India's Rocket Fuelled Digital Innovation
Different choices and trade offs -> massive grassroots adoption of digital solutions.
Every time I spend any extended time in India, I'm reminded of the astonishing digital transformation that the country is undergoing, and the fertile ground for innovation that exists. Why? There are many reasons - here are just a few things that caught my eye during my 4 week stay in Kolkata over December and January:
MyGate and the Problems of Progress
MyGate is an increasingly ubiquitous app that you encounter in almost every apartment building complex in India. India is urbanising at a rapid rate, and one of the most common signposts of aggressive urbanisation is the apartment complex. There are somewhere between 50,000 and 75,000 apartment complexes in India and this number is likely to double over the next decade. Each complex might house between 5 to 50 buildings, and have up to a thousand flats. Safety is a key feature of these complexes so entry and exit at the gates is usually managed. Enter MyGate. The hero feature of the app, which gives it the name, involves managing visitor entry. Any visitor will be issued a MyGate pass, delivered via whatsapp or text, which you need to produce at the gate, which can be scanned by security guards, or the unique code can be validated. Sounds simple, right. My gate does this for 3.5 million homes, across 27 cities, for 25,000 building societies. What do you do when you have that kind of installed base? You offer them more, of course. MyGate provides training for security guards, infrastructure management, payment solutions, panic buttons, vehicle controls, complaint redressal, asset and vendor management, financial analysis, and generally acts as an ERP for building complex management. Insurance services has also been announced.
The company, which started life in 2016, has had its ups and downs, and most recently has laid off 30% of its staff in December. But it's still has 400 employees and seems to have an excellent stronghold in a very fast growing area. Apps like this have also drawn the ire of social justice proponents, who believe that they are used as a discriminatory tool.
What the MyGate story reminds me that India is a problem rich space. The rapid growth of progress against a backdrop of inequality means that there are a vast range of problems waiting to be solved, and every solution creates its own new challenges and opportunity. The rapid urbanisation and growth of housing complexes is just one such example.
Blinkit and Dunzo: Labour Price Inequality
What do you do in Kolkata if you've run out of salt? Or feel like some chocolate after dinner but have none at home? Or want to get some Ice cubes in a hurry for your guests arriving in 10 minutes? You BlinkIt of course! BlinkIt taps into that special place at the crosshairs of convenience and laziness. People use BlinkIt to buy the smallest of things. And they arrive in 15 minutes or less. And they're not alone. Swiggy (the food delivery app) has their own version of Swiggy Genie. Or the Dunzo service which will also take the book you want to send to your friend across the city for a nominal price. These kinds of solutions work fundamentally because of income inequality and the relatively low cost of labour. You see some versions of this in the US which also has higher inequality, and less in Europe which is more egalitarian, but the costs are high either way. Hence the challenges faced by business such as Gorillas which has been aquired by Getir: the business model just doesn't stack up. Instacart, the poster child of the category, still divides opinion.
The average urban salary in India is still under Rs. 25,000, which means a daily earning is under Rs. 1,000. Which is about £10. But plenty of people earn over 20x of that. Which means that economics of services like BlinkIt and Dunzo exploit that labour cost arbitrage, because India's 300 million strong middle class is happy to outsource labour. Maybe this is trickle down in practice. The sheer volume of restaurants and cafes that have now mushroomed across Kolkata suggests that disposable income is no longer the problem, but people have become time poor.
Dr Lal and Service Orientation
An extension of the previous point is the extreme service orientation. In general, the relative cost of labour as compared to capital has always been lower in India, which extends to skilled labour as well. A good example of this is Dr Lal Pathological Labs. At 24 hours notice, they had a technician come home and take a blood sample, which I got get tested for a range of things from HbA1c levels, to cholesterol, and all kinds of other standard measures. The sample was collected at 9 AM and by 6 PM I had a report delivered to me via WhatsApp. This is the one area I can't for the life of me understand why it can't work anywhere in the world. In the UK, a blood test report takes 7 days and gets delivered to my doctor. Who will only send it to me if I specifically ask for it. It's not really feasible to have home sample collection, given costs, but the commitment to fast processing and digital processes shouldn't be that difficult.
