Cyril Maithily Gupta's Blog

Have you watched the Godfather carefully? It’s not just a movie about the mafia or the organized crime world in Godfather’s time. Ignore all the crime for a moment and just look at the lessons learnt. It is a practical treatise on business and success. Watch Godfather and you can learn how to survive and succeed in the modern business world that is full of sharks. In the ‘Godfather teaches business’ series I am going to take business wisdom from the three Godfather movies using the famous Godfather quotes, and show you what Godfather really meant, and how you can use that wisdom in your own business endeavors.

I started this series a long time ago and I wrote 9 parts. My intention was to write 12 complete parts, but I never got there and later a crash on the server deleted the work I had done. That was about 3 years ago. I am re-starting that series with this article, and hopefully I will have my 12 this time.

Godfather Teaches business 1 : Make them an offer they can’ refuse

"I am gonna make him an offer he can’t refuse"
Don Corleone

Don Corleone, the prodigal patriarch of the Corleone family was a very extraordinary man. Arriving in America after narrowly escaping death in Sicily at a very young age, he learnt the harsh lessons of life early on. He understood what motivates men, and he taught himself to exploit that. No wonder then that one of the most important lessons he taught us were to make them an offer they couldn’t refuse.

Let’s talk about that a bit.

When you are running a business you’re out to sell something. It could be a product, or even a service. Your aim is to get the buyer to give you money in exchange for the service. Why would he give you the money? When he thinks that he needs what you are selling, and that it is more valuable to him than the money that’s in his pocket. When he’s convinced about that he will hand over his cash happily.

When the elderly Godfather talked about an offer one can’t refuse he meant exactly that. An offer that makes the buyer pause, and wonder, and then come rushing to you with his purse in his hands. When you can make that kind of offer, you’ve scripted success for yourself.

When I think of offers like that many things come to mind, but nothing like the one from another elderly patriarch. Very removed from the Godfather in character and culture. He probably didn’t ever watch Godfather in his life. But he understood business and understood what an offer like that could bring.

That man – Dhirubhai Ambani told his son Mukesh that when he launched his phone services in India he should launch it at a rate cheaper than that of a post-card (the cheapest form of mailed letter in India), and if he could do that he would become a grand success. Beating the rate of a postcard wasn’t easy. It would require the establishment of infrastructure, and economies of scale that were never done in India before, but Mukesh did just that and Reliance India Mobile (as it was called then) introduced pan-Indian telephone calls at 40 paisa (.30 dollars) per minute, with free incoming calls (unheard of at that time), and achieved a subscriber base of 6.9 million in less than a year.

That unbelievable growth was the turning point of the Indian telecom industry. It woke up the rest of the industry and soon the prices of communication crashed which have been in part responsible for the communication revolution in India, and in bringing the information age to India. Today of course we have tariff plans that charge as low as 20 paisa a minute for outgoing calls and actually pay you money on incoming ones!

That one offer the subscribers couldn’t refuse finally ended up putting a cellphone in the hands of more than 250 million people in India.

If you can make an offer like that to your market then nobody can stop you from being a success. That offer doesn’t have to be about price alone. It could be an offer of better service, an offer of a better product, advanced technology, better treatment of customers, better after-sales, better communication, faster turnaround, you tell me!

So if you haven’t found an offer like that it’s time you stopped everything that you were doing. Sat down, and thought long and hard about your business.

Think about your operations, your customers, your competition, your margins, your processes. How can you squeeze out room for that one offer. Don’t stop thinking, wondering, seeking until you’ve found it. And when you finally find it, you will have won yourself a niche.

Go on. Make them an offer they can’t refuse.

I am reading a book these days of which this is the second copy. The first time I bought it, I lost it while I had read only half. That was some months ago, I thought I would find it later so I kept looking… I gave up a few days ago and bought a fresh copy. It was a good book, good enough to force me to spend the money on it again.

The book is ‘The Lexus and The Olive Tree’. The writer is Thomas Friedman. It’s on the same topic as ‘The Clash of Civilizations’, but is easier to read. So I am reading it with more attention than I read the Clash of Civilizations.

We’re almost halfway into 2010, and this book’s first edition was written at the beginning of the decade. So while a lot is still the same, too much has changed.

