NASA unveils Mars rover Curiosity's travel plans

NASA unveils Mars rover Curiosity's travel plans   18 Aug 2012 ( Source: indian express) NASA on Friday unveiled plans for its Mars rover Curiosity's first road trip, part of a two-year quest to determine if the planet most like Earth could ever have hosted microbial life, scientists said. The one-ton nuclear-powered robotic science lab landed in a large crater near Mars' equator on August 6 to search for organic materials and other chemistry considered key to life. The rover's primary target is Mount Sharp, a mound of layered rock three miles (5 km) high rising from the floor of Gale Crater. Before beginning the 4.3-mile (7-km) trek to the base of Mount Sharp, a journey expected to take months, the six-wheeled Curiosity will visit a relatively nearby site named "Glenelg," which caught scientists' interest because it includes three types of terrain. The name was selected from a list of about 100 rock formations in northern Canada. Scientists realized Glenelg was a palindrome – a word that reads the same backward – and particularly suited as the name for Curiosity's first destination since the rover will have to come back through the site to head to Mount Sharp. The road trip to Glenelg depends in part on how well Curiosity cruises through the rest of its instrument checkout. Early next week, the rover will test-fire its powerful laser to pulverize a bit of bedrock uncovered by exhaust from Curiosity's descent engine.

Why India will beat China

Extractive political institutions (autocracy and empire) lead to extractive economies benefiting elites, and cannot create general prosperity save for limited periods. Inclusive political institutions (democracy, rule of law and rights for all) create inclusive economic regimes with opportunity for all, leading ultimately to prosperity. Inclusive institutions lead to creative destruction, which is essential for sustained prosperity but threatens extractive regimes, and is typically sabotaged by them. Only politically-free regimes will ultimately allow creative destruction. This is why some nations fail and others succeed.

So says this year’s runaway best-seller, Why Nations Fail by Daron Acemoglu and James Robinson. The authors do not attempt an India-China comparison. But their logic suggests that India will ultimately come out ahead because of inclusive political institutions, and China will ultimately fail because of its extractive political institutions. That needs qualification. Democracies can be partly extractive – look at India’s many scams – and autocracies can be partly inclusive. For this reason, democracies may fail to provide prosperity for decades just as autocracies can produce good economic results for decades. But ultimately, say Acemoglu and Robinson, the fundamentals will apply. This kernel of truth is brilliantly argued.

The book gives a mind-blowing range of historical examples across continents and centuries, from the Glorious Revolution of 1688 in Britain to the evolution of Botswana and Spanish colonisation of Argentina. One chapter is titled “What Stalin, King Shyaam (of the Congo), the Neolithic Revolution and the Maya city-states had in common, and how this explains why China’s current economic growth cannot last”. It sums up the breadth of this book.

Acemoglu and Robinson differ from economic historians like Douglas North in emphasising politics above all. Good institutions are the key to prosperity, historians agree. But this book says good institutions will not get established sustainably until the politics is right. You cannot depend on the modernisation process to ensure that authoritarian regimes with rising incomes automatically become democracies. Conditional foreign aid and foreign policy cannot bring about such changes either. Internal dynamics matter above all. The most important catalyst for political freedom can be a free media.

Few Indian readers are familiar with the 1688 Glorious Revolution, which the book emphasises repeatedly. The struggle between the Stuart dynasty and parliament, representing mostly large landowners and businessmen, ended in 1688 with the expulsion of James II and his replacement by William of Orange, who accepted a curtailment of royal powers and a Bill of Rights.

This set in motion a virtuous cycle, with political reforms that gradually included more and more sections of the population, culminating in universal suffrage. The authors say this political inclusion was crucial to widen economic opportunities, and explains why the Industrial Revolution began in Britain.

Other factors included British seaborne trade being largely with merchants, whereas the Spanish and French fleets were royal monopolies.

There is no historical determinism, say the authors. Luck and accident play big roles. Small differences and small changes can have huge, unpredictable consequences. Yet, they find that sustained success needs a constant widening of economic opportunity, plus economic systems that allow newcomers to sweep away the old: creative destruction. Autocrats squashed innovation, fearing this would empower a new class that would challenge them.

Many readers will question the book’s equation of extractive economies with autocracy and inclusive economies with democracy. The original four Asian tigers, South Korea, Taiwan, Hong Kong and Singapore, were autocracies of some sort, and so were succeeding tigers China, Thailand, Malaysia and Indonesia. India was aflop for so long that many assumed that autocracy aided prosperity, and democracy was a hindrance. Only in the last decade has India’s success altered the picture.

But the book implies that this was inevitable, and that the decline of China is no less inevitable. It says autocracies can produce sterling results for some time, even decades, but not sustainably (remember the Soviet Union). Democracies like India tend to develop virtuous cycles that eventually improve governance and reduce extractive tendencies, while autocracies tend to develop vicious cycles that increase such tendencies.

The book has a big implicit message for India: rethink themeaning of ‘inclusive’. All Indian parties swear by inclusive growth, but define inclusion in terms of subsidies and reservations in jobs and education. This is vote-bank politics parading as inclusion.For Acemoglu and Robinson, inclusive growth means the spreading of opportunity to all to participate in economic activity, leading to creative destruction in which newcomers oust the old.

The IFC/World Bank ranks India 134th out of 183 countries in ease of doing business; 166th in ease of starting a business; 179th in getting a construction permit; and 182nd in enforcement of contract. These are barriers that should be attacked by any drive for inclusion. Yet, our political discourse on inclusion hardly touches on these issues.

The political process likes creation but hates destruction. So, duds like Kingfisher Airlines and Air India are propped up, crowding out newcomers. Company liquidation takes decades. Labour laws protect a unionised labour aristocracy at the cost of non-unionised ones. This is non-creative ossification. It is the opposite of creative destruction, the heart of inclusion.

Cultural Competence

Cultural Competence

What is Cultural Competence?