DigiYatra and The Privacy Paradox
Want to avoid the queues and the multiple check points for your ID and boarding card at Indian airports? Sign up for DigiYatra - which uses facial recognition technology to allow you a seamless travel experience. You can sign up for a one-off journey or on an ongoing basis. Your journey from airport gate to boarding gate is smooth. I didn't sign up for it but it's clearly very popular.
At the heart of DigiYatra is the social acceptance of face recognition technology. While clearly a no-no in the UK and much of the Western world, it's clear that the attitude to privacy is markedly different in India. There are 2 reasons for this. The first is that as Indians we're all used to a culture of extended families and cheek by jowl existence including siblings, aunts, uncles, and even neighbours, who are in and out of our our lives. It always strikes you as intrusive when you go back to the kind of well-meaning suggestions and questions you might get, if you've lived away from India for any significant period of time. It's just that privacy is not a big part of social structures, because of historical, economical, and social reasons. So there is no fear of privacy erosion through technology. The second possible reason (and this is my hypothesis) is that in a country of a billion plus people, anonymity is what you live with. There is actually a kick to being found, recognised, or identified as an individual. Both of these will change over time, and we might have a different discussion in 10-15 years time.
The India Stack and the Role of the State
Namma Yatri (our passenger) is an app that you can use to book auto-rickshaws. PayTM and PhonePe are smartphone based payment systems that together have over 400m users. What's common to both? They both rely on the digital infrastructure stack that the Indian government has put in place. The India Stack as it's known, involves Aadhar (the biometric identity system), UPI (the Universal Payment Interface), Digi-locker (the citizen data management system), and ONDC (Open NetWork for Digital Commerce). Together they Indian businesses - especially start ups and small businesses - to build and run effective digital services without being beholden to large global technology majors. It also digitally enables citizens. When my 76 year old mother needs to provide her tax documents for her property registration, she can simply give them the digi-locker token and be done with it. Or when we made our last nostalgic train journey from Lucknow to Calcutta - a 20 our journey, we were able to order Dominos Pizza for my then 8 year old daughter to be delivered at a specific station, and to our compartment and seat, thanks to the railways opening up their systems via APIs. Riding on top of this there have been plenty of other innovations such as adding a speaker and 'announcement' of payment approvals which helps small vendors keep an eye (or ear) on their payments being processed.
There are of course positives and negatives to this. On the plus side, this gives confidence to the already booming VC and investment community. From a time when most Indian start ups were technology companies looking to serve the world, we are very much in a world where the massive Indian market is by itself a draw. Most of the 100+ unicorns that have come out of the Indian start up scene are businesses serving the domestic needs as well as International. It seems to me that one of the biggest benefits is the overall heightened confidence in digital platforms and tools which encourages organisations and individuals to transition more easily to digital processes. Digi Yatra for example is an initiative undertaken by a group of airports, working with the Airports Authority of India.
On the other hand, a state run system can be an effective tool for repression in the wrong hands. And is prone to becoming a tool for policy implementation as much as a market mechanism. And the government - any government - has a spotty record when it comes to protecting and securing data. But for now, India seems to be happy to make those choices in the march towards digital innovation and enablement at speed and at scale.
Reading This Week
This week saw $4.6 billion of trading in bitcoin ETF (exchange-traded funds) on the first day of trading after SEC approved them. Probably the best news in the crypto world for the past 24 months, as evidenced by Bitcoin’s 2 year high price. (Reuters)
Hannah Fry looks at modern and cutting edge microwave oven technology (Video - DailyMotion)
Of Penguins and Prejudice - a story set in the New York Zoo. (NYT)
Using ultrasound to get alzheimers drugs to work faster and better, through the ‘blood brain barrier’ (MIT Technology Review)
RT-X - the global collaboration of robotic training to create a ‘general robotic brain’ (IEEE Spectrum)
Future of Transport at the CES - of hydrogen, AI, and electric options (Tech Crunch)
Facebook/ Meta’s successful swing from Metaverse to AI (Business Week)
Could unplanned interruptions improve creativity at work? (HBR)
The dangers of bottled water (or by extension, bottled anything!) - nanoplastics in your blood stream (Futurism)
Tim Urban writes about having a newborn baby - and makes it funny and thought provoking. (Wait But Why)
Thanks for reading, see you next week!