Political Suicide?

Demonitisation day #5.

Doubts about the thoughtfulness and preparation behind the move have been widely cited. The system is beginning to appear stretched. FirstPost and Mint present a fairly balanced view of the repercussions of demonitisation.

Given the logistical nightmare, and the 100 percent chance that this will result in sheer chaos, anarchy and anger his vote base (since traders will be the worst hit) why did Modi commit political suicide?

If the PM took such a risk, it shows his supreme confidence and a quid pro quo of deep trust between Modi and his electorate. He, as Swapan Dasgupta writes in his column for The Times of India, would have calculated that the electorate, though being made to go through utter inconvenience and hardship, will “appreciate forthrightness and loftiness of purpose.”

But he would be hurting. No matter how strong the conviction and unshakable the trust, Modi isn’t blind to the factors at play — the market slipping into a recession, daily lives suspended in a surreal act of faith and common man getting increasingly restive as the days tick by and the system near a total collapse. – Sreemoy Talukdar, FirstPost.

I don’t have any reason to doubt the sincerity behind the move. That much more reason to believe that Narendra Modi has turned out to be a special Prime Minister.

I know that I can’t completely gauge the problems people are facing from this move. An acquaintance had to default on his rent, footfalls at restaurants have fallen, and for sure those that rely on daily wages have been hit. Life continues to be orderly. I’m encouraged by the few conversations I had when standing in line at a bank on Sunday. I believe that the desire to stay the course is still present. Let’s just hope that we can reboot the system before this spirals out of our control.

Cashless India in a Single Day

8th November ended like any other day. I’d just gotten home from work. My father called me. Excitedly he told me that our PM, Narendra Modi had recalled 500 and 1,000 denomination notes. I responded that it’s probably a hoax and switched to youtube to check just in case. It was true. A number of my colleagues who I discussed this with echoed my initial disbelief on having first heard of demonetisation. Living through a full day after demonetisation has been that much more unreal.

I can’t imagine that an extreme step such as this would ever be taken. As my Dad explained, the last time this was done was in 1978 under similar circumstances. India needed this. Edelweiss Securities predicts that the crackdown will unearth 3 trillion rupees ($45 billion). Perhaps I believed our politicians didn’t have it in them. But Modi ji’s turned out to be a politician like no other. He’s allowed his determination to lead him into the unknown. If this move fails to deliver impact, it’ll hound him. If it works, at least temporarily black money will entirely cease to exist in India. Fake money will be invalidated. Indeed, the nexus between terrorism, corruption and tax-avoidance will receive a blow.

And that’s significant.

As the dust of today’s discussions, evaluations, analysis and experiences settle, it’s becoming clear that although this was a much-needed reset of our entire system, it just might be that the entire potential of what is possible was missed.

First, a little background. A little before tax-season the government announced an amnesty scheme under which tax defaulters could come clean for a penalty and avoid criminal prosecution. Although the scheme was widely availed, it came nowhere near the goals our PM had set. Perhaps he have felt that some thing more would have to be done. I’d resigned myself to “yet another unfulfilled campaign promise”. It would continue to be business as usual.

India (and Bharat) is a clear, desperate large-scale use-case to go-digital. In our cash-led economy, an INR 10 denomination note has an average lifespan of less than 10 months.

Our PM himself appreciates technology for the transparency and accountability that technology brings with itself. He’s also cited the parallel economy being a key driver of forces that are destroying us from within.

Since the early years of 2000 – 2012, digital entrepreneurs have been tracking the Internet in India. We’ve achieved big changes at a snail’s pace. First came broadband, then smartphones, mobile internet, finally e-commerce. This is over a 12+ year time period. If we think forward, will it take us another decade for us to go cashless?

And therefore skepticism. We need to be there desperately, but the inertia won’t allow. Just the other day I was asked by a potential hire, “Do you really believe you’ll sell digital payments to a group that believes in dealing in cash”? I’ve always had a ready answer, but it’s a tough argument to fight. Even now, my son’s private school conveyance hesitated to share his bank account details. We simply didn’t have the cash on hand to pay him.

If one sets out to change India to stop having to rely on cash, until last night this felt a little like an impossible task. I only know now that I felt like this. I’m simultaneously embarrassed and impressed on the boldness and on how our PM’s decision has turned out.

So just maybe, I need not have to wait a decade for this change. Let’s take a fresh look at what was possible.

