Sunday, May 8, 2016

The stark similarities between Donald Trump and Arvind Kejriwal and why Donald could well be the next most powerful man on the planet

Balls of steel was a common expression that everyone used once in a while but rarely during a public discourse – till the time Donald Trump emerged.

His candidacy - wherever it has reached so far (1001 delegates on 1st May 2016 and at a kissing distance from republican nomination and by the time I post this piece he would be a definite GOP candidate) leaves some serious lessons for each and everyone in the corporate world.

I will come to the lessons later but first lest talk about Arvind and Donald

Arvind Kejriwal : is a relentless persuader who won the Magsasay award for getting The RTI act implemented. Today RTI has empowered the nation to be well informed and a commoner can seek information on any subject on anyone from any government department. The sheer possibility of exposure has put the fear of God (to some extent) in an inherently corrupt nation.

He rose to power on the simplest of poll promises and a genuine visible commitment towards the duty of his future chair / position. He created drama, he challenged the corrupt openly, his rhetoric was simple, his promises came from the heart and he was inherently and intrinsically an honest fellow. And Boy! His party’s victory of 67/70 MLA’s in Delhi was a slap on opposition that no party wants to experience in its political career.

The poll pundits were having a field day declaring his future win as a black swan event and almost everyone had written his obituary even before he became relevant. The rest as they say was all history.

Donald Trump : Most of the American people I hear are threatening to move to Canada or relinquish their US citizenship – should Donald become the Pres of the US of A. Well my advice is - You might want to start getting your passports made because Donald’s presidency might just be a reality that no one was ready for.

Donald just like Arvind, spoke his mind and didn’t hide his naivety behind the garb of “Yes We Can”. He has raised issues that linger in the minds of every global citizen who understands even an iota of economics and has some common sense and connected instantly with a dangerously large number of Americans. He must be the only candidate who is funding his own campaign and therefore has no obligation towards the need of wars and chaos elsewhere. He has no obligation towards the pharmaceutical companies that sell a monthly cancer prescription for thousands of dollars when the same costs a minute fraction to produce.

Trump’s eventual win will also be called a black swan event but it is seemingly clear that perhaps more swans are black than white.

And this leaves us with a few significant lessons:

  1. Irrational exuberance is the biggest catalyst why executives take chances and stretch the imagination of their excel sheets to stratospheric levels. They become unreal because of performance bias. More than often tremendous amounts of wealth is destroyed due to the inability to discount black swan events.
  2. Black swan events are no longer symbolically correct – they are more frequent and more real than ever. Could anyone ever bet on Leicester at 5000:1 and by-jove Leicester won.
  3. Never ever underestimate the power of a person who speaks from his heart and has an infinite passion. Right or wrong - passion and honesty is all that’s required for success.
  4. Intent (genuine or crooked) is really the most powerful tool. Irrespective of one’s articulation or oratory, intent cannot be hidden and human beings have an immensely powerful cognitive ability to differentiate between a right and a wrong intent.
  5. People (read employees / citizens / and even family members) remain quiet or they compromise because they don’t have a choice but never ever construe someone’s silence as weakness. Else you’d be taken aback with an unpleasant surprise at some point. The majority of the US middle class has connected with Trump because he has allowed them to think and connect with himself.

Besides the drama and the useless rhetoric that comes along with Trump and Kejriwal – ‘Watch out World’ – they might just change the order of the bourgeoisie.

Sunday, May 1, 2016

Sureshot failure of Ecommerce and its underpinnings in the Indian mindset

A few days back I was oppressively put off by a mountain of garbage on my way to work and this area is Koramangala – The fulcrum of ecommerce revolution in India, with highest per capita in the country,  home to dozens of startups, stone’s throw from the offices of flipkart and Accel partners (the posterboys of ecommerce and PE funds).

While my belief in Modi’s Swachh Bharat and Acchhe Din only sees a new low with each passing day of his PMship, I couldn’t help but draw a few correlations and predict with a degree of confidence that - E-commerce in India will never be a success story and the reason behind that is the basic Indian mindset.

I will tell you how:

The basic premise of the digital economy or E-Com companies is a change in peoples buying habits. Amazon has successfully demonstrated that they have changed the mental wiring of their customers and have made them habitual to buying online and when you induce this change, customers buy more and eventually these customers will pay a premium for  the convenience of ordering and returning goods from home and will pay for the entire spectrum of services (order, delivery, product, return, reorder) and still leave a penny or 2 on the table for the Jeff Bezos of the world.

And hats off - Jeff has swung it beautifully and successfully induced a change in the buying habits of Americans

But India is an exception. Because You just cannot change the habit of an Indian.

Kahneman’s theories on cognitive studies demonstrate that humans think and develop in a very linear manner. And same set of people cannot have different personalities for different situations.

CharlesDuhigg's (of the New York Times) studies demonstrate that Habitsare formed after a person has learned something new, like how to parallel park. This process engages the basal ganglia, or the part of the brain located in the prefrontal cortex that works to start and control movement and emotions. From there, it’s a three step process to a “habit loop.” There’s a cue, or trigger, which signals to your brain to turn a behavior into an automatic routine (say-throwing the garbage at a wrong place), followed by the actual routine of the behavior, and then the reward. The reward, Duhigg told NPR, is the brain’s own personal cue for when it should recall the automatic behavior.

Once that happens, the brain takes a break. "In fact, the brain starts working less and less," Duhigg said. "The brain can almost completely shut down. And this is a real advantage, because it means you have all of this mental activity you can devote to something else." For example, Wood cited one study, which found that participants in the habit of eating popcorn at movies would eat just as much stale popcorn as those who were eating fresh popcorn. "The thoughtful intentional mind is easily derailed and people tend to fall back on habitual behaviors," she said. "Forty percent of the time we're not thinking about what we're doing."
So whats the point:

When despite all the education and rising incomes and improved standards of living, Indians don’t hesitate to dirty their corner just outside their homes and continue to litter (and I saw someone throwing a big garbage bag straight form his Audi A-8 contributing to the record breaking height of this mountain of garbage) and continue to live in a pretence of oblivion and there is no evidence of evolution in the corrupt and inhumane character of an Indian by and large, thereby proving that education , income and habitation doesn’t change the inherent character, how can the half a dozen Bansals (Sachin Binny Mukesh et all) ever hope to change this personality when they eventually decide to stop burning an average of 10 mill USD per day (an approximate sum total of cash burn per day in the form of various discounts and schemes in the digital economy space in India).

The customers will simply stop buying when they stop getting discounts.

Because Indians cannot change....

Another disappointing character trait was demonstrated by the citizens of Delhi who worked hard to make the odd-even fail by simply buying the alternate numbered cars. An initiative that’s successfulin some of the most developed countries was virtually held hostage by selfish citizens who would rather live in one of the most polluted cities in the world and thereby putting their and their families life in harm’s way but would not allow a government initiative to succeed – which is a proven success elsewhere.

Because Indians cannot change....

And perhaps in a country where we allegedly assumed an infinite potential in the Ecom space, the harsh reality is starkly different.

The game of musical chairs is on in full swing and while all the players are dancing in the cacophony of this boom, assuming that there are enough chairs to grab – In reality there aren’t any at all.

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