A Role Model of a CEO

Everyday, we face more and more news of failed US institutions that are being bailed out at tax payer expense. Ironically many of the CEO's of these mega block buster failures get to keep their excessive compensation or bonuses in spite of having railroaded their companies into the ground.

We learnt recently that even as AIG officials pleaded with government officials to save the company, they also approved a second expensive company junket where top executives went to a secret gathering at a luxury resort in Phoenix. Just in the last day we have seen another failed institution (from succumbing to its excesses of bad toxic debt) being rescued. The Citi rescue package does not do anything to change the failing management.

As I was pondering all this, I came upon this video of the CEO of Japan Air Lines (JAL) and his reactions to the US excesses. I understand that the Japanese economy has its own share of issues, however what I wanted to point out was the humility with which the JAL CEO presents himself. There is no arrogance as displayed by many US CEO's.

All I have to say is that US executives need to take a page from the JAL CEO. In striking contrast to all the excesses of the American CEOs like those at the failed financial institutions, and the recent congressional jet trip for the Big-3 auto manufacturers, the CEO of JAL rides a bus to work, sits with the rest of the employees both at his desk and in the company cafeteria and has slashed his salary to below that of his own pilots (his 07 annual pay was about US$90,000).

Note to World: Don't Write America off

The past few days we have witnessed carnage in the financial markets. The US government has had to step in and stop the bloodshed in this crisis. We can debate endlessly about the origins of this financial mess and the onset of a credit freeze and how it will affect us all. Every pundit on wall street from A to Z has some dire prediction or the other. Excuse me Ladies and Gentlemen, I just want to remind you that it took over two years for this sub-prime slime to unravel and reveal itself as this market-wrecking Godzilla. In the same note, any bailout will take time to trickle down to get us back on track. Yes things will take time, but they will surely settle down. Right now irrational fear is a big driver and we as Americans need to calm down and make up our own minds instead of being swayed by irrational 'doom and gloom' pundits.

This is America, not some god-forsaken banana republic run by some two faced dictator. We have a stable government, composed of an executive, a legislative and a judiciary branch that have come forward to take on a leadership role at times of crisis. You as an individual may not agree personally with the system or the outcomes of these decisions. However, that very same system and all the other elements in place prevent this country from going into chaos time and time again.

A number of people in America and from other parts of the world state that America's reign as a super-power is over. We have people predicting that we are not the financial capital of the world anymore. What does it mean to be a financial capital of the world? We have some in the media predicting dire consequences as a result of this crisis. In fact what this crisis proves is the opposite. We as a nation are working through this crisis and will emerge from it. Not without cost, but definitely without this country falling into chaos. I don't see gun battles and riots and looting on the streets. I don't see people hoarding food and amassing guns and ammunition. Folks, get a grip. It's not over yet. Calling a game in the first of a nine inning game is well, Stupid.

We as a nation will emerge from this crisis stronger. That is not to say that we won't face other kinds of crisis' in the future. We will weather all storms. We will hit road-blocks and face other major catastrophes', but we will prevail. We will emerge stronger, not Weaker. We will be smarter, but surely make new mistakes. We will learn and we will move on.

If you are not sure about the country, it's policies, where it's generally headed, you have a choice. People who just assume that they are the new Nostradamus of predicting doom and gloom of the United States should pack up and head over to wherever they feel is a stable country. This country is about choices and freedom. You have a choice and the freedom to leave. If not you can put your thinking cap on and help build a stronger America.

Are we done yet - part 2

Early this year, I wrote a blog article titled "Are we done yet" where I created a rolling snapshot from East to west of some major market indices.

Well today I am attaching a table of the same markets and their closing value on the first day of the year and their current value (as of yesterday). Check it out. I did this as there was some dodo-bird on CNBC yesterday saying that investors should look elsewhere in such times. I looked and found none. There may still be individual plays such as gold and other precious metals left.

Table 1: Select Major Market indexes

China is the one market taking the hardest hit followed by Hong Kong and India. In fact the US markets (DJIA and NASDAQ) have fallen the least from the beginning of the year. Note, If you had bought Gold at the beginning of the year and held it until now, you would have made about 3.35% gain. If you bought it last week you would have made 8.5% by now.

Until all the banks throw open their books and mark down all the values of their sub-prime gunk, we will continue this roller coaster as more and more reveal their liabilities on the day of their demise.

