Archive for the 'Innovation' Category
Before my Mac, I owned the ugliest Notebook in the World
Last Saturday, I did it. After a few years of consideration, I seized the moment of agony for my Fujitsu/Siemens-Microsoft-Vista-Notebook, went into the Apple flagship store in San Francisco and got myself a MacBook Pro. Life has changed -for the better. I am still getting into the nitty-gritty about the Mac, but I am getting there, especially with more and more enthusiasm. The same enthusiasm which I so far observed with suspicion from the other side of the fence owning and using a PC for almost 20 years.
The final nail in the coffin to get a Mac was that my last notebook, a Fujitsu Siemens Celsius in the vicious combination with Microsoft Vista. This evil package was the biggest piece of shit in technology which I’ve touched in my whole life. And I never belonged to those predictable Microsoft-bashers; I was indifferent as long as this thing quietly did its job, rather in terms of a hygiene factor. Maybe that’s in Microsoft’s proportions anyway the highest Zen of praise.
But with this monster, which I bought, some 15 months ago, everything started to change. Have a look:
Frankly, have you ever seen something more ugly, clumsy and less elegant than this grey brick containing chips and processors? (If so, please send me pics and links). I am actually sure, that the spec for this notebook said this had to be ugly. I imagine a conversation at Fujitsu/Siemens during the design phase, when the engineer presented the first prototype to the team getting a reaction like: “Oh no, no. Back to the drawing board, that’s way to beautiful, it has to become, really, really ugly.” After seven iterations or so the engineer finally comes up with something that looks like this insult to fundamental human aesthetics.
Anyway, I decided myself to buy this thing, and I was not looking out for a piece of postmodern Andy Warhol art, but a fast and powerful computer. But what ultimately amounted to my deepest despise for this thing is that it terminally crashed four times in these 15 months of my ownership. To be fair in giving shit: It was equally distributed between two identical crashes of Vista and two identical failures of the hardware. So, do we start to see patterns here?
I think so. And it brings me to the conclusion that the hardware-software model of the last 20 years for the PC is broken. Sadly and luckily. The model went like this: Faster machines allow for more powerful software where Moore’s law doubling processor speed every two years allows for even more powerful software and so on. The problem: The duo of MS Windows and MS Office suite, sitting centrally on your machine, have become heavier and heavier, cluttered with useless features that were built in order to keep the release cycles and its underlying license model spinning. Who lost out? The consumer, the user.
Just to deep dive into my case, which I don’t see as just an outlier in terms of, well, I was just unlucky with my particular PC-unit. There is a system of collective disregard for the customer:
- I bought the computer in Germany, but wanted the software for the operating system Vista and MS Office in English. Guess what, not that I could not just change the settings in the software or at least handily download a patch from Microsoft’s website. No, this language kit had to be ordered from Microsoft UK. That took 6 weeks to get physically shipped. Hello?!? In which millennium are we living?
- With the installation of the first pieces of software when I got started, in particular a standard driver to run my PCMCI-card for wireless connectivity in India, Microsoft Vista froze during re-booting. Froze without any chance to bring it to life. Terminally dead such that I had with the help of my dealer make a mirror of the hard-drive to save the data and run a complete fresh re-installation of the software. The same happened a few weeks later. How can that be? I believe it’s in line with all the anger and complaints that have been around since Vista was hastily released without sufficient testing.
- Last November then in India, I tried to start my computer. Nothing happened, apart from three sounds: short – long – short and a black screen. Calling in Fujitsu Siemens they let me know that the sounds were for remote diagnosis and said that the motherboard had gone. During one of my visits in Germany the technician had to replace it and mentioned something like “it happens quite often with this model as it tends to get hot which strains the motherboard to death. “
This “getting hot” is a charming euphemism for this super-heavy-ugly thing on my lap being able to either fry eggs (or my balls alternatively). And where the fan was making sounds of a sick old steam engine whose time had come.
Maybe this picture of a “steam engine” illustrates best how outdated and of yesterday this model “bigger, higher, faster, centralized” has become in a time where we are moving towards distributed computing, software-as-a-service and lightweight netbooks.
