Is life a zero sum game ?

Matter can’t be created or destroyed. 

The world got created with a finite number of atoms for every element. So the count of atoms of gold, silver, uranium, oxygen, carbon or for that matter any basic element that exists on our planet in fixed.

We keep discovering new elements but never create them. What we see around is elements combining with other elements, naturally or synthetically,  to create new compounds. However, those equations have their checks and balances, maintaining the cardinal rule that the number of atoms of each basic constituent is fixed.

So as an example, the number of atoms of Oxygen is fixed. You cant create an Oxygen atom. You can trade though. So you can chemically split the water molecule to derive oxygen but you cant produce an oxygen atom without an input oxygen atom.

This is how nature operates and dictates how everything around us exists, evolves & perishes 

So it's logical to conclude that even the life on our planet follows the same basic principles.

Life gets formed when specific atoms in specific conditions combine together to create biological compounds. Although unlike a machine, life carries consciousness in it, albeit at a different level in each specie. Let's call that consciousness as the soul for the time being.

So given the soul exists in the same natural framework and so must follow the same principles of natures, the count of souls should be fixed too. Souls can change forms (acquire bodies of different species) but cant be created or destroyed.  So souls would exists forever in the eternal loop of birth-death cycles. Whatever is born must die and whatever dies must be born again. 

One may argue, how then the human population is ever increasing if the number of souls are fixed?  

Well, all species forms - animal, fishes, bees, birds, humans etc- are to be considered when we arrive at the super set of souls. Also, in our planets history we have seen many species have gone extinct while many have evolved, possibly keeping the sum of all souls across all species constant. 

We are part of nature and nature is part of us. We live. We Die. And we are born again. 

It must comfort anyone who has lost a loved one that the nature will certainly bring them back.

Albeit in what life form & where for re-birth remain a mystery. There must be a nature’r law that decides the specie form for re-birth. The Law of Karm (Karma) fits in. It accounts for all actions in a lifetime and may be it determines the specie one is born in as the outcome. However, one doesn't carry conscience of previous birth and so it seems the previous life account gets squared off at the birth. 

The cycle of life after all is not a Zero sum game. 

Startup India - Right intentions Wrong semantics

Whoever drafted the Startup India Policy for Startup  

I am an Engineer from HBTI & an MBA from IIM Calcutta. I was one of those guys who gave up a 1+ Cr job offer to start up, yeah one of those idiots.

As a founder I have persisted for 6 long years to reach operational breakeven have generated more than 35+ jobs, most of them for fresh candidates, right out of college.

Over the last 6 years, I have raised capital from angel investors that has helped me not only build my product (a Software) but also survive. Every single time my startup has raised capital, however small it may be, we have got an IT scrutiny notice on valuation (some say I am very lucky J)

Somehow the IT Officers in India believe that only the companies that have Land/buildings/Machines are real businesses that are worth of premium valuations and companies that are built around Intellectual Property are just frauds laundering money.  

We have dealt with one such notice. We are dealing with one currently. And we will certainly face it again as we will continue to grow using external capital. 

As a consequence, IT folks have harassed us in past, they are harassing us now and I assume that shall continue as well. 

It came as a breadth of fresh air when I heard about Startup India program encouraging startup ecosystem. What an intelligent move, I thought, to encourage aspiring entrepreneurs to startup and generate tons of employment.

However, going through the hoops and tons of IFs and BUTs in the process, I realize it is not helping; instead it is burdening a startup more than anything. 

I present my learning’s here for the powers that may be to see the pain of a founder in going through the simple process of obtaining a simple DIPP certificate for IT exemption (read saving some harassment from IT folks)  

Step 1: The Registration Process

Registering on startup India was a breeze. 

Good job!

Startup India certificate too came quickly. Kudos for that too!!

Step 2- Requesting DIPP IT certificate:

This step is like a landmine filled path designed in a way that you get amputated if not killed before you make it to the other side. 

How you wonder?

First requirement for DIPP request submission is that EACH incoming investor should

-       Have a minimum average returned income of 25 Lacs Rupees as returned income in INDIA for last three FY 

-       OR Have a net worth of 2 Cr in last FY. 

You see the issue here? 

No? Pls now consider these points -

a. A startup that is just raising Rs 5-10 lacs may attract investment from friends and family. They are not only investing their hard earned money but also their immense faith. 

