The Unbounded Greed and Decline of Capitalism

The death march of mighty financial institutions in US continues sending shockwaves throughout the world and the loud murmur of socialism saving the ass of capitalism gaining momentum. Lehman Brothers may be dead for good, Merrill Lynch is swallowed for the price of breakfast by BofA, Morgan Stanley is struggling and nearing collapse and the likes of Bear Sterns, Fannie Mae, Fraddie Mac and AIG saved from demise through a socialist move of nationalizing them. And who will pay the cost of the act of nationalizing the fall guys? Of course the American tax payers – they have half a trillion dollar more debt to pay for the unbounded greed for some of the fellow brethren! How come people who run multi-billion dollar investment banks became so naive to forget the basics of banking? The reason is simple – greed under the garb of optimism took over the common sense (usually happens when you get to risk other people’s money for your personal high rewards – the new definition of high risk/high reward) and this phenomena today pushed back America at least 10 yrs behind on economic growth curve and rest of the interdependent world at least 3 yrs.

The collapse of these institutions is a déjà vu of the demise of companies like Worldcom and Enron at the start of this century and looks like we have not learnt many lessons from history. The external cause of the phenomena may look different but the philosophical reason is the same – human greed gone wild! Any Sarbanes Oxlay like reactionary legislation cannot bound the greed nor do events like imprisonment of errant office bearers. The greed is like inflation – economic lubricant if within bounds and a massive retardant if goes beyond. And all these failed institutions are victim of people running the forgetting basics of banking economics for fast buck and thousands of people who are loosing their livelihood will pay for their willful ignorance (I am sure all the top executives of these failed institutions are millionaires multiple times over and have nothing personal to loose and they know they will be back again playing the same games within a few yrs.)

This interesting interplay between greed and fear seems like a natural phenomenon with no permanent escape – whatever goes up goes down and vice versa. We can learn few lessons from it and move forward with some more wisdom. Is that wisdom enough to keep the lure of unbounded greed away? Probably not because that’s how the natural dynamics of human inner world works and rise and fall of enterprises is a mere reflection of that. The world economy will rebound – no doubts about that. When will it rebound might be a moot question for economists to answer.

The Philosophers

India has been the birth place of Philosophy and some of the greatest philosophers of all times. Philosophy is the rational investigation of questions about existence, knowledge and ethics and the learning’s are applicable in all fields equally (including mathematics, computer science, particle physics and so on – hope the Large Hadron Collider experiment currently underway at CERN will throw more light on the philosophy of the universe!)

Off all the great philosophers whose body of work I have been able to touch upon, three stand out for their original thinking. The first is Lord Krishna – his work Bhaghwad Gita is arguably the most influential and impactful philosophical work ever written so far. For centuries philosophers of all ilks have tried to interpret it completely but everyone had only partial success. The second person is Swami Vivekananda, whose body of work is quite extensive and had an influence far and wide. The third person in the list is Osho Rajanish, who is one of the great original and one of the most controversial thinkers of our times. I am yet to find a person who has read his work and has come out in-impressed. However, I have found a lot of people who hate him without even read a single book written by him. Though I do not agree with all that he has written but the originality and relevance of perspective is great (in fact, had I agreed with him, I would have failed him as his core teaching is ‘think for yourself’!) Apart from these three, I have read at least a dozen more philosophers but all of them lacked originality though some of them were brilliant in their explanations.

Browser War 2.0

Microsoft destroyed Netscape less than a decade ago to emerge winner in the browser war 1.0. Since than there had been no big competitor for the mighty Redmond till Firefox came on the scene a few years ago and started nibbling at Microsoft’s share. Being an open source product, Firefox lacked the might and muscle of a big corporation, so despite being a much superior product, it is still number two in the browser world. But this can change with Google Chrome, which was announced yesterday. Based on the information provided in the Chrome comic strip, the product claims to address a lot of issues with today’s browsers and comes with higher security, multi-processor support, JavaScript VM, a new look UI, etc. and plays out to Google’s strengths (yes, it is designed to make search very pervasive to the whole browsing/web application usage.) This can play out browser war 1.0 in reverse with Microsoft playing the role of Netscape and Google raiding the Redmond from multiple corners.

