Will you do a business where the Cost of Capital is 1500%?

Can you imagine doing a business with a Cost of Capital of 1500%!!!!

Sounds absurd isn't it! But this is precisely what is happening in rural India.

Let me elaborate...

You must have seen the lady vegetable vendor who comes to your house everyday carrying a basket full of vegetables every day. She gets up at 4 am in the morning, goes to the local market and asks the money lender for a small capital to buy one basket of vegetables. The money lender gives her, let us say Rs 500. He, in fact, gives her only Rs 475 after deducting his interest of Rs 25. The lady, then buys vegetables for Rs 475, and goes around her beat selling vegetables at a nominal profit. At the end of the day, she has to return Rs 500 to the money lender. The same scene is repeated the next day. This means that she is paying Rs 25 as interest per day for Rs 500, i.e 5% per day. Assuming she works 300 days in an year, excluding Sundays, the cost of capital works out to 1500%. This is the plight of 60% of the population indulged in small scale sales in India.

All the Government has to do is to implement a micro financing scheme to help these people, a la Muhammad Yunus and Grameen Bank of Bangladesh. But the successive governments have never cared. They are more worried about the cost of capital to major industrialists, who anyway are the major defaulters. It remains a mystery as to why the money allocated to many poverty alleviation schemes cannot be used to establish a viable micro credit facility. This will be a big relief to millions of poor people and shall encourage entrepreneurship at the grass root level.

Was Gandhiji right when he propounded his Gandhian economics that stressed on the need to develop rural communities? The bottom up approach to economic development. We have never had a chance to find out the efficacy of that model.

If our Economist Prime Minister were ever to be asked to evaluate a business venture where the cost of capital is 1500%, he will not touche it with a 1000 feet barge pole. But millions of his countrymen continue to be under the evil influence of the money lenders , wallow in poverty and do trading by incurring such ridiculous costs. And no one cares.


"But I, being poor, have only my dreams. I have spread my dreams under your feet; tread softly, because you tread on my dreams" - William Butler Yeats


The successive governments have not just tread on the poor mans dreams, but they have trampled on them. There in lies the tragedy

Thanks for your time!.....a beautiful story

It had been some time since Jack had seen the old man. College, girls, career, and life itself got in the way. In fact, Jack moved clear across the country in pursuit of his dreams. There, in the rush of his busy life, Jack had little time to think about the past and often no time to spend with his wife and son. He was working on his future, and nothing could stop him.

Over the phone, his mother told him, "Mr. Belser died last night. The funeral is Wednesday."

Memories flashed through his mind like an old newsreel as he sat quietly remembering his childhood days.

"Jack, did you hear me?"

"Oh, sorry, Mom. Yes, I heard you. It's been so long since I thought of him.. I'm sorry, but I honestly thought he died years ago," Jack said.

"Well, he didn't forget you. Every time I saw him he'd ask how you were doing.. He'd reminisce about the many days you spent over 'his side of the fence' as he put it," Mom told him.

"I loved that old house he lived in," Jack said.

"You know, Jack, after your father died, Mr Belser stepped in to make sure you had a man's influence in your life," she said

"He's the one who taught me carpentry," he said. "I wouldn't be in this business if it weren't for him. He spent a lot of time teaching me things he thought were important...Mom, I'll be there for the funeral," Jack said.

As busy as he was, he kept his word. Jack caught the next flight to his hometown. Mr. Belser's funeral was small and uneventful. He had no children of his own, and most of his relatives had passed away. The night before he had to return home, Jack and his Mom stopped by to see the old house next door one more time. Standing in the doorway, Jack paused for a moment. It was like crossing over into another dimension, a leap through space and time The house was exactly as he remembered. Every step held memories. Every picture, every piece of furniture....Jack stopped suddenly.

"What's wrong, Jack?" his Mom asked.

"The box is gone," he said "What box?" Mom asked.

"There was a small gold box that he kept locked on top of his desk. I must have asked him a thousand times what was inside. All he'd ever tell me was 'the thing I value most,'" Jack said.

It was gone. Everything about the house was exactly how Jack remembered it, except for the box. He figured someone from the Belser family had taken it.

