Pertinent Observations

Karnataka’s bizarre liquor license policy

Karnataka has a rather weird liquor license policy. Some twenty years ago, back when S Bangarappa was the chief minister (if I’m not wrong) the state decided to freeze the number of bars. “Growing alcoholism” was the ostensible reason. Since then, if someone has to open a bar, the license has to be purchased from an existing bar owner who will then shut down his bar. Thus, the number of bars in the state (whose population has increased manifold since) has remained constant.

This is not the only funny aspect of liquor regulation in Karnataka. Till recently, there was also the rather bizarre requirement that each bar sell a minimum “quota” of liquor each month. If the bar failed to do so, it had to pay “short lifting” fines. While this regulation (minimum “lifting” by bars) went much before the time when number of licenses was capped, the two can be seen to be related. When the number of licenses is capped, the state needs to ensure that it gets a certain fixed revenue out of excise licenses and sales. Fixing a minimum sale quantity ensures that licenses are not “wasted” by bars with low sales, and in case they are, the government doesn’t lose out on such sales.

A possible reason that this rather bizarre regulation on minimum sales was lifted is due to it becoming moot thanks to competition. When the number of liquor licenses is limited, the price increases, and thus bars which are selling lower amounts of liquor find it more profitable to cash out on their licenses than continue their business. Thus, bars that continue to have their licenses are those that continue to sell significant quantities, which makes the quotas moot.

Nevertheless, the cap on the number of bars means that the liquor scene in Karnataka is rather bizarre, the point being that there are no “middle class bars”. Here in Barcelona, where I’m currently on holiday, pretty much every restaurant and cafe has an alcohol license (at least beer and wine), and it is possible to have a drink in an “ordinary setting” at a reasonable price. A glass of beer at any of these establishments, for example (small quiet places which are seldom crowded), costs about EUR 1.80 (~Rs. 120 by today’s exchange rate).

In Karnataka, on the other hand, thanks to the limited licensing regime, a bar needs to do a certain minimum amount of business before it is viable. This has led to bars in Karnataka adopt one of two opposing routes. Some play the volume route, setting up an atmosphere where there is quick turnaround of customers (it can be argued that atmosphere is set up to ensure customers don’t stay too long) each of who consumes in significant volumes so that the bar can make significant amount of money despite charging only a small premium on the liqour.

At the other end you have the rather fancy “value players”, who make their margins on rather large markups on the liquor they sell. These are typically fine dining restaurants where people’s primary purpose is eating (rather than drinking) and which have rather low table turnover. A combination of the above two means that volumes are low, but such restaurants more than make up by means of significant markups. These markups are extended to non alcohol items also (these restaurants can afford to charge a premium since all other similar restaurants serving alcohol also charge the same premium, and presence of alcohol is a hygiene factor for such restaurants). Here is an old blog post where I argue why liquor regulations imply high.

So the question is if the government can do away with the bizarre regulations on minimum sales, why can’t they increase the number of liquor licenses? The problem is that it is a classic case of baptists and bootleggers. The baptist case is that by issuing more liquor licenses, it makes things easier for people to drink alcohol and that’s not a good thing for society. And the bootleggers are existing licenseholders, whose licenses will get devalued if their supply increases. I just realised I’ve already done another blog post addressing this topic.

Barcelona Harbour and Montjuic

Last evening I decided to trek up Montjuic, a hill that is in the middle of Barcelona. I remember reading a long time back (probably on my last visit here) that there was a nice hiking path up Montjuic, and decided to go, without any plan. I conveniently forgot to look up the hiking path, and instead consulted google maps on the phone.

After a while the route got boring (this was after I had passed Placa Espanya). At around the same time I had started climbing the hill, and the combination of the elevation and lack of interesting things around (there were no shops or people or anything of interest on that road) made me want to turn back. I had almost turned back when I hit a bus stop, and bus number 55 came there. And off I climbed and went.

The bus dropped me at the bottom of the Montjuic Funicular, and I thought I’ll take that. But the steep price (EUR 11 for both ways) put me off, and a helpful tourist office nearby told me that the peak was 20 minutes walk away. I did the walk in 10, only to be confronted by another queue – for tickets to go into the castle. I decided to have a look around before I went in.

Going around the castle towards the side that faced the sea, this is what I saw:

And I sat there, stunned. There were other people sitting or standing in the same area, most of them couples. And most of them seemed like they were looking out at the sea as they sat there. The sea held no interest to me, however, though my object of interest had something to do with the sea. It was the Barcelona harbour!

