This is a test post from my phone. I’m pretty impressed with how it works. In fact it is so good that I think it can be used for all my posts in the future.
Hopefully, this will increase the number of posts I will be able to put out. considering the stuff I think number is zero, I guess anything would be better.
blogging from cell phone Tuesday, May 29 2012
General stuff 9:42 pm
This is a test post from my phone. I’m pretty impressed with how it works. In fact it is so good that I think it can be used for all my posts in the future.
Thinking and computing how human beings remember –II Sunday, Nov 6 2011
Speculation 10:39 pm
This is part II of the post that I began a couple of days ago. In the previous post, I covered how human beings remember, and also to a certain extent, how computers work.
So now, lets cover some more complex memories. How do we remember things like say Newtons First Law of Motion? Oh wait, I know this one. “Any body remains in a state of rest or in a state of uniform motion in a straight line unless acted upon by an external force”. It took me a couple of seconds to remember this, but I think it’s a pretty good definition.
The definition of Newtons First Law of Motion is a pretty standardized thing. It involves a sequence of words which are in a very clear sequence and make absolutely no sense if you do not put them in the right order. I can’t remember this if I put it in my splendid data warehouse of my previous post. If i try to remove any pieces of data in this definition in the interests of quicker recall, I will screw up the meaning itself, which just would not do. So how is it done.
Again, the mechanics of it are probably beyond my abilities. Something to do with REM Sleep for all I can tell. But conceptually, we can think of this procedural memory or sequential memory more in terms of our standardised data warehouses that exist today with computers. If a computer were asked to quote Newton’s First Law, I am certain it would do a far better job than your humble blog author here.
This is a part of information retrieval that the computer is inherently better than human beings. We suck at definitions and tests. It took me almost 15 days of slogging 4 hours a day to memorize the key parts of my commerce textbook. And yet, the only part of it that I can remember 14 years later is “Money is a medium, measure, standard and a store.” That is pretty bad, considering I can still do a 10th standard Physics Paper today and expect to at least get 75-80%.
So what makes commerce so hard to remember and physics so easy to? Is it because I use physics every day, and commerce never? Well, that does not wash, because I work in a bank! The closest I get to physics is the advertisement for Physics Tuition’s that I see while standing and waiting for my train to take me to work! In my case, I suspect it’s because I genuinely learnt the concepts behind each of those physics definitions I memorised. So, I understand that uniform motion in a straight line can be expressed as similar to a state of rest in an ideal world, however odd it may seem at first glance.
In someone else’s case, this might be completely different. They might consider the 10 features of a joint stock company to be so logical that they might not be able to understand why I could not remember them. (My mom is one such example). But once I get this insight, the rest of my theory is now obvious. Even in cases where we memorize extremely long sequences of events, long-term recall is ensured by understanding of the basis of such a sequence. Else it would seem exceedingly unlikely that any person would be able to memorize and retain the memories in a loss-less manner unless they either understand the concept/context of the memory perfectly, or if they relive the memory so often that its brought into the intrinsic data warehouse explained in my previous post.
One final example to belabor the point. If someone were to ask me what is 12 times 12 I would be able to answer 144 without a second thought. But thinking about it, the concept of arriving at 12 times 12 is quite laboured. If I tried doing it from first principles, it would take me at least 5 minutes to re-understand the concept, and then to apply it to this specific case of 12×12. This is the fundamental difference between the “intrinsic” memory of the brain, where we store our most our automatic responses, and the “learned” memory of the brain, where we store corollaries, and concepts that don’t need reusing all the time.
Now, this does not really add anything. It’s just a neat (in my opinion) understanding of the way memory works. But the key is if someone were to figure out a way to segregate these memories, build short-term data warehouses that computers could access instantaneously and “guess” answers while they search their complete data banks to get the “right” answer, we would have a pretty neat form of AI. Now, I have not seen Watson, who is supposed to be the computer who is the Jeopardy Champion, but maybe Watson’s AI has this sort of guess algorithm, where if Watson has an answer which is significant to 2 sigma, he presses the buzzer.
