Archive for January, 2008

Entrepreneurs in the world’s 2 most populous nations, China and India, has through modern times been somewhat asleep. But now, says HBS professor Tarun Khanna in a new book, both societies “have woken up,” and the results could reshape business, politics, and society worldwide.

“In some sense people in these societies are running faster than their rules and laws can keep up. So they are creating the rules as they go along. And entrepreneurship is, after all, doing things in new ways, ahead of social norms and customs, and establishing the rules and laws. In both countries, these processes are unfolding not just in the mainstream business sector but in society writ large and even in politics and civil society,” says Khanna.

Khanna’s book Billions of Entrepreneurs: How China and India Are Reshaping Their Futures and Yours will be published by Harvard Business School Press on February 1. Each chapter compares China and India on a broad range of factors in entrepreneurship, including access to capital, freedom and reliability of information, governmental involvement, and infrastructure. Khanna examines the landscape of big, medium, and small entrepreneurship, including rural health-care initiatives and even Bollywood.

As Khanna explained to HBS Working Knowledge, “One can see China clearly when juxtaposed against India, a neighbor that, like China, is a large, populous, and ancient country that chose a different path. The difference is stark. The same is true when we look at India with China as a backdrop. That’s why I wrote a comparative book.”

In our interview Khanna outlines the business landscape in both countries. He also describes how indigenous and foreign entrepreneurs could get a foothold, how China and India relate to their own diasporas, and how entrepreneurial activity is reshaping both countries for the better.

Martha Lagace: Why did you choose the title Billions of Entrepreneurs?

Tarun Khanna: The title captures the ferment that is taking place in both China and India. Entrepreneurship is not only about hotshots taking companies public. A lot of entrepreneurial activity in these countries is in the exercise of getting things done more efficiently and creatively in response to constraints that people find themselves immersed in. Some of these constraints are societal; some are political. And so this book is full of stories about social entrepreneurs, political entrepreneurs, and others whom we study in business schools—investors, capitalists, and so on.

Q: What’s different about entrepreneurship in both countries?

A: The extent and type of government involvement and the nature of openness are 2 dimensions in which the countries are different. These dimensions pervade all aspects of societal existence, whether that means raising capital to start a new business, the nature of markets, copyrights, the media, movies, and religion, as well as the ways in which both countries themselves project their power, the way they deal with each other, and the way the village economy works.

In China, the government is often the entrepreneur. It is in many instances a very efficient entrepreneur. Of course there are bankrupt state-owned enterprises, but there are equally dynamic companies starting out in villages, small towns, and major cities, often with a sizable amount of investment or involvement by local government authorities. It is hard to find any reasonably sized Chinese company in which government authorities do not have input.

In India, some islands of excellence notwithstanding, the government remains inefficient for the most part, and most pockets of entrepreneurship—interesting, vibrant new ways of doing things—are in the private sector or civil society, staying far away from government intervention. So here the private sector leads many significant initiatives; in China, the lead is often provided in a top-down manner.

The second difference is the nature and extent of openness to outside influence and foreigners. Foreign direct investment pours into China. India has embraced foreign direct investment much less, for good and bad reasons. On the good side, India never had to endure a cultural revolution. China “wiped its slate clean” in the Cultural Revolution. Literally and metaphorically, it got rid of intellectuals, human capital, private enterprise, everything. With a clean slate in those circumstances it came to rely on FDI, and help from the overseas Chinese was a big piece of that.

Because India did not follow a similar extreme path it didn’t need to embrace FDI quite as much. So that’s a reasonable reason to expect low FDI levels. On the negative side, however, India, with its indigenous entrepreneurs, still engages in some protectionist behavior and lobbies to keep foreign investment out.

There are other aspects to openness, of course, than just FDI. Traditionally, India has been more open to ideas than has China, for instance.

Source from HBS: [Click on the Image to read the Entire post ]The image “https://i0.wp.com/hbswk.hbs.edu/images/site/logo-hbswk.gif” cannot be displayed, because it contains errors.


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Professionalism in the Software Industry (circa 1985)

As the packaged software industry reached its middle age around 1985, it was difficult for an individual programmer to have an impact. Software had to be marketed via traditional media, burned onto a physical medium, put into a fancy package, and shipped to a retailer. Consequently, 50 or more people were involved in any piece of code reaching an end-user. It would have been tough for a software engineer to aspire to the same standards of professionalism that put Surgeon 3 over the top. How can the software engineer ensure that his or her innovation will ever reach an end-user if shipping it out the door requires 50 other people to be paid on an ongoing basis? How can the software engineer teach other programmers how to practice the innovation if the software is closed-source and his or her organization’s employment agreements mandate secrecy? The industrial programmer circa 1985 was a factory employee, pure and simple. He or she might aspire to achieve high standards of craftsmanship but never professionalism.

What were a programmer’s options, then, if in fact craftsmanship proved to be an unsatisfying career goal? The only escape from the strictures of closed-source and secrecy was the university. A programmer could join a computer science research lab at a university where, very likely, he or she would be permitted to teach others via publication, source code release, and face-to-face instruction of students. However, by going into a university, where the required team of 50 would never be assembled to deliver a software product to market, the programmer was giving up the opportunity to work at the state of the art as well as innovate and teach.

