Net Neutrality!

Is Net Neutrality the way?

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Net neutrality is the principle that Internet service providers must treat all data on the Internet the same, and not discriminate or charge differently by user, content, website, platform, application, type of attached equipment, or method of communication. For instance, under these principles, internet service providers are unable to intentionally block, slow down or charge money for specific websites and online content.

 For example, imagine someone using a paid service from a website, regularly. That person does a lot of purchases on the site. If there is no net neutrality, the service provider will have the authority, in connivance with the web site, to allow faster access to large customers! It is like mother giving additional cookie to favourite child! In certain cases, they may block access to you! To avoid such situation Net Neutrality is essential.

Discussion on this subject has started recently in the US. Internet was born with Neutrality and US government under Trump for their own reasons want to end Net Neutrality. Main thing is that nobody “owns” internet! Internet is a service created by scientists which has changed the world beyond imagination. It is a rare service which is independent of language, nation, cast and creed!

A couple of years back Facebook tried to bypass Net Neutrality with a concept called Free Basics, in India. They said after arrangement with some service providers, if a user has fully used his usage limit, he will still be allowed use of Facebook. This is the first step away from Net Neutrality. If this were allowed, then service providers would have made their own rules slowly and allowed access as was beneficial to them. Government of India came down heavily on them and stopped free Basic from rolling out.

Today there is a news that in the USA, that FCC has repealed all the laws set by Obama administration to keep Net Neutrality. Is this the beginning of war on the net? Does it mean that there will be rich man’s internet and poor man’s internet? Does this mean that if you pay more fees then you will be able to sit in the first-class lounge?

People who are for non-neutrality argue differently. They claim that they will provide basic services to all in the same way; however, those who pay more money will get services even if their package has been used up. But what about those who already have unlimited package? Will the speed remain same for them beyond “fair” usage? Will they get lesser priority beyond a certain limit? Who will decide fair usage? Once the discrimination is allowed then it will be impossible for anyone to track what certain sites do or what certain service providers do? Agencies cannot track these misdemeanors.

In Portugal, something similar is already happening. Even though they are under EU laws, each country has its own bit of freedom. Portugal is allowing their ISP’s to play around a bit. Large ISPs have given every indication that the idea of freedom costing extra isn’t too far from their ideal. And abusing a lack of broadband competition to force users to shell out additional funds to access to the content and services of their choice isn’t too far off of what has already happened;  AT&T had decided to block Facetime from working unless users shelled out for more expensive plans, or Verizon’s had decided to charge users $10 more just to avoid arbitrary video throttling. This is going to happen! 

All these years internet is being treated on par with Electricity, Water usage. For using these services, one did not have to do anything special. If you used more electricity or water, you paid more. These utilities never say, we will give you xxx units only. You pay more then only you get additional usage. Or since you are not our priority customer, water pressure will be low at your end.

I feel that jury is still out. But with USA formally declaring internet as “Non-Neutral”, we will know the real meaning of the same over a period. Portugal has done it, but they have done it in a small way and discretely. There is another argument for “Non-Neutral” internet; the proponents of this are saying that there will be large investments in internet technology because of new policy. According to them there are “serious” users and “non-serious” users. Majority are of the second variety. For them probably internet will continue to be available as it is available today. Serious users may not mind paying a little more for additional, better, faster and un-restricted services. On the other side Netflix has already shown how people love to use it. So they already have an upper hand on the ISP’s!

Friends, I am non-serious user of internet. Will it really matter to me about net neutrality? Honestly, I do not know and only time can tell. New internet order has just started today, formally. So let’s wait and observe.

Data, the New Oil!

Walk through of benefits of big authenticated data!

In one of my blogs, I had used a statement by Mukesh Ambani, “Data is New Oil” My friend Ajit suggested that I elaborate on the statement. So here we go!

We have been using oil and Petroleum products, extensively during last century! Initially, the approach taken by westerners was flamboyant! They went to the desert land of Arabs and extracted oil at a decent profit. In early 70’s in the last century, Arabs realized that they were sitting on a goldmine and rest as they say is history! From desert kingdoms, where the countries were mainly run by expats, these countries have become rich countries and are sitting on a mountain of money! This was all due to correct commercial exploitation of Oil as a resource and later squeezing non-oil producing countries!

