Jag Venugopal's Blog

June 26, 2012

The ‘Objectives’ section on a resume

Filed under: Business — Jag @ 6:30 am

To borrow a phrase from Junior Soprano — An entire forest in the pacific northwest has probably given its life for the cause of the objectives section on resumes. To no end whatsoever.

When someone’s looking for a job, there’s only one objective they have — to land a job that pays well, and where they have the opportunity to succeed. The rest is all fluff; both the applicant and hiring manager know it. Yet, egged on by ignorant authors of resume writing books, applicants continue to fill an entire paragraph with cliches.

For the love of God, please don’t state an objective at all. I know what your objective is. I don’t want to read “to leverage, maximize, and further develop my skills and work ethic and leadership skills into a mutually rewarding relationship where I play a senior IT role for the success of the organization in an intensely competitive marketplace”.

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March 7, 2012

Its not Price vs Features, its Price and Features

Filed under: Business — Jag @ 9:58 pm

Conventional thinking is that companies compete in the marketplace on the basis of features or price. Most business professors argue that differentiation of product induces greater willingness to pay. The thinking is that economy products are built to a lower feature spec and priced lower, whereas top-of-the-line products are relatively immune from price considerations.

The iPad, which had its third release yesterday, defies this conventional thinking. When looked purely from the perspective of features and specifications,the original iPad of two years ago beats virtually every other tablet on the market today. The 3rd generation is yet another game-changer in the marketplace with screen resolution better than HD. However, here’s where Apple’s competitive advantage is virtually unsurmountable — it delivers these goodies for less than the competition. And the competition cannot match it spec-for-spec at the same price.

It is not enough to compete on price or features alone. The new competition is based on price and features. Attention paid on the front-end for features has to be matched on the back-end with efficiencies in procurement and delivery. Its just as important that Apple has an exceedingly efficient supply chain that can source parts such as screens, chipsets and batteries cheaper than the competition, as it is important that the product have a gazillion-pixel display and great usability.

No manufacturer can afford to play the price-and-spec game as currently structured, where Apple is king. Their only hope lies in changing the rules of the game — coming up with a product that is fundamentally different from the iPad. In the ability to produce a game-changer, I still hold out hope for Microsoft — if they ever get around to coming up with a tablet that’s fully integrated into the enterprise, contains Office, Sharepoint, database access, video conferencing, and performs with reasonable speed.

I think there is a lesson for us in services as well. The dichotomy between inexpensive and high-quality is a false one. The service we deliver is just as important as the process we use to deliver it. Consider but one example of an Apple analog in the services world, Narayana Hrudayalaya. If we don’t figure out both sides of the equation — quality/features and cost, someone else will.

January 13, 2012

Birthers, Tea Partiers and now… Socialists. Where’s the GOP headed?

Filed under: Business — Jag @ 6:17 am

The Republican primary season is now becoming a theater of the absurd. First it was people demanding to see Obama’s birth certificate. Then it was the Tea Partiers, who prized supposed ideological purity over all else, including electability. Now, is it socialism?

The newspapers are filled with accounts of how Newt Gingrich, Rick Perry, and their SuperPAC minions are attacking Mitt Romney for his time at Bain. Supposedly, Romney’s company fired a lot of people after taking over perfectly good companies, thereby pocketing the profits. One ad, quoted in the Wall Street Journal, states thus: “The company was Bain Capital, more ruthless than Wall Street.”

Republicans attacking a market economy? Well I guess pigs can fly.

The job of a company in any free economy is not to generate jobs. Instead, it is to deploy capital most efficiently to generate profits for its shareholders. And in doing this well, employment is generated and dollars are put to good use. For what happens when the sole purpose of employment is to generate jobs, look no further than two companies in India that I have blogged about in the past: Hindustan Cables and Haldia Fertilizers. The former does not produce an inch of cable, and the latter, not an ounce of fertilizer. Yet they provide employment to thousands (literally), wasting precious capital that could be put to use elswhere in India’s economy.

