What can I say?

Domain squatting is now a business ? and that too a web2.0 start up.They seem to post on start up jobs and other web 2.0 portals and design their site like a web 2.0 company.If that O Reilly chap had trademarked on "web 2.0" term when he came up with it first he would have made more money than any web 2.0 company ever made

This time hope they get it right

Anyone who has been through the dot com boom and bust cycle of the early 2000s or was old enough at that time knows that grocery delivery and pet accessories were among the top categories of companies that went bust.Yet a relatively new player has bravely forayed into this space. I have used Ordermonger quite a few times.Their service is good. They immediately call back to confirm your order and it is at your doorstep in within 1 hour. They have since expanded to groceries,flowers,cakes and into other cities after Hyderabad. No doubt they are useful, most web 2.0 start-ups are,but do they make any money? I was curious since online groceries and food delivery business has been beaten to death - many dot.com era companies did something of this kind and struggled to see any profits.Yet ordermonger.com seeks to turn a profit in a historically unprofitable sector.


I tried doing some basic calculations. In Hyderabad they have tie ups with around 40 restaurants and 6 sweet vendors serving around 50 localities. For groceries and flowers however they seem to have a tie up with 1 vendor and serve a lot many localities (around 300).So I thought a reasonable way to guess the orders is to assume a fixed number of orders per restaurant per day for food and sweets and an estimate on the number of orders per locality per day for flowers and groceries for example the revenue per day for restaurants is number of restaurants * number of orders per restaurant * order size * margin% .Similarly for flowers it is number of localities serviced * order size * margin % .One can then get total revenues per day across all categories and all cities.

In other cities they have much lesser presence.Bangalore they seem to have tie ups with around 5-10 restaurants (from what I see on their site) and flower delivery is available in all cities they operate in

I assume margins of 10% for food delivery and 5% for others. I dont have much of an idea though but this seems reasonable. Groceries are not a very high margin business for sure and the assumption of 5% doesn't seem way off limits. The basic calculations are here


Doing some sensitivity analysis yields revenues in the range of INR 4,000,000 - 6,500,000 per annum.The company is started by ex software professionals so the revenues are hardly enough to employ 3 software engineers. Add to this cost of maintaining a fleet of delivery staff which has to be replicated in every city,no scaling advantages here. It is going to be interesting to see how they manage to grow and yet be profitable. The biggest mistake such companies sometimes make is that they think they are a software company (one look at the website confirms that there is at least one employee trying to impress everyone with his or her web development skills) but in reality they are a logistics and operations company.(Dell, anyone?) Having that perspective will help decide the right strategy early on for the fledgling start up.

Hope the newbies take a few lessons from there.Good luck to them

Viva La Vida - Coldplay's new web site

Has anyone noticed the new design on Colplay's website after the launch of Viva La Vida...The site simply rocks.. Nice design and it doesnt play coldplay music automatically when you load the page which is good for opening in office:)

The pages have the latest album covers and other wallpapers as backgrounds. All UI controls -scroll bar, links,buttons are hand drawn.Very neat!!!

The future belongs to us

"Derivatives are the financial weapons of mass destruction" - Warren Buffett

I cannot think of anything else to say on readin this about speculators playing havoc with oil futures and other exotic instruments to cause oil and other commodities prices to rise. See this excerpt from the article.

Last August, the price of oil was $70 (€45) a barrel, in early March it surpassed the $100 (€64) mark, and then the new record high on June 6. What's next?
Ernst Tanner is asking himself the same question, but he is thinking about cocoa, not oil. Tanner is the CEO of Swiss fine chocolate maker Lindt & Sprüngli. He has had to look on as the price of cocoa beans jumped by 40 percent since early 2007, despite abundant supply. "It hardly has anything to do with supply and demand anymore," says Tanner.

Come to think of it,futures and forwards were created to protect producers from the vagaries of price movements and be able to sell their produce at a fixd price thus insulating them from risk.
A far cry from how it is used today by Wall street and hedge funds to speculate prices.

