Is Marketing a Necessary Business Expense?

While there are various talks on whether to take Marketing budget as necessary business expense or a investment. A video from Vault Analytics talks about it and shows how McDonald and Amazon took over the World by investing heavily in Marketing.

Nicely presented. Enjoy the video here.

Entrepreneurs Should Choose VCs and Not Vice Versa

I have been in the Entrepreneural venture for around half a year, and have been scouting for investment for some time. Met many VCs and attended few Start-up summits organized by Proto.in and startupcity. Let me share my experience here.

Indian Market is full of enterpreneurs and there are very few investors around. This makes investors more powerful then the fund seeking enterpreneurs.

Present Investors are of various categories -- individual investors (high net worth individuals), Seed Funds, Venture Capitalists, Equity Partners etc. They invest in different modes, and they enter and exit at certain defined stages.

Let me discuss something about different type of categorization of investors.

Categorization I : Risk Takers Vs Avoiders

Risk takers mostly prefer to be the first company to invest in a venture, and they look low valuation and high return. They have risk taking ability with good vision and judgmental ability.

The avoiders do not posses any of these three traits. All they seek is a area where they can park their fund, and get good returns. They don't know how and they do not make any effort to understand. All they do is look at places where the other companies invest and then become a secondary investor. They believe in other's judgement.

Categorization II : Big Thinkers Vs Small and Beautiful Vs Quick Monsters

Big Thinkers are more strategic. They invests in ambitious projects and are more open to ideas. They take risks but calculated risk, and often help clients grow using their network. They are active but understand the business and its challenges; they also don't bug the management team of the client unnecessarily.

Small and Beautiful are the folks who look around their closed circle of friend enterpreneurs, and make investments. They are not aggressive in growth but invest for medium to long term. They exit partially and value relation with the promoters. They are supportive but prefer not to give too much time for the venture.

Quick Monsters are very smart folks, who are strong in tactical works but not very strategic. They don't value relations, and can enter and exit at any time they want. They neither have long term strategic thought as a Investment Company nor they have for their clients. All they look is an immediate opportunity to get in, and exit when it favors them.

Categorization III : Open Minded Vs Look-up Tablers

Few people I talked with do not believe that VCs can be categorized this way. But I have an experience to support. I visited few VCs were stuck with the questions in his look up table.

They had four questions to ask.

1. Who are you clients?

2. What is your revenue?

3. How long are you in the industry?

4. How experience is your team? Any celebrity entrepreneur with you?

Is this because of the outsourcing culture in India? Does this say people here can't think outside of clients and revenues? I have no answer.

They never asked my what my company do, what is the business plan and how I can work with the investor to bring good value to the customers and the stakeholders of both the companies. I was surprised! I call them the Look Up Tablers.

These class of investors have very good experience in managing money, and they are no better than investors who buy shares from the stock market. They are of no more value than their money. Sometimes even their money can be a problem. I expect them to bug the management team every now and them, and influence the invested company to change its course.

The Open Minded Investors are the other hypothetical class of investors, who understand the team, the product, the potential and the vision. They invest in the company and share the vision.

Sadly, I have not met any such investors. Have heard about them, and would love to meet if there are any.

Investment : Enterpreneurs and the Investors

What I have learned in last few months is, as a entrepreneur one must be strong enough to reject some investors and one must posses a quality to reject an offer to meet the investors too. Companies after all do not run only on investors money; it can run in bank loans, some small borrowings, some quick revenue survival plan, and some cost sharing partnerships with revenue rich companies.

All these strategies do have their own drawback, but going around a wrong investor is more bad. It takes away the valuable time, delay the work, frustrate the team and most of all forces to divert the main vision.

The investors are in the business of investing. They have to invest in order to survive and grow. They are more forceful than the enterpreneurs towards investment.

Ending Thoughts

Most of the Investors we meet are not the enterprenuers and they are the staffs of the investment company. Enterpreneurs need to understand this, and be prepared to be rejected and misunderstood. After all had they been enterpreneurs themselves, they would not come up with questions you cant answer.

It is more important to target a right investor, and find them at the right time. It is also important to find the right partner for the business who bring in money. Wrong investor can be more harmful than a no investor. Enterpreneurs needs to be careful.

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What do you think? I would love to hear from you. Share your thoughts here as comment.

If you have any experience to share, please do it. I am sure, all want to read and understand on what's going wrong.

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World Needs Payday Lending

Payday Lending is one of the most discussed topic in Finance Industry for many months, and most of the thoughts have come against it. Being a Analyst with Interest in Subprime Lending and smaller Loans, I was looking at these market developments.

Here are few of my observations:

1. Lender's Greed went uncontrolled

There are various players in the US Market who are actively into Payday Lending. There were people who entered the market with long term Marketing Strategy while others went to make quick money. These later class had too much of greed, and were charging around 720% to 800% APR, annualized percentage interest rate (30% for 15 day cycle + administrative fees). This is certanly too bad to do any good to the market.

2. Market moved from Bad to worse

The very high interest rates forced more people to become bad, and default on their loans. This piled off huge debts on the individuals who used payday loan. This again made them not laible to Payday Loan too, and moved them from Underbanked to Unbanked Mass.

3. Early Movers Made Money, Late Movers Died

Early movers made huge amount of Money. They capitalized on the urgent need of cash for utility bill payment and others for underbanked population, and build a good customer base. As the market was raw, they got chance to exploit its full potential. 

The advantage of the early movers were the lack of intentional fraudsters in the market, and the monopoly to choose best leads. As the competition increased, the market was exposed to many fraud cases along with high risk of giving loan to less credit worthy leads. This was coupled with more people being moved from good to bad with the imposition of very high interest rates.

