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sakha (Business)

A sakha is our individual business run by sevakas. Each sakha is a separate business which runs independently. The way we build each sakha is to standardize nearly 80% of the technology stack and processes. This allows us to focus on the 20% that is unique to the sakha.

A sakha has four core characteristics:

  • close follower. Innovation is hard and expensive. It requires a lot of capital and time to get right. Our approach is not be innovators but close followers. What this means is that we are competitor obsessed, we constantly monitor our competitors and figure out ways to build products at a lower cost.
  • boring business. Our businesses are based around jobs to be done model. We focus on building products that solve a specific problem for a specific customer. Each sakha is focused on a specific job to be done.
  • cannibalistic. Our sakhas are built to be cannibalistic. What this means is that we are not afraid to compete with ourselves. If we see an opportunity to build a better product, we will do so even if it means cannibalizing our existing products.
  • AI first. We use AI throughout our stack and accelerate our ability to build new products focused on building one at a time. This requires us to standardize our technology stack and processes.

The ability to launch new products and deliver them has dropped significantly. We can build and launch faster using AI. The ability to experiment and create things faster with AI and Cloud is only going to accelerate. We make use of this capability to rapidly build and launch new sakhas.

Principles​

The niti are the principles that guide everything. Ironically, these principles are simple, yet difficult to follow. They require discipline, focus, and a settled mind. They are a circular system where each principle feeds into the next. This process is continuous and never ending.

Some companies have a lot of principles such as Bridgewater or Amazon, but those are overkill and lead to confusion. It is hard to keep in mind a ton of principles while also trying to perform the work in that business. So the niti are distilled down to four core principles: Serve, Standardized Processes, Continuous Improvement, and Remove Waste.

Our method is to use either a Lean Six Sigma or Agile method as needed. The way I see it Agile is a way of discovering something unknown. It is a discovery method, the end result of which is a Product Market Fit which itself leads to a discovery of a process. This process can then be optimized with the tools of a Lean Six Sigma process. Lean Six Sigma is also useful in cases of know outcomes. Where throughput and quality are needed such as specific known deliverables with a known process.

These principles have been gathered from these main sources:

  • W. Edwards Deming
  • Lean Manufacturing / Toyota Production System
  • Six Sigma
  • Working Backwards from Amazon
  • Agile Software Development

These principles are then applied within the framework of: sangh, sakha, and sevka. The goal is to be able to apply these principles to people and organizations.

Serve​

They alone live, who live for others, the rest are more dead than alive. -Swami Vivekananda

Build to serve others. Innovation is when you figure something out and make it applicable to others, a form of serving. Building things for their own sake without a purpose of who it is serving is somewhat useless. With a Customer, Partner, Team, or Self in mind, innovate to to serve.

  • Customers. Build products and services that serve customers. Solve their problems and make their lives better. The way to do this is to deeply understand their problems and needs. This requires empathy, listening, and observation.
  • Partners. Whether it is a life partner or business partner the need to be served just the same. Figure out what they need and how you can serve them and make their lives better. Become a preferred partner, someone people like to work and get along with.
  • Team. Serve your team members, employees, and colleagues. Help them grow, develop, and succeed. Create a positive work environment where people feel valued, respected, and appreciated.
  • Self. Serve yourself by becoming a better person. This is not selfish, but rather a way to be able to serve others better. Take care of your physical, mental, and emotional health. Continuously learn, grow, and develop yourself.

Serving is not a one way door. If done well both parties benefit and grow.

When serving there are two things to keep in mind:

  1. Specific Mission. Who are you serving and what problem are you solving for them? Make it specific and clear and easy to communicate. Anything vague is is hard to serve, a specific mission makes it easy to focus efforts.
  2. Single Threaded Owner. Have a single person who is the owner of the business who can make decisions, run the process to drive the mission forward.
  3. Measurable Outputs. How do you measure success in serving them? Have a clear outcome in mind and track progress towards that outcome.

