Month: April 2011

This week’s links:

• The Really Smart Phone: from WSJ. “Researchers are harvesting a wealth of intimate detail from our cellphone data, uncovering the hidden patterns of our social lives, travels, risk of disease—even our political views.”
• Margins: by Fred Wilson. A second post. “When you think about your business; starting it, building it, scaling it, and financing it, pay a lot of attention to your margins. Understand what kind of business you operate and where it fits in the margin universe.”
• The New Geopolitics of Food: from Foreign Policy. “From the Middle East to Madagascar, high prices are spawning land grabs and ousting dictators. Welcome to the 21st-century food wars.”
• Getting Indian Entrepreneurship right: from Wall Street Journal. “A new start-up is required to go through 37 procedures to obtain a construction permit and obtaining a permanent water connection permit requires a waiting period of 45 days.”
• India’s Big Story: by TN Ninan in Business Standard. “Even as the country grapples with in-your-face corruption and complex challenges in economic management, bear in mind that rapid economic growth, dramatic changes in Corporate India and a transformed quality of life for many millions, has been and remains the most compelling story of our times.”

Winner 5: Rakesh Babu, in response to multiple questions:

We need electoral reforms first, then you can continue with the economic reforms. This will solve 90% of the problems
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Information to farmers about what crops to grow, what the prices are etc.
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Make users pay more for using electricity at peak time.
Give incentives for solar energy.

Winner 6: Umang Saini, in response to multiple questions:

In two words – Be Transparent and Collaborate
a. Transparency via IT – Realtime analytics on government spending, projections, major initiatives for big social programs. Hard deadlines, milestones and clear roadmap.
b. Collaborate – Let big institutes succeed by collaborating with the best in the world and fulfill their roles.
Side note on Energy / Infrastructure – It’s bad, but we have tolerated far worse in the past. The assumption being that above two will help resolve some challenges in Infra, Transport, Healthcare, Agriculture, Energy, Education, Judiciary etc. as well.
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Incentive Structure –
Current policy incentives force the agriculture sector to maximize production and get out of the way. Thus longer supply chain reduces the end benefit to the producer.
To short-circuit the supply chain, small and medium farms need to integrate vertically and cross sell additional products like carbon, water certificates, organic products etc.
One example of increasing farm incomes are by tying up the rewards to sustainable practices can be seen in this presentation link
Equivalently Jwar / Bajra should give higher returns to a farmer compared to Basmati rice , for them to shift to these crops. Current policy is forcing farmers to plant paddy and bombard it with subsidized chemicals in order to maximize their incomes and short term gains.
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Reliability –
There is huge potential in smart micro-grids which will match demand with supply in a more efficient manner. Standard demand-response techniques which create Negawatts will thus ensure more reliability.
Generation –
Good potential for Micro-power generation plants – 100kW to 2MW in Gas, Nuclear, Solar and Wind. Bloom Energy Box being a good example of innovation in micro clean energy generation.
Distribution –
Electricity act 2005 allows to break distribution monopoly enjoyed in cities, a fixed last-mile distribution tariff, say 0.40p per unit kWh will ensure that theft will automatically come into check and systems/services/reliability will improve.
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I agree that villages can no longer be islands, however their micro-economies still cannot afford solutions deployed even in tier 2-3 cities. They seek solutions that scale down to their immediate short term gaps

Continued on Monday.

Winner 3, Mockingbuddha, in response to Should India be a soft state or an assertive one?

A little bit of history.

America faced this problem while it was growing big, in fact one of its Presidents got elected for saying that America will stay out of world politics. They even tried to stay out of World War II.

As we can see, circumstances forced them to a bigger role, and to say the least, they have acquitted themselves pretty well.
India too can, and will, when the world stage calls for it. Till then let us stay content playing second fiddle and minding our own business…

We got a million problems to solve.

Winner 4, Sushil, in response to multiple questions:

The role of the government very simply put should be to use the countries resources for the betterment of the country (not themselves).
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Next Generation:
Rather than teaching them that this is how it works, we need to take the initiative to tell them what is correct.
Most people who break traffic signals on a daily basis are educated urban people. So clearly education is not only what we need. There is a higher social responsibility that we have !
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1)introduce age limit for politicians
2)minimum qualifications,
3)use e-governance extensively
4) police and judicial reforms
5)bring all including PM under empowered Lok Pal
6) plug loopholes and leakages in expenditure.
7) computerise land records
8)connectivity on top priority to remote villages-
9)grid independent per generation and distribution
10) use communication technologies to provide distance education, health, information, training.
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India needs economic reforms in almost every field, but the 2 major ones in my opinion are infrastructure and agriculture.
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The government-citizen model should be that of coaching (selection) staff – cricket team. The coaching staff (citizens) will propose changes, corrections, improvements in their own right, but the final execution is that of the cricket team (government).
Accountability and performance is the only way that the government will keep working.
That said the selection committee/coaching staff should be specialists in their particular field and should be representatives of a bigger society.
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What I am suggesting here is that every farmer should not be given a tax break or free seeds or fertilisers … It should be directly proportional to their incomes and farm outputs. Today there are farmers who drive in the fanciest of cars and have incomes of more than 1crore from farming, but still use all the incentives.
Also there should be a timeline or number of times that the same family or its generations can use “right/incentives”. WE need to make them “self-sufficient”
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Power generation has to be focused on renewal energy sources. For a country like India where we have sunlight for 10 months of the year, we have been extremely poor in investments for research in Solar Energy. The government needs to come about with revolutionary investments and incentives to make solar energy attractive for the common man and not just a Tax Deduction for the wealthy few.
**
Indian agriculture needs everything that we can give :
1) Better seeds, fertilizers etc.
2) Better water supply systems so that there is less dependency on “Rain”
3) Cheaper loans and freedom from “loan sharks”
4) Better storage facilities – warehousing/cold storage
5) Centralized markets for fast selling of produce and hence reduction of losses.

