I happened to be in India last November when prime minister Modi announced the demonetization program, where 86% of the currency in the form of two paper bills (Rs. 500 and 1000 denomination) were made defunct. People were given time to deposit their existing currencies in the bank. Those who had unusually high volume of such currencies were supposed to declare the legal source or face stiff penalties such as 60-75% tax. The goal was to catch the money hoarders and black marketers who avoid paying taxes on such undeclared money.
Four months later, I happened to visit India last February. Everyone suggested I download an app. called Paytm. I could transfer money from a bank account instantly. What was convenient with Paytm was that I could use it at gas stations, small stores, and even at roadside vendor shops. Everyone seems to have installed the Paytm station where you point the smartphone with a Paytm barcode and the transaction happens instantly. You can check your balance any time. I noticed people are paying for phone, utilities, and other conveniences without having to carry loads of cash. To incentivize more usage, discounts are doled out by many vendors.
Paytm, based in Delhi, has raised $738 million from investors inside and outside India (Alibaba, SAIF Partners, Goldman Sachs, Singapore’s Tomasek, Taiwan’s Mediatek, etc) at a valuation over $5B. Paytm wallet users exceed 200m. Clearly the demonetization has come as a boon in dramatically increasing it’s usage. They have also started their international operation by making the digital wallet available in Canada earlier this year.
Why the digital wallets have not taken off big in the US? We have Apple Pay and Google Wallet for a while, but their usage has not been spectacular. One of the reasons may be the wide use of credit and debit cards that consumers are used to. But in a developing country like India where credit/debit card usage is quite low, a digital wallet like Paytm scores big. The company expects to reach profitability next year and may be one of the new unicorns (>$10B) soon.
I watched Sundar Pichai’s recent interaction with the students at I.I.T. (Indian Institute of Technology) Kharagpur, India, where he graduated back in 1993. Besides our common country of birth, I had never heard of Sundar until his rapid rise at Google a few years back. I have never met him or listened to him at conferences. So this was the first time, I had a chance to listen to his remarks and his answers to many questions from the audience of 3500 students at his alma mater earlier this week.
Growing up not far from I.I.T. Kharagpur, I was very aware of this institution. It was the first I.I.T. in India established during the 1950s. Other I.I.T’s like at Kanpur, Delhi, Mumbai and Chennai came later. These were the original 5 Indian Institute of Technologies. Lately many new ones have been added.
Sundar did his undergraduate studies in Metallurgy (study about metals). Then how did he switch from that into software? That was one of the questions from a student. He said that he loved Fortran language during his student days and that love for programming continued. The message he was giving was for everyone to pursue their own interest & passion. He mentioned that unlike in India, students at US universities sometimes do not decide their majors, way into their 3rd or 4th year of studies. Sundar’s passion was to build products that would impact a very large number of global users. During his interview at Google, he was asked what he thought of Gmail, which he had never seen nor used. Then the fourth interviewer actually showed it to him. Subsequently, he gave his opinion to the remaining 3 interviewers on what he thought was wrong with Gmail and how to improve it. He emphasized time and again the need to step out of the comfort zone and get an all rounded experience. Today’s students need not be afraid to take some risks and be willing to fail.
Besides technical leadership, Sundar possesses an amazing quality; egoless-ness, so rare to find in Silicon Valley executive community. He said that he truly believes in empowering his team and letting them execute with full trust. This is easier said that done, based on my experience at IBM and Oracle. Large organizations suffer from ego-driven leadership causing great amount of friction and anguish. Sunder’s rise at Google was due to his amazing ability to get teams to work very effectively. From Search, he went to manage Chrome, then he was given Android. His ability to work thru the complexities of products, fiefdoms, and internal rivalries was so evident that he was elevated to the CEO position so quickly. Humility is his hallmark combined with clarity of vision and efficient execution.
He made an interesting comment about the vision at Google. Larry Page said that the moonshot projects are worthwhile because the bar is so high (no competition). Even if you fail, you are still ahead with your knowledge and experience.
It was fun listening to Sundar’s simple and honest answers & remarks.
After a few years gap, I attended this annual conference called TiEcon. TiE stands for The Indus Entrepreneurs, formed 23 years back by some of the valley technocrats originating from India. This is a non-profit organization to foster and help budding entrepreneurs. I helped organize the contents of this 15 years back. Now the scale has gone up and last week, there were almost 3000 attendees from the US and outside. Many attendees came from faraway places like India, Singapore, etc. Let me highlight some of the keynotes I attended.
- Shantanu Narayen, CEO of Adobe – This was the first keynote on day 1 where he narrated how far Adobe has come, from a desktop publishing company of the 1980s and 1990s to a cloud-based digital solutions company. He emphasized the challenge of transformation and said that some of the difficult ones are the antibodies inside the company averse to change. Hence he spent a lot of cycles convincing the troops on why change is so key for survival and growth. Now Adobe has a line of products called Creative Cloud (developers), Document Cloud (Acrobat, etc delivered in cloud), and Marketing Cloud (number of analytics products in cloud). Adobe has also been acquiring companies for non-organic growth, such as Omniture. They claim to be changing the digital experience for everyone, from emerging artists to global brands.
