On November 8, Prime Minister Namenda Modi abolishes the usage of note of Rs 500 and Rs 1000. Due to the sudden policy change, these notes will be no longer being valid. This had a great impact on the public and resulted in nearly 86% of the cash of the economy invalid. This gave a way to the success story of Paytm – Vijay Shekhar Sharma.
About – Vijay Shekhar Sharma
He is the founder of Paytm which is a giant Indian e-commerce. He was born in a middle-class family in Uttar Pradesh. At the age of 5, he enrolled himself in Delhi College of Engineering. It scripted massive success after launching the Paytm. In fact, this company now exists with the worth over a billion dollars. Main inspiration for Vijay Shekhar Sharma’s is Softbank’s Masayoshi Son and Alibaba’s Jack Ma.
While studying at the Delhi College of Engineering, he faced many obstacles in understanding English. Even after facing obstacles, he soon started a website called indiasite.net which was sold for $ 1 million later. He started a content platform One97 Communications at 11 years ago which is now serving as Paytm’s parent organization.
Successful payment business of Paytm
In 2014, Paytm was launched with online wallet services after which company enabled online payment transactions. This was available for more than 100 million users. The company got a licenses from the RBI last year so as to launch country’s first ever payment bank. Moreover, the main motive of Paytm was to transform India into a cashless economy.
Vijay Shekhar Sharma started online and digital transactions to deal with the cash crisis after demonetization came into effect. In fact, the service of the company’s mobile wallet is accepted across India. The logo of Paytm is now popular almost everywhere from tea stalls to the company.
Since the demonetization, the number of online payments has increased over five million transactions every day. This shows the company’s robust growth curve. Company reports that there is 700% hike in the company’s customers and the traffic. There was an increase over the portal after the abolishment of the high-value currency notes. This resulted in the 100% growth in the value of the money across Paytm’s accounts.
Paytm is taking care all of his users. Further, it explained its availability to all its users who have no access to smartphones. A company further put in motion a toll free number 1800-1800-1234. This number will allow all their customers to receive money and recharge their mobile phones all without an internet connection. However, to use it, user first has to register for a Paytm account which will require internet.
Paytm is growing at a very fast speed
It announced the new “App Password” for the Android application. It allows user to safe their account even after the phone gets steal. Moreover, this feature allows users to lock their application using a PIN or a password. Vijay sold 1% of his shares for Rs. 325 crore in One97. In fact, this money will help in setting up of Paytm payments bank.
Customers duped Paytm
Press Trust of India (PTI) reported that Paytm was duped by approximately 48 customers for Rs 6 lakh. CBI has already filed a case in respect to this. The company is increasing its capacity as the servers of the mobile wallet had congestion problems. In last 40 days, there are 20 million new users. Paytm faced technical issues due to which users face transaction issues. A spokesperson said that the technical challenges are due to the sudden jump in the increased number of the users
The man, who always wears a welcoming smile, stands true to every word he wrote during the most difficult times of his life. He owns a company whose recent value is a little over $3 billion in the market in 2016, a dream dreamt when he was struggling to make ends meet with Rs 10 in pocket. But he tasted victory the hard way. Nothing came easy for him. The tears he hides behind the chirpy self that he puts up in front of the world could not be hidden for long while recollecting his journey.
Life tested him right from the beginning of his journey to become one of the most influential people in the business world today. Though he passed his higher secondary when he was just 14 years old, a child prodigy of sorts, making it through college was the first tough challenge he faced when he left the cosy comfort of his small hometown outside Aligarh and ventured into the real world.
He was lost in transition in college-Delhi College of Engineering. Coming from a very humble background (his father was a highly principled, school teacher, who refused to earn the extra buck through tuitions, because he believed in what was the right thing to do), He did not know how to read and write English for he finished his schooling completely in Hindi, in his small town. However, he realised soon enough that to make it through college he must start learning the language first and with the help of books, second hand magazines and his friends, he mastered the language in a way which few can. His modus operandi was to read a Hindi version of the book simultaneously with the English-one, a habit that ensured that he soon learnt to read two books at the same time! But it wasn’t easy to say the least. The first-bencher in school slowly started gravitating towards the back benches, and in a short while, was so disheartened and disillusioned with his bad grades, mostly due to language constraints, that he completely stopped attending college.
“When winning is about not giving up.
When doing all that you can, gets a new meaning.”
Struggling to learn English, survive the rigours of engineering college and the big bad city that Delhi was, this normally would be the time when many in his situation would have quit. Vijay, however, was something else. He decided to build, to use the time he had from ‘not attending college’ by turning an entrepreneur. A believer in challenging the unknown, he made the internet his playground and Sabeer Bhatia and Yahoo his inspirations. He aspired to go to Stanford, because that was where Yahoo was built, but realising his lack of financial resources and his challenges with the English language, he decided to emulate some of the genius at Stanford, by learning how to code all by himself. He started building his own content management system with some of his college mates, which went onto being used by some of the biggest news publications including The Indian Express. It was also during this time when he started his first job at an MNC. He quit after six months and built a company of his own with his friends. He finally passed his college examinations too.
