Now if you consider people’s abilities as a multi-dimensional vector (the number of dimensions will be large, since one’s abilities, capabilities, etc. can be along several dimensions), what we realized is that if someone just takes orders from other people and not work on their own ideas and intuition, then their contribution to their role is just the component of their vector along the vector of the person whose orders they are following.

And considering that the probability of their vector and the vector of the person who they’re taking orders from lying in exactly the same direction is close to zero, what this means is that by simply following someone else’s orders they are contributing an amount that is less than what they are capable of contributing (since the component of their ability orthogonal to the vector of the person whose orders they are taking isn’t on display at all).

Hence, it is important to have people in the team who are capable of independent thinking and intuition since that is the only way in which their full possible contribution can be harnessed. On a related note, in order to bring the best out of its employees, and to allow them to contribute to their full capacity, firms should allow the employee to take initiative and come up with their own ideas rather than simply taking orders, since in the latter case only the component of the abilities along the orders is contributed.

On yet another related note, they seem to have done something about the pricing. It’s friggin’ expensive now (70 bucks for a small cappuccino?) but I think they’ve gotten it right. There is obvious value in the restaurant as shown by the long waiting lines that used to be there earlier, and the restaurant is now simply monetizing that value rather than using artificial means (loud music) to chase people away.

As a former revenue management professional (damn; that sounds so corporate whoreish) I’m happy they are doing what a coffee shop like them is supposed to do – providing excellent environment for long conversations and chilled out afternoons, and actually charging for what it’s worth.

The earlier method was so cheap and country – they were clearly underpriced because of which there was overcrowding and they weren’t able to meet demand and had to use other measures such as playing loud godawful music to keep the crowd rotating.

Two thumbs up to Barista’s new pricing and music policy!

I was on my way to dinner at Fava at UB City this evening when I noticed the City Bar, and it struck me as to how few such bars there are in the city. Like places where you just go to the bar, get yourself a drink and literally hang around (around random small darshini-style tables) talking to people. I was reminded of my trips abroad, of places like London or New York which are so full of places like this one – where one just goes, buys a drink and hangs around.

My hypothesis of the shortage of such bars got some weight on our way out of Fava when we noticed how full the city bar was. It was like BTS bus 201 in peak hour – there wasn’t even any standing room!

Which makes me wonder why the culture of mid-to-high end standing bars hasn’t taken off in the city, especially considering our glorious tradition of darshinis and of standing bars at the lower segments (I hope you’ve noticed this – every “wine shop” literally doubles up as a standing bar, where people get stuff from the shop in a dirty glass, stand around and quickly gulp down. I must confess I’ve never drank at this kind of a bar).

Is it because the notion of a quick drink isn’t very well defined at the higher segments of our society? Is it because a “quick drink” is associated with the lower end of the spectrum and so the richer people don’t want to indulge in it? Could it be because of the exorbitant price of liquor licenses that makes it uneconomical to serve liquor cheaply enough to get enough crowds to sustain a standing bar? (most shady standing bars don’t have a bar licence; they run on wine shop licenses)

I must admit I’m a bit of a novice at this one (in terms of total quantity of alcohol consumed during my lifetime) but this really intrigues me. Why hasn’t the concept of higher end standing bars taken off in Bangalore? Has it taken off anywhere else in India at least? Again shady bars don’t count.

Currently I’ve managed to get around this problem by parking my car in some corner of the basement but neighbours are cribbing saying it spoils the “look” of the building (as if the look of the basement matters! ).

Coming back to the problem, I was wondering if there exists a solution. Clearly, the shape and orientation of the basement means that not more than seven cars can be parked there in a non-obstructing manner. Now, since every houseowner here was allotted a slot when the building got built, they are entitled to a slot so it is not feasible to request/tell someone to rent their house to someone who doesn’t own a car (2 bedroom houses with parking slots cost some 2 kilorupees a month more than those without parking slots).

Thinking about it, the only solution I realized is by trading a parking slot among affected parties. For example, the slot of my house (B1) is obstructed by the slot belonging to the C2 house. Now, what if my owner tries to buy out C2′s parking space? He can either buy it out outright or he can pay the owner of C2 a monthly fee in exchange for C2 not letting out his house to someone with a car.

