Innovation 101 – Cost vs. Quality. Deuce.

To me it doesn’t matter whether India will be able to maintain its cost advantage. What does is sustainable and long-term value as a combination of cost and quality. In my view we are seeing the end of the traditional benefits of outsourcing. In whichever way customers were disguising their need to leverage lower costs, the only reason for outsourcing was cost arbitrage. We have seen that gap closing especially in the case of Indian talent. Squeezing benefit from outsourcing purely on a cost basis is clearly the last remnants of Industrial age thinking, which besides all other untenable factors, seems to think of human beings as alternatives to machines. I suggest for this reason alone, that we delete ‘outsourcing’ from business lexicon.

Joel Delman, Los Angeles design director for Product Development Technologies(PDT) points out

Having already gained the lion’s share of  manufacturing work, countries like China and India are now focusing on building  their capabilities in the innovation and design phases of product development.  While some may dismiss the seriousness of this trend, we’d be naive to believe  that the United States has a monopoly on a creative workforce.

(read Cost vs. Quality: The Dangers of Outsourcing Design Overseas) Continue reading “Innovation 101 – Cost vs. Quality. Deuce.”

7 years on and still a startup

Contact IdeafarmsThis post is based on a true story. The story of  Ideafarms. We started among  equally uncertain settings in the wake of the dotcom bust and 9/11. We had no funds. We had no product ideas. We didn’t know who we would sell to. All we had was passion and deep down conviction that we would make things work for us. Today we’re almost 7 years old and alive and kicking. Ready to take on the current gloom with renewed energy. We’re back to our start-up ways.

The most important thing then was – and I say this with the benefit of hindsight – that we had no past to weigh us down; nothing of a reputation either individually or collectively that needed to be protected. Both of which we have today. So we’ve decided to shrug the baggage off our shoulders. Continue reading “7 years on and still a startup”

Innovation 101 – Death of the VC

Thingamy’s Sigurd Rinde’s great post here. From the post – Goodbye VCs, it’s been a pleasure

Betting on markets is not business building, it’s not innovation, it’s financial crap shooting.

Many of the reasons I did not choose to have Ideafarms funded by Vulture Capitalists are so lucidly captured in his post.

1. On exit strategies

And my favourite – Andy Grove and the “payday” mentioned above: 

What really infuriates him is the concept of the “exit strategy.” “Intel never had an exit strategy,” Grove says. “These days, people cobble something together. No capital. No technology. They measure eyeballs and sell advertising. Then they get rid of it. You can’t build an empire out of this kind of concoction. You don’t even try.”

Did Microsoft, Google, Intel, Dell and Amazon spend time on “exit strategies”? Doubt it.

Exit strategy is something to pooh pooh at. Makes a money lender holding your home to ransom look like a saint! The VC community cannot even imagine the damage they have done to genuine entrepreneurship. Some of it will not be undone for generations.

2. On the role of the VC and the ‘passenger’  investor

I love Sig’s allusion to the investor being the passenger. How irritating to have a passenger sit in the back seat while you’re driving, giving you instructions about when to step on the gas when he has never even learnt to drive.

I’m not against delivering the best possible value to the venture investors, quite on the contrary, but there should not be any doubt that the best shareholder values delivered over time have consistently been delivered by those who can create a great value for their customers while keeping a good margin.
And the customer is the start-up, the VC is the vehicle and the investor is the passenger. The passengers are always much better off if the driver keeps his eyes peeled on the road.

I join Sig in wishing VCs farewell and hope they will never return. RIP

Sustainable Corruption

There has been a conversation on at LinkedIn about the top 3 priorities for India today. I have noticed that there are many who have sought to ‘remove corruption’. My statement might sound like a very radical approach bordering on impropriety; it will definitely destroy our moral stand: nevertheless here’s what –

IT IS NOT POSSIBLE TO REMOVE CORRUPTION FROM ANY SOCIETY.

Let’s accept that nature’s best creation is imperfect and we live in an ‘imperfect’ world of which every society is a subset. What becomes very interesting therefore is the concept of “SUSTAINABLE CORRUPTION”.

While we are busy blaming the ‘system’ and the powers that be – Continue reading “Sustainable Corruption”

Innovation 101: People first (2)

As 2008 draws to a close, I am urged not to leave this unsaid. I’m following up on my post of 22nd December (Innovation 101: People first) where I tried to bring out human dimensions leading to innovative approaches for the new world.

One plausible approach in designing the future – especially for those of us who believe in the failure (amply evidenced by the current world crisis) of erstwhile business approaches – is to turn everything over on its head and hope it is not lost in translation (pun intended).

Continue reading “Innovation 101: People first (2)”