Emergic: Rajesh Jain’s Blog

The time around Christmas and New Year is when one ends up meeting a number of friends who are settled abroad. This year was no different. And there were three topics which were common in most discussions: Satyam, Pakistan and the Slowdown. Here is a summary of what I would say on each of them:

Satyam: There had to have been some deeper reason for Raju to make the decision he did. I have met him twice - in 1999 (a short meeting when Sify, a separate Internet company founded by Satyam, bought my company) and 2000 (when I was invited to participate in a 3-day Executive Leadership session led by Harvard faculty at the Hyderabad campus).  I came away deeply impressed with Raju on both occasions - especially, his openness, his intellect, his willingness to think long and make bold bets (Sify was one such venture). Perhaps, there was a cash crunch which necessitated a bailout at the Maytas companies. It will probably help Satyam and Raju if he stated (blogged?!) the real reasons - and then let everyone decide whether he did right or wrong.

Pakistan: War is not the solution. The only effective response India can probably give is to create an undercover team that goes after the perpetrators wherever they are. This is something we have to learn from Israel and also the covert CIA operations globally. (Maybe I have been reading too many fictionalised accounts of these!) We can beg and plead of the US and Pakistan for help but nothing is going to happen.

Slowdown: Yes, there is one. And it will stay for some time. But businesses like ours are too small and insignificant to really be impacted by it. And while other bigger players are distracted, it is a great opportunity to build innovative products and solutions. As a small company, one can only cut costs up to a point. At the end, the only thing that matters is revenue growth. And that will always happen if one has the right solutions and the right pitch to potential customers.

After all the bungling that happened in 2008 with the allocation of spectrum to a bunch of new operators for a pittance, I am amazed that India can still keep messing up its telecom policy. The rules of the 3G auction keep getting changed — perhaps depending on who has met whom the previous day. And now, it has been decided to delay it by two weeks. Here is my assessment of the reason.

I think the government has realised that after all their changes in the rules and the liquidity crunch which has hit businesses (including telecom operators) worldwide, their hopes of raising $10 billion has all but vanished. I think what the government has realised that all its flip-flops on the rules has pretty much ensured that foreign bidders (for whom the conditions were stiffer, since they didn’t have a 2G operation) will all but stay awa. So, with just the domestic incumbent operators left in the fray, the ‘auction’ wouldn’t really end up that way. As a result, the bidding would probably have ended up a little higher than the reserve price of about Rs 2,000 crore for a national licence. So, what does the government do? Double the reserve price! With 5 licences to give out (including one to BSNL/MTNL), at least this way it ensures that it can garner a minimum of Rs 20,000+ crore.

My feeling on what will happen is that the 3G auction will probably not happen in Jan. And if its gets delayed further, we start moving into pre-election territory when the code of conduct will start coming into effect, and it could end up being delay to the end of the year after the new government takes over in May-June. I don’t think theincumbent operators will be too unhappy with this — no one is really clamouring for 3G. The most valuable thing that 3G offers is more spectrum — which will probably end up being used for vopice rather than data services.

I hope this does not happen. India needs wireline and wireless broadband services of every kind if we are to create a future in data services — our digital infrastructure has been messed around since time immemorial.

I wrote this post in July 2003. I started thus: “It is a fascinating time to be a part of the world of technology. There are many new areas opening up. There are new markets waiting to be discovered. There are new technologies emerging out of the woodwork. Every entrepreneur tries to build a company in his own image, doing what he is good at.” It was true then, and it is as true now.

Some of the ideas I discussed:

Focus on non-consumption, not competition. A company is defined by its competition. I don’t like competition because aggressive marketing and spending a lot of money is not something which I enjoy. I like to look for new, invisible markets and get there first. This gives me time to get things right because I know I am going to make some mistakes - so might as well make them while no one else is watching! More importantly, the non-consumption market is typically much larger than the consuming market.

Envision tomorrow. This is perhaps one of the hardest things to do. It is also the most important. Today is visible all around us. But how will all that is happening today make a difference a few years from now? Because that is the world which we are building for. We need to think about where all the developments of today are leading. It does not matter whether one is right or wrong at this stage - if we succeed in creating the future, we will be proven right! Otherwise, it does not matter. We are envisioning the world of tomorrow, and also through our actions seeking to create that future. Having a sense of the endgame helps decide what intermediate steps need to be taken. It also helps us orchestrate the others into exactly the positions that we want them.