When evaluating a company, we were taught in MBA class to see it as a series of cash flows. And there are rather simple mathematical formulae to calculate the value of all future cash flows in today’s dollars. Its called the Net Present Value or NPV. Now, if you’re the owner of a company that is offered a buyout by Bain Capital, you look at your NPV. If Bain offers you more cash today than your NPV, you’re better off taking the money and investing it elsewhere. And in return, Bain either makes your company more efficient, or sells it for its parts. Perhaps they know a thing or two about running your company more efficiently, and therefore their cash flow projections are better than yours. And based on these better cash flows, they’re able to offer you a better price than your own future cash flows.

How can the situation be improved? Certainly not by railing agaist capitalism (how ironic that Republicans have started doing it). Its simply by allowing the owner to realize a better series of cash flows, thus preventing him from selling or breaking up the company. And how’s that done? There are many ways… allow him to sell more; reduce his expenses through reduced regulation, keeping interest rates low by keeping government borrowing low, keeping taxes low, keeping the NLRB in check, preventing ADA misuse… the list is endless.

But I guess, regardless of political affiliation, a good politician does not let truth and facts get in the way.

Update: there’s a great article from WSJ describing what private equity does. While I argue above as to why any owner would want to sell their business to private equity, the WSJ article talks more about what private equity companies do once they buy a firm.

December 22, 2011

Lesson in how to head off a crisis before it snowballs

Filed under: Business — Jag @ 6:09 am

A good example of proper crisis handling, and getting ahead of the story before it becomes a huge PR disaster.

A FedEx customer posted video to YouTube of the delivery man throwing the customer’s monitor over a fence. As it turns out the customer’s surveillance camera caught the entire episode.

FedEx handled this potential crisis with a straightforward and frank apology. And they did not issue a PR release. They had one of their Senior VPs (note, not a low-level PR flunkey) go on YouTube and issue it on video. They conveyed their response through the same medium that the original complaint was raised. And what’s more important, they did not hide behind weasel words or legalese. It was direct.

December 20, 2011

AT&T should have been allowed to buy T-Mobile

Filed under: Business — Jag @ 6:43 am

AT&T has thrown in the towel on its attempt to buy T-Mobile, the fourth largest wireless provider in the US. The US Government (DOJ and FCC) opposed this merger citing concerns that the merged entity will reduce competition. Their theory was that T-Mobile was an upstart that often undercut the majors on wireless pricing. Without T-Mobile, wireless pricing would go up.

If only it were that simple. If only AT&T were merging with T-Mobile only to remove a competitor from the marketplace.

The wireless business is extremely capital intensive. There are two kinds of capital investments that go into this business — firstly the towers, and all the physical paraphernalia. These are the least of AT&T’s problems. The second kind of huge investment that goes into the business is wireless spectrum. AT&T had too little of it and wanted to buy T-Mobile to get access to its spectrum.

In the smartphone world, data speeds, and data and call quality are everything. With everyone and his brother-in-law buying an iPhone or an Android device, tremendous demand is generated for data. The problem is that data is transmitted through the electromagnetic spectrum… think of it as invisible wires. Each invisible wire can only carry so much of data, and AT&T has run out of invisible wires in major markets such as NYC and San Francisco. This probably accounts for a lot of people’s dissatisfaction with AT&T even though it has offered the iPhone for the longest time and in general, its rates are lower than Verizon’s.

The T-Mobile merger was a Hail Mary pass on the part of AT&T to land the spectrum it desperately needed in order to stay competitive with the other behemoth in the wireless market — Verizon. Without this spectrum, the prospects of improved service from AT&T are significantly diminished. The prospects that AT&T can scale up its network to meet future demand are similarly dealt a blow.

T-Mobile is also similary hurt by the merger’s failure. They’ve been hemorrhaging customers over the past couple years, lacking the money and the spectrum to provide 4G wireless service that is competitive with Verizon. Their corporate parent, Deutsche Telekom, does not want to invest more money in the US. Without significant investment, T-Mobile will be relegated to an also-ran, offering cut rate plans without any of the new features that customers demand. Who would want to buy an expensive smartphone and be saddled with a 2-year contract on a poky network?

By disallowing the merger, the US Government has strengthened Verizon’s hand while leaving two of its competitors significantly weakened. The third one (Sprint) was weak anyway, thus leaving Verizon Wireless with a de facto monopoly in the 4th generation wireless market. As a result, prices for 4G wireless will not diminish, and will probably increase.

