Tuesday, August 29, 2006

Bubble, bubble

I can understand epicenters of growth being in the middle of a real estate boom, but now it appears as if any piece of land anywhere is madly priced. Two consecutive days in the ToI (or its group publications) in the last few weeks, I found supplements on real estate in Mysore. There are real estate exhibitions of Mysore and Kochi being organized in Bangalore. If this is the South, perhaps there are similar stories in other parts of the country too. Someone is desperate to sell land off to those who can buy.

A word about the boom in Mysore - Mysore is a satellite town to Bangalore and that too not by much. Connectivity apart from the KSRTC buses is not that great. One expressway is being built for the last many years and one road was recently four laned. Industry is just about getting its feet wet there (and Infosys is really the biggest). Mysore is more about history, heritage and culture and a "must visit" on every Bangalore tourists map. It does not have an independent standing, unlike Pune has w.r.t Mumbai. Differ with me if you like, but Mysore simply does not have the depth that Pune has in its colleges, manufacturing, technical institutes or even IT companies. And take out Bangalore from Mysore and you wont even know where it stands on the map. Why, it does not even have a half decent airport.

Real estate in Mysore is pretty expensive considering the present (developers point and say future - I dont see what they see) status of the city - I cant see it as anything but an artificial price rise, a bubble.

Update: An impression of Cochin/Kochi by Rashmi
. Connect the dots to the real estate boom there.

Sunday, August 27, 2006

11th plan....

The Planning commission is a relic of our Soviet era bureaucracy and it is one of those departments which is neither extinct and not even on the endangered species list. Infact they are alive and kicking (everybody else, I presume). And while at it, theres actually a lot of links on the site. I did not click too many of them since I was looking for something else.

Heres a draft (all 92 pages of it) of the 11th plan - An approach to the 11th five year plan, 2007 to 2012. In a moment of foolhardly bravery, I decided to plough though as much of it I could and here are my observations. It is titled "Towards faster and more inclusive growth" and is available, from June 14th 2006. I chanced upon only a few days back though, and that too because I read about it somewhere. It starts off on a promising and well known note...

The Indian economy on the eve of the 11th Plan is in a much stronger position than it was a few years ago. After slowing down to an average growth rate of about 5.5% in the Ninth Plan period (1997-98 to 2001-02), it has accelerated in recent years and the average growth rate in the Tenth Plan period (2002-03 to 2006-07) is likely to be about 7%. This is below the Tenth Plan target of 8%, but it is the highest growth rate achieved in any plan period.

While this performance reflects the strength of the economy in many areas, it is also true that large parts of our population are still to experience a decisive improvement in their standard of living. The percentage of the population below the poverty line is declining, but only at a modest pace. Far too many people still lack access to basic services such as health, education, clean drinking water and sanitation facilities without which they cannot be empowered to claim their share in the benefits of growth.

It notes that we are doing well in IT, ITES, textiles et al and we are pretty well covered from a demographic (Age) perspective. The focus is, on, well, services to poor, agricultural growth, manufacturing competitiveness, human resources, governance and environment - so nothing is left out. Then, of course, are disparities, divides among certain sections of the populations.

The solution or atleast one of the solutions, almost a Eureka is "The Backward Regions Grant Fund provides a new instrument to deal with this problem."

Under policy interventions is another point, The emphasis on expanding access and improving quality of public sector schools and health facilities may also help by reducing the need for private expenditure on these items by lower income groups and some of this expenditure will be redirected to generate demand for agriculture. How, I dont know.

Under infrastructure, it says, Preliminary exercises suggest that investment in infrastructure defined as road, rail, air and water transport, power generation, transmission and distribution telecommunication, water supply, irrigation and storage will need to increase from 4.6% of GDP to between 7 and 8% in the 11th Plan period. In other words, of the increase of 6 percentage points in total investment needed to accelerate from 7% growth to 9%, about half should be in infrastructure. This will place a heavy burden on the public sector which will have to invest more in this area. Since public sector resources are scarce, an aggressive effort at promoting public private partnership in infrastructure development will be needed.

Well, if we (had) invested money in infrastructure instead of doling it out to schemes with long names (and I include schools, electricity, roads here) for the last 60 years and done it well, this planning document would have been a list of achievements. But 60 years later, we are no better (probably worse) than where we where especially from a governance front.