This would also become the darkest time in his life, when having his dreams of reaching the Silicon Valley shattered, he was also left bankrupt by his partners, with whom he had just begun a business and raised the first round of funding. In 2005, he had raised a hefty amount of Rs 8 lakhs through his venture of which he was conned off 40%. He was devastated. But he was not a man to surrender so easily. He lived at a hostel near Kashmiri Gate in Delhi, skipped meals and walked long distances to attend work or meetings in the southern part of the State.
Infact having been through such tough times, if there is a fear that the ‘Iron Man’ of the start-up ecosystem of India still harbours, it is that someday ‘some unknown’ will take away all of his hard work.
Things took to a better turn when he began One97, the parent company of Paytm. They started experimenting with the three basics of internet- content, advertising and commerce. But the big eureka moment came in 2011 when he first pitched the idea of entering the payment ecosystem in front of his board. The board was not convinced, as he was talking about betting the company’s money on a non-existent market.
“Some other entrepreneur would have sold the equity and started their own company. But I aspire to build a 100 year old company. I think that men and boys are different because the boys flip and sell. Men run and build legacies,” Vijay said.
So he put 1% of his equity, which was about $2 million around 2011, on the table and said, “This is for all of you, if I waste the money that we put on the site.” He adds, “There is no fun in doing what others ask you to do, the real fun is in doing what people say you can’t do.”
And it is with this belief that the first avatar of Paytm, Pay through Mobile, was born, going rapidly onto becoming the next big thing of the start-up ecosystem in India. And, since then it was never looking back.
The furtive behind this gentle arch is the trust he built with his customers which none other gave as much value to before. Even before Vijay began the roll-out of his internet wallet services , he first built a strong 24×7 customer care service to address the worries of customers to enable them to trust the wallet enough to put their money into the hands of the unknown. “30% of the company’s campaign budget is invested in building trust with the customer. For us it was the single most important factor,” says Vijay, with a deep pride in what he has built so far.
“We propagated through word of mouth once the trust was built. I have a firm belief that the truest relationship test comes when one goes through a stress case. This makes our relationship with our customers special and unique than the rest. We also launched in Twitter and Facebook so that as soon as a customer complained, we got back with an immediate response and help. Trust is the secret formula which worked for us, though there were 30 other licences already available in the market like Mobikwik.”
Backed by consumer trust, Paytm’s stupendous journey to the top of the internet wallet market is now a part of startup folklore, but what is unkown is that Paytm also became one of a handful companies worldwide to secure Series a funding exceeding several $100 MN. They have done only a solo round of aid till now with Alibaba, SAIF and Alipay.
“I have always wanted a business partner and not a syndicated investor. Our relationship with “business partner/investor” is of a journey together. There are four people who own this company- me, SAIF, Alibaba, Alipay, says Vijay, in his usual animated way.
After building a billion dollar worth company, maintaining the success is the most difficult part of the journey and it cannot be done without good teamwork, he says. For that, he ensures that the right people are taken on-board who share the same passion to build like his. He has also given 4% of his equity to the team, which in current value terms is about $120 million.
“Vijay says he have given more to his team than any amount of salary cumulatively taken in so many years,” And why he chose to do so isn’t hard to understand. Given his personal experiences and the tough fight he put up to achieve where he has reached, he values everyone who contributes to creating his vision. People working in his company are never referred to as ‘Employees’, but as ‘Colleagues’ or ‘Teammates’. A staunch believer of God, he believes that only one amongst every 10 hardworking person succeeds to the levels he today firmly belongs in, and because of that respect he shares for every hardworking person, he doesn’t have the right to call anyone an employee or a worker.
It’s just not the fighting spirit that has Vijay in the place that he enjoys today. Despite his engineering background and no formal education in business management, he has the business acumen of a genius.
While the pride he takes in his creation and the people who help him implement his vision is obvious, he brushes this unique quality off by saying, “When something’s not working, I become the customer,” with a smile on his face, that is so true to himself. He attributes his humility to the lessons learned from his father. His father say no to take trainings even though the extra money would have made a huge difference to their lives, as he believed that true education cannot be the privilege of those who have money.
His struggles are the reason why he hates reading fiction. How can one are inspired by made up tales!
Vijay stands testament to the saying, “A man makes his own destiny.”
Life has been busy for this go-getter ever since he entered college. A true lover of all kinds of music, Coldplay, U2, Jim Morrison being his favourites, he takes respite in music to relieve his stress.
Inspite of all these, his attitude to life can be best defined in his own simple words.
“It (his success) still seems so surreal.”
