Tuesday, December 01, 2009

Moonlight descent

A descent under incandescent moonlight, in the deep stillness of the midnight, over the sprawling mumbai nightlights; with twinkling stars in the moonlit sky glistening, the distinct deep blue horizon curving, cabin lights dimmed to support the descent, beside the roaring outspread wing, just capturing the moment.

Sunday, November 22, 2009

Shouldn't governments have service level obligations?

Governments, particularly in India, have an abysmal record of providing uniform high-quality services to citizens. At no place is this more apparent than in the capital Delhi, where in a drive of less than 15 minutes, from the beginning of the Grand Trunk Road to the Rashtrapathi Bhavan, one can see the entire range from stinking dirty garbage covered pot-holed roads with overflowing severs to sparkling-clean well-tarred multi-laned roads bordered with well-trimmed hedges and expansive manicured lawns.

In a democracy, the Government exists to 'serve' the people. Aside from its greater role as a policy maker, every government spends an inordinate amount of time and money providing services to citizens. It is therefore quite sad to observe that they do such an inconsistent and poor job of it.

In the private sector, mature service organizations are increasingly adopting formal service level obligations (that are clearly defined and measured). For example, airports such as Changi in Singapore, or recently those at Hyderabad/Bangalore, have formal service metrics that guarantee that an arriving passenger would receive his bags, finish check-out procedures and be on his way to the cab in so-and-so minutes; as another, most banks have well defined turn-around service timelines for check/statement processing. The formal definition and measurement helps align incentives across the organization for consistent service delivery.

To expect Governments today to adopt a similar professional service mindset is probably a tall order.

Yet changes may be in the offing - if one is to go by the recent US Court ruling on the Army Corps of Engineers, blaming them for "monumental negligence" for some of the flooding during Katrina: Katrina ruling could bring new deluge of lawsuits.

While this could still be called a one-off incident in the advanced democratic setup of the US, if a Government entity could be held responsible for failing on its service obligation, that's quite a harbinger of things to come. Imagine what would happen if some day, the citizens of North Delhi took our government to task for the neglect of their area!

Tuesday, October 27, 2009

Why do teachers focus on the best students?

If anything, it would make better sense to focus on those who struggle through lessons - the best students either are smart enough to understand their lessons and/or put sufficient effort to learn; its the strugglers who require attention. But invariably, most teachers direct their attention at the brightest. Why? I muse.

For one, it has to do with the skewed student-teacher ratios that most schools (at least in India) have. The skew causes undue effort on the teacher's attention span, so that they tend to focus their limited energies on those who are easiest to teach; it therefore, takes no leap of imagination to understand why the brightest rule - they are in sync with what is being taught most of the time, unlike the poor strugglers who gasp at the whizzing bouncers (ah! I still remember the feeling).

Another related reason, is that the best (perceived) students are invariably also the more competitive and aggressive of the lot. So in the babble of the class, the teacher's attention is more taken up by these, who end up asking the most questions and answering a bulk.

A third potential reason, is linked to how teachers get incentivized. Not every teacher is fundamentally motivated by an intent to change the world through pedagogy. For most, its a profession. A profession in which incentives are often linked to the output of the smartest student. Remember how teachers revel in pride when their student tops a school, a major examination or some day wins a Nobel! On the other hand, which teacher is ever felicitated for the poor struggler who barely managed to make it through?

To side with the teachers, one must admit the fact that teaching is a demanding occupation, requiring intense emotional (and physical) involvement and leadership skills that are no less than any other occupation. It is also amongst the most thankless. From the limited teaching I have done, I will attest as much.

So there is limited point in criticism of the teachers. But one must recognize that these behaviors do emerge, and as such might not result in the best of outcomes.

As a concluding afterthought - a personal recollection. I tend to have a quiet disposition and in most of my high-school classes, was often amongst the quietest in class. As a result, at the start of class sessions, I was hardly ever given attention by teachers, and used to struggle to catch their eye if I had a question.

Luckily for me, math and science were my strong points. After the first test or examination in these subjects, I could almost always sense a visible change in the amount of attention I received. The teacher's roving eye would sweep the class and rest on a bunch of us who had scored well.(There were even days, I thought I had perfected the art of predicting test scores in advance based on how the 'eye' swept the class!). Those days, it was often gratifying and embarassing - for along with it came the undue directional focus of questions from the teacher.

But now I look back and wonder - why, oh why, do most teachers focus their efforts on the their best students in class?