Core competence is a factor that cannot be easily replicated and gives the business a competitive advantage in delivering their product or service to customers. Core competencies are how a business does something.

Cultural Competence is the lens through which opportunities are identified and evaluated. Cultural competencies are how a business figures out what to do. [1]

Implications

Every business, no matter the size, has cultural competencies.

• Cultural competencies are a reflection of the founders’ personalities. It’s no coincidence that Google was started and led by Ph.Ds, Apple by a designer-perfectionist, and Amazon by a quant from a hedge fund.
• Cultural competencies are directionally set as you go from 0-20 people. If you achieve product-market fit, you will only deepen your cultural competencies. You can inject new culture via new (strong) leadership, but the existing leadership has to be receptive. The larger the organization, the harder this is.
• Product market fit is easier to achieve if you work with your cultural competencies, not against them. Often times when a company builds the wrong product, the market they are pursuing does not align with their cultural competencies.
• If you understand your cultural competencies, filtering potential opportunities becomes much easier. Be honest about whether or not the market you are pursuing can be won given your cultural competencies.
• Don’t emulate another company’s cultural competencies, as many do against Apple. Pursue a market through your own cultural competencies to create a differentiated (and more successful) offering, as Amazon has done with Kindle Fire.

How do Cultural Competencies develop?

Cultural competencies are an emergent property of people in an organization. It starts with founders who pursue ideas and markets they understand. If they get traction, they hire a team that thinks about the opportunity similarly (belief in the vision). If they achieve product market fit, they hire more people. These people then pursue scaling a business in the way that has worked best thus far, reinforcing the cultural competencies and world view. This yields more revenue, which results in more people hired to support that core business. At each iteration, the new hires cause a deepening of existing cultural competencies.

An example: Amazon vs. Google

Amazon and Google share core competencies. They’re focused on large data problems, machine learning, exploiting massive infrastructure, experiment driven monetization, and more. They have non-overlapping core competencies, as well. Amazon has phenomenal customer support and logistics, while Google has deep expertise in search and performance-based advertising.

Given their similar core competencies, no one should be surprised that Google and Amazon both pursue the smartphone and tablet markets. However, their approaches are dramatically different because of their different cultural competencies.

Google’s cultural competence sees the world as signal and noise that must be filtered. A minority of the signal is commercially useful, and Google monetizes the shit out of it. This is how they manage to make money on search, email, and maps when few others can.

Amazon’s cultural competence sees the world as a series of transactions on which it can build a platform. Amazon pursues opportunities that will facilitate repeated transactions and then builds the platform to own all of these transactions. The Kindle was made to drive the sale of digital books. Free Shipping and Amazon Prime are levers to drive more sales on Amazon. It’s all about increasing and owning transactions.

How Cultural Competence Skews Perspective

For Google, Android is the key to owning mobile search and ads. Google’s cultural competence perceives Android as a moat for Google’s castle — search and ads. For Amazon, Android is about selling more video content, pushing Amazon Prime (which results in more sales on Amazon.com), and the Amazon Android Market (a digital goods store). Amazon’s cultural competence sees Android as a platform to enable more commerce and monetize directly.

Same platform, yet dramatically different perspectives, and ultimately different ways to extract value out of the ecosystem.

How Cultural Competence Impacts Product Success

It is not a surprise that Google makes a small amount of money directly from Android. Google’s cultural competence does not align with what the market demands from a direct monetization product — Google Wallet, Checkout, and the Play Market are examples of how Google fails because their cultural competence prevents them from building the right product.

For example, Google has rich analytics in the Android Developer Console and has search baked into the core Android experience. Given their cultural competence, it makes sense Google would prioritize these features. At the same time, the platform has no subscription billing and has yet to create a seamless integration of apps and content, 9 years after iTunes revolutionized digital content delivery. Google’s cultural lens has led them to either build the wrong product or be unable to come to a decision about what the right product is for a direct monetization market.

Meanwhile, Amazon has had no problem defining a transaction platform because of their cultural competence, and they execute on this market opportunity efficiently because their core competence is building transaction based products. Amazon has demonstrated this in multiple markets.[2]

Google’s lack of direct monetization from Android is not a surprise. Apple’s lack of monetization via iAds is not a surprise. Amazon’s lack of monetization through auctions is not a surprise. [3]

1 – I just created the term “cultural competence” to apply to something that people have talked about informally for a long time, so the definition will likely evolve. The concept itself has been floating around in lots of brains for a long time. Edit: Turns out it’s been used in the HR world to mean something different (see comments below). So the definition in this post is more of a “secondary definition” than an “invention”

2 – Another Amazon vs Google example
Hosting platforms are another great example of how cultural competence skews outcomes. Amazon looked at Amazon Web Services the way they look at their retail site. Find the simplest set of things people will buy, then broadening out to related offerings. They manage inventory, demand, and have efficient pricing. Amazon figured out what developers wanted (S3 and EC2), sold it to them, and then expanded the offerings.

Google’s cultural lens skewed their perspective towards thinking that what developers want is the most efficient way to manage large amounts of data and not worry about scaling. Most businesses don’t have Google scale problems and don’t want Google’s internal platform approach to manage their non-Google problems. They need something that works with existing (open source) systems and leaves them the freedom to customize infrastructure. Google tried to apply it’s cultural lens to a market, rather than find a market where it’s cultural competence would give it a competitive advantage.

Hosting is fundamentally a retail problem, not a signal vs. noise problem. Amazon Web Services does $1 Billion in revenue and Google has been tweaking App Engine for years. This is a prime example of how to filter opportunities and pursue ones that align with your cultural competence.

3 – Examples of Cultural Competence Failure
Companies that have a strong cultural lens will stay focused and thrive. Those that dilute their cultural competence die because they lose a very important filter for which ideas to pursue and how. Companies that try to build outside their cultural competence tend to fail as well.

