Making sense of the New Capitalists

Your smartphone is the gateway for platform businesses to drive their hooks deep into your psyche and pockets, edge out traditional businesses, and reset markets. In doing so, they are becoming monopolies, the likes of which we’ve never seen before. What is fair play in this new world?

Haresh Chawla

[Image by edar from Pixabay]

This is the first article that kicks off a special week of learning on the Future of Platforms for the Founding Fuel community. See this link for details on what’s to come.

What’s common between Swiggy, Zomato, Facebook, Amazon, Google, Flipkart, Airbnb, and Uber?

These firms don’t actually produce anything.

Uber doesn’t own cars, Zomato doesn’t own restaurants, YouTube doesn’t create content, and Google doesn’t publish anything. Facebook, the deadliest, doesn’t do much at all—co-founder Mark Zuckerberg (described by some as “the most dangerous man in the world”) claims it just helps people connect.

Yet, the power these entities wield over society and the economy is lethal. I will come to this a little later when I examine why they exhibit deviant behaviour.

Whether you run a restaurant, are a publisher, or sell pumps or furniture, or just cater kathi rolls from a small stall, these platforms impact your business, and chances of survival.

Frogs vs. Sharks

At a talk, I asked the leadership team at one of India’s largest financial services businesses this question—a digital aggregator in their space raised a billion dollars in funding a few days earlier. Do they see it as a threat?

They laughed it off. Because the online aggregator got them less than 5-6% of their business. They wondered why someone would invest a billion dollars in it.

I then asked, what’s the growth rate of business via that channel?

About 40% per annum, they said.

So, is it conceivable that this aggregator could be 10% of their overall business? They agreed it’s possible, but still didn’t think it was a threat.

Until I spelt it out: What if in a couple of years this aggregator takes a 10% share of all the firms in the segment they operate in? Won’t the aggregator suddenly have a 10% market share and possibly become larger than the leader?

That’s when realisation dawned.

No matter what business you are in, there is a platform working to put a digital wrapper around your offering, and serve you up to a customer. You are sold the idea of reaching more customers—and earning more profits.

What you forget is, the platform wants to put its own wrapper, its own price sticker, and create its own augmented bundle of value (fast delivery, easy payment, trackability and more) to the customer, with its own imprint.

Platforms are like sharks. They creep up in every market where the consumer can search, discover or transact via a smartphone. Traditional businesses are constrained by geography, regulations and are usually overseen by people keen to protect their turfs. Their DNA isn’t designed for the digital world. Their fate is akin to that of frogs in hot water.

The CEO of Time Warner, when asked about the threat of Netflix on media companies, said: “It’s a little bit like, is the Albanian army going to take over the world? I don’t think so”. We all know how that ended.

As some offline businesses try to reclaim their turf, we are witnessing tussles break out. We see neighbourhood restaurants reneging on agreements with Swiggy and Zomato, and small merchants up in arms against Amazon and Flipkart.

Globally, regulators and governments are grappling with accusations of breach of privacy, fixing of local elections and other predatory actions by these firms.

But no one really knows what to do. Why not? Our standard blueprints for regulating markets fail when it comes to dealing with these platforms. 

Much of the difficulty lies in the nature of platforms, how they’ve evolved, and a common playbook that has allowed them to corner profits and power, and change consumer behaviour. They now wield disproportionate influence acquired insidiously. 

(Note: For this piece, to keep things simple, I’ve used marketplace and platform interchangeably—at a high level the rules governing them are similar.)

The Playbook


To understand how platforms operate, I’ve identified five themes in their playbook. Let’s examine each of them.  

1. Get the Flywheel Going

The initial challenge they face is to ensure supply and demand in the marketplace, and to lubricate the path to natural network effects. Simply put, the growing size and scale of a marketplace makes it a compelling magnet for new customers and merchants, resulting in a virtuous flywheel of spiralling growth.

Some platforms, by their very nature, have strong network effects. Customers bring in their own personal networks or become super-creators in the hunt for status (followers, likes, shares). Prime examples are those that attract user-generated content and social networks like Facebook, Instagram, Snapchat, WhatsApp and Google. They don’t have to spend to grow their customer base. The network effects are so powerful that you download these apps on your phone without thinking. Being left out of the network is not a choice—imagine not being accessible via WhatsApp or not being on Linkedin. Some seed content artificially—Tiktok, the fastest growing short video platform in the world, pays professional creators for the videos you see and forward—but once it achieves a certain scale in a market, free user-created content kicks in.

