Tag: Drones

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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
Learning by Proxy

China V India – Telecom – Social Network | Learning by Proxy

Every Saturday, I publish this series called ‘Learning by Proxy’. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.

I was planning to follow-up on some of the topics that I had written the last time. But the geo-politics of it is so interesting, it almost turned into an essay in and of itself. I lost the politics section to it.

Follow Up

See below!


Politics

Chris Voss is a former CIA negotiator and the author of the book ‘Never split the difference’. The premise of the book is – when you are negotiating for the life of a hostage you can’t agree to split the difference. You have to get it the way you want it. One of the lessons therein – When negotiating, always give your adversary a way out. If you corner them – expect the unexpected. 

Some context first

China had started down the path of world dominance a few years ago. They decided to use the American (actually British) play of economic dependence = political dominance. They announced this thing called One Belt One Road, which was to be second coming for the Silk Route. They engaged over 130 countries and poured in hundreds of Billions to create infrastructure such as Road, Ports, Airports, etc. Every continent apart from North America was involved. India refused to be a part of it.

Now let us see the corner China has been painted into.

Hong Kong was an itch which has been hard to scratch for the last 3 years. In addition to that Trump and his trade wars had made life difficult. 

The Coronavirus put a new spin on things. Many of these countries that China has lent to are poor Asian and African nations and with Coronavirus ripping up their economies, they have requested loan waivers and renegotiation. 

As the coronavirus spread around the globe, Pakistan’s foreign minister called his counterpart in Beijing last month with an urgent request: The country’s economy was nose-diving, and the government needed to restructure billions of dollars of Chinese loans. […]

With each request, China’s drive to become the developing world’s biggest banker is backfiring. Over the last two decades, it unleashed a global lending spree, showering countries with hundreds of billions of dollars, in an effort to expand its influence and become a political and economic superpower. Borrowers put up ports, mines and other crown jewels as collateral.

Source: New York Times

Pakistan was supposed to keep India in check. They are now broke. The Middle-East is in a financial crisis of its own with oil prices at historic lows. This implies very limited options available to finance terrorism. Therefore, Trump is not going to give money away to Pakistan as liberally as Obama did. 

Further, not agreeing to the cries of the poorer countries will make it seem like it was an engineered Virus. The optics of it all are terrible! 

Trump called it the ‘China Virus’ and has been pressuring WHO to investigate them – WHO acquiesced. India supported the probe into China. China grudgingly agreed.

A pretty deep corner you see. Now for the push back.

China put an end to Hong Kong by passing a law that forever ends Hong Kong’s democracy – at least the way we knew it. With Pakistan now being rendered incompetent, they had to take matters into their own hands. They started trouble in Ladakh and Sikkim. India pushed back. Both sides said they will protect their sovereignty. All good distraction. But then…

Chinese President Xi Jinping on Tuesday ordered the military to scale up the battle preparedness, visualising worst-case scenarios and asked them to resolutely defend the country’s sovereignty.

Source: Economic Times

That escalated fast!

Then Trump tweeted offering to arbitrate between India and China. China changed course and figured this was one more thing they would want the American to stay out of.

On Wednesday tensions between the two nations seemed to de-escalate as China took an apparently conciliatory tone by saying that the situation at the border with India is “overall stable and controllable.”

Source: India Today

While there is a change of tone, satellite pictures show artillery build up on the Chinese side of the border. The US in the meantime is preparing to pass a law rescinding Hong Kong’s trade status.


Economics

Truth

It was a couple of editions ago that I had mentioned that the truth about the actual economic state of India will emerge post-COVID when nobody is paying attention. It is happening. 

Bank lending to MSME collapsed after 2016 as per RBI data. This during a time when the government claimed to have 7.2% GDP growth rate. Many of the MSMEs are critical suppliers to large industries how could they not want loans? If they saw an opportunity, they would have taken loans to grow. 

While large industries saw their credit expand by Rs 1.73 lakh crore, or at an annual growth rate of 1.9 per cent between April 2016 and March 2020, micro and small industries saw their credit expand by only Rs 10,335 crore, or at a 4-yr CAGR of 0.69 per cent during that period.[…]

The decline in demand for credit by the industry, however, coincides with the decline in the demand in the economy and falling capacity utilisations. The RBI’s Order Books, Inventories and Capacity Utilisation Survey (OBICUS) for the October-December 2019 quarter shows that the capacity utilisation declined to at least 12-year low of 68.6 in the quarter ended December 2019.

