Friday, September 30, 2005

Temperature, pressure, time and "feel"

When there are no measurements, how do you measure? Such situations could exist because nobody has bothered to measure or there are no instruments. Perhaps the best example is in cooking, usually traditional cooking (as opposed to microwave cooking). There have been numerous occassions when we have asked my mother for a recipe and she has given me intuitive answers. Intuitive answers are what I call, non measurable answers.

For example, while making kozhakattai (modak) she told us that the rice dough will shine after a while. Now the shine is not something out of a wizard potion, it is a slight waxiness on the rice dough.

The other time we tried to make sugar syrup for a sweet and she told me "wire consistency", which means sugar is heated enough that if you take a little of the syrup and pour it back, it
will fall back, not as a drop but as a wire and not break in between!

Unlike a microwave recipe most recipes are full of such intuitive measures (salt to taste). Sure, with some research they can be captured as temperature, pressure and time or a combination of those, but (I believe, with the exception of the salt) these intuitive measures usually allow for variation in raw material better than a well defined process would. Intuitive measures are a combination of look, feel, touch, taste, sound - anything that engages our (primal) senses rather than a measurable combination.

Perhaps there is no substitute for experience. Regardless of the best process definition, sometimes, some things are just intuitive. You know it will work or it wont. In one of Indias automotive factories, during a visit to the compressor unit, as fresh engineers we wanted to know how the workers there tracked the multiple dials that showed various measures. How did they ever know where to look? So, we asked them. One of them nonchalantly replied, "Oh, we just hear the compressor and we know what to do!" While driving too, we get a feel of our vehicle and anytime that "feel" does not sound whole hearted, we know, somewhere something is screwed up.

Its amazing how the human mind works and works around any process by creating its own intuitive measures (short cuts, if I may)!

Wednesday, September 28, 2005

1 lakh car, 1 lakh parking lot

Happened to read about Tatas Rs. 1 lakh car (as it has become popularly known) in Business Today (Subscription etc. required, so dont bother, pick up the print edition). Some of the aspects of the car, from the report, seem to be quite disappointing.

Among other things, it says the base model will probably have curtains, not doors. The car will have an engine of about 600 cc. True, it is too much to expect a Mercedes for a lakh of rupees, but a car thats "almost a car" may not make it. We may yet be proved wrong, but buying a car thats only as good a rickshaw (or thereabouts) and slower than even a Maruti 800 may not cut ice with a lot of people (atleast in the cities).

But thats not the point, the thing that comes to my mind is that these days, in Bangalore, the going rate for a parking lot in any apartment complex is upwards of 1.5 lakhs (closed parking) and about 1 lakh for open parking.

Ahem! So, with the Tata chotta car, my parking lot will turn out to be more expensive than my "car"!

Tuesday, September 27, 2005

How to beat the biggies, think different

How does it feel like competing against a few firms of 30,000 and more people each conversant with atleast one technology, operating out of 25 countries with multiple site operations in India. Unfazed?
Add to it multiple failover sites in India and the world over, dedicated staff for security, helpdesk, risk oversight. Still think you can do it?
How about a comprehensive disaster recovery plan and BCP?
How about a 10% bench on every assignment?
How about being able to get a thousand people trained at a short notice?
How about your own consulting wing? Domain expertise?

This is what any emerging IT outsourcing services firm in India is up against.

This is the same competition that have seen the Accentures, Cap Geminis, IBM Global Services, EDS sit up and take notice. The Indian companies have taken the battle to the realm of the Accentures by opening their own consulting wings too. The questions that a client asks these biggies will be the same questions that the client will ask the me-too provider?

So, does a new company in the ITES segment have any hope?

No, if it tries to replicate all of this.
Yes, if it thinks different.

When todays Infosys, Wipro and TCS started out, they were up against some very formidable competition in the shape of the IBMs, EDSs and others. Then too they did not seem to stand a chance. But with lower costs, greater process control, innovative practices and the 24 hour delivery cycle, they have proved a point.

So, if someone thinks that this model will be replicated by say, the Chinese or Filipinos, well, it will only take them so far. For breaking out of the stranglehold of these firms, something different is needed.

What that "different" is, well, we will have to wait and watch.

Monday, September 26, 2005

Shah Rukh and biscuits

Walk across any biscuit shelf in any supermarket and the brands (Parle, Britannia, Sunfeast) are hardly distinguishable from each other on the shelf. Theres Marie (call it by whatever name) of various brands in nearly similar packaging (usually red). Then theres a familiar salted biscuit (all of which for some reason mimic Monaco, the old favourite), a glucose biscuit (and its thousand variants), a milk biscuits, a cashew, butter, pista combo biscuit. To a great extent, the shapes are standard too. Marie is round , the combo biscuit is round. Glucose and other biscuits are rectangular. Even among cream biscuits, Bourbon is rectangular, the others are almost always circular.

The only distinguishable biscuits are perhaps Jim Jam (with its jam center), Arrowroot (almost Marie) and some Nutri choice (essentially tasteless), all from Brittannia.