December 8, 2011

Truer words were never said

Filed under: Business — Jag @ 7:00 am
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Obviously I’m using hyperbole, but the paragraph below from T. J. Rodgers, the outspoken CEO of Cypress Semiconductor, tell us how we landed in the mortgage mess. The real culprit was not Wall Street. It was government:

“Wall Street did nothing other than facilitate home-financing access to the next tier of less-qualified home buyers, as demanded by every president since Bill Clinton. After that, the bankers did exactly what their shareholders wanted: bundle those risky loans into securities, sell them to lock in the profits, and dump the risk right back onto the federal government—where it belonged.”

This paragraph is part of a larger op-ed in the Wall Street Journal about how government policies are subsidizing Wall Street and Chinese manufacturers of solar panels, in the name of building a competitive solar industry in the United States. An interesting read on how companies act based on the incentives available to them, and how government activity in a free market distorts its proper functioning.

T. J. was required reading in my MBA program. His argument with a nun about corporate political correctness is a classic. Even if you don’t agree with him (which I did), I am sure you will find his views give food for thought.

September 14, 2011

Not such a “Best Buy” any more?

Filed under: Business — Jag @ 10:02 pm

WSJ is reporting that Best Buy’s quarterly profit is down 30%. In response, Best Buy’s CEO had this to say:

“I understand there is sentiment in the market that they’d like to see me close more stores,” said Mr. Dunn. But the company’s mixture of online and store retailing “is the winning scenario for the long haul. There are still things in the physical world that are going to be important: expert advice and the ability to see and touch the latest tablets,”

Expert advice? At Best Buy? Sure, if one of the kids comes over and talks to you. Even if they did, they’d likely sell you whatever was in stock at the moment. And oh, they would surely load you up with Monster Cables. The very fact that Best Buy pushes HDMI cables for $60-$100 when I could buy functionally equivalent ones from Amazon for around $1-$5 causes me to completely distrust any advice they might give on anything else.

One cannot make up one’s mind about expensive electronics based on a cursory review in a store. An item may look very good, yet perform abysmally. I’ve found Amazon’s reviews to be a far better indicator of a product’s actual quality and usefulness than any advice that I might have received from a Best Buy salesperson. Sure, Amazon reviews can be gamed, too. But if a product has a few hundred reviews, and they span the spectrum from 1 to 5 stars, then in the aggregate, I can trust them.

Sadly, Best Buy’s business model is doomed. Unless they can overcome the inherent advantages Amazon possesses — better product information, honest reviews, and prices that are more competitive. For many items, especially those that can be shipped and returned without hassle, customers will continue to browse at Best Buy and order from Amazon.

July 21, 2011

A Major Accomplishment

Filed under: Business — Jag @ 6:08 am

The US Government exited its investment in Chrysler. All told, it lost about $1.3 billion dollars (that’s billion with a “B”). The treasury hailed it as a “major accomplishment”.

One needs look no farther to examine the reason for many people’s antipathy towards the Obama administration than the above sentence. I hate to think of how many more “major accomplishments” the administration hopes to achieve with borrowed money.

For all the tall claims, what the government did was to prop up a chronically ill carmaker that churns out product that no one wants to buy. In a capitalist society, Chrysler would have gone out of business, and the resources consumed by it would have been put to better use. In a socialist society, this is not allowed to happen, thus perpetuating the drain on scarce resources by these companies. Often, this happens in the guise of protecting jobs, etc. A few thousand or tens of thousands of jobs are “saved”, while saddling the millions with the costs.

Milton Friedman must be turning over in his grave.

June 2, 2010

Lessons from Apple’s Successes

Filed under: Business,Digital Living — Jag @ 10:16 am
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When the iPad was released, I swore up and down that there was no way anyone would buy a closed system that was more expensive than a netbook and accomplished less. To say that I was mistaken was an understatement — your correspondent now has the 16GB Wi-Fi version in his gadget menagerie.
 
I set about trying to understand what would prompt millions to put down a minimum of $500 for a device that only replicates existing functionality available through PCs and smartphones. Here’s what I learned from Apple’s experience with the iPhone and the iPad. Most of the comparisons I make are with Microsoft and its Windows-based products, because they’re the closest competitors to Apple.
 