GOI expects only those who have that much income to invest a few lacs? Cant a father invest 5 lacs from his life long income in his son's startup ?

b. Even in the case of an outside angel investor coming in the company, you expect them to share their complete financial health with every company (& its founder) they invest in and overexpose themselves? 

If GOI it bothered it has investors PAN in ROC filings and can chase them, why ask startups to do the tough work of belling the cat? 

c. God forbid if you have a NRI friend/family member :

            - Who is stationed outside (temporarily) India and earns his present income there

            - Who has his past income languishing in Indian accounts

            - And who is willing to invest

He/she wont qualify, as he has to earn average returned income of Rs 25 Lacs in India for last three years. So even incase he meets this condition for 2 years and not for any 1 year (remember he is outside India), he wont and thus your startup will not qualify.

d. Even if one of the incoming investors doesn’t meet the stringent criteria, the company suffers. Tell me of any one startup that would reject incoming money from a known source for the love of DIPP certificate? It’s a choice between survival and good health. You can’t have good health if you don’t survive. Simple. 

The second requirement is that startups should get a valuation certificate from SEBI registered Category-1 Merchant banker. 

Now suppose a startup raises Rs 20 Lacs from friends, family & some angel investor, GOI expects company to spend upwards of Rs 50,000 to 100,000 (almost 2.5-5%)of this vital surviving capital on just obtaining a merchant banker certificate?  Really? When a CA account or a Cat-3 merchant banker can do the same work for Rs 5,000-10,000 at most.

Not to mention the company ends up spending equal amount of money for services rendered by CA, Company secretary & auditors for each transaction. 

My humble suggestions -

a.     Remove this Rs 25 Lacs / Rs 2 Cr criteria for seed investments - Typically capital raised is less than Rs 1 cr (typically by a pool of people) and ticket sizes are in the range of Rs 5-50 Lacs. If a startup is raising 2 Cr, it can afford Rs 1 Lac expenditure.

b.    Trust our CA’s and their valuation because if a CA is not qualified then would a Merchant Banker be (both are CA’s/MBA Fin right?).  At the end of the day they are JUST validating and endorsing projections of a founder. They can’t, and I repeat they cant, value a startup independently without looking at founder’s vision and projections. Why bring them in process then?

c.     Why insist on SEBI registration for a merchant banker/CA ? We are dealing with startups that are unlisted and raising small money and SEBI’s stringent guidelines may be a tad too much for them to meet.

We somehow have to make life of a startup founder easier as they are the ones who create new jobs and create wealth.  

Please nurse us today and we promise to feed as many as we can tomorrow! 

Play treasure hunt with Zoment app!

http://blog.zoment.com/post/play-treasure-hunt-with-zoment

Hunting for food and treasure satisfy our primal instincts! This is the reason Treasure Hunt is a game that instantly excites all of us alike: be it energetic and active children, frivolous and chivalrous young men and women, or grave and serious looking senior citizens. From children parties to modern versions like:

Geocaching and Geodashing, a game of well-organized Treasure Hunt never loses its charm.

With Zoment, Treasure Hunt for adults can become even more stimulating and challenging. Unlike Geocaching or its better-known predecessor Letterboxing, you do not need to hide boxes with clues all over the region you want participants to cover when you play Treasure Hunt using Zoment.

The drawback of boxes with clues have been that they can easily get destroyed or lost disrupting the game for participants. The reason of damage could be excessive rain, fire in forests, strong winds or even an animal who decides to chew it around and check if it was edible. Occasionally, people or monkeys passing the place would become interested in the box, pick it up, play with it and throw it elsewhere. It is difficult to guard letterboxes or caches all the time.

With Zoment, your clues will never get lost. They safely reach the smart phones of the participants just when they reach the right location.

So, all you have to do is to set who all will receive clues as text or voice messages, when they reach a specified location. So, your friends will receive a clue at the starting point, the next one when they figure it out and reach the next location, and the next one there until they reach theprize.

HOW TO PLAY TREASURE HUNT WITH ZOMENT?

Let's assume Alok is organizing a graduation party for his friends Zara, Amy, Meenakshi, Pratap and Azhar with the Treasure Hunt theme.

• Using Zoment, Alok invites his friends to the game through SMS or email. If his friends are not using Zoment, they get a link to download the App. Once his friends accept his request, they appear as his Contacts under the Zoment tab.
• Alok chooses Location message icon under My Zoments, composes clues as voice or text messages, and chooses his friends as recipients. When his friends reach the specified locations, they will receive clues for the next location.
• Alok can also set a perimeter from the location, so when his friends are within this perimeter, they get the message. The perimeter can range anywhere from 200 meters to 25 kilometers.

