Last month, Vijay Shekhar Sharma was at a New Delhi flea market with his wife when she decided to buy some dress material. The shopkeeper refused to accept Sharma’s credit card and insisted on being paid in cash. As he did not have cash on him, the shopkeeper offered the next best alternative: a Paytm account.
“The shopkeeper started teaching me how I could use the app to transfer money to him,” Sharma said. “My wife stood there smiling at me with a look that said ‘you must be really happy today'.”
Sharma, founder and CEO of Paytm, the Delhi-based mobile payment and e-commerce company, did not reveal his identity to the shopkeeper. All that mattered to him was to build “India’s first $100-billion company”.
Below are edited excerpts from a freewheeling chat with Sharma.
How is it being an entrepreneur right now, given the tough business environment?
If entrepreneurship ends due to newspaper headlines, family pressure, or investor sentiment, it is not entrepreneurship. Entrepreneurs who stop because of such third-party factors are simply opportunists. True entrepreneurs … believe what they are building is needed, will be great, and will survive.
I started in 2001 and just a few months later 9/11 happened. There was a real global glut then. For two years, I had a salary of 6,000 rupees a month. My family told me that I should take up a job because my friends and peers had gone to the United States and were doing well. I did not stop. I did odd jobs to earn day-to-day money. I was not in the (entrepreneurship) game because I thought start-ups were fashionable. I was a core believer of the fact that phones will be the way forward and I wanted to keep my head down and keep walking forward to build a solution around that.
What are you hearing from investors about the Indian start-up ecosystem currently?
When it comes to a new company, investors are not willing to invest in sectors where other players already exist. Earlier, people were willing to put money in any space that was already heavily funded.
People are still willing to put money in unicorns if they can differentiate themselves in the market. What has changed is that earlier $100-million valuations became $500 million very quickly. Now it’s not happening as fast.
You visit China often. What’s the big difference you see between Indian and Chinese e-commerce?
I visit both the US and China often and if you want to see what software or mobile internet or smartphone-led technologies of the future will be, it is 100% in China. The US is a very old-man country in a way. What is happening in China is unprecedented.
Do you believe India will become the battleground between American and Chinese companies?
India is an open market, and so it is as much a market for international companies as it is for local players. We have seen that global players have managed to come to India and compete with domestic players, unless there is a local twist in the trade.
And there are several reasons why local companies thrive in such a scenario. That’s what we Indian players have to think about. We have to build something that is built for the local environment, one that a global company cannot replicate. For example, a Haldiram’s cannot be replaced by a McDonald’s. India needs to build what Indians inherently buy and what has a value proposition for this environment.
Do you think Indian e-commerce players have been able to do something exceptional like that?
At Paytm, we are trying to drive O2O (offline to online) commerce as a way forward. O2O means when you buy something online, it is delivered from your neighbourhood. Paytm today fulfills most of its orders for appliances and electronics from neighbourhood shops. I personally believe we are building a far more Indian and on-the-ground solution. If we succeed, we will enable small local retailers and shopkeepers to become a part of the success of the smartphone revolution we are seeing in commerce. At the same time, it will bring a new, third model to the world, after traditional online retailing and the marketplace model.
Banks and telecom companies have been experimenting with financial technology for years. Why do you think Paytm will be more successful?
There are two kinds of companies in the world: those that consume technology and those that build technology. Telecom operators are the first category. They don’t build any technology and they outsource their tech requirements. The second category includes players like Tesla, which built its technology bottom-up.
Similarly, we built our technology and software by ourselves, unlike traditional financial institutions or telecom companies. That is what separates us from the others.
You were recently named one of India’s richest entrepreneurs. Do such titles change anything?
It’s not wealth until it shows as cash in the bank. So these ratings don’t really matter. My mother read the report and asked me if it was real, because she thinks I have no money. I have a personal loan that I took just six months back.
There's just one reward that matters to me, which is that someday people will say: "Here’s a man who built India’s first $100-billion company." Everything else is just what happens on the way.
As told to Itika Sharma Punit.
This article has been produced in collaboration with the World Economic Forum and in line with the programme topics of the India Economic Summit on 6-7 October 2016 in New Delhi under the theme “Fostering an Inclusive India through Digital Transformation.” For more information about the meeting visit http://wef.ch/ies16.