Make money doing what you love

Answer this honestly: Do you work because you have to? Or because you want to? The majority of us would, reluctantly, have to plump for the former. However, an increasing number of Indians are finding the perfect balance on the work-life ratio concept by converting a passion into a paying proposition. It's not easy, but look at it this way - you don't need to work ever again.

All fun and games

Like Vishal Gondal, 30. Hooked onto computer games since a very early age, gaming became a full-blown obsession by the time he was in his teens. One day, when he was barely 20, he walked into the Pepsi corporate office in Mumbai and persuaded their head honcho to check out a game he had developed. It involved shooting down simulations of bitter competitor Coke's cola cans. "It was music to their ears," Gondal grins.

The young entrepreneur sold the game to Pepsi for Rs 60,000, and went on to create games for brand names like Colgate, Kellogg's and Hindustan Lever. In 1999, the Kargil war prompted him and a handful of associates to come up with a computer game, where the objective was to shoot down enemy soldiers. The game, called I Love India, was a huge hit. He then launched Indiagames, now a 350-people company with offices in Mumbai, Beijing and Los Angeles and a 2006 turnover of $5 million.

Sounds like a fairy tale? The happy ending - not that the success story's over - perhaps had something to do with the founder's complete belief in his idea. "There was no real market research or business vision behind the venture," says Gondal. "I launched Indiagames simply because it was what I loved."

After the initial tunnel vision, though, the entrepreneur has shown exemplary business sense. After venture capitalists bought into the idea, funding Indiagames with Rs 3.5 crore (Rs 35 million), Gondal diversified into mobile game publishing, game distribution in India and online, on-demand gaming.

At the same time, Gondal retains his childlike enthusiasm for gaming. "From the very beginning, I believed that if you are passionate about your dream, the money would follow. Even today, I play all day at office and then play some more when I get home on my XBox and Nintendo game consoles."

The sound of Rock

If Gondal's family once despaired of a son who flunked his B.Com finals, people even today would find it incredible that the six-member Parikrama can make a living out of music that is not Bollywood. One of the biggest English rock band in India, however, prefers to call their occupation "a hobby that pays well".

Says bassist-turned-keyboardist Subir Malik, 36, who formed the band back in 1991: "We have dedicated our entire lives to rock music. I told the band in 1991 that this is one thing I would never compromise on. So even today, we do what we love - play rock and roll - and on our own terms."

Parikrama's first paid gig was at Father Agnels School, New Delhi, on Independence Day in 1991, for which they were promised Rs 500. "But the organisers really liked what we did and gave us Rs 500 each," says Malik. Since then, the band has only gotten bigger as rock music in India grew in popularity. Parikrama now earns around Rs 200,000 per concert and most band-members nurture music-related jobs to ensure they "don't turn into Indipop artistes for want of money". Guitarist Sonam Sherpa, for instance, runs the Parikrama School of Music in Delhi, while others have launched studios and artist management set-ups.

"The going is not as difficult now as it was during our initial years. Careers in rock music are more feasible now, with the genre winning the patronage of pub-owners and event-organisers," says Malik. "Today, there are a million bands and they're all playing good music. I have never seen so much talent in my entire career!"

So does running a band cost the earth? Surprisingly, no. The band's overheads are minimal since the organisers pick up the tab for most of the costs. And things will only get better, as Malik says: "We're going to celebrate our 16th anniversary in the UK. We have been invited by Rod Smallwood (rock group Iron Maiden's legendary manager) to play nine shows in the UK, including the 3-day Download Festival. After that, you can be sure we'll hike our fees."

Soul secrets

But money isn't the only objective for hobby-hunters; pure altruism, too, can be a driving force. Take Sajid Peerbhoy, 62-year-old veteran of the advertising industry and a spiritual teacher. The man who started Speer Communications (later taken over by Ogilvy & Mather) in 1979 is today known as 'Karmajyoti' by his disciples.

Peerbhoy's spiritual awakening began after he met a Sufi spiritual guru in 1969. Though drawn instantly to Sufism, he had to keep it a secret since "other people could not know about it". The corporate life and Sufism, he says, just didn't mix.

For close to 30 years, Peerbhoy disguised his spiritual leanings with the trappings of the life of an advertising bigwig. Eleven years ago, however, he sold Speer to O&M and devoted himself and all his savings to helping individuals. At his ashram Nyasa in Alibaug, near Mumbai, he teaches meditation and self-awareness techniques to a corporate clientele and individual disciples.

Because the residential programme is entirely free of cost, Peerbhoy realised his savings would run out before his students would. But, so far, voluntary donations and corporate fees have taken care of

• the monthly expenses, which run to


• anywhere between Rs 20,000 and


• Rs 30,000. "If it hadn't been for the donations," says Peerbhoy, "every month would have been a struggle."

"But I've never had a fraction of a moment's doubt about my decision to quit advertising," says the ad guru-turned-soul guru. "People once mocked me, but my sense of fulfilment came from showing people a better way of life."

For Peerbhoy, the sense of 'giving back' far outweighs any monetary loss he might have made.

Food for thought

There's soul food and then there is, well, sinfully good food. As with Gondal or even Parikrama, money was never the motivation for Madhu Menon's decision to quit a seven-year career in IT for a leap into the unknown of the restauranting business.

"All I knew was that Bangalore, my base, needed a good, affordable Asian cuisine restaurant, and that I, as a chef, could deliver," says Menon, 31.

But the computer science graduate was also aware that the lack of professional training could be a huge handicap. "There was no way I could acquire the skills and knowledge required to run a restaurant in a short time. I think one of the best decisions I made was to hire an experienced and knowledgeable manager. After all, a good businessman must also be able to hire smart people."

Menon's timing was important as well. He launched Shiok Far-Eastern Cuisine while he was in his 20s, knowing that he would be able to take and bear higher risks at that point than at any later stage in life. "Though we never borrowed money from banks, we had a Rs 500,000 overdraft facility that we used frequently in the initial year-and-a-half," says the geek-turned-chef. "Now I'm about a year away from breaking even."

Walk the wild side

Maybe Menon's lack of entrepreneurial experience proved a handicap. But T.G. 'Tiger' Ramesh broke even in his new venture, Cicada Resorts, within a matter of months. After all, each entrepreneur has a different story.

The big idea struck Ramesh, 41, during a trip to Africa. "I realised that eco-tourism could help protect the environment in many ways. So, in May 2005, I left India's first remote IT infrastructure management company, which I had helped set up, to launch Cicada Resorts."

With $2 million from investors like Phaneesh Murthy of PM Ventures and H B Jairaj of the HRB Group, Ramesh set forth to involve the local community in resort operations on the banks of the Kabini river in the Nagarhole National Park, 220 km from Bangalore. Local involvement, he believes, will promote the local economy and reduce their dependence - and consequent pressure - on the forest.

With Cicada Resorts attracting 700 guests a month, Ramesh is dreaming of investing an additional $13 million on expansion. "Budgets aren't a problem. But adequate loss buffers are essential. A simple oversight can cost time and money a start-up can't afford," he points out. And the pay-off? "The biggest satisfaction is that I go on work to the forest instead of going on vacation."

There are two ways to have fun at what you do. One is to find something and derive pleasure from it. The other and, perhaps, easier option is to take something that gives you pleasure and commit your career to it. The really important thing is clarity of thought and the willingness to forgo the comfort of a monthly cheque.

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Word of caution
Some words of caution from Laura A. Parkin, executive director, National Entrepreneurship Network, Wadhwani Foundation:

Understand what kind of business you want to go in for. For example, if you are thinking of converting your love for cooking into a business, do you see yourself working part-time, perhaps by opening a catering service? Or, do you see yourself investing 18-hour days to build a large business, such as a chain of restaurants? It's important to consider your vision for life - not just business.

One works on hobbies because one loves to spend time at the endeavour, not because one is trying to meet a customer's needs. One needs to be careful to ensure that there is, indeed, a market for one's product.
A good idea is to minimise investment while trying to determine whether other people like your services. Adjust your investment to match your success and your choice of lifestyle. In other words, don't judge whether your hobby is a good business simply by your own love for your endeavours - other people will have to love it for you have a business.

How venture capital funding works

It is popularly believed that venture capitalists fund only established players and proven products. There is a lot of cynicism amongst many about all the hype that private equity and venture capital is getting in India of late.

