Age of the Entrepreneur

Putting your heart into it

2011-10-17T00:01:00.000-07:00

People are uncomfortable when they encounter emotions from others because they associate an emotional response with having to give in, give up or give into something in dealing with that emotional response. They feel manipulated through these emotions.
So people try to cover-up and can their emotions so as to stay away from inviting an emotional response which in turn could place on them an unpleasant demand on them.

When we talk of acting out of love and of putting our heart into our work, we are not talking about this kind of emotional manipulation.

Acting out of love (and from your heart) is acting out of a deeper understanding. It is not to be confused with responding emotionally (especially with uncontrolled emotions) or using emotions as a means to manipulate.
It comes from the understanding that giving in to emotions makes one unsteady, unpredictable and a slave to rising and falling emotions. It comes from the understanding that a caluculating mind become dry, dull, colorless, hard, ruthless. It is good at taking and grabbing things from others but it is incapable of creating. That it is incapable of giving. It comes from the understanding that these two are but our tools and sensors that help us live and work better.

Emotions are at best used as sensors (guides) and as a means to expression. Can you even think of poetry and music and art bereft of emotions? Can you even imagine anything beautiful ever being created or done without the doer having his or her heart into it?

How you really feel about work is an important indicator of how you are doing at work and the quality of work you are doing.

Are you feeling unhappy? Are you feeling frustrated? Are you are feeling happy? Are you are feeling exhilaration? If you are unhappy it's more likely that you are unable to do your work well. If you feel frustrated it is likely that the problems you encounter in your work keeps reappearing. If you are feeling happy probably you've been able to do a job well. If you are feeling exhilarated you've probably made a breakthrough at work.

Indeed reflecting on how you are feeling about your work can help you manage yourself better.

Acting out of love comes from an understanding that we are can hardly stand alone. That we are dependent on others for our well being. That we have much to be grateful to others for. And that in response, we must at least attempt to do our bit to pay it back and forward.

Here is how the great Einstien saw it -
A hundred times everyday I remind myself that my inner and outer life depend on the labors of other men, living and dead, and that I must exert myself in order to give in the same measure as I have received. - Albert Einstien

Indian companies need lower cost IT

2011-08-04T00:26:00.000-07:00

The per capita GDP of USA is 47,284 USD. That of India is 3500 USD or about 1/14th of of USA. Obviously, it has a bearing on what our companies earn per employees. E.g. the per employee earning for Citibank and the BPO in India that works for it are vastly different. It therefore stands reason that the BPO cannot afford to invest as much in its infrastructure as the American bank. These companies must therefore be looking for IT infrastructure that are far less expensive.

To start with, software now forms a larger and larger part of the IT budget and it can therefore also be the part that offers the greatest amount of cost savings. Open source software is increasing becoming a very credible alternative.

Secondly, not just the BPO, but most companies in India usually have to go through a large number of small value transactions. While, this means that there can be little compromise on provisioning for capacity, the hardware used to build the IT infrastructure can be less specialised and more generic and therefore lower in cost.

How to destress

2011-08-02T22:07:00.000-07:00

First of all learn to forgive yourself. Sometimes, we are too hard on ourselves.

While life and living is about exerting yourself to bring out your best. Sometimes we are in too much of a hurry. Sometimes we define excellence and success and happiness too narrowly. Sometimes we lose sight of that which is special in us. In the process, subjecting ourselves to undertake things that we may not like the most or be the best at. Or do things that is out of tune with our rhythm and pace in life.

Forgive yourself, because even the most talented people fail. Even the most talented people have to try repeatedly. Even the most talented of people have to go through the grind.

Forgive yourself. Because you are more than your mistakes. You are more than your limitations. You are more than your failures. You are more than anything that can be said about you.

Forgive yourself and be happy. Forgive yourself and look forward to the possibilities that lie ahead. The past is dead and gone.

The capitalist need the entrepreneur more

2011-07-26T23:07:00.000-07:00

Despite all the raving and ranting by the capitalists, the truth is that it's the capitalist that needs the entrepreneur more.
Without an entrepreneur (which of course the capitalist can himself be) the capitalist cannot hope to grow his wealth.
There are an estimated 42 million entrepreneurs in India. Most of them survive (and grow) without help from the capitalists.
Many a young entrepreneurs get hooked on to the idea of raising capital, when a little modification a little scaling down of the plan can get them started without it.

It may come as a surprise to some to know that it was the entrepreneur who showed up first on earth.

Unifying Ideas

2011-07-21T03:30:00.000-07:00

Everyday there is an endless assault of information, customer demands, breakdowns, absenteeism, insights, errors, exceptions, vendor meetings... that can easily drown us in activities and drain us of our energies. Worse still we risk losing our way and ending up nowhere.

What we need are unifying concepts, ideas and models that help us see all this in a unified way. We need to look for the 'one thing' that can explain many things or the 'one thing' we need to hold on to that helps us grip many things at once. Or we need to look for how can it all be arranged using a simple model.
Or better still what is a simple operating model that we can use to organize our response to these. Arriving at such a perspective is probably the starting point to being able to manage things better.

Most important resource wasted

2011-07-04T03:42:00.000-07:00

People are one of the biggest cost for most business. People are the most important resource in a business. But people resource is also where the most waste occurs.

Some notes on our People Philosophy

2011-06-27T05:20:00.001-07:00

Here are some notes on our people philosophy that came-up in my recent conversations at work.

Firstly, No we are not really worried about people leaving. The negative impact of people leaving is exaggerated. It is mostly that we cannot take the rejection.

Mostly, it does not make a difference as to who comes or goes, our experience has been that it has never been that coming-in of someone or going-out of someone has had any transformational impact. In the end there is a lot of grind that even the most talented people have to go through to produce worthwhile results.

Mostly the importance of a person is exaggerated by us and more so by the person himself or herself. Mostly it's illusion.

But some people make more of a difference than others. You can see them as the Steve Jobbs, or Nandan Nilekani, or Ray Ozzie, or Warren Buffet for the company. They are hard to replace. Hard to replace by either other people, process or technology.

Incidentally these are people who work for the love of it.

We don't have to worry about retaining or driving people. Some people are better gone. Some people contribute more when they stay out of the office than when they are at work. We are not interested in monitoring the hours people clock in.

We don't mean to disrespect people. We don't mean to undervalue people. Neither do we intend to waste our time driving reluctant employees. We intend to understand how things work and who makes what difference. very very clearly. We intend to know what is best about a person and how we can bring that to the fore.

We have more to gain from improving our Knowledge, Brand, Production System, Ecosystem, Culture etc. than we have from adding or subtracting people.

Lastly when we work with people, we have to understand that we are working with lives, that we are working with manifestations of the divine. So we need to act with respect and discretion.

Quality & Meditation

2011-06-27T05:14:00.000-07:00

Quality and meditation are one and the same thing. Qualtiy brings about meditation. Only those in mediation can bring about a quality outcome.
One of the ways to know a person in mediation, is the lack of hurry in him or her.
Big dramatic initiatives lack balance.

Karma Yog

2011-06-17T02:46:00.000-07:00

One of the greatest lessons I have learnt in my life is to pay as much attention to the means of work as to its end. ..and it appears to me that all the secret of success is there; to pay as much attention to the means as to the end...With the means all right, the end must come.

-Swami Vivekanand

The more we work on our methods and systems the more likely we are to achieve our objectives and ideals, whether they are to provide opportunities to deserving young people, supporting entrepreneurs, contributing to the society, contributing to our own growth and that of our people, creating the capacity to build world class products, building a place of great learning and innovation or spreading prosperity around us.

I think this is the single most important thing of all that we do at work.

The CEO in a corner

2011-06-16T23:26:00.001-07:00

The CEO must lead change. The CEO must lead the charge. The CEO must articulate the vision. The CEO must be the company's face to the world outside. The CEO must be available to his people. The CEO must know the numbers. Quality is number one job of the CEO. The CEO must go see for himself. The CEO must build future leaders. The CEO has to define the future for the company. The E in the CEO stands for execution. The CEO is the CMO (Chief Marketing officer)...

Management literature abound with such advice. But, even an idiot can tell you that taking all this advice seriously and together would be a sure recipe for failure. At best the CEO following such advice ends up inflating his sense of self worth to absurd levels. Making for some good entertainment for the rest of the team. At the worst, he ends up turning people around him into Pygmies. Making failure certain.

The CEO has to do what he has to do and leave the rest to others. Sometimes, this may mean confining oneself to a corner so that work can get done.

Sometime for the love of it

2011-06-10T00:32:00.000-07:00

Simplifying a business is the correct objective. It can make for faster growth, lower costs and greater peace of mind. But some businesses are complex. Tech businesses e.g. by their very nature are complex.
Likewise, establishing a business on enduring foundation is correct (it can simplify a lot of things). But there are rapid changes a tech business has to deal with.

The world cannot survive only on chewing gums and coke. Some not-so-simple things have to be done. Some not-so-profitable businesses have to be run. For the love of it, for the value it brings to society. And it has to be done in a business format, in a profitable way, so that it does not depend on charity (money from people who sell chewing gums at good margins) for survival.

