After the Dust Settles: Sberbank, Egypt, Netflix, Future of Tech and Indian Cricket

No matter how interested you were or otherwise, all of us in India got a consistent dose of leadership lessons in the last week as a result of India miraculously winning the cricket series in Australia. For me the true winners in ascending order were, the Indian cricket team, the rejuvenated sport of Test Cricket and finally the gold medal surely went to the Leadership Cliches which came back strongly after a COVID break. So I will stay away from cricket for this week and the one article that I have on the topic (country herd mentality) stays away from giving you any unneeded leadership and life advice. 
In most businesses, and countries for that matter, whether by its own design or whether by the will of the macro-economic environment, inherent changes to well thought out plans are inevitable. Some call it a pivot, some call it adaptability and some call it “new revenue opportunities”. There is a storm, of good news or bad news, followed by a period of very rapid movement (progress or otherwise). And then the Dust Settles. Sometimes after this dust settles you are hardly able to recognise yourself. Some emerge victorious/happy/satisfied, others not so much.

And that is what today’s theme is about. In 2021 the dust will settle on many whirlwinds and we will be left to see how these businesses and countries have changed. Action and news is many times taken as a proxy of progress and that is rarely true. Sometimes the ones making the longest strides are the silent ones. We start off with a Russian Bank which has ambitions to build a Silicon Valley within itself. We move on to the state of Egypt after the famed social media led revolutions of the Arab Springs. Then we talk about Netflix and after so many decades it proves that its finances have the potential to be as strong as its content. We move on an amazing article that tries to temper the optimism that experts have about the coming decades. The article has a beautiful mix of history and the future and is a fantastic read. I end with the most wonderful understated article about the cricket series that just ended.

Here we go !

1. So here is a question for you. The Biggest bank in Europe is HSBC. Which do you think is the second biggest bank? It is a Russian bank by the name of Sberbank. It is Russia’s most traditional bank as well as its most active 21st century lender. Russia’s citizens keep all their savings in the bank as it is state controlled and safe and then it lends at a very profitable rate. But now it is looking to be a tech giant. It in a sense as the article puts it is trying to be Russia’s Netflix, Google and Amazon all rolled into one. For my friends in India, imagine if SBI (an Indian state owned bank) and Amazon were combined. It certainly has the money to pull it off. But few times in history if ever has a bank pivoted to be successful at something else. We will see after the Dust settles.

The Tech Ambitions of a bank 

2. Nothing can explain a country better than its revolutions. Tahrir Square in Cairo, Egypt is a sign of democracy and progress as well its revolutionary spirit. Tahrir roughly translates to Liberation as a tribute to the general who liberated the country from the British. It has been a long time since the Arab springs revolutions took place, the first revolutions that were led by social media. Today the dust has settled and it is clear that the revolutionary spirit of Egypt is broken. Mr el-Sisi the ruler, is moving government buildings and museums away from Tahrir square to put a stop on protests that have happened in the last 2 years. I wonder if that will stop the protests. Revolutions were never so bothered by the address than the intention. But democracy certainly looks thousands of miles away. Do read this article. The modern history of an ancient country is fascinating to read.

The Dust Settles on Egypt after the Arab Springs

3. Netflix was playing catchup on a story that it could actually have made an original on. Debt was rising and market experts were warning that it was a house of cards that was about to come down soon. But Reed Hastings has a history of proving nay-sayers wrong and this for me is one of the biggest wins for the company. The problem with beautiful creatively driven companies is that they falter on the commercial aspects of getting all the bills paid. In the last 10 years, Netflix has borrowed more than $16 Billion dollars to finance all its content creation. Netflix has announced that it plans to break even on a cash flow basis this year. It finally generates enough cash to cover its production costs. This is specially important because other players such as Apple TV are not being able to get people to pay for their service (Read about it here). I also love this article because Barrons gives a small summary of how often they have been wrong about Netflix. In today’s world it is refreshing to see people accept that they were wrong. It took a long time for the dust to settle but Netflix is out shining.

Netflix finally proves its critics wrong

4. For the last two months, a bunch of experts from across the world have been talking about the next decade, the “20’s” so to say would be a decade of super growth as a lot of futuristic growth technologies become practical. The world would after a long time see non linear growth to a new world. I wrote about it in detail a little while back, but well sometimes you have to be sure that it is not over-optimism. The creation of the vaccine and the overcoming of the virus is not an end, it Is just the beginning  towards normalcy. And stock markets are not an accurate description of reality. This is the other version of how the next decade would be. Do give it a read. There are fascinating examples of how the world thought about the 1920’s, the age when the washing machine and the vacuum cleaner and the automobile for that matter came into everyday use. Do we really hope to see new sci-fi technologies becoming a part of everyday life? I’ll leave it up to you to decide 

Will the “20’s” take tech forward?

5. Finally we come to the only topic people cared about on this side of the world this week. This is a beautiful article about a beautiful series which showed us why Test Cricket is such a beautiful game. I resonated with the article because I admired the very same things about the sport and the match. Not too much to say here, but for me like Harsha Bhogle said in commentary, COVID lost, when the Indian captain presented Nathan Lyon with a memento on his 100th test after the match was over. It is what sport should be about. We play hard but we also recognise the achievement of the opposition after the game is over.

The Cricket Match they all talked about 

Hope you had fun reading.

Time: It’s Philosophies, Physics and Application to Business

Time as a philosophy is the most fascinating, and for me, the most complicated of concepts to understand. I am fascinated by it because all theories are usually seen through 2 lenses, one of philosophy and the other of physics. So I always imagine the concept of time as a research paper written by Plato and Einstein together 🙂

One such beautiful theory is that of Presentism and Eternalism. Presentism is what we all know, there is the past, the present and the future, and what is present today is what exists. Eternalism says that there are different frames of reference and both, the past and the future exist. So by the theory of eternalism, humans live on mars, even though it might happen at a time later than today.  Challenges core beliefs, doesn’t it ?

But my monologue on Time and philosophy has a purpose. I think theories like Eternalism, while helpful in Relativity physics, also help us understand strategy and business better.  Today most strategy is designed on changing one thing from the status quo and then imagining how the future will look. Imagining that a new future first is where visionary begins and weaving together a vision for the future with the mistakes from the past is where success exists. (If you want to understand more about the physics and philosophies of time, read 2 things : B theory of time and Growing Block theory of time)

Today I will talk about this very topic. In every article, the past exists along with the future. Magic happens when the right interpretation of history is merged with a vision of the future that we are able to draw correctly.

