Entrepreneurs’ExpressEntrepreneurs’xpress

Vol. 1 Issue 4 September 2011

Brawl over a BeverageAnkur Mathur

The Man of Steel

Green Sense and Sen-

sibility

Pixels in Business

Juggling Jargons: Net

Present Value

The Stock Souq

X and Y

Nitin Sutrave

Abhirup Lahiri

Aditya Agarwal

EE Bureau

Sanchit Agrawal & Vedant Bang

Sanchit Agrawal

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ContentsDesign Coordinator

Pratik Das

Content Editor

Ankur Mathur

Content Coordinator

Sanchit Agrawal

Content Editor

Vedant Bang

APOLOGY

We, at Entrepreneurs’ Express deeply regret that the last month’s edition of this magazine could not be out on time. As you have seen, this EE is bigger and better. So, our efforts were concentrated in making the newer edi-tion more reader friend-ly and visible with more content. We thank our patrons for their continued support and promise the best of content, always.

-Ankur MathurContent Editor, EE

The contents of this edition are Copyright sensitive and the author and may not be reproduced in whole or part without the editor‘s prior permission.

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Brawl over a Beverage

What does it take a group of loqua-cious youth to gallivant about the city in their pristine white Mercedes or BMWs ogling coquettishly at any probable arm-candy? Loud music, lots of fuel and a bottle of chilled lager. And what if these men were to meet at a more sober place with a mind at sharing their lives? A juke-box, lots of spot-lights punctuating the ambience and a cup of hot coffee.Without further stereotyping the brash as brash, and the traditional as anach-ronistic, let me quickly put forth the point. Like every occasion has its own

rituals; so does every ‘activity’. Unlike the olden times when, guests coming over were treated to a cup of soulfully made chai, and in metros like Mumbai, cut-ting chai became popular, today’s times have a drink for every ‘event’. And cashing in on this phenom-enon are the cafés mushrooming over the cityscape of modern India. And these are not re-stricted to the metros only! The city based Coffee U & Me and Mr. Beans are giving the local branches of the ubiquitous Café Coffee Day a run for their mon-ey. So what is it in a tea – total-ing nation that is making Indians wake up suddenly and smell the coffee…? For one, it’s more about

the ambience than the bever-age itself. Soft, plush lounge like couches that spur lazy conversations, the privacy of people over tables, hygiene and most importantly, convenience is what drives

them, while competition keeps the pric-es comfortably within budget. The In-dian coffee scene also has another facet to it. The luxury side – with preciously crafted silk bags filled with aromatic Arabica retail-ing at undisclosed prices to hand roasted Robusta beans hitting the right notes, the coffee connois-seur’s days have come. The branded ones too have discovered this market – with the induction of Star-bucks and The Coffee bean and Tea Store.Same is the case with the drink of the Scots – premium whisky like Glenfid-dich and women in Delhi. An increas-ing number of affluent women have taken to sitting with a glass of the drink

and chatting away through afternoons. With kitty parties held over tasting sessions at some of the most pre-mium cellars in posh South Delhi locali-ties, the drink has caught the eye…

err, tongue of middle-aged, successful women.However, in all this brouhaha, there still remains the voice of the humble drink

– that sip of sugary ochre warm-ness, made full with the body of

milk. The coffers are filling with exports of 440 000 pounds of coffee beans,

15 harvests of the splendid As-sam tea and a repositioning of

the beverage sector. It is an amazing time to be in the industry. Cheers!

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The typewriter was in-vented by Hungarian im-migrant Qwert Yuiop, who left his “signature” on the keyboard.

Time and again, the universe has wit-nessed personalities who succeed in winning the hearts and minds of millions across the globe. Setting an example and trend for others to follow, they walk with their heads high on their very own paths. One such magnificent celebrity, the 6th richest individual in the world and the man the world’s largest steel-making company boasts of as a CEO, Lakshmi Narayan Mittal has proved his mettle battling all the way from taking over his family business to what he is today.

Born to a Marwari family in Rajasthan, Lakshmi’s ini-tial days were as simple as it could be. Later, as their family shifted to Cal-cutta and his father having become partners in a steel company, fortune decided to show its brighter side to them. Com-pleting his graduation with a Bachelor of Commerce degree in Business and Ac-counting in 1969, Lakshmi started con-tributing his hand in his family’s steel-making business. A bright young mind and first hand experience in the function-

ing of a steel plant under the guidance of his very family members. What else could have made it a better start for Lakshmi?

Later, in 1976, when his family set up their own steel plant, Lakshmi had bigger dreams of expanding their business internationally. The mark

of this international venture was the dilapidated plant in

Indonesia he bought. The same year, he

married Usha, a daughter of a money-lender. Things seemed

to be going fine for Lakshmi.

