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Learning by Proxy | Chips

Potato Chips, known as Crisps in England are thin slices of potatoes that are deep-fried. The earliest known recipe can be found in a book published in 1817 called The Cook’s Oracle by William Kitchiner. 

But that is not what this edition is about.

Technology dominates our life. Also, it plays an important role in everything we do. At the heart of that technology is a computer which we have come to call a Chip. 

The Chip

In 1960 William Shockley took the design of the transistor invented at the Bell Labs and left to Stanford with a business plan. Stanford at the time was giving away land next to the apple orchard to invite tech companies. Two of his proteges Robert Noyce and Michael Moore worked toward miniaturising the transistor. 

The first transistor

A transistor is a bipolar junction. An NPN junction, for example, has two negative poles and one positive pole. The genius of Robert Noyce was to figure out that you could dope (add impurity) silicon and create a Bipolar Junction. So imagine I take a 2 Cm X 2 Cm piece of silicon and cut four windows 1 Cm X 1 Cm each and add impurities in each window; effectively I have four transistors. Mr Noyce and Mr Moore went on to found a company called Integrated Electronics (Intel). They also figured how to make these windows smaller and smaller to squeeze more and more transistors on a chip; making them faster and faster. When a chip manufacturer says 10 nm process, they are referring to the size of the window.

A Silicon Chip

The ability to achieve a smaller window every 2-3 years is what we know today as the Moore’s Law and Andy Grove turned that into a business model.

That was the story of how silicon came to the valley.

The semiconductor business has two sides to it, design and fabrication. Intel was always vertically integrated and handled both sides of the business. But designing is high margin and high cost; whereas fabrication is a high investment and low margin business.

In the 1980s as more and more semiconductor companies were going fabless [not fabricating], Morris Chang, an engineer from Texas Instruments was wooed by Taiwan’s Industrial Technology Research Institute to join them. In 1987 Chang founded Taiwan Semiconductor Manufacturing Corporation (TSMC) as a pure fabrication company. Companies like ARM, Qualcomm, AMD, Nvidia could outsource their fabrication. TSMC would create scale and bring fabrication chops while they could focus on creating intellectual property.

Today TSMC is one of the largest fabricators in the world!

Not just that they have moved their fabrication capabilities forward faster than Intel has been able to. 

At TSMC’s 26th Technical Symposium, TSMC officially confirmed that its 5nm and 6nm processes are already in mass production. In addition, the company also announced that it will release a higher version of the 5nm process next year. Furthermore, TSMC officially confirmed that more advanced 2nm, 3nm, and 4nm is in development.

Source: GizChina

There is a computer in almost every device today. From your cellphone to your car, to even refrigerators and microwave ovens. While this represents the consumer side of things; chips are also essential for defence technologies, space, telecom and several other critical infrastructures without which our cities will come to a halt.

TSMC has a huge fabrication capacity located in China. This leads many to believe that everything is built in China. But…

China will import $300 billion of semiconductors for the third straight year, underscoring how the world’s No. 2 economy remains tied to America despite billions invested in local chip-making know-how.

Source: BloombergQuint

The US has been increasingly hostile towards China and especially Huawei which has helped put 4G across most of the world. Most if not all developed countries have banned the use of Huawei equipment for the 5G rollout. In addition to this, there have also been sanctions from the USA which has restricted businesses from engaging with the company. 

“Unfortunately, in the second round of U.S. sanctions, our chip producers only accepted orders until May 15. Production will close on Sept. 15,” Yu said at a conference August 7th. “This year may be the last generation of Huawei Kirin high-end chips.” Huawei’s upcoming Mate 40 phone, scheduled for release in September, could be the last phone with a Kirin chip.

[…]

It also meant Google was barred from doing business with Huawei, preventing Huawei from being able to obtain an Android license and keeping Google apps off Huawei devices. The order used the International Emergency Economic Powers Act to justify the ban, and reads that “openness must be balanced by the need to protect our country against critical national security threats.”

Source: The Verge

For Huawei, it is a race against time to build an alternative solution. 

The Company that brought Silicon to the valley, Intel is is falling behind when it comes to designing. Last month they announced that their 7nm process is going to be released by 2022. In the meantime, TSMC is racing towards a 3nm process. Intel has always been able to hold themselves in a position of dominance but that dominance has been sliding and now it seems they might be spiralling out of control. The US government has given TSMC Billions to bring production capacity to the US to protect themselves. 

Which brings us to the next generation of telecom. 5G. Huawei is one of the largest suppliers of telecom infrastructure and across China, they have been rolling out 5G infrastructure. Till January they were also rolling out the infrastructure in the UK. The truth is nobody is holding the whole widget!

Huawei has already concluded that it won’t be able to use its chips designed in-house and on Friday Reuters reported that Taiwan-based chip designer MediaTek has requested U.S. permission to supply Huawei with chips once the new export rules go into effect in the middle of next month.

Source: Phone Arena

This battle for silicon is not over yet. Setting up fabrication in the US is one thing. Scaling it to cater to the needs of the US alone, we would be another thing. It may take a decade. 

This could result in 5G deployment being very slow outside of China. It can also result in production struggle for certain if not all, manufacturers while useful capacity lies unused in China. You may have heard of a win-win scenario, this is the classic lose-lose scenario.

The most likely outcome in a Classic Prisoner’s Dilemma.

As if computers in all of your devices and infrastructure was not enough, Elon Musk wants to put it in the human body.

Chip = Computer = Brain

A human brain is an interpretation machine. The human eye does not see colour. It responds to light and sends a set of electrical impulses which the brain interprets as colour. Evolution has meant the brain determined that there are certain colours or sounds that it does not need to interpret. This has resulted in humans having a limited ability to perceive.

Elon Musk wants to expand the scope while at the same time making it possible to use our brains to engage with machines. Creating a Brain-Machine interface. Neuralink, the company he founded showcased its product for the very first time. Our brains are awfully complicated and the human understanding of how it works is laughable.

Musk and Neuralink have plenty of speculation – you’ll be able to stream music directly to your implant and listen to it in your skull, for example – but the only concrete ability we’ve seen is the device interpreting brainwaves as beeps. And that’s something we can do with stick-on sensors right now.

The future could be bright for Neuralink, perhaps one day it’ll live up to its hype. But it’s doubtful whether that’ll happen in Musk’s lifetime. There’s nothing solid to support the idea that a simple implant can suddenly turn the human brain into an OS-accessible database ready for read/write functionality from a classical computer.

Source: The Next Web

In the meantime in India…

Intel engineers in Bengaluru, he says, have worked on its latest Foveros technology, where multiple silicon dies manufactured in different technologies are combined into a single product (Lakefield) using sophisticated interconnect and 3D stacking, redefining Moore’s law from 2D to 3D. The Qualcomm India team is working on world-leading Snapdragon mobile processors combining latest technologies in low power, processing speed, camera functions, AI/ML and a broad variety of interfaces like 5G, GPS and Navic. The AMD team has done a superb job with power optimisation techniques in the 7nm technology for Ryzen-4000 series. Similarly, very high-end work is being done by engineers at ARM, Texas Instruments, NXP, Micron, Xilinx, Western Digital, Mediatek and many other semiconductor giants, he says.

[…]

Indian fabless companies, Gupta says, struggle for funding. A fabless startup in India needs a $3 to $5 million investment and a minimum three-year gestation period. The country, he says, should create an environment to enable this. 

Source: Gadgets Now

Two weeks ago, I had mentioned how the government had announced an Rs. 4.3 Crore competition to encourage microprocessor development in India. 

Self-reliant indeed!

Apple – Energy – Manufacturing

Apple is one of the few companies in the world that has made a firm commitment to renewables. They ensured initially that all of their operations in the USA including their data centres ran of wind or solar power. They have been working hard to ensure that their entire supply chain is now running on renewable power. This is an example of corporate activism to effect change. 

TSMC bought up all the energy from a Danish wind farm because Apple wants to green its supply chain.

TSMC is an Apple supplier, one of 71 so far that have committed, at Apple’s urging, to procure all of their energy from renewable sources by 2030. Greening that supply chain is crucial to the consumer electronics giant’s goal, announced in July, to have a net-zero carbon footprint by 2030. Only about 1% of the company’s emissions—which in 2019 were about equal to those of Sri Lanka—come from its own stores and offices; almost all the rest are from the factories that produce its products.

Source: Quartz

Apple production plants are moving out of China. I am interested to see what this means for the Indian renewable energy market. It would be interesting to watch the energy markets at all the places where Winstrom and Foxconn are setting up sites.

Third World Beneficiaries

One of the greatest beneficiaries of the Trump Rule in America is the third world countries or NOT WESTERN countries. Before Trump whenever shit hit the roof, people from all countries would look towards America and try to immigrate. Now they see America, shake their heads and say let’s fix our own country. 

Disgusted with Lebanon’s corruption and seeing no future at home, he moved years ago to Dubai, where he worked in sales before returning on vacation last month.

But, he said, “When I saw the people, the crowd — not the government, not the police or anything — I’m proud to be Lebanese now, to be honest.”

New improvements had materialized at the gas station over the course of the day. Someone had welded together a metal rack to dispense the plastic rolls. Two tons of fresh vegetables had been distributed.

Sarah Barakat, 21, an architecture student overseeing the vegetables, said that she, too, planned to leave Lebanon for graduate studies.

“But I’m coming back as soon as I finish my master’s,” she said. “Who else is going to rebuild this city?”

Source: New York Times

In India, a lawyer tweeted criticising the former CJI. A case of contempt of court was against him built up. He refused to apologise stating that a false expression of regret “would amount to the contempt of my conscience.” The case started drawing attention and was amounting to a test of the freedom of expression.

