Page 32 - Masala Lite Issue 168 December 2024

32 CASH COURSE WITH ATUL one can take. Looking in your kitchen and around

your house can give you some great ideas. Great
products and services do not always come from great
companies so remember to use this as a starting point
for further research.
LEARN FROM DO YOUR HOMEWORK

AN INVESTING Peter was famous for saying, “Behind every stock is a
company. Find out what it is doing.” He emphasised
that understanding the fundamentals of a business
LEGEND: was crucial to making informed decisions. One litmus
test he encouraged people to use was to assess one’s
understanding of a company is whether you could
PETER LYNCH explain your investment thesis in just a few sentences.
EMBRACE MISTAKES AND DIVERSIFY
Even with his stellar record, Peter was not immune
to making bad calls. He admitted that some of his
investment decisions were total failures. However,
his winners more than made up for them.
A BRIEF SUMMARY: His philosophy was simple: you do not need to be right every time. But when you are, make
sure your winners count.
• Peter Lynch was a famous investor that achieved an average annual return of 29
percent from 1977 to 2000. The two big takeaways for us:

• The principles behind his success have more to do with investors’ mindset and 1. Diversify and spread your eggs in different baskets.
approach, rather than genius or mathematical wizardry. 2. Do not be discouraged by losses. Try to learn

• He popularised the idea that individual investors can find investment ideas all from the mistakes.
around them, including in their households. If something is a staple in your – and IGNORE THE NOISE
many – households, it could very well be from a great company. Peter stood out from many in the investment
• Peter also famously paid little attention to predictions about where the market community by avoiding the prediction of interest
or interest rates were going, and when the next crash was coming. Ignoring the rates, market crashes or economic trends. Instead,
noise to focus on fundamentals is a tried and tested approach. he focused only on fundamentals. For him, this was

to find investable companies he could purchase at
reasonable prices. I believe that one of the factors
Investing legend Peter Lynch was a successful investment manager with a remarkable 29 of his remarkable success was his ability to tune
percent annual return for over two decades. Peter’s success was not a result of complex out market hysteria. This is relevant now more
mathematics and number crunching. Much of his philosophy is about the approach than ever in the information age. Avoid making
investors take and can be easily replicated by all of us. decisions based on heightened emotions such as
fear or euphoria.
INVEST IN WHAT YOU KNOW
Peter popularised the idea that individual investors can easily source great investment ideas KEEP IT SIMPLE
through what they encounter in their daily lives. He championed the idea that noticing By following Peter Lynch’s principles, you do not
trends, products and services you personally use and love could lead to great investment need to be a finance or investment professional

ideas. For example, he discovered Dunkin’ Donuts because he was a fan of their coffee. to succeed. Curiosity, discipline and practice will

Finding investment ideas can be overwhelming when there are so many approaches take you much further than any accreditations will.

KATE SPADE: FASHION MEETS FUNCTION
Kate Spade, a former magazine editor, revolutionised the handbag market by addressing
a gap she observed firsthand: women needed bags that were both functional and

fashionable. Her insights led to the creation of sleek, colourful designs that resonated
THE FACTS ARE OUTSIDE
THE F A CTS ARE OUTSIDE with modern consumers. Starting with a single boutique, Kate’s brand quickly grew,
eventually being sold to Coach for USD 2.4 billion in 2017. Her success stemmed from
THE BUILDING her ability to observe unmet needs and translate them into a product that redefined

Darshan Mehta an industry.
Darshan Mehta gives case-study
ampl
ound
ompanies that f
f c
ex
examples of companies that found SPANX: SOLVING A PERSONAL PROBLEM
es o
inspir ation bey ond their c om f ort z ones. Sara Blakely’s billion-dollar brand, Spanx, was born from her frustration with existing
inspiration beyond their comfort zones.
fashion solutions. By identifying a personal need for smoother, more flattering

StanfordUniversity professor Steve Blank’s famous adage, “The facts are outside the undergarments, she created a prototype that resonated with women everywhere. Sara’s
building,” encapsulates a core principle of innovation: genuine insights and transformative commitment to her insights, coupled with her willingness to seek feedback and innovate,
ideas are discovered not within the confines of boardrooms but out in the real world. His disrupted the intimate apparel industry and established Spanx as a household name.

call to action challenges entrepreneurs and executives to abandon their comfort zones,
KODAK: A CAUTIONARY TALE
detach from entrenched ways of thinking, and engage directly with their customers,

industries, and environments. Not all companies capitalise on insights effectively.
Kodak’s failure to embrace the potential of digital
Innovation requires more than observation; it demands a willingness to embrace

photography, despite holding the patent for the first
discomfort and question established norms. According to Blank, there are two types
digital camera, illustrates the perils of clinging to
of insight seekers: reactive and proactive. The former seek insights defensively, aiming
the status quo. Rather than leveraging its innovative

to protect the status quo and stave off disruptors. This group often feels overwhelmed,
technology to transform the industry, Kodak prioritised
striving to slow down competitors rather than innovate themselves. The latter group,

its existing revenue streams from film. By the time it
by contrast, actively pursues insights as a means of offense. These proactive seekers

entered the digital market, competitors had seized the

are entrepreneurial, motivated by a desire to solve problems, break rules, and redefine

opportunity, and Kodak filed for bankruptcy in 2012.
industries. As Patagonia founder Yvon Chouinard puts it, these innovators echo the
spirit of rebellious juveniles who declare, “This sucks; I’m going to do my own thing.” INSIGHTS IN ACTION
History is replete with examples of businesses that have successfully embraced Steve The common thread in these stories is the transformative
Blank’s principle – and some that failed to do so. The following case studies highlight power of seeking and acting on insights from outside the building. Successful innovators
are those who look beyond the walls of their organisations, engage with the world
how insights derived from the world outside the building have fuelled innovation and
around them, and boldly adapt to what they discover. Whether reviving a legacy brand,
transformation.
creating a new market, or navigating disruption, the lesson is clear: innovation begins
STARBUCKS: REVIVING THE EXPERIENCE where comfort ends.
In 2007, Starbucks was in crisis. Rapid expansion had diluted the very essence of the
Starbucks experience, leading to declining same-store sales. Recognising this, then-
chairman Howard Schultz stepped back into the CEO role and reignited the company’s
Darshan Mehta is the founder and CEO of Carmina,
focus on its customers’ expectations. Howard understood that Starbucks wasn’t just
a Latin cuisine restaurant in Bangkok, and the host of

selling coffee; it was selling an experience of comfort, connection and storytelling.
the “Getting to Aha” podcast. He also the founder
Howard and his team made bold decisions, including closing 7,000 stores for espresso of iResearch, an online insights platform that enables

training and redesigning store layouts to enhance customer interaction. The company companies to quickly, easily, and affordably extract
also launched MyStarbucksIdea.com, allowing customers to contribute ideas and feel insights from consumers or employees worldwide.

engaged in the brand’s evolution. These moves rejuvenated Starbucks’ brand and financial He can be reached at dm@iresearch.com.
standing, demonstrating the power of insights drawn directly from customer experiences.
MASAL A LITE ISSUE 168 - DECEMBER 2024