However, the truth is that, in recent times in India, the VCs have actually provided capital to relatively new, start-up companies that have a reasonable, though not certain, prospects to develop into highly profitable ventures. Travelguru.com is a case in point, funded by Sequoia Capital and Battery Ventures.

The advent of firms like Helion Ventures with a $140 million corpus is helping the VC scenario to improve in the country. The three key people behind Helion Ventures, Ashish Gupta, Sanjeev Aggarwal and Kanwaljit Singh, all carry with them a successful track record across various companies in the international arena.

What is interesting is that for first time in India, venture capital will be backed by successful entrepreneurs who themselves have a hands-on experience in handling and developing businesses.

The National Venture Capital Association defines venture capital as: "Money provided by professionals who invest alongside management in young, rapidly growing companies that have the potential to develop into significant economic contributors."

Innovation is the key driver of competitiveness within organisations as well as within countries. It has been well said: "Nothing is more powerful than an idea whose time has come." However, innovative ideas need more than research and knowledge to succeed.

They need not only financial, but also, managerial (technical, marketing and HR), support to achieve success. This support is lent in many forms by private funding and incubation organisations such as venture capitalists.

Akhil Gupta, JMD & CFO of Bharti Airtel, once remarked, "While we could have raised funding from other sources, Warburg Pincus' involvement helped us in scaling up significantly." Almost identical has been the findings of a research conducted recently by Venture Intelligence (founded by Arun Natarajan, a leading provider of information and networking services to the private equity and venture capital ecosystem in India) with the guidance of Prof. Amit Bubna of Indian School of Business, Hyderabad, to study the economic impact of PE and VCs on the Indian businesses.

The following are some of the interesting observations of this study:

• The study shows that the PE and VC backed companies grew faster compared to the non-PE backed peers and even better than the benchmark indices like the NSE Nifty. They found that the sales of listed PE-backed companies grew at 22.9% as compared to 10% for non-PE-backed listed firms.


• PE backed firms added more jobs to the economy and even the wages at listed PE financed firms grew at around 32% as compared to 6% for non-PE-backed firms.


• An astonishing finding was that almost 96% of the top executives felt that without the support and the backing of private equity these companies would not have existed or would have grown at a slower rate, while only about 4% felt that they would have developed the same way even without PE funding.


• The study also shows that the biggest support of the PE investors were provided in the area of strategic direction followed by the financial advice and then recruitment and the marketing activities.

Thus venture capital has become an important source of finance for innovative ideas that are risky and have a potential for high returns over a long-term horizon. Venture capitalist investment is driven by the expectation that the start-ups invested in could give them a higher rate of return than other firms.

In the process venture capitalists have created some of the best known companies in the world. Without VCs we might not have seen companies such as Apple, Compaq, Sun Microsystems, and Intel to name a few.

Some of the unique features of a VC firm are:

• Investment in high-risk, high-returns ventures: As VCs invest in untested, innovative ideas the investments entail high risks. In return, they expect a much higher return than usual. (Internal Rate of return expected is generally in the range of 25 per cent to 40 per cent).


• Participation in management: Besides providing finance, venture capitalists may also provide technical, marketing and strategic support. To safeguard their investment, they may also at times expect participation in management.


• Expertise in managing funds: VCs generally invest in particular type of industries or some of them invest in particular type of businesses and hence have a prior experience and contacts in the specific industry which gives them an expertise in better management of the funds deployed.


• Raises funds from several sources: A misconception among people is that venture capitalists are rich individuals who come together in a partnership. In fact, VCs are not necessarily rich and almost always deal with funds raised mainly from others. The various sources of funds are rich individuals, other investment funds, pension funds, endowment funds, et cetera, in addition to their own funds, if any.


• Diversification of the portfolio: VCs reduce the risk of venture investing by developing a portfolio of companies and the norm followed by them is same as the portfolio managers, that is, not to put all the eggs in the same basket.


• Exit after specified time: VCs are generally interested in exiting from a business after a pre-specified period. This period may usually range from 3 to 7 years.

Buyouts and second-stage financing are the most popular stages of venture capital financing. Globally, according to a report by PricewaterhouseCoopers, around 80 per cent of the total private equity investment is done at these stages.

However, in spite of the venture capital scenario improving, several specific VC funds are setting up shop in India, with the year 2006 having been a landmark year for VC funding in India.

Sumir Chadha, MD of Sequoia Capital India, feels that a slowdown could be on the cards for the year 2007 as the companies and investors may try to give some time and test the investment decisions made by them over the last year.

The first quarter of the calendar year 2007 is already over. There is no sign of the VC story slowing down. This is a good sign for all the entrepreneurs out there with an idea! If you have an idea, this is the time to tell it. You never know, someone might be listening round the corner!

(Source: http://us.rediff.com/money/2007/may/08vc.htm, Puneet Bambha is an MBA from ICFAI Business School, Hyderabad. Dr Nupur Hetamsaria is Member of ACCA, UK; and a faculty member at ICFAI Business School, Hyderabad.)

What a visionary CEO must do

Continuation to 8 principles of visionary leadership.

I had briefly outlined the eight principles for transforming an organisation outlined by Shoji Shiba and Dave Walden. The first two principles are about identifying the need for transformation and are, therefore, dealt together in this article.

Principle One defined by Shiba and Walden states that a visionary leader must do on-site observation leading to personal perception of changes in societal values from an outsider's point of view. It essentially requires the visionary leader to view things differently, basically from the point of view of an outsider.

Moreover, the leader needs to build a personal perception by conducting on-site observation. He, therefore, needs to put himself in the shoes of a third person and sense a change in the societal environment to capture new opportunities.

This principle enables the leader to identify the need for transformation of the organisation. The personal perception leads to developing a strong belief in the need for transformation, which forms the foundation of the success of the organisation change. In the early 1990s, I myself followed it for the transformation of Sona Koyo. The industry landscape was changing and if we had not perceived these symptoms of change, we would have perished.

Having perceived these symptoms of change by sitting on the periphery of the organisation and viewing it as an outsider, I was able to identify the weak signals in the society that would impact the organisation and our business. We then decided to join the first SME Cluster that had been launched by the Confederation of Indian Industry.

I have repeatedly used the first principle to obtain product ideas. For instance, the company has developed what we see as a new breakthrough product based on the crisis that we perceived from the signals received from the continuous oil price hike.

The first principle requires the leader to perceive the invisible societal change and then identify what the business transformational needs are. He must further develop a philosophy about how the business should be transformed. This belief and philosophy have to be strong in the mind of the leader and he must have the conviction not to give up in the face of resistance to transformation.

The ability to perceive change requires a deep and skilled perception of what is happening in the industry and in the world at large. The symptoms of technological, economic, social or cultural change can be at times weak and, therefore, difficult to perceive.

At other times, it may be difficult to decide whether it is really a signal of impending change or "noise". These perception skills can be developed using the power of images, since data speaks of the past and can be misleading.

The societal and economic change taking place in India has many weak signals of business opportunities, especially for products that serve the unmet needs of the bottom of the pyramid. I am sure that Ratan Tata, when he decided to work on his Rs 100,000 car, must have sensed these weak signals. Today, while the car is still under development, the market projects a demand of millions of units.

In order to differentiate between the noise and the signals, the leader needs to be able to see the invisible and the unknown. In any given situation what can be seen is the visible, which is normally the effect. The cause of a given situation could often be invisible.

However, what is most difficult to comprehend is the unknown, which lies further beneath the layer of the invisible and will normally enable the leader to recognise the symptoms for change.

While some are able to perceive the unknown with out the use of tools, others need analytical tools to help them. Shiba's Language Processing methodology is one such tool that visionary leaders can use to build their personal perception of a situation through on site observation.

The cardinal rule for the leader to remember is that there is no substitute for on-site observation and proposing changes based on the need for transformation which might arise based on the analysis of the data gathered through on-site observation.

I personally conduct on-site visits to rural India to be able to sense the weak signals and determine what could be the unmet needs of the bottom of the pyramid and these needs could be served through a sustainable business model.

Having perceived the signals for change and putting in motion some symbolic change process, the visionary leader is likely to encounter resistance to change. But the leader's determination must come into play here and he/she must never give up. This is Principle Two by Shiba and Walden in their book Breakthrough Management.