1. My first article, tells you about the hot new thing on the block in computing along with the omnipresent AI. Surprisingly its analog computing. When was the last time you heard that anything with the word “Analog” was the next big thing? The past and the future as I said both exist together. Analog computing could be our answer to energy efficiency and much more.  Do read it. Let’s get analog ready 🙂 The New Kid on the block: Analog Computing
2. Why do we read or consume any information? Does the scarcity of information help consumption? For example in a world without statistics or information on a click, everyone loved consuming the scorecards on paper books or TV schedules in the newspapers, but in an on-demand world, the importance of both of these has gone down. Another beautiful  point about reading something is that, in a lot of cases, we read to complain and disagree with the person who has written. In between such opinions, it is interesting to debate how something with ChatGPT will impact professions of writing. The benefits are very clear and in fact already demonstrated, but will we still consume what an actual “human” writes? Make your own prediction maybe? But before that do read this piece from the NewYorker. Human vs ChatGPT
3. Before we go ahead, try to answer this question. What is the best definition of design? Imagine an architect, a chip designer, a fashion designer and then through a blank canvas think of your definition of design. As promised as we tour through the past and future, we realize that the definition of design has changed quite a bit. In this article we walk from the 1300s to the future and see how the definition of design has changed and how it should change going forward. How do you define Design?
4. When you think in terms of this theory of eternalism, I believe your imagination takes you much further. Think of it like this: In option 1 you draw a hypothetical future, in option 2 you start with believing the future exists, just not now. In a sense that’s what Gordon Moore did. The founder of Intel gave us the famous Moore’s Law and the whole world just believed that it was the future. The world in a sense willed productivity and efficiency in chipmaking into existence because of Moore’s Law. Did you know that in the latest set of chips, the size of the chip now comes close to the size of the atom. Gordon Moore passed away recently but not before ensuring there was Intel inside something or the other that we use.  The Man who wrote the Most Important Law

Thank you for reading. 

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The Power of Innovation: Hunger Injection, Marico, Making of a Rockstar and BYD

Innovation and entrepreneurship are relatively new fields of study . Before Joseph Schumpeter, innovation and entrepreneurship was not a major part of the scope of economics. Management of resources, demand, supply, labour, capital,  everything affected the economic world, but there was hardly any work on the “idea” that an idea or the vision of one person can bring exponential growth. It’s weird, but true. Schumpeter was the first to argue that entrepreneurship was the driving force of capitalism. From today’s startup obsessed world, it is difficult to imagine that about 60 years back, the world thought very differently about such topics. Thanks Mr Schumpeter 🙂

Then came William Baumol who felt there was still a lot to be said about entrepreneurship and innovation. His “Micro-theory of Innovative Entrepreneurship” established that innovation, especially in small scale companies, has the power to drive exponential growth for the economy as a whole. Do read about his work, it is fascinating.

Then was the time of Clay Christensen and his theory of disruptive innovation . The theory called out that innovation can start at the bottom of a market and work its way up. The theory differentiated between two kinds of innovation, and how both companies and consumers would react to the innovation in business.

One of the newer models of innovation I came across was surprisingly called the Chocolate model of innovation. It differentiates between the 4 parts of innovation, which is the change, the adopters, the change agents and the organisation. It’s a tasty theory 🙂 

One thing we can agree on, is that innovation today exists at the centre point of business strategy and is considered to be the most crucial ingredient of success.  So today we deep dive into the field and look for innovation in fields where you expect to find it, like automobiles, and places where you don’t, like music . I cover four articles through the lens of innovation, but they are not your run of the mill, process improvements. The first one takes us to one of the CPG giants of India and its founder gives us a masterclass on how to keep innovation going, and how to make it successful at scale. We move on the most fascinating of inventions. Could a medicine take your vices and cravings away, and would that be a better world? We then move on to innovation in the business of music. How do you identify the next big artist by looking at the past. A fascinating research in a very exciting field. Last we move on to electric vehicles and the company no one talks about, BYD. Their quiet innovation is taking them very far ahead and they would certainly be a company to follow. 

So, these are the my 4 most interesting reads of the week!

1. We tend to think of innovation as something done in garages, especially in the Indian context. India by design had to be a country of innovation for businesses to succeed across its diversity , population and size. In this context I’ve always admired Marico as a company. Continuous innovation across packaging, products and products lines has ensured the company has been for years a favourite of the markets. But what I have loved is the way Harsh Mariwala talks about innovation and risk taking. The continuos experimentation and the acceptance of failure as a step to finding the right product market fit. What I did not know before this article was also the commitment to create a new age org from a culture perspective. Some of the ideas presented by Harsh here might sound commonplace in the unicorn on consulting circles, but were and are certainly new for the old school Indian business establishment.  How Marico Keeps on Innovating
2. Do you feel hunger, craving , hatred, jealousy? What if I could give you an injection and you would never have a craving for chocolate instead. Would you take it?  Wouldn’t you want to give up all of your vices ? Or would you? Today medicine is starting to knock on the doors of craving and hunger. Tomorrow it could do more. But innovation in healthcare, while being the most life changing for humans, needs us to think further. Isn’t craving the very part of being human, isn’t the guilt of succumbing to the dessert, and the feeling of winning over the craving what makes us human? But then again, there is a different perspective, the one I like to call manual vs automatic. People still like the manual just for the “authenticity” even though there is a more convenient option possible. This is my article of the week and certainly an innovation that will change the world. Up to you to decide, whether you would be an early adopter.A New Breed of Medicines to Help you lose weight & Hunger
3. Can you predict from a list of artists as to who would be the next Elton John and who wouldn’t. Till recently that skill was left to the trained ear at the studios who could identify a rock star from a mile away. But well, if you look at their charts, you would realise that most of the times they were wrong. Innovation in understanding the business of music has been quite limited.  We live in a world where there is an explosion of content and now in this world, we have a model to understand what music might work and what might not. Do read this fascinating piece on how an artist’s success is created by their portfolio before their first hit. It is almost like nature making a pattern to show us that like the iceberg, what drives impact is not what you see on the surface, but what you see below it. Sometimes, the best of business and research articles, tend to take you to a philosophical level. This is one of those. The Finding of a Rockstar
4. I was surprised by how less I know about BYD. In one line, it is on track to beat Tesla as the world’s biggest EV maker this year. It is surprising how less we know about the company. It is a company that quietly delivers results. BYD started off as a battery maker for mobile phones and over the years transformed into an electric vehicle company. It is a company that has been quietly innovating for years. The parallels with Toyota are surreal to read. It has the power to make EVs the default choice once it launches in other major markets outside USA. No wonder Warren Buffett is a major investor. Tesla vs BYD would be a story of a competition in the same category between two very different players. We will have to see who wins, Loud Exuberance or Quiet Competence. The Quiet Competence of BYD

Thank you for reading.

