General Thinking

Should Startups Worry or Should Reliance?

Reliance has raised more capital in the 2 months than all of the startup eco-system did in 2019. Indian startups raised a “record-breaking” USD 14.5 Billion in 2019!

Many investors and founders across many industries are worried about what might be possible with that kind of capital in their war chest. I think it is Reliance that should be worried now.

When working with startups we often say – once you raise money, the real pressure begins. You can’t be slow and deliberate anymore, investors want returns. Till such time that you raise capital, you are only answerable to yourself, not after. Also, with deep-pocketed investors, if you falter and your valuations fall, they can easily buy you out and throw you out of the company.

Building Products

I have worked with a fairly large number of startups and seen how tough it can be to get a product right and get users to adopt it. It takes several iterations before you can declare that a product has the right ingredients to grow. The best thought out business plans require a fair amount of revision. Growing a product is not just about getting the product right but also constant engagement with the users. 

Often several assumptions are made and they are subsequently tested in the field. This is part of the reason slavishly copying another product rarely results in success. You have concluded without understanding the reason for arriving at that conclusion. Name one company that has been a runaway success consequence of a slavish copy. (Without giving it away free)

Have you heard of this app called ‘Hike’ which is owned by a company that has 100’s of millions of high paying users? Instead, an app developed by an 18 member team called ‘WhatsApp’ rules the world.

Reliance and Products

Reliance is not a product company. Reliance is a ‘license’ company. Right from the outset, their success has hinged on being able to extract licenses and political favours which have put them in the front. License for oil, license for telecom and license for retail (in the form of FDI limitation). 

Which was the last Reliance product you loved? (Not because it was just cheap)

Winning on products is a whole different ball game. It is not just about getting access which others do not have. It is about excellence. You have to be able to compete in an open market and succeed at that. No license is going to make it impossible for the other company to do business. Reliance is doing its level best to irritate e-commerce competitors. The leverage is always the law. Not the ability to compete and win. While that may be, it is not possible to turn every industry into a policy nightmare.

Product and Customer

Deploying a product successfully is about making a lot of cheap mistakes to arrive at the right formula to be able to put all the wood behind that arrow. If you are armed with USD 20 Billion, you are probably going to make huge mistakes and mistakes from which you may not be able to recover. Companies that get funded heavily before they hit the market often flame out. Reason – expensive experiments.

The reason for the expensive experiments if something called the base effect. If I have 100 dollars in capital and I need to deliver 100% growth, I need to make a 100 more – easy. If I have 20 Billion and investors have come in assuming I will double it in 5 years. Well…

Somethings money can’t buy.

Google is the latest company to invest in Jio Platforms. Google was once seen as invincible at anything Internet and then Facebook came along. Google launched a competitor Google Plus. It was a monumental disaster. Nothing Google could throw at it, including listing it on the home page of “” could save it. The reason – Network Effect. People go to Facebook because their friends are on Facebook. Google Plus, by comparison, was a ghost town. It is the same reason Hike failed. The same reason Jio Meet is not Zoom. It does not enjoy a network effect. 

So when it comes to the Indian 5G network, Reliance will have an upper hand in the highly regulated license driven space. But that will certainly not translate into successes in the area of Education, Healthcare, VR etc. 

Also, you know what happens to all-star teams?

Customer and Products

I mentioned earlier that it is important to make a lot of cheap mistakes with products. When you develop a product you are often trying to find a product-market fit. In other words, the right customer for your product.

Jio Platforms is busy launching a bevvy of products which is completely divorced from its customer base. Jio has an ARPU of hundred something rupees. A very small number of its existing customers are going to be able to afford a Jio Glass or the numerous other products that have been debuting. 


Reliance needed the fundraise desperately because they had piled on a lot of debt building Jio. The dominoes began to fall once Facebook stepped in and made a huge purchase. Everyone who had a few Billion in cash sitting around invested.

Having rid themselves of the debt, Reliance now has to undertake a metamorphosis to become a Product company. This is easier said than done. I think it is Reliance that has more to be worried than the startups that its businesses are going to threaten. 

Learning by Proxy

Learning by Proxy | Visa – Jio – COVID after effects

Every Saturday, I publish this series called Learning by Proxy. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.

Follow Up

Visa Ban

The USA has been busy disallowing Visa to several categories of people. Last week it hit students with a visa ban. Since the students would be required to attend classes online, why should they have to stay in the US? The universities sued the government from Boston to San Diego. The visa was the only thing that was going to get the students to pay tuition. Without it, the Universities would suffer revenue erosion!

