Month: December 2003

Entrepreneurial Mistakes

Eric Sink writes about lessons learnt as an ISV (Independent Software Vendor):

– Be careful about fixed-bid projects.
– Be careful about using bleeding-edge technologies.
– Small ISVs should do software and stay out of real estate.
– Investors don’t like low-margin business models.
– A market with no competition ain’t.
– The negative connotations of the word “middleman” are often deserved.
– All contracts must be reviewed by an attorney. No exceptions.
– Cash is supposed to flow from your customers to you, never the other way around.
– Small ISVs should build apps, not platforms.

TECH TALK: 2003-04: Blogs and RSS, India in 2003

10. Blogs and RSS

Weblogs continued to thrive in 2003 as more people found that publishing just become easier. While it is still not clear that there is anything more than pocket money to be made by writing for niche audiences, that has not stopped people from writing on the web. We all feel the deep desire to communicate and share, and weblogs are a natural manifestation of that. Of course, what also become clear is that it is easier to start a blog than to maintain it over time.

The real disruptive innovation, though, is that being brought about by RSS and news readers and aggregators. RSS is an XML-based syndication format that allows microcontent to be made available by software that can automatically pick it up, parse it and make it available without us having to go probing different sites for updates. RSS is laying the foundation for the Publish-Subscribe Web.

2004: Blogs will continue to be an important, parallel mechanism for us to get information and analyses from people we trust and experts in specific areas. Expect blogs and RSS to make their way into enterprises. Blogs have the potential to work as a bottom-up mechanism to extract and distribute tacit knowledge in employees. RSS will be used for syndicating enterprise events to our desktops and cellphones, and for creating information marketplaces which can connect publishers and consumers of information.

India in 2003

There are three key trends defining what we have seen in India in 2003: cellphones, BPO and affordability. Reliance Infocomm began on the wrong foot but quickly got its act together to unleash what has become the fastest adoption of any technology that India has ever seen. Indians are grabbing cellphones at a rate nearing 2 million a month as entry barriers in terms of upfront payments have fallen. Price wars unleashed by the various providers have brought down pricing of telecom all around. Watching Indians with cellphones is like watching a populace that was long suppressed of one of the most fundamental human needs communicating with friends and family.

IT-enabled services now go by a new moniker: Business Process Outsourcing. As the world hires educated Indians to do their work, it is unleashing a construction and spending boom across Indian cities. What started in the year as a trickle has now become a flood, with every day bringing forth announcements of new recruitments by global companies in India. The work is not just the low-end type; Google recently announced plans to set up an India development centre with 100 employees.

Affordability is the theme underlying technology adoption across India. The cellphone boom has showed that if a product is priced right, it can tap into an increasingly affluent middle-class in India. Computer prices are also falling. Acer recently launched laptops at the Rs 40,000 price point in India. Be it a Barista or a Big Bazaar, everyones joining the game Wal-mart pioneered worldwide: everyday low prices. Increasing competition thanks to the opening up of many closed markets and technology in the form of better supply chain management are helping reduce inefficiencies in Indian supply chains.

All of this is making the world stand up and take notice of India: both as a provider of low-cost services and a large market. Incomes in urban India are rising, and so is the confidence among Indians. For the first time in recent memory, there is a definite feeling that Indias best years lie ahead.

Tomorrow: The World in 2004

Continue reading TECH TALK: 2003-04: Blogs and RSS, India in 2003

Entrepreneurial India

The Economic Times on Sunday led with a story by Chandralekha Roy on how Indians are becoming entrepreneurial. It featured a few quotes about and by me:

There was a brief period of time when we thought the New Economy had taken risk out of risk. The Net boom spawned so many wildly successful new companies that entrepreneur was no longer a euphemism for trying something small and insignificant that will probably fail because she couldnt get a job with Goldman or McKinsey.

The trickle effect is that the downside of entrepreneurship has improved along with the upside – and this change is probably permanent. Indeed, if anything the boom has educated a lot of people on the meaning of the word.

A colleague remembers the heady days chronicling the boom. At that time, he says, there were all these people one interviewed whose theme was we were just ordinary office guys like you and then when we woke up and read about the IndiaWorld deal and I thought I had to get out and do my own thing.

When Rajesh Jain sold IndiaWorld to Sify for over $100million it was catalyst of sorts. Till then mega money-deals only happened to the global Indian. Think Sabeer Bhatia.

What Jains deal actually did was to tell people in India that one could be a success in ones backyard. Once the preserve of the NRI population, Indian entrepreneurship at home could be just as robust as it was abroad.

As Jain says today:Entrepreneurship cant be a profession, just as money cant be the driver. Those who are in the short-term, with the motivation of only making money dont necessarily fail, but are likely to.

He also agrees that todays entrepreneurial model does not start with a picture of the business to be created, but of the customer for whom the business is to be created.