I had never before seen a container terminal in operation, and here was one, right under where I was standing, in full flow. There were three ships docked, each of a different size. Containers had been stacked up all over the terminal, as if they were lego blocks. You had these machines that were roaming all over the place, which would pick up containers and place them elsewhere. And then you had these ~~forklifts~~ stackers with orange claws which would place load and unload containers to/from ships.

Just to stand there and watch this operation was mindblowing, and I stood hence for about half an hour. I noticed some nooks in the Montjuic castle where some couples were cuddled up. These nooks gave a great view of the container terminal. So I harboured visions of cosying up in one of these nooks with the wife, watching the operations of the Barcelona container terminal, analysing the operational effectiveness of the place and the algorithms involved. But then the wife was at school, and so I moved on.

On my way back I “got lost” again, as I wandered on some hiking paths past some of the infrastructure that I understand had been built for the 1992 Olympic games. Once again I got “bailed out” by a bus stop, and a bus that dropped me at a point in town that I had been to earlier. “Problem reduced to known problem”, I exclaimed and walked home from there.

For visitors to Barcelona I would highly recommend going up Montjuic. I have no clue what the castle is like, for I didn’t go in. The hiking paths are supposed to be good but I didn’t explore much of that. Yet, it is a fantastic place to go to and watch global commerce in action, as trucks roll in and out of the container terminal, only to be divested of their containers by these machines that place them aside and then transport them on to the ships. It has to be seen to be believed!

Another view from yet another other side

A few years back, after the first time I had interviewed people from campus, I had written a blog post about the experience. That post had ended up ruffling a few feathers, inviting angry comments from placement committees that it was my duty to make sure I read all the drivel they put out on their CVs and that the process I had followed was wrong.

Today I had an opportunity to be on the “other side” of another process I had gone through over a decade back – IIM admission interviews. This had nothing to do with my teaching position at IIMB; they had called for volunteers from among the alumni to help out with the admissions and I had put up my hand and thus went.

So there were two sessions, in each of which nine applicants were supposed to turn up. As it happened, only five and six respectively turned up, making our job easier. This is surprising since back in my days (2004) for most IIMs, most of the people who had applied would turn up for the interviews. The only IIM interview where I saw low attendance was Kozhikode (it was in Chennai, unlike others which were in Bangalore) where attendance was little over 50%.

The good news is that the group discussion (GD) has been done away with. It never really served much purpose anyway, and the IIMB Admissions Committee probably realised that. It is possible that GDs biased admission in favour of the more vocal and assertive, and I’m not sure if it was a great thing. Anyway, good riddance. The GD has now been replaced by a written test. Applicants are given a question they must comment on in writing. This is to test both their analytical reasoning skills and their written communication. I think that’s a great thing. We didn’t have to evaluate that though .

Coming to the interview itself, after the first few interviews I realised that there is a simple metric the professors use while judging a student. This is essentially a version of the O’Hare test used by investment bankers (banker bankers, not traders) to recruit. In the O’Hare test you evaluate if you’ll be able to get along with the applicant if you are stranded in a long layover with him/her. More generally, in a job interview you are testing if you’ll feel comfortable working with the applicant.

In a B-school admission interview, you evaluate if you want the student in your class. There are certain features that make for good students, and judgments of these vary from teacher to teacher of course. And decisions on whether to admit a particular student is made based primarily on whether the interviewing professor wants to see the student in class.

For example, if the student doesn’t display much energy, you’ll worry if she will participate enough in class. If the candidate is too loud and aggressive, you’ll fear that she may be a disruptive influence in class. If the candidate is stupid, then you know she’ll add no value to the class, and might hold back the class with her stupidity. If you think the candidate cannot work in groups, you’ll worry for her potential classmates who might have to team up with her for projects!

A similar list of examples can be produced for the other side. So essentially it boils down to this one thing – if you are going for an admission interview, you should be able to convince the interviewers that you will be an asset to the class that you’ll be sitting in, and that they should take you for that! Everything else is subordinate to this!

There are no other pertinent observations I can make without a breach of some kind, so I’ll stop here.

The Explosion of Karthiks

Back when I was in LKG, I was one of 6 Karthiks in my class, and one of two “S Karthik”s. Two years later there was a reshuffle in sections, and there were now “only” 4 Karthiks in my class. The number varied over the years but it was a very rare class I sat in (IIT being one of them) where I was the only Karthik.