Now, in this crowded marketplace how does one distinguish or even sample a new brand?? The answer is, Main Hoon Na. The only biscuit packet which has a recognisable face is, well, Sunfeast with Shah Rukh Khan. Shah Rukh Khan sells soap, sells biscuits, well why not? He is the most recognised face these days after the Big B. I wondered a few weeks ago as to why ITC is using Shah Rukh on its biscuit packets and laughed at the idea. The answer came to me a few days back. Many a time its the children who pick up biscut packets in supermarkets (or see the hanging Pop's in the kirana retail store), for them, its easy to pick up those which have a recognisable face in it among the entire cluster of biscuit packets on the shelf.

So, what if recognisable faces appear on all biscuit packets. Well, then there will be something else to differentiate.

Sunday, September 25, 2005

Dheeraj goes for a jog again

Dheeraj stepped out to jog, once again. His previous attempt at jogging had been thwarted by the efforts of a canine, who had chased him twice during the course of their lives.

Dheeraj stepped out to jog after reading a report in the days newspaper that the Bangalore Municipal Corporation apparently believed that there were about 882 potholes in the city.

Dheeraj realised that he could not possibly jog at his new address which was near a sanctuary because presumably all the potholes were on his jogging route of 200 metres itself. He decided to investigate and as an excuse start jogging again. A little ahead of his home the road disappeared and it became something a bulldozer or tractor would have been proud of at the end of a days work at a demolition site or a farm respectively. Straying tigers from the sanctuary would surely feel at home here, he thought.

Some distance later there was some construction going on. It was either a flyover or an underpass or both. Construction had been resumed at the site, but there was a hitch since some of the workers had stayed there for so long at the site that they had been granted tenancy rights. So, unless they were given alternative housing, the construction could not proceed.

Now there was some tar on the road, lots of gun toting security men and there was a placard on the side which said, "Protected Monument". "This road was tarred during the reign of the previous government and has declared as protected" followed by threats of what can happen (jail, fine etc.) if anybody tried to disfigure it.

As he moved further there was a small fountain in the place of a lake which had all been built up (remember the scene from Jaane Bhi Do Yaaron where the builders ask of the Arabian sea "Whats this empty space between India and the middle East?") and he was almost at his jogging routes end.

As he sipped coffee the song on the radio ended to give a traffic update "Apart from the usual places (which is all the main roads) no new traffic jams have been reported from any part of Bangalore"

"Sigh!", even as he started looking up the prices of treadmills. Perhaps jogging in a roadless, potholed, jammed wonder was not worth it.

Saturday, September 24, 2005

On Collectibles

Collectibles is big business. It has not caught on so much in India, but in other countries collectibles and hobbies are big. Maisto is one of the more recognised brands here. Scaled down models of aircraft, cars, military equipment and (hold your breath) earth moving equipment sell like hot cakes. So what if one can never own a Jaguar of any sort. Scale down your dream by about 1:18 or 1:24 on an average and a Jaguar is yours. Still think its too expensive? Scale it down a little more and it fits the pocket (literally and figuratively) or it can be parked in your drawing room display.

India has few collectibles on offer. GMs Matiz used to offer a scaled down Matiz (matched to the shade) with some of its models. Hawkins used to have a scaled down pressure cooker. For the Indian railways (or even good public transport services like BEST - not DTC or BMTC and their toota foota buses), this could be an amazing business, but nobody seems to have taken it very seriously. There would be a beeline of customers who would want a scaled down railway engine (of various vintages) or an EMU (nothing like it if it has its own tracks and can run too!) or even old steam locos. Another market waiting to be tapped. Perhaps the Chinese will get there first.

Thursday, September 22, 2005

The lure of the aroma

The fastest route to a mans heart, they say is through his stomach. The fastest route to the stomach is through the nose. The chaatwaala, the street hawkers all used this unwittingly to hook their customers. The latest to cash in on this trend is Cookie Man, a fairly high priced cookie shop in some malls in India. The tag line goes "Cookie Man, Australian cookies", but in the shops I have seen, it is as far from Australia, as perhaps the nearest suburb of Bangalore.

Cookie Man shops are open format shops. There are a couple of display units that separate the shop from the customers and inside the space within is a cookie making machine. As the red machine swallows dough (umm..literally) and creates cookies, it sends a delightful aroma wafting through the air. The aroma hooks men, women and children alike and Cookie Man seems to be doing good business. Even stingy me was persuaded by the aroma to try out a few (it helps that their cookies are good) despite the steep prices.

The open format is just right for products such as these. Without the smell of cookies, I think the try out ratio would have been a fifth of what it is!

Wednesday, September 21, 2005

Seconds market

The "seconds" business is an amazing business. Both from the perspective of the customer and the seller. Seconds, from the perspective of the end customer can be hardly distinguished from first quality stuff. What distinguishes firsts from seconds can be as simple as a thread that is raised, a small missed stich or a small deviation in the usual button settings. Only the sharpest quality eye can detect it. It could be designs that are out of production, therefore odd lots of last seasons prints or watch designs could find their way into the seconds market. So, the end customer gets a 30-50% mark down while the company gets back good value (atleast the cost) on what is essentially a reject.