But is it really all about browser per se? Though having a great next generation browser that can run current and future web applications much better that IE and Firefox is a nice goal but is that all about what Chrome can do? I think it can hurt Microsoft where it pains most – in its OS business. Look at what applications most of the people use on the PCs/Laptops today – office productivity tools (aka MS Office), Mail Client (aka MS Outlook) and a wide array of applications that run inside the browser (MS IE) and all this runs on top of a MS provided OS. The role of OS (aka Windows) here is to make sure these applications run efficiently and that’s where the Redmond behemoth makes most of it’s money by arm twisting every PC manufacturer to preinstall Windows on most of the PCs they sell. So each PC sold is money for Microsoft. Now let’s apply some new rules – you have a MS Office replacement in Google Documents, which all run inside the browser unlike MS software, you can use any browser based mail client (Yahoo! Mail or Google GMail or Thunderbird) to access your mail and you can have Google Chrome running all your web based applications much better, secure and faster than IE. Now why do you need Windows? Why not install a free OS like Linux and run all these applications on it and don’t pay even a penny to Microsoft? This can be the new world order. And Google is playing a clever game to control the medium for application execution, just like what Microsoft did two decades ago to monopolize the software industry. Of course, the economic engines for the two are different but who cares as long as the mint keeps running.

Management Lessons from Wikinomics

Though I have been a little late and a little slow in catching up with this remarkable book written by Don Tapscott and Anthony Williams describing of some of the powerful trends of our times, here are some of the learnings from this book nevertheless and I would highly recommend it for everyone who is perplexed with the popularity of Wikipedia, Facebook, YouTube, Linux, etc and wants to understand the social and economic dynamics behind these. The trends that these represent are becoming much larger by the day and spawning new social and economic paradigms, which were non-existent a few years ago.
The new web is all about co-creation A read/write web as compared to read-only web of the past and its given fillip to powerful social and economic trends that were nascent earlier in various places. This is fundamentally changing the way we think about innovation, value creation, consumers, intellectual property, workplace semantics, organizational structure and communication. These creates new management challenges and new opportunities for value creation and our future success as individual and organizations alike will heavily depend on our ability to understand, manage, transform and utilize these new paradigms. Here are a few pointers to some of the powerful trends that are already unmistakable in their economic and social impact.

Open Source:
Open source has become a formidable competitor to the companies selling packaged/licensed software. A large credit for this goes to integration/implementation partners like IBM, who adopted the open source software with open arms in order to reduce total cost of ownership for their customers and to rid themselves (and their customers) off the clutch of ISVs. Other reason has been monopoly in the field of basic infrastructure software like OS, Database, etc leading to slow innovation in these fields leaving the field open for open source community to lead the charge (and the result is Linux and MySQL in the fields of OS and Database respectively.)The important point to note is that open sourcing is no longer limited to software development other fields have started adopting the same model to speed up the innovation. The classic example is Human Genome Project which led to the classification of all the genes and standardization of gene discovery and search algorithms. This can lead to much faster rate of the discovery of genetic medicine so much needed to fight the diseases. In fact no life changing drug has been discovered after antibiotics in 1920 despite trillions of dollars spent in R&D by governments and pharmaceutical companies. Now the hope is high that open sourcing of parts of this R&D value chain can end this draught. As a manager, it’s going to be a necessary skill to be able to manage open source projects or at least manage the internal adaptation of an open source project. Also will be important to have the knowledge on how to best use the open sources as a complimentary value add for the organization. This can lead to newer models of project management and organization structure within the company that can be very powerful and engaging like internal open sourcing allowing people to congregate around projects that they are most interested in. Dynamic teams vs static silos.