The U-turn by the Trump administration comes following a nationwide outrage against its July 6 order and a series of lawsuits filed by a large number of educational institutions, led by the prestigious Harvard University and Massachusetts Institute of Technology (MIT), seeking a permanent injunctive relief to bar the Department of Homeland Security (DHS) and the US Immigration and Customs Enforcement (ICE) from enforcing the federal guidelines barring international students attending colleges and universities offering only online courses from staying in the country.

Source: Indian Express

After H1B and students, the next in line are members of the Communist Party of China. This is being considered as a retaliation to the change in the law in Hong Kong. 

The Trump administration is considering a sweeping ban on travel to the United States by members of the Chinese Communist Party and their families, according to people familiar with the proposal, a move that would almost certainly prompt retaliation against Americans seeking to enter or remain in China and exacerbate tensions between the two nations.

Source: New York Times

The share of non-citizens in the US has already fallen to new lows.

Just 6.2% of the people in households surveyed for the US’s monthly employment survey responded they were not US citizens in June 2020. This is the lowest share of non-citizens since 2000, and down from 6.8% in February.

Source: Quartz

All this while their passport has fallen out of favour with all but a few. These are the only countries to which a person bearing an American passport can travel to Visa-Free. Also, most of Europe would not allow them even if they had a Visa.

Jio Again

Reliance has managed to raise over 20 Billion dollars in the past couple of months. This culminated in the AGM where the Google – USD 4 Billion investment – was also announced.

During the Google For India event for 2020, Google and Alphabet CEO Sundar Pichai announced that the company will invest INR 75,000 Cr or approximately $10 Bn under the Google For India Digitization Fund for the Indian tech and startup ecosystem. The fund will be invested in businesses, social impact projects and towards supporting the Indian government’s digitisation efforts over the next 5-7 years.

Source: Inc42

This release by Google was an afterthought. They just wanted to put a spin that made it seem larger than just a Jio Investment. But that was all it was. The rest of the 6 Billion is probably expenses that will be undertaken either way over the next 5 – 7 years.

Have you seen a successful all-star team? Jio now counts Facebook, Google and Microsoft as shareholders. 

The company also announced a whole bevvy of products and services during their online AGM.

At Reliance’s Annual General Meet 2020 the company announced Google will invest Rs 33,737 cr for a 7.7% stake in Jio Platforms. Jio also revealed that the company is developing Jio TV Plus, Jio Glass, and more. The company also announced details on JioMart and Jio 5G solution.

Source: Indian Express

While it is one thing to build a product, it is another thing to be able to sell it and build an eco-system around it. While all this investment is in the anticipation that funding means success, it will not be that easy.

Even with Tik Tok banned in India, the aspiring apps are struggling to dominate the space. It takes a lot more than just making something to succeed. Google itself is no stranger to the concept. They rushed out Google Plus to compete with Facebook and promoted it on the most visited page on the internet and still failed. 

This is not over.

ARMing Softbank

In the 1980s a British company called Acorn along with VLSI and Apple created a chip design company called ARM. ARM stood for Advanced RISC Machines. RISC stands for Reduced Instruction Set Computer. This was conceived as a way of enabling low powered devices. Intel, by comparison, was offering CISC – Complex Instruction Set Computers which are more power-hungry. When Steve Jobs came back to Apple in 1997, he sold ARM and used the money to save the company. When he went back to Intel in 2005 asking them to build a low power chip for mobile devices they refused. Apple moved to the ARM design and the rest, as they say, is history. Intel missed the train and today every phone and tablet runs on ARM. Windows already has ARM PCs and Apple announced last month that they are going to move the Mac to ARM.

Unlike several of their disastrous investments, Softbank moved in and bought a majority stake in ARM in 2016. Now is the time for this investment to pay-off.

If it pursues a listing, the chip-design company could go public as soon as next year, said the people, who asked not to be identified because the deliberations are private. That would accelerate a timeline SoftBank Group Corp. founder Masayoshi Son laid out in 2018, estimating an initial share sale for Arm sometime around 2023, a goal repeated in October by Arm Chief Executive Officer Simon Segars.

Source: Bloomberg

The push to list ARM is in no small means driven by all of the other failures that the company has seen in its portfolio. 