I see parallels to what the U.S. car industry is going through. Innovation at GM in the last 50 years largely consisted of building even heavier, even bulkier and even more fuel-guzzling monsters who are in fact nothing but dinosaurs – too heavy at some point to carry their own weight, collapse and perish. And that in a time where we require “The Power of Less” (as the meaningful conference title of Web 2.0 Expo went last week. )
What the car industry needs is something like Google or Apple in technology to fix the entire model. Start from scratch with new paradigms which fulfil the demand for cost-effective mobility and balance the impact on the environment.
But back to my computer. With these three incidents I had really started to loath my notebook to the point to co-addiction. When I booted it in the morning and it went slower that usually, I held my breath (“Will it resurrect?”). I became hesitant to install new software because it could risk the freezing. Not to mention that the battery for this energy-guzzling beast lasted for some 25 minutes, whereby it took already 5 to get it running. All in all: A total, complete and utter failure on every possible front.
Finally, thank god finally, last week in San Francisco at the conference, on Thursday morning during the keynote I tried to boot this piece of crap. There they were, the three sounds: short – long – short. The motherboard again, just 4 months old. After 10 seconds of changing temperature between cold and hot, I just felt deep relief as it was clear: This was it. Never again. Over and out. Now the shit will see the trash-bin. Liberation. No more self-betrayal of the sort: “OK, I don’t like my notebook, but still: I bought it last year and I should keep it for one more year.“ (Maybe you realize that this blog-post carries traits of a self-therapy ;-)
I was immediately geared towards buying a Mac, but needed more confirmation. And it seems that this is how it works with Apple-products: The community of enthusiastic users is the best evangelist. Within 48 hours I consulted three trusted people whom I hold in highest esteem and who were already Mac-users: Anju Rupal, Sören Stamer who were also at the conference, and in good Web 2.0-fashion via Twitter (and e-mail) Lars Hinrichs who had made the change to Mac only recently.
After they had given me a thumbs-up for all the apprehensions I have had, I went into the hyper-cool Apple-Store and started my own journey with the Mac learning what it takes and having fun with it. Anyway, also to prevent lethargy from age, it is always good to be drawn out of the comfort zone by having to adopt something different. A great start for a new beginning.
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Landed in San Francisco: Stunning Lufthansa Service
I couldn’t be luckier for today’s flight LH 454 where I just landed in one of my most favoured cities, San Francisco. Bought myself an Economy Class ticket, used my abundance of miles for an upgrade to Business and checking into the Lounge in Frankfurt, I got a free upgrade to First Class. And yes, the Flugröserl was in the game again :)
Surely, this is not a lucky draw in the lottery, but based on my HON Circle-status, but I appreciate these gestures from Lufthansa a lot. Maybe, therefore, I am a bit biased, but overall flying Lufthansa like crazy in the last 3.5 years between the continents, I feel that it is time to express a thank for the splendid work the airline does.
It doesn’t come by surprise that – based on “good old Germany virtues” – Lufthansa consistently ranks high at safety, reliability and punctuality. But those same virtues culture-wise were not always prone to outstanding service, it’s usually not what Germans are like. Slightly on the brush side of life, the understanding of service falls short in the scale of galaxies what one finds in India, Singapore, Thailand or Japan. There, serving a customer is culturally considered an honour.
Hence, it deserves even more hail that Lufthansa grew above itself to be not only significantly better than average German service, but even on the many instances on the ground, but especially on board, truly exceptional. Gone are the times (which I remember) where a bitchy flight attendant would almost throw the tray with the meal in front of you.
Admittedly, passengers in Business and First Class pay more to get better service. But my point is that you can’t buy friendliness, attention and charm when it’s not in a company’s DNA, when you have the wrong people or you have the right people and over time in a bad organisation they degrade to jerks. In my perception, Lufthansa has worked hard to change its DNA. In some instances I spoke to flight attendants off the records where they told me about their training in general and the briefings before every flight in particular. The purser would remind the cabin crew that it’s them who will make a difference in choosing Lufthansa over a competitor and make a lasting impact on the experience. So there seems to be a system of deliberate effort behind, and to me it seems that the system is bearing fruit.
There are many aspects of outstanding service, but it come most in the shade of getting something which you did not expect: Like today I chose for my meal a French wine, the flight attendant asked me if I was sure not to go for the Chilenean one. I stayed with my choice, but he came back to me smiling after two minutes with a sip with the one from Chile just to give me a try.