My quotes are not completely in context and make little sense by themselves. If you are interested in Entrepreneurship (now is as good a time as any), it may help to read some of the articles I have written:

– An Entrepreneur’s Attributes (Nov 2003)
– An Entrepreneur’s Early Days (Sep 2003)
– Reflections on Ideas and Entrepreneurship (Jul 2003)
– Entrepreneur’s Enigmas (Jan 2003)
– The Entrepreneur’s Delights (Sep 2002)
– Life as an Entrepreneur (Oct 2001)
– Leadership Lessons from Lagaan (Aug 2001)
– Entrepreneurial Learnings (July 2001)
– Entrepreneurship (Mar 2001)

American Jobs

[via Anish] WSJ has an article by Robert Reich which puts the US jobs scenario in context:

It’s true that U.S. manufacturing employment has been dropping for many years, but that’s not primarily due to foreigners taking these jobs. Factory jobs are vanishing all over the world… What happened to factory jobs? In two words, higher productivity…Manufacturing is following the same trend as agriculture. As productivity rises, employment falls because fewer people are needed.

Want to blame something? Blame new knowledge. Knowledge created the electronic gadgets and software that can now do almost any routine task. This goes well beyond the factory floor. America also used to have lots of elevator operators, telephone operators, bank tellers and service-station attendants. Most have been replaced by technology. Supermarket check-out clerks are being replaced by automatic scanners. The Internet has taken over the routine tasks of travel agents, real-estate brokers, stock brokers and accountants. With digitization, high-speed data networks and improved global bandwidth, a lot of back-office work can now be done more cheaply abroad. Last year, companies headquartered in the U.S. paid workers in India, China and the Philippines almost $10 billion to handle customer service and paperwork.

The problem isn’t the number of jobs in America; it’s the quality of jobs. Look closely at the economy today and you find two growing categories of work — but only the first is commanding better pay and benefits. This category involves identifying and solving new problems. Here, workers do R&D, design and engineering. Or they’re responsible for high-level sales, marketing and advertising. They’re composers, writers and producers. They’re lawyers, bankers, financiers, journalists, doctors and management consultants. I call this “symbolic analytic” work because most of it has to do with analyzing, manipulating and communicating through numbers, shapes, words, ideas. This kind of work usually requires a college degree.

Over the long term, symbolic analysts will do just fine, as long as they stay away from job functions that are becoming routinized. They will continue to benefit from economic change. Computer technology gives them more tools for thinking, creating and communicating. The global market gives them more potential customers for their insights.

The second growing category of work in America involves personal services. Computers and robots can’t do these jobs because they require care or attentiveness. Workers in other nations can’t do them because they must be done in person. Some personal-service workers need education beyond high school — nurses, physical therapists and medical technicians, for example. But most don’t, such as restaurant workers, cabbies, retail workers, security guards and hospital attendants. In contrast to that of symbolic analysts, the pay of most personal-service workers in the U.S. is stagnant or declining. That’s because the supply of personal-service workers is growing quickly, as more and more people who’d otherwise have factory or routine service jobs join their ranks. Legal and undocumented immigrants are also pouring into this sector.

But America’s long-term problem isn’t too few jobs. It’s the widening income gap between personal-service workers and symbolic analysts. The long-term solution is to help spur upward mobility by getting more Americans a good education, including access to college. Unfortunately, just the opposite is occurring. There will be plenty of good jobs to go around. But too few of our citizens are being prepared for them. Rather than fret about “losing jobs” to others, we ought to be fretting about the growing number of our young people who are losing their footing in the emerging economy.

Game Theory for Kashmir?

[via Smart Mobs] Nature features a paper by Elisabeth Woodwhiich could help peace settlements:

A political scientist at the Santa Fe Institute in New Mexico has devised a mathematical method that could help civil-war negotiators to find the most stable peace treaties1.

Elisabeth Wood calculates that a settlement will be stronger and more likely to last if it finds the ideal way to apportion the stakes. For example, if two warring factions each want control of some part of a disputed region, negotiators need to divide the territory in a way that comes closest to satisfying them both.

Perhaps, this could be applied to the India-Pakistan talks over Kashmir.

Atanu Dey had written sometime ago on this topic in an essay entitled “Dollar Auctions and Deadly Games.”

India’s Next 5 Years

Rediff features a Business Standard article on India’s future, starting with some stats:

  • Today around 2 million new mobile connections are sold each month. That’s expected to climb to between 2.5 million and 3 million monthly by next year.
  • The auto industry should be making 1 million vehicles a year by 2005-06.
  • There will be over 70,000 bank branches and almost 200,000 ATMs by 2009.
  • By 2005 television sales should climb to about 9.5 million from the current 7.3 million.
  • BPO and software services should have a turnover of around $70 billion to $80 billion by 2007.
  • The production of motorcycles should climb to over 10 million from the current 3.2 million by 2011-12.

    “It’s so damn exciting,” says R A Mashelkar, the dynamic Director General, CSIR Council of Scientific & Industrial Research. “The change that is taking place is so huge. It’s a great time to be an Indian and to be in India.”

    What will India be like in five years time? If everything goes according to plan — in India that’s an extremely big if — the Indian economy should have undergone a transformation.