Current century is the century of data as we have already started observing. A lot many things happen digitally and there is tremendous amount of data that is getting generated and obviously being stored somewhere! The country, the businesses which will harness the power of data, already available, will become leaders in their own field. How to exploit this data? For doing any digital transaction, authentication is mandatory. We started with passwords, spoken word and so on for authentication. Indian government had a foresight to start creating a database of people in India and issuing digital identity to people called Aadhar. Aadhar has Unique identification which is biometric. This is THE ultimate method of authentication. Aadhar UID is the largest such data of population with authenticated identities in the world.

Due to this authentication method, many things can be done digitally. First and foremost, what Aadhar has achieved is to bring large number of poor people in India into formal system; this allowed these people to open zero balance bank accounts, to start with. Large number of populace has been outside the formal system all along, because of non-inclusion! Non-inclusion was because these people did not have any formal identity! The inclusion will increase GDP as transactions made by these people will get added in the formal system. The same poor people, get subsidies from the government. There has been extremely high leakage of subsidy as this money did not reach the right people. In the system when black money gets generated, it goes out of circulation and formal economy gets affected. With Aadhar, subsidies go directly to people’s bank accounts.

These are some of the effects of large amount of authenticated data being available. There are more advantages of authenticated data. During GST returns filing, it is mandatory to share that month’s sales figures with authorities. Now government will link this data from GST returns to Income Tax returns filed. Naturally, the values must match. If they don’t, the tax evaders can be easily trapped. This change will happen because of linked data. According to some estimates India’s GDP is much higher than what is seen on paper; this is because cash or black money transactions remain outside the formal system. Black money is the money on which income tax is not paid. When all transactions happening in India become above board, real GDP figures will be known. Data is the way for that! GST data will be huge data but putting it to proper use is going to be the key to success. Initially people required PAN cards for some financial transactions but there was no real authentication done while issuing them. With the result that people had several PAN cards making it easy to cheat. With Aadhar linking of PAN cards, each person can have only one PAN card. Power of authenticated data!

What is being linked to Aadhar? Bank accounts & FD’s, LIC and other policies, Mutual fund investments, Cell phones and many more things. These instruments are used by all people irrespective of their status whether they have black money or tax paid money. Authorities can link all this data from huge data bank and link it with Income Tax data base. I need not elaborate what will happen as the result of this linking.

Ambani’s cell phone company Jio has sizable data of their subscribers. Subscribers are registered using Aadhar card. Jio has plans to compete with Amazons of the world with a different business model. It is said that not even 10% of population buy their stuff on the net! Jio will provide discount coupons to the subscribers for local shops, within their cities and preferably in the vicinity. These subscribers will go to the shops using their cell phones & linked coupons will buy things they want and pay the vendor. These vendors will be local grocers, fruit wallas and will compete with Amazons through Jio. The vendors phones and customers phones are linked via Aadhar to handle the payment part.

Another business process that is being tested in China which can be adopted with or without modification in India. Someone wants to buy stuff from a vending machine. After items are selected, the person gives iris scan. This scan is linked to Aadhar card to Credit Cards (if they survive technology onslaught) or bank account. Payment is done using iris scan. Can it get easier? Just imagine that your Iris scan is going to be your credit/debit card, online banking and wallet all rolled in one!

Already there are apps like True Caller! If you have True Caller installed on you cell, any unidentified call received is checked by the app on huge data, thereby displaying you the name of the person calling you!

Another large data that is captured these days is the data from cars. Cars these days have a lot of censors to track and send the data to servers. Such sensors are now functional on normal cars like VW Golf also! High end cars are even more data hogging. What do we do with this data? I will give a couple of examples. Vehicles performance like engine performance, oil levels are captured. In case of some issues in the car, diagnostics is done quickly as data is always available. In VW Golf, if you get flat tyre, and someone else is using your car; your registered cell phone will receive a text message “Your front right side tyre shows reduced air pressure”! There are lot of such messages received when something goes wrong with the car. Driverless cars and EV’s are next in line. They will all capture very large data from all cars. How this data will help? Diagnostics, design improvement, performance fine tuning. Important thing is nobody must go and capture data!

