No matter how interested you were or otherwise, all of us in India got a consistent dose of leadership lessons in the last week as a result of India miraculously winning the cricket series in Australia. For me the true winners in ascending order were, the Indian cricket team, the rejuvenated sport of Test Cricket and finally the gold medal surely went to the Leadership Cliches which came back strongly after a COVID break. So I will stay away from cricket for this week and the one article that I have on the topic (country herd mentality) stays away from giving you any unneeded leadership and life advice.
In most businesses, and countries for that matter, whether by its own design or whether by the will of the macro-economic environment, inherent changes to well thought out plans are inevitable. Some call it a pivot, some call it adaptability and some call it “new revenue opportunities”. There is a storm, of good news or bad news, followed by a period of very rapid movement (progress or otherwise). And then the Dust Settles. Sometimes after this dust settles you are hardly able to recognise yourself. Some emerge victorious/happy/satisfied, others not so much.
And that is what today’s theme is about. In 2021 the dust will settle on many whirlwinds and we will be left to see how these businesses and countries have changed. Action and news is many times taken as a proxy of progress and that is rarely true. Sometimes the ones making the longest strides are the silent ones. We start off with a Russian Bank which has ambitions to build a Silicon Valley within itself. We move on to the state of Egypt after the famed social media led revolutions of the Arab Springs. Then we talk about Netflix and after so many decades it proves that its finances have the potential to be as strong as its content. We move on an amazing article that tries to temper the optimism that experts have about the coming decades. The article has a beautiful mix of history and the future and is a fantastic read. I end with the most wonderful understated article about the cricket series that just ended.
Here we go !
1. So here is a question for you. The Biggest bank in Europe is HSBC. Which do you think is the second biggest bank? It is a Russian bank by the name of Sberbank. It is Russia’s most traditional bank as well as its most active 21st century lender. Russia’s citizens keep all their savings in the bank as it is state controlled and safe and then it lends at a very profitable rate. But now it is looking to be a tech giant. It in a sense as the article puts it is trying to be Russia’s Netflix, Google and Amazon all rolled into one. For my friends in India, imagine if SBI (an Indian state owned bank) and Amazon were combined. It certainly has the money to pull it off. But few times in history if ever has a bank pivoted to be successful at something else. We will see after the Dust settles.
2. Nothing can explain a country better than its revolutions. Tahrir Square in Cairo, Egypt is a sign of democracy and progress as well its revolutionary spirit. Tahrir roughly translates to Liberation as a tribute to the general who liberated the country from the British. It has been a long time since the Arab springs revolutions took place, the first revolutions that were led by social media. Today the dust has settled and it is clear that the revolutionary spirit of Egypt is broken. Mr el-Sisi the ruler, is moving government buildings and museums away from Tahrir square to put a stop on protests that have happened in the last 2 years. I wonder if that will stop the protests. Revolutions were never so bothered by the address than the intention. But democracy certainly looks thousands of miles away. Do read this article. The modern history of an ancient country is fascinating to read.
3. Netflix was playing catchup on a story that it could actually have made an original on. Debt was rising and market experts were warning that it was a house of cards that was about to come down soon. But Reed Hastings has a history of proving nay-sayers wrong and this for me is one of the biggest wins for the company. The problem with beautiful creatively driven companies is that they falter on the commercial aspects of getting all the bills paid. In the last 10 years, Netflix has borrowed more than $16 Billion dollars to finance all its content creation. Netflix has announced that it plans to break even on a cash flow basis this year. It finally generates enough cash to cover its production costs. This is specially important because other players such as Apple TV are not being able to get people to pay for their service (Read about it here). I also love this article because Barrons gives a small summary of how often they have been wrong about Netflix. In today’s world it is refreshing to see people accept that they were wrong. It took a long time for the dust to settle but Netflix is out shining.
4. For the last two months, a bunch of experts from across the world have been talking about the next decade, the “20’s” so to say would be a decade of super growth as a lot of futuristic growth technologies become practical. The world would after a long time see non linear growth to a new world. I wrote about it in detail a little while back, but well sometimes you have to be sure that it is not over-optimism. The creation of the vaccine and the overcoming of the virus is not an end, it Is just the beginning towards normalcy. And stock markets are not an accurate description of reality. This is the other version of how the next decade would be. Do give it a read. There are fascinating examples of how the world thought about the 1920’s, the age when the washing machine and the vacuum cleaner and the automobile for that matter came into everyday use. Do we really hope to see new sci-fi technologies becoming a part of everyday life? I’ll leave it up to you to decide
5. Finally we come to the only topic people cared about on this side of the world this week. This is a beautiful article about a beautiful series which showed us why Test Cricket is such a beautiful game. I resonated with the article because I admired the very same things about the sport and the match. Not too much to say here, but for me like Harsha Bhogle said in commentary, COVID lost, when the Indian captain presented Nathan Lyon with a memento on his 100th test after the match was over. It is what sport should be about. We play hard but we also recognise the achievement of the opposition after the game is over.
Hope you had fun reading.