Our systems:

Standardized Processes​

Standardized processes across everything. Slinging guns may be great for a lone wolf, but to build anything great requires systems and processes with clear outcomes. These systems can be either in personal life or business. Have a set of standardized processes that are followed to achieve a Measurable Outputs. A monk like scheduled life is a great example of standardized processes in personal life. A set of documented business processes is a great example of standardized processes in business.

Every standardized process's goal is to achieve a specific Measurable Outcome while Serving. Outputs result based on the inputs. Trying to manage outputs without changing the inputs is impossible. So focus on the inputs, the processes, and the systems to achieve the desired outputs. These input processes should be continuously monitored with charts and graphs to make it easier to understand.

Every standardized process has these characteristics:

  1. Documented. The process is documented in a clear and concise manner. This documentation is easily accessible to everyone involved in the process.
  2. Repeatable. The process can be repeated multiple times with the same outcome.
  3. Measurable. The process uses control charts to measure outcomes. These metrics are tracked and monitored to ensure the process is working as intended leading to the desired Measurable Outputs.
  4. Owned. The process has a clear owner who is responsible for ensuring the process is followed and improved upon.

Our systems:

  • sakha. Setup of individual business units.
    • sop. Standard Operating Procedures for all processes.
      • flywheel. Value Streams drive how we serve and deliver value.
      • routines. Use checklists and automation to standardize routines.
      • deming. Six Sigma Process Control Charts
  • sangh. Setup of the overall organization.

Uncover Waste​

Entropy is a Law of Thermodynamics. In every system there is waste. Waste is anything that doesn’t serve the purpose of the system. Waste can be in the form of time, money, energy, resources, etc. Waste leads to inefficiencies, stress, loss of quality, and a loss of a settled mind.

Anything that doesn't lead to the improvements of the Measurable Outputs is waste.

Waste can be identified by tracking it. We build systems where any waste whatsoever is tracked and we have a weekly review of this waste. The goal being that we must have an accurate track of the kind of waste we see. Further, waste is a way to empower our team. By giving our team the ability to identify waste, we empower them to improve the system.

These are some common types of waste:

  1. Defects Errors, bugs, rework, failures, misunderstandings.
  2. Overproduction. Making more than needed or earlier than needed (extra features, unnecessary outputs).
  3. Waiting. Idle time when people or systems wait (blocked work, slow approvals, slow CI).
  4. Non-Utilized Talent. Underusing people’s skills, knowledge, creativity (manual tasks engineers shouldn’t do).
  5. Transportation. Unnecessary handoffs or transfers between people, teams, systems (Dev → QA → Ops loops).
  6. Inventory. Work-in-progress that isn’t delivering value yet (open PRs, backlogs, half-finished work).
  7. Motion. Unnecessary movement or context switching (searching for info, tool hopping, interruptions).
  8. Extra Processing. Doing more work than necessary (over-engineering, excessive documentation, duplicate checks).

and

  1. Sort (Seiri). Identify all items in the space (physical, digital, or process steps), tag anything unused or rarely used, remove obsolete tools, files, steps, or equipment, Archive items needed only occasionally, Eliminate duplicates
  2. Set in Order (Seiton). Arrange items for easy access and retrieval, Label storage locations, Create visual cues for organization, Ensure tools and materials are in designated places
  3. Shine (Seiso). Clean the workspace regularly, Remove dirt, clutter, bugs, or code debt, Fix broken tools, configs, scripts, Schedule routine cleaning tasks
  4. Standardize (Seiketsu). Create SOPs, checklists, and guidelines to maintain organization and cleanliness, Establish routines for sorting, setting in order, and shining
  5. Sustain (Shitsuke). Maintain discipline to follow 5S practices consistently Conduct regular audits to ensure adherence, Foster a culture of continuous improvement

Our systems:

  • sakha
    • reviews. Use reviews and checklists to uncover waste.
      • wbr. Weekly Business Review
      • wor. Weekly Operations Review
      • wcr. Weekly Competitor Review
      • war. Weekly Account/Customer Review

Continuously Improve​

While standardized processes are nice as a baseline, the world doesn’t stand still and the environment changes. So every process must be continuously improved. With a 1% improvement every day, over time these small improvements lead to significant gains.

