Billboards of Recession

Collage of some photographs of empty billboards I took. Follow this link to my Picasa album to see them separately

I am not into media selling business and I know nothing about it; this caught my attention accidentally. But this interested me very much because this is a direct indication of the fact that advertisers stopped spending possibly due to budget cut. To me this looked as a direct measure of the recession our economy has been passing through. A friend of mine in the advertisement industry told me a few weeks ago that promotional budget is what businesses would cut doen when there is cash crunch. This point is substantiated by what I saw there.

Billboards must be cheaper now. Those who want to have their message displayed in the city and think that still it is a good time, this is the opportunity you have been waiting for. I am sure that other cities too have empty billboards reading “recession” on them.

Another interesting observation is that, at some key locations such as Marine Drive, small-time guys have already rented couple of prominent billboards. May be, people started taking advantage of the situation.

Once upon a time, the government had a vast scrap yard in the middle of a desert. Parliament said, “Someone may steal from it at night.”

So they created a night watchman position and hired a person for the job. Then Parliament said, “How does the watchman do his job without instructions?” So they created a planning department and hired two people, one person to write the instructions, and one person to do time studies.

Then Parliament said, “How will we know the night watchman is doing the tasks correctly?” So they created a Quality Control department and hired two people. One to do the studies and one to write the reports.

Then Parliament said, “How are these people going to get paid?” So they created the following positions, a time keeper, and a payroll officer, then hired two people.

Then Parliament said, “Who will be accountable for all of these people?” So they created an administrative section and hired three people, an Administrative Officer, Assistant Administrative Officer, and a Legal Secretary.

Then Parliament said, “We have had this command in operation for one year and we are $18,000 over budget, we must cutback overall cost.”

So they laid off the night watchman.

Refreshing basics is a good idea–in any domain. However experienced you are. I found “Entrepreneurship 101: How to Turn Your Idea into a Money Machine” states the basics of entrepreneurship very clearly; covers almost all points.

It starts with the spirit of entrepreneurship. It strongly states the fact several entrepreneurs learned with their lives:

“You can’t do it alone. Building a world-class team is the only way to big success”.

It tries to define an entrepreneur in a very interesting and convincing way. I liked that section very much; I’m sure it’s gonna be a whack on the head for many.

Gordon explains the difference between an idea and an opportunity. Many think they are same. He explains the differences and provides means to find out whether an idea is an opportunity or not.

Gordon’s list of “Essential Entrepreneurial Power Skills” is a great one. I liked a practical tip called “Power of Zero” on how to step up your inflow in a phased manner. He defines phases of business which many entrepreneurs forget to track in their day-to-day rush.

Then he talks about how ideas can make or break you. The need of selecting and examining ideas which best suit you and your skills; very important I should say. An idea which is good by itself may not be good for you. He emphasis the need of finding the fit between you and your idea.

Business design is something all entrepreneurs take for granted. They go with “as soon as it makes money, it’s fine” approach. Gorden goes a level deeper and talks about designing your money machine very objectively. I liked that. It’s more scientific and rational. Again nothing new in this but a good refresher.

Once you have identified your idea the next thing you need to define is your competition. “Good” and “bad” industries are identified with this. Consider all aspects while doing this: competing products and substitutes, bargaining power of suppliers, bargaining power of customers, etc., etc.. He says “it’s a jungle”.

There is a chapter on “Raising Money” which will be a handy one for all new entrepreneurs. Gordon explains what are the options available to raise money with pros and cons of each equipping you to take a decision of your own.

I’m not from a business family. But I wanted to do business ever since I started thinking about my career and life. But I was often worried about the fact that mine is not a “business blood”. But later on I started realising that an inherent desire is enough to become an entrepreneur. This book underlines that. Gordon clearly states that entrepreneurship can be learned just like any other skill. That’s true. The question is whether you want to be entrepreneur.

The author talks about the importance of finding the lacking skills in you as an entrepreneur. This is a much-ignored element especially with self-funded entrepreneurs (who usually manages everything by themselves and “be his own boss” in literal sense) and can severely affect the growth of business.

This book referres many excellent entrepreneurial and business books. Most of them are must-reads. Read them too if you haven’t already. Entrepreneurship 101 is very informative and inspirational (an unusual combination) and includes a pep talk section at the end of each chapter.

What this book doesn’t cover are day-today running and operational matters of your business. That subject is in a domain of its own. So I would recommend reading Execution: The Discipline of Getting Things Done along with this book, if you want to have more comprehensive coverage on entrepreneurship. Another element missing in this book is the human resource part.

