The Tesla of India?

mahindraA couple of days ago the Mint newspaper published a story about Mahindra & Mahindra (M&M) working with Ford to develop an electric sedan. Ford would get the technology to build a low-cost electric vehicle from M&M and in exchange M&M would get technology to build a larger electric vehicle for potentially the Indian market. M&M is part of the Mumbai based Mahindra Group conglomerate which is run by Anand Mahindra.

So you ask what low-cost electric vehicle technology does M&M have? The answer is quite simple – REVA, which it bought in 2010. REVA (Revolutionary Electric Vehicle Alternative) was started in 1994 by Chetan Maini and way before Tesla came to the market and made electric cars cool. REVA has since been renamed to Mahindra Electric and under the M&M umbrella.

When I look at the Indian car manufacturers – Maruti, M&M and Tata Motors. Maruti is a one trick pony – build cheap cars that the masses will buy. This is not a knock on Maruti it’s just their playbook that has made them the #1 car seller in India. Tata Motors which is part of the Tata Group is currently embroiled in corporate strategy indecision and I’m sure they have not clear strategy in place for electric vehicles.

That leaves M&M, which has the best chance of being a leader in the electric vehicle space not only for Indian but other markets located near India. The Mahindra Group over the years has acquired several companies that call help it achieve it’s goal. If you look at Tesla, they are leaders because of 3 things:

  1. Design
  2. Their manufacturing plant in Fremont, California
  3. Battery technology

For design the Mahindra Group bought Pininfarina SpA in 2015. Pininfarina is the legendary Italian design house that has designed most of the Ferrari’s and one of my favorite American cars the Cadillac Allanté. With Pininfarina in-house they have no excuse not to sketch a car that is out of this world.

Tesla recently admitted that building cars is hard and hence behind schedule with their Model 3 builds. M&M has been building cars and trucks for many years and also purchased SsangYong Motors, South Korea’s 4th largest automobile manufacturer. From a manufacturing perspective M&M seems to have their act together since they have been assembling cars and trucks for many decades.

That leaves Mahindra Electric and their battery technology, which really is the main ingredient in an electric car. I’m assuming their technology is not so strong but with the partnership and knowledge sharing with Ford that should all change. With the partnership and acquisitions it looks like the Mahindra Group is leagues ahead of anyone else in India…now they just need to release a product that will wow the world.

The Future of Payments

Earlier this month I had a chance to be on a panel discussing User Experience (UX) for payments. The panel was part of the Fintegrate Zone 2017 event located at the BSE Building in Bombay hosted by the Zone Startups.

The panel was moderated by Harsimran Julka @HarsimranJulka an editor for the Economic Times. The panel included:
Anurag Sinha, Co-Founder, Walnut App
Deepak Agarwal, CDO, Barclays Wealth
Sohini Rajola, @RajolaSohini, RVP, Western Union
Tina Singh, @tinasinghj, CDO, Mahindra Finance
Malcolm Anthony, Head of User Experience Design, PayPal
Nitin Vyakaranam, @vnitinb Founder & CEO, ArthaYantra

As with any recent discussion involving the Indian financial markets half the time was devoted to talking about Modi’s demonetization. It was more about who benefited from it and who struggled with it, as a whole most fintech startups all benefited from it.

Although we touched on the overall user experience of payments and had much to debate about, I still feel most of the world is struggling with a seamless payment experience. Part of the issue is that people are used to physical cash and it’s been around for ages. People are familiar with it and how to use it, kids from a very young age are taught about physical money and many have piggy banks with some of that loot! Basically, cash is convenient, intuitive and effortless.

But as with everything else, we need to move forward and electronic payments are the future and most governments are behind it as a way to tackle the black money and counterfeit money. Credit/debit cards are a hybrid instrument, although the card is physical in nature it connects to an electronic platform to authorize, clear and settle the payments. Credit cards are prone to fraud since someone can steal your card, go to an online store and enter your card details and buy stuff.