Continuous improvement is lead by the owner of the standardized process. There are a few ways to continuously improve a process:

  • Experiments. Try new things and see if they lead to better outcomes. Use a scientific method approach to test hypotheses and validate assumptions.
  • Failures. If there is a failure, we learn from that failure and improve the process to avoid that failure in the future. This happens through root cause analysis and postmortems.
  • Upstream. All processes have upstream dependencies whether it is a customer, partner, or team member. We monitor these upstream dependencies for changes and improve our process accordingly.
  • Downstream. If there is a downstream improvement on process is there a way to improve our process to take advantage of that downstream improvement.

The way to track continuous improvement is through metrics and control charts. Every process should have a set of metrics that are tracked and monitored. These metrics should be used to identify areas for improvement and track progress over time.

Our systems:

  • sevaka
  • sakha
    • issues. Standard for projects, features, and bugs.
      • release. Project management system.
      • feature. Feature management system.
      • bug. Bug tracking system.
      • waste. Waste tracking system.
      • support. Support ticket system.
  • sangh
    • kanban. Kanban system for task management.

Stack​

  • Legal.
    • Legal Entity
    • Bank Account
    • Stripe
  • WhatsApp Group. We have a single group for all communication. This can be within a community.
    • WhatsApp Community. Shared WhatsApp Community with a group for the Sangh.
  • Cloudflare. We use Cloudflare for all DNS and CDN.
  • Apollo.io. CRM for sangh and sakhas.
  • AWS. We use AWS for all cloud infrastructure.
  • Google Workspace. We use Google Drive for all documents and spreadsheets.
    • Shared Drive
      • Legal.
      • Competitors
      • One Pager
      • Contracts
    • Calendar. Shared Calendar for the sangh.
      • Meetings. Shared Weekly Meeting Calendar.
        • Weekly Competitor Review
  • Github. We use Github for all code, documentation and issues.
    • Github Orgainization
      • main repository. Look at the sakha structure for rest of the structure.
        • ledger. hledger powererd accounting system.
    • Github Project. There should be a sangh level project that tracks all sangh and sakha tasks.
    • Github Issues. All tasks are tracked in Github issues.
      • feature
      • bug
      • waste
      • support
      • pull-request
    • Github Actions. All automation is run through Github actions.
    • Repo. All code is stored in Github.
      • .github/workflows. All the Github actions workflows.
        • pr-*.yml. Pull request validations including tests, linting.
      • README.md. Overview of the sangh or sakha.
      • tasks.py. Task runner using pyinvoke.
      • app. The backend code written in Django and Python.
      • www. The frontend code powered by Docusaurus.
        • /one-pager. A one pager that explains the business unit and made public.
        • /presentations. All sales presentations.
        • sop. Standard Operating Procedures
          • prfaq. PRFAQ for the business unit.
          • flywheel. The flywheel and the associated processes.
          • routine. Checklists for various processes.
          • reviews. Reviews for various processes.
            • wbr. Weekly Business Review
            • wcor. Weekly Competitor Review
            • wcur. Weekly Customer Review
      • infra. Infra terraform code.
        • aws. AWS terraform code.
        • cloudflare. Cloudflare terraform code.
        • github. Github terraform code.

Our individual business units are built using a decentralized team with a standardized technology stack and process. Each sakha is run by a small team of three sevakas.

The sakhas has a few core characteristics that are common:

  1. Do one thing well. A sakha can be explained with a single sentence.
  2. Small team. Each sakha is run by a small team of three sevakas. a. Business Lead. The business lead is responsible for the overall success of the sakha. They are responsible for sales, marketing, and business development. b. Technical Lead. The technical lead is responsible for the technical implementation of the sakha. They are responsible for the code, infra, issue management, and deployment. c. Support Lead. The support lead is responsible for customer support and operations.
  3. Independent. Each sakha is independent and can be run without any external dependencies including the Sangh.