Senior advocate Prashant Bhushan, who was found guilty of criminal contempt for two of his tweets, was on Monday let off with a token fine of Re 1 by the Supreme Court.

The bench, comprising Justices Arun Mishra, B R Gavai and Krishna Murari, directed the lawyer to deposit the amount by September 15, failing which he will attract a jail term of three months and debarment from law practice for three years.

Source: Indian Express

While a symbolic sentence, both sides won.

The Acquisition Reality Show

The Indian government announced a few weeks ago that it was going to ban 59 Chinese apps for security reasons. Of all the apps that were banned only one caused a stir – TikTok. Trump heard this during his daily briefing and thought, hmmm, here is a something I can turn into reality TV. What if I issue an order saying a Chinese app, which has content worse than reality TV, had to be sold to a US company within 45 days. Would help my campaign and keep the media occupied! Killing two birds with one stone.

Since then everyone from Microsoft to Oracle to Twitter to Disney and now Walmart is supposed to be bidding to buy. In the meantime, TikTok has sued the US government claiming that forcing it to sell would be unlawful. And then the Chinese government also joined the show!

China’s commerce ministry expanded its technology export controls (pdf, link in Chinese) to include a wide range of new advanced technologies ranging from drone manufacturing to artificial intelligence (AI). Among the new additions to the list, the most eye-catching entry is “data-based personalized information recommendation service”—or the kind of algorithm core to TikTok’s global success. That means its Chinese parent would need to seek government approval before it could reach a deal with foreign buyers, and could be forced to enter protracted discussions with authorities about what parts of the company are covered by the rules. ByteDance has said it will strictly abide by the rules.

Source: Quartz

China has been remarkably restrained, to say the least. Imagine they had been like Trump. They would have probably asked Apple to sell its China business to Xiaomi and get out. Apple would again be a 1 Trillion Dollar company today.

Nobody will acquire TikTok. But this reality show is sure to continue until the elections.

Also

Most of Northern USA will be swamped by the smoke emanating from the Californian forest fires. Maps

The problem is not electric cars, it is battery technology. A battery invented in the 1980s, commercialised by Sony in the 1990s because they had multi-million dollar machines sitting around idle, which could be put to use, to make the first Lithium-Ion batteries. Could a radioactive diamond powered battery offer a solution

Since my childhood, I was told that the Americans are sitting on vast Alaskan oil reserves and they are just waiting for the world to run out of oil. Trump opened up the Alaskan Wilderness to exploration and… Crickets. Nobody is interested.

You have come this far, so I assume you enjoyed reading this. If you are not subscribing but still want to know when Learning by Proxy drops; follow me on Twitter @viveksrn 

Signing off…

Categories
General Thinking

Just Imagine

Just imagine, if you were to go back to 2010, tapping a slab of glass a few times and expecting a cab to appear would have seemed like magic. It is commonplace and normal today.

Just imagine, if you were to go back to 1990, sitting and home and clicking a pointing device and accessing an entire library would have seemed like magic. It was commonplace in 2010.

Just imagine, if you were in 1980s Delhi, going to a grocery store and being able to buy milk would have seemed like magic. It was commonplace by late 1990s.

You don’t need to travel centuries to see how our lives have changed. A few years or a decade can be life-altering. Human ingenuity has meant that we have always kept our heads down and kept moving forward.

What is going to seem like commonplace in 2030? Something that solves a problem in a way that you cannot even fathom in 2020?

The current situation has opened up a broader set of possibilities than previously imaginable. Inertia does not exist; apart from in the stock markets. Things are changing fast to reach another ‘commonplace’. Also, unlike the startups that were founded in 2010; you would not even be needed to bribe your user into changing their behaviour. They are in a place where they are more than willing to.

COVID has exposed the fragilities in our systems. The more optimised, the more fragile. In education, transportation, supply chain, healthcare, real estate, hospitality; opportunities are many; solutions are few. Can you let your imagination run wild? Find a solution that seems like magic.

Now is the time – Just imagine.

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Learning by Proxy

Learning by Proxy | Climate>COVID

COVID has had a huge impact on business in general. Some businesses have been heavily hurt while others not so much. Some are even thriving [healthcare, except in the US]. To me, this just seems like a glimpse of what is to come when the climate goes off the handle. Reminds of a cartoon.

COVID and Business

There has been much said about the hit that several industries have taken in the aftermath of COVID. The numbers are not offering proof and an insight into what has gone on. Businesses that need people to come out; entertainment, travel and hospitality, which apart from being real world are also discretionary expenses, which is a double whammy.

Flying Markets

Just for Context – Bombay Stock Exchange is almost back to its pre-COVID levels.

In stock markets, circuit breakers exist to avoid over steep rise or fall of share price in the stock exchange. When news breaks, often the markets do not wait to assimilate the impact of the news and react immediately. Circuit breakers stop trading in the stock if they are breached and give the market time to consider the impact before resuming. The markets have been so excited that the Bombay Stock Exchange has had to revise the circuit breakers for 647 companies from 5% to 20%.

BSE raised its circuit limits on as many as 647 stocks starting from Friday, including stocks such as Aavas Financiers, Adani Green Energy, Adani Transmission, Delta Corp, Centrum Capital, Eveready Industries and KPIT Technologies.

Source: Economic Times

Also, Dow Jones is back to its pre-COVID highs.

Let us see what the economy is like!

Cinema

I had mentioned in one of the earlier editions how PVR was seeking to tie-up with Swiggy to start delivering pop-corn! It is anticipated that the company would be reporting Zero revenue for the first quarter of 2020-21.

It’s expected to be a very weak quarter for India’s largest multiplex player PVR as theatres have remained shut for the entire Q1 and cinemas are expected to post near-zero revenues. The ET NOW poll estimates revenues to slump nearly 98% to Rs 20 cr and a loss of Rs 230cr for the quarter compared to a profit of Rs 16 cr last year. 

Source: Times Now

Aviation

While the cinemas have been closed completely, airlines have been flying in a spartan manner. International routes are still not open. It had already been reported that flight occupancy was down 95% in India. The revenue is equally down.

InterGlobe Aviation, IndiGo’s parent firm, on Wednesday, posted a net loss at Rs 2,844.3 crore for the quarter ended June 30. It had posted a net profit of Rs 1,203.1 crore in the corresponding quarter last year.

Revenue from operations plunged 91.9 per cent YoY to Rs 766.7 crore during the quarter under review. The operations of airline companies were heavily affected during the quarter due to government orders.

Source: Economic Times

Even internationally sales have been lower, not to the extent that it has been India. Looking at the data from Flightradar24 it is clear the number of flights flown is still 25% below pre-COVID levels.

Source: Flightradar24

Source: Flightradar24

No Flights, No Travel

Moving across the country is not easy right now. People are not travelling much and this also means they are not staying anywhere outside their home. Imagine the condition of a business that helps people book these flights and hotels.

Online travel agent (OTA) MakeMyTrip has recorded a 95.5% annual fall in its revenues in the first quarter of the financial year 2021 due to pandemic and resultant travel restrictions. The company made just $6.4 Mn versus $141.7 Mn in the quarter ended June 30, 2019.

Source: Inc42

Hotels are having a tough time in India. There is a mandate to not cross 33% occupancy by the government. The trouble is that the hotels are nowhere close to coming to 33% occupancy at the moment.

Tata Group backed Indian Hotels Company (IHCL) has posted an 86% drop in its revenue from operations for the quarter ended June 30.

The hospitality chain posted revenue from operations of Rs 144 crore for the quarter under review compared to revenue from operations of Rs 1020 crore for the corresponding period of the last fiscal. IHCL posted losses of Rs 313 crore for the quarter ended June 30, compared to a profit of Rs 5 crore for the same period last year.

Source: Economic Times

Stock markets were trading IHCL up 5% because they claimed to have cut costs down by 51%. The kind of times that we are living in.

Restaurants

Restaurants have been shut but for a long time. Without the delivery volumes, they would probably have been in the same boat as the cinemas. Despite this, restaurants that do not have a strong brand presence don’t seem to be doing too well.

According to the report released Wednesday, these restaurants are among the 83 per cent dine-outs that are currently non-operational. The remaining 43 per cent restaurants that are shut are likely to open as the situation improves.

“Out of the 83 per cent restaurants that are not open for business, 10 per cent restaurants have already shut down permanently… an additional 30 per cent restaurants might not reopen at all. The remaining 43 per cent, which are closed right now, are likely to open as the situation becomes better,” said the report.

The rest of the dining industry is operating at just 8 to 10 per cent of the gross merchandise value (GMV) from earlier levels pre-pandemic levels, it said.

Source: The Print

The idea of taking stock of many parts of the economy in this manner came up because Zomato had released a report card with some interesting insights. They work with many of the restaurants across cities and what they have been seeing is orders coming in from smaller cities. People are moving back to their hometown and bringing their city habits with them!

Real Estate

Real Estate is probably the hardest hit of all. Malls and other commercial buildings have been required to write off their rentals. Sales of property have slowed as the work from home trends seems to be certain to last months if not years. Many have taken to moving back to their hometowns. The bottom is falling out.

Realty firm Prestige Estates Projects has reported a 99 per cent decline in its consolidated net profit at Rs 1.6 crore for the quarter ended June on lower-income amid coronavirus pandemic. Its net profit stood at Rs 115.3 crore in the year-ago period.

Total income fell to Rs 1,296.3 crore in the first quarter of 2020-21 fiscal from Rs 1,567.4 crore in the corresponding period of the previous year, according to a regulatory filing.

Source: Economic Times

DLF, India’s largest real estate company saw its income fall by 65%.