• Apple - Apple’s cultural competence is finding large industries full of geeky products and Apple’s core competence is building simple, cool status symbols in their place. Laptops, desktops, phones, and music players are all examples. Ping (their music social network), MobileMe, Pages/Keynote/Numbers, and iTunes are great examples of where if the product succeeds by piggybacking on their hardware business, not because it’s a great in its own right.
• Facebook – Facebook’s cultural competencies lie in identifying opportunities to enable sharing. Every software, app, or platform upgrade is about fostering more connections and data flow between people. Facebook sees markets as an opportunity to get users to share more, find out more about their friends/connections, and elicit relationships (family, friends, worked with, who likes whom) that were previously unknown. When they try to extend this into another area, like daily deals, they don’t do well. Daily deals are not about the relationships between peers, they’re mostly about Facebook’s relationships with merchants.
• eBay – has core competencies in peer-to-peer transactions (sometimes with goods changing hands). eBay’s cultural competence is around bringing groups of people together into a marketplace and getting them to trust each other and the marketplace. When they diverged from this (Skype, StumbleUpon) they failed. When Skype and StumbleUpon spun out from this cultural lens, they thrived. When eBay applied their cultural competence to Paypal, it worked beautifully because Paypal is fundamentally a trust network.
• HP - has core competencies in manufacturing, distribution, and enterprise sales. What is their cultural lens? How does HP decide what opportunities to pursue and how to leverage its core competencies? They’ve floundered on this for quite some time.
• Microsoft – has core competencies around desktop software, business applications, and selling through enterprise distribution channels. Their cultural competence has always been finding ways to make businesses more efficient with their PCs. They make a healthy profit in their servers and tools division since this aligns nicely with their cultural lens. Every time they stray away from this cultural competence, they struggle. Signal vs Noise businesses (Bing) burn cash and Entertainment (Zune, Xbox) operates at break even.

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Why Education Startups Do Not Succeed

Why Education Startups Do Not Succeed

 Avichal co-founded PrepMe in 2001. They were one of the first education companies online and the first purely online, personalized platform. They were acquired in 2011 by Providence Equity-backed Ascend Learning. In the last month, he has had 3 VC firms bring with their partnership about education and 6 independent entrepreneurs reach out to me about their new education startup. This is a summary of what he tells them in person. 

Clearly there are nuances around education policy, economic policy, technology, and more. 

Summary

• Most entrepreneurs in education build the wrong type of business, because entrepreneurs think of education as a quality problem. The average person thinks of it as a cost problem.
• Building in education does not follow an Internet company’s growth curve. Do it because you want to fix problems in education for the next 20 years.
• There are opportunities in education in servicing the poor in the US and building a company in Asia — not in selling to the middle class in the US.
• The underlying culture will change and expose interesting opportunities in the long term, but probably not for another 5 years.

What Entrepreneurs and VCs Think

“Education is ripe for disruption. Technology and great products could make education so much better. If a product like Blackboard or University of Phoenix can succeed, then imagine how great a company you could build if built educational products like Apple does for consumer electronics!”

First, let’s qualify what they’re saying here. Almost always what they are really saying is “consumer, Internet, online education in the Western world is ready for disruption. Everyone is online now and everyone gets an education, so clearly there are massive businesses to be built.” They probably aren’t talking about education in Asia because the companies in that space are started on the ground in Asia. They most likely aren’t selling to schools, districts, the government, or universities. VCs usually don’t like to invest in businesses that sell to the government until those businesses are big (at which point it’s really a private equity deal, not a venture capital deal). Angels will invest in education companies because they’re more motivated by making a difference, not by making a big return in 5 years. For now, let’s focus on US and European online education targeted at consumers.

Why they are wrong

The average person in a developed country does not think about education the way a well educated VC or entrepreneur thinks about education.

VCs and entrepreneurs tend to be well educated. Well educated people think about education as an investment. You put as many of your resources in to an investment as you can. It may take 20 years to pay off, but if the return-on-investment is high (which it is for education) then you invest. This group of people — if you’re reading this, you fall into this group — generally understand that education is an investment, and as a result are price insensitive and will optimize for quality (a higher return on investment). For this group of people, quality is the primary driver of a purchasing decision, not cost.

The average, middle class person thinks about education as an expenditure, not an investment. It’s something they have to do because it’s mandated and the lack of the highest quality education hasn’t negatively impacted their lives in a meaningful way. Step back for a second before you judge. Imagine it’s 2005, and you live in a small town in the middle of Ohio (where I grew up) and you don’t get a college degree. If you get a factory job and make $25k/year and your wife gets a factory job and makes $25k/year, you’re making $50k/year. But houses only cost $90,000 and food is affordable and you can get a loan for a car for $300/month. So you’re not doing terribly and the default state for your children is the same life. You can afford a house, food, have a car, and have weekends off.

So, what has the lack of an education done to the typical American’s life? It’s removed job security, screwed your retirement, and maybe set you up to go bankrupt if you get sick. There are no immediate consequences, there are no immediate consequences for your children, but there is an immediate cost. So the average person thinks of education as an expenditure. If you get sick when you’re 70, you’re screwed. Or if you don’t save in your 401k, you may have to work till you’re dead. Or maybe your children won’t be as competitive in a global workforce 30 years. Don’t believe me? Only 15% of kids taking the SAT pay for an out of school test prep course like Kaplan. Over 50% of Americans don’t have beyond a high school degree.

This fundamental investment vs. expenditure mindset changes everything. You think of education as fundamentally a quality problem. The average person thinks of education as fundamentally a cost problem.

What does this mean for education companies?

Educational companies that focus on delivering higher quality solutions to consumers will not scale to the mainstream. Educational companies built around driving down costs to the end consumer will scale. Or a corollary, an enterprise sales or government sales company that taps into government revenue streams will scale but will not have a consumer Internet growth curve.

