 All right the next keynote or the last keynote of the conference and the one which I'm hoping is going to leave you inspired is by Coven Coven is the founder and CEO of hike I just got to know Coven maybe a month or so before and we started working together And it was a request for him to I requested him to come in and do this talk So I'm really hoping that he can come in and leave you guys inspired. So over to you, sir. Thanks, Naresh So it's great to be here and I know this is the end of the conference. I'm going to keep it. Hopefully short and exciting enough I'm sure most of you guys have heard about hike We are you know, we're not very old to the very young company It's been 39 months since we launched the first version of hike and I'd love to tell you our story So 2011 is when I moved back to India. I was studying at Imperial College in London I was a Spencer of my sort of four years And when I came back to India, I was in a cannot place in Delhi Some friends and I used to go there pretty often in one day There's a healthy Ram the cannot place in behind the healthy Rams. There's this street where you have some great sort of street food and I was sort of buying some chart and some Golgappa's officer one of the vendors and You know, it was very interesting I noticed one thing that was very different on that day than sort of any other day and Between these people serving, you know, their food. There was one thing keeping them busy and It was this This was this was the guard phone at that time This is the Nokia 1100 phone. It was the the most popular phone of the time. It drove the telecom revolution. It was two thousand rupees. I had a flashlight on the phone, so it was a trucker phone very popular and You know, that was it. That was the reality for these people It was that cart they had in front of them more importantly this phone that could barely make calls or SMS and the reality of these people were limited to Resolve that sort of, you know work and I had an iPhone 4 my pocket back then and India didn't have 3g so locked log on the edge and You know, that's besides the point with the whole point was that, you know I had the I had a smartphone in my pocket with sort of access to the internet and You know folks like myself and all of you guys over here back in 11 had lived on the internet for about 15 16 years and You had a billion people in this country people like, you know, these guys who had no clue as to what the internet even was And how could it sort of impact their life and It dawned on us that day that you know, there's gonna be a billion people Come on to the internet for the first time in their lives on a mobile device This would be a first phenomena No market before I had sort of this Size of a population come online for the first time in their lives on to the internet on a mobile device And it really took me back to my first time experience big question was how would these guys come on to the internet? and took me back to my sort of first-time experience and You know, I still remember this was my second computer that I had This is a packet bell, you know, one sixty six megahertz computer had a turbo button to sort of increase the Frequency to sort of 200 megahertz had a serial drive a three and a half inch floppy drive Someone came and installed a used robotics modem in my house and came with the CD and Installed Right is the fun days the simple internet and the only thing that we had access to in the sort of entry point On the on the internet was yahoo. That was it. It was a directory of websites And it's a very sort of simple sort of phone book at its time. That was the entry point and the problem is Billion people coming online first on a mobile device would not have And a big question was what would bring these guys online and It became very clear to us that something very very cheap Given that the disposable income in the purchasing power of this country is overall Very low something very cheap and more importantly something that people very easily understood would be the way that people came online and There is nothing better understood than communication In this world in this lifetime if you take away all the devices if you take away all the sort of gadgets and so on and so forth What's left of the human species? So that was the idea we thought that messaging or communication will play a very large role And we didn't know how that was the idea So we launched hike in December 2001 and We launched with this idea That because people had you know because there are so low number of smartphones in the country Not everybody had data not everybody had smartphones and even if you are a smartphone with the messaging application It was impossible to stay connected with your friends and family because as I mentioned that many people had smart So we launched with this idea of hike the SMS Where you can message folks who had hike to free more importantly you could message folks who didn't have hike free of cost And we would use the SMS channel as seems backup to make that actually happen and Funnily enough within 24 hours of the launch. We were number one in Germany and in 48 hours we were number two in the Middle East and So this is our reaction. We said what is going? And it turned out that one of our engineers that sneaked in 128-bit encryption in Germany and Middle East are extremely extremely paranoid about security What about India? We actually had zero traction India We're building for India and we had no traction and the the seed money that we had raised was gonna last till about March 2013 and we had a target of three million so we had zero people and we had a target of three million users and We had about two months left and the big question was what do we do? And so with our backs pushed up against the wall we launched this thing called talk time rewards and the idea behind talk time rewards was very simple It was a Hail Mary that we sort of did If you join the app you get 10 rupees of data and if you would invite a friend You get 20 rupees of data, which would let you use hike free of cost and experiment with the application Without having to sort of pay for data and keep in mind back in 2012 and 13, you know three years ago The market was very very We had probably no more than 20 30 million smartphones and even less people on data and what we saw next completely shocked us within a couple of weeks We were number on the app store our messaging volume grew 50x week on week for four weeks And we added three million users and we were on top of the work. We thought we had solved all our problems And so we ended up with about five million users by the end of March But the problem was we just the scale was huge We had built our stack for a hundred thousand people and we had five million people so our service crashed on once but twice twice four times and Messages started getting lost push stopped working and we had to end this Awesome growth act that we had called ETR because we just could not keep up and we had this idea of a report card that we sort of You know use looking backwards and this is what a report card looked like back instead of March 30 It was horrible. We were feeling on almost everything So I'm going to continue in the interest of time So you saw the report card messaging service reliability pretty poor and We didn't have enough