Retail

The USA has seen a string of bankruptcy filings from various retailers with the pandemic exposing gaps in their operations. Amazon had already cut out gaping holes in their businesses. Already 26 Bankruptcies have been filed, you can find the list here.

India is doing no better.

Non-grocery categories have seen their businesses take huge losses and what is even worse is that with the ‘work from home’ trend, the demand is quickly shifting away from many of their products. Suitings companies have been struggling to find any demand for their clothing. Trent which runs Westside, which is not so much in the formal category also took a big hit.

When Trent Ltd announced its March quarter results (Q4FY20) in May, the initial signs of COVID-19 disruptions were visible. After all, stand-alone revenue growth had slowed to 8% in Q4FY20 from around 30% in the previous three quarters.

With the lockdown remaining in place for a good part of the June quarter, Q1FY21 results showed a much more pronounced impact of the pandemic crisis. Revenues fell 87% year-on-year to ₹96 Crore, below analysts’ estimates. The lockdown forced Trent to close its retail stores for a major part of the quarter.

Source: Mint

Healthcare

In India, hospitals have been doing quite well. They have also been using this occasion to scalp the patients and maximise their income. The stories that one gets to hear from anyone who has had the misfortune of having to visit a hospital are grim. Beds that would have normally cost Rs. 7000 a night are now being charged double.

Besides the one-time gain, Apollo Hospitals’ operational performance was strong, with revenue up 17% at ₹2,922 crores, while earnings before interest, tax, depreciation and amortisation (Ebitda) up 36% at 380.1 crores.

Standalone hospital business of the firm showed a 19% increase in revenue, while that from its pharmacy operations was up by a third.

Source: Mint

Climate

A system that moves between highs and lows is said to be showing volatility. The deviation that it shows from the mean is called Amplitude. If the amplitude is too high it can be catastrophic for the system. Every bridge moves a little up and down in the wind. It just cannot go beyond a certain amount, illustrated by the bridge below.

The climate of this planet has been undergoing a similar swing in recent times. The system might break! You would have often heard people say that we are – Killing the planet – No, we are not. The planet is not dying. 

We are.

California has been burning since last week and this has become a regular thing. There was a lightning storm that caused the parched earth to catch fire. The land was so dry, the fire spread incredibly fast. While the elections have been taking the spotlight, America has been suffering one of the worst droughts in history.

As the United States moves into the last weeks of climatological summer, one- third of the country is experiencing at least a moderate level of drought. Much of the West is approaching severe drought, and New England has been unusually dry and hot. An estimated 53 million people are living in drought-affected areas.

Source: NASA

On the other side of the world, rainfall has been at record levels. All the states on the Gangetic plains in India have been submerged. It started with Bangladesh getting flooded. Bangladesh floods every year just like California burns each year, so nobody noticed. After the flooding of Assam and West Bengal, the flooding is making its way to Uttar Pradesh and closing in on Delhi.

Millions have been forced to flee their homes in Bangladesh because of floods triggered by monsoon rains.

The flooding, which has affected almost one-third of the country, shows no sign of abating due to continuous rain.

Most of the country’s 16 rivers have overflowed – and according to local media reports, the torrential downpours have left at least 161 people dead.

Source: Sky News

According to a tweet by the chief minister’s office, posted on 18 August, the floods have affected 838 villages in these districts—which include Ambedkar Nagar, Azamgarh, Deoria, Gorakhpur, Kushinagar, Mau and Sant Kabir Nagar—and of these, 520 are submerged. In previous tweets, the CMO noted that multiple rivers, including the Ghaghara, were flowing at dangerous levels. 

Source: Caravan Magazine

In the meantime, the west coast has also been at the receiving end. Mumbai had to be shut down a couple of weeks ago due to torrential rainfall which left the city submerged. Again, Mumbai is a city is often underwater so people did not bother much, but then…

Seven people were killed in rain-related incidents in Gujarat over the weekend as intense spells caused flooding and water-logging, prompting the government to deploy 13 teams of the National Disaster Response Force in the state, officials said on Monday.

Source: The Wire

Further south, the states of Karnataka, Andhra Pradesh. Tamil Nadu and Kerala have also been receiving huge amounts of rain forcing them to release water from their dams. This causes villages downstream to get flooded since they are inundated with rain already.

Across the Bay, heavy rains are lashing Bangkok which is causing flooding and further scare of an increase.

Provinces in the lower part of the northern region are braced for flooding after downpours have submerged several areas for several days.

Chamnan Chuthing, director of the irrigation project in Phitsanulok, said on Sunday it was diverting water from the Yom River to tributary canals as it expected more water from the river to reach downstream provinces — first in Sukhothai and later Phitsanulok — by Sunday.

Source: Bangkok Post

Meanwhile in China

Water levels at China’s giant Three Gorges Dam on the Yangtze river are inching closer to their maximum after torrential rains raised inflows to a record high, official data showed on Friday.

Source: Reuters

There has been flooding around the dam in China – A video from Al Jazeera

Meanwhile in Africa

After long-running drought slashed their harvests, small-scale farmers in Lupane, western Zimbabwe, decided to switch away from irrigating their fields by flooding them, which wastes huge amounts of water.

Source: Deccan Herald

This is the majestic Victoria Falls, which spans nations.

This is as of December 2019

What do you think, when you think Afghanistan? Mountains, goats, Taliban, American turning another country into a shooting range, cold weather, snow, wonderful spring; but you never think floods. 

When the heavy rains came overnight, setting off flash floods in northern Afghanistan, the deluge quickly turned deadly and caught many residents off guard because they were sleeping.

On Wednesday, a hospital official said the floods had killed nearly 80 people and injured scores of others in Charikar, home to nearly 200,000 people and the capital of Parwan Province, just north of Kabul.

Source: New York Times

Now, this is not news collected from across time. This is all news from the last 3 weeks. As I write this the government of Indonesia has deployed the Army to prevent forest fires as drought peaks. Northern Turkey lost lives due to flash floods. While California is burning, Utah is flooded and Stanton is flooding. In the meantime, people in Californians are watching their homes burn as the fire scorches the land. Meanwhile, 2 hurricanes have made land in Louisiana and will rip through several states. Meanwhile, in Delhi, the Yamuna is at dangerous levels and there is a high likelihood of flooding.

Politicians have a way of confusing weather with climate, it is not the same. This GIF illustrates the difference.

The amplitude is increasing, slowly but surely. When will this system break? More importantly, what will that look like?

And you thought COVID was disruptive.

Assets and Loans

When the lockdown started, the first action that the RBI took was to infuse more liquidity to the lenders to avoid a collapse. The moratorium that was offered to help individual and businesses to tide through this period is about to come to an end on the 31st of August. The most optimistic estimates are that there will be Millions of defaulters. Indian banks have been struggling to reduce their NPAs for the past few years. There seems to be a plan.

The company says that the multi-year empanelment, renewed every five years, will leverage Quikr Realty’s builder relationships across 22 cities and 4800+ brokers in its network to oversee real estate e-auctions. Quikr says that the transaction mandate includes stressed properties worth more than INR 7,000 Cr.

“This is the second stint of empanelment of Quikr Realty by SEBI for valuation & liquidation of Stressed Assets. Quikr Realty’s earlier associations with SEBI included liquidation of Pearls Agrotech Corporation (PACL), Sahara and Unitech assets,” the company says. 

Source: Inc42

I would not surprised if RBI decides to empanel them to liquidate all of the asset-backed loans that go into stress.

Also

I have to thank Salma for sharing this insanely great ad by Mercedes Benz.

The moon waxes and wanes. Have you ever thought about how the earth waxes and wanes on the moon?

Signing off…

Categories
General Thinking

Brave

The times these days require one to be brave. To visit a supermarket nearby; to work outside; to just run an errand; you need to be brave. The pandemic has caused that kind of fear in the hearts and minds of people.

But this blog is not about that. Sometimes you discover something and want to share it; this is about that.

At the beginning of the 1990s, when the Internet was being introduced to consumers, Tim Berners-Lee wanted to create a system through which all content creators who put their creation online would be able to monetise it. He had imagined an internet where every time a hyperlink was clicked, the site to which the user was directed would receive a small micropayment from the user. 

Unfortunately, before he could build something like this, Mozilla was released and it opened up the Pandora’s box. The Internet grew faster than anyone could have imagined and the genie once let out of the bottle could not be put back in.

In truth, if you think about it, it was solely because the internet was a free platform that it grew as quickly as it did. While Tim’s visions would have been great for content creators, it would have drastically slowed down the spread of the internet. Think about it, Google performs 63000 searches per second. Each of those searches leads to a click. Imagine having to pay for each click, even a small amount. It would have slowed the growth of the internet in critical ways.

But, it is this very same attention that the largest internet companies have been able to monetise for their benefit. Google and Facebook have built their entire empire on hogging your attention. The unfortunate consequence of this has been the current situation where the world is so divided. If there is a certain kind of content that can help me hold your attention, I show you more of it. Over time, the reinforcement just turns into your belief. 

Is Narendra Modi good or bad? If you watched a video about all the things he has done wrong and I keep showing you more and more of those – he is all bad. If I show you videos of how he has stood up for your community and keep showing you more and more of those – he is all good. The truth is somewhere in the middle. 

What if this attention could be monetised with your permission, rather than how it is being done today? A way where you chose what you give your attention to rather than deducing the same in sinister ways and forcing your thoughts that way. 

Brave is a new browser that has taken a step towards making that distinction. Brave uses BAT the Basic Attention Token to reward its users for using its browser. They indulge in permission marketing and present notifications for ads you might be interested in seeing. You can further use the crypto tokens to contribute towards sites that you like or would wish to support. You can do this by donating the BAT tokens.

