Vijay Shekhar Sharma Curated
Founder and CEO, Paytm
CURATED BY :
Tell us something about your academic background and choices.
What inspired you during your college struggles to dream big?
It’s been quite a journey (Paytm was formed in 2010 and parent company One97 Communications in 2000). At this stage how do you envisage Paytm’s future?
Anyone who assumed us to be a wallet company, a recharge company, a payments, and a commerce company thereafter, is understanding that those are not our only businesses. We have an opportunity of being an internet ecosystem player, which can play out in as many segments of the internet as possible. We can become the champion of consumer needs in this country better than anybody else.
How did you start as an entrepreneur?
We have seen you expand holistically in that direction. Paytm is not just a financial ecosystem play anymore. What is the larger plan?
The presentation from Day One, when we wanted to build Paytm, had three components – Commerce, Advertising and Content. That is where the journey will lead. Three different verticals: commerce-led systems which are payments and financial services, content-led ecosystems, and advertising and marketing-led ecosystems. Our business offering today can be split into a customer’s money needs. They pay, they buy, invest, they lend, and they deposit. That is the whole circle of money that we are offering.
What is the edge that Paytm has when it builds a category, as against an acquisition or a partnership?
We want to control the base building blocks, which eventually gives us flexibility and control. That is why we are builders. Recently, there was a chance for us to be an investor or make acquisitions in the travel category. However, we realized that there will be a lot of things we will have to change. The reason we are getting the opportunity to become what we are is that the world is moving from desktop to mobile. In the desktop age, the checkout was different. You would go to the cart first and then the payment page. In the smartphone age, the checkout process is just the opposite. You first enter the payment, whether it is a ride-sharing app, a food app, or anything, and then checkout (with) one click...The very fact that Paytm did payments first was because we thought payments will be the anchor…for many transactions.
When you see Paytm growing at this rate, what do you see as the biggest challenge for the group today?
I have always said that the biggest challenge for Paytm is that we will never know when to stop expanding. It will always be a horizontal versus vertical expansion as a choice. In 2018, we will be growing vertically rather than horizontally and would definitely go deeper into everything instead of starting something new. Let’s say we will launch more commerce categories or will become more dominant in what we already have. And this is a cycle that Paytm follows all the time. Grow horizontally, and then go deeper in each of these categories.
How do you see the future of Indian companies?
The future is bright, the future is good. The future of Indian companies is that they will become a dominating force to reckon with. And the classic aim of every company is to continuously fight the next level of the battle. Privileged are those who get to play in the fight, and superior are those who get to win the fight. We all will find out what it really takes to fight these battles. It will be an interesting battle to win. I think 2019 will be the year that Indian startups will come of age, and no longer be looked at as third world startups. Until now, you would look at these startups as a niche market or a small market. I think by 2019 or by 2020, Indian companies will be seen as huge, sizable companies.
Do you see the scenario changing again with global competition?
The Indian consumer internet ecosystem is maturing, and that is why every company in the world wants to play in it. This is the truest testing time for the whole ecosystem, and the government, to take a call how they want it (to evolve). It is my suggestion that we should allow foreigners to come (and) invest, and not actually hijack the agenda.
What is your vision as an entrepreneur?
Your customers(like even a tea vendor) used PayTM during demonetisation but yet fall back on the standard banking system. Why is it so?
What is the advice that you would like to give to all the aspiring Vijay Shekhar Sharma’s of the country?
The immense cashbacks that you give, is it really viable?
How is PayTM mall different from Flipkart and Amazon?
How do make profit with so many discounts and free services?
Can you share with us how does your “lending” business model work?
Are there chances that your plans can go wrong?
Paytm Payments Bank restarts account opening process after RBI nod
Paytm Payments Bank has received permission from the Reserve Bank of India (RBI) to restart banking operations from December 31. This comes as a major relief for the bank, which was barred by the apex bank from opening bank accounts in June after it failed to stick to the RBI norms. It was reported at that time that Paytm Payments Bank had failed to maintain Rs 100 crore net worth limit. The RBI's action was also attributed to the bank's "close proximity" with One97 Communications, run by founder Vijay Shekhar Sharma. Now after the green signal from the RBI, Paytm Payments Bank has again initiated the Know Your Customer process for its e-wallet and bank account customers.
What inspired you to take the entrepreneurial path?
Fear & failure, and fear of failure are a huge motivator for most entrepreneurs. How do you deal with that?
Have you ever faced failure?
Where do going to take Paytm into?