Begin. As has been said, a journey of a thousand miles begins with a single step. It is amazing how many ideas never see the light of day. My regret would be not that I tried and failed, but that I did not try. Failure is the worst thing that can happen - and it is temporary. But not making the attempt - one has to live a life with that thought. If one makes the decision to close one door, God opens others. But it is we humans who have to take the first step. This is in some ways a very difficult thing to do. Status quo is easy. Change and uncertainty is not.

This weekend’s links:

• Bits of Destruction: by Fred Wilson. “Bits of information flowing over a wire (or through the air) are just more efficient than physical infrastructure…This downturn will be marked in history as the time where many of the business models built in the industrial era finally collapsed as a result of being undermined by the information age. Its creative destruction at work.”
• Top Technology Breakthroughs of 2008: from Wired
• The Real-Time Enterprise: by Tim O’Reilly. “What do Google, WalMart, and MyBarackObama.com have in common, besides their extraordinary success? They are organizations that are infused with IT in such a way that it leads to a qualitative change in their entire business.”
• 10 Tech Predictions for 2009: by Louis Gray
• Say Good-bye to Mediocrity: by Om Malik

To round off the Best of 2008 series, here are a few blog posts about me:

• 40 to 41: Happy Birthday, Rajesh!
• Letter to a 3-Year-Old: Happy Birthday, Abhishek!
• Likes: Trains, Ice-creams, Jigsaw Puzzles
• Life: Gadgets, and A Day
• Memories: 1988 and 7 Lake St
• On Blogging Daily and Writing: something I look forward to continuing through 2009

I made a number of presentations in 2008. Here are some of them:

• Mobile World Congress in Barcelona 
• Red Hat Open-Source Apac Partner Meet in Phuket
• Nanyang Business School in Singapore
• Three on Mobile Marketing: IAMAI MVAS Conference, afaqs Mobile Conversations, Indian Magazine Congress
• Web 2.0 Summit in San Francisco

The Mumbai Terror attacks and the inadequacy (and at times, sheer stupidity) of the politicians we have elected to power contrasts dramatically with the team that is now taking charge of America under Obama. Here are some of my writings on this theme:

• Reinventing Indian Politics: how mobiles will create an opportunity for an Indian Obama in the years to come
• Who will be India’s Obama?
• India needs Ratan Tata as Prime Minister for 5 Years: this post got over 65 comments, the most any post has ever received

The terror attacks in November happened just a few kilometres from home in South Mumbai where I live. I wrote three posts about the attacks:

• Terror in Mumbai (on Nov 27)
• Mumbai: What Now? (On Nov 28)
• Mumbai: Why This Time is Different (on Dec 1)

A few of my better posts which entrepreneurs may like:

• C2 R2: on the need to cut costs and ramp-up revenues in difficult times
• Watch the Cashflow: one way to prevent business failure
• What can Cause Us to Fail: think multi-monetisation
• Crucible Moments: those which  transform us, and shake and shape our lives
• Talking to People about One’s Business: openness can only help you
• Ambition for a Start-up: how much should you have
• Don’ts of Public Speaking on Panels: suggestions for the next time you are on a panel or a moderator
• Meetings with Customers: get out of office
• Why Founders / CEOs should Blog Daily: all it takes is 15 minutes a day

It is now called Software-as-a-Service and the more fashionable Cloud Computing. Back then, we called it Application Service Provider. I wrote this series in May 2005:

Even as globally ASPs are making a comeback and software-as-a-service seems likely to define at least a part of the industry, in emerging markets, the opportunity for both SMEs in Emerging Markets (SMEEMs) and the ASPs is significant. This is because of the lack of legacy infrastructure - enterprises have simply not invested adequately in IT over the past decade because of issues like affordability (dollar-denominated pricing), desirability (lack of relevant applications) and manageability (not enough skills to manage technology). Now, with the ASP model, all of this can change. As businesses realise that they have to automate for growth, software vendors have an opportunity to fulfill this market need.

In fact, I believe that from the perspective of emerging markets, the ASP model of software-as-a-service is a disruptive innovation. The competition, for the most part, is non-consumption, as SMEEMs use only limited software for their business. The need in these markets is for ASPs and SME Tech Utilities. ASPs build the back-end and SME Tech Utilities provide the whole solution to the customer (thin clients, LAN-Grid, broadband connectivity, and perhaps, consulting to ensure that they can make appropriate use of the software).

One way to accelerate the process would be to build Tech 7-11s in business neighbourhoods. These multi-purpose Tech 7-11s can be the last mile bridge between the ASPs and the SMEEMs. In emerging markets, businesses will need greater hand-holding as they automate their businesses - and this is where the Tech 7-11s can play a starring role. In addition, their physical presence will also reassure customers wary of dealing with faceless service providers.