COVID and Consequences

Escape Artist

Quarantine is a word that has become quite well enmeshed in our lexicon since the pandemic started. When you travel, you quarantine. If you come across someone infected, you quarantine. And then there are those, who try to escape quarantine. An Australian celebrity tried to escape quarantine and was fined. Fines for escaping quarantine are becoming commonplace. One of the states in the US which has a fine for escaping quarantine – Florida. Would you have thought?

When Australians return to Sydney from trips abroad, the government requires them to stay in a hotel for two weeks. But recently, there have been several reports of citizens attempting to break out of their quarantine at many Sydney hotels. One woman, an influencer who had recently returned from Paris, was fined AU$1,000 (US$694) for busting out via the hotel’s fire escape just a few days in; she might also face legal action for tampering with the sprinklers in the hotel room in which she was confined.

Source: Quartz

Real Estate

I have written about how real estate will not be the same once this pandemic is over. With the increasing ‘Work from Home’ schedule and the absence of the need to hang around cities, real estate is bound to change. There is one sector of real estate that is seeing spiking demand in India. With many people working from home, they are moving back to their home towns and emptying their houses in the city. Unable to shift out completely during the pandemic, they are putting their belongings in long term storage. 

In an extended work from home scenario, a growing proportion of the working population, primarily techies, are leaving the city and moving back to their hometowns, pushing up demand for storage houses, where household and office belongings are stocked securely for low rentals. 

Firms like Safe Storage, Storagians, StowNest Storage, Orange Safe Storage and MyRaksha, which provide the service, are witnessing a spike in the number of clients. 

Source: Times of India


The one thing that is becoming increasingly clear to many parents working from home is that they did not need schools to educate children. They needed schools to be able to buy freedom from their children. The current situation makes it very unsafe for children to go to school. This is fast turning into a crisis. What is the way out?

American parents stand to lose even more productivity—and their minds—as more school districts like Los Angeles limit how many students will return to the classroom for the upcoming school year. This situation could weaken recovery efforts over the long term.

Source: Quartz


Garbage to Energy

Most of the garbage finds its way to the landfills. This garbage is often a source of various greenhouse gases. One of the gases that can be extracted from garbage is Hydrogen gas. A company is set out to turn all garbage into energy that could power homes and transport.

Most of the landfill gas at Puente Hills is captured by a network of subterranean pipes and used to generate enough clean electricity to power 70,000 homes. But Jean-Louis Kindler, the CEO and founder of a startup called Ways2H, still considers this letting our waste go to waste. If he has his way, we’ll not need landfills like Puente Hills. Instead, he wants to use the world’s trash as the raw feedstock to produce hydrogen, the perennial Fuel of the Future that could power our homes, planes, cars, and plane-cars. “There is so much waste available—plastic, municipal solid waste, medical waste,” says Kindler. “All the things we are struggling with the processing are loaded with hydrogen.”

Source: Wired

In the early 2000s, the world was at the precipice of a new kind of automobile. Companies in Japan and Germany were working on cars driven with Hydrogen Fuel Cell which would use liquid hydrogen as fuel and release water as the by-product. They would re-fueled just like our Petrol cars are – at a gas station. Do not require any new infrastructure. Have similar running range and are much more cleaner. 

At the same time, an internet entrepreneur who had recently sold his company invested in a company called Tesla. Armed with the loan from the US government, he set out to discredit Hydrogen Fuel cell technology. Ironically, he played the role of Edison, to save his investment. (Edison tormented Tesla and tried to prove Alternating Current would not work – we all use alternating current today) Under the guise of saving the planet, Elon Musk has created a Li-Ion Cell Garbage problem across the world. In any case, we will run out of it in the next 10 years. He hopes to be on Mars by then.

I hope we move to Hydrogen Fuel Cell.

Signing off…

Learning by Proxy

Government – #MakeInIndia – Cars | Learning by Proxy

Every Saturday, I publish this series called ‘Learning by Proxy’. It is a capsule of some of the stuff that I found interesting over the week along with some context to it. I hope you enjoy it.


When your government turns against you…

Center raises duty on Petrol by Rs. 10 and Diesel by Rs. 13. Where every other nation is talking stimulus, the Indian government is profiteering.

What are we paying?

Almost Rs. 50 out of the Rs. 71 per litre going to the government! Imagine 3 of you go to a restaurant, order food worth 2000 rupees and get a 7000 rupee bill.

Despite several pleas by liquor manufacturers as well as States (because tax money), the Centre did not allow for home delivery of liquor. This resulted in unforeseen crowds at liquor stores when restrictions were lifted. There was a jump of 4000 fresh cases recorded on the very same day – 4th May. This was unnecessary. Squandering all the gains made over the past 6 weeks of sacrifice – India started the week with a shade more than 40,000 cases and will probably exit it with 60,000 cases.

