Saturday, May 31, 2008

A contrarian view on the Tata Nano: Five years at most


This is a big year for Tata Motors. Nano has produced the $2500 car, taking the world's-cheapest-car title from the Chery QQ3 from China which retails for $4000-7000. This is indeed an "innovation" in the automotive industry that has the world raving.

Congratulations to Tata, and thanks for thinking (always) about India's poor.

However, I predict that the Nano is unlikely to grow in sales for more than five years for three reasons.

Firstly, apart from Toyota (known for its quality), no car company has managed to straddle everything from the People's car to the world's most luxurious. That strategy has been tried and failed by many including Fiat and Ford. Cheap and Luxury simply don't go together, and its hard to keep them apart. The automotive industry is about scale and purchasing power. When Ford went on its buying spree (Volvo, Jaguar, Land Rover) it soon started to mix up Jaguar and Ford components. That was ok for a while because it improved the Jaguar's notoriously poor engineering. But when Ford brought in its designers and stylists, and then tried to mass market the car, the reverent brand fell fast from grace. I believe the Tata will face similar strategic challenges. How does the culture of the Nano survive under the same roof as the reverent Rover and Jaguar brands.


Secondly, eventually no one wants to be seen in the "cheapest" car. The Nano will sell for a while in India (five years tops), and allow many many people to own a car. The Nano is a remarkably nice looking car from the outside for its price. However, five years down, unless the car improves substantially in style (and loses the "extremely cheap" label, I believe sales will start to fall sooner than we think, following the follow the route of Chery's cheapest car (which fell 26% this year). The Nano will likely acquire a stigma, or be a punchline. Few will want to be seen in the world's cheapest car.

Remember the Scojo Foundation which brought affordable reading glasses to the world's poor. Although Scojo started selling $1 plain glasses and $3 glasses with better design, the poor incredibly preferred to buy the more stylistic glasses. No one wanted to be seen in the not-so-nice-looking-but-cheap glasses. The poor like to be fashionable too. Scojo has "improved" pricing, along with better designs. The cheapest glasses are now $3.

Lastly, the Nano is no guarantee that people will stick with Tata for their next car. Its more likely that they won't. Toyota and Honda have incredible brand loyalty because they make high quality reliable cars. However, GM and Ford experience a high turnover; a majority of their customers leave and don't come back (unless they give these massive "cashback" promotions). Unless the Nano is well made and highly reliable like Japanese cars, the Nano will help other carmakers more than it helps itself.

So while the Nano is great right now, does wonders for the Tata Group in terms of free global PR, is a great sell for the power of India's elegant-and-value-driven innovation, it may not be the financial success that many believe. Unless Tata enforces Japan-like quality early in the Nano.

The PR for Tata, India and the inspiration to India's innovators is already worth several billion dollars.

However, they may not recover the financial investment in five years.

Thursday, May 22, 2008

Manchester United: UEFA Champions 2008


My team won the European Cup. Why does the world's most important club championship result in two English teams in the finals, yet we cannot even qualify for Euro 2008. Some things are a mystery. I do have a solution: Bring Sir Alex Ferguson to lead the English team and it will happen.

Saturday, May 17, 2008

No More Snap Previews

It seemed like a good idea when I first saw it. Now I realize that this is a widget that still needs development. I'm taking it down. I hope the inventors will go back to the drawing board and figure out a way to make this gadget useful.

Here's someone else's perspective on Snap Previews.

Friday, May 16, 2008

The Apple Store Has Opened in Boston !

The Apple Store (billed as the largest Apple store in the world) opened yesterday. They were giving out 1500 T-shirts. Wonder what it said. I didn't get to find out.

Its definitely a large store, though most of the space is quite empty. I checked out the Mac Air today. Very cool.

This area of Boylston Street is turning into Boston's hottest real estate. First we got the Apple next door. Later this year the Mandarin Oriental opens across the road. Watch real estate prices rise. On a positive note, its easier to give directions to our office.

Invented Here - The Innovators Marketplace

The Innovators Marketplace: A one-stop-shop
• One room set up with everything you need to start a company
• Find out or meet funding sources – Grants, Angels, Government Funding and VCs
• Get advice from Serial Entrepreneurs in biotech and medtech
• Meet companies who will help you engineer and design drugs and devices
• Find out what to pursue, or meet top biopharma, devices, diagnostics and tool companies and their venture arms who will buy, license, or fund what you are working on

MA Life Sciences Innovation Day 2008

I wanted to update you on what I believe will be the most important Lifesciences event for entrepreneurs and innovators in MA this year.