So it appears that Karthik is an exceedingly popular name. But why did it become so popular? We don’t know. When did it really become popular? That is a question we can now answer thanks to Anand C, who has put out data as part of what he calls the “Indian Names Database“.

Anand trawled through electoral rolls (available in PDF form), and extracted the names of all registered voters in Andhra Pradesh. For privacy reasons he’s not put out the full data (he checked on this “datameet” group if it’s okay to put but that group convinced him it would be a violation of privacy – I’m not so sure since said data is already public , so I hope he puts out the full data sometime). So what he’s done is to extract words from each name, and published how many people with that word in their names were born in each year.

So for example the dataset he has published says that there were 2000 people with “kumar” in their names born in 1955 (and on the current electoral rolls), and this number went up to 53000 in 1984. Thus, playing around with Anand’s dataset we can find out the relative popularity and unpopularity of names over the years.

So I decided to check with my own name. How many people named “Karthik” born in each year were now on the electoral rolls in Andhra Pradesh? Given the format in which Anand has put out the data, it was easy to find, and here is the graph:

So there were a few Karthiks right from the 1940s, but the number was low, and then for some reason the name suddenly became popular in the late 1970s, after which it grew exponentially.

And it DID grow exponentially – in the literal sense and not in the figurative sense that people use the term for any fast growth. I plotted the same data using a logarithmic scale on the y-axis, and this is what I found:

Notice how this plot is a straight line between the late 1970s and about 1990. So if the logarithm of the number of Karthiks born in each of these years is a straight line, then we can surely conclude that Karthiks grew exponentially in this period?

So what are the most popular words in Andhra names over the years? The top 20 all-time names based on Anand’s data are:

Draw your own conclusions!

The Prime Minister has lunch

Much has been made of the fact that Prime Minister Narendra Modi had lunch at the parliamentary canteen a few days back. The “event” has been covered by newspapers in excruciating detail, and the opposition Congress has taken a jibe at the PM for “eating subsidised food”.

That something like the PM having lunch at the parliamentary canteen being news suggests that something is seriously wrong. I mean, I know that the PM is a busy man and may not have time to socialise during lunch and all that, but considering that he’s also an MP and that parliament is in session, the parliamentary canteen is possibly the most logical place for him to have lunch if he didn’t have any other plans!

Some of the reports also talk about the fact that no prime minister in the last <numbers vary> years had done this, and reports also go on to make a big deal that Modi paid for his own lunch. The amount he paid and the amount he got back as change is also well noted. It is possible that there may not be much news happening, but the footage this event has received is definitely overblown.

Anyway, apart from the fact that this shouldn’t have been news, I have one other quibble with the whole episode. The Indian Express writes:

“As is standard operating procedure, the security personnel accompanying the PM tasted the food before it was served to him. They also took samples of all that was served to him — which is also the standard drill,” a senior catering official said, adding that these samples would be preserved for 72 hours during which they would be sent for testing.

Now, I know that we need to take utmost care for our Prime Minister’s health and safety and all that, but I found this bit a little weird. I mean, while it might be standard operating procedure, this event discloses a level of distrust in the food prepared by the government (IRCTC to be precise) run parliamentary canteen, and that cannot be good signalling!

Programming assignments and blind men and the elephant

Evaluating a tough programming elephant is like the story of the blind men and the elephant. Let me explain.

The assignments that I’ve handed out as part of my Spreadsheet Modelling for Business Decision Problems course at IIMB involve fairly complex spreadsheet modelling (as the name of the course suggests). Thus, while it is a lot of effort on behalf of the student to do the assignment, it is also a lot of effort on my behalf if I’ve to go through the code line by line (these guys code using VBA macros), understand it and evaluate them.

Instead, I have come up with a set of “tests” – specific inputs that I give to the program (I’ve specified what the “front sheet” should look like so this is easy), and then see if the program gives out the desired outputs. Either way, I dig a little deeper and see if they’ve done it right, and based on that I grade the assignment.

If the assignments that they’ve turned in are elephants, it’s too much of an effort for me to open my eyes and actually see that they are elephants. Hence, I feel around, and check for a few different components to make sure they’ve submitted elephants. So for this assignment I might check if the trunk is like a snake, and if so, they’ve passed. For another assignment, I might check if the legs are like trees, and if they are, pass them. And so forth.

Now, this is evidently not perfect. For example, if you know that I’ll only check for the trunk to be like a snake, you’ll just submit a trunk that’s like a snake rather than submitting a full assignment! But if you don’t know what I’m going to check for, then it might be possible that you’ve only submitted a snake, I look for treetrunks and not finding them, give you a failing grade! There is a little bit of luck involved on both sides, but that’s how things work!

