The best corporate slogan ever?

Has to be "The network is the computer" for Sun Micro.

I first read this in PCQuest or one of the other computer magazines in India around '96. I didn't get it at that time. Growing up in a world of GWBasic and MS-DOS 6.0, I always used to wonder what was special about the hardware that SUN provided. Why do they have to charge Rs. 10 lakhs (1 million) for a server (in those days)? What did these servers do anyway that a PC could not do? What is different about a SUN workstation?

But oh man... this slogan encapsulates EVERYTHING about the information age. Everything about the internet. It is heartbreaking to see a company that can see the future, but cannot do anything to make money off it.

The Gartner hype cycle

One very original concept from among the IT analyst firms is the "Hype Cycle" from Gartner. It maps out the distinct stages in the adoption of new technologies -
-- Technology trigger
-- Peak of expectations
-- Trough of disillusionment
-- Slope of enlightenment
-- Plateau of productivity

Mapped out spatially, the hype cycle would look like this...

In my opinion, the hype cycle is a sexed-up well-marketed version of the following Axiom -
"Any new concept is over-hyped in the short term and under-hyped in the long term"
(Keep this in mind when you want to plan your cross-sector career moves...)

Examples of over-hyped technologies that will be big in the future -
-- RFID
-- Nanotech
-- Software offshoring
-- The mobile phone as the sole computing device for most of the world
etc etc

Examples of over-hyped concepts that have started making a huge impact (good or bad)
-- Video streaming
etc etc

Every year, Gartner places the different emerging technologies into the graph based on their understanding of where the hype is leading. The 2006 hype cycle is here (Click on image for bigger picture etc etc)...


More about the hype cycle straight from the horse's mouth.

The Daniel Loeb anthology - Chapter 2

Expanding on our previous coverage of Daniel Loeb's unique activism style, below is a letter sent to the management of Salton Inc, makers of the George Foreman grill.

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In the most recent quarterly results announced Wednesday, February 9th, the Company reported yet another "miss" on both lower revenues and poor margins. Short interest is one of the few benchmarks that seem to remain stable, with nearly 50% of the shares lent out to speculators who are betting that Mr.Dreimann will lead this Company into bankruptcy. Meanwhile, the Company's proposed restructuring, which has been in the works for over a year, remains a chimera.

What is most astounding about the Company's apparent death spiral is Mr.Dreimann's inexplicably insouciant attitude and the fact that he remains in charge. His tone and demeanor in our meeting last summer and on the conference call seemed to me to be one of denial and arrogance. I was disappointed that he refused to allow me to speak on the Company's conference call, but I might have forgiven him had he called me personally to apologize rather than having his lackey, Ken Sgro, insult my intelligence by blaming the slight on a "conference call administrator malfunction."

The conference call debacle pales in comparison to what I witnessed last summer when I attended the U.S. Open tennis final. You can only imagine my consternation when I looked around the stadium and saw the Salton name emblazoned all around the interior of the stadium walls next to such robust companies as IBM, JP Morgan and Mass Mutual. I had to wonder how much precious capital had been squandered in such a poorly conceived marketing scheme to promote the Salton name when the Company was in such dire financial straits. My bewilderment quickly turned to ange when I saw the crowd seeking autographs from the Olsen twins just below the private box that seemed to be occupied by Mr. Dreimann and others who were enjoying the match and summer sun while hobnobbing, snacking on shrimp cocktails and sipping chilled Gewurztraminer.

While Mr. Dreimann hobnobs at such social events and is driven around in a chauffeured limousine - I can only assume he has a chauffeur paid for by the Company; how else can one explain the $52,966 annual car allowance disclosed in the Company's proxy statement? -- Salton's shareholders and bondholders suffer the consequences. What is equally shocking as Mr. Dreimann's poor management, behavior and the fact that he is awarded anything more than subway tokens for his transportation needs is that this Board of Directors has sat idly by while he lays waste to this Company. In addition to the car allowance, how can the Board's compensation committee possibly justify granting Mr. Dreimann's exorbitant $600,000 annual salary?

One would assume that only a Board of Directors with no vested interest would look on while a CEO wastes corporate assets, is accused of irregularities with respect to the Company's distribution channel and is accused of trying to bully customers into engaging in uncompetitive behavior with respect to pricing. On the contrary, Centre Partners holds a $40 million preferred stock investment in the Company. Unfortunately for Centre, these preferred shares convert at a price
of $17.00 per share, which was a very substantial premium to start with and is an astronomical 494% premium to Friday's closing price. Nevertheless, one would think that Centre would want to protect the value of its preferred shares and perform its fiduciary duty, which in our opinion would involve relieving Leonhard Dreimann of his management duties as well as canceling his chauffeur-driven limousine.

