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...

Promising Deltas

I've always wondered if it is possible to tell with reasonable accuracy a given technology startup's fate, i.e., whether it will cease to be a startup someday and join the ranks of big companies. This question seems very much like telling the future and its definitely so if not any more difficult. In fact it's so difficult that even the smartest people in the trade, namely entrepreneurs and venture capitalists often get it wrong. So is it worth spending time trying to answer this question ? I don't know, but in this article I'll try to present one way of attacking 1/10th part of the problem - namely the strength of the idea.

Firstly, to set the expectations right, let me point out that even though the idea provides the foundation for a company, it's not the most important thing. At the end of the day it is the execution of the idea that matters most. I won't go into the details of this argument but there are plenty of entrepreneurship books around which seem to talk about this and only this. However, I'd like to point out that it's easier to predict how well an idea will be executed than to predict the strength of the idea itself. For example, one trick is to always bet on the rider and not on the horse. If the management is good and have a track record of success, if the founders are reliable and experienced people, most likely they won't screw up.

Evaluating ideas is more difficult because in general there success depends on too many variables. For example, is it possible that the competition can produce the same product or service for cheaper, or whether customers will accept the product or service, or whether another product or service could be used as a cheaper substitute, etc. Answers to all these questions depend on future events that are yet unknown, thereby making prediction of an idea's fate seem extremely difficult. Still, unless we answer these questions one cannot truly evaluate an idea. This article discusses one approach for looking into the future to gauge an idea's potential.

Let's start with some trends in information technology (IT). IT is growing at an enormous rate. This can be attributed to the number of people working in this field which is generating a very rapid pace of innovation. Whenever an industry grows at such a rapid pace, pockets of inefficiency appear in the system. Since this whole process is so dynamic, these pockets or "deltas" in efficiency may grow to be bigger gaps, or may disappear with the next change in the industry. These deltas are the future Googles, Yahoos, and VMware. The best thing a startup can do is to align itself with a delta that is only going to grow. Of course, identifying the promising delta is like telling the future and thats not easy at all. However, if one can identify inefficiencies in the right areas, it can make a very good business proposition.

Several areas in IT are doubling in size every year. This is common knowledge, but we often fail to see the long term impact which is the whopping 1000X increase this amounts to in just a decade. What looks like an unworthy opportunity today could be tomorrow's billion dollar company. Opportunities arise all the time as tiny deltas but can grow to become huge gaps in a few years time. You cannot hope to fill the gap when it becomes large enough cause then several people will come in for cashing on it. Your best bet is to start working on a tiny but promising delta today so that when it is big, you are ready for it. Ideas that are aligned to widening gaps in the industry grow and others perish. The trick is to be able to see these gaps, to be able to calculate which of them will grow, and align yourself and your startup with them.

Let’s look at some recent examples of successful startups that became major corporations and how they aligned themselves to the right deltas. VMware for those who don’t know is the market leader by leaps and bounds in virtualization. VMware was described by Sun’s CEO Jonathan Schwartz as "an apology from the software industry to the hardware industry as we (software industry) were allowing servers to run with very low utilization". When VMware was founded in 1998, the problem of under-utilization was not as serious as it would be today without virtualization. But hardware manufacturers were making ever faster servers while software vendors failed to utilize them fully as they were trying to solve a totally different problem (stability, gui, security, etc.). Over time, this small delta in utilization grew into a huge delta within a decade resulting in the billion dollar company VMware. There are two observations to be made here. First, the software and hardware industries diverged in utilization not by accident but by nature. Computer programmers don't write programmers so as to use all the CPU available in a system, but CPU makers try to put in more and more horse power into their CPUs. So the delta always existed and given the rate at which these two industries grew in the last ten years, the delta also grew proportionately. Secondly, a promising delta doesn't say anything about what would be the right technology to fix it. People took several different approaches towards solving the utilization problem and not all of them worked. But it does tell us that if a company aligns itself well with a burgeoning delta, it has a better chance of survival.

Yahoo was the market leader in the search industry in the late 90s when Google was founded. Yahoo search did a pretty good job for Internet search in those days but as the Internet continued to host more and more data, a delta appeared for better ways for searching this vast information space. Google grabbed this delta and grew along with it. But today, there is a new trend that is spawning yet another delta in Internet search. As more and more people are getting hooked to the Internet, there is a huge reservoir of new web content in the form of user generated content. There is a significant delta between Internet search and the vast pool of user generated contents. This delta is all set to grow with time and will result in dozens of companies being founded. We are already seeing major corporations being founded on this delta, e.g., YouTube, Wikipedia all try to reconcile Internet search with user generated content.

In summary, as small trends get amplified over time due to the incredible growth rate of IT industry, new opportunities are being created all the time. It is difficult to miss promising deltas which are the ones at the crossroads of rapidly growing domains.