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The Earth’s Resolutions for 2023

So, on unprecedented fan demand(a little exaggeration is expected), Ruminated is back!

I took a break from writing Ruminated more than a year back (work, music , exploring other interests & life made me take a break). When I wrote the previous edition, the world was struggling with COVID wave 2. We did not know about Omicron yet, companies were still insisting that WFH was here to stay and hotel and travel stocks across the world were at their lowest. When I took this break, I predicted that Ruminated would certainly come back to happier times (or better ones at least) for the world. Vaccines were being distributed across the world, the tech industry seemed to be on the move with record hiring levels and the stock market was scaling new heights everyday.

I was wrong.

Somehow in these few months, the world went into a war, the story on tech changed from one of positivity to the absolute horrors of impersonal layoffs and Elon Musk went from tweeting late at night to making decisions at Twitter late at night. Infact we live in a world where most economists around the world are trying to fight inflation but are extremely concerned about the recession around the corner.

Well in summary, the world is not in a really good place, so I thought today we should look to the future. Like all of us, our planet should make resolutions as  it starts it’s next workout across the sun. So here are the resolutions of the planet, the one’s it probably will try to achieve, the one’s it will give up on (like my workout goal), and the one’s it will try to push to next year (hopefully not sustainability). Are not our collective wishes, the resolutions of the world?

So this week, we take a walk across earthly science, space science, women in Japan, and the new global energy ecosystem to understand where the world is going? Will we be able to build manufacturing units in space? Will electric vehicles become the norm in the next 12 months? How is Japan dealing with gender equality, Spoiler Alert: Not well. And we talk about the new energy paradigm. What this world will become in 2024 is a sum total of the questions we ask in 2023. 

1. ChatGPT is not the biggest invention of 2022. It is the invention we have the easiest access to. The world around us is changed by major inventions that we can’t “login to” and at least for me they are way more fascinating. Can we imagine a world, where no one dies, because they can’t find an organ? Can we imagine a world where chips become open source, and computing enters another age? Gene editing CRISPR has now reached clinical trials in solving for cholesterol. Are we closer to a new revolution in health tech ? We need to talk more about innovative technologies in transportation, urban management, health as opposed to just social media and computing. As Peter Thiel once said “We wanted flying cars, instead we got 140 characters.” This year should be about chasing the flying cars and not just the tik tok rip offs. MITs Round up of the Top Technologies of 2023

2. Remember the last time you read “Sci-Fi”. I can bet it was written pretty long back. The HG Wells, Jules Verne and Isaac Asimovs of the world defined a world for the future. I think it’s time we look at what is the science fiction of today. What would the world look at 50 years from now? Would we have manufacturing in space? Would we have the first successful habitat of fungi and bacteria on Mars in 10 years? I’m glad that NASA agrees, and is now funding these projects. Of Course most of them will fail, but the journey from science fiction to science is a tough one. Reaching for the Moon, Mars and beyond

3. Japan surprisingly reached the conclusion that to solve the gender equality issues it faces, it needs a male gender equality minister! Providing an equal platform to women, on pay, on rights and on opportunities is somehow not making its way into Japan’s Ikigai chart. There are articles where you understand what to do and places where you understand what not to do. This article is the second type. For a culture so old, it is surprising how far they are on this axis and the snail’s pace of development they are seeing? Also the two questions I am asking myself today: Does a quota system work, should Japan start one? You might say that quota is never the answer, but structural solutions would take decades. Second we need better models for gender empowerment, that encompasses salary, higher education share, startup funding, board positions into one model. What we can’t measure, we can’t improve Solving for Gender Equality in Japan

4. The global energy system is disrupted. China’s growth has slowed, Russian energy relations with Europe are competing with the diametrically opposite views on war and value of human life.  When you alienate Russia for its war on Ukraine, you stop taking natural gas from Russia. That means in the winter as the need for energy increases, gas has to be bought from other sources at a higher cost. At this cost, there is a massive burst of inflation and competitiveness of markets suffer. And in this cycle you suddenly remember that we also have to think of sustainable sources of energy. There is a four way seesaw of current energy needs, human rights, greener sources of energy and energy prices. To balance them is never going to be easy. But it isn’t about easy, it’s whether we are doing the right thing for the planet. What would you choose? Would you be ok, if someone told you they are saving the planet but inflation will be 20%? Would you prefer human rights in another part of the world or just your daily essentials cheaper for yourself. These questions are complicated. The Choices we need to make about Energy

Thank you for the love I have received and I am glad to be back. Have fun reading. If you want me to cover a specific topic drop it in the comments, or reach out to me at d.panda.me@gmail.com

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The Role of Faith and Irrationality in Business: Coinbase, SEA Startup, Index Funds and NFTs

A year, it has been to Ruminated. A year of newsletters, a year of articles and so many of you joining me on this journey. Thank you. It means a lot to me. 
Today we will talk about faith. Not religious faith, but the plain not-purely-logical belief that people have in ideas or the future of something. James Fowler, who  studied human development and faith talked about a stage in life called Conjunctive Faith. it is the stage where people understand that logic has limitations and more often than not start giving more weightage to faith, beliefs and take down logic from the indisputable pedestal. The world would be a boring place if every decision made by every individual would be rational. It is the mix of rationality, belief and in some sense greed that brings the randomness of thermodynamics alive.  Businesses as I often say are extensions of people and in being so are more and more affected by this faith based decision making. Look at every business you see and beyond data you would start seeing the impact of faith and beliefs. So today we talk about how everyday we see signs of this is business and economics. The no evidence bet, the belief based investments and obviously the Fear of Missing out.

