Monday, 5 October 2015

Trade Secrets: TPP

Hackers can hack into a lot of systems but probably won't be able to hack into the system to find out the details of the TPP (Trans-Pacific Partnership) which was negotiated in secret.

Investors prefer startup teams?

Do investors prefer startups with many cofounders?

Economic Times reports that too many cooks spoil the broth? Paavan Nanda, one of the seven cofounders of Zo Rooms, a Delhi-based online budget hotel aggregator, doesn't think so. In fact, he has his own version of this age-old adage. "Too many cooks make a rich and lavish buffet," says the 28-year old who looks after marketing at Zo Rooms. 

Nanda met three Zo's cofounders, Dharamveer Singh Chouhan, Akhil Malik and Tarun Tiwari, at IIM-Calcutta three years ago. While the other two members of the group, Abhishek Bhutra and Chetan Chauhan, were the undergrad batchmates of Chouhan, the last one, Siddharth Janghu, is Malik's college mate. That's how the friends started Zostel, India's first chain of hostels for backpackers, in 2013. 

So, when in January this year, the circle of seven started Zo Rooms, all that was needed to finalise its structure was a huddle among the friends. "We are Seven Samurai. And seven as a number has always been our strength," says Nanda, adding that the weaknesses of the team get covered up and strengths multiplied when there are several cofounders. Nanda and his friends are not the only ones who swear by 'the more the merrier' adage. 

While having two or three cofounders has been by and large the norm for starting up, of late a clutch of ventures is taking it to the limit, a few like Zo with up to even seven promoters.  What was an exception till a couple of years is now gaining popularity. Reason: multiple cofounders bring a diverse set of skills and experience. They not only have each other's back when the going gets tough, they also make it easier for a startup to diversify and scale fast. Shubh Bansal, one of the seven cofounders of Truebil, an online marketplace for pre-owned cars, would agree. 

Sunday, 4 October 2015

Market Sentiment for Bitcoin

Bitcoin going the same way as the 500 Euro note?

Times of India reports that Australian businesses are turning their backs on bitcoin, as signs grow that the cryptocurrency's mainstream appeal is fading. Concerns about bitcoin's potential crime links mean many businesses have stopped accepting it, a trend accelerated by Australian banks' move last month to close the accounts of 13 of the country's 17 bitcoin exchanges. The development is a blow to hopes of bitcoin fans that the currency can play a significant role in everyday business transactions in developed economies, with Australia once seen as one of its most promising markets. It is estimated to hold 7 percent of the currency's $3.5 billion global value, a sizeable figure in a country of just 24 million people.

"We've got a squeaky clean reputation, and that's actually worth a lot more to us than dipping into this," said James Snodgrass, principal of Sydney's Forsyth Real Estate, which ditched the currency in late 2014 after the firm was investigated by the federal tax office. Forsyth had offered to collect home deposits and other realtor fees via bitcoin to cater to international buyers. The tax office probe found no wrongdoing but Forsyth was burned by the negative publicity and bailed out before ever taking a bitcoin payment. Although most mainstream banks in Europe and the US already refuse to keep bitcoin-affiliated accounts, developments in Australia represent the first coordinated shutdown of bitcoin exchanges by a country's banking system.

Recall Value and Ripple Effect: Brand Video Content

Times of India reports that video sharing site YouTube seems to provide a better platform to the brands in the online video realm than rival sites in terms of enhancing "recall value," a new study has found. Research from video content advertising firm Visible Measures found that brands enjoy a so-called "ripple" effect when they share a new video on YouTube that drives views of the brands' older videos -- something that does not happen when they share a new video on Facebook, Wall Street Journal reported.

As a result, videos on YouTube are watched by more people over an extended period of time, the study said. Visible Measures found that 45% of a brand's total views on YouTube are of new content and the remaining 55% are on previously uploaded videos to the brand's YouTube channel. In contrast, when brands upload a new video to Facebook, 95% of the brand's total views are of the new content rather than existing content.

Saturday, 3 October 2015

Modi's Silicon Valley Deals: Net Neutrality

Has Modi done a deal with the digital devil?

Economic Times reports that after the initial euphoria over Narendra Modi’s Silicon Valley conquest subsides and the takeaways are counted, the question of Internet biggies playing a vital role in the making of ‘Digital India’ needs to be analysed with regard to India’s stand on net neutrality and the country’s laws. First, in spite of the rattle and hum of billions of dollars pouring into India from California, till now, only Qualcomm has said it would invest up to $150 million. Qualcomm, by the way, is one of the six partners of Facebook in its venture.