I feel that, in India, data is going to help reduce corruption and black money due to Aadhar linkage. Data has already brought large number poor people in the formal financial system. Data will give true picture to the planners of the nations. All this will allow the nation and thereby people to prosper. The correctly authenticating data is the way to go forward. Looks like iris scan is the proverbial golden wand to do it!  On the technical side data will allow new business processes to evolve; some of which don’t even exist today. Speed of doing research and analysis will become fast. New products, new methods, new medicines will get evolved much faster. All the speed and accuracy due to authentic data will be a real boon to human race!

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Advantage, Poor Economies!

Sometimes not being too developed is an advantage!

As the cliché goes, “Change is the only constant”! Human race with smarter brain and use of Thumbs of both hands has leaped frogged ahead of other species. From stone age tools, to the wheel, to metals, list is endless. During any and every change there has been resistance, there has been reluctance to accept new things. Flat earth theory is the classic case of non-acceptance of the progress of science. But in the end, all the new changes became routine.

During last 50 years of previous century and 17 years of current century, the changes and innovations have happened at an breath taking speed. Some things kept on becoming more efficient and improved tremendously. Some products, became obsolete even before their potential could be realized. Classic example is Fax. Before we started using fax in a big way other methods of communications came into use, PC became a mass product and over period fax machines simply disappeared. Some products which never existed before suddenly became household names, like iPod.

Computer proliferation has been the most important change that happened during 80’s and 90’s. Advent of computers, first as big as a room, then came desk top machines, followed by laptops, tablets and smart phones. This sequence is important. Computing and storage capacities went on increasing so rapidly that current smart phone capabilities are far greater than original desk top machines. One of the most important effect of these changes is to speed up discoveries in various fields, improve diagnostics in medical field due to better imaging techniques and faster results of collection and analysis of data.

I have only touched upon a couple of innovations and technological changes, but I always wonder how the general population of the world will handle these changes. One important thing about some of these changes is that they are seamless and are accessible without the hindrance of international borders. This reminds me of a Hindi song Panchi Nadiya, Pawan ke zoke, Koi sarhad na inhe roke! Birds, Rivers, the Breeze fly and flow at will and no border can stop them. Internet is one such thing like the birds and rivers and breeze! Except in countries like China, who go by their own laws of freedom. Another unfortunate seamless development is terrorism but that is a subject by itself.

How is general population able to handle these changes? In developed countries where literacy levels and education levels are higher, you might think that they handle it the best. But we already know that India is leading the usage of Cell phones, more than 80% of India’s population has biometric identification, which is practically unbreakable. High % of Kenyans use cell phones to make their financial transactions. I am quite sure many more Indians can do it but they avoid doing formal transactions so that they can cheat on taxes. I do not know the data about how many Indians have started using Bitcoin crypto currency! This switch over will be fast because it is currency which is non-traceable, seamless internationally and illegal in India. This will help people keen on dabbling into “black money”; at least currently it is better than keeping money in Cayman’s island!

How can new technologies change the world order? This may not happen overnight, but it can happen. Countries like US, England, Germany and many other are money rich countries, but countries like India are data rich. In 70’s in the last century when gulf countries realized the importance of oil, in a decade or so they became rich countries because they exploited the oil! Mukesh Ambani has recently said that Data is new Oil! What is the meaning of this statement? It means that the country which garners and manages the data well, will become rich fast. China is both rich in money terms and is data rich, so they will probably gallop over the others.