Earlier in the week, I had written a blog about the suffering, the Real Estate Industry has to brace for, as migrants leave not to return in the short term. Right on cue – 

The Quint has accessed a letter written by N Manjunath Prasad, nodal officer for inter-state travel from the state, claiming that no more trains are required. Referring to an earlier letter requesting three trains on 6 May, the officer said that the service is no longer necessary.

A senior government official said that even though no reason was given for withdrawing the train services, the decision was taken following a meeting with the representatives of Confederation of Real Estate Developers Associations of India (CREDAI).

Source: Quint 

They are being held, prisoners!

Update – Under pressure, the Karnataka government decided to take back its decision to hold migrants, prisoners, for the sake of builders. Trains are running again.


Coming Clean

One of the good things about COVID-19 is that the Government of India can start telling the truth about the state of the economy. Since demonetisation India has been struggling. The government has been playing with the data – first changing the base year for calculation for GDP growth, then undermining reports by the Central Statistical Organisation as well as the National Statistical Commission. Just Google – ‘India GDP Fudge’. Raghuram Rajan himself as RBI Governor raised the issue several times.

Now they say 8 Core industries shrank 6.5%

“Despite some easing in industrial activities by the government, post-April 20, the production activities have remained muted with labour shortages and other issues. As a result, in April 2020 we may see a further contraction in eight core sectors and the industrial output,” said a CARE Ratings report released after the data was published.

Source: Quartz

And I still see some people forecasting low single-digit economic growth for the year. I don’t know who they are trying to fool – hopefully, themselves. 

Make in India

If ⬆️ then ⬇️

India has put aside land twice the size of Luxembourg for the purpose of driving investment in production. The government obviously wants to use the hate that China is getting and bring as many manufacturing plants to India as possible. One of the main reasons China was able to move production to their country and bring so many businesses to its shore was because of its iron-fisted approach. The country was able to make land available and get factories chugging real quick.

A total area of 461,589 hectares has been identified across the country for the purpose, the people said, asking not to be identified because they aren’t authorized to speak to the media. That includes 115,131 hectares of existing industrial land in states such as Gujarat, Maharashtra, Tamil Nadu and Andhra Pradesh, they said. Luxembourg is spread across 243,000 hectares, according to the World Bank.

 Source: Economic Times

Do you remember POSCO? What was missing? The Iron Fist. 

Here it comes.

Even as India is just coming out of a nationwide lockdown due to the novel coronavirus, the environment ministry is considering large scale mining, infrastructure and industrial projects for environment, forest and wildlife clearances by hosting video meetings of its expert panels. This is despite the expert panels admitting that time available for considering some of these projects is “very less” and in some cases just about 10 minutes per project.

People affected by projects, who don’t have ready access to the internet would be unable to send representations or documents to the EACs. “In the past, these submissions have been crucial for the EACs to ask for critical studies and ensure safeguards even if a project is approved,” said Kanchi Kohli, a senior researcher at the Centre for Policy Research in New Delhi.


There is perhaps a motive to clearing projects during a health emergency, Mohanty said. “People are busy, and not in a position to file objections.”

Source: Quartz


Jug jug Jio

As Reliance entered March they needed money bad! (If you want to know why – click here) They had several on-going conversations and Facebook came through. Not only did they come through; they came through in style. Overnight, Jio was valued at USD 65.95 Billion. So what do you do when you have 40 Billion in Debt? 

Tell a story and start printing shares! Reliance is planning to sell another 10% of Jio in the coming days. 

American private equity firm Silver Lake has invested Rs 5,655.75 crore in Mukesh Ambani-owned Reliance Industries’ Jio Platforms. The deal comes less than two weeks after Facebook made an investment of $5.7 billion to buy a minority stake in Jio. The investment by Silver Lake values Jio Platforms at an equity value of Rs 4.9 trillion and an enterprise value of Rs 5.15 trillion, and represents a 12.5% premium on the equity valuation of the Facebook investment announced on April 22, 2020

Source: Business Standard

In two weeks the enterprise valuation went up 12.5%. Can you make 8 Billion in valuation over 2 weeks? Over the next 18 2 months through many slow jumps like this one, Jio will generate enough cash to bail Reliance out of its debts. VCs are being given a Master Class, hopefully globally.

