So many times, it happens too fast
You change your passion for glory
Don’t lose your grip on the dreams of the past
You must fight just to keep them alive

Happy new year.

Classes

My courses this quarter have introduced me to 2 beautiful ways of thinking about problems. The first, called design thinking bootcamp is all about applying “design thinking” to problem solving. Design thinking, or user centered design, is a process created and perfected by the design community at Stanford and IDEO, a legendary design consulting firm that started out of Stanford. The essence of design thinking is that all thought and actions must stem from the needs and insights learnt from one’s users. Throughout the quarter, I’ve been amazed at how much I have learnt by just interacting with users and having “empathy” for their needs. No class has ever thrown me out of my comfort zone as much as this class. The entire philosophy of “bias towards action”, “fast and cheap prototypes” and failing fast and often have often overwhelmed me, but have given me confidence in my ability to identify the real problems and use the process to solve the problem.

Decision analysis, on the other hand, is about making the best decision given whatever information one has available. The class is taught by Ron Howard, who invented the  field four decades ago. Some belittle it as a mere jargonization of logic. But people often don’t use logic in decision making and base decisions on emotion. By providing a formal structure and language to think about any decision or uncertainty one is faced with, DA gives one an opportunity to make a well reasoned decision rather than merely an instinctive one (instinct is good, but not every time).

While DA in the academic form is a probabilistic tool people study for use in strategic consulting, I am attracted to it for its applicability to everyday thinking. Internalizing a thought process in 8 weeks though, is daunting. And therein lies the test of the student.

Banker to the Poor

I recently read the book “Banker to the Poor :the story of the Grameen Bank” by Mohammed Yunus. Prof. Yunus won the Nobel Peace Prize in 2006 for his pioneering work in the development of Bangladesh through the concept of microcredit and the Grameen Bank. Microcredit consists of lending tiny sums of money to the poorest demographic of the population, mainly for self-employment.

The most powerful thought in the book is the following quote :

“Development should be seen as a human rights issue rather than an economic one.”

The book traces the origin of the philosophy of microcredit when Dr. Yunus realized that since banks didn’t lend to the poor (for lack of collateral), they were left to borrowing at exorbitant rates from usurers and money lenders. Once they did, they got trapped in a cycle of poverty that was impossible to break through. He narrates the story of a cobbler who had to hand over half his daily income to the man who owned the brush and shoe-polish that he worked with. What was left of his earning was barely enough to sustain him. The cobbler would remain trapped in this hand to mouth existence for the want of money to buy a brush and shoe polish. This is where Yunus decided to step in.

Of course, the journey of developing the Grameen Bank was a long and difficult one. It faced opposition and ridicule at every stage, as is the fate of any pioneering effort. The journey is also a most inspirational one, and bears many lessons for those seeking to develop sustainable organizations, in public service, business or elsewhere.

Grameen was also pioneering in that it lends mainly to women. This has led to great socioeconomic development in Bangladesh with an increase in voter turnout, greater empowerment of women and reduction in domestic violence against women. The book is full of stories of women who rose from poverty against all odds. Most inspiring is the story of the woman who battled abandonment by her husband and family, banishment from society, a life-threatening disease, a house burnt by the Pakistan army in 1971, a flood, a disease that killed her livestock and only source of income and a famine, and 12 loans, to finally reach a stage where she didn’t have to worry where her next meal was coming from. Whenever I tend to fret over my befuddlement about a career choice, or how hard life is, I am reminded of her story.

Another powerful idea is the social cohesion that Grameen creates by making it mandatory for women to form groups (of 5) before they can borrow from Grameen. By interlinking the fates of the women in a group, Grameen manages to achieve several things at once. Firstly, it creates a great peer pressure mechanism to keep them motivated. But, since the failure of one group member implies no loans for any of the group members, the women have great incentive to help each other through difficult times rather than competing with each other. The sense of empowerment that it gives these women, who for most of their lives have been told that they are worthless, incapable and a burden, is phenomenal. By creating successful role models for the women, and raising the bar for who can join, Grameen has created a powerful self-sustaining engine of hunger for development among women in Bangladesh.

