Category: arbit

Separation of Church and Estate

I’m talking about Sathya Sai Baba here (incidentally, in Kannada his name translates to “did you die? Die! Come, come!”), who recently “attained his own lotus feet”, to paraphrase what someone said on Twitter. Even Sachin Tendulkar’s prayers for his health didn’t help him, it seems.

So there are two sides to saibaba, and going forward it is important that the two be kept disjoint. On the one hand is the “NGO work” that his organization has undertaken – the super-specialty hospitals in Puttaparthi and Bangalore, the drinking water project they’ve implemented in Rayalseema, and the like. On the other is the spiritual side, where you have thousands of “devotees” (I once called my aunt “Sai baba’s follower” and she got offended saying “I’m a devotee, not a follower”) singing bhajan and going delirious when Sai Baba produced Caramilk toffees out of thin air and threw them into the crowd (a long time ago, I was one of them, jumping up and down to catch these toffees).

I guess efforts are on to find his “spiritual successor” (and I hope China doesn’t step in to prevent his reincarnation), and there is already reportedly a huge fight among his “close devotees” regarding control of his estate. The estate is huge, and is supposed to get lots of donations, a large part of which at least (it appears) has been deployed in developmental projects. It is important that these developmental projects continue, and to ensure that they’re not hijacked by “devotees” who want to pursue a different agenda, it’s important to spin off this side of the organization into a registered NGO – recognized and regulated by the government, providing tax exemption to donations, publishing accounts regularly, and the like. You know how common it is that “spiritual NGOs” are hijacked for purposes of money laundering.

I don’t care what happens to the rest of the organization – with the delirious “devotees” who sing bhajans and give “global” speeches” and start TV and radio stations. Perhaps it is important for it to also continue – for its presence will mean people continue to be attached to the baba, which could help in fundraising efforts for the NGO. I’m sure they’re going to find a spiritual successor, but it needs to be seen how many of the baba’s “devotees” remain devoted to this successor.

On an unrelated note, I see in the papers that the baba is going to be buried. I don’t know what the rules of the caste he was born into (Raju) is, but I suppose this is a tactic so that there is no mad fight for his ashes, the “holiest of the holy vibhutis”, in case he is cremated. Even then, I wouldn’t be surprised if his body gets exhumed by some overzealous “devotee” sooner or later. They need to dig deeper.

Criminals in politics

During the Anna Hazare show, skeptics said people shouldn’t randomly protest, they should come out and vote (for the record, people have voted in really large numbers in the recently concluded assembly elections). Hazaarists replied saying that there’s no point voting because every candidate is a crook, and they are all corrupt, or something to that effect. Then someone else popped up and said that criminals should not be allowed to contest for elections.

Now, there exists a law barring criminals from contesting elections. However, only people convicted of a criminal case can’t contest, not those who are under trial. The justification of this is that activities such as “riots”, “protests”, “dharnas”, etc. come under the criminal law and you can’t “obviously” bar people who take part in such “noble activities” from contesting. So you have people who have led noble dharnas contesting, as those who have been accused of committing rape or murder. Inclusive democracy, as they say.

What I don’t understand is what is so noble about holding protests, blocking roads and railways and holding entire population to ransom. I don’t understand why perpetrators of such crimes need protection, and are allowed to contest elections.

So I think one step in decriminalizing politics would be to bar people with a criminal case against them (not necessarily convicted) from contesting for polls. Of course we won’t put this law with retrospective effect, but it’ll apply to only new cases that might be filed against potential candidates from the date on which the law is notified. It would have welcome side effect that politicians would now think thrice before they decide to hold rallies that stop road and rail traffic and hold the mango man to ransom. And apart from potentially decreasing corruption, it would make our cities a much more peaceful place to stay in.

But I’m being impractical here. Who will bell the cat? Why would any politicians “act against themselves” and bring in such a law? Can some Hazaarists please stand up, or rather sit down in fast, for this, please?

Volleyball and basketball

I’m by nature very aggressive and risk-taking. I don’t mind picking fights with people, am never afraid to banter or be sarcastic, and sometimes without really calculating it, end up taking much bigger risks than I can handle, though I never really ask for a bailout in case my bets go bad. And I’m extremely impatient.

