Saurabh Garg on The New New Thing

If you like what you see, you may want to subscribe to my RSS feed. I talk about India, Entrepreneurship and the New New Thing. Thanks.

I have been blogging for quite some time now (infact I started writing in 2004) and tons of people have asked me this question. I think its about time I answered this one honestly. On a public forum.

So why do I blog?

1. Blogging is thinking out loud. When I write/blog, I actually put pen to paper and I think before I dare make my thoughts public. And hence when I write, it helps me think. Helps in ideating.
2. Blogging helps create an archive of thoughts. I have always made notes on notebooks of all shapes and sizes. A blog gives me a permanent place to archive them. I can now look at what I was thinking, what I was like way back in 2004 etc.
3. Blogging helps me connect to more people. Since the web is permanent, anyone, anywhere in the world can read my blog (with a bit of luck obviously) and can give me feedback on what I am thinking. This is simply impossible in a real world. My immediate circle of friends can only be limited and there is no guarantee that they would be interested in what I am saying.
4. Blogging Opens up minds. Before I was blogging, I was an arrogant and a mediocre person who lived in his own self created world. I thought I knew everything and I was above all. Moment I started writing, I realized that I need to learn a lot more and there are more people who can teach me things. I am still a self-claimed mediocre but no longer an arrogant one.
5. Blogging is fun. As simple as that. :)

I am often asked why do I copy-paste my posts on plugdd.in, venturewoods.org, mutiny.in etc. Again the answer remains the same.

1. Platforms like these give me a larger audience to express my thoughts to and more importantly get feedback from.
2. Writing is about reaching out and meeting more people. Independently, I can never reach the kind of audience these platforms can give me (and have given me).
3. Finally It is also about connecting to the people who share the same ethos and ideas. Wonderful things can happen when people talk. And blogging at these platform enables conversations.

In one line, blogging for me is that constant pursuit of learning and exploration. Why do YOU blog? Is it money? fame? connections? timepass? what?

In this EconTalk podcast, Hal Varian, Chief Economist with Google speaks about Search amongst other things.

He says that search is about two things. Precision and Recall. He then defines precision as “off the number of documents retrieved by a search result, how many are relevant” and recall as “off all the relevant results, how many were retrieved”.

This is my opinion is very important aspect. Before we take on a problem to solve, we need to have the exact definitions in place.

He also spoke about co-evolution of technology and users. He said that any technology and its adopters evolve rapidly with time. He took examples of cars and extended it to search engines.

He said that users are getting more skilled at entering search queries. This helps both user and the search engine in delivering results that are high on precision and recall. And thus making the experience better for the user.

This probably explains why most of the user-dependent (user generated, network effect etc) businesses remain in beta stages for long times (gmail is still in beta). Till the time both (business and users) evolve and are mature enough to help each other, system has to remain in beta.

Lessons? Help your users evolve. Give them tools of the trade. They would need some hand-holding to learn initially. And then they would need the freedom and independence to play around with the system before they start making effective use of the system. And same goes for the system as well.

Please note that the definitions might not be exact (since I took notes while listening to the podcast), but the essence has been preserved. Link to podcast.

In one of my email conversations on mental masturbation with a very interesting gentleman, he said

I call my approach - meditating about an issue,
as opposed to thinking about an issue.
Thinking requires knowledge and a time target,
meditation does not require either.
But meditation enables one to come up with unique solutions that thinking cannot.

I absolutely loved the idea. Thinking is about coming up with perspectives on a certain topic from your previous knowledge or acquired knowledge within a time frame and with specific results as the targets.

Meditation on the other hand is contemplating what can be. Meditation is breaking all the conventions. Its like being virgin. Its a fresh start - all the time. When you are meditating you are no longer logical and pragmatic. You become evolved in the way you think. You go beyond the obvious.

What do you do? Think? Meditate? Personally, I think I think and I need to meditate more.

Other 1v1s
- 1v1: Whether vs When
- Analyze vs Act
- 1v1: Excellence vs Mediocrity
- 1v1: Expert vs Employee
- 1v1: Popular vs Pertinent

This is a post on Radio Taxi business in India. I am using Meru just as an example to understand the economics of business. There are simple back of an envelop calculations and hope someone gives me a better insight on this business. The numbers look too tempting to be real.

I was traveling with Meru yesterday (27th July 2008) and I happened to strike a conversation with the driver. During our conversation, he gave me following stats

1. No of Meru taxis on Mumbai roads: 800
2. No of taxis by EOY in Mumbai: 1300
3. Average occupancy: 100% in peak-hours and 80%+ in non-peak hours
4. Peak Hours: 7AM to 10AM and 6PM to 10PM. He said that its impossible to get a Meru Cab in peak hours. This vindicates the business model and demand in the market for these call cabs.
5. Average Fare: Rs. 15 per KM. Compare this with regular taxis in Mumbai. A regular taxi is Rs. 13 per KM and a premium of Rs. 2 is not very steep considering the convenience and comfort of a call cab.