What is it like to have influential and visionary people like Jack Ma, Warren Buffett around you? What inspiration do you draw from them?
What qualities do you look for in entrepreneurs? What impresses you that would make you invest in them?
Is there any corporate mantra that is 'no fear, no greed, no entitlement' you follow? Who are you looking for as you're building out your team?
What is that one piece of advice you want to give to the emerging entrepreneurs?
How do you see the debate around Aadhar privacy concerns, security issues as well as digital wallets that are now playing out in India?
No digital system can be entirely foolproof. Do you agree?
India figures very poorly on the ease of doing business. How do you think we can improve that?
Tell me something about you.
You are definitely a multi-tasker but don't you think it's too much to handle so many things at the same time?
How do you get started in the technology business?
In your journey so far what are the kind of interesting lessons that you have learned as the startup founder?
Now when you're planning to scale the business into the big internet conglomerate, do you feel the lessons you've learned as a startup founder will also change?
Who are your role models as you grow Paytm towards becoming important India conglomerate?
How did the idea of Paytm come about and what is the problem were you initially trying to solve with it in India?
What is the mission and vision of Paytm?
How does the Indian consumer get accessed to Paytm? What will be the exact use of the Paytm app for Indian consumers?
What was the thought process behind obtaining the banking license to become the first payments bank and how does that helped to expand the Paytm's coverage in both m-commerce and e-commerce?
What was the reaction of the Board of Directors when you first pitched the idea of Paytm?
What was the initial performance of Paytm?
What is your perception of India as the technology market?
Why you have your cabin with your employees?
How were your childhood days?
How was your experience in college?
Which part of your life did you consider a turning point in your life?
Why didn't you go for a job after your college?
When did you lose interest to go to the USA?
When did you lose interest to go to the USA?
What did you learn on this journey?
How different is India from other countries?
What inspired you to take this journey?
What are your views on the current competition you are having from GPay and PhonePe?
What do you mean, when you say that-"None of the current companies will win the digital payment war"?
What is the motive behind PayTm entering so many different sectors?
What did you learn from the big companies around you?
How do you deal with unnecessary attention?
How have you sustained this company this well?
What made you decide to take this entrepreneurial journey?
What does "Being Fearless" means to you?
What failures you had in your life?
What is Paytm right now and what is your business model?
What is it like to have mentors like Jack Ma, Warren Buffet, and Masayoshi son?
What do you look for in an entrepreneur to invest in?
What do you look in a person to have in your time?
What advice would you like to give to an entrepreneur?
Why Paytm targeted Indian Cricketing Sector?
As you admire Sameer Bhatia, What would you ask him if you had a chance?
What do you think, your college and school year shaped you to be what you are right now?
Besides hard work, what does it takes to reach where you are?
Would you consider not knowing English is a weakness in the current world?
Would you consider English to be a mandatory language for everyone in this country?
How do you deal with when things are not fare?
How Paytm is helping the society in the time of Covid Crisis?
You have partnered with many hotels to offer accommodation to healthcare professional, how these partnership will evolve post the lockdown?
When do you see things getting back to normal after this covid crisis?
What would be the new normal going forward for businesses?
How Paytm wil turn itself into a profitable company?
Do you plan to go for an IPO?
How are you managing the cash flow?
What is the future look like for Paytm?
Tell us your deal with IPL?
What Paytm Founder Vijay Shekhar Sharma wants to do to empower women?
How has brand Paytm evolved over the years?
Take us through your new cset of announcements?
How do you hope to grow your business?
How do you hope to leverage the advertising opportunities?
Does this gloomy economic picture of our country bothers you?
Will this post covid situation will be similar to the breakout moments you faced at the time of demonitization?
Kindly tell us about your insurance debut?
You dont have the advantage of monopoly in India, how does it effect the recovery or output?
What led you to digital payments and e-commerce?