features on the platform We really thought like hike to SMS and all these things were good enough for us to sort of build something pretty incredible and more importantly we'd only built for the smartphones and Smartphones are very low in penetration back in 13 and we had to sort of build for the older platforms like simian and blackberry and so on and so forth and We sort of Started sort of on that how much time does it take but 30 40 seconds? Yeah Okay, he was pretty poor We'd done an okay job on the features and we were not there on all the platforms There's one thing we had solved for then most startups Which was growth? We found a way to very extremely Cheaply acquire a bunch of users and that was the you know I wanted to show this to you but that was the big check mark on a report card right the green tick and it shows up was was growth. Yeah, I see it great and In our CPA was actually what eight rupees. This is an old number It was peanuts and we'd find a very cheap way to sort of grow the service at the back of that We'd raised about seven million dollars our series a softening The problem is as soon as we raise this money In and you know the goal is this money would last us about 12 months as soon as we raise this money Within a month. We started to see a lot of chance obviously We were very naive back then. We don't know what was gonna happen But we saw a lot of chance about 80% of our user base completely churned out 80% and We were like what just happened and so we went back to the drawing board and We call sort of the next six months sort of post ETR the six months after sort of TTR Our main goals to stop charge. So we scaled our team from 15 to about 40 people We did three big things We improve reliability. We launched a few new features on hike and more importantly we launched the more platforms and if you guys are not built for simian it is horrible S60 S40. Thank God. They don't exist today even the Blackberry platform. They are horrible to build for and we had no choice S40 that explicit phone there was a very popular phone that made our life very miserable back in 30 We launched stickers It was an instant hit We have some numbers that I'll share with you later and you know, we were we believe our design led company So we love at that point in time three years ago. We wanted to build some really cool and sexy stuff So you're in a building. This is the first version of hike on the iPhone It was really slick, right? We were very proud about this. The problem was nobody understood drawers In India, nobody got it. People had just gotten their smartphones and they could barely use them and people weren't sort of used to swiping So we completely trashed this UI and we built a brand new UI Which is a very simple sort of three-time design you had your friends you had your chats and had your updates and We saw a very large bump in our retention Between sort of April and September that year and we had stabilized churn by June and so our report card is looking a lot better That brings me to sort of October to winter winter was coming and And we would be built talk time rewards to point out we believed now we were ready our app was much better engagement and retention is much much better and We had done a few things one as we got the app in a good shape We'd launched more platforms and we'd focused TTR 2.0 on engagement But there's something we call the romantic value of the application At the end of the day you're building for people not robots and people forget that and so we did a lot of cool things in the application and you know on December 25th that year when people open the app in the morning. There was a gift ready and You could open the gift and it was a brand new feature called chat And it was two-way chat themes you could change the background on your phone and you know it would change all people's phones as well It's a very simple, you know idea, but people laptop We also introduced custom nudges inside the application if you double tap you can poke someone in the app and For Valentine's Day on 14 we had launched a custom Valentine's Day theme where if you double tap the Screen you see this heart popper and it was very carefully crafted very well sort of done and You know this is what we spent our time doing in that sort of winter and By just making these improvements in the application. We got into about 50 million users Which is 3x in about 12 months from March the year before and our stick at traffic grew tremendously We'd grown about 10 15x in about six months So we were pretty excited so at the back of this growth We are not raising about 40 million more dollars We were now one of the leading sort of bless the app in the market But we hit another problem We started to see churn again the system and We thought all our troubles were over but as soon as that we thought that There was a lot of churn in the system and the problem was that post 15 million Force 15 million Indias are very different a lot of people don't realize this and The simple truth was that you know hike work extremely well on Wi-Fi 3g plus high-end devices But we were absolutely horrible on 2g and the problem was you know, we were using you know When people would join a company would give me these really cool high-end smartphones to attract them and we had like a 30 40 Meg Wi-Fi pipe at the office and building inside that office is what caused the big problem We didn't have that realization that people actually in the market. We're actually using low-end phones and 2g phones and the big question was why didn't we have this realization soon and a Lot of people will not give you this answer But looking back this is exactly why we failed to realize the fact that the market was where it was It is due to our organizational structure We'd gone from about 15 people to about 40 people and the problem was when you're 15 people a Simple top-down approach works you're 15 20 people and it's okay But as you become 40 50 people the company cannot be top-down Because things are moving so fast it becomes very hard for you to keep your pulse on the ground if you're top-down so what we did was we completely reorganized our teams and We reorganized them as what we call today's squads, which is autonomous teams and the instead of company owning different pieces of the puzzle and this is what a simple squad looks like you have a product owner who runs the squad and This squad is the simplest unit of development The squad has designers developers QA a cross-functional team to ensure that each squad can in a can a sort of operate and develop independently of anybody else in the company and at that time we actually had four squads we had broken down the company to four squads and We now knew that we had six months Either in six months the market would sort of pass us by or we'd catch the trend sort of move with it So we sort of went into what we call war mode and between April to September in the six months We did a few things One was we purchased 20 low-end phones This is a Samsung do us. This is one of the worst phones in the market. I Have four gray hairs on my head. It's because of this phone by the way. I have it right here and One team is focusing on reliability and gprs and 2g networks. That was their goal Which was can we figure out how we can make hike work flawlessly on you know gprs networks and