And he gets compensated for this by charging a higher rent from me (note that if my landlord buys out the c2 slot, I effectively get two slots, since both belong to me, there is no obstruction). The key to this, however, is the relative pricing of various parking slot combinations.

The key equation is this: if Pn is the monthly rent of a house in this building with 2 bedrooms and n parking slots, then there is a profitable trade between the owner of my house and the owner of C2 if and only if:

P0 + P2 >= 2 P1

If the above equation doesn’t hold, the amount by which my owner gets compensated (by me) for the second parking slot will not suffice to pay the owner of C2 to not let out his house to someone with a car, so the trade I described above cannot take place.

But then, according to Coase theorem, irrespective of initial allocations (here C2 has a parking slot that blocks B1′s slot) there exists a trade in which each party gets the desired outcome. Is there a contradiction with the equation I’ve written above?

Now, thinking about it, the value of both my house and C2 is not actually P1 but a number P1′ which is less than P1. P1′ takes into account the pain of having an obstructed parking slot (I get pained because I can’t take out my car when I want; C2 gets pained because I disturb him every time I want to take out my car), and so effectively both my house and C2 would be overvalued if we were paying a rent of P1.

And if we take P1′ into consideration rather than P1, I’m sure the following equation holds:

P0 + P2 >= P1′

The only other problem here is that when taking a flat on rent, you are unlikely to check for details such as if your parking space is blocked, so it is likely that the deal will take place at P1 rather than at P1′. However, once you move in, you figure out the pain and the owner of the apartment will feel the pinch when his tenants clear out at a rate faster than he would’ve expected which ends up reducing his long-term average rental income. And the deal I described above will take place if and only if he figures out why the fair value of this apartment is P1′ and not P1.

Now there is a footballing analogy to this – the Jesus Navas style. Those of you who watched either Spain’s game with Honduras or the second half of their loss to Switzerland would’ve noticed that Spain effectively followed two lines of attack. The first was the traditional way – attack down the middle in a series of slow passes and build-up. Five of Spain’s front six players would get involved in this attack down the centre, almost rendering their game one-dimensional. And then there was Navas.

I haven’t confirmed this stat but in the game and half that he has played Navas has completed more crosses than anyone else in the tournament. He would strike it on his own down the Spanish right flank, hug the touchline, beat the full back and put in crosses. Minute in and minute out. Sometimes with a little help from full back Sergio Ramos, but mostly alone. It was fantastic to watch.

What this ended up doing was to divert the attention of the opposing defenders to cover Navas. If everyone were to have been attacking down the centre, the defending team could’ve just parked their bus in front of their centre and prevented any scoring. Spain letting free this one guy to take a different route meant that the opposition needed to cover that also leading to insufficient cover in the centre (it is another matter that Spain failed to score against Switzerland. But they did get so many more chances after Navas came on).

I’ve always been fascinated by such strategies at work, in business. You have a bunch of guys who try to attack the problem front-on, in the conventional way, working together, passing to each other frequently. And then there is this one guy who has been left out of this clique who attacks the problem “from the flank”. In his own way, without fear of failure. He knows that he is only an auxiliary solver, that he has nothing to lose (Navas lost his place in the XI after the Honduras match but I don’t think he had expected to ever play at all), and he can just go for it. The option value of letting one guy in the team loose in order to search for alternate solutions while everyone else is building up down the middle is immense, I think.

This is similar to Nassim Taleb’s “barbell investment strategy”. Acccording to that, he parks some 90% of his assets in ultra-risk government securities. They don’t give spectacular returns but his money is safe. And the rest of the 10% he uses to punt by buying stuff like out-of-the-money options. If they expire worthlessly, he hasn’t lost much of his wealth. The optionality (here, literally) of that additional 10% is, however, immense, and there is potential for spectacular returns from this strategy. with losses being capped.

Ajay mentions in his article that most articles on China (which need cooperation from sources in the Chinese government for information) tend to be favourable to the country, since no one wants to risk cutting off the supply of information (or worse) by antagonizing the Chinese government. A similar relationship, either implicitly or explicitly, is enjoyed between media and advertisers.