And just a week back, New Delhi gave approval to a multi-billion dollar helicopter deal with Boeing. No doubt, India’s strategic heavy lift capability is severely impaired and the chopper gunships are getting old. But at a time when India faces an all-time low in its combat aircraft squadron strength, dithering on and scaling back the Rafale deal seems inconsistent with the purpose of expediency behind this approval. This is just to dispel those theories of “He came, he saw, he conquered.” Now enter Facebook, Google and other biggies. Facebook’s project, already operational in India through service provider Reliance, has received flak for violating net neutrality by playing gatekeepers and allowing access to select services. 

After several prominent Indian partners parted ways and millions of petitioners flooded the Telecom Regulatory Authority of India (Trai) asking it to ensure net neutrality, Facebook and its partners — Samsung, Ericsson, MediaTek, Opera Software, Nokia and Qualcomm — decided to turn the project into an open-to-all platform, but with three ambiguous conditions that still left enough room for speculation that partners and Over The Top (OTT) content producers had undue advantage over others. Even rechristening as Free Basics has not helped alleviate concerns. It is essentially old wine in a new bottle, the same walled garden with enhanced security.

Friday, 2 October 2015

Optimists Earn Less on Twitter?

Optimism doesn't always pay on social media?

Times of India reports that your tweets can reveal more than you intend to as researchers have found that it is possible to know a Twitter user's income level simply by looking at the words that he or she uses to post messages. Analysing more than 10 million tweets from over 5,000 Twitter users, the researchers found that those who earn more tend to express more fear and anger on Twitter. Those who come across as optimists have a lower mean income, the study said.

Text from those in lower income brackets includes more swear words, whereas those in higher brackets more frequently discuss politics, corporations and the non-profit world, the researchers said.
"Lower-income users or those of a lower socio-economic status use Twitter more as a communication means among themselves," said Nikolaos Aletras from University College London. "High-income people use it more to disseminate news, and they use it more professionally than personally," Aletras noted.

For this experiment, the researchers started by looking at Twitter users' self-described occupations.

Thursday, 1 October 2015

ESOP's Fables: Stock Option Valuations in E-commerce

The fabled valuations of ESOPs in Indian e-commerce are looking a little high now which has go a lot of people fretting.

Times of India reports that Suraj Kumar (name changed), a senior executive with one of the largest e-commerce companies, has spent sleepless nights with one thought: How will he encash his employee stock options (ESOPs), which contribute about 60% to his gross annual salary. As e-commerce valuations peak, senior executives in the industry are making a beeline to the offices of lawyers and human resource advisers to find ways to encash their ESOPs before valuations start melting.

"Top-level talent is watchful of the valuation story and is keeping tabs on where the industry is going," says GC Jayaprakash, executive director at RGF Executive Search. Last week, when Ontario Teachers' Pension Fund picked up a minority stake in Snapdeal's parent company, a lot of employees holding these stock options sold out along with an outgoing investor. In the last few years, as valuations shot up, ESOPs were the biggest bait that e-commerce companies have used to reel in senior talent. Employees were also enamored by the prospect of making big bucks as public listings seemed around the corner. But, the overhang of a valuation bubble and the lack of visibility on the IPO front have made employees cagey. Industry watchers say that prospective senior hires of top e-commerce companies are now starting to fret over the ESOP component in their compensation. 

Wednesday, 30 September 2015

Neural Automation for British Financial Services

British financial institutions automating their operations and processes. Britain's major industry, the financial services industry, is automating which will result in fewer employees being required in this industry.

Times of India reports IT major Tata Consultancy Services (TCS) has announced a new partnership with a British mutual financial institution for providing a neural automation system which automates and optimizes IT operations and processes of an enterprise. Nationwide Building Society selected its services-as-software platform Ignio -- the world's first neural automation system for enterprise IT -- as part of its continued transformation of its technology and operations, the TCS said in a statement. 

As the world's largest building society, Nationwide Building Society delivers a wide range of products to its customers and recognizes the importance of deploying new services rapidly and increasing the resilience of its digital solutions, it said. Mike Pighills, head of service integration and transition, Nationwide Building Society, said, "Moving all of our services on to a digital platform, while ensuring a high level of resilience and agility, is a major priority for Nationwide." Ignio is designed to automate and optimize the IT operations and processes of an enterprise to improve speed and flexibility, reduce operational risks and enhance user experience.

Monday, 28 September 2015

Obama UN Speech Aimed at Republicans

Obama gave an impressive speech at the UN today. I think it was aimed more at America's Republican Party than anyone else. Obama showed his frustration with the Republicans as though saying that he could have achieved a lot more during his Presidency if it had not been for Republican politics.

Tech CEOs as World Leaders

Indian media showed Modi's recent visit to America and focused on Silicon Valley. The Indian media showed Modi meeting with all the major Tech CEOs but not with American politicians. There was one meeting shown in the Indian media with one of the Tech CEOs, where Modi and the Tech CEO were sitting in front of an Indian flag as though this were a meeting of world leaders. Even international media showed the Pope's visit and the Chinese President's visit with American politicians. But the Indian media concentrated on Silicon Valley.