- Vishal Sikka, CEO of Infosys – I liked Vishal’s talk a lot. He has a Ph.D. in computer science from Stanford and his thesis was on AI, which was out of fashion for many years, but is emerging as the latest big trend. Vishal joined Infosys about 21 months back, after being CTO at SAP for many years. He described the tough transition from a product/technology company to a services company. But one can see his stamp of injecting AI technology into the services sector. He calls AI as Automation and Innovation. He announced a new solution called Infosys Mana, a platform that brings machine learning together with the deep knowledge of an organization, to drive automation and innovation – enabling businesses to continuously reinvent their system landscapes. Mana, with the Infosys Aikido service offerings, dramatically lowers the cost of maintenance for both physical and digital assets; captures the knowledge and know-how of people, and fragmented and complex systems; simplifies the continuous renovation of core business processes; and enables businesses to bring new and delightful user experiences leveraging state of the art technology. I was surprised to learn that Infosys has 200,000 employees and they educate something to the order of 17000 people every year in their huge facility in Mysore. Vishal is certainly transforming Infosys and their recent quarterly results have reflected that.
- Sanjay Mehrotra, CEO of SanDisk – This was a real treat as I was unfamiliar with the evolution of SanDisk as a company, built by 3 immigrants – Sanjay from India, Eli Harari from Israel, and Jack Yuan from Taiwan. Sanjay described how he got rejected 3 times for a US visa when he was planning to come to UC Berkeley for his undergraduate studies. He got his BS and MS in electrical engineering and started a career at Intel where he met the other two founders. The three started SanDisk, which created a new revolution in the flash memory business. After 27 years, SanDisk was acquired by Western Digital last October for $19B. I liked the candid answers Sanjay gave to the ups and downs of his journey and how he learned many lessons while going from an engineer to a business leader and growing a company to such scale. He narrated how Sequoia rejected them for the initial investment, suggesting that funding will happen only if they follow the Intel model. Of course they refused. He said that VC’s don’t always see the future and are risk-averse if you are charting a new path.
- Besides these keynotes, I also enjoyed listening to Diane Green, the new cloud czar at Google and how they are planning to compete with the de facto cloud king AWS. Sandy Carter from IBM described how IBM is moving towards building cognitive apps on its Watson platform.
There were several tracks on Cloud, IoT, Data Economy Social Entrepreneurship, etc. Overall it was a good 2-days experience.
This morning, at F8 developer’s conference in San Francisco, Marc Zukerberg announced “bots” for Facebook Messenger. Bots are humanlike robots built with AI algorithms that can interact between the user and business. For example, to order a Uber cab, you do not need to go into the Uber app, but directly ask for one via Facebook Messenger using a bot.
Facebook announced a new API today that will allow developers to build bots into Messenger. The idea is that brands and retailers like 1-800-Flowers or CNN can connect with users via messaging, and automate those conversations to eliminate the need for human-to-human interaction. That means you’ll soon be able to order flowers through private messaging without ever needing to chat with another human, for example. CNN and 1-800-Flowers were named onstage as early partners, but it’s likely that many more will be shown off throughout the conference. The more tasks you can accomplish within Messenger, the more likely you are to open the app every day. And the more purchases you make inside Messenger, the more potential revenue for Facebook. This is a brilliant stroke and a game changer.
There will be a way to search for bots in the app, and developers can advertise their bots on Facebook’s News Feed, driving users to Messenger to interact with the bot. For those who don’t know how to build bots (or may not have the technical artificial-intelligence chops to handle the language recognition challenges), Facebook is offering a “bot engine” to help developers build them. That engine will be powered by Wit.ai, an artificial intelligence startup it bought in January of 2015 to help people chat with robots.
Now the question is what will happen to the Apple store in the iPhone? Apple brings tons of business apps and makes a huge profit. Now Facebook users can bypass all that and directly interact with business via these bots. That will jeopardize the relationship between Apple (Facebook depends heavily on the iPhone for its mobile users) and Facebook. Will Apple be upset enough to cut Facebook off its iPhone partnership? Let us watch and see. The other question is – where is Google in all this?
This again shows the smart move by Zuck and team!
BI Intelligence recently published the Top 5 Digital Trends that is worth looking at. It starts with a dramatic statement, “today, nearly 43% of the world is connected to the Internet, enabling us to talk, share photos, and conduct business halfway across the globe. As a result, we have seen more technological advancements in the past 10 years than we’ve witnessed in the past 10,000 years. And in the next five years, we’ll see even more”. Here are the key trend areas:
- Mobile – Messaging apps are the new OS. Facebook is winning this as it owns both the Facebook Messenger and WhatsApp. Many companies have apps on top of these messaging apps, like payments, video, taxi, etc.
- Digital Media – The rise of the bots. This morning, Marc Zukerberg showed how to use a bot to order flowers directly from the mobile device. Programmatic advertising — or the automatic buying and selling of ad impressions — has exploded in recent years, as the digital shift has led to an increase in ad inventory. This also brings in more fraud problems mimicking humans.
- Mobile Payments – Digital wallet is the future. Mobile in-store payments have gained traction over the past two years. The EMV (Europay Mastercard Visa) migration and the launch of mobile wallet solutions from smartphone providers have been the two largest enabling factors for in-store mobile payments. Consumers will be further incentivized by offer and loyalty programs, which will drive up volume.
- E-Commerce – Shipping innovation. Traditional shippers like Fedex and UPS have been increasing their fees, forcing mega-retailers like Amazon and Walmart to create their own shipping solutions. Amazon has been buying aircrafts and fleet of trucks since last year.
- IoT – The next Industrial revolution. Businesses are using the Internet of Things to lower their operating costs and increasing efficiency. Any device with an IP address (home devices like Nest, fitness devices like fitbit, etc.) becomes part of the IoT ecosystem. Eight industries are being transformed by IoT: Oil & Gas, Agriculture, Manufacturing, Insurance, Retail, Healthcare, Utilities, and Food services.