Professionalism in the Software Industry (circa 2000)

Like the MIT senior mentioned above, most industrial programmers have not changed their opinion of what it means to be a successful professional. The closer a programmer gets to Bill Gates in terms of wealth, the more successful a professional he is considered to be. Engineers in Silicon Valley worship John Doerr, a venture capitalist at Kleiner Perkins, Larry Ellison, and Bill Gates. There is some evidence that standards are shifting. Richard Stallman and Linus Torvalds draw large crowds of admirers worldwide. These pioneers in the open-source software movement are beginning to exhibit some of the elements of Surgeon 3 (above):

  • they practice at the state of the art, writing computer programs that are used by millions of people worldwide (the GNU set of Unix tools and the Linux kernel)
  • they have innovated, Stallman having developed the Emacs text editor (one of the first multi-window systems) and Torvalds having developed a new method for coordinating development worldwide
  • they have taught others how to practice their innovation by releasing their work as open-source software and by writing documentation

The Internet makes it easier for an individual programmer to distribute work to a large audience, thus making it easier to practice at the state of the art. The open-source movement makes it easier for an individual programmer to find a job where it will be practical to release his or her creations to other programmers who might build on that work. It is thus now within a programmer’s power to improve his or her practice as a software engineering professional, where the definition of professional is similar to that used in medicine.

The new definition

We define software engineering professionalism with the following objectives:

  1. a professional programmer picks a worthwhile problem to attack; we are engineers, not scientists, and therefore should attempt solutions that will solve real user problems
  2. a professional programmer has a dedication to the end-user experience; most computer applications built these days are Web applications built by small teams and hence it is now possible for an individual programmer to ensure that end users aren’t confused or frustrated (in the case of a programmer working on a tool for other programmers, the goal is defined to be “dedication to ease of use by the recipient programmer”)
  3. a professional programmer does high quality work; we preserve the dedication to good system design, maintainability, and documentation, that constituted pride of craftsmanship
  4. a professional programmer innovates; information systems are not good enough, the users are entitled to better, and it is our job to build better systems
  5. a professional programmer teaches by example; open-source is the one true path for a professional software engineer
  6. a professional programmer teaches by documentation; writing is hard but the best software documentation has always been written by programmers who were willing to make an extra effort
  7. a professional programmer teaches face-to-face; we’ve not found a substitute for face-to-face interaction so a software engineering professional should teach fellow workers via code review, teach short overview lectures to large audiences, and help teach multi-week courses

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Running: grep -r fuck /usr/src/linux/*– Linux may not be commercial but many would argue that it is definitely professional. Draw your own conclusions.   (contributed by Edmund von der Burg).

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Loic LeMeur

It’s not often you are presented with a vision of the future of online video in a pub in London.

But that’s exactly what I was shown last night by celebrated French blogger, well-connected entrepreneur and Seesmic founder Loic LeMeur.

He believes that the future of online video is not YouTube or even live video, he thinks it is video conversations among a community.

Within minutes of posting the video to Seesmic, he had replies from the community all around the world, including from members sat around the corner in the same bar.

“YouTube is not a conversation,” explained LeMeur. “As one Seesmic-er said to me, ‘YouTube is about the videos, Seesmic is about the people in the videos’.”

Users can record videos via webcams and upload directly to Seesmic, or record using YouTube and post from that site.

The company is also working on a mobile phone version of Seesmic.

He says Seesmic is more intimate because video allows users to see each other for who they are.

Users reply to each others’ replies, creating an almost infinite threaded conversation around different topics.

Source: BBC News

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In the last 2.5 years, Google has conducted the largest corporate experiment with prediction markets we are aware of. Here, we illustrate how markets can be used to study how an organization processes information. We document a number of biases in Google’s markets, most notably an optimistic bias.

Newly hired employees are on the optimistic side of these markets, and optimistic biases are significantly more pronounced on days when Google stock is appreciating. We find strong correlations in trading for those who sit within a few feet of one another; social networks and work relationships also play a secondary explanatory role. The results are interesting in light of recent research on the role of optimism in entrepreneurial firms, as well as recent work on the importance of geographical and social proximity in explaining information flows in firms and markets.

Download the PDF.

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Article Author: Greg Linden founder of Findory

We will see a dot-com crash in 2008. It will be more prolonged and deeper than the crash of 2000 .The crash will be driven by a recession and prolonged slow growth in the US. Global investment capital will flee to quality, ending the speculative dumping of cash on Web 2.0 startups.

Venture capital firms will seek to limit their losses by forcing many of their portfolio companies to liquidate or seek a buyout. Buyout prospects will be poor, however, as the cash rich companies find themselves in a buyers market and let those seeking a savior come face-to-face with the spectre of bankruptcy before finally buying up the assets on the cheap.

Startups that managed to get cash before the bubble collapses will have a cash horde, but will find little opportunity to rest on it. Most startups will find their revenue models were unrealistic and will rapidly have to seek change. Many will jump over to advertising, but the advertising market will have constricted. Bigger businesses will seek to drive out the new entrants, and online advertising will become a cutthroat business with little profits to be found. Others startups may shift toward licensing and development deals for bigger companies, but will find their investors impatient now that the promised $500M startup has become a $10M company.

The big players will not be immune from this contagion. Google, in particular, will find its one-trick pony lame, with the advertising market suddenly stagnant or contracting and substantial new competition. The desperate competition with dwindling opportunity will drive profits in online advertising to near zero.

Google and Yahoo will find their available cash dropping and will do substantial layoffs.


Unfortunately, this scenario has privacy implications as well. Much like we saw after the 2000 crash, it is likely that those with little to lose will attempt scary new forms of advertising. The Web will become polluted with spyware, intrusiveness, and horrible annoyances. None of this will work, of course, and there will be lawsuits and new privacy legislation, but we will have to endure it while it lasts.

It is a dire scenario, but one that looks much like what we saw after 2000. That was a much smaller crash without the fuel from broader problems in the US economy, but we still had investment capital shut off for a few years, most startups shut down, and the remaining startups shift business models. We also saw a dramatic rise in pop-up advertising and spyware.

The crash of 2008 will be similar to 2000 but deeper. We all will have to weather the storm. Source.

You can Download [as pdf] the Full Fledged Report on Net by J P Morgan.

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