The layout of poverty

I mentioned in a previous post why certain people stay poor. In the meanwhile, there have been lots of articles on poverty I have highlighted those below as well. Yet, I don't think enough work has been done to classify and understand different types of poverty. I believe the efforts in classification will help devise better solutions to the problem. I do not claim to be an authority on the subject but I am trying my best to think through the issue.

A different poverty - volatility induced poverty
I have highlighted two broad levels of classification i.e. transient and structural. Under structural poverty, we have a type off poverty that arises out of high net-income volatility combined with adequate average income. This kind of poverty is induced by volatility -in gross incomes and in expenses - both on unpredictable time scale (un-seasonal). Day-laborers, artisans etc suffer this kind of poverty more often. Farmers dependant of rain-water also suffer this kind of poverty. Dean Karlan and Sendhil Mullainathan have explored this here.

The unpredictability of expenses leads to in-debtedness. The flow of credit to this sector comes at high costs hence in-debtedness tends to be self-reinforcing - particularly with higher expense volatility. Hence cash-flows are directed towards life-sustenance rather than investments. In other words - expenses for healing, medicine, food, essential tools etc tend to be favored against education, savings etc. Such people find themselves caught in a structural poverty. I suspect healthcare is the most critical expense of the rest. It reduces income and increases expense at the same time! Also healthcare costs tend to be higher as nutrition is not proper. For them snakes-and-ladder game of scaling the income pyramid seems hopelessly crawling with snakes of healthcare costs denying them the ladders of savings and education.

Framework for solution
A first principles approach suggests that anything that reduces volatility (both income or expense) will be of great benefit. We can also easily conclude that smoothening incomes comes first, before smoothening expense is important. Next, it is absolutely essential to reduce expenses - particularly healthcare, food (proper nutrition) and education (for future). Yet most solutions to their problems tend to addressing volume not volatility. These solutions are likely to fail unless they add an element that suppresses volatility.

Income diversification
The growth in rural incomes in India has come from income stream diversification. Farmers have used tractors, pick-ups for transportation thereby leading to stable earnings and alongwith highly volatile agri-income. This resultant reduction in income volatility has set them on path of prosperity.


Expense smoothening Credit?
Simply throwing credit at this kind of poverty problem is not a solution. Credit repayments impose a smooth addition on their volatile expenses making their situation worse. (Hence farmer suicides in India). Indian rural banking is abound with stories of farmers wanting to pay two months installments together when they have money - and not being able to pay even one months installment in distress times. If their loan repayment schedule were to match the income generation schedule they will have much less to worry about.


In sum
Poverty reducing initiatives need to appreciate the differences in poverty. Volatility induced poverty can be tackled by addressing income volatility first, then expense volatility and then quantum of income and expenses. Expenses on healthcare, food and education are critical and need to be reduced.

Must read links:
Innovation for Poverty Action
MIT poverty action lab -
Is microfinance too rigid?
Marshall Jevons highlights course on poverty and some other links
Poverty in pictures -
Does poverty kill PSD blog links to some important conclusions

2008: Images from the Crystal ball!

I am putting together some statements that are taking my sleep away. I am going away to the calm of sea to mull over these. Or, may be, I am trying to run away from these. Here goes:

Wealth dynamics

1. A handful few own or influence large amounts of wealth.
2. A large part (read almost all) is dollar denominated and has just lost about 10% of its value!
3. Some of these wealthy few are actually countries (China, Abu Dhabi, Netherlands, Singapore etc)
4. Some of these countries (China particularly) have worked hard to accumulate this wealth. They will not like their wealth to loose value.
5. Even if few of them feel they can and should move out of dollar, it will start a landslide. To put it crudely it means if few people (even one of the few people) loose their cool at this stage we will have a run on the dollar and that wont be good day to say the least!
6. Here are some thoughts on dollar valuation by Menzie Chinn , Mark Thoma has some links here and here, by Tyler Cowen of Marginal Revolution and by Don Boudreaux.

Meanwhile Oil is another link that crosses currencies and assets

1. It impacts consumption basket across income classes
2. Dollar decline (or rising oil prices) meaning there will be impact across income classes
3. Some Readings - Stephen Gordon puts dollar in relation to oil.

Break to US

1. Expenses
   o American non-food consumption basket has considerable import component!
   o As dollar depreciates, the average monthly cost of living will rise.
   o This will mean there will lot more defaults (particularly at border of sub-prime and prime)
2. Source of funds
   o US banks and mortgage lenders have lent to sub-prime borrowers. ( Read Greenspan’s take on that here)
   o That sub-prime borrower is willing (if he has money - let us assume he is not a cheat as most people are not cheats) to pay but his occasional income is enough to pay his mortgage – but just so.
   o If he is found to be sub-prime, he pays higher interest rate to cover for other sub-primes who will not be paying.
3. Net-Net
   o Meaning that will seal his fate – he will default.
   o If cost of living increases then he defaults.
   o This makes sub-prime defaults a self-fulfilling prophesy!
   o US consumption should anyway slowdown (even if there is some demand elasticity)
4. Observations
   o Why do thing above read partly like income statement and partly like balance sheet?
   o Aren’t the wrong parts (of the financial statements) represented there?
5. Reads
   o Tanta (just one link here but there is loads of stuff in here just browse through - )
   o Herb Greenberg interviews Mark Hanson

Cut to income

1. Income for majority of Americans cannot rise if the same job can be done somewhere else in the world at lower cost.
   o Note "majority"
   o Or the job need not be done at all! As Ian Dew-Becker and Robert J. Gordon explore in their new paper
2. These people may move into sub-primes if there are any job losses
3. Great thing is there will be job gains (if dollar depreciates) unless the up-the-value-chain trick has worked for non-US manufacturers.
4. So there will be gain in American competitiveness – but against whom – Chinese or Europeans
5. Does it then mean new problems for just emerging Europe? It does, right?
   o Tyler Cowen again on impact on Europe

Cut back to wealth

1. When people accumulated wealth, they promptly invested in various asset classes.
2. This drove up the asset prices.
3. My guess is – the wealthy bought out more assets that can be purchased by consumers in the coming years.
4. Asset creation drives economy and that drives incomes and wealth
   o The trick is to know that income and income growth are highly correlated i.e. higher the income higher the income growth!
   o So technically if asset financing (by highest income earners) is far outpacing asset buying (by medium and low income earners)
5. Asset prices should correspond to income of medium and low income earners as they are asset purchasers.
6. But not so as this is asset financing bubble.
7. Since this boom is in asset financing – asset creators are using this opportunity to "lighten" the wealth burden of the wealthy
8. Is this good old "money-lender lending at exorbitant rates story" wine in a new bottle?

Government bailout

1. Then should governments bail out anyone?
2. Will real people be bailed out or only organizations who made idiotic mistakes? Read Tanta on Paulson plan here
3. What have you to say on the proposition –
   o If lenders just hold on to sub-prime for long enough they may actually, earn a decent profit. They just have to hold on to this long enough.
   o The question is how long?
   o It is a question of nerves.

