Rajesh Jain

Dhan Vapasi: The Treatment India needs to Recover from the Crisis (Part 3)

Government Control

How did the control of the vast public wealth of Indian end up with the government?

One of the things that defines a free country is the notion that the citizens are free and can own their property. Conversely, a country is not free if the citizens are subjects of some agency and don’t have full, unencumbered ownership of their property. By that measure, prior to 1947, India was clearly not free. Indians were subjects of the British crown, and the British government made the rules that governed India.

Post 1947, Indians should have become free but they did not. British-era rules continued to be enforced by succeeding governments, and the ruler-subject relationship between the government and the people continued. Instead of the people being the sovereign and the government their agent, the government continued to be the master and the people its subjects. The racial makeup of those in government changed but its imperial role did not. Two examples will highlight this.

Lutyens’ Delhi has hundreds of bungalows that house India’s politicians and bureaucrats. Built by the British, they once housed the rulers of colonial India. With the end of the British Raj, the skin colour of the rulers changed – but not their homes. Those who took over control of the government of independent India — politicians and bureaucrats — moved into those lavish quarters. Each bungalow, spread over acres, is worth a few hundred crores. It is impossible to justify that. How can those who were supposed to serve the public live like they were imperial rulers of a subjugated people, and extremely poor people at that?

A conservative estimate of the land value of Lutyens’ Delhi comes to around Rs 5 lakh crores. The aftermath of the pandemic has caused great pain to tens of crores of Indians. The proceeds of the sale of Lutyens’ Delhi rightfully belong to all Indians equally, rich and poor.

Each of the 25 crore Indian families could receive Rs 20,000 in the next few months. It is not a large amount but it will help the vulnerable families enormously to get back on their feet. With money in hand, their demand for goods and services will pull industry to increase production, which in turn will generate jobs. While helping the poor, it will give a much-needed boost to the economy without damaging side-effects.

(On a side note: I had written earlier about this idea of liquidating Lutyens’s Delhi. We ordinary citizens have to pay rent or buy our own houses. Why should the netas and babus get it for free? Like the rest of us, they should get a salary, and rent or buy whatever housing within their budget. This can be accomplished within a month. Remember, demonetisation was done overnight. The Prime Minister should give them all a month’s notice and demonstrate to the world that he means to correct the wrongs of the British Raj and that India is not going to tolerate it anymore.)

As another example of imperial rule, consider the existence of cantonments in India. The British Raj created military cantonments in more than 60 Indian cities and towns to quell rebellions from the “natives.” As a colonial power, it was rational for the British to do so. But military cantonments in the middle of a city are not justified in a free India — unless post-1947 governments consider themselves to be the new rulers.

Consider Navy Nagar at the southern tip of Mumbai. Created in 1796 (that’s not a typo — it’s 225 years old), it occupies 200 hectares of prime land. The Delhi cantonment takes up 4,000 hectares. It’s the same story in major cities such as Pune, Bengaluru and Ahmedabad. What’s their function? It cannot be protection from foreign invasion. Its prime function appears to be to provide private clubs, golf courses, fine accommodation, etc, to military and politically connected elites. In effect, public property has been usurped by the ruling nobility for their private use. This must be stopped.

These areas can be put to alternative uses to benefit the people — for housing and offices, schools and colleges, hospitals and shops, parks and recreation. Bringing these assets into use will create commercial value, which can then be returned to the people. There is a broader principle that goes beyond the use of public lands for the benefit of the public. It’s this: all public assets belong to the citizens, and they must derive tangible, direct and present benefits from them.

Tomorrow: Part 4

Dhan Vapasi: The Treatment India needs to Recover from the Crisis (Part 2)

Public Wealth

The people of India collectively own wealth that is not privately owned. That is called “public wealth”, which is in the form of public lands, the minerals, the improvements on the land, water resources, public sector corporations, financial institutions like banks and insurance companies, and resources such as the radio spectrum. These are public assets or wealth.

We all are shareholders in this wealth. It’s our wealth, in India, all around us. It’s not wealth — black or white — in foreign banks, which somehow needs to be brought back to India. The Indian government controls this wealth – much of which is lying unused, misused and abused. If this wealth is monetised and returned to the people, it can truly transform their lives and India’s future.

India’s public wealth is estimated at $20 trillion dollars. That would approximately come to Rs 1,50,00,00,00,00,00,000 – more than Rs 50 lakh for every one of India’s 25 crore families. Put in simple terms: India is rich, yet Indians have been kept poor. The median Indian family earns just over ₹ 1 lakh a year – less than ₹ 10,000 per month for a family of five. They save very little, if it all. This is what needs to change. This is why people need their wealth back.

What is needed is for the government to monetise this public wealth and return it to the people in manageable chunks every year – Rs 1,00,000 every year to every family. This would more than double the annual income for over half the Indian families.