The Rich world already had systems and with new technologies they have improved on their systems. But in countries like India a large % of people who are not in the system, are taken into formal system, thanks to Aadhar which has biometric authentication. This has enabled India to create completely new systems. This will enable such people to access loans, and funds to which they never had any access. These systems can give poor, subsidy in Electricity bills and Fertilizers, directly. Before new systems there was a big leakage of funds and benefits never reached the poor. Systems are being designed for day to day use where biometric authentication is the only thing that is checked e g vending machines. Using this authentication, financial transactions can be completed. In India power deficit has been historical. Recently, a solar power plant for 800 Megawatt was commissioned in six months in Andhra! Five thousand people were employed on this project. One more example of new technology doing quickly, what old and polluting technology was taking years to do. Those who can afford, should put a solar plant on their own rooftop, for home use. What this does is 30/35% transmission loss is gone because there is no transmission!

Will the “uneducated un included” population be able to handle these rapid technology changes? If cell proliferation is an indication, then things look good! Cell phone is going to be the tool for all so it is upto the app developers and various agencies to create business processes in such a way that life becomes easier and easier; biometric authentication is already there! Before signing off let me share one more example of new technology and thought process. There is a Dam near Pune with a very large reservoir! The is plan, is to cover 4600 acres of water with floating solar panels to generate 1000-Megawatt power! Do you know what the bonus is going to be? Great saving of water which is lost due to sublimation! Great thoughts and new technology are simply going to change things for “Have Nots”!

And The winner is….

Crystal gazing of EV scenario in India!

InternetGenie

Pramod somehow managed to make Internet Genie run at the high speed that was expected of him. Genie as usual started narrating a story. He started with a question, “I want your frank opinion about Indian Electric Vehicle scenario, your favourite subject.” Pramod knew that if he uttered a word, Genie would slip out of his control and system will hang! So Pramod did not give any reply to the question asked.

As usual Genie kept on talking. Pramod,  only a few months back, there was not much clarity about EV’s in India, but you had once said that Indian EV scenario depended mostly upon the international companies who have a large market share in car segment in India. Their current share must be around 75%. Mahindra had their foray in EV since some years back but have hardly got much traction. But suddenly the scenario has changed. It appears that many people have been working on EV’s, secretly. Last month Tata Motors grabbed an order of 10000 EV’s from a Government department for supply within one year. Pramod, this was a surprise for all! There is a story in today’s papers that Tata has invested US$ 900 million in Tesla Competitor, “Faraday Future.” This could be the secret of Tata getting ready for mass production, with “Tiago Electric?”! This indicates that both Indian companies Mahindra and Tata are well ahead of the pack for the Indian operations as their EV’s have reached production level.

What will be the situation in 2022, Pramod, five years from now? I know that Suzuki and Toyota have come together in India. Suzuki will produce EV’s for themselves as well as for Toyota, in India. Technology for EV will be provided by Toyota. These two have already joined hands with Denso, a Toyota group company, for manufacturing batteries, in Gujarat. So, this group will be the first to have their own batteries in Indian market! This will give them cost advantage. They are talking of their EV being available in India from 2020.

Honda is talking of EV in India by 2019! Hyundai has not said much but I am sure they will be around the corner! Nissan Renault is quite ahead in the global market for EV’s; if they decide to come to India, they have the wherewithal. But main India strategy has to be pricing as usual, quality must be good anyway! That is where Suzuki and Hyundai will have advantage over others as they are successfully doing this for so many years. But Pramod, don’t forget that Tata has reached mass production level already in 2017! So, they will have advantage over others!

Pramod there is breaking news below! 

https://auto.economictimes.indiatimes.com/news/passenger-vehicle/cars/pm-narendra-modi-to-unveil-fleet-of-400-tata-nano-electric-for-a-cab-aggregator/61754665

NanoElectric

Pramod, I saw just now in Economic Times that PM Modi will inaugurate a fleet of 400 EV Nanos for OLA, in Delhi on 28th November! Looks like Tata Motors have hired Usain Bolt to learn how to make a clean start against all competitors!

There is not much clarity in heavy vehicles and buses. Goldstone Infratech from Hyderabad appears to have reached mass production stage as they have orders from Himachal Pradesh transport for 25 buses, the buses have already started plying; they also have orders from BEST, Mumbai for ten buses. In Mumbai, buses will run 220 km per charge and in Himachal hilly area the buses will run 110 km per charge. It is too early to predict more  as none of the others have said anything.