Others that deal in real goods in the real world usually have weaker network effects. They have no choice but to cajole consumers to transact with eye-popping discounts, coupons and cash backs to kick-start the “bazaar”. The supply side is crucial and they invest in developing a huge merchant base so customers can experience diversity and depth of supply, which is unbeatable by any offline player. Case in point: Amazon lists over 100 million products; a typical Walmart superstore has just over a hundred thousand (about 0.1% of Amazon’s).

Kick-starting the two-sided engine is a matter of life and death. This phase is wasteful as they burn enormous amounts of capital. We’ve seen it with Flipkart, Ola, Swiggy, Zomato—capital is thrown around like a drunk sailor pouring drinks for his mates.

Once the flywheel gets going, things get interesting.

2. Your Candy, My Wrapper

Past the launch phase, marketplaces quickly realise that remaining just a digital wrapper and leaving customers in the hands of merchants isn’t enough. Truant merchants game the market—fake products, bad service and fake reviews abound. Customers, even if wooed with discounts or convenience, need a consistent experience.

The platforms now begin to weed out dubious merchants. They start imposing rules and delist those who break them. They enlist customers to sift through the merchants through reviews and ratings.

They give incentives to merchants who conform to service standards, ship faster, get better reviews (or drivers who work longer and harder). Customers now start getting quality goods and consistent services; they begin to consume more, and more often. As for merchants, the better performing ones become increasingly dependent on the marketplace as their revenues on the platform grow.

The merchants learn how to operate within narrower rules and build services designed to make customers’ experience more consistent. It’s the merchant’s candy, but the platform’s wrapper.

Marketplaces that fail to set these rules weaken and die (like Paytm Mall’s challenges in India or Ebay’s decay in the US). 

3. Value Migration

The platform puts up an impenetrable wall between you (the merchant) and your customer. You don’t know who your customer is, what they like, or how they make their choices. From a consumer-facing merchant, they convert you to a mere supplier.

Slowly but surely, from being an agent (of the merchant) the marketplace starts appearing like a principal to customers. People complain about the food to Swiggy, not to the restaurant. The customer’s entire experience, trust and faith is tied into Amazon and not the merchant who serves them. They probably don’t even check who the actual merchant is.

Consumers gift platforms this power to choose for them.

Steadily the marketplace or platform becomes the port of entry for consumers. The capture of demand leads to a capture of value, and the platform starts squeezing value from both merchants and consumers.

Their Holy Grail is to implant a new habit—that irreversible moment when customers talk to them as a digital convenience. When they hunt for Uber rather than walk to the kerbside to hail a taxi; when they pull out their smartphone to order everything off Amazon rather than enter a grocery store; when they just go with what Netflix thinks they may like, or more dangerously, when they leave the choice to Facebook to decide what news and videos to feed them

The ambition is to embed themselves as a default choice and become a verb: Uber it, Amazon it, Google it, Instagram it, Swiggy it.

At this stage, the platform’s allegiance shifts to only the customer. There is no bond with suppliers—they are seen as mere tools to fit their objective.

Value migrates to the wrapper, the candy becomes a commodity.

4. Your Profit Pool or Mine

Ask yourself: If your restaurant is not on Swiggy, or as a merchant if you are not listed on Amazon or Flipkart, do you even exist? To an increasing number of customers who live by the smartphone alone, you don’t.

Though listing (or putting up your wares) on the marketplace is usually free for the supplier, being discovered by the customer is not.

Consumers are optimisers, not maximisers. We rarely scroll through hundreds of listings. We are happy to do a cursory search, and go by the marketplace’s recommendation. The algorithm is designed to create an illusion of choice for the customer—it decides which merchant (or which piece of content) serves the end goals of the marketplace best.

And merchants must pay to be visible on the platform, because customers won’t go past the first few scrolls or recommendations the platform makes. The platform starts charging an access fee—directly (by charging a commission) or indirectly (by tweaking the algorithm, which makes it difficult for a merchant to be discovered unless it advertises on the platform).