Arguably this does not eliminate Google and Facebook. Nevertheless, I feel it is a step in the right direction. It puts the power back in the hands of the user and allows the monetisation of the same. It is a brave experiment and I hope it succeeds.

Learn more about Brave

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Learning by Proxy

Learning by Proxy | Anger

I was watching the formula one race last weekend; it was a useless procession of cars. That sport has never been as boring as it is not. Despite having a commanding lead and having won by a huge margin, the victor could not even feign happiness for the others. Sports is not about enmity but an adversarial contest. I see this not only in Formula one but also in several other sports. Money has ruined sports!

In the aftermath of the World Trade Center attacks in 2001 as I was waiting at home for my semester to begin I used to endlessly watch CNN. There was an ad that would repeatedly play for the promotion of the 2002 Winter Olympics. I remembered it and wanted to share it with you.

You are my opponent, but not my enemy,

for your resistance gives me strength.

Your will gives me courage.

Your spirit ennobles me.

And, although I aim to defeat you, should I succeed,

I will not humiliate you, instead, I will honour you.

For without you, I am a lesser man.

Watch it here.

It should be true not just in sports, but also politics, business and every other sphere that we engage with one another in.

Where has that spirit gone?

Anger

When a lot of energy is suddenly released in the Earth’s atmosphere, the release of energy causes a shockwave that pushes the air molecules. The shockwave accelerates past sonic speed. As this happens it causes all the water vapour around it to condense, which we see as the mushroom-shaped cloud. It is true not just for nuclear explosions; but for all explosions of high magnitude. 

Most recently, we saw this in Beirut, Lebanon. The explosion became an emblem of governmental incompetence. To compound matters, the people saw the French President Emanuel Macron at the site of the devastation rather than the Lebanese Prime Minister. Lebanon has since been rocked by protests. Anger spewed out onto the streets; the government capitulated. 

The explosion has fueled outrage and protests against top political leaders and led to the resignation of the government Monday. The Cabinet is now in a caretaker capacity.

Parliament is due to discuss whether to extend the state of emergency in Beirut declared August 5 by the government before it resigned. The law requires parliamentary approval if the state of emergency lasts more than a week.

Source: Indian Express

Almost 6500 km south of Beirut, deep in the Indian Ocean, a Japanese vessel, the Wakashio which was en-route to South America, beached up and spilt out. Not crude oil but fuel oil which is the lowest grade of oil. In a place known for its bio-diversity, this has unleashed an environmental disaster. 

These were the two UNESCO Ramsar Protected sites of Blue Bay Marine Park, Pointe D’Esny Mangrove Forests, as well as the nature preserve of Ile aux Aigrettes that contained some of the rarest species in the country, such as Mauritius’ last remaining low lying ebony forests, not found on any other location on the island. 

[…]

Small organisms readily absorb an array of chemicals from spilt Heavy Fuel Oil. Once inside an organism’s tissues, when some of these chemicals interact with ultra-violet (UV) rays of sunlight, energy is released from the chemicals that cause damaging chemical reactions. These reactions lead to tissue death, with very small organisms falling apart. 

[…]

Whilst the entire world hopes for the best recovery of this critical habitat, it is important to start preparing for the worst. This is at least the lesson taught to the entire world from Covid-19, and from Heavy Fuel Oil spills around the world that continue to leak their deadly poison decades later.

Source: Forbes

The article referenced above has some devastating analysis of what the oil spill means for the region and its bio-diversity. But disbelief is fast turning into anger at Mauritius.

Thousands of volunteers pulled all-nighters gathering plastic bottles and skimming oil into barrels, while salons donated hair and children collected straw from fields to help soak up the oil. Mauritians abroad began social media campaigns to raise awareness, and hundreds of thousands of dollars were collected on fund-raising platforms.

[…]

“The reefs protect us from waves, and the seagrass belts and the mangrove play a critical role in absorbing carbon dioxide,” he said. With their roots covered in oil now, he said, “It’s a tragic story, which brings sorrow and anger.”

Source: New York Times

If you are interested in understanding the extent of the damage caused, I would recommend reading the article linked above.


Moving back 8700 Kms north, in the country of Belarus Presidential elections just took place. Belarus has had the same president since 1994. He won again by a landslide – 80% – according to “official results”. The opposition candidate left the country as soon as the results were announced. She vowed to protest peacefully against the results. 

The protests grew and the authorities inspired by the USA – sent the police out. Then inspired by China – over a 1000 protester were detained. This only made the protestors angrier.

Belarusian authorities have released about 1,000 people detained amid demonstrations contesting the results of the presidential election, in an attempt to assuage public anger against a brutal crackdown on peaceful protests.

Source: Tribune

and then…

President Putin is offering help. Sending in the Russian army!


In the neighbourhood, protests have been tearing through Bulgaria. The people, tired of corruption, have been out on the streets seeking a constitutional overhaul. But they want it done right!

Three-times premier Borissov promised to resign if lawmakers approved his call for the election of a grand national assembly tasked with voting on a new constitution that should improve the efficiency of the much-criticised judiciary among other changes.

But protesters, as well as opposition, left- and right-wing parties who support them, dismissed the proposal as a ploy by Borissov, who has dominated Bulgarian politics since 2009, to win time and stay in power.

Source: Reuters

Meanwhile, a place that is known for its cool beaches, drugs and sex – Thailand is seeing large protests. Like most other countries run by right-wing leaders, Thailand has not taken to dissidents too well. They have been putting them down with an iron fist.

At least 10,000 protesters, many first-time participants in political rallies, gathered in Bangkok on Sunday, demanding change in a country where military tanks have tended to shape politics more than the ballot box has.

[…]

A state of emergency instituted because of the coronavirus made the demonstration technically illegal, and every participant could have been arrested simply for showing up. The police stood by, however, some idling behind a Mercedes-Benz showroom.

Source: New York Times

Under normal circumstances, these incidents would not have resulted in such a sudden and intense anger. The current economic circumstances, combined with the fear and uncertainty sowed by a virus that we are struggling to fight has left very little patience in people to suffer foolishness silently. 

America has similarly been roiled in protests over Black Lives Matters for the last few months. Hong Kong over its sovereignty. India over the death of an actor – yes, we roll like that.

The Nuclear Reactor and the Nuclear Bomb are the same things in theory. The former operates in the narrow range of self-sustenance while the other goes far beyond. A societal equivalent would be a protest and a revolution. Will these protests go far beyond self-sustenance?

Epic Battle

A couple of editions ago, I had written about the antitrust hearing against the four large Tech companies in the US. App developers listed on the App Store dislike paying Apple the 30% commission that it takes. Especially, if the app developers are large companies. 

Trying to take advantage of the current situation [the hearings], Epic Games, one of the largest gaming companies in the world played with fire, using their most popular game – Fortnite. To turn the discussion into one of the consumers forced to pay more, Fortnite started offering its ‘V-Bucks’ at a discounted price on the app if the user picked a payment gateway outside the Apple eco-system. A clear violation of Apple policy, which they were aware of. Apple promptly removed the game from the store and Epic Games filed an antitrust case in the court. Google did the same citing the same violation.

Apple will terminate Epic’s inclusion in the Apple Developer Program, a membership that’s necessary to distribute apps on iOS devices or use Apple developer tools, if the company does not “cure your breaches” to the agreement within two weeks, according to a letter from Apple that was shared by Epic. Epic won’t be able to notarize Mac apps either, a process that could make installing Epic’s software more difficult or block it altogether. Apple requires that all apps are notarized before they can be run on newer versions of macOS, even if they’re distributed outside the App Store.

Source: Verge

Apple has decided to go thermonuclear with this one and ensure that Epic is not using this situation to milk more media scrutiny into this. Epic is no saint here. They pay the same 30% to Nintendo and other console makers – which they argue is a fair price. It is just that the income that they get from Apple users is far more. It would heavily buttress their bottom line if Apple is forced to reduce the commission. They are not going to be selling at a discount if Apple were to reduce their fee; they would just put it in their wallet.

In the anti-trust case, Epic Games is arguing that they should be allowed to run their own app store.

Sleight of Hand

When a magician tries to attract your attention towards a hand, you need to watch the other one.

Last year ended with protests disrupting life in Delhi. The government wanted to implement the controversial Citizenship Amendment Act. The protests lasted 101 days till the lockdown came into effect on the 24th March this year. Let alone that fact that nobody seems to be concerned with CAA anymore, 50 of the protestors who were at the Shaheen Bagh joined the BJP this week!

Delhi BJP president Adesh Gupta said over 100 people from the community had joined the party as they support the Prime Minister’s effort to reach out to every section of society and end triple talaq: “These people were influenced by BJP’s effort to reach out to everyone, and not use them as a vote bank. Today’s event shows that Muslims’ faith in the party has increased.”

Source: Indian Express

If Shaheen Bagh was the smokescreen, what was being hidden?

Flying High

I have often cited Swiggy as an example of how financially fraught the idea of scaling a people dependant business can be. Not in my wildest dreams would I have thought that India would be one of the first countries in the world to deploy drone fleets for delivery! 

A couple of years ago, India announced its first drone policy and there is a second version in the works. The first drone policy had something called the Digital Sky Platform which would be able to track every drone in the Indian sky. All drones would need to register on this platform before taking flight.

On August 15, when India celebrated its 74th Independence Day, the country’s drone policy silently took a giant leap. Now, over 70% of India’s landmass of 3.28 Mn sq Km is open for drones to operate. Under the Digital Sky plan, companies can now get single-window clearance for drones which comply with India’s ‘no permission, no take-off’ (NPNT) protocol to operate in areas demarcated as green and yellow zones.

