March 2010 – 6 am pacific

No Google Voice on iPhone – Competition or Corporate Spite

David Pogue writes about Line2 in the NYT. Line2 is a service that gives you a separate phone number from which you can make calls, receive calls, get voice mail etc. etc. on your iPhone over cellular or WiFi. Everything that my Google Voice does today – with one important exception. Google Voice is not available on the iPhone as an app.

Pogue himself points this out

…Apple rejected the Google Voice app because, as Apple explained to the Federal Communications Commission, it works “by replacing the iPhone’s core mobile telephone functionality and Apple user interface with its own user interface for telephone calls.” That is exactly what Line2 does. Oh well—the Jobs works in mysterious ways.

From out here I can see no rational reason why Apple banned GV from its App Store. In what way does it serve their purpose? If there are any users out there who use Google Voice as their primary number, they are unlikely to be iPhone customers. I would probably have plumped for an iPhone instead of the Android phone I have now.

So you’re losing customers. Maybe not too many, but still, and this is important, you are leaving the door open for a competitor. Android phones are the only real competitor to the iPhone today aside from Blackberry in the US market. Palm Pre is history and Nokia was never a player. Blackberry, by the way, allows the GV app on its platform.

The GV ban can’t be about protecting AT&T either. Why then would they allow Line2?

I don’t think there are any reasons linked to strategy or competition for the GV ban. It is just spite. Apple is now in the “We don’t like Google anymore” phase. And now that you have the patent lawsuits that Apple has filed against
HTC, it’s only going to get worse.

I love both companies’ products. I think a lot of people do. For the most part they don’t compete with each other. It’s a shame that the Android-iPhone fight has to spill over into other things. I wish they’d behave like adults about this.

Why Pre Existing Conditions Must Go

In response to my previous post on healthcare reform, a reader writes in from India

…Why should an insurer agree to insure a pre-existing condition? It does not make sense to expect a business to agree to a proposition wherein it knows it will have to pay out 10x on a premium of x….

Insurance by its very definition is protection against the unknown. If the condition and its medical costs are known why take such a customer on board?

Methinks that the reason insurance premiums went up at your small business is because these guys figured out that they will now have to shell out treatment money for everyone and hence they are trying to do a CYA before overall costs go up.

For medical issues, I think either
– a public run healthcare or
– government rights to a percentage of facilities/medicines at institutions that it then distributes among the needy works best.

If there is no government healthcare in the US, it is only logical that average insurance premiums will go up for everyone if the insurance business is expected to mix humanitarian issues with cold-hearted business decisions.

The humanitarian side is actually the governments job. Making money is the private insurance business’s job. Why mix the two?

The main argument the reader makes is perfectly rational. Why should an insurer take on a pre-existing condition when they know they are going to make a loss on it?

They don’t have to today. And that is why we have over 30 million people uninsured.

My Personal Tale of Healthcare Insurance

I wanted to get this story out before the Sunday vote in the House. If you believe in healthcare reform, call your Congressman. Most of them will have their offices open tomorrow.

Here’s my personal experience with healthcare from this week. Our healthcare insurer Aetna informed the company that our premiums were almost tripling. For a family of four, our premiums would go up from just over $1000 to over $3000. Why?, we asked. That’s just the way it is, they said. We’re going to have to drop our insurance, we said. Yes, they said, we expected that. And that was that. If you are a business with a small payroll, you and your employees are at the mercy of the healthcare insurer.

So, now I have to go out and get insurance for the family. My wife’s employer, also a small business, offers insurance, but I thought I’d go out and see if I could get insurance directly.

I called Anthem Blue Cross. Nice lady at the other end. Took down all the details. Then we came to pre-existing conditions. I said my son had one and described it. She said that she’d have to put me on hold. She was back in less than 10 seconds. Anthem Blue Cross could not offer any insurance at all. Sorry.

I then called Kaiser Permanente. My wife’s employer offers Kaiser and I thought I’d see if I could something directly with them. Kaiser doesn’t decline on the phone, you have to put in an application, which may be declined (it’s more polite, but everyone spends much more time making and reviewing applications). The guy on the phone was helpful. If you get Kaiser at your wife’s company, take it, was his advice.

Now, we have options. Even if we didn’t have my wife’s insurance, we wouldn’t be out on the streets, if something were to happen. But for many Americans (over 30 million of them) there are no options. If they don’t have a job or they have a job that doesn’t offer insurance, and they have a pre-existing condition, they won’t get insurance. Hospitalization in this country can cost $20,000 and up. Which means that they could be just one major illness away from bankruptcy.