The whole document is about grandiose schemes with big names that (have) fail(ed) to deliver (ever) and prescribes more or those. These schemes fail at the grassroots level thanks to our usual culprits - babucracy, corruption and politics. The point is that the problems are well identified (and have been for 60 years of independence, perhaps earlier) but the solutions are still Nehruvian.

As I wondered if I should write more, I chanced upon this piece by Kiran Karnik, a good analysis of the same document, which in its title itself, encapsulates the problem. A great read there...

NGOs, funding and funders

An eye opening piece from The Hindu Businessline by the prof from IIMB, R Vaidyanathan. The same NGOs which ostensibly operate in the favour of civil society, demanding transparency from the government etc., are notoriously evasive when it comes to disclosing their cash flows. NGOs are a big business, IMHO and if you spout the right rhetoric, you can get money by the tons.

Anyway, to cut a long story short, the amount of money received in 2005-06 was INR 6257 crores (Thats 1.39 billion USD). To put that amount in comparison it is about 1/10th of Indian ITs estimated revenue for FY2006 - 13.2 billion USD.

Some pertinent points he raises are:

Maharashtra, Tamil Nadu, West Bengal, Gujarat and Andhra Pradesh are some of the States with large number of NGOs. It is curious to note that the poorest States such as Bihar, Uttar Pradesh, and so on, do not have as many numbers. Why, I wonder, when they are supposed to be working on poverty alleviation.

The NGOs are active in pointing out the deficiencies in the functioning of the Government, be they on human rights or wild life preservation or child labour. It is also important that the activities of the NGOs are transparent, particularly from the point of view of their sources and uses of funds.

...One can argue that they are accountable to their donors but it is not like a corporate situation where the company is accountable to its shareholders.

Going by his experience, that is tough. For instance, this writer has tried unsuccessfully for nearly three years to get the annual report, including annual accounts of three leading NGOs of this country, which are often featured in newspapers and TV channels.

but surely, as he says, they can make their own operations transparent, To start with, they can publish their annual reports, including accounts, in their Web sites on a regular basis.

The leading donor agencies are Ford Foundation US (Rs 121 crore), World Vision International (Rs 90 crore) and Foundation Vincent E Ferrer Spain (Rs 79 crore). The largest recipients are World Vision of India, Tamil Nadu (Rs 98 crore) followed by the Rural Development Trust, Andhra Pradesh (Rs 85 crore).

He ends it with...

It would not be appropriate to suggest that everything is fine with every NGO in the country. Numbers are growing, causes are getting enlarged and funding particularly from abroad is increasing.

Hence, perhaps, the time has come for them to be more transparent and enhance disclosure practices to be like Caesar's wife. And transparency and regulation and full disclosure are the things, which they demand from corporates, and the Government. Hence, is it too much to expect the same from them?

Saturday, August 26, 2006

India, China - then, now

I happened to read this post at the Patent pending blog , a post about the Great wall of China. I reproduce here:

The first major wall was built during the reign of Qin Shi Huangdi, the first emperor of China during the Qin (Ch'in) Dynasty (221 B.C - 206 B.C.). It was created by joining several existing walls built previously by regional governments. This first wall was built much further north than the current Great Wall, and made of materials that have largely dissappeared over time.

The Great Wall that can still be seen today was built during the Ming Dynasty (1368-1644), on a much larger scale and made of stone on the sides and top. The wall housed garrisons, signal fires, and a messenger and postal service. The primary purpose was to make it difficult and slow for nomadic armies to get their horses across the wall. Without their horses the Huns were not a serious military threat.

India (I am no authority on history, so I wont comment on the timeframes) and Indian kingdoms were also threatened by nomadic armies of invaders from time to time, much like China, but what did India do? Nothing. Though we built small forts, we waited for them to come in, fight, won a few times (at which points, we stupidly sent them back intact with gifts) lost a few times - entirely reactive. The Chinese on the contrary were proactive and built a great wall (no ordinary wall) through some superhuman effort to keep out the invaders.

Today, many hundreds of years later, India is yet to kick start infrastructure, though we have pockets of infrastructure (like the forts of yore). The Chinese like the great wall builders of yore, have made huge investments in infrastructure. Argue as you may about the countries were different, are different - whatever the line of argument, it kind of makes of think of how centuries apart, the countries approaches does not seem to have changed!

Fully computerized branch

Paddys comment in the previous post brought this thought back into my head.

