Quarter 11 - Week 6

Coming back after a break seems to have caused a memory lapse when it came to classes. For some reason, there was very few actual readings for this week, so it was more like a two week vacation. Profs come in to class, see our vacant stares and go 'Good Lord, don't tell me we need to do a flashback to the events from a couple of weeks ago!'. It's a good thing they're able to do a 10-minute recap after which our vacant stares are more related to the high-frequency transmissions being broadcast rather than the connection/flow that we're supposed to be going through. In any case, it's time to buck up... the assignments and projects have begun to exert some pressure.

New Enterprise Financing

The prof quickly wraps up the Kakofonix case, and moves on to Marconi. Marconi's a lot simpler than all the other cases thus far. It talks of how founders expect to raise capital through multiple rounds from investors, and what percentage of share they're willing to part with. Once all of this is calculated, and when we see how dilution works out in advanced rounds, we begin to add some realism. It's like one of the investors asks a question after pondering for a while... 'But, what if we don't get our promised return. What if the valuation actually drops?'. Uh oh, go the other investors, we should think of that. A little huddle and argument later, they proudly come around and say that 'All right, if the price of the share goes down, then we get to have an anti-dilution clause, thereby protecting the final value that accrues to us'. So all of a sudden, the entrepreneur who's expecting to hold 55% of the company (as an example), ends up with just 6% (again, an example)... because to ensure that investors can exit at their target value, SOMEBODY has to give up share and it can't be other investors. Anyway, in this case, the terms also suggest that the valuation can go anywhere between 60% and 140% of the expected value, and that the founders dont want to go under 26% share, and investors don't want to get under 50%. So we look at all the extremes, to see how it pans out and what could be the ultimate value that all shareholders receive. We also looked at a view of approaching funding, and how entrepreneurs have a fundamental issue to figure out - do they want to create value or do they want to control the firm. Economics vs. control, the prof calls it, so we look at that aspect and see how anti-dilution, preference shares, call/put options, drag along/tag along options play a part in this whole shenanigan. Awesome stuff!

Reinvention through Entrepreneurial and Intrapreneurial Learning

The prof now moves away from the ownership and intrapreneurship module, and tries to help us get more onto the plane of self-knowledge and mastery. First off, he asks us to describe what we proudly hold dear as Indian, stuff we don't find elsewhere. So people give out stuff like charity, friendliness, tolerance etc. etc. lots of nice thingies that we think we're proud of. We're then made to sit through an hour long video that describes the predicament of farmers in rural India, we have a lot more people out there than in urban India, and we get a glimpse of how bad their situation is. We see example after example of what prompts people to commit suicide, and at the end of the session, we really wonder if we are of any use. Sitting in our own comfortable cocoons, we shut our eyes from everything bad. It's sad when we think that India's more known for its generosity, when we are shown evidence after evidence to the contrary. Shows just how little we know about what's happening here.

If that wasn't hard enough, the next session was a guest lecturer who speaks of how old age is a slowly approaching iceberg. The speaker talks of the increase in the number of separation cases of old folks from the family, the emergence of old age homes, and the intolerance shown by today's busy youth to their parents. We hear of examples where the elderly are 'forced' into grandparent-hood, just because the parents dont have time. And when the kids grow up, these very folk who helped settle them, the grandparents, are treated as useless pieces of furniture around the house... just obstacles that come in the way.

This week definitely shook me, with so many problems all around us, I count myself very fortunate that my issues are not as dire. I have the choice and freedom to attend classes at one of India's most prestigious institutions, to spend my time anyway I want, to talk to whoever I want to... how many others can claim the same? And yet, what am I doing with all these privileges...

Quarter 11 - Week 5.5

I never thought I'd see another week 5.5 again, brings back such memories! So if you happen to visit the past, you'd know that due to a mixup, some of our classes were delayed by a week. This week was supposed to be the return of balance to our peaceful world. So anyway, we had only one subject with back-to-back sessions, and it was definitely a session worth coming in on a Sunday for.