Source: Inc42

As mentioned earlier, for many of the hyperlocal delivery startups which are reeling under the blow that COVID has delivered this is a godsend. They are not wasting a moment. Dunzo was the first one to jump on the bandwagon.

Dunzo, alongside Alternative Global India (AGI), claimed to have started a drone delivery trial last month. After Dunzo, Bengaluru-based B2B e-commerce startup ShopX has now collaborated with aerospace and robotics company Omnipresent, to kickstart its last-mile drone delivery trial from September 1.

Source: Inc42

For a country where according to statistics 19 Million have lost their jobs since April, this does not augur well. Over some time, this will cause further job losses for those who can ill-afford to lose their jobs.

Showing Love

What if someone professed a lot of love for you. Then took away your right to do what you liked and sent you to solitary confinement. Just the right metaphor to describe what we did to Jammu and Kashmir. After professing that the land was an integral part of India; we turned it into a Union Territory and cut off the Internet. Businesses suffered and startups that depended on the internet tried VPN and many other tricks before either moving out of the valley or giving up! Finally, the solitary confinement is over.

“High-speed mobile data services in the districts of Ganderbal (Kashmir) and Udhampur (Jammu) shall be restored forthwith, on a trial basis, while in rest of the districts, the Internet speed shall continue to be restricted to 2G only,” Principal Secretary (Home), Shaleen Kabra, said in an order. “While postpaid SIM cardholders shall be provided access to the Internet, these services shall not be made available on prepaid SIM cards unless verified as per norms applicable for post-paid connections,” the order added.

Source: Indian Express

There is a need to return normalcy to the Kashmir Valley and allow commerce to drive growth. This is the only thing that would cause the locals to strive for its continuity. If we play disruptors ourselves, we are playing right into the hands of the terrorists.

Silicon

A few weeks back, I had written about the investment being made by the US government to bring silicon fabrication back to the US. Given the strategic importance of chips and microprocessors in our electronics; the extent of its penetration in a variety of applications including defence; there is a need to safeguard it. The US is investing several Billion to create this capacity. 

India realises the same and is throwing open a challenge with prize money of USD 600,000.

In an official statement, Prasad said the challenge calls on innovators, startups and students to use microprocessors to develop various technology products. “This initiative is aimed at not only meeting India’s future requirements of strategic and industrial sectors but also has the potential to mitigate the issues of security, licensing, technology obsolescence and most crucially cutting dependency on imports.”

As part of the challenge, which will be conducted over 10 months, the government will offer financial support of INR 4.3 Cr at various stages of development of the hardware prototype. It will also support startups through an incubation programme.

Source: Inc42

A few years ago, I had met a group of Intel engineers who were seeking to start a company fabricating silicon in India. They told me, they would at least need USD 10 Million to get started. I told them to shift to the US, they did.

Also

Inflatable Scooter – It is important to reduce our ecological footprint, would an inflatable scooter be the way?

Speaking of smokescreen earlier, do you know what a real smokescreen looked like?

Slippers made out of Algae

Signing off…

Categories
General Thinking

Two Steps Forward One Step Back

When people write history, they like to smoothen the curve and make it seem like a constant journey from one milestone to the next. But history is, if anything, really messy. It is a process of attempting to move forward while repeatedly falling back only to find your way again. Between 1800 and 1900, many discoveries were made which improved the lives of people substantially. Just before the first world war, the magic of electricity changed the lives of people in unimaginable ways. 

This was followed by 2 World Wars separated by the Great Depression, it was certainly a huge step back. From the ashes of war emerged a stronger world that moved forward in meaningful ways. This led to the improvement of the quality of lives of many across the world. Life expectancy increased, job opportunities multiplied, and access to education improved. At the beginning of the 20th century, we had a little more than 1 Billion people in the world. By the end of the century, we had more than 7 Billion and still managed to create employment for more than 90% of them. For any person living today, no matter which continent, it is normal to feel that the world is taking a step back. 

A pandemic, global climate catastrophe, an unbelievably bad economy and incredibly bad leadership – everywhere! Seems all bad.

It will change.

Even if you were to look at the stock market charts or the share price movement for any company, zoom out! All you would see are mountains – peaks and troughs. This would be true, no matter how successful or unsuccessful a company is. This is the only truth of life.

You take two steps forward and one step back.

As an individual, you need to be able to see your lives through the same prism of this forward and back movement. Unfortunately, in life, much as in the case of history, we are taught to expect life to be a smooth curve upwards. We feel disappointed and let down whenever things do not play out that way. Do not expect a smooth curve; life will take you back and forth. My mother told me, life will keep coming at you like waves. It is this nature that gives life meaning. Otherwise, life would become far too boring. 

What makes this narrative even worse is when you measure life only from one dimension.

Your Narrative

I have myself suffered and watch several entrepreneurs suffer through challenges in life. In the early days, cash tends to be short in supply. If your plans do not pan out the way you had imagined, you can find yourself cash-strapped. In a world where success is measured only by the size of your bank account; it is normal to feel that you have lost everything. Rather than a step back it feels like you have jumped into a bottomless abyss. 

Invariably what I have also noticed is that these individuals grow immensely as people. Their ability to absorb pressure, their ability to analyse practically and the insights that they possess, sharpen a great deal. The world cannot see this or measure it. It is a travesty when the individuals themselves have no realisation of what they are gaining and fixate only on financial success. 

Life is a series of disappointments, hiding moments of contentedness OR life is a joyful, hiding moments of disappointments. It is only a question of how you choose to look at it; it is the same. It is all in your head and a reflection of your mental toughness and outlook toward life. 

When you feel you are taking a step backwards, always remember there is some other facet of yourself where you are taking a step forward. Keep moving!

Categories
Learning by Proxy

Learning by Proxy | Energy

This is one planet and so many things on this planet are shared by all of us. Our environment, the internet and so much more. Should nations take charge of these things individually or should some of them get regulated through a single authority?

Splinternet

After the Second World War, the American government was worried that an attack on the communications infrastructure might render their soldiers on the battlefield unable to communicate. DARPA wanted a decentralised communication network and the mandate was given to a bunch of researchers. They created the internet by connecting three universities by cable. 

Since its origins, the internet has been free and open. Everything was accessible to everyone so long as there was a cable that went there. Then China joined the internet bandwagon. They created a Chinese version of the internet which is highly censored. And companies that were willing to bow to the government for having unhindered access to the Chinese market – almost all Chinese – made it big there.

Now as these companies develop global ambitions and begin to venture beyond China in the current environment (refer to the China edition of Learning by Proxy) the entire world wants to push back. Also, it is perhaps the safest thing to push back on. China cannot retaliate in any way since they never let the other platforms in.

It began when Indian banned 59 Chinese apps to retaliate against border disputes. Now the US is joining the bandwagon.

The US state department announced today that it will expand its “Clean Network” initiative, first rolled out in April, to root out major Chinese tech products from the US system. The department said the move is aimed at guarding US citizens’ privacy and US companies’ sensitive information from “aggressive intrusions by malign actors.”

Source: Quartz

In the name of data security, almost all countries are moving in the direction of restricting or ruling what would be allowed and not allowed. The greater problem is that even when not acting out of nationalistic fervour, the priorities of different nations can be quite different when it comes to privacy and so on. Ben Evans had argued about the same issue in his blog.

These regulatory spheres are probably going to start bumping into each other. GDPR made it clear that rules would increasingly apply no matter where your servers are: if your users are in the EU, you have to obey EU rules, and for practical reasons that probably means you have to obey them for all of your users. CCPA effectively does the same in the USA, where California has increasingly become the national privacy regulator by default. An intriguing further step came from this case, in which an EU court held that Facebook must take down libellous content not just in Austria, where the case began, but globally. Meanwhile, the new Hong Kong security law appears to apply to behaviour by non-HK residents outside HK, which is truly extra-territorial. The obvious next question is what happens when an extraterritorial rule collides with a trade-off. What happens when the UK says you must do something and Germany says you must not?  

Source: Ben Evans

All this is creating a situation where the internet can no longer be the same for everyone in every country. Are there businesses where we need to arrive at a global standard and agree on the same thing? Four years back as the sharing economy was on the rise I had written a blog which is more relevant now than ever before.

The trouble with the law is that it is defined with a set of assumptions in mind. Every once in a while there is a change, a disruption, a paradigm shift, that uproots those set of assumptions completely.

[…]

The time has come when governments across the world begin to think about lawmaking as a service. Imbuing the process with greater speed and efficiency, taking the process online and making the process more participative. The steps should be taken now rather than waiting for a day when the government is disrupted.

Source

I was told at the time by a lawyer that the stability of policy is critical for businesses to thrive and the goalpost cannot keep shifting. Well by the looks of it, whether it is TikTok or numerous other services, the goalposts continue to shift either way. There are certain things that we share as a platform across the globe and we need to address them as a civilisation rather than individual nations. We have done that for space exploration, why not for things within the planet as well?

Energy Momentum

In 1880, it was prize money of 50,000 Francs from the French Government that formed the foundation of the Volta Laboratory. The Volta Bureau setup in 1893 still stands in Washington D.C. It was later renamed after the founder, Alexander Graham Bell, as the Bell Labs. In 1947, two scientists at the Bell Labs created the transistor. Their supervisor, William Shockley not only took credit for it but also was as awarded the Nobel Prize as one of the inventors. He left Bell and took some land and money from Stanford to set up Shockley Semiconductors. Some deceit and a couple of plot twists later in the summer of 1968, the world got Integrated Electronics. We call this company Intel.