Megamart used to sell seconds of Arvind brands (not sure if they still do so), Titan had a few factory stores. Both these places offered trememdous VFM until a few years back. JK (of woolen blankets fame) had a seconds store at its Thane unit which was quite sought after since they sold blankets at almost a 50% discount, which was substantial.

This is the organised part of the seconds business. There is an unorganised part too, though I am not sure of how it flows from organised to unorganised. Look around markets (I have seen it in a couple of cities atleast) and you will find men selling banians (usually) of some the better known hosiery brands, on bicycles. These are seconds, and I suspect, more "thirds" than seconds. With these, the margin for error is higher. A 90cm marking could be a 100 or 70 or the length could be really long or the cut could be markedly defective. Yet they sell well. For about 20 a piece they are about 1/3rd the price of a regular banian (vest). And make no mistake, it is not just the poor who buy it, for some of the middle class too, it is a good bargain.

Apart from this there are export rejects and surpluses of the unorganised sector, though going by the quality, I am not sure how many of these are actually exports of any sort.

In pockets of Bombay you can get unwrapped soaps with a few chipped edges, or disfigured names but the same fragrance as any of the well known brands. It is claimed that these are seconds/rejects too, but I suspect that this is one seconds market which has more to it than meets the eye.

Tuesday, September 20, 2005

Outsourcing of a different kind - biotech

Business Standard reports on a new type of outsourcing. This one is between Aurigene and Novo Nordisk.


Bangalore-based Aurigene Discoveries Technologies has entered into a collaboration with Novo Nordisk, a Denmark-based healthcare company in the area of metabollic disorders.
The agreement encompasses a joint discovery effort by both the companies on a target covering the discovery and pre-clinical development of lead series at Aurigene, says a press release.
In addition, Novo Nordisk will also work with Aurigene on the optimisation of some of Novo Nordisk's lead series of compounds on the same target....

Biotech outsourcing till recently has been limited to clinical trials, rarely for a joint discovery effort, which is what makes this colloboration exciting. Biotech today in India is at a stage that the IT industry was in the pre Y2K days. Of course biotech is more on IPRs than IT and therefore that much more difficult. But if companies like Aurigene break through and create a market, biotech could well be Indias next IT.

(In)convenienced by design

What do architects think of when they design buildings? Buildings built in the 60s in India had switches at the left or right of the door. (In India switches are rarely near the bottom, unlike American houses). Thus, when you entered or left the room, you could switch it on or off (with your hand, not feet).
Somewhere along the way, architects and building planners thought of providing conveniences (like in hotels) by adding the switches on either side of the bed. As far as convenience goes, nothing like it to turn off the lamp just before you doze into slumber reading a book or to turn on the light somewhere in the night. But it has an unintended consequence.

The switches beside the bed for example are at a height that can be reached by children and children being what they are, want to play with switches and switches only. In the earlier design, they were far away from reach and could reach switches only when they were atleast 3-4 feet tall. So, now one has to either dummy the points or use sticky tape till they grow up. Thus well intentioned ideas such as these can have unintended consequences.

The non stick cookware launched many years in India faced a similar situation. In India pots and pans implied metal pots and pans, so whoever launched non stick cookware (with freebies like wooden ladles) should have kept this in mind. Since wooden ladles are flimsy, the regular ladles were used. Ladles are invariably made of metal. Thus non stick pans gave up the fight with metal ladles early in their life and created health hazards of their own. Its been a little while since this happened but I saw their television ads only now; TTK (of Prestige fame) has a range of metal spoon friendly non stick cookware, a first anywhere, afaik. The TV ads are enticing to say the least and housewives (esp those obsessed with 'stainless steel', 'eversilver' and 'metal' ladles) must be smacking their lips with delight at the sight of a metal ladle friendly non stick cookware.

There are many such well intentioned convenience ideas that have some unintentioned consequences. The ketchup dispenser or soap or moisturiser which is a hand pump contraption that allows one to pump out these contents for use is another example. What happens when just a little is left at the end. It doesnt work. So, how about dispensing it from the bottom? Or how about having it the old fashioned way, with no dispenser at all?

Sometimes, it is good to run ideas through a devils advocate (or usage trials) before shooting off a new design into the market.

Monday, September 19, 2005

Basketball, Cricket and China

Two articles, both of which on the same vein, yet continents apart. One on basketball from Yale Global and one on cricket from IE.

Yao Ming is one of the first (only?) Chinese basketball player in the NBA. Says the Yale Global online:

...Yao's towering stature casts a long shadow that extends far beyond the court; in many ways, he symbolizes the "cosmic convergence" of China and the United States. According to Brook Larmer, the 25-year-old star is truly a "child of globalization," his life shaped "by the two great forces of our time, China's explosive rise and the expansion of transnational capitalism...

The second piece is about cricket and its fledgling steps in China.