Reinvention through Entrepreneurial and Intrapreneurial Learning

We had three cases for the day, and a heck of a load of readings. However, we focused on just one of them, the prof's own journey as an entrepreneur. I remember the feelings and thoughts that I had while reading the case, it never occurred to me that entrepreneurship could have so many potholes along the road. Yes, I knew of problems due to capabilities, bad timing in markets, inability to raise funds, and all that... but it never occurred to me that well known people could be problems themselves. The prof showed us one side of the industry, one only spoken of in Bollywood movies where there's a hero against a bunch of villians... the only difference being that here, in real life, heroes can lose.

He pointed out a few areas where he made mistakes, and mentioned what all should have been done differently. He also gave us a live example of what happens when you connect too emotionally with your business or idea. He argued that being entrepreneurs, we should have the strength to call it quits when things appear to smell bad. Sticking onto it just because of your emotions is akin to riding a tiger, the longer you're on it, the harder it is to get off. At one point turning back is no longer an option, and you just hope for the minutest of probabilities of goodness to come through.

In its own way, it reminded me of STDM from last quarter. The concept of throwing good money after bad, and the concept of Prospect Theory (When you're looking at things in the losses frame, you tend to take a larger risk than you would have otherwise). The prof then talks about how low things got, and he mentioned what it took for him to get back on his feet and stop feeling the after effects from the misery of the fall. He's not the first prof to claim this, and there have been other profs who try to stress this across to us in as non-fanatical a way as they can... there is a higher force at work. Irrespective of the faith from which you come, our prof stresses that at the end of the day, they all say the same thing. He mentions how important it will be for you to constantly keep an ear out for a sign from the understated, the subconscious, the 'spirit' or 'elements', call it what you will.

At the end of the class, it's not like the athiests suddenly got converted to believers... but I'll definitely say that those who believe had one more encouraging voice that helped settle their muddy waters just that little bit more. The prof mentions that the whole of the second half of their course is going to try and cover resilience, in the face of obstacles, which he thinks is going to be very valuable to those who want to take the unbeaten road. I, for one, look forward to it.

Quarter 11 - Week 5

You know you're getting old when you think that updating posts can happen even two-three days after you're actually supposed to. Talk about a 50% delay in timelines! This would NEVER happen in the IT industry.. or atleast it wouldn't be estimated for, despite what reality keeps suggesting. The good news is that the stats engine suggests that people actually read the blog in these last two days - there are people looking at the interview process from waaay back in the day, one of my first few posts in fact. That's the zero-th year students, or should I say potential candidates.. then there's another set of people looking at what's happening in Quarter 3, apparently a bunch of first-years who just can't stand the suspense of the weeks to come. Still, oldies always feel good that atleast someone wants to hear their war stories... so no complaints from my side.

New Enterprise Financing

The prof takes his time... we're supposed to be doing two cases this week, but the prof intends to ensure that we get the fundas right. He takes us through examples of how different rounds of financing happens, taking the example of Cartographics Online. He goes on to explain the meaning of the terms pre-money and post-money valuation. Apparently, early stage investors are this full-on secretive types. They don't like that free-market, efficient-market theory in all its finery, but prefer to keep information close to their chests... just like entrepreneurs. Sure, the entrepreneur runs around saying 'I do this, I do that, my idea is this and that' but try asking him 'HOW' he does it. VCs apparently do a similar thing. They don't want to talk about how much money they spent to get what share of the company, so if a company is valued at 1,000,000 dollars, and a VC is willing to invest only a 100,000, then he gets 10% of the company. Imagine him going out and saying that to other VCs, the replies can vary... the worst case scenarios are 'Chee, you put only 100,000?' or 'Chee, you got only 10%?' or 'Chee, the company's only 1,000,000 dollars?'. To save everyone any downside, they say 'ok, you know what, if I don't give you my 100,000 then technically you'll hold a value of 900,000 dollars'. So we'll all go and say that we invested in a company with a pre-money valuation of 900,000. For some reason, hiding the exact info seems to work for this industry, so I'll leave it at that. The kicker comes when the prof tries to show us how the company in question, Cartographics Online, should worry about its assumptions when predicting the future to VCs. He says that it's important to do a sensitivity analysis to find out that even if you were to go a little wrong, how much will it actually impact your final share of the pie. There's also a little talk of how the pie shares get diluted when newer rounds of investment happens, and some magic formulae that explain this. The way the prof puts it, you're surprised that this is post-grad level stuff. Then again, he's keeping the problem simple (which still in any case can't hide the simplicity of the funda here).