on on 2g bites matter You know people don't realize this on 2g bites matter and we've done a lot of optimizations We'd sort of build some parallel channels got the you know the clogging the system down to zero We had done 50 other network fixes and today the proud You know point that we discuss with people is that we're actually the fastest messaging app on 2g across all benchmarks It's because we've been sitting in this market spending time traveling around the country figuring out where the sort of you know problems I'm actually fixing them. We are a second team working on optimizing for cheap smartphones Memory on these devices extremely low So we knocked off the app is very fat So we knocked off the footprint of stickers images. We reduce the app opening time by 75% Today hike works extremely well and of course load smartphones We had a third team working on these experience and the problem was Even though we had done this change Force 15 million India was very different. So we had to go for a third iteration And so we destroyed this UI again, and we came and built a very simple one tab Dedicated focus on chats and nothing else and we scale that design to Windows iOS and so on and so forth and A fourth team building new features and we had ended up shipping a lot of updates In that sort of three or four month period in in three months after April to June We had shipped about ten updates and again making these small improvements in the app was possible because we had these autonomous teams dedicated to solving their own problems And we'd gotten to about 20 million users in June and this was sort of our growth over the last 18 months So pretty good growth We were making some changes and you know sort of the market was responding and we were pretty confident that now We had enough ammo to go actually take hike You know to a much much bigger user base do a marketing And we were very against doing a marketing campaign because no social media company globally has burned south By doing a TV campaign, but India was very different Back last year. There was still very few people online and the only medium to reach the mass market actually was TV So we took a crack at the TV campaign. We launched our first TV campaign on 18th of June for TV It was hike up your life very simple youth targeted campaign And what we saw was tremendous growth On 19th July about a month after we lost TV campaign On 19th July weekend 2014. We added a million users it was incredible and We saw our messaging volume go through the roof About 10x and about six or seven months and we were doing about eight billion messages per day Our sticker volume saw similar growth. If not more We grew about 15x in that same time and back then we were doing about two billion stickers And we had some incredible localized stickers in the application. You use hike you want to love this and You know, I usually present this slide to like, you know people who don't understand Hindi So that's what the English translation is there and It's a very popular sticker So the TVC ended on 15th of August and This was our growth before the TVC and This is where we were after the campaign. We had warped what we had done in those 18 months in just two months and This is when we raised our 65 million dollar round by Tiger global in September 2014 and we realized something which was that shit Now India is a very unique country There are 20 countries with a lock-up. India is a country of friendly countries and a lot of localities and There are a few problems that we discovered in the market that are very local to India that I want to talk about They'll give you more context on what exactly One is the go-to market I have a quick question for you guys. How many people here in the room have 4g just by a show hands and How many people have 3g or 2g and Is everybody on postpaid? Anybody in prepaid What what plans you haven't prepaid Do you buy like a monthly pack or like? Okay So The transition to mobile in in US China, Japan was very easy There was a large population using Desk internet on the desktop for years So when people went from desktop to mobile they understood what the internet was they really got But I'm in a market like India We have 1 billion people coming online for the first time in their lives It's a very tricky situation The problem is that 95% of the market is so most people in this room don't reflect what it actually is like and The problem with prepaid is that people buy mobile consumption in sachets So I'll buy 10 rupees of talk time 10 minutes 10 SMS is the average balance on a telco wallet is about 15 So people buy Consumption in sachets and one minute one SMS is same across all telcos. It's very measurable. It's very tangible The problem is MBs and GBs are not One MB on hike is not equal to one And as a result of which today we have 30 to 40 percent data churn month-on-month There is a fundamental lack of understanding of data You'll be surprised how majority of the market sits in this bucket have some data to show you The cost of data Data is also very expensive in India and we pulled up the stats which was How many hours does it take? You to work to afford one GB of data And it turns out in China that number is about 3.38 hours in India that number is 12 If you notice the absolute amount of the absolute cost is half of China But the relative You know, you know cost to Indian population is 4x. So data is still very expensive for most people So there's a lack of understanding of data and more importantly there's expense and to give you another stat There are 1.1 billion 1.2 billion people in this country We have 1.1 billion SIM cards active in this country that are owned by 500 million unique people We have this dual SIM behavior in India, which is very sort of you know prevalent So half a billion people only 1.1 billion SIM cards each out of half a billion people you have no more than 250 million smartphone users out of which you have 150 to maximum 200 million internet consumers That's the funnel right inside 200 million people Most people consume the internet in a sachet format Only 30% of the audience has a data pack like you guys full month or post week 70% of the market has a sachet pack and I'm on one of those packs of last year and it is a nightmare to use Seven days 150m It is impossible to figure out how your MB finishes It's impossible to know when your days finish and when your data pack gets over you get penalized by the telcos And you have this thing called bill shock Right where you know the dip into your balance and they take all your balance away and it scares a shit out of people do you And it was it's a big deal you're shocked by this so The second thing we did was we got everybody in the company on prepaid and Once you use the internet on a low-end phone with pre-pinned SIM cards You really you really feel for the market and The third thing was cheap smartphones 80% of all smartphones were shipped That are shipped right now are less than $150 Low-memory cheap smartphones. They can run no more than three to six apps on these It's crazy. All right, you know, I have I abridged a Motorola e-phone. It's a hundred and twenty dollars I have three apps in this phone and my phone's out of storage That's it three apps because Google ends up pre-loading all this crap on people's phones that you can't really