This is where a whole new generation of solutions are entering the marketplace under the banner of mobile proximity payments (MPP), this includes near field communications (NFC) and quick response (QR) codes. NFC is the technology behind Apply Pay, Google Pay, Visa payWave and MasterCard contactless,  it’s a communications protocol that works with devices that are within inches of each other. With Apple Pay when you are ready to checkout, the retailers point of sale (POS) system will “talk” to your phone and then you use Touch ID to authenticate and enable the payment. That really is the way to do it. The problem with NFC is that the phone has to have an NFC chip and so does the retailers POS system. I don’t see this gaining much traction in India as many of the phones are fairly inexpensive and won’t include an NFC chip for years.

Surprisingly, because of India’s demonetization the use of QR codes has gone from a niche type of application to full mainstream usage. Demonetization was a stroke of luck for Paytm and they turned it into gold. Overnight people needed to send money and many people quickly downloaded the Paytm app and started to transact.

A couple weeks ago, I used the QR code functionality to pay for parking at Phoenix Mills and it was pretty seamless. Since all smartphones have a camera they can scan this QR code and submit a payment to an individual or retailer. I really see this taking off and becoming the standard in India, it’s a low tech solution but sometimes that’s required to get high (mass) adoption in India.

I Love Cars but Hate the Industry

2012 Porsche 911When you decide to buy a car and open an Excel sheet to start doing the math you soon realize cars are a horrible investment. The minute you drive off the parking lot the car has already depreciated by 30%…WTF. However, one thing that Excel can’t capture is the experience of sitting in a new car and inhaling that “new car smell” or driving a Ferrari and getting pushed into your seat as the car sprints forward. Ask any car lover and that’s what you will hear them poetically speak about, ask anyone else and they will spit out those facts that cars are a horrible use of money.

The automotive industry is like many other industries, there is the glitzy side and the not so glitzy side. In the fashion industry, you have fashionista’s walking around with their $100,000 Birkin’s and then you have clothes being made by 7 year old kids in a run down factory in Bangladesh. For the automotive industry it’s pretty clear cut, the glitz and glamour is everything up until you buy the car – the car shows, the magazine review, the test drive, the jovial banter with the sales rep at the dealer, etc… The not so glitzy side is everything after you buy the car – car servicing issues, dealer not responding, insurance for the car, gas prices going through the roof, etc…

I love everything about cars, but hate stepping into a dealer because it just goes downhill for me. In fact, last week I visited a Mercedes-Benz dealer in Bombay to see the new A Class. I mistakenly gave my phone number and now I’m getting an SMS almost every other day to buy the A180 because “the prices are going up as we speak”. My other pet peeve is when a salesperson tells you how reliable and awesome their cars are, then when you are about to sign on the dotted line they will start talking about an extended warranty. A sales practice that puts most people off, but is a huge revenue generator for the dealership.  (This American Life podcast has a great episode about what happens among a sales team at a car dealership – a highly recommended listen.)

For car makers I believe it’s a case of innovator’s dilemma, they don’t want to try new things that might hurt their existing product lines and revenue stream. Over the past 4-5 years there has been an increased interest in shaking things up in the automotive industry from companies based in Silicon Valley. Tesla which is a manufacturer of electric vehicles has not only innovated on the technology used in the car but the entire car user experience – the dealership experience, servicing the car, over-the-air updates, fixed pricing, etc… Google X which is an top secret group within  Google is pouring money into self-driving car technologies, this from a company that made its mark in online advertising.

Car servicing is usually the biggest pain and most frustrating experience for a consumer since they are at the mercy of what the mechanic or service advisor tells them. My interest in cars is also in the not so glitzy side, I’ve been advising a company in India called which is changing the way people get their cars serviced in India. The team is looking at many angles of the workshop experience and the consumer website to compare facilities is the first and the most visible product from the team.

Everything I have mentioned so far is around ownership of a car, another area that is being innovated is short term usage of vehicles. Uber with its easy to use iPhone app to “hail a taxi” has quickly rolled to markets all over the world. Uber has been very successful simply because people hate the current system of getting a taxi or paying for a taxi. Because of its popularity, Uber has had to fight the taxi union in many of the cities it has launched its service. Another company, Getaround allows you to rent your personal car to others – peer to peer car sharing. In India, I can see this working for people that have a car and a driver where the car is sitting idle for many hours of the day. You can instantly and safely monetize your car by turning it into a “taxi” on the Getaround platform.

