Al Gore moving to Sand Hill Road

The blogosphere is abuzz with the news that Al Gore is joining Kleiner Perkins as a Venture Partner. This is an incredible story and again shows Al Gore's passion and commitment towards global warming.

Quote of the week

Ok, I have now joined Wharton and I definitely owe a sum-up of my experience of going back to school. I will be doing that this week, but here's a quote from The Hedge Fund Implode-o-meter that caught my attention. Couldn't resist posting and this becomes my first blog post from Philly, posting it in the middle of a lecture..

Quote of the Week:
Hedge funds and private-equity firms today are like the dot-coms in 2000: Ask for money and you'll get it. They bid up the prices of everything. The amount of money flowing is almost out of control, and it's making everything overvalued. A client of mine said it's like there are 11,000 planes in the sky and only 100 good pilots -- an accident is bound to happen.
—Ray Dalio of Bridgewater Associates, quoted in Barron's, May 26th 2007 edition

India booming and some interesting statistics

Rediff.com is reporting some very interesting numbers here. As per them, the top four Indian IT Outsourcing firms, namely TCS, Infosys, Wipro and Satyam, together witnessed an attrition of over 10,000 people (!!!) in the Q1 ending June 2007. That's a huge number by any standards.

Poor infrastructure, rising salaries, stronger rupee, amazingly high attrition rates - Do we need any more indicators for a severe reversal?

Dow, BSE at all time high

With Dow Jones and Bombay Stock Exchange (BSE) fiddling with their all time highs, I tried to do a comparison of both the stock exchanges (courtsey: Yahoo Finance charts).
While the BSE has doubled in the last 2 years, Dow is not that far behind either. Its up more than 30% over the last 2 years which is a great return, perhaps comparable to those offered by hedge funds. So, is it a great time to invest in Index funds or is this home run going to die out soon, I will let economic pundits comment on that.

The Metrix: For aspiring VCs

A fascinating video by the Wharton Follies, articulately describing the hype with VC jobs.


As an aside, I will be joining the Wharton MBA program starting this fall. I perhaps, exactly fit the profile of the guy in the video - Looking for that cool and cushy VC job with no prior Venture Capital background.

Google's acquisitions so far

After hearing about Google's acquisition of Postini a few days ago, I thought I should do a post on summarizing Google's acquisitions over the years. However, after some googling, I stumbled upon this excellent post. A great roster for anyone looking to study Google's acquisitions. Some interesting analysis of the post:

• Google has made over 38 acquisitions since 2001, of which 12 were made in 2007.
• Google's largest acquisition so far in terms of cost has been Doubeclick (US $3.1B)

When the VC says no

A very insightful post by Marc Andreessen for the first-time entrepreneurs. Some excerpts from the post:

One "no" doesn't mean anything -- the VC could just be having a bad day, or she had a bad experience with another company in your category, or she had a bad experience with another company with a similar name, or she had a bad experience with another founder who kind of looks like you, or her Mercedes SLR McLaren's engine could have blown up on the freeway that morning -- it could be anything. Go meet with more VCs.

The state of the live web

David Sifry (of Technorati) is reporting some very interesting weblog statistics here. The bullet that surprised me most is that Japanese is the #1 blogging language, amassing 37% of the market. Some very interesting data from the site:

• 70 million weblogs
• About 120,000 new weblogs each day, or...
• 1.4 new blogs every second
• 3000-7000 new splogs (fake, or spam blogs) created every day
• Peak of 11,000 splogs per day last December
• 1.5 million posts per day, or...
• 17 posts per second
• Growing from 35 to 75 million blogs took 320 days
• 22 blogs among the top 100 blogs among the top 100 sources linked to in Q4 2006 - up from 12 in the prior quarter
• Japanese the #1 blogging language at 37%
• English second at 33%
• Chinese third at 8%
• Italian fourth at 3%
• Farsi a newcomer in the top 10 at 1%
• English the most even in postings around-the-clock
• Tracking 230 million posts with tags or categories
• 35% of all February 2007 posts used tags
• 2.5 million blogs posted at least one tagged post in February
  

EDA and Private Equity

Most EDA stocks took a climb today as CDNS is reported to be in talks with KKR and Blackstone, the influential Private Equity firms. It will be interesting to see, how these burgeoning PE players can improve the output of such R&D intenstive companies operating in a flat/stagnant industry. If anything at all, it points me to another bubble in making.

