 And with that ladies and gentlemen we are moving into our next very engaging session by the founder free charge. Let's put our hands together and welcome Mr. Kunal Shah. Alright Kunal over to you. Can you guys hear me? Just to give you a quick background. I'm founder of free charge company that I built, was sold a couple of years ago. And then since then I have been advisor to Y Combinator which is one of the largest startup accelerator in the US. I have been recently advisor to Sequoia Capital. And since probably 5-6 months I've also advisor to the board of Bennett Coleman Group. It was quite fascinating to listen to the previous panel because I couldn't agree to a single thing from what they were saying. I'm curious to know how many people over here are below the age 26. Please raise your hands. And how many below 30 please raise your hands. Okay great. What we are not realizing by being in our little world is how the world is just shaping differently at the speed that we have no understanding of. And unfortunately by living in our little world and our little expertise we are not seeing some of the big changes that are coming. To explain what is happening to video which was the topic that was discussed just before. I'll give a slightly complicated but a simple analogy to explain this. In the past maybe 300-400 years ago or probably before that people discovered that temples were a great hack to create daily active users. Because of the frequency people visited temples it became a place where people frequented on an almost daily basis and markets emerged around temples. So you'll observe that a lot of markets were around temples if you go for some of the older temples. Then people who were having shops near the temples started making more money than people who did not have shops around the temples. So what they did is that they found a way to start creating their own temples. So a lot of the smart businessmen started creating own temples at every small nook and corner. Creating frequency of their own and owning the area around that temple and making the people transact with them. Why am I giving this analogy? Historically commerce platforms used media like print, video, television to advertise and get noticed. When they have now secured enough money they are creating their own temples and it's as simple as that. We may argue about measurability, tracking and all of that stuff. Not realizing that some of these large platforms are competent and have enough financial power to create their own private temples. One of the things that we forget at whatever we do all users have the same 24 hours a day. We can't stretch that and make that 48 for our own convenience and try to plug and make market for everybody to exist. There is one limiting factor that is 24 hours a day. We don't realize that if people discover good enough God and easy to go to that temple they will stick to that temple. They will not go to that special temple they probably go to that temple once in a year. The point I am trying to make is that we are living in this denial that we live right now and not realizing that the borders of all businesses are blurring. I heard a comment from Arnab earlier saying that Amazon is a retail business. Why will they become a media company? I think that statement is not true anymore. If you look at someone like Alibaba they are already the largest movie production house, the largest OTT player and probably producing more original content than most people and they are just getting started. We don't realize that today media and the news to video content to web series are the fastest way to grow for a lot of these platforms. And there is no reason that they can subsidize that to a point because the cost for them to deliver those services is barely nothing. So we cannot stay in denial about some of these things because the borders of businesses are blurring. And unfortunately we are still trying to think that we are protected from some of these businesses. If you look at someone like Amazon and Alibaba they are not retail businesses anymore. And one has to just pay attention to that but unfortunately doing research and paying attention to what is going on globally is not our forte. Because we love to believe what has been told to us instead of finding our own truth. The reason I am bringing this up is to talk about tech in years to come. The digital platforms that currently started with let's say social media, somebody started with retail, somebody started with search. They are all getting into each other's businesses and they are all doing every single business. Because their appetite of growth and their distribution and their ability to generate technology is allowing them to enter every single business. We don't realize one simple fact that thanks to social media all of us have become like the superconductor nicely placed next to each other. And any time something important happens we spread in no time. Therefore a good viral video will probably take one hour to reach the entire country. News of demonetization reached to most people within an hour's time. All of these things are possible today because of the connected superconductor that we have become. And in this world these platforms that own these distribution pipes can create more and more monetization pipes of their own or monetization opportunities of their own. I get worried when people use words like oh we are media, we are fintech, we are insurance, we are retail. Those lines, those words mean nothing anymore. I am not trying to create some panic or fear over here. I am just trying to tell people over here that if you are not thinking how they are thinking