Monday, October 26, 2009

Value, a levered affair

A recent news coverage on PE returns is generating quite a buzz - Private equity’s love affair with leverage. The article cites research on 240 odd PE transactions in the European market to present some interesting findings:

“The analysis found that the value of a company typically rose by 2.71 times during the period it was owned by a private equity house, on average 3.5 years. Of this 0.88 resulted from the use of leverage. Of the remaining 1.83, 0.87 came from growth in earnings before interest, tax, depreciation and amortisation (Ebitda), some 80 per cent of this from sales growth and 20 per cent from improved margins.

Improvements in free cash flow accounted for 0.42 and the effect of a rising multiple (i.e a company being sold for a higher price/earnings multiple than it was bought for) was responsible for 0.51. However, the data suggest the importance of leverage has grown; while it accounted for 28 per cent of value creation between 1989 and 2000, this figure rose to 36 per cent between 2001 and 2006.”


The interesting point is the outcome that a private equity investor could increase a firm's value by a whopping 80 odd percent by merely increasing leverage of the firm.

Now, how does leverage create (so much) value? Valuation theory tells us that debt increases value because its exploits the available tax shield benefit. At a more deeper level, debt increases fiscal discipline in managers as they are forced to commit to a fixed claim on cash flows, preventing them from frittering around with excess cash.

The interesting question is - how could leverage have so much of an impact? And why couldn't firm managers not act on it in the pre-PE days?

One possible reason is that private equity investors have greater risk appetite than internal firm managers, causing them to be more amenable to extensive leverage. This is quite possible - not every manager is incentivized to lever his/her firm to the point where he needs to sweat the business to avoid bankruptcy risks (that arise out of high debt). It is often easier to avoid making those tough project financing decisions than to risk his/her job security from a potential bankruptcy. PE investors, on the other hand, are incentivized to do the opposite. (Note though, at a higher risk).

For another, it is likely that the PE investors went after those firms which had a poor capital structure in the first place, so they could add 'value' by levering the balance sheet. If true, it shows how poorly a number of firms manage their capital structure decisions.

The other interesting note in the article is the (last) point about PE firms being able to time their exit enough to raise exit valuations by ~50 percent! Imagine being able to time valuation cycles in a 3.5 year average time-frame - possibly the function of a rising market in the time-period of the research?

Monday, October 19, 2009

De-attachment

Why do we get attached to things and people? Despite knowing the fact that practically everything in life is impermanent.

For one, we get attached when we 'invest' in something, emotionally and/or financially, over a period of time.

Long term financial investments result in this attachment, since there is an expectation of return, particularly as the investment often requires us to forego potential alternative consumption at the time. The anticipation of returns from foregone utility creates an attachment.

Emotional investments are a little more complex and subtle to fathom.

For example, we tend to emotionally invest in the things and people we cohabitate with over time. I don't fully understand why this happens, but I have begun to practically notice this behavior in me. I used to think of such things as hocus-pocus, but it is interesting when such things begin to take effect.

One potential (rational?) reason could be, that when we take 'care' of things or when we build relationships with people, we make some form of an emotional investment, and inherently anticipate a future benefit from it - which causes the attachment.

Another variation is attachment to work. Hindu philosophy (to the limited extent I know) propounds this concept called 'nishkarma karma' - to indicate an ideal state of detached 'desireless action'.

But, I am beginning to learn that doing exceptional work requires some measure of attachment. One can do good work, or even great work by remaining detached from the outcomes, but doing 'exceptional' work requires a certain level of passion and dedication - that a detached mind finds hard to muster. In early days in consulting, I was advised that the true hallmark of great consulting lies in emphathizing and taking responsibility for a client's issues like 'they are your own'. Now, how is a detached individual supposed to accomplish that?

Is 'detachment' just an unattainable idealistic conjecture to account for the impermanence of life - for the failures we encounter, for the individuals we must separate from, for the things we must let go - or is there truly a feasible state of detached living?

Tuesday, August 25, 2009

When in doubt, price up.

In the absence of other information, price is a powerful signal.

I went to a snack shop today to get some pani-puri. The shop keeper offered me two variants - one made of maida and another made of wheat flour. Now, I knew nothing about the difference between the two (and neither did the shop keeper). But the one made of maida was priced at Rs.10 while that of wheat was priced at Rs.12. I ended up choosing the one made of wheat.

