Feb 1, 1998 12:00 PM

Microlending in Bangladesh

By Kaitlin Quistgaard

| NEW ECONOMY

| Microlending in Bangladesh

Your Own Little Piece of Cold War Heaven

Logo Pirates Go High Tech

Wheel of Fortune

The Wired Interactive Technology Fund (TWIT$)

<h4>#### 26 bucks, Muhammad Yunus has built a multimillion-dollar bank and a telecom business to benefit the poor.</h4 Fy-seven-year-old Bangladeshi economics professor Muhammad Yunus is an irrepressible dreamer. Unlike many dreamers, however, Yunus has proved to be a brilliant pragmatist. His outlandish notions about transforming his impoverished homeland have prompted him to make available to the needy 65-cent loans, cell phones, and, any day now, wireless modems. Through his Grameen Bank, he's helped develop enterprises dedicated to weaving, farming, and fishing, as well as solar energy and telecommunications; he's also helped launch a cellular phone network and an ISP that facilitates the bank's innovative microloan program. The loans, Yunus says, have already helped one-third of Grameen's 2.2 million borrowers rise above the poverty line.

Ys first became an entrepreneur in 1976, when he realized that "the economic theory I was teaching had nothing to do with the reality of my students' lives." So he dug into his pockets and started a microloan program with US$26, divvying it up among 42 villagers and thus founding the Grameen Bank. In the 22 years since, the bank has loaned $2 billion, mostly to women (who make up 94 percent of the bank's clients), and the program has become a model for several microcredit initiatives – including some in the US – which lend or give sums small enough to buy, say, scissors and a blow-dryer for would-be beauticians to set up at-home salons.

Te days, Grameen loans average $160 (roughly enough to buy a cow and sell milk), and borrowers are expected not only to repay the loan plus interest, but to save money as well, thereby creating a credit union. Loans are made to groups of five women at a time, and if any of the five defaults, lending privileges are suspended. This peer support system has made for an astounding repayment rate of 98 percent, while the focus on women has had a perceptible effect on family planning and nutrition.

Ys and Grameen, meanwhile, have made a decisive move into high tech. Grameen CyberNet went live in July 1996, and now it offers Net connections to some 2,500 dialup customers in the Bangladeshi capital of Dhaka. Last year in March, Grameen Telecom launched a cellular service, expected to serve some 68,000 villages within four years. And, most recently, Grameen negotiated a link between its service and a fiber-optic cable passing through nearby Calcutta, giving Bangladeshi villages Net access. Soon, Yunus says, his country could be one of the world's leading "outsources," with villagers in a position to work over the Net for distant companies. "Jobs," he smiles, "will come to their doorstep."

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w shoreeks, Microsoft plans to unveil "Sidewalk 3.0" – and then to hide the cracks. Sidewalk's Matt Kursh, counting up the personnel on new Sidewalk teams in Chicago, San Diego, and Washington, DC, insists that "in terms of overall personnel we will be growing." Still, the buzz at Redmond is not about who's coming, but who's going – or, rather, experiencing "contract nonrenewal." Last year, more than 100 Microsoft Network contractors saw their projects end when MSN upgraded to version 2.5, and the parallels between Sidewalk and MSN don't end at euphemistic firings. Both continue to increase their dependence on licensed (rather than original) content and on "service journalism" (known at Microsoft as IDA, for "insight, decision, action"), where news doubleclicks to a purchase. While Si

lrass remain mum on specifics, insiders say that just as MSN all but abandoned its own media production in favor of deals with Disney, Paramount, Wired Digital, and 250 other licensees, Sidewalk 3.0 is looking to incorporate MSN titles like CarPoint, Expedia, and Music Central and to expand its third-party partnerships with Zagat restaurant guides, Multiple Listing Service classifieds, and Stern Publishing. Inside sources also confirm that the Sidewalk national team is developing new distribution platforms, including WebTV and Windows CE, maybe a hint of where March's nonrenewed should email their résumés. By I

