Learning by Proxy

Productivity Dilemma

Productivity and the measurement of it started out with the Industrial Revolution. The machine provided us with a staggering increase in output.

In the Roman Empire, it would have taken a man-month’s worth of effort to produce enough fabric to produce a dress. Imagine if every T-Shirt in your cupboard took 3 weeks to produce!

That all changed with the cotton gin and the weaving machine.

time lapse photography of road
Photo by hp koch on Unsplash

As these machines started being utilised heavily, several studies were performed to measure human productivity in factories. Productivity to those scientists meant doing more in the same amount of time.

As a result, unfortunately, productivity became correlated with activity.

Today we live in a world where “data is gold”; where thought workers get paid the most. In such a universe, thoughts, ideas and an alternate way of thinking through problems are valuable. Have you seen a person who is thinking or coming up with an idea?

They would all look like they are staring at a wall doing nothing.

In fact, whenever I speak to an entrepreneur and they are running in-between airports and tell me, “I am travelling”; I am sure they are unproductive. But in the eyes of the world, they are running pillar to post, they must be productive.

When you are productive; You look unproductive
When you are unproductive; You look productive.
This is the new productivity dilemma.

Our obsession with activity makes us think that a person should be active when productive; but in a knowledge economy, it is often hard to discern when a person is being productive at all.

I was sitting in the toilet going about my morning routine when the idea for this blog came up. I was more productive on the pot than when I sat on the laptop translating those thoughts into words. I am sure, all of us have come across similar instances of an idea or a solution coming to us when we were driving or running on the treadmill or washing utensils.

For a knowledge worker, it is not about what the hands are doing, it is about what the mind was doing. Organisations need to realise this and learn to do things that will encourage this.

This is the crux of the work-from-home vs work-from-office debate. 

Is a person only productive when they sit at a desk in front of the system in an office?


AI Cartel

In 2012, Elon Musk was in deep shit. Tesla was still only producing hundreds of cars in a year and marvellously unprofitable with no respite in sight. The company had IPO’d which made its internal affairs public and led to more questions than answers. 

SpaceX was neither dying nor staying alive. Despite landing contracts from NASA that were bankrolling the development of the company, the missions were not ramping up. 2011 had seen zero launches.

It was against this backdrop that he started digging through the trove of ideas from the last 100 years and resurrecting many of them. Amongst them were Underground tunnel transportation (The Boring Company), magnetic levitation trains (Hyperloop), Brain-Machine Interface (Neuralink) and AI (OpenAI).

All of them were lauded by the press as moonshots and since he was trying to build two companies that seemed like impossible dreams, it bought him cult status and got him a fan following. He never fully immersed himself in any of these projects because he was having a hard enough time keeping Tesla and SpaceX afloat.

Sam Altman took the helm of OpenAI and started turning it into a venture. Elon Musk was completely out of the picture. 

Between raising capital constantly, going up against Boeing and Lockheed Martin for NASA contracts, cavorting with Jeffery Epstein, and constantly lying about launch dates for Tesla models, his hands were full!

10 years later OpenAI is an overnight success. Microsoft threw in $10 Billion at a $30 Billion valuation. Elon wishes he had shown up for a few meetings, but he did not. 

So now…

Billionaire Elon Musk, Apple co-founder Steve Wozniak and former presidential candidate Andrew Yang joined hundreds calling for a six-month pause on AI experiments in an open letter — or we could face “profound risks to society and humanity.”

“Contemporary AI systems are now becoming human-competitive at general tasks,” reads the open letter, posted on the website of Future of Life Institute, a non-profit. “Should we develop nonhuman minds that might eventually outnumber, outsmart, obsolete and replace us?” 

Source: CBS

Because 6 months is all it takes to solve the whole AI problem.

The first attempt is the hardest. Amazon took years to figure out e-commerce, today absolute novices can launch one with less than a thousand dollars in investment. OpenAI took 8 years to build. Today, the Facebook LLaMa framework is available as open source, all you need is data and server capacity. 

The data to train ChatGPT was simply “Robbed” off the internet, everyone can do the same.

It is just that he regrets having missed an opportunity and if given the time could work on a competing framework and try to overcome the headstart that OpenAI has. In fact, the 6 months is a bait to see if anyone would bite, if they do, then you can go on extending it till one is at par.

Apple launched the iPhone and killed its iPod business completely. Google had the capability to launch something like ChatGPT but kept punting it because it would take a chunk out of its Ad business. 

In the book Build, Tony Fadell describes the state of affairs inside Google which is made possible by their Ad business which is like a bottomless well of money. At Nest, the average cost per employee went up from $150,000 to $450,000 once they accommodated all of the perks that come with being a part of Google. Nest had no way of becoming profitable after that. 

Why would Google kill the Goose that lays the golden egg?

2022 changed that.

Now, their hand is being forced by ChatGPT. All the useless moonshot factories are going to go and they will be forced to focus on building this line of business. 

Going back to Sam Altman.

He went in front of a Senate Committee and begged them to regulate AI.

Sam Altman: Thank you for the question, Senator. I, I don’t know yet exactly what the right answer here is. I’d love to collaborate with you to figure it out. I do think for a very new technology, we need a new framework. Certainly companies like ours bear a lot of responsibility for the tools that we put out in the world, but tool users do as well. And how we want and, and also people that will build on top of it between them and the end consumer. And how we want to come up with a liability framework, there is a super important question. And we’d love to work together.


