Indian websites haven’t earned my trust

The other day I had to create a user id on an Indian financial news web-site. I wanted to create a portfolio that included mutual funds and Yahoo Finance doesn’t cover Indian mutual funds. The portfolio worked alright, but eventually I decided to keep it on Yahoo Finance after all. That should have been that.

But then I started getting email from that web-site. One email a day about products, investment ideas and news summaries that I had no interest in. I did not opt to get these emails. That was foul number one.



In big business the phrase ‘cost of doing business’ is often employed to justify a cost that is deeply embedded or can’t be justified on an Return on Investment basis. Sometimes it truly is necessary. Often it is just handy management jargon to keep something from being cut by the accountants.

In a startup, on the other hand, the cost of doing business has a very real meaning. It in fact means exactly how it reads – the cost of running the startup. In management speak this is often referred to as the ‘burn rate’. And I am here to tell you, that the cost of doing business for a startup is going down fast.

There are many trends that impact the cost (and ease) of doing business for a startup. The two  that I think are particularly pertinent to the cost of technology are – open source software and usage based pricing. Sometimes both these things get combined.

Let me give you an example. As an ex-head of Sales, I believe in a company acquiring good habits on Sales process early. Ergo, we use a CRM system at Gridstone. When making the choice for a CRM system we never even considered licensed software. If we had, I suspect it would have cost us several thousand dollars per user per annum, for something with the functionality that we need. We probably would have needed outside consultants to implement it adding more to the cost and time to value. Most startups nowadays don’t even consider that option.

The next option, which is very popular today is which is a hosted internet application. The company is very successful and is growing like a weed. Their price for the Enterprise edition – $900 per user per annum. Simple to implement. Good service. Works like a charm.

We were almost going to go with when we heard about this open source CRM software called SugarCRM. SugarCRM is also a company. I think the way their business model works is that they, and outside collaborators, work on the open source version of Sugar, which of course is free to use and comes with the source code for others to tinker with. But SugarCRM the company also develops add-on modules like Sugar-Outlook integration that are not open source and are priced per user per month. Sugar also offers hosting and training services around SugarCRM. If we wanted to take the full hosted solution with add-on modules, we would get an excellent CRM system that matches in functionality for the price per user of $480 per annum.

Now SugarCRM is open source and anyone is free to use it themselves or host it for others for a fee. There are dozens of hosting service providers who will host SugarCRM for you. Some of them even have add-on modules. And you won’t believe the prices. The service provider we finally went with charges us $5 per month. Not $5 per user per month. $5 per month period. For the usage it allows, for us it practically means unlimited users! Plus the price includes hosting for a few other applications as well. It’s a brave new world!

Now technology costs are not the only costs for a startup. All costs related to people, office space aren’t going down. But tech costs are a major component of the costs especially for early stage startups. For two guys in a garage, the quintessential valley startup, their runway is now much longer than it used to be. In the future more  tech companies like Flickr will be going straight from garage to selling the company. It is ironic that this should be happening in an environment where venture capital is so abundantly available.

Directory is History

I’ve been using a desktop search tool called Copernic. It has changed the way I organize my digital world. Copernic and other similar tools like Google desktop make searching for a file on your machine so easy that the concept of folders may well be headed for the rubbish bin of history.

Nitin, our CTO, doesn’t use folders in Outlook anymore. He just lets the emails sit in his inbox until they get archived. Copernic and Google desktop are so much faster than clicking through folders. And the archives are indexed as well. Using folders takes more time and effort to set up and maintain, yet takes longer on retrieval. Seems like Outlook folders are going to get vestigeal pretty quick.

Over the years I have developed (what I thought was) the good habit of filing away files and emails and notes into neat, nested folders. I’d try and have the same directory structure and folder names in Outlook, Windows directory and Evernote, which I use for notes. Old habits die  hard, but I am tempted to chuck it all and trust Copernic.

