Capitalism’s Harsh Lesson: Why 16,000 Billionaires Never Existed

 

I. Introduction – The Billionaires Who Never Were

I recently stumbled upon a compelling statistic: Had America's wealthy families in 1900 simply invested their riches in the stock market, spent a modest 2% annually, and maintained average population growth, today there would be 16,000 'old money' billionaires. Instead, there are fewer than 1,000. This revelation prompted me to ponder the nature of wealth preservation.

This isn't just a tale of missed financial opportunities; it's a reflection of capitalism's inherent Darwinian nature. In the economic ecosystem, wealth that remains stagnant is akin to an untended garden, susceptible to the overgrowth of inflation and economic upheaval.

II. The Premise: 1900 Wealth + 2% Spending + Stock Market = 16,000 Billionaires?

The hypothetical is straightforward: if affluent families in 1900 had invested their wealth in the stock market, limited their annual spending to 2%, and allowed their families to grow at an average rate, the compounding effect would have resulted in approximately 16,000 billionaire heirs today.

Yet, reality tells a different story. The vast majority of these fortunes have dissipated over generations. This discrepancy highlights a fundamental truth: in capitalism, as in nature, survival favors the adaptable.

III. Darwinian Law #1: Adapt or Die

In the natural world, species that fail to adapt to changing environments face extinction. Similarly, in capitalism, wealth that isn't actively managed and adapted to evolving markets and technologies is prone to erosion.

Consider the industrial magnates of the early 20th century. Many of their descendants failed to pivot their investments in response to technological advancements, leading to the gradual decline of their fortunes.

IV. Darwinian Law #2: Competition Is Relentless

Nature is characterized by relentless competition, where only the fittest survive. Capitalism mirrors this, with constant market competition challenging the dominance of established players.

New entrepreneurs, armed with innovative ideas and technologies, often outpace traditional businesses. Without continuous reinvestment and innovation, even the most substantial fortunes can be overtaken.

V. Darwinian Law #3: Resource Mismanagement Leads to Extinction

In ecosystems, mismanagement of resources can lead to the collapse of populations. In economic terms, extravagant spending, poor investment decisions, and lack of financial education can deplete wealth rapidly.

The adage "shirtsleeves to shirtsleeves in three generations" encapsulates this phenomenon, where wealth is built by one generation, squandered by the next, and gone by the third.

VI. Inflation: The Silent Predator

Inflation acts as a silent predator, gradually eroding the purchasing power of money. Without proactive investment strategies that outpace inflation, wealth diminishes over time.

Relying solely on the stock market without active management isn't sufficient. Diversification, regular portfolio reviews, and strategic asset allocation are essential to preserve and grow wealth.

VII. Conclusion – Prosperity Requires Participation

The hypothetical 16,000 billionaires serve as a cautionary tale. Wealth preservation isn't a passive endeavor; it demands active participation, adaptability, and continuous learning.

In the Darwinian landscape of capitalism, only those who evolve and engage with the ever-changing economic environment can ensure the longevity of their prosperity.

Trump Tariffs, Trade Wars & The Abel-Lerner Connection – What It All Means for the Real World ?

This whole thought came about after watching a video of Dr. Steve Hanke speaking to a think tank ...snippet below, where he pointed out something remarkably simple yet deeply profound: “Tariffs are a tax on your own exports.” That line hit me like a freight train - and sent me digging into the Lerner condition, a 1937 economic model influenced by the mathematical symmetry thinking of Niels Henrik Abel.

In the chaos of trade wars, tariffs, and political grandstanding, it’s easy to get lost in economic jargon. But sometimes, the best insights come from surprisingly elegant theories - like the one Lerner proposed.

Let me break it down.

Understanding the Lerner Condition and Abel’s Influence

Imagine you slap a tax on imports to protect your local industries. Sounds smart, right? But Lerner’s condition flips this idea on its head. He argued that an import tariff is economically the same as a tax on your own exports. That’s because when you make foreign goods expensive, your own exporters face retaliation or reduced foreign income, which means less demand for your stuff too. It's like trying to win a pillow fight by punching yourself in the gut.

Mathematician Niels Henrik Abel didn’t study trade, but his obsession with symmetry influenced Lerner’s thinking. Just like Abel found elegant balance in equations, Lerner applied symmetry to global trade. A tax on imports = a tax on exports. Simple. Brutal. True. So how will the present embroglio pan out?

Scenario 1: The Tariff Spiral – Everyone Loses

This is the “nightmare mode” of a trade war. Country A (say, the U.S.) imposes tariffs. Country B (China) hits back. Both sides keep raising the stakes.

We’ve seen this play out. Under Trump, U.S. tariffs on China soared. China retaliated, targeting American exports like soybeans - crippling U.S. farmers. Trade volumes shrank. Prices rose. Consumers in both countries paid more. Global supply chains bent and broke.

This spiral fits Lerner’s model perfectly. Both countries tried to win but ended up taxing their own economies. It's like two neighbors blocking each other’s driveways out of spite - and then wondering why no one can go anywhere.

Scenario 2: The Truce – A Pause, Not a Peace

Now picture this: after months of economic damage, both sides say, “enough.” They agree to a partial rollback. This happened with the Phase One trade deal in 2020. China promised to buy more U.S. goods. The U.S. backed off new tariffs.

Great, right? Sort of.

Yes, it eased tensions and helped some exporters (hello again, soybeans). But most tariffs stayed. China didn’t fully meet its promises. And the structural issues - tech theft, subsidies - remained unresolved.

This is the halfway house. The bleeding slows, but the wound is still open. Trade recovers slightly, but the trust is fractured.

Scenario 3: The Standoff – The New Normal

Finally, we have the long-term stalemate: tariffs remain, trade adjusts, and both countries “decouple” bit by bit.

This is where we are today.

The U.S. still has tariffs on hundreds of billions in Chinese goods. China retaliates. Both economies slowly shift - U.S. importers turn to Vietnam or Mexico; China looks to ASEAN and Europe. Supply chains evolve, but efficiency drops. Everything costs a little more. Growth lags.

And the Lerner symmetry still applies. Those tariffs? They’re quietly taxing exporters and raising prices back home. No fanfare. Just a slow burn.

