Shankar Meembat

Entrepreneur and Business Leader

Railroad Tracks

Don’t know if its true!  Landed in my Inbox from a mailing list and could not help but share.

Railroad Tracks!!

Nothing ever changes really, the only thing is that minor modifications are made to the unchanged basic thing. That is true also for people … So don’t you forget. Read below all the way to the end, you will see what I mean. Fascinating Stuff …….Railroad Tracks!!   Railroad tracks. The U.S. Standard railroad gauge (distance between the rails) is 4 feet,8.5 inches. That’s an exceedingly odd number. Why was that gauge used? Because that’s the way they built them in England, and English expatriates designed the U.S. Railroads. Why did the English build them like that? Because the first rail lines were built by the same people who built the pre-railroad  tramways, and that’s the gauge they used. Why did ‘they’ use that gauge then? Because the people who built the tramways used the same jigs and tools that they had used for building wagons, which used that wheel spacing.



Why did the wagons have that particular odd wheel spacing? Well, if they tried to use any other spacing, the wagon wheels would break on some of the old, long distance roads in England, because that’s the spacing of the wheel ruts.

So, who built those old rutted roads? Imperial Rome built the first long distance roads in Europe (including England) for their legions. Those roads have been used ever since. And the ruts in the roads? Roman war chariots formed the initial ruts, which everyone else had to match for fear of destroying their wagon wheels.

Since the chariots were made for Imperial Rome, they were all alike in the matter of wheel spacing. Therefore, the United States standard railroad gauge of 4 feet, 8.5 inches is derived from the original specifications for an Imperial Roman war chariot. In other words, bureaucracies live forever. So the next time you are handed a specification, procedure, or process, and wonder, ‘What horse’s ass came up with this?’ — You may be exactly right. Imperial Roman army chariots were made just wide enough to accommodate the rear ends of two war horses.

Now, the twist to the story: When you saw a Space Shuttle sitting on its launch pad, you will notice that there are two big booster rockets attached to the sides of the main fuel tank.These are solid rocket boosters, or SRBs. The SRBs are made by Thiokol at their factory in Utah.

The engineers who designed the SRBs would have preferred to make them a bit larger, but the SRBs had to be shipped by train from the factory to the launch site. The railroad line from the factory happens to run through a tunnel in the mountains and the SRBs had to fit through that tunnel. The tunnel is slightly wider than the railroad track, and the railroad track, as you now know, is about as wide as two horses’ behinds. So, a major Space Shuttle design feature of what is arguably the world’s most advanced transportation system was determined over two thousand years ago by the width of a horse’s ass.

And you thought being a horse’s ass wasn’t important! Now you know, Horses’ Asses control almost everything. That explains a whole lot of stuff, doesn’t it?

 “People who think they know everything are a great annoyance to those of us who do.”

Investing successfully

Couple of days back, I was listening to Warren Buffet’s interview on CNBC. He talks about how he loves to read about companies and research them and how that guides him in his investment decision.

That brought to mind one of my MBA lessons that has stuck with me. What our lecturer then pointed out was that, using a dart board to make decisions on investments will give the same results as decisions based on extensive research. Many simulations and games where people have been given a pool of money to make investment decisions. Outcomes of such exercises invariably support our Lecturer’s hypothesis – success and failure on a portfolio has little correlation to research effort, education, experience or other skills of the participants.

So, should I be debunking Warren Buffet ? Much as I believe I have had reasonable success following my Lecturer’s advice, it would be presumptuous of me to debunk Buffet’s statement.

And I don’t think I have to. The two views can be reconciled.

For a small time investment, the law of averages work out. So the Dart board method works pretty well. But I use the Dart board to get me a pool of companies from which I then choose the ones to buy. I have realised that I  have subconsciously been doing what Buffet alludes to – research to find the undervalued companies. But I  just let the market do the work for me. Basically, I generally buy on the downswing.  i.e. those that the market has driven down the value.

Obviously, this does not work when you are buying companies – you are the market and there are no shortcuts to good research.

Well, guess I’ll be no Warren Buffet 🙂

Nokia – Too much, Too late ?

