Intel, Softbank, Venture Capital, Payment Apps and Upgrad: The Week’s Most Interesting

Philip II of Macedonia set the stage and the foundations of the army for his son Alexander. Before him the army was quite ordinary and hardly had anything special about them. He was known for all the changes he made to the entire structure of the army, including starting the practice of uniforms, regiments (called taxis etc). One of the things he realised was that even when outmatched, there were strategies and changes that you could do to win the war. He realised that almost all his opponents had armies which carried spears 6 foot in length. Philip made the primary weapon of his army the Sarissa, a 18-20 ft pike that could far outreach the spears of the opponents. This one change together with a bunch of other changes made Alexander the commander of the greatest army ever. Alexander in his time showed even more agility. While the core of his formation remained the same, his frontline would change depending on the terrain and the enemy. So when he was faced with the elephants of Porus, the cavalry gave way to archers. 

A rather simpler explanation of my point is Sachin Tendulkar’s superhuman effort to remove a shot from his book when playing Australia in 2004. He didn’t play his signature shot because he knew the probability of getting out was higher. And the beauty was he didn’t play it for 436 balls. To really understand the behaviour, think how difficult it is to make a change and stick to it ? And how do you convince yourself you change something in the first place, when status quo is comfortable, and looks like the never ending horizon.

Which brings me to the theme of this week. I bring you 5 articles from recent happenings that demonstrate the need for change, what happens when you don’t and what happens when you do. In my final article, I am not sure if a change is needed or not. You let me know if maybe some change is required. To give you one last point before you move ahead, I am not talking of change that is required instantly to survive. That is not change, that is crisis management. I am looking for change that you and organisations undertake before a crisis even arises. Resilience and foresight are two very different qualities. Today we focus on foresight.

1. Recently an ex-Intel executive wrote that Apple found more bugs in Intel’s produced chips than Intel itself found in the entire development process. This news was ominous for the company that essentially was the foundation of technological development from the late 80’s. In 2001, Apple first used an ARM processor in its IPOD and it became hugely successful. Intel ignored the signs, sitting comfortably on a pile of processors and with a divine combination of blessings from its cash cow’s and Moore’s law, it looked infallible. But if Alexander could change his formations for different terrains, so should you ! Apple decided that after a long time, it is much better off without Intel being inside its products. The first article tells you that there is enough time to change, you just need to look.

2. A couple of analysts recently wrote that if Softbank wants to stop the drop in its valuation it needs to spin off or separate VisionFund. Once the crown-jewel now the burden. The last ten years, the pinnacle of success for a startup was never profitability. Super charged growth came a close second. The first defining moment was a statement of approval or even a meeting with Masa. But the way ahead looks rather grey, with the famed turnaround of WeWork not taking off as expected and Coupang, the South Korean saviour being highly impacted through coronavirus. The famed Samurai  of the dotcom bubble and the unicorn maker has to find a new change button. When will VisionFund change or will it be able to change is the question to be asked. (also read this to know the spread of Softbank’s investment across countries and Industries).

3. The following numbers are very famous and part of folklore now. The time that these products/services took to get to 1 million users: Twitter took 24 months, Facebook took 10 months, Instagram took 2,5 months. Reasons would be great backing and leveraging the learnings of the past. My question is why can’t that happen with Vaccines. Why didn’t  we see VC backed PPE Kit ventures, new ventilator designs, and maybe a vaccine. Couldn’t a vaccine be produced in 6 months. It’s not an ideological or ethical debate for me at all. It is an economical one. Are the old systems for identifying which startup is a winner and which is not a little outdated. Are the variables of what a world is looking for and what VC’s are looking for a little different now? This article is one side of the story. I will leave it upto you to decide if you agree or disagree.

4. Great products have an ability to garner consumers very fast, but it’s not the product that keeps you around, it’s your revenue model that does. A company could do about  20 crore transactions but still have a loss of 3.4 crore rupees. The biggest success of the century in the Indian market has been the adoption of UPI and the payment apps. But sadly, while scratch cards and digital diyas in Diwali could drive your transactions, they are not revenue makers. As a surprisingly robust government created ecosystem helps Google Pay and Phone Pe grow and acquire users, 2020-2021 would have to be about adding money to their respective wallets.The crisis is just around the corner and payment apps soon have to figure the next consumer money behaviour that they have to disrupt.

5. In the noise of Bharat, bottom of the pyramid and vernacular and low cost high volume success of Jio, one company stands steadfast in producing and selling extremely high value courses online. And Ronnie Screwvala, knows how to make money as he so successfully did with the UTV and Disney Deal. Will the man with the Midas touch need to find a change in strategy or is there enough meat in the high paying Indian segment. Maybe the 40 million potential audience in South east Asia would be enough. The results of the past support the strategy, but I am torn between change and status quo. This one I will leave for you to decide while reading about the building of a successful edtech company. Sometimes you need to stand a little farther away from the herd to be succesful.

Hope you had fun reading! Let me know what are your views on proactive change and any other successful examples you might have come across.

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