What set me thinking was that many banks advertise their ATM (Automatic Teller Machines - not Any Time Money) as a 24 hour ATM. Whats the big idea in having an ATM thats not 24 hours or putting it inside a cage that will be opened only from 9 am to 12 pm and then 1 pm to 5 pm? ATM implies 24 hours does it not unless ATMs sleep or take lunch breaks!

Fully computerized branch is another dud term. Usually seen in PSU banks. What difference does it make if your branch is fully or partially (this lingo exists) computerized, if you make me stand in a line in front of a grumpy teller (many of them are not tellers - there are noteller)?

I have seen "Fully airconditioned", though I am not sure if I have seen it in banks also! In the light of the above -where I have to stand in line to meet a grumpy teller- I would rather stand in line in an AC branch than stand in non AC branch.

To your point Paddy though, in the earlier days, there was no real competition between banks. (Think PSU banks). Except for the fact that a branch of some bank was located near your home/office, there was no real difference. So in order to differentiate, they probably used these terms to subtly advertise to customers - this branch is computerized- so the customer would sign up and hope to get better service. Only to later realize that "Systems are down" would be as common in the computerized branch as was "Ledgers is with the boss/missing" in the non computerized branch.

Friday, August 25, 2006

Now or never

Not the typists express, nor the Gulf job boom, nor the American bodyshopper dream or even the wave of students going over abroad to study - what is the real swinger for India?

It is Indias IT services industry and how we leverage it for Indias overall development holds the key to the future. With about 13 lakh (1.3 million) employees, it is still a drop in the ocean, but there are many who believe that this industry will be crucial for India to find a place in the strong, developed, advanced and influencing nations of the future.

I think so too. Do you?

Companies and technology

India today is synonymous with IT outsourcing and IT enabled services. As I read The Innovators Dilemma, I figured that for someone who wanted to start an IT services division, it must have been so damn difficult to put this together as a marketing plan.

Indeed, to see the history of how companies approached IT, take a look at any manufacturing or service industry and see how they are organized. They created a separate IT department as they did for anything important! Why IT, many companies had a telex department - now its all email (I hope). And many companies had many human telephone operators and their own small exchange.

Even today most companies have a systems department. Today, their functions are quite different and revolves around maintenance of systems used company wide, but when they started out, they were the department which had computers, so to say. No other department had or used computers. They would give their data to the IT department, who had data entry operators would feed the data into the computers and then they would give an output back to these departments. One of my earlier employers banks would routinely say "The LC is with systems. They will take a printout and give us. They can take upto two days for that". Each of these requests would be passed on via inter office memos signed and countersigned by multiple people. From then on to a computer on most desks, industry has come way, especially in India, but companies still do not harness technology to the maximum extent possible.

The paperless office is almost here, but there are others who lag. Even today, with the presence of the best systems, there are still companies which maintain an attendance register at the gate (and they are not factories or old companies) or companies which insist that a leave application has to be a paper application or some form has to be on paper signed by 3 different people. Many others though have gone ahead and automated so many of the approval workflow processes and I can readily think of the IT companies as well as some manufacturing companies. And then again, the bureaucrats are still lagging behind hiding behind files, notings, scribblings and red tape.

Thursday, August 24, 2006

A1 plaza

I have written about Reliance Industries petro plans and the first time I walked into an A1 plaza on the Chennai Bangalore route, I was pleasantly surprised. Those who have travelled on Indian roads, can vouch for this. It is quite difficult to get a nice clean place complete with toilets with running water, clean ambience and decent food.

A1 plazas have all these and then some. Courteous staff, pretty tasty food (though, understandably, choice is limited), good surroundings with a lawn etc. All in all, a nice rest stop to consider - especially if you are new on a particular route - rather than walk into those shady dhabas with loud music, watery tea, rubbery rotis and vegetableless curries where the buses usually prefer to stop (for reasons of commission), A1 plazas are a good option.

Alongwith the upgradation of our highways, these are the new face of the Indian roads.

Wednesday, August 23, 2006

Aldrop and mofussil

I had no clue this thing was called an Aldrop. Learnt it in Chennai on an aldrop, where else.

Chennai has a mofussil bus stand at Koyembedu. (Again drew a blank on dictionary.com. A google on mofussil throws up mostly South Indian sites).

The English left after teaching us English and we forgot to update our dictionary. Chennai is perhaps the Jurassic park of the English language!