Now, about this bill. It’s a very, very long bill. If you really want to understand the issues it tackles, go read Ezra Klein. But basically it boils down to a few things. Health insurers should not be able to deny insurance based upon pre-existing conditions. It also bans recissions (kicking an insured person out) and life time caps (another cute trick to limit payouts). To make this work for insurance companies there has to be an individual mandate (everyone must get insurance).

Six months after the bill is passed, denying insurance based upon pre-existing conditions for children will become illegal. That’s when I’m going to call Anthem Blue Cross again. I can only imagine how many people are waiting with far more desperation for that six month boundary to be crossed.

Here’s where you find out who to call http://www.congress.org/

If you are calling right now, call your Congressman. If you read this blog, and you live in the US, you probably have a nice job and healthcare at work. If I were you, here’s what I would say to his or her aide on the phone:

Congressman (or Congresswoman) I have a nice job and healthcare insurance. I am calling you in spite of the fact that I have nothing to gain if this bill passes. That’s because I feel for those people who do not have insurance today or can’t get it. We cannot be a great country if we let our people sink into misery because we’ve let healthcare become the monster it is today.

Please fix healthcare by voting yes on healthcare reform.

Lehman and Ernst & Young

The repo sleight of hand at Lehman was an atrocious piece of work. For those of you who haven’t been paying attention here’s how it works.

Lehman had a boatload of assets on its balance sheet supported by a thin slice of equity. To hide their huge leverage, they did deals with counterparties which were essentially short-term (like a week or two) loans against collateral (which they had plenty of). Except, that they didn’t show these as debt on the balance sheet against collateral. Instead they showed them as sale of assets so that the balance sheet at the end of the quarter wouldn’t look as leveraged as it was. Terrible, terrible stuff. The accounting magic may not have been at the scale of Enron, but the end result was the same – a once proud company, bankrupted, it’s shareholders left with nothing.

With all the noise around it, it is almost certain that Dick Fuld, the former CEO will be prosecuted. But what I am unable to fathom is why Ernst & Young gets away with it. Enron brought Arthur Andersen down. Of course they did a lot of other bad stuff like trying to shred the evidence. But does that make so much of a difference to E&Y’s culpability? If the shareholders of Lehman bring a class action lawsuit against Ernst & Young, that could be worth billions in damages.

But that doesn’t seem to be the case. If anyone has a better understanding of this, please leave a comment.

Update: I think I found the answer to my question. From the New York Observer:

Indeed, the problem when Lehman invented Repo 105 early last decade was that it couldn’t get an American law firm to sign off on it. It finally got the O.K. from Linklaters, a member of the small group of top British firms called the Magic Circle. So Lehman would send over its Repo 105 assets to England, where its European wing handled them. “These firms clearly shop jurisdictions all the time for the most favorable rule set, and there’s nothing wrong with that,” the second executive said.

Also read Felix Salmon’s post on Wall Street bankers still living on a different planet.

Why are Non-Fiction Books so Boring?

I read a lot of non-fiction. But I seldom finish the book. I find that as the book goes along, the incremental insight gained per chapter keeps reducing, till it is no longer worth my time to keep reading.

For a while I thought that this was my problem. I do know that my reading speed is generally less than my friends. My wife reads at twice the speed that I read, for example.

But that is not the reason. I have compared notes with others who read non-fiction. And most people don’t finish their non-fiction books, especially if they read a lot of non-fiction and there’s another book waiting for them. The problem is widespread, if not universal.

I have a hypothesis for why this is so. Non-fiction books are typically written around a set of concepts, notions, historical perspectives etc. Often these concepts, while original, can be concisely written in the form of an article in a journal or a magazine. Or just a blog post. However, there is no model to monetize that other than the ridiculously low fee the print media industry, itself under threat, might pay you.

If you think that your ideas have power, the only way to monetize it in any substantial way writing about them, is to write a book. A book has certain definitional boundaries. It has to be say a hundred pages or more. The fatter it is, the more justifiable is the price of $20 or $30 or whatever. So you end up writing page after page, chapter after chapter on ideas that don’t really have the legs to go that far. In the process you make a book that can’t hold the reader’s interest till the end.