Final Thoughts: Trade Wars Are Boomerangs

If the Lerner condition teaches us anything, it’s this: tariffs hurt both ways. You can’t win a trade war by throwing taxes around. They come right back at you - hurting your exporters, your consumers, and your long-term growth.

Trump’s trade war with China showed this in action. The U.S. paid more, sold less, and achieved little lasting change. China took a hit too, but adapted.

So what’s the big takeaway?

In trade wars, there are no clean victories. Just costs - some obvious, some hidden. And if we want smarter policies in the future, we’d do well to remember what Lerner (and Abel) taught us: economic systems have symmetry - and that symmetry bites back.

The Mahakumbh Marketing Playbook: Modernizing the Lost & Found Saga

Lost & Found – R.I.P. Human Drama

I miss getting lost.

No seriously, back in the day, getting lost was an emotion. It was a plot twist. It was the reason for Bollywood’s existence. Today? It’s just…a GPS glitch.

You see, man is supposed to be a social animal. We were wired to mingle, bicker, play, fall in love, lose people and find them again - preferably with melodrama, rain, and background score. But no. Technology is killing it.

Socializing is now reduced to likes and comments on a post with a dog filter. Playing games means sitting in front of a console and yelling “camp the base!” at someone in Estonia. Even dating is a virtual tête-à-tête with someone who might be a fridge in disguise - or worse, a bot masquerading as Lolita_69.

Even our storytelling has suffered. Remember Bollywood’s golden age of "Lost & Found"? That magical plot device where a simple earthquake or mela separated families like socks in a washing machine - only for fate to reunite them decades later with matching birthmarks and theme songs?

Take Waqt (1965) - a disaster separates a happy family. No Google Maps. No Aadhar card. Just destiny, drama, and a whole lot of melodious pining.

Amar, Akbar, Anthony... and Alexa

Or Yaadon Ki Baaraat, where a tragedy tears apart brothers, but a childhood song knits them back together years later. Or Amar Akbar Anthony, where three brothers are adopted by families of different religions - Hindu, Muslim, Christian - and then reunited in a divine moment of joint blood transfusion. Yes, they simultaneously donate blood to their mother like the tributaries of the Ganga merging into one biological miracle. Science weeps. Bollywood rejoices.

In Parvarish, a police officer’s son and a dacoit’s son are interchanged at birth - growing up on opposite sides of the law. Classic The Departed meets Butch Cassidy, if you like your metaphors spicy.

But today? You can’t even misplace a kid in a fair without someone scanning his forehead. Literally.

Kho Gaye QR Mein: Mela 2.0

Take the recently concluded Mahakumbh. Now THAT was the dream setting for a classic "Mele mein kho gaya tha" story. A writer’s paradise. Lost children, teary mothers, impromptu songs, maybe even a holy cow or two nudging a character toward enlightenment.

But no. Enter Techno Babu with his QR-coded kala teeka.

Yes, Fevicol (Pidilite Industries) , in its infinite wisdom (and adhesive strength), launched the Teeka ID -a traditional black dot on the forehead, only with a twist. Embedded inside it? A QR code. So if your kid wandered off, a simple scan gave you all his details - name, address, favorite cartoon, probably even his lunchbox contents.

No suspense. No "Bachha kahaan gaya?" wailing. Just a beep and poof - child located. Drama canceled. Plot lost.

It’s like someone took your DDLJ moment and replaced it with a push notification: “Simran has been auto-rescued. Please proceed to Gate No. 3.”

So here lies the lost art of getting lost. Hijacked by GPS, murdered by QR codes, and buried under real-time updates.

I say bring back the chaos. Let us drift. Let destiny do its thing. Let us meet long-lost siblings through dramatic songs in shady bars. Let teekas be just teekas and not Google Maps in disguise.

Because sometimes, being found is only special…if you were truly lost.

TArTAr

One of the most respected business conglomerate in this country is embroiled in a bitter battle at the very top. Accusations and counter allegations between Ratan Tata and Cyrus Mistry is flying thick and fast. Cyrus's ignominious exit from the chairmanship of the group (under dubious circumstances) has now spilled in a turf war on the boards of TATA group companies. All this points to one thing - the sparkling white image of the TATA's is now stained beyond repair...TATA has become TARTAR. The public spat has become a sorry tale of one upmanship of Ratan Tata who was long expected to ride in the sunset. His prodigy was non other than a clansman ( parsi) who was anointed after much fanfare (global executive search is what the TATA's would like to call it).

Then

Now

 

Like Tartar (dental terminology for yellow color on Teeth) this unsavory spat threatens to tarnish the image of Tata with sordid allegations of mismanagement, misappropriation, dismantling of organizational structure, betrayal etc.

Cart to Heart: The Joy of E-Commerce in a Box

Ah, the sweet sound of jingles isn’t just from sleigh bells anymore - it’s the chime of notifications for online deals, heralding the arrival of the modern-day Santa: the ubiquitous delivery guy. Sporting not a plush red suit but rather a t-shirt and a cap, these are the poster boys (and girls!) of the consumer revolution sweeping across India.

You simply can’t escape the flood of ads these days. From a patient nudging his doctor for online health steals to an underling coaxing his boss to snag that sleek laptop deal, everyone’s aboard the e-commerce express. And, oh, if you tuned into this morning's news, you might have caught the latest sitcom episode - starring none other than Bansal of Flipkart and Bahl of Snapdeal duking it out on Twitter. It’s like watching two tycoons in a playground tiff while their money burns faster than a bonfire on a chilly December night.

E-commerce is nothing short of a miracle for the 'instant gratification generation.' Our shopping carts have become the new getaway cars, zipping us straight to consumer bliss. The surge of shopaholic adrenaline when you see those eye-popping offers and portals shouting ‘return, return…apni dukan’ is downright irresistible. Hitting that 'SHOP NOW' button feels like reaching enlightenment—a better life just a click away. And who is the harbinger of this new era? The door delivery person, arms laden with packages, bringing not just your ordered goods but a dose of happiness.

Our backpack-wearing heroes have become the new 'daakia' (postman), zooming around even in tier-3 cities. They carry not letters but parcels of joy, from bulky electronics to fragile heirlooms, all bearing the sacred tagline, ‘sign here, please’. Whether they're part of the vast network of Amazon or buzzing around for local courier services like Expressbee or Bluedart, these folks are the unsung warriors of the e-commerce battlefield.

