business-models on S Anand

Things I Learned - 12 Jul 2026

Sun, 12 Jul 2026 00:00:00 +0000

This week, I learned:

How to become an applied AI engineer is a concise, well-written, and suprisingly current summary of what AI engineering is.
Xinjiang seems to be China’s Kashmir problem. Not quite, but similar.
Analogies for how forward deployed engineers work:
- It is like a food truck that brings and serves home food while building a kitchen and restaurant around it.
- It is like setting up a field hospital: patients are treated from day one, while the equipment and procedures are built around the live work.
Froghoppers excrete ~300x their weight daily. ChatGPT
There’s a growing shift away from AI-written commit messages, e.g. Kenton Varda. I compared my human written commit messages vs AI-generated commit messages and the AI-generated ones are less helpful.
Finally, GPT live gets an update and the new speaking model can delegate to GPT 5.5 when required. I tried it once today, to plan for a teacher workshop, and it was fairly good. It tends to begin with “Hmm” like it’s thinking, which feels comforting.
Using a Unicode character like 🟢 is unusually low-risk across file systems today. It works well across OSs, mobile, ZIP, attachments, file share systems, etc. Some old apps might have trouble, but for storing and sharing, it’s fine. I’ve been using Unicode symbols like these a lot in my notes, and extending to file names feels like a natural next step.
Though swimming gets the most Olympic medals (11%), for a country chasing its first medals, 78% of first-medal breakthroughs came from Athletics, Wrestling, Shooting, Boxing, Judo, Weightlifting, or Taekwondo (which are 44% of medals) - where single athletes can win without a support ecosystem. ChatGPT
JMFL accidentally emailed several people a letter intended for their brokers. It roughly said: “Many of you are recording client calls. That’s a regulatory risk. If you keep doing this, we’ll hold your payments, even fire you.”
Several Smart TVs have software that let your TVs act as proxies for data collection companies. Include Security
MapDraw is a convenient tool to annotate maps (e.g. routes, boundaries, places) and share or download it.
There seems to be no way to edit the “About” message on WhatsApp Web. Though the help suggests steps, and the “About” mood/status is visible, there’s no way to edit it. (Editing on the phone works.)
Cloudflare optimised a reader component by sometimes letting the input buffer fill fully. This inadvertently introduced a hard to reproduce race bug because the producer would close the socket if the buffer was full. The producer bug was old (it didn’t check if a flush succeeded or not) but was never visible since the readers never let the buffer fill in the past. Cloudflare
A neofirm is a start-from-scratch AI-native business, e.g. Crosby’s AI-first law firm. An AI rollup is where a company buys small traditional firms and AI-enables them - like General Catalyst proposed. AI SaaS is selling AI agents to services firms.
Give people free platforms and collect their data. Learn the supply-demand network patterns, what pepole value, and add value-added services.
Claude Code checks if you’re working behind a Chinese corporate domain - somewhat sneakily - by changing an apostrophe or slash in the date to visually similar Unicode. Claude Code Is Steganographically Marking Requests
You can use the Kaggle CLI via Codex to solve Kaggle problems. (AutoKaggle automates it - but is 2 years old.) But, like GitHub bounty hunting bots, we will probably have a Kaggle bounty-hunting bot ecosystem - maybe already do.
OpenSubtitles2024 and subscene are large pre-AI subtitle datasets with a 2024 cutoff. IndicDialogue is a 7.7K OpenSubtitles snapshot of Indic language SRTs. The OpenSubtitles API lets you search by IMDb/TMDb ID and is up-to-date.
A soup spoon is better than a table spoon (for soup), though both carry about the same volume, because you can fit a soup spoon it fully into your mouth (a table spoon is too long) and this reduces spilling.
Here’s a sign of accelerating AI progress. I used to critique outdated techniques by saying “This feels like a 20th century approach.” Then “This feels like a 2010s solution.” Recently, “This is SO 2025-ish.” Now, “That’s Q1 2026. It’s Q2.”
The 7-day week emerged from the Hellenistic planetary week and the Jewish week (not astronomy based), which Rome adopted, then spread by several routes to India, China, and worldwide. Unlike the astronomical year and month, the week is just a convention. Egypt, China, and Athens grouped days in tens; Etruria and Rome used 8-day market cycles; West Africa used varied cycles; Java used five days; Mesoamerica used 13- and 20-day cycles. Gemini
I met an ex-photographer and learned that photography is another profession where technology (mobile cameras) squeezed the middle. Generation (taking good pictures) became cheap. Value moved upstream (direction), downstream (selection, editing, album design), and into niches (forensic, industrial, sport/event photography).
Looks like Claude favors Claude Code. Might not be intentional, and just a result of training more on Claude Code data, but it does look like a network effect that could weaken open harnesses. Armin Rocher