TiECon and interesting facts

Had an opportunity to meet a large no. of entrepreneurs/VCs (more than 4000 attendees at the 2-day conference) at the highly successful TiECon 2007. Among the impressive keynotes of Tim Oreilly, Marc Benioff and Nobuyuki Idei, one of the interesting slides that I still remember is the #employees vs page-view rank for top internet sites. Very impressive stats for the Craigslist indeed!

Rupee vs US Dollar

Indian Rupee (INR) has appreciated more than 10% against the USD in the last 3 months - This is going to hit the bottomline of Indian exporters, the giant Indian software companies and also the US companies investing in India. I'm not a macroeconomics expert, but I am sure that the direction of Rupee will have a strong say in deciding the future of outsourcing industry in India.

How to schmooze without saying

An interesting read on how to make the best first impression. Quote from the article:

"In an interview situation, research shows that positive or negative impressions are made very early on," says Tim Butler, the director of career development programs at Harvard Business School. "Often, the rest of the interview is to confirm the initial impression."

Reverse Bangalored

While most blogs and news articles today talk about the growing outsourcing phenomenon, or getting Bangalored, or the reverse exodus of skilled Indian software workers from Silicon Valley to Bangalore, there's another trend that has started to happen - I call it as "Reverse Bangalored" - the closing down of India center and shifting work back to the US. Over the last 2 months, I got to know of atleast 2 startups that have shut down their India operations, affecting close to 100 people. While the no. of people affected are less and perhaps it will turn out to be a win-win situation for both these people and the talent-seeking-software-companies-in-India, yet the trend is concerning and needs to be addressed.

Munjal, founder of high profile startup Riya, does a good job at outlining his reasons for calling it a "quit". The salaries in India, indeed have gone through the roof. With the Indian Rupee getting stronger against the US dollar and to meet the ubiquitous 30-40% annual salary increases in India, US companies are shelling out more and more $s per Indian employee. Add to it the cost of remote management - the cost of setting up a new center, the cost of travel for employees both ways, the cost of setting up a remote working model etc., which can make the investment much more expensive. However, still the average cost per employee in India is way less than the cost of his US counterpart, but the difference has been shrinking at an alarming pace. It has now reached a stage, where setting up India operations will only make sense, if the productivity expected out of the remote center will be at par with US center. There has to be another reason than the plain vanilla cost-saving factor to establish an Indian center. The reason has to become "talent" and not the "low-cost" factor. The likes of Google and Microsoft have established Research Labs in Bangalore, where the hiring standards are at par with their corresponding US Labs - Such setups are bound to see no reversal, but most other centers do a tradeoff between quality and cost and days are not far off when we will see a major player exiting out of Indian market to choose another low cost region. That will then put a lot of good people on the market, reversing the supply-demand equation in the favor of employers- Until then, the salaries will increase and we might see more small operations making a move out of India.

The Decoy effect

An insightful article here on the decoy effect - Pretty interesting !

New York to London in 29 days

Google maps is showing the route from New York to London. Of particular interest is #23: Swim across the Atlantic Ocean 3,462 mi :-)

AMD: Down, down and down

With AMD creating new 52-week lows almost every week, the stock has eroded hundreds of million $s of shareholders wealth in the last one year. The chart here (courtsey Yahoo Finance) is not one of the best that I have seen in few years. The Institutional ownership has reduced from around 76% to mid 50s, signalling a huge sellout by funds. However, with a market cap of around $7B, its definitely an attractive target for the burgeoning PE firms. I would expect more sellout by these funds, and then a sudden turnaround due to buyout possibilities to take the stock back to lower or mid 20s.
Disclaimer: These are my personal thoughts and should not be construed as an advice of any sort.

India hiring

A picture worth a thousand words. This picture gives a perfect glimpse of booming market conditions in Bangalore. Google hiring at one of the most trafficked malls in Bangalore.

PE job

While PE jobs are hard to come by in the US, they are still available in plenty in India. Here is one post from VC Circle.