Indian media is over-awed by the Tech CEOs who are becoming the new world leaders.

Friday, 25 September 2015

Second Class Citizens: Mobile Pre-Paid Billing

Billing per second for pre-paid customers is making them 'second' class citizens? After facing the regulator over call dropping, the telecom operators are now name dropping.

Times of India reports that Idea Cellular has shifted its 1.5 million pre-paid customers who were on per minute billing (PMB) plan to per second billing (PSB), thus ensuring all its pre-paid users pay only for the time they use the network. 

Apart from the 1.5 million, who will be shifted over the next 30 days, the rest of its pre-paid users are already on per second billing. The company said that out of its total customer base of over 166 million, nearly 157 million are pre-paid. Bharti Airtel too announced earlier this week that all its pre-paid customers will be put on per second billing. 

The move by mobile operators comes amid regulator TRAI's scrutiny whether there are any tariff plans by service providers wherein call drops actually incentivise or benefit the companies. 

Prime Minister, President and Pope: Coming to America

Did you hear the one about the Prime Minister, President and Pope?

India's Prime Minister, China's President and the Pope are all visiting the USA about the same time. The Pope's visit seems to be getting the most attention internationally. With Modi the discussion will be business, with Xi Jinping its cyber-attacks and with the Pope its about God.

SJP @DigitalAsian

Thursday, 24 September 2015

Game Theory for Indian Banking: RBI Rajan's Game Plan

RBI Governor Rajan seems to be allowing tech companies to enter the payment bank space to see how the market develops.

Economic Times reports that anyone wondering what the 11 payments banks and 10 small banks will do, need not go far. All one has to do is read what the chairman of the biggest lender, State Bank of India, and the Reserve Bank of India governor had to say on them. 

"Do you think the Indian banking system has matured enough to take on the onslaught from payment banks? Does the RBI see this as a first step towards some of the payments banks evolving into universal banks?" is what SBI chairman Arundhati Bhattacharya asked the RBI governor the day after payments banks licences were given out. 

On what is in store, governor Rajan had this to say, "The (RBI) board took the view that it was hard to forecast what would happen in the payment space." He added, "Given the fact that we did not know what could succeed, the board chose to license a variety of players — some tech companies, finance companies, some bank-mobile combines. Now, let's see how the game develops." 

While Bhattacharya's question reflects the potential threat from these nimbler financial companies, Governor Rajan's view shows that many of them may not survive — as with the first round of bank licences in the 1990s where many players failed and were merged with their bigger counterparts. 

SJP @DigitalAsian

Selfie Ready: Makeup Science for Selfies

Times of India reports that for years CoverGirl has checked the performance of its foundations in different lighting — in bright sun or under the fluorescent bulbs of an office, for example. Recently, the company added another test for its makeup — the iPhone challenge. "We've got one type of consumer who is constantly taking pictures, and what really matters to her and her social group is how she looks in a selfie," said Sarah Vickery, CoverGirl's principal scientist. "It's something we really have to pay attention to."

Most makeup companies have products that play with light, offering photo finishes or airbrush effects that claim to make wearers camera-ready. But a handful of brands are beginning to design and tweak their wares to stand up to the specific challenges of phone photography -among them, that a flash can make foundation look white, or that in daylight selfies, cool colours can look warmer.

Wednesday, 23 September 2015

Cashless Education: Learning to go Cashless and Mobile

Teaching students to go cashless with mobile payments maybe one way to get people used to paying with their smartphones early on.

Times of India reports that mobile commerce platform Paytm has introduced cashless payments in educational institutions. Users can now pay school fees and dues, cafeteria bills as well as buy uniforms, books and merchandise through the Paytm Wallet. 

Paytm has tied up with several premium educational institutions in the country from pre-schools to colleges, including prestigious names such as IIT Mandi, Universal Education Trust, KN Modi University, Vidyamandir Classes, Made Easy, Career Launcher, Jamboree, Primus Public School, Bangalore, Swaminarayan Gurukul Vidyalaya and a few DPS to name some. 

Paytm is in advanced stage discussions with all leading IITs, IIMs, central and state universities and will be completing the formal tie-ups soon. 

Vijay Shekhar Sharma, founder & CEO, Paytm said, "We are committed to bringing all services that require regular payment on to the Paytm platform. School fees and educational expenses form a significant part of an Indian consumer's regular spends. Since this segment involves children, the advent of cashless purchases and payments obviates chances of theft and misplacement that often come with carrying cash." 