Low inflation together with high-income concentration creates rapid wealth

1. Low inflation keeps essential services cost lower
2. Beyond a point its difficult to splurge even if your income increases from that point on
   o Consumption tapers off but not necessarily income ( more on that in next years post)
3. Meaning if you reach a theoretical threshold creating wealth becomes super easy!
   o Bill Gates once said – "It is the first million that is difficult to make"
4. Does this imply that low inflation keeps poor people poor
   o If the poor derive their incomes from sectors that form the inflation basket – is it not logical that those poor will remain poor
   o As food is central component of the inflation basket – and always under watch – results in farmers remaining poor and needing assistance.
   o You might want to read Chris Blattman’s paper here , Amol Agrawal links to IMF chief economist
5. A low-inflation policy is detrimental to GINI score ( I mean it polarizes wealth more effectively – more so away from poor and with the rich)
   You might want to read this link at The big picture

Labor and Capital
The artificial currency pegs seem to have expanded the money supply (in respective currencies) far higher than actual underlying value of products and goods
o This implies value has been limited compulsively
o Implies inflation should be higher
To me it indicates that global monetary system is signaling presence of threshold for how much capital can be present in the system.

An apology for over-simplificationYes thoughts are over-simplified. They may really be dumb. I have not put together data to test these statements and my information is primarily what my mind has retained after reading various articles.

A little disclaimer…
Also, since these are a little dumb I should remind you that they are mine… (pukka original!!) and these do not represent my employer’s views on these topic.

And finally…The divergence and weirdness of the things mentioned above confound me. I may just be out of my mind. These things happen to people who are about to leave for a holiday (15 days of bliss) after a long time (1.5 years!). I am supposed to pack my bags and head to the sea.

So hoping that these points have triggered many thoughts for the year-end, I sign off for 2007. I promise to delve into most of them next year.

Meanwhile, have a great Christmas and a great new years eve. Remember to buy some gift and make your donations – we just might need those things!

Why certain people stay poor?

When world embraced capitalism, it embraced, as Milton Friedman puts it, equality of opportunity and freedom of choice. It also embraced, as Karl Marx anticipated,  income inequality and therefore poverty.  Poverty, the product of capitalism, is a real circumstance.  Since capitalism also offers everyone a fair chance to rise above his circumstance and create wealth, there is not much discord with this arrangement. In fact, coupled with an enabling infrastructure provided by a democratic government, this represents one of the fairest civil structures yet created.

So why do some people remain condemned to poverty? To understand this, we need to understand poverty a little bit better.

Transient Poverty Vs Structural Poverty

Poverty, essentially (i.e. theoretically), is transient. In a stable, fair capitalist economy, there is a certain amount of population that always remains at the bottom - below the poverty threshold - of the income pyramid. By labour and enterprise, this population rises to the next income class. Simultaneously, competitive pressures force certain other people below the poverty threshold. These represent the transient poor. These people are currently poor but by no means restrained by their current poverty against rising through the income pyramid.

Then are there people who by currently being poor are condemned to be poor for their entire life, and even those of generations to follow? Sadly yes, and quite a few of them at that.

Dynamics of Poverty - Scaling up the Income pyramid

The income pyramid represents the basic framework on which the graph of poverty is drawn. The line income of a household will trace over time is determined by, other things remaining same, the age of the household and change in their income.

As mentioned earlier, a typical household has two ways of moving up the income pyramid - labour and enterprise. But a household below the poverty threshold, has only one way out - hard labour! This household does not have savings or income surplus or any access to finance (they are sub-prime!) to kick-start any enterprise. Even now, a household would not have a problem if labour opportunities are assured. Here is where the cusp of the problem lies. Labour does not always help this household scale the income pyramid.

The biggest hurdle - poverty!

Labour demand of an economy shifts every year across sectors. A very distinct shift is noticeable in farm labour's shift into industrial labour. Within this drastic shift there are micro-shifts moving between sectors from metals to plastics, from mechanical to electrical, from plumbing (hydraulics/pneumatics) to instrumentation (switch-gear). This movements create a chasm between available skill and desired skill. This chasm is difficult to cross without investment of time and money. Both of which our poor household does not have. Hence our poor household works twice as hard but does not get added surplus that can springboard it into the next income class.

Springboard for the poor - education and micro-finance!

The only way to help the poor out of this negative spiral is by making their labour ready for the market requirement and giving their enterprise a launch-pad.

Free training and education need to be made available to the poor. Agencies must use proper forecasting techniques and relevant research localised to the area to train the labour making them employable. Example - Locals in an area ear-marked for food processing zone, can trained in repairing, maintaining food grade machinery. Farmers can be trained in operating E-choupal kiosks and accessing mandi prices.

Micro-finance has a distinct role to play in this area. It gives the poor, access to capital to start their enterprise. Please remember micro-finance gives "access to capital". It implies financing "accessories" for the enterprise. And since its capital, return is estimated through study of potential viability  forecast of the enterprise. Thus micro-finance can be a robust springboard.

And the safety net...

We discussed two main levers that give poor households income advantage. But poor households also need a safety net in the form of accessible healthcare and low-cost banking facilities.

Healthcare represents one variable that can reverse income gains very fast. Rising healthcare costs have pushed many a household into the depths of poverty. Hence access to clean and complete healthcare is absolute essential.

Low cost banking is a worthy enabler for the poor helping them keep their assets safe and secure thereby granting small insurance against thefts and burglary etc. It also helps bank create a credit history for the household. This history (knowledge / information) acts as a de-risking element for the household making mainstream banking credit available when required.

Such a minimum safety net would indeed be a great service a nation can do for its poor.

In sum...

Poverty is not always transient. It is a nations responsibility to create adequate anti-poverty infrastructure to help its poor rise the income pyramid. Proper training and Education, accessible micro-finance provide great opportunities for income enhancing ventures to blossom. Adequate safety-nets through clean and accessible healthcare and access to low-cost banking provide critical support to household's growth initiatives.

Use value Vs sale value and Innovation

GDP, the scorecard of economic performance, does not adequately differentiate between Use value and Sale value. This can be illustrated with a simple example.

Use Value Vs Sale Value - Example

The GDP contribution of one coconut is sold is price of that coconut let say Rs 6/-.

A village buyer then drinks the water and eats the fleshy part of coconut, use outer fiberous cover as scrubber, uses the hard shell as a soap holder and later uses all of this as fuel to heat his bathing water.

A city buyer, typically, drinks the coconut water and eats the fleshy part and rest of it is discarded as garbage.

Now the use value of Rs 6/- is totally different in each case. This is what Karl Marx explained, in his paper called "Capital", the difference between use value and sale value. In this difference, or the divide between use value and sale value, lie many possibilities for innovation both for economic learning and entrepreneurial innovation.

Economic Learning opportunities - the hypotheses

First is related to computing GDP numbers. This divide implies that economies with higher ability to extract use value should feature higher than they actually do. Consequently, the algorithms used for estimating this value need to be tweaked to accommodate this difference.