I don’t intend to celebrate my middle-age-wine-decadency with such an example; it’s just illustrating how small unexpected gestures can make a difference in delighting a customer. Today and in the last months and years I have seen a couple of these instances where Lufthansa’s staff has gone, or rather, flown that extra mile for me. Thanks.
Leadership Forum: How NASSCOM just doesn’t get 2.0
After the gala dinner “Salaam Mumbai” on Friday night, I made my way to the airport and had a relaxed night flight with Swiss Airline to Zürich where incidentally Rattan Tata was two seats away from me. The landscape here couldn’t pose a bigger contrast to the previous three days in hot and humid Mumbai. On the snow covered slopes of St. Moritz (Switzerland) I found some time and focus to reflect on the conference.
These three days at the NASSCOM India Leadership Forum 2009 have – like my previous two attendances – been tremendously inspiring with phenomenal speakers like John Chambers (CEO of Cisco) as the starter and management guru C.K. Prahalad for the grand finale. Moreover, and that’s what I love deeply in Indian culture, if you know on Day 1 some people, on Day 3 you will know many people thanks to the cordial introductions which those some will make for you to the many. The strong impression which the evening events left on me, is the result of a long-term effort putting these choreographies for the shows with all the awards and dancers together. All fine, and I am quite sure I will attend next year again, that’s for the red cross in the calendar February 9th to 11th 2010.
Yet, and that’s where it really loses me, that in spite of the professional organization of the event, India’s IT-industry association NASSCOM simply doesn’t get it what this beast Web 2.0 or Communication 2.0 or Innovation 2.0 or however you want to name it, is about. Ironically, the two top-speakers I mentioned above where teaching and preaching how it works, what it means and how it positively impacts the outreach of an organization. Specifically, C.K. Prahalad mentioned in his talk that he sees a huge opportunity to consult companies in “social architecture”. NASSCOM should be the first customer.
So in my perception, NASSCOM is still stuck in the mindset: “Uuups, there is this something called Facebook, Twitter, Web 2.0 – and we have to do something with it.” The result: Applying the old mindset (which again Prof. Prahalad was pointing out as the biggest obstacle) onto these platforms and forcing the existing command & control structures of its organizations on these platforms. And it just hurts, because it just doesn’t work this way and thereby gets stuck in the old format (sorry for the blurred quality of the pic).
Examples:
- NASSCOM is running “a blog”, hu-ha-hu a blog, how fancy does this sound with a few “bloggers” writing for it here and identifying themselves on the event with a badge “NASSCOM – I’m blogging” plus some through the audacity to have their hair grown over the tip of their ears. Nothing to object, but this has nothing at all to do with blogging. What NASSCOM in fact does, it hires a few people as editors, thereby controlling the message and pushing it “out to the world”. I wonder if the world cares when the oracle has spoken. (When I got the offer by Avinash Raghava from NASSCOM to “get an account also write for us”, I politely declined. I prefer to write what I think on my own blog.)
- NASSCOM in on Twitter, check out what came out in the last three days of the conference under http://twitter.com/nilf2009: It’s nothing but pushing one-directionally micro-links of these same messages out. Moreover, using the account name NILF2009 carries a fundamental and obvious flaw: It terms that NASSCOM easily understands, it’s simply not “scalable” as for 2010, 2011 etc. there have to be a new accounts over and over again with losing all the old followers and starting from zero. If I was a cynic, I could argue: With the 36 follower at the time of writing no harm done. Note by the way, the absence of NASSCOM’s interest in conversing by only following back 10 people.
- NASSCOM has set up a community “Emerge” of its own using CollectiveX to have its members and the delegates respectively interact on that platform beyond the face-to-face meetings. So far absolutely a right move. Yet, it stops exactly there as the old mindset dictates that one must own, control and monopolize the conversation. This platform is not bad at all, but it is not exactly the comfort that Facebook offers. So where is the Facebook-group of the conference where there are not just the better features for interaction, but more importantly where EVERYBODY is already around. When I asked new acquaintances on the conference after receiving their business cards if they were on Facebook, in 80 percent the answer was “yes”.
- NASSCOM is taping all of the keynotes and most of the panels on video. Why in this world is there no channel on YouTube to put these treasures out? The same applies to the presentations where NASSCOM-president Som Mittal mentioned at the very end that most of them will be available for download. Thank you very much, had I known that before I would have not written my fingers off with taking notes. Just see this slide from John Chamber’s presentation on YouTube’s impact on his organization.