Reinvention through Entrepreneurial and Intrapreneurial Learning

Right, so you remember the rant from last week? The way the prof went all ballistic when we didn't read? This week we were supposed to watch some videos, and everybody thought the videos would be shown in class. The prof comes in, asks did you watch the videos, hears about what happened... just shrugs his shoulders and tells us 'Even after knowing everything I do, I still lost my temper the other day. I went back and asked why that happened? I was obivously angry, and one thing you should know is that anger is what you feel when you dont accept that things happen that you cannot control, and therefore you should have no expectations in such scenarios. And I realized that you people reading is beyond my control, and therefore I should set no expectations. This course is for you guys to understand the important facets of life, and if you want to treat it lightly, feel free... I don't gain anything anyway.'

After some time, he does point out with a gleam in his eye that this doesn't mean we get to shirk off readings through the rest of the course. He does have some control over us, our grades and all, so that still allows him to exercise some expectation. Anyway, nice guy that he is, he sent out some links for us to check out later. With a firm announcement that we should watch it, as they were videos that would be of great meaning to us - videos on Happiness, hardship, self-esteem, love, anger etc.

The next session had us discussing three specific Jataka tales, stories of leadership and the prof gets us to discuss what we thought were the salient points that we could take from each of the stories. The whole point was not to treat the stories like gospel, but just to absorb what lessons we could take from it. The stories were the 'Apannaka Jataka', 'Makhadeva Jataka' and the 'Mahakapi Jataka'. Good stuff, nice takeaways, and definitely a reminder to re-read the Jataka and Panchatantra tales. God knows what I missed as a kid, which I might realize as an adult.

Takes a while before I realize that five weeks are up... and there are only another five to go.

Quarter 11 - Week 4

For the first time in three years, New Years was not ruined. Yes, I understand that education is a very important of life, but in my perspective so is the concept of starting afresh, after a night of frivolity! And the events should never meet... NOBODY, atleast no sane person, likes to spend New Year's in college, no matter how insightful the day's classes are. And so, for the first time in my life at PGSEM, New Years was spared. And I spent it the way any normal person would... sleeping.

New Enterprise Financing

Man, we were still on that damn Vegetron case. I thought we'd done and dusted it, but apparently not. Luckily though, we actually finished it halfway into the first session and then we moved on to Adjusted Present Value, where we describe the effects of the various sources of funding on the enterprise. We did quite a bit of glancing over the different types of funds and the math of it all. The Corp Fin textbook actually describes the entire funda quite well. Finally, we're ready to tackle the case of Cartographics Online next week.