...China became an affiliate member of the International Cricket Council (ICC) and joined the Asian Cricket Council (ACC) in the summer of 2004. The six-day ACC-run cricket training camp that began on September 16 is, however, the first concrete step taken to promote the game...

True to our tradition, we are late by a few years! Basketball seems to have garnered a fair bit of market share in the Chinese market. To me cricket is the subcontinent (and not the Ozzies and the Poms) and basketball is the US and this is an intersection waiting to happen at the crossroads of globalization. How long before we see a Yao Ming in cricket?

The great intersection of cultures across the globe is about to happen. Sports is one, food is another, entertainment is the big third and not necessarily in that order. Opportunity beckons to Indians in each of these spheres. Soon we may see Chinese Indian food instead of Indian Chinese food and Chinese TV channels may air our Bollywood (Kutte..main tera) dubbed in Chinese instead of the other way round!

Sunday, September 18, 2005

Dheeraj goes for a jog - I

“My belt has loosened by one hole” mused Dheeraj. As he slipped the belt, he realized that it was not one hole, but two.

“Is there any way I can return to my normal size, that is two inches lesser on the waist?” he asked his office peon, the all knowing Rama.

“Very difficult sir, it takes tremendous willpower. You should try jogging”

Over the next twelve and a half minutes, Rama had covered all the points of fitness etiquette from tracksuits to shoes to be taken note of in the fine art of a morning jog across the streets of Bangalore. Dheeraj instantly lost two inches, but not on his waist, on his wallet.

Its worth a mention here, Dheerajs’ previous experience with jogging or running. He had run to dodge the rain, dodge a few vehicles, catch a bus but those sprints were never more than 50 metres. The one time he had to run more than 50 metres was when a particularly peeved member of the canine family chased him and he chose the nearest tree.

Since then trees had become fewer, Dheeraj, heavier and the canine in question had resigned to a bark at every new visitor to its kingdom having given up its vocation of training young ambitious canines in new foreign car tyre chases (he specialised in identifying new brands of tyres).

Dheeraj stepped out in full uniform. At about the same time a canine stirred at the scent of the joggers that whiffed through the morning air; he knew he had some time left to call it a night. The scent of the joggers suits brought back memories of his childhood when he was a sprightly, enthusiastic dog in 3rd Cross. It was his daily routine and he loved it.

He was a proud dog. "Neither bark nor chase without reason" (Bow wow, wowwwow, wow in their lingo) was the dictum he lived by. He had chased the young Dheeraj too, because the then young Dheeraj had attempted to ride on his back like a horse inspired by some mythological serials ( and a lack of horses on 3rd Cross).

As Dheeraj stepped out and started his canter, he spotted a banana peel strategically placed such that his fifth step would be on it. So at his fourth step, he jumped over the peel, and landed on the canines tail.

At this point, Dheerajs presence of mind must be commended because in the split second that he took off and was about to land, he saw a large furry mass below his feet. It was his sheer presence of mind that he missed the stomach and the hindlegs, but he just missed the ending of the dog and stepped on the fag end inch or two of the most furious furball.To sports lovers, this is the equivalent of a perfect gymnastics routine of two full minutes, but a small tumble on landing.

The canine rose to bite at the interruption of its sleeping time that had landed on two inches of its precious tail. The legs conveyed a message to the brain and in the time that I take to write this sentence, there was a man and there was a furious dog behind him. As furious dog chased petrified man on the 3rd cross (with the record for the fastest run between 5th and 3rd cross broken by man and dog), the canine realized that he had reached the end of 5th cross and that’s where the law abiding creature waited guarding its own territory incase Dheeraj decided to return. He sat down, tongue hanging out, waiting for Dheeraj.

It could be argued that he beat a hasty retreat, but as the saying goes, Dheeraj lived to fight (or perhaps run) another day.

“Sir, Why are you in a track suit in office today?”

Friday, September 16, 2005

After the deluge?

This year we have seen unprecedented rains in Mumbai(and other parts of Maharashtra), Delhi among other places in India this year; is this some sort of a high point in Indias precipitation levels?

I am no weather prediction expert, nor do I have a clue on global weather cycles, but a thought just occurred to me as to whether this monsoon is a high point in the long term weather cycle and whether it will be followed by a few low rainfall seasons?

Dont fix the broken window

The broken window theory in economics argues (from wikipedia) that

"A successful strategy for preventing vandalism, say the book's authors, is to fix the problems when they are small. Repair the broken windows within a short time, say, a day or a week, and the tendency is that vandals are much less likely to break more windows or do further damage. Clean up the sidewalk every day, and the tendency is for litter not to accumulate (or for the rate of littering to be much less). Problems do not escalate and thus respectable residents do not flee a neighbourhood. The theory thus makes two major claims: 1) further petty crime and low-level anti-social behaviour will be deterred, and thus 2) major crime will be prevented."

There are critics of this theory and opponents of this theory, but heres a small corollary based on how it can be used to advantage in some scenarios.

From what I have seen through personal experiences, A dent or two on your car that is visible to other drivers (note: car drivers, not truck drivers) makes them wary of you and they will think twice before cutting across your path or overtaking you from the wrong side. Therefore, it makes sense to leave that dent there as it is.