I have no clue as to how AI algorithms and machine learning theories work. But if the any of them use the thought process that I have set out, it would be intriguing to see where it would finally end up.
P.S: If you, oh reader do know AI programming and think my views are hokum (or otherwise), I would love to be told so. I would love comments on this topic, especially as my own knowledge of this field is so inadequate.
Thinking and computing — How do human beings remember? Thursday, Nov 3 2011
Uncategorized 11:54 am
Yesterday, I spent some time with a couple of friends trying to find an answer to one of man’s oldest questions. “How do we think and remember?”
First off, let me say this. If you are looking for mysticism and godly type stuff, this is not the page to visit. Second, these thoughts are my speculations. I have no background in this stuff so if you, oh fine reader are an expert and know more than me, please do enlighten me. I cannot pretend an expertise I don’t have.
If any of you have queried computer databases, you have probably sat twiddling your thumbs while the database looks through every row and column of the entire data set trying to find the relationship that you are looking for.
But if you ask a person, “do you know that guy?”, the other guy would probably be really quick at figuring out if “that guy” was really known to him or not.
If you think about this, its amazing. Modern hard discs can parse through a few hundred Megabytes of data in a couple of seconds and can literally do trillions of operations every second. And here, a humble human being can parse through all the data points that make up his/her memory and remember a face or an incident.
I am not going to try to figure out the mechanics of how the brain gets to parse through its data banks. I am sure it has to do with synapses and neurons and proteins and stuff. But I am going to try to look at it as a data manipulation problem. Assuming the brain stores a 100 billion bits of information, and that it would take a finite amount of time to go through those 100 billion bits, you can sort of work out the time taken to recall a particular set of information.
The problem is that for the brain, its not exactly a linear search process. For example, we can remember the sequence of numbers from 1-10, but at the same time, have difficulty remembering certain words…(its at the tip of my tongue!). Essentially, the number of bits of information in a word and a sequence of numbers may be the same, but the way the human brain retrieves this information is different.
Of course, I am not the first to come up with this funda. People before me have come up with this “short term memory” and “long term memory”. They even make funky analogies of RAM and Hard Disk Drives to explain it.
But I think I have stumbled upon an idea. Its always puzzled me how human beings are so awesome at retrieving information compared to computers (which ought to be even more awesome, considering their perfect recall and blinding speeds of manipulating data.). Then I actually sat and thought about it. Does having more data and perfect recall actually make you better at retrieving information….or worse!
Let me illustrate this with a practical situation. A computer records a face perfectly. It stores Ms. N’s face as a 1920×1080 pixel image, with each of those pixels having several properties (colour, tone, brightness, etc). This essentially translates into a huge pile of data which can be up to 8Mb in size. In my head however, N’s face is not stored at all (she would be the first to agree). Instead the idea of N is stored. Its a bit hard to explain because everybody stores personal details differently in the privacy of their own mind. But the best I can come up with is that N’s face is buried into this really complex data warehouse, where the number of bytes that actually represents her face is a lot less than 8Mb….it might only be a few bytes of memory.
But the advantage it gives me is game changing. Firstly, as the data that is N’s face is actually stored as part of a data query, and is a lot smaller in size, my comparatively slow speed of access is offset by a huge advantage in my software. My mental database is exceedingly efficient at parsing through massive data sets precisely because I don’t actually store all the data that a computer stores.
This of course leads me to a weakness. I cant exactly tell you how every pixel of N’s face looks. At best, I can recall maybe 10% (probably closer to 1%) of N’s facial features. My computer is probably way better than me at remembering those details. So if I want to figure out how N looks like, I don’t try to bring a picture of N in my minds eye. I just do not have the capabilities to do that good a job of it. Instead, I take a look at her photograph, which is way more detailed than I could ever be.
