Kickstarter and Crowdfunding

When we study growth of civilization over the last several centuries, we come across contributions of several people in the form of inventions. These inventions rendered difficult tasks simple, provided resources for further research and development, and thereby enriched human lives and surroundings. There are indeed big names remembered for their contributions. They have got their right of place in the annals of chapters of development. Yet there are thousands of others who toiled as much as the famous ones, but never got the recognitions they richly deserved. Then there are innumerable unsung heroes whose names never came out, but their contributions are used in many applications and inventions. What we have today is a sum total of the contributions of all three such groups.

It is possible that many contributions lapsed before taking a concrete shape which resulted in great loss to mankind. They might have subsequently come in some other shape or form. But the loss of time would have been a significant factor. This was all the more true of times when documentation and communication had not yet developed to the desired level. Nor there was an efficient system of publishing and recording rights of individual inventors. There could have been instances when the inventors themselves did not know the value of their own contributions. Thanks to the present day technological advancements, there are abundant opportunities for ideas to germinate, take shape and reach their logical conclusions. The pace of growth is now in geometric progression due to these factors.

When we analyze the reasons for many ideas and inventions to lapse before reaching an ultimate level, three factors stand out. The first was failure of recognition of the ideas by the ones who had them in their minds and initial actions. The ideas or actions were forgotten before their importance was noticed to the fullest extent. Then there were others that were identified by their owners, but did not receive support from the surroundings. The concepts could not sustain due to lack of encouragement from concerned authorities or society at large. License and permits, and clearance from governments did not come speedily enough as the promoters did not have the requisite muscle or money power. The third reason is due to lack of resources to expand the ideas and give a final shape to the products. Among all the resources required, financial resources is the most important. Many brilliant ideas never took final shape for want of funds for their development.

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Gopalaswamy Doraiswamy Naidu (1893 -1974) was an engineer and inventor and is often referred as Edison of India. Popularly known as G D Naidu, he made invaluable contributions to various fields of technology. A self-taught man, he was a genius in the real sense of the word. His life story is a very interesting study in the background of the events in the country during his lifetime. His inventions are visible in many areas; industrial, electrical, mechanical, agricultural and automobile engineering. He never had education beyond primary level, but rose to the position of principal of a polytechnic! He was an outstanding example of achievements of a man without formal education.

G D Naidu did not like to go to school. He was a very mischievous boy at school and was throwing sand and stones at teachers, and sent out of school. His education ended there. He worked as a waiter in a hotel in Coimbatore and saved money from the meagre earnings. From the funds so saved, he bought a motorcycle, which was very rare in those days. Picture of the motorcycle is given here. He dismantled and assembled it repeatedly and became a mechanic. From the earnings as a mechanic, he started Universal Motor Services (UMS), purchased a bus and ran it between Pollachi and Palani. In a few years he had one of the most efficient fleet of buses for public transport. He started National Electric Works (NEW) and brought the first electric motor in India. 

Naidu did research in the field of agriculture as well and identified new varieties of cotton, maize and papaya. He started production of cheap radio and television sets under the brand UMS. I have seen UMS radio and TV in my uncle's house. He built cheap cars but could not go for mass production due to not getting license from the government. It is said that he started construction of a house at 6 AM in the morning and finished by 5 PM. The house was ready in 11 hours! He started Arthur Hope Polytechnic (named after the then Governor of Madras) and became its principal. The polytechnic is now known as GCT (Government College of Technology) in Coimbatore. His inventions and prototypes are kept in the G D Naidu museum in Avinashi Road, Coimbatore. The museum is now celebrating its 50th year.

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The concept of Venture Capital has taken off during the last few decades. During the first half of 20th century, financing new ideas was an exclusive domain of a few wealthy families. The Rockefellers was one such family that encouraged funding new ventures. After World War II, efforts for institutional financing framework for ventures which had high growth potential but highly risky, gathered momentum. During the last three decades Venture Capital Funds have come up very well providing a robust structure for finance at different levels to upcoming business ideas and plans. Today Venture Capital funding is available in millions of dollars. Many ventures thus financed have become success stories and encouraged both entrepreneurs as well as VC funds in their respective pursuits.  