4. Use of Data Made Kings, others make their way out

There are certain companies which went out of the market citing great loss, and others like are still the kings. They have huge portfolio of around $50m in a market where the profitability of close to 10-20% Monthly. All thanks to proper database maintence and use of Risk Management Practice.

They not only used their data to lower risk, but also used to retain the good customers.

5. Payday Lending is a Risky Game, High Interest Rates are inevitible

The market of udnerbanked and unbanked where Payday Lenders actually target is a very risky population. It has very low credit worthiness, and the credit rating cannot be done due to thin file accounts. This make the Risk Management Task very challenging.

More pain is added by the lack of information to have good Fraud Model too. The portfolios of various clients, which I have seen so far have an average bad rate of 15% to 40%. This is after the Risk Control measure. When I made an analysis to predict the Bad Rate of random population, it came around 85%. 

So if you look at these statistics, you will know how important it is to charge high Interest Rates. I feel Interest Rate of around 120% APR (5% for 15 days) is reasonable, and it can go upto 240% APR.

6. Payday Lending is necessary, World got it wrong

Payday Lending is blamed for distubing the market by many activists and serious bankers. They do have some point, but all they say does not hold true.

When I miss a credit card payment, bankers charge me huge amount. Once I missed a payment of Rs. 800 and the bank charged me Rs. 1400!! It includes interest rate and late fee. Had I taken loan for Rs. 1000 and paid it, it would have saved Rs. 1,100 after paying the interest rate of 30% for 15 days.

So a serious question to be answered, is Payday Lending a real monster? Or is it a blessing in disguise? I would not be surprised if someone prove the hand of big Banks in the movement against the payday loans. Afterall they lose huge money in administrative fees if people pay the EMIs and Credit Card Installments on time.

It is also coupled with teh loss of govt. agencies and other companies. People have option of taking a payday loan immediately and pay the utility bills on time to avoid the administrative fees.

My Take:

Payday Lending Loans can be taken under Smaller Loans Act, and the interest rates needs to be capped. But the cap rate should be 240% and not 36%! No Payday Lender can live at 36%, and authorities need to undnerstand this ground reality.

General public will lose an option to not pay the hidden fees of big banks, if payday lending is abolished. This is not in bigger interest of the nation.

Instead Market needs to be left free hand (ofcourse with CAP) to function, and the competition will bring the interest rate down. Good Attritors will be retained and this retention is not possible without lowering the interest rates. The new and the risky might have to pay high rates, but thats fine as they will get cheaper loans with time.

Why Infosys Should Buy FICO

Now Indian Software Companies need to grow up and look behind Software Services, and fight for much more lucrative Software Product side with significant focus. Infosys and Iflex have shown they can play well by building Finnacle and Flex-Cube (both are banking ERP Products) respectively.

IFlex sold itself to Oracle while Infosys has gone from strength to strength. It is already the most valuable software company in India, and among Top 10 Software Services provider globally. Its main problem to move to the next level is the lack of experience in big ticket acquisitions. But that should not be a problem; they can hire few acquisition experts and go ahead.

I see FICO (earlier Fair Isaac) as one of the best possible target for Infosys at this point of time. There can be many reasons; here are few:

1. FICO's Low Valuation due to bad market condition

As per yesterday's market close, FICO share stood at 12.72 (Mar 20th After Hours) and Market Cap at $621 Million. A company having Revenue over $800million, this valuation is too low. Source Google Finance.

2. 55 Years of History and Strong Branding in US

FICO has been in market for last 55 years, and it is the pioneer company to establish Analytics and Decision Management as an industry. Its FICO Score and Falcon are very strong brands.

3. Strong R&D Culture

Fair Isaac has very strong R&D culture, and owns many patents. This will be a great addition for company like Infosys who lacks it.

4. Financial Industry Coverage

Infosys's major focus has been Financial Industry for long; its Banking ERP, Finnacle, has been doing great for the company. But this has been limited to South Asia. Most of Europe and America is dominated by IBM and Oracle.

Infosys needs some partner to break this barrier and establish itself as global major for Banking ERP. There is no other company that suit Infy better than Fair Isaac. Fair Isaac works with more than 80% of World's Banks. Its Fraud fighting product Falcon and Credit Score FICO are used by almost all Financial players in US, and outside.

5. Complimentary Products and Services

Infosys has ERP Product and BPO Operations expertise and infrastructure; while Fair Isaac has Business Intelligence Tools and Enterprise Decision Management Product. Infosys's strength lies in low cost operations and services, and is moving up the value chain organically. Fair Isaac works in high IQ knowledge management area and is fighting to move down the value chain. Great complimentary possibilities.

6. Infosys has enough cash for buyout

If Economic Times's report is to be believed, Infosys has cash reserve of well over 12,000 Crore INR ($2.4 Billion) currently. This keeps it in comfortable position to make this buy-out, and still be cash positive.

Not to worry about financing operations for FICO; it has good revenue of over $800 million.

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Ending Note:

I see Infosys as the best suitor to make this buyout but there are other probable bidders too. These are:

1. Wipro (strong cash position; experience in acquisition)

2. TCS (strong cash position; good acquisition experience; Tata group backing a bonus)

3. Accenture (can think of major entry in Banking thro this buy-out; cash position unknown; but have strong track record of acquisitions; good revenue making only second to IBM in BPO and Software Services)

4. IBM (can buy FI any day; too big operations and might not opt for this acquisition; already strong presence in Financial Industry)

5. Amazon (strong acquisition history; interest in data mining and analytics)

6. Google (Google has been buying companies from variuous background; one of the biggest data miners today and thus could opt for FI)

Well, there could be many who join this bandwagon. If Infy prepares itself well and gets FICO, it will create a new history for Indian Software Industry.