Source: Indian Express

Repo Rate

The interest rate is an instrument that is used to stimulate the economy when the times are good, expectations form the future are clear and risk can be estimated. When none of this is clear – the Interest rate becomes merely a number. If you play with it unnecessarily, you diminish your power. Modi placed a historian at the head of the RBI to act as his puppet and the bankers are giving him a lesson. RBI dropper repo rate (the rate at which banks borrow) once again to 4%. An all-time low.

“When a heightened level of risk aversion exists among banks, lower cost of capital alone incrementally will not translate into higher lending in the current situation,” said Sreejith Balasubramanian, an economist at Mumbai-based mutual fund IDFC AMC. “Banks make lending decisions based on their risk appraisal and appetite which is currently low.”

Source: Quartz

Business

Sizzling Telecom

In a world that is locked inside their homes, connectivity is a very valuable resource. It is the only thing that preserves a certain degree of sanity and allows for commerce in whatever form to thrive. Connectivity is unlocking its value.

A couple of editions ago, I had mentioned how Reliance has used Jio to free itself of debt. Also last time I had shared the surprise upswing that Airtel had registered. Airtel is now borrowing a trick or two from the Reliance Playbook. They have raised over a Billion dollar through a stake sale and reduced their debt burden. 

Bharti Airtel’s promoter firm Bharti Telecom raised Rs 8,433 crore on Tuesday, selling 2.75% stake in the telecom major to institutional investors through an accelerated book-building process in the secondary market. With this, the Sunil Bharti Mittal led-Bharti Airtel’s promoters are ostensibly looking to go ‘debt-free’, a path similar to the one chosen by Reliance Industries’ Mukesh Ambani. Bharti Airtel share price traded flat on the BSE on Wednesday. After the sale, the promoter group will continue to own 56.23% in the company.

Source: Financial Express

Also, rumours are that Google is planning to buy into Idea-Vodafone.

Not to be upstaged – Jio Platforms as it continues to raise its Billions announced Microsoft as one of the suitors willing to throw in USD 2 Billion. And they also announced their wishes to list on an international stock exchange. 

Post bagging multi-billion dollar deals from marquee investors in the last one month, Billionaire Mukesh Ambani’s Reliance Industries is said to be now considering an overseas listing of Jio Platforms, according to people aware of the development.

Source: Mint

Technology

Social media is an echo chamber and that echo chamber has resulted in far too many countries in the world having right-wing governments. India included. Life is good so long as you are on the right side of the line – White in the US – Hindu in India and so on. Facebook knew what it was doing and why it was wrong. An explosive and incriminating report exposes the upper echelons of the company brushing aside genuine concerns. 

“Our algorithms exploit the human brain’s attraction to divisiveness,” read a slide from a 2018 presentation. “If left unchecked,” it warned, Facebook would feed users “more and more divisive content in an effort to gain user attention & increase time on the platform.” […]

But in the end, Facebook’s interest was fleeting. Mr Zuckerberg and other senior executives largely shelved the basic research, according to previously unreported internal documents and people familiar with the effort, and weakened or blocked efforts to apply its conclusions to Facebook products.

Source: WSJ

The person who made this presentation was the head of the ‘Integrity Team’ at Facebook. The company has none of it.

Twitter has been a haven for trolls permitting harassment at an unprecedented level. It came as a huge surprise when Twitter which is in part responsible for Donald Trump being president decided to flag this tweet at false.

[click on the tweet and open it to see the flag]

The move, which escalates tensions between Washington and Silicon Valley in an election year, was made in response to two Trump tweets over the past 24 hours. The tweets falsely claimed that mail-in ballots are fraudulent. Twitter’s label says, “Get the facts about mail-in ballots,” and redirects users to news articles about Trump’s unsubstantiated claim.

Source: Washington Post

The president threw a fit on Twitter about Twitter. Then announced on Twitter that he would be releasing an Executive Order against Twitter. 

In the meantime, Kellyanne Conway his “Counselor” went on a rant against – guess who? – the head of the Integrity Team of Twitter; Yoel Roth. He has been subjected to a lot of trolling by Republicans and Trump supporters – where else – on Twitter.

Here is a list of all the false claims made by the President of USA to date – all 18,000 of them. – https://www.washingtonpost.com/graphics/politics/trump-claims-database/

And Twitter is not backing down!


Misc

The Indian Government is using drones to chase away locusts.

These are designed to spray 10-litre of chemicals, along with creating a sound that would disperse the locusts into different areas. “It has successfully contained the movement of locusts in an open area and on the foothills where it was not possible for the usual tractors to make it reach. A detailed assessment of its impact is being studied by the field officers,” said Om Prakash, commissioner, state agriculture department.