Ask any e-commerce veteran, and they'll tell you - delivery is the priciest, trickiest part of customer fulfillment. Every day, millions of packages crisscross the country, cash changes hands, and these delivery champs are the ones beating the clock, often giving the pizza delivery guys a run for their money.

The Indian consumer, ever so value-conscious yet convenience-seeking, sees the delivery person not just as a service provider but as a Santa Claus of sorts. Each doorbell ring doesn't just signal the arrival of a package; it's a promise of joy, a hint of excitement, and a symbol of the changing face of retail in India.

In our latest campaign at homeomart.com, we celebrate this spirit, showcasing how e-commerce has not just changed how we shop, but also how we connect with the little joys of life. So next time your doorbell rings, remember: it's not just a delivery; it's a slice of the new retail magic, right at your doorstep.

One humdinger of a picture and an inspiration - the logo in making

The venture idea was positioned clearly in our mind when we set out on the new Business venture. We knew the gaps in the market place and wanted to fill them with a unique value proposition. We also realized that having a simple, clear yet strong identity was also crucial to occupying the consumer mind space. The eCommerce market is a fiercely growing and competitive business landscape in India. It takes a lot more to stand out than a mere value proposition.

Health care in this space is like the plain Jane on the ramp walk: unglamorous and barely noticeable . For a young demographic crowd gorging on clothes, footwear and accessories, where fashion and trends is the buzz-word, hip hop happening market places selling lifestyle products are the toast of the eCom world today. But a churn is happening, albeit slowly and as the population greys, consumer priorities and preferences will follow suit. And we might find the sweet spot here...... or so we believe.
  
However this blog article is about our logo and why we were inspired by the Vitruvian man.

for starters,vitruvian man is a perfect culmination of the genius of Michelangelo whose skill of fine arts and knowledge of science culminated into a humdinger of a picture. It packs a thousand punches, so to say, about the divinity of creation and HIS sense of proportion in humans and paradox in numbers (i.e, trigonometry if you like). And Michelangelo brought this paradox and proportion beautifully in the vitruvian man.

NASA was inspired too, it sent a vitruvian type image of human form in the deep space probe as beacon for the intelligent life (?) on earth about 30 years ago. And it has just entered inter stellar space!

For us vitruvian man stood for the 1490 AD message of Michelangelo: that the Meso-cosm unites the Microcosm with the Macrocosm of our known Universe. Simply put the workings of the human body is an analogy for the workings of the universe.

Cosmic healing therapy for instance is based on this premise, it believes that Gaia (energy of mother earth) which is a part of the energy of the supreme consciousness and intelligence, which we are surrounded by, has the power to unblock the malfunctioning chakras in the human body and restore it to normal health

Hahnemann the father of homeopathy propounded this in a slightly different way - Similaia Similibus Curantur (like cure likes). Starting with cinchona tree, he proved that substances that cause symptoms similar to an existing disease would acutely aggravate the condition and present other side beneficial effects.

He devised a process called potentization that would release the spirit or the dynamic healing force contained in these substances. Given in small doses, these highly potentised substances stimulate the body’s abilty to heal itself ( a bit like how they show advanced alien forms cure themselves in Hollywood movies).

And this system of medicine stood the test of time (200 years todate) and is delicately poised at the intersection of medical, human, biological, physical and spiritual sciences.

Our logo encapsulates this spirit

• The image is made up of small dots in various dimensions represent the pills and drops (common form in which homeopathy is administered). Homeopathy medicines typically come in pillules.drops,Globules which are spherical in shape.
• The dots spread out in all directions from the center (inside out) indicating the innate healing abilities of this form of medicine..This corresponds to the Hering’s law of Homeopathy
• The dots are placed like the petals in a flower representing the Bach flower remedial system of homeopathy. Dr.Edward Bach, an English doctor from Warwickshire in 1886 discovered 38 flower Remedies containing healing properties with the help of which the sufferer could again strength to over come his anxieties, his fears, depression and so assist in his own heating in a natural way.
• Inside it is the Michelangelo's Vitruvian man signifying the oneness with nature striving for balance and proportion
• The Vitruvian man with arms spread out also symbolizes ‘H’ as in Homoeopathy

The W-L balance

It has been close to 5 years since I walked the other path. And recently I came across two articles one by Whitney Johnson & the other by Sidin Vadukut which echoed some innate voices in the grey hills to this article.

The journey of entrepreneurship is no doubt tricky and challenging. And the reasons that drove me into it was a little bit different from what Whitney had to say.

Coming to her bit first; What drives entrepreneurs? At what age that creative force comes into play? Whitney attempts to answer this. She says that as individuals move into a higher realm of self actualization, what she calls ‘Erikson's Seventh developmental stage’, creativity is a psychological urge into higher gratification and not just something ‘nice to do’.

She goes on to add that this emotional ballast stems from a better quality of life fueled by good well paying jobs secured by medical care which is the reasons why age group of entrepreneurs is shifting into the 40 plus years extending 50 plus years category when people venture out into solo or co creation.

True.

But what about this thing called ‘Work-Life’ balance? How many get prompted by this term to take the plunge?

After 16 years of turning wheels in corporate world, I realized that while the wheels were not only turning slowly much against my expectation, life was essentially happening to me than the other way around.

Soon it realized upon me that the term was inverted. It should have been Life-Work balance.

Work equated at the same level of Life is fundamentally flawed & misplaced. Work is a subset of life, a thing we do to sustain life at a monetary and materialistic level. But in the rat race of today’s existence, many people believe that they are two perfectly different worlds that are always at odds with each other and somehow needs to be balanced.

So a typical world spins around the office, its files, meetings & calls 9-to-7 five days a week and what’s left after that essentially makes up life. Those essential mundane things called shopping, home, Bills, school entertainment etc et al.,

What it all boils down to? Making wish lists and simply burning both ends to tick mark one by one. However the problem is that this list never ends and the deficit catching up much like the Govt’s fiscal deficit always perpetuates.

If you can get over with the list and believe in the following quote by Professor Howard Stevenson of Harvard Business School :

“Entrepreneurship is the pursuit of opportunity without regard to resources currently controlled.”

Then take the Plunge.

Because at some point in life, and it may be now, work experience and its acquired skill sets will tip the balance. It gives you that bit of confidence to invert the equation

However as an entrepreneur things can get really nasty. So be prepared to read this every morning

“We have done so much, with so little, for so long, that we can now do anything with nothing.”

