Archive for March, 2007

An ode to the beginning of my Journey to the haloed world of the Big-eye (I-banking). It all started when I took a conscious call to move out of software services to core investment banking while still making software solutions for a leading north American bank. It really had nothing to do with the fact that they (the ‘business users’ as they would call themselves) would always have the last and final say on all issues sometimes asking for the impossible to be done!

Anyways, in the past one year I have had ample discussions and debriefings with people in various stages of investment banking career. I knew all about (or so I thought!) the hardships of getting selected and then slogging relentlessly to stand out even among the outstanding peers and finally the obscene compensation packets. I also knew of the fantasy of work-life balance, of failed marriages lending itself to a costly divorce, of early health problems and other folklore associated with this profession. This is one of the reasons I thought I would put down my thoughts just as I complete the first few days of internship with India’s leading Investment Bank
(and the largest in Asia Pacific region). I intend to put forward my thoughts in later phases of this journey and maybe compare my notes later down the line.

What it takes: People keep giving interviews about how much you need to know in order to get into I-Banking. Rediff, Times of India, Sify and what not keep featuring ‘experts’ who let people insights into what it takes! Frankly, most of it is loads of crap. So nice and pretty Miss Su (an imaginary name!) might have made it to Goldman Sachs (GS) just due to the pretty face and that flirtatious
smile (and not because of her supposed prowess in ‘Valuation’ theories). It is a known fact that most I-Banks and Consulting firms would recruit pretty sexy girls in a jiffy, without batting so much as an eyelid while taking male candidates through 8-10 odd steps of selection. The pecking order is true and very much present. What I mean to say is this, do not go for all the sermonizing that people keep spreading as to ‘What to do’ just because they have been successful in getting through. It might be a ‘Inspite of that’ rather than ‘because of that’ causal relationship that it shares! Truth remains that you need to be pretty good in communication, in general calculation ability, in articulating business documents and possess a good overall knowledge about finance world (in that order of preference) in order to have a good chance of making it. Most misconceptions arise due to lack of understanding of difference of I-Banking from treasury, Wealth Management and Mutual Fund Management Roles. I-Banking is a very relationship and a customer oriented role. It requires a different level of interpersonal skills and a finesse which enables you to better understand your client’s business requirements and to communicate your ideas across. Hardly a ‘fully technical role’ as most people tend to portray it! Mutual Fund Management and Treasury on the contrary are hard core financial technical roles requiring very little of client-interaction! In fact the highest paid people in the industry are Fund managers and the treasury heads, but you would never hear too much about them because they are geeky, quiet and sober and hence highly un-glamorous! A brilliant example in this case is of Sunil Singhania, Fund Manager of Reliance Mutual Funds.

What it has to offer: I will not deal with the tangible benefits like an affluent bank balance and a prestigious role (Not in India though, where your next door aunt thinks you are some kind of salesman who could not get into a ‘proper bank’ like ICICI or HDFC!). I will talk about the numerous intangible benefits it has to offer like a systematic honing of your negotiation skills and your domain knowledge of various businesses. Investment banking typically requires performing valuation of various business models, projects and companies. Like Aswath Damodaran writes in his famous book on Valuations, “Valuation is neither the science that some of its proponents make it out to be nor the objective search for the true value that idealists would like it to become. The models that we use in valuation may be quantitative, but the inputs leave plenty of room for subjective judgments. Thus, the final value that we obtain from these models is colored by the bias that we bring into the process!”
Thus our understanding of underlying facets of the expected returns and the anticipated/unanticipated risk factors has wide ranging implications on our performance as I-Bankers. This makes is a much more wholesome job, so instead of limiting ourselves to financial documents of the project/firm what is required is to get well acquainted with the scenarios under which the businesses would be operating. Quite akin to doing a knowledge transfer from a 15 year old veteran in the business. This requires extensive and exhausting readings into the nitty-gritties of the business and leads to the infamous 18X7 working hours per week schedules! The good part about this whole exercise is that by the time you have spent two or three years in an I-Bank and have taken pains to work across different industry verticals, you would have acquired an enviable exposure to businesses which few others could afford. This would however require a conscious effort not to get ‘holed up‘ in the comfort zones that one creates after getting a good knowledge about any industry.

Where the Roads Lead: Investment Banking is rarely if ever a career move. It is generally a ‘pit-stop’ with the next destination being off to various domain knowledge intensive positions. The roads from here lead to consulting, Treasury, fund management and wealth management. As I read from various international authors about their accounts, the half-fife of an MBA graduate in an I-Bank is about 19 months, so 50% of fresh recruits leave I-Banking jobs within the first 19 months!