Similarly, a visible scar on the face of a kid (or a bouncer) signals to other kids (or gatecrashers) that he is mischeivous (or he means business). Of course, the unrepaired dent or scar can have negative effects too, esp when a positive effect is desired, but then, who said theres anything like a free lunch.

Wednesday, September 14, 2005

Brand India and the blogosphere

India, for long was relegated to the status of a third world nation. Try as you might, year after year it was the same perception. Poverty, pity, snakes, jungles, curry and what not.

Somewhere along the way, the IT revolution, outsourcing, offshoring, IT service providers, Y2K happened and India and Indians slowly moved from the "Wheres India..." to "India has good programmers...".

BRIC, (Brazil, Russia, India, China), the ultimate acronym has lifted India beyond the orbit of India being constantly being referred to as a suffix or prefix with its friendly neighbour. With the growth in outsourcing and its economy, India is touted as a growth engine, emerging economy and a must have in any companys strategy. From good programmers, India now has a "growth economy" as well.

Because of these two factors India is slowly moving up in the eyes of the India watcher and slowly showing up in the radars of businessmen, industry, researchers and universities for whom it was hitherto invisible (or with low visibility).

There is a third level which is contributing significantly to India moving up the proverbial value chain. This, imho, is thanks to the blogging space. Blogging and bloggers are the creators, if you will, of the zeitgeist of the web today which in turn shape the perceptions and world of tomorrow. Most serious bloggers are usually economists, professors, journalists, students, venture capitalists (who I call the "idea drivers of tomorrow") with opinions, insights, contributions, research all or some of which flow into shaping up tomorrow.

Indian bloggers today contribute significantly in determining the way India is perceived tomorrow. Indian bloggers are slowly reinforcing through the blogging community about the depth of India and how it is much more than an army of coders. Indian bloggers contribute and host many a carnival(Bharateeya Blog mela), many a colloborative blog and write on subjects ranging from education to science to brands to technology to management to analysis to writing and youth.

If Brand India emerges more as an intellectual superpower tomorrow, we Bloggers can claim our two cents of contribution to it.

Update: Updated as per Nitis comment, with all the links I could think of!

Tuesday, September 13, 2005

Indianise (localise) or perish

Walk across supermarket aisles (I mean, any store which offers the facility to walk in and shop) and you will notice something. The thing about self service shops is that it lends itself to sampling stuff, which is kind of difficult in the kirana style groceries, unless it is recommended by the shopkeeper. The trend that I am talking about is not new, but perhaps more noticeable these days and it refers to the headline of the piece.

Brands are Indianising like nobodys business.

Variants in tomato ketchup are now more Indian than ever before. Theres pudina and chatpat (tastes good) from Maggi (Nestle), theres tom chi and tom imli from Kissan (HLL) and a company called Jones has some more variants.
(Aside 1: To me Maggi ketchup feels slimy and pasty as compared to Kissans ketchups (why?). Aside 2: Malcolm Gladwell has argued brilliantly that the taste of tomato ketchup has not changed over the years; he ought to visit India for this one reason (they may not qualify as ketchups in his definition though).)

Walk across to the biscuit section and there are many Indianised versions and many launches and failures here. Maska Chaska of Britania (or is it Parle?) is doing quite well. The latest one is Snacky, a chilli flake salted biscuit from ITC, which is actually quite good.

Maggi over the years in its noodle segment has seen that it is the Masala variety that has sold the best in the veggie section (it actually had a tomato and a southern spice variety long ago, but they never clicked) and I think Sunfeast Pasta will go the same route with only the Masala flavour as a mainstay.

Earlier, there were many copy paste launches of phoren brands, but today most brands prefer to Indianise their offering rather than copy paste a brand.

Yes, there is a lot of scope for many brands (ideas, industries and a host of other things) to enter India, but all (or atleast some) of them will discover (like MTV did) that to survive in the Indian market, a direct copy paste approach will not work, a local flavour is needed to take it to the masses.

Monday, September 12, 2005

"Parachut(e)"ing into a different space

Parachute, Maricos flagship brand is now into mens hair creams. Parachutes mainstay has been its coconut hair oil. The brand has, over time, focused on its purity, quality and other attributes and the customers have, over time rewarded Parachute with the premier position in the hair oil segment.

Parachute oil (and its variants) are known for its purity and has a usp of "pure coconut oil". The mens creams are a concoction of mineral oil and other things and a far cry from the real "Parachute image". This blog has written on brand extensions before and I think this one is off target unless they get the positioning right.

