John Chambers, executive chairman of Cisco Systems Inc. and chairman of the US-India Business Council, speaking at EmTech India 2016 in New Delhi. Photo: Ramesh Pathania/Mint
Global technology leaders and senior executives from around the world spoke on a range of topics, including Digital India, Smart Cities, Make in India, Skill India and cutting-edge technologies like artificial intelligence, machine learning, 3D printing, drones, robotics, robotic surgeries and genomics, at the two-day EmTech India 2016 event, held in New Delhi on 18 and 19 March. The event was organized by Mint and MIT Technology Review, published by the Massachusetts Institute of Technology (MIT).
The speakers included R.S. Sharma, chairman of the Telecom Regulatory Authority of India; John Chambers, executive chairman of Cisco Systems Inc. and chairman of the US-India Business Council; Una-May O’Reilly, principal research scientist, AnyScale Learning For All Group, MIT Computer Science and Artificial Intelligence Laboratory; and Harsh Mariwala, chairman of Marico Ltd. The full list can be accessed here. Here are edited excerpts from their speeches and discussions that followed.
If I were to bet on one country, I would quadruple down in India: John Chambers
Cisco executive chairman John Chambers. Photo: Ramesh Pathania/MintJohn Chambers, executive chairman of Cisco Systems Inc and Chairman of US-India Business Council (USIBC), reiterated the reason for his bullishness on India in a chat with Mint’s R. Sukumar, on the first day of EmTech India 2016. Edited excerpts:
When most of us here read the India narrative, it is not uniformly positive. Yet, you are amazingly bullish on the country. What do you see that others don’t?
Sometimes when you see what is happening in other countries and other businesses around the world from the outside, you are able to gather data very quickly, and then you can connect the dots on the market transitions. I am very bullish on the country for that very simple reason—follow and connect the dots on transitions. The transition to digitization will be the biggest technology change ever. I don’t go into a country unless the leader, he or she, really understands this. Second, I don’t go to a country that does not have sustainable differentiation capabilities. So you see in India a young population with the average age of 25-26, thinking about the future. Narendra Modi is a leader who gets it—you are seeing the business result, and now building up broadband of more than 10Mbps in a period of nine months to 22,000km, reaching out to 2 million people. Take that across the country, and you are going to see a revolution in a very positive way. And you see start-up communities beginning to emerge and that is where job creation will occur, and you see a government leader with the courage to take change and take risks. We are seeing India’s commitment towards promoting manufacturing. If I were to bet on one country right now, I would quadruple down in India.
You speak of the prime minister very highly.
You have a leader who is extremely intelligent, yet one of the nicest and humblest people I have met in my life, a leader who truly cares about the country, more than he cares about himself. He enjoys the complex problems, and breaks them down in manageable strategic initiatives and puts it in simple terms—Skill India, Start-up India, Make in India. India is probably going to be the fastest growing country in the world over the next decade and yet not destroy the environment like China or the US or Europe. He cares about people. He is willing to take business risks, which he has to do in terms of leadership. When I compare him to other leaders, he is dramatically different—much more humble, with much more vision. When he came to Silicon Valley, he packed the stadium with 50,000 people—he was like a sports star. And yet he knows how challenging the situation is and is able to articulate and break it down into manageable pieces. Then he sets reasonable goals and holds you accountable for them. These are the characteristics that might sound simple, but that is what a great leader does—strategy and vision, develop and implement that strategy and vision, build a culture that believes in innovation, and communicate all of the above. I have to give him high marks in all of the above.
If you were a start-up entrepreneur trying to do something in India, what would you do? What would be the things you would focus on?
As this broadband (network across India) gets built out—and there will be a number of competitive ways to do it by the government and private players—you will get an architecture that everybody designs applications for, that ties together (industries like) agriculture, manufacturing, healthcare, etc., with a common component part to it like a database; and you can suddenly have the biggest market in the world as your initial customers and you can scale at an unbelievable pace and bring it first across India and then all across the world. I will go straight after that (if I were to start-up again). This is a good bet right now to take the risk on, because that inflection point just happened in India.
Do you see the kind of start-up ecosystem that was there in the US in 1990s?
No, I think you have a long way to go.
What do we need to get there?