Let’s look at some data from the marketplace:

• Chegg – A company that is in education and sells to consumers. A $1 billion valuation and growing quickly. But, Chegg sells you the same textbook experience for much cheaper. It’s a great consumer focused business with offering real savings to students. Note that even in 2011, the “Netflix of education” is booming because of the equivalent of its DVD (physical textbook) business. Digital, personalized learning online or tablet based, interactive, social textbooks aren’t anywhere to be found.
• University of Phoenix – $6 billion market cap. They make it easier to get a degree because it’s convenient and subsidized by government backed loans. Consumers make the decision but ultimately the government is footing the bill. They aren’t a consumer company and they are a marketing machine. They are a company that makes it easy to get the same quality diploma that you would get at the local college. They don’t compete with Harvard, they compete with the local university that costs more and only has on campus night courses. They weren’t an overnight success either; UofP was started in 1976 and they IPO-ed in 1994.
• Kaplan – they didn’t get huge because of their test prep business, which is a consumer business and (arguably) delivers educational value. They became huge because they started following the University of Phoenix model for Kaplan University. Again, the primary value they offer is not quality of education, but convenience.
• K12 – they are not a consumer, online education company. They sell to school districts and their model revolves around being able to drive down costs for school districts in their high cost students — special needs, gifted, rural, etc. They have built an interesting consumer business overseas — in the Middle East and Asia.

Here are a few examples of companies that tried to do consumer Internet style education plays and how it worked for them:

• TutorVista – started by offering online tutoring to Western students using tutors in India. All you can eat for $99/month or so. They burned millions on search engine marketing and were able to build a business that generated eight figure revenue — nice but not enough to IPO on. So they pivoted and opened education centers in India and were acquired for $213 million by Pearson. A $200+ million acquisition in India is unheard of.
• Tutor.com – started a decade ago to offer online tutoring to the masses. Never went mainstream, even after 5 rounds of funding. They’ve built a niche business that survives through deals they’ve struck with various government bodies — libraries, schools, etc.
• GlobalScholar – started by the CEO of Drugstore.com, tried initially to do a direct to consumer play. Realized it wasn’t working and bought an electronic gradebook company that works with schools and was sold to Scantron that has great distribution with schools.

There are dozens of examples of companies that have tried to build around quality and hit a revenue ceiling in the few millions. Think about the 10 local tutoring centers in your city that probably make $1 million each. This early traction is very misleading because you see engaged, happy, paying customers. So you assume that it will scale but it turns out that this business won’t scale because your early adopters behave fundamentally differently than the mass market.

An Aside: Being Asian or poor changes your perspective

Yes, this section is a little hand wavy and full of generalizations. These are observational insights with some data points that show the generalizations are directionally accurate at the end. This is not a rigorous sociological study, so take the generalizations for what they’re worth.

If you’re living in most of Asia (South Asia included) and you don’t get an education, you’re screwed. Part of this is cultural (you have no social capital if you’re not well educated) and a lot of it is economic (if you don’t have an education, you will do menial labor and not have enough money to feed your children). Consider the difference between some random person in China vs. some random person in Kansas. If the Chinese person doesn’t get an education there’s a good chance they will not get a job. They will die poor, unable to adequately feed their children, and unable to take care of their parents (since the model is that the young take care of the older members of the family). But if they do get an education, they have a shot at a good life — call centers, banks, government jobs, the army, etc. And if it’s too late for that individual, they know that they can give a good life to their children. The non-college educated person in Kansas probably won’t have a great life and a secure retirement without an education. But they, their children, and their parents probably won’t die hungry and homeless on the streets of Topeka. This cultural mentality is carried over to many Asian Americans via immigration. This is not universally true, of course, of Asian Americans but there is no denying there is a strong correlation. So if you want to start a consumer education company in Asia, you can make it work and make it scale — MegaStudy and Kumon are two great examples. However, there are not enough Asian Americans to support the same scale of business in the US.

Being poor also changes how you think about education. Interestingly, in the US, the people who are most willing to try new things are the poor and uneducated because they have a similar incentive structure to a person in rural India. Their default state is “screwed.” If a poor person doesn’t do something dramatic, they are going to stay screwed. Many parents and teachers in these communities understand this. So the communities are often willing to try new, experimental things — online education, charter schools, longer school days, no summer vacation, co-op programs — even if they may not work. Why? Because their students’ default state is “screwed” and they need something dramatically better. Doing something significantly higher quality is the only way to overcome the inertia of already being screwed. The affordable, but poor quality approaches just aren’t good enough. These communities are on the hunt for dramatically better approaches and willing to try new things. Unfortunately the poor don’t have a lot of money to spend so servicing this community requires selling to the schools, which is an enterprise sales type of business — not a consumer business.

Consider Kumon, which is worth almost $1 Billion. They started in Asia, they are essentially a franchise model that caters to well educated parents, and a key part of the value proposition is in giving students a place to go and be supervised (babysitting!). It’s a great business that serves 4.2 million students worldwide. Of this, about 200,000 are in the US. The overwhelming majority are in Asia.

It’s not a perfect dataset but the Quantcast data for Khan Academy’s US demographics support this. The people going to the site are:

• the already well educated who value education and want supplemental resources
• Poorer (which unfortunately correlates with being African American and Hispanic)
• Asian

Education is a huge market and there are opportunities

Clearly education is billions (trillions!) of dollars. There are lots of opportunities, especially if you take a long term view of it and want to build something meaningful for the next 25 years. However, don’t make the following mistakes:

• Don’t believe that building a better product will make you successful. Delivering something for cheaper will. Even if that cheaper thing is lower quality. This is usually repugnant to most well-educated entrepreneurs.
• Don’t start in developed, western countries because that’s where large, Internet businesses have been built. Asia is a much better education market if you want to target consumers.
• Don’t take VC funding because the growth curve in your education business will not live up to VC expectations early on. Take angel money from people who want to make a difference in education. Then take private equity money once you’ve figured out how to get to $10 million in revenue on your own. Even better, don’t take any PE money and grow it on cash flows. Successful education businesses are often not capital constrained.
• Don’t target suburban or urban, middle class users with disposable income. You’ll build a niche business that can’t go mainstream. Target poor students in the US and get to charter schools who are desperate to try new things. Target families in China and India where a family will put down half of their monthly income on education. Or target people who really value education and will pay 10x more for something that is higher quality. That’s where there are big businesses to be built and a willingness for new solutions.
• Don’t expect a quick flip or quick growth. Building a large, successful education company will take 20 years. The growth curve will not be like an Internet technology company until you hit $10+ million in revenue. Then things will ramp  quickly because you will have identified your core market and built the beginnings of a brand; the education industry is small and people will know if you deliver real value.