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Patent filing service based in India for catering both Indian and US clients: Ripple Research (http://www.rippleresearch.biz)

Cyber Nations: Countries on the Internet (Science Fiction)

Have you ever imagined what would it be like if nationality was not determined by birth but by choice ? When national boundaries are not drawn on land accessible to a few, but somewhere that is accessible to everyone. The first thing that comes to mind for such an "open" space is "cyberspace". Imagine "hosting" nations in cyberspace, so that people are free to choose their "cyber-nation", irrespective of where they actually live. It would be just like opening a Yahoo mail or Gmail account, just that you'll be able to do a lot more with your "account" than just check email. Cyber-nations would allow the national and social bondings of a person to be determined by choice, rather than by chance. A world where being part of the right cyber-nation is more important than being part of the right nation. Such a world won't be very different from ours, in fact, we already have most of the necessary ingredients, read on...

Nations in cyberspace or "Cybernations" will be just like todays' nations, only difference being that they are entirely online. People will no longer be confined to the nationality they earned by birth, instead they can choose their loyalties themselves. How this can be implemented is a different issue and we will talk about it later, but right now let's see how this can totally transform our existence. But before that, one simple question. Exactly what role does the Internet play in our lives, and has it become so truly necessary that we want to run good old land-based systems (like countries) over the Internet ?

My assertion is that the Internet is a basic necessity for human beings, just like bread, water, clothing (optional) and shelter. Internet appeals to human beings' social tendencies which is indeed a basic necessity for life. For example, how many of you would find it mildly pleasing to live all alone on a remote deserted island with all material comforts of life ? The Internet is a medium for social exchange and thus creates better, well connected societies. So if you are ready to overlook the technicalities, you will probably agree with me when I say that the Internet has in fact been around forever since people have always stayed in touch with each other. Just that recently technology has improved, and Internet has become very efficient in connecting people. A well connected society is potentially a better society. So, the Internet is not entirely an artificial creation or brand new concept, it is very much human and the tendency has always been around though in different forms.

So, agreed that Internet brings societies together like never before. But can it really replace conventional societies or nations ? Well, its just an idea, but potentially, if human beings' existence is tightly integrated with the web, we might choose to govern ourselves from the Internet than from down here. There are of course several ways how you choose to define "tight integration with the web". When I meant tight, I mean really tight. So I like to play around with the following popular idea: implant a microchip inside every person's brain so that they are always connected to the Internet, extending our consciousness to include cyberspace. Such a thing would be the ultimate in social connectivity, and if we are indeed able to achieve this feat one day why not upload our societies and our nations onto the Internet ?

Sun, Solaris, and Open Source

I was at Usenix 2005, the conference about Advanced Computing, Unix systems, system admins and related stuff. There was an interesting session about Sun actually and I must say I am really impressed. Here are some interesting things I heard. In particular, I'll first talk a little about some key technical enhancements in Solaris and then some cool business/open-source related stuff.

First of all, Solaris 10, Sun's latest addition to their flagship Solaris series is really a very impressive product. It is targeted towards the server market and redefines the expected standards for that particular segment. One of the key things to capturing this market segment is to really win over the people who would be maintaining the system - the system administrators; if your system is easily manageable, problems can be easily backtracked to their roots (yes there are lots of problems in large scale server installations) and promptly fixed - the sysads are on your side. The sysads I believe play an important role in purchase decisions, and they are usually geeky people who get easily seduced by robust, cool(thanks to dtrace and friends) features Solaris 10 has.

In Solaris 10, Sun has introduced a facility called Dtrace (Suraj have you been using it ?) which is believe me one of the most interesting developments in recent times in systems software industry. The idea behind Dtrace is pretty straightforward. Large installation systems are complex and are used in very complex and varied production environments. You just cannot backtrack problems in production environment to the actual piece of code that caused it - there could be tens of thousands of dollars cost associated with temporary downtime of your high end servers. Moreover, it is not a good idea to mess up with otherwise stable machines just to debug them - that really ought to be done in the lab. Dtrace solves this problem by embedding a complete infrastructure to seamlessly debug not only the Solaris kernel, but any application running on top of it while it is still running. The idea is that the debugging infrastructure which is based on "probes" is mostly turned off until explicitly enabled and when enabled gives comprehensive fine grained information about the working of the various components of the system. Dtrace provides excellent support to relate the result of these probes to things people actually understand: applications and users.

I would say Dtrace is a big big win when it comes to the novelty in Solaris 10. A highly hyped system, the ZFS file system (Zetabyte file system) is promising but its release has been delayed. Apart from that, the range of architecture support is another welcome change. You can now get Solaris for any of x86, Opteron (x86_64, EM64T, however u want to call it) and Sparc. Moreover, you can now combine 32 bit and 64 bit components in interesting ways. There are a hoard of other cool features you can find here: http://docs.sun.com/app/docs/doc/817-0547/6mgbdbsme?a=view


Technicalaties aside, there is a substantial creative thought that is going into shaping Sun's marketing strategy come Solaris 10. Software industry is witnessing major strategy changes as the open source movement gets stronger and stronger. Something that is free and is something useful, earns a lot of takers. The key aspect of open source that makes it all work is that you only contribute your 2 cents, but you get in return the 2 cents of each of the thousands other contributors for free. In this way, an open source congregation is nothing but community based software development, just that in this case, the community could be pretty big and diverse, and so are the possible benefits.