Extending this analogy to software testing, you can think of that too as an exercise of blind men learning about an elephant. The testers are the blind men of Indostan, trying to find out if the piece of code they’ve been given is an elephant. Each tester pokes around at a different part of the beast, trying to confirm if it fits what they’re looking for. And if the beast has a knife, a snake, a fan, a wall, a tree and a rope as part of it, it is declared as an elephant!

Speaking of software testing, I came across this brilliant video of a class in Hyderabad where software testing is being taught. Enjoy (HT: V Vinay).

https://www.youtube.com/watch?v=4Cir7_S6OSY

Uber’s new pricing structure

So Uber has changed its pricing structure in Bangalore. Earlier they nominally charged Rs. 50 fixed, Rs. 15 per kilometer and Rs. 1 per minute, and then slapped a 35% discount on the whole amount. From today onwards the new fare structure is Rs. 30 fixed, Rs. 8 per kilometer and Rs. 1 per minute, without any further discounts. They’re marketing it using the Rs. 8 per kilometre number.

I took a ride this afternoon under the new fare structure, and the bill was Rs. 152, about the same as it would have been under the old fare structure. In that sense, I guess this was an “average ride”, in terms of the distance by time covered. This was the kind of ride where their assumption on distance travelled per unit time (in coming up with their new formula) was exactly obeyed!

So how do we compare the old and new formulae? We can start by applying the discount on the nominal numbers of the old formula. That gives us a fixed cost of Rs. 32.5, a per kilometer cost of Rs. 9.75 and a per minute cost per 65 paise. We can neglect the difference in fixed cost. Comparing this to the new cost structure, we find that the passenger now gets charged a lesser amount per kilometre, but a higher amount per minute.

In face, taking the “slope” between the old and new rates, the per kilometre cost has come down by Rs. 1.75 while the per minute cost has risen by 35 paise. Taking slope, this implies that Uber has assumed a pace of a kilometre per five minutes, or twelve kilometre per hour.

So if your journey is going to go slower than twelve kilometres per hour, on average, you will end up paying more than you used to earlier. If your journey is faster than twelve kilometres per hour, then you pay less than you did under the previous regime.

A few implications of the new fare structure are:

1. Peak hour journeys are going to cost more, for they are definitely going to go slower than twelve kilometres an hour
2. Your trips back from the pub should now be cheaper, for late nights when the roads are empty you’ll travel significantly faster than twelve kilometres an hour
3. What does this imply for the surge pricing in the above two cases? I think the odds of a surge during peak office hours will come down (since the “base price” of such a trip goes up, which will push down demand), and the odds of a surge late on a Friday or Saturday night might go up (since base fare has been pushed down for that).
4. The Rs. 30 fixed cost implies that if a driver travels at 12 km/hr when looking for a new ride, the gap between rides for a driver is 11.5 minutes (if the driver spends X minutes, he will travel X * 12/ 60 kilometres in that time. The compensation for this combination is X + X*12/60 * 8, which we can equate to 30. This gives us X = 11.54).
5. Trips to/from the airport will now be cheaper, for you can travel much faster than 12 km/hr on that route. So Uber will become even more competitive for airport runs. Again this might increase probability of a surge at peak flight times.

I continue to maintain that Uber has the most rational price structure among all on-demand taxi companies, since the fare structure fairly accurately mirrors drivers’ opportunity costs. Ola doesn’t charge for the easily measurable time, and instead charges for “waiting time”, which is not well defined. Ola also has a very high minimum fare (Rs. 150). I wonder how they’ll play it if their planned acquisition of TaxiForSure goes through, since TaxiForSure was playing on the short trip model (with minimum fares going as low as Rs. 49). Given the driver approval before a ride, though, I doubt if anyone actually manages to get a Rs. 49 ride from TaxiForSure.

Times continue to be interesting in the on-demand taxi market. We need to see how Ola responds to this pricing challenge by Uber!

Cancellation charges in the airline industry

So seat 2B in flight number I5 1322, Air Asia flight from Bangalore to Goa this morning, went unfilled. I wasn’t on this flight, but perhaps for that precise reason I can assure you that the above statement is true. For that seat belonged to me, as I had booked my tickets to go to the Goa Project.