For ideas to germinate and reach VC funds is still a difficult task. Big ventures are able to reach these required levels. What about very small projects which do not measure up to the standards expected by VC funds? There are innumerable start-ups which do not need big finances, but resources of the promoters are not sufficient to fund them. At the other end of the spectrum are people who are prepared to invest small amounts to back ideas that interest them. Thus we have a scenario in which ideas requiring smaller funding stand on one side whereas a large number of people (the crowd) are ready on the other side to stake small amounts on such ventures. This type of situations have led to an era of Kickstarting and Crowdfunding. There are intermediaries that bring together the two groups so that the ventures can take off. 

Kickstarter is an American Public Benefit Corporation based in Brooklyn, New York. The goal is to "Help bring creative projects to Life". We old timers are familiar with kick-starters, a pedal used to start a machine by kicking it. Most vehicles, especially motorcycles, had it by kicking which the vehicle's engine came to life. We have seen Motors (buses were thus called then) in our childhood which had an iron rod used for starting its engine until modren touch start engines arrived. Crowdfunding is an activity or process of raising money from a large number of people, typically through a website, for small business projects. Kickstarter, launched in 2009, has so far generated more than 2 billion US Dollars from over 10 million backers to fund over 2,60,000 creative projects.

The ventures cover a variety of ideas like stage shows, comics, films, journalism, video games, technology and food-related ideas. People with business ideas place their offers on the website giving details of their plans and a minimum funding target before a fixed deadline date. Funds are collected only after the target amount is subscribed by the crowd. If the target is not reached, the project does not take off. Anybody anywhere in the world can contribute to the projects. The website gets a fee from all successful projects and payment processor also charges a fee for the services rendered. The website has no role after funding process is completed. Investors are offered the products or dividends if the project succeeds and it is between the promoters and the crowd. It is said that people from more than 20 countries are now actively participating in crowdfunding. There have been many success stories as well as failures. Each investor invests a small amount and does not mind taking the risk for that amount. They may get good returns as well if the venture succeeds. It is said that there are ventures that have raised more than a million US Dollars in 24 hours!

Crowdfunding is catching up and there are many websites providing similar services now. This is another diversification of fundraising and utilizing activities today.

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G D Naidu suffered from licensing and permit raj. He struggled due to lack of support from the surroundings. He was choked due to shortage of funding opportunities. Things have changed in the present times. Make in India has said goodbye to License and Permit raj. There is a large crowd around the world ready to invest in new ideas. Environment is pregnant with new ideas and opportunities to promote them in the light of success stories of modern entrepreneurship. Times have indeed changed the very look of things.

G D Naidu would have loved to be active in the present times!

The Majestic Mount Rainier

The term Pacific Northwest is used with reference to the geographical region between the Pacific Ocean in the west and Rocky Mountains on the east. Oregon and Washington states of the United States of America and British Columbia province of Canada form the core geographical areas of the region. Sometimes even Alaska and the northern mountainous regions of California are also included in this term.  The area has bountiful natural beauty with the Pacific Ocean on the one side and the coastal mountains, Cascade Range, Olympic Mountains, Columbia Mountains and the Rocky Mountain range on the other.  The Mount Rainier National Park in the Washington Cascades is one among the many tourist attractions in the area. Vancouver (British Columbia, Canada), Seattle (Washington state) and Portland (Oregon state) are the major cities in the Pacific Northwest. Water bodies, hills, wild life and rich vegetation have made the area attractive to visitors. Many man made monuments and attractions have enhanced tourist interest in the region.

Mount Rainier stands 14,410 feet (4392 meters) above sea level and dominates the southeastern skyline horizon from Seattle and surrounding areas on any clear day. Its snow clad peaks can be seen from several miles distance. The mountain was originally known as Mount Tacoma or Mount Tahoma and forms a part of the Cascade range. It is said that Tahoma meant "Mother of Waters", signifying the six major rivers in the area, that take their birth from the perennial melting glaciers on the mountains. Captain George Vancouver of the British Royal Navy who surveyed the Pacific coast in 1792, named it as Mount Rainier after his friend Rear Admiral Peter Rainier. Both names were being used until the establishment of Mount Rainier National Park. Facilities for the visitors and tourists have been improving since then and Mount Rainier has become a important tourist destination for people visiting Pacific North West. 