I (and millions of others) would buy a Parachute oil when we want good coconut oil. A coconut oil with perhaps less oiliness or less stickiness would be something that is desirable. If the mens cream has a "natural" attribute, perhaps. But a me-too mens hair cream brand? Naaah

Sunday, September 11, 2005

Hair Razing pace of innovation

There was a time when men grew beards and had no way of being clean shaven. Then somebody invented the blade (razor blade, shaving blade). Blades ruled the shaving world for a long long time. Blades were cheap then, are cheap now enabling, truly anybody, rich or poor to sport the clean shaven look. A blade today costs about a rupee. A simple holder for it will come for under 10 odd rupees. While the blade companies went about silver edge, platinum edges, double edges and so on, somebody came up with a disposable razor, that was basically a blade with a handle. Then, there was something called a twin blade razor and its many variants. Right now, its a three blade razor.

At this pace of innovation, if we had a similar law to Moores law, we can postulate that the number of blades on shaving razors will double every 3 years. So, by the turn of the century (other things being equal), we will all sport 100 blade shaving systems (yeah, thats what they are called).

That apart, the point is that what should have cost about 50 rupees for a few weeks, has now balooned to about 600 rupees for a year. Its a classic example of how we pay so much extra for something as subjective as 'convenience', 'brand', 'trend'and so on. Gillette, for example has increased its 'share of wallet' about 1200% with its 'inventions'. Each of these new fangled systems is very well designed. Once I use 2 blade system, I cannot go back to the older disposables, it simply doesnt feel good. Once I moved to a 3 blade system and its swivelling handle, the 2 blade system is no longer good enough. Thus, I am trapped.

For 600 rupees, I can get either a three blade shaving system cartridge or get about 40 shaves from my barber. And guess who gives the best shave? The 3 blade system or my barber? The barber. And what does he use. A one rupee blade. Ever seen a barber use a "shaving system?"

Saturday, September 10, 2005

Mutual funds and tigers

Over the last few days theres a radio advert that goes something like this. A voiceover says, I love you or whatever and theres an echo of the same thing. Then the voice over says, some XYZ multi cap fund and the echo comes back with "Small cap, large cap, mid cap".

Mutual funds were simple once upon a time. There was only the UTI and little else. Then a few other players entered and then the mutual funds were , without exception debt and equity. Then there was a growth (reinvestment) or dividend option. The Equity funds called themselves diversified or sector specific (there was a rash of IT specific funds in the late 90s). Some of them were tax savers and some were gilt funds and so on.

Today (and for sometime now) marketing demands exotic names for mutual funds. Therefore there have been Flexi cap funds, TIGER (Templeton India Growth and something else) funds, Super SIP (check out the accompanying visual - complete with a superman lookalike),COMMA (something to do with commodities),STAR, Discovery and many others. Notice that all names are what I could call 'turbocharged names' and not names which evoke memories of slowness, like there is never a tortoise or a snail fund, but always a tiger or a lion.

It was only recently that SEBI made the mutual funds refer to their first offer to the public as a NFO (New Fund Offer), rather than an IPO (Initial Public Offer). Looks like some more work will have to be done in both the naming and advertising sphere.

Friday, September 09, 2005

Insider trading and politics

Jyoti Basus son is an industrialist. The son of a communist is an industrialist? Not a khadi wearing socialist? He is not alone. Many progenies of politicians have ended up as 'industrialists'. The language of money is the same everywhere. Politicians are businessmen looking to make money out of "serving the people". I am not sure which is better,politicians becoming businessmen or sons of politicians becoming businessmen or businessmen becoming politicians.

It is well known that apart from politicians, kith and kin of politicians and bureaucrats by virtue of the politicians and bureaucrats use 'insider information' of the next road to be laid, the next industrial cluster to be designed and the latest order to be floated to set up their own "businesses" which usually wind up after the last government order. Thus we have sons of politicians floating prawn fisheries (or is it hatcheries) or railway concrete sleepers or construction or even liaising agencies.

So, why isnt this treated like insider trading on the stock market??

Why are people who work within the same company using information to their unfair advantage different from kith and kin of politicians who use information to their advantage?

Thursday, September 08, 2005

Last mile

The 'last mile' in telecom is well known epithet (or equivalent grammatical term). It can well be replicated pretty much everywhere else. Our building for instance. The builder built it at a feverish pace until the homes were delivered with some 'bug fixing' to be done. That bug fixing has taken forever, almost as much as the time it took to the get the entire building done. Ditto with my carpenter. The initial things were done very fast and when it came to finishing the nitty gritties, it took every groan and moan to do so. Even at work, the initial enthusiasm lasts only till a particular plateau. After that, it is a drugdery to open the same document(project/website/file) again and again trying to finish it to the satisfaction of its many stakeholders.

This post started off well, now I am at a loss as to how to end it...

Wednesday, September 07, 2005

When more is not good...

Aha, I had written on Lifebuoy on why variety in Lifebuoy is quite confusing and heres some new research to support my intuition (!).

Found this on Businesspundit, where Rob points to research at Harvard on this counter intuitive idea.

...Traditional wisdom teaches that brands win market share by offering a wide variety of products, increasing the chance of appealing to a wider variety of customers. But how happy are you when trying to find a head cold remedy at the pharmacy amid an overwhelming number of competing formulas, each slightly different than the other? It's enough to give a shopper, well, a headache.