A thousand things...but one at a time

2010-06-13T22:55:00.000-07:00

You need to get a hundred (maybe a thousand things right) to build a great enterprise. I realised this quite early in my life as an entrepreneur. Maybe in a few quick years if not months. But it took me many many years to realise that you can do it only one at a time.

Sooner or later Microsoft will have to choose

2010-06-07T22:31:00.000-07:00

Microsoft has much on its hands to catch-up with google, apple, sony et. al. That's mostly on the consumer side. Which also is the most profit making part of its the business (at least that's so for its Windows and Office products). It might therefore chose to relinquish this space and fight IBM, Oracle, SAP etc. in the business software space or do it the other way around. It will be interesting to see. Or else it risks becoming a producer of not-so-great products.

The biggest opportunity today

2010-05-12T05:17:00.000-07:00

Qualified and Quality Human Resource is the biggest void today in the Indian economy. And therefore Human Resource Development (Education) offers the biggest opportunity to entrepreneurs for both the reasons of making a contribution and creating wealth.

Most business are created & sustained without VC funding

2010-03-27T02:22:00.000-07:00

VC funding is a mirage. Don't waste your time. There are 45 million businesses in India less then a few hundred may be get VC funded.

People leave even big brands for a little more money don't count on people's loyalty. Count on your vision and your own commitment to it. Find people to subscribe to your vision.

Sometimes we are so excited by our ideas that we can't stop ourselves from pursuing it. That is what entrepreneurship is about. However take one idea at a time. Pick-up the best one.

Classify your product into the cash cow, the drain and the star. Be the Vishnu (preserver) of the cash cow. Be the Shiva (destroyer) of the drain and Bramha(creator) for the star.

For a small company it is best if you are focused (single product company). Meditate to sort out the confusion.

Learn to do more with the cash flow. Figure out ways to cut costs. Maybe you can reduce your staff and outsource the intermittent work. It can save you a lot of money.

Build a franchise of loyal customers and partners(resellers). These are your VCs.

VC ecosystem in India is under developed.

VCs in India are more likely to invest in mature companies (with revenues of ($5 million or more) than early stage companies.

Individual Genius

2010-03-20T04:44:00.000-07:00

"There is a time in every man's education when he arrives at the conviction that envy is ignorance; that imitation is suicide; that he must take himself for better, for worse, as his portion; that though the wide universe is full of good, no kernel of nourishing corn can come to him but through his toil bestowed on that plot of ground which is given to him to till.

A man is relieved and gay when he has put his heart into his work and done his best;

But what he has said or done otherwise, shall give him no peace. It is a deliverance which does not deliver. In the attempt his genius deserts him; no muse befriends; no invention, no hope.

The power which resides in him is new in nature, and none but he knows what that is which he can do, nor does he know until he has tried.

- Ralph Waldo Emerson

So many opportunities

2010-03-18T23:23:00.000-07:00

India has so much diversity, so much disparity, so many problems, so many people...so it offers many many opportunities for entrepreneurs who can fill the gaps, create the variations, use resources more efficiently...

Managing yourself by emotions

2009-10-07T02:04:00.000-07:00

I walk into the room where Sujata has been busy all day fielding customer complaints almost all by herself. She looks up at me and smiles. It's not a forced smile.

Surprisingly she seems to be at ease. She's alone today in the services room which usually has about five people taking customer calls and working out remedies to customer complaints. I say - "You are handling it all by yourself ?" She looks up briefly smiles and says "Yes sir" getting back to what she was doing.

So? You are supposed to be cheerful at work, right?

Wrong.

How you really feel about work is an important indicator of how you are managing yourself at work and the quality of work you are doing.

Indeed how you are feeling about your work can help you manage your self better.

Are you feeling unhappy? Are you feeling frustrated? Are you are feeling happy? Are you are feeling exhilaration?

If you are unhappy it's more likely that you are unable to do your work well.

If you feel frustrated it is likely that the problems you encounter in your work keeps reappearing.

If you are feeling happy probably you've been able to do a job well.

If you are feeling exhilarated you've probably made a breakthrough at work.

Working daily on how to do your work better is perhaps the best way to encounter exhilaration more often and make happiness your normal state at work.

Weekend movies, exotic holidays or frequent job changes can hardly substitute for enjoying what you do for most part of your waking life.

Demystifying what the Master said about wealth creation

2009-09-25T02:01:00.000-07:00

The Master said…

'Giving is the essence of wealth creation…..'

You gain wealth from creating Value for others, Lending out your assets, or through the Goodwill you have earned as a result of having contributed positively to people's lives or to the society. Essentially through giving.

Of course there are other ways of making money like benefiting from other peoples follies and stealing and taking advantage of other peoples miseries but those fall in the realm of immoral and unethical (the demonic ways). I presume we don’t want to concern ourselves with these.

'Worry about where the money is going rather than where it is going to come from….'

Warren Buffet one of the richest man in the world says that his most important task is 'capital allocation'. Where he has put (given) the money has made all the difference in converting a approx 100,000$ borrowed from friends and family into billions (incidentally he has pledged nearly all his wealth estimated at over 40billion $ to charity).

'Widen your sources of income instead of worrying about your expense…..'

In his book Managing for Results, Peter Drucker says- "..There is a need to concentrate scares resource on the greatest opportunities and results...". Reducing expenses contributes to wealth creation to the extent that expenses are reduced to make resources available for the most attractive possibilities (or opportunities for wealth creation).

'Where the money goes is important…..'

Money must act as a seed to grow wealth. Frivolous expense is like seeds falling on sterile ground. That does not build value or assets or good will. And therefore terminates the process of wealth creation.

And the Master said....

'If you want more money to flow to you, broaden the flow of money from you….'

The more the money flows out from you the more goodwill, value and assets that you create, which in turn becomes the source of wealth creation for you.

So you thought your fixed deposit was about saving? Not quiet. Essentially you are giving the money out to someone else (the bank) who gives it out to someone else (the borrower) and that's how the money grows. Not by keeping it with you but by giving it out. Incidentally the longer you give out your money the more it grows. It might even be that the more often you give it out the more it makes for you. Ask any money lender.

Then he said...

'Live in with the feeling of abundance…..'

Because all the riches in the world will not take the poverty out of a man who thinks he needs some more. That's exactly what a beggar thinks of all day.

What's good about the election results

2009-05-19T23:19:00.000-07:00

With more than 50% of the people favouring the Congress or the BJP, the vote certainly is in favour of the national parties.

BJP as an opposition has the fire power in the parliament - with Advani, MM Joshi, Jaswant Singh, Sushma Swaraj, Yashwant Sinha, Shanawaz Hussain, Sidhhu et. al. It certainly missed this in the last Lok Sabha, with Advani almost single handedly leading the charge (with Vajpayee in absence due to ill health).

National Parties will get stronger. BJP will reform and Congress will build-up on its gains

Oppurtunitic politics has failed.

Approximately half i.e. 266 MPs below the age of 50 so young people and New Ideas will come to the fore.

60% of the sitting MPs have lost their elections. Most of them deserved to.

With a clear majority, the govenement has no room for excuses

It's a positive vote for good governenace. Mostly the performing CMs who have been able to deliver irrespective of the party they belonged to.

BJP was never going to get this kind of numbers (given the limitations of its geographical reach). So would have been subjected to blackmail by the allies. The current configuration is likely to be more stable.

Many of the outrightly criminal candidates have lost.

Congress now has to itself clear up the financial mess it has created for the government.

Keeping truthful company

2009-05-07T05:26:00.000-07:00

To come to know that nothing is good, nothing is bad, is a turning point; it is a conversion. You start looking in; the outside reality loses meaning. The social reality is a fiction, a beautiful drama; you can participate in it, but then you don't take it seriously. It is just a role to be played; play it as beautifully, as efficiently, as possible. But don't take it seriously, it has nothing of the ultimate in it.

The ultimate is the inner; the indivisible soul knows it. And, to come to that soul, this is a good turning-point.

-Osho

Allow me an interpretation -

What Osho is telling us is to reject dogmas and theoritical understanding of the world.

This is a very scientific approach because unless we look at things as they are no scientific progress is possible. E.g for years doctors held on to the belief that ulcers were heriditary that no bacteria could grow in the highly acidic environment of the stomach. It was only when what was considered right till then was rejected that the ulcer causing bacteria was discovered and a new (very effective cure) for ulcers was found.

Our minds are clouded by dogmas and truths half understood. This really is the result of our social existence. Where all kinds of half baked ideas and understandings are thrown at us daily. That's why it is so important that we keep good (truthful) company. That's why being with the Guru and in the company of the Buddha is so important.

Technology and aspiration

2009-04-30T04:35:00.000-07:00

For years it was difficult for me to see things differently. That our existence and preservation of life on earth and our aspirations were in direct and fatal conflict was a sad conclusion I had arrived at.

I deeply and desperately desired to do something to save our planet. I reasoned that if we had to save life on earth we had to rein in our aspirations. And though I studied engineering and technology, for most of my years in college, I came to dislike it. I saw it as product of our 'evil' aspirations and as something that was at the heart of the self-destruction that we were inflicting on ourselves. All around were signs of how the use of technology was slowly destroying our forests, land, rivers and seas and polluting the air we breathe.