Prosumers:
This is a natural evolution of customization and personalization of products and services with the difference that consumers put their time and energy in creating a product and service along with the organization. This not only creates higher value service/product for the consumer but the organization can also walk away with new products or ideas that go beyond one customer. One of the prime example is Lego Mindstorms (http://mindstorms.lego.com/) when Lego released the development kit for it’s legendary toy, the committed user community lapped it up and came up with great new variants of the toy, which the users shared with the community and the company alike leading to higher sales for the toy and creation of a committed community of consumers who swear by Lego. A manager needs to know the customers of its products and services by heart and how to tap their potential to add value to the product and services. A user knows the product best and, given the right tools and platform, can come up with the best next generation enhancements and variants of that product. The ability to find out how and where customers can add value will be a critical skill for business managers and leaders alike.

Open knowledge sharing:
Clichéd it may sound but the old adage that knowledge increases by sharing is true in today’s time as well and more so in the fast paced world of business and innovation. The companies are adapting to sharing their proprietary knowledge with their competitors and public alike in order to unleash much wider mental power and professional army that they can command on their own and thus increasing the pace of innovation. For example, Goldcorp decided to open up its vast geographical database about gold deposits in its mines and challenged the world to find more of the precious metal leading to discovery of large gold deposits in its mines declared empty by Goldcorp’s own geologists. This is the power of open knowledge sharing leading to much better results for all. The same phenomenon is being played out in a lot of other industries breaking silos of knowledge so that a much bigger pie can be created. The same silos of knowledge and skills exist inside organizations as well and a manager needs to look for ways to tear down these silos to unleash a new wave of innovation easier said than done but that’s what is going to distinguish a great manager with a good one. Boundryless (a term coined by Jack Welch) is not just a buzzword but a strategic cultural differentiator.

Participation platforms:
A participation platform is a critical enabler to let people collaborate that ensures sum of parts is more than the individual contributions. Companies can create and leverage these platforms to open source some of the work, to allow consumers turn ‘prosumers’, to create shared pool of knowledge and to continually refine the ideas and solutions. Leveraging the existing participation platforms for faster innovation and development and creation of new platforms wherever the need arises is going to be a critical skill for a manager. These platforms have applicability within the organizations as well; especially large multi-nationals that need to look for ways to optimize the output of their diverse workforce.

Need for new economic growth model

The economists have betrayed us by perpetuating economic progress theories that claim increasing consumption is the way to prosperity. Yes – we do have classic examples of countries like US where quality of life drastically improved with increase in consumption. But this economic model is not sustainable infinitely for number of reasons:

• You cannot increase consumption beyond a point.
• Over consumption puts strain on natural resources, which is evident from the spiraling price rise in every resource as seen recently.
• This growth model cannot be cloned or copied in other countries as that has the risk of consumption malaise to spread.

I think time is ripe to look for some alternative to consumption fueled economic development. As we are stretching the world’s natural resources to the brink of breakdown and still slumping into recession, we need to think of some alternative levers to fuel the economic growth.

World at the brink of crisis - III

A few weeks ago US president Bush took a snide at Indian middle class for consuming too much food causing food scarcity across the world. Though this comment in isolation can be misconstrued to be in bad taste, his full speech does present a stark truth that is in front of the world today in terms of food crisis. Like water, there can be no life without food and if this basic human need is not fulfilled, it can lead to deep social and political unrest. This is evident from the food riots that broke out in Haiti recently and the PM Jacques Édouard Alexis was forced to resign. The Haitian experience has been playing out around the world - food protests and riots have erupted in more than 30 countries, bringing unrest in places as diverse as Bolivia, Burma, Cameroon, Egypt, Indonesia, Malaysia, Mauritania, Mexico, Morocco, Pakistan and Senegal. The unrest can spread to other parts of the world if root causes of food scarcity are left unaddressed as food prices are spiraling up in almost all the countries. Sample this - purchase cost for rice in Bangkok was $ 460 per metric ton on March 3, 08. Five weeks later, it rose to $ 780. On an average, the food prices worldwide have gone up by 40% in 1^st qtr of 2008.

