“Green energy”, “clean tech” and “carbon footprint” are the buzzwords of this millenium. Pretty soon we will not have to wonder how much our presence and our actions are harming the earth - we will know, down to the last millical of energy and microgram of carbon. Labels on foodstuffs at the supermarket will tell us how much energy we are consuming and how our purchase is impacting global energy usage. At home, sensors will tell us how our temperature and lighting choices stack up in the race to conserve. And that vague feeling of guilt we carry around today will harden to real, measurable chagrin.

But the truth is that all our efforts to “Switch off appliances when not in use” and “Water lawn in the evenings” are not going to make any significant dents in global energy use.  The drops we save from fixing leaks are about the same drops in the vast ocean of energy consumption, propelled by developing countries who are indignant about sudden energy piety on the part of erstwhile guzzlers like the U.S.

So what the whole point? Well, speaking for myself, I find that when I have to set the thermostat to 75 degrees in summer and 68 in winter and be uncomfortable throughout the year, I am much more vigilant about who is representing me in the global discussion on energy conservation. If I’m suffering, then the rest of the world jolly well suffer too. If I have to painstakingly install drip irrigation on my plants to conserve water, then the people in Sacramento and Washington had better share my values and my angst about my under-watered plants.

My guilt about personal energy profligacy translates to strong values about local and national energy practices. I educate myself on the environmental credentials of the people I vote for and never pass up an opportunity to pressure them to pass laws that affect the issue.  I vote for new initiatives based on their impact on the earth. And that, I find, is the silver lining in the cloud of green guilt that shadows me.

As for the fireworks, I read that perchlorate-free ones that cause less pollution are on the way. I’ll be the first in line next year.

Picture by dcjohn under Creative Commons license

Related posts:

1. Going Green - in your garden By Laxmi Natarajan Reduce, Reuse and Recycle : we...

Related posts brought to you by Yet Another Related Posts Plugin.

The Origin of Public Relations or Public Manipulation
The idea of manipulating public opinion using the sub consciousness was pioneered by Sigmund Freud’s nephew, Edward Bernays, who is also regarded as the father of public relations. In the 1920s, working for the American Tobacco Company, he sent a group of young models to march in the New York City parade. He then told the press that a group of women’s rights marchers would light “Torches of Freedom”. On his signal, the models lit Lucky Strike cigarettes in front of the eager photographers. The New York Times (April 1st, 1929) printed: “Group of Girls Puff at Cigarettes as a Gesture of ‘Freedom’”. This helped to break the taboo against women smoking in public (Source: Wikipedia).

Industrial Revolution and the Emergence of the Brand
The emergence of brands was a result of the Industrial Revolution, when centralization of manufacturing resulted in mass production. My initial professional experience was in advertising and, while working at JWT and Grey, account management had to generate creative briefs for ad campaigns. One of the questions that had to be tackled was “What was the functional discriminator?” or USP. But most products didn’t really have one, so then we had to generate an emotional discriminator, which was basically a psychological motivator we had to induce or manipulate to get consumers to purchase the product.

As products emerged in various categories which couldn’t compete on real discriminators, increasingly branding focused on human emotional drives. Fast moving consumer goods were masters in the game and categories like Tobacco, Soap, Beverages, Snacks invested heavily in advertising campaigns to build ‘brands’. In the offline world, the brands started having enormous value and Coca-Cola, the brand built on its mystique of the secret formula, acquired billions of dollars in brand value. Brand management was perpetuated by professionals focused on the brand rather than product and spurred on by mass manufacturing and the concentration of capital, resources and wealth. The notion of the intrinsic value of a product was never asked, it was about brand value.

What is Intrinsic Value
So what is intrinsic value? I don’t have an empirical definition, but in general, it is the argument that the value of a product is intrinsic within the product rather than dependent on the buyer’s perception. My personal opinion is that the intrinsic value of carbonated water, cigarettes and many other consumer products is far lower than what the buyer’s perception is. Brand value amplifies the value of products with low intrinsic value.
Internet Emerges as the Game Changer
How does the Internet change all this and what does the battle of brand value vs. intrinsic value have to do with e-commerce? The emergence of Internet and online travel companies like Amazon, Ebay, Expedia and Priceline actually changed the paradigm of how consumers search, shop and buy all products, services by making each step completely interactive, immersive and experiential. In the travel vertical which I cover, one might argue that Priceline’s advertising campaign with William Shatner is a great brand effort, but if the Priceline online experience, features, response time, product inventory depth, customer service, and usability were not behind it, the marketing campaign would be useless. Conversely, Marlboro can sell its cigarettes based on the Marlboro man myth for years without changing a thing, since it is primarily selling an image.

