The Great Indian Marriage - An Open Case Study

What follows is a narrative, referred to in management schools usually as a case study. It describes a managment situation in a very interesting (to me) area to which you, the reader, is expected to respond. Through remarks and the thoughts of the protagonist I have tried to give a flavour of the lines along which one may think. Frameworks, trends, creative ideas - all are welcome. Responses may be posted as comments. The entire problem and the solutions that you propose will be treated as open source - freely shareable in their entirety, with contributors being acknowledged and credited.

Full credit to Chetna for the idea and for suggesting that I write a blog on it.

Bharat Singhal walked up to the window. The cool breeze from his 21^st floor office was quite soothing. The 37 year old CEO of Sampoorn Vivaah Ltd pondered over his first big assignment.

Sampoorn Vivaah was an entrepreneurial venture borne out of Bharat’s vision of providing an end-to-end solution for what he always considered to be the ultimate Indian management situation – a marriage. The idea was to have a presence at every stage of the process – helping people search for their perfect match, introducing the families, the engagement, inviting people, rituals, celebrations, themes, dresses, honeymooning and so on.

Apart from such traditional things, newer trends such as internet websites and the dramatization of incidents from the bride and groom’s lives had started turning marriages into an art of story-telling – a larger than life event which required flawless planning and execution at every stage.

He also noticed that increasingly people now favoured made to order marriages – they were taking a more active interest in each and every aspect and customizing it; Standardization was out, personalization was in.

Given India’s favourable demographics, expanding economic growth and the culture of lavish spending in marriages, he was convinced it was an idea that would work.

And he now had his first big client – the 27 year old son of a prominent Marwari businessman from Jaipur was to get married. One of his friends who was a favoured guest in that household had recommended Singhal to them. Indians by nature are uncomfortable with institutionalizing what are seen as family events. Times however were changing and more and more people were ok with seeking professional expertise in managing such events.

This was as big as it got. Money would not be a concern. It being his first assignment, he was determined to avoid any goof-ups at all costs. It would be a trend setter as far as marriages were concerned. He knew that not everyone could afford to have a marriage on that scale. He wanted to make sure that many of the ideas and steps could be modified and replicated to suit different budgets.

He glanced over the hurriedly scribbled notes. So many things to be taken care of, he thought. What would be the different steps involved? How would he go about looking for the appropriate match? How would the entire process be conceptualized? Could there be a framework for it? What tools would he use for the different stages? What were the latest trends that people were following? What new ones could be set? Creative, appealing, dear to the Indian heart?

This is no longer only about Mangalyam Bhagwaan Vishnu, he thought, as he sat down to work...

Personal Experiences - the next big financial market?

"Everything that can be invented has been invented." - Charles H. Duell, Director of U.S. Patent Office, 1899

I am sure Mr Duell would disagree, 110 years later.

Throughout history, as needs and technology have evolved, financial markets have also developed seeking to derive returns from any asset possible. This has been particularly true in the last two centuries.

Futures developed in the 19th century as a means of hedging against price fluctuations in agricultural commodities.

From there, the evolution of financial markets has borne a fanciful resemblance to Maslow's Hierachy of Needs.

They have become more and more ideated and less tangible.

Commodities, equities, bonds, art, water, power, carbon credits all are traded.

One of the latest things in this list is death. (Read this: http://www.nytimes.com/2009/09/06/business/06insurance.html?_r=2 )

Another brilliant financial innovation has been options. Essentially, people had actually figured out a way to price probabilistic rights!

There are assets which generate intrinsic returns. A business is one of them. A business adds value to a certain set of raw materials, profitably sells them to customers and hence grows and generates returns.

Then there are assets which generate returns because the price which people are willing to pay for them increases. One example would be Art.

With the advent of the Internet, a very powerful set of tools have developed which enable people to construct and disseminate personal experiences. Its a second Renaissance of sorts with the available media of information dissemination being directed towards individuals and their experiences. Blogging, Youtube, Facebook, Orkut, Gmail, Twitter, so on and so forth.

Marketing has and will continue to become person centric. In that sense, the set of personal experiences as encapsulated by a person will become an asset that yields returns. It will be possible, before long, to monetize personal experiences.