Mount Rainier is in fact an active volcano and counted as one among the 16 worldwide active stratovolcanoes. That makes it one of the most dangerous volcanos in the world. In case of eruptions, the damage would be wide-spread. The ash eruption may affect areas up to Vancouver in the north to San Francisco in the south. Geologists have identified 26 major glaciers and 36 square miles of permanent snowfields that cover the peaks of the mountains. Two volcano crates of more than 1000 feet diameter are visible at the top of the mountains.  

Views of Mount Rainier varies from season to season. The green valleys below the mountains is a wonderful sight during the summer months. The all-white snow clad view in winter months has its own beauty. One can say that it is a matter of opinion, but the views during the months of August are a sight to behold. On a clear sunny day in August, the mountain offers a majestic view with lush green meadows in the foreground. 

One of the best views of the mountain is seen from a lake near Paradise visitors center. on a clear day with no winds blowing across, the reflected image of the mountain peaks can be seen in the still waters of the lake in the valley below. The lake is appropriately named as the "Reflection lake". The picture given alongside has captured this view beautifully. The area around the valleys is a popular destination for hikers and campers. Backcountry skiing, winter sports and rock climbing are the activities indulged in by adventure lovers. August month also offers great views of miles and miles of subalpine wildflower meadows. Waterfalls and small rivers and rivulets add to the beauty of the scenic spots and view points. Parking is a perennial problem, but the mere drive along the roads is itself a rewarding experience.  

The park can be visited from three different approach routes. Our visit yesterday was from the Seattle side. The 54 mile drive to the mountain had around 25 miles in the climbing road through the forest areas. It was a pleasant drive amidst wonderful scenery. The sunny day gave ample opportunities to see the majestic mountains as well as green meadows in the valleys, subalpine flowers, clear lakes and rivers and enabled enjoying the true grandeur of the Mount Rainier.

If you are anywhere around Pacific Northwest with a day to spare, Mount Rainier is the place to go! 

It will shake you...

All stakeholders love profit making companies. Loss is a dirty word in finance and banking, except when it refers to the competitor's financial statements. The era of computer accounting has changed how financial statements look now. In the days of manual accounting, black was indeed beautiful. It was so because loss was shown in red ink in the statements then. Companies pride themselves in stating that they have an interrupted profitability record. Investors love to invest in profit making companies, and more particularly regularly dividend paying companies. All companies do not make profit every year. Even those who make profits are unable to declare dividend every year. Regularly profit making companies also skip dividend payments in some years. Most regularly profit making companies declare dividend once in a year. Shareholders look to these annual announcements with interest and hope. Occasionally they are rewarded with bonus shares or a bumper dividend. It could even be said that receiving dividends on investment in shares depends on the companies profits as well as investors luck. Some companies declare mid-year or interim dividend followed by a final dividend. A dividend every quarter is almost unheard in the annals of business enterprises.

Then there are industries and businesses that follow a cyclical pattern. They have their up years and down years. Good years are almost certain to be followed by bad years. Managements of such companies have special strategies in place to deal with such cyclical patterns. There are industries whose performance depends on performance of the economy in general. They ride on good times and wobble during bad times. Thus consistent profit making and dividend paying is indeed a golden achievement for companies in such industries, during these turbulent times.

How about a company that has continuous profit making as well as dividend paying record? Also a record of paying dividends every quarter for a long period of time?

Southwest Airlines is a company that belongs to this rare category. It has all these features. As a company in the airline industry, its performance is directly linked to the performance of economy in general. It is a part of the turbulent industry, literally and figuratively. In a boom year the performance can be better and in the years of depression it has all possibilities of nosediving. But Southwest Airlines has  a record of continuous profits for 44 years. It has been paying dividends every quarter for the last 41 years. The Airline recently declared dividends for 164th consecutive quarter!

Southwest Airlines is indeed a very interesting case study for academicians as well as business enterprises.

