Making money with Free Software

When people hear about 'Free Software' it would be surprising if they wouldn't wonder how anybody can make money from 'free' software. In fact most do and quite a lot of them have asked these questions out loud. It would be a worthwhile exercise to delve into the working of Free Software economics and for that we need to examine the concepts of Free Software itself. In addition to the economics we will also take a brief look at how it changes software development perspectives, how it enhances career opportunities, how it helps the local economy and how it is relevant for a developing country like India.

What is Free Software

The 'Free' in 'Free Software' is actually 'Free as in Freedom' and not 'free as in free of cost'. To distinguish between these two words, the 'Free' as in Freedom is normally F-capitalized and the second 'free' all-small-case. So Free Software is all about the Freedom that comes with Free Software. According to the Free Software Definition(http://www.gnu.org/philosophy/free-sw.html) published by the Free Software Foundation(http://www.fsf.org) 'Free software is a matter of the users' freedom to run, copy, distribute, study, change and improve the software'. What does this mean?. It means that when you get a software either for free or for a price you get four basic freedoms, viz. the following.

1. Freedom 0 - The freedom to run the program, for any purpose, on any device, on any number of devices without any restrictions.
2. Freedom 1 - The freedom to study how the program works, and adapt it to your needs. To be able to study and modify any software you need its source code and hence access to source code is a precondition for this.
3. Freedom 2 - The freedom to redistribute copies of the software. This freedom allows anybody who gets a copy of Free Software to distribute copies of the software to anybody else either free of cost or even for a price.
4. Freedom 3 - The freedom to improve the program, and release your improvements. This freedom allows users to modify the program according to their likes. Like for freedom 1 you need access to source code as a pre-condition for this freedom. This freedom effectively adds the bite to Free Software by allowing Free Software to grow and change as it passes hands.

If there is a question as to how this can really work then it has already been answered practically by the successes of the hundreds of Free Software out there. One good example is the GNU/Linux operating system which has grown big and capable enough to challenge other established proprietary operating systems.

The History of Free Software

Software industry as we see today did not exist in the 60s and 70s. During those days software development primarily happened in academic and research institutions. People who developed software were academicians who shared software and its source codes like they did with traditional knowledge. For them software was just another form of knowledge. People developed software, shared sources, shared fixes, made fixes and updates and then shared them as well. Software grew just like science did through sharing and accumulation of contributions.

All this started changing when commercial software development companies entered the market. But for commercial software sales to happen people had to stop distributing source code. Initially these companies got the developers to develop software for them and they were paid for their efforts. But in return they had to sign an NDA by which they were not allowed to share the software and its source codes with anybody else. Since there was money involved, developers started joining this commercial fold and the earlier freedom in sharing software slowly started disappearing.

Next the commercial vendors introduced the concept of licensing in software. Under such proprietary licenses the users of the software were not supposed to modify the software, reverse engineer it or access the sources or share the sources if they had access to it. Slowly they brought under the licensing regime large portions of software and sources out there. People could not make and share modifications if the software they were working on were proprietary. Earlier the flow of knowledge as software was happening freely but soon commercial companies were controlling this. Additionally it also took away the freedom that the developers enjoyed erstwhile and quite a lot of them were unhappy about this.

Most were unhappy but one man decided that he should do something about this. He was Richard Stallman of the Artificial Intelligence Lab at MIT. He decided that in addition to the commercial licensing system out there there must be a system that maintained the freedom and harmony enjoyed by software developers in the pre-licensing era. He then went about and created the concept of Free Software, its most popular license - GNU GPL, and a non profit foundation - Free Software Foundation - to promote Free Software. In addition he started one of the biggest Free Software projects out there, that of the Free Operating System - GNU('G'NU is 'N'ot 'U'nix), as a Free replacement to the Unix operating system which had become proprietary. One man's decision to stand against the giants, akin to Gandhiji's decision during India's freedom struggle, has proved to be monumental in the history of software development.

What makes a software, Free Software

It is nice to talk about the freedom behind Free Software but how do you pass this Freedom with a piece of software. A proprietary software or non-Free Software restricts the freedom of its users by the license it grants to its users. Most software users would be familiar with the End User License Agreement that comes up during the installation of these software. Through these licenses the proprietary software companies enter into a contract with the user that allows the user to use the software provided he/she agrees with the license. This is why there is an 'I Agree' button or checkbox during the installation of such applications. The license agreed to by the user makes him adhere to the restrictions mentioned in the license.

So any software with a license that violates or restricts any or multiple of the four freedoms mentioned above would make the corresponding software non-Free or proprietary. The Free Software camp uses the same strategy of licensing to ensure the Freedom that the software grants to the user. Unlike in proprietary software licenses the Free Software licenses, specifically grants the users the above mentioned freedoms. The Free Software Foundation has maintained a list of such Free Software licenses at http://www.gnu.org/philosophy/license-list.html. The most popular of these Free Software licenses have been the GNU GPL or GNU General Public License under which a very large number of applications have been released. The GNU GPL in addition to ensuring the freedoms for the users of the software also ensures that these freedoms get transferred to subsequent users down the line if the first user decides to distribute the software.

The price of Free Software and how Free Software Companies make money

One of the basic tenets of Free Software is that, the user who gets hold of a copy of a Free Software application, irrespective of whether the application was available free of cost or was available for a price, has rights to distribute the software either free of cost or for a price. Now this brings into the picture the possibility of an interesting price competition. Suppose a user who buys a Free Software application decides to sell the application cheaper than the seller from whom he/she bought the application and one of his/her buyers decides to do the same thing and if this goes continuously the price could theoretically drop to zero. This is not just a theoretical possibility but this is what normally happens to Free Software applications.

So how can a company who decides to develop their software under a Free Software license make money under such crazy price competition structures. There is no real 'best' way of doing this as the Free Software market is still a fast evolving market which has not quite reached anywhere close to maturity. Even then there are quite a few established ways of making money with Free Software. A few notable ways are 1) Offering Support 2) Multiple Licensing 3) Dual Versioning 4) Customization Services 5) Hosted Services. These different models are based on variations in licensing and on the services that are being sold with/to-complement the application.

1. Offering Support Services - When a company releases a particular Free Software application and multiple parties decide to redistribute this software, the company who created the software will still retain an advantage over the other distributors in that they will know the ins and outs of their software unlike the others in the fray. Now they can sell this knowledge edge as Support Services for people who use their software for a charge. The other distributors can also do this but the original developer company can always stay ahead of the competition by keeping on upgrading the application so that their knowledge edge is retained. Notable examples of such software are RedHat - a GNU/Linux distribution, MySQL - a database server, etc. This model is purely a services model where Support services are sold for a price.
2. Multiple Licensing Strategy - In this model the company releases the application under multiple licenses, one of which obviously being a Free Software license. The licensing would be in such a way that, the Free Software licensing can be availed only under certain restrictions. A good example was the original Qt licensing model where the Qt library was available under a proprietary license(Qt Commercial License) which would allow the users of the software to use the library to create non-Free Software. So if somebody wanted to use the Qt library to create proprietary software they had have to pay for the library under this license. At the same time the Free Software community who develops Free Software applications using the same Qt library as is available under the proprietary license, could use the Free Software license(GPL). Recently Qt had introduced another License (LGPL) which allowed proprietary software developers use that license to create proprietary software but without the support that comes by default with the proprietary license. They still offer the proprietary license with added support. The original Qt model taps in on the proprietary software developer market to fund Free Software development.
3. Dual Versioning - This is another interesting but slightly controversial model. In this model a company maintains two different versions of the same application, one on a public server under a Free Software license and another on a closed server under a proprietary license. The development on the Free Software version happens under the leadership of company developers but with contributions from the community. Intensive testing and development of bleeding edge features happens on this version. Mature and tested features get reimplemented on the proprietary version by the company developers. The proprietary version will then be available for customers who pay the licensing cost of the software and the software will be supported by the company directly. The free version will be available for customers who do not want to pay for the licensing cost but then they will have to depend on the support of the community and will be taking the risk of having too many untested features and bugs in their version. An good example of such a software would be SugarCRM, a web based CRM solution. This model subsidizes development costs through the involvement of the community and makes money through from the proprietary software user market.
4. Offering Customization Services - No two people are alike and you can trust this. So different people would have different requirements and different likes and dislikes. This would reflect in their needs for features and functionalities in any software. Free Software companies tap in on this by offering paid customization services on their Free Software applications. Other companies who distribute the software can also do this but like mentioned earlier the developer company would retain their knowledge edge by being the original developers. Even then there is scope for third party companies to offer services on the same software. In fact a large market thrives on such services and quite a lot of the small businesses in the Free Software domain depend on this model completely. The original developer company can charge a premium for their services while leaving enough room for other companies to generate revenue using the same model. Interestingly the model is more popular for Free Software applications driven by the community as a whole rather than by a company. Good examples would be the CMS frameworks Drupal and Joomla which are used by a large number of web application companies. This is a purely services based model where money is made directly on the labour invested.
5. Offering Hosted Services with Maintenance - With the emergence of Internet as THE platform of choice, a slew of Free Software applications have emerged targeting this domain; applications developed and maintained by the community as well as those developed and maintained by companies. To supplement this, companies have emerged, who offer to host and maintain these applications for users, who do not have the technical skills to do so, or who do not want to invest directly in doing so. Such companies could either have been the original developers of the application, in which case they offer higher levels of expertise, or third party companies in which case they offer their expertise and the hassle-free nature of the model as their USP. A good example of such a software/service would be the DimDim web conferencing solution. This model makes money through sales of the hosting packages as well as on the labour invested in support

The strategies mentioned above are only some of the popular methods in use. There are other ways in which companies generate revenue from the Free Software market and different strategies are still being tried out. It is a fast evolving market and only time will tell as to what is the limit of possibility in this domain. But one thing is sure, there is money in Free Software and there is quite a lot of it. It might be worthwhile to remember that one of the recent Free Software company acquisitions, that of MySQL by Sun Microsystems touched a billion dollars.