use and you can't pull them out and It's funny. We we had one user in high who sent 500 messages in three days and We thought this guy was spamming so we went a little deeper and this guy was a real user He had six seven friends. He was chatting to an hike and had a couple of group chats and on day four he churned off And we said what what just happened? So we talked deeper. This was our reaction, by the way Too fast like yeah, yeah, what happened? What do we do? We push this guy to turn off That was a reaction and why did this guy turn off? The simple answer was that this guy loves I can hear no space And he said shit. We were probably and a lot of the things we were building stickers and everything else consumed And so you so it became obvious to us it became very obvious to us that users wanted three to four apps less number of apps that do more number of things that consume less that was very obviously and Messaging is at the top of that list 80% of times when on a phone is actually inside a messaging or social application And it's kind of obvious because as human beings were social teachers In our pocket. We have our family and friends with us 24-7. We crave social interaction which is why message is by for the highest And along the way we discovered one more problem. This was a very big problem the problem of content discovery and Today content discovery is completely broken on mobile If you look at the early days of the internet The web yahoo, this is the only way to discover content You had to go to yahoo.com you have a directory of all these sites and this is what we call a phone book and yahoo initially started off by being thousands of tens of thousands of websites But as the internet became bigger and bigger it became millions if not billions of web pages And when you have that you go from a small phone book to a fact and it's impossible to scan through a billion pages You get what you want Google came saw that problem through search index the entire web and for the first time Content discovery became very simple. I could type in something as simple as horoscopes Go to search results by a page rang will give you the most popular sites and More importantly, I could simply click on each link and just flip open one more tab It was beautifully simple, right? This is how all of us interact with the internet today Google search made the internet very simple to use and the tap concept made it doubly simple and in many ways One more app Became one more tap. That was it. That was the metaphor and You look at mobile today Search is completely broken The web hasn't scaled to mobile most websites are still optimized for these big sort of desktop sites and More importantly because this is broken the market has been pushed to the app Apps are the only way we interact with the internet on Now if you go search for horoscopes on the app store, this is what you get And this is the first half of the first page Everything is four star plus everything has at least a million downloads plus the question is which one do you know? Now, you know, this is a big big fat We have the same problem we had back in sort of the early days of the internet This is a problem globally, but it's 10x worse. Why and this is a real screenshot of my phone by the way, right? This is hike and I was trying to install Zomato just last week This is what I got. I have no space literally, right? It is impossible to install more than two three apps if you have hundreds of apps You want to choose from and you want to try three or four out? You can't because you have no space in your phone and let's say you have space in your phone You know just to finish that thought in India the number of apps Uninstalled is to us the global average people try and throw it very fast because they have no space and Even if you had space in your phones, there are severe problems around data Data is intangible and more importantly data is expensive. So to even download six MD That's potentially speaking 20% So the upfront cost to downloading an app is very very large The discovery is tedious is expensive and the internet is very very difficult to consume especially in a mobile first market and This whole idea of one more app for one more thing baffles It baffles us that I we don't get it. It is the stupidest worst way to interact and This really reminds us of the CD era, you know, not a single laptop in our office has a CD And I'm sure that's the same with everybody in this room as well CDs are like obsolete and the CD was tedious you have to go to a You know offline store and pick something off a shelf You didn't know what would sort of be in that software You had to spend a lot of money up front without knowing what the software sort of entail Buy it install it it would take space in your computer. It was a very tedious process And you can try something very easy and the CDs got completely obsolete when the browser and the web You never had a Facebook Netflix Amazon CD you just type in Facebook.com Each tab replaced every single potential CD Apps became CDs to tabs that was the transition that had happened on the desktop and our belief is that Apps are exactly like Exactly like They are tedious to download They're expensive to download they take up space in your phone more importantly every app you download requires it a login every time It makes no sense. I was in San Francisco just about four to five months back and I'd walked into Be into continental hotel on Howard Street. I was staying and when I walked in they said welcome. Hey, by the way Why don't you download our app? So why do I need your app? I put my phone. I was on data roaming. It was a 25 MB app I said, okay fine. I got out of the application and I had to sign up Do some new service and I did that and when I went inside it says oh great. By the way, this is where our gym is This is what a restaurant is. I said are you kidding me, right? I just spent 25 MB in 20 minutes downloading an application that gave me no information more than a pamphlet that was there in front of the reception and It this is the world we live in today For for everything you need one more app that does more and so in many ways the smartphones that we have today Are actually pretty dumb You have so many API's that Google and Apple give you these powerful API's but the only way to make them work and unleash them Is to download one more application So we really believe the app model is broken This is gonna happen and it's happening globally The trend started from the east with the we chats of the world We believe India is going to be sort of the second sort of way and eventually this will go to places like the West because The West are very comfortable You get an iPhone completely free of cost if you have it to your contract and most people in the US and UK are out of contracts Data is assumed to be free. You have three or four GB of data every month with a contract and then iPhone comes to you The question is What's gonna solve this and we really believe it's It is very clear to us This is gonna be a case and we believe that messaging is gonna do this a million times better Than what the browser did back in the desktop So we really believe it's time for a new interaction model to emerge and the simple comparison that I want to draw here is that If an app was one more tab in the browser What