Monday, March 24, 2008

I am not selling the product...

...just the message:
http://www.youtube.com/watch?v=m5xCGZuvhWI

Notes on first impressions of the ad seen on CNBC during Lunch:
1> The background score by Gustavo Santaolalla has parallels with Indian music.
2> Its a 90 second spot. The rationale? Apparently, time is the only true luxury.
3> This is an interesting brand initiative- and is the first Louis Vuitton TV ad ever.

What do you think?

Conference Panel: Investing in India- The Maturation Process, whats next?

The amazing panel, drawing from PE, management consulting and IB firms emphasized that they are taking a long term view of the Indian market and are doing well thought out due diligence on deals to make the best decisions for the funds. Deals have been quite competitive and negotiated.

This approach raises a line of thought regarding the non-core (?) activities of a PE fund. Why am I calling them non-core? Well, most folks would say that the only core activity for GPs is to find good investments and fund them, the rest can go for a toss. Performance is the cornerstone of success. The "official" lore is that the high performing GPs do not really have to bother much about non-core activities.

This query on capital deployment and how much GPs think about it is still worth considering as it seems to be closely tied with fund raising. The response to the query by the GPs can be that they do not really care about capital deployment as they tap into their funds on an deal by deal basis. However, I am inclined to think the GPs have a sense of what the LPs are thinking of when LPs make investments in the PE funds. Sounds like business development, doesn't it?

Anyhow, non-core or otherwise, lets dig into some aspects of the PE business. How do the GPs:
1> Handle uneven deal flow?
2> Manage different relative risk levels across deals?
3> Manage different rates of returns on their deals?
4> Set LP expectations on deal flow and deal sizes, across business environments, while still keeping LPs on board?

What do you think?

From the LP point of view, How do LPs:
1> Manage cash (e.g. lack of predictability in drawdowns)?
2> Allocate capital, from the asset allocation policy and portfolio management point of view, between drawdowns, and for drawdowns?

What do you think?

The Usual Disclaimer: This is purely a knowledge sharing resource and I have been careful to protect panelist interests. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.

Conference Panel: Selling to the Indian Consumer

Amazing insights from consumer electronics and retail consulting. A consumer electronics company was focusing on the top 30 cities, despite indicates that the rural market had as much disposable income as the urban market. This raised a couple of questions from me during the panel.

What kind of innovations in distribution do we see in India in the next 5 years?

What do you think?

Can the Consumer Electronics companies contribute to more active usage of the cellphone screen? This query had an interesting response and an unexpected fact component- India uses only about a third of the spectrum that the US currently uses.

Does the Indian cellphone consumer need an industry association comprising of consumer electronics companies, software companies, infrastructure companies and investors to encourage more active usage of the cellphone screen?

What do you think?

The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.

Keynote address: Vinod Dham, NEA- Indo-US Ventures

The amazing keynote by Vinod Dham has parallels with a keynote (different conference) by Alan Patricof, Managing Director, Greycroft, with respect to his experience in Venture Capital in Africa. Vinod was bullish about opportunities in India.

His talk raise a query. What is the difference in managing a $200 MM fund in Silicon Valley vs. a $200 MM fund in India?

On the dealmaking end:
1> Do you do more deals?
2> Do you invest in companies that are more late stage?
3> Do you invest in companies that can bring in and ramp up revenue pretty quickly?

From personal experience, Indian startups are able to keep costs pretty low.

On the investing end, what kind of support do you need to provide to startup leadership?

The Indian technology clusters- Mumbai, Delhi, Bangalore, Hyderabad, Chennai- are not as mature as the Silicon Valley cluster.

What do you think?

The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.

Conference Panel and Keynote: Managing Local vs Global

Ravi Venkatesan, Chairman, Microsoft India, talked about how the Indian market and how its challenges were different from those in the US.

How does the local leadership deal with a global company's priorities while "tending" to the local market? Does the company's DNA allow for a global/ local market trade-off based on the type of market (socio-politico-economic environment)?

