Archive for December, 2006

“Money is safer in banks than under the mattress” – outsourcing e-mail services to Google by Arizona State University

December 21, 2006

Economist carries a piece that mentions 65,000 students of Arizona State University switching over to GMail for their e-mail services (under Google Apps for Your Domain).

Adrian Sannier the CIO has shown remarkable courage in doing that.

E-Mail being such an important tool today that touches every activity, few CIOs will look at the route of “trusting” others to hold ALL the critical information. With the hassles of running IT infrastructure (attendant spam & virus) outsourcing might be the option. The far-sighted CIO quotes the “change in mindset” of people trusting banks than storing cash under mattress.

As long as the system works (cash can be drawn from banks under most normal circumstances reliably) people would trust banks better without the hassle of securing it; as long as Google (it could be Microsoft & Yahoo too) deliver reliable performance, it might well be the way.

Interesting days to watch

“The high performance entrepreneur” by Subroto Bagchi, Penguin Portfolio (2006), ISBN 0-670-999-180 – Chapter 2

December 17, 2006

In this Chapter Bagchi addresses the “Profile of an entrepreneur”. As in the previous chapter his personal experiences are well articulated to convey the message convincingly.

The key question is “Is there something common between GE’s Thomas Alva Edison, Microsoft’s Bill Gates, the Tata’s Jamsetji Tata, Dell’s Michael Dell, Wal-Mart’s Sam Walton and Sony’s Akio Morita?”

The first attribute is “Self confidence: the # 1 attribute” – “there are no exceptions to this rule. You cannot show me a person who does not believe in herself and yet is a successful entrepreneur”; of course, “it is possible to build self-confidence and it is equally possible to lose it due to circumstances”

Bagchi uses a series of examples drawn from his life; selling balloons in the village market, staying back with the school he liked, getting married to the person he liked – all demonstrating his self-confidence.

He lists a number of self-check questions

• Do you take the important decisions in your life?
• Did you enjoy the process, irrespective of the outcomes?
• Can you make friends with a stranger?
• Do you see things to completion?

The second attribute is “entrepreneurs value their sense of freedom, but they are also very disciplined

Quoting from his own life Bagchi says “I do not like someone telling me how to go about doing my work”; yet “freedom is not lack of accountability”. Quoting MindTree example, “we are answerable to the government agencies of every country in which we operate. We are answerable to the analysts who track us, press persons, industry association, and we are answerable to our customers. So what is left? What is this talk of freedom?”

“Freedom to an entrepreneur is the ability to choose a line of business and set goals consistent with the stakeholder ambitions”

The third attribute is “Entrepreneurs work very hard”. Quoting examples, Bagchi adds “Wipro Chairman Premji averages 80 hours a week, yet Premji never asks someone to change his holiday plans. Ashok Soota, CEO of MindTree works as hard and averages 140 days a year of travel when he is 62. Along with hard work comes the ability to work unsupervised”

The fourth attribute is “Entrepreneurs recognize the power of “emergence”. Bagchi quotes the example of IBM founder Thomas Watson Sr. who decided to sell the first five “accounting machines” to the New York City Librarian. “Had it not been for Watson’s capability to go with the emergent events – accounting machines to general purpose computers – IBM would not be what it is today”.

“Providence is very powerful in our journeys and entrepreneurs must make room for her”

“Nine out of ten companies born at the same time as us, do not exist today. Entrepreneurship requires the uncanny ability to seize the moment”

The fifth attribute is “Entrepreneurship is all about egolessness”.

“A person’s corporate success often comes from the power of the chair he sits on”. Bagchi quotes his personal experience of a very hurting interview, where he was made to wait for 45 minutes. “I realized that this was a set-up by destiny to prune me”. Bagchi goes on to add “when a rose bush is pruned it does not like the experience; yet without the pruning it will not give great blooms”. “The ‘senior executive’ and ‘your last organization’ are past and best treated as fiction” is his advice to budding entrepreneurs.

The sixth attribute is simple “Entrepreneurs love money”. Bagchi’s prescription is plain and simple “if you do not love to make money, do not start a business”. He cautions “some people have disdain for money because they associate money with being consumerist. In the hands of the creator of wealth, it is not always so. Some people use wealth to build more wealth”. Bagchi goes on to add “in the Hindu pantheon, wealth is generated by a goddess named Lakshmi who does not come to those who treat her as if she is incidental. So, if someone says money is not my prime motivator, know that the goddess is listening”.

Bagchi’s observations are deep; his articulation is wonderful and his examples are compelling. I do not know of any treatise that talks of entrepreneurship in such accessible language. The first chapter dispelled the myths; the second chapter talked of the key attributes of successful entrepreneus. The next step is to “sense the opportunity”; wait for the third chapter

“The high performance entrepreneur” by Subroto Bagchi, Penguin Portfolio (2006), ISBN 0-670-999-180 Chapter 1

December 15, 2006

“The high performance entrepreneur” by Subroto Bagchi, Penguin Portfolio (2006), ISBN 0-670-999-180

Subroto Bagchi’s book on entrepreneurship has set a new landmark in content, quality, style and presentation; its contents break new ground and steer from a “textbook” approach that talks of business plans, negotiating with VC, early stage & late stage funding opportunities, market research etc., but focuses on “high performance” and “organization”, the rare combination that the author combines so well. The quality of the writing, even the physical design of the book including the jacket design, is superb; it forces you to grab the book and read it, if not in one go! The style is “direct” – the author “speaks to you” more vividly than any video conferencing systems, showing the power of the “letter”. Finally, the presentation of the ideas in short eighteen chapters of about 8 to 24 pages is a brilliant way to make the book readable, particularly to the younger (Internet) generation.