A quick glance through any business newspaper, or even a mainstream broadsheet, would tell you that financial institutions (this includes banks, asset management companies, insurers and brokerages) are heavy advertisers in these media. Given the amount of money papers make from these sources, it doesn’t make much business sense for them to publish opinion pieces that are critical of these heavy advertisers. There are papers (especially some broadsheets) that claim to enforce neutrality and fairness in their reporting, but even there it is hard to come across articles that are highly critical advertisers. The potential loss in revenue is too big a risk to take.

The biggest advantage of new media is that it provides alternate channels which depend on alternate sources of revenue. Think about the number of times you’ve seen banks or insurance companies advertising in the Yahoo! sidebar, and then compare that against the number of times you’ve seen such advertisements in newsprint. Similarly, there will be companies who are heavy advertisers online, but not so in broadsheets so you will find the latter to be more willing to be critical of them.

From the reader’s perspective it is important to get news and opinion not only from several sources, but also from several kinds of sources in order to get a balanced view.

For example, it is unlikely that there was enough of a “market” for a series of posts on the Studs and Fighters Theory in the days before the internet – a market big enough for a newspaper or a magazine or a journal to bother publishing. Now, the internet not only allows me to publish it without effort or cost, but also lets me know that there is enough of a market for this kind of a series for me to bother publishing it rather than just explain it to a few friends in a smoky bar or cafe.

Now, the funda is that sometimes the long tail can exist in geographically coherent markets and not online! For example, all of yesterday, while at work i was frantically searching for sources to follow the BBMP election results. Everyone led me to this TV9 video streaming but it didn’t open on my office network and I couldn’t find any other live sources that were constantly updating the results. I had had similar problems following the results of the Karnataka Assembly elections two years back.

It was then I realized that the “traditional market” can itself be the long tail! For example, the amount of information I found about the elections in this morning’s papers was really impressive – in fact, the much ridiculed ToI had pretty good coverage of the polls, as did the Deccan Herald or the New Indian Express. Earlier in the morning, yesterday, too there were the Kannada channels which focused exclusively on the election results.

What I’m saying here may be fairly obvious, but just wanted to point out that long tail need not refer exclusively to the new media, or new channels. When you look at it in certain ways, several of the traditional media are also catering esssentially to a long tail, though when there was only the traditional media, no one really used the term.

Talking of BBMP elections, take a look at this graphic that was presented in the Deccan Herald today. Don’t you see a pattern in this?

Bangalore Map

So as per what several people had told me at various points of time in life, the Masala Dosa at CTR was brilliant. Unparalleled. The difference between CTR and Vidyarthi Bhavan is that the former makes masala dosa just the way that other restaurants do, but only much better and tastier. The dosa at Vidyarthi Bhavan is a different animal altogether and am told the has very different composition to what is made in other restaurants.

There is another important difference between CTR and Vidyarthi Bhavan and thats in terms of service and crowd management. Vidyarthi Bhavan does an excellent job in this regard, striving to “rotate table covers” as quickly as possible. Within moments of you taking your seat, your order gets taken, the dosa arrives, as does the bill and a look from the waiter asking you what the fuck you are doing there considering you have finished your tiffin. Extremely efficient from the point of view of the restaurant (in terms of maximizing capacity) and for customers looking for a quick dosa, but not so from the point of view of people who want to linger for a while and chat.

Unfortunately the one time I’ve been to CTR (2 sundays back) I was in a bit of a hurry since I had to go attend a quiz. Maybe the intention of the restaurant is to allow customers to sit for a while and chat up, but I don’t know if you can actually do that since at any given point of time (reports might be biased since this was a Sunday morning, 9am) there are four people waiting for you to leave so that they can grab your seat. This large crowd that is in waiting is also I think a result of slow service at the restaurant (simple queuing theory – for a given arrival rate, the slower the service rate, the more the average queue length).

There were some simple tasks in which CTR didn’t do so well. For example, making a customer wait for ten minutes before you take his order is not only ten minutes wasted for him, it is also ten minutes of absolutely unproductive “table time” – something that a fast food place like this can’t really afford. And then the ordered items also took a long time to arrive (again, most people at CTR have the same order – one “masaal” so I do hope the make dosas “to stock”) – but then their kitchen capacity may not match up to the capacity of the seating area (which isn’t too much). You pay bill at the table itself rather than at the counter which means you sit there for even longer. And so forth.

