Trust Issues With CellSwapper

CellSwapper is a new service (http://www.cellswapper.com) that allows one to get out of a cell phone contract they are stuck with, without having to pay the termination fee (only paying a much smaller service fee). This is a cool service and will certainly be found useful by many users stuck in their long contracts who are frustrated due to poor reception, etc. The owner of the contract (the "seller") gets out of the contract by transferring it to someone who wants a new contract (the "buyer"), the transfer being facilitated by CellSwapper. The seller gains by not having to pay the huge termination fee, and the buyer gains by not having to pay the activation fee on a new contract. However, I see one potential problem with the transfer process which can be exploited by malicious users.

This is how the contract transfer happens:

1. Seller posts his contract details on CellSwapper.
2. Buyer contacts seller through CellSwapper
3. Seller pays service fee to CellSwapper ($14-$19) to get buyer details.
   
4. Seller transfers contract to buyer through the cell phone service provider.
5. Seller ships the SIM card and/or phone to the buyer.

There are issues with this scheme mentioned on the CellSwapper website like if step 4 fails due to the buyer failing credit check, the seller loses his service fee, but I don't really consider it "malicious" on the buyer's part as he didn't gain anything. However, the seller can behave maliciously if he transfers the contract to the buyer in step 4 but doesn't immediately send the SIM card to the buyer. He could abuse the minutes on the contract before dispatching the SIM/phone and not have to worry about it since the financial responsibility is transferred already. Of course, this is possible only if step 4 happens without the seller and the buyer physically meeting each other, say doing the transfer of contract on the phone.

I don't see how the buyer can possibly protect himself from this unless the contract transfer process requires a re-activation by the buyer in which case the seller will not be able to use minutes on the contract anymore once the transfer is over. Although I haven't ever tried it myself, this kind of arrangement looks highly unlikely to me. So in the absence of this scheme, the buyer can only trust that the seller doesn't abuse the contract in this way.

IIT 2007 What Puts VCs Off

This post is going to be a short one as I only attended part of this session and now have to run for dinner. This was the gist of a panel discussion comprising of successful VCs and angel investors. Here are the two key points I noted:

Don't go to a VC expecting him to be your product manager, or sales guy, or market researcher, etc., i.e., don't expect for the VC to join hands with you in solving the problem you have and in bridging a serious gap in your argument. Go to them with a complete plan that works out of the box. Of course VCs ultimately do turn out to be very helpful for handling several aspects of a startup's functionality, but don't base your business plan on that.

Meeting a VC is like arranged marriage. You meet them twice or thrice and they tell you yes or nay. This is the fact of the matter since most VCs have many entrepreneurs meeting them all the time and they cannot dedicate too much time to one of them, if the chances of approval are so low. Most VCs make a decision early on in just 2-3 meetings. Consequently, all the usual concepts of arranged marriage apply here. E.g., the first impression really matters, and the VC must have heard really good things about you even before you went to meet them.

IIT 2007 From Engineer to Leader

This was a panel discussion I didn't spend much time at, but here are some interesting concepts that I grasped.

One speaker spoke on how a manager must be able to take complex ideas and present them as extremely simple concepts. He gave the example of his former boss (Larry Ellison) who does this really well.

One topic which dominated the discussion was risk-taking. Big companies, just like normal people, are averse to taking risks. If a business model works, or if something brings a steady supply of cash, employees are highly discouraged to change it in any way. When business is good, it is difficult to bring about change, which is why there is more risk on the manager/leader's part. When business is bad, the same decision is actually a low risk one as things are going southwards anyway. I agree that this is somewhat counter-intuitive to how we understand risks, but remember that we are talking about risks in the context of coming out of a comfort zone when it is strictly not necessary to do so.

To reinforce this point, one panelist gave an example of how he transitioned into a leadership role. There was some crisis situation in his company and a group of employees including managers used to hold meetings everyday to decide on a course of action to resolve the issue. Interestingly, the final decision was obvious to everyone from day one, but it was a tough decision to take due to the risk of not being able to fulfill it, and hence nobody wanted to actually make that decision for fear of being associated with a failed decision. But the speaker actually came out, made the decision, and set out to realize the goal (and the rest he said is history).

Two interesting points were raised about risk-taking during the course of this discussion:

The "F" words:

The most dangerous words for potential leaders are two "F" words: fear, and failure. You cannot hope to be a leader until you learn to convert these into a calculated risk.

Hedging of risk:

Risks can be hedged using two methods: PQ and EQ. PQ stands for Political Quotient and EQ stands for Emotional Quotient. The basic idea is that when you are taking a risk within an organization in a leadership role, make the right political and emotional connections in the organization, such that if you fail, the damage to your career is not much. For example, if the VP of engineering really loves you for the energy and ideas that you bring to the company, your failure is more likely to be ignored, which means you can take more risks :-)

IIT 2007 To MBA or not to MBA

This was one of the most interesting breakout sessions I attended. Although I'm not going through this dilemma myself, it gives me some amount of pleasure to sit back and watch others go through it, and make useless observations :-)

The four panelists for this session had impressive backgrounds with nearly a century worth of management experience under their belt. One of the panelists did not have an MBA (Soni Jiandani) while all others had (HBS, UTA, U of Iowa). All the panelists were highly successful people, e.g,. the non-MBA panelist once headed a $4B market in Cisco. I won't describe all the various points that were discussed, but will point out few salient topics which I found somewhat new or interesting.