What the author talks about web sites and other IT related subjects lacks up-to-date knowledge. For example, he talks about the importance of meta tags in web pages to get it listed in search engines. The days of meta tags with respect to search engines are gone. Now you need to look at SEO techniques.

Conclusion

If you are a wannabe-entrepreneur this book is a must-read for you. If you already wet your feet, read this book twice over (you might need to unlearn something).

I would rate this book 4/5.

It doesn’t make any difference whether you are a giant MNC or a garage start-up and it doesn’t make any difference either even if your client is overwhelmed with your service/product. They will have an accounts department which functions in isolation and its sole duty seems to deliver enough verbiage and delay your payment.

Ever since I started doing business I have been seeing this pattern. I had discussed this with other business people and accountant/finance people whom I met on non-business occasions. They all secretly agree that delaying payment is considered to be “a revenue” and is a standard practice. So better be prepared for that.

It doesn’t matter where in the value chain your position is. Or whether you are in B2B or in B2C business (I know one private utility company with INR 3cr. (30 million) outstanding to be collected from its end-customers). Outstanding debt in B2C business is a global story though.

Further to my research I found out that everyone in the business chain is practicing it! So that means none is benefited out of it, isn’t so? I think so. So why can’t we decide to be principled to release the money we owe to other businesses and clean up the entire chain?

A Few Notes for Start-Ups

You gotta learn to live with this unfair practice or you die. See the following notes; they will save your business.

Take control of your cash flow: That is the life blood of your business however big or small your business is. Having everything right, the only thing which can upset your cash flow is the unexpected delay in collecting your money from your clients. So leave room for that. Check out with your peers in the business about the payment norms in your sector (it is there in very sector; only difference is “how long”). Make sure that you do not expect an inflow too ahead of it actually reaches you.

Plan only after money reaches your account: This is an extreme defense you can adopt. Do not spend before you get the money in hand. But this can slow down things a little bit. So practice a safe balance.

Plan as if delayed payment is the norm: For all your long term plans which are based on your business inflow, plan as if delayed payment is the industry norm. I have seen a business with a healthy turnover of INR 2cr (20 million) and with a strength as low as 10 crumbles just because of delayed payments.

Do not spoil relationships: Collecting money is a tough thing. They will make you feel like you are in their house to ask a favor! Be prepared as they will have stories to counter your arguments. Such situations are emotionally demanding. You whim and yell and shout; but make sure that it won’t cost your relationship. The world is so small; a spoiled relationship can cost your business–not just with them but in the entire sector depending on the influence of the people you are dealing with.

You made a sale? Do not relax. The real job starts after you deliver. Do not forget this.

Players in India

All those companies who extended a piece of wire (“last mile” connectivity) to homes can be a potential provider of IPTV service in its broadest sense. So your cable provider, wired/land phone service provider or even the state electricity board can enter into IPTV business.

Telecom companies such as Reliance which doesn’t have last mile connectivity to homes are fast lying fiber connections to homes these days. They are preparing for the IPTV market.

Actually these companies are looking at a broader spectrum of services called “Triple Play” (combining voice, data and video) or even “Quadruple Play” (where wireless communications is introduced as yet another media to deliver video). This way one provider can cater all communication needs of a home all by themselves (and get all possible revenues).

In India, predominantly land phone service companies (BSNL/MTNL, Reliance, etc.) and cable service providers (Hathway, Asianet, Sify, etc.) are the potential players. MTNL in Pune and BSNL in Calcutta have already launched IPTV services on experimental basis. Reliance, with their newly laid FTTP (Fiber to the Premises), seems to be ready to follow.

What IPTV Provides

With IPTV, subscribers can expect to get what they are currently getting with their normal cable TV/CAS system. In addition to that it can provide Video on Demand (VOD). Those who subscribe to Triple Play providers can enjoy broadband and VoIP as well–all through just one connection and one IP device. All from a single provider.

Which Player has the Advantage?

BSNL is far ahead of the rest in terms of number of homes and coverage/geographical area. But coper pair has its own limitation in terms of the bandwidth it can carry.

One channel at SDTV resolution will take up to 1.4 mbps with fairly good compression. Simultaneous delivery of channels is necessary to keep user demands. For example, this is required if a subscriber is using a DVR which can record one channel while another channel is being viewed on the TV. Sometimes subscriber might prefer to use picture-in-picture which, again, needs multiple channels to be delivered simultaneously.