Some Additional Reading

I threw some numbers in here. A lot of it just stuff I’ve read over the years but I tried to track down some stats on things that I thought would be harder to believe for the people who will find this article.

• http://www.nacacnet.org/PublicationsResources/Research/Documents/TestPrepDiscussionPaper.pdf
• http://www.census.gov/hhes/socdemo/education/data/cps/2009/tables.html
• http://ec.europa.eu/education/pdf/doc274_en.pdf
• http://joeseoulman.blogspot.com/2009/03/more-spent-on-education-and-more-on.html

Reliance Strategy

Business Strategy

15th September

Dr. Harshad Manakd  

Lehman has filed Bankruptcy

Bank of America and Merril Lynch deal is almost final. Today when the markets open , there will  be dios in the market. Bse in down by 750 points down. Overall environment is in PANIC and every other market is falling. Bank AM may loose out and it will make a negative impact.

USA has to somehow saved this. AIG has already asking for 40 billion $ which signals that market e signals are dangerous. Hundreds of jobs are immediately lost. The prognosis is not very god. The situation is bad.

Reliance strategy

1. Here was a man "Dhirubhai" who was almost no body. Wen over to eden an works at the petrol pump and worked as a distributor and remained over there for almost 8-9 years. He made a statement that one day I will open my company. Came back to India in 1969 and dabbled into spices and then textile as a wholesaler at mujijeo cotton exchange. He was into the wholesale market. The Parsi gentleman who refuses his admission was NUSLI WADIA. When he plans to enter into systematic manufacturing of textile. Wadia has the backing of TATA's.  They kept on fighting with them in 1980. He established VIMAL and brought new IPO. He was within the close circle of Indira Gandhi.

1. Whether to cultivating a politicians is ethical or not. Businessmans and politicians were arms in gloves. Today the same Ambani's were vying for the same thing. Suddenly Mukesh Ambani found …the price they have asked for..to better support to Anil Ambani.

1. Dhirubhai supported Mrs. Gandhi. He was a matriculate from Gujrati School. But he embodied nursery rhyme. Classical case of Vertical Integration. First he sold the cloth. Then he make the cloth , then chemicals, then petrochemical and then Refnery(The feed stocks of the petrochemical). He went in an put in the the Refinery. Reliance petroleum is the

1. How could he get the success. He created the stock market culture and he sold shares and trust to people. People were ready to give anything that he wants. He was playing a very peculiar way in a different manner. Chryssller was on the verge of the Bankruptcy. In 1962.

1. The oil price went to 38$ and Chrysller was on the verge of collapse. Because on the other side there was FORD. One find morning FORD called CEO "LE aya cocha". He was surprised and ford was arrogant enough to say on the record that I don’t like your face and he just walked out of the gate and walked into Chryslller and accepted as CEO with the salary of 1 $. HE was a Democrat and had good links with the Jimy  Carter.

1. Chrysller paid a beautiful of the Debt Equity game. Dhirubhai played this Debt-Equity game much smarter. In 1980's in India the long term funding was into the Public sector. IDBI , ICICI and IFCI were the major lender for their capital along with the states corporation. The Debt -Equity ws in the ratio o f 2:1. Every time he raise 100 as equity and go to the bank and asked 200 from bank. Then again when he bypassed the limited of debt , he again approached shareholders as convertible debentures. But with the options that after 18-24 months you have an options to convert into the shares. So you have the choice of converting it into share.s and reaised 300 rs from public and debt equity ratio rose frm 5:1. Ambani family had only 10-12 % holding. Dhirubhai used to give always higher dividend and always kept higher prices and jacked up the prices and kept the shareholders happy.

1. As a supplier , u wont be able to get money for 9 months. Hence they offered shares  to them, was a big debtor but reliance was always cahed out but always paid in the form of shares. Afte r18 months , Shareholders used to receive a letter from the sahreholders to convert it into the shares. They were very willngly converted into shares. Hence debt of 300 become shares. Hence Debt 200 + 600 and Equity 100 + 300 and this chain reaction continues.

1. Everybody was happy and he manipulated market very well. And there was a Swing. Between 1980-1988 reliance issued 10 series of convertible shares and amassing public money and kept on investing this money. He invests the money at the plant in Baroda (Vimal Textile). So What he would do , He says he wants to project A. He will money making proposition.. Then A is on. But the money collected for A was spent else where. Hence he went ot the market and told that he wll make now. He made a money lending cycle , Reliance is a Finance and Project company. w/o being over run. Then Naroda was on and then to complete naroda ,he made huge plant for reliance. He was really adding the equity and thereby increasing the borrowing capacity. Huge fundflow for the pant. He always invest into the best technology. He build a plant of capacityof 10 k ton where the capacityof the country was 6k ton.

1. His Thinking ws what would be the demand was 5 here hence.The Mobile is cheaper because of reliance. They said they are going to have 1 crore subscribers and ordered it to NOKIA. That’s what reliance did and had 60 lakhs connection and suffered lossed. But recovered fast and are in the race with the Bharti. Now we have 20 Crore connection. This market has been created by Reliance. Aditya Birla ..Dhirubhai at 27 then 60 milion ton refineries. Bharti laid 12000 km OFC and Reliance laid down 60,000 km OFC. Reliance strategy was scale. In the sector you are in , It’s a number of hits that matters. The marginal cost is very little. When you got the first netscape , how much of the second copy cost. An dthe CD cost have come down.