I can imagine an English language historian who suddenly lands up in Chennai and to his joy and surprise, finds mofussils, aldrops, condiments, balderdashes and baloneys roaming about in free abandon - long after their extinction in ol'blighty. I am sure there are more, but I am no expert in the English language.

(Dont know the meaning of these words, dont bother. They are well past their sell by date)

The Golden Quadrilateral

The Golden Quadrilateral Indias ambitious road plan - well, nothing great - all it does is 4 lane the existing roads between the 4 metros. That 60 years after independence (NHAI's progress map) we are still evaluating whether we need good roads is a sad story in itself. If you think 4 laning is a not a big deal, check out the state highways even as of date. 2 lanes, 2 directions, bad roads, bad signage, confusion and chaos at villages and you know what our "national highways" were (and many still are).

I have written about the GQ before. The GQ is a great drive as compared to any Indian road (save the few hundred kms of access controlled expressways that exist), but one of the fundamental problems for the villages that it passes through is that, while it is the GQ for you and me, it is the local road for the villagers. Nothing wrong with that either, except that if you are a villager and you want to cross the road to buy, say, milk, you have to take a detour until a "U" turn is available which could be some kilometers away. So, what do you do? You make your own way.

Medians are broken (between Chennai and Bangalore, they are countless), fences are cut, sawn, removed and people have created their own crossings at all points. So, as you are zipping along, there is someone who ambles across the road in a trance and you better be alert. Or there is a protuding nose of a vehicle right across the road. There are small cuts enough for a two wheeler to pass. Or, which is worse, there are vehicles (bicycles and bullock carts upto trucks - all of them) coming in the opposite direction and especially on the Chennai Bangalore stretch - (Ambur, Vellore) - they come at you on the rightmost lane - the "fastest" lane. It helps that traffic in these sections is sparse, otherwise, the GQ, without people following rules is a nightmare. Imagine how bad it gets at dusk and night.

Another point is that these roads are tolled. Now if its a free service, you cant crib. But having paid the toll, surely these things can be taken care of. I am sure we can provide bypasses, underpasses for villagers or take the road above villages where there is high density of population.

As population increases, will the GQ stay the GQ or will it become like the Hosur road (incidentally part of the GQ, but perhaps the worst road in India at this point) ?

Saturday, August 19, 2006

Air Deccan - come September

Need I say more?
Previous posts on Air Deccan, here, here, here and here.

Friday, August 18, 2006

Return on infrastructure

Niranjan Rajadhyaksha in Businessworld (registratoin required), issue dated 7th Aug, makes a simple point that the next surge in corporate productivity could be driven by better roads and ports. Simple point, well understood, but one of his examples drives home the point.

The Bombay Pune nightmare is known to everybody. Prior to 2000, the journey could take anywhere from to 4 to 12 prior to the expressway. Today, the journey can be done in a little over 2 hours. That is an obvious benefit. But he notes, the fares for an airconditioned bus has gone up from INR 100 to 150. This, despite the fact that the road is tolled, value of money has reduced, fuel prices have gone up considerably, the buses are spanking new Volvos that cost INR 50 lakh each - plus no overloading, no fleecing etc.

The point that he makes is that the expressway lets the bus owners turn around their fleet faster, thanks to the lesser drive time. So, if earlier the bus owner turned his bus around for a probabilistic 4 trips a day, now its an almost certain 8 trips a day. More efficient use of capital and the benefit gets passed onto the customer.

Add up the fuel saved by not having to drive in first gear and it is a lot. Better roads, lesser signals means lesser time to commute - which results in, better productivity at work, better time spent at home and a better quality of life. For all of us who spend time in traffic jams whether in public or private transport, it is evident, but for politicians who never endure traffic jams, it is not or is apparently not.

Thursday, August 17, 2006

Wanted: Doormen

The tribe of tall, bearded turbaned doormen - a fixture in most Indian upmarket hotels is vanishing says Hindu Businessline.

"Beard-and-turban is linked very closely to Indianness. Foreign tourists are easily impressed seeing doorkeepers in ethnic attire, turbans and beards. But their being bearded is only `preferred', not essential, ," said a senior official of Taj Mahal Palace and Towers, Mumbai.

Well, it is surely impressive the first few times and it suits hotels themed on "palace" or "fort". Some doormen are pretty impressive and imposing - and thats one of the objectives too, I guess, unstated. As regards vanishing, well, if someone is tall and all they need to get a decently paying job (and tips perhaps) is a great moustache I am sure, people will acquire one by hook or crook!