"Now I'll never know what was so valuable to him," Jack said.

"I better get some sleep. I have an early flight home, Mom."

It had been about two weeks since Mr. Belser died. Returning home from work one day Jack discovered a note in his mailbox.

"Signature required on a package. No one at home. Please stop by the main post office within the next three days," the note read.

Early the next day Jack retrieved the package. The small box was old and looked like it had been mailed a hundred years ago. The handwriting was difficult to read, but the return address caught his attention. "Mr. Harold Belser" it read.

Jack took the box out to his car and ripped open the package. There inside was the gold box and an envelope. Jack's hands shook as he read the note inside. "Upon my death, please forward this box and its contents to Jack Bennett. It's the thing I valued most in my life." A small key was taped to the letter. His heart racing, as tears filling his eyes, Jack carefully unlocked the box. There inside he found a beautiful gold pocket watch. Running his fingers slowly over the finely etched casing, he unlatched the cover.

Inside he found these words engraved: "Jack, Thanks for your time! -Harold Belser."

"The thing he valued most...was...my time" Jack held the watch for a few minutes, then called his office and cleared his appointments for the next two days.

"Why?" Janet, his assistant asked.

"I need some time to spend with my son," he said. "Oh, by the way, Janet...thanks for your time!"

(This wonderful story was e-mailed to me by one of my students Sharon Philips. My heartfelt thanks to him)

Future of School Education?

This is the last and concluding part of the series of articles on School Education.

Let us to some crystal ball gazing and see what the future holds for our children?

• Home learning through computers and Internet
• Technology based training
• Instructor less training
• Access to live audio – visual lectures through video conferencing
• International syllabus
• Global Virtual School and students of different nationalities attending the same class and interacting through net
• International certification
• Flexible class timings
• Online assessment

Sounds absurd? Mark my words. This is going to happen sooner rather than later.

This model however does not take into account the development of Inter personal and group behaviours. This, dear parents, is your responsibility.

Buy him the latest computer with Intel 25 processor with 100 GHz clock speed, 10000 GB HDD and 1000GB RAM (remember we are in the future) and load Windows Omega operating system (Microsoft and Intel will still be there making our life more and more complicated in the guise of making them simpler)
But also spend some quality time with your children
Hug them
Treat them like your friend
Take them out
Share their joy and grief
Give them freedom
Give them space to move about
Stand apart and watch them grow into responsible human beings
Identify role models in the society and amongst your friends
Encourage them to share their thoughts with your children and their friends
Do not miss a single opportunity to spend time with children whether they are yours or not
Share your knowledge
Gently prod your children to spend time with others of his/her age group
Make them play any team game on a regular basis
Allow them to take decisions concerning their life
Encourage them to accept criticism
Identify their areas of interests and push them gently to excel in what they do best
You can start doing it even now

“ When your children are young, give them Roots
When they are old enough to fly, give them Wings”

10/20/30 Rule of Power Point

Ever heard of the 10/20/30 Rule of PowerPoint.

It’s quite simple: a PowerPoint presentation should have ten slides, last no more than twenty minutes, and contain no font smaller than thirty points. This rule is applicable for any presentation to reach agreement: for example, raising capital, making a sale, forming a partnership, selling a business idea etc.

Ten is the optimal number of slides in a PowerPoint presentation because a normal human being cannot comprehend more than ten concepts in a meeting. If you must use more than ten slides to explain your business or idea, you probably don’t have a business or a worthwhile idea. The ten topics that people normally care are:

Problem
Your solution
Business model / proposed working structure
Underlying magic/technology
Marketing and sales / how do you plan to go about it
Competition / constraints
Team
Projections and milestones
Status and timeline
Summary and call to action

You should give your ten slides in twenty minutes. Normally, you have an hour time slot for any presentation, but you’re using a Windows laptop, so it will take forty minutes to make it work with the projector. Even if setup goes perfectly, people will arrive late and have to leave early. In a perfect world, you give your pitch in twenty minutes, and you have forty minutes left for discussion.