This post is supposed to be a part of this series that I was writing some four years back examining the Supply Chain practices and delivery models at various fast food restaurants in Bangalore. I have only one observation with respect to CTR and based on that I don’t give it very high marks in terms of supply chain and delivery efficiency. However, the dosa there is so awesome that I’m sure that I’ll brave the crowds and go there more often and might be able to make better observations about the process.

Till a couple of years back, the only reason I’d heard of this erstwhile slum is because houses there would get flooded every time it rained. Apart from that, it was a fairly nondescript part of Bangalore “somewhere close to the 201 route”, and generally considered an area to be avoided.

And now, slums have been replaced by swanky looking apartments and office buildings, where IT companies and people who work in them have set up tent. What was earlier an unlivable part of the city has suddenly become livable. The roads remain the same though. I don’t know if the houses still get flooded. There are open drains all around. And I have no clue how localities such as this get their water and sewerage supply.

Oh and there is massive dressing up of addresses. It is not Ejipura, it is Koramangala 6th block. Similarly, it is not Byrasandra, it is Jayanagar 1st Block East. And so forth.

I think what has happened is that when the city grew in the first fifty years of independence, farmland in the villages around the pete and cantonment areas was acquired and layouts were planned. The villages themselves were left alone by the BCC/BDA. And people who migrated to the city back then (let’s say at least 20 years back) applied for and got sites in one of these planned localities where they constructed their houses. And so I grew up in this house built on a BDA-allotted site, but up the road from my house was the old Kathriguppe village.

Now, what is happening is that these villages are selling out, to private parties. Knowing the value of the land all around the village (basically in the BDA areas) , people in these villagers have suddenly realized the value of the land that they are sitting on, and are selling to private builders, who either build apartments (most of the cases) or “revenue layouts” (rare). And given that these erstwhile villages haven’t traditionally been considered livable by people living in the city for a long time, they usually end up being occupied by recent immigrants.

I haven’t been to too many FabIndia stores outside Bangalore (only a handful of stores in Gurgaon and maybe one in Delhi) but having shopped a few times at the FabIndia store in Koramangala, I feel distinctly underwhelmed whenever i go to any other outlet. Having been several times to this beautifully designed house, I find FabIndia outlets housed in less spectacular buildings sad. Of course there have been times (including two days ago) when I’ve shopped at other outlets but the experience simply doesn’t come close.

The first time I went to the store was some four or five years back when Anuroop wanted to check out kurtas. I think we went there on Bunty’s recommendation but I remember that I hadn’t bought anything. I had quickly made amends for it a couple of months later when I bought a couple of shirts, and then a year later when I bought a dozen shirts at one go!

The only other time I went there without purchasing anything was yesterday morning, when I was visiting the store after a gap of some two or three years. The first thought was one of guilt – of having shopped in a less spectacular Fabindia store (the one at Kathriguppe) just the previous night, and then as I got over it I got overwhelmed with the variety on display. I suddenly got afraid that I might over-spend and made a dash for the exit.

I wasn’t gone for too long, though, as I returned in the evening with Priyanka, and this time we discovered something even more spectacular – something that I had completely missed during my hajaar earlier visits - the store cafe. The brownie was decent, and the coffee was just about ok, but that didn’t matter one bit. Once again, it was the atmosphere at play, and that the coffee shop had in plenty.

It’s something like a small arena. If you can perform some visual art (say a play or a dance) in a five feet square area, this is just the place for you! All around the 5×5 “well” (which is full of pebbles) are stone benches, at different levels. Cushions have been placed on some arbitrary benches, and we understood that that’s where it was supposed to sit. There wsa some music that I didn’t quite recognized but was quite pleasant, and the wooden trays in which the waiter brought our coffees were also beautiful – I might have bought something like that from the store had I been in a spendthrift mood yesterday!

If you are in Bangalore and are interested in cotton clothes you should definitely check out this store sometime. It’s in Koramangala, in the extension of the intermediate ring road. Make sure you go there leisurely, for there is plenty to see and buy (the inventory is about six times as much as that of an “ordinary” FabIndia store). And while you are there, do visit the cafe and lounge around there for a while. And think about Priyanka and me while you are there.