Demand draft fees

Tue, 21 Mar 2006 12:00:00 +0000

Once, we were looking at whether banks made money on demand drafts (DDs).

DDs are costly. 90% of a bank’s costs are people-related, and it takes a fair bit of time (hence people) to process DDs. If you pay for DDs in cash, it costs even more because the teller has to count the notes.

To recover this cost, banks charge a fee. The fee increases with the size of the DD. A DD for Rs 10,000 may cost Rs 50, while one for Rs 100,000 may cost Rs 200.

But apart from the fee, banks also earn float on the DD. Let’s say you go to a bank, pay Rs 100,000, and take a DD. You mail the DD to someone, who cashes the DD three days later. The bank has your Rs 100,000 for 3 days, and earns the overnight interest rate at around 5%, netting Rs 41 in the process. This float is significant for large DDs.

Our client bank was making a small loss on DDs. Every DD less than Rs 50,000 caused a loss (even after including float). And 3 out of every DDs was smaller than Rs 50,000.

Then we had this bright idea: let’s lower fee for large DDs, attract of them, and get more float income. DDs above Rs 50,000 are profitable. So big DDs are worth going after. 80% of the float income comes from the top 22% of DDs. So surely, the big DDs are worth going after. Float income increases forever, whereas fee income is capped. So big DDs could absolutely be terrific.

We were thrilled. Here was a revolutionary counter-intuitive idea: have lower charges for DDs to get more money. We kept talking about it to our client. But at the end, we didn’t suggest it. It got left behind the conventional idea of increasing the fee for small DDs.

We were a bit disappointed, and kept cursing the conservatism of public sector banks. Goes to show how the bright young consultants can be naive. For, as it later turned out, the bulk of DD revenues is really fee income (88%), not float income. Had we lowered the fee income, there’s would’ve been no chance for the float income to make up for it.

Why did we miss that? A couple of reasons. The simple one was, though the float income increases forever, doesn’t beat fee income until the DD is about Rs 2 crores. DDs typically stay with you for a few days, and you can’t earn much interest on that.

The other reason was subtler. We had assumed that the float income for a DD of Rs 100,000 is 100 times that of the DD income for Rs 1,000. But the float income does not increase linearly! Someone who gets a DD for Rs 1,000 doesn’t mind waiting a bit to present it, but someone who gets a DD for a lakh would walk to the bank the very same day. The chart below shows how long customers wait to cash DDs. The X-axis is the size of the DD. The Y-axis is the number of days they wait. It shows a clear diminishing trend.

Lesson: Conservative bankers might make more money not listening to hotshot consultants.

