Archive for the ‘ENTREPRENEURSHIP’ Category

Dabbawalas to market Reliance Power IPO

Dabbawalahs of Mumbai

MUMBAI: Reliance Money, the financial services and products distribution company of Reliance Anil Dhirubhai Ambani Group, has latched on to a marketing innovation. The firm has roped in the Six Sigma perfected dabbawalas to get an edge in their run-up to the Reliance Power IPO, among a host of other tradeable financial services. The dabba which arrives on the dot at most office desks with home-cooked food, will have other steaming offers in a bulging paper envelope. Apart from the full bouquet of mutual funds, insurance products and money transfer services, Reliance Money expects to push demat accounts, and IPO application forms through this channel, beginning with the Reliance Power application forms. The dabbawalas will not only carry Reliance Money’s messages across the city, they will even pick up requests and completed forms from customers back to the company.

“Its a dedicated two-way communications channel,” says Sudip Bandyopadhyay, director of Reliance Money. “The idea is to reach out to a maximum number of retail investors.” According to recent estimates, the dabbawalas move around 1.6 lakh lunch boxes everyday across the length and breath of Mumbai, with a workforce of around 5,000.

The alliance ensures that Reliance Money gets access to the most sought after segment of 24-60 year old professionals in the city, “each of who is individualistic enough to insist on fresh, hot home food every day. Reaching out directly to this segment makes more marketing sense than acquiring impersonal mailing lists,” says the director.

Given that some parts of this segment may not qualify as traditional equity investors, putting across a customised value proposition for each individual is an added bonus. According to reports, though the average dabbawala has no formal education beyond class eight on an average, their work practices draw upon a 120-year old logistics system. That means the familiar workforce on Mumbai streets – for whom even the unruly Mumbai traffic stops to let pass – misses no more than one delivery in every 10 million.

Though the deal with the dabbawalas is to be an event-based deal, Reliance Money is also looking at alternate channels to sell its services. It has also tied up with coffee chain Barista, where each outlet has a trading kiosk. Many travel agencies (like Kuoni) as well as courier offices (like DTDC) too will distribute the company’s financial products.

Reliance Money is the electronic transaction platform associated with Reliance Capital, a private sector financial services companies.


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People’s Car from Tata

For those who have lived or visited India, one can relate to the excessive use of two wheelers to transport middle class families or rely on the vulnerable rickshaws to get around cities and in some rural areas between towns and villages too.  Quite like Maruti – a joint venture between the then Indian Govt. and Suzuki broke the price and size barriers to make cars affordable, Tata Motors, in keeping the promise made by  their Chairman, Ratan Tata, have yet again indicated what the Indian industry is capable of for the world market.  Designed, built and tested on Indian Roads, it can only prove to be a food for thought to the advanced design teams and factories of leading car makers across the world.  Economic Times captures the launch in the article below.

RATAN TATA, chairman of the Tata group of companies, has a cerebral and cordial manner. But the so-called “one-lakh car”, which Tata Motors unveiled in Delhi to a rapt public on Thursday January 10th, is a product of impatience and chutzpah. Instead of waiting for the great swell of prosperity in India and elsewhere to create millions of customers for his company’s products, Mr Tata has decided to wade out—further than any one has gone before—to bring a car to them.

In India one lakh means 100,000, and Tata will sell the most basic version of its new car at 100,000 rupees, or $2,500 (not including taxes and the cost of transporting it to the showrooms). This is roughly half the price of its nearest rival, and little more than the cost of a three-wheeled auto-rickshaw. But the “nano”, as the car is called, is no rickshaw. Apart from the fourth wheel and the doors, it has a 623cc engine that will muster 33 brake horsepower. The car should eke out 50 miles to the gallon, Mr Tata says. It complies with the “Euro III” pollution standards that prevail in India and should meet the tougher Euro IV standards with a bit of tweaking. The firm claims that the car produces less pollution than some two-wheelers produced in India today.

Tata Motors is best known for its trucks, lovingly decorated and recklessly driven, that clatter along India’s highways. It started making small passenger cars only a decade ago. Its low-cost car project has set a trend. Mr Tata says he is “quite gratified” that other firms are following suit. Bajaj Auto, which is known for its two- and three-wheelers, said on January 8th that it hoped to team up with Renault and Nissan to produce its own low-cost car. Fiat, Ford, Honda and Toyota also have cheap models in the works.  Tata may discover a market, only for others to crowd into it.

“It’s not our God-given domain,”says Mr Tata.

Cheap cars can be expensive to invent. Tata experimented with a smaller engine, but was dissatisfied with its performance. It hoped to use continuous-variable transmission, but had to make do, for now, with manual. Tata’s rivals may be able to free-ride on its efforts, copying the cost-cutting tricks it had to discover through painstaking trial and error. “It will be an easier task for them than it was for us,” Mr Tata admits.