What do you think?

The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.

Conference Panel: Infrastructure in India

Commenting on the delays in getting infrastructure projects off the ground toward creating a project pipeline, G.V.Sanjay Reddy, Vice Chairman, GVK Industries Ltd., pointed out that it is more important to get decisions made in getting infrastructure projects off the ground as opposed to developing detailed policy frameworks. That's the 30,000 foot eyeview of the problems in execution.

This, coming from an India company, seems to make sense. The India company has expertise in managing vested interests throughout the project lifecycle and a greater appetite for management risks.

Could there also be a realization that once Indian firms develop core capabilities and differentiate, a network of firms/ contractors/ sub-contractors model would become feasible?

Another thought that I would have like to pose to the policymakers is the consideration they give to developing policy roadmaps.

What do you think?

The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.

Conference Panel: Media & Entertainment in India

TATA Sky setup a nationwide support structure in India, flat. It is growing at a pace that is set to drive the company to leadership in satellite TV subscriber base.

How does a company manage operational decisionmaking, organization structure, core competencies, vendor relationships, training, and breakeven in such a context?

What do you think?

Given that India has over 250 MM cellphone screens, versus upto 50 MM in PC screens, how do service providers support the growth of applications and products for the cellphone screens? Does a Microsoft-Facebook dealmaking approach work in an Indian context?

What do you think?

1> India seems to have a lack of startup oriented risk-taking despite a large pool of enterpreneurs.
2> The Indian market does not have mature "competitive" technology clusters and mature financial players that support various stages of a company's lifecycle in a cluster.
3> Leaders from Microsoft India, pointed to a lack of expertise in business models.

This lack of business model innovation may be impeding a ramping up of local application/ product based activity. Would a Microsoft-Facebook type deal-making model- as a means for service providers to support cellphone market development- work in India?

What do you think?

The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.

Conference Panel: Trends in Private Equity and Venture Capital Sectors in India

Given a trio of PE, VC and IB players in India, the panel met high expectations. Some facets talked about:
1. Debt market in India
2. Constraints in structuring transactions
3. Regulatory environment and red tape
4. Nature of targets (family driven enterprises), time horizons and deal flow networks

Given these factors, I wondered how the firms managed risks- not just financial risks. I queried the panel about their experience with a deal that did not meet experience.

What do you think?

The VC investor, who had significant experience in investing in India provided an interesting insight, that emphasized the efficiencies that the PE/ VC firms can find across funds and investments/ deals.

The response also threw light on the "transaction costs" that mutual fund like SPAC aggregators would face that would make them replicas of publicly traded PE firms.

The panel echoed some of the points made by Alan Patricof, Managing Director, Greycroft, at a conference keynote, with respect to his experience in Venture Capital in Africa.

The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.

Conference Panel: Fundraising Darwinism- Evolution of PE fundraising

Bruce Rosenblum, Managing Director, The Carlyle Group, tore into the re-emergence of SPACs (Special Purpose Acquisition Companies) in the context of Private and Public PE companies. He pointed to two advantages PE firms would have over SPACs: diversification and GP incentives.

Given that there are many similarities between VC and PE fundraising, I was inclined to think that there was more to the comparison that what met the eye.
1> Was the PE firm structure an advantage?
2> Were the PE networks an advantage?
3> Were the PE firms able to gain efficiencies across investments that would not be possible in a different setting?

I queried Bruce for a comparison between Public PE firms and hypothetical mutual fund like SPAC aggregators (something I came up with to gain a better insight into his perspective). He had an interesting response.

What do you think?

Also, Francesco Guerrera, Financial Times, highlighted the paradox of PE firms going public. Bruce talked about KKR rasing $5 BN in public equity through Euronext at Amsterdam.

How do you think PE firms would deal with the q-on-q public market pressures?

