TiECON 2012 - Angel Fund panel

TiECON 2012 organized by TiE Chennai yesterday had an excellent panel discussion on Angel Funds.

Gopal Srinivasan of TVS Capital Funds moderated the discussion. The panelists were: Paul Singh of 500 Startups, Rajesh Sawhney of GSF Accelerator & Superangels, Rehan Yar Khan of Indian Angel Network, Karthik Reddy of Blume Ventures and Suresh Kalpathi of Chennai Angels.

Of the above, Rehan Yar Khan and Suresh Kalpathi represent Angel investors: wealthy people who invest their own money in small start ups, and help the companies go to the next stage. Paul Singh and Rajesh Sawhney represent accelerators - where they identify small companies who can be put together and fast tracked to next stage. Blume has raised money from nearly 100 HNIs, so it acts as a Venture Fund but Karthik claims they work like Angel investors.

Karthik provided an excellent insight into the kind of companies they invest: A company which will reach revenues of 2-5 crore INR within 2 years (so that they can attract investments in the next round from VCs) and can hit breakeven by this time so that they are not worried about any delays in the next round of investments. Even if there is no one interested in investing in such companies, Blume can itself put in more money in such companies.

Paul Singh said they typically invest 50,000 USD in their companies, hoping that it will last them for 6-7 months and look for next level investments. He said putting the start-ups together makes them perform better - peer pressure driving them to deliver more.

When queried on valuations, Paul said one could consider a ball park of not more than 15% of the company for cash to last for an year. Rajesh said he will not invest in a start-up company where the founders have given away more than 30% before the Angel round (to friends and family). Because there will be more dilutions in the subsequent rounds which will leave very little for the founders in the end. he said he has helped fix this issue for couple of start-ups but where it is not possible, he will not invest in them, even though the people are good and the idea is good.

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There was a session on 'கஷ்டமான கஸ்டமர்' (Difficult Customer) in Tamil. S.Ve.Shekhar moderated the session. Karunanidhi of SKP Engineering College, Jayakannan of Arasan Match Industries and Muruganantham (low-cost sanitary napkins) of Jayashree Industries participated. It was quite an enjoyable session too, with a lot of witty repartee from Shekhar. This sessions could have been longer - it appeared to me that the whole thing came to a stop rather quickly. It is nice to see TiE organizing a Tamil session too.

It was at the end of this session that our new book was launched - a book written by IIT-M Prof A. Thillai Rajan (in Tamil): A guide to first generation entrepreneurs. This book will be available for purchase in another 3 weeks.

Crumbling democracy in Sri Lanka

Indian news media seems to be least bit concerned about the situation emerging in Sri Lanka. The Tamil Nadu newspapers (both Tamil and English) were primarily concerned about the civil war in which LTTE was destroyed by the Sri Lankan military. Since then, the coverage, if any, is only about whether Sri Lankan state will be held responsible for the human rights violations during and in the run up to the war.

Currently, the Rajapakse clan who have enormous control over every aspect of Sri Lankan administration is in the process of impeaching the Chief Justice of Sri Lanka Supreme Court. I have not seen any news coverage of this in the Tamil Nadu media.

The Supreme Court of Sri Lanka has hardly been the upholder of democratic rights and human rights of the Sri Lankans. The Cage, by Gordon Weiss documents how the courts have systematically sided with the ruling dispensation to terrorise and bulldoze the opponents into submission. Yet, whenever bodies such as UN and International human rights organizations have complained about the dwindling civil rights in the country, the ministers and secretaries of the government will jump up and say that the Sri Lankan justice system is exemplary and will provide justice for all better than any foreign body would.

The current attempts of impeachment shows that Rajapakse & co will not brook any form of non-compliance from other "pillars" of their democracy. Just as Rajapakse group dispensed with the army commander Sarath Fonseka and put him in jail on trumped up charges, now it is the turn of Chief Justice Shirani Bandaranayake.

Indian news media focused on the power struggle in Pakistan between then dictator Gen. Pervez Musharraf and the Supreme Court of Pakistan. However, there is not much interest in a similar struggle happening in Sri Lanka.

Sri Lanka will soon be a right wing dictatorship under Mahinda Rajapakse, where dissent in any form will not be allowed. The opposition UNP under Ranil Wickremasinghe is powerless. Sarath Fonseka has been emasculated. The army is controlled by the defense secretary Gotabaya Rajapakse, a younger brother of Mahinda, while the Parliament is controlled by the speaker Chamal Rajapakse, an elder brother of Mahinda. If you have a pliant Chief Justice, then even the bits and pieces legal opposition can be taken care of.