Competitors will, for example, notice how Tata shrank the car into what its chairman calls a “concise package”, with the powertrain at the back and the wheels at the “extremities”. The result is 21% bigger inside than the Maruti 800, says Ravi Kant, the managing director of Tata Motors, but is only 80% as long. That will, at least, shorten the traffic jams to which the nano will contribute. Congestion could be a big problem, if millions more cars are to take to the roads. The country’s poor-quality road network is slowly improving, but it is heavily over-used. With India’s transport arteries already so badly clogged, a boom in sales of low-cost cars could bring about a seizure.

Commuting in India’s cities can be both cozy and deadly. Children squeeze snugly between father at the handlebars of a motorcycle, and mother riding side-saddle at the back. This precarious balancing act, says Mr Tata was the “visual target” he had in mind when he first conceived of the need “to create another form of transport”. About 1,800 people die on Delhi’s roads each year, perhaps one-third of them on two-wheelers. Only 5% die in cars. Tata’s project may pose risks for investors, but it promises unaccustomed safety for customers.

In his address during the launch he said ” A promise made is a promise made”. Spoken like Sir. Jamshedji Tata!

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The very first time I had to think, read and speak about this topic of change was during the ‘dot com’ days. Everything was dynamic – technology, change and response to change. It is during those days that I was prompted to send a communication to my team to create awareness and get them to step up to meet the challenge of change. Here is an excerpt of what I sent:

Adapt to never-ending change

In this rapidly changing market and environment, companies that want to succeed have only one choice: adapt to never-ending change.

Radical redesign of our business model

The endeavor of our new operating model is to be a customer focused organization. The first step – “the fundamental rethinking and radical redesign of the business model to produce dramatic performance improvements for our customers and business partners.”

We believe this model will help create challenging and rewarding jobs and careers. We believe this is a critical component in creating breakthrough customer service resulting in higher levels of employee satisfaction and customer satisfaction

What this means to us?

This is an offensive plan. Most of our competitors are taking a defensive approach and basically playing the wait and watch game. This is an approach to take business away from competition. This model helps us go with a laser focus on customers and ensure we have them all covered and delighted with out service levels..

We will drive the customer focus a level higher in our organization thus enabling a top-down business development emphasis. The new structure helps us go “inch wide and mile deep” in our respective territories and regions. It also helps us leverage the entire organization and its various service delivery mechanisms.

Looking back, there certainly were multiple choices of approaching the situation. I certainly do believe the message had its impact and the team responded well to stem the rot.

I had the fortune of approaching the subject of CHANGE again this past weekend. Putting it in the context of what are the different kinds of changes?

I understood that in one of the approaches, CHANGE can be three kinds.

1. INCREMENTAL CHANGE or Organic Change: That can occur in any direction. Sometimes even taking a few steps back or to the side to go forward. Mostly applied to our every day situations.

2. TRANSITIONAL CHANGE: Like the ones we follow in the event of a merger or acquisition of firms. Clear defined process or path with desired outcomes.

3. TRANSFORMATIONAL: What is needed to bring about a complete transformation of the entity or situation. Almost warranting a micro universe of incremental change while morphing the entity from one to another. Sometimes with known defined process and outcomes and other times without.

To be continued…..

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During one of my many visit to book stores, this time in Japan, I happened to pick Prof, Albert Lszlo Brabasi’s book ‘Linked-How everything is connected to everything else and what it means to Business, Science and Everyday life’. I was not only fascinated by the topic, but also intrigued by the way in which he had handled the subject.

Many years later, I would apply the framework and even subscribe to tools to enable me build a good and effective linking system of human relations and associations.

So, with blogging and reading, I was tempted to try and capture a few key elements of this book. I found a well captured essence in the NY Times article I decided to share.

ALBERT-LASZLO BARABASI, a professor of physics at the University of Notre Dame, became fascinated with the structure of the Internet in 1998. He and his student researchers designed software robots that went out on the Net and mapped as many of its nodes, hubs and links as they could. He then began studying other networks and found that they had similar structures. The Internet in particular, he found, had taken on characteristics of a living ecosystem.

That made for a valuable insight in itself. But Professor Barabasi went a step further and analyzed the genetic networks of various living organisms, finding that their genes and proteins interacted in much the same networked way as the Internet.

This conclusion, described in Professor Barabasi’s new book, “Linked: The New Science of Networks”, could alter the way we think about all the networks that affect our lives.

Professor Barabasi’s well written book will be understandable to most readers, but its core concept takes a moment to absorb.

Start by thinking of a highway map of the United States before the advent of the Interstate System. Each city, or node, was connected pretty much at random to others in the network of American cities. Each city has the same relative weight, or “scale,” in Professor Barabasi’s terminology. Knocking out one city doesn’t disrupt the network. Traffic can be rerouted easily.