But something was wrong with this picture. Because when I looked around I also saw that so much that was good about life flowed from aspiration. Indeed aspiration was life. And that life depended on aspiration to move forward on its path of evolution.

Then it occurred to me one day - technology was not bad in and by itself. It was the inadequacy of the refinement and application of technology that was responsible for the rapid destruction of our environment. And that a very large part of the solution to reconciling our aspirations with self preservation may lie in technology itself.

Amongst other things, our company's objective is to discover applications of technology and how it can be improved to build a future that is more sustainable. One in which our aspirations and existence are not on a collision course.

Our current engagement with Messaging and Collaboration technology is one such attempt at providing a faster, cheaper, lesser damaging and in many cases better alternative to travel and transportation. We also see technologies for collaboration (and knowledge management) as a way to tap into the collective intelligence of the human race to find durable answers to the conflict between our existence and aspirations.

I hope we can make significant contribution towards this.

Creating high technology companies in India

2009-04-29T02:44:00.000-07:00

I think that the primary problem with creating a high technology/software product company in India is the lack of the eco-system (in the form of an organised distribution, suppliers, skilled staff, critical mass of high tech product companies, VCs, etc.). It is, I think, the single biggest reason why the VCs have a perception of high risk associated with the success of an enterprise of this kind here. It makes success at every point in a ventures life (creation, growth and exit) more challenging and negatively impacts the net outcome. The task becomes even more difficult if the company is focused on the (considerably smaller) domestic market.

All other things being equal - Lets assume that there are five factors related to the ecosystem that a start-up must get right in order to succeed. Let’s also assume, that the difference in the probability of success in each in Silicon Valley is a little more than in India due to a better developed ecosystem there. For the sake of calculations let's assume this probability of success in each of these factors is 80% in silicon Valley and 65% in India. The net outcome is a much higher chance of failure for a company in India than in Silicon Valley.

Chances of finding suppliers to deliver as per the plan

-80% in Silicon Valley; 65% in India

Chance of succeeding in getting the product developed on target on time

- 80% in Silicon Valley; 65% in India

Chance of succeeding in setting up a distribution system

- 80% in Silicon Valley; 65% in India

Chance of reaching a critical mass of customers before money runs out

- 80% in Silicon Valley; 65% in India

Chance of finding the next round of funding to sustain momentum

- 80% in Silicon Valley; 65% in India

The combined probability of success owing to these factors is Silicon Valley would be 32%

Whereas the combined probability of success in India due to these factors would be only 11%

Secondly every kind of product has a different cycle times over which it matures. The fault with most VCs entering the Indian market lies with the small and standard cycle time that they set for all their investments and exit.

While this might be fine in mature eco-systems like the Silicon Valley (where exits are easier) this time needs to be a stretched (and even adjusted, as per the product categories, target markets etc.) here in India to account for the extra time needed to take action to compensate for the lack of a developed ecosystem.

The fault with the entrepreneur lies in benchmarking themselves against the present day entrepreneurs of Silicon Valley, instead of benchmarking themselves against the early entrepreneurs that appeared at the genesis of the Silicon Valley. The content of our work is probably closer to what they had to do. Entrepreneurs in India must allow for (indeed give themselves) time to build this ecosystem (of distribution, suppliers, skilled workforce etc.).

Entrepreneurs must invest in building this ecosystem and even enjoy the process of doing so. After all most of us are not in it for bread alone. We enjoy the process of creating something new, overcoming the challenges and dream of leaving behind a worthy legacy.

The VCs will follow. As happened in Silicon Valley.

Critical work & trust

2009-04-28T22:02:00.000-07:00

You need to first build trust to be given critical and challenging work.

Any good team, manager, leader or customer will give crucial and important work to those whom they can trust.

People who are trusted naturally get the most challenging and interesting work.

Trust cannot be built over a few short weeks or months. Trust is established by the demonstration of consistent, diligent and honest work done over several years.

Powershift to the internet

2009-04-28T02:07:00.000-07:00

The use of internet is perhaps the one of the distinguishing features of these elections. Especially with the media (particularly the television) having lost quite a bit of credibility, the internet offers a more open medium, allowing the content on display to be commented on, responded to and contested by the consumers (unlike the traditional media). Helping shape opinions in a more open and truthful way.

LK Advani's website is an interesting experiment in collaboration over the internet. The significance of this exercise goes beyond the 2009 elections. It is about educating the people, learning from the people and carrying out an informed debate. It is about people’s participation in shaping the destiny of the nation. It is about bringing out the truth.

I wish the BJP had started this initiative even earlier. I wish that the Congress and the Communist respond to this initiative with vigor.

The impact that television had on politics in the country in the 90s would be the impact that the internet will have in the 2010's. There is going to be a powershift from the television to the internet. And for the better.

Individual & isolated successes cannot substitute for Collective failures

2009-04-23T04:37:00.000-07:00

Sometime ago, someone from our office had forwarded me a mail about things that we Indians can take pride in. The mail mentions things like -
An Indian - Vinod Khosla founded Sun Microsystems, Vinod Dham (an Indian) was the creator of the Pentium chip and so on.
It goes on to enumerate how many Indians work at the top organisations like Microsoft, NASA etc. and talks a little bit of our glorious historical past.

While these are indeed things to be proud of, there are two things that disturb me about it

1. It celebrates mostly individual achievements.
2. It celebrates mostly the past glory of this country.

Sadly most Indians commit themselves to achieving only individual excellence and are focused on their own welfare. As a rule most Indians do not dedicate or even participate in activities that would benefit the larger community. That's why we do not have a Harvard, a Microsoft, a Standford or a NASA in this country. That's why our homes are clean and our streets are dirty. That's why a few of us live first world lives while hundreds of millions of Indians lead a life of desperation and deprivation.

I am not an India basher. I love India and its people more than I can state in words. My concern is that we are substituting our current failures with past greatness and substituting the failures of the community with individual successes.

Work can be tough

2009-04-23T04:32:00.000-07:00

Any work no matter how interesting sooner or later involves a lot of drudgery. Work cannot be exiting all the time. And it definitely cannot be entertaining. Work can be very frustrating at times. Especially when you are attempting to do something BIG. But when you involve yourself meaningfully in work, it can bring in a deep sense of satisfaction and even a feeling of exhilaration at having achieved what you thought impossible when you first began.

Engage and contribute

2009-04-22T04:15:00.000-07:00

Engage and contribute to the company's purpose. It doesn’t matter, where you want to go next. What matters is that - Right now you get your livelyhood from this company so you must do a honest day's work. Right now, by making this company better you are contributing to the society, nation and the world. Right now you have an opportunity to engage and learn more. Right now you have an opportunity to make things better for your customer. Right now you have the opportunity to rise above your problems. Right now you have an opportunity to stop complaining and take action to remedy whatever you think is undesirable around you.

Work better-Earn better-Spend better

2009-04-22T04:06:00.000-07:00

I think we need to replace the Work-Earn-Spend culture with Work better-Earn better-Spend better culture. Let me explain-

Work Better - Knowing what should be done and what should be left alone is all important in determining your efficacy and efficiency at work.

Earn Better - Money is not the only thing we can hope to earn in life. Growth in our understanding & capability (of not just what is on the outside but also on our inside) is the more important earning we should aspire to as part of our work.

Spend Better- Acqusitive spending (and unbridled consumption) only adds dead weight. Making life burdensome. Spending with a purpose to make our own life and that around us more liberated is the better way.

Going beyond just planting a tree once in a long while

2009-04-18T04:13:00.000-07:00

I think we need to go beyond just planting a tree once in a long while. The urgency to take action demands that we widen the scope of our action.

Here are two ideas.

One of the ways, we can contribute towards the environement is by reducing our 'carbon foot print' as an individual, family and/or business. For example one of the things I have resolved to do as part of reducing my own carbon foot print, is to not change my 10 year old car. My cousin (a car enthusiast) says, it's still good for another 200,000kms. I'd be doing this besides using my feet, the bicyle and my motorcycle more often. May be I should also eat a little less.

A second one would be to adpot a 'green spot', ensuring that this place remains clean and green. My personal preference would be to adopt the Law college hill (Tekddi) and University of Pune Campus as my 'green spots'. Over the years I have returned again and again to this place with my family and friends and it has always been a pleasure. These places have a wide variety of trees (and I have often spotted many different types of birds there). These places are wonderful getaways within the city and are beautiful anytime of the year. I especially love the mornings there, and the evenings during early monsoon. I'm be happy picking up the litter, planting trees and taking care of them...whatever it takes to preserve and nuture the place.

Government as the masters versus enterprise of the people

2009-04-16T23:17:00.000-07:00

Here is the basic difference between the Congress and the BJP. The Congress continues to perpetuate a Mai Baap Raaj. This approach is based on the perspective that people are poor and helpless and we (the government and enlightened politicians) must help them. The BJPs view on the other hand is, that we as a people only need to realise our greatness. This view incidentally is not based on western capitalistic ideal but on the ideals that is part of our vedantic philosophy that talks about the divinity waiting to be realised in every individual.