Expensive Ecommerce: Online Commissions for E-tailers

The fashion in India to get an online presence appears to be an expensive business with the ecommerce platforms.

Economic Times reports that there's bad news for fashion retailers hoping to cut real estate expenses by venturing into ecommerce — running an apparel business online is almost just as expensive as running a brick-and-mortar store in any mall. In fact, with ecommerce in the country pushing fashion brands to give more than 15-20% discounts, it could also eat into profit. 

Some fashion brands that entered the online space in the past five years claim to be paying 30-40% commission to ecommerce platforms such as Jabong, Flipkart, Amazon, Myntra and Koovs for sales and product delivery. Last year, Myntra is said to have increased the margin it sought from brands to 36-40% from 28-32% — higher than the 30-35% margins that several apparel, footwear, fashion and lifestyle vendors were giving to brick-and-mortar franchises then. 

This is almost as much as they would pay to run a physical retail store, which includes costs like rental (15%), staffing and utilities (8-10%) and maintenance and discounts (5-6%), according to Arvind Singhal, chairman of retail consultancy firm Technopak Advisors. "This (commission) is very expensive," he said, adding that strong fashion brands wouldn't pay ecommerce portals more than 10-20% as commission. 

Tuesday, 22 September 2015

Deciphering India's Encryption Policy: India's Digital God Works in Mysterious Ways

Deciphering India's Encryption Policy. India's Digital God Works in Mysterious Ways

India's Department of Electronics and Information Technology (DeitY) has published a draft of the National Encryption Policy. This policy aims to "enable (an) information security environment and secure transactions in cyberspace for individuals, businesses and government including nationally critical information systems and networks." The growth of Internet-based service delivery is making it necessary to have standards to protect privacy and security of the Internet and associated information systems. The DeitY has posted the draft on its website inviting mailed comments from the public on its mission, strategies, objectives, and regulatory framework.

But Times of India reports that shortly after a controversy erupted over government's proposal to investigate on every message that an individual will send via WhatsApp, SMS, or Google Hangouts, the DeitY clarified in a draft that social media websites and applications will be exempted from the purview of the Encryption Policy.

According to the draft posted by DeitY, there are certain categories of encryption products that will be exempted from the purview of the draft national encryption policy. The mass-use encryption products, which are currently being used in web applications, social media sites, and social media applications such as WhatsApp, Facebook, Twitter etc are being exempted from the purview of the draft National Encryption Policy, said a proposed addendum to the policy posted on the department's website.

Encryption products used in Internet banking and payment gateways, and those used for e-commerce and password-based transactions will also be exempted.

Monday, 21 September 2015

Idea Value: E-commerce Bubbles

Everyone in Silicon Valley and elsewhere are looking for that game-changing idea.

Times of India reports that Silicon Valley investor Vinod Khosla — whose net worth is estimated to be around $1.7 billion — has always stayed away from "the herd mentality" of investors backing popular startup ideas. In an exclusive interview with Economic Times this weekend, Khosla, cofounder of Sun Microsystems, said the startup valuation bubble is being caused by bad ideas and copycats chasing money-making opportunities. 

"In Silicon Valley, valuations are by analogy and that's always dangerous...there are some fundamentally new ideas coming out and all of those will result in valuable companies," he said. "But mixed in there are the copycats that will feel overvalued in few years. If you ask me if there are another dozen fundamental ideas in the next 10 years, the answer is almost certainly yes. But because of that dozen, there will be five dozen really bad ideas that get overvalued. That's the way to think of a bubble," he said. 

Expounding on the theme of bubbles, Khosla said stock prices and valuations were sometimes divorced from reality, even as Internet usage keeps going up. "There are two types of bubbles. One is economics reflected mostly in stock prices and valuation. I never think of that as reality. If you look at Internet traffic through the bubble in the US dotcom bust, you can't tell where it is. Because Internet usage kept going up. It didn't crash the day stock prices crashed. Because prices crashed, it doesn't mean people stop using Facebook. So how do you measure a bubble? Is it the reality of usage or that of valuation? In a valuation sense, you get lots of bubbles. In a real usage sense, you don't .... In 1999, there was a dotcom bust, but Google was in the middle of that and it survived and did well," he added. 

Describing India's consumer Internet war between Flipkart, Amazon and Snapdeal as "a costly battle," Khosla said in 10 years the value of e-commerce will be higher than the value of all the companies combined today, but it may not be the same companies. "The question is, who wins and gets to that point and how expensive it is to get to that point? But if there are a lot of people competing and throwing money at it, then you blow up each other's tanks. Whether the buildup is economic or not is a separate question," Khosla said. "Then there are other people like Alibaba saying 'I'll come in and spend all this money because I have it. I'll buy myself a way into the business.' That makes building the business expensive."

SJP @DigitalAsian