Domestic Help..

Very closely related to my last post on cheap labor, TOI Bangalore edition had this editorial piece by Jug Suraiya on domestic help. I'm sure all of us know this problem very well and as the article says, it is a big topic of discussion.

Personally, I like this piece of news :

"    Which of course is great news for India. Because the growing shortage of servants proves, better than any Planning Commission report, that despite all odds the Indian economy is progressing as more and more former domestic helpers get jobs in the organised sector as industrial workers or service providers. "


As I see around me, it is great to see that the children of the 'domestic helps' go to school and get better jobs elsewhere rather than following their parents footsteps. This unlocks greater potential in the country and they can add more to the GDP !!

Of course, this means that we need to start doing our own work soon !

Cheap Labor...

One of the attractive things about India is the availability of 'cheap labor'. Labor here refers to all blue-collar jobs and cheap because it is easy to find folks who work for less (compared to how much it would cost you in the US). If you have ever tried getting a simple job done in your house in the US, you would understand how costly it is.

While getting the job done is easier and cheaper, it is not necessarily the best work. Typically, these blue collar workers tend to do a patch up job and it works in the short-term and the problem would recur in a short-while. I'm talking about fix a leaky pipe, you get a plumber who does a quick fix for a few hundred rupees, but the problem would recur in a couple of months. Then the cycle repeats.

The other problem is that because labor is cheap, people tend to think that just adding more folk to the work-force would cause things to move faster (think Mythical Man Month problem in software).

As I see more of this blue collar workers, I'm beginning to think that maybe increase in the cost of labor is good for the economy as a whole. The rising costs implies that customers will expect a better quality of service and from the worker point of view, it forces them to work better. Increased costs would also force organizations to think in terms of efficiency and costs.

Two Minutes...

We are trying to move into a new apartment in South Bangalore and so, I'm trying to get the builder to wrap up some last remaining bits of work. Every-time, I talk to one of the contractors out there, the conversation usually goes like this :

Me : "Hi, so is the work done"
Other guy : "It is done sir, BUT, there is some remaining work which will be done in 2 hours"
Me:  "You promised me it would be done yesterday"
Other guy: "It is almost done sir, but the electrician was out of town yesterday. He will finish the work in 2 hours, tomorrow morning it will be ready"

At this point, I'm out of patience and I politely walk out. This conversation literally repeats itself everyday.

Of course, this is just not in my apartment complex - It pretty much happens everywhere, from plush corporate offices to the guy on the road and it is not just "time". I have seen inability to forecast when talking about distances and money. For example if someone say point X is 'just' 2 kms from here, then chances are that X is anywhere from 1 -5 kms :-)

It is something unique about our culture - it could be any of these reasons :

• They really don;t care about the customer, lets just get him out of the way and deal with him tomorrow.
• Inability to say no to things - for example, if the work cannot be done, they need to be upfront about it and say it is going to take 5 days instead of 2 hours
• Inability to plan and forecast - most folks here are overwhelmed with business and their lack of planning and organization causes them to miss deadlines.

So, patience and persistence is the key to deal with these issues.  Things usually get done, but budget 2x the time to get things done :-)

economics of a xerox machine

As I mentioned previously, xerox-ing a part of the getting things done in India. So I have been wondering is the xerox machine a good investment for all the shops.

A typical xerox machine cost around 1,50,000 Rs (1.5 lakhs).
Each xerox copy is Rs1, so it would take around 1,50,000 copies to break even (ignoring the maintenance costs and the cost of ink).
Assuming that you get 100 copies a day, it would be 3000 copies a month.
So, you would break even in 50 months (1,50,000/3000) or around 4 years 2 months. After this point, you are raking in profits on the xerox machine. The thing I'm not sure about is the lifetime of a xerox machine - but from what I have seen is that, these machines sometime run for a long time, but of course they are not working at the optimal level.

The bigger factor for owning the xerox machine in these shops is the stickiness factor, it draws in customers and it is possible to up-sell other items (like stationary).

Cash Transactions...

If you are like me and like to track your expenses on a fairly regular basis, it is going to be a tough task after R2I.

In the US, I used credit cards for most of my expenses and that was very convenient. Besides the fact that you don't have to carry too much cash on you, the credit card report allowed you to track expenses by category fairly easily.

