We know of affiliates mostly as online affiliates: Individuals willing to advertise your product on their site and take a cut of any sale originating from their source. Offline affiliates are akin to salespeople that get a commission. In North America it’s hard to find true offline affiliates since most salespeople are hired and paid, with a commission as a bonus. In India, however, offline affiliates are abundant and they’re amazingly good at what they do. 

In the streets of arid cities in Rajasthan, I’ve come across various types of affiliates. The first kind is the tour guide. Walk into some of the many temples or free sights and a man will volunteer himself as your guide. No asking about a fee (sometimes he’ll say he does this for free) and give you a long tour. They are very nice, offering to take pictures of you, telling you historical anecdotes, and they even throw in personal stories about themselves and their family. For instance, one guide we had said his great grandfather helped to carve the temple we were visiting—easily believable.

At the end of the tour, you expect them to ask for a small payment to them and when they don’t, you feel bad. Then they say, “I have a shop right next store where I do paintings and I was wondering if you could come and see it.” How can you say no after a free half-hour tour? You can say no if you want, but most people with a conscience can’t. They deftly exercise one of Cialdini’s principles of influence:Reciprocity.

It’s quite brilliant, actually. Their shops are usually exactly the same to the other tourist traps in the area, but there’s another team of salesmen inside who do a good job of selling you stuff you don’t want. Most items are pretty cheap, so it’s not a big deal. 

The second affiliate I’ve found is the taxi/rickshaw driver. Being in a foreign place, you need recommendations of some kind—for restaurants especially. Often times the guides don’t know the real local favorites, or they list too many to choose from. Or, you’re in a place where no Lonely Planet can save you. You ask your driver, “Do you know of a good lunch place?” and they say, “I can take you to the best restaurant in the city.” When you get there, the parking lot is filled with taxis. Most patrons inside are tourists. And it’s clear that the food is not the best in the city. 

I’ve had this happen in Bali, Vietnam, and Thailand. Especially on scheduled day trips, the bus driver will stop at shops and restaurants along the way that they are clearly getting a cut from. 

All of this to say, online affiliates are pretty passive in comparison. These guys will walk with you for hours, take you on a tour of a city for free, and then ask for a small purchase in return. It’s hard to identify who is genuinely wanting to help you and who is an affiliate with an ulterior agenda. More often than not, it’s the latter. 

In Steve Blank’s talk at the Startup Lessons Learned conference, he highlights the difference between what it takes to be an entrepreneur vs. a business manager. Basically, he’s saying that what’s taught in MBA programs is only partially helpful. I couldn’t agree more. 

Most people have a tough time making decisions. And it’s not even the big decisions that people despise settling on, but more the tiny everyday small choices that cause angst.

A well known theory in Behavioral Economics called the Prospect Theory may be able to explain why. 

In Steve Blank’s talk at the Startup Lessons Learned conference, he highlights the difference between what it takes to be an entrepreneur vs. a business manager. Basically, he’s saying that what’s taught in MBA programs is only partially helpful. I couldn’t agree more. 

Most of what you learn in business school is how to run a business. Primarily how to be a CEO or business manager in a large company. Understanding financial accounting, marketing, organizational behavior, economic theory, and the list of requisite classes goes on. While these are great skills to have, none of them come into play when starting a startup, especially a lean startup.

As the slide above states, being an entrepreneur isn’t applying what you’ve learned in the past, but what you are learning as you go. Your customers are your teachers and you are the student. You must throw away your business plan and instead focus on trying to find a scalable and repeatable business model. This means testing out hypotheses, often being very wrong, until you create a product that people are dying for. Having an MBA won’t help you here, and what Steve Blank has been teaching at Stanford is how all business schools should be approaching entrepreneurship. There’s no formula for success. There are formulas to help you succeed, but if your customers hate your product, your knowledge of venture financing isn’t going to change that. 

So for those of you who have gone to B-School and want to create web products, forget what you learned and start asking questions. Get out of the building, talk to customers, and start learning again. A Lea(r)n Startup!