A start-up life helps you to learn to live with fear, loneliness and uncertainty.

You jump in to a start-up assuming that you can break-even in some time and cross that time with good bank balance, some funding. You are confident with good amount of friends you are in touch and good team members, clients and colleagues you have and this gives you confidence to start. Your spouse lives a frugal life and you enjoy the same and know you have limited expenses and needs for money and see that you have 18 months to go and explore. You know technology and frustrated with cost of education. You really wanted to solve problems in Indian learning space for the people at the bottom of the pyramid. You know khan academy does not reach Indian people at the bottom and are inspired to create something for others. I used to not like fear, loneliness and uncertainty.

Joined friends with similar community mind-set and I am in midst of start-up.You develop your products to solve problem you perceive, meet customers, explain your business case, collaborate with them and perform pilots. You meet a lot of students in various institutions and happy that the students use the product and feels satisfied personally. You changed your term from bottom of the pyramid to “rest of the pyramid”. The sense of personal satisfaction makes you build even lot more and you are fascinated what you build. Some of your well wishers are surprised with the focus you are working foregoing big pay packets and this boosts your ego. You get a lot of pride in what your doing talking to a large students and teacher audience.

You need learning content in platform. Then you realize content is not the trick, the content provider has no great content and all their content are looking same, but to part their content they are looking for large share. Either the service you offer should have high price which would not reach the target segment you choose. You realize that you need marketing and you find that your skills are not that. You learn trying hard at marketing yourself but fail to create the impact to generate money. You realize that average student and teacher are not tech savvy(they might have mobiles) and teachers have no clue to even use discussion forum. You find that there are similar solutions and some of them target the top of the pyramid.

You are joined by some one who promises to create sales channels. You work with mobile companies and realize that they are looking for you increase their device sales through you and not interested in the education space. You work with some educators who wants to work with you, but are interested to exploit students and you walk out calling ethics. Some of them say that you are too early in the market. You learn that cellular operators are not interested in solving problem and naturally interested in top-line and are ready to give freebies for offline model. You are not going anywhere. An educator company wants to invest in you and you come to know that they follow corrupt practices to make deals and you shoo them away.(this was good as they were embroiled later in media).

You have earned the friendship of great educators who are focused on education and realize that you might have to spend 5 to 10 years to become successful in education space. What you saw as opportunity continues to be one, but you need more time and skills to break in to opportunity. You realize that personal satisfaction has loses its priority with the money in your hand starts dwindling and also with the responsibility to pay salaries. In focus to solve problems,you have overseen the fact “You need money. The money need not come from solving a problem and not even from a customer; it can be a grant.”.

For the first time I realize a lot of things in life that
• downside of loving technology work. Has it made me dull?. . Your technology focus is a not helping with skills needed for your business. your start-up focus has distanced yourself from your family and friends. Your family wants you to make money, but assume that that you are drowned in start-up. Your customers have started doing next pilot with next start-up.(they have not paid any one yet).
• the importance of having money. I need not spend. You might a frugal guy, but you need the comfort of having money. Your spouse gets pressure from family social circle and questioning herself “Are my family goals taken care of?”. For the first time, she looks in to bank balance and starts tracking after 10 years. She comes with valid point that ” Salaries have come down and prices have gone up”.
• You realize that you are selfish.For the first time, she calls me how much are you looking in to other well-being. You realize for the first time that you have been too selfish in what you were doing, to get personal satisfaction and you have not achieved your goals. For the first time, i realize the need to measure whether goals are achieved or not and important to measure this and keep changing.
• Need to plan actions and their impact by measuring results of actions.. You have measured results in your office with the intent that you always valued the efforts of individual more than the results and the same you applied for yourself.All was fine with money in bank and cushion job. It is not more the same when there is no money.

Life is lonely at start-up, there is fear for dear-ones and there is uncertainty going forward. I am learning to live with them. Started doing some consulting projects to remove uncertainty, reach to friends to get rid of loneliness and also catch new opportunities and thereby learning to live with fear. Going forward, I need to plan actions being aware of these feelings in me and my family.

How relevant is engineering stream today ?