there is no way you can compete. And some of these guys have the need to grow. They also have investors and they have to show returns. And when you are a $500 billion market cap company and you have to still grow at the same 10-20% you are going to do everything that is big in order issues. It's important to also talk about the size of these companies. For example, when we sold the company for roughly $500 million, the total team count was only 98 people. Uber which is probably a $70 billion market cap company, the amount of people that they have is barely anything. And that is possible because technology is allowing them to do a lot many things with a lot fewer people. So if you are not going to adapt technology for doing more things smartly, we are going to just get threatened by somebody a lot more efficient. I want to talk about a framework with you guys on how disruption happens. And it's a framework that I came up with to understand how startups work. What I was curious about is that what kind of startup disrupts and what kind of startups actually lose money. And I came up with this framework. So I am going to quickly talk about that framework. Before that, I would like to ask a question. Can anybody tell me any goods or services that were more efficient 10 years ago? Any goods or services that were more efficient 10 years ago? Can anybody guess one or two things? Any goods or services that were more efficient 10 years ago? The answer is no, nothing. I'll tell you why it's the case. But if I have to ask you to imagine yourself as a lion in the jungle and imagine what was more efficient for you 10 years ago, you will say it's almost the same. I'm waiting for evolution to make you better. Only humans have figured out how to hack through technology and become more and more efficient. One can comfortably say that all the efficient stuff is in the future, all the inefficient stuff is in the past. In fact, if you brought somebody from 1918 to 2018, they will think we are gods. One button food, one button start talking to somebody in America, watch content, they will just be amazed. Now only imagine what can happen to 100 years from now with all the technology that we've already built. If this is true, one can predict through the law of efficiency what will disrupt and what will get disrupted. And I'll give you a small example. Let's predict startup behavior through this. Let's take an example. If you had to imagine old behavior as let's say Meru taxi and new behavior as Ola and Uber, and if you have to score the behavior out of 10 in terms of efficiency, what would the score be? I would love to hear somebody give me a score. Meru versus Ola Uber out of 10. Anybody wants to just tell me a score? Sir, the question is what would you give Meru out of 10 a score in terms of efficiency and what would you give score to Ola and Uber out of 10? No, give me a score out of 10. Seven and five. Okay, what about you, sir? Both an equal score. Somebody from the younger generation. What is your score? Ma'am, yeah. Eight four, Ola Uber. And what is the old score? Three, okay. You'll observe an interesting trend emerging over here. If I took an aggregate score of this room, what you'll observe is that the delta between the old behavior and new behavior will be greater than or equal to four. And whenever you find a delta four in a new behavior, three things happen. It is an irreversible behavior. Anybody who experiences Ola Uber as delta four, they will not go back to the old behavior. It is something that is with the high tolerance. Ma'am, even if the guy does not follow the maps, you are not going to cancel the trip and go back to Meru. You'll wait patiently. The third thing that happens is it's called UBP, unique, brag worthy proposition. Every time humans discover a delta four behavior, they will scream and tell every single person who's on the old behavior and tell them, move here. You're wasting your time doing this old behavior. Imagine IRC to see versus going to railway platform to book a ticket, right? You will observe that people will scream at them and say, hey, come to this behavior. And these companies don't need so much marketing support and advertising support. Let me ask you a question. How many of you know or use true color in this room? Please raise your hand. Okay, most of you. How many of you have downloaded true color because you saw an ad of true color? Zero. This is possible because true color is a delta four company. We heard a comment from somebody saying that, okay, Google also requires ads. That's really an uninformed opinion. Google Maps probably has 100 to 100 million active users in India without spending any ad dollars. Then for the next set of users, they're trying to create a use case and create some awareness. Their marketing spends to their download growth will be disproportionately different because Google Maps is a delta four product versus asking for directions on the road. Let's take another example. If you have to take an example of buying shirts online or buying shirts offline. Offline is the old behavior. Online is a new behavior. And if you have to ask, you score Vivek, what would your score be out of 10? Buying shirts online and buying shirts offline. Six and seven. What about you? What is it? Seven for offline. Six for online. What you'll observe is that suddenly the delta drops to negatives sometimes. But what's going on? We just made a digital company. Why is it delta negative? The answer is very simple. Just by making things digital, they don't become efficient. By making things efficient, they become efficient. But unfortunately, we take the shortcut of saying, let's just make things