But there always is a time when man’s

intellect has to choose – choose between crib-bing over the paucity of liberty and taking the path non-treaded. For

Lakshmi, it was the time when a few differ-ences were created in his family. Lakshmi chose to set out on his own and thereon, he has been handling his business on his own.

Mittal steel, which was founded as Ispat International, began strengthening its hold in the global economy acquiring firms at

various places over the world. In June 2006, Mittal Steel decided to merge with Arcelor Steel giving rise to an organiza-tion named Arcelor Mittal. This merger proved to be very beneficial as Mittal then became the largest steel manufac-turer in the world. It is believed today, that one out of every five cars in the world is composed of the steel manufac-tured by Mittal’s firms. Arcelor Mittal

claimed to have a production represent-ing an astonishing 10% of the total steel output in the world.

Apart from ruling the steel empire, Lakshmi Mittal also contributed to other sectors of the society. He came up with Mittal Champions Trust to support ten Indian athletes to increase their strengths to compete at the global level. He also awarded Abhinav Bindra a handsome amount for winning the first gold medal for India in an individual event at the

Olympics. Lakshmi also partnered with the Government of Rajasthan to estab-lish a university named the LNM Insti-tute of Information Technology in Jaipur.

Today, Lakshmi Mittal is not only the CEO of ArcelorMittal, but also is the owner of Karrick Limited, an investment holding company and also a co-owner of the Queens Park Rangers Football Club. A resident of London, he owns a spectacular 12 bedroom house decorated with marble that has been supplied from the same quarry as that of The Taj Ma-hal. Apart from this, he also owns houses at places over the globe. This business tycoon has demonstrated his power and dominance in his field and does not seem to be contented with this. What more this magnate will achieve in the years to come, is just a matter of patience. And whatever idea he comes up with is sure to set just another example to the world.

The Man of Steel

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No one ever claimed that the Titanic was “un-sinkable”. The quote, “practically unsinkable” was taken out of context. In 1911, Shipbuilder magazine published an article describing the construction of the Titanic. The article stated that when the watertight doors were closed, the ship would be “practically unsinkable”.

Green Sense & Simplicity

With barely fifty years left to run out of black gold, the world is evidently headed towards a dire dearth of com-bustible fuel; the possibility of a third World War for a basic need as water cannot be ruled out; international organizations have sounded the siren indicating alarming environmental consequences of the current rate of industrialization and urbanization. The world, surely, is on the brink of an imminent crisis that may question the very existence of the human race on Earth. Hence however psyche-delic and dynamic an entrepreneur may be the world gives cognizance to just one shade of business these days, that being green. Manufacturing in-dustries and business enterprises are in a persistent attempt to improvise and optimize their resource utiliza-tion paradigms. In the wake of a new found awareness for environmental sustainability, all they prioritize is to claim the accolades of being energy

efficient green companies.What exactly is meant by going green? Quite often, it is misinterpreted as the mere decapitation of the harm-ful impact an industry has on the en-vironment, may it be through optimal use of renewable fuel or through efflu-ent treatment. In fact, green business encompasses a multitude of facets of business, of which the above dis-cussed efforts are primary aspects. A green company exemplifies efficient management of human resource and works for the overall growth of the nation in ways more than one. Notice-able contributions to this end are often recognized and remunerated by the bureaucracy and this is a huge eco-nomic boon to being a green compa-ny. The setting up of charitable socio-economic institutions like schools and vocational training centres adds to the ethical aspect. The fulfilment of Corporate Social Responsibility is a crucial way in which ambitious enter-

prises vow to engrave their names on the stones of honour and being eco-friendly on the outset is an integral part of this. These efforts, however, often need radical transformations in the func-tioning of the company engine. Plunging into the comparatively obscure world of renewable fuel re-quires a certain amount of financial consolidation and ambition in gen-eral. Many such ventures of well-to-do commercial enterprises in the heavy industry sector have failed in the past and it is not an easy decision to make when it comes to relatively financially vulnerable entrepreneurs. This has jeopardized a rapid growth in the Green Movement in the entre-preneurship sector in the recent past and will continue to do so unless dedicated efforts are taken in instill-ing in young and budding entrepre-neurs a sense of ambition and faith in novel initiatives.

Geriatrics breeds childhood and so is the case with the Earth. So moving on to a green future, lets join our hands in a consortium of budding entrepreneurs and lead our motherland to the helm of economic progress.

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The surface area of a pair of 757 wings is 1,951 square feet (181 square meters), about the same as the floor space of a three-bedroom house in the U.S. There are about 626,000 parts in a 757. About 600,000 bolts and rivets fasten those parts together. The length of all wires in the twinjet is about 60 miles (100 kilometers).