- NASSCOM, and that brings me to the last point, is acting in an era of connectedness entirely disconnected in all the separate, distinct and isolated silos of activity. The moderately talented moderator who regularly stumbles in just presenting what the presenter is going to present is of little help either in that context. Where are these closed feedback loops of someone qualified on stage continuously bring the pieces together?
But let’s take a step back and not get stuck in doing the same mistake of bashing single flaws here and simple formats there, but re-draw the big picture of what this all is about: It’s about providing the delegates with a profound and sustainable experience of the event in terms of learning, connecting and participating. Beyond that, the message should get out of the “echo chamber” and travel as far and as fast as possible to anybody who could be a relevant stakeholder. As part of a communication strategy, NASSCOM perfectly includes the press in the process. But here the story ends. Where NASSCOM entirely fails, is getting real word-of-mouth out by engaging into a CONVERSATION. A conversation by definition requires at least the same amount of listening as much as of talking yourself.
Attend a conference of O’Reilly like the upcoming Web 2.0 Expo in San Francisco next month (I will be there, too) and you see how it can be done differently by pulling all levers and connecting them. Attendants can twitter questions upfront which the moderator will use for his interview, he will suggest tags for pics and videos which will be uploaded etc. Furthermore, the conference organizers will invite impartial bloggers equal to traditional press which will, of course, write on their own blogs. The official conference-bloggers would read them, link to them, comment, retort, put things straight or, clearly, ignore trolls who are just out there for parasitic attention.
Or, visit the DLD-Conference in Munich where I moderated two panels a fortnight ago: There is a dedicated video-channel with all the panels. Also, from the organizers’ communication team someone will constantly watch what is being twittered in order to make improvements of the event “on the fly”.
Overall, if NASSCOM is serious about its efforts to move up the value chain towards products, it would require some colourful “Gondalization”, named after my friend Vishal Gondal from Indiagames, who won this year’s NASSCOM India Innovation Award for evangelizing his service in a novel way. Vishal was not the only one to wear an orange T-shirt in the dark ocean of seriousness. What is more, he has fully understood how Communication 2.0 works, he is a real blogger who has a tremendous network to leverage upon. This includes that NASSCOM would have to deal with posts like his Why Wipro, Infosys and TCS are “The Axis of Evil” for Indian start-up space which has garnered 120 comments. One of the major properties of Communication 2.0 is the ability to let go and have the network do the work from amplifying to correcting the message.
It’s not about if Vishal in right in all he writes, or if I went too far with criticism in this post. That would be missing the point which John Chambers got so right as the bracket for this keynote: “If you agree in all I say, I have failed.” But listening to it from a position of equals is the starting point for a true conversation.
Videos of my DLD Panels “E-Commerce” & “Mobile” live
So here we are with the videos which got taped last week during the two sessions I moderated during the DLD in Munich at the new format “Technology Enables Success”.
Panel “E-Commerce”
Panel “Mobile”
Link: 
Thanks to all the great panelists with their profound knowledge and enthusiasm which they displayed during the conversation and which they display every day to run their businesses successfully.
DLD 2009: “New Realities” meet “Old Excellence”
Another 3 days of DLD 2009 are over and I still feel primed by all the inspiration from this event which I consider the finest of its sort in Europe. I also explained here on video after being asked :-) The subject "New Realities" couldn't be selected better given the global gravity of circumstance we are currently in.
What impresses me every time anew at DLD is the consistency how the organizers carry its top-level theme through all the bits and pieces of the conference-experience. Overall, the panels were phenomenal, with a few people's intellect and speed of thought being in particular astounding like Marissa Meyer from Google, Max Levchin from Slide, Carlos Bhola from Celsius Capital and Mark Zuckerberg from Facebook. Mark was announced as the "surprise guest" as the very end, came, sat 3 feet away from me – unassuming and down-to-earth in the speakers' lounge – before going out on stage for his interview with David Kirkpatrick.
What in my feeling makes DLD stand out from other conferences is the ability to bring a true community to life: the event management is perfect, yet not clinically polished. Conferences in Germany in particular tend to be stiff. In that regard an international crowd brings in a relaxing element. But above all, with the inclusion of lifestyle and arts, both on the panels as well as throughout the conference area, the organizers manage to set the tone for a warm, informal and approachable setting. Here, by the way, the pictures I took from the conference.