Comments

Shreyas 27 Mar 2006 10:22 am: Very insightful case study! But did increasing the fees for smaller DDs help boost the profits? Did it not reduce the number of customers taking DDs?
S Anand 27 Mar 2006 12:08 pm: We didn’t measure that. But even if it reduced the number of customers it would have (in the long run) increased profits, since they were losing money on every small DD sold! They would be able to shift someone from the DD section elsewhere, and avoid having to recruit a new person.
ronnie 21 Mar 2006 12:00 pm: Hello i like to join and i wish to be a member of demand draft so mail me pls
Walter Atkinson 21 Mar 2006 12:00 pm: I was looking to this information and was helpful…ok Best Regards Walter http://www.surveynew.com Premier Paid Survey Company.
ritu raj 17 Nov 2008 7:32 am: what doc need to be presented to the bank for the dd of 375000 to be paid in cash?
uss 8 Jul 2011 6:42 pm: but there is no dd charges for current account in private bank.ll it cost loss to the bank
Vignesh 23 Oct 2012 9:22 am: Beautifully written. I liked your articulation.
pradeep kumar 16 Jun 2015 3:29 am: This article is very nice and informative. Came here while searching for something related and found it very informative. Thank you very much.
Donga Satyanarayana 28 Feb 2017 8:20 am: Some private banks are fee DD charges allowed with simple amount deposit. But our Bank is world wise national Bank . This Bank is some lakhs of crores rotining services. Better to allow free DD charges atleast a limited amount. Thanking you

Market emergence - fan bartering

Thu, 05 Jan 2006 12:00:00 +0000

Over my last few years as a consultant, I’ve seen many interesting ways in which markets have emerged where they shouldn’t have, creating havoc in pricing and scarcity. Fixed prices fluctuate, free goods acquire a value, and non-tradeable goods are traded. I’ll share a few of these examples over the next few weeks.

Once, a fan manufacturer asked us, We did an analysis and found that our wholesalers’ margins fluctuate. How could that happen, when we are fixing their buying and selling prices?

The manufacturer sells several popular fans. Their highest selling fan (call it HS), for instance, was sold to wholesalers at Rs 1,089, who would then sell it to retailers at Rs 1,100. No question of margin fluctuation.

I took a trip to Lohar Chawl, the wholesale fan market, to get to the bottom of this. After a few conversations in dingy warehourses, here’s what I discovered. Fans are bartered. Wholesalers keep as little cash and inventory on hand. Often, a retailer would order a fan (say X) not in stock. The wholesaler doesn’t want to lose the deal, and doesn’t have cash, but he would have some inventory of HS, since it’s such a high-selling fan. He goes to another wholesaler, and says,

“Give me some fan X, and I’ll give you some HS fans instead. You’ll be able to sell these HS fans fairly quickly anyway.”

“Why should I? Tell me your customers name and I’ll sell it to him myself, and make the profit.”

“Tell you what. I’ll give you my HS fans for Rs 1,079 instead of Rs 1,089. You’ll get a higher margin when you sell it.”

This is a routine matter in Lohar Chawl. If you don’t have a fan, barter it for another (often HS) at a discounted price. So the wholesaler’s margin would depend on how many fans they bought at a bartered price!

Poaching was another reason for the margin fluctuation. The manufacturer demarcated territories for each wholesaler, saying “You can sell the these 20 retailers, you can sell to those 18, and so on.” Ambitious wholesalers, or those with inventory to dump, would do a side deal with a retailer.

Look, your wholesaler charges Rs 1,100 for this fan. I’ll sell you this lot for Rs 1,095. And let’s keep it quiet."

Yet another reason for margin fluctuation was smuggling. Sometimes, the wholesalers would be able to smuggle fans into Mumbai without paying octroi. And sometimes they wouldn’t.

The biggest lesson for me from this was, It’s bloody tough to restrict a free market. I’ll tell you more about this shortly.

