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Depends on where you live. If you happen to live in the US, then yes…craigslist has killed the classified ad revenue model for newspapers, advertising pages for most magazines are down and many magazines and newspapers are just throwing in the towel.

Come to India and it’s whole different ball game, newsprint is doing well and the number of new magazine launches is insane. In the last few months I’ve seen at least 6 new launches, Lonely Planet being the latest. Lonely Planet is published by Worldwide Media a joint venture between The Times Group and BBC Worldwide. They also publish Top Gear and a yet to be launched home/architecture magazine.

I’m expecting more magazines to be launched as advertisers in India seem to be flush with cash. I’m really looking forward to two types of magazines, one is a Consumer Reports type magazine that will evaluate and rate products/services free of any payola – which is fairly rampant in India.  The other is a personal finance magazine, that can give you the pros/cons for new products and real down to earth advice.  Most of the existing personal finance magazines will never talk about a product in a negative tone for fear of losing advertising revenues.

India is different, when it comes to print media.

I always laugh when I get an email or phone call from someone telling ME how big of an opportunity India is for XYZ… Part of me wants to puke on their business plan, but part of me does believe India has vast opportunity if an idea is executed correctly.

Most of the conversations go like this “I was in India for 2 weeks and everyone has a BlackBerry or iPhone…wow 1.2 billion people, if I capture 1% I’m golden…” or “there is a large captive audience if we streamline service XYZ.”

Let’s examine each thought process in detail. The person in the first example probably stayed at a 5 star hotel and dealt with people that most likely are high earners.  That is not the real India, this individual is going to be shocked at how small the actual target audience is.

The second assumption is someone looking at a problem from a US/European point of view and applying it to India. An example would be mobile phone networks in India, right now India is adding 10 million new mobile users a month.  Mobile operators are not concerned about retaining customers or streamlining customer interactions, instead their biggest issue is their infrastructure cap-ex spending.

For ANYONE looking to start a business or expand their current business in India, I would highly recommend the book “We are like that only” from Rama Bijapurkar. It will get you to start thinking about your REAL market size opportunities and not fall into the 1.2 billion population trap.

Rama highlights 3 types of consumers in India based on income distribution: premium (10%), popular (30%) and discount (60%)…yes, most Indians are “value buyers.” When I hear Ferrari, Gucci or some other high end product is coming to India, you can assume it’s going to be a loss leader for many years to come.

Chapter 7 is where the action really starts with the SEC codes, what are SEC codes? Socio-economic codes (SEC) is a way to classify and segment the entire 1.2 billion people running around India. Those folks who want to sell Ferrari’s and Gucci bags will be bummed to find out their target audience is classified as SEC A1 which contains only 2 million households and 10 million people…what a let down.

Rama is very quantitative driven with her research and I was hoping for more actual case studies. However, the book is a must read for anyone looking at India or wants a PhD in number crunching India’s social graph.

It’s official, Bloom Energy has revealed what it has been working on for the past 8 years…and it looks impressive. KR Sridhar the co-founder of Bloom Energy previewed the Bloom Box on Sunday on 60 Minutes.  I happened to be watching a DVR’d version of it on Monday and was blown away by it. If it lives up to the hype then its a game changer for the world.

Something that caught my attention was the fact you won’t need to be on the electrical grid if you have a Bloom Box.  Applying that logic here in India, that would be HUGE.  Since the electrical grid in India is missing most of the time or if you are on the grid the grid is not on.  Think I’m kidding, my dad’s village in India get’s about 10 hours of electricity a day…in this day and age. And sadly that is pretty much the story all over India.

The Bloom Box could transform India and solve its age old power crisis.  Of course, that would also mean many companies that are building power plants are gonna get body slammed in the process.

So where did Bloom Energy come from? That is an interesting story and slowly being told. To get over USD 400 million in venture financing and stay under the radar for 8 years does not happen often.  As far as their first customer Google, not really surprising since the VC firm KPCB backed both Bloom Energy and Google. The lead partner John Doerr I’m sure worked his magic to get several Bloom Boxes to the Googleplex.

So what’s with the title of the post? Think of the song “Boom Boom Pow” by Black Eyed Peas.