The belief that variety is good "is not always true," argues Harvard Business School professor John Gourville in "Overchoice and Assortment Type: When and Why Variety Backfires." The research paper, co-written by professor Dilip Soman of the University of Toronto's Rotman School of Management, demonstrates that sometimes offering too many choices prompts the confused consumer to defer a purchase or run to the arms of a competitor with a less cluttered product line.

Wonder if HLL brand gurus have read this one.

Tuesday, September 06, 2005

Tea shop and isms

Imagine a third world construction site. Imagine the dust and the grime and a lot of people, because a lot of work is done by manual labour since labour is cheap. Why construction? Because they comprise usually the poorest of all of the labour class. They are usually migrants and unskilled, except the ones which pick up a skill on the job.

Apart from the buildings, the similarity of equipment and the general dust and cement, there is one common factor across all construction sites, located anywhere, even in the remotest corner of India. Any idea what that could be?
The ubiquitous tea shop.
The tea shop at a construction site is the ultimate symbol of the free market. Where there is demand, whereever there is demand, there is a tea shop.

There are workers and there is a tea shop. The tea shop sources milk, tea and sugar and sells tea at a profit to workers. There are days when milk gets spoilt or unused and this risk is borne by the tea shop owner. There is a risk of theft and of debtors not paying up. It is the risk of the tea shop owner. The customers are usually daily wage earning workers. If there is sufficient demand for any product, the tea shop owner sources it. If it doesnt sell it is his risk.

When there is more demand than what a tea shop can satisfy, another tea shop emerges. Sometimes there are too many tea shops and there is a tea shop shakeout and ultimately one or two survive.

If it were not for free markets and if the world was communist, the tea shop would not survive. Then the company (of the builders or workers) would have to create a tea shop, man it, supply tea to everybody. By letting the tea shop owner take care of it, it leaves both the tea shop owner and the builder to, literally, mind their own business. Supply and demand at work.

Anyway, thats not the point.
The point is that, is this poor enterprising tea shop owner, a capitalist or some other -ist?
Is he an evil capitalist because he makes profit from poor construction workers?
Or is he good because he himself is "not rich"?
So what happens when he makes some money and reinvests that to perhaps create a "hotel"? Does that make him evil?
If he gets rewarded for his risk is that evil?

Sunday, September 04, 2005

Anti globalization aunties

Globalization, liberalization and free markets have given rise to a new creature in India. I cant think of single name for this species, hence anti globalization aunties, but I can offer a few tips for recognising them.

They can be recognised by their dark imported glasses, tinted windows of their airconditioned cars made with foreign colloboration (no Indicas for them), the latest phoren cosmetics making them smell to a bee as a confused garden in disguise, sharply observing slums at a traffic signal, aghast, "Indias poverty has increased, these slums have not gone since 1991, ergo, they became poor after 1991. And besides, it is so dark even after liberalization."

Anti globalization aunties have good international contacts (thanks to globalization) that they contact over the internet and email (unlimited broadband- good no?) and can wax passionate about poverty (or wildlife, despite having a house bang in the middle of some sanctuary) in India and how free markets have increased poverty while collecting their dollars for an anti free market piece. All for a good cause after all, until the next dollar laden cause.

AGAs stay in airconditioned houses, some of which may overlook slums. Those slums have been there despite free markets for 14 years, they croon, even as they take up cudgels for socialism once again (dollar paying magazines only please).

At other time, while sipping their cocktails, they say, "What, oh what is there is in this lifestyle, only malls and multiplexes, when the people outside have not improved", while adjusting the AC just a wee bit so that the dust from the outside world doesnt infiltrate their high rise.

And I could go on and on...

Friday, September 02, 2005

Re-tale, 2 views

Two contrasting points of view, from two totally different persons.
In the Financial express, Kishore Biyani argues for a delay in retail FDI while in the Indian express, Nandan Nilekani argues for retail FDI. Both articles, though, agree that retail is hot and will be a future growth engine for India.

Kishore says
...Today, retail in India is huge, close to $200 billion, of which organised retail accounts for just $6 billion. This $200 billion should become $300 billion in the next five to six years. This is a time when organised retailing is just getting into full steam and the opportunity is huge. Organised retail in India is expected to grow at 40% for the next five years, thanks to the nascent stage of modern retail and the ‘malling’ of India...

Nandan says

...(opening doors of retail to FDI) will significantly augment our productive capacity. The US$50 billion in exports, combined with another, say, US$10 billion of organised retail domestic will create the need for thousands of factories, to make jeans, curtains, fans, cans, bottle caps, and what have you. It will be the catalyst to manufacturing and agriculture what IT was to services.
And finally, it will create millions of jobs in the factories, the fields and the transportation companies. In an economy growing at 7-8 per cent it will be additional jobs as the expanded domestic capacity caters to urban areas which will grow from 30 per cent to 50 per cent of our population in the next 20 years....