The Usual Disclaimer: This is purely a knowledge sharing resource. Ethically, context is everything, and I will gladly retract anything that affects the parties mentioned. Call this my mini OpenCourseWare, if you will, where Open signifies life experiences.

Tuesday, March 18, 2008

The Da Vinci Puzzle: With apologies to Leonardo Da Vinci and Dan Brown

Ladies and Gentlemen,

Admit it! You loved the book! Now, fasten your seatbelts! The Da Vinci Puzzle is here!

Before we dive into the puzzle, I'll confess:
1> I am not a fan of puzzles.
2> I am more a physics guy than a math guy.

Without going into the gory details, I find that puzzle solving is usually about picking a solution that fits. The one with the most puzzle solutions in the bag, and the optimal algorithm to access those solutions, is usually the first one to crack the problem.

However, being around bright folks interested in puzzles got me going, although only for a brief period of time. Consequently, here's my stab at constructing a puzzle.

The original puzzle is as follows:
I have ten bottles, and there are ten balls in each bottle.
Nine of the ten bottles have balls that all weigh the same.
One of the ten bottles has balls that each weigh 20% more than each of the balls in the other nine bottles.
You have a scale, which is very accurate, but you can only use it ONE TIME (you have to weigh the balls all at once, not one at a time).
How can you tell which bottle is the one that has balls that are 20% more in weight?

Now, when you figure this out, here's the next construct. I call it The Da Vinci Puzzle (pun alert!):
Extending the puzzle above (that may be your clue), what if there are 2 bottles with balls that are each heavier by 20%?
Can you tell which two bottles weigh more?
How?

I believe there is a feasible solution.
I also know a bright guy who believes there isn't.
What do you think?

I buy a beer to the first few who take a stand on the feasibility of the puzzle and can prove it.

Also, I will not be publishing the solution- the assumption is that word-of-mouth will carry the puzzle and its solution to the seekers/ faithful/ die hard/ hardcore/ whatever the latest buzzword is.
To add to its word-of-mouth appeal, and without giving away the answer to the puzzle, I will add that you can answer the Da Vinci Puzzle in one word. Could that one word either be "feasible" or be "infeasible"? You tell me.

P.S. Why is this post so long? Its got heavily veiled red herrings and clues to distract you from solving the Da Vinci Puzzle.

P.P.S. Why am I calling this the Da Vinci Puzzle? What's the pun? Have you heard of Einstein's Puzzle?

P.P.P.S. The balls could well be nanoparticles. Also, Son of Da Vinci Puzzle Coming Soon!! Thank you, Robyn, for the questions!

The Thought Provoking Case of The Consumer Electronics Company

This case focuses highlighting, in sharp relief, how strategy and analytics, as tools to lay the groundwork for all that follows, can help in execution. For the tool savvy, I expect lightbulbs for strategy and analytics to flash every time we trigger a tripwire within the case.

The real skill here is in identifying all the tripwires you can trigger in a structured manner. i.e. Analytics backed solutions you can generate, and then rank them by impact.

Your inputs are welcome- have fun!

The usual case/ problem solving approach is top down:
Strategy-> Marketing-> Sales-> After Sales-> Customer Support
Here’s a case that will help you think recursively through this process!
The approach to this post is: Case -> (followed by) Key 1: Points to Discuss-> Key 2: Structure.

Note: This case is a Work in Progress. The keys will be published separately.

Case 1
The Thought Provoking Case of The Consumer Electronics Company

You have a $450 CyberSleek AB1 camera from The Consumer Electronics Company- their first CyberSleek, released in 2002. It has served you well over the years. You moved recently and lost the little USB cord that connects the camera to your laptop.

You search for the cord at the website in vain, and finally call The Consumer Electronics Company's support number to request a USB cord for your camera. Over a 45+ minute call, the customer support person creates your profile on the The Consumer Electronics Company website, keeps you on hold while searching for the correct USB cord, and finally gets you free shipping for the $20 cord as per the promotion run at that point of time.