Coming back to online brands, no amount of brand marketing can offset the intensive consumer experience in which consumers interact with a travel product and its features. Competitors are just a click away. Big brands and mass media feed off each other but on the Internet, a level playing field has emerged due to Google. The concept of the “Long Tail” epitomizes that ideal; travel is a category that allows smaller players that provide consumer value to compete with larger brands.

On the Internet, there is only so much that a single brand can do as demand is getting increasingly fragmented across multiple points of influence and sale. The key is to control, aggregate and empower supply. In Expedia’s case, Hotels.com, Expedia.com and other white label businesses all compete aggressively for the same customer. In addition another group company, Tripadvisor, actually drives traffic to Expedia’s direct competitors (traditionally this would be seen as a brand disaster). It’s like Coca-Cola selling the same product under 10 different names, it would never happen in conventional marketing.

Yahoo faces the same problem. The centralized single brand portal is dead and content is all over the place, so there is little point in maintaining the walled-garden single brand approach to content, whether in travel or any other category.

Finally, Interbrand’s annual audit of most valuable brands in 2008 included in the 10th spot a company we all might know – Google.

The firm’s top 10 global brands are:
1. Coca-Cola
2. IBM
3. Microsoft
4. GE
5. Nokia
6. Toyota
7. Intel
8. McDonald’s
9. Disney
10. Google

How much does Google spend on brand building? Literally zero, because Google’s continued success will be dependent on delivering relevant search results, not image. The consumer is a click away in either direction - towards or away. Google realizes that advertising campaigns will do nothing if the product’s intrinsic value doesn’t hold up every second of the day. Negative word of mouth can spread globally in milliseconds. One of the key tenets of the long tail is: size of the reputation matters more than the size of the marketing budget.

Ram Badrinathan is the co-founder of Soulitudes. Soulitudes’ hope is bring together some of India’s finest creative minds in different fields ranging from visual arts, cinema, Indian classical music, folk music, photography, conscious travel, heritage conservation, Indology, spirituality, ecology and wildlife, theatre, literature, politics and social entrepreneurship.

Photograph by mleak under Creative Commons License.

Related posts:

1. The BIG move back….. By Rajeev Minocha Perhaps the x= x+1 syndrome has been...
2. Making dough from dough - Shasta Foods The typical Silicon Valley success story has to do with...
3. YouTube vs. Viacom - The return of the King By Basab Pradhan  The old adage “Content is king” doesn’t...

Related posts brought to you by Yet Another Related Posts Plugin.

The Congressional Hunger Center (CHC), a nonprofit anti-hunger training organization located in Washington, D.C., launched an exhibit last week featuring photographs of the Akshaya Patra Foundation, as well as other midday meal programs in Mali and Chile.  The exhibit is designed to help inform members of Congress, policy makers and other key opinion leaders on the success, magnitude and worth of school feeding programs around the world.
The photographs were taken along with in-depth interviews and site visits to Akshaya Patra kitchens and schools. The exhibit is part of a larger initiative to increase support for school feeding. According to the CHC, school feeding programs have been proven to not only alleviate childhood hunger, but also to promote educational opportunities for children, especially young girls. This photography exhibit is part of an effort to bring the voices of people who implement or are impacted by school feeding programs to those who are making program and policy decisions. The exhibit will travel to different venues and events throughout the country over the next year.
“It is an honor to be recognized by the Congressional Hunger Center for Akshaya Patra’s innovative solution to eradicating hunger while promoting access to education,” said Madhu Sridhar, Akshaya Patra USA’s President and CEO. “Akshaya Patra is a great example of what can be accomplished when the public sector, private sector and civic society collaborate– a cost effective, scalable solution with high quality service delivery. The program is a true global model of efficiency and ingenuity, built and designed to be easily replicated in other parts of the world.”

