It’s likely that several readers of this magazine have used the online taxi aggregation service Uber. After the Reserve Bank of India brought in new regulations, payments on Uber have been directed through a closed, online wallet system called Paytm wallet. Paytm, short for ‘Pay Through Mobile’, is the brainchild of a UP-born engineer, Vijay Shekhar Sharma, and as such, can be seen as one of the many start-ups that crowd the Indian ecosystem. But, Paytm’s genesis came from a frustrated young, and we mean young, student at an engineering college in Delhi in the late 1990s.
Sharma’s story begins in a village, near the town of Hardoi, near the city of Aligarh, on the banks of the Ganga. The son of a schoolteacher, he was the town’s resident genius. Such a genius, in fact, that he cleared the entrance exam to the Delhi College of Engineering (now Delhi Technological University) at the age of 14. While most other boys his age were discovering the joys (and lack thereof) of the opposite sex, Sharma was getting ready to go to college. Or, so he thought.
The authorities at the Delhi College of Engineering, which remains one of India’s premier engineering institutes behind some of the IITs, didn’t know how to deal with such a young kid. But, after a few legal headaches, Sharma finally walked into the college hostel at 15, barely knowing a word of English. “Well, I knew scientific terms such as volts and amperes, but I did not know that pratirodh meant resistance in English.” We meet Sharma at a Starbucks cafe near his south Delhi house, and when he speaks passionately about his plans for Paytm, you wouldn’t believe this man taught himself English while reading Hindi-to-English dictionaries in college. He can speak to investors, clients and journalists with immense ease today, but back in his first year of college, he was always close to tears. “I used to be a frontbencher my entire life until then. But, because the medium of education was English, I could not answer any of the questions.”
So, why do we describe Sharma as a savant? A person with rare mathematical and logical ability, he himself is uncomfortable with the term. “I went to college with school toppers; I was not the smartest kid in class.” But, he himself explains that he used to solve exam papers by analysing the symbols and numbers and not reading the question. Was it easy going to college when your classmates were three to four years older than you? Forget classmates, even his juniors were older than Sharma. “I was a very shy student. I felt horribly out of place. There were some classmates who really protected me like I was their younger brother, but that was no cure for my shyness. That was a reason I skipped class. Not to bunk in the normal sense, but to spend time in the computer lab,” Sharma explains.
It was in computers he found salvation. While it took him time to figure out some terms, “I never could understand why a computer was called a notebook”, before he knew it he was helping out the senior students in maintaining the computer lab. It also led him to figure his first business opportunity. “The internet was just about getting started those days, and while I could not run a business as a student, I could help others.” After enlisting a classmate, the two started using some nifty reverse psychology. “Nobody would give me a job if they knew I was a student, so we went to companies that developed websites and offered to help them out,” says Sharma. One of the websites he worked on then was Jet Airways’. “I remember entering flight details. It was a peculiar feeling since I had never flown in a plane.”
He had a knack for business and for reading. Located near Daryaganj’s used-books market, Sharma once picked up a few copies of Fortune magazine. “I discovered this place called Silicon Valley, and after reading about it I was determined to go to Stanford.” But, in his final year came the crushing disappointment that he couldn’t even afford to go to the IIMs, let alone abroad. “That was the first time in my life I was disappointed. My means prevented me from fulfilling my dreams. I don’t know what cracked in me, but watching my classmates prepare for their CAT and GMAT exams, I told myself, ‘One day I will hire these guys to work for me.’” Today, as he admits, Paytm has engineers and managers from the top engineering and marketing schools in the world.
Sharma’s first few stints in entrepreneurship were moderately successful, but there were missteps on the way. One early venture had to be shut down, and Sharma found himself out in the cold again. Instead of giving up and joining another firm, he decided to double down and start One97 Communication, a company in the mobile value-added services (MVAS) space. “197 was the MTNL helpline number. We saw the beginning of the mobile-phone revolution and the limited data opportunities and decided to start with providing MVAS services.” It was at a conference in Hong Kong in 2009, organised by The Wall Street Journal, where Sharma finally saw someone he was truly inspired by — Alibaba’s founder, Jack Ma. “The sheer numbers Jack was speaking of amazed me. This guy was talking of hundreds of billions of dollars, and in India, we were dealing with a few lakhs of rupees.” A couple of things happened that day — Sharma wanted to emulate Ma and also get to meet him one-on-one.
That meeting happened a year or so ago. When Ma and Sharma met, there was instant chemistry, so much so that soon Alibaba became an investor in One97, now better known through its consumer brand, Paytm. A few months later Ma came to India, and while some entrepreneurs and journalists were trying to get his attention, he invested $200 million in buying a 25 per cent stake in Sharma’s firm, with $375 million promised in tranches later, which should, if all goes according to plan, make Paytm worth several billion dollars.
When he started Paytm, Sharma also took a risk. He bet a lot of money and investment on the Paytm Wallet, similar to Alibaba’s AliPay. “Vijay loves risk, but he does tend to bite off a bit more than he can chew sometimes. But, what is remarkable is that he still pulls it off; he is remarkably determined to succeed,” says Nikhil Pahwa, editor of Medianama.com, a leading Indian mobile and online industry news site and a long-time friend of Sharma’s. Paytm Wallet is Sharma’s idea of creating a financial services behemoth. And, the numbers back him up. Today, Sharma says that while there are some 200 million credit- or debit-card transactions every month on Point-of-Sale (PoS) terminals, Paytm is two-thirds of the way there. “The idea will be that you will be able to buy a cup of coffee using the money on your Paytm Wallet by having your phone scanned. A unique barcode will be generated, and the payment will be debited, all highly securely.” He also wants to make the Paytm store to resemble Taobao, Alibaba’s online marketplace in which people are able to buy and sell goods. “We are also making it a place where you can negotiate. We know Indians love doing that,” he jokes.
Any regrets? “One, actually, that I could not build a billion-dollar company by the time I hit 30. I wanted to be in the global ‘30 Under 30’ list.” Marriage and a two-year-old kid haven’t slowed Sharma down. In fact, he says, “I love speed.” A case in point is when he jumped out of a plane in Australia a few years ago. “You go from zero to 350 in a few seconds. It’s a brutal way of learning the gravitational constant. I loved it and want to do it again sometime,” he says. Maybe when he’s made his second billion.
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