if an app in mobile was simply one more contact It's a very powerful thought and we've been trying this last year and it has been absolutely one more contact in your address book is one more app and So to give you an idea of what we're trying to build it's very simple We're building a new kind of a messaging app that simplifies how people stick in And we really believe messaging will change the way people interact with content services on mobile And we really believe that messaging will do for mobile But the browser did for the desktop times a hundred you have so much more context about people on their phones this is exactly what we're building and You know The question is what have we been doing in the last 18 months since we raised this We scaled up our team. We're a fairly large team now about 250 people and We took the squad model and we expanded it in the big way So we are now 12 squads across the problem with the squad model is that each of these squads operates as a Completely independent startup team inside the company So everybody's optimizing for the local maximum and you forget about the company as a whole So people got disconnected people were double building things at the same time. We said shit. We have a problem. What do we do? So we introduce these things called chapters and The idea behind chapters was that it was a chapter of excellence across each function So you would have an Android chapter? You would have like a design chapter You know a back-end chapter and we we stole this idea from Spotify. We do a great job of this stuff and These chapters would keep each function completely in line and as a combination of all these chapters They would be the glue that held each function in the company together so the Android chapter would meet once a week and Everybody in each squad was in an Android chapter would meet together and talk about what they were building and Talk about how they could expose services that were being built in each squad and we had the sense of camaraderie sort of back And to give you a simple sense of how this works the product owner and the vertical squad decides what you do and The chapter lead helps you figure out how to build You sort of have like a mini entrepreneur and a mini professor in the system and This allowed us to this organizational change Allowed us to significantly improve the application We launched a whole new version of hike Astia hike 4.0. We developed some incredibly amazing features. We have this thing called sticker recommendations If you're inside hike on Android will bring this to iOS next month as you type If you choose to it will give you recommendations based on what you've typed for stickers very powerful stuff and The problem was when you have 7,000 stickers inside a phone it becomes very hard to discover what stickers write for And so we made sticker discovery very easy. We had a lot of great. We have a lot of great stickers the application there's just some of them we have and We also launched a lot more stuff You launched a ton of stuff last year Localize stickers hike offline, which was a variant of hike to SMS where you know a lot of folks turn their data packs off When that happens, there is no way to stay in touch with these guys. We launched hike offline Hike direct is incredible. It lets you chat and share files completely without the internet by pairing two phones together And we have people transferring over five terabytes of data on hike direct Free group calling a timeline with loves hidden mode that lets you hide certain chats in the application Languages and keyboards, but more importantly we launched news. We launched for its course ideally in And the way we launched was simply one more contact It was no need to download one more application All you had to go and do was type in news in your address book inside hike and hit opt-in and boom You'd get news delivered to you every day So we went and did a big TV campaign after this again because we were pretty confident that the app was doing really well and In Jan this year we announced that we were the first Indian internet company to cross a hundred million This is a very big And if you look at our overall metrics today We have a hundred million users Sending 40 billion messages from And people are spending a hundred and twenty minutes per week inside the app And today we're the largest internet company in India by active Stab that not many people know and in the last three years if you just look back a lot has happened We launched a hundred plus features We launched 140 app updates That's a lot. It's too much. We have a hundred million users sending 40 billion messages per month, and we've just done this in about three years And hike is the number one Indian app by far, but The big thing that we've been thinking about the last six months and we had some red respect There were two big things One was This squad, you know model that we had built the first version of being only squads was a complete disaster Squads themselves become siloed teams and like you have 12 different companies So we you know sort of strapped our chapters and it made things a lot better and got so at least the functions Aligned to work to make the machinery work much much better but You know we look at We look at the company and and I look at the company and running the company in this single simple Which is you know our mission is we really believe through messaging you can bring And the only way you do this is if you solve problems We're gonna build bring half a billion to billion people online You're gonna solve a lot of problems at scale and the only way you solve a lot of problems at scale is by giving autonomy to your team as much as possible if All of us are solving all problems. We're gonna do a pretty shitty job However, the only way you can become autonomous is if you actually have Some alignment and alignment not only on which direction you're pointing it but alignment and how you build stuff as well and You know one of my team members came up and said he'll listen. I'm gonna build a torch inside I said what I'm building a torch. It's only one line of code. I said why He said hey, man, he may it may help us lose John. I said are you kidding me? And it's a great example of what happens if you don't have alignment in the company Squashes go off in their own tangents and build stuff that may not be relevant to the So you have to make things independent You have to make sure that there's alignment on your north star and more importantly how you build stuff and that's the only way you can build insanely great things and We personally believe that if you build insanely great things, that's gonna have a very large impact on the probability success It's gonna increase the probability success that you have and that will allow you in turn to solve more problems pretty straightforward, right and So what did we do? in all these pieces that has gotten us, so you know where we are and If you want to solve problems at scale and bring India online Autonomy alignment and percentage of success are by far the most So how do we drive autonomy? We had our squads independence sort of scrum teams or you know what we call Startup teams inside the company that were dedicated towards solving a problem today We have 12 squads across across the company. We have a squad dedicated