BSNL employs ADSL. ADSL can carry 2mbps which is too inadequate to support this. I’m not sure what technology they are using at Pune and Calcutta. One technology I can think of is ADSL2+ which can deliver up to 25mbps. But this bandwidth reduces substantially as the subscriber distance increases from the DSLAM.

Cable providers has an advantage here. HFC, theoretically, can carry up to 4.5gbps of data. It is a lot more than required to deliver multiple channels simultaneously even at HDTV resolution. So cable operators has a an edge over BSNL which uses coper as last mile.

Who Can Ride the Wave

Though people are waiting for the rollout of the service to sign up, business viability of IPTV service is yet to be proved. But if people receive it, IPTV can be a lucrative business. (It is possible to build several business models based on the viewer demography information IPTV system can provide. No such thing is possible with conventional cable.)

Those operators with HFC has the advantage of bandwidth capability. But HFC installations which are originally laid for analogue cable TV may fail to carry digital signals without quality degradation. Reliance with FTTP closely follows the above lot. Though their home count is less compared to that of cable TV operators, Reliance can provide better quality service due to obvious reasons.

Local cable operators are another category who can enter into this business. And thus they can move higher up in the value chain. Local cable operators can provide more localised content. They can stream targeted ads. But one thing which may prevent them from doing so; entry barrier of IPTV business.

High entry cost of IPTV business is constituted by IPTV/networking equipment costs and media rights. But local cable operators can buy media rights jointly. Equipment costs will continue to remain as a real entry barrier.

One good thing that can happen is the commoditisation of IPTV equipments including CMTS. If chip manufacturers can come up with solutions which are based on PC architecture, for example, rather than using specialised electronics (which drive up cost), this would become possible.

TRAI may consider unbundling BSNL’s last mile in future. If this happens local players can lease BSNL lines to run their business on.

Let’s wait and see.

Roughly, one in every two people who searches the Internet uses Google and Google handles more than 200 million searches every day.

When you run a search in Google for the first time in your browser, Google will set a Cookie with a unique ID in your browser. There after, Google knows that all the searches you are running are coming from “you” and presumably they keep record of them all.

So, based on the searches you run on Google, they can build a “picture” about you–what you want, what you do, what’s bothering you, your interests, hobbies, and probably what are you planning to do this weekend. May be, after God (“Everything is uncovered and laid bare before the eyes of Him to whom we must give account” –Hebrews 4:13), Google knows you best. Now closest friend of man is not his wife or even a human being any more; it is Google (or Internet search engines in general). People share the most private thoughts with Google.

This is harmless till they link that “picture” with the real you. That happened with the introduction of Gmail. You might have noticed that even if you type gmail.com, you login to mail.google.com. The moment you successfully log in, they can associate the above-mentioned Cookie with your Email ID.

An Email ID in Gmail is not like yet another ID in Hotmail or Yahoo. Each Email ID has the “genealogy” information attached to it. Each Gmail ID is created out of an invite sent out by an existing Gmail ID. So it is almost impossible to disguise yourself before Google. Besides knowing who you are, Google also knows whom you are related to. For example Google knows that you are Ram, husband of Meena and friend of John.

Google even knows what you do out side Google to a certain extent. For example when you sign up for a new third-party service (with your Gmail ID), Google knows that you did so. They even keep track of the links you click in Emails and chat texts.

They are the best in the world for text parsing and analysing. And if we closely examine we can see that that makes the core of all their technologies. Google can even analyse your chat live. So think twice next time you chat with your friend on Google to discuss a new business idea or when you use Google Documents to type a new business plan. The point is that Google is a privacy bomb which can blow up any time either though a security breach or by the data mining bureaucrats of Washington.

Google, after handling trillions of queries from around the world by now, might have an interesting picture about the people in this world, I’m sure. Nobody has ever got a chance to see the world at such a macro level yet.

But this is a newly acquired status. We need to work hard to maintain it. A carefully-thought out game plan is required to sustain this position (as this industry acquires momentum, runs up to its peak and till it dies out). Then only it can make any substantial change in the economic scenario of our country. That means we should be able to maintain this cash inflow at least for the next twenty five years.

