What happened VW?


vw-dieselgateAbout 4 1/2 years ago I penned an article talking about how the Volkswagen (VW) Group was firing on all cylinders in India. After revealing to US authorities it had been intentionally circumventing emissions standards, all that progress is coming crashing down and it could take down the VW group with it. That’s not hyperbole, what the VW Group has committed is a serious breach of trust. So what happened?

It all started with some scientists from West Virginia University who were testing random vehicles for emissions. They noticed the cars from the VW Group always seemed to spew more emissions in actual driving conditions then when stationary at an emissions testing facility. The numbers were not 5% or 10% off but an order of magnitude that was 15-35 times more then the VW Group said the cars would emit. It finally came to a head on September 15, 2015 and the US Environmental Protection Agency (EPA) got involved by issuing a notice of violation. Surprisingly, the VW Group admitted it was intentionally beating the emissions test by using software to detect if a car was being testing for emissions and then changing various parameters to the get emissions levels much lower.

Although, VW admitted it was at fault it tried to shield itself saying it was “rogue coders” who did it not anyone from the management team. HAHA. The investigation is on-going and no one really knows what happened but I can tell you some “rogue coders” would not be able to pull this off by themselves. Either that or VW is one of the most dysfunctional companies on the planet. VW was on a mission to be the largest car maker in the world and I’m sure the mandate from the CEO was to go big at all costs or go home.

The VW Group should be barred from selling cars in the US for 2-3 years to really make a point that you cannot intentionally circumvent the law for economic gain. This incident is different from GM where people died. That was a design flaw that was covered up for years and they didn’t intentionally set out to design a faulty ignition switch. If VW gets a slap on the wrist I think it will empower more companies to roll the dice and see if they can getaway. For such a reputable company like VW to go down this path is pure sadness for any car person, they have some amazing name plates like Porsche, Lamborghini and Bugatti to name a few.

As far as India is concerned, the cars will probably get the required fix to make the cars compliant for emission standards. But, then that means they probably won’t be as fuel efficient which will open up a whole host of lawsuits for fraud. As far as banning VW cars, I don’t see that as an option as the country really needs those jobs and the tax revenue it generates. Whatever the case may be, their reputation has been damaged and will take a long time to rebuild that trust with consumers.

When the Cheerleading Stops


$_35In life we all face adversity, some more than others. We go about our daily lives and take many things for granted. Then you get the call that everyone dreads, that something has happened to a loved one or a very dear friend. The world briefly seems suspended as you process the information and you feel helpless. I recently got that call from my wife and I could barely understand what she was saying between the torrent of tears and sobbing. Her youngest uncle from her dad’s side of the family had unexpectedly passed away. I was stunned.

It sounds cliche when you hear “unexpectedly passed away”, but in this case it really was surreal. In fact, for the longest time I had incorrectly assumed his age. To say the whole family was in a state of shock is an understatement, he was the “baby” of the family. He was the one that would always want to organize family get togethers or vacations so that everyone could spend time together. He was the one that would walk around the table and make sure everyone had a drink in their hand or their plate was full of calories. He cared for everyone and didn’t discriminate between family member or the staff that worked for him – he wanted to make sure everyone was comfortable and happy.

Let’s be clear, this was not an uncle that I had known since childhood but he became part of my family when I got married. Yet, for days I was shocked and couldn’t believe what was happening. Then it dawned on me why I was feeling this way, he was really the cheerleader of the family. It didn’t matter what you did, he always wanted to get behind whatever you were doing. My wife is an architect and her first project was her uncles flat – his reasoning was she had to start her career somewhere so why not with him.

He was a cheerleader for me as well. Several years ago he heard that I co-founded a financial software company and he was insistent on paying for the software. The best part, his office staff had not even installed or used the software and yet he was asking me who to make the check out to. I was like easy tiger, let’s first make sure your office can benefit from it.

The world is already filled with negativity and it’s great to have someone that is your personal cheerleader. And when the cheerleading stops, that deafening silence is the most painful part of getting that dreaded phone call.

Oh I think that I found myself a cheerleader
She is always right there when I need her

From the song “Cheerleader” by Omi. Although the song is about dating, the song is so apt.

Dear Ola & Uber, Welcome to the License Raj


Bits-Bytes-CarEveryone from the Bay Area to Bangalore is talking about whether we are in a technology funding bubble or not. I think that misses the bigger question in India of whether the Indian government might have an effect on it. I woke up this morning and saw an article that Vijay Chibber the secretary of the Ministry of Road Transport and Highways, has stated that companies like Ola and Uber must be registered with the state government like any other taxi operator. Vijay refers to Section 93 of the Motor Vehicles Act which states that the state governments have jurisdiction.