"Even though there is resistance, never give up; squeeze the resistance between outside-in pressure in combination with top down inside instruction." (This principle has been explained in great detail in the article "Change and resistance").

The belief and vision of the leader needs to be so strong that the he never gives up. This is the only way forward for an organisation to launch the process of transformation.

In my next article, I'll discuss the next three principles by Shiba and Walden. These are essential for initiating the transformation process.

(By Dr Surinder Kapur is chairman, CII Mission for Manufacturing Innovation, and chairman and managing director, Sona Koyo Steering Systems - http://us.rediff.com/money/2007/jun/12ceo.htm)

8 principles of visionary leadership

Among the various roles and skills of a CEO, the most important is perhaps his ability to observe things. He should be able to sit at the periphery of his organisation and observe, and then get back and act upon his observation.

F Zobrist, CEO of FAVI, France, has said about breakthrough leaders that they should stand at the organisation's boundary and bring in outside information. They must also communicate their company's philosophy to the outside world.

In their book Breakthrough Management, Shoji Shiba and David Walden have defined the eight principles of visionary leadership as follows:

Principle 1: The visionary leader must do on-site observation leading to personal perception of changes in societal values from an outsider's point of view.

Principle 2: Even though there is resistance, never give up; squeeze the resistance between outside-in pressure in combination with top-down inside instruction.

Principle 3: Transformation is begun with symbolic disruption of the old or traditional system through top-down efforts to create chaos within the organisation.

Principle 4: The direction of transformation is illustrated aimed by a symbolic visible image and the visionary leader's symbolic behaviour.

Principle 5: Quickly establishing new physical, organisational and behavioural systems is essential for successful transformation.

Principle 6: Real change leaders are necessary to enable transformation.

Principle 7: Create an innovative system to provide feedback from results.

Principle 8: Create a daily operation system, including a new work structure, new approach to human capabilities and improvement activities.

A true visionary leader must, therefore, train himself to perceive the future societal needs with a business perspective. Viewing the organisation as an outsider, the CEO is best placed to get a fresh perspective and perceive future societal requirements. A fresh perspective requires the CEO to forget about the existing customer and look at the entire world as the future market.

Often, new ideas sound extremely crazy and face resistance. Therefore, an important principle for the visionary leader is to never give up. To this end, he may communicate his idea to the outside world and create an "outside-in" pressure.

For instance, in the case of the Roadstar automobile project, Matsuda, the project leader, was facing immense internal resistance. He conducted a pilot test with potential users, which revealed a positive interest in the vehicle being designed by him. Post this survey, the project received all internal support and the vehicle went on to be awarded the "Car of the Year".

The visionary CEO needs to create a strong belief in societal change and a philosophy on how the business must be transformed. To be able to perceive the societal change, he needs to be skilled in perceiving what is happening in the organisation in the context of the larger societal perspective.

In leading such transformation of the organisation, the CEO needs to relentlessly work towards putting in place a new mental model, leading to a paradigm shift in mindsets and begin to force change in line with the new direction of the organisation.

Symbolic disruption could be pulling down an old building, replacing it with a new building with a completely untraditional architecture.

However, while undertaking such symbolic changes, the CEO must ensure that symbols reflective of the company's core values are not destroyed. Even as an organisation undergoes transformation, its core value system must always remain firmly rooted.

The visible images of goals work on the subconscious of the target group and are, therefore, extremely important.

For instance, when John F Kennedy gave the US the mission to put a man on the moon, he created a visible image of this in every American's mind and, in those days, even a person who was sweeping an office in the US believed that he was working towards putting a man on the moon.

Any task is that much more difficult if attempted alone. Therefore, the CEO needs the support of what Shiba calls "real change leaders" - people who will help him diffuse the transformation philosophy even while he is not present. They make the implementation of the transformation real so that the transformation does not remain a mere idea of the visionary CEO.

Most importantly, the CEO must focus on creating an organisation with a noble goal and a place that enables the team to realise not only the breakthrough but also their personal dreams in the process.

(By Dr Surinder Kapur, Chairman, CII Mission for Manufacturing Innovation, and chairman and managing director, Sona Koyo Steering Systems - http://www.rediff.com/money/2007/may/16lead.htm)

Dr Reddy's: From Rs 25 lakh to Rs 5,800 crore

It was the spring of 1970 and the then prime minister Indira Gandhi, in a deft political move, announced the promulgation of a new Act -- one that would usher in a new beginning for the pharmaceutical industry in India, 'The Indian Patents Act.'

Indian companies were now given the freedom to produce generic medicines that were patented abroad. . . healthcare would never be the same and would be affordable, and for Indian drug manufacturers this was a Godsend opportunity.

The Patents Act signalled the arrival of good times for the pharmaceutical companies. Soon after the Act was announced, hundreds of companies started reverse engineering of western pharmaceutical products. There was a virtual explosion in the pharma space, with entrepreneurs making most of this opportunity.

This also beckoned a young researcher, Kallam Anji Reddy from a small village near Vijaywada. In 1974, the 34-year-old Reddy quit his job with the government-owned Indian Drugs and Pharmaceuticals Limited (IDPL) to set up his own company and he called it Uniloids.

Managing Editor, The Smart Manager, Gita Piramal, told CNBC-TV18, "The entrepreneur in Shri Anji Reddy could not be restrained. He is one of the very few PSU managers who has made it on his own."

Kallam Anji Reddy, chairman, Dr Reddy's Laboratories, adds, "One of the reasons I left IDPL was that I said, 'I am doing all this hard work for a few rupees but if I become an entrepreneur -- there was import duty on all the imported drugs -- and if my technology is as good as western technology, then I could make money from day one.' This is what compelled me to come out and start on my own."

Uniloids was Anji Reddy's first brush with entrepreneurship but he was not to rest there. By the early 1980s, he had started a few more ventures in quick succession. He set up Standard Organics Ltd in 1980 and Cheminor in 1981, with an NRI partner Murali Divi. For Anji Reddy, the march to success had just begun.

Small ventures prepared Anji for bigger things. While he worked on the manufacture of generic drugs, his real strength lay in research. In 1984, Dr Reddy pooled in all his resources and thrust himself completely into research and set up Dr Reddy's Laboratories (DRL) in Hyderabad.

With an initial capital outlay of Rs 25 lakh (Rs 2.5 million), DRL started as a manufacturer of active pharmaceutical ingredients and soon it went out to surprise its competition by introducing branded formulations at half the prevailing prices.

Reddy now needed to sustain his aggressive growth plans and he needed cash. DRL decided to go public with an IPO of equity-linked debentures aggregating Rs 2.46 crore (Rs 24.6 million) in May 1986. Reddy says, "The reason we wanted to get money this way was for expansion and, of course, the inspiration was (Reliance founder) Dhirubhai Ambani who said, 'Why do you want to take money at 15%-18% interest from IDBI when -- if you are good at making profits for investors -- it's better to go to the stock markets.' And we did just that."

Between 1985 and 1986, DRL created a scarce drug, 'Methydopa.' Although international manufacturer Merck had its own Methyldopa, its Indian subsidiary had no access to it. Reddy approached Merck with its samples of the drug but was rejected almost immediately and that turned the fortunes in Dr Reddy's favour.

Reddy recalls, "Merck's partner in 1984-85 was Tata and it was called Merind (Merck + India) and they had a formulation which Merind obviously wanted to import from Merck USA, where the specifications are laid down according to their requirements. But the government of India would not import because it was more expensive and it was trying to import Methyldopa from Hungary which would not pass the specifications of Merck." "That is where I got into the act. Because there was no Methyldopa available, I took it as a challenge and within three months, we produced Methyldopa equal to Merck's quality and acceptable to them."

Reddy got another phenomenal break in 1987 when he got approval from the United States Food and Drugs Administration, USFDA, to make Ibuprofen. This was again a giant stride on DRL's road to success. And this approval to make Ibuprofen opened a whole new world of opportunities for Reddy.

He now had access to the biggest market for the drugs in the world, but he would soon face a hurdle that would rein in his ambition to become a global exporter and there was cause also for a bigger concern -- a reshuffle was waiting to happen in his own backyard.

In 1990, Anji Reddy's joint venture partner in Cheminor -- Murali Divi -- decided to move out of the partnership to set up his own venture Divi's Laboratories.