We’ve just spent an entire day where 500 and 1,000 notes are not legal tender. Throughout the nation Banks and ATM’s were shut. There was some chaos as people scrambled, but systems haven’t entirely failed or stopped. If you’re a daily wage earner and if you were paid in 500’s on Tuesday, you’d have a difficult time. In the coming days there will be more pressure on the system to change those 500’s into new 500’s or 100 denomination notes. On Thursday 11th, ATM’s will be back online, but if you don’t have a bank account, you won’t have access to more than INR 4,000 in the new currency right away. For sure that won’t cover the month’s rent and groceries.

Over the last 2 years, we’ve introduced Aadhaar – a biometric based system capable of identifying citizens, we’ve linked the Aadhaar system to bank accounts, and have recently introduced Unified Payment Interface, a simple account-to-account cash transaction system suitable for smartphones. If we’d made it possible to pay with UPI almost everywhere, there wouldn’t be as much pressure on the system for availability of 100’s and smaller denomination notes. Even in a hybrid system those who need cash to bridge expenses could have had them on priority while the others must pay digitally. Universal acceptance is key.

Let’s look at some of the counter-arguments I’ve got. Not everyone has a bank account, but they may have instances where they’d have to pay large sums (school fees comes to mind).

On the acceptance front, skepticism has prevented retailers and common utility providers from adopting digital. That could have been eliminated.

But just this one day, I believe that we could have prepared ourselves to digitise and made a leap. Even if it is only my limited view-point, on this one day we all accepted to be inconvenienced for the greater good. A nation that can be organised to give up their money and recognise the larger picture, they’re certainly ready to let go of their other fears. This opportunity, this reset might not arise again.

We’re getting quicker at transforming our ageing private / public systems and protocols. Reliance Jio’s doing it in telecom (they’re India’s only 100% VoLTE operator), railway tickets, our cooking gas subsidy system and many other examples come to mind. This pace of change is exciting.

There’s no doubt in my mind that 8 November is historic and a big leap forward. It has strengthened my faith in our version of democracy and in our leader. It’ll strengthen the common man by merging the parallel economy and forcing cash out into the open. It has encouraged me to think about what’s possible, what our future ought to look like and what we’ll need to do in order to get there. Thank you Honourable Prime Minister Narendra Modi for growing our picture by that much. Thank you for surprising me.

Reciprocity: Simplifying Business Networking

A little and a lot, both can be said about business networking. To write about the little is to summarise all the many little things I’ve learned over the last 9 years. Its quite simple that every business conversation starts with give and take. As a novice I’ve found learning this simple protocol to be long and confusing. A short article can help accelerate that process.

The one word that I’d use to capture this idea is Reciprocity*.

The take: Knowledge of what you need right now is distilled from your priorities in that day, week and even quarter. You get the idea. Articulate what you want and suggest ways you can be helped. You can help me with <…> just fill out the blanks.

If you end a conversation without speaking about what you require, you’re missing out. Business relationships work both ways.

The give: This the part that I’m good at. I tend to offer more than I have to in the hope of getting things started off on the right foot.

Nevermind the generosity. What I figure works best is to understand who you’re speaking to and what their priorities are. Remember how you’re priorities helped you out earlier? That’ll work here as well.

Not all give an take has money on one side. They can also be sophisticated barters. Welcome creativity!

Once you’ve established some common ground, its time to apply the idea to the many types of people you will meet.

Investors are not different beasts as is commonly misunderstood. They too want things to be done. Maybe they’re priority on that day is to identify that interesting deal which will make his year. You’re deck or elevator pitch may not necessarily be sufficient if you get where this is going.

In that same picture, always ask based on your priorities. It need not always be an investment. It maybe something the Investor will know (an Analyst’s report perhaps), or maybe someone he knows (an Investee company?).

Moving on, time-based engagements (consulting) also follow this principle. This applies to people who are supremely busy, or have something you want desperately.

Sounds simple, right? I’m glad I’ve had good mentors to help me figure out this idea in its entirety. The biggest temptation being to avoid leaving the take to the context. Doing things this way leaves little room for grudges, disappointment, or entangling yourself in confusing priorities.

I enjoy meeting new people as a part of my work and I hope that by doing business with them it’ll lead to larger things down the road.

* The Key to Getting Meetings with Insanely Busy People, Fast Company.

Is the thinking mind a Mirror or a Whiteboard?

I do enjoy pondering on the attributes of the thinking mind. What is the thinking mind? What’s the purpose of the thinking mind? What is the nature of thought? If we wanted to understand the biological content that makes thoughts possible, where should one look for it? Questions go on endlessly.

One fundamental question I toyed with in today’s meditation is does the thinking mind closer to a mirror or a whiteboard?

If one goes by a fundamental that the thinking mind is not separate from the larger body of consciousness, then the thinking mind is better explained as a smaller reflection of the larger set of events. Of course, you can decide to override what you’re thinking, but that’s still an in and out process.