So I initially decided to go to the Goa Project, and booked my tickets for it (on AirAsia). And then work and other things meant that I decided against going, but when I went to the AirAsia website to cancel my ticket, I realised that I wasn’t able to do it! Essentially AirAsia has no concept of cancelling a flight!

This is option pricing taken to one extreme, where the entire price is taken in the form of an option premium! The airline industry was at the other extreme not so long ago – where options weren’t priced at all. In other words, until a decade or a bit more back, you could change or cancel your bookings at little extra cost, though this optionality (and other things such as regulation) meant that the ticket was quite expensive!

Now it seems like some of the “extreme low cost carrier” (such as AirAsia or RyanAir) have moved to the other extreme – where there is no concept of cancellation. And I’m not sure of the wisdom of this strategy. For I believe that this strategy does not maximise either the social utility or the airline’s profits.

The social utility bit is easy to see – I ended up paying full price for a ticket that I didn’t travel on, so I’m hurt. The marginal passenger who wanted to travel on today’s flight to Goa but didn’t find a ticket was hurt (this person could’ve flown had I cancelled my ticket). And the airline missed an opportunity to resell my ticket to someone else (potentially at a much higher price) and make money on it! So it’s a lose-lose situation all round.

The commercial aspect follows from the above – in case demand for this flight was low, then it perhaps made sense to not refund any of my money, for now the airline would not be able to sell the ticket to another passenger. However, if demand were higher (a very probable event), the airline missed an opportunity to make much higher revenue on this seat than what they did by making me not cancel it. I wave my hand here a bit, but it is easy to see that the airline is letting go of potential profits by not letting me cancel my ticket!

I’m not saying that the airline refund my full amount, or anything close to that – that doesn’t make sense for them since they’ve sold me an option. All I’m saying is that the price of zero (between total cost and option cost) doesn’t make sense. Even if the airline were to refund a thousand rupees (I paid around 6000 for the two-way fare) if I cancelled it, and the cancellation procedure were smooth, I would have cancelled it. And the expected revenues on this one seat would definitely exceed this kind of refund, you would expect?

Possibly it’s time for airlines to indulge in dynamic pricing for cancellations also. If the flight is near full, the airline can resell my cancelled ticket for a fairly high amount, so they can induce me to cancel by offering me a decent refund. If at the time I want to cancel, however, demand is low, then they need not offer me much. These things are not at all hard to price!

So by going extreme on the cancellation charges Air Asia and its ilk are leaving money on the table! If only someone were to tell them to pick it up!

How my IIMB Class explains the 2008 financial crisis

I have a policy of not enforcing attendance in my IIMB class. My view is that it’s better to have a small class of dedicated students rather than a large class of students who don’t want to be there. One of the upsides of this policy is that there has been no in-class sleeping. Almost. I caught one guy sleeping last week, in what was session 16 (out of 20). Considering that my classes are between 8 and 9:30 am on Mondays and Tuesdays, I like to take credit for it.

I also like to take credit for the fact that despite not enforcing attendance, attendance has been healthy. There have usually been between 40 and 50 students in each class (yes, I count, when I’ve bamboozled them with a question and the class has gone all quiet), skewed towards the latter number. Considering that there are 60 students registered for the course, this translates to a pretty healthy percentage. So perhaps I’ve been doing something right.

The interesting thing to note is that where there are about 45 people in each class, it’s never the same set of 45. I don’t think there’s a single student who’s attended all of my classes. However, people appear and disappear in a kind of random uncoordinated fashion, and the class attendance has remained in the forties, until last week that is. This had conditioned me into expecting a rather large class each time I climbed up that long flight of stairs to get into class.

While there were many causes of the 2008 financial crisis, one of the prime reasons shit hit the fan then was that CDOs (collateralised debt obligations) blew up. CDOs were an (at one point in time) innovative way of repackaging receivables (home loans or auto loans or credit card bills) so as to create a set of instruments of varying credit ratings.

To explain it in the simplest way, let’s say I’ve lent money to a 100 people and each owes me a rupee each month. So I expect to get a hundred rupees each month. Now I carve it up into tranches and let’s say I promise Alice the “first 60 rupees” I receive each month. In return she pays me a fee. Bob will get the “next 20 rupees”, again for a fee. Note that if fewer than 60 people pay me this month, Bob gets nothing. Let’s say Eve gets the next 10 rupees, so in case less than 80 people pay up, Eve gets nothing. So this is very risky, and Eve pays much less for her tranche than Bob pays for his which is in turn much less than what Alice pays for hers. The last 10 rupees is so risky that no one will buy it and so I hold it.