Last week’s announcement of the latest setback’s at Nokia is saddening, to say the least.

I had a good innings at Nokia. As I wrote in my internal farewell note, I joined the company when the stock price was around 2.7 Euros, which was the same when I left. It had been a roller coaster ride – the stock went into the 60’s during this period.

The announcements made me look back on what went wrong and think about what the future holds.

I do not profess to be an expert, but here are some of my personal opinions.

First, however painful the recent cuts are, I join the majority view that it was necessary. Where I possibly differ is that I believe the bulk of this could have been done a year back.

Second, much as I see the negative comments around the CEO, Stephen Elop (Tomi Ahonen’s blog is one of the most vocal), I respect him – as a person. Having met him and seen him engaging with the workforce, I have no doubts about his sincerity nor his desire to do the best for the company. I do, though, now question whether he was ever up to the task he was selected for. That is something the Board should answer to, not Stephen.

And lastly, as far as the future goes, I have bought some Nokia stock. Pretty much turn it any way, it looks like it is value for its money now. Especially, as I personally believe it is a matter of time before it will be bought. (Note : this is pure personal opinion and not an advice in any way)

So, what went wrong ? Partly, it is the nature of the beast. When you get to No. 1 as rapidly as Nokia did, it is tough to hold on to the position. A small company challenging the giants has a very different style, culture and management from one that is trying to defend or grow from a No. 1 position. And when the growth is rapid, it becomes near impossible to institute the changes required at the same pace. Nokia knew where its problems were when the disastrous N97 was brought to market – that was when Stephen (or someone external) should have been brought in. By 2010, when the change came in, it was a bit too much, too late.

One of the most painful observations I hear was that Nokia was too late with Smartphones and Apps. Nokia literally created the Smartphone segment with its communicator ! And 3rd party developers were invited to develop Apps at the same time – almost 15 years back ! If anything, Nokia was too early with these. But the fact that I get that comment from even the relative tech savvy crowd I frequent says volumes about the botching up on the lead.

And that points to the other aspect of what went wrong. Nokia pretty much anticipated the trends and even took the lead in responding to them (too early, sometimes). The communicator, Club Nokia (delivering ringtones and other personalisation services),Music, Maps, etc.  – were all considered strategic moves that could have kept Nokia ahead of the competition. What broke down was the reason why working for Nokia was such a great experience – empowerment. Small units (and even individuals) were responsible for and empowered to act to deliver on their objectives. Unfortunately, when you need a strategy change, you need everyone to pull to the common strategic objective for long term results. Nokia, however, was doing so well on short term objectives (sales, margins) and the empowered teams prioritised those over the strategic ones. So, while the company knew where it wanted to go, the work of those teams that delivered the great growth was sometimes at cross purposes. Essentially everyone was not rowing in the same direction and the leadership could not make that happen.

But, then Nokia decided to stir things up bringing in a new CEO. Well, obviously, the game is not over yet, but with it coming up to 2 years of the new CEO, it does not look good. So, here’s my take on a few of the key decisions.

1. Nokia was a large company. However hard Stephen worked, one person could not change everything. But he has been trying. Most of the next level were left in place, making change difficult to really happen. Yes, that has been corrected now. But now is it too late. Two years back, Stephen could have got external talent to have come in. Now, he has had to depend on promoting within. The changes were left too late.

2. The Windows phone decision will be debated for ever. Yes, it was infinitely better than choosing Android. But, having decided on Microsoft, the biggest mistake then was to have limited it to Smartphones. Tablets were not included (Microsoft launched Windows 8 later, which explains why they did not want that included). Simple logic would have shown that Smartphone market would be tough to gain leadership back in. Even the most optimistic of analysts look at Windowsphone market share  to be in second place in 2016. And that is still an estimated 20% of the market. Given there are other manufacturers who are already active and new ones will join if traction for WP takes up, it does not leave Nokia with much room to create a smashing success story. So, while Smartphones would have been good to keep cash coming in and keep a presence, the bet should have been on the future. With Windows just announcing their own tablet, the oversight of not having Tablets in the original agreement (when Nokia was in a position of strength to negotiate) was a big mistake.