Sam Altman: Can I weigh in just briefly? Briefly, please. I want to echo support for what Mr. Marcus said. I think the US should lead here and do things first, but to be effective we do need something global. As you mentioned, this can, this can happen everywhere. There is precedent. I know it sounds naive to call for something like this, and it sounds really hard. There is precedent. We’ve done it before with the IAEA. We’ve talked about doing it for other technologies. They’re given what it takes to make these models: the chip supply chain, the sort of limited number of competitive GPUs, the power the US has over these companies. I think there are paths to the US setting some international standards that other countries would need to collaborate with and be part of that are actually workable, even though it sounds on its face, like an impractical idea. And I think it would be great for the world. Thank you, Mr. Chairman.


Sen. Dick Durbin: Thank you. I think what’s happening today in this hearing room is historic. I can’t recall when we’ve had people representing large corporations or private sector entities come before us and plead with us to regulate them. In fact, many people in the Senate have base their careers on the opposite that the economy will thrive if government gets the hell out of the way. And what I’m hearing instead today is that ‘stop me before I innovate again’ message. And I’m just curious as to how we’re going to achieve this. As I mentioned section two 30 in my opening remarks, we learned something there. We decided that in section two 30 that we were basically going to absolve the industry from liability for a period of time as it came into being. Well, Mr. Altman, on the podcast earlier this year, you agreed with host Kara Swisher, that section two 30 doesn’t apply to generative ai and that developers like OpenAI should not be entitled to full immunity for harms caused by their products. So what have we learned from two 30 that applies to your situation with ai?

Source: Techpolicy

Do you know what happens when an industry is regulated? 

It becomes impossible for the small guy to start from behind and move ahead. The regulations become a burden that cannot be overcome. This is precisely why you do not have someone just starting a bank or a hospital or an aeroplane manufacturing company.

It takes a lot of cash to overcome the regulatory hurdles just to get started. Even startups funded with Billions of dollars, operating in the fintech space, do not want to start a bank. That is what regulation does to an industry. 

Apple partnered with Goldman Sachs to run their Card and Savings Account business! Just for perspective, this is a company whose valuation is comparable to the GDP of India; 75% there. Their revenues and profits are $400 billion and $100 billion a year respectively. And they have more cash than many banks in the US.

four person wearing Star Wars Clone Trooper costumes
Photo by Saksham Gangwar on Unsplash

Sam Altman wants regulation because he has committed every copyright fraud in the book to set up his venture. He can afford to make it onerous for those who are planning to get started now. 

So a lot of statements are being made comparing ChatGPT to Nuclear Weapons and declaring it just as dangerous. If our experience with Nuclear Weapons is anything to go by and ChatGPT is really going to morph into some supreme intelligence, we should dismantle it and bury it, no?

No. We should have a small coterie regulate it!

And the IAEA *Slow-Clap*

The IAEA was set up to make it impossible for any government to operate without someone behind them peering down their necks right up to their underwear. 

In 1953, U.S. President Dwight D. Eisenhower proposed the creation of an international body to both regulate and promote the peaceful use of atomic power (nuclear power), in his Atoms for Peace address to the UN General Assembly. In September 1954, the United States proposed to the General Assembly the creation of an international agency to take control of fissile material, which could be used either for nuclear power or for nuclear weapons. This agency would establish a kind of “nuclear bank”.

The United States also called for an international scientific conference on all of the peaceful aspects of nuclear power. By November 1954, it had become clear that the Soviet Union would reject any international custody of fissile material if the United States did not agree to disarmament first, but that a clearinghouse for nuclear transactions might be possible. From 8 to 20 August 1955, the United Nations held the International Conference on the Peaceful Uses of Atomic Energy in Geneva, Switzerland. In October 1957, a Conference on the IAEA Statute was held at the Headquarters of the United Nations to approve the founding document for the IAEA, which was negotiated in 1955–1957 by a group of twelve countries. The Statute of the IAEA was approved on 23 October 1956 and came into force on 29 July 1957.

Source: Wikipedia

The IAEA is a body meant to ensure nuclear plutocracy. Those 12 countries were somehow considered righteous enough to hold weapons and others not.

This is exactly what Sam Altman is proposing. He wants a small number of people to be able to determine what is right and wrong in AI. A cartel. 

While the American senators were effusive in their praise, the story was much different across the Atlantic. 

As part of its rule-making, the EU is seeking to implement transparency measures in so-called general-purpose AI. “Generative foundation models, like GPT, would have to comply with additional transparency requirements, like disclosing that the content was generated by AI, designing the model to prevent it from generating illegal content, and publishing summaries of copyrighted data used for training,” the European Parliament noted on May 11.

The need for transparency over the data collected to train the algorithm has long been a concern for regulators in European country—that was the basis for Italy’s temporary ban on ChatGPT in March. Altman isn’t making any promises on that front. “If we can comply, we will, and if we can’t, we’ll cease operating… We will try. But there are technical limits to what’s possible,” Altman said, according to Time.

Source: Quartz

The EU regulators are not eating out of his hands. Generally, the EU is not kind towards tech companies from the US. They feel that these organisations from the US have acted in a manner which has sabotaged their European counterparts. Also, European governments are not bought and sold by lobbyists the same way that the US government is. 

Sam Altman said he will pull out of Europe and then swiftly recanted his statement. Facebook was recently fined $1 billion and it will continue to operate in the EU. There are 11 billion other reasons for it. 

OpenAI is not the gift from the gods that it is being made out to be, but while the hype is around, Sam Altman is going to try to build an AI Cartel that he leads and controls. Will everyone else sit around twiddling their thumbs? Seems like it!

Learning by Proxy


A government by the people, of the people and for the people; does not exist.

If you read the thoughts of the Greek philosophers, they all thought Democracy was the worst form of governance. Because… What they meant by democracy was wildly different from what we have been made to believe it is. 

tables and chairs inside the hall
Photo by Aditya Joshi on Unsplash

Democracy to them meant giving people the right to vote on each and every decision. Giving power to the poor to determine what to do with the wealth of the rich would make sure that all the poor will distribute their wealth and leave everyone poor. Another variant of this argument is often used to defend Capitalism. If one is not allowed to hoard money, there would be no incentive to make any. 

