Self-driving Cars in India


The World Economic Forum recently released the results of a global survey about attitudes towards self-driving cars. It turns out that India is the country most open to self-driving cars. Apparently, 85 % of Indian respondents said Likely or Very Likely to the question — “Are you likely to try a self-driving car”? Most of the developed world came in under 60%. The Japanese, at 36%, pretty much gave it a thumbs down. This, from a country that is so wired that 20% of men, aged 25-29 aren’t interested in sex at all  [link]

… otaku men (a Japanese term meaning geek) … find it easier to fall in love with the 2D female characters from anime and manga instead of human women.

Anyone who has been on the road in any Indian city — Metro, Class A, B, C…pretty much any town, city or inter-city highway — and knows a little about how self-driving car technology works will tell you that it is quite impossible to design a machine that can traverse an Indian city on its own. At least not before the Singularity arrives.

So then how do we explain these survey results?

My best guess is that the Indians completely misunderstood the question. You see “self-driving” in Indian English can mean driving yourself. For example:

FRIEND: Isn’t your driver on chhutti (leave)? Who drove you here?
MR: Myself, Mangey Ram.
FRIEND: Abey, I know you are Mangey Ram. Who drove your car?
MR: Self-driving.

Many Indian car owners have drivers (chauffeurs without peaked caps). These car owners rarely drive themselves. In the survey it is quite possible that they understood the question to be “How likely are you to drive your own car?” Many of them probably answered “Yes, but only on weekends”. But that was not one of the options on the multiple choice.

But all Indian car owners don’t have drivers. Unless, the survey was conducted among the Indian delegates at Davos — a village in Switzerland that is the venue for the World Economic Forum’s annual bash where the global elite gather to ski, attend cocktail parties and discuss income inequality. 100% of the Indians who attend the Davos conference are driven by drivers. Guaranteed.

But I digress. If the survey was actually conducted in India and the sample was representative of all car owners in India, a significantly high percentage of respondents must be driving their cars themselves. These respondents must know that a self-driving car on Indian roads will last as long as an ice cube in the Thar desert.

For instance, take the task of making a U-turn on a divided road in just about any Indian metro city. For the Indian driver making a U-turn is not about rules or methods. It is a test of mental strength. He must make a real time assessment of each vehicle in the oncoming traffic — whether they will or won’t crash into you — while slowly inching forward and progressively creating a logjam of madly honking vehicles.

Sometimes an oncoming car may speed up when they see you attempting the U-turn and then deliberately come to a screeching halt right next to your window just to scare you. How do you train a self-driving car to tell the difference between a car that is too fast to stop before hitting you and a car that just accelerated to make you think that it is too fast to stop before hitting you? A self-driving vehicle trained in Pittsburgh will wait all evening to make that U-turn. Until its windows shatter from the blaring horns of the vehicles behind it and it is physically lifted and removed by irate auto-rickshaw wallahs.

For the foreseeable future, self-driving cars in India is a fantasy. But like Hindu mythology, it seems that most Indians are open to the idea, regardless of how absurd it sounds. I’m just waiting for the day when a minister or party functionary claims that Indians were riding self-driving chariots in the Mahabharata.

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Perverse Incentives


Wells Fargo was fined $185 million for fraudulently opening customer accounts [link]. Why? Because bank employees had incentive targets for number of accounts opened.

As many as 5300 employees were involved. So this was widespread and systemic. Management must have known…but I guess everyone was riding high on beating their targets on customer accounts opened. Who was going to stop the gravy train?

As is the customary practice in such cases, the company settled the matter with the government without admitting wrongdoing. This is done to avoid lengthy lawsuits. Obviously, if the government drags management into it, the company will defend itself and take the matter to court. Instead, it is easier to negotiate a sizable fine and move on.

I bank with Wells Fargo. And while I haven’t seen any fraudulent accounts in my name (so far), I do sense that their rules are geared towards opening more accounts. For example, they have (or had) a rule that you must have at least 3 “products” to avoid a monthly fee. I needed a checking account and a debit card, but I never wanted a savings account (have you noticed the interest rates lately?) or a credit card (Groan! Not another piece of plastic!) from them. Because this was just 2 products, I would incur monthly fees, unless I kept a minimum balance with them.

