Talk Radio: Voice of the People (Part 2)

Radio’s Rise

The story of talk radio cannot be discussed without understanding first the power of radio. The first radio broadcast happened almost a century ago. Bruce Lenthall’s book, “Radio’s America”, traces the history of radio in the US and its deep roots into mass culture:

The rise of modern mass culture and individuals’ efforts to find their places within it resonated through much of the century. Making radio a part of their lives in the Depression, Americans began a process of helping to shape the meanings of their mass culture. In doing so, they turned to a medium of that culture to help them seek a degree of autonomy within it. That was part of an ongoing process, one that continued throughout the era of a mass-produced, mass-consumed culture’s ascendancy. Starting in the late twentieth century, though, the shape of mass culture began changing in multiple ways. Control of production narrowed further as ownership of media outlets consolidated—a point the Internet as it develops theoretically might challenge. Simultaneously, the proliferation of stations and outlets through cable television, the Internet, and other media may have enabled audiences to personalize their consumption—unless we consider the relatively uniform consumer messages the heart of what is conveyed. Even in flux, though, our culture still blurs the lines between public and private, still pushes us to consider the value of mass communication, and still opens up the meaning of democracy in contemporary life. We continue to seek self-control and ways of being heard in our world, and we continue to look to mass culture’s own vehicles for help. The journalist Dorothy Thompson, writing on Orson Welles’s War of the Worlds, was right: the story of the twentieth century—and perhaps of the twenty-first as well—is, in significant part, the story of the balance between individual authority and mass culture. And how Americans made sense of radio is the first chapter.”

Perhaps India’s political leaders realised the power of radio to shape and change minds and culture. Little wonder then that government control exercised on radio has been absolute – something that has never changed. India’s first private FM station commenced operations in 2001. To this day, private radio stations can give us songs but not news. In India’s radios, we can get government commentary but not independent commentary on the government. It is in this context that talk radio over mobile internet can be the ultimate disrupter. Talk radio has the potential to do to conversation and culture what mobile telephony did to landlines and person-to-person communications.

Tomorrow: Part 3

Thinks 10

Teledyne and Capital Allocation: “Dr.Henry Singleton was more than just a great capital allocator, he was a visionary, entrepreneur, and excellent business person who believed that the key to his success was people—talented people who were creative, good managers and doers. Once he had those managers in place, he gave them complete autonomy to meet agreed upon goals and targets.He and his co-founder and initial investor, George Kozmetsky, bootstrapped their investment of $450,000 into a company with annual sales of over $450 million, an annual profit of some $20 million, and a stock market value of about $1.15 billion.”

India’s PLI schemes may herald the return of rent-seeking. An editorial in Business Standard. “If the government really wishes to improve investment in manufacturing, it needs to ensure that the regulatory and tax climate is such that investors are more comfortable. Direct subsidies and picking winners help nobody but bureaucrats and vested interests — India has several decades of experience to prove this.”

The Great Courses: Must consider doing a few.

Talk Radio: Voice of the People (Part 1)

Growing up with Radio

I grew up listening to BBC World Service on the radio. Because of my eyesight troubles, the doctor had suggested that I don’t read at night. (And there wasn’t much TV to watch in late 1970s India.) For a 12-year-old, that was a hard decision. It was then that I discovered the joys of radio, and especially BBC. I had a big Philips radio, which I would position in the balcony to ensure good reception. The short waves brought the distinctive British accent into my room. For many years, the radio was my best friend. I spent hours listening. The only competition BBC faced was when cricket matches were played, and I would tune in to whichever broadcaster was doing the ball-by-ball commentary.

BBC World Service brought me news, analysis, quizzes, humour, science, plays and more. It became my window to the world. I could close my eyes and be anywhere in the world. I knew the voices of all the news announcers and presenters. The diversity of BBC programming gave me an education beyond the classroom. One of my happiest moments was when a letter I wrote got read in their Letterbox programme. And when I went to IIT as a 17-year-old, I took the radio with me. Much later, with my first salary working for NYNEX, I went and bought a Sony shortwave radio for about $250. Even in the US, the radio was my constant companion.

During my stay in the US, I also discovered AM and FM radio. Having been raised in India on the meagre offerings of government-controlled All India Radio’s Akashvani and Vividh Bharti, the sheer diversity of content available in the US was amazing. News, weather, conversations were all there with the turn of a dial. It was later that I discovered that in India, the government has a monopoly on news over radio – and that is still true in 2020s India!

Much has changed when it comes to entertainment in the past generation in India. Hundreds of TV channels have sprung up. Dozens of apps offer streams of (uncensored, at least for now) content. Podcasting is starting to grow in India. But there is one missing element in all this – talk radio.