So today we start off with the best selling story of this century. Cryptocurrency is a story more popular than Marvel and Game of Thrones combined. Coinbase is betting its future on the faith in cryptocurrency and the public markets are now open to it. We move on to the allure of South East Asia. Investors are betting on local players to unlock the value of the markets in the untapped geography. The funds have come in, returns will take time. We move on to a very interesting perspective that irrationality helps markets and new entrants. The other direction actually moves sectors towards monopoly. It is a read for the skeptic. Too much of logic can be bad practically and American markets are witnessing it. We end with the the cool new kid on the block : NFT. It  probably is the fastest bubble in history. The question is whether it will survive.

1. There is an unknown tech prophet. He wrote some beautiful lines of code. And then he disappeared leaving his code open to the world. It is a beautiful story, but certainly a very expensive story. Bitcoin, says Robert Schiller, a Nobel Prize winning economist is a feat of storytelling. This week Coinbase, a company dependent on the faith of people on Bitcoin went, public. It’s fate in the next few years and beyond that will depend on the fate of Bitcoin. There is a beautiful story of how Gold went from being a banned and ridiculed currency to one that was widely accepted to today being a regular in many peoples financial portfolio. The world doesn’t change, we just tend to forget history. Coinbase and the Faith on the Bitcoin

2. In the last 5 years $26 Billion has been invested in South East Asian startup’s by the likes of Google, SoftBank and other VC firms. The big bet is that the untapped markets of South East Asia will give returns rare to be found elsewhere. As Western markets did boom towards the beginning of the previous decade and gave returns throughout, the idea is that SE Asia will do the same for this decade. Another interesting aspect of the region is that it is very culture heavy. So Grab knew that it had to give away free Durians (a local fruit) after every ride, while Uber stuck with the free ice cream model. Soon Grab had acquired Uber’s operations in the region. The region is rich but has its own ways. The result is local players being valued at very high prices. Whether the investors will get their returns or not, only time will tell. Currently it’s all faith in the power of local knowledge and scale. Results due to come out in a few years.

Investors love for South East Asian Startups

3. First a small introduction. There are two kinds of funds that invest money. The first has really smart people taking all sorts of decisions to increase the returns on the money invested, including fancy analysis and all their experience. The second is passive funds where no smart decisions are taken but money is invested basis certain rules such as what is the market share of the company in the category. No fancy calculations or smart decisions. The second type of fund is called Index Funds and they have regularly and significantly beaten the first kind of smart, managed Suave funds for decades. That’s counterintuitive, but index funds, which essentially are a bet on the market overall have always outperformed. In the past decade or two, people have realised this and majority of money has started flowing into index funds. That’s great again, people looking at data and making smart decisions with their money. But too much of something is always harmful and with much more money flowing into index funds, new kinds of complications have started coming in.And that is what the US economy is facing. When people make decisions, they make emotional decisions which are irrational and sometimes those decisions bring out winners. The economy diversifies and competition comes in. When you make decisions by rules, newer entrants find it more difficult, money gets concentrated in the hands of a few companies, the winners find it easier to win and so on. Do you sometimes feel that today all the companies you hear about are giants and growing and new companies are lesser. That’s partly because of Index funds. Faith is part irrationality and part instinct and instinct is strong. Don’t rule it out.

The Bad thing about Rationality 

4. The new “cool” thing in the internet world is surely NFT’s. Incase you don’t know what NFT’s are, please read this beautiful initiation. Maybe you will realise that you have made some NFTs yourself. The amazing thing about NFTs is that I haven’t ever seen such a birth to bubble journey. The journey from the awareness of NFT to everyone selling NFT’s has been a speed of light journey. The problem with common resources is that they are often affected by the “Tragedy of the commons”. So if in a herding society there are grass fields, over grazing destroys the livelihood. The problem with NFT’s is the same. There is just too much of it. Everyone is trying to cash out right now before the fad ends. The idea is powerful, but powerful ideas always face a problem of everyone trying to get a piece of it.  The lessons of NFT’s mirror many such ideas in the past, from fishing to comic book publication. Do you have faith in the growth of NFT’s ? Will they sustain the oversupply and become truly commonplace or will their fate be tied to the bitcoin? As usual we will wait for time to pass the judgement. 

NFTs and the Tragedy of the Commons

The Business Stories that go Unnoticed: Tech in 2021, Winklevoss, Germany and China, Neural Networks and Sanpo-Yoshi

Lise Meitner, Bibha Chowdhury, Andree de Jongh,  Irawati Karne, Jean Purdy and Anandibhai Joshi and in a sense Alan Turing inspire me to my theme for this week. While each of their stories in unique and beautiful, let me give you a couple of small anecdotes. Lise Meitner along with Otto Hahn discovered the process of nuclear fission of Uranium in 1939. Not only did this lead to the development of nuclear weapons but it was the base on which electricity from nuclear power came to be developed. The Nobel Prize for the same was only given to Otto Hahn. Similarly, Bibha Chowdhury was an Indian physicist who completed her PhD in the 1940 ! In fact her contributions to the study of physics and cosmic radiations have led to books being written about her in Germany. A little further away, she also has an actual star named after her. It is sad that she has close to zero recognition in modern India.

March is celebrated in various parts of the world as Women’s history month. For me the most important thing that needs to be celebrated or remembered this month is the fact that we not only celebrate the modern women icons in different arenas of society but also remember and rediscover the lost icons who paved the way for equal rights and equal recognition

But that brings me to the theme of today. The theme that I wanted to write about today is “Unnoticed”. The people, the stories and the topics that go unnoticed. Not limited to women, or history, today we look at a collection of articles from the business and economic world on topics that largely are out of focus or as the marketeer in me would say, not Top of Mind.

So to start off we have a beautiful list of technologies that one should watch out for in 2021. It is a list that has been coming out for more than 2 decades, but unlike the Forbes and Fortune lists, remains largely niche in circulation. We then move on to he Winklevoss brothers. Have you heard of them? They were in a legal battle with Zuckerberg over whose idea Facebook was and they actually won the case. They are upto something interesting next. We move on a relationship that hardly ever makes the front page, the relationship between Germany and China and how this would define the future of the world economy. We move on to an unknown story of the auction of DNN Research and how it laid the foundation for our tech world of today. We end with looking at the philosophy that has guided Japanese businesses over the decades and how the model needs change in our modern fuzzy world. The article is an example of how nothing is really even close to perfect.

These are stories that don’t come to light everyday, are not on the front page, and are fascinating stories that need to be known.