In my next post, I shall try to cover the other part of memory….which is rote memory. Its how I passed my commerce examination after all! Finally I hope to draw an analogy between these types of memory and data manipulation by computers.
So stay tuned. Till then ta ta!
Godly cash flows Sunday, Mar 15 2009
People think that the credit crunch is a creation of the 21st century. However, like the religious fundementalists say, all things are there in the scriptures. The Gods of India have a practical example of how individuals with low credit ratings are forced to accept loan terms which are frankly usurious. In contrast, we shall also see how a well managed fiscal plan makes living comfortably.
Our tale begins with Mr. Venkateshwara, a young god with a great deal on his hands, but not much hard cash to his name. One fine day, he finds this young lady and decides to marry her. But the young lady is not content with a simple court wedding. After all, this is a god’s wedding, and must be celebrated with the pomp and ceremony it delivers. So, Mr. Venkatashwara goes to Kuber Bank, a closely held firm controlled by its namesake, and requests a personal loan for marriage expenses.
Now, Kuber takes one look at the impecunious Venkateshwara (also called Balaji), and decides that this young man is what would be called sub-prime. And not only is he sub-prime, he also wishes to use this loan on a mere consumption expenditure rather than investment purposes. Automatically, the interest amount is now increased appropriately by rating the borrowers risk accordingly. Venkateshwara’s repayment philosophy also seems a bit dubious. Based upon this wedding, he intended to set up a temple where people could worship him, and thereby pay off his debt.
Well, to cut a long story short, due to low regulation, Kuber bank did make the loan to this sub-prime borrower, albeit at an interest rate that he considered was appropriate for such a high risk loan. As it turned out, Mr. Venkata’s temple was a spectacular commercial success, raking in over Rs. 500 crores a year (approximately INR 5 Billion).
But that is not quite enough. From the records that mythology provides us, this only counts as payment towards the interest portion, so that Mr. Venkateshwara stays out of the term “Stressed Asset”! So Mr. Venkateshwara, inspite of having fantastic cash flows is still indebted. If records are to be believed, he will only be able to pay it off at the end of the universe itself!
On the other hand, about a 1000 kilometres away, we have the example of Mr. Siddivinayak. An astute god, based out of India’s commercial capital, Mumbai, he has access to the finest financial consultants (the ones who believe that cash is king) in the world. Having been exposed to the business world’s ups and downs, he maintains a low level of financial leverage, ensuring that his debts to the Kuber Bank are always promptly paid off. As a result, although his revenues from his temple are at a comparitively paltry Rs. 50 Crores, he is comfortably in cash.
So there ends this lesson from mythology.
Oil Prices–Price Elasticity Friday, Mar 13 2009
Well…my last serious post on oil prices can be found here. Back then, oil was at $80 a barrel. Since then, oil went up to $147 and is now at the mid forties after dropping all the way down to $30. Does economics explain this phenomenon? Well, lets have a go with that most amazing of tools, hindsight.
The total demand drop from 2006 to today ranges between 2 and 2.5% . Assuming that the predictors were expecting a gain of 1.2% yoy (a reasonable prediction), the notional demand drop would then be about 5%.
At the same time, production has increased by about 1.5% over the same period.
In this period, oil prices have risen to $140 a barrell from about $40 and have come back down to about $40 a barrell. Can conventional price Elasticity explain this?
Even assuming the widest variations in demand and supply, we have about a 6% variation in demand and supply. This ^% variation has led to a price change of almost 300%. This would mean that demand and price have a multiple of 50. By my previous calculations, the multiple was closer to 10 than 50.
So economics does not seem to completely explain this massive change in price. But what if the underlying multiple of 10 was also leveraged?
The theory behind perfect marketplaces is that more players there are, the more clearly the price in the marketplace would be provided. However, in oil, the actual deliveries are fairly small compared to the speculators who trade in oil contracts. In theory, these speculators are supposed to provide liquidity to the market thereby enabling it to find true price without distortions introduced by large market participants.