There is one reason though that makes it hard to abandon all those folders in Windows. If you want to attach a file to an email, Outlook requires you to navigate through folders. If you’ve dumped all files in My Documents with no file structure below that, you’re in trouble. Going the other way, that is to find the file first and then create an email should be doable but it isn’t the way most people work.

I’m hoping the wunderkinds at Google are thinking of a way around this (that does not involve saying ‘use Google mail’). I don’t think Microsoft is up to it. They’ve got bigger problems. Like rolling out Vista before their XP upgrade revenue dries up.

Too much of a good thing

The patent law in the US is one that the country is justifiably proud of. Over decades it has nurtured and rewarded inventors for inventing things that improve the lives of their fellow beings by granting the inventors a limited time monopoly over the uses of their inventions.

But it seems like the pendulum has swung too far to the other side. The range of innovation that is now addressed by patent law is vast and extends to things like business methods. The duration for which the inventor has monopoly rights to exploit his invention keeps going up (now 17 years).

Michael Crichton  (of Jurassic Park fame) recently wrote a piece where he talks about the need to reign in the patent law. In a recent ruling a federal court ruled that an existing patent that simply links elevated homocysteine to vitamin B-12 will stand. Just to be clear, this patent is not about a novel test to check for elevated homocysteine. It is simply the causal link between it and B-12, which is a natural phenomenon in the human body. And the court is allowing the patent on it.

Earlier this week, Netflix sued Blockbuster for patent infringement. The patents are on its business methods of unlimited rentals with no late fees and a ‘range of automated interaction with its customers’. Now I am no friend of Blockbuster and actually think Netflix has reached its dominant position in online DVD rentals through grit and gumption. They deserve every bit of what they have achieved so far. But do they deserve 17 years of untramelled access to the online rental market for some hohum ways of interacting electronically with customers? I don’t think so. An earlier and bigger brouhaha on a similar award of a business method and software patent was Amazon’s 1-click ordering.

These may be one-off exceptions and don’t necessarily prove anything. But if you look at the facts, US patent law (and other IP laws like copyright laws) have become looser, more wide-ranging and give the owner of the patent longer exclusive protection. This, it is claimed, encourages innovation.

But it doesn’t. All innovation is accretive. All creativity is remix. Great inventors stand on the shoulders of inventors before whose inventions allow them to see further. Restricting the use of an ever-widening range of patents for longer reduces innovation because new inventors will not have free access to the inventions. Businesses will spend too much time trying to figure out what to patent or how to side-step others’ patents.

In some industries like healthcare, the upfront time and costs of FDA approval make it hard for the inventor to commercialize a patent quickly. But in most of the world of commerce, 17 years is many lifetimes. The speed of business is faster than at any other time. A shorter period of patent protection should be very doable. Jeff Bezos had some very good suggestions back in 2000 when the 1-click ordering patent controversy broke.

The patent law needs some serious attention from Congress. Otherwise, be prepared to see poorer inventors and richer lawyers.

Technology and Democracy

In the last two weeks much has been said about the actions of Google, Yahoo, Cisco and Microsoft in China that are apparently aiding the Chinese government in repressing dissent. In the congressional hearing Congressmen, playing to the galleries, subjected representatives from the four companies to some pretty intense questioning. When politicians ask questions in a public hearing that is being televised they are more interested in making political statements and less in the companies’ answers to the questions. Rhetorical questions like ‘how can you sleep at night?’ which was one of the questions, can be translated as ‘Voters in my constituency, I am concerned about freedom of speech around the world, an American value that I know is dear to you.’

The American press, in general, has found the companies to be at fault. This is not surprising given that the media is the biggest commercial beneficiary of free speech. You’d expect them to be less balanced about something that threatens their raison d’être.

So are the four technology companies at fault for aiding the Chinese government curtail freedom of speech? I think this is a complex issue that does not lend itself to a snap judgment. What the four tech giants were doing was obeying the law – the Chinese law. Not complying with China’s law, would have harmed their business interests in China and perhaps the well-being of the company’s senior officials in China. It was lawful and pragmatic. Is that so bad?