Wells Fargo is not the only bank that puts this kind of pressure on their employees for new accounts. At the other end of the world, in India, ICICI Bank applies the same kind of pressure for targets on its branch managers. Which is why when I tried to close my account with ICICI Bank, a few years ago, I couldn’t. There was always some document missing. And of course there would constantly be these helpful suggestions thrown at me. “Just leave a few hundred rupees in the account. How does it matter?” I guess they hadn’t heard of FBAR.

Same story, everywhere.

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Fair vs Balanced


Paul Krugman is unhappy about the state of journalism in the US. (link)

So I would urge journalists to ask whether they are reporting facts or simply engaging in innuendo, and urge the public to read with a critical eye.

Clearly, some journalists think differently. Chris Wallace of Fox News says that it is not “his job” to call out the candidates in the Presidential Debate if he knows they are lying. (YouTube link 2:40).

Kurtz: What do you do if they make assertions that you know are untrue?

Wallace: That’s not my job. I do not believe it’s my job to be a Truth Squad.

elsewhere in the video (2:17)

Wallace: …I view it as kind of like being a referee at a heavyweight fight…

Also, interesting is how he calls the selection process that selected him as one of the four debate moderators, “fair and balanced”. Quite ironic, actually.

Chris Wallace is being forthright about the Presidential Debate probably because he thinks that moderating the Presidential Debates is not journalism (maybe we should ask comedians to moderate it then. It’ll get larger audiences.). But truth-seeking does not seem to be high on the agenda of any TV News network out there. Or newspaper.

So what’s going on. I think that fundamentally, for-profit news organizations are incentivized to be “balanced” not “fair”.

People want to read or watch news that reinforces their own beliefs. News organizations that want eyeballs and readers are therefore, just mirrors to  society. They dish out what their readers and viewers want to hear. They don’t form opinion – there’s no money in that. They just reflect the opinion of their audiences. They give them what they want. In this respect, they are exactly like consumer marketing companies.

Opinion, nowadays seems to range along a single dimension that goes left and right. You have the people on the far right who are served by news organizations like Fox News. They are all spoken for. On the left you have your liberal newspapers (though liberals aren’t entirely happy with New York Times these days).

And then there are the people in the middle – an amorphous audience of millions. They aren’t spoken for. News organizations aren’t sure which way they lean, on which issue. Or do they just vote for the best candidate?  The safe approach to target this audience is to  not lean one way or another. In other words be “Balanced”.

How does a news organization be “balanced”? Criticize Clinton as often as you dump on Trump. What they may have done to deserve it may be vastly different, but that shouldn’t get in the way of headlines that make it seem like the publication is equally critical of both candidates. Like treating Clinton granting access to raise donations for a non-profit the same way as Trump’s illegal campaign contributions to State Attorneys General. That may not be “fair” reporting, but it is “balanced”. And it is profitable.

Soledad O’Brien says it very well. CNN is the high priest of “balanced” reporting. They may be laughing all the way to the bank. But they are also putting white supremacists on air and legitimizing them.


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Friends, Roman For Your Mother Tongue

Parineeta The other day, I started reading Parineeta, by Sarat Chandra Chattopadhyay, in Hindi. I found the translation to be horrible. I could have downloaded an English translation, that might have been better, I suppose. But really, what I would have loved to do, is to read it in the original Bengali.

I am Bengali on my mother’s side (Odiya on my father’s side). I understand Bengali well enough but can’t read. Wouldn’t it be nice, I thought, if Parineeta was available in the original Bengali, but written in the Roman script – the script used to write English, commonly and mistakenly referred to as “English” script?

For that matter, wouldn’t it be nice if the many of us, who understand an Indian language well but can’t read its script, could easily lay our hands on its literature in the Roman script – the script in which we read every day?

Shoaib Daniyal, argues very convincingly in that Devanagari should give way to Roman, as the de facto script for Hindi. While there is no official sanction for it – and it is unlikely to happen any time soon – on the ground the shift is happening already. While more Hindi is still being read in Devanagari (think Dainik Jagran), more Hindi is definitely being written in Roman (think social media and texting). The tyranny of technology, the QWERTY keyboard and the implacable advance in English medium education in India point to a future with a lot more Roman and much less of Devanagari.