The problem here is that sometimes speculators themselves distort the market. In a bull market, every speculator went long on oil, which distorted market price and ensured that the real price soared well above the price that the oil sheikh needed to purchase his private A-380.
However, the reverse also occured. When the bubble burst, the speculators had leveraged their positions, and now had to sell at any price in order to exit the market. This led to an equally dramatic price drop which has seen oil drop back down to $40 a barrell again.
Of course not all of this is due to the evil speculators. The US Dollar has been appreciating against almost every currency due to a flight to safety. A rising USD means that the Arab Sheikhs (who sell their oil in dollars) can now buy those English Football Clubs cheap. This also tends to drop the prices, and cannot be ignored.
Notes: The data is approximate but the base from which it was taken was the International Energy Agency report of February 2009. Any mistakes and incorrect assumptions are my own however.
Note 2: The strong dollar affects other things than prices of Football Clubs.
Boom & Bust: Reason or Panic? Tuesday, Oct 28 2008
Uncategorized 1:59 pm
Its been a fantastically long time since I last updated anything, but that is not for lack of things to write as much as because of lack of time and effort to put thoughts onto computer!
Well, no Management/Economics type blog can ignore the current economic Superhit show that is playing on all Business News Channels today, and mine is no exception. People are blaming the current mess on US Housing Market bubbles or irresponsible lending or greedy managers, but is that the REAL reason for boom and bust?
I am sure these are reasons for the current mess, but why not try to see if there is a deeper underlying principle here? And this morning, I finally think I have found one.
First the Assumptions:
1. People Consume all they produce
2. Productivity is something that is consistent and measurable.
3. Inflation does not exist (I know…silly one that, but will relax it later)
Economic Growth is something that makes peoples lives better. Quantitively, economic growth means that people have more ability to purchase goods and services. This is easiest measured by money. If you have more money in your pocket, you are doing better than you were. The same is true for countries as it is for people. The more “Money” a country has at its disposal, the better it is doing.
So, how does the money that a country have increase? Well, its simple really if you think about it. There are 3 basic ways.
First of course, is if the people in the country work more. Lets say they all had 5 day weeks. Now they suddenly decide to work 6 days a week. Suddenly they would therefore produce more goods and thus would have more “money” (assuming all the increased goods are sold at the same price)
Second is if more people were to start working. This is 2 components. First, all those new young people joining the working population. Second would be if the retirement age of the country went up, thereby increasing the workforse. (This is assuming that all those who reach working age get a job…not all that easy!)
Third is if those who are working suddenly become more productive. Thus if a worker were given a new thingummijig that could increase his production rate, then more goods would be produced in less time with the same amount of workers, increasing the workers wealth. (Of Course, assuming that all that increased production is sold for a good price.
So this is my economic theory. ” The maximum long term growth rate of any country’s economy is the product of the growth in working population, productivity and hours of work.”
This seems very simple indeed. And the Boom and Bust that we see in today’s stock exchanges seems to me to be comeuppance for the rise that the Indian markets saw post 2001.
If the stock exchange rises by 50% while the constituents of the exchange grow by 20%, then the assumption is that the stock exchange has priced in an increase in one of the three parameters that I had laid down. But how much can productivity and workforce increase so that you can maintain the increasingly dizzying valuations that were used for companies?
So, now the Indian market begins to make sense. It may look irrational, but that is only because we lack the timeframe needed to judge things. Ideally, the stock market should have stagnated until its companies reached the size that justified their valuation. However, like a governer hunting for the position of stable equilibrium, the market had overshot the fair valuation and bumped the value too high. Now, in trying to find the fair value, the market has actually beaten down (certain) companies to values that are well below their actual capabilities.
Of course, the problem with spikes and troughs is that they tend to make the fundamental premise of economics fail, which is one where we believe that the market has rational decision makers. Todays markets are ruled by fear, and have little of the rational among them.