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Please share your view as comment here. Would love to know what you think. Cheers

More:

FICO CEO Mark Greene speaks to CNBC

When Art defines the Science of Marketing

My Friend Sneh sent me a poem today; Wonderful Piece of Art. Its here for you guys!! Find out whats there!

When I Take a long time to finish,

I am slow,

When my Boss takes a long time,

he is thorough.

 

When I don't do it,

I am lazy,

When my Boss does not do it,

he is busy,

 

When I do something without being told,

I am trying to be smart,

When my Boss does the same,

he takes the initiative,

 

When I please my Boss,

I am apple polishing,

When my Boss pleases his Boss,

he is cooperating,

 

When I make a mistake,

you're an idiot.

When my Boss makes a mistake,

he's only human.

 

When I am out of the office,

I am wandering around.

When my Boss is out of the office,

he's on business.

 

When I am on a day off sick,

I am always sick.

When my Boss is a day off sick,

he must be very ill..

 

When I apply for leave,

I must be going for an interview

When my Boss applies for leave,

it's because he's overworked

 

When I do good,

my Boss never remembers,

When I do wrong,

he never forgets.

This is Kahani (story).. office office ki.....Is the same kahani going on in your office too??? Then Poll Khol, without getting into any jhol :)

Now you have an unique opportunity to review your employer anonymously, Just log on to www.jobeehive.com and get started.

Great Ad Indeed. Lucky Jobeehive folks. Hope you guys enjoyed reading it!!

Business Intelligence 2.0 : Decision Management

Introduction

Decision Management System refers to the integrated IT System which handles Data Management, Analytics and their Implementation for Business Use.
Decision Management System which are built by DM Companies in enterprise level are even referred to asEnterprise Decision Management or EDM. EDM is equivalent to an ERP System, where ERP is for operations and EDM is for Decisions.

Capabilities

1. Collect and Explore data
2. Understand and Organize Data
3. Design Data Repository and Implement it
4. Build Reporting System (MIS)
5. Analyze Data for hidden insights
6. Perform Predictive Modeling and Segmentation of Portfolio
7. Design Strategy Based on Analysis, Modeling and Segmentation
8. Build and Implement Decision Optimization System
9. Monitor the performance of DO System
10. Fine tune the DO System with feedback from Monitoring System

#1. Collect and Explore Data: Collect all relevant data either from internal source or from external sources. External sources may be getting information from Data Bureaus or Market Research firms or from partner companies, more the merrier. Then comes exploration of these data collected and finding the necessary ones. All data cannot be analyzed due to resource crunch and it does not make any sense to analyze useless ones.


# 2. Understand and Organize Data: The data in raw form is useless. It needs to be transformed into usable form. So a thorough data study has to be done to understand the business interpretation. Then the knowledge has to be used to organize data for Analytic use. This may include creating derived variables, converting files to usable forms. The usable form may be creating CSV files from SQL server in order to convert to SAS (or whichever Analytic Package is used). The Quality Assurance test will need to be transformed in each step, either it is reorganizing data or converting formats.
Also, there might be need to collect some data for future use. Identify such shortage of data.

# 3. Design Data Repository and Implement it: Every time need for Analytics arises performing data works becomes very costly and those data works are mostly common between those functions. So maintaining a good data repository system pays.
Data Repository System should be designed in such a way that all the problems in the first two steps are phased out. The learnings from data exploration and organization can be implemented into an automated system.
If some new data needs to be collected, then build a module in DDR to do that function.


# 4. Build Reporting System (MIS): Data Collection and Maintenance is almost done with the earlier three steps, and now comes reporting. Data in raw form, however good, is hardly interpretable in business. So build a system to report basic insights from data.
Banks may like to know daily cash flow, number of customers visiting daily, rate of increase in credit, number of accounts going charge-off daily etc. There may be hundreds of such metrics that can be directly found out on daily basis and its all repetitive. Such insights when handy can help make many business decisions fairly easy.


# 5. Analyze Data for hidden insights: Not all information data can say is readily available. There might be some hidden reason when some outcome change and it needs to performed on need basis. This might be done routinally in order to avoid sudden accident, or can be done after a alarm.
This might also be needed when a new portfolio program is to be started, or some redesigning is required vis-a-vis competition.


# 6. Perform Predictive Modeling and Segmentation of Portfolio: To take strategic decisions, predictions are always important. It can be best done by segmentation and predictive modeling.

# 7. Design Strategy Based on Analysis, Modeling and Segmentation: Performing the statistical functions does not directly relate to business. It has to be put into business understanding and a strategy needs to be designed. It should include not the Analysis output and Model scores but Business Rules based on those outputs. Each and every decision points need to be evaluated and decisions need to be optimized w.r.t the desired outcome(s).
The desired outcome may be income, revenue, risk, attrition, response etc. based on the business need.

# 8. Build and Implement Decision Optimization System: After the strategy designed, its the time for it to be put in action. In the competitive environment, there might be need to change the strategy quite frequently following the change in market conditions and competition. So each time a different strategy is adopted, putting a new decision system makes it almost impractical in terms of both time and resources. This calls for the need of a Decision Optimization System that allows to change decisions often.
Two of the features of good decision management system can be:
a. creating, changing and removing business rules
b. fine-tuning the operating points for predictive model scores

# 9. Monitor the performance of DO System: Continuous monitoring of DO system is as important as building it. There might be various reasons to do it. The change in market conditions is one, while few business rules and models may have error in them or there might be error in their implementation. But most commonly the need is of change of business need than anything else. There may be many operational issues (resources crunch, lack of expertise etc) while trying new strategy.