What we miss here is a lot of venture capitalists. It is not that you need them for capital, but what is needed is their expertise in how to evolve management teams, help in scaling and open doors. This is one thing that Silicon Valley does remarkably well. We get one call from Stanford, “Hey there is a start-up you got to look at” and we go to Stanford to meet those people. What a venture capitalist says, can you open your door for this product, we go to make that happen. It is an ecosystem that moves at tremendous speed on regulations and things like that. I think there are areas that we need to fill in as we move forward on it. I do think that Silicon Valley is still probably a unique start-up ecosystem in the world. (Still), If I were betting on having a good Indian start-up ecosystem in two to three years, I would bet a “Yes”.
Landing a rover on the moon by 2017 is our challenge
Julius Amrit. Photo: Ramesh Pathania/Mint
Indians are competitive to begin with. So, as competitive as we are, when we came to know about the competition XPrize, which is essentially about landing a rover on the lunar surface, move it for 500m and send back high definition (HD) signals from there, we wanted to be there.
We reached out to the organizers and told them if there is an India team which comes in, we would really like to work with them. The last day of the competition was 31 December, 2010, and there wasn’t a single India team. So they asked us if we were interested and if we could quickly put together a team. When you do an MBA, a lot of business plans are put together overnight. So we put together a small plan and small team over the next three weeks.
We started off five years ago with a small team. This competition has helped us build a very unique aerospace company for ourselves. We have 15 ex-Indian Space Research Organisation (Isro) scientists with 30-40 years of experience who are now part of our team. On the other hand, we also have 70-75 system engineers out of college and when they clash, you can see India coming alive.
The energy of youth with the experience of people in an industry that is a black box for for-profit organizations in India, this amalgamation is what has built us. The company has 24 partners at present, and these are essentially people who have come out of nowhere and decided to be a part of who we are and our mission.
We are using the Polar Satellite Launch Vehicle (PSLV) to take off from Earth. It is a 14-minute Uber drive for us. We get injected into the Earth’s orbit and after that we are on our own. The spacecraft that we have built qualified for about 24 tests certified by Nasa scientists at Isro’s Bangalore facility, for which we got $1 million.
The spacecraft has its own propulsion system. It does two orbits of the Earth. The propulsion system fires it and it gets into what is called trans-lunar injection. So once you circle two orbits, you inject yourself into trans-lunar object, you get captured by the moon’s gravity. On the moon’s gravity, you essentially do six orbits, slow down and land. The landing is the most complicated piece of the technology that we have. Just to give you an idea, there are only three countries in the world today that have this technology and have ever landed on extra-territorial bodies. And when we do this in 2017, we will be the first private enterprise to have done it.
When we are approaching the moon, we are travelling at close to 2.5km a second—the speed is what a bullet travels at. If we are not able to slow down correctly and accurately, we would probably just orbit out of the moon. When we slow down there, there is a whole case of braking, which is the first part, which is about our own propulsion system being able to control that and slow down gradually. If we slow down too fast, we can get pulled into the lunar gravity and crash-land on the moon.
There is first a braking phase, and then there is a descent phase—a phase where we slowly approach the lunar surface roughly at about 100 metres per second. This part of the technology is extremely unique to what we have done. This has multiple applications across various industries. What we are trying to do is to find where we land on the lunar surface and where can we find a clear surface of 500m to move our rover and how quickly we can move in there. We would roughly have 12 minutes where we are crossing about 4.5km in an uncharted territory. So our sensors would scan the lunar surface, map out the various routes, analyse which one to get into and then land on that particular surface.
This bit of technology is actually the first time it is happening for any private organization across the world. All the materials and parts for our spacecraft—everything we have—is built in India. It is a very unique rover. In the rover technology, there is not much that you do which is very different from the rovers that you do on terrestrial surface. The key difference is what you do with the space-grade material, and how you ensure the electronics actually work on the lunar surface. Since we started in 2012, we have been lucky to have met and got enthusiasts not only from a national prize perspective, but also from space engineering perspective, from business and marketing perspective as well as finance.
Julius Amrit is investment lead, Axiom Research Labs. Transcribed by Moulishree Srivastava.
Machine learning can give businesses predictive models
Una-May’o Reilly. Photo: Ramesh Pathania/Mint
My goal is artificial intelligence. I want to create computers that behave as intelligently as people. I have a group at MIT that focuses on machine learning. We see machine learning as the most scalable technique towards allowing computers to acquire knowledge and use it.
I also have insatiable curiosity for complex systems. Generally, a complex system involves humans. I am interested in human behaviour as it occurs automatically. I am also interested in autonomous behaviour by humans when they interact with digital technology, like a situation where a student engages with online content and acquires knowledge.