Secondly, we need to interpret the GDP numbers carefully. A country may be actually creating more value than the GDP suggests.

Thirdly, I wonder if that is why economic development is accompanied by stress and loss of happiness (if it happens i.e.). Possibly in our hearts we know that by spending on packaged coconut water, plastic soap boxes and branded scrubbers we are actually in a loss (in terms of costs vs added benefit) than we were using plain old coconut.

Entrepreneurial Opportunities

On the other side, it also leads me to believe possibility of entrepreneurial innovation would be highest at the  innovations bridging this divide. An apt example can be found in the story of "Idea on a leaky platter". Entrepreneurs can gain immensely from bridging this divide.

Bridging this divide helps increase measured GDP. Secondly the adoption of these innovation is much faster (it already exists!), therefore easier to monetise (that the only thing entrepreneur has to do!). It also leads to productivity gain as firm-based efficiencies come into play.

In Sum

Innovation at the divide between use value and sale value holds a lot of promise in terms of success for investors and entrepreneurs. It is this area we should be concentrating upon. What say?

Newspaper or Waste Paper

Every morning my local newspaper reaches a new low in journalistic performance. The matter has come to such a state that I can trash my entire newspaper without even looking at it once and I wont miss anything.

Newspapers as they exists, seem doomed. They cannot fight television in terms of speed. The Internet beats the newspaper in terms of ability to cross-linkages ease of being discovered.

On top of it, it is really difficult of attract and retain a set of readers that advertisers would love to sell to. With money in the hands of people across the intelligence and vocations spectrums, tabloidisation seems the easy solution. Yet, it is now time newspapers realised that tabloidisation is not going to get them anywhere.

When I read in Indian express the interview of two very senior journalists - Tina Brown and Harold Evans - about this very subject, I hoped change would be round the corner. But apart from the comment that highlighted the importance of websites for the newspaper there wasn't much to look forward to. So what do newspapers do?

Step 1: Differentiate or Die - Playing the marketing game right!

Jack Trout provides clear solution, that must be the answer. Newspaper publishers should differentiate among themselves, within themselves and within their readers to survive. While most companies know about the strategy, few know what to differentiate between.

Differentiating the consumers - i.e. the readers!

Typically, for a family newspaper, readers are diverse. At the most macro level, diversity exists between families. Drill down and there also exist a diversity within each family unit in terms of age groups, maturity and gender. The appeal of each class, as created above, to the advertisers actually decides the target group. Analysis of consumption basket of target group coupled with typical annual advertising spends by brands in corresponding categories will logically decide best target segment.

Differentiating the content - guiding the eyeballs

Within a target household, there also exists diversity between roles of the readers. These can be classified into Skimming (glancing across headlines) and Analysis (in-depth coverage on headlines that catch attention). The content layout needs to be optimised for guiding the relevant household member to relevant page.

Standardizing the layouts effectively guides eyeballs. It also helps guide eyeballs if used creatively, case in point being the Google logos!

Differentiating within - between the covers

First and foremost, newspapers must differentiate within the pages. Newspapers have a systematic classification that puts city news on one place, political news on other place. From users point of view, it hardly makes any a difference unless the user can read into the classification. Newspapers seem to have forgotten that the classification must be based on users rather than news. That is the reason, why page 3 is called page 3. It would be great if newspapers can create brands out of their pages as successfully as "page3" brand was created.

For example, any mainstream newspaper may decide to addresses families of working families as their core target audience. Newspapers/periodicals are also known to target college going kids specifically. But as their audience is generically diverse - it is necessary pages are segregated properly so that advertising efficiency may be increased.

Step 2: Playing the production game right

Newspapers need to address "news production" a little differently. Current news production process can be classified into event reporting, reporter investigation, content generation, editing and finally delivery. Let us first enlarge this process by adding "follow-up" to it. As far as I understand, it is the news agencies that do the event reporting. The real winning strategy for a newspaper, therefore, needs to reside in the later part of the "news production" process.

Using reporter investigation better

As Goldratt mentioned in The Goal!, newspapers must optimise the process on their constraint. Clearly world class reporters are the constraint in this case! Using the same reporters and content they have generated, can a newspaper publisher create various stories that can move from plain event reporting to analysis of social issues behind the event. I believe they can. The process is called versioning. Content generated by reporter investigation can be versioned to feed into the headline breaking news story, the reporter's blog or a deeply researched piece. In fact newspapers often have lots of versions of the story write-up ready. (These days they literally have lots of versions of facts - hence had to specifically mention "write-up"). To be able to achieve this, content created by the reporter needs to be redefined. On this redefined content publishers can unleash different sets of editors to make the story readable for different audiences.

In essence one set of reporters can create many newspapers without much cost addition. Alternatively, news can be versioned across editions. E.g. City in the story can have detailed write-up whereas other city editions can have shorter versions!

Follow-up!

Once my boss remarked that if follow-up was an industry it would be the biggest industry! Websites give newspapers a mechanism to follow-up with their customers. Still if you read online content, it is an exact replica of the printed content. This, to my mind, defeats the purpose of the website.

Using IT effectively!

Internet should have allowed all the newspapers to have faster reporting. If all the reporters could upload their stories onto a central database, tag it properly. An intelligent editor with local knowledge can simply check-mark and get the edition out. This will enable the newspapers to create as many papers as they want.

In sum

Newspapers are an area where there is lot of potential for creating value. Steps indicated above are just outsiders view of the industry. Insiders can really create more and better avenues delighting us readers with well created, updated and analysed news in a crisp newspaper!

"In-tell"ing the "idiot box!

I have just been disappointed with my channel surfing experience. This isn’t the first time and surely won’t be the last. Indian television is at its lowest ebb. Not surprisingly, the advertising rates are among the lowest in the world.

Making the idiot box smarter - adding intelligence!
I believe television today is simply too dumb! Most of the soaps tend to take generation leaps making some characters as old as 800years and counting. I guess it is time to use television as tool for information dissemination. Look at the videos of John Bird and John Fortune, about sub-prime crises and credit crunch. They use humour to make people aware about some aspects of happenings in the financial world that are, in all probability, soon going to make life miserable for common man.

Yet all we have managed is to put humour to some crappy idiotic use in prime-time news.

Possibly only Vir Das (below) and Cyrus Brocha have managed to entertain intelligently using humour on news channels.

Intelligence is waning - Channels please wakeup!

I guess this is but just one example. But I guess it should suffice as there is not much opinion against my views. It is time channels and advertisers realised that programming catering to intelligent audience tends to be sticky. The intelligent viewer is intelligent enough to come back to the program and builds a solid "discussion universe" around the program attracting more "intelligent-aspirers" to the fold.

In Sum

Its time to rethink about the customer, about our assumptions of their intelligence and relook at what we are offering to the world. In the long run, well made intelligent programs will create their following and will bring viewers back to the channel. I am sure by making programming relevant to the people the channels can create a sticky customer. Let us hope the channels have some "intel" inside their organisations! Now isn't it what advertisers want to pay quality bucks for?