towards the home screen experience We have a squad dedicated towards chat experience a squad dedicated towards stickers and so on and so forth We drove alignment with chapters Now this drove alignment extremely well within a function The Android guys who are lying the iOS guys who are lying the back-end guys the design guys are all aligned But the problem was the company still overall was not necessary And we said what can we do to ensure that? People are aligned and are pointing towards the same north star regardless of the function and More importantly are aligned to how we build things and what we value So We spent about a year ago. We spent Three months talking to everybody in the company. We had about 150 to 100 people And we spoke to them and said guys Why are you here? Why are you working? And more importantly, what do you guys stand for? Forget work forget everything else What makes you wake up in the morning? And we spend three months talking to people and we got sort of what they're for their own personal core values and principles And we took that and we created what we call today the high code High code is our core values our operating principles and These are our operating principles of what we are today At the same time a lot of it is what we aspire to be over time And what we believe will make us successful in the long term and we have 11 codes Pretty straightforward not sort of rocket science One is we really believe if you're at hike you have to be completely obsessed and maniacal about our mission If you don't believe in our mission, you're in the wrong place as Second is you have to build insanely great At hike we don't do mediocre. It's just not in our DNA Third is and you'll be surprised how many people miss this solve for the user first a Lot of people come in building for personal satisfaction And it becomes a problem. They want to be a cool and sexy thing and that's becomes a big problem You're sort of building a company at our scale. So always solve for the user first For is get as a company can be drive autonomy and give more ownership to team Five is obsessed over our metrics something we're learning to do in the last six months to a year Have a high bottom people Have individual mastery Which which in simple terms is how do you be more self-aware about your actions? As simple as that have a fear sense of urgency always be questioning the status quo and simplifying things Always put the company over team or self and you know all of us have one life to live So enjoy the journey make memories and have fun These are this is sort of our code So alignment comes from chapters and more importantly our high code and It is already made such a big difference But the big question was let's say you have squads that are aligned building great things How do you know those great things are great things? And how do you know they'll be successful and We have a lot of people even today walking in the company saying hey, man. Look at this man. It looks so good This is gonna work. I'm sure of it This is what my gut feel says and most often than not these guys are Completely and we've seen this happen millions of times and over and over again And we said you know what it's it's about time. We learn from this in the last year and The big question was how do you go and change this mentality in behavior? And it's very simple data metrics Right data never lies and to give you an example of you know What we've done in the last year itself we shipped 15 big things last year two out of 15 were hugely successful like big impact big drivers and You know I Asked my team I said guys you think this is a good score or not and Some people said yeah, this is a great score. Yeah, it's fantastic and some people said no, it's a pretty bad score and And what emerged out of the discussion was that in every product company you have this graph and Building products and launching products and shipping products follows a power look up two percent of the things you ship are Monstrous it's absolutely monstrous it's About 80 to 20 percent of stuff is good I'll give you that sort of you know point one point two percent a week only grow and 80 percent is absolute trash and The problem we had was we were shipping everything to our users including the trash and We said this has to stop and The big question that we asked ourselves was how do we ensure that we ship only the good stuff The only way we knew and it's funny I sometimes you know I laugh because we're at such a big scale now The only way we knew on what would work was to actually launch it in the market and say Let's pray to God I swear to God and luckily for us there are a few people who actually have good intuition So we are you know, you know right enough to get our company successful to where we are But how do we get but but intuition doesn't scale? That's my point intuition does not So how do we get into a position where every single team? Can be as autonomous as possible and has a simple framework To ensure that they know what works and what does not work as early as process as early in the process and It was simple, which is how do you minimize risk as early as possible? And something that we're working in the Mauritius team on right now, which is how do you simply do? product discovery and There is a graph that I really like that I show my team That's now pinned up on all our scrambles across the company, which is this And I'm sure many of people have seen this this this image and for those of you have not a Lot of us start off by saying hey, I Want to go build a car? I think a car is important. I think people want a car And you say okay, and you build a car It takes you six months a year maybe two years and you build a car and you ship and people say hey I don't want a car And we end up spending six months to here building all this Fancy stuff that people didn't want you literally wasted six months You know we've raised enough money for us to know that money is not the most valuable thing. It's time Time is a one-way street. It never comes back six months wasted on building something that does not work He's a very very high penalty today And when you ask people why? How did you land on this conclusion? They said we we believe People want a car and they put their feet in the ground and they pour cement over it and they have these very hard And we said okay fine. Why do people want a car? And they say I don't know We believe a gut fuel says people want a car and then we ask and we say okay fine. What problem is the car solving and They say people want to go faster from point A to point B, right? That's what a car does it gets you faster from point A to point B And then we ask the question okay fine. Do people really even want to go faster from point A to point B and they say shit We don't know And this has happened so many times the last three months. It's actually pretty surprising It's common sense, but it's surprising how many people how few people have common sense today In the industry So you know the first question was can you ask the question hey listen Do people who do you want to go faster from point A to point B and how do you validate that problem in the cheapest way possible and This is how you do it, right The cheapest way to figure out whether people want to go fast from point A to point B is build a skateboard I