The dust on this will not be allowed to settle. With FOMO at play, by Friday, another USD 1.5 Billion found its way to the Reliance coffers from Vista Equity Partners! I am sure there will be more announcements in the coming weeks.

Also on that note – E-Commerce seems to be one of the great pillars that Facebook and Reliance seem to be chasing; the other being finance. Rumour has it that Reliance is looking to acquire Chennai based Netmeds. JioMart started taking Grocery orders over WhatsApp last week in Mumbai.

Walmart must be regretting having listened to Masayoshi Son.

From Mobile to Mobility

For the first time since 1984, the Indian Automobile industry sold ZERO cars in the month of April. Not surprising at all. Adding insult to injury, there is a huge pileup of inventory that is adding to the cost for dealerships. But they should brace themselves for even worse. One of the biggest contributors to car sales was Uber and Ola. With many migrants choosing to go back home and ‘work from home’ becoming a new norm, the demand for cars may never recover to the same levels again. 

The nationwide lockdown, which started on March 25, forced all car dealerships and manufacturing units across the country to stop operations. The halt is costing the industry Rs2,300 crore ($306 million) per day, according to an estimate by industry body Society of Indian Automobile Manufacturers (SIAM).

Source: Quartz


The Indian government launched Arogya Setu, its app for countrywide surveillance. Making it mandatory for Indians who are coming back from overseas. When the app was launched, the terms and conditions had a lot of leeway in terms of how the data could be used. It still remains a clusterfuck of privacy problems. Little surprise that hackers are now making their way in.

According to Baptiste, anyone with the right technical know-how can find out the Covid-19 status of a given area by exploiting a flaw that allows users to set a location within the Aarogya Setu application. Using the flaw, Alderson was able to find that five people each in the Prime Minister’s Office (PMO) and defence ministry who had reported that they were feeling unwell today (May 06).

Source: Inc42

Self-Driving Cars

In a post-COVID world the fewer people you come across, the better. Cabs are one of those cases where you have to necessarily come across another person – the driver. Self-driving cars will get a huge boost in this scenario. Volvo, the company that brought to us the three-point seat belt and gave away the patent because they believed that safety was something everyone should have, is making strides.

That news is the result of a deal with Luminar, the eight-year-old lidar company helmed by 25-year-old Austin Russell. Instead of the sort of spinning gumdrop setup used by WaymoCruiseArgo, and others making self-driving cars for use in taxi or delivery fleets, Luminar’s lidar is about the size of a VCR tape and fits sleekly into the car’s roof, just above the windshield.

Source: Wired

They believe their cars will be able to drive on highways by 2022. Tesla has taken a different approach from Lidar and Elon Musk has often derided the technology. Much like his derision of Hydrogen Fuel Cell which is far more environment friendly than Lithium-Ion Batteries.


The Edison Motion Picture Patents Company had the rights to the Projector Technology in the early 1900s. As a result of this patent any movie maker who wished to shoot a film was required to show the movie to the Edison Company and get their clearance before they allowed for it be projected in the USA. The Edison Company believed that long movies would not be appreciated by the audience and forbade movies longer than 30 minutes. The Edison Company had become the censor board without being that. Rudolph Zukor created Paramount Pictures, others such as Wilhelm Fuchs, later known as William Fox and three brother Jack, Sam and Harry Warner decided to defy the Company.

Chased by lawsuits, Police and Edison company’s hired thugs who were destroying their production sets on the East Coast, they decided to move as far away as possible from the Edison Company. They also needed a place from which they could escape across the border if they found out a Police raid was imminent. So they packed their bags and moved from New York to a dusty town near the Mexico border called Los Angeles. This is the reason the ‘Theatre’ is in New York while the movies are in LA.

This industry built over a century is at the precipice of irreversible change. The ‘Trolls World Tour’ was released by Universal Pictures directly online because of you know what. They grossed USD 95 Million. This sent the cats amongst the pigeons.

AMC Theatres—the largest movie theater chain in the world with 11,000 screens and an indispensable asset for Hollywood studios—promptly freaked out about Shell’s boasting. In particular, it took issue with Shell’s wording that Universal will release movies in “both formats” (theaters and at-home viewing) in the future. Normally, theaters are granted a roughly 75-day exclusive window to screen films before they’re released digitally.

Source: Quartz

For small budget movies, going digital directly makes a lot of sense. As if the prove the point – 

Instead of a theater release in May, or a digital rental period, Warner Brothers will release their new movie ‘Scoob!’ on iTunes for a $25 one-time purchase.

Source: AppleInsider

Signing off…