The good 'ol IPO days

Paul is pointing to this amazing IPO data collated by Carlyle group. If the data is any indication, we should not worry at all about the current market dynamics. The market is still realistic and nowhere close to the heydays of 1999-2000.

Entrepreneurship week

It appears that this is a global entrepreneurship week with various exciting events happening all over the world. To name a few are Stanford's Entrepreneurship Week and National Entrepreneurship Network (NEN) in India.

TeamAsha 5k/10k run/walk on 18th March, 2007

There is going to be a 5k/10k run/walk on 18th March, 2007 at Shoreline, Mountain View, CA. Cover charge is 25 bucks and one will get a Asha t-shirt and a goodies bag. Please register yourself at: http://sv.teamasha.org/5k

Will India's growth story continue ?

Among many of the ubiquitous Indian growth related stories, this one from Economist does a good job at reminding the basic economics fundamentals, which the Indian growth story is completely ignoring. So, whats wrong when Infosys is growing at an amazing YoY rate of 40-50%, or when Tata Steel has aquired UK based Corus group for US$11.3 billion. The Economist puts it as:

The economy is displaying alarming symptoms of overheating. This implies that demand is outpacing supply and hence the pace of growth is unsustainable. Despite lower oil prices, wholesale-price inflation has risen to 6%, which is above the 5.5% upper limit set by the Reserve Bank of India (RBI). India does not have a single rate of consumer-price inflation, but the crude average of the rates for industrial, non-manual and agricultural workers is above 7%. Capacity utilisation is higher than at any time in the past decade and severe skill shortages have caused wages to rocket.
The RBI is also concerned about a credit boom. Bank lending to firms and households has expanded by 30% over the past year. Lending on commercial property is up by 84% and home mortgages by 32%. Asset prices look bubbly. After rising more than fourfold over the past four years, India's stockmarket is one of the emerging world's most expensive, with a price-earnings ratio of more than 20. House prices in many big cities have more than doubled over the past two years.
..

While the real outcome is yet to be seen, I agree that without proper reforms in infrastructure, public services and labor laws, the Indian growth story is imminent to an abrupt halt, leave alone slowing down.

VC Midas list for 2007

is up and can be found here. Once again at the top is Mike Moritz.

Guruji, Fropper, Mauj and the state of Indian internet startups

While its been a year that I moved to the Bay area, I've been ever curious about the state of Indian internet startups, how they are different from their global counterparts, and what level of customization are they offering to people in India. A quick glance at Sequoia India's portfolio companies lists down several Indian versions of google, travelocity etc. While some of them may add value, I am particularly concerned about the following:

- Guruji: I am not able to understand its value offering. With the bulk of Indian internet users proficient in English and most popular sites available in English, I wonder how much value it can add by searching the local indian content. Moreover, in this world of globalization, how easy is to distinguish between a pure Indian context and an outside one. Is an american story published by rediff considered in Indian context? Is the ubiquitous story of Indian offshoring success published in western media considered outside the Indian context? or by Indian context we mean the web pages hosted in India? Sure, Baidu has demonstrated that such a market exists and it has done a tremendous job in capturing the local chinese market, but we have to understand that China is much different than India. Majority of internet users in China still speak Chinese and a lot of popular sites in China are in chinese. Also, Google and Yahoo already have local customized services and offer search in local Indian languges too. Given all the above, I fail to understand what extra value Guruji is going to offer to Indian customers.

- Travelguru: With almost every VC opening its shop in India, this was expected. At this point of time, we may have more flight booking sites than the no. of airlines in India. With airports already brimming full to its capacity, I would be surprised if we have more airlines joining the already-crowded-party. To increase volumes and hence business for such sites, we need bigger and newer airports, which would take decades, with the pace at which political decisions are made and implemented in India. Are we looking to a dot-com bust in India?

- Seventymm: With an exact Netflix like structure, I wonder if this model can sustain in India. With labor still dirt-cheap, why would anyone want to order a CD over snail-mail, when the local rental boy can deliver it to you at your doorsteps within minutes. A vast collection of movie titles may be the difference, but should hardly be a reason to switch to the expensive pricing strategy of the company.