The book also provides many practical tips, insights and lessons that are of great use to not just social entrepreneurs but anyone in business. The writing is simple yet extremely powerful and inspiring. The book also shattered many of the assumptions I had about poverty and the eradication of it. The corruption and malpractices perpetrated by international donor agencies such as the World Bank was a revelation. The extent to which credit can be a powerful socioeconomic weapon, the fact that people don’t need long years of education or training to rise above poverty and the fact that development (of infrasructure, IT, etc) never helps the poorest unless there is an “enabling” mechanism in place were all explained beautifully through this book.

Banker to the Poor is both, an inspirational story of the great socioeconomic change brought about by a man and his vision and also a primer to the philosophy and nuts & bolts of the microfinance movement. While I believe that micro credit is at best only part of the solution to poverty and don’t agree with all the ideas and ideology in the book, much was gained from reading it.

A Brief History of…

Engineering -fascination. JEE preparation. Underestimate competition. Failure, dismay and dejection. COEP-last choice institution. Lack of elation. 6 months-isolation. Depression. Lack of direction. Teenage infatuation. Indifferent reaction. Confidence erosion. Normalization. Club formation. Officious administration. Frustration. Dogged dedication. Grand vision. Patchy realization. Difference of opinion. Resignation. Everlasting love relation? Immoral accusation. Shame and depression. New Venture formation. Evangelization. Successful- recognition. Limitations-realization. Interest deterioration. New quarry – instant attraction. Summer flirtation. Positive reaction. Above my league -self underestimation. Hope evaporation. Determination . Affirmation. Jubilation. Rapturous preoccupation. Yet another project application. Selection. ATV creation. Victory -Bacchanalian celebration. Career confusion. MS application. Await admits – trepidation. Dream admission. Admiration & Speculation. Satisfaction. Hold celebration -long way to destination. Still going strong. Extrapolation?

(Inspired from here.)

Of fantastic tools to make lots of money

I’ve spent a lot of time in the last few days pondering over what all this talk about inflation in the Indian economy is, what is causing prices to rise the way they are and what what really is the meaning of all the stuff that the government is supposed to be doing to control it (repo rates, reverse rates, CRR and the like).

Clear and concise information has been hard to come by. Until now. This has to be one of the best and simplest financial information documents I have ever read. In just 10 minutes it explained (beautifully) the concepts underlying monetary policy, commodities trading and the futures markets and how they relate to inflation. I was compelled to share the link with you. I found the explanation of how the futures market works to be particularly charming. I once had a conversation with a stock broker, trying to understand how the futures market works. Here is what I learnt:

Me: So how does the Fuutures Market works?

Filthy Rich Gujju Broker: See, we invest money, do trading, and we can make a lot of money.

Me: But how does it work? What happens exactly?

FRGB: See, say you invest 20,000. you can leverage and buy stock worth 1 lakh. Then you either go short or long depending on market. Aur aise apan bahut paisa bana sakte hain. ( And we can make lots of money).

Me: But what is the underlying mechanism behind this?

FRGB: Its just a fantastic tool to make lots of money.

Me: Ah, I see.

P.S.: Do yourself a favor by reading the PDF.

How to prepare for the GRE

Friends and acquaintances often ask me how I prepared for the GRE exam. This owes itself to the fact that I did reasonably well at the exam. For the benefit of those who may seek them, in this post I present my views on the GRE and the method I used to prepare for it. I assume a reasonable familiarity with the exam. Also, what follows is my own opinion and by no means a definitive guide to the GRE.

A few observations to start with:

1. The GRE is, at best, a necessary evil. Different universities give your score different levels of importance. Since one can never know how much importance your dream university gives to your GRE score, it’s a good idea to do well. The objective should be to study as efficiently as possible in a very limited amount of time, get done with it ASAP and quickly go back to doing something fun or useful.
2. The time required to prepare well varies for each individual. Don’t trust someone else’s estimate.

3. There are lakhs of words in the English language. You can’t possibly know them all in 5 lifetimes. Buy just one wordlist (Barrons/Kaplan/Other) and do it well. Don’t get distracted by the abundance of study material.

