Wednesday, November 30, 2011

Reliability and lessons learnt

One aspect which you will learn to deal with  you on your return back is what I would call the reliability factor of people in India. Here are some of my experiences in various situations.
  • Directions from pedestrians: There have been a number of instances where I have had to stop and ask for directions on the road from random people. Due to lack of appropriate sign boards and the ever changing rules (in terms of one-ways and blocked roads), getting directions from passerbys are sometimes a necessity. What initially surprised me was that everyone seemed to know exactly where I was headed with confident nods and answers. Pleasantly surprised, I would heed their directions only to find myself stranded in the completely opposite direction. People never seem to say NO to a question - but in the eagerness to help often times send you the wrong way! Lesson Learnt  -- Ask for directions 2 or 3 times to make sure they tally up.
  • Coworkers and employees- My experience here again was similar. People were either afraid to say "no" or "I don't know". Be it the fear of admitting ignorance or an unwillingness to do something, the first tendency was to say yes and figure out things later. Often times the 'later' would never come and would lead to missed deadlines and wrong directions with work. Lesson learnt  -- Double check  folks understand what they're signing up for and encourage saying no when necessary. 
  • Real estate agents -- Anyone who would narrate their experiences with real estate in India would probably recount some unpleasant encounters with their realtors. I happened to buy some property a few years ago while I was visiting. Given the time frame I had we had engaged a 'known' realtor who would help us out. We ended up seeing property after property, but when it came down to meeting the owners for negotiation, the owners were no where to be seen. Only later were we told that this was a common bait and and hook tactic used by realtors. They bait you with lots of property which aren't really for sale, claiming exorbitant prices for them. then they show you the one they're really trying to push with a lower cost. In comparison this looks like a steal and you're hooked. Lesson learnt - there's no such things as a quick investment in real estate. Homework is key. I'm working on a blog post on my property buying experience, so stay tuned for that.
  • Vendors,  Business partners and customers -- I could write a chapter on this, but one that springs to mind was with a vendor, a fairly large established company that takes up machine building and fabrication. We had contracted out some lab equipment to them and were working on a tight deadline. One of my engineers was following up closely with their progress. One milestone was to examine the equipment before it was finished to approve the design and functioning. He takes an appointment and double checks before leaving (with the owner of the company) that it's ready for inspection. To his surprise when he arrives - the machine isn't there. He was given some lame excuse that his supplier didn't deliver the machine. I was so pissed that I confronted the owner on the phone and what was shocking was his lack of apology or regret. He flat-out denied that he said the machine was ready for inspection. Lesson Learnt: Find a vendor/partner you trust and don't let them go. 
However in light of these experiences and frustration - I noticed that reliability which was until then taken for granted -- presented a huge opportunity to differentiate. Realiability has been a mantra which I periodically bring up with my team. Putting this in practice has been a challenge, but one which is slowly yielding results. We have good feedback and trust from customers. One even recently mentioned to me that they had recommended my firm (Qualitas) to their management as a company not to be lost at any cost. Lesson Learnt - Don't take reliability for granted.

Thursday, November 24, 2011

Encounter with a street cart vendor

Our 2 year old was was on a 2 day excursion with grandparents, we didn't have to think twice to grab this opportunity to venture out on a date night on a Wed evening.

As we passing by Jain College (Mansa's old college), she had this sudden urge to eat her favorite street food during her college days - a tiny food cart vendor off Diagonal Road in Basavangudi. Not having dared to experiment with street food in 10 years - I was pleasantly surprised with some of his innovative methods that he used in his business:

  1. He had no need for running water
  2. He didn't use any heat to prepare food (it was fresh snacks) 
  3. He used disposable gloves to prepare food (periodically disposing them)
  4. His only non-compostable waste was a piece of paper on which he served the food (he places that on a piece of dried leaf)
  5. He uses seasonal fresh fruit/vegetables which he sources daily and makes sure he washes thoroughly before serving. This could be a risk during summer months where gastroenteritis is common (I should mention that as of the next day our tummies were still doing great :)
Now - on an average his dishes cost Rs 10 ($ 0.2). People we saw would order 3 on average. We extrapolated that on a good day he would see around 400 customers (given the vicinity to a college close by). 
Mansa about to dig into some delicious 'tomator puri'
Using gloves to prepare food
Thriving Street Food Business run out of  a cart without fire and electricity

That makes Rs 12,000/day!  There are minimal operation costs - no rent, electricity and I would be surprised if he was a regular with the Indian Income Tax department.

Some street food for thought!

Monday, November 21, 2011

Starting a business in India

Starting a business in India is overwhelming but simple. The steps involved are cumbersome, but with around $2000 or Rs 100,000 you can hire an attorney or a CA who can complete all the formalities for you. I think there are hundreds of blogs and pages which get into the details of this. Here's an example. However contrary to a lot of myths out there - you don't have to stand in long lines for hours,  paying bribes to a dozen folks and wait for months to get started. With the right professional help you can get this done in a couple of weeks.

However some tips and some basic rules worth mentioning on running a company in India:

1. There is a strong DIY tendency in the US --- resist the urge. Especially with paperwork and dealing with authorities. Get a good lawyer/CA, etc to take care of this for you. Also if you can manage it - find a good admin right away. Paperwork and procedures are overwhelming you want this delegated to the right person at the soonest.

