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When I first heard about Aadhaar I figured it was just another Government of India project that would go nowhere. (For a quick refresher on Aadhaar I put together a quick 10 slide summary.) As the program is starting to gain traction, many people are starting to challenge the claims and veracity of the projects purpose.

One of them is Sucheta Dalal, who is a highly acclaimed journalist who broke the story on India’s largest insider trading scandal in 1992 involving Harshad Mehta (he was the first person in India to buy a Lexus LS400). I’ve actually had a chance to meet Sucheta and she is a straight shooter. I’ve commented in the past that I feel Aadhaar will help to ease corruption. On Twitter, Sucheta had a more direct question for me:

@mrjain  please enlighten me how a number allotted to you will curb corruption? I am all ears

One of the misconceptions about Aadhaar is that it will solve every problem that affects India, it won’t. The other misconception is that it will be 100% fool proof and rock solid from day one, it won’t.  Aadhaar is a technology startup that happens to be ventured backed by the Government of India. As with any startup or government program there will be teething and integration issues that will have to be dealt with in real-time.

My answer to Sucheta’s tweet is “yes, but probably not for Sucheta and me.” It would benefit people that suffer from the “poverty tax”, which is a large percentage of the Indian population. If you receive a pension, you might have to pay a “fee” to the clerk to speed up the transaction. Same issue with food, subsided kerosene, government jobs, etc…if you want something you have to pay a fee.  That fee hurts more if you earn less and hence it’s called the poverty tax or you can call it what it really is…corruption. With an Aadhaar number the government would directly deposit the money into your bank account. No middle man to slow down the transaction or take money from you to speed up the process of getting YOUR money.

Fear, uncertainty and doubt are the 3 things that critics raise when talking about Aadhaar. Fear of what the Indian government will do with the data. Uncertainty about how much money is being spent on the project. And lastly, doubt of whether the program can achieve anything impactful.

The other complaint I’ve heard from several people is they feel it’s just a large technology project to benefit system integrators like Infosys, Wipro and TCS. In particular, a friend of mine questioned why Aadhaar was so keen on using iris and fingerprint scanners to authenticate people. Was it because that would force new hardware sales for iris and fingerprint scanner vendors. Why not use voice verification via cell phones that are so readily available? Granted, there might be issues with voice pattern recognition but why not open it up to a college competition for the top technology schools (read IIT’s) to try and solve the problem.

Personally, I think that’s where the Aadhaar team has done a rather poor job of openly communicating and should really improve in that department. I still firmly believe Aadhaar is a step in the right direction and will eventually benefit a large percentage of the Indian population.

Ever have one of those “oh sh^%!” moments when your data gets deleted or your hard disk spins out of control and takes all your data with it? We have all been there and it’s a painful moment. Sadly, it doesn’t have to be since it’s completely avoidable if we were just more proactive. I had my first oh shit! moment back in 2003 when my iMac went all wonky and I thought I had lost all my data. Luckily I was able to hook it up to another Mac and transfer the data safely to an external hard disk (thank God for target disk mode on Mac’s). That’s when I realized the benefits of running regular backups.

For me there are 3 “oh shit!” moments you are trying to protect against:

1. Oh shit! I deleted a file (file diversity)
2. Oh shit! my computer hard disk crashed (hardware diversity)
3. Oh shit! everything got stolen (location diversity)

The first event is very simple to implement on a Mac, you just have to fire up Time Machine and attach an external hard disk. Then it will periodically backup all your files and keep track of the files you change and allow you to recover to a previous file for whatever reason.  Apple makes it even easier with a Time Capsule (a wireless router + hard disk) which continuously backs up your computer over a wi-fi connection to the Time Capsule…pure genius.

Many people forget about event number two because they feel it’s covered by event number one, which is not totally true. If your hard disk crashes you might have all your data on an external hard disk, but you still have to waste hours re-install your operating system, reload your applications and copy your data. That’s a major pain if it happens on a Monday morning and you have a big presentation later in the day. To cover event number two I use Carbon Copy Cloner (CCC), it allows me to make a bootable backup of my computer to an external hard disk. Which means if anything happens to my main hard disk, I can just plug in the external hard disk and boot-up as if nothing happened. It’s become a Sunday ritual to use CCC and make a bootable image to an external hard disk. Oh, and the best part is that CCC is completely free.

Event number three is where I still struggle to have a completely fool proof system. Before the dawn of cloud computing people used to have a multi off-site strategy, they would store copies of their data at their house, office and bank locker. If an earthquake were to hit then most likely all your local data storage locations would have been affected and thus making the strategy useless. But now you can easily backup your data to a cloud service like Dropbox, CrashPlan or Jungle Disk. I use Dropbox for my critical data and it’s great. But, I haven’t gone down the path of backing up all my data which is around 400GB and growing by 1GB a week. To transfer that over a 1MB line would be impractical and not to mention very expensive. In the meantime, I’m still searching for a complete full proof way to insure against event number three.