Any money that came in went into paying the interest, office rent and salaries for the twenty-five people team. Vijay, who paid himself the last, had no money to pay his house rent. So he would go home only late at night and scale the walls to get into his own house to sleep. He would wake up early in the morning and run away so the landlord would not see him.
His landlord was a rich, genial soul. ‘Beta,’ he would tell Vijay, ‘you should save some money for house rent.’
‘Sorry, uncle,’ Vijay said each time, ‘the problem happened only this month, it will be fine the next month.’
But next month would only be worse, and the time came when Vijay did not have money for food. So he would pile on to friends so he could eat at their place. The paranthewallah near Moolchand Hospital in south Delhi, known for his delicious, low-priced fare served late into the night, became a source of sustenance. Vijay would walk down to it after work, but with an eye on his wallet. Two cups of tea in the winter was a luxury—a far cry from the days of golgappa shots without vodka. ‘The circle of life,’ says Vijay, with a guffaw.
Some days he would do training or consultancy work to make money. He would go to companies and teach their employees about the Internet. He was paid Rs 1000 for a day of training. For some of the companies, he would set up a website and email while his team ran the One97 operations. The money Vijay earned this way kept One97 going.
While on the training-consultancy circuit, Vijay ran into Piyush Agrawal, whose Polar Software needed help with its technology. Vijay’s work took Agrawal’s company from no profits to a handsome profit.
‘Why don’t you become the CEO of my company?’ asked Agrawal.
‘I can’t,’ said Vijay, ‘I have my own company to run.’
‘Think about it,’ said Piyush.
And Vijay did.
This was in 2004. Vijay was twenty-six. His parents were frantically looking for a suitable bride for him. But there was a problem.
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Vijay’s father would initiate negotiations with a girl’s family. The girl’s side would initially be very keen, given Vijay’s status as electronics and communications graduate from Delhi College of Engineering. Someone from the girl’s side would come over to meet him, and then things would go very quiet.
Vijay’s father was puzzled. But then he figured it out. The girl’s side went quiet once they discovered Vijay was not bringing home a guaranteed amount in salary every month. The father was now pushing Vijay to shut down his company and take up a job, one that would pay him at least Rs 30,000 a month. That, the father believed, would be a strong magnet to fetch him a good girl. He also ticked off Vijay for having taken loans from friends and family. ‘I don’t like it,’ he would say.
All this would bring tears to Vijay’s eyes. He had given his blood and sweat to One97; he could not bear to shut it down. But he could no longer stave off his father’s nagging.
So he spoke to Piyush Agrawal.
‘Why don’t I work for you half a day every day and you pay me Rs 30,000 a month? I will be your CEO, but only for half of the working day.’
For Piyush, it was a steal. He was getting a CEO who had brought his company into profits even while working as an outsider. Now he was ready to go full-time. So what if it was for only half the working day? Whoever got a good CEO for Rs 30,000 a month?
The deal was done. Vijay told his family he had become a CEO and was earning Rs 30,000 a month. In 2005, Vijay got married to a girl from Jaipur.
The wedding was a simple affair. It had to be, since Vijay had no cash flow and he did not want his parents or his wife’s parents to spend on the wedding. The budget had to be kept within Rs 2 lakh, which he had had borrowed from a chap who was his partner in XS Corps, his first company.
He has a delightful little son now, on whom he does, and who visits him at office from time to time and sits in his lap. But Vijay is still not sure that getting married was the right thing to do.
‘The spouse has a lot of expectations from a new relationship. But I could not devote time to my wife even if I wanted to.’
All his time was spent trying to keep One97 going, which was becoming difficult with each passing day.
One day, Piyush Agrawal asked Vijay what his company did and why it needed so much of his time. Vijay told him about One97’s business of systems and content, how the content was delivered to the consumer through texts and calls, and how the money was charged by the operator and shared with One97.
‘How can I help?’ asked Piyush.
‘Give me a loan of Rs 8 lakh,’ said Vijay. ‘That is the amount of loan I need to repay.’
‘I cannot give you Rs 8 lakh just to repay your loan. But I can invest this amount in your company,’ said Piyush.
That he did, and also gave space in his office to One97 so Vijay could be close to both Polar and One97 at the same time. In return, Piyush got a 40 per cent stake in One97.
Piyush sold most of his stake later for Rs 87 crore. That should be enough to make him one of the shrewdest investors in the history of India. But had he held on . . . well . . . One97, with its ownership of the Paytm mobile wallet and an online marketplace, is now valued at billions of dollars. It also has a payments bank licence now.
The high current valuation makes some people question Vijay’s wisdom in giving away 40 per cent for just Rs 8 lakh and some office space. They forget that the value of money depends on the need it serves. Had Piyush’s Rs 8 lakh not come in at the time it did, One97 may have shut down and there would be no Paytm. In a sense, Piyush’s money was Vijay’s angel round of funding.
Later, Polar sold its office and moved. And still later, when Vijay had the money, he bought back the same office.