This is of course true not just about Devanagari, but of all Indian scripts. In fact moving all Indian languages en masse to Roman has great advantage. Not only will we make writing in individual Indian languages more accessible to their speakers, we will also make other Indian languages more accessible. I may not ever want to read Kannada literature, but it would be nice to be able to read the road signs in Jayanagar.

Back to Parineeta and making literary classics accessible. If someone has the inclination, here is an idea that would get someone a lot of punya as a non-profit. I hope someone does. I’ll be the first one to buy its product.

There’s a large body of work from Indian language writers like Tagore, Sarat Chandra Chattopadhyay and Premchand that are now public domain. In India copyright ceases to exist 60 years after the death of the author. All these books are now free to translate, transliterate or make derivative works out of.

Your readers will be all the lovers of great literature from a generation in India that placed such a great emphasis on English that it crowded out the possibility to be a fluent reader in one’s mother tongue. Many of them understand, speak, but do not read, or do not read fluently their mother tongue’s script. If they could buy Parineeta in Sarat Chandra’s original Bengali, but written in the Roman script, I think many of them would be willing to plunk down cash. Like me.


You would publish these books on paper as well as on e-readers like the Kindle. Even if I can understand some Bengali, I may still have trouble understanding a work of literature. But with the help of a custom dictionary which allows me to pull up the meaning of a word by just clicking it – much better, no?

It won’t be easy to get to a critical mass of books, but it is quite doable. The first hurdle is going to be to get electronic copies (not scans) of the original works. For writers like Tagore, they are already available online. But for others, it might be necessary to recreate the electronic versions. Project Gutenberg has had much success with solving the same problem with English language books.
Actually, a Project Gutenberg for Indian language classics would be just what the doctor ordered. Unfortunately, Project Gutenberg seems far too busy to take up non-European books at this time.

The next step would be to decide what Romanization standard to use. The Hunterian standard seems to have the blessing of the Government of India for Bibliographies but there are many other competing standards like ITRANS. It should be fairly easy to develop software that converts the Indian script to standardized Roman.

An e-reader like the Kindle would be the perfect device to read on. The book would need a custom dictionary, which the Kindle supports.

Charging a small price for the books, even though they are public domain, would be totally fair and legal. It’s done all the time by book publishers.

In a few years, English will be everywhere. We will all be lamenting how nobody cares about our own languages any more. The way to think about this is to not conflate the language with its script. Once we set the language free, it will get a new lease of life.

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Are There No Good Companies?

Nityanand Jayraman has a piece in which is a damning indictment of Hindustan Unilever’s role in contaminating a thermometer factory site in Kodaikanal with mercury.

The sordid story carries the usual villainy of an evil corporation that puts its commercial interests above the safety of its workers, the community around it and the environment. While this was a while ago, things haven’t changed much. Even today, we see this movie playing out, in company after company, around the world.

Unilever dumped broken thermometers at the site and let the mercury leach into the ground. It did not train its workers adequately in safety procedures. And when confronted with the clean up after the government shut down the factory, it argued for laxer standards and denied wrongdoing. Pretty standard fare for such cases.

What makes the story uglier though, is that this thermometer factory in Kodaikanal was moved from Watertown in New York state in 1980, after the US started cracking down on environmentally hazardous factories. The standards that the US was pushing for made it economically unviable to operate. However, environmental regulations in developing countries like India are either weak or weakly enforced. So Unilever moved the factory and its accompanying hazardous contamination to India.

This is called regulatory arbitrage. It takes a special kind of villainy for a company to do this.

The factory operated from 1980 to 2001, when the Tamil Nadu government shut it down and asked Hindustan Unilever (HUL) to clean up the site. HUL has done some work but is negotiating on the extent of the clean up required, which is what led to this video. The video, by the way, is brilliant – an example of how art can be put to work by activism. Without the video, the reach of this message would be a hundredth of what it is now.

Hindustan Unilever was my first job out of business school. Hindustan Lever or HLL as it was known in those days was the top Consumer Packaged Goods job for business grads in those days. I was proud to be working for them. They had the absolute best management training program in the industry. For 18 months we got the kind of cross-functional training that was the envy of every management graduate. As part of it, we had to spend 4 months in a village in rural Uttar Pradesh and work on a rural development project. HLL had a Rural Development Program that truly helped the villagers in a very backward area of the country. I thought I was working for a company that was not just a well managed company, but also a company that wanted to give back.