And finally after all the sweat & toil, and the rough ride through the rabbit hole it may be time to savor what Whitney Johnson adds as a parting shot

‘The urge to create, to generate a life that counts impels people to innovate, even when it's lonely and scary’.

Chacha Sam's Crown and the Chessboard Tussle: The Govt vs. Vodafone Saga

Navigating the labyrinth of government corridors can often feel like playing a lopsided game of chess where the knights and rooks have decided you’re playing checkers instead. Ah, the undeniable charm of bureaucratic jousting, where taking the low ground isn't just a strategy, it's practically etched into the rulebook, and they - the steadfast keepers of red tape - ensure you never forget who's the king of the Raisina Hill

Picture Uncle Sam, but not with his stars and stripes - oh no!. Instead, he's donning a majestic Indian crown, the Kirit, complete with the Ashoka lions and Chakra. There you have it: our very own Chacha Sam of governance, presiding over his dominion with an invisible crown hovering above his head like a halo with a bureaucratic twist.

And what does this all-mighty government do when someone cheekily points out that the emperor’s new clothes are, in fact, a bit passé? They whip out their quill and rewrite the playbook, of course!

My days have been rather animated lately, following the Govt vs. Vodafone heavyweight bout - a true slug-fest that saw the underdog telecom giant not just dodging punches but landing a few good ones, right in the kisser of Indian tax laws. The Supreme Court, bless their hearts, dove into the intricacies of Sections 5 and 9 with the gusto of a detective in a whodunnit, refusing to be hoodwinked by the government's creative interpretations.

The Vodafone squad, let's not kid ourselves, are far from being the saints they paint themselves to be. They’re more like modern - day neocolonialists, cut from the same cloth as Robert Clive, who side-stepped the government's bear hug by crafting a deal on some sunny, tax-haven island. But here's the kicker: the lollipop they were eyeing wasn't just any old treat, it was a jaw-dropping 55,000 crore rupee extravaganza!

Such brazen gall right under the noses of our very own Chacha Sam was just too rich. With their pride smarting, the government bared their fangs, vowing to conjure up laws that not only clarify but reach back in time, all the way to 1961 - like a policy DeLorean -ensuring they can lasso any runaway cases back into their corral.

This might be the government's way of trying to write themselves as the wise old sage, but it's more akin to being the smirking trickster - plotting to ensure that in the game of bureaucratic snakes and ladders, they're the ones with the longest ladders and the shortest snakes. "Heads I win, tails you lose," they proclaim with a twinkle in their eye, ready to have the last laugh in this grand old circus of governance.

Morgan Stanley & the pursuit of Happyness

Remember Will Smith in the Pursuit of happyness? The first time I saw the movie, the telemarketing tactics adopted by Chris Gardner (played by Will Smith), the intern stockbroker, struck me more than the storyline about his struggle for livelihood.


As a single parent he has to achieve the same results and better in 6 hours where everyone else has 9. He calculates that it would save him 8 minutes a day if he did not put the phone down between prospecting calls. So he keeps the handset up and uses his finger on the button so that he doesn't get distracted. He also doesn't drink much water to avoid wasting excess time in the bathroom.

Why? The company, Dean Witter, where he is earning his spurs has ingrained him with a simple idea: "x number of calls equals x number of prospects, x number of prospects equals x number of customers, xnumber of customers equals x number of dollars."


The movie not only makes a statement of the hyperactive competition of the US Financial markets of the mid 80’s but also how telemarketing became an integral part in the growth of the financial services Industry (in India this phenomenon was observed about 15 years later)


Dean Witter had an interesting tagline "We measure success one investor at a time" and much like the Business it was into i.e, M&A (mergers and acquisitions) it too underwent mergers (with Reynolds) and was finally acquired by Morgan Stanley which adopted its tagline.


Another iconic name is soon set to join the ranks of Dean Witter; Smith & Barney. Ironic for another legacy company whose tagline was “They make money the old fashioned way. They earn it”.


In case you missed the Irony part, it too is being gobbled up by Morgan Stanley whose role in the subprime mortgages & creation of other toxic assets healthily contributed to the US financial crisis.

Of white Ass, Striped suits & Business etiquettes

You have heard of the proverbial white elephant but another of its ilk (very close in the animal kingdom) with similar characteristics greeted me and Sreehari (my colleague who took this picture precariously perched on his motorcycle with amused onlookers) during lunch hour in one of the by lanes of Malleshwaram recently. Resplendently white, this donkey made me ponder about the injustice that English language has done by ignoring it to the idiomatic pedestal that has been reserved for Elephas maximus. If the Greeks could associate this animal with Dionysus, the god of wine, the English could have done it better is my argument.

White elephant is described for “something that is large and unwieldy and is either a nuisance or expensive to keep up”. Its etymology is traced to the King of Siam's (Thailand where they are found) who had this reputed practice of awarding a white elephant to a courtier who had fallen out of favor. A white elephant was considered sacred and couldn't be put to work, so the upkeep of the animal would ruin its owner.

So if a white elephant was no more than an expensive burden but what would be its equivalent for a white Ass? I pondered. Here is a well known hard working beast that is commonly used for transport whether riding, pack transport, pulling carts or for farm tillage, threshing, raising water, milling, and other jobs- would be unfair to find a similar analogy as that of white elephant. So I try to find an equivalent in the world of cubiclenama (for starters this is a word used by Sidin Vadakut for a column in Mint, he describes it as a place “to look at the pleasures and perils of the workplace”). And and it turns out to be a typical CEO turned evangelist who could be best described as follows.

This once upon a time CEO puffs up at every given opportunity to put his outdated corporate karmic history on record. Even if his current role is far removed from it. This guy doesn’t realise his that his current situation is akin to that of an aging Bollywood Heroine who has fallen out of favour with the producers. He desperately tries to cling to the spotlight by ‘buying’ news space as the purveyor of his current pet theme (addressing Industry minnows as angel incarnate), on other lean days he cries for attention with his incessant twitter posted on LinkedIn. It is a different matter that his past corporate profile is a cruel anathema to the segment he now swears by ( a bit like Rambo acting now as Baba Ramdev). His photo is Darth Vader school of facial expression personified that almost says “ Hey,been there done that “ types. But people who have worked with him know that this countenance is one side of it , the other side is ghoulishly scary one when in foul mood- he is infant terrible tearing up everything that the subordinates came up with and stomping up & down on the shreds. On other similar days he would relentlessly clamor for the life of an employee who did not comply with his whims & fancies.

