Forbes India 15th Anniversary Special

Ten interesting things we read this week

Some of the most fascinating topics covered this week are: Investing (Lessons from investing in 483 companies; ESG brings distinct value to developing nations), Parenting (Working-class parents are becoming more like middle-class ones), Space Tech (Cloud computing is betting on outer space), and Sports (Game of Life: Lessons we can learn from sports)

Published: Oct 10, 2020 09:18:46 AM IST
Updated: Oct 9, 2020 06:22:44 PM IST

Ten interesting things we read this weekImage: Shutterstock

At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, ranging from zeitgeist to futuristic, and encapsulate them in our weekly ‘Ten Interesting Things’ product. Some of the most fascinating topics covered this week are: Investing (Lessons from investing in 483 companies; ESG brings distinct value to developing nations), Parenting (Working-class parents are becoming more like middle-class ones), Space Tech (Cloud computing is betting on outer space), and Sports (Game of Life: Lessons we can learn from sports).

Here are the ten most interesting pieces that we read this week, ended October 09, 2020-

1) Charlie Songhurst – Lessons from Investing in 483 Companies [Source: The Investor’s Field Guide]
In this podcast, Charlie Songhurst discusses the lessons he’s learned about business, investing, and people from such a large sample size of companies. He was the former head of strategy at Microsoft and is a prolific investor, having personally invested in nearly 500 companies through his career. He starts with his idea of having people stack rank their vices of power, money, and fame. He says, “So, someone who's interested in power tends to be better at execution. Someone's more interested in money, tends to think more about some capital efficiency. I tend to avoid people interested in fame, but if you are doing something in showbiz, it would presumably be the number one criteria.”

On recruiting great people, he thinks that recruiting is way underestimated precisely because in an early company, people replicate themselves. “So because people tend to hire not so much in their own image, but with that own set of biases, all the initial people you hire will influence all the other hires. And so you can either get this sort of upwards iterating culture of excellence. Or you can get this downwards iterating culture of excellence. So those first few hires are utterly critical.”

He also talks about what kills start-ups, organizational politics, the term alien founders, investing, COVID impact, and crypto. When asked what he thinks about what is the most mis-valued asset in the world, he says, “it's probably entrepreneurs in markets that are non-obvious. And I don't mean because their end market is not obvious. It's people addressing global problems, but in some secondary city in Romania, because capital markets at that stage, are just not efficient enough to find them.” 

2) Laughing at work should be a norm [Source: The Economist]
A sense of humour is necessary in life. A study of undergraduates found that those with a strong sense of humour experienced less stress and anxiety than those without it. But, how important is it at work? Humour can be a particular source of comfort at work, where sometimes it can be the only healthy reaction to setbacks or irrational commands from the boss. The healthiest kind of workplace humour stems from the bottom up, not from the top down. Often the most popular employees at work are those who can lighten the mood with a joke or two.

Everyone can appreciate a quip about the cramped commuter trains, the officious security guard, the sluggish lifts or the dodgy canteen food. In that sense, workers can feel they are all (bar the security guard) “in it together”. This helps create team spirit and relieve stress. Work is a serious matter but it cannot be taken seriously all the time. Sometimes things happen at work that are inherently ridiculous. Perhaps the technology breaks down just as the boss is in mid-oration, or a customer makes an absurd request.

Satire should not just be applied to other people. Perhaps the most important thing is not to take one’s own work too seriously. As the late, great gag-writer and comic Bob Monkhouse recalled at the height of his career, “They laughed when I said I wanted to be a comedian. Well, they’re not laughing now.” Though a sense of humour is necessary at work, one needs to understand that it shouldn’t demean anyone.

3) Tidjane Thiam: ESG brings distinct value to developing nations [Source: Financial Times]
The author of this article, Tidjane Thiam, chair of the audit committee of the Kering Group, member of the Group of 30, and the African Union’s special envoy on Covid-19, highlights how important ESG investing is. Suddenly everyone is thinking about ESG investing. Funds that invest according to environmental, social and governance (ESG) principles have attracted net assets of more than $70bn from April to June, pushing their assets under management to a historic high of $1tn.

The fact that investors are now increasingly supporting and rewarding responsible corporate behaviour is good news for all countries but never more so than for countries with limited resources, as is often the case in lower-income countries and in Africa. Many leaders of companies are increasingly embracing ESG. This new focus by business will over time have a significant, positive impact on the growth prospects of less-developed countries. Particularly important in emerging and developing economies is the G — governance. Why? Because companies will invest and create jobs in countries with good governance and where corruption is not tolerated. The first victims of corruption are always the poor who end up paying more for basic services and goods.