The cost of Free Software Development

Whether you are developing Free Software or proprietary software you have to invest time and effort in planning, designing, implementing, testing, fixing, updating and maintaining software. Each of these activities require some investment of time and effort towards it and time and effort equals money and this monetary value constitutes the cost of development of the software. Proprietary software companies recover this cost when they sell their software to their users. Now the cost of development of a software is always a finite amount and mostly calculable. So ideally the price of proprietary software has to fall with every sale as a part of the cost is being recovered with every sale. But this does not happen and the users keep on paying at a constant rate for this diminishing cost for ever which might sound a bit unfair for the user. Free Software business models makes a different and more fair pricing structure available for the users.

As mentioned earlier the Free Software price war would normally bring the price of the software to zero even before the cost of the software development is recovered by the company/developer. So obviously there must be some other way of covering the development costs and Free Software development models have found probably the ideal one. When a developer or a company releases a software as Free Software he/she/the-company is effectively inviting the large user/developer community out there to use the application, test the application, fix the issues with the application, and modify the application. This is totally different from the captive development paradigm used in proprietary software development. In this system a percentage of the cost of the software development, be it testing or bug fixing or new development, is being borne by the community in return for the right to use the software which they get when the software is released as Free Software. However the company/developer will still have to incur some costs in the process of software development, especially during the early stages and even through out the product life-cycle. The company or the developer would then have to recover whatever additional costs and their operational margins through one of the business models discussed earlier.

If this can be extended in an ideal system the complete cost of development will be borne by the community and the need of a company can be eliminated completely. Something similar is indeed happening with Free Software applications maintained and developed by communities. A good example would be the Drupal CMS mentioned earlier. However we do not live in an ideal system and a company with vested monetary interests can still drive Free Software development far more aggressive and normally better than typical community based Free Software development.

Technical Advantages of Free Software

When people write software, be it proprietary software or Free Software, they WILL introduce errors and bugs. It is because, well because they are human and humans make mistakes. Free Software development normally works through the contributions of users who are developers themselves. As opposed to this proprietary software development is and will always be done with a limited number of developers. During Free Software development there are too many eyes looking at a given piece of source code during a given period of time to let mistakes to pass through easily and this works much better than in proprietary software development, where there are far fewer people looking at a given piece of code. Supposedly the source code for the Linux Kernel is the most read piece of software source in the history of software development, the numbers running into millions. As opposed to this the leading proprietary operating system development team would be perhaps 10000-15000 strong and the kernel team would be far smaller.

So the first technical advantage of Free Software is its resilience to mistakes. It is not that Free Software does not have errors or bugs, but that they get mopped up pretty fast. Here is the second technical advantage of Free Software - the short life cycle of an error. Even when a proprietary software development team identifies an error they might not want to publicize the error unless the errors result in security issues. These would then normally be taken care of in the next update cycle. As opposed to this in Free Software development, if and when a capable developer comes across a problem it wouldn't take much time before the problem gets fixed in the repository. Now this fix would then be available to users who would like to get it fixed. Again the contrast increases if the errors where noticed by a normal user. For a proprietary software the error will have to go through the proper support cycle before it can reach the developer who might then just schedule the fix for the next update. This would happen only if the user decides to pay for support and report the error. In the case of Free Software all it would need for the error to get fixed would be for one of the many users to just let the community know that the error exists and someone in the community would take care of the issue just like in the first case mentioned above.

Economical Advantages of Free Software

The main economic advantage of Free Software is that it reduces or in fact takes out the financial entry barrier for the use of software. Software is only a tool for processing information. So taking out this barrier allows people from all sections of the society to take advantage of the power of Information Technology to advance their lives. It also opens up opportunities for entrepreneurs to set up shops with very little initial investments. This advantage of low initial investment does not have to apply to small entrepreneurs alone. It applies to enterprises of any size and of both public and private nature.

To really understand the importance of the economic advantage mentioned above we just have to calculate the cost of computerizing an entire country like India, computerizing as in - getting computers with required software to all the people and all government departments and agencies, and compare the costs of this process based on proprietary software versus that based on Free Software. The differences would be massive and such huge amounts of public money can always be put to other developmental activities if it can be spared.

As explained earlier proprietary software makes constant recovery of a diminishing cost. What this does is that wealth get accumulated at distinct points in the society without proper dissipation of labor or generation of value. There is nothing unfair about this as the transactions are purely voluntary. However concentration of wealth with few individuals or enterprises is never good for the society and it does not have to promote such systems. It is not that it has to fight such systems, or make it difficult for such systems to survive, but just that it does not have to spend public money in promoting such systems. So when government establishments invest in Free Software they effectively ebb the concentration of funds via the proprietary software channel.

The Free Software perspective towards Software Development

Unlike proprietary software development where information is withheld by the developing company from its users and subsequent developers Free Software is all about Free and Open information. This applies not just to Free Software but to Free and Open Technologies as well. With so much free-of-cost information out there it becomes less lucrative for book publishers, authors, training institutions to create content and offer training for Free Software and Free and Open Technologies. This in turn brings in the necessity for Free Software developers to do a lot of learning on their own and with assistance from the community. In addition, Free Software makes available billions of lines of code for the developer to see and learn. By learning directly from the work of the masters, the Free Software developers have an opportunity to become masters themselves. Add to this the fact that the Free Software community is a community based on meritocratic principles, there is a big peer pressure to learn, but there will always be people out there who will be able to guide new developers through this path.

Such a system creates developers who are self-sufficient - because they have to learn to do a lot of things on their own, competent - because they have to compete with other capable developers in the community and get peer reviewed on their code quality on a regular basis, ready & capable of learning - because they have to learn a lot of things on their own and they have to be efficient in doing it to be able to make use of their learning, with lot of initiative - because you have to be self-motivated and have lot of initiative to contribute to projects where you may not have any financial incentive. The proof that this is happening is that Free Software developers are in hot demand in big product companies like Google, Adobe, Yahoo etc and they get hired not because of their college background or because of their academic projects but by virtue of their profile in the Free Software community.

In addition to creating world class quality developers Free Software promotes an attitude of sharing of knowledge and a passion to contribute towards projects that benefit the public at large. Such an attitude enriches the society that he/she is part of. Additionally the level of development that we see around us would not have been possible if our forefathers had kept information to themselves instead of sharing it like they did. Human society has come this far only because people have shared common information, passed on knowledge to generations and collaborated on socially beneficial activities. So the basic attitude promoted by Free Software strengthens one of the core values based on which our society has grown to the present state.

Free Software and Career Opportunities

There are hundreds of Free Software companies out there looking for capable talent. These companies scout the market specifically for people who have strong profiles in the Free Software community. In addition there are even more non-Free-Software companies out there who are eagerly looking to hire capable Free Software developers because of their capabilities. Like explained earlier the Free Software perspective to software development that the developer acquires through participation in Free Software projects increases the market value for such developers. So just by being a Free Software developer, one can increase the prospects of getting better jobs than the competition. This implies that, even if the developer does not get a Free Software job per se, Free Software effectively increases the marketability of the developers and also their market value. If however they get a job in one of the Free Software companies out there, eg: RedHat, Sun etc, it could be considered a bonus in the above scenario. In either case the Free Software exposure adds an edge to the developers in their careers.

In addition to full fledged careers there are lots of bounty programs that invite people to come together for Free Software projects and contribute to the development and at the same time get paid for it. One of the most popular of these has been the Google Summer of Code project that invites students to take up Free Software projects mentored by the different organizations that Google has partnered with for this program. Through such programs people get a chance to get a feel of Free Software development and the pleasure of getting involved. These kind of involvements usually help the students/developers in their careers as the eligibility criteria for such projects are proof enough of their capabilities and such experiences are valued highly in the job market.

Free Software from the perspective of developing countries

For a developing country like India, one of the main attractions towards Free Software is of course the low initial investment. Software for a complete department or an organization can virtually be procured free of cost if it is Free Software. Yes there would be costs down the line for customizing, maintaining and supporting the software but the low initial investment part is always going to be an advantage for developing countries.

In addition to the cost factor there is another major attraction for Free Software. Once the software is procured by a department or an organization they will have to get somebody to customize and maintain the software for them. Who else could do this better than a local company. So such a system creates opportunities for local business to thrive and generate revenue out of Free Software. This becomes especially more relevant when the alternative proprietary software are developed by companies outside of the developing country. So paying for Free Software in such contexts will ensure that valuable capital in the developing country remains within the country to power the growth of technology inside the country instead of being pumped out of the country for the purchase of proprietary software.

Challenges for Free Software into the future

There is little or no organization between the different Free Software communities out there. For regular Free Software development this is not really a requirement. In this age of heavy government level lobbying, Free Software stands to lose in front of corporate interests of proprietary software lobbyists, unless the spread-out communities rally and voice their opinions. Free Software Foundation and associated organizations are doing a good job with this but there still requires national level community initiatives to prevent restrictive policies becoming laws.

It is true that Free Software communities breed geniuses but that is not really a requirement to be a part of the community, either as a developer or as a user. GNU/Linux distributions like Ubuntu has done quite a lot in this direction by mellowing the only-for-geeks image of GNU/Linux. This policy has to diffuse into the communities also to make them more newbie friendly and more welcoming for new users.

More generic training and support related enterprises should pop up before Free Software applications can be widely embraced by the general public. Without proper support and training infrastructure it will never become an attractive proposition for governments or private sector establishments to move to Free Software.