Real Estate: Where are we "real"ly?

Urbanisation of India has baffled me. Indian cities are a picture of most shoddy infrastructure and yet command more price than any other city in the world. Unlike Singapore, India has large land mass and there is no dearth of land supply. Also unlike other high cost cities, India’s per capita income does substantiate the prices in India. Therefore, what is happening and where will this lead?

Why prices are increasing?

The prominent reasons for increasing prices are said to be:

• Income and demographics
• NRI purchases
• Constrained urban infrastructure and hence higher pricing for currently available infrastructure
• Constrained low cost land supply
• Higher migration into established urban centers

Income and Demographics point to a different reality
This is the most abused story of all. If only people started looking at incomes and demographics, they will realize how outrageously prices have moved. The current incomes and spending patterns cannot support these residential prices or create enough spending to justify retail real estate prices.

NRI investments may not have an exit!
At current levels, housing is only affordable to NRIs with higher per capita income in relation to local population. However, if these purchases are investments then there has to be an exit route at higher prices for encashing the gains. Ultimate sustainable exit must be through selling to the local population. Crude calculations show the un-sustainability of this logic. In essence, the NRI investment theory may not find and exit route!

Constrained supply of low cost land is a cock and bull story!
Developers looking to acquire lands in or near the traditional CBDs are driving up the cost land. This is totally artificially created bottleneck and can be resolved using regulatory measures as seen in China.

Infrastructure constraints are government created
Lack of urban infrastructure is completely artificial, created by successive governments’ lack of vision. It has been years since government opened any new public schools, municipal offices, and water and sewage treatment facilities. The accumulated impact of this has reached a critical threshold where it has started affecting the cost of living and doing business in the city.

Higher migration into established urban centers is a key concern
Of all the reasons this represents the most critical and believable reasons. The job creation outside of the current urban centers is abysmally low. This is leading to in-bound migration across income classes.
At higher income level, it is raising prices in high-end localities. Therefore, we have the posh areas appreciating higher and faster than rationally acceptable rate. This phenomenon also brings in lower transactions leading to lower supply assimilation.
At the lower income side, slum population is increasing. Government is letting the migrant population encroach upon and absorb government and private land leading to artificially reducing the cost of living and doing business for current urban centers. This is a negative spiral as it reduced the incentives for economic activity to move out of the city. Thus, new investments in upcoming urban centers do not yield returns whereas old urban centers continue to become more congested. Consequently, emerging cities are missing the potential growth.

In sum
Governments lack of concern for living conditions, lack of foreseeing infrastructure requirements and lack of respect of property and assets is leading us down a dangerous spiral. Globalization has created ample infrastructure to let global cities compete against each other at a level playing field. Cities in Philippines, Malaysia and other south-east Asian countries are taking a lead and Indian cities will soon be left behind cursing the lost opportunity.

Selling costly products to the bottom of the pyramid!

When phones, televisions and many other costly products came to Indian villages, they were bought by few and used by many at low (or no) cost. In early days, such wonderful devices did not sell as much as they should have. Is there a way to sell such products well before they become affordable for the masses? Possibly! Let us examine the case of one product that is going through the exact same phase - the massage chair!

The massage chair!
Recently a cinema theatre we frequent put-up OSIM massage chairs. The chair is awesome and a full body massage takes about 20-25 minutes with lot of customizations possible. This massage chair from OSIM represents costly, high maintenance equipment that is not a daily use item. Using it requires a comfortable, private setting where one can enjoy the relaxation from the massage.

Converting product into service – a massage chair “Laundromat”
Imagine “OSIM massage parlours” wherein one gets to use the chair for fixed fee. This concept can be developed similar to Laundromats. Lot of such chairs can be made available in these “parlours” with a personal cubicle.
These parlours need to be placed where:

• People with aching backs and bodies are present i.e. airports, gymnasiums etc.
• People have some time on their hands - malls, cinema theatres, spas and hotels etc.

So this single product can be made into many “services” e.g. a simple massage, aroma massage (with choice of fragrances being sprayed in the cubicle), relaxation lights and sound package etc. The concept also opens up a lot of various options for allowing people to experiment with scented relaxation-candles, special relaxation music etc. The possibilities are enormous. The idea will definitely catch on resulting in product sales the company may not even have imagined! What say?

Strategy for Corporates’ under media scanner

Just today an employee is suing KPMG for sexual harassment at workplace. The company’s apathy towards her internal complaints forced the lady to involve media. The company, like many others, now finds itself in a precarious situation. A lot of its brand-building initiatives are nullified through one indiscretion of the management. Surprisingly Corporates are not able to deal with media attention. Yet corporate chieftains can draw parallels with two people to learn the do’s and don’ts of media behavior.

Learning the Don’ts
Her story would read like a normal girl’s tale if it weren’t for one critical detail. The name is Britney Spears. Britney was a siren who lured media with her simpleton charm. Media noticed her for her talent and then seduced her into letting her guard down. Relentless media pressure has driven her to wits ends. Once a girl media darling and now the one media loves to hate, Britney epitomizes the way one should avoid dealing with the media.

The do’s
On the contrary Sachin Tendulkar is still standing. From the time he was sixteen a billion people have been crazy about him. In India cricket is a religion and Sachin is the God. Yet that hasn’t affected him. He distances himself from the media and maintains impeccable conduct. The master blaster has always said that he will let his bat do the talking. And boy has he done that! Just today he became the second Indian batsman to score 1000 runs in 2007 and the first one in cricketing history to achieve the feat 7 times! Yet he rarely interacts with media and almost always gives rehearsed answers. To him media a siren whose lures with her song but like Ulysses he never left his boat.

In Sum
If you maintain an impeccable conduct and refrain from acting smart with the media you will go a long way in avoiding such blunders. Impeccable conduct and cautious nay over cautious approach is the best way to deal with the media.

Promoting Restaurants

Promoting Services is a really complicated exercise and particularly restaurant business is quite tough to operate in competitive market place. Anniversaries happen once a year, so do birthdays, dates happen across various locations, and that is why restaurateurs find it difficult to do promotions. To generate enough footfalls every day you have to have a really large clientele.
However, a reputation once created and regularly reinforced by sustained good experiences can act as a sustainable competitive advantage making a player successful in spite of the competition. A lot of new sets of ideas can be generated by focusing on the customer life cycle.

The customer Focused approach - attaching to the customer life-cycle
Touch points for various customers are different. As a person goes from age of college and dating (hopefully a lot of dates at the same place!), to jobs and marriage (and commitments along with it), the priorities change drastically. The expectations from a restaurant, as a result, changes. Some of the expectation changes could be mapped as below:
1. a hangout place
2. an exotic place for pampering your date,
3. a place where you get a meal fast during office lunchtime,
4. a place where you bring your clients to,
5. a place where you want to celebrate your anniversary,
6. place where you want to go after a movie (along with your wife)
7. a place to socialize to enhance your interpersonal relationships (for career growth)
Along these lines the strategy can evolve to attract people.

