Paytm founder prepares for his next pivot, which could be the biggest yet

Paytm founder Vijay Shekhar Sharma. Photo credit: Wikipedia.

“The last five years were an opportunity for those who were capturing Indian consumers, because people got internet connections with smartphones,” Paytm’s founder and CEO Vijay Shekhar Sharma tells me, his easy chuckles complementing the sunny poolside of a Delhi hotel. “The next five years are an opportunity for companies capturing Indian small and medium businesses (SMEs) as they begin to understand how important smartphones are to their businesses.”

Like all entrepreneurs, the Paytm founder is in the habit of predicting the next big thing. What sets him apart though is a nimbleness to welcome the unexpected with equal alacrity.

The latest instance is the cash crunch in India, following the sudden withdrawal of high denomination currency notes and scarcity of replacements. This was a windfall for Paytm, which started seeing half a million new users on its digital wallet every day.

As a startup, sometimes you take calls without looking at all aspects of a decision.

The knee-jerk reaction would’ve been to chase more consumers to grab the moment. What Paytm did instead is to focus on enabling merchants to use the wallet, which would in turn pull more consumers. It launched a new feature to let merchants who don’t have card-swiping machines to accept card payments on their wallet. This had to be put on hold the very next day when card companies raised a red flag over security, but it showed Paytm’s nimbleness to align a new opportunity with its longer-term goal to capture SMEs.

Some may criticize Vijay for being hasty with the new feature, but he’s never one to die wondering. “Not every day do you get a chance like this,” he points out. “No company in a digital payments business model would’ve figured that one day currency would be asked to go.”

It also sums up Vijay’s attitude to being an entrepreneur. “You’re a startup, you’re taking chances anyway,” he says with his characteristic grin. “Why not take a bigger chance when luck comes your way? As a startup, sometimes you take calls without looking at all aspects of a decision. Let’s find out [if it works].”

See: Paytm is laughing all the way to the bank

Rewards of perseverance

Fortune favors the brave, goes an old adage. And Vijay has made many a bold prediction ever since he founded One97 Communications at the turn of the millennium to offer astrology services to a telecom operator in Delhi. Other services followed, from gaming and content subscriptions to SMS apps. Paytm came up in 2010 for topping up phone credits. This was long before the smartphone boom kicked in.

“We built a mobile business when smartphones [for the masses] were not there. Mobile payment was not supposed to be an opportunity because this is a cash country,” Vijay observes on how this has turned in the opposite direction.

Queues snaking out of banks have been a common sight across India for weeks. Photo credit: Harsimran Julka.

Paytm has earned a series of labels over the years: from SMS services to phone top-ups to a mobile commerce and fintech company. Vijay now simply calls it a mobile internet business as possibilities have exploded over the past couple of years, especially after a US$680 million funding infusion from Alibaba in return for a 40 percent stake.

Seizing the moment

Only the nimble can survive

New, new possibilities