Happy Women’s History Month ! So let’s get started?

1.This article is one of those lists, which should make for mandatory reading. First published a couple of decades back, the mecca of tech MIT publishes an annual listing of the breakthrough technologies of the year. So here is your list for 2021. Will Natural Language processing be free of biases, will mRNA which is the base for the COVID vaccine, find a cure for HIV and Cancer.  Will other companies be able to replicate the recommendation model  that made Tik Tok so successful. Will green hydrogen finally become a viable alternative to other renewable energy sources. Do go through this. It is a wonderful primer to the tech of the next few years.

The Technologies to watch out for in 2021

2. The Winklevoss twins, were thought off as villains by everyone who saw the movie the Social Network.The movie showed them as trying to steal the idea off Zuckerberg. But reel and reality have their differences. The social media has varying stories of how Facebook came to be formed, but the world has since largely ignored the Winklevoss twins. Well it turned out that they have been busy working on something far more important. The future of social media and the internet in a way is the future of money. The twins have been busy legitimising the concept of digital money including crypto currency and by the end of it all, they might just solve the biggest problem of the internet. It is one of those stories that you might not come across, but this is the platform which will support all the fancy tech that you hear of like bitcoins etc. I had no idea of the twins before this article, nor did i know they were building something so important. Do read it.

The Not for long forgotten Winklevoss Twins

3. For the ones interested in the topic of globalisation, the relationship between USA and China has been one of vital interest and the ups and downs of the Trump administration on the topic have been well documented. Similarly, in India, the relationship between India and China and the border skirmishes have been top of mind and space in every publication. But whether the world actually isolates China, economically or not is dependent on another relationship. That is the relationship between Germany and China. It is this ignored relationship by the rest of the world that will come to the fore in 2021. USA cannot isolate China without the help of Europe. In matters of business and economics, the entire power of Europe, is essentially that of Germany. Taicang, a small town north of Shanghai, is home to more than 350 German factories, has german bakeries, which makes Pretzels that would remind you of Berlin or Munich and the new malls and hotels being built in the town are modelled on german architecture. This is the relationship that will determine how the world looks and treats China. 

The Ignored Relationship between Germany and China

4. Geoff Hinton is the name that you would not have probably heard of. But he will probably make his entry into school history books in the next decade. He is the man who invented the process and coined the term of deep learning. Yes, the same term that everybody throws around to be seen as new age. The idea of a neural network while being around since the 1950’s had never been practically solved and towards the end of the century it seemed like a theoretical idea that would never become practical. In fact Hinton in 2000 was one of the only few people in the world who was still working on building a neural network. In the end he and his students did teach machines to learn and identify images through pure learning. It had never been done before and neural networks had just become a practicality. In fact it was such a big win that Google, Microsoft, Baidu, everyone wanted him. And to sell his new invention and work he actually created a new company with just him and two of this students called DNN Research and conducted an online auction between the four companies (Baidu, Google, Microsoft and Deepmind). Essentially it was an auction about which company would he work for. In the end, Google won. It has been many years since that auction, but tech lore known to the common man, has missed the size of the achievement of Hinton and that auction which brought AI to the lands of the Big Tech. The future that we are seeing and still waiting for, was started by a man unwilling to accept that an idea could not be translated to reality.

The Unknown Auction that changed the World of AI

5. “Sanpo-Yoshi” is a popular philosophy which was coined by Shibusawa a 19th century industrialist in Japan. It simply means “three way good”, meaning that businesses should profit, the buyers, sellers and society. While the world has been recently looking at societal good in the past few years, Japan has implemented it as scale for over decades and has seen results. While the economy grew, inequality counterintuitively came down and social cohesion increased. The benefits and the changes, which came through this approach mostly after the second world war have done wonders for Japan. Executives maintain long term relationships with suppliers and consumers even when it doesn’t help the bottom and top-line and businesses have been stable for long durations of time. What mostly is not spoken about is the disadvantages of the system. Corporate growth is at an all time low, return on investment for a long time was not a top priority. In the last few years, Shinzo Abe did launch a slew of reforms at this concept trying to retain the good, while ensuring that the private sector starts driving growth again for the Japanese economy. Some initial signs are there, but the final results of the changes will take time to show. Do read this, because usually we are predisposed to a solution. So when we think of Japan, we think of a great economic system that grows and removes inequality. We tend to ignore or not notice any flaws. This article gives perspective on the other side of the system. Old school USA style Capitalism may soon be making a comeback in Japan.

Shanpo Yoshi vs Capitalism in Japan

Hope you had fun reading! Subscribe to get a weekly email from Ruminated!

Amazon, Tesla, SuperMario, Yusra Mardini and TechWars: Determinism in Business

“Free will” apart from its daily usage, has ancient philosophical origins. The ancient thinkers on the “problem of free will” wanted to prove that humans have control of their decisions and actions. So if you bought a table, changed a job, created a revolution, supported a political movement, you did it because you wanted to. Now for the uninitiated in the philosophical world, let me assure you that there is ample proof that there is no Free Will.

 In fact Free Will itself was born to debate the concept of Determinism, another wonderful philosophical idea. The idea in its essence signifies that every decision that we take, or all actions that happen, including our own cognition and behaviour are caused by a chain of previously caused events. Many philosophers later have essentially argued that determinism and free will are compatible but we will leave that for another time. I understand that we essentially equate comfort to having control over what is going on, but if you were to fly a little above the earth and observe for a couple of centuries, the concept of free will would surely take a beating. But do excuse my philosophical ramblings. And let’s start.

So I set about to think that if indeed there is an unbroken chain of events starting back from the beginning of the universe, then philosophy aside, how would it manifest in the business world. Are businesses the collective free will of it’s leaders and employees or is the impact they have and the impact they face a chain of unbroken events happening beyond their control?For a first story we look at Amazon and the impact it has had on societies and on cities at large. We move on to the successor of the Paypal Mafia: the Tesla Mafia and how it controls or wants to control the future of EVs. We continue then on to the best chance that the Italian economy has had in decades to recover in the form of Mario Draghi. Our penultimate article, a personal favourite maps the story of a Syrian war refugee, from Syria to a refugee camp to the Olympics.And we end today with the tech wars that have become as Apple, Facebook, Google and Microsoft go after each other’s. Many new challengers are not far behind.