# 10. Fine tune and upgrade the DO System with feedback from Monitoring System: The information collected from monitoring system can be used to fine-tune decision points as well as to upgrade the system. No system is perfect and it is hard to find the drawbacks prior to actual implementation, so it is important to follow the path of continuous improvement.

Customer Centricity : Future of Marketing Approach

Customer Focused Approach and Customer Centricity seems very similar from outside but they are very distant in principle. Customer focused approach stresses on knowing the profitable and risky customer segments. Then the steps are taken to market accordingly. Generally the importance is given here to the product, price, place (distribution channel) and promotion that appeals to customer. This four Ps approach of Marketing has been very successful when implemented by few of the companies. But this approach has some very serious drawback. This is covered by the centric approach.

The customer centricity is directed towards knowing customers better. Knowing their general behavior and their business value in terms of past purchasing behavior and future potential. It takes the marketeers to make them see from the customers eye. The 4Ps are thus converted to 4Cs here. The product is replaced by Customer wants and needs, upfront price is replaced by Cost to customer, place is replaced by Convenience of purchase and promotion by Communication between the company and the customers. This clearly has certain edge over the customer focused strategy.

The former approach is understanding a demand and pushing the product. The later concept is understanding the demand, knowing the reason behind the immediate demand and predicting chances of the demand movement. Thus shaping the product accordingly. There are some chances of influencing demand shift according to the company's product profile by effective promotion and advertisement.

I would like to mention Human Values here. Evaluate the two statements and try to find which is spiritual and which one is material thought.

1. Everybody exists, therefore I exist.
2. I exists, therefore everybody exists.

First one seems spiritual at the first glance. But in actual, second one is the spiritual thought. Consider Gautam Buddha. We all must accept he is spiritual. But he left his mother in poverty and everyone he knew to enrich himself with the truth. Once he got enriched, he came back and enlighten the world with his knowledge.

The principle of Customer Centricity roots from the Human Values. It is a value based approach. It is knowing the present and future market, and preparing company's product portfolio according to it. This is enriching self. The enriched self (here company), thus emit and brightens the world. While customer focused organization tries to focus more on customers current needs and thus play it right, and weakens self. Thus fail in the long run.

While now all of you must have been convinced about the customer centricity being superior to any earlier marketing approaches. Now I will discuss something about this approach and its implementation.

Steps to Implement

1. Define Market
2. Quantify Market needs
3. Segment the market appropriately
4. Profile the segments to make understandable (by business managers and others, non-technical)
5. Determine value proposition of these segments
6. Predict the possible changes in future
7. Communicate the value proposition to all concerned
8. Deliver the value proposition
9. Monitor the value being actually delivered
10. Evolve with time.

The heart of the customer centricity is customer segmentation and profiling, and evolution with time is the key to keep the strategy functional at any specified time.

InRev : Information Revolution Starts Now!

Finally today is the day for InRev to come into existence. It has been a long and challenging path to make it happen but finally we could realise our dream of starting own company. And it has come with a promise to bring Information Revolution in the World.

Last decade has been the period of development for Risk Management, Marketing Analytics and Web Analytics; and these areas have shaped up well. The challenge however remains in the integration of all these services to make optimal decisions.

There are several challenges including making Web Analytics more Marketing friendly, and taking developments of Business Intelligence and Decision Management areas in Non-Web Environment to Web. We have entered the Market to address these areas, and will be working to integrated the Web and Non-Web data to provide an integrated platform.

Company Info:

InRev transforms business by making all possible information available at all times. We combine Domain Knowledge, Trusted Reporting Structure and innovative applications to help companies advance their Business Decisions. We serve across all stages of Business Intelligence and Decision Management areas, right from Data Extraction and Integration, to Strategy Consulting using the Intelligent Insights of the Business.

InRev is the promise to the World to take the Information Extraction and Usage to the next level. We plan to make use of every possible data, and process them to build Killer Apps that brings an Information Revolution in the World.

Products and Services:

• ETL Suite

InRev ETL Suite connects to all types of data sources, and integrates them. It has a Data Processor which helps in creating new variables and preparing OLAP cubes.

• MIS Reporting

Data Visualization, Executive Dashboards and Executive Summary Reports are available at the click of the mouse. It has inbuilt best in class data security measures and tested fail proof architecture to support huge amount and complexity of data.

InRev Reports are very user friendly, and it is probably the only reporting tool in the World to give every user what they want. It has different interfaces for people at various positions. It is sure to be loved by all, from Analysts to the CEOs.

• Analytics and Consulting

InRev provides Consulting Services in various areas of Analytics including Database and Marketing Analytics, and Risk Management. InRev has Consultants, who are experts in Predictive Modeling, Optimization and Portfolio Analytics, Business Rules Management, Model Development and Deployment.

• Decision Management Tools

World has various BI Tools, but yet we thought we will add value. We provide the tools that exactly fit your business needs, and do not burden you with huge costly package. We provide tools for various Statistical tests of the data including Information Value and Single Factor Analysis. Other products include Bayesian Risk Tables, Natural Segmentation, and Objective Market Segmentation etc.

• Professional Services

Huge investment in BI Tools is everyone’s problem specially when there are very few people who can use it. InRev addresses this issue by providing Consulting Experts who can work in client site to solve the business problem or train the internal resources.