The Magna Carta is often cited as the beginning of modern democracy. It was the document that declared that the King was not above the law. In reality, it was meant to provide power to the wealthy in England.

The American Constitution was also written with similar thoughts in mind. “All men are created equal (so long as they are landowners…)”. If we were to turn back time and ask the Founders what was the most egregious mistake in the document, this omission is what they would cite.

The founding of the United States was so skewed, that the Bill of Rights had to be introduced through an amendment. 

Democracy meant asking for consensus on every issue. This would mean everyone is allowed to participate in every decision. Even the most liberal readers of this blog would be squirming at the thought. While this might seem rather odd and impractical let me illustrate why this is important.

The form of government that all countries that call themselves Democracies follow is the Representative form of government.

In this form of government, false promises are made, and agendas are brandished during an “election season”. Once the representatives have been voted into power they do what the fuck ever they like. 

Democracy as practised today is how we lose power, not take it!

Say, legislation about making education free for all was being voted upon. Would the “people” have any power over how the representative voted? Even if 90% of the people want the representative to vote ‘yes’, the representative is free to vote ‘no’. This is what dictatorship looks like. 

The media and news cycles exist to distract you from this fact.

If there are 4 years between the vote and the next election, there is enough time to distract the populace and change the news cycle completely by the time the next elections arrive. 

Consequentially, we have a political class that is full of scoundrels only good at winning elections. One is a little more considerate towards the scoundrels who tend to echo one’s beliefs. BJP is full of scoundrels, and so is Congress. Neither side is any better but that is the choice you are forced to make. 

Democrats are supposed to be liberal, business-unfriendly and climate-friendly; but Biden went ahead and gave permission for oil exploration in Alaska. The Republicans are the ones who are considered to be in bed with the oil lobby. For all the abuse heaped at Trump, apparently, Biden is the better liar. 

In effect, democracy has become the game of choosing the better liar.

Learning by Proxy

Taxing Carbon Selectively

There is a fundamental relationship between GDP and resources. Every time that GDP goes up, the consumption of resources goes up as well. 

If you buy food, it has to be produced somewhere and then transported and then processed and then transported again and then perhaps sold to you.

If you buy clothes, the fibres have to be produced either through agriculture or from petrochemicals and then processed and then sent to some sweatshop in Bangladesh to turn into clothes and then transported and then sold to you.

I can go on but you get the idea.

The growth in GDP produces a commensurate resource consumption that produces pollution.

Boiling the argument down to simply – If you want to save the planet you need to stop growing GDP.

a gas station at night with a car passing by
Photo by Markus Spiske on Unsplash

Now, the moment you even dare utter those words in the western hemisphere, people will start running around like their hair was on fire and a quarter of the Amazon would be chopped to write articles about what wrong-headed thinking this is. 

This has kept things as they have been for 100 years. 

Then Britain said that they had managed to “decouple” GDP and greenhouse gases. GDP went up and emissions did not! This was possible only because they outsourced all the dirty parts of the job to China. So new metrics were invented and it turned out that their net emissions were not coming down.

Now, the EU is sort of, kind of serious about the climate change issue. They want to show that GDP growth is possible without emissions growth. 

Last weekend, the San Marino Grand Prix had to be cancelled in Italy because the region is inundated. A few hundred miles away, France and Spain are suffering bouts of what we shall from now on call “Summer Fires”. Venice and Amsterdam are sinking thanks to rising sea levels; not to mention the Netherlands is called the Low Country because half of the nation is below sea level. If there is a considerable rise in sea level, the country is a bathtub waiting to fill up.

So EU has introduced the CBAM, which sounds like a loud weapon but is merely an acronym for Carbon Border Adjustment Mechanism. 

The EU’s Carbon Border Adjustment Mechanism (CBAM) is our landmark tool to put a fair price on the carbon emitted during the production of carbon intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries. The gradual introduction of the CBAM is aligned with the phase-out of the allocation of free allowances under the EU Emissions Trading System (ETS) to support the decarbonisation of EU industry. 

By confirming that a price has been paid for the embedded carbon emissions generated in the production of certain goods imported into the EU, the CBAM will ensure the carbon price of imports is equivalent to the carbon price of domestic production, and that the EU’s climate objectives are not undermined. The CBAM is designed to be compatible with WTO-rules.

Source: European Commission

What they are essentially saying is that EU manufacturers use clean/climate-friendly manufacturing methods and those outside the EU would have to pay a tax equivalent to the cost of using similar methods if they are not. This they suppose will motivate those outside the EU to shift towards cleaner production methods.

Normally I would say that it reeks of protectionism, but if you remove the migrants coming into Europe, the entire continent is dying. Who are they going to protect? Who will manufacture there?


The CBAM will initially apply to imports of certain goods and selected precursors whose production is carbon intensive and at most significant risk of carbon leakage: cement, iron and steel, aluminium, fertilisers, electricity and hydrogen. With this enlarged scope, CBAM will eventually – when fully phased in – capture more than 50% of the emissions in ETS covered sectors. Under the political agreement, the CBAM will enter into force in its transitional phase as of 1 October 2023.

The gradual phasing in of CBAM over time will allow for a careful, predictable and proportionate transition for EU and non-EU businesses, as well as for public authorities. During this period, importers of goods in the scope of the new rules will only have to report greenhouse gas emissions (GHG) embedded in their imports (direct and indirect emissions), without making any financial payments or adjustments. The agreement foresees that indirect emissions will be covered in the scope after the transitional period for some sectors (cement and fertilisers), on the basis of a methodology to be defined in the meantime. The objective of this transition period is to serve as a pilot and learning period for all stakeholders (importers, producers and authorities) and to collect useful information on embedded emissions to refine the methodology for the definitive period.