Conclusion

Free Software community has been slowly tackling each of the above challenges and many other problems one by one and has been gradually making inroads into the global software market over the 25 years the concept has been alive for. The progress has been pretty rapid over the last five years and at this rate it is going to redefine the way people and companies think about and develop software. Additionally the concepts behind Free Software has been translated to other domains and it has been gaining acceptance among non technical communities as well. A good example is the explosion of Creative Commons licensed artistic and creative content that is being made available online. If the trend continues it will not be long before the future arrives and Free Software becomes the norm. Let us wait and watch.

Edit:

Added a new section on history of free software. Thanks Ashik S. [09/03/05]
Added info about GSOC. Thanks Praveen Arimbrathodiyil [09/03/05]
Updated the history section with suggestions from Askhik again. [09/03/07]

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Change - Inevitable, Essential, Drivable

I have been planning to do this for some time but never got around to doing it. Now that I am down sick, I think I have just the right kind of peace and quiet time to sit and write down the full set of hypotheses behind Zyxware. This is going to be the first of a few articles through which I am going to explain the grand hypotheses and this one is going to cover the first axiom - Inevitability, Essentiality and Drivability of Change.

If you have noticed the mission statement of Zyxware, it says - "Be the change you wish to see in the world". A statement often quoted as Gandhiji's but originally exhorted by Budha. The central aspect of this statement is the change that we wish to see and then the exhortation to try to act to bring about the change through ourselves. Now what is this change?

The world we see around us is a very complex state machine. You can imagine it as a huge machine where an uncountable number of processes are in motion and an uncountable number of agents in action. Naturally there are some aspects about the way some of these processes and agents work that are good and some that are bad. There are some aspects that cause harm to the people involved while there are others that actually help people. There are some aspects that make life convenient for people while there are others that make life less convenient. Overall if you look like this you can see that there are different aspects of the world that are positive and negative from the perspective of humanity at large.

Now the world is not a static system. It keeps on changing. These changes can again be categorized as either positive or negative based on their direction. Positive changes make things better while negative ones makes them worser. We are more concerned about these changes because this is where we have some control and where we have some choice. The state the world is in is already past and, we can't change that; but the state the world is going to be in is to a certain extent controllable and within our sphere of choice.

Irrespective of whether we control these changes or whether we choose these changes they happen. That is because of the uncountable forces acting to drive these changes more or less randomly in the complex state machine that the world is. Randomly because the concepts of good and bad as applicable to us humans does not really have to bias the occurrence of a change as long as humans don't interfere with the change. From another perspective we can see that the changes are inevitable because the world is not a steady state system in equilibrium and the forces of entropy alone can continuously drive these changes.

Again the changes that are being discussed here does not really mean changes that are driven independent of the people involved. On the contrary most of the changes that we are concerned with are driven by people, mostly unknowingly or mostly passive, though there are others that are driven knowingly and actively.

We are not living the best lives that we can live in this world because of the problems and the negative aspects that we have talked about before. This means that it can be better, which would again mean that there can be changes that can make our lives better. Given a choice people would opt for a better life than a worser life. So that means that people want their lives to become better which would imply that they would want changes that would make their lives better which would again mean that these positive changes are essential. A corollary would be that people would not want the negative changes to happen.

Not all changes are within our control although there would be quite a large number that are within our control. Changes resulting from human decisions are almost always within human control. These changes that are the results of human decisions can be controlled by changing the decisions that leads to these changes. There are also another category of changes that are merely solutions to problems that can be deduced from the problems themselves. Getting these solutions or changes done would in such cases be just a matter of the people responsible deducing these solutions and then implementing them. Such changes are fully under our control and are completely driven by our initiatives.

Now if such changes are within human control then why are people not driving positive changes. There is no real answer to this but a simple explanation would be that you have to spend effort and resources to bring about these changes and that generally people would not want to spend effort and resources for such causes where the returns on investment is far higher for the society than for the individuals who put in the efforts.

The explanation about classification of aspects of the world and changes in these as simple positive or negative is too simplistic because it does not always have to be like that. A single change could have both positive as well as negative implications. The simplistic view is taken to give an idea about the differences between different aspects of the world and the changes that occur in these aspects. Additionally the simplistic classification as positive and negative also makes easier the explanation about the requirement to selectively drive positive changes and prevent negative changes.

Conclusions

1. The world is continuously undergoing changes. There are positive and negative changes
2. Changes are inevitable and they occur irrespective of whether we make them happen or not
3. People want positive changes and hence these changes are essential
4. People have the power to make certain changes happen and prevent certain others. Changes are drivable through human action

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How to promote activism over Internet

As part of my campaign for social change, I have slowly been getting involved in different types of activism in the recent past, Free Software being one of them. Being a technologist, I have been trying to use Internet as the medium to promote the causes that I have been standing for. Although it has been used effectively elsewhere, I have realized that it is not so straightforward nor easy in Kerala/India. It is not that people are not interested in the causes, nor that they don't have Internet access, but that they are probably not aware that they can contribute to the causes over the Internet. In this article I discuss on how to effectively contribute to and hence promote activism of any kind over the Internet.

Emergence of Internet as THE new age media

Internet has emerged as one of the most, if not the most, powerful mediums of communication of this age. Two aspects of this power is in the scalability and the low cost of entry for somebody in using this medium. If you can reach out effectively over the Internet, the cost and effort in reaching out to a 100 people wouldn't be that different from the cost of reaching out to a million people - hence the scalability aspect. Add to it the fact that the absolute value of this cost is far lower than traditional mediums and you have a killer medium, you have the low cost aspect.

During the initial days of the Internet, people used it primarily to view content available on the Internet generated by a few. So there were a few content providers and a large number of content consumers. This was quite like traditional media like television and newspapers, where the content consumers far outnumber the content providers. People also used Internet as a plain one-on-one communication medium as through emails, text chat, voice chat, video chat etc.

The emergence of the concept of user-generated content corrected this imbalance, and opened up the possibility of everyone who can get online becoming an information provider. What this did was to take out the control of a few people over the information that was available over the Internet enabling people to offer alternative and dissenting versions on topics already offered and also offer information on topics not covered/censored by established media.

Why Internet?

How can this help activism? How can this help a particular cause? The single sentence answer is that you can contribute towards activism for a given cause by generating content related to the cause and through this content letting more people know about the cause. Activism and social causes are really movements by a minority in the society who want to bring in changes into the system. Traditional information providers would normally be reluctant to act as channels for broadcasting information about such minorities because of market forces and market interests.

This is the gap that Internet can fill by acting as a neutral medium of information exchange. By being a neutral but meritocratic medium, Internet also offers the possibility and the opportunity, for people with initiative, to magnify their efforts and reach out very efficiently to a very large audience. Thus even when traditional media does not cover a specific item, Internet can effectively take this information to the masses.

Theory aside there are certain strategies that you can follow to do exactly this. But before we look at the strategies, there are certain attitude prerequisites required to be able to effectively embrace these strategies. We will take a look at the attitude aspect first.

Attitude you have to build for contributing to causes over the Internet

1) Build an attitude of inquisitiveness and collect facts and information related to the topic - Such an attitude helps not just the social causes you stand for, but also in moulding responsible and intelligent human beings out of you. Additionally, this attitude is probably the most important attitude that you require to progress in your life, in your career and wherever you are. Life is a continuous exercise of learning, you die the moment you stop learning.

2) Be bold and state your opinion - Once you have the required information about the topic you should be able to think about the topic and build your opinion and conclusions about the issues under consideration. The next step would be to take this out into the open through what ever online systems you can reach and then engage in healthy discussions around these. Only through discussions and deliberations will we be able to sort out differences and take decisions to embrace change and move forward.

3) Take initiative to spread the word - The contribution that we are talking about primarily means contributing towards spreading the word about the cause. When you stand for a cause or approve of a cause, you do not help the cause in any way if you remain a silent listener. You can claim to be an active supporter of the cause only if you engage in spreading the word about the cause. Outside the web such an activity will require reasonable physical exertion which could be claimed as an excuse for not contributing. But on the web there is practically very little effort that you need to put to get the word around. So it is just a question of your initiative. Take initiative and spread the word.

4) Build a strong online profile for yourself and make your voice be heard - Even though the web is a level playing field, those who play well will always have an edge over those who don't. So learn the tricks of the trade and play well to be able to magnify the effect of your contribution. If you have good visibility on the web, the chances of you being heard will be higher. So put some effort in building your online profile. Once you have this visibility, you can use it to promote causes you stand for.

Specific strategies you can use for contributing to and promoting causes over the Internet

1) Participate in Online Communities, Mailing Lists - Participating in online discussions over forums, mailing lists, irc channels are the easiest way to contribute towards the causes. Healthy discussions will encourage people to think more and to get clarity on the different aspects of the causes they are standing for. This clarity will further help in clarifying the issues for people who are not already in these lists. People very often oppose causes because they do not have very clear ideas about the causes themselves. So participating in such online discussions will help in breaking a lot of these mindset barriers of these causes. Even if you do not find a community/cause you would like to stand for, you can still participate in groups where you naturally are a member of like your alumni mailing lists, your professional mailing lists etc. You can then use the access to these lists to further the causes you stand for by letting your friends in these other lists know about the causes.

2) Use Social Networking Sites for your cause - Online Social Networking is a phenomenon that has gained quite some popularity in the recent years. Such communities and systems like orkut, facebook, myspace etc give access to collection of individuals who share similar ideas and passions. Interested people can create communities around causes they like and connect with people who share similar interests. So without requiring the physical effort of actually meeting each other these communities allow such people to efficiently collaborate for causes. You can decide to pursue your own causes using these systems or join causes for which communities already exist. Alternatively you can also become part of other communities like your alumni groups, company groups, career groups, professional groups etc and then use the access to these groups to spread information about the causes you stand for and the groups they can join to contribute.