For example, as a hangout place, there may be designated days (Wednesdays / Thursdays nights, Saturday mornings, Sunday mornings - not Mondays/Tuesdays as you are not in the mood for hanging out then - No Friday/Saturday/Sunday nights as they are “primetime”). The menu should also reflect the change (out goes the wine and in comes the beer - 2 mugs against a cover charge - coffee and grub take preference over cuisine - music changes – layout changes lounge sofas come in – concentrated lights creating luminous circles on tables and dark spaces around them hiding the people - etc)

A Client Meeting place should involve telephonic reservation facility, customized menu card (with sponsor companies name and charge column left blank- chefs specialty included – can be made by any creative DTP person). As earlier the layout and arrangements should change – exotic wines – signature accessories – welcome boards at restaurant entrance (marking the guests name correctly) – company specific welcome drink branded in sponsor company name GE special banana milk shake (with a unique recipe of course not replicated on other menus - will work well with local businesses) - lights should be good enough for people to see each other clearly – small laptop stool should be made available along with notebooks and voice recorder if required. Client meetings should be available throughout weekdays.

Office time meal approach calls for pre-paid coupons – meal packages – meal cycle (set of varying menus that office goers can pick-up so that they do not get bored (same combo repeats once in two months), are well fed, meal is complete in terms of vitamins, calories, no-fat, fiber, carbohydrates, etc. Here too company sponsorship may be possible – company can sponsor dietician to customize the menu for their staff – this will be special menu – dietician has to work with restaurant menu as a superset of staff menu.

Finally a small note - care should be taken to keep tastes distinct, an ordered meal has to taste special and office-time meal has to taste homely. Restaurants are all about tastes – some in the mouth and some in the mind. Further, a lot of ideas can be developed by learning from the clubs of London of 18th and 19th century.

Killer App definitely from Microsoft!!

People who know me also know of my admiration for the one Mr. William Henry Gates III or Bill Gates as we know him. This has had a rub-off on my expectations from Microsoft. Now, after having tested the X-box 360, Vista and read the specs of Zune, is the time to upwardly revise the probability of killer app from Microsoft.

Slipping through the door - The X-box

If the X-box is a game station then why call it “X” box? Duh! It plays DVDs, channels in the HD TV, plays Dolby Sound, shows and edits pictures, networks wirelessly, has family settings apart from playing games! It is a sort of expandable functionality box! Is it the original Microsoft idea? As expected, it is not! The Sony Playstation is essentially the very same things. However, the key difference is Vista! I would bet the X-box sits on a Vista version allowing it to do significantly more things than Sony can even dream of doing.

The visionary “X” in X-box
The day I saw the X-box, I shuddered! It spells “tough times” for makers of DVD players, Music Systems, Desktop home computers, hand held MP3 players! With the X-box, Microsoft has put into your home an entertainment enabled Hub! Each of the accessories, like Music System, MP3 players, home computer, is a node (or spoke)! Whoever successfully captures the Hub will have a say in what becomes of the node. Truly Microsoft! Capture the most essential part of the value chain and then dictate the terms!

The bigger plot!
It has already started putting the nodes in place with Zune! The credits from playing on-line games can be re-deemed for Zune songs. This is an equivalent of earning and spending online! This indicates development of an “entertainment ecosystem” comprising variety of nodes connected through the net. The variety of software (Operating systems for governing these nodes, content for these) can yield further revenues.

The business genius!
Apart from this technological ingenuity, Microsoft brings superior business sense to the table. (Microsoft must have lots of brilliant strategists amongst all those who cracked the round-man-hole kind of interviews effectively!) Let us imagine Microsoft did think about all these ideas and started work on business strategy. What would have made them put these Trojans into an entertainment machine? In my opinion, luck or otherwise, “entertainment” is the best bet for entering homes. It has the right mix of emotional attachment, passion and perception of need to make it a must buy.

In sum
While we are all busy fighting Microsoft on the security issues, they have quietly built up a platform that can bring them into our homes and much closer into our pockets. Soon Microsoft will touch every part of our life in ways that are more evident. IF someone knows how to buy Microsoft stock sitting in India please let me know!

Blue Print for next Gen Political Party

Today’s political party is hardly listening to the voice of the public. The only time when the politicians ever come to the voters door step is during the election season. This lack of communication and relevance to the general public is now costing Indians a bright future. Improper regulations, election oriented policy announcements and draining of government resources have taken governance to all time lows. Reform is the need of the hour and the political power is critical to unifying, economic prosperity that young India is dreaming of. The current political system cannot deliver anything that can be even called close half-measure!

However, establishing a political party in India is a great challenge. From an industry analysis point of view the challenges are immense. There are tough entry barriers, ability to reach out to masses across classes, financing poll-rigging, ability to generate and deploy black money etc. There is a distinct lack of expertise in this area in common man thereby making it almost impossible to set-up and successfully manage a political party. Then is it possible to design a competitive strategy, for a new “clean” political party, using traditional business management principles? Of course yes!

The story so far!

There have been several attempts to work on a political party that represents the intellectual maturity and values of the Indian masses. Some of these involved IIT/IIM alumni, while some others enthusiastic college students and young IT professionals. Yet, these out-fits find it extremely difficult to counter the incumbent goons and dons who rule the political arena. There are two inter-twined reasons.
First cost of running an election is very high! The goon side often bribes the voters to vote for them. Further goons have elaborate mechanism for booth capturing, proxy voting, etc. tactics that are morally impossible to reconcile for “clean” party.
Second the prominent and ever-increasing “middle-class” does not participate in the elections. At times this is on account of impossible circumstances, like traveling for work (long travel) while other time this is simple negligence. Whatever the reason, this ends up skewing the voter mandate to favor the views of “monetarily influenced” proxy-voters.
In fact these two reasons are primary cause of failure of any credible political initiative. It means that any strategic solution needs addresses these two basic premises as a primary test of viability. Let us ponder on these issues a little more.

Understanding the “problems”

The bribe-influenced voter is basically the first part of the problem. The genesis of the problem is rooted in lack of genuine voter turnout and availability of naïve economically lower class population that can be influenced by money. Theoretically, therefore, solution to this problem will be three pronged.
First and foremost it is imperative to educate the naïve economically weaker section. Secondly, it is essential to is to involve the educated urban middle class citizen in the electoral process. Third, and quite the easiest of the lot, is to present a credible alternative to this socially aware voter.
Experience tells us people only listen when it “pays” to listen. Hence educating the naïve EWS has to entail a robust economically viable process that can contribute stable financial earnings to these people. Evolved business plans and creative financing will have major role to play here. Since the financial and business systems would have been tested against business and economic sense they are less likely to succeed. In fact a BHUMI project in Rasoolpura slum in Hyderabad is making headway along very similar lines.Involving the urban middle class is by far the biggest challenge in this scheme. Middle class has in fact fallen off the radar of the social activities in India. As a consequence, social activities have ceased to be relevant to the “elitist” middle class thereby starting a vicious circle. The job-focused middle class has lost touch with the local community. Yet hope is not lost! Middle class can be effectively converted by Reaching Regularly with Relevant offerings.