I am being a little foolhardy in bringing this up right now, when I am writing my maiden book myself. It’ll be a business book, and I can just hear you say, “Well let’s see what your book turns out to be, Basab.” Well, Gaurav and I are hoping it will be packed with insightful goodness and will hold your attention till the end. And now that I’ve put this post out there, it gives us a goal – get the reader to finish the book.

Online Education is Coming, And Fast

An in depth piece in the New York Times magazine looks at an effort to improve teacher quality through training. While this particular initiative may be better than the hundreds of other such initiatives, I find myself wondering if teacher training is indeed that big systemic change that the school education needs. Is it just tinkering with the edges when what we need is seismic shifts?

There are a whole host of problems facing the school education system in the US. Teacher training is just one of them.

The sheer number of teachers required and the low pay almost ensures that the average school teacher will not be anywhere near the best that American colleges turn out. If you think about it, isn’t a school teacher’s job, in whose hands we leave our children’s education, much more valuable to society than a lawyer’s or a banker’s. Unfortunately, society puts a really low price on it.

An Indian Passport and Indianness

M. F. Husain surrenders his Indian passport and takes up Qatari citizenship. As the drama plays out and now peters out in the media an interesting question to ask is what is it that makes one an India.

Now one could write a book on this subject (not me, I’ve already got a gig going but someone, I’m sure) but here’s a short blog post.

Whether you have an Indian passport or not is a terrible way to look at it. From the Husain media circus, it appears that surrendering the passport was really the event that made him unIndian. In spite of his protestations to the contrary, Barkha Dutt (link to NDTV above) seemed to think that was the case. It so happens that India does not permit dual citizenship. The OCI is not the same as citizenship. If like many other countries like the US, India did permit dual citizenship then Husain could have added the Qatari passport and no one would have cared.

I have many friends who live in India but hold a US passport. I think they would consider themselves Indian.

What about residency? Is that a good criterion? But then there are all kinds of Non Resident Indians. Short stays, long stays, those that are waiting for the kids to go to college to return. And then there are those who don’t intend to go back but still feel very connected to India.

I think that its just silly to try to draw these boundaries, and affix labels. Let’s just celebrate a shared culture with great diversity within it and fuzzy boundaries at the edges.

And it is downright hypocritical to celebrate Sunita Williams as one of our own, but decry M F Husain surrendering his passport as abandoning his country.

What I Am Upto

While things keep me occupied on the personal front, I have been refashioning my professional work to fit it. And it’s been going surprisingly well.

First, I have started taking on consulting work. Most of it is strategy and business performance related work and it is quite energizing and interesting. Most of it is of course in the Offshore Services industry where I can bring my experience to bear upon problems that managements are facing as growth levels off in the industry and companies really have to compete for business.

Second, I am writing a book. Some people want to be able to bungee jump before they die. For me it was writing a book. “Regret minimization”, to paraphrase Jeff Bezos.

The book is going to a business book about the Offshore Services industry. Not a history, more of a guide or a how to book on the market side of the business. My co-conspirator on the project is my good friend Gaurav Rastogi. (Check out his recent posts on Afterlife – thoughtful, creative stuff.)

The reason we are writing this book is that we feel that for a $50 B industry there is little out there in terms of a body of knowledge on the Offshore Services industry. Sure, there’s a lot on software engineering and quality, but not on how to run the business itself. We hope to make a contribution to that body of knowledge.

Anyway, details will follow as we make some progress. If anyone is willing to contribute their ideas or just anecdotes, we’re very keen to talk to people outside our circle of acquaintances which naturally is skewed towards Infosys or ex-Infosys people. Any ideas on publishing – in India and in the US – will also help.

Reuse is Like Cutting Consumption in Half

If you are like me you don’t send Fedex packages too often (not yourself, at any rate). I happened to do that a couple of days ago and was quite tickled to see a simple change that Fedex had made to their envelope. You know, the one made out of stiff cardboard which looks like it can stop a bullet if need be to save the two sheets of paper inside.

Well, Fedex is doing its bit to save the planet. What they’ve done is they made the foldover (“lip”?) on the envelope longer and put two strips of adhesive instead of one. The first time you use the lower strip to seal the envelope. The receiving party opens the envelope using the handy “opener” (?) embedded into the fold. After opening it, there still remains one strip of unused adhesive which can be used to send out another fedex package.

I thought it was very ingenious. But the tubelight went off only after I had assiduously used both strips of adhesive to make doubly sure that my super important package was sealed shut!

Photo by hyku