Another fundamental that the ‘thinking mind as a mirror’ is based on is that of consciousness. Consciousness isn’t directly experienced in its entirety. At least that’s how I see it today. It’s the larger idea that drives every little thing we think of as ‘out of direct control’. There are so many instances of physiological functions. If I threw a ball at your face, you’ll blink and dodge even before you ‘know’ that the ball is headed at you.

Consciousness is not simply limited to instinct. What about digestion? Nail growth? Muscle growth? Or solving a problem in deep thought? It all seems to happen without me determining whether it should stop or start.

Depending on what philosophy you read, consciousness can also be explained as the fabric that binds everything, not limited by your bodily limits.

At the tip of this very large idea is what we directly experience and finally what we directly control. So I like to explain thought in this way – when you can feel a spontaneous thought cross your mind, that’s experiencing a reflection of the many, many events simply blended together.

A clutch of thoughts with no specific objective

A few thoughts on achievement. It’s a good idea to aspire to achieve.

On achieving whatever it is that you desire, it’s certainly possible to lose connection to the emotional content of your work. For instance, it’s never easy to come in every day with a smile. I’m fortunate to know of a few rare, exceptional people who can do that.

Another visual that comes to mind is the blogger who can see her audience’s claps (and Likes if you must) but knows inside herself that her product is a shadow of her former self. There will always be way more popular blog authors out there, but they all know what I mean when I write that.

What does one do then?

In such times I’d say, dare to dream bigger. To dream new. Dream on. But don’t stop working.

My Experience: Startup Leadership Program 2015

After what has been a while, I’ve put thoughts down on paper. I decided to write about my experience attending SLP Pune 2015. It was in the nick of time too. Admissions to the next SLP batch close on 15 August 2015.

In a way, I’m glad SLP came along when it did. Mid-way through 2014, I was in half a mind to move to Bangalore and start from scratch there, which isn’t altogether a bad thing*. I turned in my application from Bangalore staying over at my brother-in-laws on an extended visit. Attending weekend sessions and meeting peers grounded me just long enough to continue to find a solution in Pune.

My complete experiences are captured in this post for punestartups.org.

* Bangalore was recently in the news for having made it to #15 as a startup destination globally.

Neuroscience-led Ventures

A friend with a PhD in statistical modeling of brain signals recently shared his view that solving the Brain is a final frontier. Neuroscience and related areas continue to attract the best of breed from engineering, sciences and of course philosophy.

Entrepreneurship and technology are not exempt either. To give you an idea of the scale of the problem at hand, we’re still understanding the biological content of thought, we’re still trying to understand what makes someone effective on a job, or an effective speaker of a language and there are many mental illnesses that need attention.

Here’s a quick roundup of ventures I believe are led by developments in Neuroscience.

Lumosity.com – Games that help you stay sharp.

Pymetrics – Games to help you find your career fit.

Muse by Interaxon – An EEG headset that makes it easy to interpret your state of mind.

Elevate – Another Brain training app that’s also been selected by Apple as the App of the year of 2014.

MagicLeap – Immersive 3D that leverages how the Brain coordinates visual and sensory signals to construct environments.

I imagine that even after we’ve cracked our brains we’re still going to be susceptible to Magic.

India’s Mobile-Only Products 2015

Ecommerce and local commerce services here in India are beginning to soak up the mindspace around the buzzword “mobile-only“. I imagine that the idea of mobile-only will follow the regular cycle starting with sinking in deeper into app design and eventually, business design too. But there’s something superficial about the way its being thrown about.

Here’s one instance of the term in use to critique the product strategy of flipkart, other ecommerce players.

3 questions about Indian ecommerce’s mobile-only obsession – Karthik Srinivasan, MediaNama.com, 22 March 2015.

One of the earlier references I managed to uncover was a report on India’s Internet usage being predominantly “mobile-only” (Over 50% of India’s Internet Users are Mobile-Only, Times of India, 23 October 2014). Fast forward, we now have an accelerator dedicated to mobile-only startups.

To me, mobile-only by design implies direct, efficient function for mobile users, even beyond the desktop. For instance, if you find it hard to get something done with a mobile social networking app (as opposed to impossible) and you switched over to a laptop to do so instead, that’s not mobile-only. On the other hand, Mobile-only does not imply that your product strategy is simply restricted to the mobile as is being used in the popular press.