2. File returns and taxes on time!! Government authorities don't bother you if you have everything in order and filed on time. This includes income tax (to be paid in installments, VAT returns, excise returns, final balance sheet and income tax returns). Do it on time and you are golden.
3. Document everything! you make a Rs 1000 payment to your plumber - get a cash paid receipt for this. You need a document for every little thing in this country. This just leaves it open for authorities to hassle you later. Maintain a system that preserves all your documents for 10 years!

I'll be posting a few other tips about this topic, so stay tuned.



Sunday, November 20, 2011

Rent-a-driver

As a supplement to my earlier post on the 'traffic crisis', I just learnt of a new service which allows you to rent a driver. I know folks who use this service a number of times especially during peak hours when a lot of driving is required, on day trips and especially when you're out drinking.

There are two or three companies that offer this. DzireDrive is an example. The way it works is that you book a driver (like you would book a cab), by calling in a number and schedule a time. The driver shows up, drives you around in your car. For half a day you pay up something like Rs 200 + tips and you're all set. What a small price to pay for the added convenience.

However there is of course the reliability factor - you have no track record of their driving history. There are cases of young college kids who do this for a few extra bucks and don't take care of your car too well. So there are some downsides, but for the most part the service companies make sure there is some screening done before they are inducted into the service pool.

So next time you have a hectic travel schedule in the city - renting a driver might be a good DIY alternative.

Saturday, November 12, 2011

Solve the traffic crisis


One of my biggest nightmares about moving back was  dealing with the poor infrastructure.! This is probably the single most aspect that impacts your day to day life the most. Be it when you have an important meeting that you can't make, or when you need to get your poor child to a hospital in a jiffy -- traffic is where rich and poor alike suffer from equally! Roads are poor, traffic management is worse and the state's public works projects are just the icing on the cake. 

I don't think anyone in Bangalore is immune to it. On average the people I talked to traveled an hour each way to get to work. On bad days it could sometimes double. That's like  10% of your day disappearing or if you're like me and don’t like to compromise on sleep, it's  like  15% of your conscious day! I wasn't going to throw away 3 years  in a career of 20 or so in the Bangalore traffic! This was not a problem - this was a  huge crisis, which had to be solved

In the first 3 months of having moved back, I worked out of my dad's office  which was about 45 mins from where  we lived. Half the week I used a driver to take me to work - which allowed me to catch up with my emails during the commute  (the internet dongle is the next best thing to sliced bread - I even handled conference calls during my commute).  However that  still required you to drive for the rest of the days  - besides tiring you out during the journey.

My wife who had taken over a business had it worse - as she had a 2 hour commute each way!  After a month of this - we couldn't take it anymore and accelerated our plans to move into an office space close by - a one minute walk from where we live. We moved in on month 3  after our relocation  - and the transformation was magical. 

Suddenly I had time to go to the gym,  come home for a hot lunch, devote a lot more time to our daughter. Most importantly we maintained our sanity during the week. Although there's no empirical evidence, I even think this has a direct correlation to the number of fights that I had with my wife  :)

Our aversion towards travel also reduced. 

My simple advise to those contemplating a move back - solve the traffic crisis! Get a driver or move closer to work - there are enough problems to deal with, you don’t want traffic to be one of them.


Monday, November 7, 2011

Return to India - The economics

Quitting a safe paying job and jumping into entrepreneurship was a big one. I had talked to many people who gave me a variety of perspectives from  advising that it's never too early to quit' to getting your venture off to a successful start before quitting. What I concluded at the end my little survey is that the timing of when to quit depends on your appetite for risk. That said, entrepreneurship is all about taking risks, so playing it too safe might mean you don’t have the tolerance for risk and perhaps venturing off on your own. At the same time all risks need to be hedged and every one's situation is different in the way and means this can be done. While there are many factors to be considered in this decision, one cannot ignore the economic one -- earnings and runway to stay afloat. My decision was based heavily on this economics given where I was  at  my point in my career. 
 Some quick math and extrapolation of my potential earnings made me realize that my salary was growing at roughly 9% annually while my consulting business (which I had started with a modest sum in 2005) would grow at 50%. At this rate, it would take my business another two years to catch up with my salary at this rate. Had I made this decision three years ago, I would already be there!
Now - I have to mention that had I been on a super-star trajectory at MSFT, I suppose the story would have been different as a 50% annual growth would be a reality. While I knew some at MSFT who were on this trajectory - I also knew that I wasn't one of them. Here were some specifics:
 The earnings table looked something like this:

In a graph the above looks like this:

Basically I was betting on the fact that the economics of entrepreneurship would catch up with my salaried job.


The next decision was one of sustenance – would my finances allow a decent standard of living for two years?  My calculations and estimates revealed that the cost of living in Bangalore is about $2,500/mo. Granted this was on the higher side compared to what some others might consider a 'decent' standard of living. However - this was also based on the fact that there were so many changes going on - the last thing we wanted was squeezing on our lifestyle and making this adjustment a lot harder.
In the worst case of no profitability for two years, it would mean a burn of $60,000 into my savings. In the best case, I need not dip into my savings – the existing consulting business would sustain the transition. Armed with this information I knew I had nothing to fear! At the end of two years, if my little experiment failed, I believed I would get a similar job in either India or the US. What would be more important would be the thought that I had at least failed trying. 
ps: At the time of writing - I've broken into a net positive cash flow on my machine vision business (Qualitas Technologies) in India. My Software consultancy business has a modest growth rate.
Once I was convinced, it was on to the next most important thing… convincing your wife!