The BJP must articulate this position better. - Are we helpless people that need to live by the grace of our political masters and the crumbs that they throw at us or are we the masters of our own destiny? The question to be asked is that - can only the governments do the task of building the nation or is this nation to be built by its people? Clearly the answer is the latter because despite all the government failures this nation continues to move ahead. Now we are not arguing for no government or less government. And we are certainly not arguing for crony capitalism (like that practiced by Congress and a few of its allies). What we are arguing for, is a government that does enough to make its people succeed in realising their true potential.

What government no matter how big or wise can build a nation all by itself?

This difference must become more pronounced, articulated and encapsulated in the messages and programs of the BJP. It must take a position counter to intellectual arrogance, crony capitalism and corruption. And against government being the masters and commanders, towards collaborative effort, empowerment of the individual and collective enterprise and dharmic (principled) governance.

It is only then can we live up to the vedantic ideals of realising the divinity in the souls of all individuals. There true potential.

Only then can India take a leadership position in the 21st century. And we seek this leadership position not out of our ambition to be seen as better than others but out of our sense of responsibility to lead the world for the better.

Perhaps the biggest achievement of the rule of BJP under Vajpayeeji was going from a state of extreme despondency to one of self confidence. My hope is that the BJP can deliver on Advaniji vision of not just restoring our lost self confidence but also on moving us forward to a position of global leadership.

Why we need a vision lead alternative

2009-04-16T00:22:00.000-07:00

Mahatma Gandhi saw the need of a vision for the nation, the need to change the hearts and the minds of people, as more important than political freedom. He also saw the centrality of the vision in bringing about this change. To the extent that we (Indians) followed that vision we have been successful. And failed to the extent we compromised with it.

If Pakistan is a failed state today, it is only because it was an alternative without a vision.

So it is with some satisfaction that I note L.K. Advani's good efforts in leading with an alternative vision.

Financial innovations v/s real world innovations

2009-04-13T22:19:00.001-07:00

Money represents a quantity of something physical (real) say gold. By printing more currency against the same physical quantity, the relationship is redefined and there is loss of value (in relation to this physical reality).

When something like a mortgage instrument is created, what we do is create money in another form i.e. money that is backed by future earnings. Physical reality remaining the same, by creating this money, the value of money degrades.

When such mortgage is available against even dubious future earnings, the value degrades further. Everything becomes more expensive. Simply because the supply of money has increased.

Interestingly the additional money made by the business in the process is not passed on to the workers down the line quickly enough (it really is a trickle) for reasons of greed or prudent management (to account for the replacement cost given that everything is becoming more expensive). The result is that the borrower now buys stuff using depreciated money and pays a charge (interest) on this money.

Given that there is more money to be made per transaction the entrepreneur has no time for such distracting tasks like productivity improvement or innovation. He'd rather focus on the maximizing the number of transactions and bargaining an even better price per transaction. So the costs keep rising. The situation is further precipitated by the fact that inefficient and wasteful methods continue to perpetuate on an even larger scale putting a higher demand on the resources (both natural and man made) driving the prices even higher.

All this time ever larger quantities of money is moving into fewer hands while only a small trickle flows downstream.

Eventually this creates many a distortions in the economy. The most critical being the one between the real income of the people and the rising cost of living leading to distress abandonment of assets and possessions that no longer can be supported on a narrowing purchasing power.

Financial innovations such as these fail to provide the 'intended' benefits to the consumers. On the other hand innovations and productivity improvements (especially those that provide breakthrough gains) are a more definite way to spread the benefits to consumers (evenly across the society).

Innovation and productivity improvement increase the supply of goods and services and therefore increase the value of the money making it a faster way to spread prosperity than the 'trickle down effect' of capitalism.

The point is fewer and fewer people want to undertake the 'stupid' work of building an enterprise, improving productivity or indulge in innovating things. Even entrepreneurs these day think more in terms of trading their ideas and businesses for cash that they can then use to make more cash. Hopefully the current crisis will set the balance right between real world innovations and financial innovations.

The future of capitalism lies in the real market place and not in the money markets.

Restructuring of the world economy

2009-04-13T02:08:00.000-07:00

I think that the capacity of the current economic structure to grow has almost run out. Let's say you have a certain capacity to run. Utilising that capacity at the lower levels is easy. As you move towards the higher end of utilising that capacity, the effort (mental determination) required is greater and greater. But beyond the limit of that capacity no amount of effort (mental determination) can do it. Towards the fag end of the capacity of the current structure of the economy to produce, we've seen an unprecedented use of capital (and financial innovation) to drive growth. And then came the collapse, where no amount of financial innovation could drive the growth anymore because the productive capacity of the economic structure had been almost exhausted.

The world economy will probably settle down at a lower level. Current world economics will have to undergo restructuring to Build new and additional productive capacity. Much like the runner who failed to reach his objective, must go back and work at building a new level of capacity.

How much growth the next cycle will produce, would depend on how deep this restructuring is.

So the question is - what is the possible direction the economy will take? I get the idea as I pick my tooth brush up this morning. I'll be discarding this tooth brush in a matter of few days. It already seems like I have used it beyond its effective life span. But then I will be discarding the the whole tooth brush when it's only the bristles that need to be replaced. The rest of the tooth brush (the handle etc.) is actually just as it was when I first bought it some weeks ago. The point is a lot of the 'things' that we buy and use today were designed at a time when the constraint on resources was not a factor requiring much consideration. These 'things' have become misfits in today's world.

Many a successful innovations since the start of the industrial revolution (and even before) need now to be replaced. Indeed the success of the Industrial revolution itself might have hastened the need to discard them. Improved purchasing power (due to cheaper manufacturing and financial innovation), spreading prosperity (due to expanding trade) and population growth (on the back of better health care) have ensured a continuous growth in the demand for these innovations. But then these innovations were never designed with the impact of very large scale usage in mind. Take for example the personal Automobiles, designed for user convenience & improved quality of life, the falling costs and rising purchasing capacity have resulted in such wide spread use of this mode of transport that it now is negatively impacting the quality of life (not just of the bystanders but the owners themselves).

Having stretched material supply to exhaution, we now need new innovations that are resource efficient, sustainable, and renewable. The economics of scale itself might be on its way out. So also the life styles of the 20th century.

Triumph of the bigger ideas

2009-04-10T00:05:00.000-07:00

Triumph of bigger ideas...

...as it happened during the Parliament Debate on the Nuclear Deal.

Somnath Chaterjee's defiance of the whip of the party that got him the speaker’s chair; Omar Aubdullah's sharp criticism of the nuclear deal being tagged as anti-muslim alongside an expression of deep regret, for having sided with the NDA during Gujrat riots;

Rahul Gandhi’s acceptance of Vajpayee’s contribution towards the nuclear deal;

Shanawaz Husain's scathing attack on the government for non-performance and over simplification of the solution for the energy crisis;

Alignment of rival Kasmiri parties (NC and PDP) on the same side of the nuclear divided;

BJP acknowledging the need for the nuclear deal but opposing the government’s high handedness;

Akali Dal’s neutral stand on the deal but a vote against the government;

BJP's readiness to support it's rival Congress for reforms (both economic and social );

and so on, may at one level seem chaotic and cynical behavior - of MPs falling for bribes in cash and kind. And of self serving political interests driving the regrouping of political parties.

At another, it is a triumph of the bigger ideas over politics, personal egos and groupism.

The Indian constitution triumphed over party diktat;

The government stood rightly exposed for cobbling up a majority by fair and foul means;

The opposition to the nuclear deal in the name of Muslim interest stood rightly rubbished;

The need to break away from the isolation of India on nuclear technology stood rightly supported;

The by and large dysfunctional (or at best mediocre performance) of the government stood rightly condemned.

Expect more such episodes of fights over ideas. Watch individuals and groups switch sides. Watch the bigger ideas win.

Growth and Greed

2009-04-09T04:26:00.000-07:00

A little while ago an editorial in the Times of India written by Jug Suriya titled - Growth and Greed started me thinking...

Prosperity that comes from the growth of good things, is not accompanied by fear of losing it, is not accompanied by a feeling of emptiness of something missing in ones life, is not accompanied by sickness originating from stress and frustration, is not accompanied by discontent and disillusionment, is not accompanied by desperation.

So then what are these good things we should strive to grow? The answer is capability, quality, productivity & capacity (as measured by the production not of more quantity but of quality), improvements and so on.

And what is bad prosperity? It is the prosperity that follows - growth driven by greed, growth built on waste, growth resulting from consuming more than required, growth built on envy and comparative competition, growth built on having rather than creating, growth built on taking rather than giving, growth build on wanting more for accomplishing less and less.

If fact such growth is not growth but wealth going around from one point to another and in the process eroding the sum total wealth. E.g. if a man acquires a larger house but loses his health in the process of working for it, he is on the whole poorer. If in building more assets of production (machinery) we pollute our rivers and dirty our cities, we have become poorer not richer.

A picture caught my eye in the news paper a few days ago – Two men were standing with a sign that read - 'Starving Billionaire'. This was a picture from Zimbabwe, where the local currency has almost completely lost it value. That's really what the paper money is worth - it cannot buy you even a loaf of bread, if, the value system around it have collapsed.