Source: Times of India

The Democrats are using the Republican playbook – GOD. Only God can save them now. God is peddling conspiracy theories on Trump!

Go on check out the twitter handle. It’s got a lot more there. About Ivanka’s Shoplifting and much more…

Signing off…

Categories
Learning by Proxy

Immigration, Power and Disney | Learning by Proxy

There is a lot happening on this planet. Due to the attention that COVID-19 is getting, there are many things that politicians are able to get away with. When the dust settles all this will matter. This is the fourth edition of ‘Learning by Proxy’

Politics

Using the distraction of COVID-19 as a cover, Pakistan took 1000’s of terrorists off their terror list. That list is an eyewash and does not mean much anyway. But still.

Pakistan has removed thousands of names from its terrorist watch list in what the country says is an effort to meet its obligations ahead of a new round of assessments by a global anti-money-laundering watchdog.

The so-called proscribed persons list, which is maintained by Pakistan’s National Counter Terrorism Authority, or NACTA, is intended in part to help financial institutions avoid doing business with or processing transactions of suspected terrorists.

https://www.wsj.com/articles/pakistan-removes-thousands-of-names-from-terrorist-watch-list-11587393001

The Donald

At the other end of the world, Trump is using the current situation to force a ban on immigration into the US. For now, he could only as far as to stop the issuance of any Green Card for the next 60 days. 

A major category of people who are banned is those seeking green cards through a family member of an American — a parent, an adult child or a sibling.

The order temporarily bars green card holders from sponsoring a spouse or child for permanent residency.

It also stops individuals from receiving green cards to enter the U.S. through other means, such as employment or the EB-1 “extraordinary ability” category.

https://www.nbcnews.com/politics/white-house/trump-s-immigration-ban-raises-more-questions-answers-here-s-n1188946

Canada is rejoicing!


Economics

Power

One of the biggest problems that India has been faced with over the past couple of years has been – Electricity. And contrary to your expectation, we have too much of it. The electricity business has two players – Production companies and distribution companies (known as Discoms). Over the past 5 years, production has heavily ramped up in India with the addition of several renewable power plants. While production is centralised and easy to scale; distribution is a tricky business and there needs to be enough demand for the supply coming in. Setting up distribution in villages is not a profitable undertaking given that their consumption is low but the cost of infrastructure is high.

Anyway, more to the point. Distribution companies have contracts with producers to draw from them and pay a fixed price for the energy. At the same time, they depend on contracts that they have with large buyers – industries, to draw a certain amount from them. COVID-19 has triggered Force Majeure and they are not able to sell the power coming to them. Ironically, they stand powerless and losses are mounting. 

Following the lockdown and revenue from a major chunk of industries and businesses—call them, milch cow—touching almost nil, discoms have been pushed to the brink. Forget clearing the past dues, going forward they won’t have money to pay for the power they buy for catering to essential services such as healthcare viz hospitals, isolation wards/quarantine facilities, ventilators and so on. Can discoms invoke force majeure to avoid making payment? That may not stand legal scrutiny.

https://www.financialexpress.com/opinion/corona-pushes-discoms-to-the-brink/1925283/

But light seems to be at the end of the tunnel

The Power ministry’s proposed amendments to the Electricity Act of 2003 have received a thumbs up from the industry with players welcoming the proposed push for cost-reflective tariff, simplification of tariff structure and reduction of cross-subsidies.

Companies and industry experts applauded the proposed amendments for creation of Electricity Contract Enforcement Authority with powers of the civil court, the single selection committee for appointments to the appellate tribunal and regulatory commissions and ensuring payment security mechanism in the sector.

https://energy.economictimes.indiatimes.com/news/power/power-industry-gives-thumbs-up-to-proposed-electricity-act-amendments/75285907

At the same time, questions are being asked if this situation can be used to pursue clean energy more effectively. They do not have the troubles that coal-powered plants face. 

Oil

Also, do you know what happens when there is no more space left to store oil that is being produced? 

The world found out that even oil, yes oil; for which the US has turned the middle east into its national battleground, can end up selling at a negative price. Flights are not flying; Trains are not plying; Cars are not driving, and; the world is producing oil as if nothing has changed.

The consequences to this are quite political, this will be greatly destabilising to the middle east and all of the kingdoms that have been able to thrive because of the oil money. On the other hand, terror funding might see a decline.