Talk radio (think of it as talkback radio) is about interactivity and conversations. A host talks and listeners can call in, ask questions, discuss and debate. In India, what’s missing is the interactivity. TV has its monotonous talking heads and shouting panels. But radio? All it has are songs and music. No news, no conversations, no interactivity. Can talk radio streamed via a mobile app be the next innovation on the Indian media front? Can talk radio change our minds – or even open them?

Tomorrow: Part 2

Thinks 9

2021 Strategic pearls on email and content marketing: “Email marketing has an average ROI that is 4X higher than any other channel.”

8 Themes For The Near Future Of Tech: by Scott Belsky. “More and more niche functions of the enterprise will become multi-player, powered by a next generation of highly specialized, AI-bolstered, enterprise companies with consumerized product experiences.”

20 Myths about Markets. From Tom Palmer (2007).”Most, but not all, such myths are spread by those who are hostile to free markets. A few are spread in much smaller circles by people who are perhaps too enthusiastic about free markets.”

My Proficorn Way (Part 60)

Acquisitions

Some years ago, I had gone to seek advice from a wise and successful business person. My question to him was: how can Netcore grow faster? His one word answer was: Danaher. (Of course, he elaborated on it later.) I had not heard of Danaher till then. His key point was: to grow, you will need to think of acquisitions. You will not be able to build everything in-house. Danaher is one of the world’s best companies that has figured out how to make acquisitions work.

Here is a brief from Andrew Banovic: “Danaher’s business model is pretty simple, despite its continued success.  It basically acquires and operates manufacturing companies.  And not just one or two acquisitions each year.  Over the last 30 years, Danaher has completed over 400 acquisitions.  Not necessarily shiny brand-name companies, rapidly growing companies, or companies that need turning around.  Simply companies in growing markets, without large competitors, where they can use their operating model to provide a competitive advantage. Because of their specific brand of value investing, they typically stay away from flashy markets and well known companies, basically because they don’t want to pay a premium for a name.”

This is from a strategy+business article in 2015 where Danaher’s executives speak about their approach to acquisitions:

Our approach to finding acquisition targets was 20 years in the making. It started when we decided we would not wait for Goldman Sachs to call us with their prospects. Instead, we did our own up-front research into prospective markets and started to build funnels of names of companies to buy and industries to enter.

Other companies try to make one perfect bet. That’s a risky way of letting senior executives with no experience sit on a lot of cash. Instead, we continue to explore many acquisitions and bring a significant number to fruition. When you acquire frequently enough, you learn what to do and what not to do. You develop skill at assessment and integration, and you learn to hold these assets over a longer time than might happen in private equity.

Our main criterion: Through this acquisition, can we ultimately become one of the market leaders in that industry? That typically requires that we pick up one of the stronger brands or assets within that industry, and that we generate at least as much value as, if not more value than, the current owners do.

We have a very disciplined M&A process. It starts with having a clear sense of what markets we find attractive. We look for large global markets with good growth profiles and generally low cyclicality. We also look for the ability to develop sustainable competitive advantage through a brand and intellectual property. We also look, obviously, for good profitability and low capital intensity. If we don’t like the market, we don’t bother looking at specific companies.

We do 12 to 14 deals a year and turn down 10 times that, so we’re doing 150 due diligences a year all over the world. We do extensive due diligence on each one. Our pre-acquisition investigations, especially on the finance side, are designed to dig up, expose, and share every bit of risk, making sure we all know what we’re getting ourselves into. If something looks scary, let’s make sure we sit around the table and figure it out or walk away. We try to be patient and not to get emotionally tied to any particular investment.

For proficorns, acquisitions can become a powerful lever of growth. Danaher is perhaps one of the best companies to learn from on how to do acquisitions right. Just one piece of advice: as you evaluate companies, look for a cultural fit also, especially with the founders of the target companies.

Will be continued soon.

My Proficorn Way (Part 59)

New Growth Platforms

As a business, it is very important to seek out new growth platforms – especially in the fast-changing world of tech. In Netcore, if we had stuck to our original product line of Linux-based mail servers, we would have long been dead! What we have done is to look at new opportunities for growth. Netcore today has two significant growth platforms: CPaaS (communications platform as a service) and martech (automation and personalisation). Even as both have plenty of room for expansion, my belief is that we will need to add one more in the coming years.

A 2006 Harvard Business Review article discusses new growth platforms: “We identified and approached 24 companies that had achieved significant organic growth and interviewed their CEOs, chief strategists, heads of R&D, CFOs, and line managers who had delivered material growth to their companies. We asked these executives and managers the same basic question: “Where does your growth come from?” And we found a consistent pattern in their answers. All the companies grew by creating what we call new growth platforms (NGPs) on which they could build families of products, services, and businesses and extend their capabilities into multiple new domains. The platforms provided a framework in which acquisitions served less as a direct driver of growth and more as a way of acquiring specific capabilities, assets, and market knowledge. These are not small, fledgling ventures that might be funded by a business unit or an encouraging executive. The scale of the platforms is strategic and material to the corporation.”