In the last issue, I had mentioned Intel is fighting hard to die. The initial rise of Intel was supported by government contracts before they became the preferred supplier to computer manufacturers. It took 30 years for the invention to turn into a well-defined business.

In 2009, the Obama Government created a new body called the Advanced Research Project Agency-Energy (ARPA-E). ARPA-E had the explicit agenda of supporting new energy technologies, renewable energies, new battery technologies, advanced vehicles, power electronics, etc. One of the not so well-known beneficiaries of the ARPA-E support is Tesla, which got a loan of over half a billion dollars and successfully returned it as well. But often, thanks to the republicans, the company that is brought up is Solyndra, which lost half a billion.

Unlike Intel, where the science had been proved before the investors showed up with the cheques. With initiatives that ARPA-E supported, investors went and poured in the money as soon as these companies had received support. This disallowed them the slow incubation which would have allowed the science to become more robust before scale was forced.

Either way, you cannot hide good work.

The initiative forced a lot of thought about renewable energy and many countries, not just America started investing and competing in the area. Manufacturing scales rose, bringing costs down as a result of economies of scale. As competition rose, the costs moved down just as fast.

As a result…

During the first half of 2020, the world’s coal-generated power capacity shrank for the first time since at least the 1950s, according to the non-profit Global Energy Monitor. New plants haven’t entirely stopped coming online: The world added 18.3 GW of new coal-fired generation. But it retired plants capable of generating 21.2 GW, mostly in the US and Europe, cutting about 1% of total global capacity.

Source: Quartz

Currently, the US solar industry employs about 242,000 people and generates tens of billions of dollars of economic value. By the end of September 2019, the US had deployed over 2 million solar PV systems, totalling about 71,300 MW of solar capacity, and generating over 100 TWh of electricity (2019 total, est.). In 2018, solar generated about 1.5% of US electricity. Of all renewable energy generation, solar PV is expected to grow the fastest from now to 2050. Some solar-heavy grids, such as the California Independent System Operator have experienced times where over half of the demand was met by solar PV.

Source: Forbes

But not every country is headed in the same direction.

But we are seeing two energy worlds emerge. In China and India, coal plants still generate lots of jobs and electricity (as well as attract government subsidies). In industrialized countries, coal plants are closing down as the price of electricity from natural gas and renewables undercuts them, and climate regulations take hold. Net coal capacity would have been declining since 2018 without China, estimates Global Energy Monitor.

Source: Quartz

With the larger western countries moving in the direction of renewables, it is highly likely that the economics will soon tip over in favour of renewable energy. This will force India and China move in that direction if not for any other reason, just to save money and attract investments.

With commercial real estate completely out of action due to the shutdowns forced by the pandemic. The electricity consumption patterns are also changing.

The country’s coal imports registered a drop of 29.7 per cent to 48.84 million tonnes (MT) in the April-June period of the ongoing financial year, according to industry data.

[…]

“The weak trend in imports is in line with market expectation, given the continued high stockpile of coal in the system. The plunge in thermal power sector’s PLF (plant load factor) in the past couple of months and the sharp decline in cement output do not augur well for import demand in the coming month,” mjunction MD and CEO Vinaya Varma said.

Source: Business Standard

Solar is also finding new spaces in countries like India.

But one of the main challenges in building solar farms is finding the right place to do it. The land is relatively expensive in India and often has multiple owners, so the purchase of land involves many formalities. India’s high population density also puts pressure on the land, with an average of 464 people per square kilometre. Rooftop solar panels are one solution, but sunny space atop buildings is limited too.

In Gujarat, the answer has been to cover its canals with solar panels, as a solution that saves land, water and carbon emissions in one.

Source: BBC

While this is the state of electricity production, oil has taken a beating in the past few months. Some of the largest oil companies are looking toward renewables.

BP reported a $16.8 billion quarterly loss on Tuesday and cut its dividend in half — the first reduction since the Deepwater Horizon disaster a decade ago.

[…]

Mr Looney, though, was more specific in his investment goals, saying that he intended for BP in a decade to be investing around $5 billion a year in renewable energy like wind, solar and hydrogen, a clean-burning gas, about 10 times the current amount. BP’s capital spending is likely to be about $12 billion this year.

Source: New York Times

Even Shell is applying for tenders across Europe for renewable energy plants. Oil companies are some of the wealthiest and largest organisations on the planet. If they start moving towards renewable energy what hope does the coal syndicate have? Further, imagine the degree to which the cost of setting up renewables will fall if the scale increases.

2020 has been a year of enlightenment for oil companies. They have seen how swiftly things can change for them. With the rising demand for EV and the coalition against climate change, the writing is on the wall. They are reacting before they have no time left to.

World oil demand will tumble by 9.06 million barrels per day (bpd) this year, the Organization of the Petroleum Exporting Countries said in a monthly report, more than the 8.95 million bpd decline expected a month ago.

Source: Reuters

Having said that

Despite the steep fall in earnings, to $6.6 billion from $24.7 billion, the company said it would continue paying a quarterly dividend of $18.75 billion, almost three times its cash flow. Aramco is locked into paying such a large amount — $75 billion a year — because of commitments made in the run-up to its initial public offering on the Saudi Tadawul stock exchange.

Source: New York Times

With the decline of traditional energy businesses, all the new age carbon sequestration businesses are taking a hit. Almost all of these businesses had a model that involved making pollution generators pay for their sins. With the sin on decline…

The $1 billion systems, known as Petra Nova, was built in 2017 to catch CO2 from one unit of a coal plant near Houston. That plant is one of the dirtiest in Texas, both in terms of climate and air quality impacts, according to a Rice University study. Petra Nova was meant to cut the unit’s carbon footprint by about a third—roughly the equivalent of taking 300,000 cars off the road each year.

But on July 28, E&E News broke the story that the facility has been shuttered since May. And while the plant’s owners have said they plan to get it running again once the economy improves, Petra Nova’s shutdown exposes the weird market dynamics that could threaten the sustainability of carbon capture facilities in progress around the world.

Source: Quartz

Panic Buying

When the pandemic started in March, there were stories about how retailers were running out of stuff in their stores. There was a toilet paper emergency! The lockdowns came into place so suddenly, people did not know how to react. Amazon recorded greater sales last quarter than they did during last Christmas!

That means Amazon outdid the $87.4 billion in sales it recorded during the holidays last year when demand typically peaks before levelling out again. On the company’s earnings call yesterday, CFO Brian Olsavsky said it was “unheard of” to surpass those sales at this time of year—and then added that next quarter is also on track to surpass that level.

Source: Quartz

I think two things are happening. Jeff Bezos’ defence of Amazon being a small player because they don’t own 100% of retail is coming apart. With the pandemic, people are preferring to buy online rather than go to stores. Amazon has used every trick in the book to kill every other e-commerce competitor. There is no other legitimate competitor left!

The not so well to do in America have been receiving a $600 cheque. In many cases, I think this amount supersedes their normal income. More money in hand has meant more spending power, which in turn has implied greater sales for Amazon. Those cheques stopped on 1st August.

Now that retail is dying…

The e-commerce juggernaut has been in talks with Simon Property Group, the largest mall owner in the US, about turning some of the spaces occupied by its anchor department stores into distribution centres, according to the Wall Street Journal. The talks have focused on spaces held by JC Penney, which filed for bankruptcy in May, and Sears, which has struggled since its 2018 bankruptcy filing.

Source: Quartz

In this case, Amazon seems to be panic buying warehousing!

Shoot yourself in the foot and saw your hand off

The year that the USA decided to shove itself down the path of reducing their influence globally by electing Trump and turning itself into a joke, the UK decided to leave the European Union. 3 Prime Ministers and a lot of dilly-dallying later the Brexit will be complete on the 31st December 2020. The fact that the pandemic struck the same year is a little more than inconvenient. Britain was supposed to be in economic shambles without a deal with the EU as it is. Now they are in a recession.

The economy shrank 20.4% compared with the first three months of the year.

Household spending plunged as shops were ordered to close, while factory and construction output also fell.

Source: BBC

I am sure they are not looking forward to the new year!

Moving Away

A couple of weeks ago when I had written about China, I had mentioned about the China Vs Rest of the World dynamic that is developing. The one lessons most countries have learnt is that they never want to create an economic situation where they have all their eggs in one basket. In no other arena can be it be more obviously seen as in the case of manufacturing. Under pressure is Foxconn, a Taiwanese company which is responsible for a massive amount of electronics manufacturing. The chairman of the companies said China’s days are over.

“No matter if it’s India, Southeast Asia or the Americas, there will be a manufacturing ecosystem in each,” Liu said, adding that while China will still play a key role in Foxconn’s manufacturing empire, the country’s “days as the world’s factory are done.”

Source: Bloomberg

Launchers

I have harboured a deep fascination for space since I was a child. With the rise of private space startups, I was fascinated at the opportunities that it opens up. At the same time, I was quite dismayed to find the Indian space ecosystem to be filled with pocket satellite makers. I heard about Skyroot a couple of years ago and upon reading about them made it a point to meet Pavan, the Founder & CEO, when I visited Hyderabad. A group of scientists who had quit their jobs at ISRO and decided to create India’s first private space launch startup.

Pavan was very agreeable and I spent a good hour speaking to him. They had found initial support from Mukesh Bansal of Myntra and Cult fame. I was thrilled to read that they completed their first test firing.

Indian aerospace startup Skyroot Aerospace successfully test-fired an upper-stage rocket engine, which is the third and fourth stage of a traditional multi-stage rocket, fired at high altitude and designed to operate with little or no atmospheric pressure. Skyroot has thus become the first Indian private company to demonstrate the capability of building an indigenous rocket engine. 