Corruption and poor governance are both morally wrong and economically inefficient. Civil society and non-governmental organisations have a key role to play to denounce abuses and drive change. In 1Q2020, 94% of ESG funds outperformed their parent benchmarks. This owed something to the fact that ESG funds were not exposed to oil and gas, carbon-intensive industries that suffered a slump in demand as a result of the pandemic. However, it seems that the outperformance continued in Q2 2020, after these stocks recovered. ESG also looks at how companies treat their employees, including their approach to health and welfare benefits. Companies that have treated their employees well since the pandemic started, made working from home easier and mitigated the impact of furloughs, did better financially than those that did not.

4) Working-class parents are becoming more like middle-class ones [Source: The Economist]
We all have thought of the way that we want to raise our kids. Many a times, the child-raising habits of middle class such as habits endlessly pointing out new things and answering children’s questions with other questions are mocked. Across the rich world, parents expect more of their children than in the past, and treat them differently. Gradually, they have adopted child-raising habits normally associated with middle-class parents. That largely unheralded change has probably mitigated the harm done to poorer children by covid-19 and the school closures it prompted. Unfortunately, some damage has been done anyway.

In 2003 Annette Lareau, a sociologist at the University of Pennsylvania, published an astonishing book about child-raising. “Unequal Childhoods” showed that working-class parents—whether they were white or black, poor and welfare-dependent or with steady jobs—thought and behaved differently from middle-class ones. Most assumed that their children would develop naturally, and that their job was to keep them happy and safe. Middle-class parents, by contrast, engaged in what Ms. Lareau called “concerted cultivation”, stimulating, stretching and scheduling their progeny to within an inch of their lives.

In the mid-1970s highly educated and thinly educated mothers alike spent little time interacting with their children. Over the following decade the highly educated changed their behaviour, opening a large lead over everyone else. The less-educated then closed the gap. Two scholars, Sean Reardon and Ximena Portilla, have shown that in America the gap between the test scores of the most privileged and least privileged children upon entry to nursery closed slightly between 1998 and 2010. Working-class parents have learned to bring up their children in a more stimulating way. The next thing they need to learn from the middle classes is how to nag their children’s teachers.

5) Why Bother with Consultation Papers? [Source: CFA Institute]
Responding to consultation papers can feel tedious. Organisations and individuals do respond to them to further their own interests. But, why should anybody give their views and feedback on these lengthy not-so-easy-to-comprehend documents? The author of this article feels that by giving feedback, we can stand up for and speak out on three core advocacy principles: 1) Investor protection over commercial interests: All investors must be protected, especially the most vulnerable — less experienced retail investors. When these retail investors encounter well-funded companies staffed by professionals, a typical David and Goliath situation develops. The Goliath Adam Smith company is for profit: Commercial interests are paramount. And often those commercial interests come at the expense of the investors. Investor protection should come before commercial interests because investors play the central role in channeling funds towards productive investments.

2) Transparent corporate reporting: Most investors demand transparent corporate reporting. Transparency improves corporate governance practices. ESG plays an important role here. And many in finance believe that the “G” governance, is just as, if not more, important. So, whenever a consultation paper requests feedback on a transparency issue, the response should be an easy one: The more transparency the better. 3) Financial market fairness for all investors: Why do we value fairness? Because we have all been treated unfairly at some point in our lives. What are the consequences of an unfair financial market or one that is perceived as such? Well, mistrustful investor won’t invest as much if they don’t think they’re getting a fair shot compared to the more wealthy or connected.

Also, professionalism is of utmost importance. Professionalism comes from competency in performing our duties. And competency comes from knowledge acquisition, application, and experience. Professionalism requires us to put clients’ interest first and thus demonstrate and live the fiduciary mindset. So how can you contribute? Respond to consultation papers — either as an individual or an organization. Respond to consultation papers, but also speak up for ethics, trust, and professional standards. Support fair and transparent financial markets and practices. Protect the interests of investors. Be an advocate.

6) Health care is already benefiting from VR [Source: The Economist]     
Augmented reality and virtual reality (VR) has been playing a key role these days in helping people get rid of their phobias. Not only that, the VR system is also now used for various treatments. Albert “Skip” Rizzo and Arno Hartholt, experts in medical virtual reality at the University of Southern California, developed Bravemind system to treat soldiers returning home from the wars in Iraq and Afghanistan. Immersed in a virtual environment that mimics their traumatic experiences, veterans narrate the scene to a therapist, who can control how the events in the simulation unfold. Bravemind builds on a well-established psychological technique known as exposure therapy, in which people are brought to face their fears in a controlled way.

