The young and the senseless

 

Whatever appreciation I had for the lead actor in TZP greatly diminished when I heard he had refused the best child actor award. He may be a great actor but nevertheless a child actor. It is tough to imagine if it is this 10 year old who really has an ego of a 30 year old or it is his parents making him do such things.Still,for the benefit of doubt I  ignored his tantrums,be it his parents speaking through his mouth or may be it is his childish immaturity. But not for long. Yet again the kid has surpassed himself. Whatever he lacks in age, he makes it up with  his larger than life actions. According to recent reports the  boy who has no doubt been flooded with offers,wants nothing to do with directors or actors who he hasn't heard of in his lifetime of 12 years. So he will not hear anything until the movie has Shah Rukh  or Hrithik or Akshay and of course not to forget a sum of about 1 crore as compensation!!

Now, I am all for talent and recognizing it early, but at this age kids must not try to grow faster and bigger than what their age allows. It is harmful and I wouldn't be surprised if attitude causes the actor in question to burn out too quickly after a few 'big budget' films. With due respects to the neo liberal ideas of child upbringing and pedagogy sometimes the good old smack on the buttocks is what is needed to put astray kids back on line.

He is not the first kid to have tasted success in films. There have been others before him and insisting on big budget films and big money is not what made them fine actors later in their careers.Success has gotten into his head unfortunately  and its known to mess people up in strange ways.

Incentives

 

Marc Andreessen has a good post  on  incentives. Based on Poor Charlie's Almanac, it goes to explain how RSU's and stock options can make a difference to incentives. If an employee gets an option to buy a stock of the company at INR 100 there  is absolutely  no pay off as long as the stock is valued at 100. The employees have a pay off only if the value of the company increases - i.e the options motivate employees to add value to the company. Whereas stock grants, don't motivate employees the same way as options. They employees sure gain more if the stock rises to 200 but are going to make money anyway even if it stays at 100. That surely does not motivate employees well enough to increase firm value.  RSU's in my opinion are just bonuses for past performance. Neither should the employees nor employers perceive it as an incentive future performance.  In the short run employees who receive grants may work harder out of sheer momentum from the pat they received on their backs but that will not last long. Eventually employees just do enough to preserve value.And when that happens for long enough,  especially in an industry like technology, it ultimately hurts the company. When everyone works towards preserving value , its certain that soon this culture will diminish value.

Marc has a blurb on how Microsoft decided to give RSU's as against options which eventually led to the stock being flat since 2000.

Surely, options are better suited at startups where each employee has a clear idea of how his or her actions will impact company value. For larger companies however it is difficult to justify doling out options to lower rung employees. Most of the rank and file employees cannot impact firm value solely on their actions. Stock grants are a better way to compensate employees.However executives and senior management who oversee a business unit should be compensated only in stocks. I hope that is the case with Microsoft, if not then definitely Marc is right.  One should never underestimate the power of incentives and neither should one overestimate the power of bonuses. Bonuses are not incentives.

No switching cost - no monopoly?

Google surely loses no opportunity to drum the message that they are the leading search company primarily because of their genius engineers  solving hard computer science problems.

No doubt this propaganda is great for their hiring engine. Which computer science undergraduate wouldn't want to solve 'hard problems' and get paid a lot doing it while getting fat on the gourmet snacks?.I have to commend them on this marketing stunt. And they promptly justify why they need to continue doing  this for the foreseeable future - because search has practically zero switching costs for the user, therefore Google has to remain significantly better off than competitors if it wants to be the leader in search.The argument is also used to potentially ward off antitrust  allegations. Competition is only a click away. 

 

Recently Google's chief economist Hal Varian tried to explain on his NY times column and a post on the official Google blog on why Google was successful .He talks about  kaizen -  the Japanese product development methodology of continuous improvement. Google's billion queries a month give it ample data to improve the algorithm. Sure all this helps Google  stay ahead and the messaging certainly does help win with antitrust regulators.But why doesn't anyone care to point out that their dominant share in  search is not as easy to out perform as they claim it is - build a better search engine and users will come flocking to you because search is a 1 click switching cost business.No!There is something called Network effect  and Google benefits from many network effects to the extent that breaking their monopoly is not as simple as doing a better search engine. Looks like their internal propaganda got Hal too.

Network effect or demand side economies of scale happens when the product's utility improves as more people use it. Lot of products to name which have benefited from the network effect - the telephone, fax machine, Windows, social networking and search.

Google's network effect? Here is how

A better search engine - more users - better trained algorithm.

A better search engine - more users - more advertisers - more tools and SEO -> more advertisers -> more users because of better targeted ads.

10 years ago when 2 PhD students came up with a great search engine they were at the right place at the right time. Network effects compounded from then on to make them the leader in search.

When demand side economies of scale work in your favour it is good enough to be only marginally better off than the rest of the pack.The 'low switching cost'  actually works in Google's favour here. After all why would the end user switch to another search engine even if it is just 0.05% worse off than Google, when Google is just a click away and the users have all the network effects accruing to them.

 

So is Google's market share solely because it out executes everyone else on sheer engineering brilliance? You got to be kidding yourself. Network effects  of the search economics and the serendipity to hitch a ride on it at the appropriate time have played a bigger role than Google would have you believe.  How do you think Microsoft got what it has with Windows today?