Source: Inc42

I suppose their cause was helped in a major way with the support that was announced for Private Space Companies as a part of the “Stimulus” package. They moved out of a legal grey area and this would have helped them a great deal.

I am thrilled, this will be the first space launch startup from India and I can’t wait to hear Elon Musk begin to weep and whine about it. Why? They will be way cheaper than SpaceX.

Nine Lives

They say a cat has nine lives. Looks like Kodak is a cat. Kodak is a company that is immediately associated with photography. The one thing that traditional photography involves a lot of is chemicals. Do you know another thing that has a lot of chemicals in it – Drugs. So Kodak is pivoting to become a pharmaceutical company. Also, because they got money for nothin’.

Last week, the US federal government announced a first-of-its-kind loan to Eastman Kodak, a US-based company once known for its leadership in the film photography industry. Kodak will be using the $765 million to begin producing components for generic drugs—specifically, active pharmaceutical ingredients (APIs), the chemicals that make a drug work.

Source: Quartz

Their share price jumped 15X before cooling off! And somehow the company got into trouble even before the loan came in – for?

Kodak’s manufacturing may be on hold, however, until the US Securities and Exchange Commission completes an investigation regarding the disclosure of the federal loan. Kodak offered its chief executive 2 million stock options on July 27—the same day it leaked details of the loan to reporters. The subsequent news reports and the official announcement, which Kodak made public on July 28, caused share prices to skyrocket.

Source: Quartz

Human greed!

Signing off…

Categories
General Thinking

Reimagine

In the year 1940, Alcoa came with the portmanteau by blending the terms Imagination and Engineering to create the term Imagineering. Disney took up the term in 1962 and called its Research and Development wing – Walt Disney Imagineering. The idea was to imagine something that did not exist and then to turn it into reality.

We are having the greatest Imagineering opportunity of the century with the difficulties that the current situation has unleashed.

In 2008, we last saw a recession that wiped out many businesses. It was an opportunity to Imagineer. Companies like Airbnb were founded at the time re-imagining the way travel and vacations were organised. For many, it was another way to look at the business and it was also a way for many to get involved. The tailwinds of those changes brought about Blockchain. Slowly but surely blockchain is in the process of changing the way many industries function. In certain cases, it is even transforming governance. 

In 2020, we have been offered an unprecedented opportunity to re-imagine. The number of industries that seem to have one foot in the grave is not small. Real Estate, Fashion, Travel, Tourism, Aviation, Restaurants, Weddings, Education (Infrastructure), Gyms and others are facing existential challenges. I have probably left out several others that are suffering to no ends due to the pandemic. 

In each of these industries, there is an opportunity to reimagine a new future. Not necessarily one where one uses the internet to create a virtual paradigm but one where we could dream of new ways to do things that are completely unlike the old. As Airbnb did, instead of hotels, they got people to stay at other people’s homes. It is far more environmentally friendly, affordable and has the potential to offer a better experience than a standard hotel.

It is time again to think what the future would need and how that future must be enabled. How to make things possible for the people and industry in a way that enhances possibilities and while creating opportunities for many. At the end is that not what startups do and excel at? 

What kind of world do we imagine for ourselves? What possibilities have we ignored simply because it sounded strange in the world that we lived in? Now is the time to roll out all of those business models and test them out in the market. You never know, you may just find a gem or the next major revolution.

Never in the history of this world has the world been so willing to change and at the same time had the wherewithal to affect it in a very short time. What change are you going to bring to the market?

As I had mentioned in my previous blog, whatever you plan to do, do it soon. The change will come like a tsunami and before you realise the opportunity would have vanished.

Categories
Learning by Proxy

Learning by Proxy | Antitrust – Travel – Economy

Whenever the stock markets have reached historic peaks only one thing has followed – a humongous collapse. Most markets across the world are either past or flirting with historic highs. When will the bottom fall out? 

It is a little more complicated. Apple posted a record quarter, that too in the middle of the pandemic. Amazon is posting sales numbers that would be considered “too good” for Christmas.

I think it is panic buying and the demand caused by work from home. Christmas this year won’t be like Christmas.

When will the bottom fall out? My bet is January 2021, when do you think it will be?

There is a lot of ground to cover this week, let us dive in.

Antitrust

Two years ago, Scott Galloway wrote a book called ‘The Four’; which breaks down the extent to which Google, Facebook, Amazon and Apple had taken over our lives. If you are not into reading watch this video – 90 slides in 15 mins – from the DLD Conference. 

The four companies together are today worth about 4.25 Trillion or about 1.5 times the GDP of India. Being in that position of power is bound to result in some abuse. Acquisitions are their favourite weapon and Shares are their preferred ammunition; issue as many as it takes to absorb the nearest innovator. 

The CEOs were called in to appear before the congress. It did not go too well. Some of the evidence presented was damaging.

“If someone came to me with an idea for a website or a web service today, I would tell them to run. Run as far away from the web as possible,” said Celebrity Net Worth founder Brian Warner about Google, which he accused of scraping his information and presenting it as its own. “Launch a lawn care business or a dog-grooming business—something Google can’t take away as soon as he or she is thriving.”

[…]

Mark Zuckerberg had expressed an interest in buying the photo-sharing app. “Will he go into destroy mode if I say no?” Systrom asked. Cohler replied: “Probably.” This chat is one of several exchanges that shed light on the lead-up to Facebook’s $1 billion purchase of Instagram in April 2012.

Source: Wired

And

Google’s promotion of its own content on its search results, or how the price of a box of diapers changed after Amazon acquired the parent company of Diapers.com—but the true target was lack of accountability as an operating principle of these companies. And that has a particular bite during a period of global crisis, during which their digital tools have helped us endure trying circumstances while simultaneously promoting the kind of isolation and misunderstanding that can make emerging from them even harder.

Source: Wired

Not like Apple was faultless. While Apple is not in the data business, they do make app developers bend to their will on the app store and charge them 30% commission to sell on the app store. If you do not agree, you have to get the user to go to your website get an account and pay before coming back to use the app. The trouble is not even that; it is that Apple will not allow you to explain why it is such a pain to use the app as mentioned beautifully by John Gruber.

This was just round one and it is not over. I think the four of them would be mighty relieved that Elizabeth Warren is not the Democratic candidate or even being considered for VP. If this could happen with Republicans in power imagine if a Democrat is elected! 

Wednesday’s hearing was a major milestone for the House’s investigation, but far from the finale. Given the chaotic nature of the four-way hearing, it would be great to see separate one-on-one hearings with each CEO. But that’s unlikely. The next step is most likely the subcommittee’s final report, due out sometime in August or September. Wednesday’s hearing made clear that the report will have some real substance to it. Whether it will fire up the American public—or spur real governmental action—remains to be seen.

Source: Wired

Also, in case you are interested, you can go through all of the evidence that was submitted as part of the hearing at this link.

In the meantime, Facebook would like you to think that they are small fish.

Sure, Facebook is a big deal in social media, this thinking goes, but what about videoconferencing, telephones, birthday cards, backyard barbecues, kickball leagues, and friends who insist on playing matchmaker? They all connect people, too, and if you add up all that activity, surely Facebook makes up a more reasonable share of the market.

Source: Quartz

Also, Facebook has so many large competitors in oil and gas, banking, e-commerce, space travel and even tax collection – those fools call themselves the government. 

Travel no more

Travel is one of the largest industries that creates a lot of employment throughout the world. When you travel to a new city, you create jobs in transportation (airline, railways, bus, cabs), transportation infrastructure (airports, stations), hotels, restaurants (you may not Swiggy or Doordash in a new city), Museums, Guides, Tours, Souvenir shops. 

Tourism alone employs 100s of Millions globally, but if you were to include retail which is a certain beneficiary, probably a Billion jobs are at stake. And they are hurting…

India’s international borders have remained closed since March 22, while domestic travel has been limited since March 25 when the country went into a nationwide lockdown. 

[…]

“The sharp drop in the number of tourists and foreign visitors have already impacted millions of jobs in the hospitality and travel industry as many businesses are going through a severe cash crunch,” said Sudeep Kumar Sen, a spokesperson at HR firm TeamLease Services. “More than 50,000 tour operators have shut shop as there is no hope of revival anytime soon.”

Source: Quartz

When you think of large tourism markets, Africa is not the Continent that first comes to mind. But tourism is a massive employer in Africa and the industry has collapsed.

When the Covid-19 pandemic changed the world earlier this year many African countries were quick to react. Borders were closed and protocols from past or existing epidemics (TB, HIV, Ebola) were rolled out. Of the many industries hit by lockdowns, tourism—an industry that indirectly employs 24.6 million people across the continent (6.8% of total employment)—was hit particularly hard.

Source: Quartz

and nobody is being spared

Aside from obviously tourist-dependent businesses such as hotels, a number of retailers are feeling the effects. Among them are high-street fashion chains, luxury boutiques, watch and jewellery shops, and department stores such as France’s Printemps and Selfridges in the UK, says Vinod Paul, Planet’s head of business and market intelligence.

Source: Quartz

Also, there is no end in sight.

Keep Trying

If you keep trying to do something, you will eventually be successful.

Indian businesses were so resilient that a shock and awe demonetisation did not kill them. The introduction of GST was a source of pain for a lot of small businesses that were previously not on the tax regime. Even worse, making businesses operate with improper data. Last year, the government was still claiming that the GDP was growing at 6.7% only to revise it closer to 3% once the pandemic started. COVID did what all of these could not – went for the jugular. 

Hit by a stringent lockdown, 57% of micro-enterprises have zero cash reserves and 65% will have to turn to their personal savings for operational cost, the report further stated. Also, around two-thirds of them have reported a fall in orders, the report said. 