digital. And it does not work. Whenever there is a negative delta or less than delta four companies, three things happen. It's a reversible behavior. You try it once. It fails. You say, I'm never going to try online again. So therefore there's a low tolerance and there is no UBP. We don't brag about it. And therefore these companies require maximum advertising and marketing support. And also lots of cashbacks and discounts so that you can artificially increase the score of the new behavior. This is a central theme on how you can create wealth through new ideas or disrupt or destroy wealth through ideas. The thing is that this formula has been understood by some of these large platforms. And thanks to the technology that they have, they can constantly keep creating delta four ideas. That will make a lot of sense. We keep talking about digital and traditional media. We don't realize that it's not the same. The reason it's not the same because unlike traditional media, everybody is not shown the same ad. It's a very simple thing where somewhat the users are selecting what they want to see by searching for certain things and showing some attributes about themselves. And somewhat advertisers are targeting them based on their attributes. This is completely different to let's say a print or a television or others where no matter who you are you have to deal with that ad. And therefore it has become a lot more efficient. Now if things are going to get insanely efficient and they are happening already, we cannot just be waiting and hoping for our business to continue by just giving pep talk to each other. We have to prepare for it. We have to understand how these things work and really come up with ideas and solutions. A lot of times staying in denial is the worst thing to do. According to me the shelf life of businesses has shrunk from 30 years to 5 years now. And I'll tell you why that is happening. In the past getting an idea across from the first person to last person took decades because we were not connected in a seamless manner. Today a new idea can seamlessly spread and become the new norm in less than a few hours. In that world if we are not constantly innovating and challenging ourselves and coming up with more differentiated offerings we are more likely to destroy wealth than create wealth. I'll tell you what companies that don't have delta 4 do amongst each other. Let's talk about a more sensitive topic. Let's say between two agencies if they are not delta 4 against each other they will keep doing things like let me hire this delta 4 executive. He will fix everything. So when there are companies have no differentiation they start looking for these delta 4 piggybacks in people delta 4 piggybacks in media delta 4 piggybacks in PR delta 4 piggybacks in lobbying against some of the companies who are coming against you that we have observed in many industries that we lobby against the global players to come and block them but you cannot stop efficiency. I remember I was in a small group conversation with this management consultant Ramcharan and somebody from the media industry consulted with him saying that we need to come up with a strategy to combat piracy and he went through the research and he made a very interesting comment he is saying that we can combat something by calling something illegal when only 2 or 3% people do it when 98% of people are doing it it is called a social change now if we don't understand these basic principles and we keep fighting about some of these points without understanding how human behavior is shifting and changing we are going to only create more and more friction more and more pain for ourselves coming to one more thing about blurring borders I was the guy who raised my hand when I talked about crypto let's talk about blockchain for a second how many of you know anything about blockchain please raise your hand so let's just understand a few things historically humans had trouble trusting each other beyond their immediate family and they would always have disputes and to resolve those disputes they used to appoint somebody who was more powerful it started from a tribal leader it went up to a king and then it went up to democracy and all of these times we paid a tax as a fee to offer justice the role of that leader was to give us take a tax from us and give us justice and protect us from other clans so it is important for someone like India to keep making Pakistan a threat China makes India a threat everybody does that to create the image that they are protecting us it's an important strategy in political science now through blockchain it is possible to trust each other without somebody having the power in center that is the fundamental thing that blockchain is doing now please understand the power is not just political power power is in all formats power exists in form of platforms like google and youtube and facebook powers also exist in formats like news channels power also exists in formats like regulators and so on and so forth what is happening is blockchain is creating a method where strangers can trust each other and create a platform so what we are hearing now which is coming up use cases there is a recent white tip paper where one company raised 100 million dollars ICO which is another complex to create a platform where creators can upload original content and they will be paid directly from the advertisers through a blockchain method with no central person so both for advertisers there is complete clean measurability because in blockchain you cannot really fake anything it's a completely transparent platform and same for creators now when something like this happens right