The Expertise Areas include SAS™, BusinessObjects™, CART™ from Salford Systems, Model Builder™ from Fair Isaac etc. We also provide consulting services for various open source tools like OpenI™, JasperReports™, Tableu™, and Mondrain™.

• Open Strategies

Open Strategies is the major differentiator for InRev from other Vertical Solutions players. The Open Strategies include two initiatives:

F Cube (Forecasts For Free): InRev brings the latest Macro-Economic Forecasts for the US and Global Economy. And it brings for free for use for all purposes including commercial.

InRev will however charge for any ad-hoc requests made by its clients for specific reports or forecasts, which are not included in the regular offerings. Additional revenue source for this initiative will be the Advertising. 

Cricketing Queries: InRev plans to make a user friendly simulator for World Cricket Reporting and Forecasts. It will include all basic reporting functions from the cricketing world, to prediction of Player and Team Performance.

This initiative will be done in partnership with companies involved in Cricket. Advertisement and Ad-hoc request processing will be revenue sources for InRev.

I am very excited about my new venture, and am happy to have great team with me. Laxmi's background as a successful business person fighting crisis times, and Deep's passion and expertise in analysing Economic Data to make business decisions are some of the major strengths we have.

I have few other folks with me. Will keep updating on them and products and services of InRev in days ahead.

Would appreciate you feedback and/or comments. Please give them via comment to this post or email me.

Very Happy New Year to you and your family. Have a great year ahead.

Cheers!!

Twitter Tricks : Getting 500 Followers in 4 days

Few of my friends called me to Twitter. Had known this company for sometime but didn't have so much energy to start something else again. I was already using Orkut, Facebook, LinkedIn for Networking; StumbleUpon for time pass; knol and blogger for writing articles etc. I was actually over packed.

But Bibek and Lokesh inspired me to join it 5 days ago. I thought of giving it a try. But a greedy Marketer came to existence, when I read that the success out there is to increase the followers! I thought of a strategy for it with all the analytics I have been doing. The result -- 563 followers till now.

Here is my strategy. It has three principles.
1. People usually reciprocate the favor done to them.
2. People who follow other people like you have high chances of being your follower.
3. The chances of conversion are more with more chances given to people.

Implementation Steps:
Step 1 : Go to the Twitter profile of people who are like you.

Step 2 : Follow all his followers

Step 3 : Everyday check who is not following you at FriendorFollow; if someone does not follow you, un-follow him and then again follow him.
Remember people wont know when you un-follow him, but he will keep on getting mail when you follow. Do this till someone follows you. Test his patience or his arrogance what ever you may call :D

My Plan is to get 20k followers in 3 months. Let me see if I can get that. Do you want to do the same? Let me know if you implement this strategy. Would like to know if it works for you or not.

Good Luck!! Happy Twitting.

Want to add me at Twitter. Please do it now.

Have Dollars, Sell It OFF

US Economy is in problem, everyone knows it. First the sub-prime crisis, then the overall Financial Crisis due to liquidity crunch, and now overall economy in recession. No one should be unaware of this fact.

But are you following the Financial Markets? If yes, then you must be knowing that value of USD is increasing w.r.t. all major currencies of the World. Surprising huh!!
Earlier when the sub-prime crisis started people throughout the World just got panicked and lost their confidence in US Economy. They started doing transaction in other currencies, and selling whatever dollar they have. In this period, Indian Rupees went stronger against dollar from Rs. 45 per dollar to Rs. 39 per Dollar in 4 months window.
This was obvious as people had more confidence in Indian Economy than US. But suddenly dollar value started rising while the US Economy was going from Bad to Worse. Investment Banks collapsed, then the major banks went into crisis and now Auto Companies are in the verge of collapse, the employment scenario look gloomy; but still dollar rises.

Few argue that these things are obvious because by this time other World Economies went into crisis. But are other Economies worse off than US? It is not specially when I consider Indian Economy. Europe and Japan are in recession; but China and India are not. So, why does value of dollar increases against these currencies?

It is all because US Economy dominates the World, and specially whole of Asia is run by American Investments. When the American investors had bad time at home, all they could do is sell overseas operations or buy dollar from outside and fund their US operations. The impact is so huge that US Govt. had to sell hundreds of billions of dollars to few of the Economies to control the dollar shortage. Korea South, Taiwan and others took about 30 to 50 billion dollars each from US; but still the money market seems skewed towards dollar shortage.

This could lead to serious consequence of dollar collapse in coming days. And it can only get more serious if US govt. have actually pumped more dollar by printing it to fight the crisis. With more dollar floating in the market than it was a year back and patchy economy brought by sub-prime and mortgage crisis, all we can expect is a steep correction. I expect it to fall at-least by 30 to 40% against all major currencies as soon as the markets starts getting normal. This however wont be so bad news for US Economy and the US Companies; but it will hurt the general public, the consumers.

So my suggestions general US population is that, just sell the dollar off. Buy some Indian Rupees or Euros, and wait for one year to get a huge bonus. May be it will bring some cheer for you at the end of the crisis. Else you will again lose, lose the value of money you have, and lose the opportunity gain that you could have got.

Good luck!!

Economic Crisis, Liquidity Crunch and Cash Bubble

Wait for few months more and you will see growth. Growth in all quarters be it stock market, or the economic activity. Its not because everything that has gone wrong for last one year in US is getting back, and also not because World governments have been doing a lot to being economy back on track. But because of one evil that exists now-- CASH BUBBLE.

We have been hearing about people selling whatever commodity they have. From stocks to metals, from houses to currencies everything is being sold. But if you consider the principle of Trade, is it possible to sell without people buying it? No right!!
Even if we consider it is possible, if people are selling in such an huge extent and not buying, where the hell they are keeping the money? Banks!! No way, all banks are facing liquidity problems and it is understood that people are not parking their cash in Bank too. They are just keeping cash with themselves.