So what started out as reason is now culminating in panic. And I am now finally buying stocks…after 2 years of looking at the markets as a mere speculative gambling table, it looks like there are quite a few valuable gems lying there getting ready to be picked up. So like Warren Buffet says (or should have said)… a panic selloff is the time for the rational investor to buy.
The Productivity View — better is good? Tuesday, Sep 2 2008
Well, its been a VERY long time since my last post, but never fear loyal readers, I am back!
Today I was looking at a ragpicker on the road, and thinking that it would be really simple to make her life a bit better by giving her a pushcart in which she could push higher loads of stuff collected and thereby earn a higher income. This is what is called a productivity tool, which is supposed to make the world a better place.
And surely, improving that ragpickers productivity might make it better for the ragpicker, thereby helping society! But a bit of thought brought some counterpoints.
Now economic theory states that if the ragpicker got a a huge competitive advantage by having a cart, a lot of people would have jumped on and bought/rented carts in order to improve their own productivity as well. This would make the entire ragpicker population even more productive than it used to be. Surely, that is a good thing?
Well…maybe not. You see, although the amount of garbage that the 17 or so million people in Mumbai produce is monumental, its not infinite. At the end of every day, the ragpickers of Mumbai, however unproductive they are, have sifted their way through the morass of dross, and have found their little pieces of gold. So improved productivity would therefore mean that the ragpickers would merely be done faster….not produce more gold from dross.
Well, even then, that would be a good thing undoubtadly. A ragpicker who is done by mid afternoon could attend evening school, get a mechanics job, move up in life, and then improve economically. But lets consider for a moment that the current system is a level playing field…mostly. The late wakers are not shut out, as they would have been if the early birds grabbed eveerything. So, although the total wealth out of picking through garbage would be the same, its distribution would now go to those who woke up earlier, and scouted out the best piles.
This greater inequality in wealth distribution would be accomplished by those with access to better information on which localities are putting out good garbage, or who can anticipate which garbage will yield better returns. Previously, even if people held this information, they could not corner the market, as the information flow filtered down before they could grab it.
This seems to show something strange. Improved productivity does not lead to better conditions for all. Infact, in this case, it leads to much greater inequality. And this is what I would call the productivity trap. In a place where productivity improvements do not lead to increased sales/offtake as well, it only would lead to inequality.
Of course, there is always a silver lining. If you are a nimble company (or a person) and can see that the existing players are unproductive, you can move in and quickly make yourself a number 1. However, be warned that your advantage depends on you having a productivity too that can’t be copied….and no one seems to have come up with one as yet!
So there you go….another rambling post, but my tale is done for now. I will post on slightly less garbage like topics sometime later. Till then… Ta Ta!
General Update Tuesday, May 27 2008
Well, its been some time since I have posted anything. So, I guess its time that I deliver a general update on life, the universe and everything (almost) that I am doing.
Well, the groves of academia have hereby hurled me out, ensuring that I get to face the real world again. And from the small and sleepy university campus of IIT Kharagpur, I am now at the western corner of India, in Mumbai, the city that almost lives up to its reputation for never sleeping
I have joined my work with YES Bank, and the hours ensure that its certainly a good excuse for not posting (although I shall not use it). But rather than talk about work, why not the city?
Mumbai is a unique place. Each of India’s metropolitan cities is different, but Mumbai revels in its uniqueness. Everything, from the city’s straight line like layout, to its odd working hours, its cobbled (almost) main roads where traffic rattles along day and night is unique. Mumbai is like a mad scientist on adrenalin, up to no good, but hiding behind a veil of equations.
Mind you, I rather like this mad city. Its very different from the sleepy Bangalore, and the early-bird Chennai. Even the sun sets later here than the rest of the country, with it being bright enough to play cricket at 7:15 pm.
Well, that is enough for the day. I will continue with more management gyan from my next post. Mumbai has given me at least 4-5 new posts on economics already up and running. But it will have to wait till I find the time to put them down on computer! Till then!