Soon the scales fell from my eyes. It wasn’t really managed very well. I was a junior manager and had very little visibility into top management decisions. But even from my vantage point I could see that the company treated its distributors very poorly. Dumping or channel stuffing was so common that the trade often had months of stock – ruining their economics and the stock of tea they carried (I was in Lipton). The top management knew this was happening but couldn’t bring themselves to stop the practice.

At the time, this was befuddling to me. Doesn’t someone at the top have the courage to tell headquarters that we have to reduce stock levels in the channel even if it means a bad quarter? But I was young, and naive. Now, of course, I have a better understanding of these matters. Managers are poor agents for shareholders. Shareholders themselves are poor long-term stewards of public companies. They can sell and get out at any time. But while they hold stock in the company, nobody wants a miss on a quarter.

You can look at management making self-serving short-term decisions that hurt the company in the long-term (while quoting Keynes “…in the long term we are all dead” with a smirk on their faces) and shake your head and say “Such is human nature.” But when they knowingly poison the ground and kill unborn children, it makes your bile rise to your throat.

I worked at HLL from 1989 to 1994. The thermometer factory was in full production at the time. The top executives that interviewed me and confirmed me from a management trainee to a manager – the Chairman of the company and several high-ranking executives – probably knew that mercury was going into the ground in Kodaikanal. It makes me sick, just thinking about it. If you want to be charitable to them, you might choose to think that they didn’t know. They just never went near it, never reviewed its operations, afraid of what they might find. Still, they are guilty of neglect and willful ignorance.

Screen Shot 2015-08-10 at 10.58.14 AM

Today’s Unilever is a very different place. Ironically, the company seems to have bet its future on its Sustainable Living Plan. Many of its brands are positioned primarily on what they do for the planet. The screenshot above is from Unilever’s company website. The blurb under CEO Paul Polman’s picture talks solely about Unilever’s Sustainable Living Plan.

All this is quite creditworthy and I hope they are successful. But they must pay for their past sins. I hope Hindustan Unilever cleans up the site and compensates the victims. It would be the right thing to do and it would be good business too. You can’t be betting the company’s future on Sustainable Living while fighting a PR battle about dumping toxic waste in a third world country.

But what I know will not happen is that no former executive will be held responsible. That just never happens. Pay a fine. Take a temporary hit to earnings. And move on. That’s not real deterrence. But that’s the best we can expect. Whether you are leaching mercury into the ground water or bringing down the world’s financial edifice, you can feel safe that the company you work for has your back.

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IT Services: Which Margin is the Best Margin

How do you assess the profitability of an IT Services business? Some of the performance parameters are the same as any other business in a different industry – Gross Margin, Operating Margin, Net Margin, EBITDA margin or EBIT margin.

But these are generic profitability parameters, uninformed of the structure of the IT Services business.

While not the only one, in most situations, the best profitability parameter to use is Billed Margin or Project Margin. This is the % profit from billed hours – revenue minus the direct cost of these billed hours.

I should quickly add that if you are an investor evaluating a company you should absolutely look at all the generic profitability parameters. You may not have a choice anyway because no public company reports Billed Margin, to my knowledge.

But if you run the company, Billed Margin is a very important way to assess the profitability of your services and accounts.

Billed Margin differs from Gross Margin in a crucial way – Bench Costs. Companies differ in how they compute Gross Margin, but Bench Costs always come before Gross Margin.

Billed Margin boils down the two most important aspects of an IT Service business – Prices and Wages – and the difference between the two. You could say that it captures the net effect of the two markets that the business operates in – the market for its services and the market for talent.

Why is it important that Bench Costs come after Billed Margin? For a couple of reasons.

Bench Costs, in an IT Services company, is the oil that greases the skids. It can help the company staff client projects faster than competition, enter a new account with a skill set that they desperately need, or even enter a new country.

Unfortunately most of the industry has seen Bench Costs as an undifferentiated blob of inefficiency – to be shrunk as much as possible. The same CFOs who hate missing quarterly estimates, treat Bench Costs like the plague. Which is ironic, because a healthy bench can make a huge difference within a quarter.