Kishore ends his piece with
...There is enough empirical evidence to indicate that most other governments allowed domestic retailers to gain size before opening up the sector. I believe that Indian retailers too should be given this opportunity and allowed a couple of years to demonstrate what they are capable of....
Every country goes through a demographic boom, when a majority of the population enters the earning and the spending bracket. India is currently going through this and we should utilise it
to grow the country, rather than gift-wrap it and allow others to grow their revenues, profits and market capitalisation. If, with organised retail at 3%, India is attractive, at 10% it
still will be. But by then it will be a level playing field. Allow Indian retailers to gain size and then open the markets. I do not oppose FDI in retail; I just feel we are opening it a bit too soon.

Nandan ends his piece with a beautifully persuasive push

...And, who knows, like in the software, the telecom and the airline industry, the ultimate winners may not be the foreign companies but our own homegrown entrepreneurs who time and time again have shown what they can do when they have been unshackled and exposed to global competition. Over a decade ago, we did some far-reaching things that put the sparkle back in the eyes of our educated urban youngsters. What right do we have to deny to the millions of kids growing up today, the same opportunity in our fields, factories and stores? The only way not to let them down is to create the supply chain pipes that will connect our farms and factories to the consumers of the world. For that we need 100 per cent foreign direct investment in the Indian retail sector. There is not a minute to lose. We should just do it!

When two giants such as the two above comment, there is little left to say. I am not sure why the honcho of Pantaloon and Big Bazaar is worried. His stores and concepts are different and will give more than a run for money to the Walmarts and the Tescos when they come in. I personally feel that retail FDI has to be allowed and agree with what Nandan has to say rather than push for a delay much like the Swadeshi club did.

Retail FDI, is what will break the shackles of the middlemen that the Indian market has been under and which will ensure that the economies of scale that the market offers will be passed on to the end customer. More organised retail will also sound a death knell to the retailers who dont bill and evade a substantial amount of tax, VAT or no VAT. Agriculture (and therefore farmers) will benefit to no end.

Retail is a future growth engine for India. The sooner we kickstart it, the better.

All our customer service executives are busy...

Call up ICICI Bank or Tata Indicom and after a thousand rings and a hundred instructions (Press 732 if your great grandfathers name third alphabet had a "Z" in it), we, the customers are greeted by.

"All our customer service executives are busy at this point in time. Please stay on the line or call later."

I have a problem. My phone does not connect, my account system online does not respod and I dont know why. But thats the message I get. Welcome to the online queue, a replacement of the line in front of banks, PDS shops and the like. During this "hold" period, you, the customer are subjected to inane music and stupid promotions.

What is the message that I, as a customer, get out of this?
1)If your customer service executives are busy, you either offer such an abysmal level of service that your executives are busy round the clock dealing with problems.

2) Or you have one employee handling all your calls and he is also shared with another company.

3) When I am calling up customer service, I am calling up for reporting a problem, the last thing I want is to be bombarded with marketing BS.

When will these companies learn that customer relationships have to last beyond mere signing up for an account or a phone connection?

Thursday, September 01, 2005

Job market, stock market?

It was one of those discussions: Two friends and their objectives in the stock market.

What is the objective in picking up a stock? Since the measure of returns from a stock is not in its holding period, defining objectives in terms of a holding period hardly makes sense. Therefore, we reasoned, a stock has to be held with a certain target percentage of return in mind. Once that target is achieved (there is no saying that this target is right), as an investor, we sell it and move to another stock. In a bull run, such as the present Indian bull run, with the benefit of hindsight, the medium term seems profitable while the short term is filled with opportunity losses (and reasonable profits) while nobody is really sure of the long term despite all the exuberance (irrational or otherwise). The short term investor operates on the premise that the profit he makes by rotating his (limited) money is more than what he can make by investing (technically, all his money) in one stock for a long term.

Then, came the question. Would you do the same if it were your job or would you have a different objective?

On the face of it, it is a tough question. But thats what many of us do. Except for some "buy and forget investors" or employees who do not seek a change unless change takes them by their collar, most employees have a certain target in mind from a job. What one seeks out of a job could be salary, learning, responsibility and so on. Once those targets are met, the employee re-looks at the job both inside and at the opportunity outside and picks up what he feels best.

In the stock market there is a sudden demand for certain types of stocks (today it is nanotech and biotech, yesterday it was the dot com) or a bull run in certain counters. What if it happens in the job market that there is a sudden demand for a certain type of job/skill? In the market all (except the naysayers) investors throng to the "in vogue" counters. Likewise, eligible employees throng to these jobs (In India currently it is the call center job or IT jobs for non IT engineers and MBAs ).

Bull runs are characterized by their fickleness. Likewise, job booms are followed by periods of stagnation or dips in demand for certain skill-sets. Over a longer term, out of the millions employed, only a few go on to become CEOs. Employees therefore seek to maximise their return in the job market bull run, while hoping for a long term appreciation (of their skills).

As employees they are cashing in on a bull run in certain job markets. Like investors in a bull run, they hope that it continues for ever, despite the fact that no bull run lasts for ever. Given limited investment potential (working life span during the boom period) we try to maximise our earning potential during the bull run. How do companies ensure that employees see a perceived return, and stick to them, despite such bull runs in the job market?