It means that if his first clue leads his friends to Sikandra – where Mughal Emperor Akbar is buried, he can make sure that they receive the second clue right at the gate of Sikandra - leading them to the popular Bhagwan Talkies in Agra, where they can get their third clue to reach Taj Mahal. Isn't that cool?

If you have a group of friends who love a bit of adventure and mystery, play the Zoment Treasure Hunt and enjoy. Show those kids that adults are smarter and funkier!

Is it the right moment ?

Is it the right moment to ask her out ?

Is it the right moment to ask the boss for a leave ?

Is is the right moment to change a job?

Is is the right moment to invest in gold ?

Is it the right time to message your client ?

We all grapple with such questions, day in day out, all through our lives. It is hard to find the right moments and harder to find time and act on it when those moments do arrive.

Thank God, Zoment application exists to take care of some of those questions. At least my messages reach my friends & colleagues at the right moments!

You wonder what Zoment does for you? Well, Zoment enables you to schedule your messages for location and time.

So the request for leave reaches your boss at sharp 9 AM, when you know he will be fresh thus giving  your request the best chance of approval. And your plead to meet that girl next door reaches her when she is visiting a cafe nearby, a time perfect to make a pitch ...... Cool, isnt it ?

Do try Zoment , an easy tool that helps you cash in on some of those special moments!

Here are the links -

http://goo.gl/bI6E5 (iOS)

http://goo.gl/uKF6a (Android)

Is OneYear MBA a disruptive innovation?

“Disruptive innovation, a term of art coined by Clayton Christensen, describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors.”

To put out simply, a disruptive innovation is cheaper, dumber, and unattractive to the existing set of customers. Rather it attracts a new segment of customers. Lets evaluate the 1year MBA program being offered in India by IIMs, ISB and few other premium management institutes on the same scale of disruptive innovation.

a    Unattractive to a typical MBA aspirant – In India we are taught to learn and then earn contrary to the western philosophy of earn and learn. Learning, in India, for few doesn’t stop after graduation as they chose to complete their masters in business management before they take on the corporate world. Many students chose an MBA early on (read just after the college or when they have 1-2 years of experience) as they think that a two-year program from IIMs is a sure shot way to success in life. For many of them “Placements” is the biggest attraction, probably higher than the learning part. Then there are few who are so nostalgic about their graduation days that they are driven towards another college stint. Similarly many other reasons do exist for young people to choose a regular MBA program.

This mindset has created a flux of young, mostly fresh out of college, aspirants, who compete vigorously to secure a seat in the prestigious two year MBA programs in IIMs and other reputed institutes. Data corroborates this hypothesis, as 80% of the two year MBA class at IIM comprises of people with 0-2 years of experience.  For these folks time is an abundantly available resource as they try to take mileage out of their MBA. And mileage is important, as placement is the key driver for their MBA. For them a one-year capsule course is not attractive, as it doesn’t have the mass placement muscle that a two-year program enjoys.

b.   Dumber: Compare 860 contact hours of a two year full time MBA (IIM-C data) with a 800 hours one year full time program.  Holy Cow! You may wonder. That’s the reality! The course design for a one-year MBA program is no different. The same knowledge capsules designed for a two-year participant are shrunk slightly and made available to a one year MBA participant. The teachers, the courses, the structure, the workload, the assignments, the methodology everything remains the same. So from outside (well from inside as well) it appears to be a dumber course. It appears that not much intelligent thought has been put in the course design and execution making it dumber and unattractive for many. Also many wonder if one year is good enough to transform an individual, which they think a two-year program does help in achieving.

c.      Cheaper – I know many would be inching to grab me by my scuff reading this absurd statement that one year MBA is cheaper.  Lets look at it objectively. Two year MBA at IIMs will roughly cost 12 Lacs or so for two years. Plus the living expenses would constitute another 8 Lacs or so. So one can expect to dish out a total of 20 Lacs in two years. Is that it? No way. One needs to add the opportunity cost of two year of job forgone to calculate the total expense. So suppose a guy with 6-8 years of experience earning 10-12 Lacs of yearly income goes for a two year MBA, his total expense would be:

Two year MBA – 12 (tuition fees) + 8 (living exp) + 2*10 (opportunity cost)  = 40 Lacs for two years.