In contrast, consider the airport hub-and-spoke system that dominates the nation’s airline transportation. A few nodes like Chicago, Atlanta and Dallas-Fort Worth have become far more important than, say, Lincoln, Neb. Knocking out the important nodes has serious cascading effects throughout the network.

This is similar to a disruption on the Internet. Because the nodes of these networks do not have the same scale, Professor Barabasi calls them scale-free, a concept that permeates the book.

Once you understand that concept, you’re off on an intellectual detective journey. Professor Barabasi has invented a vocabulary to talk about the structure of networks.

“We are witnessing a revolution in the making as scientists from all different disciplines discover that complexity has a strict architecture,” he writes. These networks do not operate at random, the author contends; there are laws that govern their behavior.

In the case of human genes, scientists have decoded the genes and proteins of DNA, but that is just the first important step in understanding how genes and proteins interact, Professor Barabasi says. The next step, he writes, is understanding how genes and proteins interact as part of a network, and he predicts the discovery of a clear set of rules for their behavior that will help unlock some mysteries of the human body.

Professor Barabasi makes that prediction partly because he and his researchers mapped out the interactions of 43 primitive organisms and found they took the form of a network with rules.

There are many examples of scale-free networks. Even a cocktail party can be mapped that way: the most sociable people are the “hubs” that link all the guests in a pattern that can be drawn. Other scale-free networks include the electrical power grid, companies and consumers linked by trade and the nervous system of living creatures.

Business writers have long talked about “network effects,” meaning that a network generates more power than individual parts can do by themselves. That was part of the intellectual case against allowing Microsoft to dominate so many personal computers using its operating system.

But Professor Barabasi has put more flesh on the relatively primitive concept of the network effect. His work is relevant not only to physicists and mathematicians, but also to business executives, computer scientists, sociologists and biologists.

Networks have strengths and weaknesses, and Professor Barabasi contends that we have to understand both. On the positive side, because of the multiplicity of connections, some things happen quickly. A good idea can win rapid acceptance.

Professor Barabasi uses the example of Hotmail’s explosion in popularity. Created on July 4, 1996, by Sabeer Bhatia and Jack Smith, it had one million users within a year. By the time Microsoft came knocking on the door to buy it a year later, it had 10 million. “Innovations and products with a higher spreading rate have a higher chance of reaching a large fraction of the network,” he argues.

By contrast, networks have what he describes as an Achilles’ heel. Knocking out a single major hub can cripple the network, which the Sept. 11 attacks almost succeeded in doing. In the United States, the airline system, financial markets and telecommunications networks all suffered grievous blows.

The extensions of Professor Barabasi’s thinking go in many directions. What caused Cisco Systems and other technology companies that outsource much of their production to be so clobbered in 2000 and 2001? Cisco, in particular, had bragged that its Internet-based supply chain meant that it would never be surprised by having too much inventory. But, Professor Barabasi writes, Cisco did not understand network effects and had to pay for billions of dollars’ worth of components in its extended supply chain; oddly, Cisco, the master of the network, didn’t think in network terms.

“A me attitude, where the company’s immediate financial balance is the only factor, limits network thinking,” Professor Barabasi says. “Not understanding how the actions of one node affect other nodes easily cripples whole segments of the network.”

Professor Barabasi makes a provocative argument about “the market.” For hundreds of years, economists like Adam Smith have argued that there may be an “invisible hand” guiding the market but at the end of the day people cannot understand how the market works because it is too big, too complex, too random.

Nonsense, Professor Barabasi says. “In reality, the market is nothing but a directed network,” he writes. “Companies, firms, corporations, financial institutions, governments, and all potential economic players are the nodes.”

If you understand the structure and evolution of this network, you can, in fact, understand how the market performs, the author contends. That is sure to bring howls of derision from proponents of the dismal science known as economics.

If there is any criticism that can be leveled at him, it is that the reader is left wanting to understand more of the implications of his work. If we understand the network of the human body, can we cure cancer? If we understand the network of the global economy, can we stop recessions? If we understand the network of Al Qaeda, can we eradicate terrorism? The answers may be elusive, but Professor Barabasi’s argument suggests that answers may indeed be found.


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HAVING grown at an annual rate of 3.2% per head since 2000, the world economy is over half way towards notching up its best decade ever. If it keeps going at this clip, it will beat both the supposedly idyllic 1950s and the 1960s. Market capitalism, the engine that runs most of the world economy, seems to be doing its job well.

But is it? Once upon a time, that job was generally agreed to be to make people better off. Nowadays that’s not so clear. A number of economists, in search of big problems to solve, and politicians, looking for bold promises to make, think that it ought to be doing something else: making people happy.