Swiggy and Zomato, which started with a 15% commission from restaurants, have steadily upped it to 25-30%. The “organic reach” of your Facebook post is merely 1-2% of your followers. Pay up, and Facebook will ensure the post reaches all of them.

Amazon earns over $12 billion in advertising revenues from merchants paying to be discovered on the platform. But it is incorrect to call it advertisements. It’s actually a rent that Amazon is charging merchants so they are visible on Amazon’s digital aisles. Don’t pay, and its algorithm will probably bury you.

Slowly a merchant becomes beholden to the marketplace. You get business, but your cost of doing business creeps up, until you are caught between a rock and a hard place.

5. How Deep Is Your Love  

Success and failure for a platform are heavily dependent on two things:

  • The nature of the underlying market—its level of formalisation, excess capacity, and fragmentation. And Customer behaviour—are the transactions high frequency or low? Are they taking high involvement or low involvement decisions? And what tools will create habits?
  • How deeply can a platform make inroads into the value chain to organise supply, and how well it is able to execute on the shift of trust from the merchants to themselves to create a moat.

That is why, once their flywheel gets moving, many marketplaces simply launch their own vertically integrated services and private labels. It gives them more control over the customer’s experience and higher margins. Since they can channel demand, they are instantly able to create successful sub-platforms. Netflix starts making movies (it produces more shows than the top five studios combined), Airbnb operates some properties like a full service hotel, and food-delivery platforms dabble in private-label kitchens. Amazon owns the warehouses, operates the planes, the trucks and even does the delivery right into your home when you are not there. It even publishes catalogues now.

Eventually these marketplaces start looking more and more like the offline businesses they set out to disrupt. Except for one big difference—unlike offline businesses, they own and nurture a direct connection with the customer. P&G doesn’t know which family has had a baby and buys Pampers; Amazon does. The digital wrapper is worth a fortune more than the physical one.  

Seeds of Deviant Behaviour

[Image by Doerge from Pixabay]

The twin engines of network effects and migration of value to the digital wrapper give these platforms the power to upend every industry.

Powered with this playbook, these firms blur market boundaries, ignore regulation, exploit merchants, suck in freely available venture capital and grow at breath-taking speed. Move fast, and break things—until last year, Facebook’s motto—is applied recklessly.

The first reason they behave strangely is actually survival. If they don’t build a dominant position, someone else will.

Two good engineers sitting anywhere in the world can put together code to make a new digital wrapper. They can easily undo all the hard work a marketplace has put in to build up the habit.

In fact, the pioneer’s curse plays itself out perfectly. The early mover enters the market, burns capital to organise supply and consolidate demand, and boom! A swanky new version of the platform arrives and cleans out the “incumbent’s” customer base. Amazon isn’t the first ecommerce player, Facebook isn’t the first social platform, WhatsApp isn’t the first instant messaging service, and Tinder is not the first dating platform. 

Switching costs for consumers are low—they really don’t care whether they order on Zomato or on Swiggy. It begs another question: if you delete Swiggy on your phone, does Swiggy even exist?

The loss of attention from customers is what worries them the most. That gift of trust and habit is the leading indicator of success or failure. If that starts waning, a downward spiral begins. Twitter was on the verge of going out of fashion till Donald Trump’s tweets started shaking the world and journalism as we knew it.

This fear of irrelevance propels these companies to out-innovate, out-spend, and out-manoeuvre every form of business known to the modern economy. 

The second reason is more complex—it is why you see the headlines on $100 billion venture funds, founder misbehaviour, and the tussle with merchants, regulators, governments and citizens.

Enter, the Perfect Company

As these players scale, they realise they have something else within their grasp. Why aim for profitability and function like any other company, when they can reach a goal every business in the world tries for? Perfection.

It means a few things:

  • Zero competition
  • Locked-in customers
  • Capacity to scale infinitely
  • Great margins

In other words, a monopoly.

The marginal cost of serving a new customer is near zero, operating costs become fixed in nature—and the benefits of scale give them unprecedented bargaining power over suppliers, which is used as a lure to keep customers coming back. Scale begets scale. 

Their singular aim is to create monopolies, dominate markets and become gatekeepers to the customer’s attention and wallet. Capital follows them blindly to this place where scale is free, customers are hooked and competition is absent.