Regardless of whether prices go up or down, speculation results in preposterous exaggerations, with real consequences for the economy.Once again, it is the excesses of modern financial markets that are sending the world economy into convulsions. Indeed, German President Horst Köhler may have been right when he recently said, in an interview with the German magazine Stern, that the financial markets have developed into a "monster" that needs to be tamed.

Is this a new form of imperialism? Cash rich pension funds and other pools of money in the developing countries are finding their ways into commodity futures driving up prices.Inflation affects the poor much more than the rich.

Globalization, a success story for many until now, has stalled. After initially helping hundreds of millions of people escape from poverty, it is now showing its ugly side. As profits grow on one side of the world, hunger is on the rise once again on the other.

It's a completely different story on the computer screens of Wall Street analysts, where commodities are the biggest growth industry of the 21st century. Vast sums of money are being invested in the markets for food commodities and energy

Help!

One of my friends is suffering from a rare form of leukemia.Treatment costs are heavy and he seeks help.
Go to http://helpmishra.blogspot.com/ .
Any ideas on how this can be promoted to seek more donations are welcome(No, don't suggest I spam on orkut!)

Update

Update on the previous post. http://tv.burrp.com/ is quite useful, I no longer have to look for the newspaper to see whats on the tube..May be http://movies.burrp.com or http://events.burrp.com/ will be coming next on this site.Atleast I would love to have the events microsite and an RSS feed for it.

Do you want to discuss this topic?

Anyone who reads blogs and has even the slightest technology orientation will discover in a short while how many web 2.0 companies are starting up each day. Therefore there are websites that track new web2.0 start ups.I think off late even that number is growing out of bounds.I already have 10 of them in my feed reader.

Most of the new start ups have something to do with social networking - new way of intruding into friends' lives,share videos with them, create social profiles,chat with them on IM from your socially powered blog, share music with friends of similar interests, inform them about mind numbing boring activities you did via text messages.. and the list goes on.. How about a site which takes your email and just disconnects you from all your friends on various networks an anti social app where you can make foes and not friends!! Does it sound boring?If yes it is because I am bored of seeing how my friends throw paris hilton at each other or super poke themselves or pimp their pictures..give me a break.Where are the real companies, which help me get things done faster.The last one I know came more than 10 years ago. Yeah OK this here and this one have made life more fun but am hoping for more.

Meanwhile I have added one more 'useful' social web2.0 gadget to this blog. Its called disqus, you can now freak out on my blog's comment section with full blown discussions based on my rants.

Finally..

After months of adding small and barely noticeable features,Orkut the social networking site from Google has finally added  third party Apps,like Facebook. Apps are based on the Open Social platform.I tried iLike - I  couldn't get to add favourite songs or artists and yes if you are in office, be careful before starting the game.For me, it started a loud rock song much to others' surprise. May be I will try later.

In general it is a good development. Orkut is the most popular social networking site in India and for almost a year Indian users of social networking have been deprived of the state of the art in social networking- i.e a Facebook like experience. At some point of time one gets pretty much bored of seeing his/her friends' faces on the profile or their pictures from a vacation.Sometimes you just want to throw a strawberry cake or poke then or smash a bottle of beer on their heads and then tickle them.

And for all those desperate single guys who think Orkut is a dating site just because women put up their profiles,there might be light at the end of the tunnel in the form of a dating app.The much (ab)used scrapbook  pickup line "Wanna be friends?" may see decline in usage. Although given the opinion women have of strange guys on Orkut I am not sure how successful it will be.

The way they have promoted the apps interesting. No friend invites for apps so far.Just a link to announce the Apps with the hope that it will catch the attention of Orkut fans. Overall the apps have a long way to go before they match the  Facebook application platform but a good start  and it was about time.Over the last few months more and more Indians have been experimenting with Facebook, and if left unchecked, there could have been an en mass defection from Orkut. Hopefully the apps will make life in Orkut more interesting and worth sticking around.

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.