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Knowledge is Bliss

Archive for February, 2007

Dr Govindappa Venkataswamy

Posted by g.e. on February 18, 2007

Thanks to Daily Reckoning, may never have read these bits on Dr G Venkataswamy:

The inspiration, Dr. V says, comes from McDonald’s. He first discovered the golden arches at the age of 55 and it changed his life.

“In America, there are powerful marketing devices to sell products like Coca-Cola and hamburgers,” he says. “All I want to sell is good eyesight, and there are millions of people who need it…If Coca-Cola can sell billions of sodas and McDonald’s can sell billions of burgers, why can’t Aravind sell millions of sight-restoring operations…? With sight, people could be freed from hunger, fear, and poverty.

“In the third world, a blind person is referred to as ‘a mouth without hands,’” says Dr. V. “He is detrimental to his family and to the whole village. But all he needs is a 10-minute operation. One week the bandages go on, the next week they go off. High bang for the buck. But people don’t realize that the surgery is available, or that they can afford it, because it’s free. We have to sell them first on the need.”

The hospital picks up the tab for those who can’t pay. Paying customers are charged 50 rupees (about $1) per consultation and have their choice of accommodations: “A-class” rooms ($3 per day), which are private; “B-class” rooms ($1.50 per day), in which a toilet is shared; or “C-class” rooms ($1 per day), essentially a mat on the floor. Paying customers choose between surgery with stitches ($110) and surgery without stitches ($120).

Since he began, his eye hospitals have restored the sight of more than one million people in India. Even with such tiny revenues per patient, Aravind makes a profit, with a gross margin of 40%. One operation is completed; another is begun right away. It is apparently a very efficient and productive enterprise.

Aravind now does more eye surgeries than any other provider in the world, though it accepts no government grants. The hospitals are totally self-supporting. Nor does Dr. V. try to hustle a profit from the enterprise for himself. He lives on a pension, taking no money out of Aravind.

Dr. V. is helping the poor in a big way. But he also helps them in a way very different from the typical world improver. He sees them as individuals.

“Consultants talk of ‘the poor,’” he says. “No one at Aravind does. ‘The poor’ is a vulgar term. Would you call Christ a poor man? To think of certain people as ‘the poor’ puts you in a superior position, blinds you to the ways in which you are poor – and in the West there are many such ways: emotionally and spiritually, for example. You have comforts in America, but you are afraid of each other.”

Dr. V set out only to do eye operations…quickly and cheaply. The world improvement came – as it always does – as a by-product of private action. In Tamil Nadu state, where his main hospital is located, the incidence of blindness is 20% below the rest of India.

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Gaurav Dhillon’s Second Act

Posted by g.e. on February 12, 2007

On BusinessWeek:

In the world of online movie distribution, Gaurav Dhillon, chief executive of startup Jaman.com, has an edge over a formidable leader, Apple’s (AAPL) iTunes Store. Jaman has 1,000 films available for download, four times as many as iTunes.

Jaman is a second act for Dhillon, who was founder and CEO of Informatica (INFA), a Redwood City (Calif.) software company that launched in 1992. After stepping down in 2004, he took a few years off to look for something new to do. “I had wanted to do something with photography, which is my hobby, but I realized I wasn’t going to change the world with that,” he says.

During that time, he traveled around the world and learned a surprising fact: Some 99% of the movies made globally will never be shown or distributed in the U.S., the biggest movie-watching market. So he teamed with Carlos Montalvo, a former vice-president at Apple, who was also general manager of the Quicktime group, Apple’s video and streaming media software division. He’s raised $4 million from his own Dhillon Capital and additional financing from unnamed “technical luminaries” in technology and entertainment. The company has negotiated the rights for movies from studios including Arc Light Films, a Taiwanese studio, and Celestial Pictures, with headquarters in Hong Kong, and is now looking for a second round of funding.

“There are 56 million people who live in the U.S. but who weren’t born here or who speak another language and who would like to see movies and TV shows from their native countries,” he says.

While in big cities there are often local retailers who import movies from around the world, that’s not always an option elsewhere, says Dhillon, a brain surgeon originally from India now living in Topeka, Kan. His target customer: “He’s got a job he loves and likes where he lives, but he can’t get movies from India at the corner video store,” he says. “This is for someone like him.”

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A Beautifull mind

Posted by g.e. on February 12, 2007

Was reading this interview on Rediff yesterday and was stuck by the energy and the vision Mr Mukesh displays. The bit on SEZ made me wonder if the interview is of someone from the Planning Commission.

On Retail:
We are working at putting the most modern technology in farms at Indian costs. I always say whatever the US implements in dollars we should be able to do it at exchange rate of Rs 10, then we would be globally competitive.

We talked of IT. What is IT? It is the arbitrage between the per hour rate in the US and India. We have gone from zero to $20 billion in exporting software, employing about 1 million people in 10 years. These million people changed the brand of India, consumption pattern and gave us the confidence that we can do everything.

The arbitrage has narrowed but is still there. It will disappear in a few decades by which time our software exports may be $100 billion. From a million people, it will benefit 10 million people. If that is what has happened in software, imagine what will happen in agriculture.

Let me give you some numbers. Take potatoes, the most common food across the world. From Bill Gates to my driver, everybody eats potatoes. Now, plot the prices. Farmers in Uttar Pradesh and Bihar get about Rs 4-5 a kilo; in the Middle East, the wholesale price is about Rs 25-30 a kilo. In the US, Sam’s Club, it is Rs 90 a kilo. In Europe, it is Rs 110 a kilo. The arbitrage is 1:20. If we get our produce right, and if the US market is opened up, you will be surprised how quickly we reach $20 billion.

The food market is much bigger than the software services market. And the money goes straight into the hands of millions of farmers. The spinoffs are enormous — jobs, houses, durables, a whole new consumption boom will start in rural areas.

On SEZ:
The logic of SEZ is simple. India is long on talent and we need to create as many jobs as possible in manufacturing and services.

India’s land bank is about 750-800 million acres. Out of this, 500 million acres can be potentially farmed, but today only 300-350 million is arable and used for agriculture. We need to bring the remaining 150 million acres into productive use. More than 100 million households rely on this land base. India is creating 800,000 engineers a year and 400,00-500,000 semi-professionals. So we will bring in about 2 million professionals into the workforce annually over the next 20 years. We need to create jobs for them.

What is missing? It is integrated infrastructure and a reasonable assurance of facilities that are good for at least 10 years. My target company would want to come to India but operate near the big metros. This is the example that you learn from Shanghai or Shenzen. That is where our SEZs with integrated infrastructure come in — they provide an integrated airport, seaport, transportation, power and housing — all at sensible costs.

When I put out a comparative chart, I should be able to tell big employers: this is how we compare with Singapore, Dubai, Shenzhen or Malaysia and Korea. On every parameter, I should beat others in cost and quality of infrastructure. India might be short of infrastructure but here you have guaranteed infrastructure and talent.

You are near Bombay and Delhi and have access to the Indian market and global markets. So ours is an employment-led SEZ. The strategy is first to get the employer. I think we can create 5 million jobs in each of the two 25,000-acre SEZs. But we need many more just to make sure that most of our educated youth is occupied.

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