“The photo exhibit was extraordinarily powerful,” said Rep. Jim McGovern, (D-MA), co-chair of the Congressional Hunger Center.  “I’m proud that the House Hunger Caucus continues to educate members and staff about not only the reality of childhood hunger in the world, but also the incredible people and programs that are tackling the problem.”

Related posts:

1. Akshay Patra - Food for education The Akshaya Patra Foundation is the world’s largest NGO-run midday...
2. Akshaya Patra crosses the one million mark! Akshaya Patra reached its goal of feeding one million underprivileged...
3. Gifts for mom, smiles for children It costs Akshaya Patra $28 to feed a child daily...

Related posts brought to you by Yet Another Related Posts Plugin.

No, the distressing conclusion I’ve reached is that I just don’t have the mental space to handle two competing responsibilities at the same time. Call it bandwidth, if you like, though I detest the word. Both are creative pursuits and both are satisfying, so it’s a bit of a disappointment to realize that I can’t do it all, or at least do it all well.

And I suspect, therein lies the generation gap. Unlike the youngsters of today, who are at ease listening to music while chatting with their friends over the phone while tweeting, I get distracted even listening to  NPR while driving-to the point that I become a road hazard, only saved by overtime effort on the part of my guardian angels  or those of my near-victims. I cannot write if music I like is being played, since my attention gets diverted and I start humming along. I cannot read a book if the TV is on, one ear cocks to the sound.

I wonder if technology and the ease of its use has wrought evolutionary changes in the span of just one generation.  How else to explain the utter nonchalance of the multitasking teenager, whose earphones have evolved from listening devices to fashion accessories to body part in the blink of an eye? Kids today also appear to be born with a symbiotic relationship to their electronics, intuiting their use without instruction. I have seen 3-year-olds master a Nintendo handheld without any help from their (clueless) parents.

Dinosaurs of my generation will probably become extinct due to our sheer inefficiency,  as hiring managers start asking prospective employees not how many things they know but how many gadgets they can juggle at one time.  While we’re blundering around trying to decipher the arcana of those twinkling lights and dazzling screens, the next generation will have out-transacted and  out-networked us, all while conducting multiple conversations and receiving multiple stimuli.

Meanwhile, this dinosaur has an unexpected free day tomorrow which shall be used excusively for WNI. I’m not giving up the fight so easily.:)

Pic by Thom Cochrane under Creative Commons license.

Related posts:

1. Generation “O” By Vidya Pradhan Her grandmother is Indian; grandfather Jamaican. Her...
2. “Uni”-tasking Day Are we really mindful about any of the activities we...

Related posts brought to you by Yet Another Related Posts Plugin.

The corrupt politician

The manipulative bureaucrat

Swiss bank accounts

The well-connected guruji and his numero-astrology

The item bomb and the casting couch

Crazy movie fans

Film shooting in Switzerland

Rigged award ceremonies

The oppressed Andaman tribal

Police brutality and corruption

The Mumbai underworld

Drug deals gone bad

The honest cop and his inevitable transfer

The khadi-clad activist

The intrepid journalist

The Bhopal gas disaster

The earnest documentary maker

Call centers

Dynastic rule

Mail order bride scams

The North Indian wedding and its excesses

Pakistani terrorists

Hellfire missiles

Construction sites rife with corruption and hazard

Prayag, Sangam and naked sadhus

Rajasthani forts and Rajput honor

The dumb Texan (who spawns his own set of clichés)
27 Indian stereotypes

1 incredulous reader

6 suspects

Six Suspects has been optioned by British producer Paul Raphael’s Starfield Productions and BBC Films.

Related posts:

1. Book review - The 3 mistakes of my life By Vidya Pradhan “Books like these,” huffed a friend, “expose...
2. Book review - Marrying Anita One of the benefits of leading an interesting life is...
3. Book review - a good indian wife If Marrying Anita was a look at the changing mores...

Related posts brought to you by Yet Another Related Posts Plugin.

itsdiff

invites you for an afternoon chat with

Annie Fox, M. Ed.

What kind of help isn’t helpful?

Guiding your child toward independence

a seminar for parents and teens.

How do you find the balance between wanting to do whatever you can to help your child succeed and stepping back so he/she can figure things out alone (even if that means making mistakes)?

