India's longest-running show on startups and entrepreneurship Young Turks marks another milestone as it completes 19 years! To celebrate this landmark, we wish to take you through our time capsule, The Young Turks Archive, recounting the journey of some trailblazing entrepreneurial talent over the last two decades.
As India transforms, shrugging off the old cloak and dressing up with the digital debonair, we believe the lessons gleaned from these handpicked stories will be a trusted guide to the next generation of changemakers. Join us in this celebration of ideas, innovation and inspiration!
This week, we go back to a time when people were yet to say, “Paytm Karo or GPay it.”
In 2013, two veterans of the tech industry spoke about how India can go digital. We replay their words to acknowledge how India has gone digital from its snaggy inception to present-day disruption.
A few years earlier, Infosys co-founder Nandan Nilekani had established Aadhaar in his capacity as chairman of UIDAI and hoped it would enable something bigger besides being a tool for the government to make Direct Benefit Transfers.
The other stalwart on the panel, Sun Microsystems co-founder and Silicon Valley-based venture capitalist Vinod Khosla summed up the idea boldly, “Aadhaar should be the basis on which people should not need to carry cash anymore.”
Three years after the interaction came the Unified Payments Interface (UPI), which now processes over 3 billion digital transactions every month. “Once you go person-to-person, and you have it as a bunch of APIs, then all these entrepreneurs will figure out very attractive ways of embedding those payments services in their app,” said Nilekani.
On doubts whether Indian entrepreneurs can do what Nilekani expected, which was to create startups with great tech products, Khosla called for patience, “You may have to wait five years to see great product companies.” Today, India is home to 11 fintech unicorns, which include Paytm, BharatPe, PhonePe, PineLabs, RazorPay, and CRED.
India’s digital payments market is expected to grow at a CAGR of 15 percent from Rs 100 trillion in 2020 to Rs 280 trillion by 2027, according to the Research&Markets Report. In addition, UPI has gone global with Bhutan becoming the first country to adopt it for QR deployment.
Following the blitzkrieg in digital payments, these startups are now turning to digital lending, all set to disrupt the status quo of traditional financial services in India.
Shereen Bhan:
One question that everyone seems to be asking in the startup ecosystem is, “When will we see India produce great tech product companies?” A NASSCOM 10,000 Startups event held in Delhi saw two big names come together to talk about the Indian tech products scene: Co-founder of Sun Microsystems and now Silicon Valley-based venture capitalist Vinod Khosla, and Co-founder of Infosys and the Chairman of the UIDAI Nandan Nilekani. Young Turks brings you all the action from the event. Also an exclusive chat with Khosla.
Narrator: The theme of this conversation at the NASSCOM 10,000 Startups event was ‘Look Inward - India's Billion-dollar Opportunities Are Its Problems’. Taking off from this cue, the exchange of ideas and thoughts between tech mavericks Nandan Nilekani and Vinod Khosla revolves around the innovation ecosystem and the government’s Aadhar programme.
Nandan Nilekani: Now, the big push is really on Direct Benefit Transfers. And what that does is that it creates a platform of linking a person's Aadhar number to a bank account. You use government benefits to jumpstart this thing. But, once you create the link between the ID and the bank account, you can then start using it for commercial payments. For example, if a company has 100,000 employees, they don't need to go and collect the bank account details. They just have to send the money to the Aadhar number. So that becomes a business-to-person thing. Then, the next step would be person-to-person. So, we expect that in the next few months, I can send money to your mobile number, your Aadhar number, all that. So, suddenly, now it becomes person-to-person. Now, once you go person-to-person, and you have it as a bunch of APIs, then all these entrepreneurs will figure out very attractive ways of embedding those payments services in their app. But, also we need people like Vinod because, the thing is, we now have a platform on which people can innovate. You're gonna have entrepreneurs who are going to build companies that use that technology. We have to make sure there's enough accelerators and other developer toolkits and developer proposals to make sure people get this technology osmosis. And then you need folks like Vinod to say, “Okay, I'll back a few guys who seem to have a very promising idea.”