Getting this wealth back means the people can choose how to spend it for their families. That spending, in turn, becomes income for sellers. When they spend on food, it is income for farmers. When they spend on other goods and services, it helps boost employment and creates jobs. The wealth return is universal and not means tested. This eliminates political and bureaucratic discretion, and thus reduces corruption.

Tomorrow: Part 3

Dhan Vapasi: The Treatment India needs to Recover from the Crisis (Part 1)

The Need

There is no denying the gravity of the state of the economy. With a 24% year-on-year contraction in GDP during the April-June quarter, analysts are now predicting a fall of 10% or more for the financial year. The Central and state governments are engaged in a confrontation about the shortfall in GST compensation. The Central government is caught in a bind – to pump in more money and risk a ratings downgrade as the deficit rises, or wait and watch and risk prolonging the recession. There is also a growing clamour for augmenting the fiscal stimulus and putting money in the hands of the people.

Simultaneously, coronavirus cases continue to grow, and local lockdowns slow the recovery as the virus lives amongst us. The availability of a vaccine that will provide long lasting immunity is still unclear though there are reasons to be optimistic. Against a backdrop of fear, uncertainty and doubt, people are cautious with their spending. Many small and medium enterprises face pain due to demand slump.

So, what can the government do? A set of actions is needed to achieve the following:

Put money in the hands of people without enlarging the fiscal deficit
Get India to sustained 10% GDP growth rate
Not entail any government borrowing which will impact the future growth
Attract global investors and their trillions of dollars
Not cause inflation
Be politically popular and financially wise
Solve the credit constraint problem that many Indians face
Give families the freedom to make their own choices
Not a violation of the fundamental rights of the people

Sounds like Mission Impossible?! And yet, there is a solution which can meet all the above requirements – Dhan Vapasi. It combines two ideas – the monetisation of surplus public assets combined with universal wealth return. India’s public wealth of $20 trillion which is locked up in land, PSUs and minerals needs to be returned to the rightful owners – the people of India, who can then decide what to do with it. Dhan Vapasi is the one idea that can work as the economic treatment to help Indians recover.

The building blocks of Dhan Vapasi are these:

We, the people of India, as the rightful owners of India’s public wealth, have a claim to the income from our public wealth
Public wealth is all that is not privately owned. It consists of public lands, minerals, public sector corporations, government-owned financial institutions like banks and insurance companies, and resources such as the electromagnetic spectrum
The surplus public wealth of India is estimated at Rs 50 lakhs per family
Dhan Vapasi is the proposition that every family must receive a dividend income of Rs 1 lakh every year from the public wealth they own
The government must be prohibited from taking any portion of that public wealth for its own use

The claim is that:

Dhan Vapasi will eliminate extreme poverty
Dhan Vapasi will create millions of additional jobs every year
Dhan Vapasi will eliminate the need for the dozens of public assistance schemes that are riddled with corruption
Dhan Vapasi will reduce public corruption —by stopping leakage of funds meant for public assistance

Tomorrow: Part 2

Prashnam – My Interview with ThePrint

ThePrint published a report with some background quotes from me about Prashnam:

Prashnam founder and internet entrepreneur Rajesh Jain explained that any survey irrespective of the population could be representative in nature if it included participants across demographics and highlighted different voices such as people from urban and rural areas, men and women, etc.

And if a survey had such diverse voices then roughly 1,000 people being surveyed was enough for it to be representative of the population, he added.

“Our basic idea is that we want to transform surveys. What Google did to information, we want to do to opinions,” Jain said.

Explaining how the surveys are conducted, Jain said there is an opt-in panel, IVR system, which does the outbound call. They are telephonic surveys and randomised samples. And Prashnam has all the details of the people being surveyed, he added.

“Our main objective is that we want to democratise surveys. Usually comprehensive surveys are very time-consuming and expensive. On our website and soon to be launched app, we will allow people to conduct their own respective surveys by paying a small fee. They can choose their own geographical area. Our sampling cuts through demographics and can be conducted district-wise, state-wise and even pan-India,” explained Jain.

The survey being representative in nature is taken care of by the back-end. And the results of the survey can further be verified by picking 10 numbers randomly and can be cross-checked to verify if it was what people said, Jain added.

“We hope this enables people to make decisions based on what people are thinking,” he said.

With this new model of surveying, Jain said that he hoped that the decision-making process improves and becomes data driven.

“Currently a lot of decision making takes place in a vacuum,” he said.

Launching: Prashnam.ai

I have launched a new startup, Prashnam. It is India’s first AI-powered feedback engine that collects real opinions from real Indians.

I have been using this over the past month to do various surveys — think of a question, and get an answer almost immediately. It changes the way one begins to perceive India. No more gut / intuition / half-baked online surveys. This is the real thing — a truly representative and a large sample of Indians for opinion gathering.