VR adds a way of creating detailed, carefully tuned scenarios that can elicit different levels of fear. It works because, even when people know they are watching computer graphics, their brains nonetheless react to virtual environments as if they were real. Scientists have used VR systems to create and control complex, multi-sensory, 3d worlds for volunteers in their labs since the 1990s. Rather as an aircraft simulator can train and test pilots in a wide variety of settings, virtual worlds allow psychologists and neuroscientists to watch people’s cognitive and emotional responses in situations that are difficult to set up or control in the real world.

The technology has been successfully applied to tackling schizophrenia, depression and phobias (including the fear of flight, arachnophobia, social anxiety and claustrophobia), and reducing pain in cancer patients undergoing chemotherapy. It can help train spatial-navigation skills in children and adults with motor impairments and assist in rehabilitation after a stroke or traumatic brain injury. Mark Mon-Williams, a cognitive psychologist at the University of Leeds who has worked with VR for more than two decades, reckons simulated worlds have huge potential for improving education and physical and mental health. “But if you’re going to make the most of that powerful set of tools,” he says, “then use the scientific process to ensure that it’s done properly.”

7) Mumbai’s real estate revival depends on lesser greed — not from the developer [Source: Money Control]
Redevelopment has its exuberant days in 2006-11. That was the period when developers were jumping over each other to gain favour among residents of buildings that had potential to get redeveloped. The older the building, the better. Until 2011, norms mattered little while the nexus mattered a lot. The widespread manipulation, along with a hot property market, permitted developers to make super-normal profits. But that has changed now. In 2011, the Brihanmumbai Municipal Corporation (BMC), the municipal body that runs the city, would get its most impactful regime in at least two decades under the municipal commissioner Subodh Kumar. In a short tenure, the brazen leakages would be closed and the real estate industry moved to a level-playing field.

Given the paucity of open land, real estate in the commercial capital is predominantly a redevelopment theme. Redevelopment proposals in the last year have come down by 50%. It is certain that 2020 and 2021 will see even a further decline. A large part of the blame goes towards the notorious level of levies and premiums charged by government authorities. In the current crisis, there may be waivers and deferred payments dangled for a limited period but it is unlikely to be sustained. From 2022, the journey towards bankruptcy of the BMC is likely to begin as the central government stops compensation in lieu of octroi. With this is mind the only way to get redevelopment kick-started is by reducing the land cost for a project.

Naikaj Bhobe of PN Bhobe & Associates says “70-75 percent of plots in premium locations of central suburbs are estate owned which has a higher cost structure. In an environment of falling prices, projects on these plots are unviable or done at wafer-thin margins. Hence developers avoid redevelopment in estate plots.” Also, lack of unity within members, rampant corruption in selection of the developer, last-minute demands and greed have hurt enthusiasm among credible players for undertaking such projects. Eventually redevelopment is sustainable only when stakeholders lower their expectations to an extent wherein the end-customer finds value and affordability in purchasing an apartment in the new building. The era of the jackpot in real estate is over. Every other stakeholder in the chain has recognized it. It’s time the owners do it too.

8) Cloud computing is betting on outer space [Source: Livemint]
It is touted that space tech would be the next big thing. On 22 September, Microsoft CEO Satya Nadella announced the preview of Azure Orbital at Microsoft Ignite 2020 in New Orleans. According to Microsoft, Orbital is ‘Ground Station as a Service (GSaaS)’, which is aimed at helping its customers to communicate with, and analyse data from, their satellites or spacecrafts on a subscription basis. According to the International Telecommunication Union (ITU), non-geostationary satellite orbits (NGSOs) such as medium earth orbits (MEO) and low earth orbits (LEO) are being increasingly used worldwide. NGSOs, unlike fixed or geostationary satellite orbits, move across the sky during their orbit around the earth. With space launches becoming more affordable and accessible, a slew of private companies are starting to rely on this new array of satellites.

While the cost of the satellite itself is falling, building and running ground stations can cost up to $1 million or more, according to a recent blog post by Jeff Barr, chief evangelist for AWS. Complex data processing also requires a lot of computing power, and the huge data storage requirements only add to the cost. Leading cloud computing service providers are now starting to offer satellite operators the option to use these ground stations on a ‘pay-per-use’ or subscription basis, thus, helping the latter save on capital expenditure costs by employing an operating expenditure model. India’s cloud computing market was estimated at $2.5 billion in 2018, dominated by infrastructure as a service (IaaS) and software as a service (SaaS), according to industry body Nasscom. It is forecast to touch over $7 Billion in 2022.