Pixels in Business

Around the same time the ‘the’ was droppedfrom thefacebook.com, there was anotherclean and neat idea that popped into ayoung entrepreneur’s head. Literally themillion dollar idea. Nothing more, nothing

less - www.milliondollarhomepage.com was launched on 26th August, 2005, borneout of a 20 minutes brainstorming sessionby then 21 yr Old Alex Tew, as he waslooking for ways to pay his tuition fees for

a university he had secured admission into.The concept was simple, a masterpiece ofpure advertising. The homepage consistedof a million pixels (small dots that makeup your screen) arranged in a 1000x1000pixel grid. And the idea was to sell thesepixels a dollar each as advertising space andmake your million dollars. The minimumpurchase was a 100 pixel block, costing$100, big enough for the advertiser to carrya small image or a logo and display a smallmessage if hover your cursor over image.The pixels would hyperlink to the adver-tiser’s site. The site was intended to run forfive years, but if runs forever, people whobought those pixels would own a piece ofinternet history.Pixel Sales and MarketingThe first sale, three days after the launch,was made by a friend of Tew’s who boughtthe first 400 pixels (a 20x20 block) for hisonline music website. At the end of twoweeks, 4,700 pixels were sold mostly toTew’s family and friends. With $1000dollars now in his pocket, Tew sent out apress release that was picked up by BBC. It acted as a catalyst to the already strongword of mouth campaign and the snow-balling had started. The Million DollarHomepage was featured in articles on BBConline, The Daily Telegraph and a bunch orso of other websites. The website began toreceive worldwide coverage in the UnitedStates (Alex is Brit, the Dollar trick worked)and featured in newspapers in Germany,New Zealand and even China. Soon, thewebsite was an internet sensation and ason 17th October, the site had received 100,000 unique visitors. By new year’s eve, thesite reported that it was receiving 25,000unique hits every hour and had an AlexaRank of 127. 999,000 of the 1,000,000 pixelshad already been sold.On January 1st, 2006 Tew decided toauction the last 1000 pixels on ebay insteadof launching a second million dollarhomepage, thus preserving “the integrityand degree of exclusivity intrinsic to themillion-pixel concept”. As a matter of fact,

2milliondollarhomepage.com, another one of those mimic spin-offs has hardly anypixels filled. After a ten day auctioninvolving a lot of hoax bids and retractedbidders, the final 10 blocks werepicked up for $38,100 by a site called Milliondollarweightloss.com.After costs, taxes and a donation to acharity, Tew’s net income was around$650,000 -- $700,000 from total sales of $1,037, 100 in five months. With that much inhis pocket, Alex now paid off his univer-sity fee, purchased a Toyota Mini, went ona Tokyo trip, and finally bought a pair ofexpensive socks—pixelled design of course.Tew had taken a celebrity status and inwords of The Wall Street Journal “hadpainted an interesting picture of onlineentrepreneurship”. The million dollar homepage workedthe way it did because of its novelty andfreshness. The publicity made use of viralmarketing and Alex’s enchanted story ofan ‘honest’ boy trying to make money topay off his university fees and buy ‘a pair ofsocks’ caught the media’s attention. Noneof the other spin-offs made any money.Advertiser’s were largely unhappy evenwith Tew’s own version 2.0 Pixelloto (wherepixels were sold at $2 each, and anothermillion was given away to a random guywho clicked on one of the ads).What Next?After dropping out of the university inless than a year, rejecting a truckload ofjob offers, and a series of entrepreneurialflops on the web – Tew came back to whatmade him a millionaire and launched onemillionpeople.com(check it out) around October this year. Well, lets wait and watch.

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Net Present ValueSo what happens now, that you have diversi-fied your portfolio, increased your outlook, decided to take risks and invest in stocks. I guess its time to move on to the mathemati-cal aspect of management. Ask any actuary, banker (or even a commerce student for that matter!) across the world and they’ll tell you this – if there were to be one single concept that overshadows above all aspects of fi-nance planning, it has to be this ‘Net Present Value’ (NPV).Suppose you are told that for a sale you made, the payment will come after a year. Then, how much should you charge the customer? Charging just the billed sum is not the answer since it’ll reduce in value over the year – the sum’s present value. And this present value is the ‘billed value’ over 1 less the discount rate. So, money to be given today has a higher face value than the billed value which is due for a year hence.The above discussion proves a singular point in finance planning a rupee today is worth than a rupee tomorrow. This is be-cause you can use that rupee and invest it today so that after a given time, that rupee has appreciated to a larger face value (note

that its actual worth may decrease due to inflation, etc.) In a nutshell, NPV gives you a way to bring on money to one common time platform where you can compare it and choose the best option of return.Now, how much does this rupee give you back when you invest it today are tabulated in what is called an annuity chart whence values may be read and multiplied for any sum required. In the meanwhile, which in-vestment option gives you how much return may be known from various ratios – Cost/Benefit Ratio, Investment/Benefit ratio, etc. that will be discussed in the next edition. So long, get you calculators out and go for it!

