Zopa: Borrow money from others via the web

Check out this site. Very interesting concept. I saw it mentioned in Business 2.0 magazine. Currently based in Europe.

Global merger mania has just begun

First IBM-Lenova, then Maytag-Haier and now Unocal-CNOOC (wonder why India's' ONGC didn't bid on this?). Suddenly, you have a hue and cry from all corners of the US, fears of security and what not. I think these large global mergers are just beginning.

With globalization and the current US Govt's obsession with the spread of freedom and democracy and its pre-occupation with Iraq, the US economy has been sinking steadily. As companies continue to under perform (like Unocal) and their values drop, such mergers and acquisitions are bound to happen. Rather than get into protectionist mode and prevent such mergers, I think these mergers should be encouraged. Its just the inevitable result of globalization and the growth of Asian economies. So "let's bring'm on"

Prof. C.K Prahalad's talk at Stanford

Attended a talk by CK Prahalad yesterday at Stanford University. "Changing Lifestyles in Asian Countries: Opportunities for Entrepreneurs" presentation and discussion by:

• C.K. Prahalad, Professor, Business School, University of Michigan
• Jonathan Barker, Managing Principal, Center Street Advisors
• Moderated by Richard Dasher, Director, US-ASIA Technology Management Center

The talk was about growth in India and China and opportunities for entrepreneurs that arise from it. While Jonathan Barker focused on China, Prof. Prahalad spoke about India.

Prof. Prahalad is an interesting and extremely articulate speaker. He spewed plenty of facts, figures, quotes and statistics like most B-school Profs. Some catchy ones:

• 20M people travel by train everyday in India.
• The cell phone is more reliable than the watch to keep track of time. A whole generation of people in India and China might growing not ever owning a watch but using the cell phone instead to serve the same purpose in addition to acting as a cell phone, of course.
• Its easier to teach someone something totally new when they don't have to unlearn what they have learned.
• NGOs do very good work in India but they are never good at "scalability".
• A small town in Tamil Nadu is developing into a mostly cash less town (all transactions are done via credit card!).
  

He plugged the benefits of focusing on the "bottom of the pyramid" (which is the basis of his recent book "Fortune at the Bottom of the Pyramid"). According to him there is great opportunity for entrepreneurs in focusing on the bottom of the pyramid since it is a huge market. The challenge is to provide innovative products at a low cost (meaning: affordable to people in developing countries). He identified a bunch of potential sectors but given the shortage of time discussed only a couple of case studies - one from Hospitality sector and the another from Adult Education.

Hospitality: With 20M people traveling everyday in India by railways there has to be an opportunity for providing hotels at affordable prices. Most people can't afford the conventional hotels. He was a consultant for a study that resulted in the new Indione hotels. These hotels apparently provide excellent quality rooms with internet access etc at an affordable price of around Rs. 900 ($20) per day. They studied the existing hotels and optimized resources to ensure that they can achieve high quality at a low cost. For example, the average Hotel employee per room is about 2.4, but in the IndiOne it is 0.8.

Adult Education: Next he discussed the example of adult education in Tamil Nadu and Andhra. Apparently, most adult education programs require proficiency in the 3Rs (Reading, Writing and Arithmetic). This requires some 400 hours (I think this was the number he mentioned) to achieve an acceptable level of proficiency, and most adults can't and won't make the time for it. So they said, "Why bother with all three aspects, lets just focus on Reading". Then instead of following the conventional -- learn alphabets, learn words, then learn reading" approach they developed a different strategy of seeing, hearing, then learning words and finally the alphabets". All this learning involves computerized content so adults can learn at their own pace as well. TCS and NIIT have embarked on these programs and achieved great success in spreading literacy. However, the business impact of these programs were not discussed.

Audience Question: With all the opportunity being overseas and all jobs going overseas what does the future hold for the middle class here in the US? (there were other questions but this one stood out)

Jonathan Barker in response to this, said that a lot depended on leadership. The US needs to actively invest and explore new fields (like stem cell research) to continue its leadership position.

Prof. Prahalad, agreed with the challenge posed by "the 50 year old who needs to be re-trained" (Tom Friedman's book apparently refers to it too). However, he said he is not too worried about the future of industry here in the US. He compared the present to the times in 80s when manufacturing was headed overseas. The naysayers said the US was doomed, though that never happened.

