New Age Business Models

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The new age mode for most of the businesses is the asset-light format and the marketplace model. This is an astonishing change that one observes around. Let’s consider a big brand, say, Uber. Uber has Intellectual Property and acts as an aggregator model for the world of travel. “Uberization” has become a new word among the current generation. This has been the impact of asset-light models around the world. If we look critically, many companies are yet to breakeven, even when their businesses are flourishing.

The old model of own, acquire and produce has taken a paradigm shift. Globalization has been the major vitriol for this. The opening of economies, FDIs, FIIs, lowering of interest rate and “a partially convergent cultural change” has contributed positively towards the companies outsourcing the so called “core product”. The tie-ups between the countries, trade treaties and an ardent potential in emerging economies have propelled the new business models. Franchising still persists, but the asset-light model has become a fad. The likes of Amazon, Flipkart, Ola, Urban Clap and many other service industries have become aware of the advantages of asset-light models. The advantages are multi-fold. The company can clearly focus on the core value proposition of delivering the service rather than wondering what is to be done on all fronts. This would also reduce costs, as an established veteran player well ahead in the learning curve would embrace the opportunity to tie up with the company.

Apart from the above, the chances of service failure would drop substantially. The Build Operate and Transfer (BOT) model is also a positive transformation of mindset in the Indian subcontinent. The positive footprint of the same is observed in a host of highways across the country. The major question one needs to ponder is whether the Indian Railways needs to go for a BOT, BOOT or a BOO model? There is a huge scope for improvement in the same and that would help a great deal to the country.

Another astounding move has been made by the Indian government on the procurement of supplies. The Government has embarked on creating a portal for itself called “Government e-marketplace” (GeM). This system would help the Indians to wean out corruption from the system to a great extent. There are more than 2 lakh products available on the website and it will be an end to end online process. There are thousands of buyer and seller organizations participating in the GeM process. The prices are available in the portal and thus, guzzling of money is reduced enormously. The buyers are the ministries and the offices at the state and federal (central) level.

As the business opportunities are expanding, there is a sense of consolidation in some markets where the same players have managed to gain huge market share. Apart from all these, the world is changing at a rapid pace. The competitive prices from the export-oriented countries are unmatchable. Thus, expertise is being given prominence and this is altering the landscape to the maximum. Diversification on one side (for the big companies) and asset-light model on the other, has proven to be a stunning bazooka to conquer the world of business! Albeit every rule has an exception, the growing trend suggests that the gap between a product business and a service business is reducing enormously.

Landslide Victory of Shinzo Abe – What’s In Store For India !

1400 years of irrevocable relationship has been strengthened with the re-election of Shinzo Abe as Japanese Prime Minister. His election not only strengthens Japanese economy but also significantly contributes to global political and economic stability. His assertion against North Korea acts and his concern towards aging people of Japan has provided a landslide victory to Abe. Also, with China reasserting itself as the power centre in Asia, Abe’s victory will soothe Japanese concerns due to his unconditional support to security issues.

While all the global economies are preparing to absorb the anticipated Fed’s interest rates hike, Abe’s election pacifies their anxiety. Abe promised to continue to retain the lower interest rates to boost the economy. This would imbibe lower capital into the global markets while the money may move towards U.S.A after Fed’s interest rate hike. India would be a major beneficiary as many projects in India are funded by Japanese. For example, India received capital for its bullet train project in Gujarat from Japan for a minimal interest rate. Nevertheless, it should not be forgotten that the interest rates in Japan are negative which makes it a win-win situation for both the countries.

In terms of security, Japan understood the importance of strengthening its defence capabilities after the North Korea’s blatant acts. Korean missiles flew over Japanese airspace sending shivers to its citizens. Abe staunchly opposed the acts of Korea and resolved to retaliate accordingly. After the Hiroshima and Nagasaki incident, Japan was in the protection of U.S.A and never tried to build defence capabilities. It was a strong propagator of peace highlighting the dismantling of nuclear weapons. But now, with Trump focussing more on its own economy, Japan cannot rely on U.S.A for its security. It needs to develop its own army, navy and air force. Also, Japan may extend support to India’s nuclear policy, which is a bone of contention between two countries since our independence.

With U.S.A reaching out to South Asian countries with its renewed foreign policy, it’s time for India to strengthen ties with Japan. Trump’s withdrawal from Trans-Pacific Partnership (TPP) has generated discontentment in Japan. India, along with Japan, could put pressure on U.S.A to reconsider its stand on Paris agreement and TPP. Also, Trump’s recent speech at IMF and World Bank stating that U.S.A has pumped in more money than expected into these institutions is a cause of concern for India. So, we could take help of Japan in making the USA reconsider its decision.