Netflix demonstrated how it can be done when it launched at once in 130 countries, on a single day—just like that. Google powers search, video, maps, email and more for the entire world (except China) with a few engineers sitting in Silicon Valley. Craigslist, which should be a role model for all platform businesses quietly generates more than a Billion dollars annually in revenue with a 90% margin and just 50 employees. It is single-handedly responsible for catalysing the decline in the newspaper industry in the US. 

But, having raised capital at such astronomical valuations, the goal of the management team shifts to find a way to justify it—their wealth, status and reason for existence gets wedded to creating market power.

Naturally, with great power comes the thirst for even greater power.

So, how do you get greater power? A few rules emerge here too:

  1. Customers are minions, merchants are lemmings
  2. The best way to keep a moat is to dig a new one
  3. No one can compete with free
  4. Data is meant to be abused

1. Consumers, the new minions. Merchants, the new lemmings

Over time, platforms learn how to extract their price from customers as well by examining data closely. Uber famously increased ride prices for customers whose phones were running low on power. Consumers are the new minions. Every aspect of our behaviour is tracked and exploited, as we will see later.

They pit merchant against merchant, feature against feature, and bring down competitive differentiators down to the width of a few pixels. Customers win and so does the platform since it—and not the merchant—gains customer loyalty. 

Game theory tells us that if firms come in direct competition with each other, they will drive profits down to zero. Merchants become like suicidal lemmings—one dies, and another is ready to take its place with all the inherent optimism that drives an entrepreneur. Example? For every restaurant willing to leave Zomato Gold, there are hundreds interested in getting in. 

Amazon is a master at the game, on both sides. In a curious way it makes you pay for your own loyalty. You pay a fee to become a member of Amazon Prime, and then buy more from Amazon to recover that sunk cost. You stop checking prices on other platforms—the platform lulls you into becoming an inefficient consumer, and you quietly hand over the power to Amazon’s algorithm to direct your attention and your eventual transaction.

2. The best way to keep a moat is to keep digging new ones. 

If you have millions of customers hooked to your platform, and have direct, personal access to their digital wallets, the marginal cost of entry into a new business is near zero. The upside: Infinite.

What’s more, customers may actually prefer dealing with you versus setting up a new relationship with another platform. Thus, like I said earlier, once customers shift their markers of trust to the marketplace, a flurry of related businesses start on the back of the original flywheel: Amazon started with selling books and moved on to appliances, Kindle, insurance, healthcare, and finally aims to become a bank; Swiggy is moving from food delivery to groceries and local merchandise; Uber recently announced it will list freelance service providers, besides the food delivery business; WeChat has become the gateway to payments, insurance, and mutual funds.

Investors love this ability to sell other things to the customer and extract value from a customer over a life-time. Investors pump up valuations and cash into the business as they predict towering market share across categories of consumption. They start valuing the “optionality” the firm has to enter new businesses.

So, Uber is not valued like a company that merely transfers bits and bytes between a driver’s and a customer’s smartphone. Instead it is (over)valued like a company that is expected to herald the future of transportation with its own self-driving fleet. Investors disregard unit economics, overlook founder bad behaviour, and ignore the cost to society—they are punting on a company that will destroy a category and replace incumbents. 

Source: CB Insights

(Note: One prevailing belief is that to keep the customer hooked, create a deeper ongoing relationship with them, and gain access to their pocket, add a financial product (wallet, loyalty programme, insurance, even offer them credit). Almost every large platform—from Apple to Amazon to Ola—dabbles in this. And you get Amazon Pay, Ola Pay and Apple Pay. Even Facebook, which doesn’t do any financial transaction with a user, is trying to launch Libra, a cryptocurrency for the masses. This belief extends to content too—streaming content is seen as a great freebie to offer consumers—another way to keep their attention from moving elsewhere)

3. You cannot compete with ‘free’ 

Cross-subsidise and kill. Competition is for losers, anyway, right?

Some readers may recall the browser wars of the 1990s—Netscape’s battle with Internet Explorer. Microsoft gave away Internet explorer for free with its flagship operating system Windows, effectively cutting off Netscape’s air supply. Google is accused of similar behaviour.