It’s been a while since I played any kind of sport, but I’ll go dig back into the past in order to make this argument. In most sports that I play or have played, I’ve been by nature the way I am in real life. Take chess for example, the only sport I’ve played at a level that can be called competitive (I participated in state-level age-group tournaments in 1994-95, before I retired at the ripe age or thirteen). I’m this extremely tactical and risky player, and don’t really have the patience to play correctly in slow boring positions. While this nature helped me do well in the odd game here and there, my lack of patience meant that I was never winning tournaments, and that led me to call time on my career.

In contract bridge, another indoor sport which I’ve played at a reasonable level (Madras city tournaments), again I’ve been very adventurous and risk-taking, often bidding for contracts over what could have logically been made (we used to play pairs, so making a “better contract” sometimes helped), playing sometimes for impossible card distributions based only on a whim. Again, a few spectacular hands here and there, but mostly indifferent performance. I haven’t played much cricket, but in all the tennis-ball cricket I’ve played I’ve been an across-the-line slogger. In my childhood I bowled superfast and erratic, and then suddenly lost my pace and started bowling loopy off-breaks. So you see that in general, for me, sport has reflected life.

The exception is in perhaps the only two outdoor games where I’ve been anything better than downright ordinary – volleyball and basketball – both games I started playing back in high school, and in which I could’ve done much better than I did (at least represented my college in both) if I’d bothered to put in rigorous practice.

And the exception is that in these two games, I play extremely defensively. Most of my “moments of success” (uncopyrighted) in volleyball have come when I’ve blocked or lifted smashes, and though I did have a booming serve I’d get into the team due to my defensive abilities, and serviceable “boosting”. In basketball, despite having the ability to shoot from random angles and distances, I’ve mostly made it to teams based on my ability to block and tackle; my inclination to be the first to track back when we lose the ball (though not being very quick); of basically being this old-fashioned disciplined guy in the team, which I’m not in real life.

Unfortunately, my biggest moments of sporting disappointment have come on the volleyball court (I’m definitely better at volleyball than basketball, if you could compare). And have been the guilty party on many an occasion.

Exhibit A: August 1999. Voyagers versus Pioneers. We go 2 sets up, opposition gets 2 sets back. 15-14 in final set, I’m serving on match point, decide to “play safe” (remember I had a booming serve). Serve into the net.

Exhibit B: February 2005. G Block versus F Block. Same story. We go 2 sets up, they get back 2 sets. We’re leading 20-16 in final set (new scoring system). I decide to spike rather than boosting for the in-position Pedro. And spike weakly. And then later on match point, remembering the 1999 fiasco, go for an even more safer serve. Serve gets returned and we lose our advantage. And lose the game.

Exhibit C: February 2005 again. Section C vs Section A. Story way too similar to Exhibit B, so I make a conscious effort to not remember the details. But it was as painful.

I wonder if the fact that my most painful moments on the sporting field have come when I’ve shed my usual risky-and-aggressive behaviour and put on a disciplined avatar, have led me to become even more risky and aggressive in real life.

On reliably asking for help

Last evening while I was trying to teach the wife to ride a geared motorcycle, a middle-aged woman accosted us. She told us that she was a teacher from Hiriyur (Chitradurga district) and had lost all her money and needed help for her bus charge to go back to town. This sounded suspiciously similar to the couple from Nagpur with a similar story that I’ve encountered a few times, and so I told her off, rather rudely I must say.

She seemed to be taken aback, and hurled some curses on me as she walked away, and then my wife pointed out that there were some things about this woman’s story that made it sound genuine. So now I wonder (given that it is a finite possibility that I might be stuck in an unknown city without money) what one needs to do in order to reliably ask for monetary help – given that fraudsters abound (if I had been convinced that this woman wasn’t a fraud I would’ve helped her out, so let’s take that as a given).

Here are some points that I can quickly think of:

  • Location – would you think someone who would come to you in a residential area (Jayanagar) where not too many people were walking around, and ask for help if they really wanted money? Wouldn’t they rather try at bus stops, or even get on to buses and try get the ticket off a conductor or a fellow-passenger? Or considering that this lady had to make an inter-city journey, wouldn’t it be more reliable for her to have somehow got to the bus stand and asked someone there?
  • Persistence – after I’d told this woman off, she just kept hanging around, and refused to go after I told her in no uncertain terms that I’m not helping her out. Wouldn’t you expect people who are really in need to be more rational and try and look for other sources rather than hanging on to the one person she sees on the street?
  • What you ask for – again ties back to the first point that it might be easier to convince people to buy you a ticket than give you money. Or if you were to walk up to a shop and ask to use their landline phone? (mobile doesn’t work, since that’s a well-known method of swindling mobiles; was once tried on me in Bombay)
  • Abuses – when you are really in need, and someone doesn’t help you out, you don’t loudly abuse them when you go. You’d rather quietly slink away and try your luck elsewhere .