Such is this “Dr.Jekyll–now-Dr.Hardy-later” honcho, but ignoring all this I tried to introduce him to someone I thought was complimenting his Business proposition & was mutually beneficial as a Business contact. But for reasons I am yet to fathom, this jacko doesn't even bother to respond. As though I stood to gain from it! The person I was introducing runs a Software company in Bangalore that offers innovative IT products & offerings on a service model for small companies.

In another instance, a Sr level candidate and ex-colleague I had referred met him at some place in Mumbai. But this twiddle-dee striped suit was so engrossed with his Blackberry throughout the interview period that he rarely made eye contact with this candidate or showed basic courtesies in a face-to-face meeting. This irritated candidate later told me that he came out of a meeting with a Blackberry device!

So Mr.Fancy CEO turned god-knows-what , here is the epithet that goes to you for proving what it takes to be a white Ass .

A Citi that Slips

Have you ever gone through an ordeal with the customer service dept in your bank? Chances are that 9 out of 10 you would. Can you pls describe how the experience has been? Chances that you felt like tearing your hair out or yelping at the other side would have been equally bright. And a thought that some pea brained official sitting in a cosy corner cubicle in some part of the country formulates the bank rules and in another you have a ill trained fresh- on- the- job executive sitting in the call center and reading out the rules like some kind of sermon in a Sunday mass that the customer is customarily obligated to. While the disconnect is complete , all in the name of Customer (kasht se mar) Service.

For a while I had been under the impression that Citibank was the better of the lot when it came to Internet Banking. The user interfaces were friendly and the features less cumbersome as compared to ICICI Bank & HDFC Bank (in my firsthand experience). But that was until recently. Last week I attempted to register a new payee in my account to effect some electronic fund transfer. After keying in the mandatory beneficiary details in the ‘Add new beneficiary’ section , the bank automatically sent a OAC (online authorization code) to my mobile number. The ensuing page gave me two options 1. Authorize payee now 2. Authorize payee later. As I did not get the SMS (OAS) immdtly I opted for option 2 (i.e, Authorize payee later). A good 5-7 minutes later I received the SMS but by then the webpage has expired and relogging into the account I see that the payee was not in the pending list (i.e, registered payee list). So I go through the whole rigmarole again to find in the same spot in the beginning.

Then comes the dial ordeal. I dial the call center and go through all the number pressing options, first dial the account #, then the Pin#, then listen to your automated account balance and then press 9 to finally go to a call center executive. Here once again you through the online verification and after another good 5 minutes of explanation, the executive says ‘as a part of our new security procedures’ the authorization option is valid only for a few minutes on the Account page. That means if there is a time delay in my receiving the OAC then the whole exercise is as good as a walk in the Garden. I protested that I did not get the OAC immdtly on 2 occasions and therefore had to opt for option 2 (i.e, Authorize payee later). The call center executive nonchalantly says ‘then you have to call the mobile service provider’ as the problem is at their end. But then why the ‘Authorize payee later’ option I ask? The reply harks back to square one ‘Sir as a part of the new security .....’

I throw up my hands in despair.

The Ambani Saga continues...

The supreme court made its verdict in the Ambani Gas dispute yesterday. It was no ordinary dispute but the kind of media attention it got was amazing. No other corporate group would even come close to the kind of drama that was played out. The 2 dramatis personae of this saga, Mukesh & Anil have been at each others throats for a long time,and the family story has been the kind of stuff or rather fluff that the Bollywood mills churn out regularly. There is this patriarch (Dhirubhai) who starts out as a petrol bunk attendant but goes on to successfully flourish in the license raj era and create an industrial empire with his typical Gujju way of working around obstacles . He excels in the art of covert operations and wherever possible uses the cloak & dagger technique to hit out at competitors. But then the father never expected that the same techniques would be used by his 2 sons against each other.

The supreme court episode has been one of the important turning point of this drama (power struggle) that probably began after Dhirubhais death in July 2002. The father died telling the world “ My sons are never going to fight over family assets. They’ll always be together”. He probably underestimated that the 2 brothers (with a 2 year gap between them) were poles apart right from their childhood and deeply distrusted each other. So when he went ahead & made Mukesh the vice chairman, Anil raised the hackles because he felt Mukesh was treating the Reliance group like his personal fiefdom and alienating him from the decision making process. On the other hand Mukesh saw his younger brother as a non serious businessman; one who had time to go to parties, rub shoulders with politicians and middlemen and move around with celebrities.

However somewhere down the line Mukesh seemed to have made his mark especially by commissioning the Jamnagar petrochemical plan (which was touted as one of the world’s largest and most complex project) and claimed his father’s legacy from the Investors and the Business world. That has only fuelled Anils ambition & his angst to outdo him . And the ensuing war , in the truest of Ambani tradition, has been fierce , murky and no holds barred. The 2 brothers have hurled mud at each other that is still stuck, they have ripped each other’s credibility as entrepreneurs, they exposed the unprofessional manner in which each ran his companies, they exposed the alleged dishonesty of senior most managers in the group. All this & probably it’s still not over , like Shahrukh khan In Om Shanti Om Anil might be still saying “ Abhi Kahani baki hai, mere dost”.

P.S: I Recommend the book ‘Storms in the Sea Wind’ by Alam Srinivas for readers interested in the blow-by-blow account of the war between Mukesh & Anil.

The Big Wave & its aftermath

It was a serene night setting on the 10 floor of a hotel in central Chennai recently. The roof top setting had a variety of seating arrangements each giving a section view of the panoramic night lit view of the city. The weather was surprisingly pleasant, the summer onslaught would begin little later. With a light blanket of smog engulfing the city, the city lights appeared with a halo down below. Amid this setting were 2 old ex-collaegues of mine, the 3rd one expecting us to join any time , and involved in some light banter. One among them had just left a Sr.Mgt role in a multinational bank of recent history to set up his own fledgling firm. The other one also had followed suit. Some of our talk would hanker back to the days we had spent in a high profile bank earlier. For we had seen the good days of this bank that rode the big wave in the consumer market between 2000-2006 and a lot of exciting things had occurred then.