However, the story doesn't end here, there is the "free" tag after all, so there are bound to be side effects and in this case they are pretty major ones. The open source movement has a strong following among students and hobbists. It is a fundamental truth of student life: give them something for free, and they will make it work. While students and hobbists are not necessarily as competent as industry "experts", don't forget that they form a huge force sheerly based on their numbers. No offence to Ayn Rand, but one thing that history teaches us is that the community is more powerful than the individuals. This large student and hobbist community find their way into the industry sooner or later, where they are directly or indirectly involved in purchase decisions, and more often than not shape the way the industry is headed. Employees are a valuable asset to any organization and it is in the organization's ultimate interest to keep up their productivity. The fact that a majority of their employees prefer Linux to Solaris is a very strong argument for any company management to favor Linux over Solaris in purchases. Additionally, by doing so the company gets a huge reservoir of Linux expertise essentially for free without having to train the staff ground up.

I must say it has dawned upon Sun that just producing good products is not enough, their marketing strategies have to change. One has to embrace and win over the community to help spread the good word around, and to tap on the potential buyers for their product. Embracing the community is the marketing strategy of the future. But it doesn't have to be open source really, Microsoft has done it in its own way; and of course your definition of community can differ. Open source is one easy and proven approach, which I believe has only shown a small glimpse of what it is capable of.

Google Suggest and Privacy

Google recently added 'google suggest' to its ever-growing suite of search related offerings. The idea is to help users benefit from Google's huge database of search queries launched by users worldwide. However, as with some of the other recent additions to Google's services (Google Desktop Search), this once again raises the question of search versus privacy. At first sight, Google Suggest service presents itself as a harmless, cool feature that makes the search experience more rewarding. However, it raises another issue which has been raising its evil head all to often recently.

As I am working routinely in my office, there are daily, countless small and large things for which I have to knock on Google's door, and needless to say, Google makes the search experience only more productive. I wonder how much boost has Google given to productivity worldwide. The point I want to raise is something about Google suggest, which makes me feel insecure on Google now. Let's put it this way. Imagine that you embark upon an idea. The first thing I would do is googleit. Apart from regular information hunting, in my case, this search also tells me if someone has already tried this idea before. Let's say there is a 'method' X, and another one 'Y'; and nobody has ever thought of combining the two together. And here I am looking up "X Y" on Google. And voila! my query is not mine anymore, its Google's! Now my search will be available for the 'benefit' of other Googlers, and who knows how many people will discover that X and Y can be combined to do something cool.

Its not that I get life changing ideas everyday. But there is something much bigger happening here. Firstly, isn't my query completely mine ? If web pages can be protected with copyright laws, I could as well ask for privacy of my queries. I'm here not concerned about the kind of privacy dating-beaureus guarantee you, I'm only concerned about the privacy of my idea, not necessarily its association with me. Its not that Google is doing something wrong. One can say that, its in the nature of search and information retrieval, that, if you try to be helpful beyond an extent, you would end up breaching somebody's privacy. In the case of Google Suggest, the problem is not so severe currently, for example, Google only 'suggests' those search strings which have been tried out a certain number of times before. So if something is popular enough, its not such a private idea after all. However, Google Suggest still gives us a hint of where the search world is headed for in terms of issues that it is going to bring up in not-so-distant future. In coming months/years we are probably going to see more, and possibly more serious forms of this issue.

Google can handle the above mentioned problem in many simple ways, like offering a private-search capability, searches from which are not available to Google Suggest. However, the bigger question of information search versus privacy still remains. Google is continuously redefining large scale information search, constantly breaking new horizons in search technology, and over past several months, I've almost gotten used to expecting pleasant surprises from Google on a regular basis. At this speed of innovation, it is quite conceivable that in the future, there are going to be more clashes between the open search and privacy.

Interestingly, until now, Google doesn't seem to have given any thought to this issue. There was some fuss recently about the danger posed by Google Desktop search to user privacy. However, AFAIK, Google didn't officially say anything about it. It all looks quite straight-forward to them: If you are installing Google Desktop, you gotta know how it can screw you.

There are two directions the search-privacy tussle could take. In one, the search world would solve this problem by coming up with a revolutionary new scheme which will change the very architecture on which search systems work. The other possibility is frightening. What if the concern about privacy suffocates the currently-so-dynamic search industry, driving innovation out of what matters so much to the entire computing industry now - Internet search, mostly redefined by Google. To me, it is evident that one day easy availability of information was destined to clash with privacy issues. However, it took a search engine of google's strength to actually bring up this issue.