Caste clashes in Tamil Nadu

It is very disturbing to see the emerging caste conflict in Tamil Nadu. The MBC castes in particular are coming together as a bloc against... not the upper castes but the dalits!

PMK's Ramadoss has organized a meeting last week in which other MBC castes have come together, possibly to create a united political front. But the key agenda is to keep the dalits from marrying their womenfolk! Look at the language here:

“They wear jeans, T-shirts and fancy sunglasses to lure girls from other communities,” [Ramadoss] told reporters. A resolution adopted at the meeting cited statistics of broken marriages to claim that inter-caste marriages ended in failure because they were unions born out of caste design and not love.

Dalits are portrayed as 'girl-snatchers'.  This is very similar to the Hindutva organizations accusing the Muslims of love-jihad. Ramadoss claims that dalits are waging a jihad against 'their girls'.

The agenda is two-fold:

1. Stop inter-caste marriage, in particular if the boy is from the dalit community.
2. Weaken the SC/ST (Prevention of Atrocities) Act.

The second demand is more sinister. SC/ST Act itself is very rarely applied and it has not prevented any atrocities against the dalits. Now, the MBC castes want the act to be weakened (read: removed) so that they can roll out their gameplan without any worries.

The response to this is very muted from the mainstream political parties. No official statement from DMK, AIADMK, Congress and BJP. Only Thirumavalavan of VCK is trying to organize a political front asking for support from the communists and Periyar groups (a bunch of fringe political entities opposed to caste, amongst other things). Such a political front will not have the strength to withstand the fury about to be unleashed by Ramadoss and his cohorts.

I don't think a few dalit boys marrying a few vanniar girls is the real issue here. The anger and hatred against the dalits seem to be very real. The speed with which nearly 40 MBC/BC castes have come together on an anti-dalit platform shows that they are very serious. There are regular statements from other caste groups as well against the dalits in the recent times.

It is important for the sociologists to quickly understand the reasons for this simmering anger coming to the fore so quickly and suddenly. Besides the burning of three dalit colonies in Dharmapuri district, there have been a couple of minor (which means only 4-8 houses burnt and not 100s of houses) burning incidents near Neyveli (heartland of PMK). This can flare up into a full scale war, if the government doesn't act immediately.

TN encounter killings

Two accused have been killed by police when they were being taken from Madurai to Sivaganga. These two are accused in the killing of a police constable sub-inspector named Alvin Sudhan couple of months back.

The encounter story is the usual police story. One of the accused apparently complained of chest pain. The police stopped the van, when the two jumped out and escaped. They were later found to be travelling in a two-wheeler. They were surrounded by police. The two accused then attacked the police with country made bombs. As a defensive measure, the police apparently shot and killed them.

The video footage released by the police show a few large sickles and various other weapon as if picked from a typical goonda arsenal.

The police version sounds so implausible and yet the media is not asking hard questions. People who call in during talk shows brazenly defend the police action, as a sort of revenge to Alvin Sudhan killing. Facebook and Twitter discussions support the police action.

Indians don't seems to understand the concept of a modern democratic state with a rule of law, independent judiciary, a just trial before a verdict is pronounced, the right to defence in a court of law etc. They seem to love the police state, where police barge in, shoot and then make up the evidence. Every single encounter killing in the state of Tamil Nadu in my living memory appears to be a sham. No independent verification of the police story, no explanation on whether such an action was really required etc.

This is not to defend the killing of the policeman. But in a civilised state, the criminal who caused the death will be caught, a fair trial given so that the people really convince themselves that the accused is indeed guilty, and then a punishment given commensurate with the crime, while at the same time the accused is given all the rights to defend himself.

Somehow, the citizen of this country does not seem to understand this process. He in fact thinks this complex procedure is a drain on our finances. He seems to want a quick solution, instant justice, a hollywood/kollywood form of draw a pistol out and pump a few bullets into the alleged killer's head.

But what about Alvin Sudhan, is the oft repeated question. What about him? Like so many people who have been killed in random violence or planned violence, Alvin Sudhan is just another victim. Like the software engineer who went to a TASMAC bar in Velachery to have a whiskey, and found himself caught between two gangs with lethal weapons fighting each other.