More Insight: A lot more insight is available in these two world renowned booksMonkey Businesses’ and ‘Liar’s Poker’. The former is about the more recent version of Investment Banking profession whereas the later is about ‘Trading’ profile, which is now one of the subsets of the complete gamut of services of an I-Bank. For a little more technically inclined two other books to read in addition to these are ‘Random walk down the Wall Street’ and ‘Investment Fables’.

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Tonight is a night of celebration. It’s time to pop open the champagne and garnish with fresh red strawberries! Its more than a Diwali or a Christmas (those have had very little meaning anyway in the past year with deadlines at 11:59, clouded by double submissions on the ‘due list’ and the terror of getting a ‘D’ in most subjects), more than a ‘Celebration of Life’. Its exuberance, its ecstasy, its sheer madness. For I’ve become a 50% MBA!

This blog post reflects on the ‘Take-Home‘ from this experience. It talks about things that I have learnt and those unlearnt. Lessons taken, choices made & crossroads chartered. It talks about the more action packed half of arguably the most academically rigorous course, an MBA!

  • Time Deadlines are read ‘DEAD’lines. Past year has taught me that 11:00 hours are better read 10:59 hours if you have the uncanny habit of popping in on the wrong side of 59 seconds. So seminar and sessions are invariably on time zones other than ‘IST‘ (Indian standard Time, which is the colloq. For a time which lags the official time by a princely sum of 30 minutes!)and in case you are late, you are a million times better away from abstaining to attend it.
  • Talent is never short, seek and you shall find. We dug and you can’t believe the booty we found. We found people who made fantastic movies, people who design amazing T-Shirts, People who are split second organizers, people who are enthralling Radio Jockeys and people who are the most gifted negotiators. All this in a B-School in which you hardly have time to breathe and try out your hobbies! I have found two new things that I am really good at; photography and negotiating,
  • You never know how much you are capable of. Last I knew my limits were on working for about 28 hours without significant rest. As I write I have slept for not more than 12 hours in the past 6 days and yet I am not exhausted (if you forget the momentary bouts of yawns which are a giveaway!)
  • Mantra of Life: Decide what you want, find out its price and be prepared to pay it! It’s that simple! So if you want to be a top of the line Investment Banker, that extra dose of B-School frill affectionately called ‘life‘ would have to wait. So skip the Cul-nites, the booze parties and skip the treks and excursions. Come on, if you want a merc you got to pay the huge price!
  • Murphy forgot the Thirteenth law: Whatever you desire, most previously undecided fools will start desiring. So if you are not gathering enough support for something. Go Right ahead (As Rabindranath had said ‘Jodi tor daak shune keu naa aashe tahole ekla cholo re’ !). You would need to do some internal selling and probably a bit of viral marketing here and there. But, you would soon find a lot of people who are undecided till then would start falling in line, if only to get good riddance of the dilemma of ‘decision making’!
  • Murphy forgot the Fourteenth law: When you put all you have at stake for a solitary cause, the odds fall apart! As Mark twain once said, ‘There are three types of lies. While Lies, Black Lies and Statistics! So don’t bother too much about your odds. If you want something pretty bad and you know it might be a colossal task, spare a thought about alternatives. Mind you, don’t compromise, but look at more acceptable routes to that goal. And if there aren’t any, stop giving a damn about what your chances of winning are (as said in Gone with the wind to Scarlet O’Hara: Frankly my dear, I don’t give a Damn!). Go ahead and put everything you have into it. Look around, all the super achievers are people who never gave up on their dreams and fought hard for it!
  • You can never be good at EVERYTHING: It is a most obvious fact of life which we somehow manage to disbelieve. We have our own set of queer notions about our Superhuman abilities. Truth be told, you do not need superhuman abilities to do superhuman stuff. The key is in surrounding yourselves with people with very good abilities. Together the team works in a mutual embellishing mode to achieve what would not have been possible individually. In science we call this ‘Resonance
  • Pygmalion Effect is for Real! This HBR article has not entered the ‘Hall of Fame’ without adequate reasons. The Pygmalion Effect is true and here to stay. So high expectancy of the boss does have a tremendous effect on the morale and the performance of all his subordinates. So in case you are up agains t a super talented team with a bunch of mediocre yourself. Don’t lose heart! History bears easy evidence to the fact that Supercharged teams of Mediocre caliber have far outshone the super-talented geeky but unmotivated ones. Set high standards, believe in them and then sell then to your team. Do what it takes till you have washed their doubts clear and have belief in them. Then jjust sit back and enjoy their stellar performance as they break all moulds to fetch the ‘Unfetchable’!
  • Be good to people on your way up, cause you will need them on your way down (And also in the un-eventual scenario that you have to stay up!)