The simple agenda: Do not allow another player to achieve network effects.

Customers are served free, or at a price way below the value they derive from using the platform. This is a recipe to keep network effects intact and competition at bay. So you can store years of photos and documents for free, interact and make video calls for free, or get next day delivery for free. Do you ever wonder why?

Amazon’s cross-subsidisation play is folklore. It doesn’t need to make money from retail. Over 75% of its profits come from the Cloud business, and it is shoring up revenues from advertising (over 65% product searches begin directly on Amazon). Between the two highly profitable pools of profits, Amazon can cross-subsidise its product marketplace endlessly. How will anyone else compete? The results: Amazon controls over half the online market in the US.

4. Data is meant to be abused

Every swipe you make, everything you watch or hear is tracked. Your actions and behaviours are profiled. Your Google searches contain your dreams, aspirations, fears and hidden biases. Your digital avatar now resides somewhere in an algorithm. It knows more about your impulses than you do.

The marketplaces (or platforms) know that the lure of free compels consumers to make that misguided trade of their personal data. Different apps on your smartphone ask your permission to access different sets of data. That information is then traded and re-traded by thousands of data brokers. By triangulating these different data sets, platforms know where you are, who you are with, and how much money and time you spent on what. Nothing is private anymore.

The algorithm knows you are a function of your biases and fears. And there are no limits to the exploitation of your mind.

Facebook’s algorithm learns how you react to messages and notifications. Forget the market for products and services, it found a bigger market in selling ideology. It left a window open via which voter activation firms like Cambridge Analytica could peep into your mind, check for susceptibility and then choose political messages you were most likely to absorb. It kept iterating, hidden in the background, until it got the desired results.

Over the last decade, politicians have exploited the direct access these platforms offer. Why allow journalists and editors to put a filter when they can get direct access to the customers’ minds, via WhatsApp or Twitter? This has led to a seismic change in how politics and propaganda works in the digital era.

This abuse is still being unravelled. (Those interested should read Mindf*ck: Inside Cambridge Analytica’s Plot to Break the World, a book by the whistleblower Christopher Wylie.) The Indian elections and the holes through which WhatsApp messages reached your smartphone from political parties is yet to be investigated and documented as meticulously.

As you read this on your digital device, know that some algorithm somewhere is preparing to send you down a path you never intended to go. The Rubicon between advertising and manipulation is criss-crossed trillions of times a day.

Here’s a more benign example: has over 10,000 experiments running at any point of time to evaluate how consumers react to cues and notifications. Next time you see “last room available at this great price”, or that “21 other people are viewing this property right now”, or “free cancellations till you check-in”, know that you are being gamed into booking impulsively.

Controlling the Beast

[Image by Barbara Iandolo from Pixabay]

Society has started to grapple with this force. It is just beginning to understand how narrowing of choices, access to personal data and network effects  can effectively create competitive barriers.

There are early signs of action: The EU’s orders against Google and YouTube, the investigations into Facebook’s actions in the US, and the Indian Supreme Court’s ruling on data protection.

The Supreme Court created history when it ruled that data privacy is a fundamental right and must be protected. And that all entities that operate in India must do what it takes to protect user privacy. The matter had gained attention when vociferous arguments were raised for and against Aadhaar (the identity layer of the India Stack platform), and how data can be manipulated by social media platforms.  

Social media platforms claim that they simply offer choice and are not exploitative; they use freedom of speech as a fig leaf. They abrogate their fundamental duties as publishers in favour of profit. The ‘choice’ is a deception. At an atomic level it is nothing but a predetermined feed and a set of cues designed to make you behave exact as they want. This three-and-a-half minute speech by Sacha Baron Cohen is an eye-opener.