can build a skateboard in two weeks of my free time It's the cheapest thing to do and by that you validate the problem and when you validate the problem You can build a much better solution and you actually end up building a much better car And It's it's very straightforward. You know, it's not rocket science, but it's like I said It's surprising how many people including myself sometimes lack it's a very simple idea, which is you an idea great How can you validate as soon as possible? With some user research and prototyping that the problem you're solving with the idea actually Is the need large enough? Is there a need if you prove that can you build something? And ship it out to maybe a percent of people and validate your hypothesis. I Believe if I build a skateboard people in this room 20% of people will use a skateboard and go faster Right as simple as that not sort of rocket science. And so we have this saying in the company now, which is If we build it doesn't mean we want to ship it So be careful about what you do the problem We had one year back was that yeah, I built this now. We must ship it You know human beings have this Tendency of invested time and effort if you put so much time and effort you just you want to ship it and This simple statements had a big impact And you know nourish mentioned this to me when he visited us last month, which was Horde is a liability And when I say that for the first time people will be like what are you saying my job is shit engineers We said no, no, no, no code is a liability and you spend 10 minutes pausing and they said shit Each line of code has to be tested Maintain this that's on a so forth you end up racking up so much debt in the system so the less code you have the better And so before you even touch one line of code make sure what you're building has a very high That's it and The goal of this was to de-risk everything Don't waste time building crap Right, and when we went to our squads and we talked about that talked about what we were doing and how the shift to agile Is going to happen we asked hey guys, how many people think this is more process of becoming a big company Almost every single hand went up Buddy company hogie a lot of process. This is become a big company. It's a lot of process now, right? And we said okay fine. Let us spend the next hour explain to you what we're trying to do and When people realize that we are trying to make each in every person more productive And we're trying to improve the probability of success of each team in every single person in the company It'll light bulb turns on Nobody wants to be the person who at the end of the year can't brag about what he shipped To his friends and family. No one wants to be that guy You want to talk about how the future you shipped had 10 million active people And I mean when we sort of explain the team this idea they got it is such shit. Let's go And this is what agile is about this is what scrum is about which is You know all this stuff gets enabled Through agile and scrum you have autonomous teams through squads You have a lot of alignment through the chapters and also the code that we have and we have a simple sort of Framework or thinking or what we call a new approach to problem-solving That encompasses all this stuff and Makes it repeatable makes it predictable and more importantly everything just becomes objective That's it all conversations become absolutely objective And what's more important is our discussions become easier the vocabulary in the company changes now we talk about hey listen What's happening the next two weeks? We have two experts right and while we had this in some form of fashion below before it was never this structure and We used to have these two-month releases three-month releases building a car all the time and we said no Let's go to sort of these these thin slice model this thin slice model and our discussion the simply hey listen What's on your sprint board for two weeks? What are you shipping? What's the measure of success and the best one is that the feedback loop is so fast that every single product owner who runs a squad and More importantly every single engineering leader who runs a squad and partners of the product owner The feedback loop from the market is very fast Every two to four weeks they get feedback and what's working and what's not working and that is the best way to make teams autonomous and scale this culture and the impact so far in the last two or three months since we've started this journey has been absolutely and if this if if I want to sum up All the stuff that we're doing in just one slide It would be this Agile really helps you remove the bullshit and keep people's When people walk in the room If they don't have data backing up what they're talking about it becomes a very very embarrassing situation And what happens is culture gets formed whether you choose to or not and It is this kind of thinking this kind of framework that forces a Culture that's very objective That keeps people's egos in check and more importantly just knocks all the bullshit out of the system And with that thank you guys Tencent made about 1.7 billion dollars of net profit in one quarter itself from a business model or multiple business models built on top of To answer your question in simple way there are three big parts on how we'll make money over time It's not a focus right now One is we really believe that given that the app model is so broken a special market like India given the constraints that you actually have and How cheap messaging actually is messaging will play a very large role in commerce something people Cannot picture but something we believe will happen Messaging will play a humongous role in middle-tail commerce and long-tail commerce in this market given how simple and cheap actually Messaging is a medium to communicate second is virtual economy but that's gonna take some more time because For a virtual economy to sort of kickstart you need a critical mass of people on to the internet Using the internet in a very very deep fashion That's not happened yet in India Only 30% of 200 million people are actually using the internet in a very sort of second nature deep sort of fashion Our guess is that when that number reaches a hundred million people That's when seeds of a virtual economy will come through that's number two number three is We really believe there's an interesting opportunity for brands to talk to users on the application Now when I say that people say oh spam Oh my god, and we don't want to do that. So what we're trying to do is we're trying to figure out very tastefully How can you actually go and do this and there are good examples and bad examples of this globally The worst example is a line if you use line this and Messaging is supposed to be personal. It's supposed to be intimate. You can't do that on a message but that's gonna be number three and Making a business model always has a two-sided view Consumers will pay or brands and partners will pay and you go to tap into sort of both sides of the That's broadly speaking how we expect to make money No, I think if you look at the best first of all, why would we want to return the money? We raised it with such we raised it with such difficulty. We're not giving the money back No, our goal is see at the end of the day the the The