Converting the Middle Class

Urban middle class, today, interfaces with the local community primarily through local purchases (grocery, cable TV, newspaper etc), house help (maid, driver etc), for community security (typically when there is a burglary close-by) and schools for kids. The good fortune is that these are the very economic activities that can create transitionary employment that can then generate reasonably sustainable regular financial returns for economically weaker sections.
Employment can be generated by harnessing innovative business models to organize, train and professionalize host of services like

• House-help in the form of maids, drivers, etc.,
• Bill payments (concierge services),
• House-keeping services,
• Contract services (plumbing, carpenter, mechanic etc)
• Home delivery services,
• Local community security
• Daily tiffin delivery
• Computer / TV / Electronics and appliances maintenance
• Play-pen services.

Social services involving youth to deliver local community oriented civic, history, technology presentations in association with National Geographic Channel and Discovery networks can seed the young population with bright ideas for implementing in local communities.These activities establish reach to this isolated “voter” group on a regular basis through activities that are relevant to the job-focused middle class person thereby creating an influencing relationship between local community and the middle class.

Why it may work?

While the activities I have suggested may not be exhaustive, the intent behind them is to make political parties more relevant to day-to-day life of the modern Indian. Unlike in the pre-independence era, today there is no single objective that can clearly differentiated. To highlight the community goals political party sponsors, to win the voters to the path of achieving these goals requires a channel of communication. Such a channel is no-longer available today for the common man. Political party of the future cannot afford to talk to common man through the media lens!

In Sum
Finally, through whatever means, whoever’s plans, let us hope India awakens to this new reality some day when we can really say we have set forth on the road our forefathers dreamt of during our freedom struggle.

The new "Car"ma

Daimler-Chrysler recently launched the new Mercedes C and S class. The wonderful thing about it is the presence of a hard-disk on board. This sort of partly fulfils my prediction dated as far back as 1992! It was the time I just introduced to the microprocessor. I was fascinated by what it could do. I had ventured that this programmable piece of electronics was what was needed in the automobile! And along with the micro-processor, there was needed a hard-disk! It brings to one of my most favourite topic of electronics in automobiles. It also gives me confidence to un-veil some of the electronics usage in automobiles.

Pieces of the puzzle!

We observe a lot of developments in different technologies that could make an impact in this field:

1. Micro-processors are ubiquitous!
2. Memory is easily available.
3. Cellular infrastructure is in place! Also GPS systems are already being installed on vehicles.
4. Sensor technologies are well developed. We already have rain sensors, backing sensors, cameras on board, light sensors etc.
5. Short range information exchange technologies are available for example, RFID.
6. Display technologies are well developed, a case in point is the new Honda Civic!

Connecting the dots…Car as a gizmo!

To connect the dots we can look at the development of military hardware. We can hazard a few guesses.

We will see more customizable displays in dashboard. For example, the new speedometer is Civic could be customised into a tachometer! We can also expect the LCD screens on the rear passengers to read out the dashboard so that passengers can keep a check on the chauffer! It will also mean that the dashboard space can actually replace speedometer and other read-outs with camera images while backing up or parking.

Your car will be much more integrated with the manufacturer. The manufacturer can put-in a SIM card to transmit the operation data from the car back to factory test centre! In fact soon you could get a call from your manufacturer informing you that your radiator temperature is suboptimal and you need to bring in the car for repair / maintenance.

The revolution will actually happen when automobiles are integrated with traffic system. This will give a whole new meaning to traffic management systems. In fact we may even get some public announcements being relayed into the car speakers! There a possibility for vehicle to vehicle interaction as well. This will give the driver alerts on obstacles beyond the vehicle in the front giving precious seconds for response in case of accidents. Evolved safety systems depending on faster response, automatic collision avoidance etc. will make life easier and safer for passengers and pedestrians. We can very well look forward to “no overtaking” warnings and “vehicle closing-in” alerts.

We can expect vehicles to have access card system to grant access to various systems. If your card has information that you are an authorized driver for relevant vehicle type then the vehicle will work else it will not turn the ignition on.

In Sum

These developments are all a matter of time. Yet these gizmos are virus-prone. We noticed in Mumbai floods that cars with lot of electronics actually ended up worse-off than plain simple mechanical ones. Devices like power windows turned cars into death traps. So we need effective failure-proofing of these technologies before they get into our garages! All said we are looking into a fantastic future for gizmo lovers!

"Basics" In stints

As I write this Indian cricket team is playing Sri Lanka in world cup. India, as usual, have got themselves into a hole early in the tournament by losing to a minnow team. What happened in that match often happens with Indians. To put it simply, India went wrong in basics. The cricketing basics were simple; bowl straight, close to the batsman, get a little bit of swing and field well. Indians went wrong in these basics while trying more esoteric ideas and experiements.

Importance of "Basics"

While Srinath discovered this fundamental truth in final series, yours truely has discovered this a long while ago. (If only the cricket team would ask me). Yet the question remains if I have discovered the "basics" related to my work. Frankly, I am not sure! As apalling as it sounds, I am not alone. Almost everyone knows only a part of the real basics required in the job. So how can we ensure that we get out basics right everytime.

Know the basics

It is not so simple as it sounds. We almost never know what are our employers basic expectations from us. This is primarily because the expectations keep changing often and we are not informed as frequently. Unfortunately we never take the initiative to ask! Also it is important to ask often enough.

All basics Right All the time

I often found myself incorporating too many "experiments" into my project work. These take up lot of monitoring, focus and therefore energy. This induces a loss of foucs on basics. I have found an easier way by limiting "experiements" and giving adequate focus on basics.

Find an "articulate" mentor!

Often the immediate supervisors may not be able to help us. We need to find enough people who can give us the organisational view-point and explain the changes in the role expected of us. I really have never found mentors who can articulate "basics" (thats "spoon-feeding"!), but the perspective really have helped me in getting closer to what are the base level deliverables.

Finally

It has been a learning process for me till today. I believe I havent even scratched the surface. Feel free to let me know the secret if you have found it already!

A Dog named Moti!

