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Yesterday, Twitter announced they had struck a deal with the largest mobile phone provider in India – Airtel. It will allow users to send a status update to Twitter for only Re. 1 and receive tweets by SMS for free. It’s apparently only a 4 week exclusive deal after which I’m assuming all mobile carriers will offer the service.

I tried the service for about 5 minutes and soon realized how much it sucks…for me. I really don’t want to get over 100 SMS tweets via my phone.  I was thinking WTF, what was Twitter and Airtel thinking when they struck this partnership, but then it dawned on me that this is India.  And when something is free, Indian’s will figure out a way to use it or monetize it.

The first use of this service would be around stock picks. Since people sign-up for a stock picking service to receive updates this would be an ideal use and free for the person receiving the pick. This is one instance and I’m sure we’ll see many more in the coming months.

The official Twitter @ Airtel site. Doesn’t have much info, which is par for the course for most product launches involving an Indian company.

When I first heard about Mint.com back in November 2007, I thought it was a great idea but wondered if people would be willing to part with their financial data via an online platform. The market has spoken, Mint was acquired in Sept. 2009 for USD 170 million by personal finance software market leader Intuit.

So what is Mint?  Mint takes your personal financial data and makes recommendations on your spending habits, investments, insurance, etc… Mint makes money via the service providers who want to sell products to the Mint audience. Simple and Sweet.

To get access to all that financial data they went to a single provider – Yodlee.com  and then enticed users by slapping an amazingly simple user interface on the data.

It’s a remarkable story and exit for CEO Aaron Patzer. He recently talked about the journey, the video is below and I would highly recommend viewing the whole thing.  I love his quote (about 5 minutes into the clip) about outsourcing the development to oDesk or India…”dead wrong.” The last 3 1/2 minutes are also really good.

It’s that time of year where I start to train for the Bombay half-marathon.  I’m going to start training this week but with the Indian holidays the real training will start from the first week of November.

In the past I’ve run for fun, but this time I wanted to work towards a certain time.  So I’m going on record with my goals and looking to achieve them.

My Goals:

1. Finish the half in under 2 hours.  My previous times for the Bombay half-marathon were 2:15 (2006), 2:15 (2008) and 2:07 (2009). In order to achieve my goal I need to run 9:10 min/mile (5:41 min/km).
2. 100 push-ups in one stretch by January 17
3. Drop to 176 lbs. (80 kg)

Currently:

1. My pace is around 9:41 min/mile (6:01 min/km)
2. 64 push-ups
3. 187 lbs. (85 kg). This time a year ago, I was around 200 lbs. Due to yoga, diet and nutritional changes I was able to shed the pounds.  I’ve been able to maintain it for a year and reached a plateau at 184 lbs. and need to break through it.

Its been a busy week in Indian telecommunications and my frustration with the government grows. After the Indian general elections in May, the press had a love fest with the new government saying everything would change and the economy would be back on track.  And one of the first things to get fast tracked would be the 3G auction. News trickled in this week that the much awaited 3G auction for high speed mobile data services would be delayed yet again.

For me the 3G auction should be one of the easiest policies to implement and to show the Congress Government has indeed arrived and changing the way business is done.  There are no slums to move nor environmental impact surveys to conduct.  The government is acting like most stock markets investors, they want to see those previous all-time highs and then auction off the spectrum. In the meantime, companies are losing revenue and the government is losing out on taxes. It all comes down to money, who gets what and how much – hence the title of the post.

All is not lost for the consumer, this week the government said they wanted to look at implementing per second billing for all carriers as opposed to the current per minute billing.  This all came about when Tata DOCOMO launched their service with per second billing. I have a feeling it will happen because Reliance Mobile launched their “Simply Reliance” plan which offers 50 paise (USD 1 penny) per minute for local, long distance and SMS’s.  Since Reliance is pretty well connected to the government, they probably have better insight to what policies will get implemented and threw down the pricing gauntlet.  The “Simply Reliance” plans reminds me of the AT&T Digital One Rate launched in 1998, that really was the game changer for the US mobile market by eliminating “roaming” charges.

It’s been over year since the financial markets started to collapse and since then we are seeing many deals that might make you scratch your head.  The one that comes to mind is Sequoia Capital investing into low incoming housing in Bombay.

Sequoia Capital is one of the oldest and most well connected venture capital firms in the world, they have invested in companies like Atari, Cisco, Google, LinkedIn and PayPal to name a few. It was started by Don Valentine who had the balls to invest in Cisco Systems back in December 1987, which was just weeks AFTER the October 1987 stock market crash.

Back to the low income housing project. Sequoia Capital is investing in Tata Housing which has a project outside of Bombay in Boisar. The flats will most likely sell for between USD 8,000 to 10,000. So why would Sequoia get involved? I’m betting there are a couple reasons:

1. Sequoia Capital is first and foremost a technology VC firm and unfortunately the number of technology deals that are in play in India is a fraction of what they see on a global scale.  Which means instead of funding entrepreneurs they have to be entrepreneurial themselves.