4. Accept the fact that luck can play a significant role in this exam.

5. Studying wordlists is NOT a waste of time. Most of those words, you will come across in the stuff you read. The GRE asks simple words that are in common use, but have different meanings in different contexts. If you waste time learning long, esoteric words of no consequence; you’re to blame, not the GRE.

6. Starting to cultivate a habit of reading 6 months before your GRE, in an effort to boost your vocabulary is not a good idea. Reading for the fun of it is great, but if you think it will boost your GRE score, you’re wrong.

7. Preparing for the Analytical Writing section has a very small profit margin. But if you think you’re bad at writing, some practice is surely useful.

The Quant section:

This consists of simple arithmetic, geometry, probability and statistics. Most students have no difficulty scoring in this section. Aiming for anything less than 800 here is unacceptable. The biggest challenge here is complacency, which often costs students a few points. Beware of this fact and all shall be well.

Verbal Section:

This is where a lot of us tend to falter. The verbal section tests 3 basic skills/abilities:

1. Your vocabulary

2. Your ability to put that vocabulary to use

3. Your ability to comprehend passages of an academic nature ( such as those that you will be regularly required to read as part of your Master’s Degree coursework).

Doing well in the verbal section requires one to be reasonably adept at all 3 of these. If you develop just 1 or 2 of these, the only way to do well is through getting lucky. So lets deal with each of these 3 one by one.

How to build your vocabulary?
This is what I did. This is what I recommend. It consists of the following steps:

Step 1: Buy the Barrons Guide to GRE

Step 2: Learn the Barrons Wordlist

Step 1 is fairly simple. Step 2 is not so simple. Proficiency at Step 2 varies for each individual. The Barrons wordlist has around 5000 words. Now, 5000 words is very, very intimidating. However, a lot of these are simple words that we are familiar with. The time you need for finishing the wordlist (and remembering all the words!) depends mainly on how many of them you already know. If you’re exceptional at mugging you have a great advantage, but you don’t really need to mug.

My objective was to finish the wordlist in as little time as possible. I developed the following method, which many of my friends have found useful:
1. Make a 200 page notebook for your wordlist studies.

2. Find a bright, well ventilated place to study. This is important since the wordlist tends to make one extremely sleepy. I preferred the mornings for reading the wordlist.

3. Open the first wordlist and start reading.

4. One by one, read all the words, their meanings and the sentence examples given.

5. When you’re done, read the whole wordlist again. But this time, use a pencil and make a small “-” sign against the words you don’t already know. Even if have half an idea about what a word means, mark it. Read all the words and meanings carefully as you mark them. For example, you are likely to know what “abundant” means, and there is no chance that you will ever forget what it means; so don’t mark that. But say, you don’t know what “acclivity” means. Mark that.

6. After marking the whole list ( typically 75-100 words), write down all the words in your notebook, one below the other. Do not write the meanings of the words. But read the meanings of the words that you write.

7. Now, after writing all the words, once again go through the wordlist and write down the meanings opposite the words in your notebook.

8. Now read the word-meanings in your notebook.

9. The above process will take from 45 minutes to 2 hours, depending on your ability. If you have done it right, you have revised all the difficult words in the list 5 times. Yes, 5 times in an hour. Now forget about the wordlist for the rest of the day.

10. After a reasonable time, say 10-12 hours, open your notebook again, cover the meanings and test yourself to see how many word-meanings you remember. You will ( or rather, should) find that you remember quite a few. Make a small * before the ones you don’t remember.

11. In one day, you have revised the unfamiliar words 6 times. If you’re fast, it took you just an hour for revising words 6 times. If you’re slow, it took you 2 hours. That’s still quite efficient.

12. Do the next wordlist the next day. Revise the previous days words in your notebook as well. As you progress, keep revising all the notebook lists from that week. All you need to revise are the words marked with an *.

13. Once you’re comfortable with this method, and if it starts working for you, you can modify it an way you like. The idea is that at every stage you make a fresh list of the words you don’t know at that stage. There will be many stages. I studied 3 wordlists a day, finished the book in 15 days and then kept revising for 15-20 days. You may start with 2000 words in your notebook and have 800 words marked with an *. The objective is that on the day before the GRE, you should have no words marked with an *.

What not to do?

Learn from Flashcards: Flashcards don’t give sentences and therefore, no context to the words. It’s hard to remember words this way. When you read words in alphabetical order, you develop some associations. This can be of help.