But some time last year this bank went into a so called ‘tactical retreat’, which essentially meant that it had abandoned its pure unadulterated high growth strategy . So it scaled down from disbursing roughly 1200 Cr of Car loans each month in 2006 to less than Rs 100 Crore a month in 2009. Other large volume products like Two wheeler , Small ticket Personal Loans (STPL)were not so lucky, they were abandoned altogether. The collateral damage of this demolition exercise was felt on the careers of innumerable people both within the bank structure & those outside like DSAs (or direct sales agents). The latter had a veritable army of their own who had thrived on the generous dole out of sales linked incentives . And like Narayana Murthy’s orderlies they were famed for being millionaires overnight. People within the bank structure i.e, on its rolls who until then were the darlings & free masons of the retail market , and accustomed to fast track growth & hefty bonuses and incentives were suddenly left in the lurch. They became a part of the so called ‘Common Pool’ a term ingeniously devised by a shrewd HR to either find less honorable avenues within the Bank or put on undeclared notice.

The bank had suddenly shed its skin & was chanting the new 4C mantra - Capital conservation, Credit Quality, CASA & Cost Optimization. In practice it meant

• The bank became extremely choosy of whom it lent to i.e, select prime instead of prime & subprime customers. These customers had to walk into the bank branches instead of being hounded in the open market
• Employees who were hawking loan products & those underwriting them were shifted to recovering delinquent loans. Few others were moved from the truncated retail lending business to branches to chase current & saving accounts or HNI individuals

As we were discussing the aftermath the third one who epitomized this change joined us, from being a Commercial & Personal equipment loan champion in the bank he lamented his current role of a Collection Manager whose daily routine now was to be the 4th in queue of bank executives standing in front of the dreadful defaulted customer. Life had come a full circle for him like many others.

All this in the new lingo of the bank’s fiendish HR head, who incidentally bears his name to a Hindu GOD is , ‘ Collections are now a part of Customer Service’. Many of the bank customers who bore the brunt of its goons earlier couldn’t have scoffed less.

Cash for Clunkers

Many funny terms & jargon's emanated after the grand bust of 2008 and amongst them ‘Cash for clunkers’ best reflected the euphemism that Americans invented to deal with the aftermath of the excesses. So here was a state funded dole out that encouraged Americans to let go off their gas-thirsty vehicles off of the roads. But whats that go to do with their economy going belly up you might say. Pure economics was the main consideration though to an undiscerning eye it meant that Americans got new, efficient vehicles on their roads where gas-hogs once existed. And I guess there were plenty of takers for the $4,500 vouchers toward new vehicles, it was said that Auto Dealers everywhere in US ended up seeing more clunkers than they ever thought possible. Its another matter that they will make money out of these by recycling it to some poor 3rd world market.

The economics behind ‘cash for clunkers’ was revealing, it actually busted the American ‘free market’ hyperbole that is ‘Tom Tom’ed around the world. The big 3 US Automakers (GM,Ford & Chrysler), much like the motifs of dead towering presidents on Mount Rushmore were destined to be engraved on Automotive history for posterity . That was ideally what the market forces operating in a free market would have wanted to. But no, the stakes were too high for the Govt to sacrifice, closing the Big three would mean loss of 240,000 very highly-paid jobs, a loss of 980,000 highly-paid jobs at the suppliers and local dealers, plus the loss of 1.7 million additional jobs throughout the economy—a total loss of 3 million jobs. Never mind they churned out large sport utility vehicles (SUVs) and pickup trucks that made customers turn away from the counters. It also dint matter that Darwinian market evolution missed them completely, these US automakers became increasingly uncompetitive suffered from considerably higher labor costs than their non-unionized counterparts from Japan & Europe, including salaries, benefits, healthcare, and pensions. In return for labor peace, management granted concessions to its unions that resulted in uncompetitive cost structures and significant legacy costs. And the damning message came as early as in 2006, Consumer Reports reported that all 10 of the cars that it considered to be the 10 best were built by Japanese companies.So the bust came as a blessing in disguise for the Govt to bail them out, even though only 41% of Americans approved of the actions (as per Washington Post poll finding).

If you missed the humor in all this here it goes; The message from the US bailout was clear ‘If you are poor & loose $100 the Govt would do nothing to you , but if you are rich & loose the $100 billion, the Govt would bail you out’ . Bizzare but true.

The Unstoppable Power of Word of Mouth: A Lesson from IFB

In the vibrant and ever-evolving world of Sales & Marketing, the timeless power of Word of Mouth (WoM) has always held a special allure. Reflecting on my early days in the field, my journey began with a pivotal experience at IFB's marketing head office in Bangalore, back in 1994. It was a time when India was poised to ride the wave of Manmohan Singh’s economic reforms, a period that promised to reshape the market dynamics.

Landing my first job in the private sector with IFB, then in collaboration with the German giant Bosch and known as IFB-Bosch, I was brimming with the lofty marketing theories I had absorbed during my MBA. Yet, it was the simple, yet profound, concept of WoM that truly opened my eyes to the grounding realities of marketing.

The Impact of WoM: Unpacking IFB's Marketing Success

At that time, IFB found itself in a unique position within the washing machine market - a niche, yet uncontested, player in the fully automatic segment. Remarkably, without the heavy artillery of advertising and marketing budgets, IFB commanded a staggering two-thirds market share in this segment. This was an era when Videocon's jingle was the new anthem of the masses, overshadowing even the famous Nirma washing powder jingle. Despite Videocon and other giants like Onida, Godrej, and TVS-Whirlpool venturing into fully automatic washing machines, none could hold a candle to IFB's sales figures.

My role in the Customer Contact Programme (CCP) at IFB offered me a front-row seat to the raw data of consumer feedback (fed into a FoxPro program), which painted a picture that seemed almost too good to be true. Day in and day out, CCP forms flowed into the marketing head office, filled out by service technicians from across the country. The feedback was captured during installation visits, sweetened by the gift of a bottle of Cuffs’n Collars, and included a seemingly simple question:

Q: You bought an IFB washing machine because

• Newspaper Advertisements
• Dealer recommended strongly
• Product demonstration/Sales appeal
• Neighbour/Relative/Friend recommended
• Others (pls specify)

Customer Feedback: The Eye-Opening Data from IFB

In what turned out to be majority of the cases (something like 70 -75%) customers overwhelmingly bought IFB because of the positive reinforcement due to word-of-mouth publicity in their relative/friend/colleague circle.