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What makes Southwest Airlines such a distinguished company? Those who use its services frequently are well aware of these features. Some of them are:

• Goodwill earned over a period of time by providing efficient low-cost flying experience.
• One of the best overall on-time performance.
• "When you fly, your bags fly free". The airline allows two checked-in bags as against one bag by most other airlines.
• "No assigned seat" seating system. Seat numbers are not assigned at the time of booking or checking in. Instead a boarding group number is given and one can choose any available seat once inside the aircraft. 
• The company uses only Boeing 737-700 and 737-800 aircrafts. While this in itself may not be a special feature, this facilitates training of all crew members efficiently and flying as well as cabin crew are at home on any aircraft in the fleet. (Those of us who were in banking industry during the initial years of computerization with different vendors know the difference!)
• Friendlier cabin crew and courteous behavior.
• "Bring your own food" system that allows flyers to bring food from home and use it on flights.
• "Not charging change fees" that allows flexibility in travel plans and last minute changes without extra cost.

A statement printed on the paper napkins reads "In a world of many "No"s, we are a company of many "Yes". 

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The flight to Chicago Midway airport had taken off as scheduled from Philadelphia International airport at 5.30 PM on Saturday, 5th August, 2017. There was some anxiety in the mind as the connecting flight from Chicago to Seattle was to take off within one hour from the scheduled landing at Chicago. The airline policy of no assigned seats came in handy as seat 1C, the first seat for getting out of the cabin on landing was available for grabs. 

The usual message from the CEO in the airline magazine, kept with safety instructions to be followed in the aircrafts, made interesting reading. Gary Kelly, Chairman and CEO of Southwest Airlines had mentioned that he would sum up his 31 year experience with the company in "Our People". I was going through the article when the cabin attendant enquired about the choice of soft drink to be served. The CEO had mentioned that the company looked for three qualities when they hired people: a Server's Heart, a Fun-LUVing Attitude and a Warrior's spirits.

I was just handed the apple juice cup when the pilot advised on the PA system, all the passengers to get back to the seats and fasten seat belts. He said that we may experience some heavy turbulence for the next few minutes. We were cruising at 36,000 feet and generally not much of it happens at that height. For first time flyers turbulence can indeed be scary, but seasoned travelers take them in their strides. There were indeed some instances in the past when drinks were spilled during such extreme movements of aircraft in the air. But what happened at this time was indeed different. The violent shaking threw out all the liquid from the cups of all three of us in the front seats. The cabin assistant had to use sheafs of paper napkins to wipe the soaking liquids. The turbulence continued for several minutes. Cabin attendants ran to their seats and buckled themselves. It was indeed an experience! Many might have suddenly remembered long forgotten prayers on their lips. After about 15 minutes, things were back to near normal and rest of the flight was uneventful with smooth landing at the Chicago airport. We got extra serving of juice to compensate for the wet dresses!

The entire thing fell in perspective when a news item on the next morning was read and understood. 

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An American Airlines flight (flight number 759) had taken off from Athens in Greece to Philadelphia nearly ten hours ago when our experience on southwest airlines happened. The flight was full of people who had spent their vacation in Greece. The 10 hour flight was another normal flight and the aircraft had cleared its flying over the Atlantic. Passengers later even described that the American landline was visible from the sky. A sudden strong bout of turbulence hit the plane. A man who was on his seat flew high, hit the ceiling and landed hard on his father sitting on the next seat. Ceiling of the aircraft was splattered with coffee and there was coffee flowing in the cabin. All flight attendants ran for safety. After sometime, one attendant appeared and said that she was the only one able to serve others; other flight attendants were injured and needed help themselves. The turbulence lasted for sometime, but final landing at Philadelphia was indeed smooth. 

Ten people including seven flight attendants were hospitalized after the flight landed in Philadelphia. Travelers said that it was as if the aircraft was on a free fall. The experienced pilots and the capabilities of modren aircraft had saved the day. There was no forewarning and the previous aircraft that had just passed that area had only reported mild turbulence. There was no time to react or go around the troubled area in the sky.

We were on the Southwest flight to Chicago, a few hundred miles to the west in the sky, around the same time.

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Safety instructions like being with seat belts on at all times while seated and reading safety instructions are often ignored by travelers, especially the frequent flyers. The American Airlines flight 759 experience is a timely reminder to highlight the importance of safety instructions. 

Thomas Campbell's Loichiel's Warning mentions ".... And coming events cast their shadows before.."  It is a famous quote that is often used to say that shape of things to come are given out by some warnings well in advance.

Not always, as this turbulence showed.