Why? Practically, I'm indifferent to either price. But the costlier wheat variety made me think that it must have something better in it, that made the shop keeper price it higher. So why take a chance with an inferior variety.

The interesting thing is, I have seen this effect in a lot of decision making - particularly where there is limited associated information (other than price) that can help differentiate and decide. Restaurants - same food, but the pricier ones seem always better. Cars - same drive (and particularly if I don't know the specs), the pricier ones are always an envy. Even laundry services - somehow I've figured after a year of experience that the cheap dhobi who comes to my apartment does as good a job as the professional shop that charges 10 times as much - but why do I pay the professional guy so much more?

For one, price is itself a signal of quality. Price is a derivative of value of a product or service - if the seller himself undervalues his offering (and given that he always has more information than the buyer), why should the buyer, in the absence of better know-how, think otherwise?

Secondly, the absence of information creates a perception of risk. In the pani-puri example, why should I take a chance with eating a poorer variant when I could pay marginally better and avoid a health hazard? Or in the dhobi's case, why take a chance with my pricey clothes when I could pay but a small percentage of their cost to prevent the risk?

Third, is a sort of self-fulfilling prophesy effect in intangibles, wherein my belief in the better product/service due its higher price influences my experience, causing me to enjoy it better, which in turn reinforces or fulfils my belief. A costlier hair-cut feels better than a cheaper one (though in practice, there might be no difference at all), because I force myself to believe that there must be a reason for paying more, which influences my enjoyment of the service.

In sum, price acts as a strong signal of the quality of the product or service. So when in doubt, price up.

Saturday, August 15, 2009

Of salad days in Srinagar and lingering summers in Leh

| pagudhi moondru (part III) of the kashmir varalaaru...

Leh GateLeh, a city set amidst the vast barreness of the Ladakh plateau, besides the meandering Indus river; a city filled with tourists from all over the planet, with Tibetan handicrafts and culture all around, and nice smiling people. The most backpacker-ish destination I've seen in India - milling with European, American and Asian crowd - almost reminded me of Thailand.

The Leh palace, a beautiful multi-tiered, though dilapidated, structure overlooking the city, with a further steep climb up to the Namgyal gompa. The Hemis monastery, with its stunning views of the city, its environs and the airport.

The Khardung La, the world's highest motorable pass, covered in snow even during summer. The sweet kashmiri-ladakhi kahwah. The yellow mustard flowers adjoining meandering rivers.

Nubra Valley, LadakhThe Nubra valley. The ride along the river bed enroute to Siachen. The tall monasteries in the middle of nowhere. With smiling, red and yellow covered, monk kids. So intensely quiet. Why do people live here? So far away, yet so happy?

A camel ride on bactrian double humped camels on white sand-dunes at 10,000 ft, beneath the snow covered mountains. Meeting school kids from the US doing social service and backpacking women from the Netherlands, in the middle of nowhere. The long discussions and debates late into the night, on life, universe and everything, beneath the star studded lucid night sky.

The Chang La, the world's third highest motorable pass. Its smiling Indian soldiers who serve free kahwah and biscuits to the worn-out traveller. The ride along meandering dry river beds to the Pangong Tso. The sighting of the Himalayan marmot.

Pangong Tso, LadakhThe Pangong Tso, the world's highest freshwater lake (why is everything the world's highest in something here?). Crystal blue and hued in myriad colors as the sun passes by. Incredibly quiet, and icy cold. The hot maggi served to the parched throat by the restaurant beside the lake.

Thikse Monastery BuddhaLeh is a place at peace. Despite its bustle, it has an omnipresent feeling of eternal peace, that permeates everyone who passes. May be its the people, maybe it is its isolation and barren beauty, maybe its the monasteries. Om Mane Padme Hum.

Thursday, July 30, 2009

Of salad days in Srinagar and lingering summers in Leh

| part II of the kashmir chronicles ...

The bus to Leh takes a slow, winding (and sputtering) route to Kargil, along the banks of the Indus river. I met a couple of American backpackers on the bus with whom I was to share much a friendship later, a couple of Indian travellers with whom I was to share much a smile, a triad of Portugese with whom I was to share hardly a nod, and the bus driver and its conductor who became my guide on the long ride.

Now I have this zest for photography, nothing serious, but a whimsical fancy that comes to the fore everytime I travel. Early into the ride, not content with getting an aisle seat, I managed to secure a place right next to the driver, that gave me an expansive front view of the route. The seat also bought me the cameraderie of the driver and his chummies, who spent the ride explaining the intricacies of the way.

