Summit Notebook

from Abhiram Nandakumar:

A garage, a beaker and a Bunsen burner

Kiran Mazumdar-Shaw, one of India’s most influential businesswomen and among the world’s most powerful women, says she’s an accidental entrepreneur.

Mazumdar-Shaw has shown that modest garage start-ups can extend beyond software and hardware companies. She set up what is now India's largest listed biotechnology company in 1978 and she encourages others to follow suit.

“Today a lot of early stage research work can be done in a garage,” she said at the Reuters India Investment Summit.

Mazumdar-Shaw reckons opportunities for bio-tech startups are huge, considering the demand for sophisticated technology like genomic based systems, diagnostics for cancer stem cells, and high-end synthetic biology. All these are usually developed in small labs across the country.

“What I find today is that there are a large number of very innovative young biotech entrepreneurs who are doing things in a very small way. CellWorks is doing very interesting work on drug design.”

Her advice to budding entrepreneurs – If you have a novel idea and are looking to set up a business, don’t think twice, just go for it.

HK Exchange’s Arculli plays it cool

Spilling a piping cup of hot coffee down yourself in front of a room of journalists seconds before they start firing questions at you isn’t in your standard media training handbook. But 72-year-old Hong Kong Exchange Chairman Ronald Arculli, isn’t a man who gets easily ruffled. While the Reuters reporters went off in a frenzy bringing in tissues and mopping down the table, he just sat there keeping his cool,having not got a drop on his crisp white shirt or tie.

Aside from his role at Hong Kong Exchange, Arculli is a senior partner at law firm King & Wood, and his legal training shines through in interviews.

Asked what the exchange’s biggest weakness was – he thought for a while and then replied “I think in some ways our strength may be our weakness”.

Talking about the threat posed to Asian exchanges by the alternative trading venues starting to emerge in the region he went into a highly detailed analysis of how they’ve developed in Europe and the U.S, before cutting them down with an erudite, “but their business model doesn’t seem to propel them to great financial success”.

Arculli is a man used to prizes, he’s been named in the UK Queen’s Birthday Honours List and received Hong Kong’s highest award, the Grand Bauhinia Medal. But if he feels landing a mega-deal for his exchange could be a lasting legacy, he’s not prepared to show it yet.

“We don’t see that equity is necessary a component of any possible co-operation,” he said, when discussing potential tie-ups for the exchange.

from Sakthi Prasad:

From coffee beans to brick buildings

M.R. Jaishankar, chairman and managing director of real estate firm Brigade Enterprises, the youngest of 12 siblings, started his career in the family business of growing coffee beans.

 But after a nasty labor dispute, which resulted in the burning down of his factory in 1984, he saw an opportunity in the real estate business in the then sleepy Bangalore city -- and tasted big success.

Jaishankar said his first real estate loan of 10 million rupees in 1984 was considered so large that it had to be approved by the bank’s board of directors.

 In contrast, he said in today’s IT-driven Bangalore, a loan of 10 million rupees could be approved at the level of a branch manager.

 Perhaps even possible that people do sign such a deal these days over a cup of coffee?

from Sakthi Prasad:

Real Estate – To invest or not

Everyone of us has our own ideas about a dream home and usually wonder if it makes a good investment or not. 

But for Abhijit Mukherjee, president of the pharma firm Dr. Reddy’s, the choice is very clear -- He is not a big fan of real estate investment. 

While speaking to Reuters journalists at the India Investment Summit in Bangalore, Mukherjee cited the American example of a recent real estate crash and wondered whether India, too, is headed in the same direction. He said buying a house and holding it for value appreciation over a number of years is not a good idea.

Notwithstanding his skepticism, he said he is thinking of changing his apartment. But he was quick to add that it is not a very exciting investment.

Mukherjee would rather park his money in a high-risk, high-reward investment like equities.

from Sakthi Prasad:

The brave new world of Ideas

The world was built on ideas and in the absence of innovation, mankind would have continued to live in stone age.

Of course, Rostow Ravanan, chief financial officer of Mindtree, would subscribe to the view that new ideas are absolutely necessary to promote business growth. Well, who wouldn’t? While talking to journalists at Reuters India Investment Summit, he vigorously defended his company’s foray into designing smart phones saying it is a new idea, which may as well pay off.