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ogameso experience the consensual hallucination of cyberspace, visit the New York Stock Exchange. There, in four crowded trading rooms, space is just as scarce as time, and nowhere will you find people embracing technology more eagerly to save on both crucial commodities. In the past three years alone, order cards and bulky card readers have been eliminated in favor of tiny Epson handheld computers; cumbersome monitors have been replaced with flat screens; and the exchange itself has gone wireless. Its first-of-a-kind Wireless Data System has enabled massive jumps in trading volume. Despite thes

ibrokers are pushing for even more palmtop power, and a new generation of PDAs is expected to hit the trading floor within the next few months. These PDAs will feature full color and run Windows 95 instead of DOS. A few months ago, Louis Pastina, the exchange's managing director for broker services, began testing the Mitsubishi 586, but he says the NYSE's order-management system will ultimately run on any number of PDAs. A winner in

is PDA sweepstakes had not emerged by deadline. But a wild card candidate, Via Inc. of Northfield, Minnesota, did stand out. The pitch: a wearable, tethered PC. With the Via solution, processing power's no problem, but the apparatus remains cable dependent, and Pastina expressed doubt that brokers would want to wear something like Batman's utility belt for an entire workday. Maybe it's time Via recruited George Clooney as a spokesmodel. By Brad

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urnove#### igh tech business leaders have learned to market themselves. Here's a preview of the latest top spin. By Brad Wieners</h4> Sometimes you h oinvent yourself for who you really are." Queen Latifah in Rolling Stone, ig Blue's Loutner in Business Week? have to be trst to beat yourself." Chicago Bulls coach Phil Jackson, or Intel's Andy Grove? Today's high tec

sss leaders are hit makers, and like their counterparts in music and sports, they're also doctors of spin, adopting the guise of comeback kid, corporate rebel, or philosopher-king as befits the moment. And if you've been hoping this Brand of Me cycle would wash out, don't count on it, as the parallels between showbiz and big business have migrated rapidly from CNNfn ("the MTV of the '90s") to celebrity self-help books. Management guru and pianist John Kao has proposed suits take note of jazz impresarios like Dave Brubeck. The Harvard Business School Press has tapped Boston Philharmonic conductor Benjamin Zander for a book on leadership. And no less a figure than Peter Drucker has entertained the notion of the executive with a baton. "What we are increasingly talking about today are diversified groups that have to write the score while they perform," says Drucker. "Sounds beautiful, yet nobody has really found a way to do it." John Kao thinks

aThe Harvard and Stanford B-school instructor recently founded The Idea Factory, a San Francisco outfit that holds seminars drawn heavily from the "riffs," or exercises, in his book Jamming: The Art and Discipline of Business Creativity. While the primer rec- ommends the jam session as a model for strategic planning, Kao has a new metaphor for org-chart climbers: the film producer. "Admittedly, the

rillions of different kinds of producers," Kao says. "But the bottom line is that the producer makes it happen and is able to convene the right mix of resources and talent, often without having any direct control over those resources. From a show business point of view, it's akin to creating a dramatic situation in which the right kinds of things take place." Asked if candida

fa top spot at a high tech firm would help their cause by referring to themselves as producers, Silicon Valley headhunter Ann Peckenpaugh shakes her head. "They would be seen as someone who had a pretty strong directive from elsewhere, someone not used to being in charge." In the Valley, she said, it's all about the player-coach: "You know, someone who is both the leader – has been there before – but is also suited up and on the field." She cites as examples John Chambers of Cisco Systems and Dave Peterschmidt of Inktomi. Leaving aside th

owood may be the worst-managed business on the planet, Doblin Group president Larry Keeley feels that both the jazz and producer metaphors are "missing something." The Doblin Group is the world's leading strategic design firm (sound bite: "What MacKenzie is to finance, Doblin is to innovation"). Like Kao, Keeley thinks manager is due for retirement. "Ditch manager for leader," he says. "Leader is a much bigger thought." Keeley understands both of Kao's metaphors as a way to come up with something new, but observes that "jazz is mostly about a conversation, where I play something complementary to what you just said. Maybe you bring talented individuals together, but seldom do you get an emergent form." Hollywood, meanwhile, "is governed by the pitch. The genetic code of the pitch is what it's close to and what the twist is. Hardly the recipe for something unprecedented." "What's missing,

emuses, "is the person who's wildly opportunistic, the person who takes a call from someone and is asked the impossible and only after they've already said 'yes' do they figure out how they're going to do it. Or the person who has an ear, who listens to all the flunkies and crackpots and hears something in what they're saying and then aims their resources at it." So what does he propose? "I guess," he grins, "the CEO as idiot savant." By Joao de S