On another note I am aware that this year human drama took place as the number of participants was almost reduced by half. I received countless requests from people "if I couldn't do something" for them to get in since they saw me on the speakers' list. I would have loved, but this was beyond my control. On the other hand, I have to admit, that perhaps this very reduction of size contributed to a more intimate and personal atmosphere which allowed for easy approaching of anybody you wanted to talk to. In that respect, it reminded me of Clay Shirkey's explanation in his book "Here comes Everybody" that the perceived group cohesion is negatively correlated with its size.
Just on one critical note: The co-chairman Yossi Vardi is an amazing person, appears to be a genuine good-heart, made it in life and is fully entitled to display both his deserved independence and extroverted personality. Yet his appearance as the moderator of a high-calibre panel with Chad Hurley (YouTube), Samir Arora (Glam) and Mitchell Baker (Mozilla Foundation) was a disaster. If there is nothing left than having the audience do the "tarzan cry" and ignoring his guests on stage, then there is something going wrong. But here's the video, so go ahead and form your own opinion.
Yesterday afternoon, in a new format called DLD-TES (technology enables success) by Burda Digital I had the honour to moderate the two sessions about E-Commerce and Mobile. The first one was the easier one as it was fairly straightforward to build a common thread along the four panellists where technology makes a difference in their strategies. Mobile is a hell of complex issue where we had to spend half of the time not just describing what each of the panelists' companies do from a tech-standpoint, but also explain where and how the panelists' companies are intertwined (a lot in fact, I swear). Overall, I had a good feeling on both panels and the feedback so far was also ok. From what I heard, the sessions have been taped on video. Once I get ahold of the URLs, I will happily share them here.
Thanks at this point to the organizers to make this event happen again where "New Realities" met "Old Excellence" of DLD. Thanks in particular to Marcel and Steffi (picture below), Rupert and Heiko as well as Tobias.
Busy preparing for DLD Moderation
Temperature-wise, it makes quite a change: Last week in Lapland at -32° C I could not have thought of stepping out in shorts and T-shirt and enjoy it like I did yesterday on my terrace in Bangalore. Unfortunately there is not too much time to hang out in the sun as I have quite a tight travel schedule in the next days.
Tomorrow, it's going to Delhi for the "Regional Integration Event" (=RIE 2009), a congregation of all Indian Chapters of the Entrepreneurs' Organization (EO). These events used to be always a blast in terms of enthusiasm, bonding, speakers, learning and fun. Last year it happened in Bombay, to be precise in the lately heroic Taj Mahal Hotel (see my blog post here).
Unfortunately, I will only be able to stay for the whole Saturday and leave one day earlier, as my bed for the night to Sunday will be in LH 761 Delhi to Frankfurt in order to make it on time at 2 pm for the opening of the DLD. In my view the finest conference of Digital, Lifestyle and Design in Europe, featuring digital innovation in a broader context of science and culture.
Like last year around the subject of "India", I will have the honour this year to moderate two panels within the newly created format "Technology enables Success" which will take place on Tuesday afternoon. "My" two panels revolve around mobile and e-commerce, whereby we will focus on the critical role of technology as a strategic differentiator for business. The good thing for the audience is that I am not alone, but will have four distinguished thought leaders on each panel from big incumbent players to new start-up which intend to disrupt the current landscape – guess what, by technology.
So the preparation these panels besides day-to-day business is keeping me quite busy. As I learned from old school moderation of 10 years in radio: Lots of preparation allows for lots of spontaneity. So I am siphoning through the CVs of the panelists, calling each and every one up for a small up-front chat, reading up on their companies and piece by piece formulating questions and ultimately some common thread to spin a meaningful conversation on stage.
Moreover, besides all the facts, atmosphere is essential: Relaxing the situation from the very beginning with everyone involved. That's something one could really obeserve from the new U.S. president during his campaign which got a name I really like: "No drama Obama" :-)
Excellent Health Check-Up at Koramangala Clinic (Bangalore)
What I experienced yesterday at Apollo Koramangala Clinic is the best what India has to offer, one of those increasing experiences I have labelled “NCA”: neat – clean – affordable.