Catalonia in Spain and Gorkhaland in India

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When a region is not respected, revolution is the repercussion. Catalonia in Spain and Gorkhaland in India have intensified their assertion for a greater autonomy. The underlying issue behind these protests is the discontentment generated due to the subjugation of their regional aspirations by the corresponding governments. Though the displeasure in both the regions was simmering through many decades, the immediate cause was the negligence of their language by their governments. Mamata Banerjee in West Bengal imposed Bengali as the compulsory language in the Gorkhaland. Similarly, Spain never respected the Catalan language. So, the protests were imminent and led to political unrest in the region. As of now, peace is established in Gorkhaland but the war is just about to begin in Catalonia.

The present-day Catalonia is on the border of Spain and France. Through ages, it has its own culture and identity. By 1715, Spain was able to subjugate Catalonian provinces and brought the entire islands under its control. Till 1938, Catalonia was granted greater autonomy and it was able to protect its traditions. However, in that particular year, General Francisco Franco destroyed Catalonian nationalism with a deadly war which consumed 3,500 lives. Since then, Catalonian people tried to gain more independence through various protests. But, the drastic step taken by Catalan leader this September, led to present crises. Carles Puigdemont brought in a resolution in Catalonia urging for its complete independence. 90% of the participants voted for independence but only 43% of voters participated in the elections conducted.

This was not in line with the agreement between Spain and Catalonia. So, Spain had to take a drastic measure of imposing Article 155 of Spanish constitution which brings Catalonia’s governance under Spain’s control. In response to which Catalonia lawmakers passed a resolution demanding complete independence. Now that the Catalonia has taken the extreme step, Spain is left with no other choice but to impose direct rule. Further action by both the governments is yet to be seen. Political parties such as Catalan European Democratic Party are adamant are not accepting anything short of complete independence. Spain on the other hand, cannot lose Barcelona, present in Catalonia, which contributes to 20% of its GDP. The situation is nowhere near peace and it will just add the fuel to the already burning European crisis in the form of Brexit.

In India, Gorkha Janmukti Morcha is demanding for the creation of Gorkhaland. They needed a separate identity for themselves. They also feel that Bengal is slowly intriguing into the affairs of its administration. Gorkhaland, similar to Catalonia has got autonomous powers to create their own rules in the form of Gorkhaland Territorial Administration (GTA). However, both the Catalonian administration and Gorkhaland administration has to abide by their nation’s constitution. Few fringe elements in Gorkhaland used artillery to demand their independence which cannot be tolerated by India. Similarly, Catalonia went ahead and passed the resolution which is contravening with Spain’s constitution. So, it has to ready to face the backlash from the Spain’s government. If India were to take a stand, we would definitely support Spain, as we have Kashmir sitting right above our head.

Amaravati – The place for immortals

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Being one of the capitals of the Sathavahana dynasty from second century BCE to second century CE, Amaravati was one the most prosperous cities from our history. Geographically located on the banks of river Krishna in Current Guntur district of Andhra Pradesh, Amaravati is chosen to be the capital of Andhra Pradesh after its separation from Telangana. Amravati is a conurbation of two metropolitan areas of Guntur and Vijayawada.

After 58 years of unionized rule and living, on June 2nd, 2014, both the brotherly states Telangana and Andhra Pradesh decided to part ways and form separate states as they were before 1956. Hyderabad, the capital of the united Andhra Pradesh lies in the heart of Telangana state and did not show any scope for being a combined capital for both the states as in the case of Chandigarh.

Here arises the concept of building a new state capital from scratch. All the cities of India had a long track record in the history and took the current shape of Capitals by substantial and continuous development. So, how feasible is it for us, to build a capital from foundations?

Temporary facilities for legislative buildings were set up and the staff was moved from Hyderabad to Velagapudi (An area in Amaravati) in March 2017. The Chief Minister’s office was moved in April 2016 itself. Now, we hardly have small skeletons of staff working at Hyderabad as the major portions of every administration has already been moved.

It’s not just Rome, even Hyderabad was not built in one day. After 1956, people have clearly portrayed Unified Andhra Pradesh as their home to last for centuries together. Not just investments but also relationships of the people has moved across both the regions. How unimpeded can people be in a place now they know is not theirs? Only time has to answer all these questions.

