Connecting the dots

Come mid-Fall quarter and you see 2 things at Kellogg. There’s the wonderful fall of the leaves as they go from green to red to yellow and eventually glide their way to the ground beneath. And you see another kind of Fall, the one that involves 1st year students! You see them move from the glowing color of triumph and a yearning to learn about every business case out there to one that is more sullen, unshaved, barely awake and just skimming through the headlines of only the most mandatory of cases. Having been there and done that, I often get asked what are the shortcuts to reading these cases. Are those supplementary readings worth it? If I’m going to have a career in Finance, does it make sense to spend my time pouring over books on Social graphs and Personality Types?

I hear you. You see, more often than not, these cases are about some business that perhaps was an interesting problem a few decades ago. And more often than not, its about an industry that is likely obsolete or has been shipped overseas. So at a cursory level, and definitely by only skimming through the summaries of these cases, I always felt that this was a waste of time.

But I think the 2nd year for an MBA is for a reason. Strangely enough, after a year of cases and an internship, one can, to paraphrase Steve Jobs, “see and connect the dots”. You begin to realize that the case on some Gillette razor that added another blade was never really about whether adding another blade made a better business case. Far from it! It really was about the lessons you can draw from it; timeless lessons that can be applied in very different settings. Marketing yourself on just a few lines (Facebook status message), creating a need in consumers for something they were doing without (iPad), the psychology of consumers towards deals (Groupon), etc have something to draw from this age-old case. And therein lies my point. It’s not about the cases. It’s about the dots that you can draw from there to issues that abound today.

This reminds me of Moksh. He’s 22 months now and in that phase where he’s still blabbering baby talk but does use some words every now and then that we understand. What’s surprising is that even he, in his own little way, connects words he picks up from different sources. Whenever Megha is having coffee, she reminds him that its is not for his consumption. In his own toddler-like way, he calls Megha as "Menga" and Coffee as "Koshi". We had some guests the other day and opened some beer. When we told Moksh that it was not for him, he pointed to the beer and exclaimed... "Menga Koshi!" :) . Through the little cases of his life, my little boy was also connecting the dots!

So, yes, my MBA 1st year friends, please read as many cases as you can. But don’t just stop there. Go ahead and connect the dots. For as any child who has done the puzzles on connecting the dots will know, the more dots you can have to draw from, the faster you can converge on the complete picture!

God Speed!

The Semi-Conducive Industry

The Semiconductor Industry is a paradox. Having worked in this industry for close to 7 years, I should know. Thanks to a dude called Gordon Moore, who, besides confining many of my friends at an institution called Intel, also coined the Moore’s Law. Plainly put, this law states that the average size of chips (semiconductor, though this may apply to the potato variety as well) halves every 18 months. What Jesus is to Christianity, Moore is to the Semiconductor industry. The Semicon Industry takes his word as gospel and spends on an average 20% of it’s revenue trying to reduce the size of chips and prove him right.

And therein lies the paradox. Customers of Semicon Companies expect the Semicon Cos to halve the cost of their chips every 18 months! And if the Semicon Cos don’t do it, their customers always have their competitor’s number on speed dial. So that puts these Semicon Cos in a situation where they actually spend more on research so that they can charge less to their customers and make less money! Talk about shooting yourself in the foot! The only way they can make any profits in this situation is to sell at least twice the number of chips. Unless we all figure how to either double our consumption or our population every 18 months, the Semiconductor Industry will be stuck with a case of a flooding of chips. Perhaps this also explains why this industry sees such a cyclical pattern of growth and downturns with the downturns lasting longer and deeper than the times of growth.

So is the future for anyone in the Semiconductor Industry doomed? Not at all. In my next post, I’ll discuss my thoughts on the business opportunities in the Semiconductor Industry. In fact, I’ll argue that it’s a great time to be in the Semicon space.

And so Mr. Moore, while we will thank you for your famous law, we thank you still for not making any further ones. For sometimes, it’s best to let those foolish entrepreneurs be ignorant about laws that go against what they’re trying to build…. that’s the only way they succeed.