Continued tomorrow.

Over the next few days, I will reproduce excerpts from the winning entries. The detailed responses for most of the winners can be found in the comments of the original posts.

The winners, in no particular order:

Winner 1: FirstBallSix, in response to “Is there an alternative to entitlements for the social sector?”

At this moment, India has a huge demographic advantage in terms of the percentage of overall population that can be part of the workforce (in other countries, the population is aging). This is India’s moment – we should do everything to seize the moment.

The best role the government can play here is that of an active enabler. Just a passive “no hindrance” role will NOT suffice (though many people want it that way) – we need an absolutely positive approach to this decade and the next.

Winner 2: Aaren, for answers (reproduced partially below) across multiple questions:

The objective of government in India should be the provision of some key services – law & order (public safety, the enforcement of contracts, etc.), defence (protecting the people from external threat) and the development of MINIMAL regulation to permit markets to solve all other problems. As an extension of this, the government should not be involved in the provision of employment or education, industrial / agricultural policy should be restricted to minimal governmental intervention.
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Direct Cash Transfers – based only on economic criteria, none on on caste / religion based critiera would be a good starting point.
The long term, the key is to move AWAY from an entitlements-based regime. We need to give people opportunity to access the market, and stop there.
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Local government is a great place to start, but the key is to empower people.
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Given that increased urbanization is inevitable globally, and even more in India, the solution does not lie in giving rural Indians a method of building a good life for themselves in their villages, it lies in improving our existing and developing new urban communities where the rural populace has a chance to improve their lot.
**
We need to –
a. Permit private sector investment and involvement in education. Nothing quite works like competition and the profit motive, the market will weed out poor performers
b. Promote school vouchers and cash transfers to the poor to pay for schooling – school choice and/or charter schools are great methods of improving access and quality to primary and high school education
c. Look to build more universities – either completely private or with governmental support or in public / private partnership
d. Appoint regulators who will ONLY overview curricula from a standpoint of minimums in skills or knowledge that students should have AND monitor testing efforts to see how much students are learning.

Continued tomorrow.

We have chosen 11 winners. Each of the winners will receive a copy of Atanu’s book “Transforming India: Big Ideas for a Developed India” soon.

The winners:

1. FirstBallSix
2. Aaren
3. Mockingbuddha
4. Sushil
5. Umang Saini
6. Prakash
7. Rakesh Babu
8. Pratik Mhatre
9. Jeevak Kasarkod
10. Anshuman Goenka
11. Abhishek Puri

Congratulations to the winners, and thanks to everyone for having participate. Hopefully, the process of thinking about what India needs and getting these ideas to policy makers in government will continue.

Over the coming days, I will reproduce sections from the winning entries.

Thanks very much for the response to the Big Ideas for India Contest. There were 150 responses in all to the 13 questions. I want to thank you all for the participation, and apologise in advance if you thought your answer was better than one of the winners we have picked. There is always a subjectiveness in the process of judging. I hope that you learnt something thinking through the challenges we face in India, and that you will continue to explore the topics going ahead.

A couple points to note: The winning entries do reflect in many ways the bias Atanu and I have towards what needs to be done in India. Also, we did the judging on April 22-23, so a few entries that came in later could not be considered.

As Atanu and I sifted through the entries and the diversity of responses, we realised that it wasn’t easy picking the winners. In retrospect, I should have probably asked the questions in one go, asked you to pick one or more questions to answer, and then provided a structure for the responses – outline the pain point, propose the solution, and do so in about 300 words. These are learnings for the future that I will keep in mind.

I am more than convinced that India needs big ideas and dramatic transformation going ahead, and it is our generation that has to help in that process. We have to pick one of the two national parties, and participate in the system. The 2014 elections will come at a critical time for India’s future. We have three years of groundwork that can be done in creating awareness and driving action in the chosen areas of our specialisation to bring good ideas to life.

I will announce the winners tomorrow, followed by reposting excerpts from the winning entries (including a few that were sent directly to me and therefore did not appear in the comments).

To the winners: I will get in touch with each of you personally to ensure that I can send a copy of the prize (Atanu’s book) soon to you.