Amaravati, a 52,000 CRORE project as estimated by CRDA or at least a 10000 CRORE project as estimated by Andhra Pradesh government is estimated to take a first phase shape by 2024 (until then Hyderabad will serve as a residuary capital) and have a final shape by 2050. Planned to span over 217 sq.km, the project has entered the execution phase. The city is planned to be built in three phases and the Singapore government delegation headed by Iswaran has submitted the plan for second phase development recently.

The special status for the state that has been asked for has never been approved. The project also had huge rebellion from the local farmers about the land acquisitions. Amidst all these problems, Amaravati still stands as a ray of hope with a city with three national highways, 940 kms of roadways which is going to be a home for more than 14 million people providing 5.6 million jobs. With 21% of the city planned to be covered with greenery including islands, theme parks and 80 km of well-planned water network over the banks of river Krishna still gives us a hope of an oasis lying in the desert of problems.

Article Written By Bommineni Jyothirmaie Reddy

Valuation of a Company v/s Valuing a Person

A wide range of models exists in the market to value a company. May it be the evergreen Discounted Cash Flow Model (DCF), which considers the future cash flows of the company or more advanced RE and AEG Models. On the other hand, we would value a person based on her Net worth. The underlying assumption for all the models is that the value is dependent on money generated. However, in the real world, neither the value of a firm is assigned based on fundamental analysis nor a person’s worth is based on the amount hidden in her wallet. The Price-Earnings (P/E) Multiple is at all-time high (28x) when the economy is in doldrums and ofcourse Abdul Kalam is valued way higher than Subrata Roy.

Indeed, the value of the company and the person depends on the intangibles they possess. For a company, it is in the form of Intellectual Property, the expertise of employees, the brand perception among the customers etc., never can these intangibles be completely measured. And these factors contribute to the growth of the firm which drives the share price in the market. Similarly, the worth of a person is measured using the value system she is adhered to. Which also reflects the potential of the person thereby leading to her growth. Moreover, the growth of the person or company is dependent on the efficiency through which the investments are utilized.

The worth also depends, both, on the returns the company gauges for itself and also to its shareholders. For a person, the value is derived both from her ability to develop herself and the capability to contribute to others development. Return on Operating Assets (ROOA) reflects the core capabilities of the firm to generate wealth for itself with the assets employed. In the above case, only the operating income is considered which mostly eliminates the external interactions. Likewise, the value of a person is attached to the efficiency through which she could generate higher returns with low resources. The whole Tata Group is worth around $126 Billion and Facebook alone is worth around $350 Billion. The difference in the assets employed by both companies is well known. With minimal resources, Nelson Mandela could eliminate apartheid and with all the available resources Vijay Mallya escaped to London.

The other component which exemplifies the value is the Return on shareholders or well-wishers investment. Return on Common shareholders’ Equity (ROCE) demonstrates the ability of the firm to satisfy its investors. A firm is punished when it could not reach the expectations of its shareholders. Infosys had to forcefully opt for a Buyback as it could not please the investors. Similarly, a person’s social capital is shattered if the return on emotions invested is not satisfactory. Tiger Woods had to face the brunt of his wife for blatantly cheating her and Arvind Kejriwal was contended by people, for he could not reach their expectations.

In the first case, as the Asset turnover and Profit Margins are important for a company so does the discipline and hard work for a person. In the second case, as the Dividends payment and customer relationship are important for a firm, so does the person’s capability to instil trust among her well-wishers.

Swimming – Needs to be learned not mandated

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As an Indian who has studied in a CBSE school, I was taught that Mawsynram and Cherrapunji are among the wettest places on planet earth. But as of late, there are many unexpected places that are receiving higher rainfall above the mean values. The Climate Change phenomenon is taking shape at a new level altogether. The expected increase in temperature is about 8-10 degrees for a century. The increase in temperature would cause the icebergs and the ice on top of the peaks of mountains to melt. This would in turn lead to an increased level of water in the rivers and would increase the level of water bodies on earth. As the water level rises, the coastal regions are more prone to be invaded by the inanimate force of the water leading to floods and high inland tides, making it virtually inhabitable.

On the other hand, the recent rains in Bangalore are a great example of how life gets disrupted due to rain. The rain lashed for days together and flooded the city. The rains have uprooted almost a thousand trees. Is this an effect because of the cutting of trees in the first place? Or is it because of some other reason such as construction activities after the uprooting of trees?