In the course of my investigation into corporate governance matters at Salton I decided it would b worthwhile to understand Centre's operating philosophy and culture and to see why Centre managing directors, Robert A. Bergmann and Bruce A. Pollack, have not taken swift action to terminate the Company's bungling CEO. What struck me about Centre's website (www.centrepartners.com) was the wishy washy tone replete with business school jargon, buzz-words and cliches but little substance. Two examples are below:

"Our reputation rests firmly on the integrity, commitment and intelligence
of our professionals."

"Responsiveness has always been an essential, core value of our firm.
Whenever we are called by our partners, we react quickly to provide counsel
or services they need, and stay by their side through challenging times."

With all due respect to the professional staff at Centre, how intelligent was making a $40 million investment in Salton at a very substantial conversion premium, which could all be lost in a "cram down" should the Company have to file for bankruptcy? Secondly, one can only wonder how responsive Centre has actually been in light of the value destruction. I looked through the entire website and found it curious that there was no mention of holding management accountable or of Centre's own investment performance, which I imagine is probably pretty mediocre and inferior to that of the firm I manage. Third Point's culture differs from Centre's in our emphasis on performance, money making and accountability, in stark contrast to Centre's affable "Mr. Rogers" approach to investing. I suppose that if Third Point were to have a website, rather than the feel-good background of two shaking hands, we would likely depict a well-worn boot colliding with the backside of an incompetent manager.

It is admirable that Centre describes itself on its home page as a "firm with a middle market focus that seeks to make friendly acquisitions and equity investments," but the time for friendship with this CEO should end now. We at Third Point demand that Leonhard Dreimann be terminated immediately and replaced by either David Sabin or William Rue as interim CEO until such time as a qualified executive can be found to lead the Company back to the level of performance and prosperity that we believe is possible under new leadership.

Sincerely,
/s/ Daniel S. Loeb

Daniel S. Loeb
Chief Executive Officer

Related Posts:
The Daniel Loeb anthology - Chapter 1

What does the customer want really?

In many cases, a customer's desire for a particular product is actually a metaphor to an underlying deeper desire. And in most cases, the customer is not consciously aware of this deeper desire that they are expressing thru their interest in a product. To be a great marketer, you need to understand what the customer really actually wants. This is what will separate you from the riff-raff.

People buying condos are looking to buy into a lifestyle. Similarly, as Rashmi Bansal puts it so well in this awesome rip-roaring post, people looking to buy clothes are actually looking for wardrobe advice. And active users of social networks in most cases really actually want to get laid.

Check out this excerpt from Rashmi Bansal's post...
"There are two kinds of salesmen in the world - sorry salesmen and sari salesmen. The sorry variety diffidently walk upto a customer and enquire - just for the sake of enquiring - "Madam, can I help you?" Madam glares at the salesperson and he/ she beats a hasty retreat.

The second kind of salesman sizes up his prey and then moves in for the kill. "Aaiye na sister, baithiye na... " He then proceeds to pull out some 'latest stuffs' and even as 'sister' protests "mat kholiye" he grins and declares,"Dekhne ka koi daam nahi lagta." Or so you think.

The fact is once this sales fellow has dug his claws into sister's skin she will never leave the shop without buying something. "Kya mangaoon, chai, thanda..." And he proceeds to open a few hundred saris more without a care in the world about who will fold them.
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The irony is that a lot of the people who enter designer stores might not be as well turned out as you'd expect. Maybe that's why they are at a designer store - in need of urgent wardrobe advice. Deciding who are the freeloaders and who the potential big bucks but you-would-not-know-it-if-you-looked-at-me is where a true salesman's instincts kick in."

In India, there really is Paper Email!

Google had an amazing April Fools' joke out - GMail Paper Archive.

But wonder of wonders, such a service already exists in India. The Indian Postal Service has a service called "ePost". Emails sent to the post-office will be printed out and delivered to the recipient in the village. Similarly, somebody in the village could write a letter and pass it to the postman; it would be transcribed into an email and sent!!

"S.K. Bharadwaj's octogenarian uncle S.N. Bharadwaj has never seen a computer. That's not surprising, since he is a farmer in India's remote state of Uttar Pradesh. His village has no phones, never mind Internet access. Even so, the old guy is "delighted" to get emails several times a week from his nephew in Delhi, some 300 miles away.