Retaining joint venture partners was a niggling worry for Reddy and one that he had faced since his initial start-up days and so now he decided to assign key management responsibilities only to his family members. He brought in his son-in-law GV Prasad and son Satish Reddy.

On the July 31, 1991, a major American manufacturer of bulk drugs -- Ibuprofen Ethyl Corporation -- filed an anti-dumping administrative complaint against Cheminor. The price offered by Cheminor was deemed less than fair in the US and Flavine International (Cheminore's sole distributor) cancelled all its orders.

After a long drawn legal battle, Cheminor was left with no option but to withdraw from the US market.

Reddy was now ready to move beyond generic drug development and venture into new drug discovery capabilities and research. It was time to take big strides and during the same year, it made a global depository receipt, or GDR, issue in Europe to raise funds for expansion. The issue fetched a whopping $50 million.

Reddy explains, "All the investors knew that it is a long-term story and they bought the shares. My primary concern was my scientists. They have come from cushy, safe jobs from other labs and I need to have enough corpuses to keep them going. This was my main concern and also the expansion. We were expanding at a terrific speed at that time, so we would rather go for a GDR."

By the mid-90s Reddy was gearing up to go global. In March 1997, it achieved its first breakthrough by licensing out an anti-diabetes molecule to the world leader in diabetes drugs -- Novo Nordisk of Denmark. In fact, this small step taken by DRL proved to be a giant stride for the Indian pharmaceutical industry.

The pharmaceutical industry went through an instant paradigm shift in its image from being known just as copycats to innovators.

Piramal says, "He wanted to be a research company. He didn't want to be just a copycat all his life. But Novartis and Nordisk retuned his molecules saying that they didn't work. His friends and his rivals asked him why does he want to push for drug discovery in an industry, which is flourishing on reverse engineering?"

In 1997, DRL filed for its first abbreviated new drug application (ANDA) process for Ranitidine. It was also planning its next round of expansion. In 1999, DRL took over a pharmaceutical company based in Chennai -- American Remedies -- where he bought out 45% of the company's stake at Rs 175 per share.

DRL would now be able to cash in on the American Remedies strong prescription base of over hundred thousand specialist doctors.

The 1990s ended on a high note for Anji Reddy. His businesses had both expanded and consolidated over the last two decades and he had already made inroads into the international pharmaceutical market. In 2000, he became the third largest pharmaceutical company in India but Reddy was keenly eyeing for much more -- beyond Indian shores.

On the April 11, 2001, Dr Reddy's Laboratories was listed on the New York Stock Exchange. The issue was dubbed as the year's best performing American depositary receipt, or ADR. It fetched DRL $133 million at a time when stock markets across the world were at their lowest end.

Reddy says, "When we went on talking about our company we told them what we have done so far and then we promised them a few things that we will do. And on April 11, 2001, we listed and we went on fulfilling those promises -- for example, we said we have a patent challenge going on but we think we will win."

"We won the patent challenge for Prozac and we got the company $100 million profits and then we licensed and we said we have got more drugs in the pipeline and we will license them out. So, we licensed DRF 4158 to Novartis. So, when we fulfilled these promises that year, Dr Reddy's was called the best performing stock in the New York Stock Exchange."

But the initial highs of 2001 soon met with reversals of fortune. On the August 3, DRL won a protracted battle against Eli Lilly. It went ahead to make Norvasc drug that had been patented by Pfizer since the early 1980s and now a battle with Pfizer was brewing.

In February 2003, when Pfizer's patent for Norvasc expired, DRL saw an opportunity. Pfizer still had sole marketing rights, but DRL decided to produce the drug with different components and through a different method.

It also applied for approval from the USFDA, but Pfizer did not sit easy, it decided to take legal action against DRL. DRL promptly filed a motion to dismiss Pfizer's complaint. The new formula of DRL got the USFDA approval and a New Jersey court ruled in DRL's favour.

Piramal says, "To crack the US market to get your product on a shop shelf means you have to win the right and that right actually comes from the courts of law. Reddy knew that if he wanted to succeed he would have to fight for this right. He had seen other companies from other countries succeeding in this. He had seen that other Indian companies were shying away from it but he was sure of himself that he would do it at whatever the cost and the cost was definitely high. Fighting in an American court against American companies in a very patriotic country is not easy. The American companies had far deeper pockets, but to his credit, Anji did win some stupendous victories and got some money back, but there were some expensive defeats also."

These stumbling blocks hindered, but couldn't stop, DRL's growth, and in 2005, DRL purchased Roche's API business at the state of the art manufacturing plant in Cuernavaca, Mexico, with a total investment of $59 million. That wasn't all -- the next acquisition made DRL a frontrunner in the European pharmaceutical industry.

DRL moved to Germany in early 2006 and acquired Betapharm Arzneimittel -- one of the largest generic drug companies in Germany for Rs 2,250 crore (Rs 22.50 billion). It was the biggest every overseas acquisition by an Indian pharmaceutical company.

DRL was now gearing up to become a global company with a presence in all the key markets of the world with a net worth of Rs 5,800 crore (Rs 58 billion). From Rs 25 lakh in 1984, DRL today is one of the most significant companies in the global pharmaceutical industry.

Driving this success has been Reddy's unflinching conviction that what they (the MNCs) can do, he can do better.

Research deciphers 'déjà-vu' brain mechanics

Neuroscientists at the Picower Institute for Learning and Memory at MIT report in the June 7 early online edition of Science that they have identified for the first time a neuronal mechanism that helps us rapidly distinguish similar, yet distinct, places. The discovery helps explain the sensation of déjà vu.

The work could lead to treatments for memory-related disorders, as well as for the confusion and disorientation that plague elderly individuals who have trouble distinguishing between separate but similar places and experiences.

Forming memories of places and contexts in which episodes occur engages a part of the brain called the hippocampus. Study co-author Susumu Tonegawa, Picower Professor of Biology and Neuroscience, and colleagues have been exploring how each of the three hippocampal subregions--the dentate gyrus, CA1 and CA3--contribute to different aspects of learning and memory.

Tonegawa, a Howard Hughes Medical Institute investigator and a frequent world traveler, described his own occasional experience of finding the airport in a new city uncannily familiar. This occurs, he said, because of the similarity of the modules--gates, chairs, ticket counters--that comprise airports worldwide. It is only by seeking out unique cues that the specific airport can be identified, he said. "In this study, we have revealed that learning in the dentate gyrus is crucial in rapidly recognizing and amplifying the small differences that make each place unique," Tonegawa said.

In addition to Tonegawa, authors include Picower Institute research scientist Thomas J. McHugh; former MIT postdoctoral associate Matthew W. Jones; Matthew A. Wilson, Picower Scholar and Professor; and colleagues from the University of California at Los Angeles and Beth Israel Deaconess Medical Center in Boston.

Overlapping blueprints

In this study, the researchers used a genetically altered mouse to pinpoint how the dentate gyrus contributes to the kind of pattern separation involved in telling the difference between new and old spaces.

Researchers believe that a set of neurons called place cells fire to provide a sort of blueprint for any new space we encounter. The next time we see the space, those same neurons fire. Thus we know when we've been somewhere before and don't have to relearn our way around familiar turf.

But if we enter a space very similar to one we have seen before, a new but overlapping set of neurons creates the blueprint. When there is enough overlap between the two sets, we experience an eerie feeling of déjà vu--a French phrase that literally means, "already seen."

As we age, or as neurodegenerative disease such as Alzheimer's advances, it becomes difficult to form unique memories for similar yet distinct places and experiences, leading to the confusion that afflicts some elderly individuals.

Forgetting fear

In experiments with mice genetically engineered to lack a certain gene in the dentate gyrus, Tonegawa and colleagues pinpointed the signaling pathway underlying the recall of specific places.

Different sets of mice were placed in two similar chambers, one of which gave them a mild foot shock. After three days, the mice began to freeze in fear in both chambers, even the one in which they had never been harmed.

Within two weeks, the normal mice learned to associate only one chamber with the foot shocks while recognizing the second as safe. The genetically engineered mice "had a significant but transient deficit in their ability to distinguish similar contexts," McHugh said. "This study shows that plasticity--the ability to change in response to experience--in the dentate gyrus contributes to spatial learning and fine-tuning pattern separation."