The view that economics should be about more than money is widely held in continental Europe. In debates with Anglo-American capitalists, wily bons vivants have tended to cite the idea of “quality of life” to excuse slower economic growth. But now David Cameron, the latest leader of Britain’s once rather materialistic Conservative Party, has espoused the notion of “general well-being” (GWB) as an alternative to the more traditional GDP. In America, meanwhile, inequality, over-work and other hidden costs of prosperity were much discussed in the mid-term elections; and “wellness” (as opposed to health) has become a huge industry, catering especially to the prosperous discontent of the baby-boomers.
The things you never knew you wanted

Much of this draws on the upstart science of happiness, which mixes psychology with economics (see article). Its adherents start with copious survey data, such as those derived from the simple, folksy question put to thousands of Americans every year or two since 1972: “Taken all together, how would you say things are these days—would you say that you are very happy, pretty happy or not too happy?” Some of the results are unsurprising: the rich report being happier than do the poor. But a paradox emerges that requires explanation: affluent countries have not got much happier as they have grown richer. From America to Japan, figures for well-being have barely budged.

The science of happiness offers two explanations for the paradox. Capitalism, it notes, is adept at turning luxuries into necessities—bringing to the masses what the elites have always enjoyed. But the flip side of this genius is that people come to take for granted things they once coveted from afar. Frills they never thought they could have become essentials that they cannot do without. People are stuck on a treadmill: as they achieve a better standard of living, they become inured to its pleasures.

Capitalism’s ability to take things downmarket also has its limits. Many of the things people most prize—such as the top jobs, the best education, or an exclusive home address—are luxuries by necessity. An elite schooling, for example, ceases to be so if it is provided to everyone. These “positional goods”, as they are called, are in fixed supply: you can enjoy them only if others do not. The amount of money and effort required to grab them depends on how much your rivals are putting in.

Some economists think the results cast doubt on the long-held verities of their discipline. The dismal science traditionally assumes that people know their own interests, and are best left to mind their own business. How much they work, and what they buy, is their own affair. A properly brought-up economist seeks to explain their decisions, not to quarrel with them. But the new happiness gurus are much less willing to defer to people’s choices.

Take work, for instance. In 1930 John Maynard Keynes imagined that richer societies would become more leisured ones, liberated from toil to enjoy the finer things in life. Yet most people still put in a decent shift. They work hard to afford things they think will make them happy, only to discover the fruits of their labour sour quickly. They also aspire to a higher place in society’s pecking order, but in so doing force others in the rat race to run faster to keep up. So everyone loses.

Yet it is not self-evident that less work would mean more happiness. In America, when the working week has shortened, the gap has been filled by assiduous TV-watching. As for well-being, other studies show that elderly people who stop working tend to die sooner than their peers who labour on. Indeed, another side of happiness economics busies itself studying the non-monetary rewards from work: most people enjoy parts of their work, and some people love it.

As for capitalism’s wasteful materialism, even Adam Smith had a problem with it. “How many people ruin themselves by laying out money on trinkets of frivolous utility?” he complained. It is hard to claim that pyramid-shaped tea-bags (developed at great expense over four years) have added much to the sum of human happiness. Yet if capitalism sometimes persuades people to buy stuff they only imagine they want, it also appeals to tastes and aptitudes they never knew they had. In the arts, this is called “originality” and is venerated. In commerce it is called “novelty” and too often dismissed. But without the urge for material improvement, people would still be wearing woollen underwear and holidaying in Bognor rather than Bhutan. Would that be so great?
The joys of niche capitalism

If growth of this kind does not make people happy, stagnation will hardly do the trick. Ossified societies guard positional goods more, not less, jealously. A flourishing economy, on the other hand, creates what biologists call “a tangled bank” of niches, with no clear hierarchy between them. Tyler Cowen, of George Mason University, points out that America has more than 3,000 halls of fame, honouring everyone from rock stars and sportsmen to dog mushers, pickle-packers and accountants. In such a society, everyone can hope to come top of his particular monkey troop, even as the people he looks down on count themselves top of a subtly different troop.

To find the market system wanting because it does not bring joy as well as growth is to place too heavy a burden on it. Capitalism can make you well off. And it also leaves you free to be as unhappy as you choose. To ask any more of it would be asking too much.

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Sales Prayer

Today I begin a new life.

I will greet this day with love in my heart.

I will persist until I succeed.

I am nature’s greatest miracle

I will live this day as if it is my last.

Today I will be master of my emotions.

I will laugh at the world.(I will cultivate the habit of laughter)

Today I will multiply my value a hundredfold.

My dreams are worthless, my plans are dust, my goals are impossible.

All are of no value unless they are followed by action.

I will act now.

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