UPDATE: Kudos to Bloom’s PR agency for blanketing every medium to get the word out. 60 Minutes interview, Times of India coverage, Engadget live blogging the event…

UPDATE2: It appears Bloom Energy has 2 developmental offices in India, one in Bangalore and another in Bombay . The one in Bombay is located in Vikhroli which is a Northeastern suburb.

If you have been following this blog for the past 4 years while I’ve been living in Bombay, you know I rarely cover two topics – India’s movie industry (aka Bollywood) and Indian politics.  However, when the two collide it creates a chemical reaction that the media can’t ignore nor I.

My Name Is Khan, the newest film by Bollywood’s biggest star Shah Rukh Khan (SRK), ran into some turbulence this week in Bombay because of the dirty politics played by the Shiv Sena. Let’s rewind a bit.

SRK who is a part owner in the cricket team Kolkata Knight Riders said he would not mind having Pakistani’s players on this team. Agreed, with the terror attack on Nov. 26 in Bombay it’s a sore subject for many but the Shiv Sena, took an extreme view of his comments.  The Shiv Sena flew into action and did what they are good at – scare people and disrupt the flow of things.  The Shiv Sena threatened to block his new movie and damage the property of the theater owners.

This is not the first time this has happened, the Shiv Sena pulled the same sh#& with a film by Karan Johar (KJ) and sadly KJ had to say sorry to the Shiv Sena leadership team…weak. That’s the issue, the Shiv Sena knows that millions are on the line and can extort people and force their version of terrorism on the film industry. This time the industry and more importantly SRK, told the Shiv Sena to get lost and as usual the Shiv Sena’s threat of violence was all bark.  Of course, the PR machine of the Shiv Sena was telling anyone that listened that they were successful in their efforts. I’m still trying to figure out how the Shiv Sena keeps score.

The latest stunt by the Shiva Sena is just another in a long list of things that will make anyone shake their head in disgust. They are focused on all the wrong things because to tackle the real issues would be too much work.

Their stance on past issues:

• Valentine’s day should not be celebrated since it’s not our culture
• All taxi drivers should speak the local language – Marathi
• SJ’s movie “Wake Up Side” – should be banned because they call the city Bombay, not Mumbai
• All BMC/MCGM (governing body of Mumbai) correspondence should be conducted in Marathi

As you can see, the above are all VERY critical issues and much more important then some of the real issues affecting Bombay – poverty, water shortages, electricity blackouts, etc…

On a side note, I think part of SRK’s success in standing up to the Shiv Sena can goto Twitter (he tweets at @iamsrk). It gave SRK an unfiltered and real-time communication channel with his audience. I’d love to see the Shiv Sena use Twitter, oh wait it’s not part of their culture and Twitter currently does not have a localization for Marathi!

Since the financial collapse, I hear more and more companies in India talking about targeting people at the Bottom of the Pyramid (BoP).  In a nutshell, it’s concept termed by Professor C.K. Prahalad that defines people living on less than USD 2.00 a day and when you aggregate their buying power it’s actually quite large.

There have been many case studies done on this idea and the big urban legend is that someone from P&G came to India because sales were dismal.  After a few days, the exec realized that selling products in single use sachet packets would be the way to big profits….SORT OF.  Funny thing I couldn’t find any case studies or documents about P&G, instead I found some info from a local player that had the idea of selling sachet packets (Scribd document).

This idea of targeting the BoP maybe a decade old idea, but then I realized there are people that have been targeting this demograph for decades – political people. And they have successfully sold people on a vision and hope for years and do it quite well. If anything a case study should be done on the political entities that have been targeting the BoP.  Granted, some of their tactics are probably not for corporate consumption but I do believe there might be a couple things that could be picked up from them and implemented.

Setting a price for a product is sometimes one of the toughest decisions a company can make. Set it too high and people scream and run the other way.  Set it too low and you end up shooting yourself in the foot and leaving money on the table. One thing seems to be true, if you lower your price you pick up extra customers and hopefully enough to offset the new lower pricing strategy.  Someone needs to tell that to the Indian bureaucrats. Recently, I’ve noticed a couple instances where they have raised prices hoping to make more money…incredibly stupid.