It is funny for a dog to be named "Moti". I named him exactly that as that was one name that was not taken on my vet’s database. Yet when you find yourself searching for a generally acceptable, easily pronounceable name for more than 10 dogs it is rather difficult. Yet, I named him exactly that as that was one name that was not taken on my vet’s database. Moti came as a quiet, lean, brown pup with intelligent. This shy reluctant puppy was as small as my hands. But aggressive he definitely was! He insisted on biting any hand that touched him. None of the “cho-chweet” gang members ever got close to him ever!
This pup’s day was filled with lot of interesting things. Mornings were spent waiting for breakfast. After a heavy breakfast Moti would get his chain and absolve himself of guarding duties for his day nap! Between dreams he also had lunch! Evenings were designated for fights with yours truly! On a saner day Moti insisted on a tug of war with his rug as a rope. Usually he liked to wrestle with me. At his age it was easy for me to beat him. Nights were designated for “hunting” expeditions with coconut tree branches as targets that were usually found dragged all over the yard and often shredded and bitten. All this exercise made Moti a really big and ferocious guard dog. And he took his guarding duties seriously.
The newspaperman once found himself lying on the road under his own bicycle with Moti waiting to take a bite. The only person Moti listened to in such situations was me! I could take his food from under his nose! Occasionally some storks, pigeons and rats tested his hunting skills. My neighbors’ dogs typically liked to test Moti’s patience from behind our gate. Occasionally Moti broke free and taught them rules of the jungle.
People often found themselves face to face with Moti who liked to put his head out of the gate grill. We had to install a separate bell outside of the gate for people to ring without touching the gate. Yet, the most interesting was how is hid himself waiting for people to open the gate and come in before he confronted them with bare teeth and red eyes.
Yet for his aggressiveness Moti was a gentle dog! My cat took full advantage of this nicety. This skinny (more appropriately lean) hero used to pick fights with all the fat and plump toms in the neighborhood and then run to Moti for protection. The cat even developed the confidence to go between Moti’s legs with his tail up!
I will always remember how “angry” Moti got when my sister and I had fights. I will always remember calling his name out as soon as I returned home. I will always remember how Moti used to obey a “NO” command with dish full of meat in front of him. I will always remember how his enthusiasm for games would wane away if he sensed I had a bad day! Last week, Moti died of illness and old age. I will always remember him!

P.S. = As I console myself the memories of Moti come back to me in the form of Taggy (his son) who incidentally is exhibiting the very same traits he has inherited from his father.

Individualism and Innovation

Very recently I read an article that explained that Indians are rather individualistic and general process principles are not well adapted to mass manufacturing. This, the author deduced, manifested in higher dominance of Indian products/services in creative space. There also appears to be a lesson in this history.

This explains to a certain extent why there are no truly national parties in India. In fact, never in the history of India has there been a single leader ruling the entire Indian subcontinent. The only exception to this rule was Indian National Congress (founded by Alan Hume counting Mahatma Gandhi, Lokmanya Tilak and Subhashchandra Bose amongst its members). After the Indian National Congress (that was gratefully buried after independance; the current congress is a version used to be called Congress I), most of the current crop of political parties are essentially agglomerations of regional parties including the BJP. At one level this is the very core of democracy and possibly the single most important reason why Indians have taken to democracy like no other nation has.

This traditional Indian mindset is most apt for start-up ventures or companies that are just finding their feet on global stage. To my mind this explains the Indian successes in IT and manufacturing (in specific cases involving commodity products). Using capital better and more creatively Indian companies have created enough wealth to buy-out global giants.

Sadly, this is also the reason why Indians have not innovated most of the new path breaking products. In industry driven by creativity, like advertising, Indian companies have not been able to sustain innovation in a people-independant manner. Path breaking innovation needs the bedrock of processes. It needs standard, non-deviating operations to release the time and free the energy required to design and bring to fruition a path breaking innovation.

To a certain extent, these changes are visible in the software industry particularly in the BPO business where process orientation is a prerequisite. The next phase of Indian corporate development will essentially revolve around the way companies are able to assemble an efficient, non-deviating operational core to free up talent and resources for great more impactful innovation.

The New iPhone

In one of the most happening month for tech-crazy we had CES, Detroit Auto Show and MacWorld clamouring for attention. Amidst this innovation frenzy, Apple launched its new device, the iPhone. There is a lot to learn from the “history” Steve Jobs created at the MacWorld.
One set of learning is more about the technological aspect itself. While other, a more generic, is related to how good companies function. In both Apple showed remarkable insight, attention to detail and perseverance to do right things right.

A device to make history

I am deliberately calling it a device and not a phone. It has almost all the qualities of the device for the next digital revolution. And that it’s a phone is ancillary. To put in a full scale OS was a real clincher. This truly makes this device a platform device rather than a collection of camera, multi-media player, phone and contact-manager taped together. A platform device enables Apple to put in user’s hands a service pipe. Through this pipe Apple can supply unparalleled range of services. Apple has augmented pipe-features for this device featuring a carrier dependant pipe (EDGE) and a carrier-independent pipe (WiFi).

Intuitive Product Features

A lot of phones / multi-media devices currently function in two distinct areas, work or entertainment. However a person who works is the same one who needs to be entertained! I have never understood the reason for separate devices for each need. Apple however packs both features into their iPhone and even packs in two separate batteries for these functions.

Superior product design

Apple launched the iPhone with two memory variants 4GB and 8GB! That’s a lot of memory for a first product. Despite of this the weight of the product is quite manageable. This incorporates the learning from wide-screen Nokia phone and N‑Series. The initial demo of creating a wall-paper from a picture is also an example of smaller innovations packed into the iPhone design.

Better Interface

Apple equipped the iPhone with touch screen, no keypad! A very sensible idea indeed as most of the time PDAs are used as phones and do not need the full scale keypad. In fact when using the PDA as a phone the QWERTY keypad is a pain to use. If you have tried to use the small keys of Treo you will know what I mean. Using software innovatively, Apple has eliminated these disadvantages, giving us a QWERYT keypad when required. Further, the company who give us pointers highlighted using the ultimate pointer i.e. finger! I have no doubt Steve Jobs has made the screen smudge-proof.

Exceeding expectations

After a lot of anticipation of iPhone, when it finally came there was a fair chance that Apple might not deliver the hype really surrounding the product. Yet, Apple not only met but exceeded the user’s expectations from this product. Nothing new that’s something CFOs have to do regularly with Wall-Street analysts. But the key difference is that Apple shows this behaviour with customers! The Wall-Street analysts are automatically addressed.

Web augmenting customer communication

Being located in India, I was asleep when Steve Jobs was making history. So the first thing I did next morning was log onto Apple’s website. And there it was the iPhone page! Neatly displayed with all the details! Here is a company which knows that a lot of users will log in to their site on or after the MacWorld. Moreover here is a company that makes it “talks” to these visitors about its new products it is desperately trying to showcase. Try finding latest versions of Mustang.

In Sum

This was a perfect example of how a company should go about creating value! Give value to customers and demand value from them! This is precisely what management jargon “customer is king”, “customer first” etc. really mean. Compare this with Ford, GM and kin, which is addressing analysts rather than customers. The rest is mere detail!

Innovation inspired Services

We have seen that devices have actually evolved and are ready to serve as a launch‑pad for innovative services to takeoff. Creating innovative devices is costly. There are development costs, roll-out costs, (user) training costs and finally cost of changing user preferences. However, it is not difficult. It benefits from competitive race between device manufacturers. The nature of new devices soon becomes a standard expectation. Services, however, are a totally different ball game.

Current services
Currently services that are gaining acceptance are those that are based on the mobile phones’ ability to interface with computer (e.g. mobile phones as MP3 players) or mobile phone content being downloaded on the phone (e.g. movie ringtones, wall papers etc). This is in some way a parallel to what happened with computers.