This event, titled Massachusetts Life Sciences Innovation Day on June 3, 2008 at the Sheraton, Boston. This event is going to be a flagship event for showcasing and celebrating research, innovation and entrepreneurship in MA in biotech, medtech and diagnostics. This event is a first-of-its-kind because all the organizations in MA in Life Sciences are involved (Mass Biotech Council, MassMedic, Mass Tech Transfer Center, TiE Boston), along with all major universities and entrepreneurial organizations.

Selected Highlights
• Craig Mello, Nobel Laureate 2006 for the discovery of RNA interference
• Philip A Sharp, Nobel Laureate 1993 and Co-Founder of Biogen
• James Collins, Professor of Biomedical Engineering, Boston University and McArthur Fellowship Recipient
• Josh Boger, CEO Vertex Pharmaceuticals
• Christoph Westphal, CEO, Sirtris Pharmaceuticals, Former CEO, Momenta Pharmaceuticals
• Alan Crane, CEO Tempo Pharmaceuticals and former CEO, Momenta Pharmaceuticals
• Ganesh Venkatraman, Founder and SVP, Momenta Pharmaceuticals
• Amar Sawhney, Founder & former CEO, Confluent Surgical, CEO, I-Therapeutix

The Innovators Marketplace: A one-stop-shop
• One room set up with everything you need to start a company
• Find out or meet funding sources – Grants, Angels, Government Funding and VCs
• Get advice from Serial Entrepreneurs in biotech and medtech
• Meet companies who will help you engineer and design drugs and devices
• Find out what to pursue, or meet top biopharma, devices, diagnostics and tool companies and their venture arms who will buy, license, or fund what you are working on

The Research Showcase
• Meet 20 Faculty members, Principal Investigators and Innovators from the top research laboratories in MA
• Universities represented include Boston University, Children’s Hospital, HST, Tufts, Beth Israel and MIT
• Get insights into what the top labs in Massachusetts are doing; work with them to develop your own ideas

Event Links
About the Day http://www.mattcenter.org/mlsid2008/home.html
Registration: https://secure.massbio.org/early_stage_conference/

Pricing
• $50 – All Students and Post-Docs
• $185 – Members of selected organizations (MTTC, TiE, MBC, CIMIT, MassMedic, Partners)
• $225 – Everyone else

MALSI Day Advisory Board
• Mara Aspinall, Senior Advisor & President, Genzyme Genetics
• John Brooks, Founder, Prism VentureWorks
• Robert Creeden, Partners Venture Fund
• Robert Coughlin, President, Mass Biotech Council
• Rainer Fuchs, Vice President & Head of Incubator, Biogen Idec
• Michael Greeley, Managing Partner, Flybridge Ventures
• P Laxminarain, President, Codman/Johnson & Johnson
• Amar Sawhney, Founder, Confluent and CEO, I-Therapeutix
• Thomas Sommer, President, MassMedic

In case of questions, please contact
• Anupendra Sharma, Partner, Siemens Venture Capital and TiE Life Sciences Chair; anupendra@yahoo.com (Event Chair)
• Abi Barrow, MTTC Director; abarrow@umassp.edu, (Event Chair)
• Laura Allen, Director, MassMedic allen@massmedic.com
• Imran Nasrullah, Chief Business Officer, MBC imran.nasrullah@massbio.org

Who will attend ?
Everyone connected to the entrepreneurial ecosystem in biotech, medtech and diagnostics. It is especially focused on the entrepreneurs, innovators and post-docs who will create the next generation of companies in the State. This is an opportunity to meet serial entrepreneurs, venture capitalists, angel investors as well as many top leaders who have created companies or commercialized technologies coming out of laboratories and ideas. The day's event will bring the major companies in MA, key life sciences funding sources including angels, foundations, venture capitalists, grant experts, Federal Government and philanthropists. We’ll supplant this with consultants, lawyers and sector experts who can help you find answers faster.

Wednesday, May 7, 2008

Who Will Tell the People?

By THOMAS L. FRIEDMAN
(New York Times / May 4, 2008)

Traveling the country these past five months while writing a book, I’ve had my own opportunity to take the pulse, far from the campaign crowds. My own totally unscientific polling has left me feeling that if there is one overwhelming hunger in our country today it’s this: People want to do nation-building. They really do. But they want to do nation-building in America.