India Post's ePost system allows anyone with Internet access to send email to those without it and vice versa. The logistically ambitious project is emblematic of modern India: Though it's a global technology powerhouse, life for many of its people hasn't changed much in centuries. A quarter of Indians live below the poverty line, and only about 6% use the Internet.

Using ePost, Bharadwaj can send an email to his uncle's local post office, where it is printed and hand delivered. In reverse, rural patrons can handwrite letters and have them translated into emails. Delivery by ePost-gram costs less than 25 cents per page and usually takes a day, compared with about a week by snail mail."

Check out the full story at Fast Company...


I am sure there is some translation service embedded into this whole thing. Mr. S.N. Bhardwaj is not going to read an English email from his nephew. And I can't imagine S.K. Bhardwaj typing laboriously in Hindi on an en_US keyboard...

An for all those non-Indians out there who are going to ask - What about Privacy?
Relax.
Firstly, In India, privacy is not important. Example: Everybody knows how much everybody else is making in the same office, and knows all minute details about their co-workers.
Secondly, with privacy involved, this service would not have been possible at all.

You won't throw away these business cards

Jeff Nolan has a photo of Steve Wozniak's incredible precision machined biz cards. Check them out on Jeff's blog.

If you want to order similar cards for yourself, go to PlasmaDesign. Prices are ~US$5/card for a batch of 100. My suggestion is not to worry about the cost and instead go with the "field of dreams" approach - If you get such cards, your clients will be so impressed that they will dump you with no-bid contracts.

2007 letter to Berkshire Hathaway shareholders from Warren Buffet

Warren Buffet publishes an annual letter to his shareholders. The letters have a general pattern -
-- Overall performance of Berkshire over the past year
-- Analysis of the Berkshire performance by sector. Special focus on the good and bad sectors and why these sectors did well (or not)
-- Acquisitions in the previous year and why the acquisitions were made
-- Major future issues that affect Berkshire as a firm
-- Tirade against derivatives
-- Tirade against hedge funds
-- Warning about US trade deficit
-- Some interesting tidbits of info
All of these sprinkled with amusing quotes...

I am no finance wizard. So I leave it to the readers to contemplate the deeper content in the letter. You can download the letter here.

But lemme decorate this post with some of those amusing quotes...

"
In fairness, we’ve seen plenty of successes as well, some truly outstanding. There are many giant company managers whom I greatly admire; Ken Chenault of American Express, Jeff Immelt of G.E. and Dick Kovacevich of Wells Fargo come quickly to mind. But I don’t think I could do the management job they do. And I know I wouldn’t enjoy many of the duties that come with their positions – meetings,speeches, foreign travel, the charity circuit and governmental relations. For me, Ronald Reagan had it right: “It’s probably true that hard work never killed anyone – but why take the chance?”

We continue, however, to need “elephants” in order for us to use Berkshire’s flood of incoming cash. Charlie and I must therefore ignore the pursuit of mice and focus our acquisition efforts on much bigger game. Our exemplar is the older man who crashed his grocery cart into that of a much younger fellow while both were shopping. The elderly man explained apologetically that he had lost track of his wife and was preoccupied searching for her. His new acquaintance said that by coincidence his wife had also wandered off and suggested that it might be more efficient if they jointly looked for the two women. Agreeing, the older man asked his new companion what his wife looked like. “She’s a gorgeous blonde,” the fellow answered, “with a body that would cause a bishop to go through a stained glass window, and she’s wearing tight white shorts. How about yours?” The senior citizen wasted no words: “Forget her, we’ll look for yours.”
What we are looking for is described on page 25. If you have an acquisition candidate that fits, call me – day or night. And then watch me shatter a stained glass window.

When Charlie and I were young, the newspaper business was as easy a way to make huge returns as existed in America. As one not-too-bright publisher famously said, “I owe my fortune to two great American institutions: monopoly and nepotism.” No paper in a one-paper city, however bad the product or however inept the management, could avoid gushing profits.

We show below our common stock investments. With two exceptions, those that had a market value of more than $700 million at the end of 2006 are itemized. We don’t itemize the two securities referred to, which have a market value of $1.9 billion, because we continue to buy them. I could, of course, tell you their names. But then I would have to kill you.

The good news: At 76, I feel terrific and, according to all measurable indicators, am in excellent health. It’s amazing what Cherry Coke and hamburgers will do for a fellow.