The book talks about the telecom and the Internet revolution, globalization vs. protectionism, and other topics which are still relevant. Thomas Friedman does an excellent job of showing me how globalization isn’t just good and necessary, but how it is unavoidable. Friedman is a well-traveled writer and through anecdotes from his own journeys and meetings he makes it quite clear that whether governments like it or not globalization is going to happen, and that there is going to be a plenty of resistance to it because people see it as a threat to their culture.

“There’s no use protesting against globalization wearing a blue jeans.” Well the process is still on. Globalization isn’t global yet, but it’s pretty much everywhere.

But the book has its funny bits too. Thomas Friedman is an American patriot and he makes it a point to make it quite clear why America is so successful. He compares the American way of working to Japan and Europe and comes to the conclusion that they can’t compete with America, he mentions China but only to reject its ‘brand of globalization’. He thinks globalization can’t work without capitalism, and because China is communist dominated it is likely to hit some serious snags which will remove it form the scene. Well, Mr. Friedman. Heh Heh…

He doesn’t mention India and use the  phrase  ‘competition to USA’ in the same paragraph.

That was 10 years ago. In 10 years a lot hasn’t changed, but a lot has. America, the greatest place for innovation and business is now feeling the heat from India and China.

American senators want Indians to quit taking away American jobs (globalization goes full circle, you see the globe is round). They want Indian companies to quit coming to America, and they want Indians to quit working so hard on everything.

America is still the greatest place for business and innovation, but I see Indians coming back from America to innovate in India, and others who want to come back.

I love America, its culture, its freedom and its attitude. There’s no denying that, but in 10 years India has changed enough that the American president tells his country’s children to buckle up cause the Indians are coming.

If Thomas Friedman wrote that book again now, he would talk more about India and China than he talked about Europe and Japan.

Smartphones are the big boom in the US and the next big boom in India. With the arrival of 3G there will be compelling reason for mobile users to upgrade to a smartphone. There is a good scope for small players to make little fortunes developing and selling smart phone applications. That’s why I have been giving them a serious look starting this year.

The most popular smartphone platform is of course iPhone, but it hasn’t been able to repeat its success story in India because it is locking its services with a single player who is marking up the price very high. That’s why the number of smartphones sold could be well under 10,000 according to one study. Until iPhone makes itself an open platform which works with its complete capabilities on all networks and is available for a price at par with international prices there will be very little desire for customers to shift to iPhone.

This of course is the most compelling reason why I won’t be developing for iPhone. The second reason is Apple’s tight regulatory policies and their desire not to let any other marketplace bloom than their own. The problem is not just that Apple arbitrarily rejects and approves applications but also that it decides whether your application gets any exposure and paying Apple a cut of your profits is vital if you’re developing any app for iPhone. That’s like paying Microsoft 30% on every software you make for Windows.

Since Apple is making so much money off iPhone already I don’t think it should lock the developers down so hard.

There are some other platforms available as an alternative to iPhone. Android is small but it has the potential to be a winner just like iPhone. Development on Android is free and you can get all the tools from the Android website.

All the development is in Java so you can potentially re-use some of your code to make apps for other smartphones like Blackberry and Nokia.

So I am going to be try to be an early entrant on Android. Maybe beginning with a port of one of my core applications.

 Black Swan’s back cover talked about the phenomenon of Black Swan describing companies like Google as the Black Swan that came out of nowhere taking analysts by surprise. I thought this would be a book that would analyze Black swans like Google, describing why they are doing so well, but the book couldn’t be more different.

The book is not about Black Swans but about Black Swan the phenomenon. Nicholas Nassim Taleb talks on unpredictive people, companies and happenings can change the way the world works. His mission is to convince you that ultimately all analysis is useless, the analysts are overpaid louts who are actually no better than unpaid louts and that no matter how much data you have the future is going to make you a sitting duck anyway.

When I started to read this book the most refreshingly different thing that I found about it was the style. Taleb has his roots in the middle east and that’s why the book is written very differently from the usual Western/American authors. His language is different, expression is different and he will have you pausing in some places and reading the sentence again just so that you can have a look at the sequence of words he has used.

If the writing style wasn’t enough he introduces some delightful new ideas. Like talking in great detail about the experiences of a person, citing examples from his life to illustrate his point, and then telling you that the person is imaginary. In a non-fiction book that surprises you because you actually think all the way that the person is very real cause you’ve heard so much about her degrees and her job and everything else. Well that’s one example of Black Swan phenomenon at work.