GoldstoneBus

Pramod, what about infrastructure for charging? Well, Suzuki-Toyota combine have said that they will invest heavily in this area too. Government of India is also going to invest heavily in infrastructure. Oil companies, Indian Oil/BPCL et al have said that they will jointly put up the battery plants and invest heavily in charging infrastructure! They already have petrol pumps all over India along the roads! Things look reasonably good in infra area ! Now Pramod, I want you to stand on the stage and call the winner by saying, “And the winner is…”

Pramod, I want your reply on this as I know that you have strong views!! Pramod just could not keep quiet. He said, “Under Indian conditions, Tata Motors turned about to be the dark horse! Mahindra has been around for some time. But Suzuki Toyota could be the force the to recon with!  “

With this statement Pramod broke the golden rule of silence that Genie had locked him in.  At that instant Genie slipped out of Pramod’s grasp, Genie’s speed became equivalent of 2 G and system hung!  Genie could not help but make a passing remark before escaping. ” Pramod, don’t forget Hyundai!”

 

 

Digital Numero Uno!

India the Numero Uno of day to day transactions!

                                                                  InternetGenie

Pramod somehow caught hold of Genie, managed to make Genie run at the high speed that was expected of him. Genie as usual started narrating a story. He started with a question, “Pramod, you always claim that you know a few things in digital world. Tell me who is going to be the Numero Uno (the best or most important country) in day to day digital transactions? US of A, China (中国), Japan (日本) or Good old India?” Pramod knew that if he uttered a word, Genie would slip out of his control and system will hang! So Pramod did not give any reply to the question asked.

As usual, Genie kept on talking. Genie said, Pramod now that we have had a decade and half of digital revolution (a la Industrial Revolution) who do you think will be the leader by 2030 in day to day transactions! Even as early as in next five/ six years the clear winner maybe seen; do you want to say something about it, Pramod? Genie was hoping to trap Pramod into talking but Pramod just smiled. Genie as usual kept on blabbering.

Pramod, I feel it is going to be India! Come on, don’t believe in me. Let me share some information with you. Last year along with demonetization, Indian Government started digitalization drive. This gave impetus to digital way of doing transactions and payments. Even some small time vegetable vendors, fruit merchants started accepting money in new format. You obviously don’t go to market with your laptop, so the obvious solution was using cell phones. Suddenly, many apps started coming into picture. I am giving you information based data available today.

There are two methods of transferring money from A to B. Bank to bank transfer (the best method for this is created by Government is known as UPI, (Unified Payment Interface) and Wallets by private parties and banks. Basic difference is that in UPI your money remains with you in your bank account till you transfer it. Whereas in Wallets, you have to transfer the money in Wallets from you bank account for further use.

Let me start with UPI; Unified Payments Interface (UPI) is an instant real-time payment system developed by National Payments Corporation of India facilitating inter-bank transactions. The interface is regulated by the Reserve Bank of India and works by instantly transferring funds between two bank accounts on a mobile platform.

“UPI is built over Immediate Payment Service (IMPS) for transferring funds. Being a digital payment system, it is available 24*7 and across public holidays. It uses Virtual Payment Address (a unique ID provided by the bank), Account Number with IFS Code, Mobile Number with MMID (Mobile Money Identifier), Aadhaar Number, or a one-time use Virtual ID. An MPIN (Mobile banking Personal Identification number) is required to confirm each payment.”

Pramod, many banks are now using UPI but again the Government is also equally serious and has come up with an App called BHIM. BHIM (Bharat Interface for Money) is a mobile app developed by National Payments Corporation of India (NPCI), based on the Unified Payment Interface (UPI). The app supports all Indian banks which use that platform.

All banks have their own apps but Pramod you will realize that it is a seriously big business and Google has jumped into fray  with an App called TEZ (fast and furious!) based on UPI. It cannot get any more serious than Google making app only for India.