This phenomena has increased also because of many market analyst suggesting people to keep cash at times of crisis. This is a good suggestion, but is cash a commodity whose value remains same? No. People are forgetting this fact. But thats fine, I am not discussing that today.

I see all of my friends to relatives, from employees to organizations all are saving cash. Ofcourse this do not include who are not able to finance their own operations, but the others who have good disposable income. They are not spending or investing.
Above it, governments are printing more and more cash. From US to EU, from China to Japan, and from India to Kuwait everyone is pumping money to the World economy. But still economy is not growing and consumption of products are coming down. Where the hell is the money going? I am surprised!! Are you also??

Well I found the answer, money is in the hands of people. Banks and Govts don't have it. This has in one side created a cash crunch, and the other side CASH and DISTRUST BUBBLE. Its just few months for it to burst, and then we see a lot of economic activity around. After all none of the recessions have remained for more than a year and this too will not remain for long.

If you have cash, then today is the time when you will have to invest. ICICI Bank share is at Rs 300 or Cisco share is at $20; chance to own huge number of these high value share may not come again. I expect there will be at-least 100% increase in stock prices of these sound functioning companies. Don't be late, just buy it and be patient for the cash bubble to burst. Move early and be at the top. Or wait for others to join in and get lost in the crowd. Choice is yours.

Economic Crisis to Analytics

Economic Crisis has hit the World. Now it is not only the US Crisis but a Global One and like never before all the World Governments are doing their best to minimize its effect. Financial Institutions are worst hit followed by Real Estate. This has drilled down to other industries, and now from Telecom to Retail every sector is affected. What has been the effect on Analytics Industry?

Analytics as an industry seems to have got boost. I see a lot of Job Vacancies for Marketing Analytics and Risk Management everyday in all medias, be it in Web (Naukri.com, LinkedIn etc.) or Newspaper (I read Times of India and Economic Times). Even more surprising is to see many Analytics and Business Intelligence start-up companies coming up.
I am not sure if this is the trend everywhere or just in India. But it is really surprising (yet true) that Analytics Jobs are everywhere wherever you see.

Does this mean when Economics fall, people realize the importance of Analytics?? I have no answer but I wont be surprised if someone proves it.

Long back I had read a comparison of importance of Three Major Professionals -- Engineers, Doctors and MBAs with Economists and Sociologists. Let me share with you guys here.

When a country is poor and is having lots of social and economic issues, the people who earn the highest are the Doctors (e.g. most Africa, Asian LDCs) followed by Engineers and MBAs. In these Economies, Economists and Sociologists hardly have any role to play.

When country starts growing the importance of Engineers rise, and their salaries too. They overcome the Doctors and at later stage MBAs overcome all (e.g. in India, China etc). Till this stage Economists and Sociologists role is very limited. (I hardly see any economist making a news in India!! Surprised? Well, don't be. Its the reality)

Now comes the developed World. People hardly want to study Technical subjects (got to know from my friends; but not first hand knowledge). And most Technicians are from Underdeveloped and Developing Nations who serve these economies. This is so normal as Doctors and Engineers have very limited role to play here. Infrastructures are there, and system is there. Here managers rule, and Economists and Socialists rule more. Because this is the time when the society needs values with value creaters, and thoughts with philosophers.

When I remember all these stuffs and I see the increased activity of Analytics Industry in the Crisis Time, I feel its the Analysts Time. The time has come, and we have got this rare opportunity and we should capitalize on it.
By the time Crisis ends, Analytics should establish itself as an Important Business Function on the line of Marketing, IT, and Operations. This would mean every big organization having a CAO (Chief Analytics Officer) along the lines of COO and CMO.

Is this possible? I feel, yes. With the Software Biggies (Oracle, Microsoft, IBM) bringing BI Solutions and many specialized BI and Analytics companies bringing great EDM products this is coming to becoming a reality. Not to forget is the contribution of smaller Analytics Consulting Companies that actually uses (and helps clients to use) these tools to bring efficiency to Business.

What is your take on it? Are you with me? Or against me? Please share your feedback and comments here.

Why Do Europeans and Australians Over React?

When there was bombings in London and Madrid, there was no big cry in India or any Asian countries. It was taken as a security failure and everyone believed that the respective countries will take care of the situation.

Now when there is terror attack in Mumbai, touring English Cricket Team choose to leave India citing security reasons. They left the 7 ODI series in the middle with India winning the series 5-0. Was this done to save it from becoming 7-0? Or is it usual practice of pulling touring team back? I am not sure of it.

England and Australia are masters of pull-out. They have done similar things with Pakistan, Sri Lanka and Zimbabwe earlier. Now they have done to India. Should not this be reciprocated by these Asian nations saying they wont tour those countries too? Or is England safe and Asian not safe for Cricket?
England, Australia and New Zealand have even started talks about shifting World Cup 2011 from Asia to Australia-New Zealand at the time when more than 80% of World Cricketing budget come from Asian four. What does this signify? I have some serious reservations against the bias people outside have against South Asian Nations.

Europe's over reaction stories are plenty. Once Europe used to be one of the best destination market for Nepalese Hand Made Mats, and many people took bank loans to produce these high quality Mats. The economy was booming, and Nepal was gaining good here. Suddenly a news came from European Union regarding banning of Nepalese Mats for use of Child Labors. It was a great step taken by the Developed and Civilized Nations to preserve Child Rights, which ended many villages around Kathmandu into becoming Banks' NPAs. It not only harmed the children but their parents too.