The inexorable math of this grotesque arrangement is certain to make the Gotrocks family poorer over time than it would have been had it never heard of these “hyper-helpers.” Even so, the 2-and-20 action spreads. Its effects bring to mind the old adage: When someone with experience proposes a deal to someone with money, too often the fellow with money ends up with the experience, and the fellow with experience ends up with the money.
"

Real estate market in Hyderabad etc

This blog has an interesting view on the real estate market in Hyderabad.

Meanwhile, there are plans for 4 completely new cities to be built near Bangalore, Hyderabad, Bombay and Gurgaon. These will be built by Real Estate Investment Trusts.


As usual, make your own research and judgments.

What's up with these crocs

I went out for some lunch and some detergent shopping (yeah.. very focused guy). Saw at least 20 people in the supermarket wearing these pink embellishments. Interesting thing - Most of those pple were at least 30 years old... I can understand kids loving them, but grown-up women???

Would like to know what's attractive about these monstrosities. Are we all itching to express the rebel within?... or yearning for that lost childhood?

Maybe products that allow non-confrontational expressions of our rebellious individuality have a great market. Maybe this is what's so great about those Pumas.

Giesecke & Devrient: In the business of secure transactions - From security paper to smartcards

There is a nice story that many management consulting firms use to explain the nature of their work and lure the starry-eyed graduates into the mothership. It goes somewhat along these lines...
"Once upon a time, Birmingham was the center of the drill manufacturing business. The people of Birmingham were confident they made the best drills in the world. They felt they did not have to worry about competition as their drills were so good. However, one day someone produced lasers and the people of Birmingham suddenly realized they were not in the drill business but rather in the business of making holes. They realized that if someone developed a better way of making holes the people of Birmingham who made drills would be in trouble."

Now, strategic shifts like this happen when a new technology emerges that completely rewrites the way something is done or made. Some companies identify the technology shifts and remake their themselves. But successful examples are few and far between.

An great example of success is Giesecke & Devrient (GnD as we call them).


I have been working on DB's corporate banking application for sometime. Last year, the project that I led involved (among other things) adding support for new types of smartcards to our application. The smartcards are used by the customers to digitally sign transactions. This digital signing is done to prove the user's identity and to approve a transaction. Our smartcard vendor is GnD. Being the inquisitive guy that I am, I did some Google research on this firm. What an eye-opener...

GnD was setup in 1852, and for a long long time, their business was to print banknotes and security paper. But in 1970's, GnD realized that they were not in the banknote printing business. Instead, they were in the business of secure transactions. They started an R&D arm to develop expertise in secure cashless transactions. Now GnD is a leading provider of smartcard solutions, enabling secure digital transactions.

Wow... To identify the paradigm shift to digital security in 1970. That's something. Consider that the public-key-cryptography concept that underpins digital security today was introduced only in 1976.

The transformaton of Iraqi Kurdistan

Michael Totten has an incredible post (with lots of pics) on the change sweeping Iraqi Kurdistan.

Fourteen months ago I flew to Erbil, the capital of Iraqi Kurdistan, from Beirut, Lebanon, on the dubiously named Flying Carpet Airlines. Flying Carpet’s entire fleet is one small noisy plane with propellers, cramped seats, and thin cabin pressure. Only nineteen passengers joined me on that once-a-week flight. Everyone but me was a Lebanese businessman. They were paranoid of me and of each other. What kind of crazy person books a flight to Iraq, even if it is to the safe and relatively prosperous Kurdistan region? I felt completely bereft of sense going to Iraq without a gun and without any bodyguards, and it took a week for my on-again off-again twitchiness to subside.

Last week I flew to Erbil from Vienna on Austrian Airlines to work for a few weeks as a private sector consultant with my colleague Patrick Lasswell. This time I didn’t feel anything like a fool. Almost half the passengers were women. Children played on their seats and in the aisle with toys handed out by the crew. We watched an in-flight movie and ate the usual airline lunch fare served by an attractive long legged stewardess
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Read the full post here.

Learning from cabbies

Today I left work a bit early. At 9. Heh... :)
Usually, its very easy to get a cab at 9. But nowadays, I have to call and make a booking by 8:50. After that, the cab phone lines are always busy. And when I get down to the DBS Tower lobby by 9, the whole place is jam-packed with at least 20 cabs. Usually its something like 5. First time I am seeing something like this.

There are lots of investment ideas, lessons and indicators you can learn simply by keeping an open eye (and ear). I still remember one from Ross Mayfield - The parking lot indicator.

