YBB, Ugenie and market effeciencies

When I finished college, all I wanted to do was to go and become "geeky" and work on the Linux Kernel. I came very close to it when I got a "First Day First Job" campus offer with Veritas.

Looking back at it, I can't help let of a big laugh. I was never good at anything closely related to systems. The two courses on Systems related stuff that I did - one in DU during undergrads - and the other in IITK during post grads were complete bombs, in the sense that I got almost my lowest marks of my entire college life. I had never even opened and looked at Kernel code, and almost never worked on Linux consistently. Still, I wanted to go write Kernel code. I guess it was just the extremely geeky effect it creates on you, when you are in college, to talk about systems. I still meet a lot of guys just out of college speaking the same tone.


Now, with about 2.5 years in the software industry, I have not written a line of Kernel Code and I still feel very satisfied. And a major part of the satisfaction comes in the fact that I have worked a good part of that time in Technology that addresses market efficiencies. Whats that? you may ask.

In a free market, every vendor of a product is free to sell his goods/services at whatever price he wishes to, provided he gets customers. As it happens, for something as commoditized as books, you get the same book at different prices from different vendors. Other factors such as location, service quality, merchant perception etc add up to allowing multiple prices to co exist. This is called market inefficiency.

Black Monday Shopping Day

Being an Indian and having never been out of India, I have never really appreciated the "Holiday Season" in the US. It is quite amazing that the holiday season economics can play quite a big role on the bottom line of many consumer ended retail organizations. An article describes how one day - "the monday after thanksgiving" can alone make a difference to whether a online retailer makes his targets for the year or not. Given this background, Ugenie has also been working hard to gain some traction out of the holiday season. With this in mind, we just released a brand new Home Page. Check it out.

If you happen to have any suggestions/feedback/comments, mail to me at shreeniwasiyer {at} gmail.com.

Inflation, growth and IT salaries

I recently received an email on a list talking about how "we" (specifically targeted towards IT professionals) can stop inflation by not spending money, by not going to cinemas, restaurants, cafes, by not booking a house etc. He also goes on to talk about how the current inflation is being caused primarily due to high spending by IT guys who earn a lot by working really hard and working night-outs and by being away from family etc. He also talks about how if we decide to not visit restaurants etc for one month, inflation will come down etc. For your reference, a copy of the mail is here. I shot back a mail with appropriate response.

I thought this should make an interesting read and should cook up an interesting debate or two. I have more ideas on this topic and I shall be writing more about this.

I don't know who wrote this email, but I am sure, he knows very little about economics - certainly not about the economincs of consumption, growth, inflation etc.

Firstly, the IT guys earnings is not because we sit in the night away from relatives and functions. A lot other professionals also do that - CAs, Lawyers, Doctors, Journalists etc. We earn higher because of the demand for good software and the way software has been priced. On one hand, many companies made money through licensing, while a lot of others made money through innovative distribution mechanisms and revenue models. Whatever said, it has nothing to do with our night outs. Night outs just happens to one of the many lifestyle choices we software guys have made, nothing to do with how much we earn.

Secondly, India is almost a free market today. Every company has a right to enter the market, exit it, sell and buy goods and price it at whatever they wish it for. Eventually the market is what is deciding the prices for all goods and we IT guys form a very small section of this market. The market is being driven up by a consumption growth fuelled by the Govt choices of keeping interest rates low and it is a result of the low growth 90s that the Govt is pushing for growth.

If you talk about stifling inflation, then growth will also be equally hindered. Growth and Inflation are two sides of the same coin.

As for the real estate boom, it is again the result of open market economy driving up demand and supply is yet to catch up. I understand that there are a lot of people with easy foreign earned money who might be pushing up demand in this section, but it is quite a localized phenomenon nothing to do with what we IT guys earn or do. Real estate boom-bust cycles have been happenning for the last 100 years - nothing new about it.

Real estate pricing is exactly the way any other good is priced. You market it one way and you charge in another. Same when you buy a bike and same when you get a loan. And to be frank, the same way Software companies charge you separately for trial, installation, upgrades, maintenance etc. It has nothing to do with how much IT guys earn.

Lastly, todays rich and the spendy people are fairly distributed among a lot of industries, not just IT. People from Insurance, Manufacturing, Finance, FMCG etc are making as good money as we are, just not in the same volumes. And there is also the big section of business families who still retain and grow their wealth much faster than our salaries. If you happen to hang out among particular restaurants in Bangalore, you might be getting the illusion that software guys occupy 70% restaurants. Thats just rubbish. I would challenge the guy to visit 5 restaurants in 5 metropolis in the country and take a survey and prove I am wrong. I am sure this guy can't.

This mail seems the result of an extremely frustrated IT guy who does not know how to manage his money and most probably fritterring it away. He doesn't know a thing about economics and just shooting off his mouth.

Be careful about such mails.

Ugenie beats Darya Ganj

I studied at SGTB Khalsa college, University of Delhi (DU) during my bachelors. A lot of people did not hold DU in that great an esteem for technical or engineering studies. But I would say I was blessed to have spent 4 years in DU. The reason why I liked DU was that somehow, the structure of the courses was such that left you a lot of time to a lot of others things.

For me, the extra time was primarily spent in taking tutions ($pocketmoney$), having long rounds of debates, discussions and dumb charades at International Student's Hostel (ISH), watching HBO (yes, during those days, HBO programming would beat Star Movies by a mile and a half) and reading books.

Of all the things mentioned above, the last activity was particularly expensive. From the 3 maths tutions I would take, I only earned Rs. 750 (later on I used to get Rs. 1050) and a good part of it was spent on canteens and eatouts in the campus. So, exchanging books with friends and using the library to the maximum became the norm. In spite of the all these arrangements, the craving to browse through a book market and picking up a not-so-popular but interesting read remained.

It is this gap that Darya Ganj Sunday Book Market used to fill up. It was a market held every Sunday on the stretch between Ambedkar Stadium and Jama Masjid and used to primarily sell books. These wouold be run down second hand books that could not be sold from the normal used book shops. These were bought for a pittance by the hawkers and used to be exhibited/sold at the Darya Ganj market.

The price at which you bought these books was directly propotional to the bargain you could drive and it was always a pleasure to negotiate out a good book. It was here that I went down to hunt for Bjarne Stroustrup's "The C++ Programming Language" second edition. I couldn't find the second edition, but found a good condition first edition (List price. Rs 220 or so) copy. The price of a brand new latest edition was Rs. 350 in the market and this guy quoted this for Rs. 80. I started bargaining at Rs. 20 and we finally closed the deal at Rs. 40. I handed him a Rs. 100 note and since he did not have change, he accepted the Rs. 34 that I had as change. So, I bought it for Rs. 34 or $0.75.

That was in 2000 and now, in 2006, I work for Ugenie, the next generation shopping comparison engine. I thought it might be worth checking out the price of the same through our site and see what I get. Surprise of surprises, I found it at $0.38!! Of course, that is exclusive of shipping, but neither did I pay any shipping during my purchase. This is the first time in my life that I have seen somebody quoting a lower price than quoted by Darya Ganj.

uGenie Launched

The company for which I work - ugenie - went live for the public last night. We have some reviews at Techcrunch and some comments thereafter. There is an interesting podcast interview with one of the founders: Harish Abbott by India’s Podcaster Kamla Bhatt at http://kamlabhatt.com. Red Herring has written about us, so does GigaOM. StartupSquad writes about our coupon search.

Play around with it and if you think you want to contribute to uGenie's dream of building a great shopping comparison site, then join us.