Shocking!! This is a reality. Europeans and Australians often Over React. These are just few example. And no one knows when their rights or environment agenda comes to hurt you. Anyone knows why they do it? Or it is us who does not do it?

Economic Crisis Hit : Move to Work From Home

There are many reasons now to work from home and avoid going to office. If you are in HR or in Operations, better think early.

1. Low Power cost -- you don't have to pay for electricity for Employee's home.
2. Terrorists might attack the office premise but they are not going to bomb multiple employee's house. Maximum they can attack a person, and that also have less probability.
3. When people work from home, they end up working more than they do at office. Being at office can be their excuse for low productivity, but when its work from home they will have to show productivity through results.
4. Save office space cost.
5. Save Office Maintenance Cost including Tea/Coffee and snacks, toilet papers, printing paper etc.
6. Have least tension in your head; employee enjoy home and you enjoy your smooth business ride.
7 Above all score high in Employee Satisfaction score.

If your company is hit by economic crisis, then certainly think of it. IBM and CISCO has started moving this way. It might be your turn now.

Death of Personal Blogs?

Most of the highly rated blogs are maintained by group and not by individuals. Seth Godin says in his blog post. And he asks if this is the death of personal blogging?. He says, NO. I agree with him.

Seth has taken the Top 10 Blogs from Technorati or from Alexa or Feedburner. But if you look closely, you will find every new ranking ranks the blogs differently.

(Group Victory is different from Individual Victory.)

Seth is the most successful bloggers, in Marketing Domain, in terms of most rankings. He has huge numbers of feed readers, he has huge number of fan following in Facebook Blog Networks, and he is in Top 20 in Technorati rankings. He might have been trying to move up, and not making it might have forced him to write this post.

But is it necessary to have good ranking? Well yes! If you are involved in any sector then it does make feel good if you reach the top in any rankings. But can you compare Best Movie Award to Best Actor Award? Well, not!
I would take the group bloggers as Movies where the individuals are not as important as their competitors who come close solely. So Seth, there are no reasons to feel bad. Just keep up your good work! You are anyway the best actor in the industry. No matter what the rankings say and how your movie perform.

May be we need some way to measure individual performance. Technorati does not rank blogger but ranks Blogs. A Blogger Ranker is the solution to this issue. Anyone does that? Or shall I start a business out of it? Suggest me!

Google Destroying Intellectual Value?

Today I had a discussion with a Professor of Economics and an Economic Researcher. Both had wonderful view about Google. They say, Google is destroying the Intellectual Value of the Information Creaters.

In their Own Words:

• After Google has come, all the focus has gone from the Information Creation to the Information Integration and Publishing.
• The Print Media is dying, and all the focus has gone to the on-line publishing where Intellectual Property is not protected.
• The free information distribution mode including blogs are creating so much of buzz where they are hardly of any value. Most of the information present in these formats are junk.
• People can copy and reformat, and republish same material creating so much of redundancy.
• The concept of Knol where a portion of revenue is shared with the Writer is hardly of any value to them. It just pays off very little. And all the profit goes to the platform and not to the writers. Google just benefits from it.
• Blogs and Knol provides platform to anyone to judge and reward. This creates a difficult situation for great researcher as the common man hardly understands it.
  
• Information collectors, Interators and Good presenters are highly rewarded. This is making people to believe in searching and copying rather than in doing serious research.
  

I just have one thing to say to them. They don't understand business and are not able to cope up with the changed situation.

Professors and Researchers will have to understand business logic and need to create value readers. They cant just run away with saying people are stupid, who don't understand or value their findings or writings. This is just not done. They will have to find wrong inside themselves and have to respect the people's views. Need to digest the Information Area, and not blame Google.

Google's Knol is one of the best platform for any underdog to put his views. This has made World more flat and now the information world is not dominated by few Media agencies and so called intellectuals. But by the group of the entire mass who is interested in the information. Everyone in the world is in the same plane, and one needs to build his profile in the open market to be successful in the long term.

I however don't say, Professors are totally wrong. There are problems with the free information distribution. Most of these websites and blogs are filled with advertisements. It really pisses off sometimes, but readers have the right to punish them. They just need to do is to learn on how to punish them.
e.g. They can mark "Don't Like" in StumbleUpon.

The other weakness I see is that of the profile and linked profile. It is the disadvantage of extreme freedom and democracy in all areas, and it has entered Information Space too. A new guy who thinks to blog from company like Google can quickly have good traffic, if his friend bloggers link his website from theirs. But I doubt he can really sustain with just help, if he does not have quality.

I support Google's fight for right to information to all. They have done a remarkable job. But few points that Professors have put up are alarming. We need to make sure how good researchers and information creaters are rewarded. If they are not valued and left behind, it will hurt the World. World will just become a place of smart players trying to fool each other.

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Wonderful follow up by Deep Sherchan. Thanks a lot Deep.

Global Analytics Preparing to Take on FICO

Fair Isaac ec-CEO Larry Rosenberger is now in the board of Directors for Global Analytics, a San Diego based Analytics firm with major operations center in Chennai, India. This is however not a new news, it has already been about 6 months old.

Interesting fact is that Larry is not the first person to join Global in near past. First Fair Isaac senior fellow Ted Crooks joined Global Analytics as VP for Business Development, who was followed by Chris and Steve. All these together is giving a feeling that Krishna, CEO Global Analytics, is preparing himself with a major battle with FICO. After all he is one of the person responsible for designing and building one of FICO's most successful product, FALCON.