Anyway, today's cabbie was telling me that its only in the last month or so that demand for taxi pickup has reached such high levels. He has been a cabbie for 26 years, and the last time was in 1997, just before the the Asian Tiger economies crashed...

The problem with Geni

Geni is a social networking application for genealogy. (From Wikipedia) Genealogy "is the study and tracing of family pedigrees. This involves the collection of the names of relatives, both living and deceased, and establishing the relationships among them based on primary, secondary and/or circumstantial evidence or documentation, thus building up a cohesive family tree".

Specifically, Geni allows you to start filling in your family tree. You can add relatives with their email ID's, and emails are fired off to ask them to join Geni. Once they join, they add more info about themselves, start filling in their relations, and so on, and in some time you have a map of your extended family with all the information that the family members have chosen to disclose.

Charles River Ventures has invested US$ 10 million in Geni, valuing the company at US$100 mill. But I have my doubts about the viability of this application. These views are also posted as comments in a VentureWoods discussion on Geni.

On the positive side, Geni is a very slick application. You can easily draw up a family tree, and makes it very easy to invite other family members to share their info and start adding relations they know.

But the service has 2 major shortcomings -
The "Getting Laid" feature is not there
The single most important feature that a social networking app should have is that it should help the user to get laid. Even if that doesn't happen, the user should think that it will increase the chances of him/her getting laid.

Thats it. This is the "critical path" feature. If directly (Orkut, Facebook, Myspace) or indirectly (LinkedIn: Better job --> more money --> better potential) this feature is not there, then users won't stick around 1-2 hours a day writing scrap entries, exploring photos and seeing profiles of friends of your friends, and adding more and more unique stuff about themselves to their profiles.

Geni cannot help users get laid. If that happens, it would probably be illegal :-).

Relevance of the application in markets outside the US
Geni applications will be relevant for India only 10-15 years down the line. It makes sense in the US where you completely grow up in nuclear families with very little contact with your grandparents, cousins etc. However, in India, even though many of us would have grown up in a nuclear family in a city, we had very close relationships with grandparents, cousins and other members of the extended family. So the usefulness of “discovering” your relations is not there. Even considering only the US market, I would think a typical user would use his application obsessively for a week or two. After that you start getting irritated with requests from your relatives and stop hanging around.

Quote of the Year: Cisco enters social networking space

via TechCrunch
Cisco has bought social networking startup Tribe.net as well as Five Across. Apparently they want to start offering "social networking services" to their corporate clients.

The enormity of the stupidity amazes me. Companies should focus on what they do best. No corporate customers are going to buy more routers if Cisco throws in a social networking app for free.

This is what happens when companies don't know what to do with so much cash lying around. But still, even a share buy back would have been better than this.

At least some entertaining quote has come out of this -
“The idea that Cisco is going to be a force in social networking is about as plausible as Ning being a force in optical switches.”
- Mark Andreessen, founder of Ning (another social net)

Salesforce.com clinches 25k seat deal with Merrill Lynch

Salesforce.com, the online CRM provider, announced on Feb 27 that Merrill Lynch has signed up for a 25k user license. Merrill will be using the new "Wealth Management" module.

Actually Deutsche Bank's PWM division had also signed up with Salesforce.com some time back. But I don't think it is for the "Wealth Management" module. The service is to be branded internally as dbForce.

Private wealth management (PWM) firms provide asset management and advisory services to High-Net-Worth (HNW) and Ultra-HNW individuals and families. The definition of HNW, at least in Deutsche Bank's PWM division is 1 million euros in liquid assets. So the calculation does not count the value of your home etc.

Out there on ZDNET's excellent Between the lines blog run by Dan Faber, Larry Dignan and David Berlind, they are speculating that Salesforce.com is now going head-to-head against Bloomberg. Frankly, I don't agree with it.
1.) The information requirements of PWM advisors are quite different from the traders/brokers in the core Trading divisions of investment banks, funds and other investment firms. PWM advisors take a longer term view to investment and do not require bleeding-edge real-time access to financial news, unlike the proprietary trading desks in banks. Online applications cannot guarantee the necessary technical performance currently provided by Bloomberg apps.
2.) Bloomberg owns this space and the cost of these data services is NOTHING compared to the potential loss in profits if Salesforce.com is down. Those traders make the necessary monthly Bloomberg costs in 5 mins of trading.
3.) I don't think Merrill Lynch Sales & Trading dealers will be using Salesforce.com. More likely it is only the PWM division