As I haven’t been to the doctor for a few years (luckily I didn’t have to, apart from the medicals for my pilot license), I decided to do a full check-up. From a positively perceived reputation for the owner Apollo in combination with googling, I found the package “comprehensive health check-up”. I showed up yesterday morning at 9 am, had fasted for the first blood test, went for ECG, lung volume check, breast X-Ray, ultrasound scan of liver, stomach and kidneys by a radiologist and got some yummy Idli with Sambar as South Indian breakfast. After a little break I proceeded to the urologist (the examination was harmless :-), physiotherapist and to the second blood test (now with the metabolism at work after breakfast). Went back to the office at 12.30 pm.
Came back for the second round in the late afternoon at 5.30 pm, the test results were already prepared, got called to the consultation with the general physician who did a thorough anamneses, looked over my lab-values: so far ok, just cholesterol marginally elevated. (No wonder after the sins of Christmas overeating like lately in Awtar, Dubai.) Next was the cardiologist with the Doppler-Test for bloodstream around the heart, EKG in quiet position as well as on the treadmill. For the final I spoke to the dietician on nutrition advice, went out and home at 7.15 p.m.
Besides of all the details and steps I underwent, I found the clinic very well organized, I got regularly communicated where I was in the process and what was next for me to be expected. Two doctors whom I kept in particularly good memory: the general physician Dr. Prethi and the cardiologist Dr. Nagami, two ladies who were extremely knowledgeable, also from the scientific standpoint of their profession, very focussed on the issue as well as its follow-up and at the same time approachable by answering patiently each of my annoying “I want to know it all”-questions and not lacking some warm sublime Indian humour.
If you come from Germany like I do, then medicine doesn’t have a price tag. This is very unfortunate because you end up paying much more anyway though mandatory contributions to an inflated apparatus of public health. Of course I am privately health insured which jumps in soon as the cost of treatment is above a certain threshold. Since then, I started to look at the cost of medicine as a service and develop a certain sensitivity to price. From the perspective of a for-profit organization like Apollo Clinic it means that my payment must not only cover their cost, but also yield some reasonable margin.
And? And? What do you guess did this whole health check-up cost (payable up-front in cash or via credit card)? I found that completely unbelievable: Rs. 5,350 which corresponds at the current exchange rate EUR 79 (seventy nine only). I am sure had I done the same in Germany, I would have paid at least 15 times the amount and I wouldn’t expect treatment to be any better.
My summary for Apollo’s Koramangala Clinic: Outstanding quality, high competence, very well run, with lot of care for the detail (e.g. smoothing music concept in the building) and no frills (who needs them, I am not in a spa) taken together allows for such a price which is even for Indian standards reasonable. Comparison: You can easily blow that money at wining & dinner for two in one of Bangalore’s high-flying restaurants.
The only thing where I believe the clinic could improve is the first point of contact on the phone: Yes, friendly, answering every question, but this exactly can fall short when I don’t even know what to actually ask. So a bit more of “consultative sales” from the supplier’s perspective would provide the entire picture of what is to come and certainly thereby increase the “conversion rate” of customers taking a positive decision to show-up.
Many companies not just in India, but all over could take an example for such a well executed concept of “NCA”.
Indian Winter at 14° C warmed by “Benny Lava”
After a quality-wise mixed LeWeb-conference in Paris last week (pictures here) which is close to to revive the diplomatic American-French rift and a brief intermediary stop in Munich, I arrived in India on early Sunday morning with my good friend and business partner Dirk Schornstein. Actually, the flight LH 754 from Frankfurt to Bangalore added those few missing miles to become a Lufthansa HON-Circle.
607,771 miles in 2 years, uffz, so I kind of deserve it for spending half of my life on a plane :-)
Bangalore at this time of the year has it's coldest season of the year where I almost feel like a sissy wearing a pyjama during the night in South India, but it's just these 14° C during the night which make it slightly chilly.
It's Dirk's first time to India and for me it's almost a bit of re-discovery through his "virgin eyes" for this country which with tomorrow's date exactly for 5 years has become the centre for my little universe. Dirk is doing very well, with learning fast how to cross a street alive by running like a headless chicken (Quoting his last tweet: "Crossing streets is like playing Frogger. Difference: only 1 life. #india #traffic") and eating spicy food with his hands.