I believe an important facet of intelligence in a machine is its ability to build a model that is predictive of something that happens in the world. Machine learning algorithms need to be fed with data, and it so happens that we live in a world where data is just raining down. And that happens because of cloud computing—scalable computing has risen. Now when we put sensors on our bodies and in our machines, and we instrument our interactions with the Internet through smartphones and laptops, what we collect is behavioural information of ourselves. And if we could pass on that behavioural information through machine learning to computers, they can bootstrap from that information and behave more intelligently.
Right now, it is possible to record our navigation, our Internet behaviour, online purchases and online learning, which businesses use. This presents us a great opportunity to investigate the behaviour of these systems and make them more intelligent, but it also means if machine learning can deliver models with competition systems that are predictive, businesses can use those models.
Predictive models in business cases allow you to anticipate which of the customers will come back. They solve the churn problem. They allow you to anticipate what a particular segment of customers will buy. They allow you to innovate and remain competitive.
So the promise of data science and interpreting data and building models of the world, so that we can predict things about the world, is very compelling for businesses. My research group sits at this very exciting nexus—we develop machine learning algorithms and we use those algorithms to examine the world through data artifacts and behavioural traces. And all our work is enabled by the fact that data can be collected by cloud computing and we can execute algorithms on the cloud.
For instance, the team works with data collected from people who are severely ill. And they are heavily monitored. At the moment, that data is tapped for situational awareness, but it does not provide any forecasting and predictive power. So it is of great interest to clinicians to develop models on what will happen to these people based on that physiological data, and those models can be embedded in devices which are coupled with sensors. Or models can be provided to clinicians when they have to make decisions about resource allocation and clinical care plan for their patients.
Una-May’o Reilly is a principal research scientist at MIT. Transcribed by Moulishree Srivastava
We will see a lot more disruption in fintech in the next 5-10 years: V. Vaidyanathan
V. Vaidyanathan, chairman, Capital First Group. Photo: Ramesh Pathania/Mint
In a chat with Mint’s R. Sukumar at EmTech India 2016, V. Vaidyanathan, chairman of the Capital First Group, spoke about how digital is disrupting the financial sector. Edited excerpts:
What kind of changes can we expect in fintech?
We will see a lot more changes and disruption in the next 5-10 years from this one word—technology. Most Indians do not have exposure to the stock market or even a demat account. We have close to about 200 million accounts on credit bureaus for an eligible population of nearly 600-700 million people. Whether you look at the number of bank, credit, demat or home loan accounts, India is just completely under-penetrated. With the private sector actively getting into this space and the multiplier effect of technology, I see huge growth in the future.
The opportunity is palpable, but there is also a lot of unease—especially on the part of big banks.
It’s not unease of big banks but unease of the financial sector as a whole. If you are one of the large smart banks like ICICI Bank, HDFC Bank, Kotak Bank or State Bank of India, I still feel that you will look forward to the market and the future with a great amount of confidence. Of course, you will have to figure out what’s happening around you, but you still have a great degree of confidence because you can do what the new guys can do. But if you are one of the remaining (ones) who are not yet talking about technology and someone else is coming from the fintech sector and disbursing loans in just 10 minutes or even 10 seconds… I think it (the unease) is coming from the fear of irrelevance. One of the biggest issues human beings face or corporations face is the fear of irrelevance and the feeling of unease coming from the fact that I shouldn’t become the Air India or Nokia of tomorrow.
That unease is also there because electronic payments are catching up and so are newer alternative lending models—for example, peer-to-peer (P2P) lending. The traditional models of finance—in terms of how you issue a loan, how you make a payment, and sometimes even how you facilitate a transaction using a credit card, all those things have changed.
That is dramatically changing. Actually, I think to the discomfort of a number of people. Let’s take Paytm as an example. It has 125 million accounts. Imagine if companies like it or telcos (that have payment bank or small bank licences now), will also get a full banking licence, say two years, five years from now—I don’t know what the RBI roadmap is—they can also issue (account holders) loans wirelessly. So the fundamental cost architecture of the alternate lending models is going to be so dramatically different that existing companies need to be a little worried.
To facilitate transactions like these, you also need very intelligent back-end technologies. Here I would like to draw on what your own company does. You were in some ways doing analytics before it became fashionable—understanding borrower profiles, understanding who is likely to default or not pay back, and things like that. Do you think we have the ingredients in place to set this kind of smart back-end?