Annie helps parents get clear on their true parenting role so that they can give their children what they need for healthy social/emotional development in elementary school and beyond.

When: Sun, Jun 28 2009 3.00 - 5.30 pm

Where: Indian Harvest Cuisine, 4161 Cushing Parkway,Fremont, CA 94538

Tickets: Admission FREE. Register here.

Teenagers encouraged to attend

Suggested donation of $10 per family

Venue & Snacks sponsored by : Indian Harvest Cuisine

This event is a great opportunity for parents to:

-Tune in to your child’s psychological/ emotional needs.
-Explore the role that stress plays in your child’s academic and social success.
-Learn to parent more calmly and effectively.
-Re-define your long-range parenting objectives.
-Help kids in ways that best support age-appropriate independence.

Annie Fox, M.Ed., an award-winning author and educator with 30+ years experience,
presented at the 2008 National Middle School Association Conference. Her books
include: the new Middle School Confidential™ series, Too Stressed to Think? and The
Teen Survival Guide to Dating & Relating. Learn more about Annie at www.anniefox.com
Read workshop participant feedback at reviews.anniefox.com

Please invite  your friends also. Parents & Teachers can forward to other friends who would be interested to attend the seminar

itsdiff also has a weekly indian music and talk show radio on KZSU Stanford 90.1 FM - Wed 6 - 9 am.

Related posts:

1. It’s Galaata Time! - Udavum Karangal presents Galaata 2009 The impulse towards charity is probably present in all of...
2. Parenting Today - Analysis Paralysis By Rohini Mohan Yes, yes, labor is excruciatingly painful, but...

Related posts brought to you by Yet Another Related Posts Plugin.

Savitha Sastry, guru of Sadhana Dance Academy in San Jose, CA and Navia Natarajan, an independent luminary to watch out for; both students of A. Lakshman of Channai, sparked the beginnings of the underground movement in Bharatanatyam on Saturday June 13, 2009 at the Leigh High School in San Jose. I say “underground” as an achievement we all should laud. A debut underground performance is characterized by superlative talent, an experimental approach, limited audience due to lack of publicity, and lack of sponsors. This recital had all these.

It was a pleasure to see these sinewy, evenly matched dancers on stage; they seemed to calibrate the stage into ethereal latitudes and longitudes. The first two pieces were traditional, the Mallari and Shankara Sri Giri; superbly executed, some or all of it had to be original choreography. Such flawless dancing induces one to fully immerse oneself into the pieces, the very many nuances were brought to life. Savitha and Navia broke through the pressure of symmetry sometimes, (I’m hoping intentionally,)- they would juxtapose instead of mirror-imaging their poses, making for an interesting effect. The other neat thing they tried was staggering their nritta, like syncopation in music.

The music for the third piece was cleverly edited, the pieces themselves were intelligently chosen. It was a study in contrast, not just because of the subject matter; but also because Savitha and Navia have contrasting styles. Savitha is a minimalist, she likes to say as little as possible while using the bharatanatyam vocabulary in a frugal manner. She’s like the mystery woman and one would like to see a less austere/ reserved side of her. Navia, on the other hand, is an expressionist and ventures to the far-reaches of the same vocabulary. Savitha’s virahotkhandita nayika showed very little, but it brought out the other woman “tease” very well. Navia’s khandita nayika felt deeply, showed effusively and brought out the man’s “debauchery” well.

The performance unraveled in the first piece after the break–“Sanjana’s love for the Sun God” had a lot of potential, the piece though, was muddled by either bad story-boarding, or mis-paced voiceover. A strong beginning showing the lovers and subsequent separation was sorely missed. The timeline for Sanjana’s yearning, and dance with the Sun God was confusing–the dance in tandem between Savitha and Navia was interesting, but again seemed out of line with the voice-over; we were supposed to be seeing Chaya, Sanjana’s living shadow at some point. The tandem dancing would’ve made for great real vs. shadow depiction, but was it the lovers, after the supposed separation? Chinmayi, Savitha’s student formed an unexplained middle-woman at the start, and 5 minutes into the item made a strange run from stage left to right… was she the wind? What was her role? The bar was raised so high in the first half, one could almost hear it crashing down here. What happened in this piece will remain a mystery. And the whole thing with the white cloth needed more context, why was it shown in the beginning? (The voice-over explained after a time-lag that it was Sanjana, wandering about as a mythical beast.)