Baltal from Zoji LaThe road to Leh snakes its way up the hill via Sonmarg, up the Zoji La pass and downwards on to Kargil. The route is dry and barren, but with a stunning scenery of exotic grey-brown and enormous mountains and the blue indus river snaking beneath. At many a section along the route, it seems the road is exposed to firing from across the border, something the driver took great glee in pointing out to us grave-faced folk (but of course, these are peaceful times). And at many a point along the route, are memorial stones of Indian soldiers who have laid down their lives in the multiple wars that the two nations have fought.

DrassEnroute Kargil, is the infamous town of Drass, epicenter of the Kargil war that took place a decade back. Today, the town is yet another small township, with a small teashop, a quiet police station and an exquisite J&K tourism board indicating that the town is the 'second coldest inhabited place in the world' - bloddy hot in summer though, I must admit. Outside Drass, and enroute the town of Kargil are military memorials to the decade old war (yes, it occured exactly a decade before - 1999 was the year).

Kargil townThe Kargil township itself is a narrow, though bustling, market intersection with a bunch of shops and houses crowding the hillside. This was our night halt. Interestingly, the place has quite a few decent hotels, cybercafes and restaurants serving everything from Mughlai to Chinese cuisine and playing old Hindi songs.

Early in the morning at 4 am, vary of my keylong morning dog-chase last year, I made my way, with trepidation, in the darkness to the bus. Thankfully, Kargil had quite a few early birds, up to catch buses, none of whom were dogs.

And what a roar the Indus makes in the quietness of the morning twilight!

S-curves enroute LehIt was another day's journey to Leh, a day through dry mountainous passes, through 21S-curved roads, along the edge of tall gorges, with exquisitely shaped mountain ranges colored in red, green, blue and yellow!, through a monasteric Ladakhi landscape and along the omnipresent Indus river. The apricots were sweet, the weather hot, the driver amusing, the company interesting and the ride, unforgetful.

This is a ride people must undertake, if only to realize that beauty exists even in the dry barreness of mountains and in the craziest, remotest of places. As I was to realize later, Ladakh would remind me of this over and over again.

...

Of salad days in Srinagar and lingering summers in Leh

It was a spur of the moment choice that I decided to hoist my bags and head out to the Kashmir valley. I had a week's alloted vacation, no particular destination in mind and was nursing a loathful grudge against a certain visa officer who chose not to stamp my passport in gay abandon.

The flight to Srinagar took but a passing hour; the cab ride to town with a cowboyish driver, almost half. A hotel on the banks of the Dal Lake, lay roomed beneath a temple hill.

srinagar flower sellerSrinagar seemed so different from other Indian cities. Inherently pretty, the charm of a place still apathetic to the passage of time. The Dal Lake with its innumerous shikaras and multitude of boats, yet so peacefully quiet. The kahwah tea, with its cinnamon, cardomom and saffron scents, that I so fell in love with. The Mughal gardens, so serenly beautiful, wistfully reminiscent of a bygone era. The Shankaracharya hill with its all-encompassing views. The warm kashmiri people - never else across the country have I seen such care and affection for a wandering traveler. And finally, a choking military and police presence, a lingering tension in the air and in words, a smoldering war zone feel to an otherwise incredibly beautiful place.

And yet, Srinagar seemed so similar to other Indian cities. People crib about ineffective politicians. Autos and guesthouses fleece you, unless you bargain. People dump garbage everywhere on the street. People love watching hindi soaps on TV all the time. And all buses belong to the last century.

Gulmarg GondolaIn such a bus I made the trip to Gulmarg (and later to Leh). Gulmarg is a small hill-station, some 50 odd kilometers from Srinagar. The slouching bullock-cart of a bus sputtered its way to Gulmarg over a leisurely 4 hour period. Slow enough, for us to savor the white-daisy studded green meadows and the tall deodar trees covering the route.

Gulmarg has a two stage Gondola that goes all the way up to the snowline and to the edge of the Line of Control of India. The top was all snow, even in the summer heat. The LOC, an unseen border between two nations, with military huts on either side. The first Gondola stage is in fact, more pretty than the second, with lush green, horse grazed meadows and tall verdant deodar trees beneath the snowy mountainous peaks, as if out picked out of a pretty painting. Stood I, staring there, for many an hour.