Let’s assume that about 85 to 90 people have been paying on their loans each month. Not the same people, but different, like in my class. Both Alice and Bob are getting paid in full each month, and the return is pretty impressive considering the high ratings of the instruments they hold (yes these tranches got rated, and the best tranche (Alice’s) would typically get AAA, or as good as government bonds). So Alice and Bob make a fortune. Until the shit hits the fan that is.

The factor that led to healthy attendance in my IIMB class and what kept Alice and Bob getting supernormal returns was the same – “correlation”. The basic assumption in CDO markets was that home loans were uncorrelated – my default had nothing to do with your default. So both of us defaulting together is unlikely. When between 10 and 15 people are defaulting each month, that 40 (or even 20) people will default together in a given month has very low probability. Which is what kept Alice and Bob happy. It was similar in my IIMB class – the reason I bunk is uncorrelated to the reason you bunk, so lack of correlation in bunking means there is a healthy attendance in my class each day.

The problem in both cases, as you might have guessed, is that correlations started moving from zero to one. On Sunday and Monday night this week, they had “club selections” on IIMB campus. Basically IIMB has this fraud concept called clubs (which do nothing), which recruiters value for reasons I don’t know, and so students take them seriously. And each year’s officebearers are appointed by the previous year’s officebearers, and thus you have interviews. And so these interviews went on till late on Monday morning. People were tired, and some decided to bunk due to that. Suddenly, there was correlation in bunking! And attendance plummeted. Yesterday there were 10 people in class. Today perhaps 12. Having got used to a class of 45, I got a bit psyched out! Not much damage was done, though.

The damage was much greater in the other case. In 2008, the Federal Reserve raised rates, thanks to which banks increased rates on home loans. The worst borrowers defaulted, because of which home prices fell, which is when shit truly hit the fan. The fall in home prices meant that many homes were now worth less than the debt outstanding on them, so it became rational for homeowners to default on their loans. This meant that defaults were now getting correlated! And so rather than 85 people paying in a month, maybe 45 people paid. Bob got wiped out. Alice lost heavily, too.

This was not all. Other people had bet on how much Alice would get paid. And when she didn’t get paid in full, these people lost a lot of money. And then they defaulted. And it set off a cascade. No one was willing to trade with anyone any more. Lehman brothers couldn’t even put a value on the so-called “toxic assets” they held. The whole system collapsed.

It is uncanny how two disparate events such as people bunking my class and the 2008 financial crisis are correlated. And there – correlation rears its ugly head once again!

On tea being served before a talk

Later this evening I’m planning to go for this talk on Temples of the Badami Chalukyas, being held at the Max Mueller Bhavan in Indiranagar.

The text of the invite (not present in the picture above) says that “tea will be served before the talk”. Now you might think that it’s no big deal – but in my opinion that’s one marker that sets apart what can be a high-quality fulfilling event for the audience member than one that is merely good.

There are two reasons that people go to talks like this one – one is for the talk itself. For example, the topic of today’s talk looks extremely promising and exciting, and inherent interest in the topic itself is likely to spur audience participation. The other reason people like to go for such talks is that they are good places to meet with other like-minded people, and that is where the tea before the talk comes into the picture.

At the Pratap Bhanu Mehta lecture at IISc two weekends back, there was no tea being served prior to the talk. As a consequence, everyone who arrived walked straight into the hall and took their seats. When I arrived there there seemed to be no conversation whatsoever taking place, and so I went and quietly took my seat. Looking around, however, I noticed a number of acquaintances, and people I wanted to get to connect to (people who could connect me to these people were also in the audience). However, there was no chance of going up and talking to them and indulging in what some people uncharitably call as “networking”. And after the event was over everyone was in a hurry to get home and there was no chance to talk!

This is where tea before the talk comes into the picture. When tea is being served, people usually stand around the service area (not to be confused with Cervezaria) and mill around talking. It’s a great occasion to catch up with old acquaintances who happen to be there, make new acquaintances (that both of you have come for the same (usually esoteric) lecture indicates that you have some common interests) and generally talk to people. And meeting interesting people (new or old) at an event is always a good thing and attendees go home much more satisfied than they would had they only consumed the lecture!

Hence it is of paramount importance that tea (or coffee or milk or water or beer) be served before the talk, for it gives an opportunity for people to talk to each other, to network and to get more out of other attendees than they would from the talk itself. And if you are the antisocial type who doesn’t want to meet other attendees, you can quietly go take your seat while others are having tea – they won’t even notice you!