Ability to use your newly acquired vocabulary

The GRE doesn’t ask you word meanings. It tests you on antonyms, sentence completion and correlations between words. If you know what the words mean, there shouldn’t be much problem. Practice exercises are available easily on the internet and in the Barrons CD.

Reading Comprehension:

The complexity of some of the passages can seem daunting to start with, but the questions are the most predictable of all. A little practice, and you should have no problems with this.

Practice Tests:

I recommend taking the Kaplan & Princeton practice tests and the GRE Powerprep.

My friend Rohit has compiled a list of study material available online. Though I never used any of that, you can peruse that here.

A final word : Don’t follow anyone’s advice blindly. DO what works for you. This is an easy exam. Decide how much time you want to devote to studying (as less as possible), what your current command of English is and what realistic score are you aiming at. Then start studying.

This is all the perspective and opinions I have to offer. If you found any of this useful, do write me a comment or an email (It will make me really happy J).

Line of the day

comes from my Industrial Management textbook’s opening notes about advertising.

” Running a business without advertising is just like winking at a beautiful girl in the dark – you know what you are doing but she does not know it.”

Well, most times, its in your best interest that the beautiful girl doesn’t know.

Hmmm.

The “purpose” of Stanford

Surfing around the web, or the blogosphere in particular, one is likely to find mixed opinion about Stanford University. For one year, I’ve been obsessed with the idea of living and studying there, so I’m more on the side of Stanford’s admirers than the cynics.

My Google Alert for Stanford threw up the following gem of a blog post today, written by a Stanford GSB student from an ethnic minority. I found it as insightful as it was touching. An excerpt,

“Because of this place, I will graduate with a changed mind, a changed perspective and a changed heart. I will take that into my workplace, into my relationships and into my community. Because of my fellow classmates and those who came to Stanford before us, I can change the world around me. I used to think the GSB motto, “Change Lives, Change Organizations, Change the World,” was lofty at best and unattainable at worst.

I was wrong. “

Read the whole text here.

Here’s an old story that I re-heard a few days back. It’s quite a common one, but made an impression this second time around. I’ve since been trying to practise it as best I can. It goes as follows :

————-

There is a Taoist story of an old farmer who had worked his crops for many years. One day his horse ran away. Upon hearing the news, his neighbors came to visit.

“Such bad luck,” they said sympathetically.

“We’ll see,” the farmer replied.

The next morning the horse returned, bringing with it three other wild horses.

“How wonderful,” the neighbors exclaimed.

“We’ll see,” replied the old man.

The following day, his son tried to ride one of the untamed horses, was thrown, and broke his leg. The neighbors again came to offer their sympathy on his misfortune.

“We’ll see,” answered the farmer.

The day after, military officials came to the village to draft young men into the army. Seeing that the son’s leg was broken, they passed him by. The neighbors congratulated the farmer on how well things had turned out.

“We’ll see” said the farmer.

—-

How long will I be able to practice the message?

We’ll see.

Californication

If all goes as planned, then come September 2008, I will begin studies at Stanford University towards pursuing an MS Degree in Management Science & Engineering. Studying at Stanford and living in California and the Silicon Valley have been on my list of “Things to do before I die” for a few years. Naturally, I am quite excited and look forward to the experience.

Stanford is a great brand name and an education there (or any other place of repute) is an insurance policy of sorts. There is a tendency among students at prestigious schools – IITs, IIMs, Harvard, MIT & Stanford among others- to use the brand name as a crutch; using the institute brand and the fact that they made it through the punishing admissions routine as a substitute for real academic rigour and achievement. In only 2 weeks, I have myself been tempted to do this on a few occasions. This however owes itself mostly to the euphoria of making the cut. I hope I’m able to enhance my abilities and skill-sets at Stanford rather than turn into a cripple needing permanent support from a crutch.

I have also been worrying myself silly over the tremendous cost of a Stanford education without financial aid. The 2 years will be spent in near penury. I will soon be joining the ranks of the PIGS* -Poor Indian Graduate Students

__________________

* For all my friends reading this, I’d rather you call me monkey-man than pig-man, or some such.