Monthly Archive for June, 2010

Interesting Reads – 25 June 2010

Reading at Seattle Library on Tetris Chairs

Economics and Finance

The Long Now of Finance update. An ongoing attempt to see what the world of finance be in 10,000 years from now.

Making it fun to save. A very interesting idea to enable savings products on top of the usual no frills account that financial inclusion typically provides.

The average credit rating for corporation has fallen in last 30 years. This mirrors the rise of Private equity, Hedge funds and LBOs. This also means that premium for a higher credit rating should be higher than before. In other words, while the average has worsened, the standards for good vs bad haven’t.

IT

Bank in a Box. A very good summary of the business and operations models on offer in today’s core banking software market

Startup

Celent’s selection of Financial Technology Start ups.

Start ups from the Mobile Breakfast event

Mobile

Apple’s people centric design

Social Media

How many times should one tweet one’s post. Good post and discussion

Science

A more reliable invisibility cloak. Remember Harry Potter?

Research shows that memory improves while walking.

Misunderstanding Indian Culture

Aakar Patel, in his Mint column, quotes some very interesting data on culture but draws incomplete conclusions. I think that the real story underneath the data is very different and more complex.

Aakar took Time Out; “the most comprehensive events magazine in the world” and counted the no of cultural events listed in roughly the same time period in Oct 2010. The time span for New York and London was 1 week each whereas it was 2 weeks each for Mumbai, Delhi and Hong Kong. I’ve summarised the Aakar’s research in the table below:

This is good data that quantifies the cultural volume across major cities. It also shows the difference in scale in both absolute and per capita terms. In Aakar’s words:

Two things become clear, and they’re related. One, that we have few events. Two, these are free.

Aakar goes on to conclude that:

No culture is sustained much less advanced by such a poor audience. We assume that other Indians somewhere are carrying the tradition forward. Those who believe culture is happening in the small town are mistaken.

Being modern in India means being uninterested in classical Hindu tradition and ignorant of classical Europe. Our civilization is past.

This is good data but bad research. Let us see why.

First, New York and London score over other cities because they have had a longer history. London’s first landmark theater, the Royal Opera House, started in 1734 and New York’s first landmark theater, the Carnegie Hall, started in 1891. Compared to this, Mumbai’s NCPA started in 1969 and Prithvi started in 1978. In Delhi, Kamani started in 1971 and Sri Ram Center in 1976.  Over time, other institutions and groups have grown around each of the landmark theaters. But this local ecosystem takes time to develop. Given the decades of head start, its not really any surprise that London scores over New York and New York scores over cities like Mumbai, Delhi and Hong Kong.

Second, people tend to care about culture only at higher levels of economic achievements. After all, spending on culture as an expression of refinement is not the first priority for anyone. Historically also, all great cultural movements have come at the zenith of civilizations where peace reigned and wealth was at a height. Again, cities like London and New York have a much higher level of per capita income and a higher no of people with a high level of income; another reason why there are more patrons of culture in these two cities.

The point is that the numbers are actually as expected. Once we realise that culture in Indian cities is actually in its early stages rather than late (an assumption that Aakar starts with), its easy to see why volumes are low and that culture is being promoted and hence a higher proportion of free events. In fact, there is a high correlation between age and the % of free events. Older the history, lower the number of free events. Only New York beats that correlation.

What is happening in India is that the culture itself is undergoing a massive shift. What is classical is not really the culture of the current Indians; as Aakar currently points out. People find it difficult to understand classical music. School curriculum is also more focussed on creating earning capacity in the students than inculcating culture. The new culture is heavily influenced by the popular western culture and Bollywood. This new culture is just coming out and is low in volume. The old culture survives but either as promotion in larger cities or on its own in older cities. For eg look at the tradition of music concerts at the Sankat Mochan Mandir at Varanasi or the Sabhas at Chennai. The older Indian tradition of arts was focused around temples and courts. For example, Ustad Bismillah Khan played Shehnai almost every week at the Kasi Vishwanath Temple at Varanasi. Thus, looking at Time Out is probably an incorrect way of measuring Indian classical culture as neither these cities nor the temples figure there.

I think its easy to sit in Hill Road and write columns that Indian civilization is dead compared to really understanding what Indians see as their culture and how they interact with it. In reality, India is just too big and too complex to be explained in a few columns. Any claim, implicit or explicit, to the contrary appears false to me.