Source: European Commission

Do you see the omission? Oil and Gas! Agricultural Produce! They have also left out rare earth minerals. 

They have announced the names of only 6 specific industries in their first list. They have left out industries that aid and abet the greatest pollution across the world. Agriculture represents 1.4% of the EU economy at EUR 222 Billion it is a minuscule part of the economy, sure they can go after fertilisers. But they have left out the agriculture that they import because that will cause spiralling inflation and people in France already want Emmanuel Macron to be dealt with the same way that Marie Antoinette was. Imagine if food prices were to shoot up!

They have gone after construction, with a declining population how much more construction will be needed? Since they are already in bed with Natural Gas, going after Hydrogen makes sense. Whoever is exporting electricity to the EU?

Nevertheless, it is a start. Creates a precedent which is good.

Whether emissions go down with increasing GDP or not will be seen. I am certain in the meantime, tax collection will definitely go up!

The tax is expected to raise as much as €14 billion ($15.4 billion) a year for the EU. The ensuing reforms of the overall carbon market are projected to cut EU emissions by 62% by 2030, from 2005 levels.

“It is one of the only mechanisms we have to incentivize our trading partners to decarbonize their manufacturing industry,” Mohammed Chahim, the European Parliament’s lead negotiator on the law, said in a statement in December, during the contentious negotiations over the tax.

Source: Quartz

Whether other countries establish similar regimes would be interesting to watch out for. A country exporting fertilizers to the EU can use the same principle and establish a carbon tax on the export of cars from the EU.

Fun times ahead!


Tughlaq Returns

Mohammed Bin Tughlaq was the last king of the Tughlaq dynasty and ruled from 1325 till his death in 1351. He ascended to the throne in Delhi. On a whim, the man decided to move the capital of his empire from Delhi to Daulatabad which is located in Maharashtra. He supposed being centrally located in India would give him greater control over the kingdom. He ordered the entire populace of Delhi to shift to the new capital in Daulatabad. Thousands died of heat exhaustion and starvation on the way from Delhi to Daulatabad.

He then set up the city from scratch, he realised that his northern borders were far more exposed to attacks and decided to move the capital back from Daulatabad to Delhi. The result was that thousands more perished and it left the empire diminished and weaker. He lost wars and he died. With the death of Mohammed bin Tughlaq, the Tughlaq dynasty also ended.

In 2014, we put the Tughlaq of our generation in power. In 2016 India underwent the most radical demonetisation that any country not suffering from uncontrollable inflation underwent. The Prime Minister came on television and announced that from 8 PM that day, all hundred rupees and five hundred rupee banknotes would no longer be valid tenders of exchange and to submit them back to the banks within a period of 2 weeks. There would be new banknotes that would be designed and issued thereafter.

Ostensibly this was done to eradicate black money. The wealth, which went undisclosed to the government to avoid taxes. 99% of the cash that the Reserve Bank of India (RBI) knew of, was collected back. If there was any ill-gotten wealth, they could not trace it.

While black money was the purported reason, rumours have it that the move was made to starve the opposition parties of cash during the 2017 UP legislative elections. The ruling BJP had not held power in the states since 2000 and came to power in 2017.

The people suffered.

Many had to stand in queues for hours to deposit their money in the bank. Most of these people were neither rich nor had any ill-gotten wealth. During those days, there would always be hundreds of people standing outside ATM machines. Queues would start forming at 7 AM. Bank employees got the worst end of the deal having to deal with the large influx of cash and their customers’ corresponding frustration and anger. The new banknote that they designed was of a different dimension and hence over 350,000 ATMs had to be reconfigured across the length and breadth of the country so they could dispense the redesigned bills. 

It was a masterclass in engineering hardship. 

What was utterly befuddling was the decision to issue new two thousand rupee banknotes. This would make money laundering easier. If someone had to hide cash, larger denominations made it easier to hide it. It is like the Americans deciding to solve the gun problem by taking away all the revolvers and making sure it was easier to buy machine guns.

So it came as no surprise when…

India will withdraw its highest denomination currency note from circulation, the central bank said on Friday. The 2000-rupee note, introduced into circulation in 2016, will remain legal tender but citizens have been asked to deposit or exchange these notes by Sept. 30, 2023.

Source: Reuters

Much like the shift that was made by Tughlaq was destined to fail, the introduction of the 2000 rupees note was destined to fail.

Tughlaq is what Tughlaq does.


ONDC – A solution that will create many problems

In 1950, Frank McNamara noticed a problem. He was at a restaurant and found that he had forgotten his wallet back home. This gave birth to the idea of a charge card. Wealthy customers could charge their expenses to the card and pay for it at the end of the month.

He started a network called the Diners Club. This gave birth to a new industry called the Revolving credit industry which we today call the credit card industry.

Banks saw the rise of the Diners Club and thought they needed to get in on the act. The purpose of a bank is to lend. This is the best kind of lending. Small sums, high volume, high interest, high throughput, the holy grail of finance.

One of the banks that went after this business was Bank of America and in the late 50s they launched “Bank Americard”. They started an experiment in Fresno, California and distributed the cards to all of their customers. The experiment worked and soon they expanded this card distribution all over California. And like that, the police were introduced to a new kind of crime – Credit card fraud.

Playing loose and dirty, Bank of America had managed to corner a huge market share but had a 22% delinquency rate, not to mention the frauds. Joseph Williams who masterminded the Bank Americard was promptly fired.