While the Supreme Court ruling is good in the longer run, attempts to tame a beast you can’t even see clearly or comprehend fully poses unique challenges:

  1. Platforms are now inescapable. Because when they cross-subsidise businesses, they offer customers extraordinary value. We cannot imagine functioning without Google search, connecting with others on Facebook, or chatting for free on WhatsApp. The cognitive load of switching to another mode is too high. If attempted, there is a chance we may regress in some cases. That is why there is a paradox. Platforms are intrinsic to our society and an imposition, at once.  
  2. The standard tests for abuse of power, and our standard blueprint for regulating markets fail precisely because the platforms’ power is hidden in the algorithms—the behavioural hooks they deploy to acquire consumers. These algorithms control our behaviour more than we know. Operating like precision-guided missiles, they analyse thousands of data points, to   manipulate us and send us down whatever paths they choose. It is difficult to scrutinise an algorithm.  
  3. Ironically, platforms actually welcome regulation, as long as it is designed to suit them. That is because once they already have critical mass, and their algorithm isn’t subject to scrutiny, any regulatory activity will only put the brakes on network effects others are seeking to gain, strengthen the moat of incumbents, and make it harder for new entrants. In other words, it will perversely safeguard monopolies.
  4. These new monopolies are unlike anything we’ve seen before. They keep redefining the market to avoid being caught in standard anti-competition and predatory pricing norms. Amazon is 50% of all online retail in the US and nearly 70% of all product search. But it defines itself as a retailer with a mere 5% share of the total multi-trillion-dollar retail market. Between Swiggy and Zomato, they control over 90% of online food delivery. But they define themselves as a tiny player in the overall food consumption market. Google, despite running seven services with over a billion users each, claims it has a small portion of the overall media advertising market.

In India, things are even more interwoven and complex. We have the dominance of the Google and Facebook ecosystems on one hand, and the Chinese platforms and handset players on the other. On top of that, we are creating our own public digital bedrock through Aadhaar and India Stack.

Flush with dollar capital, the American and Chinese platforms are attacking Indian businesses with rupee balance sheets. National security, citizen privacy and surveillance issues collide in our courts and there are no easy answers. India doesn’t have a blueprint to deal with these new capitalists and will need to craft one, soon. 

The path ahead is rough. A regulator cannot ordain how algorithms must work or will evolve. Nor can anything be done about the natural instinct of consumers to deal with a limited set of choices.

But regulators can start with severely restricting the use of data to cross-sell and up-sell services, or sell data to third parties. Or impose rules that compel platforms to “restrict my data usage to your platform, restrict it to the minimum required, and do not buy or trade in data about me from other platforms where I leave my fingerprints”. 

One way regulators are thinking is to break up large platforms and end the element of cross-subsidy. That may be a partial answer.

Another is to apply the test of monopoly at an individual’s level or at a network level. Each dominant platform exhibits different patterns of monopolistic behaviour and will need a unique framework. It will be interesting to watch how this evolves over the next few years. 

Merchants too must fight back for fairer terms of trade. We are seeing that in India. Pressure is on the government and regulators to ensure that online firms don’t undercut small offline merchants with predatory pricing and consumer incentives. Again, there are no simple answers because the tests we can apply are antiquated.

In conclusion, of course, there is much good platforms do. When they resets markets, they weed out weak businesses and expose inefficiencies. They force competition on firms that hitherto had localised monopolies and got away with poor service or pricing.

The challenge lies in dealing with artificially induced competition, when customers’ biases are exploited, and the process of discovery is monopolised.

The future looks even more ominous, as these platforms are now surrounding us in our homes and cars with smart speakers, launching wearable devices (watches, intelligent earpods, smart glasses and rings), which act like a second skin on consumers, and become the guardrails of our experiences, effectively dictating our choices, and our view of the world itself.

We must rewrite our understanding of what is a fair playing field. And relearn the rules of this frictionless game

“My kids accuse me and my wife of being fascists and overly concerned about tech, and they say that none of their friends have the same rules. That’s because we have seen the dangers of technology first-hand. I’ve seen it in myself, I don’t want to see that happen to my kids.” - Steve Jobs

(Note: Haresh Chawla will join a by-invitation Masterclass on Zoom with Prof Karim Lakhani and K Vaitheeswaran on ‘Understanding Platform Power: Destruction or Disruption?’ on Wednesday, November 27, from 6.30 pm IST – 8 pm IST. A recording of the live Masterclass will be published later on