Governance Infrastucture

2009-04-09T03:48:00.000-07:00

India is moving from a nation of low activity and a slow moving one to one of hyper activity (from Taamsik to Raajas state as my friend Koushik would put it.)

Governments have been talking about building Physical and Social infrastructure for long with chequered success at doing it. Much still needs to be put in place. But physical & social infrastructure will only enable the flow of these energies. Even act as a multipliers.

What we need is management infrastructure or as L.K. Advani would put it a 'Governance' infrastructure.

Without it, these newly released energies are likely to collide violently or dissipate or worse still, get blocked leading to a dangerous growth in frustration.

What is required is an intense focus on managing the growing activities of our economic and social life. Mind you I'm not talking about containing or controlling them, I am talking about channelising them, giving them directions.

As much as we need good ideas to lead these energies, we need equally good action to be able to do this. So what is this management infrastructure (or governance infrastucture)? Management infrastructure as I see it would be the Vision, Policies, Methods, Human Resource, Regulatory Framework, Governing bodies, Leadership etc. of our cities, towns, airports, ports, roads, public utilities, religious places, educational institutes, judiciary, the police and so on.

Such a management infrastructure can help us direct the unleashing energies into the making of a better India and a better world.

One of the ways to weigh an advice (to our ruling masters) on bettering things is to see if we as citizens can act on it. I see this as such an idea. The RTI (Right to Information) Act e.g. gives us the power to be quasi-Auditors and quasi-Board members of the government run institutions we care for. Asking for information and advocating improvements can improve the goverenances of these institutions. Or easier would be to start with getting involved in the management of - our societies, our children’s schools, our teams at work etc. Easier still to start by managing one’s own self better.

Fortunately all this is already being done by many people in our country and across the world. We need to quickly become part of this tribe.

I wish the media is less cynical, less intent on manufacturing political controversies, less inclined to merchandising misery and more active in seeking the truth behind the miserable management of our institutions and exploring possible solutions.

I support Advani's idea of Governance being the central plank to judge performance of governments. It is great to see Advani et. al. spend more time building & articulating their idea of governance. It is heartening to see him lead more by an alternate vision around the idea of good governance, than by slamming the incumbent government on the mat for its every fault.

Unusual remedies for the current economic crisis

2009-02-20T04:24:00.000-08:00

Rather than discuss more on the problems of the current economic crisis and what caused it, I have attempted here to explore some solutions. These might not be the only alternatives. But the current crisis may just force the movement in such a direction of change. What was once a wise choice might now become the only choice in many instances.

Not Consumption but Capacity Creation----------------------
Unfortunately, the economist are mostly thinking in terms of consumption i.e. by bailing out financial institutions and kick starting credit flow, they reason, people will be back in the markets buying things as before and all would be fine soon. A slightly longer term thinking revolve around creating a more integrated financial system in the market so as to enable a more transparent and faster flow of money across the world markets. These measures they argue would restore confidence in the financial markets and bring back the global economy onto the growth path.

One thing that is not given enough attention is that unprecedented levels of consumption had stretched the material supply beyond sustainability. That's why all commodities and assets were at an absurdly high level before the world economy crashed. One wonders if the government released inflation figures truly reflected the stress on peoples income as a result. That this stress was sought to be compensated by access to cheap and easy credit only compounded the problem.

Increasing money supply by way of increasing credit supply is only a demand side intervention that does not address the real issue of a supply side constraints. In a country like India for example with nearly 400 million working age people, if the salaries rise rapidly (especially for only a few segments like professional services, financial services and IT), it is more so because there is lack of supply of trained people, which in turn is a result of the lack of capacity of our education system. So what we need is not more credit supply to these businesses that are rapidly eroding their profitability, but a greater supply of trained manpower.

What is true about the Indian education system is also true about the manufacturing world wide. For example manufacturing must discover more efficient uses of material (maybe using Nano technologies), substitutions for material use (using software) and new designs that are more efficient, durable, reusable and sustainable. Or else high commodity prices will threaten its very existence.

Not Repair Work but Restructuring---------------------
Over the last many decades humans have become too accustomed to quick fix solutions and that is why the debate doesn't go beyond, interest rate cuts and bailout packages. These are all lazy approaches.

An economy driven by consumption (more) itself is the problem. The financial crisis is just a symptom. And while we must realise that there are material limits to consumption that can only be stretched through improving material efficiency and reuse in things we make, the more important things is to realise that there are limits to our consumption imposed by time and attention. And that we just wouldn't have enough time or attention to consume all that we can buy with our money.

It won't be enough if this restructuring only goes to the extent of reworking the use of things material. Perhaps we need to move from where the society values owning and enjoyment of the goods that the world has to offer, towards pursuit of learning, creating, leisure, contemplation and common good. Only then can we hope to spread material benefits more widely. The true long term solution therefore lies in building new capabilities and in redesigning the values on which our society is based.

There has to be compression of a lot of activities that are doing no good to our life and to life on earth. So also there is much work to be done. The economy can go on for years around regenerating our forests and bringing back to life our rivers and lakes, bringing up children to each realise there special talents, building bridges amongst communities, nursing the world back to health, making our planet safer, inventing new ways to use material more optimally, in learning better ways to live together.

If only we are willing to expand our vision.

Not More but Excellence-----------------------
A life time spend in pursuit of excellence is far richer than one that is spent on keeping up with the Jonneses, where every time you catch-up with one there is another one to catch-up with. It is time we realise that we have to wake-up and move forward on our journey to take life forward, in pursuit of individual and collective excellence - measured, not in terms of our possessions but in terms of our capacities and capabilities, measured by the quality of our action and thinking and not the quantity of our acquisitions.

We need to move to a future in which parents pride themselves on the goodness of the deeds of their children and the contribution they make to the society than on the size of the multinational businesses their children work for or the salaries they get.

Not Systemic Problems but Greed(is the problem)----------------------------
I was watching a discussion on the BBC on the current financial crisis where the audience was quizzing board members and executives of very large financial institutions accusing them of being lax and self serving in the discharge of their duties as board members and executives. Unfortunately the panelists defended themselves by citing it as a systemic failure of the financial markets arising out of inherent complexities, one in which they were helpless and of which they were clueless. The truth is that while financial systems around the world are in need of a restructuring (because of the sheer size they have assumed), it really is greed, irresponsibility, lack of vision and plain stupidity that have got the better of these capitalists.

Not China but Independent Thinking-----------------------
The failure of American financial institutions doesnt automatically qualify the Chinese model. The current regime in China is demonic. Their aggressive pursuit of economic success is doing little good to the world. I believe we (Indians and the world at large) have very little to learn from them. What is needed is independent thinking rather than getting caught up in the illusions(Maya) that is spun by the world's financial institutions or the Chinese government.

Not Financial Markets but Culture--------------------
Not rejuvenation of financial markets but a cultural renaissance is required. Clearly the lifestyle of the west cannot be lived by all on the planet without threatening our very existence. The breakdown of the financial system is only one in the series of warning that follows the phenomena of global warming, terrorism etc. hinting at the possibility of much worse to come if we don't change our ways. I believe that changes by way of redefining of lifestyles can contribute the most to correcting this imbalance. One in which, nourishment of the soul is more sought than the pleasure of the senses.

For a person living in the Dark Ages, nothing must have seemed wrong till the 'rebirth' of classical values. Perhaps the world is about to see such a change. We will in all probability look back in time from a future standpoint and wonder how we allowed ourselves to be carried so far out in our material pursuit. I imagine a new economy that is built around a dynamic culture not a decaying one. Here is where India can take leadership position. Not for the sake of leadership but leadership with the purpose to recreate the world for the better.

Not Individualism but Community living---------------------------
The high ideals of liberty and individual freedom have been flogged to dead end where it has manifested itself in greater and greater separation amongst individuals. The communities themselves decaying for lack of dynamism have been easy targets for anything that promised freedom from it. So individualism became fashionable and then a marketable commodity driving consumerism to ever higher levels.

Communism has failed. Consumerism is failing too. Perhaps the answer lies somewhere in between where voluntary Communities drive the economy forward, creating shared resources for the common good.

Voluntary communities are coming together to pursue common good while at the same time allowing individual freedom. When Tarun Bharat Sangh works to re-hydrate hundreds of villages in Rajasthan through voluntary community service you are seeing investment in collective generative capacity. When citizens in Europe volunteer to bring in cycles to create cleaner cities, what you are witnessing is purposeful community action. When people at SSY get together to build an Ashram for learning and meditation, you are witnessing Community Economics. When people at AOL resolve to plant millions of trees you are seeing community action in pursuit of a common good. Perhaps the best example of community living is India itself which sustains a large population using much less resource - much of which is owed to the existence of various different communities that act as support systems for the individual. There is economics involved in all this.
This change is not going to come in a hurry there are too many people hopeless stuck in the current systems. And it is not going to be easy to bring about the new order without working out many many conflicting interests and ideas. But that the change in happening in this direction is clearly visible.

Though, it might be a while before these communities that exist as islands today proliferate more rapidly to cover most of the landscape of our societies.