• Overall, all panelists agreed that the answer to this million dollar question is actually a very short one: "depends". An opinion shared by most was that if you want to stay in a technology management role, then an MBA may not be useful/very-useful, but if you want to switch to a different industry, like media, finance, etc., then it is very useful.
• Another well known point that came up was how MBA is useful mainly for the networking aspect. The contacts you make in all the top business schools can serve you very well during the course of your career. However, one panelist did mention how some graduates fail to leverage this potential, so one needs to consider that possibility when making a decision.
• One panelist pointed out that Jeff Immelt once said that the professional network you build in your engineering job in 5-10 years time can be made in B school in three months time.
• Talking about networking, the panelists had widely different opinions about whether they learnt anything in B school apart from the professional network they made. The general consensus eventually though was that most of the knowledge you acquire in B school can be gotten through specific, short terms courses (e.g., executive MBAs) outside of B school.
• The non-MBA panelist on the panel made another interesting point: most business situations are unique, and school learning in general doesn't help for solving real world business problems. In other words, her emphasis was on experience.
• The last question was the killer question. Each of the panelists had to mention one mistake that they made when they were trying to decide whether to do an MBA or not do an MBA. The two serious answers were:
• The non-MBA panelist described how she underestimated the importance of short-specific courses to fill her knowledge gap during the course of her career - the knowledge that people usually get during their MBAs. She wished she could go back in her career and correct that. Still she was 100% positive that she didn't need to do an MBA.
• One panelist mentioned how he went for an MBA without getting any job experience first, due to which he made some terrible mistakes in his MBA, e.g., underestimating the importance of network building. He also mentioned that lot of the coursework didn't make any practical sense to him until he graduated and experienced the industry.
  

IIT 2007 Arun Sarin's keynote

I just came back from what was a very fruitful day at IIT 2007, the global meet of alumni from all IITs. I attended only the Saturday day session of IIT 2007 and it was totally worth it. Here are some of the ideas that impressed me during the course of the day.

The first event during the day was Arun Sarin's keynote talk. Arun Sarin is the CEO of Vodafone, which is the largest mobile telecommunications network company in the world. Arun is a graduate of IIT Kharagpur and graduated around three decades ago. Arun spoke broadly on three key topics: leadership, globalization with an emphasis on India and China, and the mobile telecommunications industry.

The main impetus of the talk was leadership, especially in the context of IITians. Arun was of the opinion that most IITians are not realizing their full potential as leaders. Leadership is not merely the recognition that you are better than others and lead them to wherever you are supposed to go, but more importantly, it allows you to bring about fundamental change. Leadership allows you to achieve tangible results without fighting with the intricacies of team work which he described as "holding hands and singing songs".

Arun likes to think of three forms of leaderships but there is a catch - all three forms need to be practiced simultaneously. The three forms are:

• Strategic leadership
• Operational leadership
• People's leadership

Strategic leadership

Strategic leadership is about tracking change, how the industry is changing, how customers are changing, how suppliers are changing, how technology is changing, how the business landscape (e.g. competitors) are changing. Strategic leadership is about navigating this change with bulk of the organization you are leading behind you. On a side note, I'd strongly recommend Intel's former chairman and CEO Andy Grove's book "Only the paranoid survive" on this topic. Andy also presents strategic management as a method for discovering and adapting to change. Note the emphasis on discovering, as one fundamental argument of the book was that very bright people often don't spot a changing trend because of the inertia associated with day to day work. Anyway, I won't digress any further, just wanted to note how important this aspect of leadership is and all the points Arun mentioned can be found in Andy's book, e.g., the point about how easy it is to lose sight of your goal in day today operations.

Operational leadership.

The most important aspect of this leadership trait is that a leader must produce results everyday. Strategic and people's leadership is good, but to sustain the team spirit, to keep things ticking, you have to keep producing results at a regular pace.

People's leadership.

People's leadership is about connecting with people, making the right contacts, etc. It is about building great teams, attracting and retaining great people, inculcating team spirit in the people who work for you. A good leader sets great vision and goals for his or her team members and guides them to achieve those goals.

Even besides this excellent perspective on leadership, Arun's talk was very inspiring. He is a motivating speaker and has interesting perspectives on many topics. He spoke how he believes China is really going to be a powerhouse, and how India must make some tough decisions, especially in creating infrastructure if it hopes to catch up. He did speak very passionately on Vodafone's acquisition of Hutch Essar for $11.8B and how the deal took less time to be realized than it would have taken in the U.S. However, he did mention how other contenders for Hutch Essar were calling Ministers to unwind the deal even after it was signed and called for better transparency in the system.

Someone from the audience asked Arun the million dollar question about how to leave the comfort zone and take on the risks involved in leadership. We are all no doing too bad anyway as software engineers or whatever else that we do, so is the gamble really worth it? His answer was that you have to come out of the comfort zone to make a difference and achieve your full potential, there are no short cuts. Leave engineering, go to product management, sales and marketing, etc., whatever it takes to get to a position where you can deliver value through leadership. One other talk later in the day discussed how there are ways to mitigate the risk associated with leadership which makes the transition less painful, more on that in a later post. On a side note, a friend once told me that this is not really a gamble, gamble is when a penniless farmer mortgages his farms to buy a shop, that is a real gamble...