Well there you have it, a quick summary of how to avoid those three “oh shit!” moments. Since external hard disks are so cheap these days, I would say get two external units and starting backing up right now to avoid events one and two from happening to you. Granted all the information was Apple specific but I’m pretty sure the same can be implemented on the Windoze platform.

Over the past couple of years an initiative by the Government of India has been gaining momentum which could have far reaching implications for its residents. In early 2009, the Unique Identification Authority of India (UIDAI) was setup to issue universal ID’s (UID), they have called the program “Aadhaar” which means foundation or support. However, most people still refer to the program as UID. This is the one rare initiative from the Government of India that excites me because it could help the people that need it the most – the poor.

Currently, most government aid programs are pilfered so heavily that at one point Rajiv Gandhi famously said only 15% of the benefits reach the poor. The Public Distribution System (PDS) distributes subsidized food and non-food items to India’s poor via a ration card that is issued. However, the ration cards get duplicated and “ghost” accounts are created, then the food is taken and sold on the open market. Even before the food gets to the recipients there is “leakage” all along the supply chain – transportation, warehouses and government officials.

The aim of Aadhaar is to create a central database and provide proof of identity when using government services. Aadhaar will be technologically advanced in that it will be a combination of a person’s iris scan, fingerprints, photo and optionally include demographical information such as age, sex, address, father, mother, etc. With an iris scan you can be sure that only the receipt of the food or cash-subsidy is receiving the benefit and not a middle man, which is often the case today. Aadhaar has an ambitious goal of issuing 600 million numbers in the next 4 years. The Aadhaar number will be 12 digits long and oddly enough there is no card, it’s a piece of paper with a number. Users would authenticate their identify via fingerprints and an iris scan hence no need for a smart ID card. Aadhaar will be useful in 5 areas – 1. food distribution via PDS; 2. National Rural Employment Guarantee Act (NREGA) ; 3. health services; 4. education; and 5. financial services. Number 5 excites me the most since it might put an end to the poverty tax that so many citizens of India face on a daily basis.

The poverty tax is everywhere if you are poor in India.  If someone wants a loan they can’t goto their local bank because they don’t have the required documentation, which leaves them to the loan sharks where the interest rates charged would bring a tear of joy to any investment banker. When you receive money from someone you can’t put that into a bank account so you lose out on the interest that you might have received from a bank. If you receive a pension, you might have to pay a “fee” to the clerk to speed up the transaction. Same issue with food, subsided kerosene, government jobs, etc…if you want something you have to pay a fee.  That fee hurts more if you earn less and hence it’s called the poverty tax.

Financial institutions are thrilled at the prospect of Aadhaar because they can start to market their products to potentially 600 million new customers. With the large number of mobile phone users it also means that banks don’t have to setup branches in every corner of the country, they could use the mobile phone to keep track of balances instead of the old school passbooks. Near-field communications (NFC) is probably a couple years away from being adopted by the mass market but that is potentially another game changer in the way people transact in India.

Aadhaar would also streamline the plethora of numbers that many middle class people need to keep track of. If you are a taxpayer and an investor you might have several numbers such as PAN for taxes, TAN, TIN, MIN, DIN and folio numbers for investing in mutual funds. The reason for multiple numbers is because each group has a vested interest in keeping their numbering system because it creates jobs for them and more importantly they have access to the money flow. Knowing where the money is coming and going is a source of information that can be used against an individual.

For Aadhaar to work it needs to be made mandatory, currently it’s optional and that might be more of a political move. If Aadhaar was mandatory on day one then people would jump to the next logical step – using Aadhaar for voting. And changing anything to do with the voting process would absolutely disrupt the status quo and would be shot down by politicians in a heart beat. However, once end-users start craving for the “optional” Aadhaar then nothing would stop its mass adoption which would make it mandatory in the end. The second thing that needs to happen is that Aadhaar should be an acceptable form of Know Your Customer (KYC), this would help financial institutions, mobile phone providers or really any one that needs to authenticate an individual for a companies product or service. Since the government would have validated someones identity then why go through the process again, this would also lower the acquisition costs for companies and allow them to provide “no frills” type services.

Facebook Connect in the virtual world has turned into the de-facto standard for identify, whereas Aadhaar has the same potential in the real world for India. Aadhaar could be the catalyst to open up many more markets for companies and also bring products to a set of customers that have previously been excluded from financial services.

The above article was syndicated on VCCircle.com.

Update:
June 4 – View a quick 10 slide summary about Aadhaar (via SlideShare)
May 18 - India’s Poor Yet to Reap Full Benefits of Its Anti-Poverty Programs (World Bank report)
April 30 – India’s $9 Billion Jobs Program Fails its Poor (WSJ link)

Last week one of the most respected CEOs in Silicon Valley, John Chambers, admitted that Cisco Systems had lost it’s path (only a true geek would recognize that pun) and was planning to do something about. I figured Cisco would take some time to make those changes and then I could write about it, but John has already started the process by scrapping the Flip camcorder division. The interwebs lit up when it was announced and most of the comments were along the lines of “who couldn’t see that coming.”