Limited Scope​

I do not intend to cross pollinate too much between the different business units (sakhas) so all decisions for the most part will be made at the sakha level. The sevakas will work as a small team within the sakha and will be responsible for the day to day operations. Each sakha will operate independently.

So what does this mean for the Sangh level operations? The sang will largely be focused on finance, legal, and infrastucture. Everything else will be pushed down to the sakha level.

What consistitutes finance, legal, and infrastructure?

  • finance
    • bookkeeping
    • tax filings
    • financial statements
  • legal
    • contracts
    • incorporation
    • IP protection
  • infrastructure
    • cloud infrastructure
    • DNS and CDN
    • email and communication systems
    • lead scrapers
    • social media automation
    • common git templates and actions

Nearly everything else will be pushed down to the sakha level.

Boring Businesses​

The problem being in proximity to San Francisco is that newness is always the rage, entrepreneurs chasing the newest gold rush. Makes sense since San Francisco started with the actual gold rush! But if we look at the companies remaining in San Fransico from the actual gold rush of 1849 the two prominent remaining companies are are Wells Fargo and Levi Strauss.

Bank and pants are boring businesses. These businesses are not going to be changing rapidly but will remain the same for a long time. sakhas should not to chase to build innovation led products with high capital costs. We build things that people need delivered at a lower cost than our competitor with exceedingly simple business models.

Boring businesses have some advantages that we can provide them:

  1. Entrepreneurs don’t find them sexy so don't work on them.
  2. The legacy players are not nimble enough.
  3. They tend to be process heavy.
  4. Costs can be driven down with standardization.

All of these are advantages that we have as a small, process oriented organization.

Definition of Done​

There is tendency in software towards enshitification. To avoid this, all sakhas will reach a point where they will be considered done. The way to determine this is if it meets the objective that it started out with. This means that a sakha has a specific goal in mind and once that goal is achieved, the sakha is considered done.

Once it is done, the sakha will continue to exist but will not add new features or functionality. It will be maintained and supported but will not be actively developed. There will be security updates and updates to any upstream API changes.

The goal is to avoid feature creep and to keep the sakha focused on its original purpose. If there is a new opportunity or idea, a new sakha will be created to address that. If this results in multiple sakhas that are similar, they can be later merged or one can be deprecated or both can continue to exist if there is a market for both.

Ledger​

Fortress Balance Sheet​

We use a cash based accounting system making it easy to track cash flow. Because of this our financial statements become easier to generate and understand. But we have hyperspecific metrics that we track to ensure that we are building a strong business.

MetricGoalFormula
Revenue Growth30% per year
Asset Growth30% per year
Free Cash Flow Growth100% per yearFree Cash Flow = Net Income + Depreciation and Amortization – Changes in Working Capital – Capital Expenditures
ROIC30%ROIC = (Net income – Dividends) / (Debt + Equity)
Debt-to-Free Cash Flow400%
Debt-to-Asset25%
Effective Tax Rate12%

Study​

If I have seen further, it is by standing on the shoulders of giants.

Sir Isaac Newton

  • Business
  • Finance
    • Understand the basics of bookkeeping.
    • Read financial statements.
  • Operations
  • Software Engineering
    • Github and Git.
    • Write in Python, TypeScript, Go and Terraform.
    • Understand ReactJS and Django Frameworks.
    • Linux and bash.
    • AWS and Kubernetes.
  • Sales
  • Marketing
    • Strong English speaking and writing skills.
    • Email and social media marketing.
    • SEO and content marketing.
    • Support and customer service.
    • Public relations and networking.

Businesses​

Biographies​

  1. Steve Jobs by Walter Isaacson
  2. Titan: The Life of John D. Rockefeller, Sr. by Ron Chernow