Shocking Difference Between Poor and Rich in Developing Countries (Dharavi, Mumbai)

I am reading this book called "The Fortune at the Bottom of the Pyramid" by C K Prahalad. This book discusses about inclusion of poor in strategy of larger private corporations. How they can be made consumers and creators of value and their untapped potential can be utilized for their own development as well as profits for private corporations. One very alarming data I found recently in this book is that the poor live in high-cost ecosystems. It means that they pay premium price for everything. They take credit at unbelievable rates. 

Here is an example of Mumbai. It is taken from the same book. The result was earlier published in a research paper. The poor people live in an area called Dharavi. It is located in the center of the Mumbai city in India. Dharavi is like an area occupied illegally by poor people many years ago and that time, I guess Mumbai wouldn't even have been that big. But now it is the center of Mumbai as the city has expanded with growing population. There have been lots of studies done on Dharavi. It is a total slum area. While if you come out of this area, there is adjacent area called Warden Road which has higher income population and have better facilities. Now the below table shows the difference in the prices these two localities pay for different services. 

It is shocking to see the rate of interest for people in Dharavi. It is 600-1000%. I guess this high rate is because though they can go to the banks in Warden Road area but may be since they live on illegally occupied land, they may not have bank accounts. And there are strong reliable intermediaries who charge such exorbitant rates. The book says that the difference is 5-25 times and it is generally same in all developing countries. There are local monopolies in such areas. The book says that banks can open their facilities for people in this area and can charge even up to 25% interest rate which is highly beneficial for the bank and extremely cheap for the poor people. It is also discussed that there is a lack of proper distribution of goods in such areas which can be done by the expertise of large corporate firms. 

It is also to be noted that since the people in this area do not have legal title to land, they do not invest in real estate. Instead, they have basic equipment for daily life like television set, kitchen setup, and mobile phones. 

This post is not very thorough researched. Feel free to add anything that you know about Dharavi or people at the bottom of the pyramid.

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What Warren Buffet Thinks About Earning Money

I was going through a short biography of one of the richest man on planet, Warren Buffet, and found an interesting quote from him about earning money and happiness. What matters and what now. It makes a deep sense and gives a better meaning to life. Here it goes:

My guess is that if Ted Williams was getting the highest salary in baseball and he was hitting .220, he would be unhappy. And if he was getting the lowest salary in baseball and batting .400, he’d be very happy. That’s the way I feel about doing this job. Money is a by-product of doing something I like doing extremely well.

 As far as I guess by reading his biography, he mean it! Sometimes, what is perceived as the aim is not the aim but the byproduct of fulfilling your aim. In words of Simon Sinek, a company works not to earn profits. Profits are a result. The vision of a company is to do what it is best at doing and what it enjoys most. And this is same as what Warren Buffet says. Well, I will come to post by Simon Sinek later on in another post.

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The Inspiring Story Of Virgin Founder - Sir Richard Branson

Introduction

Born on July 18, 1950, in Surrey, England, Richard Branson struggled in school and dropped out at age 16—a decision that ultimately lead to the creation of Virgin Records. His entrepreneurial projects started in the music industry and expanded into other sectors making Branson a billionaire. His Virgin Group holds more than 200 companies, including the recent Virgin Galactic, a space-tourism company. Branson is also known for his adventurous spirit and sporting achievements,

Early Life

Richard Charles Nicholas Branson was born on July 18, 1950, in Surrey, England. His father, Edward James Branson, worked as a barrister. His mother, Eve Branson, was employed as a flight attendant. Richard, who struggled with dyslexia, had a hard time with educational institutions. He nearly failed out of the all-boys Scaitcliffe School, which he attended until the age of 13. He then transferred to Stowe School, a boarding school in Stowe, Buckinghamshire, England.Still struggling, Branson dropped out at the age of 16 to start a youth-culture magazine called Student. The publication, run by students, for students, sold $8,000 worth of advertising in its first edition, which was launched in 1966. The first run of 50,000 copies was disseminated for free, after Branson covered the costs with advertising. By 1969, Branson was living in a London commune, surrounded by the British music and drug scene. It was during this time that Branson had the idea to begin a mail-order record company called Virgin to help fund his magazine efforts. The company performed modestly, but made Branson enough that he was able to expand his business venture, adding a record shop in Oxford Street, London. With the success of the record shop, the high school drop-out was able to build a recording studio in 1972 in Oxfordshire, England.

Virgin Records

His first artist on the Virgin Records label, Mike Oldfield, recorded his single "Tubular Bells" in 1973 with the help of Branson's team. The song was an instant smash, staying on the UK charts for 247 weeks. Using the momentum of Oldfield's success, Branson then signed other aspiring musical groups to label, including the Sex Pistols. Artists such as the Culture Club, the Rolling Stones, and Genesis would follow, helping to make Virgin Music one of the top six record companies in the world.

Business Expansion

Branson expanded his entrepreneurialefforts yet again, this time to include the travel company the Voyager Group in 1980, the airline Virgin Atlantic in 1984, and a series of Virgin Megastores. But Branson's success was not always predictable. By 1992, Virgin was suddenly struggling to stay financially afloat. The company was sold later that year to THORN EMI for $1 billion.Branson was crushed by the loss, reportedly crying after the contract was signed, but remained determined to stay in the music business. In 1993, he founded the station Virgin Radio, and several years later he started a second record company, V2. Founded in 1996, V2 now includes artists such as Powder Finger and Tom Jones. 

Branson's Virgin Group now holds more than 200 companies in more than 30 countries, including the United Kingdom, the United States, Australia, Canada, Asia, Europe and South Africa. He has expanded his businesses to include a train company, a luxury game preserve, a mobile phone company and a space-tourism company, Virgin Galactic.Branson is also known for his sporting achievements, notably the record-breaking Atlantic crossing in Virgin Atlantic Challenger II in 1986,

He was knighted in 1999 for his contribution to entrepreneurship, and in 2009, he landed at No. 261 on Forbes' "World Billionaires" list with his $2.5 billion in self-made fortune, which includes two private islands.

Virgin Galactic

In recent years, the ever-adventurous Branson has focused much of his attention on his space tourism venture. He partnered with Scaled Composites to form The Spaceship Company, which is currently developing a suborbital spaceplane, and, in April 2013, the project made an impressive leap forward with the test launch ofSpaceShipTwo.Branson was delighted by the success of his spaceship's first test, telling NBC News that "We're absolutely delighted that it broke the sound barrier on its very first flight, and that everything went so smoothly." He expects to be finishing testing the craft by the end of 2013. By April 2013, more than 500 people had bought their tickets for Virgin Galactic's voyages.

Taken from https://www.facebook.com/permalink.php?story_fbid=174886346049584&id=125492477655638

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How Bitsspark Angel Network of Bits Pilani was Founded

Graduates from the Birla Institute Technology and Sciences (BITS) have spawned their own angel network known as Bitsspark. This alumni association was born out a tragedy. Vamsi Pendalya, a BITS alumnus, was on the flight that crashed into the World Trade Centre in 2001. His collegemates created a memorial fund in his name and five years ago they grouped together to form an angel network.

Taken from Economic Times

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