Questions like this one raised by this member in the audience are very common these days. But I am yet to hear a convincing answer from any of the experts to questions such as these.

The Irony: Both case studies were very interesting and helped re-reinforce Prof. Prahalad's view that innovation and creativity can help take advantage of the large available market. Ironically both case studies were the result of efforts by large conglomerates like the Tatas. This is understandable, given that Prof. Prahalad's "core competency" lies in consulting for large corporations.

In what way does this growth in developing countries translate to opportunities for entrepreneurs?The average Joe on the street with a cool idea will still have to struggle, can't get very far and could eventually drown to the bottom of the pyramid! In theory yes there is opportunity whenever there is a large market, but in reality how can the small guy with the idea get ahead? The talk and discussion that followed didn't quite address this issue. There is no question that the Tatas and Birlas will milk the bottom of the pyramid as more cars, cell phones, TV, refridgerators etc are consumed. It would have been far more helpful had there been some specific examples from one of these developing countries, of up and coming new companies/products that have combined innovation, smart business and bottom up growth to achieve success of a significant scale despite stiff competition from the big guys.

Man, All these browsers!

Netscape, IE, Firefox, Safari etc etc. and each of their versions, extensions and what not! Testing websites and applications on each of these has become quite a task. Check out Rediff (a pretty popular site) on Firefox. The home page is pretty messed up. It has been so for quite a few months now. Or maybe its something unique to my PC.

Its about time someone (Microsoft, huh??) came out with a master browsers (Netscape seems to be trying this with its new release) and destroyed all other browsers once and for all. It will make everyone's life so much easier on the net. There was an article some years back in Time magazine (I think) where the writer suggested that we give all the software business on the planet to Microsoft, then the next time we have trouble we'll have only one company to blame! (Of course, it could be a hardware issue!).

p.s: Btw, can someone tell me how to prevent pop-ups from this site! I use Firefox for the most part and sometimes IE.

A VC calls it quits

Check out this article by a VC who has decided to quit the VC business. Interesting analysis -- can no longer make insane amounts of money from investments, so its not worth it, the dynamics of the VC business has changed etc. Maybe its about time more VCs quit the business. The world will be then be left with less greedy VCs who are ok with the idea of making smaller returns over a longer period of time. Entrepreneurs will have true partners in building companies. There will be fewer VCs but hopefully genuine, quality ones, who won't have to claim that "their money is different". With the economic downturn every industry has seen changes, its about time the VC industry did. After all, the business of "making money without doing any work" (quote from a well known veteran VC, Bill Draper I think) can't last forever!

Flying Autos are here

The airline industry in India is poised to take off in a big way. The rapid economic growth, a growing middle class, plenty of multinational companies, all combined has driven a huge demand for airlines. Quite understandably a number new airlines have enterted the fray: Jet,Sahara, Deccan, Kingfisher, Magic, Spicejet to name a few. Jet Airways, the leading and most established among these, is eyeing the international market. It has just started flights to Singapore and Middle East. The market in India is clearly huge. Airlines can be hugely profitable provided they can find the right routes and maintain affordable price levels.

Deccan airlines uses RK Laxman's "common man" as its logo/symbol signifying that its aspiring to reach the masses. They have launched a price war by announcing a limited number of seats at Re. 1 per ticket (requires 90 days advanced purchase plus some other requirements). Other airlines are threatening to follow suit. I hope these airlines survive and don't compromise on quality, safety and other bare essentials associated with air travel.

A friend of mine, aptly described his flying experience in one of these low cost airlines, "It was like a flying auto!!".

Adobe-Macromedia acquisition

I think this is a smart move on the part of both companies. Macromedia is reaching a point were an imminent threat from Microsoft is inevitable. Adobe on the other hand has always seen Microsoft as a threat. Coming together of these two companies gives Adobe a solid installed base of users and whole bunch of new products. Macromedia on the other hand can develop a more comprehensive strategy to counter the threat from Microsoft by being part of Adobe's suite of products. Besides, Macromedia has so many products now accumulated from so many acquisitions over the years, that its a good time to evaluate its long list of products. The only downside in my opinion is that historically large mergers have never worked. And of course, some users will suffer because Adobe is sure to end of life some Macromedia products. While Microsoft is all focused on IE and Search, its nice to see parts of the software industry joining forces to beat them in other areas.