Business

Disney

When the daughter of Roy Disney, the older brother of Walt and the Co-founder of ‘The Walt Disney Company’ skewers the company for laying off 100,000 workers while at the same time paying the top executives salaries and bonuses equivalent to USD 1.5 Billion, there has to be some soul searching that the Board needs to do. She says the 100,000 could have been paid for 3 months if the executive had avoided taking the salaries and bonuses. Bob Iger, Chairman of the Board received USD 62 Million in 2018. He could forego awards but instead decided to forego only the salary and not the bonus. She used the words – ‘What the F***?’ in the thread. Just incredible!

Co-Working

Or how Masayoshi Son chose to squander the Vision Fund.

When the WeWork debacle let loose last year, the Indian entity that is run under franchise by the Embassy Group proudly proclaimed their plans were separate and they would make it though. Now it looks like they will make sure a few startups perish in the process. 

Earlier this month, WeWork India, which is run by Bengaluru-based real estate company Embassy Group, said its existing customers need to pay only 30% of the rent throughout the lockdown period that started on March 25. But in reality, instead of allowing clients to pay just 30%, WeWork is offering to give a credit equivalent of 70% to their existing contracts.

This means that customers will have to continue paying the entire rent each month even though they are not using the space. At the end of the lockdown, WeWork will add extra days to their existing contracts equivalent to 70% of the rent for the days its offices remain shut.

https://qz.com/india/1837749/indian-startups-now-battle-both-wework-coronavirus-lockdown/ 

These guys have been in business long enough to know its all about the cash-flow. Giving me back 70% of the rent when my contract ends will do nothing for me. In the meantime, homegrown co-working players such as 91Springboards and BHIVE have waived the rent considering this a force majeure event. 

Jio – Facebook

Earlier this month as rumours swirled, I had written a post about why Reliance needs Facebook to invest in Jio – Badly. Facebook tried bringing its Facebook basics service to India and was chased out of India as fast as it arrived. It was against the principles of net neutrality. By making certain services free, they can make users prefer one over the other and kill the competitors. Reliance was dying under a mountain of debt and their plans to sell 20% of Reliance to the Saudis also fell through. They needed a lifeline. Facebook needed a partner who can twist the law to its will, has political clout and enough penetration.

Match made in heaven. 

“This investment by Facebook values Jio Platforms (at) Rs4.62 lakh crore pre-money enterprise value ($65.95 billion, assuming a conversion rate of Rs70 to a US dollar),” RIL said in a statement. “This is the largest investment for a minority stake by a technology company anywhere in the world and the largest FDI in the technology sector in India,” RIL said in a statement. “The investment values Jio Platforms amongst the top five listed companies in India by market capitalisation, within just three and a half years of the launch of commercial services.”

https://qz.com/india/1842729/facebook-invests-5-7-billion-in-mukesh-ambanis-reliance-jio/

So what is the problem you ask? Facebook owns WhatsApp and Jio owns the pipes. If you want to pay a bill in China, you turn to WeChat. If you want to buy a movie ticket in China you turn to WeChat. If you want to check the news in China, you turn to WeChat. iOS and Android do not matter in China because the Operating System of China is WeChat. Reliance and Facebook want to do something similar in India. It is sinister and diabolical. 


Technology

Weather

Did you think the weather forecast was always shit? I always thought so. Well, it is going to get worse. Flights used to contribute a lot of data to help model weather patterns. Since flights have reduced drastically since the pandemic began, the data available has sharply declined. This may lead to worse weather forecasts.

Observations of temperature and wind routinely collected by commercial aircraft are routed to government weather agencies and other users around the world through the Aircraft Meteorological Data Relay (AMDAR) program, operated by the World Meteorological Organization.

The number of AMDAR reports has risen from about 7,000 per day in the early 1990s to more than 800,000 by 2017, according to a recent overview of forecast improvements published by the American Meteorological Society and led by Stanley Benjamin (NOAA Earth System Research Laboratory).

https://weather.com/health/coronavirus/news/2020-03-24-fewer-people-flying-might-affect-quality-weather-forecasts

Drones

I had written a blog last week about how new technology adoption will get accelerated in these times. Africa is leading the way with their homegrown drone startups getting a huge push. 

In Ghana, rural health facilities send their coronavirus tests to the distribution centres. On Friday, Zipline ran four flights to Accra, transporting 51 COVID test samples and making each trip in under an hour. On Saturday, it started service to Kumasi. Now, Rinaudo says, the company is ramping up service, looking to deliver as many samples as needed every day.