This work was supported by the National Institute for Mental Health and the National Institutes of Health.

(Source: http://web.mit.edu/newsoffice/2007/deja-vu-0607.html)

Goodbye wires…

MIT team experimentally demonstrates wireless power transfer, potentially useful for powering laptops, cell phones without cords

Imagine a future in which wireless power transfer is feasible: cell phones, household robots, mp3 players, laptop computers and other portable electronics capable of charging themselves without ever being plugged in, freeing us from that final, ubiquitous power wire. Some of these devices might not even need their bulky batteries to operate.

A team from MIT's Department of Physics, Department of Electrical Engineering and Computer Science, and Institute for Soldier Nanotechnologies (ISN) has experimentally demonstrated an important step toward accomplishing this vision of the future.

The team members are Andre Kurs, Aristeidis Karalis, Robert Moffatt, Prof. Peter Fisher, and Prof. John Joannopoulos (Francis Wright Davis Chair and director of ISN), led by Prof. Marin Soljacic.

Realizing their recent theoretical prediction, they were able to light a 60W light bulb from a power source seven feet (more than two meters) away; there was no physical connection between the source and the appliance. The MIT team refers to its concept as "WiTricity" (as in wireless electricity). The work will be reported in the June 7 issue of Science Express, the advance online publication of the journal Science.

Late-night beeps

The story starts one late night a few years ago, with Soljacic (pronounced Soul-ya-cheech) standing in his pajamas, staring at his cell phone on the kitchen counter. "It was probably the sixth time that month that I was awakened by my cell phone beeping to let me know that I had forgotten to charge it. It occurred to me that it would be so great if the thing took care of its own charging." To make this possible, one would have to have a way to transmit power wirelessly, so Soljacic started thinking about which physical phenomena could help make this wish a reality.

Radiation methods

Various methods of transmitting power wirelessly have been known for centuries. Perhaps the best known example is electromagnetic radiation, such as radio waves. While such radiation is excellent for wireless transmission of information, it is not feasible to use it for power transmission. Since radiation spreads in all directions, a vast majority of power would end up being wasted into free space.

One can envision using directed electromagnetic radiation, such as lasers, but this is not very practical and can even be dangerous. It requires an uninterrupted line of sight between the source and the device, as well as a sophisticated tracking mechanism when the device is mobile.

The key: Magnetically coupled resonance

In contrast, WiTricity is based on using coupled resonant objects. Two resonant objects of the same resonant frequency tend to exchange energy efficiently, while interacting weakly with extraneous off-resonant objects. A child on a swing is a good example of this. A swing is a type of mechanical resonance, so only when the child pumps her legs at the natural frequency of the swing is she able to impart substantial energy.

Another example involves acoustic resonances: Imagine a room with 100 identical wine glasses, each filled with wine up to a different level, so they all have different resonant frequencies. If an opera singer sings a sufficiently loud single note inside the room, a glass of the corresponding frequency might accumulate sufficient energy to even explode, while not influencing the other glasses. In any system of coupled resonators there often exists a so-called "strongly coupled" regime of operation. If one ensures to operate in that regime in a given system, the energy transfer can be very efficient.

While these considerations are universal, applying to all kinds of resonances (e.g., acoustic, mechanical, electromagnetic, etc.), the MIT team focused on one particular type: magnetically coupled resonators. The team explored a system of two electromagnetic resonators coupled mostly through their magnetic fields; they were able to identify the strongly coupled regime in this system, even when the distance between them was several times larger than the sizes of the resonant objects. This way, efficient power transfer was enabled.

Magnetic coupling is particularly suitable for everyday applications because most common materials interact only very weakly with magnetic fields, so interactions with extraneous environmental objects are suppressed even further. "The fact that magnetic fields interact so weakly with biological organisms is also important for safety considerations," Kurs, a graduate student in physics, points out.

The investigated design consists of two copper coils, each a self-resonant system. One of the coils, attached to the power source, is the sending unit. Instead of irradiating the environment with electromagnetic waves, it fills the space around it with a non-radiative magnetic field oscillating at MHz frequencies. The non-radiative field mediates the power exchange with the other coil (the receiving unit), which is specially designed to resonate with the field. The resonant nature of the process ensures the strong interaction between the sending unit and the receiving unit, while the interaction with the rest of the environment is weak.

Moffatt, an MIT undergraduate in physics, explains: "The crucial advantage of using the non-radiative field lies in the fact that most of the power not picked up by the receiving coil remains bound to the vicinity of the sending unit, instead of being radiated into the environment and lost." With such a design, power transfer has a limited range, and the range would be shorter for smaller-size receivers.

Still, for laptop-sized coils, power levels more than sufficient to run a laptop can be transferred over room-sized distances nearly omni-directionally and efficiently, irrespective of the geometry of the surrounding space, even when environmental objects completely obstruct the line-of-sight between the two coils. Fisher points out: "As long as the laptop is in a room equipped with a source of such wireless power, it would charge automatically, without having to be plugged in. In fact, it would not even need a battery to operate inside of such a room." In the long run, this could reduce our society's dependence on batteries, which are currently heavy and expensive.

At first glance, such a power transfer is reminiscent of relatively commonplace magnetic induction, such as is used in power transformers, which contain coils that transmit power to each other over very short distances. An electric current running in a sending coil induces another current in a receiving coil. The two coils are very close, but they do not touch. However, this behavior changes dramatically when the distance between the coils is increased. As Karalis, a graduate student in electrical engineering and computer science, points out, "Here is where the magic of the resonant coupling comes about. The usual non-resonant magnetic induction would be almost 1 million times less efficient in this particular system."

Old physics, new demand

WiTricity is rooted in such well-known laws of physics that it makes one wonder why no one thought of it before. "In the past, there was no great demand for such a system, so people did not have a strong motivation to look into it," points out Joannopoulos, adding, "Over the past several years, portable electronic devices, such as laptops, cell phones, iPods and even household robots have become widespread, all of which require batteries that need to be recharged often."

As for what the future holds, Soljacic adds, "Once, when my son was about three years old, we visited his grandparents' house. They had a 20-year-old phone and my son picked up the handset, asking, 'Dad, why is this phone attached with a cord to the wall?' That is the mindset of a child growing up in a wireless world. My best response was, 'It is strange and awkward, isn't it? Hopefully, we will be getting rid of some more wires, and also batteries, soon.'"

This work was funded by the Army Research Office (Institute for Soldier Nanotechnologies), National Science Foundation and the Department of Energy.

(Source: http://web.mit.edu/newsoffice/2007/wireless-0607.html)

The amazing story of the birth of HCL

In 1976, during lunch time at Delhi Cloth Mills, DCM, a group of six young engineers in the office canteen were discussing their work woes at DCM's calculator division.

Despite them all have having jobs that paid them well, they were an unhappy lot -- they wanted to do more, riding on their own gumption. They decided to quit their jobs and start a venture of their own.

The man who was fuelling the ambitions of his five other colleagues at that canteen was a 30-year-old engineer from Tamil Nadu, Shiv Nadar. And this is how the story of Hindustan Computers Limited, HCL began.

Nadar and his five colleagues quit DCM in the summer of 1976. They decided to set up a company that would make personal computers. They had gathered enough technical expertise at DCM's calculator division, but like for all start-ups, getting funds was the problem.

However, Nadar's passion for his new dream company and the support of his enthusiastic colleagues soon made the task very easy.

Founder, Chairman and CEO, HCL Technologies, Shiv Nadar told CNBC-TV18, "The first person I met was Arjun and he was also a management trainee like me. He was a couple of batches junior to me. . . We became very good friends and we are still very good friends. Then, the rest of them all worked for DCM and we all are of similar age, so we used to hang out together, crib together, have fun together, work together.

Nadar would first have to gather cash to give wings to his idea of manufacturing computers. He floated a company called Microcomp Limited -- through which he would sell teledigital calculators. This venture threw up enough cash to allow the founders to give shape to their ultimate dream to manufacture computers in India, at a time when computers were just sophisticated cousins of the good old calculator but support also came from the Uttar Pradesh government.

Finally, the founders put together Rs 20 lakh (Rs 2 million) and HCL was born.