One may wonder as to what is the cause of this sudden breakdown? It’s a result of decades of mismanagement and abundance of food in most of the developed and developing world has kept the malice hidden for long. Now the hunger monster is out of the closet and we need to fight it to survive. This is a combination of following independent factors:

• Per hectare yield of almost all food grains has been going down in most of the all food grains has been going down in most of the biggest cultivation areas.
• The area under cultivation has been shrinking in most of the developing world, thanks to mindless expansion of cities turning green fields into concrete jungles.
• Water scarcity in a lot of places forcing people to abandon cultivation and move to other more reliable and profitable occupations.
• Unmindful wastage of food in most of the developed world (for example, the US wastes almost 25% of food every year.)
• The rise of middle class in most populous countries in Asia like India and China, which allowed people to move up the food value chain and result is the rise in demand for varied diet (especially meat) putting pressure on supply side.
• Antiquated trade restrictions and protectionism from supplier countries causing hoarding of food in some countries while starving others.
• High oil prices heightened the costs of fertilizers, food transport, and industrial agriculture increasing input costs for food production.
• Increasing use of biofuels in developed countries, which causes significant amounts of food grains like corn to be diverted to fuel conversion. Also, significant portions of cultivable land are being used for producing biofuel crops causing food grain cultivation area to shrink.

Among the many negative consequences of the recent explosion in food prices is that more than 40 countries have taken steps to discourage grain exports or to stop them altogether. For hard-pressed governments in the developing world, this is politically tempting and, indeed, understandable approach - one's own hungry citizens come first. But it is fatally shortsighted. Over time, the curtailment in trade simply encourages hoarding and discourages production. The result - shrinking supplies and higher prices.

What can be done? A lot of small things:

• Free up trade – It’s not that there is not enough in the world for all the people to eat, just that there are way too many restrictions on free movement of food stock and the distribution of food is uneven. If the world forums like UN can work towards removing trade barriers, a lot of current issues can be resolved.

• Reduce subsidies – Subsidies hamper natural price discovery, reduce incentives to create efficiencies, raise artificial trade barriers by creating price differentials and give rise to regional imbalances. Subsidies for compensating farmers who lost their crops due to natural calamities are fine as they are not perennial but direct subsidies as a mechanism to keep the prices down for a very long period of time for everyone can be detrimental to the financial and social health of the countries.

• Encourage eco-friendly cultivation methods – So that reproductive power of mother earth can be restored.

• Increase areas under cultivation, esp. in land rich countries like US, Canada and Australia – These are some of the countries that have almost 10% fertile area not under cultivation. This should be used as a hedge against crop production going down due to natural reasons in other areas.

• Make agricultural trade more rewarding so as to incentivise people to stick to it or adopt it – Cultivation as a profession should be made more rewarding, especially for marginal farmers so that there is good incentive for them to continue in this profession and if this calls for providing true value for their produce (and resultant price rise), so be it. Also, a social security must be in place to protect marginal farmers at the time of crisis (crop failure.)

• Stop food wastage – US alone wastes 25% of the food, which can fill the empty stomachs of a few African countries. And same might be the case with a lot of other rich countries. As humans, if we all can resolve not to waste the food, this single action may go a long way in softening food demand and stabilizing prices.

• Go vegetarian at least few days a week! Well, 1 kg beef requires over 10kg grain equivalent to produce and it’s the same case with other eatable livestock.