Reinvention through Entrepreneurial and Intrapreneurial Learning

So we were supposed to read a couple of intrapreneurship cases for the day. And apparently there were a few cases from a couple of weeks back which the prof wanted us to go through. He kindly sent a reminder on the day before classes, so that we'd be prepared. The day of the class, he walks in with full enthu, gets us warmed up and starts discussing the case. After around fifteen minutes, he makes a reference to one of the cases and goes.. "Do you see it?" with all the expectation in his eyes. 10 seconds of pindrop silence. And he asks "Didn't you read?"... 10 seconds of pindrop silence. So he ignores that, and goes to the next point. Within a couple of minutes, he asks "Get the connection?", and when the same thing happens, there's this incredulous look on his face. "Has none of you done the readings for today? Those of you who did, raise your hands!". Surprisingly, for a class consisting of PGSEM and PGP, five-six feeble hands go up, out of over seventy. For the first time during my PGSEM journey, I heard a prof admonish the hell out of us. This guy was furious! Doesn't raise his voice beyond an acceptable limit, but his anger is evident. He explains how REIL is not a subject where you can just sit there, you get to take a lot away from each story he brings forward, provided you read the case. Each reading, each case is picked after strong deliberation on whether it brings out a key value, and if we don't read it... it's as good as doing nothing. He continues the class, every once in a while sighing when we don't get it, shakes his head and moves on. Towards the end of the session, he calmly tells us not to bother coming the next day if we don't read the cases for it. He ends by saying that if we continue not to read, he'll just sit back and make us do presentations in each session while he grades them. It's not something anyone of us wants...

The next session obviously has a marked difference. Everyone's commenting, bringing out points and the prof's keeping up with the pace by jotting them down and adding some refinements of his own. I know that most of us consider this elective to hold some deep content, and I'm keeping my fingers crossed for us to keep up with his requirements if we're to unearth it.

Quarter 11 - Week 3

Nothing special about this week, just the cold December mornings and the standard cusses about how we end up in class by 8 AM instead of snuggling in bed under a warm blanket. Then your thoughts go out to those batchmates of yours who finished last quarter, and how they're gleefully sleeping soundly in their warm homes. Tends to bring out very un-Christmassy thoughts...

New Enterprise Financing

This week, we continue a little with the Capital Market Myopia paper. The funda for this, as I've mentioned last week, is that people go about investing in stuff that is actually good, but because there's so many people investing and they've got their blinkers on, the sector gets filled with money - which is not so good. Innovation and money tend to bring out the worst in each other... you need to starve one to make max use of the other. Anyway, our prof's trying to approach it from a different angle. We were discussing if there were some early signs that we came across, that should have pointed out to the investor that it's not the right time to do that particular investment. And so we pore over the GDP data for those years, the returns that the companies tended to have, and relevant data about the population (such as unemployment rate) to identify the possible signals that investors had. One thing the prof said stood out in my mind... sometimes people see other people investing in something, then you tend to wonder if the rest of the world has gone mad OR are you not seeing what they're seeing. That's a dangerous place to be in, says the prof, and it inadvertently leads you to making the same mistake they did.

The second session had us discussing the case of Vegetron, and how they came up with estimates for cash flows, and a balance sheet for the next five years of that startup. I didn't really catch much, because the professor's voice was being drowned out by my snoring (I'm not entirely sure if the snoring was in my head, or out there for real). The prof did say that you need to love numbers, I understand now why he said that. But yea, he says that we need to give this a manual run after class to really get the funda across. Maybe once I do that, I'll be better poised to understand the nuances.

Reinvention through Entrepreneurial and Intrapreneurial Learning

We had this guest speaker who looks like he's a simple person from one of India's many villages. He comes in, introduces himself, and then spends two sessions just yelling at us and making us feel worthless. That's it. Funny thing is the whole class was hanging on to his every word. He talks of how the IT wave ruined our country's progress, and how we avoided hardware development which is difficult but far more profitable to us in the long run (both socially and financially), in order to make a quick buck out of software which is far easier but has had us do the equivalent of slaving over work that no sensible person would do. The only reason we do it is because they're paying us for it, and we dont bother finding a more efficient way to do it. The concept of time vs. money comes out very clearly when you look at why we do what we do, and why the clients do what they do.

He talks to us about how India has so many problems, and how if we apply 1/10 of our mind, we can bring a great deal of happiness to many of India's underprivileged folk. He shows us examples of guys who travel to tribal village in various parts of India, or inside volcanos in Indonesia just to bring clean drinking water or electricity to the people who live around the region. He gives us more examples of how students who fail to pass out from some of India's colleges are groomed and now paid a hell of a lot more than India's finest Ivy League scholars by some of India's top corporates, after they're trained at simple institutes started by some visionary men. He talks of how we can make a difference, but just because of our colonial heritage and our middle class mindset, we hold ourselves back.