Ola has raised just under Rs. 6,660 crore in funding and employs thousands of people and that is most likely going to come to a screeching halt if the government has its way. Registering with the government is not the issue but existing taxi’s are registered and it’s pretty clear no one likes the existing system. How many times have people been refused a ride from a taxi driver? How many times has the taxi driver driven like he was in an F1 race? How many times have you stepped into a taxi and the floor board has rotted and you can see through? Yup, I’m sure all of us have faced this issue.

This issue goes back to my disconnect with Modi. He will travel all around the world and meet with enthusiastic entrepreneurs like Facebook’s Mark Zuckerberg and Tesla’s Elon Musk but back at home…

Well back at home, we are back to square one with the “license raj” of yesteryear. The central government has punted on the issue and has let each state government frame the guidelines for the taxi app aggregators like Ola and Uber. This just means more work for Ola and Uber in dealing with each state government – oh, what joy for them! And, in states like Maharashtra they may impose a cap on the number of taxi’s that an operator can have, because that’s how we roll in the license raj era. VC funding meet Indian Government regulators, you may have met your match.


A Decade in India


(too long, didn’t read)

The original plan was to land into Bombay on October 1, 2005 and stay for 6 months…I’m still here 10 years later. In what can be termed the longest 6 months ever.

The long version

I landed into Bombay on Oct 1, 2005 and thought I would be back to the shores of California by April 2006. But, life had other plans for me. Just to refresh your memory, what was happening around October 1, 2005:

  • USD-INR was Rs. 44
  • Sensex @ 8634
  • DJIA @ 10,658
  • NASDAQ @ 2151
  • The big song in India was Kajra Re from the movie Bunty aur Babli
  • Louisiana was still reeling from the after effects of Hurricane Katrina (Best quote “Brownie, you’re doing a heck of a job”.)

I’ll be honest, I never expected to last 10 years in India. I used to come to India during the summers as a kid and I would always complain about things not working right, things getting delayed or it smelling. One thing is for sure, some things never change!

Cousins, friends and business associates will ask me from time to time “are you happy in India”. Living in India has it’s own set of pros and cons just like living in the US does. However, after 10 years I can categorically say yes – I like India. The reason is very simple, living in India is an adventure. You will never know what to expect and everyday there is some new thing to deal with. For some, this environment just doesn’t work well if you want things to be consistent, straight forward and proper.

Don’t get me wrong, there are days where I have to shake my head and say to myself “I moved here for this crap?” Such as the recent kerfuffle regarding encrypted internet communications. The Government of India, in their infinite wisdom wanted individuals to save their previous 90 days of chat messages in clear text in case the government requested them. To call this idea stupid would be an understatement, it’s the type of half-baked policy that many Indian government agencies roll out and then quickly back pedal because they didn’t think through the process.

Anyways, they call India an emerging market for a reason. Lots of opportunity, but also lots of issues to deal with you. As I say “if it was easy, everybody would be doing it.”

The Disconnect Between Modi and Me


modi-digital-indiaYesterday, India’s Prime Minister Narendra Modi (@narendramodi) visited ground zero for the home of many unicorns – Silicon Valley. Modi hosted a Digital India dinner to show that India wants to roll out the red carpet for companies to invest in India. Modi is an articulate salesman and its just want India needs. Someone to get out there, cold call, visit countries and get them excited about India and it’s 1.3 billion people.

When I used to live in the US, a colleague of mine at Cisco Systems would always tell me – never confuse selling with installing. In his eyes, they were two distinct activities handled by different teams. The selling was done by the sales guy and the installing was done by someone else. Of course, you really need to make sure the entire process works well or they may not buy again.

Since Modi assumed the office in May 2014 he has been busy trying to handle both sides of the equation. Traveling all over the planet in Air India One selling the vision of India and getting companies to sign on the dotted line for foreign direct investments (FDI). In India he has been battling the Congress party to get many of the needed reforms in place such as the land acquisition act and GST (Good and Services Tax).

For the uninitiated the GST bill will unify the tax code and shifts the power from the States to the Central Government. Currently, each State collects various taxes if you manufacture products and if you move goods from one state to another, it’s like moving it to another country. With GST, the Central Government handles the taxation piece and goods can freely move from state to state, which would be the logical thing to do. Of course, this creates an issue because the guys on the ground that used to get bribes to move the paperwork more quickly are effectively cut from the action.

There are many rules and regulations that need to be passed in order to get India moving in the right direction. Another example is if you are trying to open a restaurant in Bombay, you need over 40 licenses in place to be compliant. My favorite is you need a phonographic license to play music in your restaurant. You can imagine dealing with over 40 departments for running a restaurant will definitely lead to some policy violations and those representatives are all to happy to show up asking for a bribe…welcome to India.

I’ve talked to many people that run manufacturing facilities and they all say the same thing, the Make In India initiative is a joke. The disconnect is Modi is absolutely selling the vision of India but the implementation of policies to operate in India is still stuck in neutral. Fix that.


Older Entries