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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.

Standardized Technology 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.

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%

Bibliography

Inspiration​

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

Sir Isaac Newton

Bibliography​

  • 7 Powers: The Foundations of Business Strategy by Hamilton Helmer