In addition to shipping test-kit flights, Zipline is using drones to ferry unused tests, protective equipment like gloves and masks, and supplies including vaccines and cancer drugs from its distribution centres to the rural health facilities. The idea, Rinaudo says, is to make it easier for people to get what they need without going to a hospital, where they could be exposed to the coronavirus and take up scarce resources. The company is doing similar work in Rwanda.

https://www.wired.com/story/drones-flight-carry-covid-tests-labs-africa/

Misc

The space shuttle was the NASA workhorse that for years made ferrying the astronauts to the ISS possible. This came to an abrupt end when NASA retired the Shuttle in 2011 in the hope that United Launch Alliance backed by Boeing would deliver on the rocket that they were building. 10 years and several Billion dollars later, nothing has been delivered!

In the meantime, NASA has been totally dependant on Russia for any space transport. Especially of man and material to the ISS. Even during the Ukraine crisis, they were needed to go back to Russia! SpaceX is finally about to deliver; bringing the capability to launch a man into space back to the US.

At long last SpaceX will finally carry a human to space next month. 

Signing off…

Categories
General Thinking

Why are food delivery businesses so troubled?

Most delivery related startups in the food space have been having trouble over the past year and by the looks of it, we seem to be ushering in the new year with news of more firings. Why is it that all the guys in the food delivery business seem to be experiencing problems?

 

The cause of their troubles is to do with a more fundamental questions; what is a startup?

 

According to me;

Startups are businesses that have an asymmetry between manpower needed per unit of additional income. 

 

If you run an agency engaged in building websites, there are only so many websites that you can build simultaneously with a team of 10 developers. In order to increase your income, you need to be able to do more which means bringing in more people. There is hence a symmetry between the human resources needed to grow income. Of course, you will find efficiencies as you scale, but those will be to the tune of 10%-20%; not 70%.

 

Unless, some part of it can be automated.

 

Time Vs Cost

 

The current trouble with the delivery business is that they do not possess this asymmetry at all. They run much like the website developer where one needs to recruit more people to take on more deliveries. This fact coupled with the challenges  of recruiting and retaining manpower has resulted in ballooning salaries.

 

Currently, the delivery boys are getting paid to the tune of Rs. 25,000 per month (base+incentive). This implies Rs. 1,000 per day being paid to delivery boys (assuming 5 days off). Let us suppose a 10% delivery charge on the products that these boys deliver; implies, they need to be delivering goods worth Rs. 10,000/day. If an average parcel is priced at Rs. 1000, they need to make 10 deliveries a day. In all that I have heard, on an average they do about 8.

 

To make matters worse, the average price of the parcel is rarely Rs. 1000. Invariably the average price is in the range of Rs. 150 – 300. This implies that the financial model is stacked firmly against the business. They need to pick up 4 or 5 parcels at the same time to make it work. The reason they cannot pick up as many distinct parcels is because, they need to meet the 30 minute delivery deadline.

 

When you have to deliver food, you are not just taking a package from point to point, you are in fact on a timer to fill an empty tummy. The longer the tummy stays empty, the angrier it gets.

 

Cluster Vs Cost

 

The only way to make hyperlocal business work to the advantage of the service provider is to undertake the business in an extremely clustered manner. Much like the postman, if a delivery boy can cover hundreds of addresses in a small area, and the pick-up locations are also in the very same area; the cost of logistics would come down dramatically and also the time taken to deliver. This will in turn cause an increase in the capacity that one can carry, since the time taken to pick up multiple order will be much lower.

 

Now this requires a company to have almost a monopoly position in the market to have such a large user base.

 

A company can focus on building a monopoly or DRONES.

 

Going back to the beginning of the article, we spoke about asymmetry between manpower needed and income. Drones can create this asymmetry by automating the delivery part of the business. A drone can fly from point to point on auto-pilot. Software can take care of pick-up, destination, and flight as well. They use electricity and hence are far more cheaper and hopefully, drone traffic will be lower than road traffic.

 

There is certainly an initial capital expenditure in terms of acquisition of equipments but thereafter the cost of operations are significantly reduced. The cost of manpower is almost completely eliminated. Also the nature of manpower required will change. Instead of skilled individuals who are riding bikes, the company would have engineers who program drones.

 

Scaling the business to multiple cities and gaining a monopoly position would become much easier since the only factors holding back growth would be capital and scalable software architecture.

 

It may seems like science fiction but autonomous drones are the way of the future. The sooner its realised, the sooner these company can start burning their cash on the right things.