Another area ripe for innovation is car parts with 3D printing of certain car parts. Imagine how great that would be for the spare parts market, it would require much smaller warehouses and reduce the overall time to deliver those parts.

As you can see, I love cars but hate the old school car industry. Much of the innovation for the car industry is coming from outsiders which is not surprising, since no car insider wants to kill the golden goose for their old school car company.

Bombay – The Perfect Bubble

It’s been a week since several bombs tore through South Bombay like a hurricane and already the city is getting back to normal. Some say it’s the strength, courage and/or resilience of it’s people that allows Bombay to move forward. I would simply say, we have created the perfect bubble to live in. This bubble has been created out of necessity since the political infrastructure of this country has simply lost its moral compass. Everything I read about government in India revolves around two basic issues: money and disregard for life.

Safety in this country is a joke. The police patrol the streets with nothing more then a stick and a fat belly. Money that should go towards police issued revolvers, CBs and police cars has surely been pilfered by the higher ups. When a terrorist attacks, the police are clueless and powerless as they don’t have the tools to deal with this type of threat. In the end, people die.

About two years back my parents visited Bombay and they had an extra suitcase which we had no place for. Since real estate is a premium in Bombay, I had the brilliant idea of sticking the empty suitcase in the trunk of my car. For 5 months we visited pretty much every hotel and/or mall that had security and NOT ONE person questioned what was in the suitcase. They opened the trunk looked at the suitcase and then proceeded to shut the trunk. If the government was truly concerned about it’s citizens it would not let private companies conduct security checks and instead use the military as it does for the airports. This decision allows the government to save money but puts the public at risk and in the end, people die.

A politician first and foremost should be doing everything to take care of people in his/her district, but in reality they are more worried about taking care of themselves first. Another great example are the roads in Bombay. Building roads is a fairly simple thing and is done around the world and other parts of India without an issues. However, for some strange reason the roads in Bombay are always in a state of disrepair, of course corruption plays a part. If the cost of the road is Rs. 100, by the time the road is completed only Rs. 5o might have been spent on sub-standard materials, the rest is classified as “leakage”. When roads are so badly constructed it could be a death trap or lead to a serious injury for someone that is riding on a motorcycle and happens to hit a pothole. If you hit that pothole and are taken to a government hospital, let’s just say I wouldn’t even send my worst enemy to a government hospital for treatment. Yet again, the mixture of money and disregard for life creates an environment where government hospital facilities are on par with hospitals from when dinosaurs roamed the earth. In the end, people die.

You get the point, I could go on and on with examples. So what do we do? We create our own bubbles. Who cares if the building we live is filthy, as long as your home is clean. Who cares if people are begging on the street, you are sitting in an air conditioned car. Who cares if someone’s office got bombed, you and your staff are safe.

The problem with bubbles is that they can pop at any moment. When it pops who will help you? The government or will your strength, courage and resilience pull you through.

2011 Mumbai Marathon

The 8th edition of the Mumbai Marathon took place on Jan. 16. This was the 4th Mumbai Marathon that I have participated in and each year it gets better and better, not only from an excitement perspective but also my running time.

This year I completed the half marathon (13.1 miles, 21.1km) in 2:01:26, I was absolutely shooting for sub-2’s, but couldn’t pull it together during the last 4 kilometers to pickup some speed…next year.

My Mumbai half-marathon timings are:

2011 – 2:01:26
2009 – 2:07
2008 – 2:16
2006 – 2:16

What really helped me this year was using the RunKeeper app on my iPhone. RunKeeper was constantly giving me real-time stats on my run and I was able to speed it up or slow it down based on the information. I would highly recommend the program if you are planning to run a 5km or a full blown 42km marathon. You can see my RunKeeper stats for my 2011 run. The website tracks all your runs and aggregates the data and I can see this turning into a much bigger platform then it currently is.