3. The Symbian decision is another that has drawn flak. I’ll break ranks with the majority opinion that it should not have been done in Feb 2011. The mistake in that announcement was not that the end of Symbian was announced. It was that a plan to sell another 150 Million devices was announced. Someone obviously did not understand the business dynamics and thought the sales could be kept up. It would have been easier to bite the bullet, declare the demise and shut down ASAP instead of having dragged it on for this long. Many of the cuts that will happen now could have been done a year back if the assumptions were done right. As it stood, all it  did was was divert the focus and resources of the company from a new child to a patient already declared dead.

4. The Meego decision. This is something I’ll always find it difficult to understand. Yes, it was not doing well. But, the new CEO was specifically selected for his expertise in managing a software company. And the first major decision he made turned the company into a hardware company – that does not seem to be right use of the expertise. Everyone knew software development was screwed up in Nokia. Someone with experience in software focussed company should be fixing it, not ditching it. Having said that, it was surprising Nokia still went ahead with the N9 launch (again trying to pump life after writing a death certificate) and continued to invest in Meltemi (which was supposed to have taken parts of Meego). The latter, at least, is expected to be corrected in the latest announcement.

So, is all hope lost ? I don’t think so. Nokia is still a great company and it has turned around before. But, as with all its previous turnarounds, it will need even more painful decisions.

Given where it is, I guess focus is what is needed. Nokia has made a big bet on WindowsPhone and on N. America. Go for it. If the company can make a significant breakthrough in N. America early enough, there is definitely hope. Given that cost pressures remain high, I hope the latest restructuring will clearly bring that focus. Once Nokia demonstrates it can make an impact, maybe Windows 8 based Tablets (and other devices) could be something Microsoft will consider doing with Nokia. Though I am not a Microsoft fan, I think they have something going with Windows 8. It is a great opportunity to bridge between their still dominant Windows base and the new consumers. It may well be a Go for broke ! approach, but well, isn’t that where Nokia is headed anyway ?

Reward is proportional to Risk

No pain; no gain is another way of putting it. There are different ways of investing your money. Put it in a fixed deposit and you can be sure it is there pretty much intact always. Invest it into stocks, securities and the like; you can expect an increase in your wealth. But it can also go the other way and you can lose.

And that is pretty much the same in work. You are always faced with decisions.  There is typically a safe option and one that ventures more into the unknown. How do you decide? Is it always the riskier approach that would benefit?  Not necessarily, but the key is to understand the options and weigh correctly. One of the reasons why a riskier option tends to offer better results is that it goes against the grain. It is much more difficult for the competition to anticipate and gives the opportunity to take a lead. Risk also comes out of uncertainty. And again that is the nature of business. You are never certain of all the parameters. There is a fine line between a calculated risk and plain foolhardiness.  In taking a risk, I advocate an approach of being approximately right. The key message behind this is that you need to understand the impact of changes in your assumptions before deciding on the way to go. Once you can assess the risk, go ahead. A risk that cannot be estimated is foolhardiness.

Strategy is about what you don’t do

Continuing from my post on basic rules. Here’s something I have found people forget.

Most of us have either worked on strategies or have been presented them. I am willing to bet that in the vast majority of cases, the strategy set out what and how something was going to be done. I’d challenge that. Yes, a strategy needs to cover how one would accomplish the objective. However, it is also a fact that time and resources are limited. As with mass, you cannot create these out of nothing. So, when you set out a strategy to do something, make sure you take the time and effort to understand what it will mean giving up. Because there definitely is something. The most common failure I have seen is when a team or person keeps trying to add on to the stuff they are doing. It may be because they want to prove themselves or it is a reluctance to give up something. In Singapore, they call this Kiasuism – loosely meaning “the fear of losing”.

I am sure you have seen companies do a vast multitude of products which do not necessarily differ too much from each other. Goes under the guise of portfolio management. Something I talked about in an earlier post. It is one result of not being willing to give up something.