A few days back I saw this Hindu article Most engg graduates are not readily employable and wanted to think what is relevance of engineering and MBA today. Let me first state that I am not an engineer not MBA graduate.

Why this blog? I saw people who have spend their parents’s money on education and did not get a job in campus. Not getting a job, they join some firms that lures them with a promise of a job and they need to pay money upfront. their parents once again sell their land and get pay the money. Some of these firms cheat them and they feel miserable, not knowing what to do and how will they communicate to their parents of their miserable state?

Why am I not an engineer? In my final year at school, there were only 38 engineering colleges(govt and private) in Tamil Nadu( highest in state in 1993).What was criteria of a good college those times? (no internet those days). The criteria was Colleges termed by senior students as good quality to study and where companies offered them jobs( placement is a later term) and better if they are closer to home. With my admission chances very low in colleges terms good to study engineering, I decided to skip engineering.

Let me come back to today. In Tamil Nadu, there are 525 engineering colleges in the State, including nine government colleges and three aided colleges. I see that the criteria to select college remains the same, offering quality education and have placements and closer to home. I would urge parents and students to ask themselves these questions, before deciding to join engineering. Even if you have already in engineering, ask yourself these questions and get prepared .

• Does the college have placements? That would bring the college to group where the industry consider college students readily employable. That is good start. Do students study engineering for 4 years and then learn that you are not employable by industry?
• Does the college offers quality education? That still is not easy thing to find today. the answer comes more from what you want to gain from the college and contribute back.
• The cost of education has increased. I spend close to 40,000 to study and was able to earn the money in 4 months. What is the cost of education today and how much time is needed to earn the money spend?
• I know that regular courses in IIT and IIM gives access to alumni network and provide people a better networking support. Does your college have great alumni that you to bank upon? Benefit of alumni comes from those who are in active hiring or decision making positions and not just working as manager in companies.
• Student studying in non-IT stream find IT jobs as means to get want high salaries. if the student get admission to non-engineering colleges with placements,should they still study engineering?
• There are good available online for free. Can students get a laptop or computer and use online resources to study from home? I am sure that internet cost cannot exceed engineering college fees, add the free laptops and PC given by state governments.
• I hear from friends that their families face difficulty to marry younger male siblings who are in non-IT streams as there are more engineering studied girls and they want to marry only engineers. Seem to be a good reason to study engineering?

I would encourage to look at these alternate thoughts

• I know that a good number of science and commerce stream students who climbe corporate walls with the help of IT wave. This is the same wave utilized by non-IT engineering stream students. Look for the needs of the wave you want to climb and equip yourself. It need not be always engineering.
• Software jobs requires good programming skills and communication skills. If you have money spend on communication skills. I see freshers still not able to communicate in English.
• You have organizations like FSMK, Bangalore which offers free courses in computer science discipline and want to ask people to utilize that
• There are companies like PurpleLeap working to make college student employable and jed-i.in helping engineering students to get quality education, missed in college.

Let me end with a positive experience. A female cousin of mine spend 4 years on engineering and works as engineer as IT industry. Another cousin younger to the It cousin attended 3 years commerce stream and also completed her ICWA and was placed before the end of the college course and works as manager in finance stream. Please calculate the return on investment for the money spend on education in above cases.

Are we leaving behind the students who need education the most?

I wanted to see whether I can start free classes for 11th and 12th standard CBSE mathematics. The idea came from my childhood where the only class outside school was from free maths class offered by Subramaniom residing in Block-27. To start with, I planned to buy textbook as first step to implement my thoughts. Let us remind ourself that for a lot of my generation, our primary education learning (whether calculus, grammar, or art history) centered around the textbook.

I started with Oxford store and then Crosswords and then Landmark. I learnt for the first time that none of these shops seem to deal with student books. They said that CBSE board book is not available and they have study guides and showed my a lot of study guides for display. I glanced at them and found most of them were only as study guides and serve as addition to school text books. They advised me to visit Bangalore only book chain and they have the book.

Is there a reason why these chain shops do not stock school text books?. They might give a reason that schools get the textbooks and give to students. what should the student do if the book is lost in the mid of the year or just before the exams? I was scared and prayed that student should not fall in to this unfortunate position.