1. Economics of IT is economics of numbers. Dhirubhai understood this very quickly. He said the extra cost wont be that much and the incremental cost was only 40%. That’s y he talked about world scale. So he made the yarn factory and it was talking time. He planned to make chemical along with yarn at Patalgana. Only SPIC and IPCL were the only 2 companies making petrochemicals. IPCL was a great company always operated at 100% capacity.

1. Patalganga was into operation and found that the technology (DUPONT technology). The quality of the product was very good. And they asked the price. They said why do you want to worry about the price. They knocked out the IPCL price from various place to place. They offer 1000re discount per ton ..against the previous invoice of IPCL. They captured 40% market share. The CEO of the IPCL failed to change the prices and by one stoke of genius , They got the IPCL prices. They got to know how they were operating. IPCL dod a mistake of going close to Dhirubhai. They again put up a plant near patalganga at NAGOTHANA.

1. The engineers of patalganga and naothana had same places. Reliance directly recruited people from IPCL in the MARIO_PUXO style. The offer you can t  reject. They always went for the higher salary and steal people. The same way Americans did. Hence IPCL (all Ppl) went to Reliance. Then 5 years back, Reliance took over IPCL and is been merged totally.

1. IPCL has over employment and merger problems would occur. JP Morgan didn't recruit 1 out of 18000 employees and all went home in this game. Reliance went into an agreement and said there would be no retrenchment. The other party kept quiet. They had 12000 plant and said such a plant don’t need more than 6000 employees. Hence reliance invested another 50o crore and no recuitment. Today IPCL plant is as effective as patalganaga plant. They just double the investment. They built patalganga. They knocked out th market share. In 1987 ,There were major floods in Maharstra. Patalganga is a river and flooded Reliance and Bombay Dyeing on both the sides. Mukesh was at patal Ganga and couldn tcontact dhirubhai. In 12 0 clock midnigh t, He shouted that these guys at DUPONT are a big hurdle. They said this plant wont survive for more than year. He said tom when the water recede , I will receive. He said they would be very happy to go. Dupont engineers were thrown back. He said the scrap the damaged plant and replace the plant with double capacity. And didn’t paid import duty. That’s how they build. The plant was recovered in 20 days. Gurumurthy found that they had imported and for 6 years they didn’t paid an import duty and paid 250  crore as penalty. At that time he got double capacity in 20 days and Bombay Dyeing didn’t start for 2 years. They were making the same product but were using different technology.

1. GOI , Increased import Duty against Wadias raw material. What happen after was…..Dhirubhai ..announced to make another plant RPCL in Hazira(a plant of bigger size) and public issue financed it. Now Hazira started getting built. Patalganga had money to hazira but there was a spoilsport. FM Mr. VP Singh. He was the FM and brought a very peculiar provision of deemed dividend. He brough ta tax that if one company gives money to the sister company , it would be deemed at dividend and required to give 47% tax. Patal ganga had money and could nt transfering funds to feed Hazira. As Hazira had to be built. That was the time , Banks were on the hight for the mutual fund. One bank that was nt established was BOB. All the Chief of Banks were dhirubhai friends. He advised BOB to start mutual fund. U need some good securities and BOB went over to LIC and GIC. LIC is a very power cash company and very efficient. LIC was holdin ghuge portfolio of its own. He said we want a particular security called L&T. They were holding 54% holdin gof L&T.. BOB asked for 12 % and sold to market price to BOB. BOB mutual purchased it from LIC and transferred to trishna investment firem (DHIRUBHAI AMBANI). By Virtue of 12  %, dhirubhai became the chairman and he took all of Mukesh * Anil to the borad and passed a resolution. That L&T will build HAZIRA on the Deferred Payment basis.L&T wentfor its own public issue for 8400 crore and Signed Dhirubhai chairman. It was a Reliance company hence it was oversubscribed due to Dhirubhai Ambani.

1. One thing DhiruBhai didn’t anticipated that ….Rajiv Gandhi lost in 1990 and same VP Singh become Pm and Mr. Madhu Dandwate became Fm. They found that public sector companies are holding 60% and Relaicne only 12 % but ..he is chairman. They asked for EGM and stalled this plan. Dhirubhai knew that …it wont possible. Hence made peace with Governement and cancelled the resolution at the board level. NO Hazira expansion and IPO money cont be used.

1. L&T was already sitting on the 400 crore as the initial money. They didn’t asked for the further money. And gave all people fully paid share. Henc ethey went for the Cement Industry to utilise the Idle money. They did very good business and 33% of L&T revenue came from cement. BCG advised larsen to Exit from the cement business. Birla came into picture and Century bought 12 % stake from AMBANI and made huge pile of L&T money.

1. That didn't prevent dhirubhai , within 15 days , Lawyers werein the court fo rthe merger of RIL and RPL and there was nothing that governemtn couldnot stopped them t merger. There was a big elaaoboo…but overwhelmingly they voted for the merger. Once it become one entity , there was nothing to stop them to use the surplus money. Hazira plant went in full steam.Still it was short by 600 crores. Henc ethey float 2 new comoany RRPL , RPEL for 300 cr each . Which were oversubscribed and took money. And wthin 1 years , both were merged in the RIL fold. They have got the information fom within the government in Advance for borroing overseas. They were ready with due dilligenc e and went for the GDR. It tool 9 months fo rAditya biral to go fo rGDR.

1. Ambani was on the paralytic attack adnwas badly hit physically. From 1990 to 2004 when he was died , he was working at 25% of his capacity. This happened in the march, Dhirubhai with the speech thrapist went to switzlerland at practised 2 min speech for 6 hrs (2 months) for the Kukerage Stadium AGM. Came the AGM days , Dhirubhai was on the Dias and here was dhirubhai was sittng out there and Mukesh walked up to him and He refused to receive his hand and delivered 2 minutes speech and audience was absolutely in GAGA.