World at the brink of crisis - II

After centuries of water mismanagement, we are at a point when the nectar of life is either not available or contaminated to the degree of being unusable. Water is a renewable resource but human and industrial contamination has reduced even mightiest of clean water carrying rivers to a trickle. The fact that only 2% of all the available water is suitable for human consumption makes it a very scarce resource that needs to be used with an utmost caution. We all have been wasting water since time immemorial as if there is an endless reservoir of it and this uncontrolled wastage of water has now put us in a position when we are thinking if water will last longer or oil? In India, the biggest of the rivers have started shrinking – Delhi is no longer on the banks of Yamuna, mighty Brahmaputra does not wreak havoc in Assam anymore, the sacred Ganges became a trickle, Allahabad is not ‘sangam’ anymore and Kaveri just flows in the year when it rains! Civilizations have been built on the banks of rivers across the world and perished when rivers changed course or dried up. Though the economies have lesser dependence on agriculture today than a few hundreds of years ago but people still eat and eating more than ever before – more on this later – the takeaway is that drying rivers will become harbinger of disaster unmatched to anything known to mankind. The doomsayers have been warning that 3rd world war will be for control of water and will be the last one. The process of decay that has been going on for centuries has picked up a visible acceleration in last 7-10 years and the rate of acceleration is going up faster every year.

But the good news is that all is not lost yet and the changes are not irreversible as off today and we can still control our destiny. If we can stop the Wall Streetization of the world, that is, focusing on short term gains at the cost of future (ours as well as our children’s) and stop the unbridled exploitation of natural resources, we can still turn the tide around. But for this, we have to start thinking about ‘One Earth’ and rise above the issues of individual countries and work with a common agenda to save the planet. Let's not wait for government's of the world to wake up and do anything to save the planet, what it will need a people's movement to get the ball rolling. The environment can be the common cause binding diverse people of the world together and a lasting movement can born out of this dire need.

World at the brink of crisis - I

I recently came across a great video on environmental crisis that’s staring us all at the start of new century (visit www.storyofstuff.com). Our uncontrolled plundering of finite and non-repleneshable natural resources has created a multitude of crisis for mankind (and in turn opportunities!) Fuel crisis (fast depleting sources, demand at the highest level ever and the result is crude at $135 per barrel & growing), water crisis (70% of earth is water and there is crisis of drinking water in half of the world), food crisis (food prices are up 40% in last one year across the world, so much as to attract attention of war addicted US president.) All these are man made problems & we collectively have to find solutions for them. In next few posts, I will try to deconstruct some of these problems (or scratch the surface, to be precise.)

I was reading ‘Straight from the Gut’ by Jack Welch recently and in one of the chapters he talks about how GE in late 70’s was trying to come up with strategies to counter crude price rise to $30 a barrel! Feels like a dream, isn’t it? The great economies of the world have been built on uncontrolled plundering this precious non- repleneshable natural resource. Any forever sustainable growth cannot be dependent on a depleting resource and we have to find alternative energy sources that are viable, cost effective and longer lasting than oil. The world politics has been greatly influenced by control over this growth driver but those days of chasing oil may be over sooner than we think as there will be no oil left to chase. And we have to speed up our efforts to tame other sources of energy that are as or more efficient and mobile than oil. But this time it may not be a war for domination but for survival in which everyone has equal stake and may benefit equally if such source is globally available (solar energy, for example.)

Back to top

US Slowdown/Recession and its Repercussions

Is it a slowdown or a recession? Is it a slowdown leaping towards recession? Is it a recession deepening to become a depression? Is it just a natural cycle of slowing down economic activity? Well, there are way too many opinions and economic pundits worldwide are divided in their degree of pessimism. No matter what it turns out to be, it’s definitely an opportunity for doomsayers to earn some money. Since 2000, US slowdown never went out of fashion anyways and there have been noises all through the decade announcing it’s round the corner. Irrespective of the brouhaha, there were three troublesome spots on the horizon:

• Large and growing current account deficit (hovering well above 5% of GDP.) This simply means that the country is borrowing from abroad to finance the gap between imports and exports of goods and services. Further, the quality of this deficit has been worsening - the money borrowed was increasingly being used to finance imports for consumption vs. being deployed for growth.




• The real estate bubble. The real estate prices in some parts of the country spiraled up without any good rhyme or reason. There was not enough economic activity impetus to justify very high prices. This led to unnatural property valuations (and subsequently, large mortgage loans, which became ‘sub-prime’ when property prices crashed.)