Have a good week reading 

1. It would be impossible to capture the impact that Amazon has had on the world with over eight lakh employees and a line of products larger than the number of species in the Amazon forest. It is virtually Impossible to track the impact that Amazon is having not only on individual lives but on society at large. This article is a beautiful one because it does not go after the skill of Amazon or the revenue of Amazon. It rather goes after the impact Amazon has had in society and in small cities on how growth and wealth have been divided across because of its development in the last 20 years. The individuals impacted whether positively or negatively had very little control of what was happening and in many circumstances did not even have another option

The Impact of Amazon on Society and Cities

2. Sila Nanotechnologies, Lucid Motors, Redwood Materials, Fisker Technologies. What do you think is common to these companies? They are all formed by ex-Tesla employees. Back in my college days, whenever there was a question which had a bunch of logos and you had to connect the companies, more often than not the answer would be the Paypal mafia. The PayPal mafia was a bunch of ex-employees who had left the company and gone on to form their own successful ventures. Today the same thing is happening in electric automobiles. There are many start-ups founded by former Tesla employees dealing with creating the next big thing in e-mobility. The connection of course between the two happenings is Elon Musk. I wonder if we can attribute this directly to him. Some people are great at  developing and making leaders. Such a mammoth achievement twice can hardly be a coincidence. His leadership is hardly ever spoken about, given his outsized personality, but data suggests that he is surely doing something right 

The Tesla Mafia

3. Italy is the behemoth that has never woken up. For years its rising debt and its lacklustre growth has plunged the area into economic hell. Italy’s south is one of the least prosperous regions in Europe and no one has ever shown signs of changing the narrative. But that is about to change. Mario Draghi is one of the most respected leaders in Europe. His work in the European Central Bank post the financial crisis of 2008 remains one of the biggest achievements of the ECB. As he takes over the post of Prime Minister, he has the unique distinction of being someone who commands the respect of all parties. But that is not all. With the EU as a whole having a big purse to drive growth post COVID, the environment he comes into is much more helpful once. For me, his arrival Is crucial in the chain of events that can lead to Italy’s revival. For the result, we will have to wait and see.

Can SuperMario Rescue the Italian Economy?

4. In a world, where everything around you is broken or in despair, finding any sort of inspiration can be a difficult task. But for Yusra Mardini, the journey from being in the war in Syria to reaching the Olympics is my favourite story of the year so far. Her experience of reaching Germany through the treacherous sea route and surviving in refugee camps is a story that can be taught everywhere. It is also a story of how so much happened in a short life span, from surviving a war to becoming a refugee to reach the Olympics. During this whole time there were so many players that came and went and in doing so created the story of Yusra Mardini.

From the war in Syria to the Olympics

5. In the last 5 years, the profit percentage of all tech giants including google, Facebook and Apple has fallen by 10% or more. Competition has intensified across and the relationship between the tech giants is not really friendly. The strange thing is no one has been able to eat into the others pie. So Google and Amazon still don’t make money from devices, Apple still still can’t get its users to use Apple maps. In areas like the cloud increasing competition is eroding margins. A new development is that the relationships are becoming even more frosty. The interesting part is that the number 2 and 3 in every industry actually increased their market share in the last 5 years. With so many events happening in the tech space from the need for regulation to the privacy debate, the next decade will be much more competitive for the tech giants than the previous decade. And you can be sure that the results will not be decided by the free will of its leaders.

The New Tech War and the Old Giants

Have fun reading !

The Revolutions in the Business World: Musk, Big-Tech, Robinhood, Public Companies and Credit Schemes

In the 13th Century the word was first noted to describe the movement of celestial bodies originating from France. In 1450 for the first time, it was used in the context of a change in the social order and status. REVOLUTION. It’s been used in various contexts since then from upending the social order in France to changing the way someone can trade directly through an app. Somehow in a faster world and in an internet driven world the speed and frequency of revolutions is also increasing, driven by the power to change the world from the bed and not literally go out into the roads. Not all revolutions are good after all. Last week we discussed how Egypt a decade after the world’s first social media led revolution is struggling to come in terms to its situation. But these revolutions happening especially in business and technology are making our lives a little different everyday and laying the future way beyond what we can see.

So today we talk of revolutions and revolutionaries. Of the big and bigger picture, of the perspectives that are being sold to us and of the ones that we should ourselves develop. Every revolution has a good marketing team these days. Reality and Perception might be difficult to separate. So today before revolutions we first start with the biggest revolutionary of the modern age, the man literally trying to save humanity as he says. From there we move to the Data revolution and the associated privacy debate. Who is right? Apple or Facebook, your call to make. Then we move on to how Robinhood found itself in a grilled sandwich between Wall Street overlords and millennial revolutionaries. It, like in all instances in history sided with the overlords. Nothing changes about human nature. We move on to an even more interesting topic of the logic of stock traded companies and does it even make sense to have them anymore. Why do they need to exist? We end with a fascinating article on how a new breed of companies are coming up that promise to finance everything you buy, even your grocery. The “Buy Now, pay later” revolution is certainly fascinating but I don’t think I will be joining in.

Let’s start.

1. Does the world need an innovator, a magician of science, a saviour of mankind. Someone to polarise and someone who is aiming literally for the stars. A crucial part of this newsletter has been to dig out the best profiles there are on the internet. And here’s one more for you. Elon Musk for the first 4 months of 2020 and for a couple of years before that was the “saviour of mankind”. He was building electric cars, going out on Solar power and well was sending actual people to space. He had in a sense proved that he could make the biggest leap possible in the modern age, that he could go from a tweet to reality and make stuff happen. Then he for some reason decided that COVID was overrated and was not dangerous and we went from being compared to Steve to now being compared to Donald. Then he proved that he could scale Tesla up and became the richest man in the world. A man building reality in the world of clicks is a rare man to be, but he is at the moment, the most famous innovator in the world. Whether genuine or not, whether likeable or not, whether socially correct or not, I will leave it up to your judgement, but I agree with the article when it says that his achievement might be the one which no one else could achieve, the ability to give a damn about what other people think.

