Tuesday, 21 November 2017

Uber's CXOs are now flying to India to meet cab drivers

Uber's CXOs are now flying to India to meet cab drivers

While building products, Uber's CXOs are now talking to driver partners in markets outside the US to find out what works and what doesn’t, a possible result of a change in the company culture.


A Head of Products is generally regarded as someone who is the epicentre of a tech company. However, in the last few months, the epicentre of Uber has moved quite a lot after the resignation of key employees, board members and even the company's co-founder and CEO Travis Kalanick.

The troubled year, however, has been a treasure trove of important learnings, feels Daniel Graf, Uber’s VP and Head of Products.

Uber hired Graf in 2015, who is an entrepreneur who founded and sold his company Kyte before moving to Googl “The backlash has brought forth collaboration to the fore in many ways. Sometimes when you are on a high growth trajectory, collaboration often takes a back seat. You are only focusing on problems,” says Graf, on a visit to India, one of Uber's key markets outside the US.

Graf is credited with the feat of launching Google Maps for iOS. Before joining Uber, Graf was head of products for Twitter. Currently, he oversees everything at Uber, from surge pricing to dispatching. For him, Uber has been a crazy, but a positive experience.

In the last few months, however, the company has toned down, taking a much more dedicated approach to work in a collaborative environment.

“It was a pivot actually, with Dara (Khosrowshahi) joining Uber as CEO. He is the right person to take Uber to the next level. At Uber, we are taking it as a new chapter; we are taking it to the next level,” Graf says.

Naturally, Uber has little choice but to change its policies.

In June, a law firm hired to run an internal investigation into Uber’s “toxic” work culture, harshly criticised the company.

A 13-page recommendation list of over 40 suggestions touched upon various issues highlighting the need to eliminate certain company values like “Let Builders Build” and “Always Be Hustlin’,” which were used by the company in the past to justify bad behaviour.

The recommendations also suggested the company to tone down its predatory approach to market expansion.

Uber

In India too, Uber has been at loggerheads with the government authorities regarding several road transport rules violation.

Uber has categorically said it doesn’t want to adhere to India’s stand against surge pricing.

Now, Graf says, the company is a lot more cross-functional, where conscious efforts are being made to bring members of other teams on product development. The US-based company is basically changing its approach to how it operates.

“This kind of change never would have happened, or would have happened at a much slower pace if we were not forced to look within and re-evaluate business practices,” Graf says.

The change in the company’s narrative is an indication that the company is now moving away from rapid growth and expansion that fueled Uber previously, towards a more thoughtful evaluation of the product.

“We need to earn back respect and trust among our users and driver partners. Technology alone will not do that. It is a lot about being good human beings and listening. For instance, one of the crucial reasons for our visit here in India is to talk to driver partners and listen to them, find out what works and what doesn’t. If I tell you everything is great, that is just not true. There is a lot of room for improvement and we are young,” Graf says.

The Uber senior team – including Manik Gupta, Head of Product, Marketplace and Maps; and Peter Deng, Head of Uber Rider Experience – has been touring Delhi, Bengaluru, and Hyderabad.

In terms of technology, there’s a lot brewing at Uber. To start, the company launched a dedicated marketplace for its driver partners to avail loans, insurance, car maintenance and much more.

Addressing the security issue, the ride-hailing app launched a face-recognition ID approval system for drivers in August that will require them to take a selfie before accepting rides. The move is to avoid duplication of driver details and to curb impersonation by unregistered drivers.

The US-headquartered company also extended the share trip option to drivers to increase safety features for the driver partners.

“The new rider app that was launched also changed the game for Uber,” Graf says.

Drivers of Uber and Ola walk next to their parked vehicle's during a protest in New Delhi, India, February 14, 2017. REUTERS

The company is now running several experiments in-house to increase the use of artificial intelligence to help its driver partners with predictive analysis.

“Our driver partners need stable and predictable earnings and we can help them in that. If next week is a holiday, we need to know that and tell them. That transparency is important. We can predict if a public holiday is going to have low demand based on data. We can also push analysis on weekly basis – which day has higher demand, which will provide flexibility to drivers to plan their days of work,” Graf explains.