A few of his associates decided to clean up the program and put financial controls in place. By late 1960, the program was profitable but Bank of America let the perception of troubles linger so that no new competitor got interested in the sector.

In 1970, they decided to open up the program for other banks to participate. A manager at a participating bank Dee Hock identified that there needed to be an independent company that managed the rails. That way, all the banks could participate in the wealth creation opportunity. Bank Americard was spun out into a separate entity. Eventually, in 1974, BankAmericard along with Chargex, Barclaycard and others would come together to create a single internationally accepted network for money movement called Visa.

What they provided in essence was a trust layer for money movement.

This layer was insanely complicated back in the 60s when computer penetration was basic at best, but with greater computerisation, it became easier to run and scale this layer.

Today nobody from Visa visits any of the stores to ensure that the operations are run smoothly.

When you come to a country like India, one of the problems is micro-transactions. Traditionally, Visa would charge 5 cents and a 1.5% commission. But what is the transaction itself is 10 cents. While Visa did localise, this was insufficient.

India created a body called NPCI to take care of the needs of the country. They successfully created National Electronic Fund Transfer (NEFT) and Real-time Gross Settlement (RTGS). Then they meandered through a series of missteps including Mobile Money Identification (MMID) and finally pivoted that system to arrive at Unified Payments Interface (UPI).

In 2015, Paytm which had started merely as a phone recharge business was ruling the micro-transaction market with their wallet. Their success was in no small part paved through insane customer service. If your transfer was not processed or hung, all you had to do was drop a tweet. An actual human would respond to it and make sure that the problem was resolved in a timely manner.

Mobikwik, Freecharge and even Ola tried their hands at it but were getting nowhere. This was the time at which UPI was introduced. A government-aided trust layer, where Paytm had done all the handwork to earn the trust.

In no time, everyone including Google had a UPI app. The unassailable Paytm was left in the dust as UPI transactions soared to hundreds of billions of dollars amply aided by the demonetisation. Today, close to 10% of India’s GDP is transacted through UPI.

UPI much like Visa does not have an operational layer today. You need to be sufficiently bourgeois to acquire the license and you can set up an app.

Learning and innovation go hand in hand. The arrogance of success is to think that what you did yesterday will be sufficient for tomorrow.

~William Pollard

Having worked with startups for over 10 years now, I know that it is rather easy to engage in intellectual masturbation in an air-conditioned room. It is another thing to translate that into real-world impact.

In the case of UPI, the real-world impact was primarily delivered by demonetisation and the subsequent hardship that was imposed on many. In addition to that, all the “fintech” laggards who were in no position to catch up with Paytm got on the bandwagon and put thousands of people on the road to onboard shops and distribute their QR codes so their apps would become the preferred destination. Not to mention, offered insane discounts and cashback offers to users.

Now, the likes of PhonePe are figuring out how to monetise and all roads lead to debt.

By any metric UPI was a wild success. The government helped spread a trust layer and it has brought so many people who were previously unbanked in the banking net. Along with fintech, delivery was another segment that rose and rose over the last decade.

In January 2013, there were NO services for food delivery in India. There was no Amazon in India. Uber had not been launched in India and Ola was an inter-city cab service provider.

This changed rapidly and it created opportunities for retailers, wholesalers, restaurants and gig workers. Nobody is happy with the kind of commissions that Swiggy, Zomato, Ola, Uber or Amazon charge.

The question was – Can we do to delivery business what UPI did to transactions?

In 2021, a private company with the blessing of the government launched the Open Network for Digital Commerce or ONDC for short. The idea was that if restaurants, shops or even delivery networks were free agents an application layer could connect the restaurant or e-commerce companies with the people who undertake the delivery.

They imagined that if a store had a delivery fleet of its own, it could take care of delivery itself and if a consumer app brought the customer to the store, ONDC could effectively be the intermediate layer that enable the transaction. The trust layer.

Much like UPI, which connects all banks with the consumer app which in turn enables the consumer to transact.

The problem is trust.

In the case of UPI, the trust layer simply is the technology and it should work.

Have you been at a restaurant with only your mobile phone wondering if you will have to wash plates when UPI fails you? Or at the end of a cab ride with an irate driver who wants to proceed to the next trip but cannot because your payment is not going through?

UPI is far from perfect and fails when you least want it to.

The reason it has gotten as big is the network effect. It is also extremely safe, almost all of the frauds are socially engineered it is not like someone hacks the system and keeps bleeding your account. You have to enter the code of your own volition on your own phone. Also, despite the fact that it fails to deliver at times due to server issues, you will not lose your money.

ONDC by comparison has a human aspect to deal with when it comes to trust.

What would happen when your delivery boy does not show up? When he delivers the wrong item and leaves? When he calls you up and says he has a puncture and cannot come? This trust layer is far more complex.

Amazon runs the warehouses, the delivery fleets and the logistics from city to city. Replicating this will not be easy.

There is a huge operational layer at work. People, call centres and sometimes just absorbing the loss when the delivery guys go astray. ONDC just assumes this will all go away. It has taken Swiggy, Zomato, Flipkart and the like decades to perfect the operational aspects of the business. Drawing a line between customer service and the asshole who will call up and ask for a refund even though he has got the delivery.

Even if restaurants and the like get on this bandwagon for now, when they calculate the amount lost to all these kinds of “operational challenges” and money saved from not having to pay Swiggy or Zomato or whoever else; they are probably going to want to stick to the aggregators.

Learning by Proxy

Populous India is Popular India

In 1951, India conducted its first census. Since then, every 10 years like clockwork India has been conducting its census. The Indian census is quite an affair, superseded only by the election in the breadth of logistical and operational challenges that it poses. No undertaking in the world is more complex than the Indian elections.

The last census was conducted in 2011.