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e checn the Paris flea market of Saint Ouen uncovered what at first seemed a classic case of casualwear counterfeiting: sweatshirts, jackets, and polos bearing the logos of such famous brands as Ralph Lauren, Eden Park, and Timberland. But as customs officers pursued their investigation to Bourg-la Reine, a residential area in the city's southern suburbs, they were surprised to find five computer-driven sewing machines. Authorities said the devices were together worth about US$50,000, a level of technology unusual for a case of this sort. The high tech bust also suggested a new breed of thief – one who, rather than smuggle goods into the country, steals the digital logos and embroiders them on cut-rate fabric inside the country. Even more troubling for the police and the textile industry: no one could determine whether the logos had been pilfered from the manufacturers or simply scanned into a computer from store-bought originals. To help clothiers pr

teir wares, the customs agencies of France, Germany, Italy, Austria, Spain, and the Netherlands have joined forces in a project called Musyc (multimedia system for customs), a Net-based link between agents in each of the six countries that promises to speed up the process of distinguishing the originals from the fakes. Nonetheless, the only real solution, says Musyc director Jean Louis Ferracci, "lies in the use of digital signatures and cryptography." By Jennifer Hill

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ever-rling. Today, only 13 of the original top 50 from 1955 remain. More revealing than this attrition, however, is the profile of the companies that have replaced yesterday's giants. Where once the list was dominated by businesses that actually made stuff (US Steel, Swift, Gulf Oil), these days the list belongs increasingly to communications, health care, and insurance firms (AT&T, Columbia/ HCA, Prudential), companies with inventories that can be hard to find. By Jeffery Wardell (

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the amn turbulence in Asian and US markets. The portfolio gave up 14 percent of its previous gains over the preceding two months, but we're still outperforming the Russell 2000 by nearly 10 percent since July 1. On November 3, I sold Neoprobe, Oak Technology, PairGain Technologies, and the remaining General Scanning shares to build up reserves, just in case we're in for more turbulence. The European Committee for Proprietary Medicinal Products asked Neoprobe to provide more data before approving its cancer-detection drug. The weakness in bellwether I

sed the whole semiconductor group to slump, so I exited specialty chipmaker Oak Technology as well. This month, I am selling For

ss in order to buy Cisco Systems, and I'm capturing profits in Citrix Systems, which is up 33 percent. ArQule, a promising combinatorial chemistry company, has signed a number of licensing deals and is profitable already, a rare feat for a young biotech concern. And I'm also buying PathoGen

,ose cystic-fibrosis treatment breezed through its FDA Advisory Panel Review. Investing in companies soon after FDA recommendations can prove a less risky way to play the biotech sector. Company Primary Busines

res Close 12/1 Since Purchase Action | ArQule | Pharmaceuticals

R| 8,000 | 21 23/32 | + 0% | bought 11/3 | Arbor Software | Softwar

A| 4,000 | 29 13/16 | – 40% | held | Ascend Communications |

4,000 | 10 | – 5% | held | Biochem Pharma | Pharmac

c| BCHE | 5,000 | 25 3/4 | + 17% | held | Citrix Systems | Softwar

C| 2,000 | 75 1/4 | + 33% | sold | Dataware | Software | DW

000 | 3 3/8 | – 33% | sold 1,000 11/3 | Fore Systems | Network h

ORE | 9,000 | 17 11/16 | + 10% | sold | Forte Software | Softwar

F| 15,000 | 10 | – 26% | held | Fusion Medical | Medical

int | FSON | 35,000 | 3 7/8 | – 19% | held | General Scanning Inc. |

X6,675 | 6 17/32 | – 60% | held | Intel Corporation | Micr

pINTC | 2,000 | 81 1/2 | + 15% | held | Neoprobe | Pharmaceutica

P | 10,000 | sold 11/3 | Oak Technology | Microch

|KT | 13,000 | sold 11/3 | PairGain Technologies |

a| PCYC | 7,000 | 23 | + 22% | held | Quick Response Services

fation services | QRSI | 4,000 | 37 1/2 | + 9% | held New Holdings | Ci

Sems | Network

lPGNS | 4,000 | 36 1/8 | buy to 44 Cash Holding | $443,884 </p

rtfolio Value | $2,322,04

pp> Portfolio Performance since

1– 14% Russell 2000 Index | – 4.25% Legend: This fund started wi

Smillion on December 1, 1994. We are trading on a monthly basis, so profits and losses will be reflected monthly, with profits reinvested in the fund or in new stocks. TWIT$ is a model established

Wd, not an officially traded portfolio. Jeffery Wardell is an a senior vice president executive financial services representative for Hambrecht & Quist LLC who may have a personal interest in stocks listed in TWIT$. The opinions expressed herein are those of the author and not necessarily those of H&Q's research department. H&Q has not verified the information contained in this article and does not make any representations to its accuracy and completeness. Wired readers who use this rmatir investment decisions do so at their own risk.