We can boldly state that these surveys have a 95% confidence, and 3% margin of error. Just as its done in developed countries.

Here are some of our initial case studies.

Quint (Hindi) published a report on our Sushant Singh Rajput survey.

My Proficorn Way (Part 40)

Ego as the Enemy

I was meeting with a senior person from a large company. I had spent a lot of time preparing for that meeting. Half-way through, the person I was meeting called an abrupt end to the meeting. I was taken aback – I was just two-thirds of my way through the presentation thinking I had much more time. I could have protested then, but I decided not to. I wrapped it up and came out. I was very angry then – How could someone do this to me? Did they not have respect for my time? I felt a rage building up within me.

I then decided to put my ego aside, and think with a calmer mind about the meeting. I had the good fortune to get the time I did. And during that time, the discussion that happened had actually opened up new lines of thinking for the solution I was pitching. I spent more time replaying the meeting, and realised that there were many positives from the interaction. In my initial fury about the curtailment of the meeting, I had almost lost sight of the gains.

Ego is a killer, a disease. We have to learn to set it aside. Anything that hurts us is not an insult that we have to take personally, and therefore respond with equal ferocity. By controlling one’s ego, it becomes possible to spot opportunities and openings that may not have been previously visible. Ego is like a fog that hampers our vision.

By not throwing one’s weight or title around, there is so much more that can be learnt. As an entrepreneur, one should be ready to meet anyone in the organisation to pitch the product to. And every meeting will have some learning. In the past few months, I have done 80+ meetings with marketing and digital heads to pitch my idea of Velvet Rope Marketing. I told my sales team to set up meetings with whomever was willing to listen – without worrying about designation. I go into each meeting with humility – as a student keen to learn about the world of marketing as seen by the people I am meeting. This has helped me refine my ideas through the months, and open up many new angles (linkages to referral marketing and loyalty programmes) which otherwise would have been closed.

Entrepreneurs must set ego aside. In fact, this is true even after one is successful. There is much we do not know about the world. If we go in without ego in meetings, we are more likely to meet more people and learn more things. Over time, by connecting the dots from all those meetings, a new image will appear – enriching our own mental models.

Will be continued soon.

My Proficorn Way (Part 39)

Worst Case Scenario

Entrepreneurs are optimists by nature. Data shows that new businesses have a more than 99.99% chance of failure. Yet, entrepreneurs feel they have a better than even chance of success. In fact, that optimism is one of the hallmarks of an entrepreneur. The low success rates of new ventures is why I also believe that an entrepreneur goes to work each day working to reduce the risks of failure.

It’s one thing to think about future success. But what many entrepreneurs fail to take into account is what could happen in the event of failure. This “worst case scenario” thinking is very crucial and needs to be done before starting up. What is the personal impact you are willing to bear – financially and otherwise? How long are you willing to give the venture before you call it quits? What are the things that can go wrong – because many of them will?

I was speaking to a friend recently and he said he had lined up 9 months of capital and was starting up. His product would be ready in 4 months and it would give him 5 months to get the early testing and initial revenues. I told him, “This is the best case scenario. Have you thought of the worst case scenario? What if your product development takes time? What if market feedback takes longer? You need to double the runway you have from 9 to 18 months. In effect, you need more capital to reduce the risk of failure.”

When I started IndiaWorld in 1995 after multiple failures, I asked myself the same worst case scenario question. My answer then was – I would lose the remaining of my savings and perhaps some family money, and perhaps two years of my time. At that time, I wasn’t thinking much about the upside. All I had to do was to make a decision whether I could accept the worst case situation. And from then onwards, every effort was towards ensuring that I never reached that outcome.

Thinking through the worst case scenario prepares one mentally so that one is not surprised when things do not go according to plan. As optimists, entrepreneurs tend to think everything will go according to plan. But what if it doesn’t? That is why entrepreneurs think of what can happen if things do not go according to plan.

Tomorrow: Part 40

My Proficorn Way (Part 38)

The Moat

To succeed big in business, one way is by constructing a moat. This concept was popularised by Warren Buffett:

What we’re trying to do is we’re trying to find a business with a wide and long-lasting moat around it, surround — protecting a terrific economic castle with an honest lord in charge of the castle.

What we’re trying to find is a business that, for one reason or another — it can be because it’s the low-cost producer in some area, it can be because it has a natural franchise because of surface capabilities, it could be because of its position in the consumers’ mind, it can be because of a technological advantage, or any kind of reason at all, that it has this moat around it.

But we are trying to figure out what is keeping — why is that castle still standing? And what’s going to keep it standing or cause it not to be standing five, 10, 20 years from now. What are the key factors? And how permanent are they? How much do they depend on the genius of the lord in the castle?