What's all this fuss about iPod?

The media is full of news about iPod and its various incarnations. I guess its a fad that's catching on real fast. What's all this fuss about? I find that most people who buy iPods do it because of the craze and thinking that they can use it during their work out, and of course because it looks "cool". Interestingly, I find that many who purchased it with this intent pretty soon lose interest and let it lie around with minimal usage. It remains to be seen how long can Apple sustain this craze. In any case, hats of to Apple for continuing to bring such cool products to the market.


As for myself, in the car, I am quite happy with the car stereo. At home, I listen to a conventional CD player and on the web I listen to desi music on Raaga. (btw, if you want a large desi collection of songs that you can listen to via the web, this is a great site). I never really felt the need for a gadget that can hold more songs. I never ever used a walkman, so I am not sure I'll ever buy an iPod.

Kissing good-bye to tech jobs

There is an article today in the SJ Mercury News about a couple who transitioned from hi-tech jobs to managing and owning a Baskin Robbins. There are going to be a series of such stires in the newspaper over the next few days/weeks.

Return of dotcomm days?

An online dating site picked up a cool $110M in VC funding. Is this the beginning of the return of the dotcomm days? Interestingly, this announcement coincides with record highs on Wall Street.

The Elusive "Good" Indian Travel Agent

Travel to India from the US means purchasing tickets from travel agencies run by people of Indian origin in the US.  These folks clearly give you the best deals for whatever reason. The flip side though, is that customer service is virtually non-existent. Its almost impossible to get a call back from these folks.  I suspect this situation also has a lot to do with us, the customers.  Many of us are ruthless bargain hunters and would contact so many travel agents for quotes and haggle till the cows come home before deciding  on a deal. So these folks are eternally suspicious that you are about to dump them in favor of the next travel agent who is willing to give a tenny-weeny break on the price.  So its an interesting tussle, with the agent on the one hand, aggresively going for the close, while the buyer on the other, desperately heading for the door so they can evaluate "all" options before they can make the call.   The result is that the agent calls you back maybe once or twice before they determine if you are a good prospect for their business.  If you make the cut, then you might receive another call or two, else you are out of luck until you decide you want to make an actual purchase and call and explicitly express your sincere intentions.  

 

I suspect that the money in this business is in volumes. This means, you are likely to get a little more attention if you are purchasing tickets for a family rather than the one off ticket.  So single ticket buyers are certain to be at the bottom of the rung for already pathetic service. Of late, some travel agents have started to communicate via email. While this certainly helps, there is no doubt that the poor customer service in this business is unparalleled and almost endemic, and unlikely to change until market monopoly of these outfits is challenged by some newcomers. After over a decade of experience in dealing with these outfits, my self-learned conclusion is as follows:  They are all equally bad, stick with one agent and your loyalty is likely to be rewarded with some reasonably decent customer service!

Techies Beware: Immigrating to America Ain't Easy Anymore

During the 1980s and 1990s a number of engineers and other professionals routinely immigrated to the US.  After your undergraduate degree in India, go to the US, complete your Masters degree, pick up a job, get your green card and settle down in the US, this was the norm for a number of professionals.   This tried and tested path has started to get harder for several reasons.

Globalization and Outsourcing, driven primarily by technological advancements, have caused several new trends to emerge among the Indian expatriate in the US.  Firstly, a number of Indian professionals who moved to the US during the Internet boom days have returned to India due to the lay-offs that followed the dramatic downturn.  Many of these individuals were on H-1B visas and hence potentional immigrants whose aspirations were prematurely ended by the downturn.

Secondly, a number of mid to senior level professionals (some out of choice and others due to circumstances)  have started to return to India to work for American Corporations at their India centers.  These include green card holders, and others who had taken up American citizenship.  While its hard to predict, its highly likely that a large number of these individuals who have re-located to India are unlikely to return or even if they desired to, the return path is bond to be difficult and challenging, both professional and financial.