We are here half-business, half-fun, later the day we'll attend the TIE Summit with the most impressive entrepreneurs from various industries in India. For the fun part we'll have two journeys. The first starting tomorrow by flying to Coimbatore, taking the toy-train to Ooty, spending two nights in the Mudulamai National Park and driving back to Bangalore with a stop-over in Mysore. The second trip from next Monday to Goa over Christmas and one night in Bombay.
After the terrible terrorist attacks in Mumbai three weeks ago, I was very carefully assessing the situation. In terms of risk I had identified three possible scenarios: Another attack, either by the same group or some other who wants to take a "free ride" in an anyway tense situation, a clash between Hindus and Muslims like it had happened in 1993 already and rising military temperature between India and Pakistan. The latter is becoming increasingly unlikely thanks to India's prudent reaction to Pakistan which has to be considered a failed state in all the harshness of the expression. Or as Shashi Tharoor put in in the current print edition of the Time Magazine: "India is a state with an army, Pakistan is an army with a state."
If there is anything of a good in all the evil which has been done, it is the fact the honest hard-working Indians from the middle and upper class are waking up, saying "enough is enough" to it's incapable political leadership and reclaiming democracy from those who have corrupted it. A good read on the "State of the Union" is the country-special in the current "The Economist" where it for instance says about India's progress in the abysmal infrastructure everywhere: "But India will not meet its target; it never does."
Still, the subcontinent is always full of surprises and nothing would be further from reality than writing India off. Dirk and I will have a good time in the next days and weeks for sure. If you want to follow our trip, here we are:
Finally, to end this post with something extremely, tremendously funny, a music video from a Bollywood dance-scene which is even by Indian standards on the rather "extreme" side of the scale by itself. What makes it, however, completely OTT (=over the top) are its "subtitles" which are "explaining" what is being sung. Check this out, because at the end of the day we are all "Benny Lava" :-)
Viren Khanna and the Internet changing Bangalore Nightlife
Internet penetration in India is still relatively low, only around 30 mn of the Indian 1.1 bn population are online, growing at a fast pace of 27 % p.a. Yet, as everything in India, one has to put things into a context before making a conclusion, one has to put a frame around what one ist going to say. The context that I'd like to narrow down is the increasingly affluent group of people who like going out for a good night's party in Bangalore. Indians usually in their 20s, and a bit elderly expats in their rather 30s (like me ;-). Although the "good night's party" in Bangalore is strangulated by a curfew at 11.30 pm including a no-dancing policy whose zeal of enforcement reminds me rather of the Islamic police in Iran that in the allegedly "biggest democracy in the world", one thing has changed for the better in the last 1.5 years or so.
Previously, due to the reason mentioned above, the entire nightlife was entirely fragmented across the various locations in Bangalore. No doubt, that there is nothing more boring that going to a bar or a club and having the impression to be almost the only guest. So today 23-year old Entrepreneur Viren Khanna seized the opportunity of aggregating the dispersed crowd. He made a deal with existing clubs and started to send out text messages to people of his address book on the mobile phone which he systematically grew with every event; a typical example of "building momentum". Since then, the so called "Viren-Parties" have become a synonym for "something is happening" at least two times a week in Bangalore.
In a not surprising quest to grow his business, he went on to organize fashion shows. What is more, the platforms of communication got enhanced as well, getting into the Web 2.0, an environment that the mentioned target group is very familiar with. For one, a group called "Viren's Nightlife Group – Blitzkrieg" on Facebook with 789 members at the time of my writing. For second, in order to provide a higher level of proprietary branding, a social network of its own, "The Ives Club".
Positioned as a club for interns, trainees and expats in Bangalore, I was astonished in the first place about the technological sophistication of it and wondered what huge effort it would have taken it to engineer this monster. When I digged deeper into the souce code, it dawned on me that the platform entirely uses Ning, which allows you to "create a social network for anything". Co-Founded by Marc Andreessen, the founder of Netscape in the 90s, Ning is an amazing example of the Über-Plattform, as Marc elaborately explains in his blog-post on "The three kinds of platforms you meet on the internet". When I asked Viren how long it took to build The Ives Club based on Ning , he replied "It did not take me much long to stitch this thing together, but it did take me an extremely long time and a lot of fidgeting with CRM softwares, phpBB and 3 versions of it to find out about Ning and use it."