It could be. A company’s management often faces choices that may be all legal, but are not all equally ethical. Some of those choices may violate the stated values of the company. In a rapidly evolving industry sometimes the laws have not ‘caught up’ with the state of evolution of the industry. In such cases, very often the industry will come up with self-regulatory mechanisms. For instance, in the early days of the e-commerce boom, customer data privacy was a big issue that was first tackled through self-regulatory mechanisms before laws could be enacted. E-mail spam went through the same cycle. In these cases, ‘good’ business behavior emerged before the governing laws were framed. Similarly, some commentators say that American businesses adopted a self-imposed economic boycott of South Africa in the days of the apartheid. This was well before the US government and the UN mandated a boycott.

China, however, is not South Africa. The stakes are much higher. We are talking about a country that will soon become the second largest economy in the world. I can just picture the management of Google on an investor conference call saying that they had decided to pull out of China because complying with Chinese laws on censorship would put them in conflict with one of Google’s values (‘Don’t be evil’?). It would be ugly. Guaranteed.

Then there’s the question – is what they are doing really ‘evil’? If so, how evil? On a scale of 1 to 10 where would you put Yahoo aiding the Chinese government in identifying Falun Gong web-site owners? On that same scale, where would you put the US government asking Google to hand over usage data related to terrorist like activities (I guess they want to know about anyone searching for ‘build a nuclear bomb in your garage’)? How about if the US government asked Google to hand over search phrases and click-stream data on suspected terrorists? To Google’s credit they have staunchly refused to do this. The matter is now in the courts.

Obeying the laws of a country is has binary states. You either do or you don’t. Being ethically or morally right is not binary. There are vast grey areas. And when the stakes are high like they are in China and you are managing a publicly listed company it is not easy to take the high ground.

What could make it a lot easier is if the US government stepped in and made some rules here. Like the Foreign Corrupt Practices Act, maybe there should be a Foreign Abetting Repression Act which prohibits American companies from collaborating with repressive governments. I see serious implementation problems here, but that’s what Congressmen are good at – legislating on complex matters. Such a law would make it a level playing field, so Yahoo wouldn’t have to worry that if they took the high ground in China, Google would eat their lunch. These four companies are great companies and I’m sure that given the chance they would do the right thing.

After all, the softest pillow is a clear conscience.

Infosys getting the attention of class-action lawyers

In another development it seems like my old employer Infosys,
like TCS, has also caught the attention of the class-action trial lawyers. Some
law firm seems to be soliciting interest on the internet from Infosys employees
who, in the past have worked overtime in California and have not been paid
overtime. Interestingly, if you search for ‘Infosys’ on Google, the top-most
sponsored link is from this web-site. Someone obviously thinks this is worth
the trouble.


Interestingly, IBM has a similar overtime class-action
brewing. Many law firms are behind this one, including Lieff Cabraser,
the firm suing TCS. So Infosys is in good company on this one, with IBM.
Unfortunately, that is the only good thing you can say about the situation. A
lawsuit like this, if indeed it materializes, can be expensive, distracting for
management and can damage the company’s reputation.


The claim itself, that the company’s employees were asked to
work overtime without payment, is not going to get more than a shrug, at least
in the Bay Area. Silicon Valley runs on Jolt Cola and other higher forms of
caffeine that allow IT workers to minimize sleep and maximize work. Whether its
IBM, Infosys or the latest start-up, IT workers in general put in more than 8
hours of work a day. Before we start feeling sorry for them, we should remember
that an IT worker is well paid and in-demand. His skills are highly
transferable in a huge global market for IT workers. I don’t believe he needs
the kind of protection a unionized auto worker has (and see what that’s done to
Detroit) – neither in the US, nor in India.


I do hope the Infosys overtime ‘fishing expedition’ fails.
Otherwise, it will be bad news all around – for IT services companies, for
clients and yes, for employees as well.