A man changing the real world in the age of clicks 

2. The Tech war of 2020 was the US Congress vs Big Tech. The Tech war of 2021 is about to be Apple vs Facebook. Preamble is simple. Currently apps and websites can track your movements even when not using the app. Apple is now adding a pop-up where users would be asked whether they want to give permission to Facebook to track them. Such information is crucial to Facebook as it uses these metrics to show ads to its users in the most relevant and targeted way. This could result in losses in millions of dollars for Facebook in terms of ad spend, at least in the short run.  Facebook is standing up to be the warrior of the small businesses, Apple the warrior of Privacy and data safety. I somehow side with Apple. But to be honest, our perceptions in a battle of such huge companies only prove one thing. It proves who has the better PR and marketing department. Nothing more. But I will still try to construct an argument here. Apple, I think for a long time has cared about Privacy and therefore its actions have a history of consistency. What surely helps them make this decision is that they earn nothing from advertising revenue. They earn purely from in-app purchases, so the commerce makes it easy for them to take this step. Facebook’s argument of helping small businesses does have sense to it, but maybe people’s privacy in the current age stands taller. Your decision to take.

The Battle of Morals in Tech : Facebook vs. Apple

3. I restrain from writing about the most watched news of the week. Primarily because there is already so much noise about it. But I wrote about Robinhood a few months back and its relationship with Wall Street. You could sense it coming. So apologies to add to the glass of murky news. There was something strange about the way they grew. The last week as you would have heard was all about the common-man investor taking on Wall Street. You would think that with the young millennials forming a bulk of their customers (and because of their name), Robinhood would have at least not interfered in the finance revolution. But like in the age old war movies, Wall Street proved that Robinhood was working only for them all along. Do read the earlier article if you don’t have reference. This is the one article you need to read this week. It is sad that the “disrupters” of Wall Street  after the extravagant valuation and growth forgot about the disruption and sided with the status quo.  The story otherwise too is  extremely fascinating. The fact that in an emergency they could raise a billion dollars in one day shows that the word billion is becoming too commonplace now.

Robinhood: Caught in the Crossfire between the Gods and Common Humans

4. So much has been said and written about trading and public stocks and companies listed on the stock exchange. But why are companies traded on the exchange? What is the point of the public listed companies? Roughly a 100 years back it made sense, when pension funds invested in them, when companies only used to aim for long term growth that would require planning into decades and when workers referred to manual labour. It was a model where a company would slowly increase the value of shareholders and provide significantly incremental value over time. In today’s day and age most company executives think of their welfare before that of their shareholders or the company itself. Most banks which fail or make gross errors and are punished by regulators have in a previous or upcoming quarter given significant bonuses to their CEO’s. In Fact many companies which shutdown in the financial aftermath of 2008-09, had actually given out major payouts to executives at about the same time. Executives do not look at long term growth of the company and look at immediate results. This harms, owners, shareholders. So maybe a century old model needs to change. Maybe publicly traded ownership is the way to go. Dell did wonders when it took itself out of the public markets. The idea is revolutionary, but the future before it happens always is.

The Age of Publicly Listed Companies might be over

5. Post the financial crisis, even credit card obsessed USA realised that maxed out credit was a bad idea and the number of new users signing up for cards fell by more than half. The world over, credit cards seemed like a bad idea. Strong villains have a tendency to come back in new outfits. The age of buy now, pay later is becoming increasingly popular across the world. The consumer addiction of taking something home from a store and not having to pay anything for it right then is a high that would become addictive too soon. In many shapes and forms you can also see it appearing across many different counties. A fascinating article about how a bunch of companies now make people buy even bed sheets on credit.

This is the “new” Credit Card

Predictions about 2021 and the Decade, Buddhism mixed with AI and the History of the PDF : The Week’s Most Interesting

It has been a very interesting year so far.  If the two to three weeks of this year have taught us anything from across the world, it is that character is important. It can make you win, and it can be judged even better when you lose. The two examples came to us from the 2 ends of the world, one from Australia and the other from the Not so United States of America. Firstly, it is difficult to ignore the attack on the US Capitol, not because of anything but for the highly publicised way it showed how Dictatorships take over.  In the dictatorships of Africa and The Middle East to some extent you do not have such a rich history of democracy coupled with such a strong first world developed human rights agenda and such intense media scrutiny. America and the rest of the world must understand that it is not leadership or systems only which prevent a dictatorship, but rather the present of extremely rich in-country media and education about democracy. The police didn’t stop the Capitol takeover. The real blow to the dictator’s army came when Facebook and Twitter blocked his voice. 

The second example of character came from the cricket series between India and Australia. It is by far one of the best examples of character that sport has seen in recent years. When you have some five or six players injured and you still compete intensely, it is that it is a team that knows how to survive and never to give up. The Indian cricket team, literally gave blood and sweat to draw the match and what pleased me the most was the number of people commenting on social media. The beauty of the series showed that test cricket will live on and probably be the format that would be the most watched as long as the pitches make sense.

But my first series of 2021 is a mixed bag. We start with what we should expect from 2021 and we end with what would be the technological drivers of this decade and will it be better than the slow decade that 2020 was. In between there are two beautiful articles, one about the Future and one about the past. I would leave it up to you to decide whether you are more fascinated by the Future of AI or the past of the humble “PDF” Document. 
So here we go !

1. 2021 would be an open market in many different ways because the “the new normal” would be about reinvention and new perspectives. A host of new champions would emerge but a lot of old champions will try their hands at new areas. As flexi-working space becomes a crucial part of the economy, will Airbnb step into the co-working space. Will residential real estate boom and commercial real estate dive or will the new normal be almost the same as the old one. Will the rise of Tesla continue as Elon Musk proves that genuine innovation is a much better bet than finding another ad driven model in the internet world. Prof Galloway has a history of making good predictions and he is always candid about the ones he gets wrong. So this is your crash course on what to expect from 2021.

The Business Predictions of 2021

2. A simple theory of intelligence in a sense is that it is a skill of having perspective. And perspective is about using those neural networks to connect words that are never used together. Let’s talk about AI. In the past I have talked about the problems of AI adopting our biases towards gender, race etc. Now honestly I have always looked for a solution but the complexity in the system is that your biases enter the design. Which is why I think this solution this so elegant and so out of the box. Religion in its purest sense was made to unite, was made to be universal, then why shouldn’t AI learn from religion. It is so surreal to find the solutions to the problems of cutting edge tech in age old documents.