1. User experience is paramount
 
When purchasing an Apple product, the company controls the entire user experience, right from retail, through the hardware and software to the services that are sold with the device. And in each step, usability and user experience are key issues that are addressed. Each store has a “genius bar” where you can take your questions to, whether it be in hardware, software, services or content. Apple is the sole point of contact for most issues, whether they be hardware or software.
 
By contrast, with a Windows product, the user experience is a mess. In most cases, there is not a working model of the product in the store, and neither are there trained salespeople to demonstrate it. The hardware, software, drivers, peripherals and OS are all sold by different vendors. When there is a problem, much finger-pointing results. The user experience is fragmented and disjoint. The same is the case with most Sony products. The Sony outlet in Wrentham, MA has all three versions of the Sony reader available… behind glass, so no one can touch and feel the device.
 
2. What you won’t do is just as important as what you will do
 
Having a Windows PC that can run all manner of software is indeed a benefit in certain circumstances. However with the Apple iPad, less is more. They won’t run Flash. And I’m inclined to give Steve Jobs the benefit of the doubt when he states that the reason they won’t allow Flash on the device is because its buggy and a power hog. You cannot download applications from all over the Internet and download it on the iPad. Developers are constrained to use Apple’s APIs and development tools. 
 
With the iPad, you cannot develop software on it, cannot run arbitrary applications not downloaded from the App Store, and there are no USB ports for peripherals.  The mail client does not have spam filters. The Safari browser does not have any extension widgets like Firefox has.
 
In the bargain, you get a device that is very fast for what it does do. The iPad is a device that is positioned for consuming content, between a smartphone and a PC. Content includes audio, video, books, news and the web. Virtually everyone that has used it agrees that it’s great at what it does (which is limited).
 
3. You succeed by getting people excited
 
When the iPad was first released, cartoonists had a field day depicting Steve Jobs coming down like Moses from the mountain, holding an iPad in each hand, with the masses waiting for him. While some levity was intended, there was a fair amount of truth, too. Before any Apple release, people can be seen lined up outside stores waiting for them to open. 
 
Consider another data point, closer to home: we wandered into the Apple store in Natick, MA one night. My six year old son happened to try one of the demonstration iPads in the store. He immediately got excited and declared that he had to have the device. Better still, he said, buy two. One for daddy and one for me.
 
While we may laugh over the fanaticism of the Apple fanboys, we also need to acknowledge that Apple has created a buzz surrounding its products that makes eager and enthusiastic fans out of customers. When was the last time people got excited at a Steve Ballmer speech? When was the last time people lined up overnight for a Microsoft product?
 
4. Sophistication = ease of use
 
Most of us conflate sophistication with additional knobs, buttons, tweaks, bells and whistles. If something has a lot of dials and buttons, it must be very sophisticated, right? Wrong! A sophisticated device ought to be easier to use, not harder. By any reckoning the iPad hardware and software are pretty sophisticated, right down to the 3-d icons. Are they more difficult to use than, say, Windows? Emphatically not!
 
On the other hand, the complexity of Windows seems to be about the same or increasing with each release. I can’t speak for Windows 7, but with Vista, setting up a home network can be quite the chore. Much worse, in fact, than the corresponding Windows XP experience.
 
5. Build it, and they will come
 
 When the iPad was first introduced, it was derided as nothing but an oversized iPhone without the phone and camera. But if sales are any indication, the acceptance trajectory is steeper than even the iPhone’s way back in 2007. With hindsight, I believe that the reason the iPad succeeded was because it is a paradigm-changing product. It defies conventional notions of what a computer ought to be. to Apple’s credit, they had the courage to invest in a product that no one had ever imagined, much less wanted.
 
Contrast this with the Microsoft Tablet PC release of a year ago. It was a thin veneer of stylus-sensitivity grafted on to the existing Windows model, without any consideration given to improving the interface for touch. For them, the stylus acted merely as a different kind of mouse. 
 
Most products from Sony, Dell or Microsoft incorporate incremental improvements, if that. Clearly the market values innovation, and they’re willing to pay a premium price for Apple’s products and its shares.
 