Next came Chinmayi, who held her own when dancing in the line-up as the other two accomplished dancers. Though, it seemed like her piece was a hasty addition to the program, especially since there was no mention of her on the flyer. Her “Glimpses of Krishna” needed some reigning in at points; like with Putana’s pain/confusion when she realizes Krishna’s latched on to kill–it was overdone. It was not also in keeping with the spirit of the program. The MC had explained that there was no requirement for us to be knowledgeable rasikas for the second half, but then there was this traditional piece!

The recital redeemed itself in the last piece; which was experimental, novel in its story, and arresting in its portrayal. The two ordinary women played by Savitha and Navia, discovering that they are not alone in their wish for deliverance albeit for a temporary period of time was portrayed well. The non bharatanatyam vocabulary suited the story well, the two lithe dancers executed the free-flow rhythms well. Watching this made the memory of Sanjana’s story even more of a mystery- The choreographers paid so much attention to detail for this piece and not the other one?

What they should’ve done was create the entire second half around the Sanjana story but with this stylistically different approach. The red salwar khameezes, free-format dancing, white cloth indicative of the lost love–all of it would’ve fit very well in the experimental format. They could’ve dispensed with the filler traditional piece, and the second half would’ve been as enrapturing as the first one.

All in all though, one wishes Chinmayi well, and to see Savitha and Navia, together and as soloists again and again. However, a note to any further attempts at experimentation–do do a private peer level/ ordinary folk comprising friends/ family preview first! The simple feedback one receives at such informal previews goes a long way in tightening any performance. Also, a printed program lineup at the door is a must; even in place of the refreshments (it was a nice touch, but unnecessary). Without a program in hand, the audience doesn’t know what to expect, the MC’s script was no help at times. There should also be an announcement before the last piece that it is the culminating item–the event ended quite abruptly on Saturday.

In any case, one hopes that this is a more affirmative start to BharataNatyam Underground–more mature dancers and gurus taking on more experimentation.

Lehkikaa is a Bay Area dance and drama critic.

Related posts:

1. Bharatanatyam, Bollywood and Ballet Given the profusion of dance forms that thrive in India,...
2. A Rhythm of Four, A Tribute in Bells: Bay Area dance gurus of Kuchipudi and Bharatanatyam honor two ancient poets Writes Lehkikaa -Bay Area dance rasikas had an ethereal experience...
3. Keeping classical dance traditions alive - the Abhinaya Dance Company A fixture in the Bay Area cultural scene for nearly...

Related posts brought to you by Yet Another Related Posts Plugin.

Lately, things have been much better. Film studios have adopted a more professional attitude, registering as public limited companies and making their books more transparent. In return, they have been able to attract funding from banks and venture capital firms, in recognition of the enormous potential for success of the Bollywood industry.

However, the small budget film-maker still has to have a powerful script and well known actors to attract funding. Like any other business, the plan has to be, as they say, “solid.” So what happens if the subject of the movie happens to be controversial and the actors unknown? Filmmaker Onir( My Brother Nikhil, Bas Ek Pal), perhaps encouraged by the success of social networking and community organizing in other spheres, attempts to fund his new project through the internet. His first short movie is Abhimanyu, which deals with the story of a survivor of sexual abuse. He spoke to WNI from Mumbai.

First let me ask - how much does it take to make a movie?
Onir – It depends on the scale of the film. It could take about  a crore and a half to 40-50 crores. My aim is to make a collection of 5 short stories for 30 lakhs each. The reason for making 5 movies is that each is a short and it is not possible to screen a short movie by itself on screens in India. The films are interlinked but also stand on their own. For each movie, I am putting in 50% and hoping raise 50% through the public.

Abhimanyu, one of the movies, is about a survivor of child sexual abuse. Is there a market for movies like these?

O: One has to always experiment. At the end of the day if the stories are engrossing there will an audience. When I made my first film (My Brother Nikhil,) people were worried that its subject (AIDS) was controversial, but it found its audience.
Sometimes we get are too scared to try but audiences are quite bored by the usual run-of-the-mill Bollywood movies. The world is also getting smaller and we can find receptive viewers around the globe.
Yes, it has to be made within a certain budget to make money for its investors.