The year after HCL was floated, the Indian government reigned in the ambitions of the foreign companies in India. This pronounced the death knell of companies like IBM and Coca-Cola while bells began to ring for Indian entrepreneurships like HCL.

Managing Editor, The Smart Manager, Dr Gita Piramal says, "Few Indian businessmen were happy when George Fernandes became industry minister in 1977, when the Janata Party came to power. Foreign businessmen were even less happy that Coca-Cola and IBM left India. IBM's leaving, left a major vacuum and this was the vacuum in which Shiv Nadar spotted an opportunity. He stepped in and customers began to trickle in."

HCL started shipping its in-house microcomputers around the same time as its American counterpart Apple, and took only two more years to introduce its 16 bits processor.

By 1983, it indigenously developed a relational data based management system, a networking operational system and client-server architecture, almost at the same time as its global peers. The road to the top was now in sight and HCL took it a step further by exploring foreign shores.

HCL's first brush with international business came about in 1979 when it set up a venture in Singapore; it was called Far East computers. HCL was only three years old and its net worth was around Rs 3 crore (Rs 30 million). Shiv Nadar set up an ambitious target for the venture and notched up sales of Rs 10 lakh (Rs 1 million) in the very first year.

Co-Founder, HCL Technologies, Ajai Chowdhry says, "We discovered that there was a good opportunity to enter Singapore with our own hardware we had manufactured in Singapore. But the strategy was very clearly around selling computerization rather than computers and so we actually took the whole idea of hardware, software solution and service and packaged it and presented it as computerization."

Even as it was basking in its success in Singapore, HCL planned a whole new area of expansion and it tapped into a territory that was lying unexplored in the country - computer education. Sensing the increasing demand for computer training, HCL set up NIIT in 1981 to impart high quality IT education in India.

Nadar explains, "We knew many people in IIT and Indian Institute of Science. We formed an advisory panel and asked them, can you help us navigate this whole thing and they were very enthusiastic about this and they of course shaken up a little bit when they saw that we started advertising in Bombay -- selling education as a commercial project."

From calculators to IT education, the first five years of HCL was a combination of growth and expansion riddled with uncertainty but the company was now gearing up to set a much bigger target for itself and an announcement from the government would help it takeoff to those soaring heights.

In 1984, the Indian government announced a new policy that would change the fortunes of the entire computer industry. The government opened up the computer market and permitted import of technology. With new guidelines and regulations in place, HCL grabbed the opportunity to launch its own personal computer.

The demand for personal computers was slowly but surely mounting in the Indian market. Most banks were shifting to the UNIX platform. A few companies approached HCL for personal computers, so, the founders flew all over the world to bring back PCs they could take apart, study and reproduce and indigenously upgrade. Their first innovative personal computer was ready in three weeks' times and soon they launched their first range of computers, and they called it the Busybee.

Chowdhry says, "In a lot of ways, it opened up the market because one thing was that, you no longer had to develop basic stuff in India - like operating systems but on the other hand it opened new opportunities like banking because as per government policy, all banking computers must be UNIX based. So, feverishly we set out creating a UNIX based computer and we bought the UNIX source code and created that product out of nothing."

In two years, HCL became one of the largest IT companies in India. The founders now went to different corners of the country to set up sales and marketing offices and it now needed the brightest minds to take it to the next level of competition.

Campus recruitment in management and technical institutes began in full swing and HCL grabbed some of the best talent by offering pay packages that outscored some of the best companies of the time -- Rs 2,000 per month to start with.

The adrenaline rush of the first half of the 1980s and the rapid expansion strategy soon caught up with HCL. A turning point came in 1989, when HCL on the basis of a report by McKinsey and Company decided to venture into the American computer hardware market.

HCL America was born but the project fell flat on its face. HCL had failed to follow a very crucial step necessary to enter the US market. A big disappointment was on its way.

Piramal says, "For every entrepreneur, the US will always remain the dream market. It's the biggest market in the world and Shiv Nadar obviously was drawn to it but he really didn't know what he was getting into. The computers he made didn't get environmental clearances. In fact, HCL probably turned into his biggest mistake but HCL and Shiv himself, he is a very strong person, he understood he was making a mistake, he saw that Infosys and Wipro are doing really well in software and he was not too proud to change gears and finally HCL did enter the software market."

It didn't take too long for HCL to brush off the disappointment in the US. Its first failure in the US was set aside in 1991 and HCL entered into a partnership with HP (Hewlett-Packard) to form HCL HP Limited. It opened new avenues for HCL and gave opportunities to firm up its revenues.

In three years, another new possibility came knocking at its door and in 1994, HCL looked beyond PCs and tied up with Nokia cellphones and Ericsson switches for distribution.

Chowdhry explains, 'In 1991, when India didn't have enough foreign exchange. We were in the hardware business and we didn't have enough funds. That's the time when a clear thought entered our minds - that we should globalize and in the very early days, we actually created a joint venture with Hewlett-Packard.

In 1997, HCL was already a multi-dimensional company spun off HCL Technologies Limited to mark their entry into the global software space. It made up its mind to focus on software development, which was twenty years behind its entrepreneurial journey, Shiv Nadar was now ready to take on global competition with all his might.

From 70s to 90s, the HCL story was one of steady rise but in the face of its rapid expansion and continuous flow of achievements, Shiv Nadar didn't anticipate that he would be in for a rude shock and that it would come from someone very close.

In 1998, Arjun Malhotra, Shiv Nadar's comrade and friend decided to leave the company to start his own TechSpan, headquartered in Sunnyvale, California. He was also one of the largest shareholders in HCL Infosystems at that time. For Shiv Nadar, it was time to think afresh.

The revenues were shrinking from the hardware sector and Nadar now decided to redesign HCL. The company once again needed funds to grow and this time around, Nadar decided to look at the capital market. An initial public offer (IPO) was made on the Indian Stock Exchange in 1999, which was a stupendous success.

President, HCL Technologies, Vineet Nayar says, "The shareholders supported us and then I think we started with Rs 580 an IPO and went up to Rs 2,800 or something like that. So, it was a dream run, I think the shareholders bought the argument we were making, they liked the articulation of the strategy, they liked the management team and they liked the vision we were painting and they supported the stock full time and that was a turning point for HCL."

Shiv Nadar now put aside his dream of becoming a global hardware major and venture into software with an open mind and a clean slate. Technology was opening up vistas of opportunities in the software sector and HCL now wanted to build new businesses.

Global business became a priority, so, now they started a BPO in Ireland in 2001. His partner in this ambitious venture was British Telecom.

The years that followed saw HCL in an expansion mode. In 2005 alone, HCL signed a software development agreement with Boeing for its 787 dreamliner programme. Next came a venture with NEC, Japan.

It even brought out the joint ventures Deutsche Bank and British Telecom's Apollo Contact Center. In the same year, HCL Infosystems launched it sub Rs 10,000 personal computer and joined hands with AMD and Microsoft to bridge the digital divide.

The successes of 2005 spilled over into 2006 and the company now produced over 75,000 machines in a single month, with more parallel joint ventures growing on its list. But in spite of this overwhelming success, Shiv Nadar would not rest. There was a nagging sense of dissatisfaction and perhaps not having exploited its full potential that still drove Nadar and the company to achieve much more.

Thirty years after starting his company, Shiv Nadar really does not have much to complain about. Hindustan Computers Ltd today is an empire worth $3.5 billion with staff strength of 34,000.

But then dissatisfaction has been the quintessential factor that has made Shiv Nadar the visionary that he was and continues to be. Dissatisfaction once drove him to quit his job at DCM and it is that same quality even today, that is driving him to achieve much more when he can quite easily rest on his laurels.

(Source: http://in.rediff.com/money/2007/jun/09bspec1.htm)

Life lessons from Narayana Murthy

N R Narayana Murthy, chief mentor and chairman of the board, Infosys Technologies, delivered a pre-commencement lecture at the New York University (Stern School of Business) on May 9. It is a scintillating speech, Murthy speaks about the lessons he learnt from his life and career.

Dean Cooley, faculty, staff, distinguished guests, and, most importantly, the graduating class of 2007, it is a great privilege to speak at your commencement ceremonies.

I thank Dean Cooley and Prof Marti Subrahmanyam for their kind invitation. I am exhilarated to be part of such a joyous occasion. Congratulations to you, the class of 2007, on completing an important milestone in your life journey.