Wednesday, August 16, 2006

Fun cards - Mobile phones

Hutch has introduced Fun Cards, which are Scratch Cards that offer customers multiple caller tunes and ring tones.

I havent seen a fun card yet, but from ads and reports, they are ring tone compilations (like a cassette or a CD really). Whoever would have thought that a market for ring tones could exists and it is a big market, really. The other thing that Hutch does is that it gets the ringtone market for itself rather than allow other service providers to take a piece of the pie. The price is attractive too, at 20 bucks for a few tunes, to buy and gift.

These scratch cards are just scratching the edge of possibilities.

Saturday, August 12, 2006

Retail services

Up on Aadhists blog, a nice post on the other retail - services retail. And yes, honestly I had never thought about it. Why? Because of a blind spot. I have never visited a Webworld yet. Maybe I should.

For a lot of services though, the web is good enough and if it already is not, it will be good enough at some point. So, I would see this service as a transient service at best in the urban areas. Second, as rightly pointed out, getting trained staff to cross sell multiple products is not easy. Petrol pumps and their credentials in retail, IMHO, are very low, because if you need parking space for even 30 cars, there are few pumps who have that much space. So, their play would be restricted to quick pickups en route to home or wherever.

The big guy in this space who is really the Kumbhakarna who should wake up and smell the opportunity. The department of posts (was surprised that they have a functional website) has actually woken up to the opportunity of using their post offices as touchpoints for the 1 billion (oops, thanks Abi, it is not 10) population of India. (Remove some of the city slickers, they still have the world in their pocket.)

The website lists out a few things they have realised about the goldmine of touchpoints they are sitting on. This year, IT returns could be filed via post offices - which bought them a cool INR 3 crores. Passport applications, e-bills are just the tip of the proverbial iceberg they are looking at (they are actually looking at a post bank - whew). Add a few computers, broadband and perhaps a small coffee shop and they could pip any Webworld to any post.

Meanwhile Super bazaar joins the list of Reliance acquisitions after Sahakari Bhandar, HPMC reports DNA India. Whos next? Slowly but surely, RIL retail is taking shape.

Friday, August 11, 2006

Spirit or helplessness?

Just outside my house near a busy road in Bangalore are a set of saplings that were planted by the BDA (Bangalore Delayed Development Authority) almost a year ago. Those saplings were first provided with tree guards, made of, ironically, wood - but thats besides the point. The place is rampant with construction workers dwellings, which as you can imagine, do not have electricity. So, as you rightly guessed, slowly, but surely, part by part the tree guards were taken off for burning (I presume). The saplings were left unguarded and as humans would have it, they plucked a leaf each time they crossed the road or pulled the leaf or branch along as they crossed the road leading to the progressive loss of leaves and branches. This happened to not just one tree but to all trees save those in front of a few responsible apartments/business establishments.

Those trees, left to themselves or as you can see in front of the establishments, would have grown to about 10 feet in height today (the ones that are protected by some apartments are a testimony to that) after about a year and a half. But, they were either left unguarded or left for vandals to pluck leading them to their present state. The trees are about half a feet high today and stunted, like a cruel form of bonsai. They continue to grow, a leaf here and a leaf there waiting to be plucked once they reach a particular height. (At this point, those who cross the road do not pluck them since they have to bend to reach). Is this the spirit of the sapling or its helplessness?

This post is a little dated and really should have come in a few days after Mumbai's terrible terror blasts. Yesterday was the day of the verdict of the 1993 blasts, the first of the lot. Mumbai is a city where I spent a long time of my life and still have family and good friends, but that apart, I strongly appreciate the city and its ethics. For those who read this post, it will be a reminder at a time when the blasts seem to have been pushed away from top of the mind recall. Just after the blast that took a toll of about a 186 hardoworking Mumbaikars, there were a lot of reports on the indomitable spirit of the city. How people came forward to help, how trains were back the next day and how people returned to their work the very next day and even the stock market surged ahead. There were a few sane authors who wrote, very rightly, that the former are confused between spirit and helplessness and it is actually the latter, the helplessness of having to survive - the helplessness that the state (country) has reduced us to that we continue to, like the plant, move on, because we have no choice. (Note that I dont comment on the great of the city rushing to the help of its citizens - if only the state did so too.)