The water retention capacity of soil goes down because of the absence of roots of trees, which on the other hand absorb the water and act as an impetus to the gushing flow of water. Apart from the nature’s brute force, the outbreak of epidemics permeates during the rainy seasons. The arrangement of the clogged water is apt for mosquitos and its other cousins to breed. The number of deaths due to Dengue, Malaria and other diseases are generally high during this period.

Rains are not bad. But excessive rains are ones to combat especially in places like Bangalore, Chennai and Mumbai. Majorly, all three places should have contingency plans to reduce the losses. The approximate loss during the infamous Chennai floods was anywhere between 2 billion dollars to 2.3 billion dollars (Depending on various sources). Government could actually allow the builders or collaborate with them to build a few townships right outside the cities so that, the relocating is easier during mishaps. The saving of lives is the prima donna during such events. Thus, we must do our best in preventing a scenario where swimming would be a mode of travel to office along with boats and jet skis!! Some momentum in the fiscal spending can also be generated in addition to the infrastructural growth and contingency measures. Providing insurance is only a short term measure and has proved to be a short term cure. Hence, more prominent action needs to be stepped up to build a more resilient economy.

The Future of Device Technology: Intangibility

The internet landscape is growing at an exponential rate. It’s not just about computers, laptops, tablets and smartphones anymore. There are now a multitude of devices that are internet connected.

The Garnter Hype Cycle for Emerging Technologies 2017 focuses on three emerging technology mega-trends that will shape the future: Artificial intelligence (AI) everywhere, transparently immersive experiences and digital platforms. The buzzwords are becoming popular and it is certainly going to rule the future. However, I would like to introduce you to some other emerging technologies in device computing that you must watch out for in the future:

First one is Smart Dust devices. They are small wireless microelectromechanical sensors (MEMS) that can detect everything from light to vibrations. It is a tiny dust size device with extraordinary capabilities. Smart dust will be able to collect data that can be used to understand or monitor better. If Smart Dust becomes a reality, then it’s time for Internet of Things to say goodbye sooner.

Already, glued to your smartphones and computers? Get ready – Neural Lace is coming soon to link your brain with intelligent computers. A neural lace is an ultra-thin mesh that can be implanted in the skull, forming a collection of electrodes capable of monitoring brain function. It creates a link between your brain and a device. Elon Musk announced his new venture in 2017 called “Neuralink” that aims to connect computers to your brain through the use of neural lace. Brain-computer interface is certainly going to change the future of device computer.

Finally, we have Edge Computing. It brings the core building blocks of cloud – compute, storage and networking – closer to the consumers. By moving compute closer to the origin of the data, the latency involved in the roundtrip to the cloud gets reduced. Image a self-driving car – it’s effectively a data center on wheels. Thus, Edge Computing might make Cloud Computing take a back seat.

There are many exciting new device technologies that are emerging that will continue to transform the world.

Let us know your comments about any other new device technologies that will transform the future.

Book Review: My Gita- Devdutt Pattanaik

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“Yada Yada hi Dharmasyaa glanirbhavati bharata.
Abhithanaamadharmasya tadat manam srijayam yaham.” (Chapter 4, Verse 7)

It is an elaborative yet eloquent book which has laid out the basics of life. The book comprises of 18 chapters similar to the Bhagavad Gita, but the interpretation by the Chief Belief Officer of Future Group, Devdutt Pattanaik is resoundingly easy to understand. I for one had a pre-conceived notion that the book might be philosophical, religious and all about God. But I was totally proved wrong.

The book starts with the definition and overview of Gita. The author then goes on to explain the meaning of Tyagi, Yoga and Yogi. All the three are distinctive and are explained elusively. The book incessantly stresses that the humans have a “Need for Association” and social acceptance. It is a proven fact that many people assert validation in life to make themselves feel important.

The explanation of Matsyayana is also provided in the context of life. People often ponder over the difference between Ramayana and Mahabharata in terms of the learning obtained from mythology. The difference between the yugas such as dvapara yuga and kali yuga is provided in terms that are understandable to the common man. The taxonomy used to explain important facts and concepts by Devdutt is intriguing. The usage of matrix to explain the difference of rules and principles, arrow diagrams and block diagrams for other concepts help the reader recall the same with minimal effort.

The book further delves deeper to help the reader understand the differences between deha, dehi, aatma and aham. All four are different and knowledge about the same is vital for a person to remain at peace. The elucidation of dharma and adharma is also outlined with the help of relevant context. The importance of subjectivity countermands objectivity in the real world unlike MCQ question papers at college or school. This concept is driven home with placid examples eliciting the perception of truth from the participants of the conversation.