The company tried, rather unsuccessfully, to carry forward this concept by getting prospective referrals from these customers through the same CCP programme and marketing them directly. It did not succeed because the customer pull it generated was effectively cannibalized by the dealer through undercutting and realizing better price margins to consumer. That the consumer durable market was highly price sensitive and the dealers ravenously undercut each other on product margins helped them.

However the fact that WoM helped the company sell more than its competitors who were bigger brands and had much higher marketing spends in the market stood out in my mind. In the process I learnt a thing or two about database marketing from the marketing Guru ‘A Ramana Rao or ARR as we fondly called him’ who made this concept the cornerstone of company’s marketing strategy and took the company to NumerUno position in the market. That crown went uncontested for many many years.

The Evolution of Consumer Voices: From Personal Networks to Digital Platforms

Fast forward to the present, and the significance of WoM has only magnified, with brands now keen on measuring its impact in a structured manner. The digital era has amplified consumer voices through blogs, forums, social networks, and RSS feeds, among other platforms. Giants like Toyota, J&J, Kellogg's, and Nike have fully embraced WoM, supported by specialists like Chatthreads Corp, Cymfony, Umbria, Trnd, and Buzzador, to navigate this powerful communication and advertising medium. This evolution from a humble, organic form of endorsement to a strategic tool in the marketer's arsenal underscores the enduring power of Word of Mouth in shaping brands and influencing consumer choices in an increasingly connected world.

Pepsi Redux

Pepsi is shedding its logo for a bolder theme. Its marketing chief d’Amore has unveiled a new logo- well not one but 3 actually. The earlier 3D logo is replaced a smooth new circle which poses as a “grin” for diet pepsi, a ‘Smile’ for the regular Pepsi & a “Laugh” for the Pepsi max. All this they claim is a part of the creative destruction of the brand. The designer traces his new creation not just to the pepsi days as a local brand in New Bern N.C but to the touchstones of western civilization: the golden ratio, the Parthenon, Mona lisa smile, Einstein’s theory of relativity & of course iPod. All this hoopla for a few gulps of sugary carbonated water? You might say, well with consumers increasingly preferring fruit juices, & fruity sodas they’d better come up with something exciting.

The last part of the inspiration bit was interesting i.e, iPod. Its creator Apple stands out in a world of bland corporate identities & product designs. Its visual identity , store design & product designs have been inspiring. They touch people at a emotional level when most product fail to do so and most of that Credit goes to Steve Jobs , its honcho who is apparently very passionate about aesthetic beauty & excellence and demands both.

The Asatyams of Indian Industry

This week a good friend & ex-colleague touched base to say Hi from Mumbai. Our talk meandered on an Organization we knew well & its recent developments and how the promoters did a con job of it. It goes something like this, sometime back there was an upcoming private sector bank say X & another wannbe BPO company you can call Y. The promoters of Y find common (unholy) ground with that of X through a common friend who was once in the top mgt echelons of some multinational company who are now in X. They float a JV Co say Z and get senior professionals from the Banking sector promising them stock options & a bright future. 3 years down the line none of it materialises, it turns out that while the promoters of X & Y made money clandestinely, the banking professionals who came in had to leave with empty promises while others in the junior rungs are left with a hopeless future in Z as X has changed ownership hands and no longer supplies job to Z. Point is that the ASatyam’s of corporate India are dime a dozen and few fall out of the closet once in a while. So while Satyam has not been the first of its kind in India, many like DSQ have traversed the path before and there are many now perpetrating in varying degree and magnitude . Randomly examine some of these facets of Corporate India & you will understand what I am talking about

Advertising : If misreporting of financial statements amounts to a fraud in financial world what would you call misleading advertisements that propagate false claims on unsuspecting consumers? Advertising standard council of India (ASCI) has been pulling up all kinds of companies that have been falsely promising anything from anti ageing to fairness, long lasting blades to fat reduction, better food to dramatic health benefits . Most of these companies, as much as 47 in 2008 were booked for violation of ASCI codes on ensuring truthfulness and honesty in claims made by advertisers.

Marketing: Contests & schemes whose results never get announced, false/misleading promotional schemes & offers such as 0% financing , Discount schemes, 100% Returns etc. Many schemes are misleading in nature, the communication with its catchy line gets reflected prominently in the main body while the actual benefit usually subject to Terms & conditions goes in fine print under an asterisk.

HR : Moonlighting job role & responsibilities, compensation & benefit promises & other misleading claims to prospective candidates at the interview stage are common. Subsequently leading to unkept promises regarding Job role , compensation, rewards & benefits are common practices that HR depts. indulge in frequently. This got particularly accentuated during the bull run when competition was rampant & chasing scarce talent

Operations: People in India are now familiar how credit card companies trap consumer in the so called ‘debt trap’ with revolver facility, or take the case of Telecom Cos who have been accused of Improper billing & misrepresentation of tariff plans, Delays in refund payments , or airlines that does not provide seats despite confirmed tickets.

Stock Market malpractices: Rigging of company share price by promoters in collusion with brokers through circular trading or insider trading practices by Management in violation of SEBI guidelines are commonplace. The number of vanishing companies who get listed on the stock exchanges also tell the same story

Corporate disclosures : If one were to go by the number of firms that have volunteered to subject their corporate governance to assessment by credit rating agencies, it turns out that only 19 of the 4700 listed firms have made this cut. This talks volumes of the quality of corporate disclosures in India.

The Business of Conferencing

This week I attended a International conference in New Delhi, it was a 2 day affair with about 250 Foreign delegates participating from 32 countries in Africa. 

For the past 2 years I have attended several conferences in India and with a bit of hindsight and experience sharing a few thoughts on the business of conferencing.

I treat them as cardinal truths taken with a pinch of salt and humor

• Essentially they are networking forums where people with a nose for business opportunities sniff around intensely. The conference may be packaged with paraphernalia like speeches by experts & eminent personalities, panel discussions, exhibitions etc but it all boils down to Networking, some discreet and others not so.