3) Effectively use Social Bookmarking and help the items get public attention - Social Bookmarking is yet another way of sharing with your friends, links to pages that you think deserves attention. Social bookmarking also gives you the option to categorize the links so that your friends will just have to look out for links related to areas that they are interested in. In addition to letting your friends know of the links, social bookmarking also manages to classify using democratic means the content that are being bookmarked by people. It classifies and at the same time identifies popularity of the content that are being bookmarked by virtue of the number of bookmarking a particular link. So if you want to promote a website/page with information about the cause you care for, bookmark it in your favorite social bookmarking system.

4) Blog about the event, activity, activism - A blog is no longer a personal web log, it is your personal online news channel. There will always be people around you who will monitor your blog, i.e. once you have a blog. If you are really good with your blog you can even reach out to millions of people across the world. In any case you can use the blog to let these people know about the causes you are standing for, the issues you are facing around these causes, the kind of support that you need from these people etc. A blog also gives you an opportunity to point your readers to relevant blog posts on other blogs and other websites that you think they should also get to know.

5) Mail your friends about the causes you are standing for - This is probably the most expensive way of contributing (in terms of time spent per target person) to a cause but the return on investment of time could be equal or higher based on whom you decide to mail. You might want to pursue this strategy with people whom you think could massively impact your cause. For example writing about a legal cause to a friend in the legal practice who can let his friends in legal practice know about the cause. You would also want to pursue this strategy to let critical officials know about your causes. When you mail people it would always be good to point them to some permanent URL on the web where the recipient can go and get more information.

6) Link to other blogs and sites where the topic is being discussed - The internet is a huge mesh of web pages interconnected by hyperlinks or links. The importance of web pages are decided by several factors like the content on the page, the title used, the organization of the content, the number of pages that link to that page etc. There are questions about the relative importance of each of these factors. However, of these, only one is directly within your control i.e. the number of links to a page. If you see a website or a page which you think need to be promoted you have to link to it from your blog or website. It is like voting for the page and saying that - yes you agree with it. You could also vote for a page and say you don't agree by linking with negative terms in your link. The more links that a page gets, the more people will get to know about the cause and the more easier it becomes to promote the cause. So when you see something that you agree with and want to promote, blog about it and link to it.

What we have discussed here is not the exhaustive set of attitudes and strategies that you require to actively campaign online. But these would give you an indication of what all you could do online. Use this as a starting point, read more and figure out yourselves how best you can contribute given your time and resources. So as the zen saying goes - find your own way. If you have questions or suggestions, feel free to comment to this article and I can try to answer them in the best way I can. Before I close this discussion, I have to issue a warning note, you should be very careful in implementing these strategies as there is very little margin between online campaigning and spamming.

Suggested Reading
http://en.wikipedia.org/wiki/Online_forums
http://en.wikipedia.org/wiki/Electronic_mailing_list
http://en.wikipedia.org/wiki/IRC
http://en.wikipedia.org/wiki/Social_network_service
http://en.wikipedia.org/wiki/Social_bookmarking
http://en.wikipedia.org/wiki/Blog
http://en.wikipedia.org/wiki/Backlink

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You are a terrorist if you have a beard

Not exactly but it goes like this - You are a terrorist if you have an unkempt beard and I don't know you. This is not my opinion but that of lot of people whom we met on the roads during the recently concluded Freedom Walk campaign. I will probably have to put more context here. Freedom Walk was a campaign around the Gandhian message - 'be the change you wish to see in the world' - focusing on the social and technical aspects of this change. For this a team of people, including myself, walked from the northern district of Kerala to the southern district of Kerala, passing through all 14 district headquarters in Kerala, and talked at educational institutions, government organizations and NGOs.

The walk took us 44 days to complete and we walked more than 1200 kilometers for this. At the places of stay which were almost all public places, we barely had enough time and convenience to rest and to recuperate from that days walk of around 30 kilometers. We ignored our beards which had started to look scraggly by the second week of our walk.

Around the fourth week of our walk a bunch of SIMI (Students Islamic Movement of India) extremists were captured from Kerala. Popular media created such a hype around this issue that the CM had to request the media to act more responsibly.

But it looked like the damage was already done. People used to watch us curiously before this hype about terrorism was created. Now where ever we walked we had to bear the taunts of people who did not have the courage to ask us straight about us and our irregular appearances. Statements ranged from - "Looks like terrorists" to "Do you have bombs in those backpacks" were common. It is not that everybody behaved like this.

There were still people who used to stop us and get the complete story behind our walk. In the initial part of our journey these interactions started with the curiosity of the people but in the latter this curiosity was replaced with an aggression coming out of fear. Even when there was aggression, the air would be cleared of it in 5-10 minutes of interaction with us. And interactions usually made the situations bearable for us. There were even extreme cases where the local police was called under suspicion that we were terrorists.

I am not sad about the taunts and the aggressive interactions but rather about the stereotype that has percolated the minds of the population and that too a stereotype based on looks. I think the natural progression of thought must have been like this :- If you have a beard, you are probably a Muslim; if you are young, have a beard, and if the beard looks ragged and nobody around me knows you, you are probably a Muslim extremist or even a terrorist.

There are two problems with this stereotyping. Not just this but any stereotyping based on looks is utter nonsense. Lot of Muslims grow beards but that does not mean that most people who grow beards are Muslims. A lot of extremists have scraggly beards but that does not mean that a lot of people with scraggly beards are extremists. Simple logic isn't it. Funny that lot of people, and even educated ones, fall for this stereotyping.

The second problem is that such stereotyping could easily fuel segregation which could further worsen problems like terrorism that first started this stereotyping and this would strengthen the stereotyping - a classic vicious cycle. Any one with a little common sense should really understand the problems associated with this and try to break the above cycle.

One practical way of fighting the above stereotyping and any other stereotyping based on looks is to embrace the visual aspect that is being stereotyped. For example if it is a stereotype based on beards, let us (those who want to break such stereotyping) all grow beards. If it is a stereotyping based on kaavi (orange color) let us wear kaavi. If it is a stereotyping based on long hair let us grow long hair. Hope you got the point.

In any case I have decided to keep my scraggly beard for some more time, i. e. until most of the people who know me knows about my beard. That is my small contribution towards breaking the specific stereotype mentioned above. I have been told by almost everyone who saw my beard that it does not look good with the heavy uneven growth. Although looks does not really matter, it helps in business where I have to deal with people who does not know that looks does not matter. I will therefore have to conform, but till then I will protest peacefully with my ugly beard.

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Ask and you shall receive

My policy about communication is simple - shoot straight. It does not always work, especially when and where people expect facts wrapped in intonations, hints, gestures etc. I try to follow the same policy in my actions also. If somebody wants me to do something for them, they have to ask me. It might sound very rough and mechanical but believe me, it is very efficient. I seldom deny my friends and relatives any help/assistance that they want me to do for them. I also don't expect anything in return, including the oft said "Thank You". I normally let my close friends and relatives know that I don't like the "Thank You"s that I get back. I help/assist them because I consider it either my responsibility or my duty and I derive pleasure in doing it and that itself is my reward. I also try to say No in situations where I can't practically offer them the help that they require.

During conversations I don't normally iterate through the series of possible assistance options that I can render to the person I am conversing with and hence I expect the other person to ask me for the specific help they want me to do for them. That has to be far more efficient than me trying to guess their needs.

That is with my policy. There is a small problem here, our society does not work this way. People expect each other to enquire about each other and ask for possible things they can help with. This has a definite advantage in that this avoids embarrassing situations where a request is denied. You only latch on to offers you need and ignore other offers. Giving offers is never going to hurt the ego of the person offering the help while asking for help could possibly hurt the ego of the person asking for it and especially when the request is rejected. And here is the rest of it.

So how does it work with my method? Simple, you rate your relationship with me and calculate if I would have asked you for a similar help and if you would have serviced the request. On rethinking it is not quite as simple as that. How would you know if I would have asked for something similar? Tough question. Well the answer is, just try and ask me :-). I don't expect all my friends and relatives to know my policy nor how to tackle the above question. So I normally service all practical requests for help, mostly irrespective of my convenience or inconvenience.

Asking and getting help is a very delicate system in our society. I don't like indirect transactions and was planning to write about this for some time. On thinking about this topic I realized that I seldom ask help from other people and I do so only under dire circumstances. Possibly it is because of my larger than life ego :-) and possibly it is because of my (over)confidence in being able to handle the issue on my own. Ideally I should be able to figure out exactly where I need help and where I can get help easily and where I have to ask for help.

Additionally I needed some help urgently from my friends and relatives to find people (either you yourselves or your friends or relatives) who invest in the Indian Stock Market. You can read more about this here in my post about my need to find people who invest in the stock market. So the timing of this article was perfect. I had to ask for help and I wanted to clarify my policy about asking for help.

Anycase, my policy remains - Ask and you shall (most probably) receive :-)

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Simple solution to global energy crisis

Recently international crude oil prices surged past the 140$ per barrel mark. Although this possibly could have been caused due to artificial shortages due to market manipulation by producer countries, it is a small sample of what is to be expected in the future. To top this, startling evidences for the disastrous effects of global warming are being discovered at disturbing frequencies these days. Energy crisis and Global Warming are two aspects of the same problem and a simple solution to both is moderation. But why is this not happening?

Environmentalists across the world have been trying their best to convince political leaders to take active steps to reduce energy consumption and to reduce emissions. They have at best convinced governments to set emission standards and enforce some kind of regulation in the industry segment. But they have not been able to make any real impact in terms of reducing the energy consumption pattern of the general public. Why is this so?