“We are automating a lot more and get more data in the system. Our city teams communicate with the drivers on call or SMS at this moment. But I think we can do a lot more about it,” he adds.

Uber has already started pushing a detailed statement to Uber drivers after every ride that elaborates on how much the rider paid, did they get a promo code, how much cut the driver got from the total fare, and how much did Uber retain.

“We are moving towards full transparency and this is the first step,” Graf says.

But a crucial pain point in Uber app still needs to be addressed – the estimated arrival time.

“Maps are central to what we do at Uber. Now the system updates and refreshes itself based on available data but ETA is often not accurate. If a driver goes to a wrong location, we don’t have a way to determine the exact time and distance between the driver and rider, Graf elaborates.

Uber is working on several mapping technologies globally. While in some markets like Singapore, Uber mounts a mapping system on cabs, otherwise it depends heavily on Google maps, layering it with its own APIs.

“We are looking at every market and looking at the available mapping infra to see what we can do and how we can improve it best. We are experimenting things, and then it will depend on several things on how we roll them out,” Graf says.

Last year, Uber had announced plans to spend USD500 million on an ambitious global mapping project.

In India, Uber on Thursday opened an engineering office in Hyderabad, which will house its maps division to address the challenging traffic scenario in the country.

The company has announced a slew of India –specific solutions including a new feature that allows Uber users to book a cab for friends and family in different cities.

Acknowledging the poor reach of internet in the country, Uber also launched a nation-wide number for people to call and book a cab.

This will allow Uber to expand its reach in India to the population who don’t use a smartphone or have a limited network.

Another product Uber launched is offline destination search, targeting to bypass issues of patchy network and fluctuating internet connection.

Monday, 6 November 2017

How an Indore cloth trader built a snacks company now valued at Rs 2700 crore

How an Indore cloth trader built a snacks company now valued at Rs 2700 crore

Almost bankrupt in 2001-02, a wholesale cloth trader from Indore Amit Kumat has built a multi million dollar company Prataap Snacks Limited which listed on the Bombay Stock Exchange in September...

How an Indore cloth trader built a snacks company now valued at Rs 2700 crore

It was in the year 1992 that Amit Kumat, now 48, returned from the US after a masters degree in science from Louisiana State University, determined to make a difference in India.

Back in hometown of Indore, he could not find a job in an economy which was in shambles. He started assisting his father in his wholesale cloth shop in a busy bazaar of Indore selling stockpiles of nylon, cotton and linen by the tonnes.

“Those were the best two years of my life which taught me how to sell to an Indian customer who is extremely price conscious,” says Amit Kumat, now CEO of the Rs 900-crore company Prataap Snacks, which owns Yellow Diamond brand of chips, namkeens and snacks.

The company listed on BSE in September, this year and boasts of a valuation of about Rs 2700 crore on the Indian exchanges with Salman Khan as Yellow Diamond's brand ambassador.

Coming back to Kumat's story. The cloth business did well which led Kumat to start expanding in various areas. He started an SAP training institute, a chemical dye business and even a website called dealinchem around 1996-1999.

The family landed neck deep in debt

Come dot-com bust and all businesses started collapsing like a stack of cards. This landed the Kumats in neck deep of debt of over Rs 18 crore.

“There were days where I had to think twice over whether I should take a bus or simply walk. There were days where I used to wake up and wonder what to do all day as our offices had shut down,” says Kumat.

PRATAAP CAMPUS

That is when Amit approached a family friend and a classmate of his elder brother Apurva Kumat for an investment of Rs 15 lakh in setting up a snacks business out of Indore.

Arvind Mehta, a family friend, who had a real estate business agreed to become a partner in the snacks business. Kumats started getting cheese balls manufactured in Lucknow, and selling them in Indore and other parts of the city.

The snacks business clicked. The trio set up a chips making unit in Indore and started making potato chips by the thousands every day giving competition to market incumbents such as Frito Lays, in certain pockets.

In 2006-07, they launched Chulbule, a rival to Kurkure, a popular snack made for the Indian palette by Pepsico India.