The platform in India is definitely developing very fast. Our own company, Capital First, in 2010 was borrowing at 14.5% per annum and we had a retail loan book of about Rs.90 crore. Clearly, you can’t do any business or build a significant retail business at this rate. So we started developing a model whereby we lend to customers on the basis of profiles, on the scores we built on them—whether they are married or unmarried, whether they are self-employed or salaried—and we then broke this up and figured out a scoring methodology that we could then extrapolate to the larger system. It’s working so well. We are lending over 100,000 loans a month. We added close to 2 million customers in the last five years. So, definitely I think that if you are doing it, we have proof enough to say that this platform exists in India.
Do we have the right kind of regulatory framework to facilitate this transformation? Because regulations, especially in banking and finance are a very key constituent of how the industry works.
I really feel that the Reserve Bank of India, in a regulatory sense, is seized of the situation, which is actually encouraging. But the regulator will have to really have to apply its mind in areas like bitcoins, which are really a multi-country, multi-currency sort of platform.
I am just going to broaden that a little bit to talk to you about crypto-currencies. If you look at the underlying technology, which is really blockchain, how do you see that transforming the financial sector? Are some Indian companies already experimenting in this area?
Well, there is some phenomenal work happening there. In Venezuela, inflation last year was 65%, this year it is 276% and maybe next year people are talking about it going to around 600%. So, countries are naturally imposing capital controls and you can’t easily go and spend forex money. Therefore people are looking up on how to use alternative currencies and crypto-currencies like bitcoins. Last year, use of crypto-currencies in Latin America grew by 1,746%. That is the kind of explosive growth that industry is seeing. I think wherever there is inflation, wherever there is capital controls and wherever there is uncertainty, people will move on to the new platform. In fact, I won’t be surprised, if even gold were getting traded; I won’t be surprised if Google will start some sort of a currency. These things are around the corner .
10 ways to create a culture of innovation
Harsh Mariwala. Photo: Ramesh Pathania/Mint
Innovation is very important for an entrepreneur’s journey. What we have done at Marico is to try and create a culture of innovation. All of us get excited when we hear about the likes of Steve Jobs. But how many Steve Jobs can you get in the world? The larger question here is, how should an organization create a culture of innovation so that everybody in an organization thinks of it?
Innovation comes with little resources
When Marico began operations in 1990, it gave me a great opportunity to recruit a new team. We were a new company. Nobody knew the company. We had two brands, which we had taken over from our sister companies. The first task for me was to recruit talent when the company’s name is not known. We briefed the advertising agency and asked them if they can come up with a campaign that will help us attract talent. We had very limited money. So the ad agency came up with a brilliant campaign. It came up with a line—Mass Killer Nabbed. The concept was fresh and unique, and fetched the company the desired attention. I realized that when you have very high aspirations, very little resources, you are forced to think innovatively.
So once Marico started operations, we said culture of innovation is very important. But how do we do that? We believed that we had to have an open organization, a trusting organization, where dialogue takes place. Because innovation doesn’t happen in research and development labs, it happens across the organization. You discuss an idea, tell somebody else and that’s how an idea gets developed.
So the brief given to the interior designer was that the office should reflect openness. Everybody should be able to see each other. Every year I have a session among all our employees and within that session there is one part which is kept for open-house so that people can ask any question. Then there are relationship reviews between the boss and the subordinate again promoting openness. So when you take openness from different angles and reinforce it from different angles, you get an open culture.
How do you create a culture of trust? I am talking of 25 years back. I asked why do we need a muster roll for people to sign. We did away with that. People did not have to sign from that time onwards. We also said that everybody is entitled to leave. At that time, we had three types of leave and still many organizations have it—privilege leave, sick leave and casual leave. We said we don’t need casual leave, we don’t need sick leave. If an employee is sick, he is sick, we trust them. If they have some casual work for a day or two, they can just tell their boss and do that. So we did away with that and everybody maintains their own leave records. Even in terms of expense statements, when an employee spends money on something, he goes to his boss who authorizes it. We said can we do away with that. So we did away with that and started self-authorizations. So again we are reinforcing trust from all angles. So that’s how you create a trusting culture.