Industries in the developed world are trying to commission researches that 'prove' that global warming is not a direct consequences of increased emissions. Industries in the developing world are clamoring that their counterparts in the developed countries had their share of polluting the world and they would like to have their fair share too. Why are they both blind to the fact that delicate balance maintained by mother nature is at risk of collapse any minute?

In a country like India where mass transportation depends mostly on Electricity or Diesel, you can easily discourage the consumption of oil and promote mass transport systems by a) Allowing the price of petrol to follow international prices and at the same time subsidize the diesel prices, and by b) Adding a very heavy tax on diesel non-commercial vehicles. Keeping the price of diesel low will ensure that general industry and goods transportation is not affected by the increasing fuel prices.

Again when you look at the impact of a price rise in diesel on the price of commodities and services it might not be that bad. The percentage of the cost of products and services originating from a cost in transportation, of which only one part is fuel costs, might not be that high to really cause a very significant price rise even if the fuel costs double.

When I first went to the US in 2001, I remember that petrol prices were around $1/gallon. Currently it is hovering around $4/gallon mark. In the US the prices of petrol and diesel are controlled by international prices. By allowing these prices to increase with international prices the affordability of alternate energy vehicles have been increasing. Hybrid Vehicles sales in the US have gone up by around 30% when normal car sales went down by 3%. Although hybrids account for only 2% of the number of cars in the US the trend is evident.

So what is the simple solution to the crisis, short term and long term. In the long run the only real solution is to find sustainable alternate energy sources and ways to consume energy from these sustainable energy sources. Say for example nuclear energy. Even if we have nuclear plants that generate all the energy that we need now we still can't use this energy in our transportation sector where the dependence is still primarily oil. So in addition to these alternate energy sources we need to change the ways we consume energy.

What can we as individuals do to move towards achieving this long term goal? We should try to promote and support decision making that will help us move towards this goal. We should try to promote research and industries that are trying to achieve this long term goal. We should reject and fight decision makers and industries that are trying to take us away from this mission.

What is the short term strategy to the energy crisis? Simple, just reduce our energy footprint? How can you do that, save energy, consume less energy, avoid wastage of energy. There is yet another way which people fail to recognize. It is moderation in consumption of everything that we use in our daily life. I had discussed some time back about the composition of cost of things. Energy is a part of the cost of everything that we consume. Everything means everything including the products and services that we consume. As we moderate our use and avoid the wastage of anything and everything we save energy, we reduce our energy footprint.

This is not a trivial solution. If you decide to take public transportation once every week or if you decide to turn on one light less (of an average of 5 lights in your house) your energy consumption in these areas would go down by approx 20%. There are tonnes of other ways you can reduce your footprint. I will have to dedicate another post to write on ways you can do this, but I hope you get the general idea.

As far as indirect reduction of energy consumption, via moderation in consumption of material products is concerned, the key points are Repair, Reuse, Recycle. This could be anything from the humble pen you reuse to the bottle you recycle to the majestic car you repair. The underlying philosophy is to reuse everything until it is broken and if it is broken you repair and then reuse it until it is unrepairable and then you recycle it. Translations in energy savings would depend on the energy component in the product.

A reduction in 20% per capita consumption of energy would directly translate to a comparably large reduction in global demand of energy which would further translate to a lower pressure on the environment and a sustainable future until we hit upon our fully usable, reliable, and sustainable alternate energy sources. Till then let our motto be conservation and moderation in everything we consume including - energy, products or services.

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What is the easiest way to make money?

I have been in business for only 2 years now but I have learned a very important lesson during the course of these two years. As a matter of fact, I have learned quite a few :-), but this is something that I felt was worth sharing. Well, I have learned the easiest way to make money in business. Interested to know that, dont you?

It is not a big secret and probably you know this already. Additionally if you have read a few books in economics you must definitely have come across this before. Well, the easiest way to make money in business is by saving money. A rupee saved is a rupee earned (or in other words - A dollar saved is a dollar earned). Adam Smith was so fond of this principle - parsimony, he called it fondly - that he must have mentioned it where ever he had talked about profits in his book.

An employed person always earns regular fixed income (unless he gets a hike/promotion/bonus/dividend) and he does not have to deal with the concept of profits. He can go ahead and spend whatever he want whenever he want as long as he can survive for a month with the money he gets.

As opposed to the above concept in the case of an employed person, a company earns a variable profit which is equal to the total income for the month minus the total expenses for the month. Unlike in an employees case where the salary is fixed, a company can increase its profits by increasing its income or reducing its expenses. Simple math isn't it.

Now increasing income depends on two factors - company's internal efforts and the result of this effort on external factors like public, media etc. On the other hand, reducing expenses is a totally internal effort. Of all factors related to a company, the company would have more control over something that is totally internal than on something that is partly internal and partly external. So reducing internal expenses has to be more easier than increasing income.

Now reducing expenses is not about reducing operations or scaling down operations. It is all about increasing efficiency and reducing wastage. This could be as simple as reusing and refilling pens or as complicated as optimizing delivery trips or purchase trips. It could be as simple as keeping things ordered in your drawer or as complex as indexing and ordering your registers. It could be as simple as reusing a pin/clip or as complicated as rewinding a burnt fan.

Even though an employed person does not have to worry 'per se' about his profits, he can always cut down on his expenses and increase his efficiency to be able to utilize his saved time and money on other worthwhile activities/products/services.

For a company, in addition to reducing expenses, an overall increase in increase efficiency will also indirectly increase the overall income of the company. So now you know how to make easy money. Go ahead and try it out in your company i.e. if you are lucky (or is it bold) enough to own your company.

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Why should you control your desires and emotions

When I think about human mind there are two separate sets of aspects that I am interested in. One set concerns thoughts and related process that are within your conscious control and the other is the set of emotions and desires that are not normally within your conscious control. My hypothesis is that a person will be able to lead a happier and more successful life if the conscious/thinking part of his mind is in control over all his thoughts, emotions and desires. Let us see.

There is a small ambiguity here in that I am taking about a "you" and a "your mind" here. The "you" I am going to talk about will represent the part of your mind that is concerned with the first set mentioned above. It might look funny because under this notation "you" is a subset of "your mind". Leaving aside the play of words let us take a look at the issue I would like to discuss.

Any discussion on mind and its processes would inevitably touch a lot of different areas that I am not very clear about and these are discussions primarily to get my ideas clear on the subject. There are several interesting related questions like What is mind? What is matter? How is mind related to brain? What defines "I"? Is "I" different from "my mind"? How do you define consciousness? What is ultimate happiness? What is the objective of life? - that are still not very clear to me. However I think the topic under discussion is more related to practical aspects of getting in control over your emotions and desires than the epistemological aspects of these questions.

Every person has both sets of processes within his mind. Processes that are within his conscious control and processes that are not. Any thought or action resulting from a thought where the thinking part of his mind dictates the thought or action and where the person is fully conscious of the thought or action constitutes the first set of process.

Let us look at a simple example for a process that is within a persons control. Consider myself typing this article. My mind is framing the sentences that I am going to write and then this thought invokes the necessary mechanical processes in my hand to get it into typing. This is a process that is within my control. I have to decide to think about the next sentence and then I have to think about the ways of phrasing the idea into a good sentence. Once the sentence is formed I will to have my fingers type them in. These are processes controlled consciously by the thinking organ that my mind is.

There is now a second set of processes in human mind that are not quite within the conscious control of the thinking organ. Simple examples would be emotions like sadness, anger, happiness. Desires form another class of processes in human mind that act as root causes for further thoughts, emotions and actions. Habits, memories, recollections etc are another classes where the conscious being does not really play a role.

Why did we try to classify these processes as those that are within the control of your conscious being and those that are not? The objective is to find a way for a person to be more in conscious control over his life, his actions, his thoughts, his emotions and his desires. Why does he have to be more in control? Again, to be more in control over one's life will give the person an ability to chart out a fairly predictable life and allows him to increase the probability of him achieving his goals in life.

So the premise on which we are going to build the discussion is that people would be able to increase the probability of achieving their goals in life (and that they would have goals in life) if they are able to control their actions. Yet another assumption is that achieving happiness in life is a common goal for every man and the goals in life mentioned above includes this common goal also.

All of our physical actions are dictated by our mind - either consciously or not consciously. I type - because I want to. I sit late - because I want to. I quit my job - because I wanted to. I sneeze automatically - because of an itch. My eyes well up automatically - when I become sad. I smile automatically - when I become happy. These are small examples of how our consciousness dictates our conscious actions while the rest of the mind outside of our consciousness dictates the remaining actions.

Whenever a person comes upon a situation where he has to take some action there would be two different forces working in his mind. One would be the thinking conscious part of his mind and the other would be the part constituted by his emotions, desires and memories. The stronger of these two parts would take control over the situation and biases the decision making. A person who has more control for his conscious mind would take conscious decisions whereas the opposite kind would take more impulsive/habit oriented decisions.

If our actions are controlled by our consciousness then we can base these actions on a logical framework where we can weigh the causes and effects and decide for or against taking the action. If instead our actions are not controlled by our consciousness then they will not be based on a logical framework, rather they would be based on habits and impulses and their root causes would be emotions, desires and memories and they may or may not align with the rational choice under the given circumstances.

A rational action is the optimal action taken after analyzing the pros and cons of the possible alternatives. If we were to assume a generally applicable rational framework then all rational actions should lead to optimal solutions given the situations, issues and criteria. This would mean that such an action would be superior or at least of equal quality to an action based out on habits or impulses. This should mean that rational actions should be better than the latter set based on emotions, desires and memories.