Mobile App opportunity on Nokia Phones

Image from http://www.flickr.com/photos/catmachine/3826156707/

There are new Mobile apps coming out every day but inexplicably almost all of them skip the Nokia platform. This could be an interesting opportunity for other developers who could fill in these gaps for Nokia/Symbian platform which arguably is bigger than iPhone, Android or Blackberry.

Foursquare is a good example of a popular and growing service that doesn’t have a Nokia/Symbian play. Evernote promises to connect “all the computers and phones you use daily” but still skips Nokia/Symbian platform. Just yesterday, Amplify launched a new mobile bookmarklet which again is not available on Nokia/Symbian. These are just examples of many products that are focusing on iPhone, Android, Blackberry, Palm and Windows Mobile (in that order) and skipping Nokia/Symbian.

Surely, Nokia and other Symbian based handset users look at these apps and wonder why they are being left out. Some of them may switch to a iPhone or Android or Blackberry but a large number stays with their device. If you look at the data, what jumps out is that forget abandoning Nokia, more users than ever are buying Nokia Smartphones. As per data from IDC, Nokia shipped 39.3% of the smartphones worldwide in Q1, 2010 which is ahead of Blackberry’s 19.4% and Apple’s 16.1%. Android, Palm etc are not large enough to be mentioned by name and are clubbed under Others. Nokia has maintained its market share while Apple has gained at the cost of Blackberyy. The absolute numbers also tell an interesting story. Nokia shipped 21,500,000 phones in Q1 of 2010 which is 50% higher than their own sales. In other words, if the same growth rate continues for another three quarters, Nokia would sell over 100,000,000 smartphones in 2010 alone! Combine this with the already installed base of Nokia and the number is truly staggering.

This begs the question of why so many apps are ignoring potentially the largest market for apps. Some reasons are:

  1. On the demand side, no of users doesn’t translate to dollars earned. Some users pay more for the app than other users or their click thrus are more valuable. Once segmented this way the US market comes at the top. US market has a far higher penetration of iPhone, Blackberry and Android devices than the rest of the world and therefore, its no surprise that more US focused companies are developing for these platform. Focusing on US makes sense for an early mover as its a huge market by itself. Even Apple focussed its iPhone in US for quite some time.
  2. On the intersection of demand and supply, something interesting has been happening. Apple and now others have promoted the app store heavily. This has led to more iPhone users trying out apps and more developers developing apps for iPhone. Its a virtuous cycle where Apple is ahead and will stay ahead.
  3. On the supply side, Nokia hasn’t made it easy for developers to develop apps. First there is a challenge of multiplicity of devices and multiplicity of OS flavors. Second, Nokia has not painted a clear picture for developers and has also failed to deliver on some of its promises. Third, re-orgs within Nokia doesn’t give confidence to developers about Nokia staying the course or its future directions. Having said all these, these are probably less true now than they were a year ago. Nokia is showing signs of resurgence by launch of new models and platforms

The upshot is that large markets are being ignored because the overall market is huge. A blue ocean if you like. But it will take a lot of effort to own the blue ocean and I think justifiably so. So what are the opportunities for developers looking at this space? I think the following could be some themes:

  1. Meta Apps which put together several of the web services like Evernote, Amplify etc in one app. A good case study is what Nimbuzz has done in social networking services. Such apps would meet the latent demand of Nokia users who do not have such web services on their mobile as an app.
  2. Derivative Apps which build additional layer of functionality on top of another service like Foursquare. These apps would have a better take off in the current scenario as Foursquare itself is not a mobile app on Nokia.
  3. New Apps which are inspired by what is happening elsewhere but are made for unique needs of the target segment. For example, Indian urban users have longer commute times than their global peers and mobile serves multiple needs in these long lonely hours. A good example of an earlier opportunity of similar nature is the Chinese Internet market. Global players were slow in moving in as it was not the first priority and had language challenges. It gave ample time for local innovators to localise what they saw elsewhere and to ramp up. Today Chinese Internet is bigger than English Internet in volume and maybe in some time in value too and is dominated by local players.

Arbitrage Apps, apps that provide the same functionality as another one on another platform, in my opinion is not an opportunity most of the time. First, the original one is always ahead in learning curve due to greater adoption and feedback. Second, in copying the original the developer surrenders mentally and never recovers from that mindset. Third, once the arbitrage app shows traction, the original can start competing by launching on the skipped platform. So, no there isn’t an arbitrage app opportunity.

Image Courtesy: The Mobile Phone 1974 by catmachine