Remember though that every leaf plucked, each attack on the sapling, city, reduces its growth by a little bit. It may not be evident today or tomorrow, but each day we dont protect our citizens, they get a little more helpless. And each day we delay or dilly dally stalking those terrorists or their enablers or supporters tacit or otherwise or their funders (I see no difference between either), we stunt ourselves. Our self confidence, our mind, our city, our country....

Thursday, August 10, 2006

Create an ad network for Indias mobile service providers

...is third in the list of Business 2.0s ideas for creation of overseas start ups as part of their cover story the best business ideas of the world. Heres the link to that idea and the link to their cover story.

India figures once more on that list where you could create a startup to "import wines to some upscale restaurants in India".

The introduction to the piece was too good, so here the intro:

International borders used to be the biggest barrier to entry for Americans (remember B2.0 is American) interested in starting a business overseas. But today, as more nations ease trade regulations and restrictions on foreign investment, borders are more like invitations.

Take real estate, for instance: According to research firm Jones Lang LaSalle, Americans spent more than $12 billion on foreign commercial real estate ventures last year, almost double the amount they invested in 2004. Meanwhile, American investment in overseas businesses has nearly doubled, too, since 2002.

So we enlisted a team of top reporters to find out what, and where, the most intriguing new business opportunities are today. They returned with a dozen stories that describe lucrative ventures in unlikely places - from starting a coffee business in Rwanda to discovering the next great cabernet in Greece.

They also found opportunities in Brazil (delivering Wi-Fi to coastal resorts), China (remodeling homes), and Russia (creating a social network for millionaires).

Our goal isn't just to show where the latest business trends are converging, but to coax more of you armchair entrepreneurs out of your Aerons. We've supplied the ideas, the rationales, and even some how-to guidelines from local experts. The rest is up to you.

So here they are

1. Build cheap Wi-Fi networks for Brazilian resorts.

2. Become a biodiesel producer in Argentina.

3. Create an ad network for India's mobile content developers.

4. Launch an exclusive social network for Russian millionaires.

5. Open an American-style restaurant in one of China's fast-growing cities.

6. Remodel homes for China's burgeoning middle class.

7 Flip mining claims in Bolivia.

8. Export the planet's next great wines - from Greece.

9. Import fine wines to upscale restaurants - in India.

10. Export gourmet coffee from Rwanda.

11. Become a social entrepreneur in South Africa.

12. Be among the first to invest in the new Libya.

Quo Vadis?

Aravind eye hospital

This link is from the world changing weblog - a great place to go to if you are looking for dope on sustainable living and building a bright green future. This post is about Aravind eye hospital, an institutition which is very well known for its pioneering work in the area of optical surgery.

"Millions and Millions Served" - a slogan that conjures up images of Big Macs and fries -now stands for something at the opposite end of the spectrum: a hospital. The analogy comes via the Wall Street Journal, whose weekend coverage included a 2-page spread on Dr. Govindappa Venkataswamy, founder of India's Aravind Eye Hospital. Worldchangers may already be familiar with the hospital, which revolutionized eye care by applying profitable, assembly-line techniques to simple surgeries - the McSurgery approach, according to the ever-witty Journal.

Worldchanging has covered it earlier in another post here with the focus on innovation and the BoP.

Tuesday, August 08, 2006

Turning the price equation on its head

Hindu Businessline reports here that the surcharge on airtickets will be more than the base fare of INR 500 offered by Air Deccan. The surcharge is now at about INR 650 per ticket. So, you end up paying INR 1150 for an INR 500 buck ticket - but point is that the surcharge is more than the base fare.

If the Tata INR 1 lakh car comes out priced at INR 1 lakh, it will be more expensive than the parking lots in most cities. The going rate in Bangalore is about INR 1.5 lakhs for a single covered parking lot and it is about INR 3 lakhs in Bombay!

The previous post was about online share trading for INR 9 - thats roughly the price of a coffee a regular restaurant...

Online share trading, 9 rupees only

The Hindu Businessline reports that Kotak Securities is offering a flat rate for online share trading, 9 rupees per transaction. Just when you thought that all these service providers (I dont call them brokers) had ganged up to create a cartel, Kotak upsets the apple cart and rightly so.

For all deliveries up to Rs 5,000 and non-deliveries up to Rs 50,000, the brokerage would be Rs 9 per deal (statutory charges extra). For deliveries exceeding Rs 5,000, investors will have to pay an additional Rs 9 for every transaction amounting to Rs 5,000.