• Spurt in sub-prime loans. Financial institutions distributed loans like never before to anyone and everyone creating a largely credit driven spending. This created a mess when people started defaulting on these loans. Some investigation needs to be done to find out why banks went on an overdrive to give a loan.

So a correction to rebalance the economic equation was overdue. However, whether it will result in a full blown recession or depression is yet to be seen. Also, since economies of world are so tightly integrated now that any change in one parts creates immediate ripples across the world, this may act either as a shock absorber or as a single ignition point of to detonate the large part of world economy. Earlier recessions had a regional flavor but this time that does not seems to be the case.

Another important point to note is that since US is a largely consumption driven economy, most of the slowdown is very negative sentiment driven. This phenomenon has troubled the economists no end and none of the fiscal or monetary measures taken by Fed chief Ben Bernanke or his predecessor Alan Greenspan have succeeded in stimulating higher consumption in US. The phenomena definitely created space for some Nobel laureates though but so far no one knows how to induce higher consumption by American people. Maybe consumption levels have saturated and can not go up any further. Economists need to find other levers to stimulate the American economy.

I sometime wonder if recession is really an economic phenomenon - it seems more econo-psychological - you talk more about a possible recession and it will arrive. That’s what seems to have happened this time - for over a year, everyone who is anyone in financial market has been talking about a possible recession in US and it seems to have arrived. The reason is simple - as US is a very consumption driven economy and if people stop, slow down or postpone spending, it creates a vicious negative feedback loop for economy (less spending >> high inventories >> price crash & output reduction >> layoffs >> defaults on loans >> strain on banking system >> less spending >> and the cycle continues!) If I am a consumer convinced by innumerable financial wizards that US is going into recession and people will loose their jobs, my basic instinct will be to cut down on spending and save every penny I can for that possible rainy day. And I have started a downward spiral - the less I spend, the more economic activity slows down, the more the doomsayers talk and I cut down on my spending even more. Gentlemen, you have created recession out of the blue!

But not everything is lost here - the economic indicators are inconclusive on whether the US is in a recession or not (indicators like unemployment claims, unsold inventory levels, quarterly corporate results, price stability, inflation, etc. are mostly a mix bag not showing any special favor.) Further, US has many structural features to make a recovery faster and there is no political paralysis to put spanner in the recovery engine.

Let’s all talk about recession being over and it will run away!

Back to top

Internet Industry Trends in Year 2008

The year 2007 went in a flash with not much to write about except iPod economy extending to iPhone, Facebook becoming darling of developers & speculators, sub-prime crisis and a failed summit in Bali to tackle almost irreversible climate changes. However, this should not desist me from thinking about what might happen in the New Year, and the optimist I am, here are some of the internet industry trends that I think will gain momentum in 2008.

• Ad $$ will start moving towards social networking as well

Social networking sites like www.facebook.com, www.orkut.com, www.myspace.com, etc have seen outrageous traffic jump in last couple of years but their business model has always been suspect. However, it will change this year and we will see them attracting a significant pie of online advertising dollars. Whether this will be additional money flowing in or money moving away from other destinations (traditional media, search advertising, other favorite online destinations, etc.) needs to be watched carefully.

• Ad Networks will gain momentum

Advertisers will take a harder look at the ROI from online advertising and the cost of placing these ads on various destinations and ad networks will establish themselves as a better alternative for running ad campaigns. The advertisers will continue looking for much better targeting and conversion.

• Web will become more ‘semantic’

Aren’t we all tired of just poking our friends or leaving scrapes on their wall? I think the web is a few steps away from becoming much more ‘semantic’ where it will be possible to do much more meaningful interaction than poking and it can make that leap of faith in this year. What kind of application or applications will do that and what will be the nature of that ‘meaningful’ interaction is not very clear to me yet but that inflection point seems to be in sight. And this trend is not limited to social networking only!

• Emerging markets will continue to attract attention

Footprint of internet economy will keep expanding in the emerging economies with more and more local services getting delivered or initiated on the internet. However, this growth will not be like the Internet’s growth in US as there are some inherent structural rigidities and limitations in most of the emerging economies. But a decent growth is plausible.