With these numbers the business sure makes a lot of sense. Only deterrents I can think of are:

1. High fixed cost of acquiring taxis. Not a huge problem. They can take long term loans from banks or PE players. They can also acquire more cabs by using the part-ownership model (where each driver pools in some money to own the taxi and Meru is just a brand name).
2. Setup of call center. Obviously each taxi needs to have a GPS device and a two-way radio. There has to be a way to connect the cab with the nearest available free taxi. And since this is a pure service offering, call center is very important.
3. Capped Potential: The earnings is directly proportional to number of taxis on the road. The scope of innovating on income stream is really low. At max you can use your taxi as an advertising medium.
4. Traffic rules and regulations: Registration with transport authorities in India is a very cumbersome and long process. Although this is a one-time stumbling block, companies would have to divert a lot of attention there initially.
5. What else? Am I missing something here?

Business Sense

1. I would want to what percentage of bookings is done for immediate travel and what percentage is booked at least 2 hours in advance. If the pre-planned travel is very high, then these companies can better utilize their capacities and go for some kind of planning.
2. I would also want to know what percentage of bookings is for large corporates (say institutional). Because moment Meru gets institutional bookings, they can again manage the fleet better and can be assured of certain minimum number of bookings.

Future

1. Is their a merit in getting into contracts with airlines, hotels,
   coporate parks etc to manage their taxi services? Again its of those
   things where you convert huge one time capex for companies into on-demand opex.
2. What innovations are possible so as to maximize the utilization of fleet and make more money from the same number of taxis? Would a thing like car-pooling work with radio taxis? Say junta going from Andheri to Town everyday can pool a Meru.
3. What else? Please send in your suggestions.

From the Meru website, I could get following details

1. After Mumbai, Meru is now available in Hyderabad, Bangalore and Delhi. As I said earlier also, the business potential is vindicated by simple calculations.
2. India Value Fund has already invested in Meru. Although I am no fortune teller, but I can easily foresee a handsome return on the investment. And I can’t understand why the Penguin effect is absent in this industry. If I had money, I would have loved to get into this business. Obviously at the right time and right price.

Other Radio Taxi Players in India

1. Meru
2. MegaCabs
3. Orix

If anyone can help me connect to someone with Meru or any other radio cab owners/managers, please drop a line. I will keep on updating this post on my wiki at s4ur4bh.pbwiki.com.

More links

• Dare Magazine, July 200

Image Credits: Andertho via Flickr

Disclaimer: I am assuming that the occupancy rates given by that driver are correct and the taxi service would have similar occupancy numbers in other cities

BookExpoCast.com has this podcast where Jeff Bezos talks about Kindle and then Chris Anderson (Wired Mag, The Long Tail) speaks to Jeff about publishing industry, Kindle, Amazon and Blue Origin.

The podcast is very very insightful and here are my raw notes from the podcast. Please note that these are raw notes and I scribbled them while listening to the podcast. I might have mis-understood and/or mis-interpreted the podcast but there are so many gems of wisdom that it would be a crime to not post them here.

I am breaking them into sections.

On Amazon

1. Amazon was founded in 94. (I read later that Jeff Bezos created the Amazon business plan post his road trip across the country. I am planning to take one myself end of 2008. May be I will have some ideas too :D)
2. When he was founding Amazon, Bezos had more than 40 meetings with 22 angel investors to raise USD 1 mn for the seed.
3. Bezos also said more likely someone knew about the publishing business, less likely were they to invest in Amazon.
4. One Amazon customer has bought more than 1700 books. WOW.
5. Things like Super Saver on Amazon saves time and money or both Amazon and end customer. This helps them save by exploiting economies of scale and scope. They can ship two orders together faster.