A person who is more in control over his desires and emotions would be able to rein in these aspects of his mind and allow his reasoning to take charge and make decisions for or against possible actions. This would make sure that the percentage of impulsive actions would be fewer and the person would behave according to the rational framework mentioned above.

I don't think it will be possible for a person to bring the whole domain of his mind into his complete consciousness, but as the percentage of actions under his conscious control increases the person would start to act more rationally than otherwise. If people were to start taking actions rationally as discussed above and if we are to assume a generally applicable rational framework, then, a lot of problems faced by the human race like communal tensions, religious conflicts, international conflicts and most importantly general crime would start to diminish.

When we look at a more personal level, rational actions should allow the person to be more efficient in whatever he is doing. As was mentioned above it would also increase the probability of success in the endeavors since the actions are more tuned towards the outcome than otherwise.

We have looked at a cause perspective to see why controlling desires and emotions are beneficial. It can be shown that this control would be good from a result perspective also.

Irrespective of how much you control your own actions there would still be too many un-controllable external factors that will decide the final outcome of your individual action or the outcome of a circumstance. Now if you do not have control over your emotions then you will end up being depressed when circumstances turn bad or when actions don't lead to successes. There is also a corollary i.e. you will not be ecstatic when circumstances turn good or when actions lead to successes. Now by the elimination of ups and downs you will effectively increase your average productivity by increasing predictability.

I should however warn that a total control over emotions are desires would lead to a mechanistic world. Now emotions and desires are what makes humans humans. Without them we would just be machines. Emotions and desires give the flavor to life that has made the world what it is now. Since a total elimination of desires and emotions is practically outside of the reach of humanity we really don't have to worry about such a scenario

Rather, given the advantage of being able to solve some of the most acrid problems faced by humanity this is something that most people should strive to achieve. Moreover, being in control over your emotions and desires would also mean that you can decide whether to yield to an emotion or desire according to your need. So you could decide to be happy (or for that matter be in any positive emotional state like passion, affection) whenever you want and wherever you want.

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How to help your business connections?

One of the most important resources in business is the number of useful or potentially useful contacts that a person has. Business is all about making money and this might sound harsh. There is no point in having a lot of contacts if you have not been able to or will not be able to gain any advantage in your business by having these many contacts. Business is a different game than a regular employed job. Since you would like to make most out of your contacts you should also in turn try to help your business contacts in whatever way you can. This is the only way a good business networking system can be built. A person running a regular job, as part of his employment, probably would not require any kind of help from anybody else, other than those who have already been assigned to help them. And for those who have been assigned to help them it would be their responsibility to help the person whom they have been assigned to help. The person who is being helped can request/order the person who is helping him/her to help him/her. Simple isn't it. Unless the person is extremely selfless or totally foolish he/she would not (and should not) do things that he/she is supposed to do. So everything is supposed to be run like clockwork.

Additionally an employed person does not need any help in his/her work (other than perhaps when looking for new jobs and some marketing help if he/she is into marketing) from his set of friends and relatives. Even if they wanted to they would not be able to help him/her too much since things are mostly defined and predictable(more often than not) in a regular employment.

However in business there is a small difference. A business owner would be dealing with potential customers all across and all throughout his operations. He/She would be competing against a lot of other players in the market and would be able to use any and all help he/she can get from his/her friends and relatives. Unlike in the previous scenario, a person willing to help would probably be able to massively impact the success or failure of the businessperson.

Now here is the slightly tricky issue. Most of the regular employed friends/relatives of a businessperson would not have any clue about how to help a businessperson. They would always have been employed people and would probably have never needed any professional help from any of their non-co-worker friends and their relatives. They will very likely not understand the position the businessperson would be in and in most cases would not lift their little finger to help the businessperson in any way. This would apply even if the friend/relative sincerely wants the businessperson to succeed and thrive.

At the same time a businessperson would understand the position another businessperson would be in and would gladly lend a helping hand under the unwritten condition/assumption that the other businessperson would help him in a similar scenario. By doing this they would not only help their friend but in turn would be helping themselves in the future indirectly through a return favor.

Each of these businesspersons would know that the other would come to some help in the future or that they would prove to be useful to the other in the future and would therefore not hesitate to ask each other for help and would normally get help when asked for. This is the foundational principle behind business networking. You build more business connections so that these connections would prove to be useful at some time in the future. Effectively you invest in building your business network.

I can give a perfect example of how a simple good word about a businessperson could possibly help the businessperson. In the beginning of this financial year I had written a post on Zyxware Website thanking all the service providers of Zyxware who had rendered us valuable service during the last two years. One of the people whom I had thanked was a DTP center near us. A professor in the US who was searching for somebody in Trivandrum to do his DTP works came across our post and this resulted in him giving regular work to the DTP center. In yet another case another person who was looking for places to get visiting cards done came across the post and got in touch with our service provider and gave him his work.

Now let us come back to the friends and relatives of the businessperson. The probability of a businessperson proving to be as useful for his friends and relatives as for other businesspersons is relatively very low. This is because his/her (non-businessperson) friends and relatives would be normal employed people and they would normally not need any help from the businessperson. If the businessperson asks for help he/she would effectively be soliciting a transaction where he/she would most probably remain a debtor to another person. In my opinion no self-respecting businessperson [with a reasonably big ego :)] would want to do this and put himself/herself in such a position.

One of the easiest ways in which people can help businesspersons whom they would like to help is to put in a good word or two to other people they know and to possible customers of the businessperson. This might sound trivial but the impact could be statistically explained as highly significant. It has already been proven and well accepted that word-of-mouth marketing is the best marketing strategy. Now to put some numbers to the claim let us consider the following example :-

Suppose a businessperson has 200 friends and relatives, then of these 50% (by a conservative estimate) would want him/her to succeed in her life. Now if an average person has 100 contacts and if the 100 people who wants his/her businessperson friend to succeed tells half of the people they know about this businessperson friend then this word-of-mouth marketing would easily have reached 5000 people. Yes there would be intersections between the sets of contacts but this example should convey the general idea.

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People without Vision Perish

My idea of a company I would like to work for is what I have been trying to materialize through Zyxware. A company which would give its employees a lot of freedom and flexibility in what they do and when they do; a company where people would have infinite potential for growth; a company where people could have all the opportunities to learn whatever they wanted to learn; a company where people would have the freedom to fit their abilities to the opportunities available; a company where capability would be rewarded more than anything else; a company where friends work together for the heck of it; a company where working is fun; a company where employees share the profits.

Since inception we have hired a total of 15 people at Zyxware. Of these 6 have already left the company. In spite of my best efforts, which have been quite aligned with my vision described above, people have left the company. I am neither angry nor sad nor depressed that these people have left the company. Even though I had mentioned about a 2 year bond at the time of signing up these people I had not actually made them sign an agreement for the bond. The reason was simple. If I cannot hold a person in the company just with the vision, the work ethics, the environment and the actual work involved, then there is no point in holding them back with a bond.

Working for a small company is a risky proposition. The only way the risk can be mitigated is to work for the quick growth of the company. The company has been growing quite steadily in terms of market reach, internal capabilities, internal processes, brand value, brand recognition, generation of opportunities. Working for a small company is like digging an oil well. You have to work really hard with little or no returns on your effort until you strike oil. You wouldn't know when you are going to strike oil and once it does it would take only very little effort to get the oil out. The faster you dig the earlier you strike oil. If you quit before you strike oil, it would be tragic if you were only inches from the oil when you quit.

I am very confident about my vision and the possibilities of Zyxware. I know that it is just going to be a matter of time before we strike oil. It is one thing to dream about something and it is quite something else to make another person dream the same thing. I have been trying very hard to infuse this into the employees of Zyxware. I know that I have succeeded partially with this (only partially, as suggested by the attrition). One particular factor that I have identified as a common reason for employees (in most of the cases) leaving the company was the immense pressure from the families and friends of the people who have quit because they had no clue about the vision behind the company nor the prospects of making money in the Internet domain.

I am very confident about my oratorial abilities and I have seen sparks of excitement whenever I had shared my vision with my team. However from the attrition rate I can see that this vision has not quite managed to percolate in any level to their parents or friends. It is sad that even in circa 2008 people in Kerala make collective decisions about careers even in the case of people as old as 28. Again it should be noted that nobody is truly fully not responsible for their decisions. Friends and family can only influence decision making. Decisions have to be ultimately made by the people themselves. This again points to another peculiarity of Kerala culture. Most people are easily influenced and most people do not have solid convictions or opinions on their own.

There is a verse in The Bible that goes "People without vision perish". This is what I have to say to the youth of today. You have to have a vision and then follow your vision with your passion. You would already have increased your chances of phenomenal success, several fold by this single point of action itself. Life is not just about the mean, it is also about the extremes, because without the extremes the mean would have been something else. It is always better to be a leader than to be a follower. But then you will always need followers for leaders to exist. So we need both leaders and followers. Those of you who think that you should be leaders should try their hand at it and those of you who think that they are not suited to be leaders they should rather not and just be good followers.

I am not at all dejected by the fact that these people have quit the company. I hope that once the company gains a little more brand recognition, the possibility of grand success would reach the family and friends of my employees and in turn bias the decision making in the company's favor rather than against it.

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Can we remove evil from the world

I was a volunteer at the First GNU/Linux Install Fest in Kerala (first publicly held). The event was a lot of fun and we had a lot of technical discussions. One of my discussions with a volunteer diverted and ended up on a discussion about evil in the society. I am sharing the relevant parts and some of my related thoughts and questions here. We could not discuss much because of the busy schedule at the meet but it had set off a few trains of thought. This is still an idea in the works and this is probably going to be a lot of questions, if not all, than a lot of answers. Also this is probably going to be highly incoherent as some of the chains of ideas were widely separated.