[…]

It’s clear that merely supporting MSMEs through an indirect route like the infusion of credit and equity isn’t enough. The Indian government needs to realise this if it wants to pull small and medium-sized businesses out of a deep and prolonged mess.

Source: Quartz

When the GST bill was signed into law, to push it through, the centre agreed to provide a 14% tax growth year over year for the first 5 years. It must have been a tightrope act already given that the GDP growth was not in line with what was being told. Given the current circumstances, the government is also broke! The centre has been falling behind on compensating the states and now the centre is throwing them under the bus. 

The impact of the virus and lockdown on the economy can be clearly seen in the GST collections, with the first-quarter revenues down 41 per cent over last year, despite signs of an improvement in June, when the lockdown was eased. This has impacted the Centre’s revenues as well as GST transfers to the States, which have fallen below the mandated 14 per cent annual growth rate as promised under the GST law for five years

Source: Business Line

The centre transferred the GST owed in March ’20 to the states in July. The states are already 4 months behind and are struggling to make payrolls. The attorney general has opined that there is no obligation under the law. The states have been asked to try and borrow from the markets.

Twitter 

I had argued a couple of weeks ago that no company should have the power to start a world war. Twitter does. 

Trump spews all kinds of nonsense on all platforms but it is from twitter that it is reported. Turns out that the hack that was run on twitter was the handiwork of teenagers who registered the Bitcoin wallet to their own name! This was not sophisticated sovereign hackers.

A 17-year-old, Graham Ivan Clark, was charged separately with 30 felonies in Hillsborough County, Florida, including 17 counts of communications fraud. Together, the criminal complaints filed in the cases offer a detailed portrait of the day everything went haywire—and how poorly the alleged attackers covered their tracks. All three are currently in custody.

Source: Wired

Guess what might have been possible if it was the Russians or the Chinese who were running the hack. Or perhaps a White Supremacist? Oh! 

On that note

Duke’s account “has been permanently suspended for Twitter Rules on hateful conduct,” a Twitter spokesperson said in a statement. Twitter’s policy, revised in March, prohibits posts that promote violence or threats of violence against people based on their religion, race or ethnic origin.

Source: CNET

Also, when the advertisers had started withdrawing ads from Facebook, Mark Zuckerberg had scoffed. Many outlets had reported that those brand spent only $10 Million a month. I had argued that 8 brands spending 10 Million a month would mean a Billion dollar hole in the topline.

Facebook and Twitter on Wednesday took extraordinary action against President Trump for spreading coronavirus misinformation after his official and campaign accounts broke their rules, respectively.

Facebook removed from Trump’s official account the post of a video clip from a Fox News interview in which he said children are “almost immune” from Covid-19. Twitter required his Team Trump campaign account to delete a tweet with the same video, blocking it from tweeting in the interim.

Source: Washington Post

Facebook is, after all, a company and capable of growing a conscience when kicked where it hurts.

Cross-Industry

Do you know a position that almost every company has?

Think.

Accountant.

There may be a lot of fancy names that they are called, but the position exists in every company. It looks like AI is something that almost all companies will end up having. I do not suppose this should come as a great deal of surprise. 

If AI had to have a tagline, it should be – Use this to reduce your salary bill. And what kind of capitalist would say – “Nah! I don’t want to do that.”

The list also includes 11 graduates who went to brick-and mortar-retailers Walmart and Target, nine who went to defense contractors Lockheed Martin, Northrop Grumman and Raytheon, and five who went to office supplier 3M, a conglomerate perhaps best known for making Post-it notes (and, more visibly during the pandemic, masks and respirators).

Source: Quartz

The Elephant turns into an Ant

A couple of weeks ago I had written about the Arm IPO that Softbank wants closed. Also, how the US government has been handing Billions to TSMC to get them to move their fabrication to the US and reduce the dependence on China. Exploiting Arm and TSMC has enabled Apple to leapfrog the industry and delivery products that its competitors can’t keep up with. Intel, on the other hand, has been struggling to ramp up newer processes. This has further moved Apple towards adopting Arm architecture for their laptops and computers as well. Given this, Intel’s announcement does not augur well for the company.

“The company’s 7nm-based CPU product timing is shifting approximately six months relative to prior expectations. The primary driver is the yield of Intel’s 7nm process, which based on recent data, is now trending approximately twelve months behind the company’s internal target.”

Source: Tom’s Hardware

Intel can’t afford this.

New Oil Order

In the 1970s there was the Oil Crisis. The Saudi’s refused to supply oil to the US and petrol pumps ran dry in the US. Henry Kissinger went to the Kingdom with an offer to put an air force base in exchange for energy security. America brought the only thing Americans continue to make in America – Weapons – to the middle east and the place has never been peaceful thereafter. They helped flame the Shia Vs Sunni fight and half a century later the region still burns.

Lately, Americans have sought to take energy security into their own hands and pushed shale oil extraction. This has resulted in the USA becoming a major oil producer and a thorn in the sides of Saudi Arabia and Russia. COVID was sort of a godsend. Oil prices crashed. Shale extraction requires prices to be north of USD 60 per barrel for it to be profitable.

The major oil producers have been tactfully adjusting supply to keep prices in a narrow range around USD 40 per barrel locking out American oil companies. This is causing much soul-searching.

One of the world’s largest oil companies just announced it would cut 40% of its oil production. During an investor presentation on Aug. 4, BP announced it would roll out the dramatic cuts over the next decade, while limiting future exploration for new sources of petroleum.

[…]

BP says it will invest as much as $5 billion annually in low-carbon technologies by 2030, a ten-fold increase over current levels. If implemented, the cuts put BP on track to bring oil production down to zero by 2043, according to energy engineering researcher Arvind Ravikumar of Harrisburg University of Science and Technology, well before the mid-century target established by the Paris climate accords. 

Source: Quartz

Exploring new lands

When explorers used to land on new land, they would set off with their machete to learn more about the land and find its riches. Would it not have been easier if they had choppers and could fly over the terrain and determine what was of interest and what was not? 

Our exploration of other planets has been akin to the former. We have sent rovers to the Moon and Mars. These can cover a limited surface area and are slow-moving. Would it not be easier to fly over the land and see it. We have done that through satellites traditionally. While satellites cover massive ground, they are not close enough and can only be so detailed. But what if we could fly a chopper and determine what was of interest? NASA is sending an experimental chopper to Mars!

Perseverance will boot up a mission to collect samples of Martian dirt that might have traces of ancient life so that they can be returned to Earth by another mission later this decade. It will also carry a payload, unlike anything that’s ever been boosted into space: a small autonomous helicopter called Ingenuity. Sometime next spring, probably in April, Ingenuity will spin up its rotor blades and become the first spacecraft to go airborne on Mars.

Source: WIRED

Also Read

Meat consumption in America has gone down for the first time in perhaps forever.

A misunderstanding between two brothers during the World War II bombing raid resulted in the Dassler Brothers Shoe Factory turning into two competing brands – Adidas and Puma. A thread.

Signing off…

Categories
General Thinking Entrepreneurship

2016 : FoodTech :: 2020 : EduTech

In 2016, there was an explosion of food-tech startups. These were not really food-tech. Frankly, there has never been much food-tech in India. What was deemed food-tech was just food delivery startups. It also happened to be a time when more and more wealthy Indians were getting involved in investing. Having seen Flipkart come from nowhere and make Billions had fired up the imagination of many!

There were a few issues.

Most of the “food-tech” companies were cloud kitchens that delivered, with an app slapped-on. Even worse, they were providing an undifferentiated product. Still, further, they were often priced below cost because “customer acquisition”. Everyone has to eat and if the food delivered home is going to cost less than cooking people are bound to buy. Investors were also focused only on the user base. The trouble is when you lose money on every single transaction scaling fast means only one thing – losing more money.

Eventually, dozens of them went out of business and many of the wealthy who had just entered the “Angel Investor” pool swore never to invest again. 

The rise of the education

Now you hear EduTech all around. The reason – all of the educational institutions have been shut down due to the current pandemic and this has disrupted the rhythm of educational institutions which are a well-oiled machine. 

Institutions run an intake and graduation cycle. Students cannot join when they please. But with no clarity on when the pandemic might end this cycle is being tested.

Around the world, almost none of the parents finance their children’s education so their children learn. Here in India, children are sent to educational institutions with one express purpose – getting a job. Have you ever heard anyone discuss how good any professor at any college is before deciding to join? In the United States, they go to college so that they may have a lot of rich friends – Network.

The schooling system we have is a result of a compact between the industrialists and the politicians. To supply trained labour for the industries. In India, this same compact translates into engineering colleges that produce engineers who can’t engineer anything! They can join IT firms for paltry pay.

How is an app going to live up to this? Substandard engineers – sure. Jobs?

Investors are again making a misplaced bet. The question that they should be asking themselves is what ‘piece of paper’ will guarantee a job in the future? Can they bend policies to their will? 

Byjus although highly valued; is still a conduit to get into IIT or IIM. They started with CAT classes. Their popularity is because kids who study with their assistance have a better chance of getting into those hallowed institutions; implying job placement.

Byjus probably should purchase an HR company and commence placement. In the words of techies, they will then have a full-stack! 

Where is education moving to and where will it end in the next 5 years? Will the industry stop demanding degrees? This is not just about a few startups, but the industry as a whole? 

Will they be willing to hire those with certifications from private organisations? 

How will the politicians (college owners) who have hundreds of millions to be lost in revenue react to this? 

These are but, some of the questions that investors have to be asking themselves while going gung-ho on Edu-tech.