Not Financial Freedom but Freedom from Fear-----------------------
Much of the western and westernised world, suffer from the desire to be free from having to work for a living, hoping to put enough money away into a retirement fund that gives then a guaranteed return so they don't have to work any more. They call it financial freedom. The financial crash has highlighted the limits of this idea. It is time we recognise that - Wealth without Work is only an illusion. Many years ago a Mahatama (Gandhi) had warned us of the seven things that can destroy us - Wealth Without Work, Pleasure Without Conscience, Knowledge Without Character, Commerce (Business) Without Morality (Ethics), Science Without Humanity; Religion Without Sacrifice; Politics Without Principle - we must urgently pay heed to it if we are to truly free ourselves.

Not Economits but Leaders-------------
Perhaps leaders like Obama (or perhaps like Nitish Kumar et. al.) and not economists can make a difference. What the world needs now is clear thinking and honest leadership to lead the change the world needs. That kind of leadership is needed not just at the head of governments but at all levels of all human enterprises. Perhaps the time for the Economists to define the course of the economy has reached its end (at least for the moment).

Not Politicians but Teachers------------
Only a teacher, a seer can show the way. Only a sadguru can build in us the capacity to change. Only a sadguru can instill in us the correct purpose. For, it is the Guru who symbolises the living, dynamic knowledge of a society. In fact any one who speaks of this knowledge is a Guru. Only a Guru (or the chosen one) can tell us that we are caught in yesterdays decaying ideas.

Perhaps the ideas on which our economy and society rests has been overused. Maybe it has outlived its use. Maybe in our pursuit of growth we have gone too far away from the seed, from the universal principals, from the truths and therefore we suffer. Who else other than a Guru can bring us back to the center.

With much gratitude to all my teachers and Gurus

One Election can change the nation and the world

2008-12-04T02:30:00.001-08:00

Sadly a lot of the reaction to the Mumbai terror attack has been emotional (and at times simply naive). That is understandable. But it serves little purpose to condemn all politicians. That only ends up undermining democracy.

My belief is that democracy offers the best mechanism to make meaningful change. And it is quite simple. One, we must resolve to vote. Two, we must find the best candidate to vote for in our constituency.

The idea seems too simple & simplistic to work. But, it isn’t so.

Firstly it is not simple - voting for the cleanest candidate means voting across party lines, across regional, cast and religious divide. That would mean a leap for most people. Also, it would require some work to figure out who the honest, diligent candidates are.

The idea is not simplistic either - no matter how cleverly the candidates have worked out the electoral math, a one percentage point votes added or taken away from a candidate can make all the difference (actually even single vote can do it). More importantly since we are dealing with not just a case of security lapse but a rotten system, we must start by fixing it from the top. And there are many more things to fix in India than just the security apparatus.

If you find this idea sensible please send this mail to as many people as you can. If you are enthused by the idea spread the word further. And if you are charged up to really make a difference gather the information on the best candidate in your constituency and spread the information around (emails, blogs and networking sites are simple ways to do this).

The more honest people we can get into the parliament the sooner we might see the change we so desperately need.

One election may just change the course of history for our nation and the world.

Engineering is applied science. Marketing is applied engineering.

2005-10-03T22:18:00.000-07:00

Engineering is applied science. The questions that should concern engineers are - How do you reach the benefit of science to more people? How do you make things more accessible and affordable? How do we use technology to do more things that are beneficial to people?
Marketing is applied engineering. The questions that should concern them are - How can we get this stuff that we’ve engineered into the hands of more people? Are the desired benefits being realized by those who are using it? How can we make it better?

Contibuting to developing human capital

2005-10-03T22:14:00.000-07:00

Many young people starting out on their work lives see us as a training ground from where they can graduate to (what they think are) bigger things in life (like a say a job in an MNC). We don’t see a problem in this. We're happy to train people and happy if they pursue learning inside or outside of the organisation we believe that the human resource in our country has to become substantially more capable to compete in the world markets for products and services and we are happy to contribute to it’s development in whatever way we can.

A honest day’s work

2005-10-03T22:09:00.000-07:00

A few day back I was reading what Rahul Bajaj had to say in the Indian Express column on ‘India Empowered’ on what would truly empower India. He said India can be truly empowered if all of us push the limits of our achievement in our own sphere of work. I couldn’t agree more it was as if words were pulled out of my mouth and appeared on the paper before me. But, I think, before we reach out to excel in our field of work, we have to learn to do ‘a honest days work’. The person who idles away his time at work or is not putting his time to good use at work, is as much guilty of dishonesty as the person who takes bribe to dole out favors.

Return on Investment V/s Total Cost of Ownership

2005-10-03T22:06:00.000-07:00

You can't invest large amounts of capital on the promise of productivity gains, because productivity gains can be only measured in retrospection. It makes more sense to buy the more cost effective stuff that does the work well. What you can only be sure of (at least to some extent) is that the stuff you have bought will help you do things faster or with less errors but that it will result in more sales or profit is much harder to predict. Therefore it makes more sense to invest using the Total cost of ownership (TCO) computation rather than on a prediction of a certain Return on Investment (ROI).
The TCO as opposed to the purchase/transaction price (which can be deceptive), covers the upfront capital cost, running cost and the cost of renewal.
In fact a lower TCO makes a higher, faster ROI more possible. That's all one can be sure of.

India and the meaning of work

2005-10-03T22:02:00.000-07:00

India is not the political territory but an idea. An empire, of ideas and ideals for life. It's influence is currently limited and it’s values lost on many (even in this country). But I think that India will have a profound influence in shaping the 21st century not so much by the growth in power of it's economy or the might of it's military (those things are needed more to preserve India (the idea)) but by rediscovering the ideas that created this spiritual empire. And I don't mean just reciting the teachings of the past but starting off where Buddha, the Sufi saints, Nanak, Vivekananda and Mahatma Gandhi left.
In the pyramid of human capability and performance, India's most significant impact will be in showing the way towards building greater spiritual and emotional capacity.
The contribution of the western world to scientific thinking, was added to by the Japanese in brining mental focus and pursuit of quality at work. India has the potential to bring greater emotional and spiritual understanding to work and human endeavors. India, I think, can make substantial contribution to shaping the context and meaning of work.

The need for a quality bias

2005-08-24T21:23:00.000-07:00

In India everything seems to happen four years later than you expect it to happen. I'm trying to figure out if there is a way to speed things up. The all too often discussed reasons of red-tapism, inefficiencies of our legal system and ineffectiveness of our governmental agencies are becoming a rather boring and fruitless part of social conversations in our country. I don't want to be part of such conversations.
I think it's this bias towards cheaper products and services that seems to slow down the economy, making it poorer. It's a cycle that feeds low quality and perpetuates poverty. Now I'm not suggesting that the guy asking for a higher price for his services is necessarily a better vendor but the guy who made a lower offer had probably overlooked contingencies or factored in an excess amount of luck in drafting his offer. Cash flow problems that result from unaccounted contingencies lead to delays in implementing projects and sometimes into projects that never end. I can hardly think of a project in India that finished anywhere close to the scheduled date and within budget. I have no objections to buying products cheaply but excessive focus on costs can make us victims of low quality. Everybody is for quality but provided it is also at the cheapest possible price. Businesses ending up buying low quality products because of their excessive focus on the purchase price may end up with a) Lesser number of customers b) Cost overruns due to frequent maintenance or replacements and c) A higher cost in supporting and selling it's products and services. Gary Hamel and C K Prahalad in their book 'Competing for the Future' warn businesses of lower profitability from- 'A downward spiral of customer expectation where, ever poorer service begets ever lower expectations and ever more price sensitivity.' Most people trying to reduce cost by focusing on the purchase price, end up with contrary results. Excessive focus on purchase price has kept higher quality vendors away from the Indian market and resulted in a drain of high quality professionals to markets where quality is better appreciated. So the Indian market now has abundance of low quality products and service vendors willing to work at lower margins. Lower margins in turn leads to – a) Poor investments in product improvements b) Use of capital equipment for longer than their recommended life span c) Under budgeting for planned and capital expenditures, leading to higher unplanned and unexpected expenditures in maintenance and emergency replacements. So these vendors who start out as low cost alternatives eventually pad up their price to cover for all the unexpected maintenance and repairs. That's a double whammy - low quality at high costs. True sometimes what starts out as poor quality, in time improves as has been the case for Japanese and Korean products that started at the lower end of the product sophistication and moved up to occupy the top slots. But that happens only when there is overriding quality vision driving businesses. In the absence of such a vision, external market conditions play an important role in determining the fate of a business. Right now the Indian market place breeds low quality at high cost. That's bad news for Indian businesses in a rapidly integrating global marketplace. Unless we as businesses and consumers change our buying habits, Indian products and services are likely to fall into a mediocrity trap. Quality doesn't necessarily mean high costs; in fact many times it means lower costs. The paradox is that the lower cost may be hidden beneath a higher initial purchase price.