As the fundamentals of Web 2.0 go, these services become better the more people use them. So besides just having a distibution channel to annouce further events, the members among each other begin to interact before and after the events. So the shy ones for instance get the opportunity to address a girl onlline which they have failed to do while seeing her "in da club". Subject to some positive response he will be able catch up during the next party and prove that is is not that shy, though …
Microfinance explained by Anal Jain (Microventures India)
Catching up from our first encounter at NASSCOM's "IT Product Conclave" in August, I felt very proud and privileged to receive an invitation from Anal K. Jain today to Bangalore's pristine Golf Course at the Karnataka Golf Association. Anal has an amazing career behind him with setting up IBM India as employee #1 and after that likewise starting-up the Indian operations for Sun Microsystems. He is strongly involved in mentoring young IT-companies together with NASSCOM, India'a industry association for companies in the space of software development and business process outsourcing (BPO).
His major focus, however, is his current involvement into Microventures, a for-profit fund in the space of microfinance. The sector has recently gained strong public awareness after Mohammed Yunus' got awarded the Nobel Peace Prize for his Grameen Bank, a micro-finance institution from Bangladesh. Indeed, the beautiful thing about micro-finance is three-fold: One, it is ideally suited to raise people out of (absolute) poverty in a sustainable way. Second, giving these people a sense of dignity as the improvement of their lives is the immediate result of the empowerment towards entrepreneurship. And third, yet another confirmation that profit is good – both for the new entrepreneurs, the bank as the mediator in between and ultimately the investor on the financial supply side. Microfinance proves to be a perfect example for the "Bottom of the Pyramid"-principle, where "the poor" are not just considered from a philanthropic perspective, but as equal participants in a vivid economy: As entrepreneurs and customers.
Anal's role for Microventures is an advisor for directing the incoming funds from the European headquarter of Microventures into prospective channels in India. The exiting thing is to understand how the company tackles this challenge in probably the most unsystematic, fragmented, long-tail market that lacks any supportive eco-system so far. Clearly, the opportunity in the aggregate is huge with 70 % of India's 1.1 bn population living in the rural areas being potential customer for micro-finance. My key insights:
- As it is entirely impossible to reach out to each and every of the few hundred million potential customer directly, one has to rely on existing structures of microfinance-institutions which – again – are structurally fragmented and widespread all over the country. Microventures acts as a "fund in fund", i.e. like a meta-layer on top of these existing institutions by taking an equity share in exchange for a cash-injection.
- This cash will be supplemented by bank-loans and then dispersed down to the village level by local employees of the same institution. There the employee will invest into a group of women. Why women? It has proved – reality bites – that men against all promises tend to spend any incoming money at the bar around the corner while women prove to use it for the purpose of their small enterprise. Why groups? Addressing a little community seems to provide a joint sense of ownership, better performance and a lower default rate.
- On average, one loan will amount to Rs. 5,000/- (app. EUR 80.-) which is repayable within one year in 50 instalments where the credit-employee will show up for weekly collection. In the absence of formalized agreements, not to mention their legal enforcement, the personal rapport between the bank's local representative and the recipients is essential. Ultimately, you don't want to either fool or disappoint someone whom you consider a friend by defaulting on your debt.
- Interest rate is usually a reflection of two factors: risk and cost of capital deployment. By nature the risk of such a loan without any collateral is high. Astonishingly, the default rate is relatively low due to the measures explained above. On the other hand, as one can easily fathom, the cost of deployment along these various cascades of intermediaries as well a logistic issues of transporting money back and forth is painstakingly high. Therefore, the annual interest comes at a price around 20 percent.
- Mircoventures' role, besides the allocation the funds in the investments phase, consists in the governance of the investee companies. The model to earn its money back could be either a trade sale of the stake to some strategic investor or possibly an IPO which would create a liquid event for the limited investors. The fund itself makes its money in the typical two-fold model of a fee as the share of funds under management plus some carry in case of disproportionate returns.
Anal being a seasoned businessman was very candid that "if you are looking for pure economic profit, then there are easier industries to go into than microfinance in India". That's why the limited partners of Mircoventures are predominantly wealthy individuals who want to invest and do some good at the same time. Who are seeking for both a return on capital gains and a return on social benefit. In the microfinance industry the term coined for that aspiration is called "double bottom line".
I really like that expression. Maybe we should all look for whatever we do, a bit more for that "double bottom line".
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