Pramod, Wallet is another option which transfers money in two ways. One is Wallet to Wallet and second is Wallet to bank. Wallet to Wallet transactions have the limitation that both parties should have same Wallet. Wallet to bank is a normal transaction. But how does money come in the Wallet in the first place? It come through credit cards and through Bank transfers! Wallets have started using UPI too! Wallets are apps by private companies like PayTm which is currently the most famous amongst the wallets.

Pramod, which one will you prefer? Many banks have their own apps. BHIM UPI has ease of use as your account can be from any bank, your UPI id can be 1234567890@upi where digits are your cell number! Easy, isn’t it? Current authentications are MPIN number, but this authentication can be easily replaced by biometric authentication? Aadhar anyone? Of course!  In Wallets I will currently prefer PayTm. It is backed by Alibaba in a big way, so theoretically should be around for a long time. It has facility for UPI too! Another interesting feature they have started is Chat! While chatting with someone you can get or transfer some money from the Partner. Another reason it is my favourite is that Uber account is linked to it and for extensive user like me, money gets automatically debited to PayTm!

Pramod, don’t you think that entry of Jio in cell phone service providers is a game changer? Their low-cost cell phones are offering most facilities provided by expensive cell phones; this  will also play a major role in proliferation of digital transactions. Credit cards are looked at by many as elite tool; so for users who do not spend large amount in month, credit period offered by card companies is of no use. So, cell phone is going to be Swiss Army Knife for us. Capable of doing everything and anything. Making calls, taking photos, chatting, video calls, financial transactions, sharing photos, chats, GPS the list is unending! Pramod, do you think that after say about ten years credit & debit cards will be relevant? Debit/Credit  card needs investment from vendors but UPI and Wallets don’t need to have swiping machines!

SwissArmyKnifeCellPhone

 

Pramod, I want your reply on this as I know you have strong views! Pramod tried his best not to talk but Genie hustled him again with the same question! Pramod just could not keep quiet. He said, “Genie, with one billion cell phones and one billion biometrics data in the from Aadhar (which is the best authentication method), it is no brainer to say that India will be Numero Uno in day to day digital transactions over next ten yeas”

With this statement Pramod broke the golden rule of silence that Genie had locked him in.  At that instant Genie slipped out of Pramod’s grasp, Genie’s speed became equivalent of 2 G and system hung!  Genie could not help but make a passing remark before escaping. “Pramod my gut feeling tells me that it will be five years and not TEN!”

 

Has living in India become easier?  

Ease of use on day to day basis for common man has increased by 60 points!

I read a news item in newspaper that India has jumped 30 places in “Ease of Doing Business” ranking, given by world bank. (Later our PM also said that general living has become easier in India.) These experts have used pre-defined methodology; the same methodology is used all over the world. This indicates India’s ranking is compared with world’s other nations.

This made me think of us common people. Has our life changed? Has “Ease of doing things” changed for us on day to day basis? I am not talking of general infrastructure and holiday destinations and that kind of things. It is day to day mundane things that we are required to do. It is like shopping, making bill payments, availability of services, standing in queues. It is also about travelling from place A to place B which is part of our daily things that we do.

I am talking about city dwellers who have access to wi fi,  and internet on cell phone.  This infrastructure has improved a lot during last five years. Proliferation of cell phones is really deep. This has made life easy for the people, who have adapted to the use of this technology, irrespective of their location. Payment procedure of regular monthly bills like cell phone, electricity, insurance policy premium has become extremely simple. These are done by card, net banking or even simpler “standing instructions”. New system of wallets is also spreading quite fast. But how many of us have really started taking advantage of this change? I still see many people going physically, to pay these bills, standing in queue! Reason no belief in the system! Systems are available and they are making things easier. More people should be encouraged to use such systems.