After some thought, I have decided to share with you some of my life lessons. I learned these lessons in the context of my early career struggles, a life lived under the influence of sometimes unplanned events which were the crucibles that tempered my character and reshaped my future.

I would like first to share some of these key life events with you, in the hope that these may help you understand my struggles and how chance events and unplanned encounters with influential persons shaped my life and career.

Later, I will share the deeper life lessons that I have learned. My sincere hope is that this sharing will help you see your own trials and tribulations for the hidden blessings they can be.

The first event occurred when I was a graduate student in Control Theory at IIT, Kanpur, in India. At breakfast on a bright Sunday morning in 1968, I had a chance encounter with a famous computer scientist on sabbatical from a well-known US university.

He was discussing exciting new developments in the field of computer science with a large group of students and how such developments would alter our future. He was articulate, passionate and quite convincing. I was hooked. I went straight from breakfast to the library, read four or five papers he had suggested, and left the library determined to study computer science.

Friends, when I look back today at that pivotal meeting, I marvel at how one role model can alter for the better the future of a young student. This experience taught me that valuable advice can sometimes come from an unexpected source, and chance events can sometimes open new doors.

The next event that left an indelible mark on me occurred in 1974. The location: Nis, a border town between former Yugoslavia, now Serbia, and Bulgaria. I was hitchhiking from Paris back to Mysore, India, my home town.

By the time a kind driver dropped me at Nis railway station at 9 p.m. on a Saturday night, the restaurant was closed. So was the bank the next morning, and I could not eat because I had no local money. I slept on the railway platform until 8.30 pm in the night when the Sofia Express pulled in.

The only passengers in my compartment were a girl and a boy. I struck a conversation in French with the young girl. She talked about the travails of living in an iron curtain country, until we were roughly interrupted by some policemen who, I later gathered, were summoned by the young man who thought we were criticising the communist government of Bulgaria.

The girl was led away; my backpack and sleeping bag were confiscated. I was dragged along the platform into a small 8x8 foot room with a cold stone floor and a hole in one corner by way of toilet facilities. I was held in that bitterly cold room without food or water for over 72 hours.

I had lost all hope of ever seeing the outside world again, when the door opened. I was again dragged out unceremoniously, locked up in the guard's compartment on a departing freight train and told that I would be released 20 hours later upon reaching Istanbul. The guard's final words still ring in my ears -- "You are from a friendly country called India and that is why we are letting you go!"

The journey to Istanbul was lonely, and I was starving. This long, lonely, cold journey forced me to deeply rethink my convictions about Communism. Early on a dark Thursday morning, after being hungry for 108 hours, I was purged of any last vestiges of affinity for the Left.

I concluded that entrepreneurship, resulting in large-scale job creation, was the only viable mechanism for eradicating poverty in societies.

Deep in my heart, I always thank the Bulgarian guards for transforming me from a confused Leftist into a determined, compassionate capitalist! Inevitably, this sequence of events led to the eventual founding of Infosys in 1981.

While these first two events were rather fortuitous, the next two, both concerning the Infosys journey, were more planned and profoundly influenced my career trajectory.

On a chilly Saturday morning in winter 1990, five of the seven founders of Infosys met in our small office in a leafy Bangalore suburb. The decision at hand was the possible sale of Infosys for the enticing sum of $1 million. After nine years of toil in the then business-unfriendly India, we were quite happy at the prospect of seeing at least some money.

I let my younger colleagues talk about their future plans. Discussions about the travails of our journey thus far and our future challenges went on for about four hours. I had not yet spoken a word.

Finally, it was my turn. I spoke about our journey from a small Mumbai apartment in 1981 that had been beset with many challenges, but also of how I believed we were at the darkest hour before the dawn. I then took an audacious step. If they were all bent upon selling the company, I said, I would buy out all my colleagues, though I did not have a cent in my pocket.

There was a stunned silence in the room. My colleagues wondered aloud about my foolhardiness. But I remained silent. However, after an hour of my arguments, my colleagues changed their minds to my way of thinking. I urged them that if we wanted to create a great company, we should be optimistic and confident. They have more than lived up to their promise of that day.

In the seventeen years since that day, Infosys has grown to revenues in excess of $3.0 billion, a net income of more than $800 million and a market capitalisation of more than $28 billion, 28,000 times richer than the offer of $1 million on that day.

In the process, Infosys has created more than 70,000 well-paying jobs, 2,000-plus dollar-millionaires and 20,000-plus rupee millionaires.

A final story: On a hot summer morning in 1995, a Fortune-10 corporation had sequestered all their Indian software vendors, including Infosys, in different rooms at the Taj Residency hotel in Bangalore so that the vendors could not communicate with one another. This customer's propensity for tough negotiations was well-known. Our team was very nervous.

First of all, with revenues of only around $5 million, we were minnows compared to the customer.

Second, this customer contributed fully 25% of our revenues. The loss of this business would potentially devastate our recently-listed company.

Third, the customer's negotiation style was very aggressive. The customer team would go from room to room, get the best terms out of each vendor and then pit one vendor against the other. This went on for several rounds. Our various arguments why a fair price -- one that allowed us to invest in good people, R&D, infrastructure, technology and training -- was actually in their interest failed to cut any ice with the customer.

By 5 p.m. on the last day, we had to make a decision right on the spot whether to accept the customer's terms or to walk out.

All eyes were on me as I mulled over the decision. I closed my eyes, and reflected upon our journey until then. Through many a tough call, we had always thought about the long-term interests of Infosys. I communicated clearly to the customer team that we could not accept their terms, since it could well lead us to letting them down later. But I promised a smooth, professional transition to a vendor of customer's choice.

This was a turning point for Infosys.

Subsequently, we created a Risk Mitigation Council which ensured that we would never again depend too much on any one client, technology, country, application area or key employee. The crisis was a blessing in disguise. Today, Infosys has a sound de-risking strategy that has stabilised its revenues and profits.

I want to share with you, next, the life lessons these events have taught me.

1. I will begin with the importance of learning from experience. It is less important, I believe, where you start. It is more important how and what you learn. If the quality of the learning is high, the development gradient is steep, and, given time, you can find yourself in a previously unattainable place. I believe the Infosys story is living proof of this.

Learning from experience, however, can be complicated. It can be much more difficult to learn from success than from failure. If we fail, we think carefully about the precise cause. Success can indiscriminately reinforce all our prior actions.

2. A second theme concerns the power of chance events. As I think across a wide variety of settings in my life, I am struck by the incredible role played by the interplay of chance events with intentional choices. While the turning points themselves are indeed often fortuitous, how we respond to them is anything but so. It is this very quality of how we respond systematically to chance events that is crucial.

3. Of course, the mindset one works with is also quite critical. As recent work by the psychologist, Carol Dweck, has shown, it matters greatly whether one believes in ability as inherent or that it can be developed. Put simply, the former view, a fixed mindset, creates a tendency to avoid challenges, to ignore useful negative feedback and leads such people to plateau early and not achieve their full potential.

The latter view, a growth mindset, leads to a tendency to embrace challenges, to learn from criticism and such people reach ever higher levels of achievement (Krakovsky, 2007: page 48).

4. The fourth theme is a cornerstone of the Indian spiritual tradition: self-knowledge. Indeed, the highest form of knowledge, it is said, is self-knowledge. I believe this greater awareness and knowledge of oneself is what ultimately helps develop a more grounded belief in oneself, courage, determination, and, above all, humility, all qualities which enable one to wear one's success with dignity and grace.

Based on my life experiences, I can assert that it is this belief in learning from experience, a growth mindset, the power of chance events, and self-reflection that have helped me grow to the present.

Back in the 1960s, the odds of my being in front of you today would have been zero. Yet here I stand before you! With every successive step, the odds kept changing in my favour, and it is these life lessons that made all the difference.

My young friends, I would like to end with some words of advice. Do you believe that your future is pre-ordained, and is already set? Or, do you believe that your future is yet to be written and that it will depend upon the sometimes fortuitous events?

Do you believe that these events can provide turning points to which you will respond with your energy and enthusiasm? Do you believe that you will learn from these events and that you will reflect on your setbacks? Do you believe that you will examine your successes with even greater care?