Even though the book’s premise is not new, the approach is fresh. Taleb has been an investment analyst for a long time and you’ll find that the book talks about the financial markets a lot. He’s an insider and when he tells you that all the guys you’re trusting your money with are actually playing poker with it, you better listen. I for one am not going to put my money in mutual funds soon.

Taleb is also a scholar and he puts you under a slight awe with details of all the classics he has read. Well that’s the undoing of his book. When he goes on about the mathematicians and philosophers who you haven’t heard of and tells you how much he hates or loves them, you just can’t relate. You don’t know those guys well enough to know what Taleb is talking about.

By the second half of the book he also got a bit repetitive and argued the same arguments over. Not that I was unconvinced earlier.

The book is fine, not spectacular, but fine. If you’re deeply interested in economics and how money works like I am you will read to the end, not otherwise.

I would recommend it only to a small selection of people.

Just saw on the news the other day that West Bengal’s CM Buddhadeb Bhattacharya wants to offer land to software development hotshots if they would only open shop in WB. What? Really?

Well, this is the same guy whose party was very miffed not a very long time ago that there are no unions of software company employees (Who apparently are one of the highest paid lot today). They tried to raise their communistic fervor at Wipro and make a union. Unfortunately for them Wipro clamped down big time and everyone who wanted to make the union was ahem… shown the error of their ways. So finally there was still no union at Wipro no matter how much Buddhadeb and his party-members fumed at IT companies.

Now that the rest of the world has charged ahead and WB is still in the dark-ages, even as Buddhadeb’s party gets routed in elections they never could lose, they want ‘reform’. They want IT companies to come their shores, start call-centers, development centers, and you know, generally bring the dirty capitalistic money that they hate so much into the state.

Right around the time those guys wanted to form unions in IT companies they were disrupting Honda’s motorbike manufacturing plant at Faridabad. The plant was closed for months, and no bikes were manufactured. The losses to the company and the workers ran in millions. Many workers lost jobs that were paying the highest in their grade. That’s why I took a special notice of what these dirt**** were trying to do to IT, the only industry that is salvaging India’s economy and position in the world right now.

The hypocrisy of West-Bengal’s communist party is downright disgusting. In their home-state they want IT companies and industries to come in, so they’re offering free land, tax holidays, labor law exemptions, and everything else that they can muster. But in the states where they are not in power, they are disrupting companies, causing strikes, rousing sentiments against industries, closing down factories and doing everything they can to create chaos that prevents the economy from progressing.

Why? Oh why? Mr Buddhadeb, should any IT company want to open a development center in your state?

Haven’t you and your goons caused enough damage to India’s economy already? Why at all should anyone believe even for a moment that you are serious about reforms when your party-workers are busy shutting down India Inc. in the rest of the country at this very moment?

I’ve been a part of a small company from the last 10 years, watching, participating, helping it grow from shrimp-size to salmon-size. It takes time and effort to build a business and sometimes you’re up against market situations that cannot be overcome no matter how creative you are (for me it is software piracy).

But is that sort of thing the biggest challenge for a small company? I don’t think so. The biggest challenge in my opinion is finding skilled people and getting them to stick around.

We’ve got an enormous amount of training going on here in India, and there are a lot of qualified good people who have the skills and the drive to make things happen. Sadly they are not here for the likes of me. They’ve all been grabbed by the bigger fish in the pond who’re ready to offer them bigger salaries and better perks. A small business has to depend mostly on the promoter’s skills to grow until it turns into a mid-sized business at least.

I’ve learnt along these years that the people I’ve spent months training will leave for a small job in a big company. Nobody has the patience anymore to stick around and wait for a small company to get bigger and grab a bigger job. Is that because they don’t have enough confidence in the potential of the small company to get big? Or they would rather work in a bigger name as soon as they can?

So while bigger companies attract the star talent, the smaller companies have to depend on their entrepreneurs and untrained people who they will train so that they may become worthy of bigger companies.

Not that I find anything wrong with this system. After all small companies cannot afford to pay so much and they manage to get productivity out of their people.

Don’t ask me for any solutions to this problems though, I am still battling with this.