Vinod Khosla: I'm very bullish on Aadhar. Very few times you get an opportunity this large where somebody's trying a user base of 600 million people ready to sign in. Trust is a huge source of inefficiency. I think Aadhaar removes inefficiency in the system. I, for one, am completely convinced that Aadhaar should be the basis on which people should not need to carry cash anymore. The way you get in an airline should be with your Aadhar number. The way you do banking should be with your Aadhar number. The way you deal with your cell phone company or pay bills should be an Aadhar number-based system. I actually think the government has made one of the most powerful investments to enable an IP-enabled low-friction economy.
Narrator: It's no surprise then that Khosla timed the launch of Khosla Labs in November 2012 with the end of Srikanth Nadhamuni’s term as Technology Head of the UID project. Some of the experiments at this Lab that Nadhamuni has fostered include products for cashless banking on mobile phones, products for small retailers to manage inventories, and even piloted the healthcare delivery and big data space. We caught up with Khosla for an exclusive chat and began by asking him what he expects the Khosla Labs experiment to throw up and if India can lead the next generation of product innovation.
Vinod Khosla: We have tried two or three experiments, we are trying more. I can't tell you which ones will work. So, I don't have to know what will work to invest. We're putting small resources, we’re not putting a lot of resources behind it. But, once that works, we'll put a lot more resources behind. But, something has to work. Your second question is product. I do believe products can work in India. People always say it can't. I do believe it can. One of the things you'll find is whenever you have a new area, people look to big companies but they never innovate. They do what they've done. And they do it very well.
Shereen Bhan: But, we haven't actually had an Indian big product company that could act as a role model and inspire young entrepreneurs to think product.
Vinod Khosla: Not yet. But I do believe it is possible. You’ve had Indian products - Snapdeal or Naukri. But, look at the companies you think of when you think of startup companies in California. Twitter. But, when did it start? A long, long time ago. Facebook was 2004. So my bet is, you may have to wait five years to see great product companies. But, it's one of the ones that started today. It won't be clear who's successful, or whether they get successful on their second or third product iteration, their third try, their fifth try. That always happens.
Shereen Bhan: Which are the young companies under, a decade old, that you're betting on? Since, you do sit in Silicon Valley, and you have access to their plans and all the information that they share with you?
Vinod Khosla: See take a company like Twitter, they’re doing pretty well. Frankly, they have a huge opportunity but how big they can be depends not on that opportunity, but how well they execute it.
Shereen Bhan: Yeah. And manage to scale.
Vinod Khosla: Well, scale is a much easier problem to manage than people think. Short-term, again, if you take a short-term view, you focus on, “Do they have the people to scale?” If you take a long-term view you focus on, “Do they have the right strategy?” I’m absolutely still very bullish on Amazon. I think they'll be in many more businesses than people realise.
Shereen Bhan: Any Indian companies that you're excited about?
Vinod Khosla: Companies like Snapdeal are doing some very clever things. Snapdeal’s trying to solve a different problem than Flipkart. I actually think they're doing a pretty good job. But I, again, don't know the inside operations. Their strategic ideas are pretty good.
Shereen Bhan: Companies like Snapdeal, like Flipkart, who have been in the business for a little over five years now, not yet profitable, on the path hopefully to profitability. What would your advice be to Indian startups who are now in that phase of trying to break out into the next league?
Vinod Khosla: So, my one general piece of advice is: If capital isn’t available, people change their strategy. That's usually not the right thing. If you have a large vision, you have to follow your vision and do it. You don't compromise the vision, but you can change your tactics. If less capital is available, grow slower. Don't try and grow as fast in a different business. Keep your original vision. I think vision is the most important thing that makes for a big company
Transcriptions by Arunima Rao
Arunima Rao interned with Young Turks from April to June 2021