The War of the Currents Wednesday, Apr 16 2008
Uncategorized 4:56 pm
Ok…its been aeons since I have done a history post…and even longer since a physics post, so why not do 2 in 1 and do both together! Its time to do a history of power transmission!
The Main Characters Involved
Once upon a time, there lived a magician. Almost deaf and self educated, he played a major part in the history of Industry. He was known for perseverance, and for a factory that burnt down as well. His name: Thomas Alva Edison, more colourfully known as”The Wizard of Menlo Park”
The second chap in this was rather less colourful. He was known for an obsession with Railway safety and his major contribution prior to his adventures with electricity were his amazing invention of brakes for railways. Even today, the air brakes that are used today are a product of George Westinghouse, who shall be called “Moneybags“
The third chap here is as much of a character as Mr. Edison. Rather than Gandalf, it was he who was first called “Wizard of the West”. A mathematician and an inventor, he was a former employee of the Menlo Park wizard. After some harsh words were said on both sides, he quit to fight his battle for efficiency and superior science. His name: Nicola Tesla.
The Technology:Sneak Peek
So what did these chaps fight about. It was no less than the way the new magic of the century, electricity would be transmitted. It was a battle between Alternating Current and Direct Current. The battle between AC/DC.
On the DC camp stood the reigning champion, and knight of the American derring do spirit, T A Edison.
On the side of AC, the challengers were an embittered Nicola Tesla and Westinghouse.
The Rivalry Begins:
Nicola Tesla was originally a humble scientist, working under the heel of an acknowledged genius in Edison. But Tesla was also a super mathematician type dude, while the more prosaic Edison was merely a brute force experimenter. Tesla was a huge fan of the newfangled Alternating Current that promised revolutionary change.
Edison though was not entirely for things that used imaginary numbers and wave equations. In his opinion, if you had to use things like root of -1, you were off your rocker a wee bit. But being a fairly loud-mouthed guy, he proclaimed to Tesla that if he ever got an AC motor working, he would get a bonus of $50,000 (no mean sum at the time).
Tesla of course was truly fascinated by that grand sum. He spent days working, and nights calculating under the patented light bulb of Edison and Swan’s GE. Finally, after months and years of toil, he came up with an awesome AC generator that works. He goes smiling proudly to Edison, and shows it to him.
Unfortunately for him, Edison was a bit deaf. He claimed that he never heard himself say such a ridiculous thing in his life, and laughed at Tesla. It might have also been exacerbated by the fact that Edison never really understood the principles by which AC power was generated and transmitted as well.
Tesla decided that this would not do, and ran away in a huff, threatening to do Edison in someday. Thus a magnificent rivalry was born.
George Westinghouse was no mean inventor himself. With patents pouring in for railway safety brakes, and a machinist par excellence, he was an inventor in the mould of an Edison. Unlike Edison though, he was also a big believer in the utility of calculation and mathematics in invention. Spotting Tesla out of work, and digging ditches in New York, he realized that he had an ideal employee on his hands.
Back to Technology– The Numbers
Edison’s DC current is comparatively easy to understand, and is based on middle school physics. Power transmitted is given by VI, where V= Voltage and I= current. However, power loss is given by current squared multiplied by resistance of the wire. At low voltages, the power loss is rather large, unless the diameter of the copper wire is made terribly large. However, high voltages were deemed to be unsafe, and Edison was using DC voltages of about 110 Volts.
As a result, power losses made it impractical for Edison to transport electricity across large distances. The resistance would have killed him. Edison was nothing if not a canny businessman though. He started making tonnes of generators that generated electricity locally, and started selling them. This ensured regular sales of GE generators, because the effective radius of even the largest DC generators at 110 watts was a couple of miles.