Spread across 28 states and 8 union territories, the census covered 640 districts, 5,924 sub-districts, 7,935 towns and more than 600,000 villages. A total of 2.7 million officials visited households in 7,935 towns and 600,000 villages, classifying the population according to gender, religion, education and occupation. The cost of the exercise was approximately ₹2,200 crore (US$280 million) – this comes to less than $0.50 per person, well below the estimated world average of $4.60 per person. Conducted every 10 years, this census faced big challenges considering India’s vast area and diversity of cultures and opposition from the manpower involved.

Source: Wikipedia

2.7 million officials! Just to put that in perspective, that is a little more than the population of Lithuania or half the population of Denmark.

Thanks to COVID-19, the census never happened in 2021 and is slated to take place sometime in October 2023.

In 2011, India’s population was 1.210 Billion.

people walking during daytime
Photo by Laurentiu Morariu on Unsplash

In the intervening decade, the standards of living have gone up and millions 500,000 officially were lost to COVID. Not to mention, the current government has done everything in its power to devastate all statistical bodies including the National Sample Survey Organisation (NSSO) and the Central Statistical Organisation (CSO). This was meant to manufacture growth number post demonetisation in 2016 which decimated the economy. 

So much so that the RBI at one point, when it still had a governor with a spine, commented that the economic data had to be taken with a grain of salt and deemed it “somewhat unreliable”.

On 24th April somebody in the UN “projected” that the Indian population has surpassed that of China. 

The latest estimates and projections of global population from the United Nations, indicate that China will soon cede its long-held status as the world’s most populous country. In April 2023, India’s population is expected to reach 1,425,775,850 people, matching and then surpassing the population of mainland China (figure 1).

India’s population is virtually certain to continue to grow for several decades. By contrast, China’s population reached its peak size recently and experienced a decline during 2022. Projections indicate that the size of the Chinese population will continue to fall and could drop below 1 billion before the end of the century.

Source: UN

Given all of the factors mentioned above, this must be taken with a large grain of salt. If this is true, India would have added the equivalent of the working adult population of the United States in the last 12 years. 

India’s population is not radically different from what it was a month ago. It may have changed by a few thousand, but not all that much. It nevertheless seems to have had a huge psychological impact on businesses.

Apple CEO Tim Cook said he was very bullish on India and that was the reason why Apple was investing in retail and online stores in the country and putting out a significant amount of energy here.

Speaking on the post-pandemic opportunity in India in the first quarter earning call, he said, “We actually did fairly well through COVID in India and I’m even more bullish now, hopefully on the other side of it. I’m very bullish on India.’‘

Source: The Hindu

Apple does not offer many of its online services including Apple Fitness in India. India is one of the last countries where most of its products are released. Till 30 days ago, the company did not even have a company-owned store in India. But he is bullish.

Hospitality major Airbnb’s cofounder and CEO Brian Chesky is betting big on the Indian market and expects the country to be the startup’s biggest growth market in the current decade.

“From a business perspective, India is an exciting new market for us. We now have 1,000 employees there, and I believe it will be one of the biggest growth markets, if not the biggest, in this decade,” Chesky told The Economic Times.

Noting that India is well poised to have the world’s biggest middle class in future, Chesky said that rising internet penetration and GDP would enable the company to build a ‘really important business’ in the country.

Source: Inc42

After one and a half decades, Airbnb figured out India exists! In India, Airbnb is the last place you turn to, to find lodging. But “Big Bets”.

US network gear maker Cisco today announced manufacturing plans for Tamil Nadu, India, as its chairman and CEO Chuck Robbins asserted that the company is bullish about India market and its prospects.

The company, in a statement, said it is targeting over USD 1 billion in combined exports and domestic production.

Source: NDTV

This is partly motivated by the need to hedge against China whose relationships are growing more and more frosty with the US. But at the same time, it is also the “largest nation” tag that is playing on their minds. 

The fact is that the middle class in India is very different from the middle class in a developed country. A middle-class household in India has an average monthly salary of Rs 8000 ($95) per person per month. With that much money, let alone the iPhone, the household cannot afford the myriad connectors and cables one is forced to buy when one buys an iPhone.

The population that consumer brands end up targeting in India is about 10 million people. CRED an app that bills itself as one catering to the upper crest of India has 11.2 million users as of FY22.

Frankly, it does not matter whether we have the largest population or not. It is a great advertisement and it is causing many companies to take notice and try to include India in their roadmap if not for any other reason, to signal to the investors about avenues of growth. 

In the late 90s, the young English-speaking population attracted global attention, which led to the outsourcing boom in India. It resulted in wealth creation for a lot of young graduates. Between the BPOs and KPOs, there were a lot of jobs to be had. It changed the face of India.

More than anything else, it changed what one could aspire to be. There were only three people who could run large businesses in 1980s India, Tata, Birla and Ambani. Come the 2000s not only did more people dare but also more of them found success.

The attention attracted by being the most populous nation alone has the potential to turn a possibility into a self-fulfilling prophecy. 

General Thinking

Language of Marketing

I have been contributing some of my writing to a project called the Carbon Almanac which was conceived by Seth Godin. Gave me an opportunity to quiz him on things.

He has written a total of 21 books. Last week, I asked him if any of his books had failed and he told me one of his books had succeeded only in Germany! Boo-fucking-hoo.

Got me thinking about how successful he has been. All he does is write about marketing and how to leverage marketing. Although, he has published a few rants on ‘how broken education is’; most of his work is in the area of marketing. 

Marketing is about spreading ideas. He has been able to spread ideas using his books. 

How many great marketing thinkers do we know who do not speak English?

How many thinkers, who do not know English, would have great ideas?

How much voice would a Brazilian Seth Godin, who knew only Portuguese, have had?