Random or planned killings cannot give police extraordinary powers to act on their own as if they are above the law. That in Tamil Nadu they do this with impunity is because the people support them.

I feel sorry for the people, because they will be at the receiving end one day.

FDI, DCT, Congress, BJP

Some folks seem to oppose FDI in retail trade and direct cash transfers championed by Congress, simply because those folks are, by nature, anti-Congress and pro-BJP.

I do not like the current Congress dispensation either.

Congress may have brought out Direct Cash Transfers primarily to attract the votes of the poor in the upcoming parliamentary election. However that alone should not be the reason to oppose this scheme.

BJP is yet to make its views on DCT, but you can safely assume that it will be negative.

This is a wrong approach. The right approach should be to evaluate this policy vis-a-vis BJP's own approach to Indian economy, growth and subsidy and then decide whether to support this or not.

Indian administrative set up is entirely corrupt. It is impossible to think of any department in a state or central government which is devoid of corruption. It may be only a thing of degree; some states may be less corrupt than some other states, but it will be impossible to find a state that is completely clean. Much of the money spent by the governments on the welfare of people is lost along the way. Again, there is no doubt here. The only argument is about what percentage is pilfered: Is it 15% or 85%?

What are the arguments against DCT?

(1) Subsidy itself is wrong. How long do we continue to provide such subsidies?
(2) Aadhar is faulty. Anybody can get an Aadhar card. This will encourage infiltration from Bangladesh.
(3) How is BPL determined? Who decides who should be included in the BPL list, which in turn will make them entitled to Rs 32,000 an year?
(4) Direct cash subsidy implies removal of indirect subsidies. This will impact those who are just above BPL, but may still need support.
(5) Grains in hand much better than cash in hand, as these folks will spend the cash on liquor.
(6) Indirect subsidy controlled the prices directly, and made cheap food, education and healthcare available directly to the poor. Direct cash may not be commensurate with the actual market prices of essential goods and poor may find life more difficult going forward.

Let me take each of the above.

(1) We can dismiss the first question straight away. We already provide subsidies. They were provided in an indirect manner. Whether we should provide subsidies (either direct or indirect) at all is a different question, not relevant to our current discussion.

(2) Aadhar seems shaky. There are many people who oppose the system because it violates privacy and because anybody can get an Aadhar card by giving random and spurious data. I don't think Aadhar card by itself entitles you to a subsidy package. With a bit of understanding of RSBY scheme (Rashtriya Swasthya Bima Yojana), I can say that the central government does have a list of BPL households on a district by district, taluk by taluk level across the country. This list may have a few dodgy households in it. Some genuine families may not find a place there. This problem exists even today. In Tamil Nadu, you can't easily get a ration card today. So, many deserving families don't get subsidised ration goods today. This will continue in the current model also. Some undeserving will end up getting extra Rs 32,000 cash while many deserving will not get it. But by and large, bulk of the population in this list will be genuine.

This is just my belief and how this will established and how the list will be cleaned up every year is to be left to the Central and the State Governments. We need to push them to come up with a workable mechanism.

I am less concerned about Bangladeshi infiltration as of now. I genuinely think it is a minor problem.

(3) & (4) How BPL families should be defined is a big question. I am sure various agencies we have follow different methods and thus come up with very different data. Also, what constitutes a poor in different states, from rural to urban regions should vary. It can't be a simple "annul family income" number. Also, the subsidy amount should ideally worked together with a state government. It need not be a flat Rs 32,000 per annum. Also, it may be desirable to consider multiple buckets (groups A, B C), who will get different subsidies based on the per capita earning of that particular family. It could be Rs 32,000 per annum to one group, Rs 24,000 per annum to another and Rs 15,000 per annum to the third.) This way, we can gradually reduce the shock to every group.

(5) Grains vs cash. It is quite possible that a whole lot of people may misuse the money and waste it on liquor or other vices. I suggest transferring the cash to the woman of the house rather than the "head of the household" who is usually a man. Women in poor households are more likely to spend the money wisely. They understand hunger and healthcare requirements better than men. Money in their hand will also make them more powerful in the family. In some cases, this may also make the women vulnerable to attacks from the man. It will have to be left to the law to deal with such situations.