But the one I love was in a project I was involved in. As more requirements came in, the possibility of deadlines slipping became real. And I watched in amazement as the project team came up with a solution – split up the project into multiple projects. So we had more project managers, the teams were divided and it was expected that it would help deliver all of the projects in time. No reward for guessing where that eventually landed up.

What’s your experience been ?

Matter can neither be created nor destroyed

I talked about some basic rules in my earlier post.

Here’s one of those, one that is the law of conservation of mass. Now, we have all learnt this in Physics. Why am I bringing it up here? Such a basic law is applicable not just in the physical world, but also in macroeconomics. Here a similar concept applies to production and consumption.

In business, it is pretty much the same. At a macro level, consumption income does not vary significantly. There is generally only so much spendable income and there are only so many people to spend.

I recall the boom in the 2000’s. In Europe, where I was then living, 3G licences were being auctioned by governments. Companies paid enormous money for them – existing mobile operators and a host a new ones. And in our company, we were literally drooling at the business to be obtained from this large number of licensees. Not surprisingly, things changed dramatically in a year or so. The issue was simple. Take, for example, in a small country such as Denmark, which awarded 5 licences. All of the winners started out with ambitions to build their own network. But as they progressed, it became obvious that the potential income from the subscribers would not provide the return on investment for five separate 3G mobile networks. Obviously, the number of subscribers was only so much, their disposable income was limited. And needless to say, that is what happened. Mobile operators decided to share the infrastructure investment, suddenly reducing our potential market by 40-50%.

So, if you are looking at a new business opportunity, it is important to understand where that business is going to come from. Your gain generally has to be someone’s loss. And it is often not an obvious one. As the mobile prepaid payments caught on in some of the emerging countries, people gave up other expenditure to pay for their airtime. So, the tobacco industry had an impact, the movie industry was impacted – all as a result of more people now being able to talk more over distances.

I have failed ! And because of that, so has my company

Note : This is a externalised version of a post on the Internal blog. So, colleagues who have have read that, please bear with me.

If you are reading this, I hope it was because the title was provocative enough. Thanks.

Was my failure really the reason for failure in my company ? You decide. While I am going to quote a personal example here, the “I” can well be any of the millions of  employees across the globe. I know you will be to place yourself or someone you know as the “I” here. I look forward to your own experience supporting or disputing my view.

The realization of this failure of mine came when I used a service that had been hived off from my company. I was looking forward to see what the team had done once they were outside and I was shocked. No, it was not the service itself – that had improved a lot. But one of the first things I would have had to do was to break the link of the service with my company and instead use another. (Apologies for being cryptic to avoid breaking confidentiality)

So, what had this to do with me ? More that a year before that had happened, I had identified an opportunity for the company to build a link with 3rd parties that would have built loyalty – that would have led to many services building links to our company rather than breaking them as just happened.

– It was a dream I had – it would be used by millions and millions of 3rd parties, not just by in-house services.

– It was a dream I had – when the competition had not started on that path yet.

– It was a dream I had – when we were the only player who had the reach to have done that.

It was a dream I had and shared as widely as I could. On internal sites that asked for employee ideas. One on One with the senior most executive responsible for this area. In direct emails to other executives.

And it had just stayed a dream ! The new hived off service was a sharp reality check. It was not that we did not have many 3rd parties jumping on, we just lost the easiest reference case we could have had.

Today, that game has been lost. Others have taken the role that my company could have.

So where did I fail? I do not have an answer, just more questions. Was there more I could have done to convince the decision makers? Did I talk to the wrong people? Was I not compelling enough? Was I just plain wrong and would it have remained just a dream ?

The answer to the last question is the only one thing I am sure of now. Every time I use the competing service, I know I was not plain wrong. It was an opportunity that others have now clearly seized.

I know I was not unique. I am sure others in my company had the same or similar idea. I know each of us did what is needed in our sphere of influence and tried to do more outside. And I know most of the effort got lost in the vast jungle of a large company decision making.

And I have heard similar stories from friends in other companies too. And I am sure you know some too.

And therein lays the company’s lost opportunity or the failure I alluded to in the Title of this post.