Now, AC is a whole different ball game. The power loss is practically the same at a given voltage (we won’t go into the formula. Like Edison, I am not a formula guy!). However, AC has the huge advantage that it can be “stepped up” and “stepped down”
Enter the Transformer
The transformer was the device that made AC a great option. A transformer is a very simple device that converts electric voltage up or down. By winding more wires one way or another, you could generate power at one voltage, then transform the voltage up. From basic electricity we can say this: V1I1=V2I2. When Voltage goes up, the current carried by the wire goes down. Power loss is calculated as I*I*R. Now, when Voltage goes up to 22000 or 40000 Volts, the current drops dramatically. Now, I*I it becomes very small, and power loss is lessened dramatically. Near the end consumer a transformer is used again to drop the voltage to a usable level.
Of course, the catch was that a transformer could only be used in AC. It could not be used (for various reasons) in DC format. The various reasons include esoteric terms such as inductance and flux, but this is not a post about physics, but history.
Return to the Battle: Publicity time
Westinghouse and Nikola Tesla began to make an AC Generator that would unshackle the world from Edison’s DC generators. But it was hard toil. Firstly, AC current keeps cycling up and down, which in lightbulbs would mean a flickering of light bulbs as current cycled between two extreme values.
Then there was another problem. Cyclic voltage tends to do something nasty. The shifting voltages cause the heart to change to an irregular rhythm, which tends to lead to a quick trip to a nearby graveyard. Low Voltage DC does not cause any such problems. And Edison knew exactly how to exploit this unfortunate “feature”
Edison launched a campaign which attempted to prove how dangerous AC was. Initially, he started by electrocuting cats and rats. Soon, he progressed to man’s best friend. Size of course matters…he continued by going after horses and then cattle. In a fit of extravagance, he completed this with a finale where he finished off an elephant with AC.
But this was not enough. The AC Camp led by Westinghouse was still winning. Now Edison was getting desperate. First he tried to replace the term electrocute with the phrase “to Westinghouse someone”. That did not work out too well though. It never did catch on. Although Edison was against the death penalty, his business interests now dictated he needed to do something radical. Size did not seem to matter in the war. Now it was time to change tack. He began a secret product called the “electric chair”. Soon an instrument of death was ready, and an unfortunate convict was ready as a test subject.
As a deterrent to crime, it was a staggering success. The dashed thing failed on the first attempt, merely leaving the guy with severe injuries rather than killing him. After several tries, he was finally put out of his misery, and it was described by one appalled journalist as, “It would have been kinder to kill him with an axe!”
Unfortunately, as a proof of concept, the electric chair was not quite an unqualified success. The tide was beginning to turn in the favour of the Westinghouse camp. Soon, the death knell for Edison’s generators was about to sound.
The Niagara falls were the holy grail for power guys. Here was a mountain of water falling a few hundred feet, which had the potential to generate enough power for the whole of the North-east USA (at the time). The catch? It was just too far away. Any chap who generated power in the Edison way could not actually transmit the damned thing without losses that crippled it to unusability. Westinghouse lobbied long and hard, and finally got the permission to generate power in AC so that it could be transmitted easily. And since Edison’s GE was too powerful to be ignored, it got the contract to transmit this electricity. With this, Edison ended his opposition to AC power, and the war of the Currents was won by Westinghouse and Nicola Tesla.
Tesla was known as the wizard of the west. There is little doubt that he was at least partly responsible for the way the 20th century became the century of electricity. However, his rivalry with Edison was not tempered with time, and it is curious that neither Edison nor Tesla ever won the coveted Nobel prize. Rumours still abound that it was jointly offered to the two of them, but Tesla refused to ever accept a prize alongside Edison. Later in life, he began to make futuristic predictions about wireless electricity, but these were never considered practical, so he was slowly shunted away from mainstream science. But he forever gloated about his joy at defeating Edison.
Footballing Management: Of talent and age Sunday, Apr 13 2008
My good friend Ratnakar is a great fan of football manager 2008. During his interminable hours of play with that game, he came up with a fantastic observation that makes for good learnings in management as well!
