Spotlight

On December 24, 2014, AirAsia Flight 8501 took off from Surabaya (Indonesia) at 5.30 am local time. With 155 passengers and 7 crew members onboard, the flight was headed to Singapore. About 43 minutes into its flight, the Airbus A320 disappeared from the radar. The worst had come to pass. Two days later, the rescue team discovered the plane wreckage in Java sea. All 162 people onboard perished in the crash.

The crash investigation revealed that it was a pilot error. The in command Captain Iriyanto — a 53-year old former Indonesian Air Force pilot — performed a non-standard reset of the onboard flight control computers. Which means he did something which was not mentioned anywhere in any of the operating manuals. Why would someone with an experience of more than 20,000 flight hours do such a thing?
[Read more…] about The Risk of Worrying About the Non-Risk

Among all the contemporary business leaders, very few come close to Jeff Bezos’ talent for communicating business strategies in a simplified manner. Like Warren Buffett, Bezos writes an open letter to Amazon’s shareholders every year. He’s been doing it for over two decades.

These letters have become an extraordinary source of insight into how Bezos (the world’s richest man) and his company (Amazon) think about customers, innovation, building products, and future.

Amazon started as an online bookselling platform and interestingly didn’t turn a profit for the first six years. Today it’s the second publicly traded company (after Apple) to ever hit a market capitalization of $1 trillion.

Like me, if you’re an admirer of Bezos, then you’re in the good company of people like Warren Buffett and Charlie Munger who are also big fans of the Amazon CEO. Buffett and Munger admit that they failed to see Bezos’ genius early on. Buffett called him the most remarkable business person of our age. Munger, in his nonchalant voice, said, “Jeff Bezos is a different species.”
[Read more…] about Wandering with a Beginner’s Mind

According to an estimate, 2.5 crores people were born in our country in the year 1981. I was one of them. Of those 2.5 crore infants, about half (45%) were born to parents living under the poverty line. Fortunately, I wasn’t one of them. And that’s perhaps the greatest fortune I’ve had in my entire life. That one event — being born to financially sound, kind, educated, and loving parents — contributed about 95% to the outcome that today I am not among those who don’t know where their next meal will come from.

Warren Buffett calls it winning the ovarian lottery. He writes —

I’ve had it so good in this world, you know. The odds were fifty-to-one against me born in the United States in 1930. I won the lottery the day I emerged from the womb by being in the United States instead of in some other country where my chances would have been way different.

Imagine there are two identical twins in the womb, both equally bright and energetic. And the genie says to them, “One of you is going to be born in the United States, and one of you is going to be born in Bangladesh. And if you wind up in Bangladesh, you will pay no taxes. What percentage of your income would you bid to be the one this is born in the United States?” It says something about the fact that society has something to do with your fate and not just your innate qualities. The people who say, “I did it all myself,” and think of themselves as Horatio Alger – believe me, they’d bid more to be in the United States than in Bangladesh. That’s the Ovarian Lottery.

My streak of luck didn’t end with my ovarian lottery.
[Read more…] about Here’s to Continued Luck

Andrew Carnegie and Henry Ford are considered among the handful of capitalists who played a defining role in building America. The early 20th century skyscrapers in the US stood on Carnegie’s steel and Ford revolutionized the automobile industry with his low-cost cars.

Carnegie became the richest man in America when he retired and sold his company to JP Morgan for a sum that was equivalent to $400 billion in today’s money. Sadly, Andrew’s billions were amassed at the cost of factory workers’ sweat and blood. Literally.

The working conditions in steel mills in the late 19th century and early 20th century were inhumane and unsafe. Some estimate that the rate of serious accidents (often leading to death) was as high as 10 percent. Twelve to fourteen hours a day and six to seven days a week was standard at that time. There was no extra pay for overtime. Not only that, the hourly wages were squeezed so the hilt to drive profitability. And any resistance from labour unions was often crushed ruthlessly with the help of private armies like Pinkertons. (Trivia: at one time Pinkertons had more armed personnel in their squad than the entire US national army.)

This changed when Ford entered the scene. He offered his workers the luxury of 40-hour work week, great hourly wages, and safe working conditions. With his assembly line, he was able to achieve better productivity and lower costs without compromising on labour wages and working hours. The life of a factory worker was no more exhausting and unsafe. Other industries (including steel and railroad) had to follow suit and offer the same deal as Ford did to the labour force.

However, there was still one thing common between a Carnegie’s factory worker and Ford’s assembly line foreman. Their output was directly tied to the number of hours they spent on the shop floor. It mattered how fast they moved their hands. When a steel mill worker left early on a day, it was a loss of business for the bosses. Similarly, when a Ford employee on the assembly line took an extended lunch break, it wasn’t acceptable to his supervisor.
[Read more…] about Wasted Hours and Saved Years

Richard Branson is a British business magnate, investor, author, and philanthropist. He’s the founder of the Virgin Group, which controls more than 400 companies.

When someone asked Branson how to be a millionaire, he replied, “Start with a billion dollars and invest in an Airline.”

Vijay Mallya would probably be questioning Branson, “Aisa tha to pehle kyun nahi bataya?” (translation: why didn’t you tell me this earlier?)

So that’s the first way to go from riches to rags — buy an airline. Now, I don’t know of a way to verify if Branson actually said that. So let me tell you another story which is true, verifiable, and recent.
[Read more…] about How to Go from Riches to Rags