Daily transportation is one of the biggest hassles in daily life! In this aspect, things are definitely improving. Main difference is due introduction of Metros in a big way, in many large cities. Metros definitely ensure that people travel from place A to place B in world class comfort and in shortest possible time. Just to give an example in city of Pune, going from Pimpri to Mandi area in peak hours takes about 75 to ninety minutes. After Metro is introduced, this will be reduced to 30 minutes! This one world class solution does overcome daily hassles, reduces traffic on road. Metro is operational in Kolkata for a long time, Delhi was the second city and now in coming three to five years 10 to 15 cities will have Metro. Another advantage of Metro is world class system has changed the mindset of people in public, they are quite disciplined while using the Metros. Of course, they go back to original ways, once they are out of Metro concourse! But I am sure slowly this conduct will improve outside Metro system too!

Abundance of various items, has definitely improved. Vegetables, fruits, groceries, milk, grain, medicines, and what have you, it is available in abundance! Days of shortage have simply gone. Availability of services of technicians like electricians, plumbers are easily found through yellow pages!

During 90’s when people’s aspirations started increasing, getting admissions to schools, colleges and professional courses became very tough. But since last few years seats in many courses and school/colleges remain vacant. This indicates that supply has become much more than demand.

In Banking system, there is marked difference due to technology. Processing of documents has become easier and many types of personal loans are available quite quickly provided all documents are ready. In fact, some banks offer pre -sanctioned loans to some elite customers. ATM’s have made access to cash simple.

Since India is huge democracy many things take time to happen. But they happen. Income levels have gone up and easiest indication of this is the sale of two wheelers in India. India has become the largest manufacturer of two wheelers in the world! Ok this creates its own problems. But expressways are coming up all over and authorities are trying to improve infrastructure to the best of their abilities.

I will share with you a very efficient system created by Pune Municipal Corporation. This is about their yearly property bill. They send the property bill details by SMS or text message. On clicking the link in the message, I was taken directly to their site with all required details filled in! They only showed a button “Pay”; when clicked it asked the normal payment options and  I paid the tax. Time taken 1 minute. Very similar system is created by vehicle insurance companies; insurance renewal time required is similar. Flipkart, Amazon and all such companies have made doing daily purchases very simple. Don’t forget ease of buying Bus tickets, Air and Train tickets.

Why people do not use the systems is due to apprehensions, lack of knowledge and simply because they have techno phobia. I know of an eighty-year-old lady who decided that she wanted to use all the modern payment systems and she has done the switch in about one month!

Most important change for business community is the GST! This one change has made things very simple. There were many taxes before GST and doing business was a nightmare to which we were used to! But talking to many factory owners, people from trading community, they find things much simpler than before!

Of course, there are minuses! Main issue is confrontational politics, there are naysayers like “development experts” whom I call zolawallas! There are people who are really upset because of Government drive against parallel economy! According to me there is an improvement of 60 points and not 30 points in our day to day lives.

New .com bubble!

Startups, Venture funding and profitability go hand and hand else you have a failure on hand!

My friend Nandu Pradhan sent me a message if I have opened a blog tap! The fact of the matter is that I am on a bit of a sabbatical for a week or ten days. Thoughts keep on coming in the mind and somehow I am able to reach the end line pretty quickly.

I read an article about venture funding this morning. It said that venture fund taps seem to be shutting down, albeit slowly, at least in India. I don’t understand much about venture funding but I am told that this funding is given to start ups with brilliant ideas; then there is second and third round of funding as the idea tries to bloom into business. One term that goes hand in hand is “burn rate” while discussing startups. Burn rate is the money spent every month, without doing any business at least in the beginning.

Most of my life I have been running a small business and during this period, barring a few years, I never needed outside funds! Of course, those loans were in the form of bank facilities. I paid outrageous interest charges on the bank funds. At some stage, I decided that enough is enough and returned all the bank funds. Idea behind running my business was simple, it was my job, and it earned me a living! So idea was to keep on making money from whatever activities I was doing!