The World is Flat is a popular book and it has been in the market since a long time. I am probably going to be the last guy to write a review on it. I bought it because I saw Friedman’s new book ‘Hot, Flat and Crowded.’ I thought if a book spawns a sequel it ought to be good. So I finally bought myself a copy from the Book Cafe located in Noida Shopprix Mall.

The World is a Flat is a book about a trends that’s now and here. It’s about Globalization, the impact of the Internet, new technology, emerging markets and economies, and things like that. It was first written in 2005 and the future that it talks about, is now. So for me the book read like a lesson in contemporary society. Certainly there were many updates and new information was added to keep the book updated, but the spirit of pre-2009 economy is pretty much evident here.

So I am going to say here that the book is great. It has some amazing interviews, stories, anecdotes and analysis, but if you are looking for an insight into the near future you don’t want to read it. This book is about now, the times we live in, and you don’t need a book to figure out Now.

You see, the world is flat.

Read it if you are interested in Today, and you want to understand the journey that brought us here.

I am going to read Hot, Flat and Crowded when I am done with the four books I have added to my reading list

- Stay Hungry, Stay Foolish (Rashmi Bansal)
- Business Stripped Bare (Rich Branson)
- Entrepreneur Journey (Sramana Mitra)
- Starship Troopers (R A Heinlein)

 No matter what the newscasters say, and no matter what the governments claim, I don’t see a quick end to this depression, and neither does the corporate world. You shouldn’t take it lightly when the Microsoft chief says he doesn’t see a ‘glimmer on the horizon’ or words to that effect.

Is it finally happening? Is the Intellectual Property business finally slipping out of the hands of the big corporations? The change that is inevitable with the organic growth of the Internet and associated communication mediums.

I could be wrong here, but I feel that many of the experts who earlier opted to work for big companies to forward their careers would rather have a small startup of their own now. Or is this a maturing of their careers, when they’re finally ambitious enough to try and stake it out on their own instead of a reversing market trend.

Although there are some pretty strong reasons why the market should slip out of the hands of the big corporations and into the hands of numerous smaller but skilled players.

– Open Source. Open source right now is actually working only for the techies. There’s hardly a techie who doesn’t swear by Firefox and use many other open source solutions/code in his own products. These are the guys who are contributing and getting the most out of open source, not users.

Open source reduces the cost of development and that’s a big opportunity for smaller developers, because now they can get the job done for a lesser investment.

In fact open source works in more ways than that. Because of open source, big corporations like Microsoft have had to give free access to tools like Visual Studio and SQL server in the production environment. They’ve also created better learning resources and community support in an effort to beat the open source guys at their own game. That’s a big boost to the developers who earlier had to pay to get their questions answered.

– So is everyone going to be more skilled? Actually, YES. Since there’s better documentation, faster Internet, and better learning resources available to anyone who cares enough, more people will be able to learn technical black arts and create formidable solutions.

These people will be competing directly with the solutions from the bigger companies, and in many cases, they will give the bigger companies a run for their money.

– And will they get the contracts? Have you heard of the story of Delhi MCD paying crores to get their website developed by Infosys. A job that could have been done in lakhs by a smaller player, and probably done better. So yes, it might take some time, and it might be a little while before stupid government officials or cash-rich corporate honchos realize they’re paying more than what they should, but they will (specially now in the depression when there’s a cash crunch), and the focus will be finding better solutions for less.

– The future belongs then, to the independent IT solution providers. The future of IT my friend, is in the individual. Are you ready for it?

  Knol is this ‘hot’ new venture from Google.com. The same guys who also brought us that incredible search engine that we all so love and use. Knol’s supposed to be a take on Knowledge, a unit of knowledge if you please. At least that’s what the guys at Google think it is. It’s supposed to be the wikipedia "killer". The secret weapon that will take eyeballs away from wikipedia and stick ‘em right where Google wants ‘em.

No matter what Google calls Knoll, and no matter what Google wants it to be, right now the only thing that Knol stands for, is NULL. In CAPITAL letters.

I heard about Knol a few months ago, and when the public beta was launched I expected it to be simple, responsive, effective, and useful, like most products from Google. But this website seems like it was made by Microsoft! It sticks, doesn’t and for most parts is TOTALLY useless.