... part I of the kashmir chronicles |

Monday, July 13, 2009

Leaving money on the table

Pricing perfectly is a science, nay an art.

I just realized how difficult it is to price something well and not leave money on the table when I paid my laundryman. The guy charges the lowest prices per piece I have ever seen anywhere in the country (and by extention anywhere in the world). His prices are atleast one-tenth the prices I would pay if I took it a professional shop thats a 10 min drive from here. And the poor guy ends up borrowing money in advance to tide over his expenses during the month.

Clearly, he could easily raise his prices without losing customers.

Or can he? Now, he is one of the two laundrymen who service the apartment complex where I live. And both of them charge the same rates. If he raises his prices, there is a good chance customers could switch.

So whats his way out?

He has two basic options. One - collude with the other laundryman to raise prices. Or Two - start differentiating, for e.g. offer a premium service at a higher price point and attempt to move customers up.

Again, how much could he raise prices?

Pricing theory says one could raise prices all the way to the point till customers see value, capped by prices of comparable alternatives. In this case, if I were a representative customer, he could raise prices almost 10-fold (assuming he could match the professional service shop) or atleast 2-3 fold at his current service level. I'd imagine that the money he's leaving on the table could solve most of his monetary problems. But does he realize it?

One factor in this is the availability of quality information. A lot of pricing that happens in practice (even in large firms) is through benchmarks. For the laundryman, the only comparable is his competitor. And this makes him leave money on my table.

This underpricing is something I've noticed in a lot of the unorganized labor in the place where I live. And this is quite sad for it feels almost exploitive to be keeping back money from people who are more in need.

Finally, it is interesting to look at professional services available in this town. Quite a opposite to the unorganized, they seem to follow the maxim 'when in doubt, price up'. With scarcity on their side, they rule the roost. To cite the contrast again, I've never seen professional services priced so high anywhere else in India.

Gurgaon is an interesting city.

Thursday, July 02, 2009

The firm of the future

Warning: Idle rambling ahead.

Outsourcing is today, a nascent phenomena, atleast to the general public. Beyond the standard hulla-balloo that is heard in the media on outsourcing and the loss of jobs in the US, most are largely ignorant of its play.

What is interesting about outsourcing is its impact on the structure of the firm. For something that started out as a means to delegate fringe services (non 'core', as they used to be called some time back) to third parties as a cost and headache reduction measure, its interesting to see how widespread its impact is, today. From running entire IT setups to large parts of firms - I've even heard of new firms being setup from scratch in a totally outsourced manner - outsourcing is today an integral part of the structure of the firm.

In effect, outsourcing service providers are turning into service factories - that can take any proven business operation/process and industrialize it to run it faster, better and cheaper.

The only thing that's not yet been ever outsourced is the conceptualization or the ideation of the firm. Entrepreneurs still need to figure out business models and prove their worth - however, once they have done that to a reasonable extent, the operations and management can be very well parcelled out to an outsourcer.

So what will the firm of the future look like? One extreme view is that firms of the future (excluding, of course, the service provider firms themselves) will just consist of the ideators - who will conceptualize, design and initiate service offerings - and a bunch of service managers, who will govern delivery relationships with outsourcers. Therefore, a much leaner and more agile firm.

The other view is that outsourcing service providers will not be able to competitively perform every task that an internal firm environment can; that the marginal costs of outsourcing will someday catch up with its marginal benefits and stop it in its tracks. But nothing we know currently seems to point in this direction - if anything we have a long way to go till we get to that point of equalization.

It would be interesting though to see what ultimately happens - hopefully the options would play out in our lifetime. Or maybe, like the theories of contracting and expanding universes, we would just need to be content with conjectures.

Monday, June 15, 2009

In tall orders we trust

Is our society fundamentally heirarchical? I wonder about this as I work more and more with people from other cultures and am made aware of our subliminal biases ("our" - meaning us as Indians).

Its interesting to notice how we Indians exhibit heirarchies at work so much more than people from other, particularly western, geographies. A laddering of seniorities is almost taken as a given - with a view that somehow, people who are "senior", are greater in some respect. Its noticeable in the body language and the mannerisms, particularly when seen in contrast with the behavior of non-Indians in the same work environment.