Have your movies done that?
O: The last one (Sorry Bhai) didn’t because it was released after the Mumbai attacks last year. The entire release got very badly affected. It made money for the producer but the distributors lost money. But one has to note that last year it is the small movies like A Wednesday and Welcome to Sajjanpur that made money when big budget movies like Chandni Chowk to China were flopping.

Is it the multiplex phenomenon?
O: Partly. The fact is that big cities like Mumbai have only multiplexes, so good or bad, small or big, all movies get released in multiplexes. Yes, I would not release a movie like My Brother Nikhil on a single screen. In smaller towns, you still have single screens but these kind of movies would not have released there before and they would not be released there now.

What about the international audience?
O: Till now the international audience for a Bollywood movie has been the NRI population. And these are typically attracted to big budget movies with well known stars. Small movies generally get only a DVD release. But there is a wider international audience that is interested in movies from India, just like they would be interested in movies from Korea or Iran.

How do you reach these audiences?
O: Film festivals. Festivals typically attract a discerning crowd. Only films of quality get picked up the local markets. I traveled with My Brother Nikhil to many of these festivals. In that instance, I was hampered because I had already sold the overseas distribution rights and was not able to take advantage of the demand for the movie in , say, the German cable television market or Canadian distributors who saw the movie in the San Francisco festival. This time I am keeping the overseas rights for the movie.

Why did you decide on this unique method of finance?
O: I’ve been wanting to make a movie on these unconventional subjects for a while but traditional finance has just not been there. My movies have no big names, and uncomfortable issues. All my stories are inspired by  real-life events. Abhimanyu deals with the story of a survivor of sex abuse. Omar, the next one is about the nexus between the police and male sex workers to entrap gay men. Afia is about a girl working in an NGO who discovers how deep the corruption in the system is. I am still developing the 4th and 5th stories called Megha and Rudra, respectively.

It sounds like the NFDC-financed movies of the 70s like Ankur, Nishant, Manthan. Has that source of financing disappeared?
O: The difference is that those movies dealt with corruption at the individual level whereas mine deal with endemic and systemic corruption in the government. I am shining a light on dated sex abuse laws and asking for them to be changed, for instance. That is out of the comfort zone for governmental sources of funding

So how is the funding coming along for your first project?
O: Facebook has been a tremendous source. We have a page for each movie and details on how to contribute. It is a new thing and the response has been great. I’ve already raised the money needed for Abhimanyu and shooting starts in mid-July. Of course, I am also helped by the many people working on the movie as volunteers.

How does the contribution system work?
O: There are different categories. The first is a  student category-1000 rupees; that is about the money they would spend on one weekend going to a nightclub. These contributors get credit on the movie. Yes, it is a little bit of sacrifice for them but they get a sense of community and the recognition that they had a hand in getting this movie made.

People contributing between 25,000- 1,00,000 get their money back. Contributions  over that get a share of the profits. We’re not a real big company. If I do profit sharing for everybody, I’ll go crazy doing the accounts.

What kind of a cast have you been able to get for your movies?
O: Fortunately, I have a good relationship with the actors I’ve worked with in the past. Juhi(Chawla), Sanjay Suri and others are very happy to be part of the project. I am also launching many new faces.

I did approach some of the big names, arguing that given their interest in animal rights they should be interested in human rights too. But I did not get any response.

What has the reaction in the industry been to this novel way of funding?
O: When I went public with my idea people called and told me I was spoiling my reputation and making a cheap movie. But I don’t care. I feel people will be involved with the movie. They will have ownership in the movie and will encourage friends and family to see the movie. In a sense it is a community project.

A lot of people thought I was slotting myself. But I have an identity and I treasure it. I want to have the independence to make the kind of movies that interest me, not 20-crore extravaganzas.

How does one become a part of this project?
O: Facebook members can look up “Abhimanyu” and they will find directions. Others can check out http://iamabhimanyu.blogspot.com where there is an online donation system. I will thank and recognize everyone who is kind enough to support this project.

