Sunday, 24 January 2010

Why does young India regret its past?

A couple of recent movies in India - "Rock On" in 2008 and "3 idiots" in 2009 have done very well at the box office. I enjoyed the two movies. But my level of connect was pretty low with both- the underlying theme being how successful young Indians look back at their lives and true passions (music, writing, photography) and find ways of going back to that. I am ok with that, but unhappy if school children get distracted by that message.

What i want to caution many of my fellow country men is this:

- India was a poor country 50 years ago, 20 years ago, today and will continue to be poor 50 years from today. (1 billion people will not get rich overnight)

- While many professions will open up, the competition for jobs will always be very very high.

- Applied professions (engineering, medicine, carpentry etc) will always be the best ways of making a living and getting the family out of poverty.

- Writing, painting and photography will keep you mostly poor.

So get to school and study, is my message to the youth. Looking back at the past from the very comfortable confines of a cinema is possible when you have used engineering to get a very good job and life.

"3 idiots" the biggest blockbuster of the last 10 years, was only watched by 10% of India's population in the cinema. The rest could not afford it.

There is a message in that.

reproduction- your best bet against fundamentalism?

I was reading a note in the economist on how hindus- muslims integrate well into American society and do well for themselves. And avoid radicalism. It re-iterates what i have always believed- that economic growth is the best way to integrate people and cultures. A rich population has little blame to levy on its neighbors.

A very random thought...the declining population growth rate of western economies (christian faith), declining population growth rate in India, China. And conversely, where are population growth rates the highest? In parts of the world with least economic opportunity- arabic states in the gulf/ middle east...and Africa.

High population and low economic opportunities are fueling violent expressions of intolerance.

Fortunately, violent fundamentalists represent a very small fraction- but is it possible that as we leave unresolved issues confronting the muslim world to fester, that these numbers will grow?

For all the technology of the west - surveillance, preventive and predictive analytical techniques, large armies have often beaten back technologically superior ones.

While i dont predict doomsday, i ask whether developed countries should focus more on increasing their population?
Not to prepare to fight wars, but to demonstrate very clearly that we love our way of life so much that we are bringing more people into it. Should that not be a good advertisement for progress? Why doesnt Obama make this a central piece of his administration?

And hopefully grandad will not have to learn to use a big gun! Just kidding! :-)


If you didnt build it, and cant control it, dont try to sell it!

Pretty poetic title, inspired by a report (click on title to read) on Nokia building in navigation software to boost sales in China.

Its a good service and like "life tools" in India aimed at building services into the phone proposition.

So far so good. But is this expected to help pricing or market share?

We think unlikely in the long run.


Because the open standards on these services will allow other companies to build, bundle and sell similar services.

But its all good for the consumer and we dont argue against that.

What we think should be optimised in companies, is the capacity to build proprietary technology and control of the distribution and access to that technology.

Everything else is tactical.

In a technology company, technological innovation must be at the core. Alliances and partnerships built on these proprietary technologies are to be valued.

ritu and venkat

go on, be a Nokia- core purpose or core business?

By the title we dont ask you to adopt Nokia's business model. (we are far from convinced it is the right one). But we ask you to do what Nokia did in 1992, move away from its rubber, cable and non telecom businesses, to focus on telecom!


Core purpose or core business? What should really matter to an investor?

India and China are huge markets with unmet needs across a wide range of goods.
TV penetration in India is 60%, but
- refrigerator penetration is less than 10% (among 220 million households)
- car penetration is less than 4%
- microwaves at 4%
and so on....

Mobile phone usage is still very low, with 90% of the penetration accomplished with "pre-paid" users shelling out 2 USD per month as revenue.

Value added services are 6% of phone bills, which on average are 4 USD per qtr.

Consumption is so low, the only restraint on an organisation's growth is imagination and ambition.

Now, here is some back of the envelope calculation:
If 20% of the families bought cars at USD 6000 each, this is a 250 Bn USD industry
If 60% bought refrigerators at USD 200, this is a 25 Bn USD industry
If we could get current mobile users to spend USD 5 per month on VAS, its a 30Bn USD business PER YEAR.

Ok, so your core business may not be in any of the above. But if you truly want to grow, why would that be an excuse?

Indian companies are not lacking for innovation. They lack for capital. Which is abundant in the west.

Why not acquire aggressively Indian companies, and bring in capital to "go to market" faster, stronger?

On another note, water purification and electricity generation will be interesting businesses to get into. At the household level. Technologies that dont depend on the government grid.

Stop worrying about your core "business". Worry about your core "purpose". Profitable growth!

Ritu and Venkat

Tuesday, 12 January 2010

TV programming, advt dollars , and the audience!

The note below is taken from a site we visit regularly
Insightful comments on happenings in the marketing world.

The authors argue "TV networks don't exist to serve content to audiences; they exist to serve *audiences* to advertisers."

We agree. And explore deeper this idea in the case of an emerging country like India where there are no "content" dedicated TV channels, and no segmentation in the market. Each channel wants to grab the same eyeballs- so very little differentiation.

Over the past few years, Ritu and I saw that we were tuned out completely from prime time TV viewing, because the channels would only show drama and reality shows. How could Indian audiences (teens) for reality shows and drama (older aged) be relevant targets for advertisers? The 30-40 year old of our generation had disposable incomes, yet hardly getting any content on prime time TV.

All this changes with new technologies. We now watch recordings of programs that appear late at night. This is a very new technology in India unlike in the West.
And herein lies a new pot of gold for TV channels. This recording technology will allow advertisers to get in front of audiences irrespective of show times.

What then becomes prime time? Interesting thoughts that came out of our reading of today.

Ritu and venkat