Knowledge and Leverage is key to any Negotiation

I sat down at the table after the presentation was done. The meeting continued as our team and the excited client were now discussing actual steps of engagement. The deal was not done but they were going to try our product based on some of the feedback they had been getting from other new customers. Suddenly, the conference room door swung open and in walked the divisional head of the group. He just stood there for a second and stared down at all of us. He took a seat and flipped through a copy of the printed presentation slides. His next words and actions are something that I will never forget for the rest of my life. With his hands thumping on the table he announced in a loud voice, "Why would I want to buy this new product from a new startup when my teams have a working solution. I do not want my teams to invest their time or money learning new products. This is a waste of time". With that he got up, tossed the slides onto the table and walked out. (Keyword: Leverage)

It was a cold february afternoon in Ottawa (Hint). On the way to the airport, I was kind of disappointed about what had happened, but was reassured by the design manager of the client that he would revisit this with the divisional head soon. We did not hear from them for a while. We went about our business and were quite successful with a lot of other companies.

Many months earlier I had joined a new software company as an applications engineering manager. This new company was embarking upon delivering some ground breaking verification technology to the semiconductor design companies. The new technology had been developed in anticipation of the emerging seismic technology shifts and was built to handle the various complex technological changes in the entire design flow. Some of these design flow changes would basically force existing applications to rapidly scaleup to handle larger amounts of data. We were certain that existing applications could not handle these changes and would fail. We had worked with many of the vendors who were in this design eosystem and had the foresight to accomodate for this. (Keyword: Knowledge) Many of the design companies would encounter this as they shifted their flows to design the next generation of integrated circuits. The company in question above would have roughly about three months before this hit them. Of course we had told them about it in the presentation and the team was buying it until the Divisional head had waved us off.

In late August of the same year, we got that call from the manager at the client site. Their existing tools were failing and unable to verify the next generation designs. We went in and in less then half a business day had all (I repeat all) their new designs loaded up in our tools and verified. We were verifying the integrity of the designs faster and with much lesser memory than any of their existing solutions. To top it all, we were the only solution capable of actually completing the designs. In fact they were so bewildered by the speed of our technology that they acutually inserted deliberate flaws into the designs to ensure that we would catch them. And catch we did, everyone of them.

A few days later, I got a call from the VP of sales of our company. He was calling to ask me about my email to him regarding the No-Discount to this particular client. As a startup we were accustomed to handing out generous discounts to many companies just to get some revenues in our first year (FYI: Our software list price was around $ 150K). I basically told him that given the clients arrogance and the fact that they gave up their leverage, meaning that they were basically screwed without us, that I would not offer a single percent discount even if it meant a potential loss of sale. I mean in simple terms, we were their only option period. We had them by their balls. Why the heck would we negotiate down or even offer a discount. Long story short, they are the only customer that I know of who paid full list price on nearly 6 copies of the tool and with maintenace and support thrown in, it was well over $ 1.2M when the deal was closed.

The two keywords here are Knowledge and Leverage. Know what is your customers' pain not just for today, but for what's on the horizon. Educate your field marketing, sales and application engineers to keep a eye and an ear out for information that may help you negotiate better terms. Hot heads who some company insiders consider as god (because they usually speak in a loud voice) must be kept away from customers or even let go. This is simply because their ability to supposedly keep a well oiled machine on the inside may be compromised by the fact that they are not able to handle the same on the outside.

A Mighty Ping Pong Palooza

I had the opportunity to participate in a Ping Pong Matchup organized by Howard Lindzon. The event was sponsored by BuddyMedia and held at the Wang Chen's Table Tennis Club (250 W 100th St) on the upper west side of Manhattan. However I must say the place looked more like a Wang Chen's dungeon. The basement area where the ping pong palooza was held was steamy hot. I had to be careful to keep myself hydrated as you did not have to do much to start sweating in that cramped arena. Mike and Kass Lazerow (CEO and COO of BuddyMedia) had pulled together some great refreshments for the participants.

I must say that I made it to the final 16 only to be bested by Ben Kartzman, CEO of Spongecell. He ultimately went on to win the paloozathon beating Nate Westheimer. I ran into Aaron Task 0f Yahoo tech ticker fame at the event.

Post palooza celebrations were at "The Abbey Pub" on 237 W 105th st. I also did meet some old friends Wayne and made some new friends Vishy, Adarsh, Timothy Sykes, Patrick Courtney, Scott, ozsultan, Brian, Leora and more. You can find some pictures here. I had a great time and the event was great for networking.

In the end I did get something - a Tshirt from Spiritual Gangster, a clothing company based out of Scottsdale Arizona.

A divergence of sorts

Well time for a quick update.