we are going to a decentralized world where things like governments companies everything is getting threatened and these are not some imaginary things happening in the future which is distant from us we have to understand that smartphones were not mainstream 10 years ago and at the speed on how some of the younger people are adapting technology these things may happen faster than ever one of the things that we forget that currently there is a chief technology officer in every house that person is between 12 to 18 years old that person is also slowly but surely becoming the chief procurement officer because this person understands technology now if this person understands technology he has no fear in using online platforms no fear in buying a cryptocurrency doing a bitcoin or any of that because they come from a generation which does not have fear they click first think later some of our older generation including me we keep our finger away from the phone and only click when something important is there these guys just click and then keep deleting and going back this generation is not having the same challenge of mistrust right and if we are not preparing our world for some of these guys who knows this difference and not bringing them up on the leadership and asking them to think about what should be done and we are giving them instructions to follow this generation does not even care about their jobs they will find out something, do something else which neither start up this generation if you don't adapt to them or understand from them how the behavior of consumers is shifting we talked about earlier in the panel that people go home and switch on the television those millennials also have their screen on then watch television they don't keep the phone on the side I know a lot of people watch two parallel contents together right depending on their mode to switch on the attention span is non-existent so a lot of these things are around us in our own households but we stay in denial because it threatens our own existence but if we don't threaten ourselves we will definitely be wiped out so that's all I wanted to talk about I didn't have any specific agenda so there was no topic to talk about I thought I will just pick it up from there and I can probably take a few questions thank you so much anybody has any questions hi Kunal, so you know some people have very vague and broad understanding of what cryptocurrency and you know bitcoin and all of that jazz is doing is there a connect all of this has to the digital advertising business and how this is going to impact our marketing the way it is happening on digital as a medium right now maybe what happens five years down the line to understand this concept we have to just assume that a lot of the businesses today exist because two people could not trust each other directly and they needed a middleman so be it an ad agency to be it let's say a real estate broker rather these people existed because two people had trouble trusting each other and they used multiple middleman layers to do businesses the block chain's key role is to make two strangers be able to trust each other completely in a transparent manner when this thing comes true the current use cases are solving just let's say currency use cases but blockchain is a technology see first of all cryptocurrency is a use case it's like cryptocurrency is assuming that so blockchain and cryptocurrency is equal to internet and email email is one of the use cases of blockchain sorry internet same way cryptocurrency is a use case of blockchain the objective is to remove middleman so one has to prepare for middleman being removed across the value chain now one can get disrupted or plan for that and implement blockchain in their own world so that you create a more transparent system that you stay relevant in five, seven years from now so if I were to advise any digital media agency I would say start exploring start looking at what the world is doing and start implementing some of those things so that you can create more transparency and trust and therefore be more relevant in the future you spoke about a lot of technologies and you also mentioned that you are looking at a lot of startups yourself so this is a two part question one what are the two technologies that you think will cause the maximum disruption in India I am being specific with my question over the next five to ten years and do you see enough startups coming through the ranks given that you are involved across two advisory boards across these two technologies here in India for them to be coming out of India and not globally and coming here which has happened most of the time as far as disruptive technologies is concerned in the past so great question so first talking about technologies that are going to disrupt and create the new tectonic shifts in India one technology is blockchain and blockchain is actually a lot more applicable in mistrust nations and trusting nations so India the mistrust nation judiciary takes forever to get resolution between two dispute members so blockchain may actually come faster in mistrust nations than other nations so everything is the India stack what is happening with UPI, Aadhar and all of these things which most people just kind of take it for granted but these are already out there and doing big changes for example whatsapp payments I have seen the demo of that that is a fundamental movement for this country where you can just seamlessly just send picture to somebody you can send money to somebody I have seen that demo and we don't understand the impact of that the commerce will just move at a different speed after that these