I started Zyxware with a vision to build a business that itself will be able to drive the change I wished to see in the world and also to get me to a position where I would have the financial and operative base required to set off on my own towards this ideal. I am making a few assumptions as foundations for this vision. One is the existence of 'good' and 'bad' and the possibility of a positive change from good and bad. Two is that I would be able to distinguish between them and do what I think is good.

But is there something called an absolute good or an absolute evil? For example can killing a man be called an absolute evil? What if he himself was on a killing spree using a machine gun in a crowded street? Would it then become an absolute good?

For actions where the consequences are not directly evident, how do you know what is good and what is bad? For example, Is giving money to a poor man good? Wouldn't it have been better to invest the money for his children's education?

When you have alternative choices for an action, can we really classify the actions as good and bad? For example, Is distributing a given amount of money to build houses in a village better or worse than using the same amount of money to build a school in the same village? Is giving money for a charitable cause like an orphanage better or worse than giving money for a rural development program?

Can we really know whether the macro and micro consequence of our actions and decisions to be able to classify them or even attempt to classify them? Example - Have the invention of computers made human life better? Do we even know that our lives have become better? Is living longer better than living a shorter life?

What if something that is good for me is not good for others? Would it be good or bad? Say if we take democracy as a means to solve this problem and define that it would be good if it is good for the most number of people, then would it be good if it was good for me and not good for just one another person? What if it was very good for one person and slightly bad for another person?

Humans are not all rational and hence some of them will always do irrational things. So some of them will do evil things. But is evil always irrational? Can't evil be rational? Can it be? People are not all identical. They will perform different actions under identical situations. So there will be variabilities in life. Some of these variations would be what one could classify as 'not good' as there would be some variations that could be classifed as 'good' which have to be different from the 'not good' in some aspects. So there will always be evil.

Some people derive satisfaction in fighting the so called evil. If mankind comes to a stage where all the currently defined evils have been elimated what will happen to such people? What will these people do? They will probably then define something else as evil and then fight against that.

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Bending rules without breaking them

A lot of road widening has been happening in Trivandrum city during the last two years. Shops and commercial establishments that existed close to the original road boundary had to pay with their spaces. Some lost their shops completely while some lost them partially. Corporation of Trivandrum has strict rules when it comes to modifying existing buildings or building new ones. But quite a lot of the shops and establishments wriggled out of these regulations. One of the most frustrating aspect about city roads is the inevitable traffic congestion that you come across frequently. One simple and effective solution is to widen the roads. Building a wide road across a barren land is easy but widening an existing one right through the heart of a city is tough. It is tough because of the building infrastructure present on the edges of the existing roads.

It is not just tough but it is very expensive too. The Government has to pay a compensation for the part/whole of the buildings demolished as part of the road widening. It also has to pay for the land acquired back from the public. To reduce future expenses and to facilitate easier widening of the roads in the future there is a regulation that says that any new construction has to be at least 5 meters from the edge of the new road. This leaves scope for one more widening exercise in the future without any demolishing.

Road widening is highly beneficial for the public since it reduces traffic congestions, increases parking spaces, provide an opportunity to build bigger and better building infrastructure near the roads. It must be mentioned that the rejuvenation of the 'roadscape' is soothing for the eyes too as the facade of most of the buildings along the roads changes because of the demolishing and reconstruction.

As with any positive action there are some negative consequences for this road widening exercise also. Shops and commercial establishments that were close to the old roads were at the receiving ends in this case. Where ever shops lost parts of their old buildings they had to rebuild. Quite a lot of these commercial buildings were pretty old and any kind of restructuring were out of the question. So the only option available to the old shops was to demolish and build ground up.

Where ever the buildings had enough spare land available for them, they demolished the complete old structure and built their new buildings adhering to the 5m clearance rule. In almost all such cases the new buildings were far bigger and far better than the old buildings. Building these new structures provided the owners and opportunity to upgrade their infrastructure and hence open up the possibility of larger revenues.

Things were bleaker for a second category of building owners who did not have any spare land available for building a new building while adhering to the 5m clearance rule. In some cases the 5m clearance would have completely eliminated the possibility of building any viable commercial structure at all. Being highly resourceful and trained in the art of bending rules these people figured out a work around for this problem.

Corporation rules allow for restructuring and modifying an existing building without having to meet the 5m clearance rule. So they could avoid having to fulfill the 5m clearance regulation by demolishing just enough to give to the Government whatever is required for the new road and then walling up the damage and rebuilding the facade. But there arose a new problem here. The old structures did not allow for massive reworking. Additionally if they did just this they would have forgone an opportunity to increase the rentable area by building multiple storeys.

Most of the buildings of the latter category were very old single storied tiled buildings which did not provide the option of adding a storey or two to the building. To overcome this problem without breaking any rules the building owners demolished their old building in parts while rebuilding a completely new structure capable enough to be multiple storeys in height within the old structure itself. At any point of time the work being done would only be a modification work as the building would have both old as well as new sections. Although by the time the complete work is done the structure would not just be completely new but also would be a totally different structure and with a far bigger rentable area.

Strictly speaking there is no violation of any rule in this process. But there is a violation of the sense of the law. By building very close to the new road the building owners hinder future growth, makes future growth more expensive and make it inconvenient for the public by not being able to provide parking areas. There is also an aspect of unfairness in this breach. The situation is unfair to the people who build new buildings by taking unfair advantage in terms of getting more buildable area. It is also unfair to the general public as it increase a cost in the system through a 'violation' of a law.

Some cases where the building owner is the business owner itself or where an adherence to the 5m clearance would have totally eliminated the possibility of any building at all, might fall on the border of fairness and unfairness. What right has the society to deny a man of his current livelihood for the sake of its possible future growth. Usually if such businesses lose their commercial space it might become practically impossible to find a similarly convenient location and re-establish their business at the new location.

It would have been far better if the government had an option open for the building owners to violate the 5m rule at the risk of not getting paid for their buildings when they get demolished for future road widening. It would also have been nice if the government promoted consolidation of infrastructure during road widening exercises to increase the efficiency of the utilization of the land. If the incentive for consolidation is good enough then people could be lead to doing that without violating the law or the sense of the law.

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Retailers unite against big retailers

Last week there was a state-wide protest organized by the association of small retailers and traders of Kerala. The protest was against the entrance of big retailers like Reliance and Bharti into Kerala. The irony of the situation is that you have small capitalists joining hands together to fight bigger capitalists in a fight seemingly to protect the consumers. First let me take a look at some of the major issues raised by the protesters. A major concern voiced was that the foray of national and multinational corporates into the retail sector is going to cause loss of income, and loss of jobs of people owning and employed in the small and medium retail industry. Another point was that the big retailers would lead to a collapse of the small and medium retail industry, leading to monopolies and ultimately increased prices of everyday commodities. A third issue predicted was that once monopolies were established the farmers, manufacturers and producers would be at the mercy of the retail giants and hence they would be exploited.

Some of the underlying assumptions are a) Retailers and Traders have a right to be retailers and traders and nobody can deny their rights b) The association of retailers and traders are not just fighting for themselves but also for the vast majority of people ie the consumers, c) The existing system as such is very fair to the producers - farmers and manufacturers - in terms of giving them just shares of the retail prices of the products. d) Big retailers are bad e) Multinationals in retail industry are very very bad, f) The retailers and traders form a significant percentage of the population

Before we dissect these assumptions and claims let us take a look at the economics behind this. In any economy people generate revenue by the transfer of goods and services. Correspondingly you have the retail sector and the services sector. The retail sector includes not just the retail shops that sells us the goods we buy, but also the network of systems that exist to maintain these retail stores. Similarly the services sector has the service delivery framework.

From the point of manufacture, or cultivation as the case may be, of items bound for retail trade, to the point of the retailer selling the product to the consumer, there are usually several intermediate processes and people involved in these processes. Some of these would be wholesale purchasers, regional collection centers, transporters, distributors, sub-distributors. There would also normally be several layers of middlemen between these steps.

As the goods move along these chains of people the cost increases at each level until it finally reaches the customer. By the time the product reaches the customer the cost of the product could even have gone up a few hundred percentage points over the original price at which it was bought from the farmer. There would also be other intangible value additions like advertisements, insurances etc along the way which contributes further to the final selling price of the product.

However the real value of the product for the end consumer would not have changed as much as the increase in the cost of the product. Now we could deduce three different things from this. One is that the intermediary steps from the point of production to the final sale are very inefficient in terms of value addition. The second is that if the efficiency of these processes were higher the cost of the product for the consumer would become cheaper. Finally if some of the intermediary steps were avoided and the final price being kept the same a higher price could be paid to the manufacturer or the farmer.

Retailers exist to trade, and trade they do, and their motive is to make profits. The profits that are expected by the retailers would be in proportion to their investment rather than to their livelihood expenses. This rule would apply for all but the small and samll-medium retailers. The right to earn ones livelihood is a universal right, but the means to do that is not a right. A trader has a right to earn his living through his trade. But, the moment the returns are higher than his cost of livelihood his trade will not be covered under the right.

A retailer or a trader sells at a price which will yield him the profits that he is expecting out of his business. The price would also be regulated by the prices of the product at the other retailers also governed by a similar mechanism. A reasonably big percentage of the final price of the product goes towards the overheads in the retailing process discussed above. A percentage would go to the farmer also. This percentage that goes to the farmer and the small percentage that corresponds to the small value addition to the product are the components of the price that is effectively used to maintain productive labor. The rest is used to maintain unproductive labor working in inefficient processes.