Putting some Buddhism into AI

3. As you read more and more, very rarely do you come across such gems that make you smile. So here we are. The story of the only technology that has withstood time. It is the PDF. The story of the most useful technology that has been around for 3 decades and has still not been disrupted. It has the usual hits of starting off in a garage and how Xerox started off a generation of entrepreneurs who today have helped form the internet world we live in. But it is in my opinion a story of one of the first platforms in the world. The PDF team saw well in advance that to be successful you have to work across platforms. Today it may seem commonplace but I can imagine that some decades back, such thoughts would be revolutionary. This is also a masterclass in branding and how brand associations play. I for one, had no idea that Adobe no longer owns the PDF format. This is one of the articles that you shouldn’t afford to miss. 

The History of the PDF Document

4. This is what I think of the technological innovation of the last two decades. As Peter Thiel put it wonderfully, a majority of the innovation and the best minds behind them were working on how to make people click on ads. Now the problem is that the technological innovation before that was very different. Whether the  Ford Model T, or the assembly line of Toyota or the iPhone, these innovations made breakthrough progress in human productivity. And the chart works such, that as people grow, GDP/Wealth/Prosperity grows, but for one generation to be more prosperous than the previous one, the productivity per person must grow, that is you must be producing more value than the generation before you. In the last 10 years that didn’t happen. Now the next ten years look much more promising. If you are interested in the future of tech and how it would change our lives while also changing the way all of us work, then this one is a must for you.

Tech in the next 10 years needs to accelerate

Hope you had fun reading!

The Queen’s Gambit in Business

Fedex, Salesforce, Health-Tech, Credit Algos and Cars24

Till I watched the Queen’s Gambit, I had a passing interest in Chess, rediscovered every few years leading to a few videos on openings and a few matches till the board went back into the shelf  for another couple of years. I certainly like the rest of the world (see the graph below)  rediscovered my love for the game after watching the Queen’s Gambit. (If you haven’t watched it, do watch it. Some stories are universally beautiful). But in a blatant oversimplification  I learnt that the most beautiful games are the ones where white sacrifices a queen or an important piece to win the match.Since Chess is supposed to be a representation of the world, I went about searching for the Queen’s Gambit and other such sacrifices in the business world.   

The Rise in Interest in Chess mirrors the release of The Queen’s Gambit

In the first story we look at probably the most accurate representation, where FedEx has sacrificed its most successful consumer and readied its pieces for the battle royale of shipping. In it’s long walk, Salesforce has acquired a pawn and is looking to make a queen out of it as it makes another effort to dethrone Microsoft as the King of software. Big Tech has made the best AI to play chess but the one game that they haven’t been able to win is one of Digital Health. We look at what Apple, Amazon and Google need to do to establish themselves in the field. Like in Chess where the development of pieces is more important than the actual attack, technology needs to be readied before it is deployed to solve the big problems of our world.  In areas like loan disbursement and renting, the tech is ready but the algorithms are flawed and sometimes such releases push you back rather than forward. My last story for the week is about a recently minted Unicorn and how it has moved beyond all the ambiguities of regulations and macro-economics to arrive on the fast lane. In this search for stories, my love for the game actually increased because almost every business strategy I have studied or known of can be found in the game of chess.

So, Let’s play !

1. FedEx is a brilliant example of sacrificing a piece to maintain advantage. It sacrificed its most successful customer Amazon and announced that it would no longer be working with it. I realised that at all times, everywhere someone in the world is trying to stand up to Amazon and compete in some territory. If you take a moment to stop and ponder, you would understand the scale of it. For example a month back it was Amazon vs. Reliance in India. It is now Amazon vs. FedEx in the US. But this is a story I have been following for a very long time. Essentially, your biggest partnership is your biggest cost centre. At a scale and size of Amazon, what happens when Amazon opens its own shipping services. But the beauty of this is that this time Amazon is not disrupting an industry. It is going toe-to-toe with the company that has been the innovator in the category. The story is exciting because my bet is probably Amazon won’t win so easily and FedEx has shown this pandemic that no matter what happens it is up for a fight. 

FedEx said NO to Amazon

2. In the world of Software, there is one King. And to be clear it was and is Microsoft. The longest prince in waiting outside of Buckhimgham Palace has to be Salesforce. It is a company that has managed to stay innovative, jump over the high waves, but never really taken off so successfully that it could defeat or dethrone Microsoft. This year for Microsoft has been the year of Teams as it has driven user and revenue growth, but Salesforce is taking another shot. Salesforce and Slack are at least in my head the two ends of the narrow tech spectrum. There is a possibility that Slack will help SF gain new users for its heritage SAAS products and finally give a running to Microsoft. We will have to see, but Microsoft you can be sure is not slacking 🙂

Salesforce and Slack

3. If I talk to you about Digital medicine and “health-tech” you would get the drift of the industry in 2020. Digital prescriptions became mainstay in a lot of countries. Because of the pandemic what really took off is digital consultation with doctors as people were afraid to visit hospitals. There was the online pharmacy business which made waves as Amazon entered etc. But that is a little passe now. The question to think about is that Big Tech has been trying for years to get into the health care business. Why haven’t they succeeded? There are two concepts you need to look at. First, the health care sector is a big business with strong regulation and massive incumbents.  Second is that ads for data models won’t work. Another beautiful model I found in health tech was Verily. In his model patients are charged not for using a product/service, but charged when their health improves. I don’t think in the history of medical science you would find something that beautiful for lack of a better word.

Why hasn’t Big Tech cracked Digital Health

4. Most credit, loan, rental and financial decisions would soon be made by algorithms. Unlike 5-6 years back there wouldn’t be humans available as readily to understand flaws and make assumptions. Infact once you  release the product on the market, the loan executive doesn’t know how the algorithm decided you were not suitable. And this is not the future but the present in some developed countries. So now there are reports on how to identify the flaws in every algorithm being used in the US. I find that ridiculous. Love the tech adoption, but I think tech readiness is a precursor to adoption and not the other way around. The sacrifice of established ways must be for a purpose and not herd mentality.

Adopting Tech before it is Ready

5. This last story of the week is about Cars24, a recently turned Unicorn that deals primarily in the used cars segment.  The reason this story comes here is that their journey over the last 5 years is almost a succinct summary of the Indian economy and its ups and downs. There is a resilience that was required to survive such events.  Another point which intrigued me was the comparison to Maruti, Tru Value, the incumbent in the sector and probably the company with the best knowledge of consumer behaviour in India. A good story to read, because I too believe that in the near future the sector will heat up and Cars24 has made a strong start.

The New Player in the Old car Segment

Hope you had fun reading.