responsibility to the shareholders is second to be our primary Primary responsibility is can you build some insane stuff in the market if we do that our shareholders will get a phenomenal return And if you look at some of the the biggest social companies globally Facebook Twitter Interest Tumblr They've all raised north of half a billion dollars before they've gotten to a point where they actually kickstart a business In a social service, you need to be able to figure out what the social product means to a consumer What it means to you in your daily life We have a lot of people who use hike in a very deep fashion as a matter of fact internally We are tracking this thing called hourly active users Which is and messaging you need to track that which is is someone present between 9 and 10 in the morning And as hike becomes a platform, we're doing news Coupons and so on so forth. So we see people using the app or much more the messaging as well And what we got to figure out is what hike means to people before we actually go deploy a business model In the application or we don't want to become like a nimbus or anybody. We don't right? We're very clear about that and that requires time and patience We're only three and a half years old Companies like facebook are 15 years old So there's a lot of time for us to go figure out what to do No, I don't Yeah, I know very early on and our end goal is not changed We really believed from messaging would bring India online. We didn't know what that looked like three years ago So very early on in our journey. We competed completely head on about seven And we looked at our data again and again and we realized something very interesting There is a large full app between our user base And people are using hike for very different things in addition to messaging than simple messaging And most of us are based by the way is between 15 and 25. That's where we're very very strong But our pitch to the market is very simple If you want simple text and photos go to whatsapp You're better off there But if you want a world online where the internet is a lot simpler and you can you know play games with your friends You know browse and use the friends and so on and so forth If you want something that's going to make your life simpler through messaging you come to hike And we're not very surprised that people actually use both applications And they're different combinations of people So we have a lot of people who have seven eight friends on hike who use it heavily But they'll have their mom dad on whatsapp and their biggest groups on whatsapp those, you know Mass market alumni groups that you have right so we we want to build hike is a very intimate personal application, but You know if you talk to me in nine months from now It's going to be very hard to compare hike to whatsapp That's the goal. We We believe that in each market if you look globally there are two very big dominant messaging groups QQ and we we chat in china Part talk in kakao talk in korea You have four guys in the us. You have iMessage. You have snapchat. You have messenger. You have kick Uh, you i think whatsapp and snapchat in europe and in india now it's becoming hike in whatsapp So we really believe two messaging apps will win that do fundamentally very different things will become sub 2000 pretty soon Right and data is going to be I don't know perhaps in a in another 18 months the price points will come down even 10 times once once reliance jio comes Who comes on full stream? so Wouldn't your business model be seriously challenged at that time? That's a great question and you know everybody asking a question which is hey, are you building for like a temporary sort of you know Dip you know in the market and our response is very simple Even if phones get better faster cheaper and we hope they become better faster cheaper We really hope data becomes cheaper as well The app model is still broken The app model is still fundamentally broken and It's important that I describe this Technology swings on a pendulum back and forth and whenever a new paradigm emerges You always have a fat client model that starts off first Look at the desktop world the cd model was a fat line model And all processing happened on the desktop Because the network itself was very expensive and not cheap enough to actually have you do stuff in the cloud As the network became cheaper Even though processing power increased tremendously on phones Everything went to the cloud Because the thin client model always emerges to be the lightweight faster cheaper in simple interaction model for a paradigm On mobile Pendulum swung back we are on a fat client model the app model is a fat client model Network has been so far very expensive But one network becomes cheaper the thin client model will emerge The question is what is the operating system for the thin client model on mobile? It was the browse on the desktop. We believe it's going to be messaging on mobile. That's the way we think about it You know it's it's very simple these days It's very simple to grab a hold of 10 people who are walking down the street and talking Number two is it it it is very cheap in this day to build prototypes If you look at marvel Envision all these services you can you can actually build a very high fidelity prototype in two hours So you can take this prototype and grab 10 people down the street and say hey Can you use this and that's what we started doing down the company? Fortunately for us we have a large user base so we can pull people in but That's the best way And the question is what's the cheapest way you can figure out what to show to consumers And that'll help you validate not only the problem you're solving but also the cheapest first version or to build And we've gotten into that more across the company now and it's being like huge difference You know actually it's android it's it's not All all the messaging apps are competing to make the the native operating systems completely opposite And if you guys heard about google's announcement at mobile world congress, they announced the rcs initiative Which is a messaging initiative because they finally realized that holy shit Messaging is going to be the new voice for mobile So over time, you know, my worry is that google kicks us off the platform. That's what i'm worried about Um, we are a very very strong number two player in the market in the messaging market. We're a strong number two It's us it's whatsapp us and facebook messenger is a very distant number three Uh, not many people use facebook messenger as their primary messaging product. It's a bit of a reactive sort of product So I think that's it and I think also the competition is just ourselves Can we execute on this vision or not? It's a very complicated piece to do I think these are the two pieces that we think about and what keeps me up at night every day Yeah, you know, we we don't store It's a very simple policy. We don't store anything at all on ourselves And um, we're also not bound by telecom regulations. So that helps Um, that's it. So even if someone hacked our system, there's nothing there That's how we do it. It's the easiest cheapest simplest way to scale up a messaging application For time that may change if that changes the first thing we would do is end to an encryption That's the question just yet Maybe soon