1. Had he not given Speech , Relaianc ewould have collapsed. His detractors would have taken hell out of relaince.

India's world class corporations

1. Gita Pirama said , in 1990 Dhirubhai said "Future lies in Communication". While diging the OFC and got into the partnership with railways. 20 meters on the either side of the track …..was of Reliance. They had blanket permission all over the country. Once those 60,000 was in the place. Reliance entwined around Anil's finger. Its all r going to go to Relaince. Today Bharti buys OFC's from reliance. Mukesh laid 4000 km of pipeline. And that pipeline is used for distribution for IOC , BPCL and ONGC. Now GOVT is  paying. After the brothers split , first purchase of ADAG was ADLABS. But a very smart move,  Hritik. Recently they bought ND studios and paid 150 crores. An dAnil said this studio will rival any hollywood studio. Narendra Desai got 50% stake int h venture and better than Ramoji. And went into the agreemtn with Speilberg.

1. Piracy is an issue. But once the infocom is ready (matter is few month) the movie maker will make one DVD and that one DVD will shpw more than 1000 shows every day. Only 50% of the OFC's will be used. He is going to control 50% DATA traffic of the country.

1. Anil is doing has a synergy in what he is doing. RIL has straegised ………MUDRA ADVERTISING (A G KRISHNAMUrthy)

Suzlon Energy – Winds of growth

date - 12 july 2008
Macro - dr. mankad         Session 10

Due to iran missile test , crude oil has gone up to 10. As our oil prices are climbing , our economy will derail. With high inflation , the current government will nt be able to survive. The destability of the governement and the political scene does have the adverse impact on the socilology and economy of the government.
The dethroning of Rajiv gandhi government is the live example of that. After rao , due to economic turmoils and political unstabilities , we are continuously having political uncertanities.
The kind of political uncertanities this will

The nuclear agreement has some valid reasons , why anil kakodkar is endorsing. What is going on at viena is remarkable. USA need as much as india in the agreeemt.
Nuclear reactors demand fuel, tough which we have fuel but not enuf. tarapore is obsolete. remem chernobyle , radioactivity can create havo with the health of the people. Countries like norway and japan ..faced the
We cant build new defense nuclear installation. We have to identify the installation of the defense.

Tarapore is already leaking and working at very low capacity. Coz govt. is neither obliging and providing information on tarapore. Thats y maharastra is facing acute enery scrisi. We have not repaired for the growth. we were not ready for the growth.
in India , we found defeciencies of infrastructure. Power def. is rubbing off our development in a very serious way. Economics is a tradeoff. china took major initiative in power. But had major pollution problems due to the power plants. 11 out of 20 cities most polluted ..is in china . beijing ..

Hydel power is a cleaner way. Its requires manmade ..KOENA (MAH.) is a marvel of engineering. River Mulamotha has been put on the escalator. They have raised the river and put it on escalator and generated the man made water fall and put it on the turbine. tremendous amount of tenecity ...but we had to pay the price ...for the geological...distubance. One of the very major reason for earthquakes....we tampered worth the crust of the earth.

Oil and power electricity is getting costlier. Gas fired and nuclear energy ..if u discount the danger ..of nuclear hazard . its a very clean energy. It doesnt affect the environment. It doesnt affect the coomunit in the neighborhood. It happened in USA (pre-mier island) they shut the plant. In the early phase of USA ..they start dumping nucleat waste in a very quiet manneer..in the place called LOVE CANAL in the north america. Essentially old people ..community developed out there...discovered that the radioactivity buried in the ground , affecting their health and creating cancer.


gas is another form , which helps. USA-INDIA nuclear pact , we have decided to build a major pipeline bwn IRan and India. Iran is a major factor in india's foriegn policy. If we are talking abt energy , we are talking abt iran, IRAn is the second largest oil producing nation. Iraq is still not able to market their oil. rebels are destroying pipelines . and oil is not able to reach BASRA. Oil is a product of geopolitivs.

Iran is a bone of contention and a major threat to saudi arabia. USA is very comfortable with shah of iran. Ayatullah khumaini (1979). It became a muslim state. Still Iran is not a modern state. Here is another twist..it is predominantly SHIA . Iraq and saudi arabia --are sunnis. COz Iraq is majority shias and there is an impending danger of unification of iran and iraq. Thats y USA is playing the cards.

USA ..term Iran as rogued state. Our Foreign minister mr. pranab mukherjee ..did a commendable job in the 1-2-3 agreeement. Today there are 5 formally nuclear armed countries in the world. These are avowed nuclear states. They are producing nuclear weapons. Now USA is getting worried abt china. Thats y they are terming INDIA as a  balancing factor. I 1998 ,when we had the nuclear testing , The NSG(nuclear supplies group) came out heavily on US. and discontinued the heavy water suppply to us. Arnd 40 countries stopped the supply. Not all memebers of NSG ..can make bomb.

India is saying that our nuclear facilities , u cant get unconditional entry. India says , we have a right to make bombs and can conduct the test. USA asked us to swear away the right to conduct test. Now USA has relented on that.Thats where , ADVANI is hoarse shouting that India will not be able to conduct test.which is not the case. Agreement doesnt says. But we have to define , which all plant are meant for defense purposes and which one the are civil. We have to tell them that MUMBAi and KALPAKKAM are the defense plants. But that will make us ...

One fine morning , ISRAEL secretively demolished the serians nuclear plant. Now what prevents USA to bomb India. Why they cant even allow pakistan to demolish the same ..if we disclose the same.