Vijay Shekhar Sharma: I grew up in a small town called Aligarh where I studied in a very basic Hindi medium school [where Hindi is the medium of instruction]. I didn't have fancy schooling. I was lucky to get into engineering college in Delhi at the age of 15. I taught myself English by memorising rock songs and simultaneously reading translated textbooks in English and Hindi. When I graduated, I was the youngest teenage engineer out of the University of Delhi. As the Pink Floyd song [Breathe] goes, Run, rabbit run. Dig that hole, forget the sun, And when at last the work is done Don't sit down it's time to dig another one. For long you live and high you fly But only if you ride the tide And balanced on the biggest wave You race towards an early grave. My early heroes were Internet entrepreneurs Jerry Yang and Mark Andreessen. I started One97 Communications in 2000 and began by selling content to users through telecom operators. By 2010 the smartphone became the distribution channel. Payment became our thing, and destiny was in our hands. In 2014 we launched our licensed wallet product. By 2015, Ant Financial had invested in us, then Alibaba and then SoftBank. A whole generation of Internet entrepreneurs in India have small-town roots and hunger to build something significant and successful. My father was a schoolteacher. I had four siblings; there was no money to go around. I had to find ways to make money through weekend consulting jobs to set up computer networks for small businesses. At engineering college, I naively asked around [to find out] what the best-paying job is. Somebody said CEO. I didn't even realise the person was being sarcastic. I knew the only way to get to be CEO was to build my own company. Looking back, I've never had a business card which said CEO. When I set up One97 Communications, my business card stated my title as EO. My engineering school buddy and one of my first employees, Harinder Takhar, also had the same title. We were both EOs. I couldn't get to Stanford or Silicon Valley. Somewhere there was the urge that I should do something worthwhile, but I would have to do it in the Silicon Alley called Delhi. I wanted to build a great company; I wanted to attract the best talent. The Internet age was calling. Paytm began offering people searches and went from there into business services, payments, commerce, gaming, content, financial services, and banking.
Are you satisfied with what you've built so far?
Many entrepreneurs are called “overnight success.” I say, “Yeah, my overnight was 19 years long.” We started in the dial-up Internet era, where we ran up huge phone bills. We now carry the Internet in our pockets. How far we have come! The last 20 years have been the most significant for India. It is an unprecedented kind of change the world hasn't seen, not even in the U.S. or China. Nowhere else have such a large number of users come online in such a short period of time.
How will India's digital payment transformation be different from China's?
China has two players. We will not have that kind of dominance. India will have four or five players, with a leader, which will have significant market share. Everybody can coexist. Payment is way too huge a problem for one or two players to control. India is far more competitive. We have neither the best talent nor the best infrastructure, nor the required levels of capital. We have to be far more resourceful. To raise money we have to take a flight out of India and explain our market to investors. Neither the Chinese nor the Americans have had to describe their market to their investors.
Is India changing?
With low mobile data tariffs, the Internet is reaching the corners of India. That's spawning a huge number of startups in payments, cloud, and even startups that help people file taxes. There is a large local market. Risk capital is available to win the market. We are now grade-A entrepreneurs, not Third World businesses. It is possible to build a business to serve this country and then take it to the rest of the world. These are phenomenal days. Ten years ago, there was no local market, no risk capital, no Internet infrastructure, no customers. When we started, it was the very beginning of the Internet era of the country. I feel tickled that I am now bracketed with today's young entrepreneurs of India, like Ritesh Agarwal of Oyo [Oravel Stays Pvt.] and Bhavish Aggarwal of Ola [Electric Mobility Pvt. and ANI Technologies Pvt.]. Nobody remembers that I started with old-generation Internet businesses.
Competition is building up in digital payments—Walmart, Google, and others whose launch is imminent.
Rivals are spending huge amounts of money, but none of them have dented our market share. India's digital payments market share is expanding. In the next five years, India will be a much more digitised country. That's a good thing. As for rivals spending money, the big giants with the deep pockets never win the war. Microsoft didn't win the search war. Search didn't win the social war. Social didn't win the messaging war. I can bet that none of the above is going to win the digital payments war. It's a huge opportunity. There will be many players. This country could produce the payment player which will go on to dominate the world. It will be an Indian player, not a Chinese one. The payments leader of India will build a low-cost, highly scalable model in an extremely competitive environment. The winner here can go and win anywhere.
Why is cash still king in India?
We've had the first phase of India's digital payments journey with many world players as our rivals. We were the clear leader in the digital wallet phase. The second phase began with the United Payments Interface, which is the tech backbone linking banks and digital payments players so they can create services quickly and cheaply. Our rivals are using that backbone for person-to-person money transfers rather than merchant payments. Our business model is in merchant payments, in the everyday experience of users paying businesses. That's our journey now. Less than 10 percent of payments made by users to businesses is through digital means. We believe merchants should provide their customers the whole range of options, and that's what we offer through the Paytm wallet, which accepts cash, debit cards, credit cards, UPI-linked bank accounts, and other wallets. A digital wallet is far more inclusive. Even if a user doesn't have a bank account, he can do digital payments.
When UPI was introduced, it seemed that digital wallets were going to die.