Space is just an additional frontier for the leading cloud services providers. It all began when companies, which traditionally used servers for their computing needs, realised that they could lower costs by accessing IT resources over the internet, and paying only for the services they needed, reducing capex—a trend we now know as cloud computing. Many companies today use private clouds (on-premise), public clouds (on a network, typically the internet) and hybrid clouds (combining public and private). User companies, though, became wise and began adopting a ‘multi-cloud’ vendor approach to avoid being locked in by any single technology or cloud vendor. The distributed cloud market is forecast to reach $3.9 billion by 2025, growing at a CAGR of 24.1% during the forecast period from 2020-2025, according to market research firm, IndustryARC. Security, though, remains a concern if proper protocols and policies are not adhered to in a distributed cloud.

9) A portrait of a market in India run solely by women [Source: NY Times]
The travel and tourism industry has come to a standstill (though slowly reviving now). Travelling is how you learn about different cultures, traditions, cuisines and more. Though there are many hidden gems in India, the author of this article visits Imphal, the capital city of Manipur, and talks about how women have headed the social and political activism in the Indian state if Manipur. And the centre of attraction of Imphal is the Nupi Keithel, or Women’s Market. Every shopkeeper in sight is a woman. Collectively, around 5,000 of them here in the Indian state of Manipur constitute one of the largest markets run solely by women in all of Asia.

One incident that brought the place to limelight occurred in 1904. Traders from Nupi Keithel protested the colonial administration’s use of forced labor. Other Manipuri women joined the movement and stirred public outrage with several demonstrations. Eventually, the forced-labor policies were revoked. This was the first Nupi Lan, or women’s war, a crucial milestone marking the political awakening of the people of Manipur led by women traders of Nupi Keithel. In 1939, the market spearheaded a second Nupi Lan against the King of Manipur. In the wake of both movements, the market emerged as the dominant voice of resistance against oppression and injustice — and the women emerged as the sentinels of a more equitable Manipuri society.

The vendors in this market are spread across three buildings and a massive open market. The shops are separated from each other by various goods. There is only enough space to display a small fraction of wares; the rest are bundled away in trunks and bedsheets that flank each seller as she sits cross-legged in her shop. Among the towers of surplus goods, the author spots perfectly camouflaged placards with slogans like “We won’t stay silent” and “We demand justice.” “We don’t speak the language of silence here,” says Laishram Mema Devi, who has sold handmade jewelry at the market for more than three decades. “It doesn’t matter who we are up against; if what they are doing is not in Manipur’s best interest, they will hear from us.”

10) Game of Life: Lessons we can learn from sports [Source:]
We can learn many life lessons from sports. The benefits of participating in a sport can seep into your professional life, too. This article specifically points out to three distinctly different athletes and the lessons that we can learn from them. 1) Andy Potts (2004 Olympic Triathlete, 2007 Ironman 70.3 World Champion); Lesson – Seek new Passions: As a child, Andy Potts tried everything from football to tennis before he realized his talent and passion for swimming. In 2000 the sport of triathlon debuted at the Olympic Games. Despite having no cycling experience (save riding his bike to school) and little training as a runner, Potts began pondering a career as a triathlete. It would be several years until he acted on his urge, though. “At 26 years old, nine months into a stint as a sales rep for a payroll company, I said, ‘I can’t do this. I’m going to buy a bike and do triathlons,’” recalls the 35-year-old.

2) Paige McPherson (2012 Olympian, Tae Kwon Do); Lesson – Persevere: Paige McPherson, an Olympic tae kwon do bronze medalist, is one of those people who make you believe you can do anything you set your mind to — even if it means defying other people’s expectations. From an early age, her interests ran toward something entirely different: martial arts. Initially, that path didn’t seem feasible for her. When a 5-year-old McPherson showed up for her first tae kwon do lesson, she was so hyperactive that the instructor sent her home for two separate, six-month “maturity periods.” “He said, ‘I can’t teach a class and watch her, too,’” recalls Paige’s father, Dave McPherson. But Paige was persistent. She eventually got back on the mat and stayed there. Seven years later, the same coach was taking McPherson and a small team to the tae kwon do national championships.

3) Flip Saunders (Former NBA head coach of the Washington Wizards, Detroit Pistons and Minnesota Timberwolves); Lesson – Prepare: One thing Flip Saunders recalls from playing high school basketball was the sense that the team had his back. “I had a coach who said, ‘Just go out and do what you have to do; don’t worry about making mistakes.’ I always played at a higher confidence level because of that,” he says. Winning isn’t just about calling the right plays, he says; it’s about what happens during practices, meetings, workouts and even the moments in the locker room just before a game. Saunders, who is married with one son and three daughters, says he takes the same approach toward family life: “There’s no question that in order to have success in life, you need to prepare. In athletics, the preparation never stops. It’s the same in real life: It’s ever-changing and you’re always working.”