job while working part time on his website.

Spanx founder Sarah Blakely kept her job of selling fax machines, alongside her project.

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Why.

Would they do that.

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It is because human brain is hard wired to seek safety.

So, entrepreneurs being human and not being gamblers, first assess complete risk before burning their boats.

Thay modify the risk.

Who take blind risks, are likely to fail.

So, next time you get angry on your boss, just sip a glass of cold water and rethink over your future projects.

Make it a reasonable guess and moderate risk and go with complete set of emergency brakes.

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.Take your plan A, B and C with you.

Inspiration – Originals by Adam Grant

How to get original ideas. #process #personalgrowth #business #money

Reading time – 5 minutes

Category – Psychology

Daily you get out of your bed with tired eyes and head to the same bathroom. By the time you have taken bath you work subconsciously. You don’t even realise that you have been in absent mindedness for an hour.

And then same scolding from your wife brings you to senses and worries of your office work slowly crawl on to you. You suddenly realize you have to take bath and eat breakfast in 10 minutes to be on time.

Next day same repeats.

You have developed patterns. You do and think in a same way day after day. There are no new or original ideas.

Your boss also snorts when in meeting you give the same idea that you had given in meeting two years back. Of course that is idea that is never going to work. You and boss both know that.

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Now your friend who is himself lazy guy; tells you to be original. He tells you that you only live once and even if you can never get young again, try to be an original thinker to succed. Then you come back, finish your drink quickly and head towards same old bed.

But there are a few things that this guy we are discussing can do. Lets try to enumerate them.

1. Question status quo

See what you are doing. Identify wrong things. Question them as they are not written in our constitution. You can tinker with them. Even your boss will like if you could change a few bad things. Even your big boss ( Your wife) will like; if you behaved and acted differently. Try to change things for good. Till you don’t recognise defeciencies; how could you act on them.

2. Increase number of ideas

If a hen gives 10 eggs and 5 of them are good. Then it is highly advisable that she should produce more eggs. By increasing number of new ideas you can increase chances of finding a good idea. Swing your bat and you may hit the ball someday. Don’t restrict number of possibilities you may consider.

3. Try new domain –

Research has shown that professors who had diverse hobbies like gardening, arts, sports, music had greater chance of winning nobel prize. Learn new skills. Learn new language. In stead of accumulating fat in front of television; go and read something. When you expand field of your knowledge, number of original ideas increase.

4. Socialise out of your field

Meet people from different jobs, different ethnicity, different country and different religions. When you come in contact with new cultures you learn new facets of life. You may find a new idea in the process. Artists who visit different countries benefit from their experience. Same applies to authors.

5. Repeat

By repeating and discussing idea you become familiar with it. Alongside you tend to get to a little depth.

You can mix new idea with old famous one to succeed. Like King kong movie shows theme similar to beauty and the beast. Similarly Pixar’s toy story shows theme of friendship and sacrifice with use of common toys. Both movies were successful.

6. Start by analysing drawbacks –

Start by seeing weak aspects of your idea. This will make you more receptive of criticism. Also listeners of your idea will be hard pressed to find more flaws, when you have already found few common ones. It makes you sound honest.

Babble website is for children care and its founder Rufus Griscom used this trick to pitch Disney to buy his website. He told them five reasons why Disney should not buy his company. Disney bought it for 40 million.

7. Take mindful risk – When you have got a new idea. Analysis of risk profile becomes necessary. When you take risk in one domain of your life like your job, you must become more cautious in other domains like investing and family life. Don’t quit jobs or throw a gamble. Mitigate risk when you work on your original idea.

8. Feedback– In surge of endorphins you may fly a little high. You may not see obvious flaws in your plan. Make a original idea and get feedback from peers and mentors. They provide you with valuable insights. Use that insight to improve on your plan.

9. Be lazy sometimes– It is never a good idea to jump as soon as you get parachute. First check it for holes and check wind speed. Check for rescuers. As Stephan King said, ” No need to write an idea. If it is good enough it will stick.”

Give your idea an incubation time. Let the market become ripe and receptive. Ideas get fatty and more productive with time. Dont be super lazy but give your ideas some time.

Wao. You made till the end. That’s amazing.

Inspiration – Originals by Adam Grant.

Stuck in a miserable job- What are your options. #freelancer#personalgrowth

Category- Psychology

Reading time – 2 minutes
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As we walk deeper into new century being an employee is becoming more difficult. Gone are the old days when one employee stayed in one company for many years and company provided regular growth and even health insurance and emergency leaves.

But now it is different. There are no pensions, minimum health benefits and if you are not delivering or mishandling of economy leads to an inevitable recession, you stand high probability of being handed over a pink slip.

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AI and robots are on the horizon but even before that doing job is not very cool.

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On the contrary if you are stuck in a bad job with a bad boss or may be poor growth potential; what are options that fall in your lap.

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What on the earth a dependent employee lacking ng other income streams can do on earth if he doesn’t like face of his boss.

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1. Exit-

Leaving the job. Saying some swear word and after watching few YouTube motivational videos; you can write an emphatic resignation.

You need to have stored , “f*c* you boss money” ; for surviving till you get next job.

Then you update your resume on all job sites and seeks motivation from family and friends and grow a serious beard and few layers of fat to face new boss.

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It can be good or bad depending on situations. But this is also most radical solution.

All jobs have some inherent problem, but if new jobs helps you grow your skills and reach your potential and resonates with your principles , it is good to jump.

Don’t jump for slight pay raise or out of desperation.

Wait for some time to assess qualities of new job.

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2. Voice-

If you are little brave , you can go to your boss and tell him in a diplomatic manner, how he and his company suck.

You can tell him to improve your condition and alongside tell that you will like to work in company for a long time, if conditions permit.

But these scenarios roll out only when , your skills are important for the company or you are a golden egg laying cuckoo in your department.

3. Persistence-

If you have particularly strong will and you know your boss never listens to good advice and your voice is going to land you in a firing line; you try to persist.

You try with all your soul to remain in the job, bacause it is not worth to move to another sick company.

You work extra hours, you try to be extra polite with your clients and even listen to people in routine meetings.

You listen sad songs and movies and cry sometimes in the pillow while your wife snores.

You watch survival videos on youtube and try to stick to the bread like butter waiting to be devoured.

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4. Neglect-

If you are a normal guy with smartphone and Netflix connection, you will probably neglect. You will stay but do minimum work to prevent boss from firing you immediately.

You choose slow death for your association and you count hours and figure out ways to pass them in an enjoyable way.

You play games on phone and gossip with other neglecting colleagues.

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.wao.

Other options if exist, I am still to notice or read about them.

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.Out of these of course quitting and neglecting are bad for business and company.

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.Then what is best option,

it is a thing to ponder.

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What expert say ; is that it is best to voice your concerns and alongside measure your options and risks. Then stay if things work out or stay ready to leave if boss is actually stuck on same place.

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next time you face a difficult situation, try to figure out what you are going to do.

Inspiration – Originals by Adam Grant