The new public/private airports (i.e. Hyderabad) are facing a revenue shortfall with decreased airline traffic and to make up the difference they have increased the airport usage fee, aka User Development Fee (UDF).  In India, where people are VERY price sensitive this will just drive more people to look at alternative transport methods.

Another instance is the recently opened Bandra Worli Sealink (BWSL) in Bombay.  They currently charge Rs. 50 (USD one buck) one way and traffic has been about 50-60% of their revenue targets. So the infinite brain trust of the BWSL management are planning to increase the rates by 20%, this is just beyond words.  I’m sure traffic will fall even further.

If the management from the two companies mentioned above are reading this, please take a page from the Indian wireless carriers. Follow the 3 step method they use:

1. Drop prices, get more users
2. Drop prices, get more users
3. Drop prices, get more users

Do you see a pattern?  I thought paying Re. 1 (2 cents) a minute was cheap but apparently not, with the latest price war my call rates went down not up.

There are days where I look at a company and just shake my head at how simple the business model is. For me that company is Times Private Treaties (TPT) which is such a brilliant concept it amazes me and something that cannot be easily replicated.  TPT is part of the massive Bennett, Coleman & Co. Ltd. (BCCL) group which publishes the flagship newspaper – Times of India.

BCCL is currently run by brothers Vineet and Sameer Jain* and according to Wikipedia has over 7,000 employees, 5 daily papers, over 30 magazines, 32 radio stations and 3 TV stations. In short, they have a massive footprint when it comes to consumer media services.

In 2005, Sameer Jain came upon a very simple but highly lucrative idea – barter ad space for equity stakes in new and existing companies. I’m not sure this would work in the US, but here in India it not only works but is highly successful. I’m only assuming it’s successful because their portfolio contains over 200 companies (see list below) and there must be something that attracts companies to TPT. I’ve known about TPT for several years but didn’t realize it’s size till I read that AEGON Religare a life insurance company is owned by TPT via a 30% equity stake.   TPT has also begun to advertise in the Times of India about the power of TPT and how it can help young companies reach a wide audience.

TPT can be viewed as a venture capital firm or private equity firm, but instead of handing over cash or providing management guidance they give you a marketing vehicle. And in India, that marketing vehicle is key.  You really have 3 avenues to pitch your product in India:

1. Actor – Bollywood pitch person or as they call them a brand ambassador
2. Sports – cricket player
3. TV/Newspaper/Magazines

With so few marketing avenues, the above 3 get very expensive for a new company and thus TPT enters the picture. So, next time you read the Times of India and wonder how a young company can spend a large amount on marketing dollars, more then likely it has TPT written all over it.

* Disclosure: I’m not related to Vineet or Sameer Jain, although I have requested to be adopted by them…still waiting for the adoption paperwork.

Below is a partial list of the TPT partnerships:

Last week the inevitable happened, the dream run for Dubai came to a screeching halt. Dubai World a state owned investment vehicle for Dubai announced it needed some breathing room on it’s upcoming debt repayment. It currently has over USD 60 billion in debt, when you compare it to the sub-prime crisis this is nothing.  But, what is concerning is that 3 weeks ago the ruler of Dubai, Sheikh Al-Maktoum, said there was nothing to worry and everything was on track.

The personal investment vehicle of Sheikh Al-Maktoum is also rumored to be in trouble, now this should not be surprising. He’s been spending on all types of goodies, such as the 2nd largest yacht in the world. Dubai Holding owns a ton or properties from hotels, real estate and telecom.

The basic theme of Dubai was that it had very little oil and needed to diversify and create businesses that could generate revenue once the oil dried up. And the unwritten rule was that big brother Abu Dhabi would bail it out if anything happened.  The Abu Dhabi Investment Authority (ADIA) at one point was worth close to USD 900 billion, so it seemed it had cash if things went south. Well, things are going south and ADIA is not saying much, which is a bad thing.