Thirdly, it has become extremely difficult for fresh undergraduates and graduates, to find jobs in the technology industry, in particular. The downturn in the technology industry in the US being the main reason for this trend. Corporations don't have the time or the resources to hire and train fresh graduates. Instead, they need more experienced individuals who can be productive from day one. In a market where unemployment is at its peak, experienced individuals are relatively easily available.

A big part of the immigration is the processing of the green card by the employer.  Over the last two decades, American corporations routinely processed green cards for their employees, many of whom joined the workforce after their Master's degrees with little or no work experience. In fact, it was so common that the green card generation machine worked like clock work as immigration lawyers churned out applications in almost assembly line fashion.   However, lately, multi-national companies have become very stringent about processing green cards for their employees.  Very often, employees of Indian origin are being encouraged to return and work at their Indian centers. This is understandable, since it is a very cost effective option for companies with established centers in India.  Its highly likely that US corporations will hire less number of graduate students (with a Masters and no work experience) in the US, than ever before, with each passing year, because its far cheaper to hire graduates in India and other countries.  In fact, American corporations might choose to hire in the US and post the individual in India on Indian salaries.

The good news about globalization and outsourcing is that over time, where employees are located is likely to  matters less and less to businesses. Instead, efficiency, productivity and overall ability for quality work are likely to be of greater importance than mere location. As a result of a large number of multi-nationals establishing operations in India and the small to medium sized businesses likely to follow suit in order to remain competitive (and viable!), attractive and exciting opportunities are likely to continue to evolve in India, particularly in the technology business. For example, the venture capital community has become very tuned to the fact that an operation in India or some other cost effective location where talent is available, is no longer "a nice to have" but a "must have" for businesses.  In fact, a number of venture capital firms have started to focus specifically on companies with a presence in both India and the US.  The bad news about outsourcing and globalization is that, the traditional road to America for Indian professionals is not very viable anymore.

So what does this mean, for example, to an engineer  graduating from one of the leading institutions in India and aspiring to head off to the US like many of his/her predecessors? Unfortunately, its a very different paradigm today from a decade or two ago where immigrating to the US was a tried and tested path.  In fact, these days you have foreigners seeking internship and sometimes jobs based in India!  So, if the engineer does not have genuine interest in pursuing specialized advanced studies (like a Ph.D), coming over to the US as a student might not be a very good option especially if immigration to the US was the ultimate objective.

DAC 2004 -- It's all time and place!

I took a day trip to San Diego to check out Design Automation Conference 2004's exhibits on Mon 6/7. The best part about the travel is that the convention center is barely 10 min away from the airport. As expected there were so many DAC visitors on the plane that I piled on with three others on a taxi ride!

As always I renewed a number of old contacts and made a few new ones. I thought the attendance was a shade better than last year.

Logicvision didn't turn up (either they are saving on cash or don't find this conf. useful anymore) this year. The last time I noticed a company that didn't show up was Get2Chip. It was acquired shortly thereafter.

The EDA industry hasn't changed much from an outsider's perspective. Still a $3-4B industry. Very critical to the semiconductor industry, but can't seem to get paid more for the value they provide. Three large players (Mentor, Synopsys, Cadence) and one up and coming large player (Magma). Then a whole slew of startups, all mostly providing niche products and hoping to be acquired by one of these big three.

Mentor acquired 0-In and Matrixone acquired Synchronicity.

An interesting perspective from Intel CTO. There could be some interesting changes in the industry with some new stuff coming up to address the issues he talks about. As chips get smaller, designing them efficiently so they turn out in high quality in a predictable fashion is not going to be easy. I suspect there are some new opportunities here. I also think that there is a huge opportunity in education/training. So much of new tools and technologies that are going to fundamentally transform design methodologies and so many people the world over to be trained and supported!

Most of the standup folks hired in the booths were pretty lame.

The Cadence booth was perennially full, thanks to the free food. Unlike last year no free beer was served after 4.00 pm.

Lastly, I shook hands with Art de Geus, Synopsys CEO when he came by to meet my publisher (I happened to be talking with him). I also shook hands with the Cadence CTO, Ted Vucurevich (again, I happened to be talking with an old acquaintance at the Cadence booth). My moment of glory and brush with fame, ladies and gentlemen! .....it's all about time and place :-)