Plus he only starts earning after two years. In contrast a one-year MBA student spends 14 (IIM-C) -20 Lacs (other IIMs) as tuition fee and then 5 Lacs as living expense for a year. After adding opportunity cost of job it comes to:

One year MBA  - 20 + 5 + 1*10 = 35

So total comes to 35 or so for a year. Hardly a difference of 5 Lacs one may wonder. Not exactly! One saves a year of employment, which can give around 18-20 Lacs in return, which is 50% on average more than what a two year program can fetch for a fresher, and that too a year early. So by the time the clock his two years the situation is:

Two year MBA – 12 + 8 + 2*10 =40 + a 12 Lacs job (on average)

One year MBA  - 20 + 5 + 1*10 = 35 – 18 =17 + 18 Lacs job (on average)

 Now see which one is cheaper for a person with 6-8 years of experience? The scene is entirely different for a person who has 0-2 years of experience.  For him the two years expense would be around 25-26 Lacs as his forgone salary would be in the range of 2-4 Lacs. He would need the backing of a more renowned course (read 2 year PGP) for securing a good job. Plus he (in general as exceptions do exist) wouldn’t be able to command an 18-20 Lacs job right after a one year MBA.

So it doesn’t make sense for a less experienced guy to go for a one year MBA right now. In other words one year MBA attracts those 20% of students who are not interested (or can’t afford) in a two year MBA. Thus the argument that it attracts a new set of consumers in the market holds good as it brings in those students who otherwise would not have pursued MBA.

To give credit to Mr. Christensen – a one year MBA does fit the bill for a disruptive innovation. As it has picked up and become popular in Europe, it has the potential to become the preferred course in India well. As the popularity will grow, as the alumni base increases and does well, these one year programs would start attracting folks with the 3-5 years of experience. And time may not be far away when these courses may become equally popular if not more. 

However, the focus of the institutes should be on making the course more relevant than just re-packaging the same two-year course. That would take the proverbial dumbness out of these one-year programs. 

Is Euro one of the culprits in creating and protracting the latest European credit crisis?

Is Euro one of the culprits in creating and protracting the latest European credit crisis?

European union was formed in 1999 with the vision of creating “One Europe”.  Its objective was to increase the economic and political unity and financial integration thus leading to a sustained economic growth. One of the means employed for achieving this was to have a common currency – the Euro. The idea was to curb the costly currency conversion between European countries thus allowing free flow of money towards better business opportunities across the countries thus leading to harmony and prosperity.

Seventeen member states of the EU adopted the Euro. Additionally, few other countries in the central and eastern Europe, such as Baltic countries, pegged their currencies to the Euro thus linking their monetary policies to that of the EU central bank. This EU worked well for a decade, during which the member countries experienced rapid growth and high employment rates. However, the very environment created by Euro, which was initially congenial for growth, in the background fostered a credit bubble.  

How did that happen?

European union consisted of core countries (rich developed economies such as Germany, France etc) and periphery countries (poor growing economies such as Spain, Greece, Ireland etc).  The merger in EU created different effects for each of these groups. Historically, the public and the private institutions in the poor periphery countries had to pay 4-5% more interest (spreads) than their rich core counterparts on its bonds resulting in a higher cost of capital.  However, when Euro was introduced these spreads completely disappeared. Capital was made available for everybody at the same price. This brought an immediate tangible benefit in the shape of lower funding cost for governments, corporations and households.

The free capital flow not only fueled the demand for credit but also triggered a boom in asset prices and domestic demand. This increased money supply also resulted in a greater demand for imports and stimulated a rapid expansion in the non-tradable sectors such as real state and financial intermediation. The effect was rapid increase in wages and cost, which in turn affected the profitability of tradable sectors (such as manufacturing). Net result was that the higher costs negatively affected exports. 

Secondly, the rapid growth in non-tradable sectors further attracted bank and FII investment in it whereas low growth in the tradable sector resulted in a reduction of FDI investments. Increasing imports and decreasing exports resulted in current account deficit and inflation. And once the current account deficit started increasing, these poor countries became increasingly dependent on the foreign capital inflow to fund their deficit thus further increasing the risk of financial disruption incase the flow stopped.

