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The Mittal way

Kavin Mittal wants to do in the mobile Internet space what his dad, Sunil Mittal, did in telecom

Bhupesh Bhandari
Conversations with Kavin Mittal take you back to the late 1990s. Almost overnight, everybody had a mobile phone: rickshaw pullers and greengrocers to housewives and tycoons. His father, Sunil Mittal, as the largest service operator, was at the centre of this revolution, providing millions of Indians the thrill of calling from anywhere, anytime. India would never be the same again. Mittal Jr too adds thousands of subscribers every day - for his messaging app, Hike. And he feels he has embarked on a journey that will transform lives.

Actually, most 27-year-olds believe they can give history a helping hand, till skepticism sets in one day. Does Mittal have it in him? Or will he be just another shooting star? In Delhi's business circles, few know Mittal well because he moved to London immediately after school. Somebody who saw him at a discussion forum recently was impressed with his articulation and confidence: Mittal had come in denims.

 
What is certain is that serious effort and money back Mittal's plans. Bharti SoftBank, of which he is the head of strategy and new product development, is owned equally by Bharti Enterprises, the holding company of the Mittal family whose stake in Bharti Airtel is worth over $15 billion, and SoftBank Corp, the Japanese technology giant. Hike is a subsidiary of this company in which Tiger Global, the New York-based investment firm, invested $65 million in August.

Around 180 people, most of them engineers, work at the Bharti SoftBank offices in Gurgaon and Bengaluru. The buzz of a tech startup is unmistakable at the Gurgaon office. Most of the people here look fresh out of college - the average age is just 25. There is no dress code. Many will turn up in shorts once the weather becomes warmer. The youngsters talk animatedly around work stations. There is a gym tucked away in one corner. Food is on the house.

In August, Hike, with 35 million users, was second in the pecking order of messaging apps in India after Facebook-owned WhatsApp, which had 75 million users. With almost 100,000 additions every day, the number of Hike users is likely to have crossed 50 million by now. Half of them, Mittal says, are active users.

Rivals insist Hike has an unfair advantage: it has been pushed heavily by Airtel. Mittal knows that Hike is assumed to be an Airtel app by many but says its users are distributed across service providers in the same proportion as their market share. "The success of something like Hike depends 80 per cent on the product and only 20 per cent on distribution," he says.

To attract youngsters below 25 to Hike, Mittal has introduced features that hide from parents chats that are personal and usage after night curfew. Stickers are customised for local markets: those available for a user in Mumbai will be different from the ones in Patna. News from the ongoing cricket World Cup is available in rectangular cards that update every 10 seconds and act as gateways to more information.

In January, Mittal acquired Zip Phone of the US (the deal was wrapped in less than a month), which has enabled him to offer free voice-calling service on Hike. In the next few months, he hopes to deliver services like cricket updates through voice packs. "There are 14 to 15 features that we are working on right now, which we will roll out over the next few months," says Mittal.

Those who have known Mittal are hardly surprised at what he is doing - he was writing software code at 15. After studying at Modern School and The British School in Delhi, he enrolled in Imperial College, London, to study electrical and electronics engineering with management. In 2006, during the first year of his undergraduate course, Mittal interned with McLaren Racing, the British Formula One team.

At its factory in Surrey, he helped embed a technology that would show the track flags on the steering wheel. "I was even taken to the test tracks, where I met a young fellow called Lewis Hamilton," he says.

 
Mittal became a racing enthusiast early in life and had met the McLaren team at some races. What helped was that it had always drawn upon Imperial College for engineering talent. (Bharti Airtel would sponsor the Formula One Indian Grand Prix in 2011.)

Speed obviously thrills Mittal. As a child, he had racing simulators fitted at home. Later, he was a part of the go-kart team at Imperial College. (He was also a member of its cricket team.) This reflects in his choice of career: tech startups move fast and need decisions in double quick time.

The following year, Mittal did his summer internship at the Google headquarters in Mountain View, California. The biggest takeaway for him during the three months was the informal work culture. "I decided that if I ever set up a company, it will be along these lines," he says.

In 2008, Mittal was at the Goldman Sachs office in London as an intern. At the end of it, he was convinced that he would do anything but become a banker "because the learning curve plateaus after a while".

 
While with Goldman Sachs, Mittal founded his first startup, AppSpark, along with classmate Namit Chadha. The idea had been playing in his mind since 2007 when Apple launched the iPhone. "I was fascinated by it," says he. "I would swipe the screen with my fingers and enlarge or reduce the pictures all the time." The two pals decided to make apps for the iPhone.