Even at their higher end fee of 18 rupees, thats still dirt cheap. Competitors like ICICI take upto 1% on either side of a transaction. So, Kotak would rightly expect investors to rush to them to open/transfer trading/demat accounts. Fair enough. But what if ICICI, Sharekhan and HDFC come up with equivalent rates? And the article says that they too are not too far from offering flat rates themselves. In a flat (tepid) market, will flat rates do the trick?

Update: HP is right. The 9 rupees fee is not flat, theres a 499 monthly fee and the 9 rupees is for every multiple of INR 5000. If you want a really flat structure it is at 20 rupees per trade without a monthly fee. So, its not as pathbreaking as it was made out to be in the initial report.

Monday, August 07, 2006

Why Web 2.0 is a bubble...

Do read this brilliant post by Rob from Businesspundit...Here's a nugget, but the whole post is worth reading, even if its a little on the longer side.

Wisdom of crowds fails in many cases because the members making the decision don't understand the context surrounding it. You shouldn't rely on a crowd for advice in your industry, because the crowd doesn't know anything about your industry.

The wisdom of crowds is a byproduct of other processes, not a process in and of itself. People trying to figure out how to harness the wisdom of crowds are already thinking about it the wrong way. It cannot be your end goal. You have to establish a process that allows people to make their own individual decisions and reap the rewards and consequences of their decisions individually. Then, and only then, can you look to see if you can tap into the collective wisdom for some extra benefit.

Wisdom of crowds is really a misnomer. It should be referred to as "the aggregated wisdom of lots of individual decision makers." Crowds tend to feed of themselves and they get stupid as a result. Unless members of the crowd have an incentive to act honestly and seriously, and aren't influenced by other crowd members, the results of the crowd will likely be wrong.

Sunday, August 06, 2006

The end of cookbooks

I saw a cookbook recently at a friends place and I wondered if anybody still buys them. Well, they may soon be antiques.

Will blogs signal the end of cookbooks was the instant thought that came to me? Today in The Hindu there is an article about learning to cook from the net.

The thought recurred as I looked the Indian blogger rankings and you will see that throughout the top ten there is a garnish of, well, food blogs. The ranking might not be accurate, since all blogs are not registered here, but it is indicative and fairly so.

The web was the first shot at cookbooks, those glossy and shiny books with a recipe on one side and a "finished product" photograph on the other. But with the web came constraints like register, membership and premium access. Blogs have fired the second salvo on cookbooks and perhaps this is a stronger one. I havent read too many cooking blogs, but have scanned a few here and there and most of them are quite informative and make cooking appear easy (well, it is) and even fun. So, the next time you want to learn a recipe or prepare something in an instant, just log on to the web and read it from a cook blog.

Friday, August 04, 2006

Access controls on roads

Bombays highways (highways by Indian standards, not international) have done a good job in keeping pedestrians out of the roads (mostly). Those who know how they used to be will agree.

Some roads are raised, some have sloping embankments, some have underpasses and some have high medians. But the best innovation I saw was a simple barbed wire fence with 2 wires on the raised median near Everard Nagar on the Eastern Express highway. Concrete has failed (people still try and climb), iron railings have failed (people cut through it for a shortcut), but this one looks good. Not one single person dares to cross it.

Simple rule: Increase the cost of breaking a "rule". Be it talking on phones while driving or crossing roads or stopping terror.

Thursday, August 03, 2006

The taxi stand and the phone

Taxis in Bombay are not exactly doing great business. So, they are pretty good in being as responsive to their customers as possible as much as their existing models would help them. There is a taxi stand in Sanpada, Navi Mumbai and this taxi stand (like many other taxi stands) has a phone. So, you call up, tell them the destination and they land up at your house, pronto, no extra charges.

While thats full marks for their entrepreneurial capability, it is made possible thanks to the telecom revolution...

Wednesday, August 02, 2006

The evolution of ads in India

A good series, (to be continued) from the DNA website.


...This era started somewhere in the 1950s and lasted a long, long time. Early ads were like elementary school lessons: often using one of the most effective learning methods, “Show-and-tell”.

...Sometime in the mid 1970s, an ad featuring a young girl in two-piece green bikini, enjoying a titillating shower under a waterfall created history. Three generations later, this original Liril ad is still etched in public memory.

Read the full piece....