In the early days, I had assumed that people would give up on the wallet after you could link a bank account and begin using UPI. But users are still uncomfortable with linking bank accounts. There is low penetration of digital money and low consumer trust. The pecking order in the country is: cash, followed by card, then wallet, and UPI. We do more than 600 million merchant payments a month. All UPI payments together are not even as big as our wallet transaction numbers. The whole UPI universe has 110 million registered users, but less than 10 percent of them account for more than 80 percent of transactions. On UPI, all apps put together have a $150 million (roughly Rs. 1,000 crores) monthly payments volume. We have a total of $390 to $400 million (roughly Rs. 2,770 to Rs. 2,840 crores) volume via Paytm through UPI, other wallets, cards, and cash. After spending billions of dollars, Google Pay and Walmart's PhonePe haven't been able to touch us.
How do you enlist merchants?
It takes time. Shopkeepers need a lot of hand-holding for digital payments, cloud services, and everything else. They are underserved by tech companies. We are currently at 13 million merchants and will reach 25 million by March 2020. It's all about how many cities, how many shops, how many markets give consumers the chance to use digital payments. We are very visible in India's main cities. We are now headed to Tier 3 and Tier 4 markets.
To transition merchants to digital payments and other digital services can't be easy.
We are offering software where they can create their own store and start selling online. They can build their business's credit score and access our instant business loans. We have leapfrogged from being a payment company to a complete ecosystem for small and medium enterprises for their software and financial-services needs. Our “Business With Paytm” app is in 10 languages. In this era of zero-margin digital payments, as mandated by the government, we have to make money on additional services such as financial services and cloud services.
Isn't every digital payments service using cashbacks as a lure?
Cashbacks are a good thing. They incentivise users and merchants to try out digital payments. Our cashbacks, by the way, are not in cash. They are in the form of movie vouchers, flight vouchers, and so on. Cashback is a strategy for us. We have pushed the Paytm cashback logo a lot more in the last few months.
How have you innovated for users in the smaller towns and semi-urban India?
We use a lot of data. Rich users don't value the Rs. 20 cashback. Our engine understands who values the small sum of money. Our AI is built at Paytm Labs in Toronto. We started in 2014. We have the ecosystem advantage because we can be the one stop for many things. We introduced cancellation insurance for movie tickets. This is a global first. The cancellation value is extremely low, and our AI engine ensures that it's an extra revenue earner. Here's another example: India saves in gold. We allow users to buy infinitesimal amounts of the metal. For example, a user can buy gold for Rs. 11 and aggregate. Buying gold is a wealth service we offer everyone. Our gold product has more customers than all wealth management companies in India put together. We have 17 million users.
What will it take to win India?
Some people still want to pay by card—card transactions are the highest by value. Others want to pay by wallet because they do not want to link their bank account to third-party apps for fear of digital theft. As the market matures, all use-cases as a combined offering makes sense rather than just one. In the countryside, there's huge fear they'll get defrauded of their money. Soon as one system grows, fraudsters walk into that system. That is why we have a large investment in setting up a lab in Canada building fraud detection systems. We have 110 people there. We have been lucky so far. We have been working hard. For a payment company like ours, competition does not come from another payment company. It comes from hackers.
What's the life of an Indian entrepreneur like? We had a tragic suicide recently of the founder of India's largest cafe chain [V.G. Siddhartha], who described himself as a failed entrepreneur.
In India it is particularly tough. Entrepreneurship is looked down upon, unlike in the US. We are just above Africa markets in terms of per capita income. We have to build a business model for that. Then there are many rules and regulations, sentiments, behavior. Siddhartha's suicide is heartbreaking for entrepreneurs like me. You have to be far more Zen to survive in this country. As I said, if you build in India, you can go build anywhere in the world. What do you think is the first thing an Indian kid learns? That the bus stop is not where the bus will stop.
Is there an IPO round the corner? Some of the most high-profile companies backed by Masayoshi Son, such as Uber, have gone the IPO route.
Masa has never mentioned the word IPO to me. We will remain private for the next two or three years for sure. I look up to Warren Buffett, Masayoshi Son, and Jack Ma. Their ambition is to build huge impact on their markets, cities, countries, business domains. They are all market share-centric. What I take from them is: First, learn to do one thing really well. Then build the next level of business on top of it. That's the common thread. We're not even on the preparation journey for the IPO, which itself takes a couple of years.
Then are you looking to raise funds?
There is a huge amount of incoming investor interest. People with large-dollar checks are knocking at our doors. Once we figure out the business requirement and get the necessary board OK, we will raise money. We are very well-capitalised for our business model.