From a series of two posts last year:

I was talking to a friend recently on the problems of early-stage investing in tech companies India:

• lack of  serial/successful entrepreneurs whom investors can bet on
• limitations of the digital (Internet and mobile) marketspaces (in terms of revenue opportunity) in India
• dearth of risk capital (from angels and VCs)
• not enough mentors to guide early-stage companies through the challenging initial years
• poor digital infrastructure (broadband, 3G) which limits scope in the domestic market

In this context, it is no surprise that the whole investment cycle has shifted: angels act like VCs, VCs act like PEs and PEs like banks. There are many entrepreneurs who start off, but end up in  struggle because of limited capital. So, can something be done about this?

In India in the tech space, only a few companies end up getting funded. My guess is that out of every 100 companies that start off, less than 5 end up with adequate capital to build their business. So, what can be done to change this?

What many of these early-stage companies need is a combination of capital and management expertise. For this, they should be willing to give up a significant stake – provided they have not managed to raise capital for an extended period of time (say, a year). In this situation, the product/solution already exists. But it has not succeeded in the market for a number of reasons: the idea itself could be bad, the lack of money makes for decisions that are not optimal for the business, the company is not able to hire the people, or the business model itself needs some change.

In this scenario, what the company needs is a combination of cash and top-notch talent. Rather than go down the path of the “living dead”, the company should be open to bringing in an entity or a group of people which takes up 40-50% stake and can also help drive the company’s execution process. Money required will be about Rs 5-10 crore ($1-2 million). This will provide a lifeline for the company in the short-term, and an opportunity to succeed in the medium-term.

This week’s links:

• Crafting Best-in-Class Business Intelligence: from strategy+business.
• How Genius Works: from The Atlantic. “We enlisted some of America’s foremost artists to discuss the sometimes messy, frequently maddening, and almost always mysterious process of creating something new.”
• The Unlit Social Graph: by Lawrence Coburn. “Much like the Dark Web, there exists network upon network not yet graphed by Facebook, waiting to be mapped, organized, and optimized for communication.This is the unlit social graph, and this is where Facebook is vulnerable.”
• 2 New Books on Entrepreneurship: reviewed on 800-CEO-Read. 6 Secrets to Startup Success: How to Turn Your Entrepreneurial Passion Into a Thriving Business, and The Entrepreneur Equation: Evaluating the Realities, Risks, and Rewards of Having Your Own Business.
  
• India as a soft state: by Chandan Mitra. “A weak Government; a Prime Minister besotted with Pakistan irrespective of its hostility towards us; a complete disconnect between the vocal section of the urban elite that has arrogated to itself the title of civil society and the vast rural community; an increasingly irresponsible electronic media pushing the case of anarchism while pursuing commercial gains; and a flabby, largely corrupt political class served by an equally incompetent and venal bureaucracy, have combined to make India lose its sense of direction.” Also see: Is India’s growth economically sustainable? (from WSJ)

For your vacation last June-July, we travelled to China (Hong Kong, Shenzhen and Shanghai). You also did the two annual trips to Surat where SaifaliMasi and Niyati (who is just a year older than you) live. We also went to Lonavla to attend my cousin’s wedding. The times when we travel are the ones I love because it maximises our time together.

On most days, we get our 45-60 minutes together every morning after you wake up at 6 am. Our morning time ends with me giving you bath. Which reminds me: this year, you better learn to bathe on your own. And hopefully, you will also start sleeping in your own room – I know you love your Mom and cannot be without her, but every kid has to grow up!

Your Mom is the centre of your life – as she always has been. Watching the two of you together has always been an absolute delight. Now, with your snappy answers, it has become even more fun. You are not afraid to take her on – in a way I never could!

Your world is one of being in the present moment. You can’t read – though you can do enough pattern recognition to browse Amazon.com on your own in search of beyblades. You can barely write – and yet you don’t forget the important things. Your body clock works better than the ones that tell time. Your lose yourself in the world of your TV characters for half hour every evening as you have dinner – Chotta Bheem, Ninja Hattori, Doraemon and the absolutely obnoxious Oggy and the Cockroaches.

Yours is a wonderful world. It is one that I love to get lost in every so often. Are you ready for another game of Hide-and-Seek?

Happy Birthday, Abhishek!

You are currently learning swimming. And you are quite good at it. Your instructor is impressed by your enthusiasm and yet you push your relatively smallish body to do more. You learnt Skating in the first half of the year – and actually won a second prize in the competition at the end.

Your Sports Day came and went, and, well, you completed the two races. Let’s leave it at that. In your Annual Concert, you were a Magic Fish. Earlier this year, you did a good job in class speaking about the Golden Toad as part of a project on extinct and endangered Animals. Now, your school project is on old Bombay with the class mothers frantically doing all the work. I wonder what you will do.

School for you is from 8 am to 12:40 pm. From August, you will be in first standard, and will be in school till 2:40 pm. Life will change then. Maybe, you will need to do some homework. Right now, on the rare days that you need to do some writing on the weekend, you are quite good at not just delaying it right till the end, but also stretching it to an extent that tests your Mom’s patience to the extreme!

Continued tomorrow.