I visited Swapna,Bangalore book shop. I asked the shop assistant to help me and he showed me guides and then I requested him for CBSE regular text books. He showed my some of the CBSE text book. I saw Physics 12th standard books, but not the maths one. He said that these textbooks do not come on regular basis and asked me to look at a guide. I asked whether their other shops in city would have a copy of the book. I was asked to go to a different center and given contact address of other center and asked to call them and ask for the book availability. I asked whether they could get a copy across and it was not welcome. For me it was a strange behavior as their response have always cordial. I checked with supervisor and he also shared that CBSE textbooks do not come in regular times and there is a scarcity of them and hence they do not want to commit and fail, hence they were not extending regular support service for CBSE textbooks.

It was nice to find digital copy of the books at NCERT Textbooks. With the demand and supply problem in reality, Is there actually a market for digital text books on new digital devices like tablet? Wonderful, all text books can be made available in computer and tablets. What about the large population that cannot purchase these devices? Now the books are also not coming through freely. Are we creating this market and effectively leaving behind the students who need education the most?.

Seems the same thing applies to USA and references that talk of a digital divide in USA.
• Why the Online-Education Craze Will Leave Many Students Behind
• Cellphones helping minorities close gap on Internet access?
• As Some Schools Plunge In, Poor Schools Are Left Behind

Is your financial information safe online?

Citibank offers me regular credit card transaction updates over email and SMS for free. I find this very useful as it makes me aware of the transactions performed on my card and can help me to identify the issues. The communication email looks as below and makes me feel good.

Rs xxx.00 was spent on your Credit Card NUMXXXXXXXXNUM on DD-MM-YY at xxxx .

The bank also send me account statement and credit card statement is password protected document and the password is combination of my name in the account, and Date of birth in a specific order. They also share with me the combination, which makes me little uncomfortable. I gain comfort as the document is send only to me and not to others.

If you trade in shares and dividends, the share agent sends you encrypted document sometimes of the transaction and sometimes plain text form of the transactions. So they reveal my DEMAT depository number and my DEMAT identification number,  they do not reveal the my bank account or my bank number.

If you hold shares in Indian companies, they credit dividend to your bank account and send you details of the dividend credited to your home earlier by regular post. Now they send by email and that saves paper and postal charges. But should they not make sure that my personal details are not leaked.

Below is the extract of the email send by one of the registrars of the Company(example,Karvy consultants) for company with whom I hold shares.

Dear Shareholder,

Re: Intimation regarding remittance of dividend through National Electronic Clearing system(NECS)/Direct Credit.

We are pleased to inform you that the Final Dividend for the Year xxxx-xxxx in respect of the equity shares held by you in the XXX Limited has been remitted to your bank account through electronic credit as per the details given below

01.	Advice No.	1517192
02.	DP ID & Client ID No.	XXXXXXX XXXXXX(information leak)
03.	Name	Name
04.	Dividend per Share(Rs.)	4.00
05.	No. of equity shares held on Book Closure Date i.e., close of business hours on 15/06/2012	XX(information leak)
06.	Dividend Amount (Rs.)	xxx.00(information leak)
07.	Name of the Bank	<< Bank Name >>(information leak)
08.	Bank Account No.	<< Account Number >>(information leak)
09.	MICR code	<< MICR Number >>(information leak)
10.	Date of remittance	Remittance Date
11.	Mode of Payment	National Electronic Clearing Services

Are Cloud Services taxed?

I do not pay any taxes for charges paid to cloud computing service or purchasing a mobile application in android platform. I learn that all services in India are taxable. How about cloud services or mobile application service?

Cloud Computing allows Governments and Companies to access IT resources as a Service over the Internet. One is not required to invest in the IT infrastructure, Software and Services upfront. The software and data is stored on the servers of the Cloud Computing Service provider.