The situation was somewhat different in the richer countries as they witnessed expansion primarily in the tradable sector during the same period. Thus their export to the GDP ratio increased whereas the periphery countries saw a decline in the same.

In the pre Euro regime, every country’s central bank controlled its currency, regulated local interest rates and credit conditions. However, with the euro, that power now rested with the European Central Bank (ECB); And ECB adopted a uniform policy.  Unfortunately, this one policy didn’t fit all. Low interest rates became suitable for core countries whereas it were too low for the “periphery” countries. At the same time, governments in the peripheral countries failed to effectively use the fiscal policies to control rising inflation and account deficit.

Additionally, Euro’s creation gave private investors a feeling of reduced risk. It was widely assumed that the strong core countries would protect the weak peripheral countries from any eventuality. Hence capital kept flowing in at a rapid pace resulting in further compression of interest rates. For example: In late nineties, rates on 10-year Greek government bonds averaged 9.8 percent, compared with 5.7 percent for similar German bonds. By mid 2000, Greek bonds fetched 4.3 percent, just above the 4.1 percent of German bonds. It is evident that the Euro helped in creating this credit bubble resulting in a higher account deficit and inflation.

This boom came to a sudden end when Lehman brothers filed for bankruptcy. Staring Sep 2008, all capital flows reversed. The most severe retrenchment was seen in the banking flows from the core countries. As risk aversion rose and equity markets sank, banks in the core countries faced capital shortage. In turn they curtailed their supply to the peripheral countries. This resulted in a sudden dip in investment and consumption in the periphery countries triggering recession. The loss in demand negatively affected government revenues too, thus further increasing government deficit and compounding the existing current account deficit problem.  Lack of capital further resulted in increased financing cost for both government and private sector.  Governments in these countries needed fund to sponsor their account deficit that was not available now. But no bank, government or private institution was willing to lend them. Thus what appeared to be a banking sector problem soon translated itself into a sovereign debt problem, pushing these economies to the brink of bankruptcy.

Did Euro impede recovery as well?

Once the credit bubble had burst, the euro impeded the economic recovery as well. The periphery economies needed money for recovery, which they found hard to find. There were few ways how the periphery countries could have crawled their way out of this recession. First, if they had the monetary policy under their control (independent currency) they could have printed more money and could have sponsored their debt as well as invested in infrastructure thus fueling demand. Second way out for these countries to recover from the financial crises, was to depreciate their currencies. This would have made exports and local tourism cheaper, creating more jobs. Here again, these countries couldn’t leverage this option as they were latched to the euro.

The problem now is that if any of those peripheral countries defaults, it would create a panic situation where investors may dump bonds of other periphery countries fearing failure in those countries as well. That could lead to sharp increase in interest rates and put more losses on European banks. A banking crisis now in turn will endanger the economic recovery. Thus the prime focus in Europe right now is to prevent any fragile peripheral economy from defaulting till those countries figure a way to handle their debts. And the cost for it is being bore by the core economies for now. Contrary to the intent, this very process makes the euro a source of contention, as countries shift blame as well as costs to others. Given Europe’s huge debts, the question is how long this model can sustain itself?

Last day email sent on Mar 31, 2011, exactly 2 hrs before India Vs Pakistan cricket world cup semifinal...

*****************

As they say “its inherent for water and aspirations to keep growing” .. So it’s time for me “to stop dream living and start living a dream!”

For almost nine years I never chased balls outside the off stump..never fallen trap to sucker balls.. played only to those deliveries that were closer to stump or on my legs..  worked hard for my runs, ran hard, did well both on the homely spinning tracks as well as on the bouncy and swinging overseas wickets. There were few lofted shots in between but all of them were well calculated risks (or at least I think so).. I feel I played a satisfying inning so far ; however, now it’s time for me to turn it on.. I hope that now  when I play those lofted shots aiming for the boundaries, I still get lucky enough to see my edges fly pass the keeper or hope to find a Kamran Akmal dropping the straight ones... I need every bit of luck and wishes in the remaining part of my inning..  head down, fingers crossed and praying!

The updated  score will always be available at  http://in.linkedin.com/in/XXXXi or  XXXXXX@gmail.com.  For all  your needs now, please contact the new star batsman of our team - XXXX and  ever reliable XXXXXX.

I will miss each one of you and this wonderful company!! Till we meet again.. keep playing straight until the life comes calling J

Thanks,

XXXX

PS: BCC to all who I liked working with.. My apologies if I missed anyone..