Now, I have been in Bangalore for the last 3 weeks and I have no clue how much money I have nor do I know how much I have spent, nor I do I know where I'm spending. The only thing I know is that my wallet is perpetually empty and I keep re-filling it with more money. In the hope that I don't run out of money at the most inopportune moment, I have started filling my wallet with lots more money and that is causing me to spend more money :-)

I just wish I could use credit cards everywhere. The biggest problem is that in India, there tends to be a lot of micro-transactions with folks who are ad-hoc and temporary (vegetable vendors, auto-drivers, small merchants). These folks live on a day-to-day basis and to them cash is the king, they don't believe in credit (or some form of delayed payment as with credit cards). Their business model is built on 'cash flowing through the system'.

Contrary to the popular belief that having a credit card makes you spend recklessly, in my case at-least, I would prefer credit cash to spending cash !! It does looks like there is some opportunity for mobile payments to ease out this pain, but that would require some mind-shift and change in business models.

when you gotta go..

..you gotta go.

If you are new to Bangalore (or anywhere else in the country for that matter), the first thing that strikes you as you drive across or stroll across the city is the number of people (usually men) answering the 'call of nature'. This could be anywhere - empty plots of land, busy roads, residential neighborhoods, literally anywhere. Of course, we could all blame each other - but the fact is that we lack civic sense and we also lack the sanitation infrastructure to provide the bulging population a cleaner way to answer the call of nature.

In this perspective, this video circulating around of Asha volunteers trying to solve this problem, is really commendable.

In the same vein, Bill and Melinda Gates foundation also called for innovations in re-inventing the toilet :-). There is a good business opportunity here for all entrepreneurs out there.

Getting connected..

Setting up a home office and getting connected has been a breeze. And it is enormously cost-effective too.

For my home office, I have these setup :

• BSNL DSL connection ~ 400Rs/pm
• Tata Photon Broadband Wireless Connection ~ 750Rs/pm
• Data plan on my phone ~ 600Rs/pm

So for 1750Rs/pm or 40+$, you are all connected. Compared this to the $45+ I was shelling out for Comcast broadband connection, this seems like a cheap buy. I didn't even compare the link speeds here, since I am able to do anything I could do with the broadband in the US, no complaints so far.

If you have a bunch of devices, the first thing you need to do is to buy a whole lot of adapters which convert from the flat-pin to the indian-style round pin converters. They cost 40-75Rs per piece.

As I mentioned, getting connected has been a breeze. I managed to set all my devices (laptop, monitor, wireless, VOIP, DSL, wireless modem etc) in a few minutes. After a few minutes of happiness, the entire circuit in the house tripped, since the electric outlet could not handle the load :-) 

That is the general theme of things in India - the new stuff is seamless and just works. It is the old infrastructure (like the electric wiring in my house) which causes the pain, till we get rid of these legacy infrastructure issues, it is going to be a pain.

xerox, xerox, xerox..

If there is one country where the copiers are most widely used, it gotta be India. 2.5 weeks into my visit, I have xerox-ed approximately 300 pages of documents, around 20 pages per day :-).

Every office you visit, every request you make typically tends to be associated with a "request to get documents xerox-ed".  Sometimes, the request makes sense, but more often than not, you are left wondering what the heck the xerox is for. For example, I had to provide some documents for custom-clearance, one of the things I needed to xerox was *all* pages of my passport, including the blank pages. Now, you are left wondering why would anyone need blank pages :-). If you add the 80 pages of my passport, at 2 pages per side, that is a whopping 40 pages of document, which I'm fairly certain no one would ever look at.

Cost-wise, each page costs you one rupee, but it just makes sense, most of the time.

I guess there-in lies a business opportunity, if there is a way to digitally and securely transfer documents, that is going to be a killer app.

crore-pathi...

If you grew up in India in the 90s, then you would typically associate a crore-pathi to be someone who is stinking rich.

A crore = 100 lakhs or approximately 10 million Rs or 220,000 USD.

As I was speaking with more people in Bangalore  (folks who are financially savvy and have a good eye for investment), I hear more statements on these lines -  "If you don't have a crore in your bank account NOW, you have made a wrong decision to get back to India". That got me thinking and worried, I had to scramble around and see what I have in my account, of course, I'm a long way off from that target. Only time will tell if that statement holds true :-)

Cost of living + inflation has hit a point where crore today is really not that worth much these days !!

Mental toughness..