They are not only tired of nation-building in Iraq and in Afghanistan, with so little to show for it. They sense something deeper — that we’re just not that strong anymore. We’re borrowing money to shore up our banks from city-states called Dubai and Singapore. Our generals regularly tell us that Iran is subverting our efforts in Iraq, but they do nothing about it because we have no leverage — as long as our forces are pinned down in Baghdad and our economy is pinned to Middle East oil.

For those who care about America, the rest of this outstanding piece follows here.

Sunday, May 4, 2008

The Solar System

My son's six. Two week's ago, a kid's dad in his class took apart a laptop and showed the class what was inside. My son came home talking about mother-boards and batteries. Impressive !

We presented the Solar System to the kids this week (my wife's excellent idea), managing to hold the kids attentive for half an hour thanks to the Smithsonian model, some good photos, aliens, and some very bright and curious children!

I learnt a lot in the process. Neptune winds blow at 1000 miles an hour. The ice in Saturn's rings are what causes the pretty colors. The surface of Venus is lava. Fascinating stuff. I must admit its easier presenting to entrepreneurs, VCs and college kids - especially when your son is in the audience.

I'm sharing my presentation in case you want to use it. I've uploaded it here. We need to expose school-going kids to science and math at every opportunity. The text for the presentation is also provided.

MA Life Sciences Innovation Day - June 3, 2008

I wanted to update you on what I believe will be the most important Lifesciences event for entrepreneurs and innovators in MA this year. This event, titled Massachusetts Lifesciences Innovation Day on Tuesday, June 3, 2008 at the Sheraton, Boston. This event is going to be a flagship event for showcasing and celebrating research, innovation and entrepreneurship in MA in biotech, medtech and diagnostics. (see highlights below). This event is a first-of-its-kind because all the organizations (MBC, MassMedic, TiE Boston and Mass Tech Transfer Center) in MA in Life Sciences are involved, along with all major universities.

Selected Highlights
• Craig Mello, Nobel Laureate 2006 for the discovery of RNA interference
• Philip A Sharp, Nobel Laureate 1993 and Co-Founder of Biogen
• Josh Boger, CEO Vertex Pharmaceuticals
• James Collins, Professor of Biomedical Engineering, Boston University and McArthur Fellowship Recipient
• Amar Sawhney, Founder & former CEO, Confluent Surgical, CEO, I-Therapeutix
• Christoph Westphal, CEO, Sirtris Pharmaceuticals, Former CEO, Momenta Pharmaceuticals
• Alan Crane, CEO Tempo Pharmaceuticals and former CEO, Momenta Pharmaceuticals
• Ganesh Venkatraman, Founder and SVP, Momenta Pharmaceuticals
• 10 thought leaders, innovators and successful entrepreneurs
• An Innovator’s Marketplace – everything you need to start a company
• Renowned Futurist Panel looking at the next 30 years
• Showcase of research at MA laboratories
• Live panel evaluations of new ideas
• Several networking sessions

MALSI Day Advisory Board

• Mara Aspinall, President, Genzyme Genetics
• John Brooks, Founder, Prism VentureWorks
• Robert Creeden, Partners Venture Fund
• Robert Coughlin, President, Mass Biotech Council
• Michael Greeley, Managing Partner, Flybridge Ventures
• Rainer Fuchs, Vice President & Head of Incubator, Biogen Idec
• P Laxminarain, President, Codman/DePuy; Johnson & Johnson
• Thomas Sommer, President, MassMedic
• Amar Sawhney, Founder, Confluent and CEO, I-Therapeutix

General Georges Doriot: The First Venture Capitalist

General Doriot is known as the father of the venture capital industry. I learnt this last week at a very interesting afternoon session discussing the future of Venture Capital in MA run by Vinit Nijhawan at ITEC/Boston University.

Georges Doriot is an interesting story. He was a Frenchman who became a US citizen, Doriot was born in Paris in 1899. In 1920, he came to the US, and got an MBA got an MBA in the USA, and became a Professor at Harvard Business School in 1926. He became a U.S. citizen in 1940. He joined the Army, working on military R&D and Planning, and was promoted to Brigadier General. He returned to Harvard in 1946, and founded the American Research and Development Corporation (AR&D), the first venture capital firm, raising $3 million. AR&D went public and invested in 150 companies. In 1972, AR&D was merged with Textron after investing in over 150 companies. One of his investments was in Digital Equipment Corporation (DEC), one of his most successful investments. Doriot also founded INSEAD in 1957. He died of lung cancer in 1987 in Boston, Massachusetts.

France. Harvard Professor. Publicly traded venture capital. I would never have guessed that such an important industry would have started this way.