Where is Paytm headed in the next few years?
Paytm is [dominating] and will dominate India's mobile payments ecosystem. Paytm Payments Bank has overtaken India's No. 1 mobile bank, state-owned lender State Bank of India. Just like Ant Financial dominates payments in China, Paytm wants to dominate in India. We are getting into insurance and lending. We've created world-class tech that can be replicated both in emerging and developed markets. We built payments from the bottom up in Japan with Made in India technology. PayPay [a joint venture among Paytm, SoftBank, and Yahoo Japan] today has 10 million customers. We will go to the Americas and Europe.
Can you trace the path from each of your earlier projects towards reaching the success that Paytm has come to signify?
I have treated all my assignments as a management course. I jumped jobs to learn management strategies, which I could implement later on in my company. One of the important lessons I learnt was the importance of quality team members. You might have great aspirations but if your team members don't sync to that, then you are stuck. The second thing I learnt was perseverance.Working with large companies taught me how they end up becoming places where innovation and new things are not encouraged. In my company, I make sure we always respect new ideas, new businesses. That's how Paytm came up. One of the team members and my college junior, Abhishek Rajan, wanted to try out the payment business. We supported him.
Which is your favourite failure?
Not launching an IPO in 2010. I can't be more thankful about it not happening. Sometimes a failure is a blessing in disguise. Failure to launch an IPO gave birth to Paytm.
Having studied in Hindi medium, you had trouble with English in college. How did you learn the language?
I wouldn't have completed my graduation if it was not for my mother. I didn't want my mother to say, "We spent money on you and you didn't even graduate." I also figured out that education is overrated. Education should teach you how to think about a problem, how to address a situation and have clarity of thought, not rewriting what's written in textbooks. Overcoming English was quite a story. One single mantra that changed my learning was you should start thinking in English instead of thinking in Hindi and then translating it.
What was your family's reaction when you decided to become an entrepreneur?
My mother was crying. I was working in the US and in 1998-99, I returned to India to run an internet company. My parents and sister didn't approve of it. I sort of negotiated with them on the benchmark that defined success. We eventually came to an agreement.
You are the first engineer in your family. Have you become a role model for the youngsters in the family?
(Laughing) Yeah. I was a black sheep in many ways. In my family most people are doctors or teachers. So yeah, some relatives want to become businessmen but I always tell them it's not necessary to imitate someone. You should choose what you like.
You are an angel investor as well (One97 Mobility Fund). What are your criteria for investing? What have you learnt being on the other side?
I always invest in the bus driver instead of the bus. In other words, I would back the entrepreneur I know versus his company. So I try to find out about the entrepreneur — do I sense chemistry in the conversation, do I respect him, etc. As for learning, a lot of entrepreneurs need to know that it's fine to give up and move to the next idea if one idea is not working out. It's tough to make that call and it's also challenging for an early stage company to discover that what they are pursuing will be a great success versus doing something new altogether. That balance is an art.
What traits do you look for in a person when hiring?
I usually look for a person who went through horrible times and came back a success, with a smile and lessons. If you haven't gone through the worst patch of your life already, I wouldn't know how you will behave when tough times come.
Do you have exentrepreneurs on board?
I do. I have lot of respect for entrepreneurs whether they have failed or succeeded. It takes a hell of a lot; it takes a lot of energy and giving up on a lot of things. I would always prefer an entrepreneur who went through tough times over a cushioned, 'been there, done that' person. Your inspirations? I am inspired by Jack Ma, Masa (Masayoshi Son), Steve Jobs, Rupert Murdoch and Sunil Mittal. All of them were the world's underdogs who ended up creating business empires even when they were written off at different points in time.
How do you unwind?
I love any high adrenaline activities. I regularly go rafting, have done bungee jumping and sky diving. I also drive a lot. It forces my attention on the road instead of thinking about work. Even music helps me relax. I usually drive a BMW and listen to music. U2 and Coldplay are my favourite bands. I also like to listen to Cuban jazz and the blues. And I mostly go to sleep listening to western classical music.
How do you maintain work-life balance?
Work-life balance is such an overrated thing. If you enjoy something, you don't balance it, you do more of it.
What about Mission Masa?
"I met Masa (Masayoshi Son of Softbank, above) a couple of times — one time related to funding. The fi rst time was in Los Angeles around May. I love the energy and passion he carries into the room. When you have been through what Masa has gone through, you can create an impactful statement in a few words. He's a very simple conversationalist. He would ask you the correct questions and that's an uncanny capability."