Don’t punish failure
I believe that experimentation is very important in creating an innovative culture and we encourage experiments. It is alright to fail because the moment you punish failures, people stop experimenting. We recruit 15-20 management trainees every year from good management schools. They were reluctant to take risks because at that stage in their career, they did not want to have a negative in terms of failures. So we said that we will not give them responsibilities in terms of new products at that stage but only after two, three years. And whenever an individual has taken a step and it has not worked out, we use failures as learning. We say: Sometimes you win, sometimes you learn, not fail.
Constant consumer insights
Getting consumer insights is something we do regularly with all our brands. Many a time the consumer himself doesn’t know what he wants. So we actually train our brand and sales managers to go deep into a consumer’s mind and find out what is that he needs which we can satisfy. Out of those consumer insights, we have got lot of product ideas. For example, the fabric starch. At that time, to starch a fabric, users had to boil the water and there was a lot of chore involved. We realized that there was a gap and we came up with ‘Revive’ based on an insight that the consumer was reluctant to starch products because it took a long time.
We acquired a brand from Procter & Gamble a few years back and that brand was making anti-lice shampoo for children. At that time, 20 years ago, we said that if we can offer the same product in an oil format, we would be able to increase sales because our insight was that hair oil usage in India was much more than shampoo usage. And within one year of acquisition, we launched Mediker oil and our sales just doubled.
Disrupt the existing market
Consumer insight plays a very important role in new product launches and newer variants. Two years back, we launched Saffola Oats. We realized that in the oats segment there was a high competition. We were able to get a market share of 10-15% at a time when there were the likes of Kellogg’s and Quaker. And we had to do something disruptive, so we went again back to the consumer and asked them how they liked eating oats. And the insight was that Indian consumers do not like to eat sweet breakfast. They like savoury breakfast. So in the south they will have idli-sambar, in the north they will have aloo paratha. So can we make savoury oats? And that’s how we came up with a range of savoury oats—masala oats, tomato oats, pepper oats, etc. The product was launched about two years back and the category is growing about 50-60% every year. We have a 70% market share. So again, being disruptive in an existing business where you have a consumer insight has played a very important role in our journey.
Learn to execute ideas
Innovation is not just ideation but a lot of execution. People can get a good idea, but until it is executed well, it will not succeed. That came strong and clear to me when we launched our Parachute coconut oil in plastic bottles. That happened 30 years ago when the whole market was in tins. We thought that plastics would be a great success because it was cheaper, more attractive and convenient for the consumer to use. But when you went for the trade, they were reluctant to store coconut oil in plastics, because apparently 10 years ago somebody had launched coconut oil in plastics in a spear-shape container with a lot of oil oozing out from the top of the container. The retailer closed the shop and when the next day he opened the shop he saw that rats had bitten the bottles. So they were saying that they will not keep coconut oil in plastic bottles. We went back to the drawing board, briefed our design vendor, chose a round shaped bottle, and briefed our packaging department that no oil should come out on top of the bottle. We did that and actually kept that product in rat cages for a period of two days. Nothing happened to the bottles, we clicked pictures and with those pictures we went back to the trader. This is how we slowly overcame resistance. It took us almost seven years to shift the whole market from tin to plastic. At one level a very simple idea, but a lot of execution went into this. The same thing we did in Bangladesh. Today we are the largest Indian firm in Bangladesh with 80% market share both in terms of turnover and profitability.
Ahead of copycats
A few years ago a colleague of mine had gone to Europe and identified a mould which was difficult to be copied. In our category, there are a lot of copycats. We got that mould which was very expensive at that time. As a result, all the copycats vanished. However, it was just a matter of time when Indian mould makers were able to make it at a fraction of the cost of our imported cost. But still what I am saying is that on a continued basis, you have to go on thinking differently for every brand, for every business.
It is very important to have flat structures and cross-functional forums. That is how dialogues happen and you break down bureaucracy within the organization. The role of top management is very crucial. We have to reinforce innovation on a perpetual basis. So every time there is a presentation made by a brand for me, they all know that I will ask what is the innovation that they have planned. So there is a lot of top-down pressure in terms of expectation that they have to be innovative.
This is how we see innovation. We are at a stage where there has to be disruption in terms of technologies and no industry will escape them. I think (mobile phone maker) Nokia is a great example. They did not make any error in the existing business. It is just that they did not see what was there on the horizon. So the key lens that we need to wear is of opportunity and disruption.
Harsh Mariwala is chairman of Marico Ltd. Transcribed by Priyanka Sahay.