The majority of the presentations normally have text in a 10/12/14 point font. As much text as possible is jammed into the slide, and then the presenter reads it. However, as soon as the audience figures out that you’re reading the text, it reads ahead of you because it can read faster than you can speak. The result is that you and the audience are out of sync. The reason people use a small font is twofold: first, that they don’t know their material well enough; second, they think that more text is more convincing. This pitfall has to be avoided. Force yourself to use no font smaller than thirty points and you are guaranteed that it will make your presentations better because it requires you to find the most salient points and to know how to explain them well.

Observe the 10/20/30 Rule of PowerPoint and be a success.

(this is not my original idea. I read it on web about 2 years back and have found it to be quite useful)

Adhithi Devo Bhava!!

The other day, I wanted to meet a friend (!) of mine in Kuwait and didn't think twice before starting the car and reaching his place in 10 minutes. I have not been to his house for more than a year. It was around 10 a.m on a Friday morning. He opened the door himself and with a scowl on his face said, "Oh! you. But you didn't call me up and tell me you were coming". I was taken aback. This was the same guy who barged into my house two months ago at 10.30 in the night when he wanted my help. This was the guy who used to sit in my house from morning till night on weekends when he needed my skills on editing written materials or when he wanted to pick my brain.

Anyway, I am made of sterner stuff. Though hurt, I went inside. He started complaining about how busy he was at work and how little time he has for himself. I was able to get a word in after 10 minutes. Mind you, no coffee or tea was offered. Nor did any of his family come out to say 'hi' to me though we are family friends. As if on cue, in the 11th minute, his 12 year old daughter walked in and asked her father "Papa, We are supposed to go out in 5 minutes". Believe me, neither my friend nor his daughter had even taken a bath nor were they dressed to go out. I have had enough. It was clear that I was not welcome. I left the place as quickly as possible.

One of the trends I have noticed of late is peoples reluctance to invite someone to their house.

Why are we like this? What happened to the old world courtesy? I have told you before that I had my childhood in a rural area. The nearest bus stop was 10 minutes walk away. Since I started driving at the age of 14, it was my duty to drop whoever has come to our house in the bus stop either in a scooter or in a car. We used to have regular traffic from Bombay by way of relatives from my mothers side. The railway station was 30 kms away and the incoming Bombay train normally comes at 2 'o' clock in the night. The relatives would tell my father not to bother to send a young boy at 2 am but rather they will stay in the railway station till a decent hour. My father used to insist that I be present to bring them home at 2 am telling me that these people have travelled for 40 hours and the least we can do is to ensure that they are home early and dry.

Just a couple of years before his death, I was outside when I got a call from my father. He was ailing and a coronary patient by then. All he said was "Come over". No explanations. As is my wont, I reached home in 30 minutes. It was 8.30 in the night. He was dressed, holding a flask of coffee and a tiffin carrier. He rarely travelled during those days. Before I could ask him where the hell he was going, he asked me to turn the car around, got in and brusquely said 'Railway station, Trivandrum Mail'. On the way he explained that his friend was travelling from Cochin to Chennai and the train will stop for 5 minutes in Palghat Junction. I asked him,'but what will you talk to him in 5 minutes and why does he want coffee and food at 9.45 in the night?'. His reply,"it is not the coffee, but the fact that I made it a point to meet him that is important. Both of us are old, and we may not meet again". I was skeptical. But the beauty of it was that his friend was anticipating him, expecting him to come and was not at all surprised to see him with a flask of coffee that he drank with relish. Standing back, watching two old friends share coffee, albeit for 3 minutes, I learned a big lesson in life. What friendship really is and that personal gestures do count. My father was tired by the time he reached home. The meeting lasted the whole of 3 minutes, the journey one hour ten minutes. Within three months I got the news that my fathers friend had passed away. I had a lump on my throat. What if I had not taken my father that day?. The picture of two old men sharing a quiet moment is etched in my memory.

Have we lost the old world courtesy? Our house was always open to anyone at any point of time. There was always food for one extra person on any given day in our house. We never turned back anyone who came to us for help, whatever our inconveniences are. We, the children, had to come out and greet the guests always. We were encouraged to interact with the guests, allowed to sit through discussions and we in turn learned a lot from them. It constituted a critical component of growing up.