The first app they launched, in the middle of 2009, was called Movies Now. It listed all film shows and featured trailers. In the US, users could even buy tickets on it. And based on your location, it could tell you which theatre was the closest to you.

The app was downloaded almost 500,000 times, Mittal claims. He then planned to give it another feature that would help theatres sell vacant seats at a discount an hour before the show. "I even came to Delhi and spoke to PVR (the country's largest multiplex chain) about it," Mittal says. But there weren't too many takers and the app was put on the shelf.

Mittal next devised an app called Foodster that told people what was popular in the restaurant they were visiting. This it did by converting online comments into scores. "But the algorithm ran into trouble when it came to comments like 'The lemonade is better than my girlfriend's kiss'," says Mittal. Foodster met with the same fate as Movies Now.

 
By 2011, Mittal says, it was clear to him that he ought to do something that was of more value than just movies or food. Growing up, he had seen how mobile telephony had changed lives in India. That became his benchmark. He wanted to do the same in the mobile Internet space in India, a unique market where a large number of people were getting their first Internet experience on the mobile phone.

He relocated from London, leaving his course for a private pilot's licence midway, to the family home on Amrita Shergill Marg in New Delhi, easily the country's most exclusive residential area. That is when the idea of Hike took birth. Work started on the app in early 2012, and it was rolled out towards the end of the year.

Many say Hike is a latecomer: while WhatsApp came in 2009, WeChat (China) and Line (Japan) launched in early 2011. Mittal agrees that he couldn't have launched Hike in mature markets like the US, Japan and China because a large number of people there have already used the Internet and broadband quite heavily. But India is virgin territory. Of the 950 million mobile connections, Mittal reckons, not more than 100 million have sampled the Internet.

Going by the blistering pace at which data usage is growing, Mittal feels there could be space for an app like Hike. All told, he expects Internet usage on mobile to rise to 500 million in three to four years time.

The Indian market may have a sizeable upside but is difficult to crack. An app needs to add more features without adding to the complexity. Since the screen size on a mobile phone is small, the space must be used judiciously.

Almost 80 per cent of Internet users have low-end smartphones that cannot support more than three or four apps. For such users, the app has to sit lightly and not take up too much memory space on the phone. And unlike a website, an error in an app cannot be corrected right away. That's why it is important to get every feature right in the first place.

These are the challenges Mittal and his team are grappling with. "Data is still expensive and its tangibility is not fully understood by users," he admits. As expected, Mittal knows the telecom sector well and is conversant with the latest buzz around spectrum.

The key task in a startup is to keep the core team of engineers intact. As they are often very young and impressionable, they switch jobs on a whim, and this slows down the pace of work. Mittal says he hires only those people who he feels will fit culturally into his company. In engineering campuses, he recruits one in 400 applicants. Entry-level salaries are high: almost Rs 10 lakh per annum.

To improve engagement, he has formed 15 "squads" within the company "which work like mini startups" - autonomous teams that build features for Hike. He even has plans for a Hike University for training. Attrition in his company, Mittal claims, is, therefore, close to zero.

While he might be choosy about whom he hires, Mittal has let nothing come in his way once he has zeroed in on a person. Some two years back, he had met somebody at an online design forum whose skills impressed him. When he got in touch with the person it turned out to be a young schoolkid from Srinagar who was not yet 17. He agreed to join Hike but couldn't muster the courage to tell his father that he wouldn't go to college. Mittal flew down to Srinagar the next day (he takes commercial flights and doesn't get to use his father's jet) and convinced the father to let his son join Hike.

Like his father, Mittal talks with conviction and likes to pepper global insights with local idiom. Both father and son have what it takes to be a successful salesman.

Many wonder if Mittal will be able to open revenue streams for Hike, which is a free app. Some even say that he will scale it up to a size and then cash out of it. Mittal insists he is not interested in flipping the company, and revenue streams will open up soon. At the moment, Hike offers free stickers, coupons and games. For higher versions, there could be charges.

Mittal feels it's possible to offer news feed and e-commerce on Hike. These offer more monetisation possibilities. Eventually, he sees messaging services as a tool for content discovery, some kind of a browser for apps.

Still, Mittal realises that his venture is risky, and there are people around who don't find his business plans convincing. "Sometimes," he says, "It's good to be naïve and foolish."
Sounak Mitra contributed to this report

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First Published: Feb 21 2015 | 12:30 AM IST

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