Knull content
If you go to the Knol frontpage, you will find a lot of articles on medicine. It seems Google’s out to cure a sick world, but that’s not what I was looking for. I found no catigorisation, and no way to reach the freshly submitted articles. Don’t even ask me about the search, almost everything I fed in was MISSING from Knol. In fact I looked for terms from the article I had submitted in the morning, and found nothing. Is this the famous Google search technology, or have they really started recruiting monkeys to filter search results?

Knull policy
Reports on Knol suggest that Google doesn’t plan to edit, or whet the articles submitted to Knol, but judging from the reports that I got from other submitters, the article don’t show up on Knol immediately. Is there some kind of sand-box, or verification going on? If yes then why isn’t the user informed?

The world is U-S-A (Knull Globe)
Google’s got pretty big, and one would like to think that they’re finally ready to go global. You know like Pepsi, Coke and Heinz, but not the folks at Google.com. The world for them is the USA, and nobody else is supposed to submit an article to Knol. When you try to do a name verification, you will be taken to a page which lists only one country: USA. The others simply don’t exist! What the!? Am I in some sort of virtual reality place called India that Google isn’t aware of? Or, how hard is it to put a note that says, "Name verification is only available for USA at the moment."

Knull Future!
That’s what Knol has plenty of. A great big amount of NO future. Not if there are some changes fast. Why did the header keep saying Sign in when I was already signed in? Why isn’t there any kind of organized directory or reference? Why aren’t there tags? Why isn’t there a way to show article popularity (Since Knol will have multiple articles on the same topic). Why isn’t there a way to see other articles on the same topic? Why hasn’t Google fired the guy who took Knol live so prematurely, and so crappily?

I don’t watch TV, but sometimes I channel surf. Yesterday I was channel surfing when something caught my eye and I stayed on for a couple of minutes. It was a show on brand promotion on one of the TV channels (don’t ask me which, and don’t ask me the name of the show either.) In the show some ‘marketing expert’ would go down to some city, pick up random business enterprises and dole out brand promotion advise to them. The city in question this time was Agra, the city I was born in, that’s why it caught my eye.

The questionable expert had picked on (and I mean picked ‘on’) poor Panchi Petha to shove brand promotion advise down their unsuspecting throats. Panchi Petha is the most popular Petha promotion brand of Agra, a synonym with good quality Petha. I’ve had a few boxes, so I can vouch their Petha is damn good. But the expert’s advice. It wasn’t any good. Here’s the advice: -

– Organize Petha tours for tourists, and show them how Pethas are made to generate interest in the Pethas –

Yep, that’s what you get when you put a questionable expert of questionable sense who has no idea of how Pethas or any other mithai is made in India.

When he says Petha tours, he’s probably re-visiting tours in Cadbury factory, coke, pepsi, or some other fully automated plant in his little head. If he had been inside a Petha manufacturing factory and had a good, careful look around he wouldn’t have mentioned ‘tour’, in fact he would have insisted that Panchhi Petha never, never show anyone their factory.

If tourists were taken to a Petha manufacturing facility, it wouldn’t generate interests in the Pethas, quite contrarily it would extinguish all interest that the tourists had in Pethas in the first place.

– Petha factories are not automated units in which every employee wears a mask, plastic glovers and blue overalls.
– They don’t have conveyor belts taking packed pethas from one deptt. to another, and a cute little bell that goes ding every time a packet is finished.

Here’s what you would find in a Petha factory.

– Stockpiles of green raw Pethas (big gourds), piled up on the floor. They don’t arrive in neatly labeled boxes.
– Huge woks, over-burnt and blackened from constant exposure to heat.
– Litres of chashni and about 10,000 flies trying to get into it.
– Aluminum trays placed on floor containing Pethas at all stages of preparation. No they’re not covered.
– Overweight halwais dorn in gamcha, baniyan, and a lungi, sweating and swearing over the huge woks.
– Empty tins of used vegetable oil set up in random places, and used to store cooked pethas.
– An old leaking tap that’s been leaking since such a long time that algae has grown around it. Discarded pants and shirts are hung over it. The halwais will wear them again when they go home.

Yes Mr. Brand expert, that’s your Petha tour. Take a tourist to one of these and you would have a hard time finding one ready to get video-taped happily plonking a Petha into her mouth.

So Mr. Panchi-Petha-Wale, no matter what Mr. Branding expert said, don’t think about organizing that Petha tour. He’s paid by the channel to look good and attract viewers, not to do real research and give you practical suggestions.