I must say that the woman was rather “respectably dressed”, and before she started abusing she spoke “good Kannada”. It’s just that I wasn’t convinced she wasn’t a fraud so didn’t give her any money.

In any case, what signals would you look for when someone were to come and ask you for monetary help? And what signals would you try to give out if you were to ask for monetary help?

 

Expat Living

When you live in a city other than the one you’re comfortable living in, and if you have a lot of disposable income, you try to live like an expat. By that, I mean you will try and use your disposable income in order to insulate yourself from the parts of the city that you’re uncomfortable with. You basically try to take the city out of your lifestyle, and try and live in a way that wouldn’t be different from the way you’d live in any other city.

So for example, two years back I had to relocate to Gurgaon since my well-paying job took me there. And I knew that water supply, electricity supply, security and public transport were major issues there. So the first thing I did when I got there was to find myself a comfortable apartment with assured water supply and “100% power backup”, with round-the-clock security. I also transported my car to Gurgaon to hedge against the bad transport system there. All shopping was done in malls, so I could avoid the heat and dust, and the unreliability of the traditional markets there. As long as I wasn’t driving on those roads in my air-conditioned car, I could have been living just about anywhere else. I had tried my best to take Gurgaon out of my life.

You find people like this wherever you go, except perhaps Bombay (where the cost of living is so high that very few people have “disposable” income), but is perhaps more pronounced in Gurgaon where there are few natives with disposable income so most of the people you’ll meet turn out to be fellow-expats. So essentially a lot of your income goes in just hedging yourself against the city.

Like in Bangalore, you’ll find that “expats” always want to take a “Meru cab” wherever they’ve to go, while us native folks prefer to take the humble auto. I don’t blame the expats – they are yet to learn the skills required in finding an auto here that will take you where you want at a “fair” price, so instead of choosing to learn the system, they get around it by using their disposable income. “Expats” usually shop in malls, try and travel only to those places where they can easily take and park their cars, live in the outskirts where they can get big houses with “amenities” like the one I had in Gurgaon, send their kids to “international schools”, and the like.

So this tendency to live like an expat shows up the cost differential between living in your “own” city, and living in another where you would rather prefer to buy your way around the parts you don’t like rather than trying to blend into the city. And this tendency to live like an expat means that expats will always be expats, which is an accusation (not unjustifiably) thrown at the Koramangala types.

When I returned to Bangalore from Gurgaon about two years back, the thing that struck me was about how comfortable I suddenly was. So many of the worries that had been worries in Gurgaon ceased to be worries now. I was comfortable enough with the system to not bother about any of those. And as I ran across my road and jumped on to a moving bus to take me to the city centre, I realizeed I was back, where I belonged.

Floor Space Index

In an extract  from his latest book Triumph of the City Ed Glaeser argues that one way to improve urban living would be to increase the floor space index, and allow higher buildings. In another recent article, Ajay Shah argues that the presence of army land in the middle of cities is again hampering urban growth and development by increasing intra-city distances and reducing space for the common man inside the cities. I was thinking about these two concepts from the point of view of Bangalore.

Floor space index (FSI) is a metric that controls the total supply of residential area within a city. It is defined as the ratio of built-up area of the house to the area of the plot it stands on. Currently, in Bangalore it is capped at 1.5. This means that if I own a site measuring 60′ by 40′, the maximum area of the building I can build on it is 3600 sq ft. Clearly, by capping FSI, the total supply of residential area in a city is capped (assuming cities don’t expand outwards, of course). Currently, a lot of the development going on is of the type of builders acquiring “underutilized property” (old bungalows, say) and then “unlocking the value” by building buildings on it up to the permissible limit.

So I was wondering what were to happen if the government were to tomorrow decide to act on Glaeser’s recommendations and suddenly increase the FSI. For one, it would jack up the value of land – since there is more value in each piece of land that can now be “unlocked”. On the other hand, it would lead to a gradual fall in prices of apartments – since the limit on the supply of “floor space” would go up, that would lead to a fall in prices.

Existing owners of “independent houses” (where they own both the house and the land it’s built on) would be overjoyed – for now the value of the land they own would suddenly go up. Existing owners of apartments wouldn’t – their net worth takes a sudden drop. But all this doesn’t matter since both these groups are highly fragmented and are unlikely to matter politically.