• Internet & traditional media convergence will gain momentum

Maybe someone will find a good and clean way to make money out of video on the Internet! The convergence of traditional media (TV, Newspapers, Radio, etc) and Internet will continue and Internet will carry more and more of traditional media content. The efforts will be on to find and define a ‘universal media’ but they may not see much result this year. But coming years will see it not only being defined but created as well – both for audience and advertisers.

• Mobile will overtake PC as choice of Internet endpoint

The small screen mobile will take over large screen PC as an endpoint of choice to access and interact with Internet. With phones becoming powerful and feature packed day by day and some of the biggest web applications like search and mail getting available easily on the mobile phone, it’s a natural phenomena waiting to happen.

However, serious business transactions will continue to be delivered from PC for some more time to go.

• New user growth rate will slow down in developed world across the board

The new user growth rate on all the popular destinations will go down across the board in the developed world as Internet penetration in those countries (esp. US) seems to have already peaked out.

• I will earn my first $ from this Blog

Well, the point is not about me really. The bigger point is that advertising $$ will start chasing focused audience that, by virtue of their online hyper activity, leaves a rich trail of data usable for behavioral targeting. And viral through referral advertising will gain momentum.

What’s in store for us in near future is not an easy question to answer and anyone else’s guess is as good as mine. I will watch these trends in the Internet Economy closely this year and may be some of my guesses will be termed as ‘predictions’ later!

Challenges for Internet in India

Low per capita availability of high speed net access is still the ground reality and the ready availability of [relatively] high speed internet is only a big city phenomenon in India so far. And in semi urban and rural India, which account for over 90% of the population, internet is either a novelty or an unknown world. What needs to be built is a positive feedback loop by connecting this large population to the internet so that their aspirations can get molded by the infection of knowledge and they can, in turn, drive the growth of internet as a medium of communication as well as a business. Internet is still seen as a luxury so far and not as an enabler to move up the social and economic value chain. Unless this notion is corrected, it will be hard to make internet access a commodity as it is in the west. The skeptics might say that first solve the problems of water, food and electricity availability in the country and then talk about internet availability but this argument is flawed as information and knowledge has emerged as the biggest enablers and if we can build this ‘soft’ infrastructure, there will be much larger number of brains and hands to solve the problems of basic infrastructure. In 60 years of independence, the successive so called governments in India have not been able to provide basic necessities to all the people and, given the quality of people in Indian politics, future governments will never be able to solve these problems (can we have genetically modified politicians please!) We have to empower the people to solve their own local problems and internet can be one of the mediums to do so. Of course, we have to address some of the structural rigidities to make it happen. Here are some basic thoughts on what tools and ideas can be useful to make it happen:

• Cellular networks have the promise to bridge the connectivity gap as India now has very good wireless network connectivity all across the country. The number of Indians accessing internet through their mobile phones is now over three times those using the PC to connect to the Web. India has 9.27 million internet subscribers as against 31.30 million users who access internet through their mobile handsets—GSM or CDMA—to read and reply to mails, download content and for online transactions, according to latest figures released by telecom regulator Trai. Trai’s figures for the quarter ended March 2007 imply that one out of every five mobile users (there are 165.1 million subscribers to mobile services) in the country connects to the internet through the handset. Technologies like Wi-Fi, Bluetooth and WiMAX can be very effective to make this happen. One other possibility is power line internet
  

• Power is another issue as it's not regularly available and can be the biggest impediment in the way of better internet penetration. Low power/battery operated computers hold a much greater promise to bridge this gap.

• The cost of owning and maintaining an end user computing devices (aka computer) is still very high for low income group. One novel concept in this direction that I get to know recently is the idea of NetPC from Novatium, which is a low cost terminal placed at user’s place and connected to central computer to provide internet access. The idea is to provide an internet enabled terminal to users in less than $100 with very low per month subscription cost (less than $5 per month.)
  

