Thread by @kavinbm

1/ One of the wisest decisions we made in recent years was to cut payments from our overall strategy. Here's a tweet storm talking through some of the thinking behind this (and more).

2/ We launched payments in mid-2017 to a lot of excitement. It was our way to start building a business model on Hike the SuperApp.

3/ We had sizeable scale at our peak (10m+ DAU) and given that distribution, within a month after launch we were doing 3 million transactions / day (mostly recharge, some % of bus bookings etc).

4/ A few things became clear to us quite quickly:

1. Scale came fast but not without incentives. This was going to be a big capital sink. Cashbacks with no end in sight.

2. In an open market like India anyone with a ton of capital could jump in. Distribution was no moat.

5/ contd..

3. Regulation uncertainty at the time around KYC was brutal making innovation difficult

4. On the cusp was also UPI which if worked would commoditise this entire space

6/ 4 months in, we realised that the probability of success of the project was quite low and it was a game we would not win. So by the end of 2017 we cut payments and we moved on.

7/ Fast forward a few years, ‘payments in its current form’ as a business model in India is a big ?. At best, it's a loss leader but my god what an expensive one.

8/ Today, we have a 'high-stakes poker game' going on between 4 massive balance sheets with no clear winner in sight:

Walmart (PhonePe)
Amazon
Alibaba/Ant (PayTM)
Google (GPay)

Looking back cutting payments was one of the wisest choices we made.

9/ At hike, we are constantly innovating. Reality is sometimes innovations don’t work out and that’s ok in the long term as long as you're learning rapidly from everything you do.

10/ A metaphor I first heard from Jeff Bezos that I loved and adopted and tell our teams regularly:

"In baseball the best batters with highest batting average hit more home runs but also have higher strike out rates. So they're incentivized to swing for the fences."

11/ "Business is like baseball with one difference - A home run is 1 run but in business a success can yield a 1000 runs."

So @hikeapp we swing for the fences and we swing big, as long as:

1. We're 'thoughtful'
2. The 'cost of striking out is low'.

12/ If we do it right, this allows us to "make big bets without betting the company". That's how we do things.

13/ So in the interest of being thoughtful we had to ask - Was it un-wise to launch payments in the first place? How could we avoid being in such a situation again?

14/ As a result we now have a set of principles that we use to make decisions on what opportunities we jump in to. Think of principles as a decision making framework (and an incredible way to scale culture). Here they are:

15/ The principles:

1. Is the problem/market big?
2. Do we have a unique perspective on it?
3. Can we truly be Customer Obsessed?
4. Less is More (Opposite SuperApp)
5. Compete only on our strengths
6. Can we have super fast product Iteration?
7. Do we like the business model?

16/ The simpler the principles, the more you're on point. This is a great filter not just for us but for anyone launching something new. The more points that check off the higher the probability of success of a project.

17/ Applied to our un-bundling, things start becoming very clear. It’s the reason we’re not unbundling Hike News & Content.

It also becomes clear the move(s) we’re making in Gaming that led us to invest in WinZo (and not build ourselves).

18/ These principles are a part of a set of broader values that we call ‘The Hike Code’ which is our culture document.
One day hopefully soon we’ll publish the whole thing.

19/ If you’ve made it all the way to here, there's one more thing.

Something new is on its way... - hike.in/somethingnew/

@hikeapp