     

    And to end it all, the Best of them all, ‘We Don’t need no EDUCATION’
    J

In case you are a visitor to my blog, Please be kind enough to fill this survey. It won’t take more than 2 mins, I promise.

This survey has been re-engineered to the needs of our generation which thrives on Instant noodle, Instant coffee, Instant Gratification and what not !

A little bit more about the research that we are doing is presented below

Background of the Project

With the conditional access system coming into force in a phased manner the battle for Home viewer-ship (or as some would call Home Box Office) is heating up.

The cable TV market largely a dormant sector till now dominated by major Multi System Operators(MSO) like Hathway, Siti Cable and Incable will have to change their mode of operation in all the major metros to incorporate Conditional Access system(CAS), which will require viewers to have a Set-Top Decoder. According to a report, for CAS-notified cities, non-availability of adequate number of set-top boxes continued to trouble the 750,000-800,000 consumers.

To add to the sizzle of the changing market dynamics we also have the various Direct to Home (DTH) coming in aggressively into the market with their state of the art digital Television broadcasted directly from the satellite to the homes. The Direct-to-Home service providers are cashing in on the confusion over the implementation the Conditional Access System in some areas of Delhi, Mumbai and Kolkata. Industry sources say over 20,000 consumers in the three metros have called up for DTH connections in the last two days, in comparison with an average of 6,000-8,000 calls that the call centers of Tata Sky and Dish TV receive every day.

To win this stiffly competitive race between the various DTH operators and the MSOs implementing CAS, DTH is being marketed as the latest ‘Interactive TV’ featuring a lot of value added services. One such service is ‘Movie on Demand’ is the subject of this study.

This Facility is aimed at the metro households who want to watch the latest movies released anywhere around the world and visit the multiplexes paying highly inflated amounts for the movie tickets. The service hopes to lure them into the comfort of their couch sitting with the whole family together (spending an otherwise rare family time), at the hour they prefer and at a fraction of the cost (not to mention the savings on popcorns and soft drinks which are astronomically priced) watching the same movie in the ‘Movie on Demand’ service of their DTH operator.

Our study aims at finding out how feasible indeed is the whole idea, how much of the market share of the multiplexes would it be able to acquire, how many of the CAS operators would it be chosen over and most importantly how profitably would this movie on demand service run and at what price structure would it be best suited.

 

Initial Hypothesis

H1:     At least 25% of the people earning Rs. 5,00,000 and above are willing to use the ‘Movie on Demand’ Service

Parameters considered for questionnaire design

  1. Family Annual Income
  2. Urban/Metropolitan Cities
    1. CAS implemented
    2. Undergoing CAS Implementation
    3. CAS implementation on the cards
    4. Possible CAS implementation in future
  3. Professional considerations
    1. Profession
    2. Working hours
    3. Frequency of traveling

4.     Activities on a weekend

  • Movies
  • Picnic
  • Travel/Excursion

5.    Convenience Factors and their influence on the decision

  • Nearness of the multiplex
  • Pricing of the auxiliary things like Popcorn/Soda/Refreshments/Parking ticket
  • Period of watching movies released in the first/second/later weeks
  • Entertainment facilities at home like a Widescreen TV/HDTV/Plasma Screen/home theatre system
  • Willingness to try out new movies in the early weeks of release
  • Willingness to watch movies sitting at home at a nominal cost of Rs. 70

6.    What factors do you look at while watching a movie?

  • Viewing experience
  • picture quality
  • no of people accompanying
  • type of movie you prefer to watch – regional, foreign , Hindi, English
  • would the option of playback control (play, pause, control) enhance viewing experience?,

Ab na Jaa

Posted: March 1, 2007 in MBA Ramblings

“Aankhen bandh kar loon jo main, dekhoon bas tumhain, khwabon main hi kah sakta hoon apna tumhe”

As I am listening to the mellifluous voice of Palash Sen in this song, even as I write this post, a lot of pictures come floating to my mind. People like Srivatsav, Kaushik, Manoj, Prosenjit and Anil to mention a few. This post is dedicated to these people who made a difference with their presence in IIMK.

The past ten days or so have been tremendously packed and hectic. We had four project submissions and a number of quizzes and evaluations. Not to mention the terror of Advanced Corporate Finance (better known as FM-II), with the many different and often contradicting models. The first respite came today, though even today we have an important assignment to submit in Operations Management, but of course, that can wait!