Where has your biggest support come from?
O: Facebook. The response has touched me and left me speechless. A lady in New York who was an early investor called to ask about the status of the movie. I told her we were still 5 lakhs short. She sent me a mail saying, I am sending you 5 lakhs, can you start shooting, I want this film to happen. I actually had to tell her to hold back because there were other people who were interested in being a part of Abhimanyu too.

Related posts:

1. Movie review- A Wednesday A Wednesday has been unfairly clubbed with other movies dealing...
2. Kite Runner, the movie- True to the book By Rohini Mohan For those living in the San Francisco...
3. Movie review : Jaane Tu…..Sho Shweet How refreshing, that a movie about upwardly mobile young people...

Related posts brought to you by Yet Another Related Posts Plugin.

India has a long history of entrepreneurship. Traditionally, entrepreneurship in India has fallen under one of the following categories: (a) family-owned businesses who pass along established businesses to the next generation of entrepreneurs to grow and diversify (b) forced entrepreneurs who do not get as many lucrative job opportunities as they get opportunities to make a decent personal income without significant investment (c) self-made businessmen with the nose for big opportunities and the acumen to bring together the right stakeholders and provide them with good share of profits in return for their power, resources, expertise or moneys. These three set of entrepreneurs still contribute to a bulk of the innovation and new business in Indian markets.

The late 90s saw a new breed of entrepreneurs, for whom entrepreneurship is a calculated career choice. These entrepreneurs neither have family businesses, nor dearth of good job opportunities, nor the natural tendency or access to deal with government, media, corporations or investors to mobilize a mature market opportunity. These entrepreneurs are usually young graduates from top colleges, returning Indians with a taste of entrepreneurship in the US, or senior employees in multi-national tech companies. This new breed of entrepreneurship, or organized entrepreneurship, subscribes to the ‘American dream’ formula and relies on access to external investment at an early stage of the company. In college campuses and NRI circles, the word entrepreneurship almost exclusively refers to organized entrepreneurship. Unfortunately, organized entrepreneurship in India has not seen enough success in India and probably mis-represents the term. Instead of extending the incumbent models of entrepreneurship in India with the meritocracy and scalability of entrepreneurship in the US, it operates as an elite form and even dismisses the traditional Indian models as rustic and arcane.

Dysfunction breeds dysfunction. In the late 2000’s, foreign investment came looking for investment opportunities in India at all levels - venture capital, private equity, hedge funds, mutual funds, real estate funds, investment banks. Between 2006 and 2007, dozens of US VCs set up India offices and set aside first funds of $50M to $150M for Indian investments. The fund management naturally saw opportunities through the goggles of the funds’ successes in the US and saw market trends from a US frame of reference. A rush to allocate the funds was tempered by the lack of understanding of Indian markets, culture differences in Indian start-ups and lack of access to local deal flow.

People who understood the differences and could translate from one culture to the other were at a premium. Full-time hires moving back from the US were good translators but suffered from the same handicap in understanding. Only a few funds hired management with operational experience in India, though rarely could a fund hire management with early-stage operational experience in India. This gap gave birth to a new culture of angel investing that mis-represents the phrase angel investing, and for identical reasons as organized entrepreneurship, let us call them “organized angels.”

Angel investment usually comes from ex-entrepreneurs or wealthy individuals with a penchant for new ideas, and is invested in entrepreneurs they can trust. The criteria for such an investment is informal, and each angel has a unique way of evaluating the idea, size of opportunity and people. Just like entrepreneurship, there is a long tradition of angel investing in India. Self-made businessmen, individual investors, family businessmen and wealthy corporators have been promoting new ideas and entrepreneurs informally and every successful self-made businessman tells about those in the network who helped him in times of need when no one else gave them a chance. Although angel investing is always active within networks, in India, it could even be seen as an extension of friends & family.

As long as real angels and real entrepreneurs work together to build great companies, there is much room for innovation and development of new ideas in India. As long as organized angels and organized entrepreneurs indulge each other without affecting the outside world, they would not affect the market in a significant positive or negative way. The trouble begins when the two paths cross. Entrepreneurs should be wary of organized angels when seeking investments for their businesses. First time entrepreneurs who are inexperienced with corporate structures, equity structures, and investment structures should especially be wary about raising money from organized angels posing as angels. This would take away their chance of building a company even before they got started. Here are a few ways for real entrepreneurs to identify organized angels.