A big retail chain in the market would be operating under a different framework. The entire chain of processes from the point of procurement from the original producer to the point of sale to the end consumer would normally be operated directly or supervised directly by the big retailer. This would introduce a massive efficiency increase in the process. Also the advantage of size gives another efficiency increase in terms of the unavoidable overheads. Consequently the big retailer would be able to make two changes - one is to reduce the final selling price for the consumer and the second is to increase the purchase price from the producer.

By giving better prices to the producers big retailers promote productive utilization of labor and by increased efficiency in the retail process the deviation of capital for unproductive labor is minimized. Additionally by reducing the prices for the end customers they are provided with excess capital than if it had been not so. This excess capital could lead to higher purchasing powers and in turn better average quality of living.

Both of the above changes provide the necessary financial incentive for the producer and the consumers to embrace the big retailers. This could result in a collapse of the existing retail framework. Now this is a potential cause for a problem as it could lead to monopolies at the purchase level and at the sale level. If monopolies are established both the above incentives can be taken out or even reversed by the big retailers. However big retailers can not exist everywhere. They will establish outlets only where it would be viable to set up one in terms of the market reach and the purchasing powers of the locality. So there would be big retailers in areas where the population sizes justify the existence of the retail outlets.

The emergence of monopolies in localities where the big retailers exist is a potential risk. This risk however could easily be mitigated by good ant-monopoly laws and regulations. Additionally the monopolies could only emerge even if it does emerge and in cases where it does, local trade establishments can reemerge to bring down the prices. So even in such cases the prices of the products would be cheaper than from an average retailer and the purchasing price given to a farmer would be higher than from an average retailer. If it had not been so the small and medium retail segments could re-emerge to neutralize the situation. So it would be in the interest of the big retailers to maintain the prices at such quasi-monopolistic levels.

Finally it might be good to take a look at the numbers. In an average society the percentage of retailers and traders would be around 10-15% of the population. Even including all the support framework it cannot be more than 15-20% of the population. In the case of big retailers this number would be reduced but would still have to remain significant. This reduction however will have to result in an increase in unemployment. The excess capital saved in the system by a reduction in the costs of retail products and a higher purchasing power for the producers would result in an availability of capital for non-retail use and that would mean the service industry. So this could result in an increased growth of the service industry where the lost jobs in the retail industry could be absorbed easily.

Having said so I still have reservations about multinationals entering local retail industry as it would result in a biased cash flow mechanism in the system in the short term and the Indian economy may not be mature enough to be able to afford that. Also the emergence of Indian big retailers is going to cause a short term aberration in the equilibrium in the system leading to undesirable results like the job loss mentioned above. However in the long run both national and multinational retailers are going to be helpful for the system. Efficiency increases has to be good in itself.

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Everything is relative including the colors we see

We depend a lot on our perceptions, how we see things, how we hear sounds, how we feel things, how we smell things, how we taste things. More often than not people take these senses for granted and never for once think beyond the senses perceived to the act of perceiving. I recently happened to think a lot about one of these perceptions - sight. These were afterthoughts of a discussion with a person I met during a train journey recently.

When we see something we don't normally think beyond the thing that was seen. We don't think about the physical process that happens when we see the object we are looking at. We don't realize that light waves reflected (or originating) from the object travels through the air and passes through our eyes and falls on our retina. The light that falls on the retina triggers signals on the optic nerve which in turn causes the sensation of sight once these signal reach the brain.

Television engineering was one of my favorite subjects during my undergraduate engineering course. It was very interesting because I was always fascinated about how a television works - how the images are translated to pictures in the television camera and how these pictures are transmitted to the television set where these are converted back to images.

Once the course was over the operation of a television looked simple and plain to me. However I still cannot fathom how human eyes work. Simple questions like the number of pixel elements on the retina and the way the signals are transmitted to the brain. Research has been going on to decode the signals that get transmitted through the optic nerve. I am sure that the person who finally decodes the signals correctly is going to get a Nobel price as the discovery is going to eradicate blindness in humans.

Decoding the physical process of the generation and transmission of signals on the optic nerve is probably going to happen soon; but what about the decoding the process in the brain that gives the perception of sight? What is sight? It is so complex that I cannot even begin to imagine a physical explanation for the perception of sight. This is somewhat similar to the discussion I had on the form of human memory. What happens when the electric signals from the optic nerve reaches the brain?

Now let me come to the point I would like to highlight. How do you define a color? For example how do you define Red? How many primary colors are there? What do you mean by a primary color? What is infrared? What is ultraviolet?

Let me try to answer these questions one by one. A color, for example red, is defined as something we see when an electromagnetic wave of a particular range of wavelength(625–750 nm) falls on our retina. There are three primary colors - Red, Green and Blue. All other colors can be generated as a combination of these three different colors in different proportions and different intensities. Infrared is defined as the range above the wavelength of red. Ultraviolet is defined as the electromagnetic spectrum below the wavelength of violet.

These answers look simple and looks almost like taken out of a Physics text book. There is one thing that we are taking for granted here. An electromagnetic wave does not have a property called a color. There is no such thing as color. It is just a perception that we get when electromagnetic radiation of a given wavelength falls on our retina. If by some quirk of nature, my retina response curve gets reversed and starts generating the same signal that your retina generates corresponding to light of 650nm and 380nm respectively, then I would start seeing red when you see violet.

There is a natural explanation for why we see the colors we see for the range of frequencies as defined by the visible spectrum. These are the frequencies of light that get reflected by the elements and compounds and mixtures that we see in nature around us. In other words, the rest of the spectrum (mostly) gets absorbed by these physical objects.

If we were on a planet that had a different set of elements (that would require a different set of sub-atomic particles and different forces acting on these particles than those that we already know) with a different set of absorption spectra then we would probably have seen the same colors(there is no need to think otherwise) but for different frequencies of the electromagnetic spectrum.

Colors exist only in our brains. Also for a given wavelength of light the colors that each of us sees are unique to ourselves since the physical response of my retina is for almost for sure different from the response of your retina. You will never see the red color that I see and my red color is always going to be my own personal red color.

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Is there an absolute fair price?

I had written once about my thoughts about fair margins while pricing products. I have been trying to get the concept clearer in my head but have not quite been able to do so till now. A few days back I had a rather productive discussion with a couple of my friends regarding the same issue. Productive because it brought a lot more clarity to my thought process regarding this issue.

When you talk about absolute fair price you are making a fundamental assumption that there is a price that can be called an absolute fair price. The definition of such an absolute fair price would be a price that is independent of the actual buyer or seller. Such a price will be the minimum at which the seller should have to sell and the maximum at which the buyer have to buy and would be fair to both the buyer and the seller.

In a perfect market where there is perfect information and market forces are working perfectly, competition and awareness of the customers will ensure that prices will be fair to both the buyer and the seller. Markets are seldom perfect, perfect information is only a myth and hence the above scenario never occurs in real life (at least it wont happen for all the customers at all the places at all times in the given market).

I am more interested in an answer to the question under imperfect market conditions where there is no perfect information and where customers are not fully knowledgeable about the market. The reason why the answer to this question is interesting is that it will give a solid basis of estimation of prices under any market condition and for any customer.

Before I proceed further, I would like to bring to your attention a few extreme scenarios. Consider a situation where a billionaire is convicted by the court and is going to be hanged. His death penalty will be canceled if he can write a letter to the President asking for amnesty. He does not have a pen. He has access only to a single store and the storekeeper, seeing his situation, sells him a 1 dollar pen for 100 Million dollars. The man gladly pays the amount and buys the pen to write his petition. Here there is no competition, the buyer does not have any choices and the seller sells at a price that the buyer can afford to buy.

Now consider another situation where a man walks into a store to buy a pencil. The storekeeper convinces the man to buy a pen, that is available online for 10 Rupees, for 100 Rupees. Here there is competition, the buyer has choices but he is not aware of his choices and is tricked into buying something at a far higher price than if he had been aware of the other cheaper options.

Pricing, as defined as a function of marketing, is an exercise of profit maximization. Prices are fixed between the total costs incurred by the seller and the maximum affordable price for the buyer. The exact value will depend on the market conditions including competition and consumer awareness. This is how it should work under the Capitalistic model of economy.

Earlier I had come to a conclusion that pricing was to be fixed based on the minimum ROI that is still fair to the capitalist and the growth rate expected of the company. The minimum ROI should be the market rate of Interest for the capital as otherwise the capital invested could have been invested in another venture that would have yielded at least the market rates of interest.

Now the expected growth rate is a tricky question. What should be the expected growth rate? Can't the company grow more if the margins are higher? Yes it has to be conceded that high prices might deter growth but still there is that positive slope till the peak. Should the expected growth rate be equal to the growth rate of the country? But then wouldn't a higher growth rate be better for the country?

I could just be a traditional capitalist and play with the prices according to how the rest of the market behaves. For example I could charge a person higher accordingly as he can afford to pay more or accordingly as he is less aware. I could charge as much as my competitors are charging. I could make a killing in areas where there is no competition.

But the socialist in me is pulling me back from doing that. I cannot give two rates to two different people based on their circumstances or their knowledge. I can not bring myself to give two answers to the same question - "What is the price of this product?". When I had stated my intentions of starting a company, people who knew me told I wouldn't survive as a businessman without engaging in malpractices. I said I will. Neither them nor me ever thought of this kind of predicament that I really have to face.

My take on the issue is that, prices should be determined by the costs involved and not the intended profits to be made and that the fair margin should just be a cost. So if we include a fair margin as a cost we have a solution to the problem. Price of the product equals the cost of the product (See also - True Cost of Things) + the Fair margin. Now if we have an equation or a method to find the fair price then we have a fair pricing strategy. But alas!, both the parameters - ie the true cost and the fair margins - are kind of difficult to find, as we have seen, and my pursuit still continues.

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