Most people left in the campus have gone off to Either Taj/ITC for a sumptuous meal or to some nice virgin beach like Mahe/Wayannad. Somehow I could not get myself to rejoice and party today, I miss some of my friends a lot. These ‘friends’ are my seniors who have moved out of Campus as they complete their PGP (that’s what the MBA degrees in IIM are called). Over the years, I have realized that my taste in food, life and people are similar. I like simple uncomplicated things, which are not garish but sober and reserved, with their own share of dignity! All this with a nice and pleasing touch!

In IIM’s people do not really develop new potential they just realize their latent potential. So factually speaking, you can’t really shine unless you have it in you! This goes for almost everything here. People realize their ‘hidden colors’; whether they were the loud and attention seeker types, the Type-A/Type-B Personality or simply the reserved observant ones; Chances are that societal norms might have had them camouflaged maybe even to the ignorance of the person himself . IIM makes steam-cooks you to make those hidden facets come out. So while some metamorphose into arrogant ignorant bastards, or as some people prefer referring to as people with ‘Attitude’; there are those who rise above petty trifle into stuff leaders and legends are made of!

I have always bonded well with people, something which came quite naturally to me! Things were particularly easy with seniors. In IIM the trend continued. Whether it was some stupid and outrageous demands, like asking Srivatsav for his expensive Hi-Fidelity Home theater system or asking him to lend me his laptop when mine was out of order, knowing fully well that he himself would need the same. Whether it was bugging Anil with my numerous problems, hoping him to find solutions for me or simply to hear a sympathetic voice. Whether it was asking Manoj to pitch in to solve my Corporate Finance Case assignments or asking him how my balance sheet had gone bonkers! Whether it was asking Kaushik-da to do all my elective selection for me or taking tips how to deal with the demanding facilitatorsor whether it was Prosenjit-da who would not be allowed to booze in peace even in a restaurant until I knew every single conceivable detail about the ‘East Bengal Vs. Mohan Bagan’ Saga! I always found them very friendly, very helpful and very approachable. Something which I never shied away from using abundantly!

I have seen a lot of different kinds of people. People with a ‘Holier than thou’ feeling, ones with the stink of arrogance made only worse by the putridity of their condescendence to people around them. People who have a personality that could have swept you off your feet (these are the ones members of opposite sex clamour to!) and the soft, gritted and foolishly optimistic ones. Invariably the ones that really impress them, are the last ones! Met every kind of friends here, ones who would not shy away in making hay out of your misery and ones who would risk more than their skin to help you out of mess which you got yourself into just by sheer callousness or negligence or outright foolishness. I recently came to know of a senior who ‘leased’ his outdated desktop to a colleague and friend (whose laptop had got stolen in airport) for an atrocious amount. An amount which would make the deal nothing short of exploitation! Not to mention that this individual, whom till now I thought to be noble, fell fathoms below in my eyes and though he is going to the largest Investment Bank in the world, rest assured if he ever needs my help, I would definitely think more than twice before helping him.

Somehow I fully agree with Harsha Bhogle, that ‘Talent and Capability’ are the most overrated qualities today (he said this in an interaction with students of IIMC, a video of which is readily available in our Campus repositories). A far too many people have gone down in the belief that their ability would see them sail through; all they need to do was to just sit and wish away time! Life truly is about the choices you make, the route you take when in a crossroad and the sacrifices that we make in that. A bare fact of life is that, ‘We Always have a Choice’ and the ‘Choices we exercise define what/who/how we are as individuals’!

A Picture that would remain embedded in my mind for a very long time would be the sad and sorry face of Srivatsav in the evening as he was a few hours away from leaving Campus. The sadness was so pristine and so pure that it was purer than tears. It is the sadness a baby boy has on his face when he has to let go of his mother’s hands as he sets his first step to his Kindergarten School! I went to him; we both did not talk for a while, which is really odd considering loud and jovial guy he is (not to forget his roaring Laughter and his silly boy grin!) and then I put my hand on his shoulders whispering softly ‘You feeling sad?‘ and all he could manage was a soft and sullen ‘Yes’!

Today as they go ahead with their life, they leave a void behind. While I overwhelmingly wish them happiness and success (in whichever way they would define it!), I do hope at some point in life our paths will cross again and we would share some more such pleasant times.

The Road goes ever on and on
Down from the door where it began.

Now far ahead the Road has gone,
And I must follow, if I can,
Pursuing it with eager feet,
Until it joins some larger way
Where many paths and errands meet.
And whither then? I cannot say.

(pictures of the people I have referred here are present here)