Once it is passed , we will have guaranted supply. but the major bone of contention is ..When bush and manmohan met , they didnt talk abt IRAN. But in the agreement , we cant deal with iran. then what wud happen to gas supplies. We have cultural ties with Iran. In mumbai , the irani rest. were very famous. some of them are still survive. As i said , USA is nt going to like iran. for them IRAN is a hurdle to exploit oil reserves  in the southern russian countries. All these countries like turkmenistan , ..they havn't exploited the oil.As they dont have the acces to the sea. The original plan was to take pipeline to the arabia sea. The war..was the biggest hurdle. Till u have peace, it is not possible to lay the pipelines. These southern states...all these wars that USA is fighting ..for last 20 years ..is the for the oil. So long is IRAN out there , Oil will remain in LIMBO.


 What do u think , USA is not aware of where is OSAMA. It is in there vested interest to keep osama alive.

Now USA has recognised we are growing . They want us to develop a level palying field against China.

 

Iran Nuclear Issue : lecture at SPJCM Singapore

date - 12 july 2008 Macro - dr. mankad         Session 10

Due to iran missile test , crude oil has gone up to 110 $. As our oil prices are climbing , our economy will derail. With high inflation , the current government will nt be able to survive. The destability of the governement and the political scene does have the adverse impact on the socilology and economy of the government. The dethroning of Rajiv gandhi government is the live example of that. After Rao , due to economic turmoils and political unstabilities , we are continuously having political uncertanities.
The kind of political uncertanities this will

The nuclear agreement has some valid reasons , why anil kakodkar is endorsing. What is going on at viena is remarkable. USA need as much as india in the agreeemt. Nuclear reactors demand fuel, tough which we have fuel but not enuf. tarapore is obsolete. remem chernobyle , radioactivity can create havo with the health of the people. Countries like norway and japan ..faced the
We cant build new defense nuclear installation. We have to identify the installation of the defense.

Tarapore is already leaking and working at very low capacity. Coz govt. is neither obliging and providing information on tarapore. Thats y maharastra is facing acute enery scrisi. We have not repaired for the growth. we were not ready for the growth.

in India , we found defeciencies of infrastructure. Power def. is rubbing off our development in a very serious way. Economics is a tradeoff. china took major initiative in power. But had major pollution problems due to the power plants. 11 out of 20 cities most polluted ..is in china . beijing ..

Hydel power is a cleaner way. Its requires manmade ..KOENA (MAH.) is a marvel of engineering. River Mulamotha has been put on the escalator. They have raised the river and put it on escalator and generated the man made water fall and put it on the turbine. tremendous amount of tenecity ...but we had to pay the price ...for the geological...distubance. One of the very major reason for earthquakes....we tampered worth the crust of the earth.

Oil and power electricity is getting costlier. Gas fired and nuclear energy ..if u discount the danger ..of nuclear hazard . its a very clean energy. It doesnt affect the environment. It doesnt affect the coomunit in the neighborhood. It happened in USA (pre-mier island) they shut the plant. In the early phase of USA ..they start dumping nucleat waste in a very quiet manneer..in the place called LOVE CANAL in the north america. Essentially old people ..community developed out there...discovered that the radioactivity buried in the ground , affecting their health and creating cancer.


gas is another form , which helps. USA-INDIA nuclear pact , we have decided to build a major pipeline bwn IRan and India. Iran is a major factor in india's foriegn policy. If we are talking abt energy , we are talking abt iran, IRAn is the second largest oil producing nation. Iraq is still not able to market their oil. rebels are destroying pipelines . and oil is not able to reach BASRA. Oil is a product of geopolitivs.

Iran is a bone of contention and a major threat to saudi arabia. USA is very comfortable with shah of iran. Ayatullah khumaini (1979). It became a muslim state. Still Iran is not a modern state. Here is another twist..it is predominantly SHIA . Iraq and saudi arabia --are sunnis. COz Iraq is majority shias and there is an impending danger of unification of iran and iraq. Thats y USA is playing the cards.

USA ..term Iran as rogued state. Our Foreign minister mr. pranab mukherjee ..did a commendable job in the 1-2-3 agreeement. Today there are 5 formally nuclear armed countries in the world. These are avowed nuclear states. They are producing nuclear weapons. Now USA is getting worried abt china. Thats y they are terming INDIA as a  balancing factor. I 1998 ,when we had the nuclear testing , The NSG(nuclear supplies group) came out heavily on US. and discontinued the heavy water suppply to us. Arnd 40 countries stopped the supply. Not all memebers of NSG ..can make bomb.

India is saying that our nuclear facilities , u cant get unconditional entry. India says , we have a right to make bombs and can conduct the test. USA asked us to swear away the right to conduct test. Now USA has relented on that.Thats where , ADVANI is hoarse shouting that India will not be able to conduct test.which is not the case. Agreement doesnt says. But we have to define , which all plant are meant for defense purposes and which one the are civil. We have to tell them that MUMBAi and KALPAKKAM are the defense plants. But that will make us ...

One fine morning , ISRAEL secretively demolished the serians nuclear plant. Now what prevents USA to bomb India. Why they cant even allow pakistan to demolish the same ..if we disclose the same.

Once it is passed , we will have guaranted supply. but the major bone of contention is ..When bush and manmohan met , they didnt talk abt IRAN. But in the agreement , we cant deal with iran. then what wud happen to gas supplies. We have cultural ties with Iran. In mumbai , the irani rest. were very famous. some of them are still survive. As i said , USA is nt going to like iran. for them IRAN is a hurdle to exploit oil reserves  in the southern russian countries. All these countries like turkmenistan , ..they havn't exploited the oil.As they dont have the acces to the sea. The original plan was to take pipeline to the arabia sea. The war..was the biggest hurdle. Till u have peace, it is not possible to lay the pipelines. These southern states...all these wars that USA is fighting ..for last 20 years ..is the for the oil. So long is IRAN out there , Oil will remain in LIMBO.


 What do u think , USA is not aware of where is OSAMA. It is in there vested interest to keep osama alive.

Now USA has recognised we are growing . They want us to develop a level palying field against China.