• For emerging economies, it might be a good idea to think of applications that do not take connectivity for granted (applications that do not stop working if connectivity is not available and sync the information as and when the connection is available - taking a cue from Adam Bosworth’s old blog) This can be a powerful enabler, especially for educational applications.
  

• Wired networks in India were not built for success - they started cracking as soon as usage starts going up exponentially and required large additional infrastructural investments. If this can be calibrated better going forward, it will be a boon for the country and will give rise to other usages to achieve optimum utilization of network bandwidth.

I am sure some of these ideas can be generalized to some extent for most of the emerging markets and, to use an old cliché, third world countries.

Emerging Trends in the Internet

I am back after a small hiatus to mull over some of the trends as I see them emerging (well, some of them have already ‘emerged’; only I am beginning to slowly understand them now!) The internet has passed over its novelty phase, at least in the so called developed world and showing signs of becoming a basic service that people expect. There are two side effects of this maturity - the customer’s real self has started to show on the net (demanding, selective, looking for 'value' rather than 'experience') and possible consolidation in the industry. The richness and reach of internet is peaking in developed countries but both are increasing in emerging markets - this might cause the balance of the speed of innovation to shift towards emerging markets. However, whether it will really translate into real business is still to be seen - more than on this later.

The second trend and the popular one is social networking, though I am yet not educated enough to declare that it a real business trend or just a fad (if valuations of companies like Facebook are anything to go by, this seems to be the biggest trend in the industry, but it is yet to be seen if valuations are based on real revenues or just an aura created by M&A hungry wall street analysts.) Let me dive in by classifying the internet networking into three parts - social networks (http://www.orkut.com, http://www.facebook.com, http://www.myspace.com, etc.), content networks (http://www.digg.com, http://www.flickr.com, http://www.YouTube.com, etc.) and professional networks (http://www.linkedin.com, http://www.openbc.com, http://www.connectbuzz.com, http://www.businessnetworkingme.com, etc.)

If we closely look at it, social networks try to bring back some old world charm to our cyber lives - a close knit community where we can anything and everything with people we might or might not know in the real life. I still remember the small colony of around 200 families where I spent my childhood - all the people knowing almost all, either directly or indirectly, decision making (at least about buying products) being more social than individual and the word of mouth being the most important opinion maker. The social networks seem to give the same feeling to people like me. On the other hand, they empower the individuals to convey an opinion or message on an international stage, if not make it count.

As the opinion of the community starts counting in want of a differentiator in a product or service, any good or bad publicity can be a very potent reason for success or failure of a product or service. This is making organizations circumspect if not heavy advertisers on these channels. They definitely don't want negative publicity on the net for their product or service. Also, as these networks tend to be groups of people with similar tastes, likes and dislikes, it is possible to do very deep targeting - something that eluded the advertisers worldwide so far, which makes the social networks a ripe target for advertisement dollars. Now will it really flow in and provide greater ROI is yet to be seen. One problem is on how to do advertising in a very non-intrusive way so that not to influence the basic nature of social interaction happening on the social network.

It feels strange to come back in this space after a couple of years. But this time it is for keeps - that's my promise to myself. I would like to scribble my thoughts on some of the diverse topics I have been thinking about off late. These are some questions I have been grappling with in various lives I seems to live:

• The evolution of Internet and how is it going to change the way we live, connect and do business.
• How to build successful and self motivated teams?
  
• Is global warming really the biggest threat to mankind?
• Why is it easy to explain an economic downturn than to predict it?
  
• Is there really a model for investment in stocks that can give guaranteed results?
• Semantic web and building applications for it

In next few weeks, I will be jotting down my thinking/learning in these areas and hope to start some conversations with anyone who would like to share and enhance our collective understanding.

Well, after a long bouts of laziness, I decied to come online and pen few thoughts, or random thoughts, to be precise. Believe me its an effort to shed the old habits, create an account on this site and start writing. Hope I will catch the blogger virus and continue ...