Taxation of cloud services is complex and is subject to the fact where is the Cloud located. Across the world, the practice is to tax where it is used, whereas in some cases,it is taxed where the service is offered( location of the server) or it is taxed where the office of the cloud computing provider is located. If companies are accessing Cloud Services from outside India, can the Indian Government tax it?
I might need to understand International law and Taxation domain and this is going above my head/ knowledge.

Governments depend on tax revenues on goods sold within their borders. How will the Indian government like to treat the cloud? They would like to follow an approach similar to off-the-shelf software purchases, which are of course taxed. How will the cloud computing company project this? They would claim that Cloud computing amounts to providing Software as a Service which will be governed by the local laws where the cloud computing company is located or where their servers are. These locations are mostly in the US where these are non taxable. As Infrastructure, Platform and Storage is provided as a service on the cloud model, this is going above my head/ knowledge.

Now I am in confused state.. On one hand as Indian citizen, I do not want Indian government to lose the tax revenues. At the same time, I would like Indian companies to make use of cloud computing and save costs,be leaner and more efficient. if Indian company wants to offer cloud computing services,this company would be under Indian tax jurisdiction and the cost would become charges + taxes. Can this company compete against the existing ones?

Are the above leading to the reason to my own question,”why the cloud computing providers like amazon and azure do not have cloud data centers in India?”. For both these providers, I was able to use my Indian credit card.

First Observation in Green Initiative in Corporate Governance

Some times back I have posted a blog “Green Initiative in Corporate Governance – I see a risk to investor interests”, my doubt has the first email coming from company XXX.
1. See the email below. Will the company publish these mistakes on a newspaper too?
2. I do not want companies to give my name and Folio No in demat account in the email.
Should they not encrypt and send the same?
3. At the same time, I wanted to mention that Tata motors send me a CD of the annual report.
I am sure this costs today less than printing a book and would prefer that instead of the email? Hence Should companies not ask for printed book, CD or by email?

XXXX Limited
Regd. Office: XXXXX

Name of the Shareholder:XXXXXXXXXX
Ref: Folio / DP Id & Client Id No:XXXXXXX, XXXXXXXX

Dear shareholder(s),
We have noticed a few printing errors in the Annual Report of the Company for the financial year 2010-11 despatched to you in the first week of August 2011.

These printing errors have now been corrected. Accordingly, we have attached

1. Relevant revised notes on page 70 and page 135 of the full version of the Annual Report (Annexure I);

2. Statement under section 212 (8) of the Companies Act, 1956 forming part of the abridged Annual Report on pages 53-54 and full Annual Report on pages 159-160 (Annexure II)

We request you to read these versions in lieu of the versions in the Annual Report received by you.

Corrected versions of the Annual Report is available on the Company’s website http://www.XXXX.in and can be viewed / downloaded by clicking the following link:

XXXX Limited Annual Report 2010-2011

We apologise for the inconvenience caused.
For XXXX Limited

XXXXXX
Dy. Company Secretary
Place: New Delhi
Date: XXX 19, 2011

What is Commodity Trading?

Some one got in touch me and asked me whether I am interested to open a commodity trading account and performed some research to learn more of what is this and what is expected of me if I want to perform Commodity training.  Here are my learning’s.

You want to buy gold because you believe that the price of gold will rise.  You could then buy gold, store them, wait for the prices to go up and then sell them at a profit.  But you need to make sure that the gold you buy is pure, you have to find a place to store it, you have to provide the security, transport it to vault and other such hassles.  A better way to invest in gold is to buy gold futures from the commodities exchange.  When you buy a Gold Futures contract, you undertake to do three things.

1. Buy the amount of gold specified in the contract.
2. Buy it at the price specified in the contract.
3. Buy it on the expiry of the contract. This could be after one month, two months, three months and so on. Of course, if you sell the Gold Futures contract before it expires, then you don’t have to worry about actually buying the gold.

When you buy a Futures, you don’t have to pay the entire amount, just a fixed percentage of the cost. This is known as the margin. The low margin means that you can buy futures representing a large amount of gold by paying only a fraction of the price. Any increase or decrease in the price of gold would result in money credited or debited in your account depending whether the price of gold increases or decreases.