Linux software needs a friendly face

2005-08-24T21:19:00.000-07:00

Microsoft has switched it's battle tactics from the not so successful one of calling Linux a cancer that spreads to anything it touches to one that focuses on the cost factor - the total cost of ownership. A little while ago, a Microsoft sponsored study by IDC compared the total cost of ownership (TCO) of Linux and Windows software. IDC used a five-year timeframe, which is a typical lifecycle for many IT implementations of server operating systems, and interviewed IT executives and managers at 104 North American companies in multiple industries who have used both operating systems. The study has added some weight to Microsoft's argument that Linux is not as cost effective as popularly perceived. So while the study acknowledges Linux as offering advantage over Windows in workload/hardware utilization and lower up front costs of licensing. In the areas of network infrastructure, print serving, file serving and security, participants reported between 11 to 22 percent savings over a five-year period -- primarily as a result of Windows' significantly lower IT-staffing costs. The findings show that investment in resources to engineer products that are comprehensive, easy-to-use, and deliver value 'out of the box'' for key IT scenarios is paying off for customers in the form of lower TCO. The study shows that lower cost of learning and managing, deployment and repair all add up to a lot of saving. IDC's findings show that factors such IT-staff-skill requirements and long-term supportability, have a far greater impact on the overall cost of IT solution ownership. So the challenge for the people developing solution on the Linux platform is to create well-engineered and user-friendly products like those that exist in the Windows world. For example, there is no dearth of Systems integrators who can configure an email solution from freely available open source components for a small fee. Though well-designed open source components to create an email network exist, it is not enough to put together the available open source components. The email network is a complex systems and a critical communication infrastructure for an enterprise. The form in which most solutions are being offered on Linux today, is not doing much to put users at ease. A typical refrain at most organizations is ' we don't have Linux expertise around here so we'll keep away from it' Systems integrators who configure solutions based on open source components manage only to create system that could be missing on elements that are important to the customer. Making life difficult and expensive for the user and negating the initial advantage that Linux has to offer by way of low start-up costs and hardware resource requirement. That's much like buying a car that works efficiently but would need ‘expert’ help even for things like replacing a flat tyre or refueling the car.

The cost of software piracy and why free software won't work

2005-08-24T21:00:00.000-07:00

The fall of the dotcoms has substantially illustrated the point that you can't build a business by giving away things free or below cost. But one another fact that has received lesser attention is that as a business you can't do much good if you are always scraping the bottom to find resources. Because you priced your products and services too low you couldn't make enough profit to adequately resource yourself to serve your customers well. One of the stated objectives of our company's is to promote the use of IT in India. The objective is not purely philanthropic. The intention is to work out a business model for a low cost economy. The idea is to bring the cost of software to levels that is affordable for the average Indian customer & enterprise
Consider the difference between what an average American bloke earns in a year - $32000 to what an average Indian manages in a year - $500 and you can understand why a software that costs $3000 is very expensive to an Indian - roughly the equivalent of six years of income for an average Indian. Compare that to how it turns out for an average American - less than 1/10th of his year’s income.Now you could argue with the whole premise of being able to make money selling software in India, when (a lot of people believe) software in general is free in India, given the high level of piracy. So you'd say that going after the pirates would probably improve the prospects of software business in India. In fact a recent study by IDC recommends just that, purposeful action against piracy.
But experiences from elsewhere point to the contrary, for instances tax evasion are higher when the level of taxation is high. When the cost of being on the right side of law is higher than dodging the law, many choose to dodge it. In the end you have a situation that is rife with corruption. The long-term impact of all this is terrible.
Right now software users in India have to pay a very high price for being on the right side of law (own legal software) especially when you compare it against their earnings. So many resort to pirating software. Does it help? Not so. There is no support for such software and while it might be easy to manage consumer software, things aren't quite that simple when it comes to enterprise software. In fact acquiring and running pirated enterprise software is difficult. So most enterprises either delay buying software (in turn delaying productivity improvements) or experiment with downloadable versions of free open source software (that their IT departments are ill equipped to handle, besides the IT departments at the enterprises should be looking into the application of IT and not working at writing code to configure the basic IT infrastructure).
Software solutions at roughly 1/3rd the cost of what currently users pay for legal software with an assurance of quality and support can enable more people to use legal software. The important driver is the match between the costs and the ability of the customer to pay for it. The software companies must find a ways to do this profitably. Because if software companies don't make money they will loose interest in the customers and both would end up as losers.

Innovation often takes a long to becomes economically viable

2005-08-24T02:26:00.000-07:00

Innovation often takes a long while before it becomes popular or economically viable. The immensely popular email first came into being more than 20 years ago. For most of the 20 years or so of its existence, the email was popular mostly amongst the educational institutions and research centers. Its popularity in the recent years has grown not just on the back of improvements in technology but also as a result of faster geographical spreading of businesses and the resulting increase in mobility of people. The need to stay connected at low costs was as much responsible for the growth of the email as was the need to exchange information speedily. Look at the solar power; decades after it was identified as a limitless and nearly free source of energy it has gotten nowhere. It's strange that sun's energy, responsible for fueling almost all of life on earth, does not even contribute to a percent of the worlds energy needs.

For Innovation to succeed, a lot of things have to fall in place before an innovation becomes a big business. Improvements in technology, change in demography and needs of the people, the service infrastructure, the cost of the product service, change in perception etc. Sometimes an innovation is pushed into the mainstream by force of regulation and circumstances. E.g. the resolve of the United States after 9/11 to accelerate the research and adoption of alternative sources of energy will push alternative energy sources faster into the main stream. The world finally seems keen on reducing its dependency on hydrocarbons for it's energy needs. Or e.g. the Indian supreme courts directive on clean fuel has suddenly pushed up the demand of CNG kits in Delhi. But these are rare and lucky events for the involved businesses and an innovation may have to wait for a longtime for such events to come by. Even after 20 years of work artificial intelligence is still of interest mostly to in academic circles.
The years 2000 and 2001 were littered with the deaths of on-line business ideas and technologies. The WAP has come and perhaps gone. E-publishing, banner ads and a hundred things in between that were slated to rake in billion of dollars have all but faded away. People found the WebTV and the Network Computer too elementary for their needs. Perhaps it was that Mobile phones and hand held devices that caught their fancy (what with the falling airtime charges). Now those few that bought the WebTV are probably looking at replacing it with the more exciting Playstations or an Xboxs. Needs and desires have been shifting. And e-books will probably take-off once the PC-Pad becomes popular.
With the accelerating pace of change, most entrepreneurs find themselves becoming victims of the race to be first to the market. In recent times that logic has driven most new businesses too far forward. Sometimes putting in place a supply capacity way in excess of the demand. Most innovators and entrepreneurs wish for a fast adoption from the market. Unfortunately in most cases the adoption happen over a long, slow and often painful period. 'People usually overestimate the change that will happen in two years time and underestimate the change that will happen in over period of 5 years' - Says Bill Gates the richest entrepreneur of them all. Entrepreneurs usually find themselves caught between the need to scale down their expectations (to survive) and being the first to the market (to avoid being run-over).

Irrespective of the end result, the innovator-entrepreneur takes a huge personal and professional risk and must be respected for that. The progress of technology and indeed the resilience of the economy is greatly dependent on the enterprise of these people. For proof look at the rising use of the mobile phones and SMS and the growing number of people visiting the newly open coffee shops. Entrepreneurs will need to learn to live through changes impacted by slowdowns, shakeouts, disruptions, demographics and god-knows-what to see their innovation through to success.

India and Capital Efficiency

2005-08-18T23:01:00.000-07:00

A recent study shows that Indians do about 4% points better than the Chinese as a return on investment. The scarcity of capital in the country has forced businesses to be more efficient. The return on investment for Indian companies is likely to improve further as we move up in providing higher value-add products and services and as the current inefficiencies in the system are worked out. Over the long term such a trend could translate into much higher levels of wealth creation.
However, the study has in all probability covered only public (and well established companies). Young and potentially next generation of public companies starved of capital would have to pay in terms of time to achieve scale/ breakeven/ profitability/ sustainability. Which could have a negative impact on the growth of the economy.

Need for a scalable training model

2005-08-17T22:42:00.000-07:00

Without off-shoring (i.e. doing work for international clients from India as against doing work at the customers location) it would have been very difficult to achieve the scale. Given VISA restrictions, higher cost of onsite service and high attrition amongst people sent on overseas assignments (further escalating operational costs). Off-shoring was rarely considered as an option for large and complex projects, till people at Infosys and elsewhere started working on what they call a ‘Global Delivery Model (GDM)’. Bulk of the work for international clients of these companies are now done in India. The GDM blasted the key bottlenecks for growth for the IT services industry.
The next level of growth in the industry cannot be achieved without investing in building a model for rapid (and low cost) selection and training. Today despite a large workforce in India, it is hard to find enough well trained people to support the growth. The situation is similar in almost all fast growing sectors like retail, textile, media, airlines, infrastructure and so on. Without enough well trained people there is likely to be a rapid deterioration in performance standards, which would seriously damage the prospects of growth.
It’s incorrect to assume that universities and colleges in India are producing a substantial number of qualified people to support the growth. And it is stupid to expect that they will be able to rapidly improve the quality of training to match the needs of a fast globalising economy. More importantly with the current framework of education it is unlikely that the gap between what is taught at these schools and what is really needed at work can be narrowed any time soon.
Interestingly hidden in this lies a large opportunity for entrepreneurs to build systems, tools and businesses for rapid (and low cost) selection and training.