are the big things that I can imagine two years will change the country's direction about startups I have been fairly disappointed I think the reason has been I think a lot of us at least in the startup world figured out that engineering and writing code was the right thing to do so we created a bunch of dam builders that you know how to create great dams but none of them have any skill to detect where the rivers are flowing that's the summary of my startup experience Kunal I want to ask one question regarding I wanted to connect the advertising piece back to what you said at the beginning about what digital does is allow you to do a personalized advertising I want to connect to the previous discussion where there was a lot of discussion around PTO and TV as a medium do you see that eventually even on the TV we will move towards having a personalized advertising where a different person watching the same content on the same TV channel might see a different advertising depending on you know what his background or whatever information is available about that person watching the TV I think we need to give up a lot of these hard definitions of what we call as TV and what we call as Netflix and what we call of this we have to treat them as screens some are small screens some are big screens and people will watch what they want now not what's coming anymore we have to realize that part is already happening even if a 14 year old sitting with a family to watch it together he's already watching his own content sitting with a family the family is made of rituals but that's not what he's doing he's already doing something as be it social media, be it watching a binge series or something happening so we have to imagine that in the future the content is going to become more personalized and not going to be a social event anymore and if not going to be a social event there cannot be one content playing and with that when I think the content becoming personalized is going to be a more bigger thing than advertising becoming more in fact I want to challenge that the overall advertising market should shrink because if these platforms become large enough that people don't need to really switch out of them then the advertising should also reduce in impact and therefore you have to start thinking about how to address these platforms where you don't have to leave the platform for example in WeChat in China people the amount of time they spend on the thing they book tickets from there so WeChat is a chat platform which is also the largest hotel booking platform which is also the largest dating platform which is the largest payments platform because people don't even leave the platform they keep chatting and keep doing other things and these are not things happening in the future they are happening right now I encourage a lot of you guys to see some of the use cases some of these things will happen in India also nobody wants to leave what they are doing and do other things they will just keep switching between platforms and I think younger generation we don't understand that the ability to multitask is probably 10x to some of the older generation we just kind of get angry at them for being able to do multitask let's move on into that generation last question Hi Guna, this is Preetam from MVP news firstly thank you you have been sharing some good perspectives my question is related to delta 4 which we are talking about the brands which are into delta 4 do you think so advertising are going to help them or they have to wait for the social change to happen great question the thing is if the delta is really dramatically lot more than 4 the company cannot even control their own speed of growth because it will spread like a virus so someone like true caller cannot really slow down they were not even needing marketing but they could not even keep the servers up and running so they had to move at the speed that the consumers are adopting it in terms of the companies that do not have 2 delta 4s and there are a bunch of these companies actually let's take an example 2 people in college don't have delta 4 amongst each other there are education institutes, coaching classes who tend to tell us that we will make you differentiate and therefore pay us money right now so they try to create this ways for people to compete or companies to compete so the thing is that it's best for an advertising company to find a way to accelerate so for example a delta 4 company may struggle in their 2 cities so you have to find a way to address that versus trying to give one blanket solution for them to grow so those slices for them is more important finding out for example I was talking to Ola and let's say women participation of labour in urban India is only 14% only 14% women in urban India work we don't know the stack, most people don't know the stack but that's the scary part about India but Ola fortunately had 45% riders women which tells you that something is working for women and delta 4 is for women versus going from public transportation then if I was an advertiser I would go and go with this insight to them and tell them I have a strategy to attract more women to come to you because they are already seeing delta 4 for you and that could be a great way of addressing a delta 4 company cool, thank you so much yes Naan that's all the time we have but thank you so much for sharing some very fresh insights I'd like to invite on stage Mr Satya Patardas group head strategy Lux Group to please join us and present a token of our gratitude to Kunal, Kunal thank you very much ladies and gentlemen once again a huge round of applause for Mr Kunal Shah founder of pre-charge