Which begets the question in my mind - how long will it be before the army of financial engineers and quantitative wizards turn their attention towards developing a financial market out of personal experiences?

How long will it be before they figure out how to price how much personal experiences would be worth in the future?

If this sounds ridiculous, read on.

I base the idea on two key things.

The first is the possibility of standardization and packaging of personal experiences from a financial view point, in terms of risks and returns.

The second is the set of tools which will enable it to be done.

Anyone who has read about the subprime crisis of 2007 and the subsequent 2008 bust would have read the term Mortgage-Backed Securities etc

Without getting too technical, I would say that MBSs refer to investment assets in which the returns were obtained from the people who had availed of loans to buy homes with the homes themseleves as collateral. Several thousand mortgages could be packaged together and sold to investors who had money to put in.

This was a paradigm shift in financial markets. As beautifully described by Michael Lewis in "Liar's Poker", for the first time the asset side of the balance sheet could be tapped into. As long as the home loans could be standardized and packaged, they could be sold to investors.

I am confident that mathematics will evolve to the point where in it is able to price personal experiences in such a collective pool and turn it into an investment.

Coming to the tools which will enables this to happen.

The Internet is the bane of Classical Economists. This is because of two features that it has: One is what is called " positive network externality". That is, higher the number of people that use the Internet, the more is the benefit that each user can derive.

The second, more importantly, is Zero Marginal Cost (not for the Internet in itself, but for products or services that are sold and disseminated through the Internet). Zero marginal cost means that the cost for producing an additional unit of the product or service is zero.

This causes problems because classical economics state that in perfect competition, demand and supply match off at the point where Marginal Cost equals the Market Price.

This can obviously not work for Internet based Products / Services, since Market Price will not be zero.

The Market Price, then, must be the price that people are willing to pay.

And people are willing to pay for personal experiences.

Naturally, WHAT they are willing to pay will change over time. This is where financial markets will step in.

I must emphasize - personal experiences have been marketed and sold since times immemorial. Paintings, books, music, photos, blogs, journals, newspapers - all of these capture them.

My point is that financial innovation will ultimately end up intersecting with technology to create the next big punter's paradise in this field.

Google, that mecca of innovation, for example, has come out with Wave (no I do not have an invite)

To quote Google:

"Google Wave is an online tool for real-time communication and collaboration. A wave can be both a conversation and a document where people can discuss and work together..."

How long will it be before some financial whizkid figures out how to package a set of Google Waves and sell it to a Japanese pension fund which thinks this set of experiences may be worth more in the future?

Not too long, is my guess...

XL Memories II: SACrificial lambs...

The Maharashtra state elections yesterday coupled with a chat session with an XLRI senior toggled a chain reaction of snapshots from the past. Another indifferent turnout left me feeling a bit sad and indeed irritated with those who did not vote.

I did vote. I voted for a candidate with a post-graduate degree and no criminal charge. He is unlikely to win unfortunately. So what. I took part in the process.

For XLRI taught me, amongst other things, to respect and to have faith in a democratic process. I have experienced how powerful it can be, first-hand.

For those who would not know, XLRI has a body known as the Student Affairs Council. (No, its not a committee which aims to keep track of philandering educatees). This Council (SAC for short) consists of the General Secretary and representatives from each of the classes. It is the apex student repesentative body and as such, case default for all student problems and grievances.

Circa early July 2006. As a typical newbie MBA, after examining my "skill sets" and deciphering how best to "leverage" them, I concluded that I needed to apply for elections to the SAC. I would be a harbinger of change. I would be a true leader.

Over discussions with a senior SAC member at Chhappan Bhog (a popular snack outlet in Jamshedpur) I made up my mind to apply and submitted my nomination.

Instructions were absolutely clear. There was to be no campaigning. (This ain't no engg college). Each candidate would have some time to present his candidature. (known as the soap box; the term probably originated from Hyde Park, London where public orators would stand on soap boxes to deliver impromptu political speeches). That would be followed by a Question and Answer session. May the best man win.

As expected, I was not the only enthusiastic contender. There were a large number of people for each division. I sat nervously anticipating my turn. I had prepared a list of the issues which I intended to focus on.