Unfortunately, when you receive the package, you find that you were shipped the wrong make of the USB cord.

Thinking that customer support may not have the right tools to help you, you look to give the website another try. You go back to the site, struggle for over and hour and finally find your cord this time by eliminating, as an option, the one you were mistakenly sent. You order the new cord and have to pay shipping charges this time around for a total of $30 in charges.

You call back to claim a refund because customer service shipped the wrong cord to you, and are asked to ship the first cord back, at your own expense, to claim a refund. You have already been charged for the new cord you bought from the website. Requesting customer support to check these details does not help your case.

Shipping the first cord back, where you pay the $20 charges for the customer service mistake, does not make sense to you. You have spent enough time on this task already. The cord is useless with you anyway. Finally you relent. You request that atleast the shipping charges be borne by The Consumer Electronics Company. If you thought that should be easy- the customer support person will now have to contact another department to ensure you don't pay shipping charges.

You receive a standardized email about this conversation with customer support which miscategorizes the request and are requested to call another number.

When you call the next number, you have to explain the situation from scratch. You are now beginning to get frustrated. You want to talk to a supervisor regarding the quality of support you have received. You are put on hold and the call drops.

You call back the next day, and explain the process from scratch. You are finally advised that The Consumer Electronics Company will pay the charges for shipping back the incorrect cord sent to you. You demand to speak with someone who can take some action to alleviate the misery of going through this process. You believe you should also be refunded the shipping charges for the cord you bought yourself, because, it was, after all, customer support’s fault that you lost out on the promotion.

You are transferred to customer relations, where you explain the situation from scratch. Again. You mention that any customer who goes through this process will talk, even blog about it, and create a lot of negative publicity for the firm. Customer relations responds that they can do nothing more that pay the shipping charges for receiving the incorrect cord.

You are transferred back to customer support, where someone commiserates. You mention that you want action not commiseration. The whole process so far does not make sense from your point of view. Customer support agrees.

You go to FedEx and ship the cord incorrectly sent to you. Shipping is free. You receive the new cord for $30. $20 is credited to your account in a few days.

You are left wondering that you are a consumer of a $450 product and The Consumer Electronics Company put you through a lot of hassle for a $20 accessory.

The process seems un-American and un-East Asian to you. What are the things you would like this company do, in its own interest?


--

Sunday, March 2, 2008

Blast from the past: Other TATA products? A.k.a. And you thought Indian IT was getting hammered?

I had been reading articles about how Indian IT is getting hammered, so I had to send this one out. Its a blast from the past for me.

This note would be useful to folks interested in product management for the B2B space, as well as useful to folks tracking emerging markets, the banking sector, the business process consulting segment in IT consulting, and finally the IT sector as a whole.

This is about trends in Universal Banking, the corresponding impact on Financial Services Technology products and also about a little bit of nostalgia.

Yours truly was involved in product development and management of important components (core banking and trade) of the portfolio of products below. You could probably find an IDC report about how it all started, though this insider would disagree with some details in it. :-)

TCS BaNCS Recognized as #2 Universal Banking Solution in the 2007 IBS Sales League Table:
1> http://www.forbes.com/prnewswire/feeds/prnewswire/2008/02/29/prnewswire200802290830PR_NEWS_USPR_____LAF007.html
2> http://www.foxbusiness.com/markets/industries/technology/article/tcs-bancs-recognized-2-universal-banking-solution-2007-ibs-sales-league-table_501179_12.html
3> http://www.techweb.com/showPressRelease.jhtml?articleID=X678164

TCS BaNCS Core Banking ranked China's No. 1 Core Banking Solution in 2006:
1> http://www.myguides.com/guide/news/2007/Jul/31/TCS_B%CE%B1NCS_Core_Banking_ranked_China%E2%80%99s_No._1_Core_Banking_Solution_in_2006_by_Independent_Research_firm.html

Now, I would like to find that IDC report on how it all started. Any pointers?