• You will find conferences of every hue & type packaged as Colloquium ,Symposiums, Theme events, Industrial fairs & exhibitions or simply Summits throughout the year. This industry feeds a whole array of sub industries ranging from exhibitors, event organizers, expert speakers , hardware vendors, PR agencies and other service suppliers.

• For business starters, the conferences provide a platform for leapfrogging into the mindset and; perceptions of intended segments, for established players it’s a way of keeping up with competition and; staying relevant in Business.

• The Business of conferencing draws the best of suckers ,the big fishes come in as Platinum, Gold & Silver Sponsors while the small fishes get hooked up as partners to every conceivable item on the table ranging from Delegate kits, Travel, Media etc etc..

• The economics of conferencing assures that the promoter at least breaks even if not make tidy profits unless of course he goes overboard with spending.One way they keep the expenses under control or even minimize it is by hitchhiking on others. For instance an educational institution can be roped in to sponsor the event hall and food services by making them event partners. If the budget does not draw expert PR agencies to bring media traffic and coverage just go ahead & tie up with some nondescript media house willing to suck up as media partners. Internet B2B business portals are another cheap source to find event coverage that front line media cannot.

• Dont expect enlightened speakers to come & deliver insightful sermons on burning topics of the day at conferences. It could be some apprentice at the foreign embassy with horrible diction or some foreigner in some other orbit of his own. If it’s some motormouth bureaucrat you can expect him to be all over the place eating up precious time and adding little to the event

• Inviting top notch Govt ministers and official’s is a sure way of inviting trouble, not only is their itinerary unconfirmed till the last conceivable minute but due care has to be taken to protocol lest you rub them on the wrong side. 

• Don’t expect great food or services in the conferences even though they may normally be held at 5 star hotels. There can be a total blackout also (as my experience counts) , as the regular & alternate supply may go up in smoke at the same time.

The people fevicol factor in Organizations

Pidilite, the manufacturers of adhesive brand Fevicol brand have captured their brand USP through very imaginative & interesting advertisements on TV.

Whether it is the fisherman catching fishes with a few drops of fevicol, be it the overloaded bus with people clinging to it on a rickety ride or the guy hanging to his lady on a precipice, have very creatively rendered the brand's proposition - its ability to bind on any surface & in any condition.

Is there any such ‘X’ formula that Organizations can replicate to create stickiness with its employees? I have heard a lot of lip smacking verbose that Companies often dole of when they talk of their employee relations, however to the contrary the reality may be.

On their part, It may be a necessity borne out of the usual PR (public relations) demands and the business posturing required in the marketplace .

Last week I was speaking to someone I knew who after putting in 6 months of work in a consulting firm had left in a huff recently without a job alternative on hand. He attributed his exit to the style of leadership in the organization and lack of transparency and empowerment given to him on the job.

 He said that the mails from his boss started to get nasty and a feeling crept in him that he was not being valued at job. All this when he felt that Business was looking up after signing a couple of new clients!

From our talk I could gather that his engagement process with his employer had soured quickly and the relations got strained to break point quite abruptly.

Talking of effective employee engagement, Hewitt Associates define engagement as comprising 3 measurable behaviors on the part of employees.
1. Stay - people stay with the company despite tempting offers elsewhere, the extreme opposite is what happened in this case, people move on despite no job on hand.
2. Say - people say and advocate good things about the company. Employees also like to have their say on job, when that get stifled engagement breaks.
3. Serve - they exert a lot of discretionary effort which may not be part of their job description. This is particularly true of small organizations when one person dons many hats.

So in essence is effective employee engagement the invisible glue that binds people to organization? the secret sauce of successful HR departments?

Engagement in its entirety could mean a lot of things, developing and communicating effective career progression, transparent performance appraisal & feedback, Performance linked incentive programme with buy in etc.

Business Guru and a leading current genre influential thinker, Howard Gardner, has examined this aspect in his book “changing minds” where he says work place behavior is influenced by factors like role models (that turn out good or bad), & responsible (or otherwise) Co-workers.

But at its core it remains a heightened emotional and ntellectual connection with a job and the Organization sustaining it.

Private Treaties

Going through recent media reports I came across NEWS about how media houses were ganging up to offer advertising space to buy equity stakes in small companies. Commonly called SME, small business houses are being approached by media conglomerates to offer media space as a currency to buy latent wealth in a quid pro quo arrangement. Call it a new age commercial bartering or a meeting point of vested business interests, the trend is visible in the management space too, consulting firms bartering management services for equity stake commonly called sweat stakes in small companies. 

The commercial terms of these so called ‘Private Treaties’ makes for a compelling business deal, a win-win situation for all it seems. SME’s who were looking for publicity but could not afford to pay in cash can now find a messiah in the media houses. The latter will provide strategic media space that can reap commercial benefits for these companies in the form of brand equity building, subtle product and service message delivery to intended target segments and not but the least, enhancing the PR quotient of the promoters. 

Even the stock markets of late have taken a liking for News & views of small quoted companies, a ground for good speculative trading with media in tow. Similarly in the Management space, small companies can avail Management bandwidth & Networking skills that normally eludes them.

Whether its media houses or fancy Consulting firms, it’s all about recognizing the ‘hidden value’ of these companies and unlocking them by extending what appears a generous helping hand. Of course strings are attached; the promoters have to cough out 2-20% stake for these angels which eventually would mean a windfall gain for promoters when these companies grow to the next stage in an emerging economy.

What drives this kind of deal making? Jack & Suzy Welch have an interesting insight to this,”Blame the fierce competition of the global marketplace. Too often, deal heat is inexorable especially if there are other contenders in the ring”.

Whether such arrangements has a bearing on the impartiality of media and their primary business of fair reporting without bringing any conflict of Interest is a moot point . On the other hand can Management consultants be impartial and objective without being affected by ownership frailties in such scenarios?

SME has suddenly become a focal point of interest and attention to a whole new generation of evangelists masquerading as value partners, mentors, turnaround specialists, growth agents, catalysts, and what not. A truth to whether they measure up to their lip services can be found in the details of their so called working terms & conditions for engagement. These guys in my opinion are essentially Corporate miners who see SME’s as the next treasure trove for making quick money. 

A lot of parallel can be found in History books which is replete with tomb raiders masquerading as archaeologists, treasure hunters seeking distant sea shores in the garb of merchants & spice traders and so on. So it’s all about history repeating itself with new jargon's & mumbo jumbos suited for the current digital age.