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August – September 2011 STOCK MARKET ANALYSIS

LAST MONTH SUMMARY (08/11)In the last month, when S&P downgraded the US credit ratings, it ruffled quite some feathers in the global market nest. The down-grading basically meant that the ease of getting loans or the cash flow which the US had for years would now be a bit tougher for them. This would result into slower growth of American economy, thereby slowing the global growth. The commodity prices fell sharply as their demand reduced due to the slow growth. Some speculative activities were seen in precious metals viz. silver and gold since they are considered as safe bets during periods of such volatility. Owing to this, they gained around 15-20% in a month’s period.GOING FORWARD (09/11)As Indian markets are in an oversold zone, looking forward for September, they are expected to bounce back. The signs of this pullback were seen in the form of gains in the last couple of days of August. On the upperside NIFTY may touch 5250. It would continue to consolidate around 5200 levels, unless another bad news in the form of Repo/Reverse Repo Rate hike or deepening of Eu-rozone crisis strikes the market.Currently in the bearish rally that we have seen, many stocks came down by around 20-25%. Thus they are available at very cheap prices now. So one can start building up an SIP (Systematic Investment Plan) portfolio of IT stocks. The SIPs are a plan that invests

a particular sum in different instalments on every further dip in the stock price. The major reason for IT stocks’ fall was their outsourcing based business model. But com-panies like HCL Tec and TCS are still get-ting big contracts and continue to grow. Also some private sector large and midcap bank-ing stocks – like those of FEDERAL BANK, YES BANK and HDFC BANK – are still promising as their loan-books are showing good growth even in this period of high inter-est rates.From the long term perspective Indian mar-kets are looking very good fundamentally. Chiefly because, inflation which has been an obstacle for the growth of India for around one and a half years now would automati-cally come down as the repercussions of downgrading of the US credit rating trickle down in turn reducing commodity prices. One should avoid interest rate based sectors like real estate or 4-wheeler auto segment for longer term.

Entrepreneurs’ Express07 September 201118:29

SKS Microfi-nance

A 370.80 240.0 -35.01

Jet Airways A 430.90 305.50 -29.10

Educomp So-lutions

A 286.15 223.50 -21.89

Biggest losers August 2011

Company Group Prev Close Current Price % ChangeRajdhani Leas-

ingT 63.52 139.15 +119.06

Sapan Chemi-cals

T 2.10 4.24 +101.90

TCL Technolo-gies

T 5.97 11.48 +92.29

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Across4. As of January 2010, Amazon.com is America’s largest online retailer. Which company that deals with office supplies is the runner-up?5 .n 2010, which company reportedly bought the domain name of the American Farm Bureau Federation for $8.5 million?7. What’s the name of the new phone launched by Taiwan’s High Tech Corp for competing against Apple iphone?10. Which American car firm made the Corvette?12. What word describes the minimum number of members required to be present for the proceedings of an assem bly to be valid ?13. In 1996 what overtook Coca-Cola as being the most well known brand name in the world?17. Who first produced a book in 1955 to help pub owners settle debates (and bets) between patrons?18. Yoshida Kogyo Kabushibibaisha or YKK for short appears on nearly every what?22. Which was the first company formed to manufacture motor cars?23. According to a study by global brands agency Millward Brown released in May 2011, which company over took Google as the world’s most valuable brand?24. Ron Dennis has been the manager for many years of the team behind which Formula One motor racing car?25. Which drink was named by its inventor after rejecting the first six names that were offered?26. Red Barn, now a historic site in the US, was the original manufacturing site of which company? Down1. The discovery of Metallica’s song “I Disappear” on a file sharing network in 2000 started a chain of events that led to the demise of the original incarnation of what company?2. What was the Jaguar car called before 1945?3. Owner of Mr.Beans Coffee Junction?6. Who’s the largest operator of Duty Free Retail Shops?8. The 1st vending machines in the USA were installed on New York City railway platforms in 1888, what did they dispense?9. Lambretta is a famous manufacturer of what?11. Which company opened the first Burger Restaurant in Britain in 1954?14. What is Colombia’s chief export?15. What was Mr. Ferrari’s first name?16. It is made from thermo-plastic paper and the manilla hemp used to make rope, it is designed to withstand boil ing water, what is it?19. Which vehicle took its name from the fact that it was made to be used for general purposes?20. Conducted by tea expert Yangdup Lama, ______ Tea Trails is a journey traversing the rich and unknown his tory of tea, its prop erties, varieties, brewing and serving secrets.?21. The world’s largest Mobile Phone maker is based in which country?

X & Y

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