2. There is a HUGH potential to streamline the construction industry in India.  I’m guessing Sequoia will try and see if they can inject some technology into the process and see how it scales with Tata Housing.  If it works, then they can target the entire industry and get a piece of the action.   I’ve seen people bring foreign building products to India which are priced 25-50% more then a local product and that just won’t work. You need to innovate within India so you can understand the cost constrains and get the locals comfortable with the product.

If this works out, I would expect them to go after the agricultural space and drop some knowledge there as well.

Over the past 2-3 weeks I’ve been hearing all sorts of terms such as public option, government option, socialized medicine, death panels, etc…and wanted to take a closer look at the health care crisis the US is facing. There has been a lot of hype lately with people running around and saying “Oh My God, those death panels want to kill grandma.” My take is that if we don’t change the current system, many people like grandma are going to die.

Over the past week I stumbled across T.R. Reid a reporter for the Washington Post who released a new book last week titled “The Healing of America” .  I actually didn’t know about the book, I happened to watch a PBS Frontline special and a couple of days ago listened to an NPR podcast, both chronicling the various health care systems from around the world…both were from Reid. I’m assuming the book expands on his travels and adds more depth to what he saw. If you want to get up to speed on the health care debate I would take a look at the PBS and NPR specials.

Reid outlines 4 basic systems of health care around the world:
1. Completely government run healthcare (aka socialized medicine) – Britain is the prime example. Everyone is covered.
2. Private docs/hospitals and private payments – France & Germany. Everyone is covered.
3. Private docs/hospitals and public payments – Canada. Everyone is covered.
4. Out of pocket (I like to call it out of luck) – US and many 3rd world countries. If you don’t have the money you are sh#@ out of luck.

And, all 4 systems are already running in the US:
1. Completely government run healthcare (aka socialized medicine) – Native Americans and Vet’s
2. Private docs/hospitals and private payments – Large companies
3. Private docs/hospitals and public payments – Medicare
4. Out of pocket – Millions of Americans

In the US, health care is not viewed as a way to help people but a for-profit endeavor and I believe that’s the crux of the matter. Pharma research, clinical trials, medical devices, etc…all target the US market because that’s where the big money is. There is no magic bullet to this situation and until we take out the hugh cost structure and margins associated with health care, this problem will not get solved.

However, the magic bullet might be found in India. While Reid traveled all over the world for his book he also had a shoulder problem and wanted to find out what the diagnoses would be in each country. He finally settled on an ayurvedic solution from India that worked.

Update: Another article I came across this past weekend offers a unique solution – How American Health Care Killed My Father.

While most businesses and industries around the world are struggling to get back to their glory days of 2007, one industry that continues to sky rocket is the wireless industry…at least in India.  As of July 31, 2009 there are over 441 million wireless connections.  I don’t think anyone could have predicted the hugh uptake in wireless, just 4 years ago there were only 70 million connections. Of course, the average revenue per subscriber (ARPU) is a paltry USD 4 a month, but it’s a numbers game – the more numbers the better. I could go on and on about the statics of the Indian wireless market but luckily the Telecom Regulatory Authority of India (TRAI) conveniently provides a mind crushing PDF every quarter that slices and dices the data.

On a more local level, the latest wireless carrier to enter the fierce Bombay market is Tata DOCOMO. It’s a joint venture between the largest industrial group in India – The Tata Group and Japan’s NTT DOCOMO. This will be Tata’s second wireless network in Bombay, they have an existing CDMA network while the new venture is based on GSM.

The question arises does Bombay need yet another mobile carrier? Apparently, the Tata’s feel their is space for one more carrier. With the latest entrant we now have 9 carriers: Aircel, Airtel, BPL, Idea, MTNL, Reliance, Tata (CDMA), Tata (GSM) and Vodafone. The Virgin Mobile brand in Bombay is just reselling the Tata (CDMA) service, almost like an Mobile Virtual Network Operator (MVNO).

So what’s the current selling point for Tata DOCOMO – per second billing and a 3G ready network.  That’s not enough of an offer to swing me over as a customer, but if number portability comes into play that’s another story.  You could see many people switch over just for the per second billing feature, remember the average bill in India is USD 4 per month…so seconds count. Of course, Airtel and Vodafone could just turn that feature on as well.

The Indian online travel agent (OTA) space became a bit smaller this week, with Travelocity buying out Travelguru. Although the terms were not disclosed the media is reporting the acquisition was valued around USD 9-10 million.  The insiders know the true number but typically when a successful exit is announced all the players want to highlight the fact by saying “we returned 5x, 50x or whatever to our investors…blah, blah, blah.” I didn’t see or hear such a statement and honestly that’s not the point of this post. Instead it’s about the current economic viability of the OTA’s and the Airlines. OTA’s are much more then just airline ticketing but I believe they are a large financial component for most OTA’s.