Starting today I plan to blog each of the eighteen chapters, roughly a piece a day; I plan to use some “quotes” from the book interspersed with my words. I find that is the best way to “review” this amazing book.

Read and enjoy; at some stage I am sure you will grab your own copy.

Isn’t it an interesting coincidence that both Bhagavad Gita and Bagchi’s book carry eighteen chapters?

Chapter 1: “When do I know if I am ready?”

This is a “must read” for many students thinking of entrepreneurial opportunities. Using three simple stories

• “Neil was clearly frustrated and wanted to something on his own”; but he was not ready for the “critical first step needed to be an entrepreneur – the ability to make personal needs and comforts subservient to the larger organizational goals”. He was caught in the “inevitable comfort trap”. Bagchi quotes Mindtree founders’ experience “each one of us took a salary reduction of 40% at the start and some of us even took an additional 25% reduction when the economy tanked in 2001”

• Vincent’s example of “poor resilience and the lack of integrity” showed clearly he is not going to be an entrepreneur. “Faced with the smallest obstacle he was ready to give up” as demonstrated by his request “assuming that I gave the idea a try and failed, do you think you could hire me at Mindtree?” Doing it after excusing himself from his two colleagues showed his lack of integrity too.

• “Ismail was married to an extremely attractive woman given to the creature comforts of life. Ismail rented a guest house and appointed a company cook who for all practical purposes was to cook for his wife. With that he subordinated organizational goals to domestic peace” – sure ways of not demonstrating entrepreneurial capabilities.

“Failure cannot be an option when you raise money from others or take on employees who work to make the shared vision a reality”

“Starting your own enterprise is a little like motherhood. You waive all caution and comfort to embrace”. I resonate so well with Bagchi as I used to say in the earlier days of IIIT-B that “I am like the mother of an infant; the infant calls the shots; my time, schedule and activities are completely decided by IIIT-B’s calls”

Bagchi also punches holes in the common follies associated with entrepreneurship

• “Being great friends and having fantastic ideas is not a sufficient condition. Apple, Intel and Infosys are great examples but there are myriad examples where not only did the companies go haywire, so did the relationships”

• “All it takes to build a high performance organization is a great idea for a new gizmo” is not true. Bagchi convincingly argues quoting GE, Ford and SONY examples. “Building a company is not like planning one giant tree. It is about creating an entire forest some day”

• “My career is not getting anywhere. I hate this company and I do not like my boss” are no reasons for starting a company. Once gain Bagchi convinces you using the examples of Mahatma Gandhi and Mother Teresa.

• “My time is running out” is no great argument either. Bagchi’s excellent idea for such impatient youngsters is to “get a boy friend or girl friend, get married and raise a family”. Last, but not the least important

• “I do not need the money I want to do it for the country”. Bagchi is crystal clear “if you do not need the money, do not start a company”. “Profitability is a social obligation of an enterprise”

Assuming one has all the right reasons, the next question to ask is “Am I entrepreneur material?” Wait for the second chapter.

In the larger Indian context IT is more symbolic than substantive

December 15, 2006

Panel discussion
Mind Tree “Resonance” (Dec 14, 2006)

“In the larger Indian context IT is more symbolic than substantial”

Yes

1. India with one billion people needs 200-300 million jobs; IT has created 2.5 million jobs; likely to create not more than 3.5 million by 2015; what big deal! Textile industry has created 75 million jobs.

2. IT accounts for 3.5% of GDP only

3. With all the hoopla around, only 5 million PC’s sell every year; we would sell 1.25 million cars in 2006!

4. IT Pros – code and code; speak in crazy languages (even names are c++!), brew no interesting drink (even in Bangalore city with Mallya around!), not even tea / coffee, but boring Java. No great singers, dancers, cricketers or football players from IT; contrast with Tata Steel who also made steel!

5. Healthcare, Construction, Retail, and Tourism will create 6.1 million, 9.9 million, 9 million and 19.6 million jobs by 2010! How about IT? Just 2 million!

No

1. IT created positive International Press about India for the first time; the first New York Times front-page news item in 2001 was “Customer Asset” story – great “Sri Ganesh” with “K Ganesh” the Founder!

2. Several “firsts” were triggered by IT

• Bangalore adds the largest “office space” side-stepping London & Tokyo
• Mysore is the second city other than Davos that “remotely opens” NASDAQ
• 6.2 million mobile subscribers in Aug 2006 is a world record (higher than Chinese)
• Cheapest phone tariff (10 seconds pulse) possible due to “low cost” billing
• 2,026 people join Infosys Mysore on June 26, 2006!

3. IT is for “Aam Admi”; Bhoomi for farmers, Railway Reservation for construction workers and mobile phones for plumbers. Ratio of minimum to maximum salary is 1:18 in IT; it is 1:30 in others. There are just 100 people with Rs 1+ Crore salary in IT; but there are 2,000 such people in other industries!

4. IT “triggers” other industries and innovations; for example,

• Captain Gopinath and Deccan Aviation overtake Indian Airlines, thanks to IT
• Banks became “8 to 8”, if not 24X7, thanks to IT
• Tata’s “Rs 1 Lakh car” & National Housing Bank’s “Rs 1 Lakh home” and the upcoming “Rs 99 shirt from Reliance” are all inspired by and sustained by IT

To sum it up,

“Putting man on the Moon is symbolic than substantial to US”; if you agree with that statement you can also agree with the statement “IT success is symbolic than substantial to India”; and only then!