Compared to stocks, there are no balance sheets, no complicated financial statements, but you need to follow the supply and demand position of the commodities you trade in very closely.  This means that I need to track them on daily basis across work hours compared to stocks where i could perform analysis at midnight.. Would I be able to do that?

Contra Facts

You have invested in shares and you also have invested in mutual funds. You have invested in deposits. You think that shares have high risk and mutual funds have medium return and Fixed Deposits are losing their importance.

Are mutual funds you have invested looking for short term or long term? Let us understand fund manager . Fund manager needs to be focused on short return returns ; a large chunk of the fund manager’s bonus is based on that. If you are shareholder you have opportunity to questions directors. Is there a way to question fund managers? Do they not asked to annually meet with their investors and answer questions. Can Investors enforce that the fund manager to invest in ethical companies?An incomplete feedback loop;

You have invested your money in bank deposits. You should be careful about the bank where you deposit your money. Realize that depositors do not have any forum to express themselves to the management.Now banks were the main reason for the global financial crisis; in their quest for short term returns they forgot the basic tenets of safe lending and went on a sub prime lending binge to boost short term profits Depositors, who contribute more than 7 times the funds of the bank, do not get a chance to quiz management though shareholders do.

Same, when the successful commencement of auction of 3G spectrum, expected to raise some Rs 45,000 crores for the Government. Have we forgotten that it was thanks to the vacation of the spectrum by the army; the same army on which such little is being and has shortage of food, drinking water, medicines and ammunition.

Some investment pointers to be aware in 2010

1.FM said in the budget, for the next three years, the government will contribute Rs
1,000 per year to the NPS account of those who deposit less than Rs 12,000 per year and start
their account in 2010-11. This scheme could well be the promotional impetus that the NPS needs
to do generate awareness among a larger audience.

2.savings bank accounts will now pay interest daily. Up till now, banks would pay interest
only on the minimum balance between the 10th of a month and its end, which was a rule designed
to generate income for banks without having to pay customers for use of their money.

3.Businesses with annual revenue of less than Rs 60 lakh can now just pay tax assuming an income
of 8 per cent of turnover, without even having to maintain books of accounts.

One approach to interpret sensex?

I liked this blog “Predicting the 1 year returns on the NIFTY based on the current PE Ratio” and liked the same and copied for my reference

The current NIFTY PER is around 22.5, thereby falling in the “Hostile Zone” as described below.

To describe the above table in words, we can look at 4 zones based on the PER:

· Safe Zone with incredibly attractive rewards and low risk for the patient investor,:

If you had invested on days when the NIFTY traded at a PER below 15, the subsequent 1 year return was positive 96% of the time, implying an almost guaranteed safety of capital with an average return of +48%. The maximum loss you could have sustained was only 9%; i.e. though there was a small 4% chance of losing some money, you definitely wouldn’t have lost your shirt!

· Buffer Zone with attractive rewards and moderate risk for the nimble investor:

If you had invested on days when the NIFTY traded in a PER band of 15 to 19.99, the subsequent 1 year return was positive 63% of the time, implying a reasonable safety of capital with an average return of just +13% which is not much higher than 1 year bank interest rates for this period. The maximum loss that you could have sustained was pretty high at 33%; i.e. there was a good chance of losing a significant part of your shirt if you weren’t careful enough!

· Hostile Zone with uncertain rewards and high risk for the adventurous investor:

If you had invested on days when the NIFTY traded in a PER band of 20 to 24.99, the subsequent 1 year return was negative 62% of the time, implying a high chance of losing your capital in the pursuit of a maximum return of  +61% and an average return of only -4%. This is definitely not a zone for the faint hearted given that there was a high probability of losing your shirt in chasing high but risky returns!

· Suicide Zone, almost certain to blow up a gullible investor’s money

If you invested on days when the NIFTY traded at a PER 25 or more, the subsequent 1 year return always negative and you would have been guaranteed to lose at least 11% at the end of that period. The maximum loss sustained was 57% i.e. there is every chance of losing your shirt!

Disclaimer:

Needless to say, this exercise is completely amateurish in nature and none of these conclusions should be used by anybody to make any investment decisions without further investigation and application of independent thought.