Another way to think about the moat is to ask the question: “What is your 10X advantage?” What makes you so much better that a challenger will find it very hard to switch your customers. For many tech businesses today, network effects become the moat that helps them create a dominant position that becomes hard for a competitor to penetrate.

During my IndiaWorld days of 1997-99, the popularity of the portals became a moat that helped us grow. People came in for one of their interests and stayed on to find others. Samachar with its single page news aggregation became the magnet. Interestingly, everyone else tried to build their own editorial teams. The aggregation of the most important news on a single page became Samachar’s differentiator and the word spread virally for it to become the default ‘home page’ for many Indians globally. Habits once formed become hard to break – which turned out to be good for us.

Today, in Netcore, one of the moats we have created with our email business is ensuring better deliverability of emails. This leads to more opens, clicks and transactions. Email deliverability becomes a moat that is hard for challengers to cross.

So, one of the first questions for entrepreneurs to think about is about how to construct the moat. That is the foundation for future success.

Tomorrow: Part 39

My Proficorn Way (Part 37)

Latticework of Mental Models

I came across the word “latticework” many years ago when a friend recommended an eponymous book by Robert Hagstrom about investing. (The book was later republished with a new title: “Investing: The Last Liberal Art.”) The book provides an overview of the major mental models in various disciplines — physics, biology, sociology, psychology, philosophy, literature and maths, and how all of these apply to decision making.

Writes Hagstrom:

The process of building and using a latticework of mental models is an innovative approach to thinking, and one that can be intimidating to many, to the point of mental paralysis. Fortunately there is a road map to the process that is easy to understand.

[According to] John H. Holland, a professor in two fields at the University of Michigan—psychology, and engineering and computer science, …innovative thinking requires us to master two important steps. First, we must understand the basic disciplines from which we are going to draw knowledge; second, we need to be aware of the use and benefit of metaphors.

…The ability to link mental models together and then benefit from the connections assumes that you have a basic understanding of each model in the latticework…Holland argues, metaphors are much more than merely a colorful form of speech, even more than representations of thoughts. They can also help us translate ideas into models. And that, he says, represents the basis of innovative thinking. In the same way that a metaphor helps communicate one concept by comparing it to another concept that is widely understood, using a simple model to describe one idea can help us grasp the complexities of a similar idea. In both cases we are using one concept (the source) to better understand another (the target). Used this way, metaphors not only express existing ideas, they stimulate new ones.

Entrepreneurs need a latticework of mental models to solve the problems they are likely to be confronted with. The best ideas often come at the intersection of two or more disciplines. Therefore, understanding the core ideas from different disciplines sets the right foundation for the thinking necessary for questioning the status quo and breaking through obstacles.

One of the regrets I have in life is that my early education did not include enough of the liberal arts. It is what I emphasise now to young people I meet – especially those with an engineering background. An early start can lay a deeper foundation for decision making. It is never too late to begin. Explore the most important ideas in different disciplines and create your own latticework of mental models to become a better entrepreneur.

Tomorrow: Part 38

My Proficorn Way (Part 36)

Entrepreneurship vs Investing

All entrepreneurs do not necessarily make good investors – be it in public markets or private companies. I am one of those – I like the world of entrepreneurship. But over the years I have realised I am not a good investor. There is a big difference between the two.

Entrepreneurship is all about doing it yourself – taking an idea to reality, making it happen. At each stage of the journey, there are challenges to be overcome and risks to be reduced. Each day has a thrill in itself – the breakthrough meeting, the new feature idea, the customer feedback that just makes your day. Each day brings its unexpected joys – with of course the down moments. It is like a game of ‘Snakes and Ladders’ being played daily. There will always be more downs than ups. But the ups take you much higher than the descent of the downs.

As an entrepreneur, you are also very much in control. You decide your own future as you make many micro decisions. At the end, it is you who is responsible for success or failure. It is this responsibility that you have to live with as you seek to make something better in the world around.

Investing is very different. When investing in private companies as an angel or early-stage investor, you have to relinquish the running of the company to the entrepreneur. This realisation that one is not an entrepreneur is not easy – you cannot be giving advice constantly. The entrepreneur is on the front lines and seeing things differently from you. You are not the driver, but the passenger. You may guide with a compass, but the map is with the entrepreneur.

Investing in public markets is about understanding which companies to bet on the future with limited information – and then once the choices are made, to wait patiently and think long-term. It is not about daily activity that is the soul of the life of an entrepreneur.

In both the cases of private and public investing, the control and steering wheel lie elsewhere. One has to get comfortable with that.

Investing is not my forte. I like the thrill of building from scratch and exploring new domains. I tried my hand at both private and public investing, and did not like it. There are many entrepreneurs who have become very successful investors – and I admire them. The transition is not an easy one. For me, it is always going to the world of entrepreneurship – with all its risks, thrills and rewards.

Tomorrow: Part 37