He challenges us to break away from the rut and do something useful with our lives. He stops short of asking us to drop out of the Indian Institute of Management, just pausing to say that we're just here to get yet another certificate, or sticker of authenticity using which we anyway go back and do dull jobs. He expresses his anger and disgust for the IITs and IIMs saying how they've ruined the country when they could do so.. much.. more. Instead of encouraging and developing visionaries out of the capable minds that come to them, they just convert those minds into more expensive cattle. The fault doesn't always lie with the institute, the students still have that middle class mind, but it's the institute's job to help students break those shackles.

The class stays silent for most of the two sessions, either pondering how right he is, or how wrong he is. Time will tell if anyone takes his talk to heart and really does something. God knows we're capable, and there's plenty of opportunity out there. We don't need to be in the IIM to know this, or help do something about it, but now that we're here... do we have the courage to make use of what we know for the benefit of others and not just ourselves? Or are we still going to be a better breed of cattle?

Quarter 11 - Week 2

The hustle and bustle begins, half of the courses started this week (courtesy of the mixxup from last week) and the halls are bustling again. Starting at the bookshop where the long queue snakes from outside the door, to the Amrith Kalash cafeteria where you spend half the lunch break waiting in line to buy a token, and the other half wolfing down the meal with the case study for the afternoon's session.

New Enterprise Financing
This week has us discussing funding sources and the differences between VCs and PE guys. Apparently HNI individuals/trusts play around with a specific class of assets called alternate assets. This is approximately 5-6% of their capital, and goes towards VCs and PEs, real estate, oil, arts etc. Depending on the size of the VC fund, it wields a certain amount of power in the new venture arena. We even spend a little while discussing basic differences between the types of firm ownership, how partners are compensated, and how returns, once harvested from a venture, are not reinvested back in... that's the name of the game. The prof takes us through the stages of new enterprise funding and talks of the gates between them, and how certain problems with the venture partners should be unearthed far earlier in the process than much later.

The second session has us discussing more about what makes new ventures tick, and about why some ventures tend to come together, mainly due to aspects like capitalizing on knowledge intensity... or for something far easier to understand, like having a global footprint. We had a case for the day, not so much a case, more a reading that talks of how myopia can affect the ecosystem/field. Apparently, individuals tend to think from their perspective while investing in new ventures, without realizing what can happen at a large scale when everyone invests. By themselves, it appears to be a really good decision, but when you look at it from a larger perspective, you tend to realize that there's too much money in the game, for a value that doesn't measure up. And it was not only the individual's fault... collective thought was just missing. Or so I think the funda was. The example was the hard disk storage domain back in the mid-80s.

Reinvention through Entrepreneurial and Intrapreneurial Learning (REIL)
The prof starts off with an abstract talk. Speaks of how this course is something we should be aware of. He wants us to uncover a deeper meaning for ourselves, by paying more attention to what we want... to what we believe in... and to have some sort of direction. He opens up a little about himself, about his journey and then speaks of how we seem to be missing ownership. This lack of ownership is what tends to crush innovation, and he's hoping that by the end of this course, we'll walk out knowing what we want to do, and what we're willing to take ownership of.

We spend a little time discussing the characteristics of entrepreneurs in the second session, and the different aspects that make a workplace entrepreneurial. It's interesting that we are now drawing block diagrams with words we learnt in school. Stuff like passion, competence, trust, support, discipline... these are lofty goals that we're primed for in school. But something goes wrong, and we get to hear all this again when we come to do an MBA. Anyway, we move on to discuss the difference in the outlook of an entity as it transforms from a startup to an organization, and about how people tend to choose between two roles in their lives - One as an administrator, and the other as an entrepreneur. It's quite interesting to see the different outlooks of both these types of people, and as to how willing to stay low down in a hierarchy need not mean that you should be willing to remain at the level of an administrator. The prof only says one thing, even if you're a clerk by the time you retire, maintain that spirit of entrepreneurship and know that your choice is conscious. I know it sounds a little abstract, but I think his basic funda is that irrespective of our station in life, there's no reason to hand over the reins to any other individual. Be your own master, he says.