Angel writes the cheque.
If the individual evaluating the deal is different from the individual writing the cheque, he is no angel. Angels may operate through trusts or other entities, but they do not not invest someone else’s money nor do they need the approval of another individual (besides maybe their wife!). Organized angels insist on council meetings, board approvals, business plan submissions, and defering to someone else for decision making or writing the cheque. If angels are organized as a fund that believes in a process driven evaluation and council driven decision making, the entrepreneur is probably paying the price of an institutional investment while raising money that would only get them past seed stage. Organized angels demand multiple board seats, usually seeking majority control of the board, making them more like institutional investors than angels.

Convertible debt is not Preference equity.
If the investor offers you a convertible note allowing himself sole discretion to convert to equity or withdraw money with interest when an institutional investor participates in the future, it is not an investment, it’s a loan. Convertible notes show as liability in the balance sheet and are not equity. The entrepreneur and future investors must view it as debt since neither has control over their conversion to equity. Preference shares, on the other hand, give investors rights protecting their interests in case of below-par performance, while giving investors all rights and ownership of equity. Preference shares do not force a dividend or return of loan when the company raises more money or generates cash, although allowing for those provisions if all parties find it necessary. Don’t let organized angels tell you that Indian laws do not have the equivalent of US preferred stock or that preference shares in India involve more paperwork than convertible notes.

Planned flip to a VC is not in Company’s interest.
An investor who wants to sell off all or part of his shares in the next VC round to cover his initial investment (with committed IRR) is not betting on the long-term success of the company, only on its ability to raise a VC round in the near future. While a long-term investor bets on the company’s eventual success, an organized angel is focused on the immediate gains. The organized angel would set up the equity structure, board structure and controls that protect this short-term agenda, even if it is in conflict with the company’s long-term agenda. After flipping to a VC, organized angels usually leave the company reeling without enough insider control and handicap future strategic alternatives. Organized angels also maintain sufficient control over the terms of the VC round, the choice of VC and when/whether it is the right time to raise money. In some ways, organized angels are VC brokers who get them good deals in return for a small commission that keeps them motivated.

Tranches are not for start-ups.
Start-up stage is probably the fastest growing stage for the company’s value. Every milestone that the company hits in the first two years reduces investment risk and increases valuations. Just as the organized angel wants to retain the right to not invest a committed amount unless a milestone is hit, the entrepreneur should retain the right to not accept a committed amount if a milestone is hit. If this is not the case, an entrepreneur is probably doing a dis-service to the company by issuing shares on a 6-24 month old valuation after hitting a big milestone. Besides, setting milestones beyond 3-6 months unnecessarily ties the company to a direction which may not be right. At start-up stage, there is tremendous value in agility. One should expect major milestones to change every 3-6 months and structure the business to allow for that change. Tranches help organized angels manage exposure on their loan and manage cash-flow on behalf of their fund. However, this is unnecessary baggage for a seed-funded start up.

Kashyap Deorah is the founder and CEO of Chaupaati Bazaar, Mumbai’s phone classifieds. If you are looking for good deals on computers, electronics, mobiles, automobiles and rentals, call 922-222-1947 and talk to a friendly call center representative. These deals are advertised by thousands of households and local entrepreneurs. You can advertise on Chaupaati too. Just call 922-222-1947.

Kashyap also maintains a travel blog where he logs his travels and tribulations.

Related posts:

1. Entrepreneurship in times of Recession Writes Kashyap Deorah - Recession is a great time to...
2. In heaven, as it is on earth… Salil Chaturvedi takes a humorous look at the American obsession...
3. Trends in Hiring in India Shreyasi Deb examines the trends faced by employers looking to...

Related posts brought to you by Yet Another Related Posts Plugin.

One wonders, what would Tiananmen have been like in the age of tweets?

Huffington Post has a compilation of Tweets on the Iran elections, constantly being refreshed. But you can probably find your own threads at Twitter.com.

Related posts:

1. The vote in Iran My heart goes to the youth in Iran, who...
2. Ananda Sen – A new voice in the online music revolution By Vidya Pradhan First there was the single. Those of...
3. Withdrawal symptoms The Onion, as usual, got it absolutely right( is it...

Related posts brought to you by Yet Another Related Posts Plugin.