Mobile-only is intended to simply serve the user with that characteristic. In other words, what makes the Uber app mobile-only is the assertion that you’re reserving the cab on the kerb-side. They’ve fastidiously stuck to this idea despite the immense temptation to solve for other cases. The fact that you can’t book a cab on your laptop is then just a symptom. The day we see an Indian ecommerce service restricting itself to serve the user on the go, that’s going to be an interesting day and will hopefully mean they’ve grown out of a “serve all equally” approach. As you can imagine such as service must have a different product mix on sale, perhaps an entirely different business model as well.

Think HotelTonight and not MakeMyTrip.

We are like this only!

India’s Digital Payments Freeway

In the process of building a movie tickets platform, the BookEazy team stumbled upon a revelation of card-less digital payments. We weren’t the only ones to come upon this discovery. And yet, its taken eight years for the digital payments freeway to become a potential reality. I believe that this is an important, polarizing discussion as it offers the ability to permanently close the larger digital divide in India.

Card-less Movie Tickets Online, April 2006 to 2009.

When working on getting BookEazy live we framed the problem of movie tickets in simple terms. We wanted both students and knowledge workers to be able to book their movie tickets via mobile SMS without using plastic. This was before net-banking had become possible and only a small portion of the urban population were card-enabled. An offline method, Cash on delivery was on the horizon and multiplexes had begun offering home delivery of movie tickets to movie-goers.

BookEazy cofounder and CEO offered a solution. Inspired by how we rent movies and Inox’s cashless “reserve a movie ticket by SMS and show up 40 mins before to collect them”, she suggested – why not take that idea to the next level? We then designed a cashless system which allowed movie-goers to reserve movie tickets against a security deposit and show up at the theatre to collect their tickets any time before the show.

We built over several assertions, selling ~1CR of movie tickets in Pune. Some turned out to be true, while others turned out to be false.

  • We got the mobile-only use case bang on right and ported the system to work not only with desktops, but with SMS transactions and mobile browsers. But we were too early for smartphones and native apps.
  • Urban debit and credit card penetration has grown significantly since then. I can imagine more than 60% of a site’s transactions are card based (with a 3 to 1 factor in favor of debit cards to credit cards).
  • We were on target for the “impulse buy” use case. By eliminating the card altogether from the workflow, our movie-goers booked more often than box office average in a year.
  • We weren’t able to onboard Students as well as we did with Knowledge Workers who valued convenience over price [1].

E-Payments Develop, 2009 to 2012.

The years that followed, were relatively quiet years for payments, overseeing the development of card gateway infrastructure and other channels such as cash on delivery, net banking. Since 2012, Flipkart and other ecommerce sites drove the development of the e-payments infrastructure. Oxigen and One97’s PayTM were two outlying payments services that continued onwards through this time.

The other key building blocks that solidified during this time are inexpensive smartphones and ubiquitous saturation of mobile internet. As we’ll see further – these will have a significant say in the development of our digital payments freeway.

Wallet Services, 2012 to 2015.

For comfort I’ve always stayed with prepaid mobile cards. Recharging them with my local kirane-walla (local Grocery store) hasn’t always been convenient and so began the search for an online solution. My earliest prepaid recharges with PayTM culminated from the frustration of trying to recharge directly with the operators website (AirTel, TATA DOCOMO, Idea). Initially, PayTM recharges were restricted to the desktop with a credit card. Subsequently, PayTM launched their Wallet service and app for iOS and Android.

The original insight for a Wallet service comes from prepaid users ‘lending’ each other minutes [2] of talk-time (or credits, if you will). Which also explains why the growth of M-PESA a mobile wallet service in Kenya was led by a telecom operator and not a bank.

It makes sense for PayTM to have mobile recharge as a captive service [4]. Even if there appears to be a contradiction between the Wallet service target demographic (prepaid customers) and the channel favored (smartphones). Students are perhaps a unique target demographic where both attributes happily co-exist. Explained another way, students are both – heavy users of smartphones as well as prepaid services.

On the flip side, at least one source directly cites unfavorable regulation as to the reason why Wallet services haven’t developed in India [2]. Fast forward to today and we’ve got a plethora of Wallet service providers here in India led by first-generation wallet services, banks and others with a desire to bank the unbanked and the underbanked [3].

The creation of a nationwide digital payments freeway has implications for e-commerce and others. For instance, students now can now be included under digital payment channels making it possible for them to be a higher margin demographic and offer a greater lifetime value. On a longer timeline, Wallet services can potentially digitize common small-value cash transactions and simply unite the larger India.

References:
[1] Product plans must pursue a target demographic with a desire to make it possible to replicate their success.

[2] Mobile Banking: Financial Services Meet the Electronic Wallet, Knowledge @ Wharton and Ernst and Young.

[3] HDFCICICI Bank launch digital banking services.

[4] What is the Growth Strategy of PayTM?