I do not know any great German or French marketing thinker. But at the same time, only Louis Vuitton can sell $50 bags made in Bangladesh for $50,000. Only SAP can sell enterprises atrocious software for the price at which it does. It is so bad that it takes months to implement. 

There seems to be a reason that most of the marketing thought seems to emerge from the USA. 


If only the South Americans had allowed the ‘right’ people to loot them. They would have been so much more prosperous.

What if Seth had been German? Would he be as successful?

Also, what is the marketing sauce that Louis Vuitton uses? What marketing dark arts are we missing out on? Would we ever find out; locked up in our Anglophilic world?

Learning by Proxy

Inflation | Learning by Proxy

Price discovery in any market takes place when demand meets supply.

Over the last couple of years, it has been very difficult for demand to meet supply simply because of the number of disruptions that have taken place in the supply chain. This has further been exacerbated by the fact that people have been hoarding things because of the uncertainty surrounding availability, access, etc. 

When demand exceeds supply prices go up. This rise in price is called inflation.

Capitalism seeks growth. Growth can only arrive when demand rises. When the growth in demand is not met by commensurate growth in supply, inflation is the result. 

The government use fiscal and monetary policies to control inflation. If demand is more than supply; either make it difficult for consumers to borrow (increase interest rates) or make it easier for producers to expand supply (stimulus, subsidies, etc). 

Since the Second World War, a cornerstone thesis of policymakers across the globe has been to keep inflation low.


Deflation, which is the opposite of inflation often results in revenues shrinking even if demand exists. Lesser revenue would lead to layoffs and therefore further decrease in demand. So nobody wins. 

If inflation is high, goods and services become more and more expensive over time. People will spend only on things that are absolutely essential and even that, sparingly. Consumption drops. The other way in which this scenario plays out – employers are forced to increase the salary of employees. That lowers margins. 

Let me illustrate this with some data from the US.

Source: Official Data

This is US Dollar Inflation since 1635. Throughout history, It was normal to have deflationary years. Prices went up and then markets collapsed and prices went down. That is all fine, till you reach 1948. After the Second World War, there was a focus on reigning in Inflation. Leaving out the fiasco caused by the Oil Embargo in the 1970s, inflation has been quite sedate. 

Source: Official Data

At the same time, what we also notice is that buying power has collapsed since the Second World War. The absence of deflationary years ensured that prices kept going up. This resulted in more money being required to buy the same goods. For most of American history, $1000 dollars from 1800 could have bought $1000 dollars worth. In other words, the buying power of $1000 remained strong.

In the last 50 years, you would need 10s of thousands of dollars to buy what $1000 dollars could have bought in 1800.

Source: Official Data

Another way of showing the collapse of buying power.

In this context let us look at the rising inflation that is being witnessed in 2022. 

For more than 2 decades now, the US has had an inflation rate of 1% to 3.5%. If you buy an item for $10, a year later it is likely going to cost you $10.1 – $10.35. Nobody would even notice this. Worse, at a one per cent inflation over a prolonged period of time, while prices might move from $10 to $12/$13, it happens so gradually that nobody would realise the changes taking place. The sudden doubling of inflation makes the changes in pricing obvious. 

For companies that need to compensate their workers, when inflation is at 1% giving them a 3% hike and letting them know that they are going to comfortably beat inflation is easy. The more blue-collar your work, the truer this is.

As inflation hits 7%, claiming to be providing a hike 3 times the inflation becomes far more difficult. A worker who is paid $30,000 per year is offered a 3% increment or $900 more the next year. The minimum wage stagnated at the same level for decades. 

This is the advantage of a low inflation environment. The top managers and executives in the company are able to give themselves 20%  to 50% in salary hikes without causing too much hurt (they are fewer in number) to the shareholders while giving little to nothing to the people who make the wheels go around.

The chasm between what the country’s corporate leaders and their workers earn is widening to Grand Canyon-like proportions, according to new research that shows CEO compensation surged 940% between 1978 to 2018 while the average worker saw a meagre 12% pay hike over the same 40-year period.

Source: CBS News 

Simply divide 940% by 40, you get a respectable 23.5%. Through multiple recessions, stock market collapses, etc. CEOs have managed to pay themselves more! In that same period, the average worker saw their salary increase 12% or 0.3% per annum.

Then comes a term popularised by Alfred Rapport in 1986 – Shareholder Value. The thesis is that the sole purpose of the company was to maximise shareholder value. Not stakeholders but only shareholders. And managers who maximise shareholder value (read CEO) are rewarded with money. Often this maximisation happened at the expense of all own the other stakeholders. The environment suffered; employees (esp Blue Collar) were paid incredibly poorly, and sweatshops were invented.

Source: Times Now

Source: Livemint

Source: BBC

Source: Investopedia

The issue at hand is not inflation. It is the possibility that corporations would have to dish out unprecedented salary hikes to retain employees. The pressure on Biden is not from the consumer, it is from corporate leaders.

The unfortunate truth is, we will see the other side of this inflationary peak much sooner unless COVID has a say in it. COVID has battered the world and its economies and still, Apple managed to sell more iPhones in 2020 and 2021 than ever before. This is because of the liquidity that the stimulus has introduced into the market.

That tap will be closed. Demand will fall.

Inflation will climb down in less than 2 quarters. The leaders will project this as incredible economic shepherding. It will be hailed a victory. The corporates will continue to dish out measly single-digit salary hikes.

The rich can continue to get richer and the poor can continue to get poorer.

Learning by Proxy

Real Philanthropy | Learning by Proxy

Earlier this year I had written a piece on Philanthropy where I had mentioned how the wealthy have been using foundations as a vehicle for tax evasion. In fact, under the guise of charitable foundations, these billionaires are using these are vehicles to influence policy across the world to get preferential treatment and make themselves even more wealthy.