What one needs to consider is how builders and real-estate developers would react to this kind of a move, since they have the ability to influence politics. For one, it would allow them to build additional floors in properties where they already own the land, so they have reason to stay positive. On the other hand, due to the increase in land prices, new development would become much more expensive than it is today, thus making it tough for them to expand. Another thing to note is that increased supply of housing and office space in the city would definitely negatively impact the prices of such holdings on the outskirts, and I’m of the opinion that a large number of real estate companies might actually be “long” housing space on the outskirts and would thus lose out in case the FSI were to be increased.

There are other implications of increasing FSI, of course. One of my biggest nightmares is that density in cities will increase at such a high rate that the sewerages won’t be able to handle the extra “flow”. And then there is the issue of increased traffic – though it can be argued that increased density means that commutes might actually come down. Overall, to my mind at this point of time, the picture is unclear, though given the overall incentives to the powerful real estate community it is unlikely to happen. Though I would definitely welcome any increase in FSI (this has nothing to do with my financial situation; and yes, based on my current holdings I’m “long FSI”).

As for army land, there are vast areas that used to once be on the outskirts which are now inside the city. If the army were to decide to sell them to the city, I’m sure it would be able to make a really large amount of money. But then given that the army is not a profit-oriented institution, it has no need for the money so will not let go of the land. In fact, as I write this, the army in Bangalore has taken up the development of lands around the inner ring road – some townships and football fields have come up. But then, this is not the use that Shah envisaged – for none of this actually integrates enough into the local economy to make an impact. And so for the army to sell the land, the decision would have to come from the central government. And given that increase in in-city floor space is likely to negatively impact the powerful real estate companies, don’t be surprised if they were to lobby against the sale of urban army land.

Tailpiece : A while back there was this issue of Transferable Development Rights. When the BBMP wanted to widen roads it announced that people losing land would be compensated in the form of tradable TDRs. For that to be effective, a necessary condition is that the cost of violating the building code is actually high.

Career Development

I realize that in my close-to-five-years professional career, across four companies, the only time I’ve been really happy with my job has been when I’ve abandoned thoughts of “learning”, “career”, “career development” and stuff, and simply worked for the money.

Given that I don’t expect to ever retire completely (though I do plan to “half-retire” sooner rather than later) I think it’s important to focus on stuff like career development. But given that sometimes I believe I only want to build up a big enough base that after that I can take chances, short-term cash flow is important, too.

Oh, and in other news, I recently discovered that I’ve spent more time in my current job than in any of my earlier jobs.

On working in a consulting firm

Ok so my hypothesis is that a consulting firm is a good place to work at if and only if the partners are involved in day-t0-day business.

Once the partners move on from doing day-to-day work into purely managerial roles – where they only manage their teams and interact with clients, they are no longer concerned about the quality of work, or the career development of their employees. All they are concerned about is the billing, and as long as they can sell their team to the client, and keep the client happy, that is all they care for.

Sooner or later, I hope to start a consulting firm. The basic idea has taken seed in my head, and once it’s firmed up enough I’ll let people know. However, at this point in time, I want to assure whoever will be my future employees that I don’t intend to grow the firm too large. I don’t have that much of a passion for managing people, so the thrill for me will be in doing the work that I want my consulting firm to do. And that way, the proud and arrogant man that I am, I’ll ensure that the quality of work at my firm doesn’t dip.

 

Priors and posteriors

There is a fundamental difference between version 1.0 of any thing and any subsequent version. In the version 1.0, you usually don’t need to give any reasons for your choices. The focus in that case would be in getting the version ready, and you can get away with whatever assumptions you want to feel like. Nobody will question you because first of all they want to see your product out, and not delay it with “class participation”. The prior thus gets established.

Now, for any subsequent version, if you suggest a change, it will be evaluated against what is already there. You need to do a detailed scientific analysis into the switching costs and switching benefits, and make a compelling enough case that the change should be made. Even when it is a trivial change, you can expect it to come under a lot of scrutiny, since now there is a “prior”, a “default” which people can fall back on if they don’t like what you suggest.

People and products are resistant to change. Inertia exists. So if you want to make a mark, make sure you’re there at version 1.0. Else you’ll get caught in infintely painful bureaucratic hassles. And given the role of version 1.0 into how a product pans out (in the sense that most of the assumptions made there never really get challenged) I think the successful products are those that got something right initially, which made better assumptions than the others.