When each of us employees fail in getting their best ideas across and implemented, it is not just the employee that fails, it is the company.

There are means and methods to really avoid these kinds of failures. The tools are there, the people are willing. Participation in internal social tools offer a clear evidence of the employee’s willingness to participate. But, as in my experience, separating the wheat from the chaff, picking the right ones and nurturing them is hard work.

Companies need to put the effort and resources to make sure the ideas of the many “I”s in the company are heard and responded to!

Value of my MBA

After I completed my MBA, other aspirants used to frequently ask me about the value I got from my MBA. I usually answered with a smile – “The biggest gain is that when someone now bulls**ts me, I can confidently bulls**t back”. That answer would have probably applied to the outcome of my engineering degree too, just in a slightly different context.

But in reality, I was only half joking. I believe that an MBA and for that matter, almost any education, first and foremost equips one to communicate better. A formal qualification is not always needed to make you an engineer or a manager or yet another professional. Watch “Catch me if you can”, a movie made around a  true story about Frank Abagnale Jr. who, before his 19th birthday, successfully conned millions of dollars’ worth of checks as a Pan Am pilot, doctor, and legal prosecutor. Obviously, none of that with formal qualifications.

But that is not to say you have wasted good money and time in the years you have spent picking up those degrees. I have personally gained quite a lot.

But one of the things my experience has reinforced in me is what I call the Basic Rules for good management. Call it common sense, if you will. It is just the ability to recognize that there are some fundamentals that you can measure decisions against. And if you can apply them to the context you are in, that will help you significantly with your decision making.

Rules or guides such as “Matter can neither be created nor destroyed” or “No pain, no gain” apply very well to management decision making. But more on those in future blog posts.

Cofounder Myth

As I contemplate striking out and starting my own business, a common theme that keeps coming back to me is – “there is no such thing as a one man start-up”.
I see the value in the argument. Even if I hold a Master’s degree in Engineering and have led a Product Development team for 6 years, the many years of sales and marketing have left me out of touch with the latest in technology. Sure, I am still confident of engaging in those discussions, but I am no longer able to initiate those. So it made sense that I find a co-founder who would complement me, someone who I can spar with.

Then I came across this blog. Somewhere down that page the blog states :


#1. Cofounder Myth: In the early days, I was consistently told that the first thing I needed to do was find a cofounder. Every investor/incubator/advisor brought this up. I wasted a month searching. I learned that you don’t find a cofounder; it happens naturally or it doesn’t. Don’t force it and don’t waste time searching for someone. After spending a month building the first prototype, investors saw what I could do and I never heard the cofounder advice again.

And that makes sense too 🙂

While I am not totally bought into the idea that it happens without any effort, I think it is not worth forcing.

Compete or colloborate ?

Interesting post that I came across at AAS on Microsoft, Nokia and Skype. Other related posts by Dave Winner and Kevin Fox.

Dave’s recollection of Bill Gates view from 1981 tends to explain why Microsoft got where it is and why it is where it is now.

Essentially, it is one of the basic rules of any business – a business grows very profitably when it is new. Once the market has been established and there is an attractive profit pool – you will have many more companies wanting to drink from the same.

The carriers have had a couple of advantages – the billing relationship and a regulatory one on having a standardized numbering system. These have resulted in a nice income and profit source that has been attracting the various such as Google, Apple, Skype, etc.

Now, things are changing. For one, the opportunities from these advantages are drying out – there is only so much it can grow. Especially, when these are within National boundaries, which are becoming steadily irrelevant. Next, technology advances and regulatory regimes are constantly chipping away at the barriers these have provided so far.

Which brings the question – Is it time for the carriers to be replaced ?

In my opinion, while this seems to be an attractive option, it is far from easy. The biggest advantage of connectivity – an alternative to the simple means of calling a telephone number is going to take to create.

So, in the meantime, the player that can effective collaborate with the carriers has a much better chance of success than the one that does. And on the reverse, it makes sense for the carriers to collaborate with one of the potential competitors. Will that be Apple, Google or the Microsoft+Nokia+Skype combination – I look forward to seeing the answer.