Ravanan, in a philosophical manner, said the world is “spermicidal” and is designed to kill new ideas -- but that will not deter a company like Mindtree in pursuing business opportunities. Just because the smart phone market is perceived as crowded, it is not a good enough reason for Mindtree not entering the market.

 When he was pushed by Reuters journalists to provide some color and details regarding the company’s smart phone project, he evaded the volley of questions in an innovative manner: He said he is paid not to reveal the details before the official launch.

from Sakthi Prasad:

New Contracts are like honeymoon

As the old adage goes, it is easy to build a new house as compared to remodeling an old one. If one would like to extend this adage to the new-age IT industry, then we could use what L. Ravichandran, president, IT Services of Tech Mahindra, told the Journalists at Reuters India Investment Summit in Bangalore: it is easy to negotiate new contracts with the clients rather than renegotiating old ones. He likened the new contracts to that of a honeymoon -- both the customer and the service provider are happy. But, of course, he did not extend his metaphor to old contracts by likening it to a marriage gone vinegary.

Ravichandran also pondered over the fate of fixed lines telephones. According to him, the fixed line phone will not be done away with altogether. Instead, it will be increasingly used to deliver other digital services like broadband internet, IPTV etc.  So in a perverse way, landlines may continue to be used, but not much to make phone calls though.

from Sakthi Prasad:

Old business in New bottle

When the term “real estate” is mentioned, people immediately get images of bricks, cement, sand, gravel, dusty construction sites and so on. And the business is rightfully termed as “brick-and-mortar” or categorized as “old economy.”

 Many youngsters nowadays would prefer to work in swanky offices of a software company or an investment bank instead of sweating it out in dust and heat at construction locations.

But for J.C. Sharma, managing director of Bangalore-based real estate firm Sobha Developers, it makes business sense to combine the selling power of “new economy” Internet and “old economy” real estate. 

While speaking to Journalists at Reuters India Investment Summit in Bangalore, Sharma said the Non-Resident Indian (NRI) demand has gone up to 17 percent this year compared to less than 10 percent of demand last year -- thanks to the power of Internet.

 Maybe, Internet would after all help a homesick Indian toiling in faraway foreign lands to find a home in India. And as J.C. Sharma would have it, one could always find a Sobha home on the cyber highway.

from Sakthi Prasad:

India Investment Summit comes to Bangalore

Executives of real estate, technology and pharmaceutical firms will be exclusively talking to Reuters journalists about their companies’ growth plans, challenges they face and business opportunities that are available within the wider context of India investment story.

Stay tuned.

Recession’s perfect storm speeds up change in ad industry

Why is it that the United States’ advertising as a proportion of marketing services is at its lowest point since 1977, maybe even lower than since the Second World War?

You may have guessed it it’s the recession.

But it will get better, Martin Sorrell, CEO of advertising giant WPP, said.

“The recession is less worse,” Sorrell said, repeating a favourite phrase of late, and while it’s the biggest recession since 1929 it is also “a perfect storm” that has brought forward change. 

“The recession has accelerated structural changes that were already happening,” Sorrell said at the Reuters Global Media Summit.

Will advertising ever go back to where it was? Yes, if you are looking at new media advertising on Kindles and mobile.

Will the United States rebound? Western Europe? Yes, to both.

200MB? It’s only human nature to want more

Broadband subscribers want as much speed as they can get their hands on, even if it’s way beyond what’s needed by the most avid downloader of music, keen watcher of video or biggest Facebook addict, reckons cable operator Liberty Global’s CEO.

Maybe he would say that, but Mike Fries says today’s subscribers are signing up for speeds of 100-200 MB to be safe in the knowledge they won’t be left behind whatever the next stage of the Internet — a bit like owning a car with a top speed way beyond the limit.

“Intuitively, you would say: ‘What the heck does somebody need this for?’,” Fries told the Reuters Global Media Summit.

“But in the end we find that increasingly when you say to somebody for the price of a Volkwagen you can have a Porsche, generally they take the Porsche. It’s just human nature.

“Is it fully utilised today? No. Will it be? Absolutely.”

(Posted by Paul Sandle)