6. Great hardware requires great software
 
If I were to look at hardware alone, I love Sony. They made some of the most beautiful Walkmans (Walkmen?) out there in their day. Even with the onset of digital music, they made digital MP3 CD players and Walkmans that were a joy to hold and behold. Alas, their software sucked rocks. Those that suffered through it will agree that Sony’s Connect software singlehandedly made it a non-entity in the digital music player market. Sony appears to be repeating the same blunders with its eReaders. The Sony Pocket Reader (which I own) is an amazing little device, let down by miserable software.
 
Apple’s software (on-device and on the PC) is head-and-shoulders above the likes of Sony and even Microsoft. While I find iTunes to be slow, I would rather put up with iTunes than deal with Windows Media Player any day. Within the device, there is no comparison between, say, Apple’s iPhone/iPad software and any version of Windows Mobile.
 
 7. Touch is fundamentally different from the mouse
 
HP valiantly tried to make a slate device with Windows 7, before throwing in the towel. There is now talk of selling the slate running Palm’s soon-to-be-acquired WebOS. A blogger on the web used mouse-overs as an example of why touch OS’es need to be designed from the ground up. Windows 7 uses desktop widgets such as mouse-overs that have no meaning in the touch world. Neither for that matter do numerous tiny widgets such as checkboxes, radio buttons, tabs and the like. Touch is inherently imprecise. It requires larger widgets to accommodate the size of a human finger, and it requires fewer of them. Spend a week with the iPad and you will realize that every aspect of its GUI is designed specifically for touch, and not a mouse paradigm grafted over.
 
8. You can make good money off the consumer market
 
Microsoft, Dell and HP are conspicuous by their absence in the consumer space. Sure, Microsoft sells Windows 7 and the modibund Zune, and Dell and HP sell various desktops to consumers, but fundamentally, the consumer is an afterthought for them. Business sales are their bread and butter. Apple’s recent success has showed that a computer company can make money, and lots of it, by building an entire infrastructure around consumers.
 
 9. One tyrannical genius can produce products better than a hundred mediocre saints
 
Stories of Steve Jobs’s tyranny and hubris are legion. Whether it is his abrasive late night arguments with bloggers, or his total and absolute “No” to Adobe on Flash, its clear he’s in charge. However there is no gainsaying his contribution to Apple’s success (anyone remember the pre-Jobs, Gil Amelio days?). The company has put out hit after hit under his watch. Not just products, but products with revenue streams that continue long after the sale (iTunes, iPhone fees, App Store, etc).
 
The open source movement has a number of well-meaning, equally intelligent people. Yet, not one has come up with a game-changing idea in the mode of Steve Jobs. It can be argued that this is an unfair comparison — open source contributors often work for no money. But, keep in mind, I am not looking for out of the box implementations, I am looking for out of the box ideas. The less said about Microsoft’s many managers, the better. They have done a good job of turning Microsoft into a version of pre-Gerstner IBM.
 
10. Design matters
 
Apple’s computers and peripherals are all designed to be functional and beautiful. By contrast, anything that’s available on Windows (with the possible exception of some Sony Vaio laptops) is made of black or beige plastic, and looks like it was put together by the lowest bidder. It is no wonder that consumers of Windows compatible hardware scour around the Internet looking for the cheapest components (there’s nothing to differentiate them from the rest of the pack). Apple on the other hand, sells its PC’s for 2-3 times as much. The iPhone and iPad are not cheap either, but have people lining up to buy them. No one hears of people standing in line to buy a Dell PC, a Samsung phone or an HP handheld. They’re generic. Apple stands out for its design.
 
Postscript: For an example of truly ghastly design, I present you the Aluratek Libre e-Reader.

May 28, 2010

Plane re-routed and passenger had a memorable experience?!

Filed under: Business,Management — Jag @ 8:54 am
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A Southwest plane was diverted from Denver to Pueblo, CO owing to the weather. With the plane on the ground for a couple hours, the pilot decided to order in Little Caesar’s pizza for everyone on board. One passenger stated “We arrived in Denver four hours late, but [we] had a memorable experience!”.

Southwest never ceases to amaze me. Any other airline crew would have either been silent or quoted chapter, title and verse as to why the re-routing wasn’t their fault. This Southwest pilot on the other hand, spent a little company money (I’d wager it was a relatively very small amount), and bought his company a ton of goodwill with the public.  More at http://www.thedenverchannel.com/news/23620842/detail.html

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