Chance discovery

There are phases when I get immersed by a television show for months and hunt down all episodes and watch them.First it was Curb Your Enthusiasm,then Seinfeld and then The Office and currently Prison Break . Curb has just finished season  6 so I decided to try searching for it on torrents. Before I continue with the next sentence, let me state that I cannot wait to get my hands on a DVD.I am a true fan of Larry David and would support his comedy by buying original stuff whenever I can. I bought first 3 seasons and now am looking for season 6. But until then long live torrents. So while looking for reviews and fan mails I found this site

http://larrydavidfan.com/ 

Finally someone decided to put all things related to the comic genius in one place. The thing I like about his comedy (both Seinfeld and Curb) is the twists he lends to everyday events which make it really funny. The Christ nail or the dropping a Junior mint into the patient in the operating theatre.. His mind is still fertile for 3 more seasons of Curb I hear. Bring it on!!

Race or mother

Sometimes I have to admit that Indians are more liberal when it comes to dealing with race and caste , the latter which is sometimes passionately held and protected by its members. With so many castes/sub-castes and sub sects in India, its a miracle that we live as one country.A certain Australian cricketer  raises a hue and cry about being called a 'monkey'  which he claims is a racist abuse. Aren't we all descendants of that mammal family irrespective of colour?  The irony is that the Australians are pacified when they come to learn that he actually heard it wrong and the actual abuse was a common Hindi expletive  referring to his mother's ---- No, I am not putting blanks because I do not want to offend the readers of the blog by mentioning something profane.It is actually a literal translation. Fill the blanks yourself  Mr   'Abusee'. On of the creative expletives which gives a choice to the receiver of the abuse. Strangely the Australians were relieved that its only a reference to the cricketer's mother and not the entire race. So let there be peace. 

I hear on FM radio that the two protagonists in the incident will soon be  seen together in a television commercial  . Is it going to be an ad for Tata Indicom? Kajol would probably step in and ask Bhajji ,who is getting frustrated yelling the Hindi expletive at the Australian, to throw the existing connection  and get a Tata Indicom connection so that the person at the other can can clearly hear the abuse and be convinced its not racist.   

The right byte

I used to love this nutritious and tasty chocolate bar. Unfortunately it is no longer available in my office cafe..Looks like I need to hunt for it outside. I wonder why I never saw any ads for this one. Its exactly the kind of snack for those people  who warm the seats of many a cubicle and sit in front of a monitor all day

9.99 % and unlimited liability

Anyone who travels by a shuttle to office is audience to the morning shows on FM radio channels. A recent campaign by GE finance is doing rounds and every 10 minutes you get to hear an ad about home loans at 9.99%. Even before I could think this was too good to believe there was something at the end of the ad that made me think.Usually there is guy who says disclaimers like "Mutual funds are subject to market risks..please read offer document carefully" with such speed which makes me think they made him drink litres of water,tied him to a chair and got him to repeat the disclaimer till his bladder burst out. In a similar tone there is guy who tells "A company with unlimited liability" Will someone tell me what the hell unlimited liability is? As far as I know a company especially a financial one doesn't get limited liability if its credentials are shaky so that customers can personally hold the directors responsible if something goes awry..

I need to find out more..The deal of 9.99% looks shady.

Godel and Bollywood

If the mathematician Kurt Godel were to be alive and by some miracle was watching the recent bollywood releases,he would be pleased. Kurt Godel was the first to disprove the whole premise of the rigorous axiomatic systems proposed by the Principia Mathematica. He did this by constructing self referential structures and proved that in any axiomatic system there are theorems which are true but cant be proven.The concept of self reference appears quite frequently in theoretical computer science. Another place where it finds mention , quite strangely is television and media.Both OSO and Khoya Khoya Chand have references to themselves or strictly speaking references to movies with the same name as themselves in the script. The idea can be used effectively to generate some good intelligent humor.The concept has been used before in subtle ways, for example in Seinfeld when Jerry and George try to pitch their show "Jerry" to NBC which is actually a reference to the real show and tells the story of how the show Seinfeld actually came into being. The co creator of the series Larry David , used the same concept to even more comedic effect in the series Curb your enthusiasm where he makes references to a character Larry David loosely based on himself.

The idea blurs reality and fiction and when used in comedy results in some humorous situations. Its good to see Hindi movies using this technique. How about a movie which actually tells the story of how it got made.

Rivals or dinosaurs?

 

 

Here is a  very interesting multi part video featuring Steve Jobs and Bill Gates discussing their vision of the future of computing, Internet and mobility in the All Things Digital conference. Sure these guys were rivals but a question brings up a discussion on whether PCs(both windows and Mac) are bound to go extinct in the next 5 years in favor of pocket devices,cloud computing and other gizmos that allow you communicate,entertain yourself (ok not that you pervert) and be productive. I am glad to see both agreeing on the fact that thick clients are not going to go away.Its a combination of client and cloud computing that are going to deliver compelling services. There is discussion on search,mobile and tablet computing, natural language processing ,education etc. Go see it!

The tug of war between the Congress and Left may have caused political analysts to predict polls and the markets to sway like a yo-yo but there may be one winner.That is the Indian democracy.

 

If this were Pakistan ,the Congress would have arrested the Left leaders and exiled them for a decade

If this were the US, the Congress would have convinced the Left and the public that we are in the brink of a national security crisis.A terrorist attack may anytime cripple the country's power existing supply grid and an alternative nuclear source needs to be developed

If this were the China, ... actually this can never happen in China.

If it was Mexico, a covert deal would be signed with a rich industrialist to start nuclear power generation.The top rulers would get a decent cut and holiday home in Florida

 

Whatever happens in the tussle,I am happy that we have different opinions and views. It may slow down the process but is no excuse for having a unilateral decision making ruling party.