Why have we changed? Why are we more self centred? How can we expect others to help us when we don't take the trouble to lend a supporting hand? Have we really progressed? People always whine that "no one is helping me". My repsonse always is "when was the last time you helped someone?". The answer is always 'i dont remember'.

I try to follow the simple principle that has ruled Indian household from time immemorial "Adhithi Devo Bhava". My doors are always open at any time of the day or night. I always have a welcome smile and a cup of coffee for my guests. And my time is at their disposal. I always find time to send a personal reply to all my incoming mails.

I cannot change others, but at least I can practice some old world courtesy.

Should you follow tips on shares?

You are bombarded with tips and advices everyday on which stock to buy and sell. What should you do?

“In March 2001, financial astrologer Christeen Skinner, professional investor Mark Goodson, and one other participant took part in a week-long investing experiment hosted by the British Association for the Advancement of Science to mark National Science Week. Each contestant was given a fictional £5,000 to spend on any four FTSE stocks.

Skinner, using planetary movements to select her stocks, lost £266.46. Goodson, using more traditional metrics, lost £130.32. The winner? Tia Laverne Roberts - a four-year-old girl from south-east London who chose her stocks by throwing numbers papers into the air.[Tia's shares included the Bank of Scotland, Sainsbury's, Diageo and Old Mutual; Skinner chose BOC Group, BAE Systems, Unilever and Pearson, which she said had "a good planetary wind behind them"; Goodson chose Vodafone, Marconi, Cable & Wireless and Prudential.]”


Human behaviour cannot be predicted. Distrust anyone who claims to know the future, however dimly (Zurich Axiom 4). Don't go blindly on other’s advice. Research on your own and trust your own judgement.

Nobody has the foggiest notion of what will happen in the future.

“On October 20th, 1929, the noted Yale University economist Irving Fisher declared that "stock prices have reached what looks like a permanently high plateau." Nine days later (October 29th, 1929) "Black Tuesday" arrived; the stock market crashed and America and the world were plunged into the worst recession in history”

Remember, the easiest thing in the world is to give advice. It doesn’t cost anything.

The more things change, the more they remain the same

The essence of Customer Relationship Management is to segment your customers as high value customers and low value customers, develop systems and procedures to take good care of the high value customers. The belief is that 20% of the customers give 80% of the business and hence need to be nurtured.

Now where have I seen this philosophy being applied?

Let me roll the years back. I lived in a rural area. My father, being the local Executive Engineer in Electricity Board, was considered to be a mini VIP and in turn a high value customer.

We had near us a tailor, by the name Aruchami. This guy had a small tailoring shop with a single sewing machine. He will make personal visit to 10 or 15 important clients in the area, take measurements at our houses, collect the materials and deliver the finished dresses in person. A kind of customized personal service. Our work used to get precedence over the other relatively non affluent working class people, whom he used to run around in circles to the extend of positively discouraging them. When asked, he will say, "they take so much of my time, are never satisfied and don't pay on time"...............

Next in the line was our family jeweller Chakkappan. Managed a core clientele list comprising of around 10 families who were totally dependant on him as a solution provider to their Gold needs. Remember, those days it was rare for someone to do retail shopping for gold. I remember him coming to the house, setting up his workplace, melting the old gold in front of our eyes, weighing it, showing the box containing the designs, taking the order and delivering the finished ornaments after a fortnight. Again highly personalized service. He didn't even have a shop till much later in his career. And he was essentially a service provider, the actual work being done by goldsmiths to whom he outsourced the work. Again, note that he was concentrating only on high value customers.

The same was true of Ramachandran mama, who ran a modest car workshop, Bhargavi - our washerwoman and Dr.Sudevan - the family doctor. There were many others.

All of them were very focused on their high value customers, ensured that they developed a personal rapport with them and the ensuing relationship was a lifelong one. They were the first to be invited for any family function and we in turn joined them in their moments of happiness and sorrow. The relationship was built on quality service, understanding the needs and absolute trust. Ultimate in relationship building and customer satisfaction, wont you say.

Most of them are no more. But their spirit and philosophy has survived, and has made a comeback as CRM.

"The more things change, the more they remain the same"