All of this is not surprising to people that have been following Dubai from a distance.  It comes down to the fact that it’s a desert and Dubai Inc. was trying to portray the image of people living in million dollar pads, shopping like a king and making it a mini vegas minus the gambling. I visited Dubai about 10 years back for work and back then the common theme was “make a lot of money in Dubai and hopefully move to a place like the US.” I believe the same thing still holds true, their is no character to Dubai it’s all plastic or in this case sand.

So, who is next?  I read an article talking about Bombay being the next city to go belly up. Granted I live in Bombay and a bit biased, but I’m pretty sure there is a hugh difference between Dubai and Bombay.  Take housing for example, in Dubai you had lots of supply and very little demand as we are now seeing.  In Bombay, you have very little supply and lots of demand so much so that housing prices are up 15% in the past 6 months.  Yes, prices are up 15% in this pathetic market. Commercial real estate in Bombay may take a hit, but nothing like what we are seeing in places like Mid-town Manhattan or Dubai.

Or could it be China?  One thing I’ve always said about China, it’s a communist country and with that the press is 100% controlled and managed by the central government. We will NEVER know what is truly happening, even their projected GDP numbers are always suspicious.

In the end, I think Dubai did a great marketing pitch for the world but just never could live up to the hype.

Forbes India has released their list of 100 richest Indians and the Top 10 played out as expected with the Ambani’s, Ruia’s and Mittal’s on the list.  More interesting were some notable people missing from the list such as Ratan Tata, Pallonji Mistry and Raghav Bahl – who are these people you ask?

Ratan Tata is the head of the Tata Group and for someone who has the authority to buy companies such as Corus Steel, Jaguar and Land Rover, I’m surprised he’s not on the list. Not to mention he is building a bungalow on Altamount Road – blocks away from Mukesh Ambani and Kumar Mangalam Birla.

Pallonji Mistry is the head of the Shapoorji Pallonji Group which owns over 18% of the Tata Group and therefore it’s single largest shareholder.

Raghav Bahl who runs Network18 a massive media conglomerate which includes many TV outlets and magazines such as Forbes India.

Part of the omission for the above 3 is that they may not be Indian citizens and hence excluded. Pallonji Mistry is an Irish citizen.

But, the big 800 pound gorilla in the room is the fact the list does not have a SINGLE politician from the Indian government on the list. Of course, we all know the money was gained illicitly but THAT would be the list everyone would talk about.

Getting back to the title of this post, Indrajit Gupta, Editor of Forbes India, summed it up best

Should we be celebrating the individual wealth of a 100 Indians in a country where more then 75% of the people earn less than Rs. 20 (50 cents) a day?

The average mutual fund investor in India must be celebrating since the Securities and Exchange Board of India (SEBI, it’s like the SEC) is doing everything in its power to bring down the costs of mutual funds.  The speed in which SEBI is mandating these changes is fast and furious…nice to see for a change.  On the flip side, many of the asset management companies (AMC’s) and banks that offered mutual funds are taking a hard look at their business model.

During the past 4 years what drove the mutual fund industry was the “entry load” that was paid to distributors.   The fee was as high as 2.25% paid by the consumer and then sometimes the AMC would throw in some additional coin to generate more sales.  The biggest distributors were banks and independent financial advisors (IFA).

The writing is on the wall, most of these AMC’s will have to steamline their operations and look at technology to enable their sales growth. I see two options:

1. Go directly to an AMC’s website and get their products, such as Fidelity.co.in

2. A low cost mutual fund online aggregator, which makes money directly from the AMC or supported via advertising

Both have potential but India has a small number of internet users, the reason the mutual fund industry grew was because of the IFA’s in the Tier 2/3 cities and villages.

To be honest 2.25% upfront was a complete joke and really lined the pockets of everybody but the consumer.  And when the markets were going up, many financial advisors were telling customers to switch to Product X because it was better.  In reality, the advisor wanted to get the 2.25% entry load on Product X – not much of a financial advisor.

The real winner in all of this could be brokerage firms. SEBI recently issued guidelines which allow mutual fund products to be bought and sold through brokers. The real losers will be the independent financial advisors who in a span of 9 months have gone from gravy train to derailed train.

NOTE: The above image is the SEBI logo, which could possibly be the worst logo ever designed.