You'll even notice it in the behavior of global and Indian arms of the same multinational firm - the global 'big boss' would walk down and shake hands with everyone in a meeting room, while the Indian would hardly ever acknowledge the junior members of his own team. And its weird, for I now notice this pattern over and over again in a number of multi-cultural interactions. (And mind you, this doesn't change much amongst those who return from global stints)

And then maybe, its a culturally inbred thing. Maybe its a remanant of the royalty that ruled our land and its consequent class systems. Maybe its a relic of the brit-raj and their babudom that made some citizens more equal than others. Or just maybe, we Indians do not like shaking hands in meetings :|

In any case, its time we started being a bit more civil to each other (at least in the workplace), its time we got over this false sense of ordained heirarchy and started building flatter organizations, its time we realized that fortunes do exist at the bottom of a pyramid.

Sunday, June 07, 2009

To boldly go where no man has gone before

Rarely, just rarely, does come along a film that makes you root for it with whoops and whistles, that makes you forget the adult you've grown into and relive the excitement of a kid. To science fiction aficionados, star trek will always remain an unforgetable franchise - the adventures of the starship enterprise, always religion. It is, but a tall order, to expect a movie to live up to such expectations; and it is to the new Star Trek movie's credit that it, not just meets, but takes it to a whole new level of awesomeness. This post is a tribute to those who made the best science fiction movie I've seen in a long long time.

Friday, March 20, 2009

"Society doesn’t need newspapers. What we need is journalism."

A brilliant perspective on the changing media landscape, drawing analogies from the past to highlight the inevitable and the imminent - Newspapers and Thinking the Unthinkable:

"Revolutions create a curious inversion of perception. In ordinary times, people who do no more than describe the world around them are seen as pragmatists, while those who imagine fabulous alternative futures are viewed as radicals.

...shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of their most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away...

That is what real revolutions are like... The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen. Agreements on all sides that core institutions must be protected are rendered meaningless by the very people doing the agreeing.

...And so it is today. When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution.

...Society doesn’t need newspapers. What we need is journalism. For a century, the imperatives to strengthen journalism and to strengthen newspapers have been so tightly wound as to be indistinguishable. That’s been a fine accident to have, but when that accident stops, as it is stopping before our eyes, we’re going to need lots of other ways to strengthen journalism instead."


(via twitter @suryanair)

Wednesday, March 11, 2009

What is this funny thing called value?

The central tenet in a lot a economics and strategy is this concept called 'value'. These days, I seem to be ploughing through one engagement after another building all sorts of valuation models and therefore I present my (rather muddled) musings on this notion that has vexed me through many a sleepless night.

In its most basic sense, 'value' is said to be 'created' in an activity if the benefits exceed its costs (note that this could be economic, social, metaphysical, whatever). That is to say, if the outcomes exceed the effort you put into an activity, you have created value.

This notion is of course extendable to a group of individuals who come together to form, say a firm, and thus if they create something together thats worth more than their effort, the firm's created value.

The question is, who determines the worth of the outcome?

This is clearly relative. If the output is being consumed by the creators (say, if I wrote a piece of code to search my own data), then I determine the value (say, the amount of time it saved me from going through the data manually).

But in most situations, we are concerned about the worth of the outcome to the market. Value, in a market context, is set by the consumers who would benefit from the outcome. (In the same example, if I started giving out the piece of code to all, value is set by the benefit to all who utilize it).

Of course, this is a bit simplistic. What if there is a big group of similar producers (like a lot of people writing the same code) and consumers could ideally choose between any producer? Value created is then bounded by the how much of it can be consumed. In economic terms, this point is where the market 'clears' and a price is set.

The interesting question of course is, how much of this 'value created' will each of the creators and consumers capture? The answer, is clearly not easy to determine and (it seems) is dependent upon market structure and the bargaining power of each in the market.

If you would recognize, in a firm's context, this question is what a lot of strategy literature tries to answer. The whole notion of 'competitive advantage' or 'strategic moats' (and all those Porter 5-force models) is largely linked to identifying those elements that enable a firm to gather as much of value as is possible from its market interactions. In a micro-sense, this is the realm of pricing theory.

(These days, there is also this interesting field of research in coalitional game theory, thats trying to answer the question from a GT point of view. See this and this).

'Shareholder value' creation by a firm is therefore largely linked to its ability to participate in a marketplace that values its output and then its ability to appropriate as much as possible from its interactions.

Value creation is an oft bandied term. Whoever knew so much lay beneath.

Thursday, January 29, 2009

Wednesday, January 28, 2009

Human, human, burning bright...