Krishna started Global Analytics with his Falcon Team mate, Steve Biofore and few other folks. He started the company in 2003 and have been quite successful since then. While I joined Global Analytics in 2005, I was the 33rd employee of the company. Now the company has grown to above 120, and most of these people are involved in high end analytics. This makes GA one of the leading player in Analytics.

Global Analytics is heard to be expanding to UK, and have built a Fraud product for Banks. These developments have taken place after its tremendous success in serving Decision Management Services for the Sub-Prime market in US. fair
The two development happened last year i.e. the same year when Ted and Larry were brought in. And it is heard that Krishna and his team is working really hard to take the company to the next level. So, this year and next should be interesting to see on how Global Analytics moves ahead. If it gets the right strike, it would be no wonder to see GA taking FICO head-on in the Decision Management and Analytics Space.

Connect to Earn

Seth Godin has an interesting post today regarding Earning Money Using Internet. He has rightly pointed that the way to go ahead is "Connect".

• Connect advertisers to people who want to be advertised to.
• Connect job hunters with jobs.
• Connect information seekers with information.
• Connect teams to each other.
• Connect those seeking similar.
• Connect to partners and those that can leverage your work.
• Connect people who are proximate geographically.
• Connect organizations spending money with ways to save money.
• Connect like-minded people into a movement.
• Connect people buying with people who are selling.

This is a real great point. Most of the today's Web 2.0 companies have just been doing this. Either it is Google or Amazon, or Facebook to Ebay, all have been doing the same thing.

Indian Govt. Needs to be more Responsible

Indian Govt. have decided to keep the high petroleum prices intact and not bring down after the price of Petroleum has come down from $170 per barrel to $50 per barrel.

The reasons:
1. Govt. had to fight a lot to increase the price and they fear if they can hike in future if they bring down now.
2. Decrease in price could swell the demand, and as India is a net importer it will harm its trade and fiscal balance.
3. The Oil Companies have been harmed when the international prices were high, and now is the time for them to recover the loses.
4. Reliance is coming up with its KG Basin and is going to reduce huge external dependency. But along with that it is also speculated that Reliance is lobbying govt. for not cutting retail prices. all to the benefit of the firm.

Govt. is fighting with Inflation and low economic growth pressure, and they are trying to influence Industries not to fire more people so that unemployment does not shoot up. Economist PM understands the Economics and Financial system much better than I do. But it is really surprising to see him choosing not to lower energy prices to shoot demand and go for bleeding the already failing companies.
He is also using Financial measures like reducing CRR and Interest Rates to fight the crisis. This is increasing money supply in the market but this can hardly solve the industry problems. The crisis is global and it has come to India with the reduction of Global demand for Indian products. This has coupled with insufficient fund for companies to expand in India.

PM rightly took the second cause. But if the first does not bounce back and if there is no demand in the grass root level, the increased money supply may just end up rising inflation and lowering currency value. He might need to learn from Zimbabwe and Japan. Japan's use of these instruments in 1995 Asian crisis didn't do any good. And Zimbabwe's current Financial collapse is horrible.

PM Manmohan Singh has taken Indian and Developing Nations issues to G20 Summit. He has criticized WB, IMF and the developed nations for not doing enough to tackle the crisis and putting false blame in developing nations while they are just the victims of the crisis. He is probably correct and it seems India is really getting ready for taking some responsibility in the International Governance.
But does India want greater role in the International Area at the time when Most of the Asian Economies (Including India) grows on American Consumerism? Has time not come yet for India to push itself for increased consumerism and uplift the social/economic status of the general people?

Indian Govt. and India Inc may seriously need to review this. Blame game hardly helps.

Bailout for GM?

There is an article on New York Time today on Bailout for crisis hit Automakers. It is not surprising to see these protectionist voice once the economy is in problem but US Govt. should be very careful in taking these steps. Any subsidy or bailout tend to make people less cautious and careless going ahead. And after-all US Govt. cannot spend tax payers money to bail out the corporates in all sectors.

I see everything bad in the bail-out and for various reasons. Let me list down few.

1. Where does the money come from? Increasing Tax?
Govt. is after-all just a institution, a massive organization with both investors and clients as the people of the country. They hardly have any external source of Income apart from Tax Income. And if they go on bailing out the problematic firms, they will have no options but to increase tax for the General Public.
Bad for government stability. Bad for the Citizens.

2. Bailout can help cure the symptoms but not the disease.
There was something wrong with any company that collapse, or in verge of collapse. How will bail out help ensure that the root causes are addressed. The reasons for GM's financial condition is its poor cars, they are neither good looking like the Europeans nor are fuel efficient like the Asians. GM has one of the poorest distribution channel in India (don't know about US), and the worst amongst all automakers in terms of the after-sales service. You will find a Maruti, Mahindra, Tata or Hundai service center in the most rural areas also. There are Toyota Service Centers in all smaller towns and every corner of big cities. Searching a GM service center will be a real pain anywhere.

More to this, is the increasing expenditure of the US Companies. Asians have build their firms in very cost effective manner while the Americans and Europeans have inherited the high spending culture once gained by political power. This is the root of all cause.

Can bailout address these issues? NO.

My suggestions to the US Govt. and GM would be to work in their own areas. Do not interfere, and don't cry for help. GM's Board should get together sell few unprofitable units to finance their operations and for obvious reasons search a Executive from IBM and replace the CEO.

If GM needs to do anything good in future, they will have to learn from IBM. IBM is one American Company which has mastered lowering cost of operations and is still leading the Software Services area by far margin.

Good cars and competitive GM is better for the Americans and the World. Nothing else is.

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Good Follow up by Deep Serchan.