The innocuous approach of Arjuna in Mahabharata guided by Krishna in the battlefield is synonymous to a guide seeker striving in his/her life to accomplish a goal. Krishna provides the words of wisdom to Arjuna on a constant basis to enable him to unleash his entire potential. The book further elicits the effects of the “Three Gunas” viz. Rajas, Tamas and Sattva in defining a person’s life. Greed drives away peace. The analysis of Maya and Moh is commendable. Speaking frankly, this was one of the best concepts explained in the book!

Also, one wonders the differences existing between heaven and hell, except the colloquial fact that states, suffering is in hell! Devdutt has conveyed as to why only one pandava went to heaven (Read the book for further details on who went to heaven) and not all. The book also highlights the involvement approach vis-à-vis the hermit and solitary approach which focuses on an amazing act called “Meditation”. The learnings one can embark on practicing the suggestions from the book is almost infinite.

So, why should one read this book? Should one be mythology savvy or a connoisseur to appreciate the script? My take on this is simple. The reader should accept the arguments of the author with an open mind. One need not necessarily be a connoisseur to appreciate the book. No doubt, one needs to be interested in listening to stories as most of the concepts in the book are substantiated with stories. All in all, this is an outstanding book which focuses on awakening the inner self of a person. I would rate the book a 4 on 5 and it is a must read for all. Business leaders have a lot of takeaways with respect to designing the motivational programs and leadership summits as well!

If you have found this article to be interesting, do comment in the box below! Happy learning!

Google Pixel Event: Transition from “mobile first” to “AI first” strategy

On 4th October, Google announced a range of hardware at a special event conducted in San Francisco. Artificial intelligence is the most important development that takes place in the consumer technology space. Google’s equation for new products seems to reflect the same – software + hardware and then integrate it with AI. Here are some important highlights from the event:

Google Announced Pixel 2 smartphone – a 5 inch and a 6 inch display version. The phone is powered by a 12 Megapixel rear cam and an 8 megapixel front cam. There are a lot of exciting features in Pixel 2 like activating Google Assistant by squeezing your phone, Google Photos capabilities including Lens, as well as virtual- and augmented-reality capabilities and finally you have a male voice to Google Assistant. The Pixel 2 phone will be available in three colors – “Just Black,” “Clearly White” and “Kinda Blue”. The 5-inch Pixel 2 starts at $649, while the larger 6-inch Pixel 2 XL will cost at least $849.

The most interesting announcement that we felt interesting was the Google Pixel Buds – a wireless headphones that is going to rival Apple’s Bluetooth-powered AirPods. The most interesting feature is that it can do an instant translation for a variety of languages. When the user speaks her native language, an English translation is provided from the phone’s speakers. So, next time if you stuck in another country, just put up your Pixel Buds and start conversing. The Pixel Buds come in the same three colors as the Pixel phone and cost $159.

Google also debuted the Pixelbook – a brand new laptop powered by Chromebook. It has a 12.3 inch screen that’s meant to function both as a laptop and a tablet. Priced at $999, it’s also the first laptop to have Google Assistant. You can also purchase a stylus for $99 that lets you interact with your laptop.

Google also announced Home speakers – Google Home Mini, a smaller version of Google Home speaker and a high-end smart speaker called Google Home Max. Google claims that the Home Max offers deeper bass powered by dual 4.5-inch woofers, and it’s 20 times more powerful than the original Google Home. It shows that Google clearly intends to compete with Apple’s HomePod and Amazon’s new Echo. The Google Home Mini will cost $49 whereas Google Home Max will cost $399.

They also showed off called Google Clips – a new clip-on camera that can take photo and video remotely and synchronizes what it captures instantly with a connected phone through an app. Well, GoPro’s share did fall when the announcement was made.

Google also redesigned the virtual-reality headset Daydream view that works with the Pixel smartphone. It has better lenses that will increase the image clarity and field of vision.

If we look at brand new Pixel 2 phones, Google Home Mini, Google Home Max, Google Pixel Buds, and Google Clips camera, everything is powered by Google Assistant. It’s clear, the future is going to be AI driven and Google has already made its moves.

Another interesting point to observe is that there were more female presenters for the event. There were four when compared to last year’s two. Google was embroiled in controversy earlier this year when former company engineer James Damore wrote a manifesto arguing that women are underrepresented in tech because of “biological causes” rather than bias and discrimination. Looks like Google is just getting started.