At Bharatpur, near Mathura, is the Kaladeo Ghana bird sanctuary. Near Alwar, is the famous Sariska wildlife sanctuary. Both are located at an approximate 200 kilometers from Delhi and are good weekend destinations. Taking advantage of a long weekend, we decide to check out both.

The drive to Bharatpur along the NH2 is pretty much peaceful because of the good roads (except for a small stretch before Bharatpur that's getting relaid) and takes around 4 hours. Now, Bharatpur lacks enough decent accommodation for a tourist season and one must reserve well in advance. We discovered this to our folly when landed in Bharatpur late at night only to be told all the rooms were taken. After some cajoling we got ourselves into a govt guest house that was not clearly worth the money.

Early morning saw us queuing up at the sanctuary gate, trying to get ourselves to the services of a rickshaw to ferry us around. 20 rickshaws, carrying 2 each, to service a 1000 tourists who land up in a day. So imagine the odds of getting one. Luckily, and likely since we were one of the early 'birds', we chanced on two untaken rickshaws. That saved the day for us.

The sanctuary is spread over a huge acreage and requires around 3-4 hours at least (by rickshaw) to do justice to. The rickshaw men are clearly erudite guides, dispensing detailed info on birds of every variety around. As a comparison to Vedanthangal (near Chennai, which I've been to) the sanctuary is clearly more vast and has greater diversity.

For people going to Bharatpur: reserve accomodation before you land up (the RTDC one inside the sanctuary is great if you manage to get it), get there as early as possible at the entrance (the park opens at around 6 am) and try to get the earliest rickshaws. A lot of headache could be avoided if one manages to arrange good cycles to use at the sanctuary (as we saw a couple of foreign tourists do).

The route from Bharatpur to Sariska takes about 4-5 hours and is paved with potholes. The route broadly runs to Deeg and onto Alwar before reaching Sariska. Since we couldn't manage to reserve accommodation in Sariska, we decided to stay the night at Alwar - which in retrospect turned out to be a good decision.

Alwar is a beautiful, well planned town, very alike Jaipur and endowed with a beautiful looking fort on a hill and a lake. Its also just a hour's drive away from Sariska. We hit out early morning to Sariska and chanced upon some beautiful barasingha deer on the road.

It is a testament to the abysmally inadequate tourism infrastructure in our country that a sanctuary with thousands of visitors a day has less than 20 jeeps at its disposal, so that one needs to stand in line at 6-7am braving cold, hoping to be alloted one. Luckily, we managed this as well.

Sariska has recently transplanted two tigers (three more are on the way, as it seems) but spotting them is an exercise in impossibility. What one can see are large numbers of deer (sambar and nilgai), peacock, wild boars and an occasional jackal. But the anticipation of catching sight of a tiger seems to have brought so many people to the sanctuary that, while open, there are clearly more humans inside the sanctuary than wild animals. I bet the animals go "Human, human, burning bright..."

Besides the hunt for the unseen tiger, the jungle track off-roading is quite an experience and the kankanwadi fort has quite a beautiful setting (though with a back breaking approach road).

In sum, Sariska is worthy of a weekend trip. But more tigers and jeeps would greatly help. And so would better accommodation options. Finally, the latest news is that the the road from Alwar to Gurgaon is being relaid - if so, its better to take that, NH8 is way too crowded with heavy traffic.

Saturday, January 10, 2009

Vegetable Pad Thai

Thailand is a beautiful country, so culturally similar to India, yet as economically developed as a lot of the west. And Bangkok is an impressive city - incredible flyovers, malls with wares from all over the world, gorgeous temples, a beautiful meandering river and smiling people all over. What's also nice is the harmonious mix of cultures and religions - the Thai, the Chinese, the Indian, the western, the Buddhist, the Hindu, the Muslim,... - in expressions all over the city. Most of the city is explorable on foot (with periodic hops onto the bts, the metro, the ferries and the tuk-tuks) particularly the old town which hosts the magnificent Wats.

So one day, I paraded into this crowded Thai diner, which specializes in sea food, and asked for a vegetable Pad Thai. Pure vegetarian, I emphasized. (Don't ask why, I have these streaks). The withering look I got from the waitress said it all. Then, in a typical Thai fashion, she laughed, and said something (which I later figured was mai-pen-rai or 'its ok' in Thai), and got me a bowl of tastiest noodles I've ever had. In memoriam, I title this post, the Vegetable Pad Thai.