Comments

ritzkini 6 Jan 2006 6:25 am: :) Bloody tough indeed ! lemme guess,these were all gujjus !rite ?? ingenuous, i tell you,these guys..
Arun 6 Jan 2006 8:27 am: Neat! Thanks for those Excel tips. And look forward to more of these!
Madhu 6 Jan 2006 12:10 pm: I have noticed instances where a TN Auto Distributor comes and sells his stuff to a Karnataka retailer! How did you solve this problem? in my case, which was personal advice to a friend, we wrote to the company with some of the fake bills etc and asked for a higher discount for my friend who is a karnataka distributor, things like CST also start to matter in inter-state things. now the problem has come down bcos of VAT
S Anand 6 Jan 2006 4:50 pm: I did this work as part of a proposal. We finally didn’t get the project. But I suspect (and will try and show over the next few posts) that this is a problem that’s probably not worth fighting. The market will eventually win!
Madhu 7 Jan 2006 11:53 am: Ideally a very good supply chain management system will help solve this problem atleast. For eg: If i can order and get it immediately instead of having to bargain. Another issue is how was fan X priced? If its lower than 1089, it will also solve the problem
S Anand 7 Jan 2006 7:15 pm: The problem wasn’t supply chain lead-time, but shortage of cash for inventory among wholesalers. Whenever they were short of stock in one fan, they’d sell some other fan they had as inventory to get the fan they were short of. They can’t order it from the manufacturer, remember: they’re short of cash. They NEED to barter.
joe 7 Jan 2006 11:39 pm: the fan company had no clue why the margins were fluctuating ? scary thought. how could they not know about this. I presume it is top management that did not know this
Madhu 8 Jan 2006 3:53 am: Ok. A SCM which can even take in account demand considerations is ideal. But how can the HS and X be priced the same to the retailers? Isnt that failure of the market? Shouldnt a HS fan be priced different(higher?) than some random fan X?
S Anand 8 Jan 2006 10:52 am: Madhu, you’re right. The fans ARE priced differently. So it won’t be a one-to-one barter. If Fan X is priced at 1000, the wholesaler will give agree to sell 10 HS fans at Rs 1079, give 10 HS fans PLUS 790 Rs, and get 10 Fan X in return.
S Anand 8 Jan 2006 10:54 am: Joe, even the line mgmt didn’t know about this bartering! One of my colleagues discovered it. This guy’s a god of black money market operations, incidentally :-)
shyam 9 Jan 2006 10:07 am: This is something similar to the SJP Road market in Bangalore where u can buy computer parts at " SJP Road price “. the shopkeepers will undercut even the wholesaler price and sell it for " cash "

Netflix and lost mail

Wed, 12 Oct 2005 12:00:00 +0000

Netflix doesn’t charge you if you lose DVDs in the mail. Nice of them. The only way I see it work is if they have the right to copy a DVD if they lose it in transit. Do they?

Huh Corp

Fri, 29 Nov 2002 12:00:00 +0000

Huh? Corp. If you have money, and they have shares, buy! They’ve got the soundest business model you’ll see around. via Vijay

The Newspaper is dead

Wed, 30 Oct 2002 12:00:00 +0000

The Newspaper Today is dead. Yet another blow to the pay-model. via Netahoy

Business model of The Rolling Stones

Fri, 27 Sep 2002 12:00:00 +0000

Fortune, on the business model of The Rolling Stones.

Charge for eliminating spam

Tue, 30 Jul 2002 12:00:00 +0000

Here’s a good business model. Buy a free e-mail provider. Add spam. Then charge for eliminating spam. Good thing I got rid of my Hotmail account.

Sell free products

Wed, 19 Jun 2002 12:00:00 +0000

Joel on why companies try to sell free products. (To sell more complementary products, to spare you the suspense.)

Human Capital Valuation

Wed, 17 Oct 2001 12:00:00 +0000

And article on [Human Capital Valuation](http://www.iimb.ernet.in/review/abs133.htm#Human Capital Valuation: An Improved Model) from Deep, Kalidas, Kundu, Pankaj and Sumit on IIMB Review.

B2E

Wed, 06 Jun 2001 12:00:00 +0000

After B2C and B2B, is it now going to be B2E?

Paid auctions working

Sat, 10 Feb 2001 12:00:00 +0000

Yahoo’s auction listings fell 82% when they started charging for auctions. But the sales apparantly is steady, and quality of listings is going up. Amazon may follow suit. Looks like the pay-model is the one that will survive on the Net.

Free ISP becomes paid ISP

Fri, 22 Dec 2000 12:00:00 +0000

Jain Internet is the first to move from a free ISP to a paid one. How long before the rest follow? LESSONS: It’s NOT okay to sell products for less than what they cost ( USA Today).