Recessionary Times

We are in recessionary times, and there seems to be no way out of it. Its no longer a shock-and-bounce thing, and it will take years of grinding to get out of this mess.

Surprisingly, there seems to be very little introspection happening on where we went wrong. Even though Enron and Lehman went bust, their employees made millions (and some even billions). Something is terribly wrong with the way things are structured, and the more I think about it, the more confusing it gets. When Lehman stock was trading at 2 dollars, fed needed a meeting to plan its rescue, not withstanding the fact that its employees could very well have bought every stock in the market.

Its a recession of character and morality, and don't think there is any way out of it.

Travel Plans

Finally managed to squeeze a long weekend plan to a 'foreign country'. Well, even though Singapore is not a proper travel destination (shopping and adventure parks don't count as travel destinations), its a first. And hopefully we could plan similar trips in months to come as well.

So the next weekend and two days would be well spent in Singapore. Should be posting a few pictures soon after the return.

One Click: Part Two

I couldn't help but notice the irony in the title. Something which was intended to be simple and fast, has got a second post on it. Anyways, this one is not about the book, but on e-commerce and internet as a whole.

The fastest way to become a millionaire these days seems to be via technology based start ups. They may be pure plays like Instagrams of the world, or can be a web enabled real businesses like Flipkart (more on flipkart on some later date). People are investing like crazy into tech start ups, and valuations are reaching close to bubble zones. So what is it which makes an e-company more attractive than a brick and mortar one? Is this just the premium on betting on future or there are other real tangible present reasons?

For one, they are more nimble. Compared with a company on ground which may have locked a long term lease, have inventory, and old information systems, an e-commerce company would be much more nimble. It would be much quicker to adapt to changes, and can completely re-invent itself at lower costs.

Another reason I think is the efficiency - compare the music selling models for Apple and a CD store. While the actual store would place orders for CDs, wait for shipment, pay for transportation costs, pay rental for the store, and then be left with unsold inventory. Apple on the other hand just sells a digital file, gets a hefty cut on each song sold, doesn't carry any inventory risk, and has almost no capital deployed. Little wonder Apple has a margin in 40s, compared with single digit margins at say Walmart.

And lastly, I think its a huge monopoly of scale potential. On internet, its just one or two guys who control each markets - be it google in search and mail, microsoft in OS, Apple in products you didn't knew you needed. So, no wonder when someone opens a flipkart, it gets a much higher valuation than if he had opened a store of even twice the scale.

It may all be a big lie, and ten years from now mankind may return to real brick and mortar businesses. But whats the harm in trying to understand a few things, and try to rationalize the same.

One Click: The Amazing Amazon

This may be a long post, or I may split this into multiple posts. Depends on how much the battery in my iPhone lasts, and how much I can think or write at one go. The reason why it would be a long one because its about the book, and then, about a lot more things.

Firstly the book. The one I'm talking about here is titled 'One Click', and is about Amazon and its founder Jeff Bezos. Few stories in the internet era have been more successful than that of Jeff Bezos. I'm not counting Facebook and Twitter and a whole lot of other companies simply because its too early to tell. Internet is like the big wild jungle, and its all about 'winners takes all'. The pace of change is mind numbing, and very few companies survive after the initial hype. Amazon did, and changed the rules of the game. It has survived the first decade, seen two crisis, and still manages to grab the front page.

Bezos can be credited to a large extent for shaping the e-commerce as it exists today. He just hung in there, overseeing profitless growth for years, and yet believed in the future. Now we have a lot of portals offering similar services and it all looks so natural now. The book briefly deals with some of the very obvious problems faced by the founding team, and how some of the features so common today were conceptualized.

On another level, it makes you wonder about the possibilities of the internet. Is it really going to change the world for good, or is just a passing fad. Its a crazy world out there now. The aggregator websites offering air tickets are valued much more than the airline companies themselves. Similar may be the case for online movie ticketing, book selling ventures in India. Most of them are being valued at more than the valuations of the underlying business they are supporting. May be, world is changing for ever, or it may be just another bubble. Anyways, we are back in the dot com mania, albeit a little bit wiser than last time.

P.S. - I will have to split this into parts, and let me write the other half later.

Diary Of A Wimpy Kid

As I may have mentioned in few of my earlier posts as well, I'm currently in my reading phase. Have been reading a lot a books, the latest being the four books in 'Diary of A Wimpy Kid' series.

I first read about them on some blog, can't remember which one, and had ordered them long time ago. On my last India trip, was travelling quite light and hence managed to carry lots of books back with me. Anyways, I digress. Coming back to the book.

The book is very differently written, and its more of graphic novel with each page having pictures and only a few sentences. It deals with a middle school kid named Greg, and the world from his perspective. There is a good bit of humour in the book, and the cartoons add to the story greatly. Read it to relive your school days, these are very light reads with each book not taking any more than 2 hours at maximum.