Seeing the success of Yellow Diamond, Sequoia Capital, a globally renowned venture fund approached them for investments in 2009.

However, the Kumat brothers and Mehta waited almost 18 months before saying ‘yes’ to a USD 30 million investment in the company.

IMAGEPRATAAP

With the money, they installed a chips making unit, a potato rings making plant and a namkeen production unit.

Now Rings constitutes almost 42 percent of the business and chips about 26 percent.

The company makes about 40 lakh packets of rings a day with a toy worth Rs 0.50 inserted in each packet.

The assembly machine inserts a toy in each packet. “Kids are the biggest consumers of Rings, with each packet costing just Rs 5 for the consumer,” Sumit Sharma, the company CFO informs me.

A management that eats together, stays together

It’s now lunch time. The company management invites me to their daily lunch routine.

Lunch is made each day in either the home of Kumats or the Mehtas. The cooks decide amongst each other on their weekly turns.

At 2 pm every day, office boys come with steel hot-cases of freshly cooked dal, curry, rotis, rice and papad to the boardroom.

Plates are laid and the food is served hot to the top management, which includes the three founders - Amit and Apurva Kumat and their family friend Arvind Mehta.

Despite over 21 years of working together, the top management eats together every day. It’s very unlike other MNCs where food is served in the cafeteria or inside the cabins of the top management.

Perhaps this is the way, the company management bonds and stays together in thick and thin.

PRATAAP6

“The company’s name was earlier proposed to be Diamond. However, the trademark was found to be registered thus forcing them to suffix ‘Yellow’,” Amit Kumat informs me during the working lunch.

“This also made perfect combination as Arvind bhaiyya believes in numerology and it exactly made 13 digits,” he adds while Arvind Mehta relishes the homemade besan laddoos.

The company which started with just three people now employs about 750 people directly and about 3,000 people indirectly through contract rolls.

Plant is stuck in a hot chocolate problem

After lunch, we travel to a nearby plant making a new product for the Indian market - chocolate pasted jam biscuit.

As I enter the air-conditioned plant, fragrance of a bakery engulf me.

Fresh wheat and maize flour dough is being made by the assembly plant which converts it into biscuits.

The biscuits are baked and travel some distance on the conveyor belts, before jam is poured on them at 68 degrees centigrade. The biscuits again travel some distance and air cooled before being flipped.

BISCUIT1

A coat of hot chocolate sauce is pasted on top. The biscuits move further down the belt before getting air cooled and are then packed into small packets of Rs 5 each.

There is one challenge though. The hot chocolate is not solidifying easily even after getting air cooled so sticks to the plastic wrappers on the side.

Food technologists from Italy have flown down to help solve the issue as the company plans to launch the product in the market in the next few weeks.

The assembly line is in pilot phase. This means the thousands of biscuits being made daily are not sold in the market.

“Every day about 40 kilos of chocolate biscuits are distributed in the orphanages around Indore, as the product is still in a test pilot stage,” an HR manager of the chocolate biscuit assembly line informs me.

The assembly line hires people from around the village thus creating employment. “We are the biggest employers in this area,” Kumat informs us as we move out of the facility, just a stone’s throw from the Ralamandal wildlife sanctuary.

PRATAAP

I see reams of Yellow Diamond Snacks hanging upside down alongside packets of Lays and Kurkure, at the roadside paan shops, lining up the road to Ralamandal wildlife sanctuary.

The company’s immediate plans include expansion into Bangladesh with a new plant, launching the chocolate cake-biscuit and expanding India capacities with the proceeds of the recent public offer.

Yellow Diamond has also started exporting products to Canada and South East Asia.

The total size of the recent IPO was Rs 482 crore. Out of this the company raised 200 crore and the rest Rs 282 crore was diverted towards the major shareholders Sequoia Capital and promoter families which took a partial exit. The company also raised Rs 50 crore through a pre-IPO offer.

PRATAAP6

The company's market capitalisation based as of Friday's price on the BSE is about Rs 2,737 crore.

“My next milestone is achieving a market cap of a billion dollars (Rs 6500 crore) in next two years,” informs Kumat.

Whether Yellow Diamond will be able to achieve that, only time will tell.