Entrepreneurial India

2005-08-13T00:36:00.000-07:00

India ranks relatively high in entrepreneurial capacity, according to the Global Entrepreneurship Monitor (GEM) project's India Report. The findings say that India, with more than 85 million businesses, is the most entrepreneurial country by volume.
But lack of physical infrastructure, educational support, and R&D investments and transfers has resulted in most businesses remaining extremely small.
Most businesses in India remain local businesses fighting with other local businesses for a share of the small local market. Businesses of all sizes find it difficult to scale in India mostly because of a highly fragmented market resulting from artificial barriers, imposed by a poor transport infrastructure and a complex web of local taxes, against free movement of goods and services in the country.
It's the lack of job opportunities that forces people to start these very small businesses in search of livelihood. The biggest employer in India today are hawking, rickshaw pulling and corner grocery stores. All of which would qualify as businesses but are unlikely to scale and create substantial wealth.
However there is a big positive resulting from this high volume of entrepreneurship. It has helped keep some terrible social and political problems from happening.

Our hope

2005-08-12T22:41:00.000-07:00

When we started our company to create high technology products in India, we were driven by the belief that some of us would have to go outside the popular trend in India of providing cheaper labor to the world, to creating useful and affordable technology and products for use in India and across the world market. Our hope is that we would some day become a model for change in the industry and business in the country and inspire entrepreneurs everywhere. Our hope is that we as a company will play our part in laying the foundation for the next level of prosperity for the world.

Bet on people's enterprise

2005-08-12T06:18:00.000-07:00

I think the Finance Minister is right in pushing for a higher level of lending and lower interest to the Small and Medium Enterprises (SMEs). While many may disagree with the mechanism for implementing it, the principle idea behind it cannot be faulted. The chances are that a SMEs of today will become the billion dollar corporation of tomorrow.
The popular argument is, that the reasons banks are not lending to this sector and charging high interest rates for whatever little they lend, is because of the high incidents of Non Performing Assets (NPAs) amongst SME borrowers. The real reasons for the NPAs lies in high interest rates charged by the banks to the SMEs in the first place.
And the popular suggestion is, to lend credit to those SMEs that have linkages with larger units. Wrong again. A lot of large corporations in India exploit SMEs by delaying payments to them for as long as they can. In effect getting themselves financed by SMEs who borrow at high interest rates from banks. The SME is likely to succumb to cash flow shortage than lack of sales.
One has to treat lending to the SMEs and the small scale as seed capital(venture fund). The Finance minister is absolutely right in pushing for more credit to this segment even at risk of some of it becoming NPAs. The payback for India can be huge. Nearly 50% of the US GDP is contributed by SMEs. For India the ratio is 30%. Quite large considering all the problems they have to face up to in doing business here. Also an indication of how much growth potential there is in this segment. Even if the government has to write-off some NPAs that are created in the process of pushing for greater financial assistance to SMEs, it will be shortchange when compared to the colossal waste that government enterprises (the original choice as growth engines for for the economy) have inflicted on the nation. The Finance Minister is acting as a venture capitalist and as a long term investors, attempting to create some very high yield assets. This of course does not mean that one is proposing a soft stand towards willful defaulters.

Software companies serving local markets are at a disadvantage

2005-08-11T01:26:00.000-07:00

Interestingly while there are deep tax concessions to Indian IT services companies serving international clients, for the product companies selling software products (or providing services) to Indian customers, there are no such benefits. This goes against both the stated objectives of the government and industry associations to build a world class IT industry in India. Which in turn requires a faster growth in use of IT in India and a move up towards offering IT products.
Product companies need local markets to be able to build deep understanding of their customer’s needs and perfect their offerings. A tax concession to these companies should be seen as an investment into the future growth of the industry.

Eroding competitiveness of the IT services industry

2005-08-11T01:25:00.000-07:00

The appreciation of the Rupee, the rapid rise in salaries (by as much as 36% y-o-y), inflation, increasing tax burden(all tax concessions to the Indian IT services companies to go in the next 7 years or so) and increasing competition form other low cost destinations countries are likely to seriously erode the margins for the software services companies in India. The remedy lies in growing the volumes, investing in training to compensate for skill scarcity (which in turns pushes salaries rapidly) and moving to deliver higher value services and products.

Unsustainable trends

2005-08-10T00:41:00.000-07:00

Most young people in India today (especially in IT) are jumping jobs too frequently in search for bigger paychecks. I believe this to be both a self-destructive tendency for the individual and a serious long term damaging trend for the performance of the industry. The rising cost of salaries without a corresponding capability and productivity improvements is likely to erode the key advantage of lower cost that the Indian IT industry has been enjoying for all this while. Individuals moving from job to job are likely to accumulate less and less depth in capability even as they add years to their experience. Such people are likely to run into a dead end soon. In their desperation they are likely to try new tricks such as taking up courses to upgrade their qualifications in their bid to make it for the next higher paying jobs (a popular choice these days is management courses). What is really needed is not more qualification but building up of ones capability and performance. Capability and performance result in economic value add which can form a more sensible and sustainable basis for improving ones earning.

Build capacity

2005-08-10T00:37:00.000-07:00

MNCs have responded to the lower cost challenge from India by putting up their development centers here and offering much higher salaries to pull away people from the Indian companies. It helps them in two ways 1. It somewhat destabilizes the challengers (Indian companies) and 2. It gives them a lower cost base for serving their customers and compete with Indian companies. Indian companies have responded by quickly upping their own salary levels (foolish but somewhat difficult to avoid for now) and pushing out towards cheaper destinations (not altogether a bad choice).
The right long-term choice however lies in training, improved processes and investment in brand building.
Currently a large part of India's potential workforce is poorly trained or unemployable (thanks to the dysfunctional education system in India). The resulting scarcity of qualified people is driving up the salary levels, quickly eroding much of the low cost advantage. If Indian businesses instead actively choose to invest in training the larger set of the not so well trained people to enable them to become more capable and employable, they will continue to have a good supply of low cost workforce. Extending their low cost advantage over a longer period of time. More importantly it can enable a huge number of people to enter the job market, lifting their earning potential. It will also force the ‘better trained’ people towards improving their performance and capability. Which would in turn benefit the industry and economy as a whole. What comes to ones mind is the excellent work done by Telco (in Pune) and Reliance (in Jamnagar) in transforming essentially agrarian local people into a very capable industrial workforce
Secondly Indian businesses must improve their processes to be able to take work form relatively junior/inexperienced staff and ride over disruptions that may be caused due to attrition. The Pioneering work done by Infosys on this stands out as an example for all to replicate.
Thirdly Indian companies must invest in building their own alternatives products and brands over a longer term to take the war to the enemy camp.

Lack of Risk Capital

2005-08-04T22:03:00.000-07:00

Almost all VCs operating in India seem to have come to believe that Indian entrepreneurs lack the desire to be world class and world scale players. I would think that this is an unfair judgment.
For example one of the biggest reasons why we don't have many world-class software product companies in India is because there is a lack of market size. Interestingly the reason behind it is rampant and deliberate use of pirated software by the consumers, inadequate IT spend by the enterprise customers (approx about 1% of there revenues which is amongst the lowest in the world) and presences of a large number of enterprises customers that don't pay in time, pay little or don't pay at all for the software they buy from local vendors. Given this it is impossible to have a healthy cash flow to build out thebusiness.

The second and equally important reason is the inadequate availability of risk capital that can serves, as the buffer against the poor payment culture (as a cushion against its impact on the cash flow) especially in the initial years of the start-up, or as the resource base necessary to help target more lucrative and larger international markets. Such market conditions dampen the spirits of all but the bravest and the stupidest of the entrepreneurs.

The world needs a new economic model

2005-08-04T21:57:00.000-07:00

An economy like that of the US cannot be created again on this planet – it borrows, buys and controls huge amounts of the world’s natural and financial resources. Attempting to create such an economy elsewhere is likely to result in acrimonious disputes. Even wars. Let alone the disastrous consequence on the environment. We are already witnessing the rise in competition and disputes for the control and access to world energy resources with the growth of energy consumption from the booming Chinese and Indian economy. Creating a more resource efficient economies is the only sensible and possible alternative. Therein also lies the biggest opportunity for the coming generation of entrepreneurs.

Indian customers killed the market for software made in India

2005-08-04T21:52:00.000-07:00

Indian customers killed the market for software made in India by paying little, paying late or sometimes not paying at all. Soon no sensible company wanted to work for Indian customers. Mastek, TCS, Wipro, all abandoned the Indian customers for the better paying international customers. Indian customers are now paying the price by having to buy more expensive software from international vendors who incidentally outsource their work to Indian software companies.

The comming age of the entreprenuer

2005-07-18T22:35:00.000-07:00

I wish to write about entrepreneurship in my blog. I want to write about it a. Because I believe that the entrepreneurship will be a huge driving force in shaping the 21st century b. Because most of my working life I've spent being an entrepreneur so I think I have some kind of a right to do this. c. I hope talking about what we've been through will benefit other entrepreneurs d. I hope it will make some impact towards improving the support system for entrepreneurs everywhere, and especially in India, which I think would easily qualify as one of the most hostile place for entrepreneurs.