On Kindle

1. It took more than 3 years to develop Kindle.
2. Kindle is a device that allows people to get books that they are looking for. And the ones they aren’t looking for. Serendipity and accidental discovery of interesting books plays an important part of Kindle experience.
3. Kindle uses electronic ink. This is different from text that we see on a computer or LCD screen
4. While designing Kindle, the Amazon team wanted to capture few essential features of the system that they were making redundant. Things like book like form, ability to take notes, underline things etc.
5. Other important things were weight of Kindle, ability to read in sunlight, efficient on power-consumption.
6. The annotations and markings are stored on the Amazon servers. These are later searchable and can be accessed from anywhere.
7. Kindle wanted to make it easy for the customer to browse the books and eventually buy more titles off the store. (The streamlined the book buying experience by integrating the buy button on recommendation engine and then not charging customer for the download separately. The cost of the network/download is bundled with the price of the book)
8. Bezos made sure that the popular titles, including the ones on the bestsellers lists were available on Kindle right from day 1. This is important so that the customer who have spent about USD 399 on buying a device are not disappointed.
9. Someone sent a comment “it is about the message and not about the medium” - when they were comparing reading physical books with Kindle. (This I think is very important. We can make thousands of industries redundant if we focus on the delivery of the message).
10. Interesting statistic. About 6% of total Amazon book sales (by volume) now come from Kindle. Kindle customers buy as many physical book as eBooks. This was a surprising for even Jeff Bezos.
11. The grand vision for Kindle is all books ever published in any language anywhere in the world made available to you in less than 60 seconds. Which in my opinion is as large as a PC on every desktop. Kudos to Jeff Bezos for this grand a vision and ACTUALLY making it come to life.
12. He actually got CEO of Simon and Schuster on stage to talk about Kindle and how it is making it easier for publishers. (This was probably to address concerns of publishers - since the publishers have to first make the books available in electronic format).

On Future of Kindle

1. Amazon sees Kindle as more than just an access device. They are already talking about experiments like never-ending book and collaborative writing using Kindle.
2. Bezos envisions Kindle as a toolset for publishers and readers. He further talks about giving both publishers and customers these toolsets and let them surprise everyone else with their discoveries and inventions (I am reminded again of Jan Chipchase and his research).
3. Its also about finding the right readers for publishers. If you are a student in Iceland looking for books on biological traits of Saharan camels, you can only find them on Amazon. Or Kindle. Kindle thus acts as a platform where a publisher can find his audience and vice versa.
4. When asked if Kindle is already redundant with faster cellphones and other access devices, Bezos compared it with cameras. Every mobile phone has a camera now and people still buy smaller cameras and SLRs and other photography equipment. (I am sort of confused at this one. I think cameras AND Kindle both might get redundant at some point in time.)

On Bezos himself

1. Jeff Bezos is bald. :D (And so am I.)
2. 4 kids. 8.6.3 and 3. :D
3. “You do not choose your passions. Your passions choose you.” Awesome quote by Jeff Bezos, when he was asked about Blue Origin. Bezos says motto for Blue Origin is Step by step ferociously and he says they are in an industry that helps humanity get into space.
4. Bezos says at one point in time that planetary alignments were needed to Amazon what it is today. Is he superstitious? (Am sure paparazzi would be snooping :D)

Other things

1. Jeff Bezos talk about a concept of “me time”. A time that you spend away from everyone including your family, co-workers etc. This time is typically spent bathing, exercising, traveling etc. A Kindle gives people something to do in this “me time”.
2. Awesome insight into way humans understand interactions. Humans are storytelling animals and we like narratives. (Actually wrote about branding as storytelling few months ago but I never developed the concept further.
3. What about used books? Is there money to be made there? Everyone wants to read books and doesn’t really want to pay for the book prices. If there was a website to regulate that? A pre-web2.0 era website is doing that in Delhi. Is their merit in buying that website out?
4. You make money when you help customer make the purchase decision. This was in response to someone asking if negative reviews are bad for the business. All reviews actually help make the purchase decision. Negative , positive doesn’t really play a role
5. On elastic compute cloud, the idea was to convert the huge fixed cost for customers into onDemand variable cost. (I wrote about onDemand economics for my Berlin School application)

The best part about any great conversation is the quality and quantity of ideas that stem out of there. For me, these are the things that I think have the potential to be businesses.

1. I think the Techcrunch Web Tablet probably stemmed out of the Kindle idea. And even though the commercial production and distribution might be years away, they want to stake a claim on the idea before anyone else.
2. How about doing something on the old books market in India. Especially in all the engineering colleges in India, the content remains same and thus there is a large chunk demand. And then obviously there is the long tail.
3. Search cost plays an important part in getting the buyers and sellers together. I wrote about Search Cost way back in Feb 08 and I think its about time I revisited that.
4. Purchase decision is an interesting thing to think about. My day job involves working on this purchase decision for some of the leading brands in India and there is so much that I learn everyday. Need to post about it. What if there was a tool that everyone trusted and assisted in purchase decisions?
5. The entire idea of making fixed costs redundant has been in existence for a long time. Things like outsourcing and contracts actually do that. But doing it to something as fundamental as network, access and storage is sheer brilliance. Airtel did that with their network in India and do far have reaped awesome rewards off it. What else can converted into variable costs? Brain power? Processing? Coding?

If you are listening to the podcast, please share your thoughts. And apologies for such a long post. I did not realize that I have taken these many notes.

Credits
Image: Gizmodo.com