    At one level, the changes will be one of scale — the economy will simply be much bigger than it is currently. At another India should, truly, have become a knowledge economy and an even bigger player than it is today on the global stage.

    • TECH TALK: 2003-04: Web Services, Social Networking

    8. Web Services

    The hype surrounding web services is slowly turning to real-world solutions. The buzzwords in 2003 – service-oriented architectures (SOA) and business process management (BPM). Writes Phil Wainewright: At the same time as building up a service oriented architecture, enterprises need to equip business managers to take charge of processes from the top down.

    A quote by IBM’s Bob Sutor explains SOA: In an SOA world, business tasks are accomplished by executing a series of ‘services,’ jobs that have well defined ways of talking to them and well-defined ways in which they talk back. It doesn’t really matter how a particular service is implemented, as long as it responds in the expected way to your commands and offers the quality of service you require. This means that the service must be appropriately secure and reliable as well as fast enough. This makes SOA a near ideal technology to use in an IT environment where software and hardware from multiple vendors is deployed.

    What has also become clear in 2003 is that to accomplish the next leap in productivity, organizations have to rethink their business processes, which is where the emerging area of BPM comes in. Web service providers the tools to bring about this transformation.

    2004: The Web services revolution will continue. The software development which began at the edge of the enterprise will reach within and extend outside to the larger ecosystem that organisations do business in. A service to watch is Sforce by Salesforce.

    9. Social Networking

    Venture capitalists found their calling in the last quarter of 2003 in social networking sites. Whether this is a bubble or a disruptive innovation, only time call. But for now, sites like Friendster, LinkedIn, Tickle, Spoke, Ryze and Tribe.net are part of the new connectivity revolution. This time, it is about networking people. Be it dating, jobs, business contacts or sales relationships management, social networking at least for the moment seem to have a solution for everything.

    Wrote the New York Times recently: Some of the fledgling social-network companies may indeed mature into powerful business hubs like eBay or Amazon. Yet the more intriguing prospect, from a sociological standpoint, anyway, is whether these applications will actually transform our lives. Ever since the publication of Bowling Alone, we’ve been flooded with even more data about the end of community and lamentations for its return. At least in theory, a readily accessible social network would enable more of us to bond with people we regard as far less anonymous than strangers. The larger possibility, that plugging into our social networks might somehow remedy a profound national loneliness, is even more enticing.

    2004: The coming year will be the true test of whether the social networking sites can build up a truly profitable and sustaining business. The leading sites are now well endowed with capital, so they will now need to show that it is possible to transform the six degrees of separation into something more than just network theory. 2004 will also the social networking ideas applied to many other verticals, and online reputation will plan an increasingly important role in our professional and business lives.

    Tomorrow: Blogs and RSS, India in 2003

    Continue reading TECH TALK: 2003-04: Web Services, Social Networking

    Faith Popcorn’s 2004: FutureTENSE

    Faith Popcorn is a consumer trend expert and marketing futurist. “FutureTENSE involves everything from “Identity Terrorism” on one hand, to generalized anxiety over political, ethical and economic disruptions on the other. Other Trends such as EGOnomics (a de-personalized society drives our desire to be recognized for our individuality) and Anchoring (taking what was secure from the past to prepare us for the future) will also play an increasingly dramatic role in shifting the direction of the culture.”

    Among the trends: Big Mother, Persona Propaganda, Identity Terrorism, Profiling Paranoia, Porn as the Norm, Idoling of America and Mystic Messages.

    IT Hierarchy of Needs

    Phil Windley, listed in Network World’s top 10 weblogs, writes:

    If you haven’t seen the IT hierarchy of needs before, the idea is pretty simply. There are some problems you have to solve before you even become aware of or appreciate the scope of other problems. The bottom level is called “base infrastructure” and includes things like desktops, networks, etc.–the stuff that it takes to just make the enterprise go everyday. At the top is “business processes” meaning automation of and support for business activities.

    The problem is that while most CEOs are screaming for the top two or three levels of the hierarchy, most IT shops are struggling with the realities of the bottom three. Everyone ignores data.

    Take another look at the hierarchy and ask yourself which of those tasks can be outsourced (off-shore or not). That’s right, the bottom levels. You can’t outsource the top levels of the hierarchy.

    What’s getting outsourced? The IT equivalent of coal mining jobs. My undergraduate degree is in metallurgical engineering and I’ve spent some time in mines. Its dirty, but high paying work that doesn’t require much formal education. People love it. But its also subject to lots of ups and downs and over the years had steadily declined.

    My prediction is that while hundreds of thousands of IT jobs will go off-shore in the next decade, we’ll gain more than we lose as we move up the hierarchy. We do a poor job of meeting demands at the top of the hierarchy and there’s plenty of work to do. When you think about the real problems that IT should be solving, its amazing how little attention we pay to them. Our goal ought to be to provide every employee with the information they need to do their job when they need it. Instead, we throw an email client and a word processor at them and say “good luck.” We can do better and the first step is to embrace the changes that are required to solve the problems at the bottom of the hierarchy—even if that means some pain in the short term.