2 weeks down, eight weeks to go.

Quarter 11 - Week 1

Damn it, I'm still here.

I come in to campus on Friday, and the regular classrooms look much emptier. It's like PGSEM Quarter 7 and 8 all over again... the halls are a little less noisy, the energy a little low, the mad scramble for the attendance monitor at ten minutes before class (I never really understood that, we have like 15 minutes to swipe... why the hell was everyone waiting till the clock struck T-10 anyway??)... anyway, I miss that. I think I was actually happy last year this time... it looked like more space to breathe now that those 'damned seniors' were gone, felt a little lonely this time around.

Would have stayed that way, had it not been for a couple of things. One was the small bunch of us 2009ers who hung around for yet another quarter. A couple of them were sneaking back into class, hoping to do an audit (they'd be mad to actually take more credits and go through the pressure, even if it was just one more quarter!), a couple others actually willing to undertake the extra credits because.. well.. they're crazy... and finally there's a bunch of students who just took up the freedom and kept some credits for one more quarter. So they kind of made up for part of the melancholy. Then... a few juniors were walking around confused as usual like we tend to be, see me and walk up to me. "What the hell are you still doing here? Why can't you get out and leave us in peace!" they ask, another guy asks "Failed, aa?". As I correct whatever misconception comes across with a tinge of despair, confusion and glee... the remaining gap was filled. Home, sweet home.

New Enterprise Financing

One of our profs from first year happens to be teaching this course, he's the prof who did the first half of corporate finance for us. This course was really given the two-thumbs-up by many seniors (personally, I think to spite us and make us go through one last round of pure hell), and I just had to attend this one... especially since it says "New Enterprise". Imagine my shock when the prof outright says "Guys, I've gotten feedback from your seniors that many join this course thinking that it's going to be about entrepreneurship. This is not about entrepreneurship. This is hardcore finance topics, where we study the numbers of new ventures.. and study the various aspects of the same. You better like numbers, and better remember corporate finance and FinAcc, else you're in for a load of pain... there's the door, get out while you can". Here I'm thinking that let's save one course slot for this guy, it'll be good.. and here he deflates any entrepreneurial learning bubble that I had within the first five minutes. Yet, the introduction of the course still sounds interesting. Appears to combine the concepts of FinAcc and CorpFin to understand issues that come up while dealing with new ventures, both from the perspective of the entrepreneur and the investor, leaning more towards the latter.

Of course, the standard drivel about it being a heavy course... lots of reading, lots of numbers, standard pain and relative gain etc. I'm going to give this course atleast a looksie, before considering if I should make a switch. The prof doesn't gain anything out of this course, I do... and seeing him plead to us to really think if we want to be in this course if we don't appreciate numbers much is worth giving it a rethink.

Reinvention through Entrepreneurial and Intrapreneurial Learning

It's a mouthful, and I'm thinking of just calling it REIL next time onwards. Why oh why can't people come with less complicated names. In any case, there was some botchup by someone either in the PGP or PGSEM arenas (I'm betting it's the PGPs.. the PGSEM office makes their plan way out at the start of the year and it's far too simple to screw up. Think about it... 10 weeks classes, 1 week break.. repeat 4 times... really, how could we POSSIBLY screw up?). Thanks to that, our classes will only start next week.

This totally spoils my concept of a weekly update, but I guess we'll just have to get around it... one week I'll probably write up a double-sized account for the week that was.

It's good to whine again. It's good to be back, even if it's just for one more quarter (hopefully).