There is another important way in which Bench Costs can be strategic – in starting new services. Expanding the footprint of new services is essential to maintaining the company’s Billed Margins. For many years Enterprise Solutions played this role.

New services are always going to need creating a pool of resources before you can ramp up revenue from the service. You don’t want to assess the performance of a new service based on Gross Margin, because it is going to be low, even negative for a while. At the same time, you want to make sure that the business that is being built has the right price/wage relationship. Which is why Billed Margin makes sense.

Billed Margins are structurally ‘hard’. Prices and wages are difficult to change. If Billed Margins are going down, that is a sign of long-term decline in the fortunes of the business and must be addressed immediately. Unfortunately, the response to declining Billed Margins, or ‘commoditization’ in the industry has often been to cut Bench Costs, which has made it even harder to arrest the decline.

The truth is that you cannot build a Digital practice without a serious injection into bench costs. Many of these consultants will be onsite. And they will be expensive. You are not going to sell a whole lot of business to a CMO with resources trained in Java in a common bench in India.

My sense is that the big companies in the industry, which are giant lumbering public companies will find the shift very difficult. They will find it very difficult to invest in creating new higher margin services when margins in the core business are declining. Long-term planning can’t rely upon the decline in the rupee. They will have to acquire their way into new services.

The exception to this is of course, Cognizant, which among other things, has used its Bench Costs, and subsequently lower Operating Margins, as a strategic weapon. They are on the right path and have been for a while. That’s the company to beat.

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Of all the global standards that America studiously ignores, I find its date formats the most galling.

I have learnt to deal with pounds, miles and fahrenheit. I came to this country as an adult with an education that relied entirely on the metric system, which is completely useless in the US. Since then, with dogged determination, I have learnt enough to be able to inform someone about my weight, body temperature and the distance I can run before collapsing, in units that he understands. But alas, I will still not be able to tell him what the boiling point of water is, in fahrenheit, without using a calculator.

Volume measures, I just ignore. I don’t have enough space in my “attic”, which gets smaller with age, to store all this information. I think Americans have trouble with them as well, which is why the good folks at Starbucks simplify their sizes to Tall, Grande etc. Wine bottles are perhaps the only significant product that escaped the tyranny of fl.oz. I never forget that it is 750 ml. Which could also be because I see these bottles often.

Date format by country

Back to dates. The US is the only country that follows the middle-endian format for dates. As you can see in the accompanying chart, most of the world (blue) follows dd-mm-yy (little-endian) and a few countries (yellow) follow yyyy-mm-dd (big-endian). The US is the only country on the planet that stubbornly sticks to the mm-dd-yy format.

People have philosophical issues with the middle-endian approach (mm-dd-yy). It is inelegant, non-intuitive and is not in keeping with the best traditions of a Keep-It-Simple-Stupid culture.

But my problem is not a philosophical one. It is a real one. I deal with two date formats on a daily basis. My work involves dealing with people in India and in the US. Sometimes Indians in India. Sometimes with Indians in the US. Some of them are on short trips. Some of them are on long trips. Some of them are settled here. What is the length of stay after which an Indian in the US switches to mm-dd-yy? When someone writes to you in the last week of April, saying lets meet on 05/06, which date are they talking about?

Luckily emailed dates for scheduling meetings are rarely ambiguous because of the context. But there certainly are situations where middle-endianness causes issues.

At my non-profit, I use a SaaS product called TicketTailor – an excellent product at a very reasonable price, by the way. It’s British company, so the dates are all dd-mm-yy. When you download a CSV with all the sales data, it comes down to you in dd-mm-yy. But my spreadsheet software – Numbers (Mac) or Google Spreadsheets – are set to mm-dd-yy. So I end up with a time series with wrong dates. (The solution to this problem is not to change the date format – that doesn’t work. You first have to change the standard language to UK English. Then open the CSV file.)

Let’s talk about hand written dates. Opening a bank account in India requires a dozen or signatures. And every signature must be dated. Every time you write a check you write a date on it. If you live in the US and you are writing a check on your Indian bank (or rather “cheque”) what date format are you using? By the way, what happens to checks that are post dated? I suppose you can’t bank them.

I’ll tell you what I do. I follow my own format – mmm-dd-yyyy. So today’s date is Jun 29, 2015. No ambiguity.

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