A graphic in the article explains the idea of new growth platforms:

Investing in new growth platforms will come through envisioning the future. What does tomorrow’s world look like? What will our customers want? What do current trends and consumer behaviour changes point to? What bets do we as business make to prepare for the future? Answers to these questions lead to decisions on build-or-buy decisions for the next growth platforms.

In 2014, a colleague, Veer, first mentioned the word “martech” to me – marketing technology. He had heard it in a conversation with a customer. Veer’s belief was that Netcore needed to move up the stack from communications to offering customer engagement, and martech was the core for that. Veer and I then attended a Martech conference in Boston, and that began our journey into the world of marketing tech solutions. This became our second growth platform to complement email and SMS solutions that we already had as part of our communications suite.

The search for new growth platforms is a constant one. Proficorn entrepreneurs need to spend time in this search – because their business can be one mistake away from obsolescence (or becoming part of the “living dead”, as I keep reminding my colleagues.) For the founder / CEO, identifying where tomorrow’s growth is going to come from is as important as meeting this year’s growth targets. It is this search and discovery which keeps the excitement, adventure and journey going. And one way to make that happen is via acquisitions.

Tomorrow: Part 60

Thinks 7

Reports: Shopify on the future of ecommerce and Sparkpost on email marketing

John Battelle: 2021 Predictions and 2020 Predictions review

James M. Buchanan and the Public Choice Tradition: A paper by Art Carden and others. “People respond to incentives in markets. Why not assume they respond to incentives in government, as well? People are self-interested when they are buying and selling. Why not assume they are self-interested when they are voting and making policy? People face imperfect information in markets. Why not assume they face imperfect information in government? He described this approach, which came to be known as public choice theory, as merely “politics without romance.””

 

My Proficorn Way (Part 58)

Culture

I often get asked about Netcore’s culture, how did we define it and how do we maintain it. It wasn’t an easy question to answer in the early days because I never really understood what culture in the context of a company was or maybe because there were many other things to worry about. Or maybe because we were small enough that whatever I as the founder did became the culture. But over time, as the company grew, I realised there are some underlying things that define us as a company and need to be explained, reinforced and transmitted. Just as countries and their people are defined by their culture, so too are companies.

Every company culture needs an ideal and a story-teller. In Netcore, the ideal has been Kalpit and the story-teller has been Bhavana. Kalpit, our present CEO, has been with the company since day one. He has risen through the ranks, served in different positions through the years, and rose to the top as Netcore’s third CEO in 2015. Kalpit embodies the spirit of Netcore – humble, humane and yet determined to win. He is very much a people’s person in as much as I am not. Success has not come easy for him and Netcore. It has been a gritty journey through the years – and it still is. Competition comes from many different corners as companies tread on each other’s territories. Netcore has survived and thrived in the midst of all this. Kalpit – like Netcore – has grown with each passing year.

Company culture can be described in words, written on walls, and spoken in speeches. But it only acquires salience through the actions of the leaders at the top. It is what they do and not what they say that matters. Their actions are what drive behaviour of everyone else. And that is why every company needs an icon – a person others can learn from. In Netcore, Kalpit is that symbol of our culture.

Culture also needs a story-teller – someone who can talk about the actions and spread it through the teams. Bhavana is exactly that. She is a natural – when she speaks to the new joinees during the induction programme, she brings to life the atmosphere of Netcore through the stories that have made Netcore live through 23 years. Bhavana brings that touch of family and familiarity. She can connect with people across all levels. No person is small, no problem is insignificant. Conversations are full of anecdotes that reinforce the nature of Netcore. That is how culture spreads – one interaction at a time, one action at a time.

Of late, I too have been doing a bit. I have started a monthly “Ask Rajesh Anything” interaction – an open house where Netcorians can ask any question that they have. These sessions have given me an opportunity to speak about my past and Netcore’s origins – and of course, the future. I have always strived for an open culture, and this is another way of showing it in practice.

For entrepreneurs, culture becomes important as the company grows. It creates the glue that binds people together. It motivates them to do that little extra that can be the difference between good and great. So, ask yourself, who is your company’s ideal and who is the story-teller?

Tomorrow: Part 59

Thinks 6

What comes after smartphones? Ben Evans: “As well as looking at the sequence ‘mainframe – PC – web – smartphone’, we should probably also think about what was going on underneath: ‘database – client/server – open source – cloud’, perhaps. That is, there are other progressions that are less visible but just as important. On that model, the fundamental trends of today are clearly machine learning and, perhaps, crypto.”

Platform Revolution 2021: A deck by Sangeet Paul Choudary

Consumer Trends 2021: A deck by Coefficient Capital. (US context)