Also Read And Watch

  • The difficulty of cross-selling: How far can businesses push the power of platforms to sell new types of products? The past week offered some interesting pointers. (A special edition of the This Week in Disruptive Tech column by NS Ramnath)
  • How platforms really work: A reading list: A curated list of articles, videos and a podcast (By NS Ramnath)
  • The difficulty of cross-sellingHow far can businesses push the power of platforms to sell new types of products? (By NS Ramnath)
  • Understanding platform power—disruption or destruction? Founding Fuel Masterclass: Platforms, data, analytics are not going to go away. The good news for incumbents: they do have strengths they can play to. The bad news: They will need a different mindset and rethink customer experience. 
  • Battles in the Age of EngagementThe tech giants are rewriting the rules of how business empires are built. How deeply they can engage the millions on their network is the key to the kingdom. No business, including their own, is invulnerable. The concluding part in a two-part series. (By Haresh Chawla)


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Ajinkya Pawar on May 26, 2020 7:38 p.m. said

Appreciate your critique of the Big Tech. We need more people to see for what it is. I would urge you to take your argument further though.
I read extensively on this topic - from Evegny Morozov to Scott Galloway and even Noam chomsky and Naomi Klein. What i see is, often commentators who are part of the system such as yourself and Scott Galloway - shy away from appreciating the full impact of your own analysis, while those on the left don't offer concrete insights - a pathway to change the system.
Sure, Platform economy is a juggernaut that will destroy the fabric of our civilization if left unchecked (with gargantuan monopolies hacking our behaviour to an extent where we would be rendered automatons without any semblance of free will).
The important question to ask now is - SO WHAT DO WE DO ABOUT THEM? As an investor, you are at the heart of the system - the FOUNDINGFUEL of sorts that is creating these monopolies of future. What is your moral compass telling you to DO??

If you take your own critique ahead, you will realise that we (civic society) need to reign platforms in (and by extension the VCs too).
Platforms are essential. My utopia is a world where everyone has access to such platforms - where access to these platforms is as fundamental a right as access to water, electricity or education is.
And for this to happen, Platforms, like other fundamental rights, must become 'commons', publicly owned infrastructures.

Will the current owners and investors acquiesce to such an idea? of course not. As part of civil society's here's some of my thoughts to make it happen -

we must have a strategy in place to turn platforms from private monopolies to co-op commons.

Ajay Kelkar on Nov 26, 2019 11:12 a.m. said

Nice article Haresh. A few aspects that get missed out in this mesmerizing effect that Platforms are having on us is the twin effects of a) How AI will begin to empower us as individuals & how we can & will leverage technology to create a personal inventory of chatbots that can outwit the platforms-call it Consumer to brand technology (c2B) b) How privacy & the possibility of creating a personal data warehouse-you as a consumer will have your own data in your own personal data warehouse in the cloud-both these will change the game for platforms over time, but I guess over a long time!

About the author

Haresh Chawla
Haresh Chawla


True North (formerly India Value Fund)

Haresh Chawla is currently a Partner at True North (formerly India Value Fund Advisors). True North is one of India's most experienced and respected private equity funds, with over $1.5 billion under management. At True North, he focuses on investments in the food and consumer sectors where he identifies and helps transform mid-size businesses.

He is best known though for his leadership in transforming the Network18 Group into a formidable media network. Under his watch as Founding CEO, Network 18 became India's fastest growing Media and Entertainment network.

In his dual leadership roles at Network18 and Viacom18, he built a media conglomerate that reached over 300 million households across platforms including television, print, films, mobile and internet.

His career at Network18 spanned 12 years, and he grew revenues from $3 million in 1999 to $500 million in 2012. He transformed the company from a TV production house to India's leading multi-media house with over 11 TV channels including Colors, CNBC-TV18, CNN IBN, MTV India and Nick India. He forged joint ventures and long-term partnerships with the world's largest media companies including NBC (Comcast), CNN, Viacom, Forbes, A&E Networks.

Haresh has also been keenly engaged in the consumer internet revolution in India from the early nineties. He is credited with building India's largest most well-known internet businesses like Moneycontrol, Bookmyshow, Yatra, Firstpost and Homeshop18. He continues as a successful investor and mentor to several internet and consumer start-ups today.

Earlier, Haresh has been part of founding teams at the HCL Comnet; ABCL, where he set up the Film Distribution Business, and at the Times of India Group where he launched Times Music.
Haresh holds a Bachelor's degree in Engineering from IIT Bombay and a Master's degree in Business Management from IIM Calcutta. He lives with his wife and two children in Mumbai.

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