I hope you believe that the future will be shaped by several turning points with great learning opportunities. In fact, this is the path I have walked to much advantage.

A final word: When, one day, you have made your mark on the world, remember that, in the ultimate analysis, we are all mere temporary custodians of the wealth we generate, whether it be financial, intellectual, or emotional. The best use of all your wealth is to share it with those less fortunate.

I believe that we have all at some time eaten the fruit from trees that we did not plant. In the fullness of time, when it is our turn to give, it behooves us in turn to plant gardens that we may never eat the fruit of, which will largely benefit generations to come. I believe this is our sacred responsibility, one that I hope you will shoulder in time.

Thank you for your patience. Go forth and embrace your future with open arms, and pursue enthusiastically your own life journey of discovery!

(Source: http://in.rediff.com/money/2007/may/28bspec.htm)

The coming collapse of the US dollar

The skew in the global financial system -- commonly called 'global imbalance' -- seems to be fast spiralling out of control.

For some time now economists have been engaged in the mother of all debates: whether the US dollar would collapse by as much as 40% when compared to other currencies (some are even betting on the US dollar going belly-up) or whether there would be an orderly devaluation -- that is, a gradual revaluation of other currencies vis-a-vis the US dollar.

In effect, the question that is confronting us is not 'whether' but 'when' and by 'how much.'

This global imbalance can be understood in economic terms by simply examining the massive size of America's twin deficits -- trade and budgetary. Put modestly, Americans have been living way beyond their means, consuming much more than what they could possibly afford and, in the process, borrowing far beyond their capacity for too long.

This was facilitated by a policy of maintaining weak currencies across the world, notably in Asia. This policy of maintaining a competitive exchange rate for their currency to boost exports has resulted in a race to the bottom amongst various countries.

Nevertheless, this arrangement suited countries, both Asian (with a huge unemployed population) and American, (as it provided cheap imports for its huge consumption binge).

While the going was good, everyone profited and expected the arrangement to continue indefinitely. Unfortunately, linearity as a concept has limited appeal in real life, much less is global macroeconomics.

No wonder, of late, countries are discovering that this arrangement has its limitations. The current account deficit of the United States translates into current account surplus of exporting countries. To cover this deficit, US borrows: this corresponds to the forex reserves of exporting countries. The crux of the issue is that no other country, barring the US, has such a huge consumption pattern and an ability to absorb this huge export surplus.

In substance, countries are producing their goods, exporting it mostly to the US, and parking the resulting export surpluses with the US to facilitate US to finance its imports!

Clearly, the global imbalance is a by-product of this mindless competition by various countries to devalue their own currencies and the reckless consumption in US. Naturally, it is indeed tempting to blame US consumption for this crisis. However, one must hasten to add that the emerging economies -- notably Asian countries, especially after the1998 currency crisis -- with their fixation for weak currencies, are equally to be blamed.

The net result? Well, consider these facts:

By mid-May 2007, the US National Debt stood at approximately at mind-boggling $8.85 trillion -- i.e. approximately $28,000 for every American.

The basic structure of the American economy is that the deficit of the US government is 4% of the GDP and the household sector 6%, which are offset by a domestic savings of 3%, largely from corporates, leaving a substantial national deficit of 7% to be covered by the capital flows from the rest of the world.

The current account deficit of the United States for 2006 is estimated to be in excess of $850 billion. This approximates to 7% of its GDP. Surely, even for the US, this is unsustainable.

In order to ensure that this money is routed into America and to sustain its gargantuan borrowing programme, the US has repeatedly raised its interest rate to its current levels of 5.5%. While the very size of the US debt makes any further increase in interest rates virtually impossible (as it would make borrowings uneconomical), any cut in interest rates to stimulate its economy and make it competitive would mean that the US may not get the money it requires to sustain itself.

On March 28, 2006, the Asian Development Bank [Get Quote] is reported to have issued a memo, advising members to be ready for a collapse of the US dollar.

Since end March 2006, the US Federal Reserve has stopped publishing the quantum of broad money (that is the aggregate of US dollars circulating in the entire world -- technically called 'M3') in the US economy. This is the worst possible signal that the US Federal Reserve could have sent to the world.

Suspended sense of disbelief

Obviously, what aids and sustains the US dollar is a 'suspended sense of disbelief' amongst countries about the value of US dollar. Yet, common sense tells us that the excess supply will obviously result in a fall in the value of any product. The US dollar is no exception.

Late Iraqi leader Saddam Hussein was fully aware of this paradigm. Seeking to exploit the inherent weakness of the US dollar, Saddam wanted to trade his crude in Euros, which would have lead to a lower demand for the US Dollar and thereby triggered a dollar collapse. And those were his 'weapons of mass destruction -- WMD.'

And if some analysts are to be believed, Venezuela and Iran too possess the very same WMD. Naturally, it requires some specious arguments and military intervention to protect the US dollar. Never in the history of mankind has a national army protected the national currency so vigorously as the US Army has done is the past decade or so.

What is bizarre to note here is that despite the fact that crude is produced mainly in the Middle East; officially it can be purchased in dollar terms from one of the two oil exchanges situated in New York and London. Obviously, should Iran carry out the threat to commence oil trade in Euros or better still an oil exchange, the US dollar would come under tremendous pressure.

The US dollar is akin to the promissory note of a defunct finance company. It is common knowledge that a currency, when not backed by anything precious is just a piece of paper. When US abandoned the Gold Standard in early 70s, countries habituated by then to the US dollar under the Bretton Woods arrangement continued to accept the US dollar as an international currency without demur as the world was not prepared for any other alternative. Else, the global economy would have collapsed by 1971.

But the diplomatic silence did not solve the problem. It merely postponed it and it has come back to haunt us.

Post gold standard, by a tacit approval of the Organisation of Petroleum Exporting Countries (OPEC) and strategic manoeuvring, the US had ensured that its currency is implicitly backed by crude, instead of gold. This explains the American 'geo-political and strategic interests' in the Middle East.

But over time even this was found to be insufficient and consequently the oil standard of the 70s gave way to an implicit multiple commodity standard of today. Naturally, commodity prices -- including crude prices -- have soared in the past few years. Unfortunately, this arrangement too is failing the US. No wonder, the US dollar increasingly resembles a promisory note of a defunct finance company.

It is no coincidence that global trade in most commodities, including oil, is denominated in US dollars as the respective international exchanges are located in the US. To what extent are the prices of these commodities manipulated to protect the US dollar is anybody's guess.

However, it may not be out of place to mention that a barrel of oil which cost less than $10 to produce is sold approximately at $70 in the international market.

But as commodity prices go up it has lead to inflation across the globe. No wonder, countries are forced to increase their interest rates to fight inflation.

This has triggered an interest rate hike across continents and the US is finding it extremely difficult to sustain its current borrowing programme: it hardly has any elbow room to manoeuvre.

Doomed if it does, damned if it doesn't

Meanwhile, countries are increasingly realizing that the value of the US dollar that they are holding is fast eroding, whatever be the 'officially managed exchange rate.' And if fewer people want the US dollar -- as for instance when oil is traded in Euro the demand for the US dollar will fall -- it would trigger an avalanche.

No wonder, the US Fed is unwilling to make public the M3 figures, as it does not want the holding position of the US dollar to be publicised.

Interestingly, in such a doomsday scenario, some economists are still betting on central banks of other countries to defend the US dollar. It would seem that the US has 'outsourced' even this sovereign function to the central banks of other countries. After all, should the US dollar collapse, the biggest losers will not be the US but those who have US dollar-denominated forex reserves.

Naturally, countries holding US dollar reserves are caught on the horns of a serious dilemma -- should they seek to correct the global imbalance, it could result in the imminent collapse of the US dollar, and should they continue to defend the US dollar, they would be a long-term loser as the current arrangement has seeds of self-destruction.

While every central banker is conscious of this fact and thereby seeks to postpone the inevitable while nervously looking for his counterpart in any other country to break ranks and thereby trigger the collapse.

Surely, the emperor is without any clothes. There are only two possibilities from here on: Either we are witness a global meltdown of the US dollar, or allow controlled US dollar devaluation (read, revaluation of other currencies). If it is a global meltdown the global economy is doomed, if is an orderly devaluation, it is damned.

(Source: http://in.rediff.com/money/2007/jun/11dollar.htm)