As the year draws to a close and a new one dawns I want to write about the good things that are happening in philanthropy. Of all the Billionaires out there, one seems to be taking ‘giving away’ seriously and doing a good job of it.

Mackenzie Scott.

For those of you who do not know, she is the former wife of Amazon founder, Jeff Bezos.

Scott has not only begun to make good on her word, but she’s doing so at a record pace and with total control over where her money goes: In a little more than two years, Scott, who is worth $57 billion, has given $8.6 billion to 780 organizations promoting issues including gender equity, racial justice, public health and beyond. She has done so without an office or even a mailing address, and with scant evidence of a full-time staff. Instead she works with her husband Dan, researchers and advisers from nonprofit consulting firm Bridgespan. She answers to no one, has no board of directors (that we know of) and, because she’s not making gifts through a charitable foundation, no reporting requirements, either. (In comparison, the Gates Foundation, which has nearly 1,800 employees, made $5.8 billion in grants in 2020. Scott distributed slightly more than $5.8 billion that year.)

And, crucially, she employs a “no-strings attached” giving philosophy, meaning each organization can use the funds however they see fit. “It empowers receivers by making them feel valued and by unlocking their best solutions,” Scott wrote on Medium in June.

Source: Forbes

Just for perspective; Bill and Melinda Gates Foundation has 1763 employees across 9 offices. Giving money away should not require that many people. You just need one person to sign the cheques is it not?

There are others who are also stepping up to put more money where it is really needed. One of the crusaders comes from the unlikeliest of places. Robert Downey Jr, better known for his role as Iron Man is bringing a group of philanthropists together to provide fast grants to scientists who are working on challenging problems.

If we really want to get the planet to net zero emissions, we need to transform how we produce and consume electricity. We need newer, more-efficient transportation, and a food supply that doesn’t rely on deforestation. We need climate-friendly agriculture and better ways to preserve ecosystems. We must capture and remove existing greenhouse gases. We need constant iteration for efficiency. For all the above we need the best minds working on the right problems, and quickly.

Unfortunately, if there’s one major shortcoming of our existing scientific institutions, it’s speed. In the earliest days of the pandemic, as researchers raced to understand COVID-19 and test ideas for response, a group of outsider philanthropists stepped up to create Fast Grants for quick-turnaround financial resources for new questions and ideas. The program did more than just fund projects, it showed that there was a more effective, less bureaucratic way to support scientists.


Funding risky research first requires bets on risky new models. To help stop the leaks on the scientific talent funnel, our team is launching a new program: the FootPrint Coalition Science Engine.

We are in the business of supporting entrepreneurial scientists and we are in agreement that the major impediments are the obvious limitations of decision-making by committee. We’re trying something different. FootPrint Coalition is funding early research in brand new environmental fields, and doing it under the direction of esteemed Science Leads who can move quickly and fund at their discretion. The FootPrint Coalition Science Engine builds off suggestions made in the Funding Risky Research paper. It operationalizes the “loose-play funding for early-stage risky explorations” but doesn’t bind it to universities.

We’re doing it “in public” on the Experiment funding platform, a website for crowdfunding science research projects, so anyone can participate as a cofunder.

Source: Fast Company

In the meantime, Laurene Powell Jobs is taking a slightly different track to do her giving. She created the Emerson Collective, but unlike other Billionaires who hide under the guise of a foundation, she has incorporated it as an LLC. She is using the money to invest in causes that she believes in and supporting entrepreneurs others may not necessarily.

The collective, as The Post describes it, is “equal parts think tank, foundation, venture capital fund, media baron, arts patron and activist hive.” The collective invests in private companies not because the goal is to make money but because, she says, Silicon Valley has demonstrated that “amazing entrepreneurs who … are 100 percent aligned with our mission” can help find solutions that might elude a nonprofit.

Because Emerson is formed as a limited liability company rather than a foundation, it has the flexibility to do more than make grants to nonprofit groups. It can support advocacy groups, launch its own activist campaigns and contribute to political organizations.


“What’s fascinating is that by listening to all these founders, she has basically put founders at the head of each of the sectors of Emerson Collective, so that she’s really funding entrepreneurs inside the collective who want to disrupt their spaces,” Conway told The Post. “She wants people to innovate in their sector — education reform, getting the Dream Act passed. So Emerson has become like an accelerator for causes around social change.”

Source: CNET

But with this new crop of philanthropists, one sentiment seems to be clear, they are not going to be taking their wealth to their graves. Whether it is Laurene Powell Jobs…

“I inherited my wealth from my husband, who didn’t care about the accumulation of wealth,” she told the New York Times. “I’m not interested in legacy wealth buildings, and my children know that. If I live long enough, it ends with me.”

The sentiment, which she doesn’t appear to have expressed before, syncs with a building consensus among some of tech’s wealthiest people: That the rich should give away their money today, rather than later, and that the heirs of long-dead billionaires shouldn’t have so much power in society centuries later.

Source: Vox

Or MacKenzie Scott

“My hope is that MacKenzie’s style of giving inspires the philanthropic sector, and inspires other donors to give in a way that supports bold, big visions,” says Favianna Rodriguez, who works to aid communities of color in Oakland, California. “We don’t have a lot of time. We’re looking at the crisis of the epidemic, the economic crisis, the climate crisis, and this moment of racial reckoning.”

With $57 billion still to give away, Scott has big plans to continue to affect real change and have a lasting impact on the historically underfunded and overlooked. As she puts it: “Generosity is generative. Sharing makes more.”

Source: Forbes

So in the end, it seems like it really is possible to give away a lot of money. As the old adage goes; if there is a will, there is a way.