(6) In the models of indirect subsidy, government purchased in bulk, thereby could get grains at cheaper prices. Now, too, the government can procure in bulk and sell goods through the ration shops. Only, the price will not be Rs 1 per kg. It will be Rs 10 or Rs 15 or whatever it is.

Now what could be the advantages?

The ration shop guys won't loot this and sell elsewhere at a higher price, because no one will pay any higher price than what is being charged. You can only arbitrage on subsidised goods, like the Tamil Nadu rice in Kerala market.

The ration shop fellow will have to be nicer to the public, because if he isn't, the folks will buy from a private shop. The price difference will be marginal. If the ration shop fellow is not nice, he may not have a job, because the shop will eventually be closed for want of customers.

People will not accept third rate, rotten grains because for that rate (Rs. 10/15, they can get decent rice elsewhere too). Now, they are forced to accept inedible junk, because they won't get them so cheap anywhere else.

Market shock can be best handled by few govt. run shops which will ensure that there is always a correctly priced alternative.

If the prices still increase for essential goods which were earlier indirectly subsidised, the government will have to take a look at whether direct cash transfer subsidy amount should be increased, and whether they can fund the increase.

I see enormous advantages in this model. This is certainly worth a try - even if it has been introduced by a Congress govt. for cynical political gains.

Direct cash transfer

Poll time: Ministers detail biggest reform measure "direct cash transfer" from Congress Headquarters

Indian central government has decided to offer subsidy to families below the poverty line directly through cash transfers to their bank accounts, as opposed to the prevailing indirect model today.

The amount per family per year seems to be large: Rs 32,000. For 10 crore homes, this amounts to Rs 3.2 lakh crore an year. How this is going to be rolled out while dismantling the current indirect subsidy is unclear.

At a certain level, some kind of subsidy is required to lift poor people up. Let us hope they use the money sensibly and not waste it away. In fact, the leftists are the ones who disapprove of direct cash transfers. They probably do not trust the poor to spend the money wisely on food, education and healthcare.

We have to see how this works in the pilot districts. It may be worthwhile that the money be transferred to the woman of the household rather than the man.

New Blogger app for iPad

Blogger has released its app for iPad yesterday. This is obviously much better than the earlier iPhone version. Hopefully now, I will blog a bit more in English.

There is a built-in camera feature for taking a live picture and embedding in a blog -- something that may make better sense within an iPhone app. Probably the iPad mini can make better use of this.

Just to test that feature... An image of one of our recent publication...

Nagarjuna

I chanced upon the book, Karl Jaspers on Philosophy of History and History of Philosophy edited by Joseph W Koterski S.J and Raymond J Langley, published by Humanity Books, couple of days back in Anna Centenary Library, Chennai. By the way, this library is a fabulous place to visit if you are a book lover.

This book offered a decent introduction to the philosophy of Nagarjuna, arguably India's most well known philosopher. He lived in the 2nd/3rd century CE in what is today Andhra Pradesh in India. Buddhism was undergoing a lot of changes then. Mahayana was being born from the earlier Hinayana version. Nagarjuna developed a thorough Buddhist dialectic to present the thoughts of the Buddha, which influenced scholars from around the world. Nagarjuna's Madhyamaka school of Buddhism (the middle way) paved the way for Ch'an and Hua-yen schools of China, the Zen tradition of Japan and the monastic philosophy of Tibet.

The two articles in the above book dealing with Nagarjuna are:

1. "Karl Jaspers and Nagarjuna" by Malcolm David Eckel
2. "Jaspers on Lao Tzu, Nagarjuna and Dialectic" by Richard N Bolsey

Karl Jaspers started studied the various philosophies of the world and published a book, "The Great Philosophers" in 1957. In that book, Jaspers considered three types of philosophers.

1. The Paradigmatic Individuals. Example: The Buddha and Confucius
2. The Seminal Founders: Plato
3. The Original Thinkers: Lao Tzu and Nagarjuna

The typical western logic considers only two states: A statement is either (1) True or (2) False. However, Nagarjuna, following Indian tradition, was considering four different states: A statement is (1) True (2) False (3) Both True and False or (4) Neither True, Nor False. Malcolm Eckel adds that at times Nagarjuna was also considering (5) None of the above!

Jaspers saw Nagarjuna as a representative of the extreme possibility of transcending metaphysics by means of metaphysics.

Nagarjuna acknowledged the inadequacy of all speech and developed a precise logical procedure to examine all possible categories of thought and to demonstrate that none of them have ultimate validity.