As a past employee of Cisco I think John is a stand-up guy and a VERY charismatic speaker. I would joke with people that if John told us to sell cocaine, I would because he was so persuasive. However, as a shareholder of Cisco I think John really needs to clean house and take a hard look at the direction of the company and more importantly look in the mirror.

Since John’s admission, many columns have been written about what ails Cisco. Most articles are going for the low hanging fruit such as get rid of the consumer focused product line and get back to basics with enterprise and service provider customers. But there is a much bigger issue that goes to the heart of Cisco – people.

Executive Departures
John has been around since 1991 and has had the top spot since 1995, he runs a tight ship and probably to tight of a ship. So much so, that I believe many top executives are leaving because he won’t give up the throne.  The list of departing executives include Tony Bates (left for Skype), Sue Bostrom, Judith Estrin, Charles Giancarlo, Kevin Kennedy, Don Listwin, Carl Russo, Jayshree Ullal and Mike Volpi to name a few.

Failed M&A Strategy
Cisco was once hailed for it’s inorganic growth via their M&A (mergers and acquisitions) strategy. That strategy worked early on for Cisco when it acquired companies such as Crescendo (the heart of their LAN switching platform), Kalpana, Grand Junction, StrataCom (WAN switching IGX platform) and Calista (IP phones). Most of these deals took place on Mike Volpi’s watch when he used to run the M&A group. In a Fortune Magazine article back in May 15, 2000 they called Volpi the Cisco M&A wunderkid.  Volpi had a great reputation within Cisco of being super bright and potentially could have led Cisco.

But, over the past 7-8 years that strategy has been a complete disaster with acquisitions such as Scientific Atlanta, Linksys and Pure Digital Technologies (Flip camcorder line). It appears many of the consumer focused acquisitions happened under Ned Hooper, the recent M&A head. It’s easy to say the strategy was completely flawed in hindsight, but Ned took a chance and unfortunately it didn’t work out. However, a lot of money was flushed down the toilet in running this experiment. Little known acquisitions such as Monteray Networks were shut down within a year of signing a $500 million term sheet. Internally, Cisco talked about how quickly they could integrate these new companies into the Cisco machine. Unfortunately, many founders of these companies left just as quickly and started new companies. Such as Dev Gupta who sold two companies to Cisco, Dagaz and MaxComm in 1997 and 1999 respectively.

Cisco Globalization Center East
I get annoyed every time I read an Indian business magazine and Wim Elfrink is talking about how he re-located to India to setup Cisco’s second biggest campus.  It’s a catch-22, is Cisco East something truly revolutionary? If so, then please communicate that better to the world so we can learn. If it’s not revolutionary then get over it, many large technology companies do it all the time – it’s called cost arbitrage.

In summary, John Chambers has one goal and that is to keep his shareholders happy which has not been happening. Cisco was the internet darling in the 90′s and all the way to March 25, 2000. On that day, Cisco became the largest company by market capitalization in the world at USD 579.2 billion, few companies can say that. Since then it’s a different story, if you bought Cisco in April 2001 you should have paid around USD 18.00 a share which is exactly where it is today in April 2011…over those 10 years it hit a low of USD 9.50 and a high of USD 33.00. Compare that to Apple, in April 2001 you would have paid USD 12.00 a share and now it is hovering around USD 330.00…the lure of the consumer market.

Recently a good friend, Sahil, gave a presentation (view via SlideShare) about building a web product company. If you have a startup bone in your body I would highly recommend taking a look at the presentation not only because the information is great but the actual slides are something you don’t often see. Most presenters like to pack 20 bullets into a single slide, use 12 point font, throw in a worthless graphic or a bunch of other things that usually lead people to tune out. One word can summarize his presentation – simplicity.

That got me to think about Apple. Many people would say Apple is about simplicity when you look at their products and design. I would argue it goes one step further – the number of products.  You want a phone from Apple? Great, that is the iPhone end of story. Granted they have various models based on storage but that’s it. Look at Nokia, Samsung or Motorola, I honestly get a f***ing brain hemorrhage when someone mentions their model number of their phone.

Apple follows what German car makers have been doing for decades. Have a basic design and sell it in 3 levels, what I call SML (small, medium and large). You want a Benz sedan? The low end is the C, mid-range is the E and high end is the S class. Within those 3 classes are various models based on engine specs but at least when someone says “I bought an E class” you know the general specs of the car. BMW has 3, 5 and 7. Audi has A4, A6 and A8.  American car makers face the same issue as Nokia and Motorola, confuse the buyer with all sorts of models and then spend massive marketing dollars to “educate them.”

Simplicity is easy to achieve on day one but to maintain that same level of simplicity 10 to 20 years later is almost next to impossible. Companies that can figure it out get compensated and you have to look no further then Apple’s market capitization, not bad for a company that just sells consumer electronics. Simplicity at its best.