When I was finally called, I was quite shaky. Staring at 180 faces, most of them unfamiliar and asking them to vote for me was, to put it mildly, unnnerving. I blurted out the points that I had noted, reading them almost verbatim at times from the paper in my hand. I hardly looked at the people present.

Q & A began. And I learnt the most important lesson of leadership. Just when I thought all the questions were done and was about to walk back to my place, a person whom I will call Revolutionary Vampire (if you are reading this, absolutely no offence meant) got up and asked me: "How do you expect to represent us, when you are not even prepared to look at us?"

Ouch. I thought Mallus were nice people. I was stunned. I had no answer. I knew then and there that I had lost it. The senior SAC members who were moderating Q & A told me not to answer the question, but that was not the point anyway. I came back to my seat, feeling listless.

When the process ended, we were each asked to leave a person behind who bear witness on our part for the counting of votes. I picked on one of the few people whom I knew at that time - Nirkesh Mulundwala (keep guessing, folks!).

Finally the results were announced. 6 deserving people had won. (As later events proved, they were deserving). I gathered the courage to ask Nirkesh how many votes I had received.

"2" he replied.

2 votes. Not as bad as I had expected. To this day I don't know the kind soul who voted for me.

"Ah well" I consoled myself. "Public life is not meant for everyone"

Cut to Jan 2007. January is a transition period in XLRI. The senior batch typically lazes around in the JLT, getting photographs clicked in arbitrary poses, while the junior batch starts shaping itself up for the year ahead as the new senior batch. Entering Grihasthashram.

I was with the Lord of Destruction in his room. (One of the 6 people mentioned above).

"Are you applying for SAC this time?"

"No no, I failed miserably last time."

"Things are different. People in the batch know you now. You have helped everyone a lot with acads"

"That doesn't matter. I still am not networked enough"

"People don't want a high flyer. They want someone whom they can trust enough to get the job done"

"It won't work..."

Well, I applied again.

Life one year later in XLRI is quite different. Everyone knows everyone. Bullshitting doesn't work.

I knew the real issues this time. I knew what to focus on. I knew the questions that could be asked. And I didn't need the piece of paper.

Still, the past creates its own overhangs which are not easy to get rid of.

I don't recollect feeling more nervous ever in my life. Two people (who shall remain unnamed) were kind enough to accompany me on a walk in the bylanes of Circuit House. Much of the time was spent in anticipatory silence. The cool bracing air did lift my spirits.

I entered the classroom and took a look at the other 2 contenders (2 out of 3 would make it, so not a bad ratio one may think). Number 1 was the Lord of Destruction. Number 2 was CRISPy Bong - a person whom I do not know very well personally but have high respect for. The kind of person who would take the shirt off his back and give it if needed. These were the sort of competitors you would much rather give up against in all humility, than fight to the finish.

Backing out was not an option now. I stated my points. Looking at the faces in front of me, each one which had certain qualities associated with it. Unconsciously trying to connect with them.

Trust me on this guys. I am here to do my best. I won't screw up.

Q & A followed. I tried my best to answer with raw honesty.

Time was up. Votes were to be cast. People looked as inscrutable as ever.

Did I manage to strike a chord with them?

Ganjeshwarnath was my counter this time. I waited for the few minutes of counting outside. It felt like an eternity.

Finally, the people inside came out. I looked at Ganjeshwarnath, a standing question. He broke into a smile.

Before I knew it, I was in the air, a dozen arms holding me, spread eagled and legs flying around, subjecting my rear to a brutal volley of kicks, cheering and shouting.

Yes, my vote count this time was slightly higher than two.

B(e) for Mumbai...& Maharashtra...

एक छन्निच्या एक घाव तरी
बसू द्या रे माझा दगडा वरी
आज इमारत जुनाट झाली
मरतील जीव अकारण खाली
म्हणुनी आदि या
पाडून टाका देऊन धक्का ...

What's in a name? That which we call Mumbai by any other name would still be as intoxicating...

Let's focus on the real issues, gentlemen. Like power shortages, farmer suicides, naxalism, infrastructure, water management, terrorism, congestion, slum rehabilitation...

Or suffer the consequences. You can fool all of the people some of the time or some of the people all of the time, but you can't fool all of the people all of the time.

Wake up, Raj...