Nagarjuna's view was that it was impossible to teach about ultimate truth without depending on the categories of conventional truth. The understanding of emptiness is the goal. But ultimately it is no understanding and no goal.

Nagarjuna's philosophy does not take a person out of ordinary experience to something or somewhere else but rather brings a person back through the practice of the bodhisattva path, into the realm of ordinary life and ordinary experience.

Eckel compares Nagarjuna and Nietzche as below:

Both prevent a person from coming to rest in any single position and both are meant to bring about a form of liberation. But both have different aims. One aims toward nirvana and the will to salvation; the other toward the will to power and the superman.

There was a nice summary of Nagarjuna at the end of Eckel's article, which I quote in full:

According to Jaspers, "Buddhism never resorted to violence, never forced any dogmas on anyone. Buddhism had no religious wars, no inquisitions, and never engaged in the secular politics of an organised church." Not only is this questionable historically; it is questionable theoretically. The master-narrative of the bodhisattva practice in which Nagarjuna's dialectic is placed, is to a large degree a narrative of power. Bodhisattvas are concerned about gaining all sorts of "masteries" and "powers" not only over their minds and bodies, but over minds of bodies of others. These masteries culminate in the figure of celestial bodhisattvas such as Avalokitesvara who are endowed with all the powers of Hindu gods. The will to power and the will to engender a superman (albeit of a rather different kind) are not far away from the system of values and practices that encompass Nagarjuna's dialectic, and both were given concrete expression in the struggle for power between different monastic communities in china, to say nothing of the fascination with power in all its modes that lies behind the practice of Buddhist tantra.

Bolsey summarises the philosophy of Nagarjuna according to Jaspers as below:

Insofar as this method of refuting every assertion of being or nonbeing is represented as universally valid, we have before us a doctrine. As such it has been called negativism or nihilism. But this is not correct. For what this doctrine seeks is an authentic truth which cannot itself become a doctrine. Hence, all its operations end in paradoxical statements that cancel each other out and so point to something else: "The Buddha says: My doctrine is to think the thought that is unthinkable, to practice the deed that is un-doing, to speak the speech that is inexpressible, and to be trained in the discipline that is beyond discipline.

There is plenty of material available online on Nagarjuna's philosophy, if you look around.

Apple vs Samsung

In the Apple vs Samsung case, the Californian court's jury verdict has gone in favour of Apple.

It is unclear to me how such important cases are handled by the jury. It is not a murder case or defamation case. The US should change its system of deciding on these copyright or patent infringement cases by jury and instead let this be handled by competent judges.

Charges like "copying" rounded corners for icons is ridiculous. I have seen rounded corner icons on the web for decades. A few other features such as 'bounce-back scrolling' and 'tap-to-zoom' are innovative original ideas, but still to be given a patent for such things is ridiculous. The patent office should never have allowed this. So many features in the computing industry have come about by way of copying and perfecting existing ideas.

Touch computing is a new area and has a long way to go. Only by way of copying and improving will there be progress in this space. As noted by the judges in Europe, Samsung's Android tablets/phones are quite inferior in experience compared to iOS devices. Yet, it is growing fast because of its range, price point and product roll out. Apple's attempts to curb this activity, in making the cheaper devices available to a large number of people, should be resisted. Invoking spurious patents for supposed innovations to block a competitor should be seen as anti-competitive and should not be allowed.

Let everyone copy ideas, reproduce and innovate!

Kindle in iPad

I have acquired an iPad recently and have since been using Kindle app on this for reading books. Most of my recent book purchases have been through Kindle. The reading experience is better than what I had expected. It appears that I can read more pages in a given time (compared to reading the paper version).

It is still not convenient when it comes to reading a book lying down on a bed, as the iPad is somewhat heavier.

Kindle application on iPad appears to be quite efficient in power usage.

I do read a fair bit of Tamil books as well; but unfortunately, as of now, PDF is the only solution. As a publisher of Tamil books, I have access to all our books. I recently read Ponniyin Selvan (5 volumes - roughly 3000 pages in Demy 1/8) as PDF files through iBooks on iPad. Again, the reading experience itself was okay (though not as good as re-flown text of Kindle). Here too, I noticed that reading seemed faster than traditional ink on paper.

Ideal for Tamil books will be epub Unicode files, and a good reader that will handle them. Kindle itself may not be able to read Indian languages for quite a while.