Don’t get me wrong but I honestly do not understand this concept of venture funding and startups. All can’t be Microsoft, Apple, Facebook and Googles of this world. These are some of the names that come to mind when we talk of starting up in garage and so on! Don’t forget that people behind them were brilliant people. They may not have had the best of the ideas to start with. Apple took 20 plus years to really hit it. Microsoft initially had a tough time but the idea of MS-DOS is what really took off! These guys had different business models. Microsoft has been making software products and are now also in cloud computing, in a big way! Microsoft’s obituary has been written a few times but lately they have become extremely agile to customer requirements. I need not write about Apple; once the iPod became a hit, rest as they say is history. They have real world hardware that they are selling at very high margins. Google made a brilliant search engine and the advertisements on the engine are their bread and butter; they hardly have anything else that is earning money. Facebook was pioneer in social media and have taken up Google business model but this forms 80% of their income. They have about 20% of their income from other sources. What I am trying to imply is that they are all real profit making companies and balance sheets have been in black, most of the times. They all have hard cash.

Coming back to start ups. I am sure that there is a genius lurking behind all these startups that we keep on hearing. Mr. Mukesh Ambani recently made a statement that Jio is a startup! I think what he meant by that is Jio is thinking out of box, its agile, its is taking business behemoths in the same field head on but of course there is a business plan which will make it profitable sooner than later!

I am naming two large e commerce giants in India, Flipkart and Amazon.  Amazon is doing billions of dollars of turnover world over but I understand that even after 20 years their E commerce business is not in profit! So they keep on pumping money. Because of market capitalization Bezos of this world have become billionaires. So must be Flipkart honchos. What is their business model? To my understanding this is trading business as these two companies’ sale products themselves or through their partners; they do not manufacture a single product. How come their burn rate is much more than their income? I feel that it is because of the discount war they keep on playing to gain territory It is a good thing that they do not take loans from banks; otherwise list of bank NPA’s will grow longer! Loss figures March 2016 Amazon Rs.3572/ crore, Flipkart Rs.2850/ crores, Paytm total loss Rs.7971/ crores! Not bad! Profits can always wait! (Ref. Economic Times dated 24th Sept 2017)

If the organization is not making money then what is the point in doing business? With the taps of funds being slowly turned off, the startups are thinking, in terms of operating profits! Real profits are miles away! I am not sure about operating profits too! I am surprised about both sides. Those running business are not really bothered about profits and the funding guys are hoping that one of their clients will become a Microsoft or a Google and then they will get windfall! I am sure the funding guys are very very smart people and they are pumping only part of their billions as investment in startups! But what about startups which are very small or medium size? Or do the promoters also make their money, on the side, from the “burn”? If there is no profit then how do you sustain? What do you achieve by having a high “burn rate”? Is the business model right? Do these guys have enough maturity? They must be real smart technically but running a business is different ball game! An idea, a great presentation, business plan (which always look lovely on paper) get them funding. But how long can the operations sustain on funding? Should the business not be self-sustaining? Is it easy to convert a brilliant idea into a self-sustaining business? There are many so called brilliant ideas, on paper; they face different hurdles, when they come into business domain.

Coming back to my lack of knowledge, I feel that business is a business is a business! The aim should be to make it profitable, of course not at any cost! One has to follow business ethics. When you get funding you don’t have to pay interest on funding that you get though you actually borrow it!  Funding is a cool name for this borrowing! One is really lucky that this is interest free loan. That most startups fail, is to me, an indication that most ideas don’t get converted to profitable business.

I will give you an example of a “startup”. This was not a startup in the conventional way. This person’s business and products were not hi fi type but products made for farmers and used in farming. Of course it was not cool! He was mentored by my wife Jaya. Jaya happens to be on cool side of life i.e Computers, IT and all. What she found was that the person was brilliant and knew his subject and had good products. He was trying to make too many products on laboratory scale for different produce. After a few meetings Jaya asked him, “What is the USP of your products? Which is your best product?” He said, “My products will give immediate results with very high returns in Pomegranates!” Jaya told him to concentrate only on that. He did it and rest as they say is history. Now he is a reasonably successful businessman. He received recognition from United Nations and business wise he is doing pretty alright! Mind you, he took funding but only after his business had grown reasonably well and was very much in black! Writing this story probably has answered the questions which I raised in the beginning! So startups and venture funding is good provided you have good profitable products and a profit making business plan; otherwise you have to be Amazon or Flipkart or Paytm! To hell with losses! There are enough people who will fund you, if you are large enough!