If you have been around in Bangalore, the easiest way to get around (in theory at least) is the auto (short for auto rickshaws). And these are driven by auto-rickshaw-drivers who are an amazing set of entities by themselves. Any discussion about autos and their impact on Bangalore elicits heated discussions (both locally and abroad among folks from Bangalore), more often than not, it borders on negativity (and accusation on how they have really screwed up the Bangalore traffic).

But, instead, there are some amazing positive things which I have observed :-). To list a few :

• Customer is the king - Sometime, if the driver for some reason likes you and is nice to you, he is willing to go that extra route to make you happy. For example, the other day, my rick-driver made a turn which I quickly disputed. Since he was in a happy mood, he literally in a spur of a moment, turned his auto around 180 degrees and inspite of the traffic behind, got me back to where I wanted to turn. A'int that amazing, he was willing to break all rules for the sake of a customer.
• Asking for a raise - How often have almost all of us walked back from our regular meetings with our managers/HR-folks/recruiters and cursed ourselves that we should have asked for more money or a pay raise. If there is one thing I like about auto-drivers and want to apply this in my corporate job, it would be the willingness to be bold and ask for more :-). I have had instances when the drivers would ask for around 15-20% more, just on the whim - when you ask for a reason, they would either provide something sane/rational, sometimes they would say they are just trying, some would laugh it off.
• Team-work - They are a very closely knit breed. If you find a cluster of drivers in the same location and if you ask one of them if they are willing to take you to your destination, if the first one refuses, the chances are that the rest of the drivers in the cluster would also refuse. In you happen to get into a conflict with a rick-driver, you are actually taking on their community. They work on telepathy and they trust their mates intuition - which is something I would love to see more in workplaces. More often than not, in the normal work-space, people are trying to step on each other.
• Don't disturb me - How many times have we been nice to people we really didn't care about or wished that we could be nastier just for the heck of it. More I see these rick-drivers, the more inspired I'm. There are instances, when for example, I'm trying to communicate with a driver on where I want to go, either they don't care about what I said, or they just don't want to be disturbed. It might seem offensive at first, but what the hell, he owns the auto and he can drive where he wants to, after all I'm just putting in a request (and I should be happy if he chooses to agree with my request). This is something I really want to apply in my real life when i want to deal with people I really dont like.

"Auto-Rickshaws make my life better everyday" - Enough said :-)

Thriving or just surviving...

One of the things which struck me when you arrive in India (or at least in Bangalore) is the number of smaller 'mom-and-pop stores' as they are called in the US.

These typically tend to be really small food-outlets/grocery stores/convience centres/tailors/you-name-it. And from what I have been seeing is that these are always packed with customers. There seems to be a continous transaction flow - which to me seems amazing, that these small shop owners are generating so much business.

Now, the next question is are these owners thriving or barely surviving (breaking even). By thriving, I mean, sustainable profitability. Note, there is no competitive advantage in these business(es), unless of course you have a niche - for example, a food outlet with some amazing recipe. More often than not, it is location and of course loyal customer base. By competitive advantage, I mean, it really doesn't take much time for some one to open a similar store (it is just the grunt work of getting your supply chain ready).

None of my immediate family members shop in big retail outlets, we still rely on stores nearby for our daily convenience shopping.

I'm still looking for some relevant information on what the revenue/profit structure is.

Talking with my cousin, who has a lot more knowledge on retail than I do, his take is that the Indian retail segment is poised to grow from 65$ billion to 300$ billion in the next 5-10 years and apparently, there is room for both big retail as well as these small shops.

Crowd-sourcing at its best.

With all the construction going on in Bangalore, all the main arterial roads in the city tend to be dug up for some reason or the other (road widening, metro construction etc). So, one fine day, your typical daily route might land up with a slow-down due to construction (though typically you would get some advance notice). How would you handle this ?

The best way, as I have been finding out, is to just let the crowd around you handle this. You would pick some other commuter in your same direction and then just follow-them. Chances are that the other folks have done some research and would have found adjoining 'side' roads which would lead to the same destination.

So, over a period of time, all the traffic would start converging on the most optimal route :-). It is amazing to see how traffic dynamics change in a few days...

R2I aka returning to India..

When I left India, I never thought that it would take me 13 years to get back home :-). Getting back was long journey, it look me all of 13 years to plan it out !

Returning back is a different experience, you tend to view 'usual' things in a different light.  And of course, it is a big deal, uprooting your family/kids and transitioning across geographies, climate, institutions and culture.

These are just random thoughts, and hopefully are useful for other folks returning back ! So here it goes :-)