Let’s first start with the product – air travel.  It’s no secret the airline industry went through a massive airplane buying and airport construction binge since 2005.  With the economic environment we are all feeling the after effects, carriers are delaying deliveries of new planes, newly constructed airports are jacking up their user development fee (UDF) and the aviation turbine fuel (ATF) surcharge is killing everyone’s balance sheet.  The UDF is a catch-22, with the decline in traffic, airports want to charge more to makeup for the short fall but this pushes away consumers. With the drop in tax collection, the government needs money as well and hence the ATF is a way to recover some of that tax money. This puts the airline in a painful spot, Air India is begging for a government bailout of USD 2-3 billion to help alleviate the situation.  Secretly, the private carriers would love a bailout as well, but I doubt Praful Patel, Minister of Aviation, can save face with the public if he bails out Kingfisher or Jet Airways.

One of the ways the airlines have dealt with this situation is to cut the commissions paid to travel agents. This recently led to many travel agents refusing to book flights for certain carriers since it wasn’t worth their effort. The OTA’s that have high fixed costs and shallow pockets are going to face the music very soon.  Most OTA’s started during this binge when the number of passengers traveling in India looked like a hockey stick (J curve) and hence all the VC money thrown at them. Some of the OTA’s have looked at bus and train travel which have very small margins but potentially a hugh number of travelers.  But, most of those travelers are not connected to the internet. How many OTA’s will exist in their current avatar 18 months from now? It’s anyones guess.

Random Fact: TravelGuru was started in 2006 by Ashwin Damera and Ganesh Rengaswamy, they both attended Harvard Business School (HBS). Travelguru was selected in 2005 as the Harvard Business Plan Contest winner.

Here we are in the thick of the supposed Monsoon season and it’s frikkin’ bone dry all over India.  Usually, most urban Indian residents complain of the Monsoon since it leads to floods and is a general nuisance.  This year the complaining is due to a lack of water which is leading to water cuts and don’t get me started on the havoc it has on farmers – the largest industry in India by revenue and people employed.

Several days ago the news channels were mentioning that the Prime Minister was going to meet with the Chief Minister’s from the affected drought states. What is that meeting going to accomplish? Are they going to schedule a meeting with Mother Nature and fix the problem. Everybody knows that the Monsoons come every year and yet every year India suffers from either too much or too little rain. There seems to be no long term strategy in dealing with this perennial problem.  There are a host of initiatives that could potentially lessen the burden such as rain water harvesting but India always seems to be focused on the short term strategies.

I grew up in Southern Indiana in a sea of corn fields and I bet more innovation comes from that small region then all of India. I fail to understand how a country who prospered with it’s “Green Revolution” in the 1960’s seems so far behind in terms of technology. I’m sure there are pockets in India that are using the latest in technology and benefitting, but what about the rest. Punjab is the first place that comes to mind, they say there are more Mercedes Benzes in this part of India then anywhere else to give you an idea of the wealth creation from farming. But, beyond that I think most farmers are suffering.  If you stop by my dad’s hometown in Madhya Pradesh you would be hard pressed to find many tractors farming the land, instead most of it is manual labor.

The government has helped the farming industry with many things such as no taxes, free water and free electricity but I think some of those are band-aid’s on the real problem – lack of innovation.  The government always seems willing to throw USD 5-10 billion at forgiving farmers debts but when it comes to spending the same about on new farming technology it gets politicized. If farmers were committing suicide in droves over the past 2 years, I’m sure this year we are going to hit record numbers. And the government’s response – forgiveness of debt, a couple thousand dollars and a guaranteed government job for the oldest son.

I’m absolutely lost with the recent turn of events at Porsche, Wendelin Wiedeking the CEO for the past 16 years just resigned. I know that happens all the time but just 6 months ago he was hailed as the “European Businessman of the Year” by Fortune Magazine. And if we go further back to October 2008, he was the guy that ran a hedge fund that just happened to make cars. In October, he was busy executing his plans to takeover VW and in the process body slammed some major hedge funds like Marshall Wace, SAC Capital and Och Ziff.

So what happened?  It appears his David and Goliath strategy to take over the massive VW group meant Porsche had to rack up some serious debt – USD 10 billion.  It all ended badly as now VW is going to takeover Porsche and hence the CEO was shown the door fired with a fat golden parachute.

The VW Group is not just VW but a host of name brands most people can recognize:

• Audi
• Bentley Motors
• Bugatti
• Lamborghini
• Porsche
• SEAT
• Scania
• Skoda
• VW

No matter what happens with the management team, the 911 is still an amazing car. The new Panamera will take some getting used to, it looks like a luge.