Location-based Advertising Service through mobiles
We know that telecom providers have a database of subscribers with addresses. They also know where you are located based on the nearest tower your cell-phone connects to. Yet if I want to locate, let us say, a Petrol Pump then there is no service wherein I enter a keyword and the list of nearest Petrol pumps pops up. Now which network will people choose while roaming?
Let’s say if Airtel were to offer a service to owners of shops, hotels and other consumer establishments wherein they get themselves a business connection which will make their Airtel phone number searchable and accessible to people searching for it. Intuitively these people will pay a fee to get a connection with Airtel and pay a small yearly fee to get found!
Telecom service providers know this and hence will soon tie-up with Google, feed Google with the location details and Google will find you the list and keep the revenues too!
Let us twist this idea a little, if telecom equipment manufacturers can develop a small base station capable of covering a shopping mall and people within can be sent advertisements very specific to that location. Imagine you are shopping around 6pm and a restaurant close-by advertises a food-fest you might just be inclined to change your dinner plans.

Logistics – A device, network innovation
Have you noticed the range of devices logistics personnel carry to audit the schedules and delivery performance of delivery trucks? Now imagine a vehicle black‑box equivalent that can monitor all the vehicle details (speed, load, fuel) and send that across once it reaches the cell-phone coverage area through a cell connection embedded in it. Now do you think it will give GPS a run for money? I think so!
This can also help performance car manufacturers gather data from your car and keep car records for you. I can imagine myself receiving a call from garage telling me that my fuel efficiency seems to be dropping and I need to get a check-up! It can also call up authorities if there a crash which will be promptly relayed to the 911 / 100 number and the car garage as well.

A mobile Desktop calendar / Photoframe
Now imagine a company who wants to keep in touch with CEOs and key decision-makers regularly, every single working day. They give them desktop calendars to be on top of your mind. They sure are on top of your desk but it is not interactive. Now put a digital display with a calendar chip (these are very cheap) and a mobile device. This could be a desktop calendar or a photo frame and the message can be relayed through the SIM reaching the desktops of CEOs and decision-makers. Imagine they can change the picture on the frame by emailing to your-name-photo-frame@sponsor-company.com! They are now your partners aren’t they?

In Sum
Likewise, anything that has a battery and space can be fitted with a mobile SIM and innovations can be based around that.
Creating innovative services is not always costly, and roll-out is fairly simple. However, it has basic requirements that are not imbedded in most corporate DNAs. It needs a lot of innovation. Make that a hell lot more innovation! Add to it the very complicated “planned innovation”. Further complicate it by adding high failure rates. And the clincher, all this is easily replicable by competitors. This makes service providers lethargic to any innovation in services. So much so that telecom service providers have yet to come up with downloadable ringtones on fixed-wired phones. It will take one inspired service provider to zealously re-invent the boundaries of this space. In a nutshell, services innovation will not happen easily. What we have is a basis to dissect the possible innovation in services.

A Device for revolution

The search for next killer app is a product of two important components, the device and the service. However, real world economics drives each one independently though over a feedback loop. Consequently, we have mobile device manufacturers trying to add functionalities of popular services (like internet connectivity for email) and services are being designed taking into consideration the new devices (like m‑blogs).

I have mentioned about the components of device in my earlier post an year ago. Between that time and now we have significant developments along the lines of what I had written about. I am just going to summarize some of these developments.

Processors have gotten better

Mobile Processors are now a lot better with certain mobile devices now calling themselves computers, particularly Nokia N-Series Mobiles. These are not special processors but standard processors with stable OS with an ability to deal with text, different installable applications and their file types, streaming media etc. So now our mobile devices can identify different profiles of data like documents(Word, pdf, etc), html (xml) files, contact information files, text files, calendar entries, pictures, music files etc.

Devices have more memory
After a lot of development involving IPods and Mp3 players, we now have about 4GB of memory being stacked in a Sony Ericsson phone. The developments mini SD and micro SD cards, packing up to 2 GB in a micro SD, bring more good news.

Devices have better Human Interfaces
Human interaction with the devices has improved with touch screens, bigger screens, video conferencing cameras and full-function key boards being available on mobile phones. We also have mini USB to interface them with other devices.

Battery life is better
In spite of the famous Sony battery recall, we now have better and longer lasting batteries and devices that use power more efficiently. Put together we have more juice in our hand-held than few years back.

Network Interface
Devices are now ready to access the network in more efficient manner. Nokia phones now come with the capability of accessing 3G network and Wi-Fi networks.

Summary
All these developments have in fact set the stage for a string of developments. We should now see set of applications that can revolutionize the use of mobile devices in years to come. These applications will trigger a realization of importance of security identification that will influence further development of applications.

Next let us try and understand what killer applications can make our hand-held devices even more important to us.

The next Killer App from Microsoft!

Long after the post-dotcom era dust has settled, the search for the next killer app continues. People are looking everywhere for the application that will have as big an impact as the internet. Everything from “Web 2.0” to “ubiquitous computing” and everyone from Google to SUN is being scanned and groped for a hint of “killer app” potential. Well, not exactly everyone, no one is searching Microsoft!
Yet, Microsoft has under its hood assembled technologies that, if assembled intelligently, can deliver the next killer app! I have been loosing sleep over the next killer app till it all occurred to me. My confidence in Microsoft emanates from the fact that under all the inertia, Bill and his boys have assembled quite a bit of stuff.

Microsoft understands things others understand

Three key areas which are most definitely going to be part of the next revolution are also areas where Microsoft has established expertise. They are:

1. Devices: Microsoft understands variety of devices from servers, personal computers, Pocket computers, mobile phones, game stations, music players, clocks and what not! Microsoft knows how to make these things work, connect and share data.
   
2. Search: Window’s Live is Microsoft’s biggest bet in web search business. It might not be successful as a business but it is good enough to demonstrate Microsoft’s technical capabilities. Further the tight integration of search with Vista and Microsoft’s inherent strengths at desktop search are well known.
   
3. Security: I realize that I am treading soft ground but I trust Bill’s team to know and understand a lot about security. After all they created too numerous security holes than the entire programming world put together.

Beyond this, Microsoft also understands key skills operationally required for delivering the next revolution. Tons of cash, enviable marketing and sales engine, global reach are key enablers that can multiply Microsoft’s capability.

But the most important thing Microsoft understands…
That has to be “context”! Have you noticed a pop-up that irritates us when we start typing a letter in MS Word? Microsoft knows that you are typing a letter. Microsoft also knows who it is being addressed to and the location, email address of the person. This through a feature called “smart tags”.
Google on the other hand does not understand context. Nor can others.

Put together…
Microsoft can deliver the next revolution. This revolution will be created through a two level approach:

1. At one level will be a device connected to world through a spate of technologies including WLAN, 3G.
   
2. At Second level there will be services that will through software, social networking site technologies and other sharing enabled technologies will create unparalleled utility.

In my next posts I will detail more on each of these. Meanwhile, I just hope people at Microsoft, particularly one who is in India currently, take notice and start working on getting us into the next technology revolution!