I have been hard at work with JP and RB over the last few weeks. It seems that we may have some help finally on the Blackberry front. Very shortly we will have our software on the desktop, the Windows Mobile, the Blackberry and the iPhone platforms.

Well this update is not really about all that. I am writing this post just to update some of the readers that I will be now separating my personal blog from my professional blog. Meaning this blog will become my personal rant space. I will write here about things that I know about or things that I want to know about or something like that. Here I will also write about my personal experiences of this past year. I call it my entrepreneurial sabbatical. Don't get me wrong. Its no sabbatical. But it certainly was a welcome change from the previous industry that I was in. Going up to my Boss and saying I am resigning was hard. I had a comfy job, a great salary, good perks and all. I knew the ins and outs of the industry and the entire eco-system. But I was ready for a change and I had to get out of it. Now I am so excited to be doing the things that I have been doing over the last few months. Its been a process of discovery. Discovery of the new, the unknown and also unique ideas of how to link the new to the old.

I am moving over my technology and work related discussions to my blog on http://blogs.mobow.com/latest/. You can visit that site to learn more about our product and our future direction with MOBOW, our startup.

Good Luck. Follow me here for my rants about this and that and all things relevant.

The Viability and Monetization Potential of Social Networks

Is there money to be made in social networks (SN)? Well if you are interested in SN’s and are a developer or an entrepreneur building tools that leverage SN’s in the web 2.0 world, or for the mobile arena, then that is a very important question for you. As an entrepreneur myself developing products for the mobile presence space, I am constantly quizzing myself with the single question “Can the business model work or sustain in this changing eco-system”? Well, if you are interested in finding out more, you should set aside the last Monday of this month (July 28th 2008) and come to the Mobile Monday event at the Samsung Experience Center (10 Columbus Circle, NYC) for an expert-panel discussion. Lubna Dajani of Stratamerge™ and Co-founder at mobilemonday-NY, will be moderating a panel of experts, entrepreneurs and others with the discussion centered on the subject “The Viability and Monetization Potential of Social Networks”. She does plan to share some of her initial findings of Stratemerge™’s study on social networks and debate the findings and potential market implications.

Current methods of monetization come from two areas. One is the advertisers, who flock to the sites despite the anemic response rates. The second method involves the user who pays for some premium service. SN operators, who rely solely on ad based revenue models, have to convince their customers that there is continued value in advertising on these networks.

A recent BusinessWeek article titled "Generation Myspace is Getting Fed Up" revealed certain shocking advertisement metrics; Response rates of 0.04% (on SN’s) compared to a 0.2% in general on the web. Response rate numbers like 0.04% to 0.2% cannot continue to be an acceptable ROI number for those who spend money on advertisements on the web. One industry executive put it right when he said, "it’s really hard to make money when the click through rate is that anemic". Read my article "Ad Deluge on our senses" written earlier this year. Another report in "VentureBeat", reported flat to falling ad revenues for June 08. What is interesting to note in that report is the pubmatic's ad price index of web publishers by site type. One can clearly see that SN sites have the lowest ECPM's among the other site types. You can find more details on the report at pubmatic's site.

Will consumers pay to play in a SN? The value of the extended social network fades over time unless there is a continued exchange of relevant and contextual dialogue. One has to ask the question, “What is my network’s NET-worth”? How exactly am I benefiting by participating in the SN’s? SN’s will need to continue to provide overall value to the community and unique value to each user. If this duality is not satisfied, the users will leave.

In my personal opinion, as the world moves toward mobile gadgets and phones, factors such as relevance and context become more important. Desktop centric SN users’ initial euphoric experience of finding and reconnecting with old friends is usually followed by information overload and eventual disillusion. The ad model will also have to change and provide users with a meaningful experience as opposed to pure product promotion. It is imperative that new applications provide a platform for intelligent information delivery, one that provides immense value to the user in their daily activities.

SN sites will also have to control spammers and unwanted business solicitation that irritate users. Twitter (a microblogging site), a service that I use, is an example where this happens. Many businesses hide their real identity, get accounts on twitter, try and get people to follow them so that they can spam them with the irrelevant material. As for me, my current rule is to periodically scan my followers and delete/block those who have no profile information. I try and control what’s relevant and contextual to me. Recent reports by bloggers and other SN site users have evidenced the fact that some of the SN application sites are resporting to spam themselves in an effort to increase their user base leaving a very bad user experience for the end user.

SN’s will have to create new forms of attention aggregation and inform, entertain and allow for fulfilling content consumption to effectively provide a platform for monetization.