We get IT contracts from outside mainly because it’s cheap to get the work done here. Besides this financial advantage, there are other factors which help to run this business smooth such as effective communication, reliability of companies, predictable turn-around time, etc.. If any of these parameters is not met, a business transaction will become infeasible. Or India will become a bad destination for sending out work to. And we will miss this opportunity too to become a developed nation (in 2004-05 ITES alone aggregated revenues to the tune of USD 5.2 billion).

So that is the context. Now lets come to the point. There is a proposal coming from the Centre for Indian Trade Unions (CITU) which argues that IT professionals are coolies of the information age and they are being exploited. So it needs labour union, they say. Following that suggestion the state IT policy of Kerala released a few days ago sports a green flag for trade union in the IT sector.

They are coolies of the information age. I agree with that concept; it’s true in the sense that they are many in number, they work like an army and for prolonged hours. But they ignore one fact: they are also paid the highest salaries. More over, they are skilled laborers and there are plenty of opportunities around. If he or she doesn’t like a place he or she can move into another. If they work for prolonged hours, they are paid for that. If they are not, there are many employers they can find who will.

I agree that there are good guys and bad guys. But to control the bad guys union is not a good idea which knows only primitive methods to tackle issues. It can affect the functioning of the business and eventually the image of India as the most preferred IT destination.

We can resort to other means to protect IT and ITES professionals, if necessary. We have a government to look after such situations. We have a Ministry of Labor which can appoint a watch guard, for example. It is government’s job to protect its citizens. We should try out that first before bringing in a parallel mechanism such as trade union.

It would be worth remembering that we need to sustain our status India has been enjoying in the world IT sector. India needs to grow at this pace for a few more decades. Think about it.

Those who download it first can buy it for free, they can recommend the song if they find it good. If a song gets constant downloads, its price can rise up to USD 0.98. It’s very similar to stock market–if more people need it, it’s gonna be costly (but with a ceiling).

Let me use a cliché here: you got the cake and now you can eat it too: all the songs at Anistreet are DRM-free, plain, MP3s. You can play them in any MP3 player you want. That’s a good-to-have feature these days as most online music stores have some sort of DRM mechanism in place.

Amistreet is a different kind of Freemium business model. But at the same time, I don’t see that their business will explode with sales someday–some sort of piracy mechanism will come up as they become more popular (such as a parallel repository). But this is a very innovative business model, indeed.

If you are in the business of marketing/selling disruptive products to mainstream customers? This book is for you.

When Apple introduced iPod in the market how long did it take for you get one yourself? You might have tried it as soon as you heard about it, or you might have got one yourself when you saw it in the hands of your savvy nephew, or you might have bought one as you started to see them around in your office, or you might have bought it due to peer pressure. Or, at the last, you might have bought one because you needed that for your survival.

In every technology market, the Technology Adoption Life Cycle of a disruptive product passes through the above-mentioned five stages. These markets are technically called Innovators, Early Adopters, Early Majority, Late Majority and Laggards by Geoffrey A. Moore. Interestingly each segment is separated by a chasm; a chasm can be fatal if not managed properly. He explains how a chasm can be identified, tackled and can be got over to continue to ride the Technology Adoption Life Cycle.

This book also explains the importance of selling disruptive products to “self-referencing” markets. You will not really build a market by initially selling your disruptive product to banks, transport companies, government and school; all at the same time. You need to identify the niche that most suits your product and starts selling. He says, “Trying to cross the chasm without taking a niche market approach is like trying to light a fire without kindling”.

In the section “Beyond Niches” he says that “there is life after niche. Major market dominance ultimately transcends niche.” As the next step, the book shed light to the importance of selecting the strategic target market.

Moore also says the importance of having a defined target in your actions. He quotes the quote: “If you don’t know where you are going, you probably aren’t going to get there”. One can use the guidelines given in this chapter to identify the best niche market to target his product at.

He introduces the concept of “Whole Product”. What we generally supply is a generic product which cannot fulfill the requirements of customers. They either need to have their team to work on it to make it a Whole Product or the supplier has to do that job. There is a strategic advantage with your product if you can provide it in a Whole Product form.

The book says about the importance of having competition to enter the mainstream market. Principles of Positioning is also explained here with process and examples.

Building channels is another important step in any sales process. This book explains various channel/distribution mechanisms found in the market along with its merits and demerits. And the book ends with a chapter named “Getting Beyond the Chasm” which explains the role of Financial Decisions, VC, Organizational Decisions, etc..

This book is an absolute read for anyone who is trying to market anything disruptive. This books contains several case studies to demonstrate the principles explained. A must read. I would rate this book 5/5.