Financial Terrorism Now Playing

If you have been following this blog for the past 4 years while I’ve been living in Bombay, you know I rarely cover two topics – India’s movie industry (aka Bollywood) and Indian politics.  However, when the two collide it creates a chemical reaction that the media can’t ignore nor I.

My Name Is Khan, the newest film by Bollywood’s biggest star Shah Rukh Khan (SRK), ran into some turbulence this week in Bombay because of the dirty politics played by the Shiv Sena. Let’s rewind a bit.

SRK who is a part owner in the cricket team Kolkata Knight Riders said he would not mind having Pakistani’s players on this team. Agreed, with the terror attack on Nov. 26 in Bombay it’s a sore subject for many but the Shiv Sena, took an extreme view of his comments.  The Shiv Sena flew into action and did what they are good at – scare people and disrupt the flow of things.  The Shiv Sena threatened to block his new movie and damage the property of the theater owners.

This is not the first time this has happened, the Shiv Sena pulled the same sh#& with a film by Karan Johar (KJ) and sadly KJ had to say sorry to the Shiv Sena leadership team…weak. That’s the issue, the Shiv Sena knows that millions are on the line and can extort people and force their version of terrorism on the film industry. This time the industry and more importantly SRK, told the Shiv Sena to get lost and as usual the Shiv Sena’s threat of violence was all bark.  Of course, the PR machine of the Shiv Sena was telling anyone that listened that they were successful in their efforts. I’m still trying to figure out how the Shiv Sena keeps score.

The latest stunt by the Shiva Sena is just another in a long list of things that will make anyone shake their head in disgust. They are focused on all the wrong things because to tackle the real issues would be too much work.

Their stance on past issues:

  • Valentine’s day should not be celebrated since it’s not our culture
  • All taxi drivers should speak the local language – Marathi
  • SJ’s movie “Wake Up Side” – should be banned because they call the city Bombay, not Mumbai
  • All BMC/MCGM (governing body of Mumbai) correspondence should be conducted in Marathi

As you can see, the above are all VERY critical issues and much more important then some of the real issues affecting Bombay – poverty, water shortages, electricity blackouts, etc…

On a side note, I think part of SRK’s success in standing up to the Shiv Sena can goto Twitter (he tweets at @iamsrk). It gave SRK an unfiltered and real-time communication channel with his audience. I’d love to see the Shiv Sena use Twitter, oh wait it’s not part of their culture and Twitter currently does not have a localization for Marathi!

Building Sand Castles in the Sky

Indiabulls_logoWell, that didn’t take long for Bombay real estate developers to go from building “affordable housing” to overpriced properties.  Back in March 2009, at the height of the financial crisis every real estate developer was talking about changing their business model and going after value for money projects.  Now it seems many are scraping that residential business model and back to building massive properties, case in point – Indiabulls Real Estate (IBREAL). They recently kicked off their advertising campaign for Sky, Sky Suite and Sky Forest, all 3 properties are located in Lower Parel.  According to a sales rep I spoke to at IBREAL, Sky is sold out and their managed residences at Sky Suite are 20% sold. Sky just came onto the market about 6 weeks back, so that is either an incredible sales effort or excellent marketing to say “you can’t buy, go away.”

The latest building to go on sale is Sky Forest. The marketing info talks about 10,000 to 22,000 sq/ft for either a duplex or triplex.  I called and asked about pricing, it starts at Rs. 20,000 a sq/ft plus Rs. 50 per floor rise and Rs. 1000 sq/ft for a Worli view. So the math for a 30th floor 10,000 sq/ft pad is:

Base price = Rs. 20,000
Floor rise @ Rs. 50 x 30 = Rs. 1,500
Worli view = Rs. 1,000
Total 22,500 x 10,000 = Rs. 22.5 CR (approx USD 4.7 million)

The kicker is that the 10,000 sq/ft is really super built-up area, whereas the livable carpet area is more like 4,430 sq/ft. Why such a hugh difference? That’s because of the crazy Bombay real estate math that includes things like the lobby and other common areas of a building and quoted as “super built-up”, exceptionally stupid I must say.

So the price is really more like Rs. 45,000 sq/ft or around USD 1,000 which is quite spendy.