A football manager is always scouting for talent. And football has 3 major types of players. They can be split into the strikers, who range forward to score goals. They include stalwarts like Ronaldo and the more recent Wayne Rooney. Pace and raw talent makes them great
The next group would be the midfielders. They are the stars who play at the centre of the pitch. Their skill and artistry are the tools that they use to weave magic at the centre of the pitch. Bamboozling the opposition, they are playmakers…either going down the centre or running down the wings. David Beckham and Zinedine Zidane are the most frequently quoted lot here.
The neglected bunch in this group are the poor defenders. Usually sitting at the back, they are known for trying to block those heroes, the forwards and strikers from doing damage. To do this, they can slide into the striker (if they get the ball first), shoulder barge the man, or just kick the ball aimlessly away from the strikers.
So much for context. Now lets look at average age and price of a striker. Strikers are most valuable when they are young. between the tender ages of 19-25 they are at their fastest, and with spectacular reflexes, are capable of feats that most cannot even imagine. Its no wonder that a Wayne Rooney would be transferred off for an almost 50 million dollars at the tender age of 19. By 25, he would be all burnt out, and his market value drops significantly. But if like AC Milan, you get a Kaka at $8.5 million dollars, you can get a great star at bargain basement prices.
As for wingers and attacking midfielders, they need pace first…and although they need those reflexes as well, they are not quite in the same league as star strikers. But because they control the game, and are versatile, they get paid staggering amounts too when they are young. Here, the retirement age would be close to 30. David Beckham at 32 is seen as over the hill, although at 25, he was seen as at his prime. So he has to play in the USA because the Real Madrid’s and the Inter Milan’s of the world no longer see him as the star he was.
But defenders just seem to go on and on. For example, the AC Milan and Brazilian defender Cafu is 38 and going strong. Defenders hit their peak at 32-35, and can go on even longer. That is because the defender is not about pace as much as anticipation and experience. Like wine, they get better as they get older. So Cafu is worth a lot more at 30 than at 20, and his market price is fairly detemined.
So where is the management analogy? well, here it is. In management, as in football, different people perform different functions. Each person’s talent is valuable at certain stages, and experience is valued at other stages.
In a marketing manager, the hunger to get hold of a new acount makes a young man take a bus 500 km across beat up roads and obscure villages. Here, his experience does not count as much as his hunger and drive for success. And only when you are young can that hunger be matched with physical stamina and committment to career. As the marketing man grows older, he might marry, settle down in a city with 2.2 kids and sit back. He might no longer want to spend every weekend hunting for those new accounts. Instead he would be content to spend his days at the corporate office, using his experience to design corporate “strategy”. A sales and marketing star is a bit like a striker, who is best at a young age.
On the other hand, the finance and legal team are more likely to be the defenders of the firm. A finance man needs to know the ropes and learn through time. No matter how talented he may be, a few years in the trenches help the finance man develop a “feel” for the numbers that talent does not always give. And the legal man needs years and years before he knows which loopholes can let the proverbial elephant pass through, and which ones will merely drown you in a morass of legal battles. These gentlemen tend to be most valuable in their 50′s when they know the tricks of the trade (And keep themselves updated with the latest moves).
The problem is this though. When you hire a young marketing man, you always take a risk. He or she would be unproven and untested, but only when they are young can you extract maximum value out of them. Getting the right pay for these people is a challenge. If you underpay a star, the star shall disappear faster than beer in a college party. But you always run the risk of overpaying someone who is later found to be unsuitable.
The issue is very different for experienced financial managers. By the time they are 40-45, they have a proven track record. By this time, the market prices them fairly. So the problem here is that you never actually can get a bargain basement finance guy who is very good. The market ensures that the good ones are already paid stratospheric levels.
So, what’s the lesson? Well, its this. Recruiting talent is tough. But while recruiting, it might be suitable to evaluate what “hunger:experience ratio” is. It makes it easier to decide at what age and price a person ought to be recruited at.