Ten interesting things we read this week

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At Ambit, we spend a lot of time reading articles that cover a wide gamut of topics, ranging from zeitgeist to futuristic, and encapsulate them in our weekly ‘Ten Interesting Things’ product. Some of the most fascinating topics covered this week are: Business (A janitor at Frito-Lay invented Flamin' Hot Cheetos), Technology (India’s digital payments Catch-22 in 2021; What is driving Asia’s technological rise?), Sports (She turned 2020 misery into a breakthrough; Ex-footballers on life after the final whistle), and Storytelling (Creating a culture of storytelling in businesses).

Here are the ten most interesting pieces that we read this week, ended January 9, 2021.

1)  How a janitor at Frito-Lay invented Flamin' Hot Cheetos [Source: The Hustle] 
The key takeaway from this story of Richard Montanez is being dedicated to your work surely pays in long run. When Mr. Montanez got a job as a janitor at Frito-Lay, he decided that he was going to be the “best janitor Frito-Lay had ever seen” — and he quickly made his presence known. “Every time someone walked into a room, it would smell fresh,” he says. “I realized there’s no such thing as ‘just a janitor’ when you believe you’re going to be the best.” By the mid-1980s, Frito-Lay had fallen on tough times. As a way to boost morale, then-CEO Roger Enrico recorded a video message and disseminated it to the company’s 300k employees. In the video, Enrico encouraged every worker at the company to “act like an owner.” Most employees brushed it off as a management cliché; Montañez took it to heart.

After nearly a decade mopping floors, Montañez gathered the courage to ask one of the Frito-Lay salesmen if he could tag along and learn more about the process. Soon, Mr. Montanez observed that Frito-Lay had “nothing spicy or hot.” A few weeks later, Montañez stopped at a local vendor to get some elote, a Mexican “street corn” doused in chili powder, salt, cotija, lime juice, and crema fresca. Cob in hand, a “revelation” struck: What if I put chili on a Cheeto? Working late one night at the production facility, he scooped up some Cheetos that hadn’t yet been dusted in cheese. He took them home and, with the help of his wife, covered them in his own concoction of chili powder and other “secret” spices. It was a hit!
 
Somehow he got and dialed CEO’s number. He was asked to give a presentation on his idea. Six months later, with Montañez’s help, Frito-Lay began testing Flamin’ Hot Cheetos in small Latino markets in East Los Angeles. In 1992, Flamin’ Hot Cheetos were greenlit for a national release. And in short order, the snack became one of the most successful product launches in Frito-Lay history. And Montañez is no longer sweeping floors: Over a 35-year career, the former janitor rose through the corporate ranks and is now the vice president of multicultural sales for PepsiCo America (the holding company of Frito-Lay). A student once asked him how he was teaching without a Ph.D. “I do have a Ph.D.,” he responded. “I’ve been poor, hungry and determined.”    

2)  India’s digital payments Catch-22 in 2021 [Source: The Ken] 
The way we make payments has changed a lot over years. From paper cash to now digital. Also, it takes few seconds to transfer money, thanks to Unified Payments Interface (UPI) by the National Payments Corporation of India (NPCI). But, we might soon get a new payment system. The Reserve Bank of India (RBI) in February sent out guidelines calling for more entities to create, manage, and operate new retail payment systems. That means the quasi payments regulatory body, the NPCI, is set to have more rivals. Besides growing the market, RBI felt a rival to NPCI is needed to keep the organization in check. After all, NPCI is in charge of a payments hydra like UPI that does two billion transactions a month, much more than any other payments system.

So, RBI proposed forming New Umbrella Entities (NUE) as a method to keep NPCI in check. The central bank isn’t allowing an individual entity to apply to become an NUE. It wants groups of companies to form consortiums, with the promoter holding no more than 40% of the entity, which gradually needs to be pared down to 25%. Those in the industry expect no more than two to three entities getting an NUE licence. But like with any licence that RBI gives out, there has been a lot of interest. So, who are the potential contenders? First, there’s the State Bank of India (SBI) camp. This is a bank-led camp, as HDFC Bank and Bank of Baroda are reportedly in talks to form an entity together with SBI. SBI and HDFC Bank alone account for over 40% of India’s bank account holders.

The second killer combo is the Jio camp. Google and Facebook are the popular kids; everyone will want to be in their camp because of their distribution might, along with Jio. Google Pay today has 43.4% market share in UPI payments, while Facebook’s WhatsApp Pay has finally been allowed to roll out to a limited set of 20 million users. Google and Facebook as part of the Jio consortium have the chance to design a global payments solution, one that could potentially be free of market share caps. The third faction is corporates like the Tata Group, for whom this is a chance to claw back to relevance in the digital age. Then, there are fintechs like Paytm, BillDesk, Pine Labs, and card networks like Visa, Mastercard, and even Walmart, which also reportedly want to join the NUE party.
 
3)  Inside the Whale: An Interview with an Anonymous Amazonian [Source: logicmag.io] 
In this interview, an AWS cybersecurity engineer talks about his working experience with Amazon and much more. Talking about how an outsider should think of Amazon, he says, “In general, Amazon thinks of itself as a technology company. So we put the technology first, whatever the product is that we’re selling. And we believe that because we have so much talent and so much capital, we should be able to use our technology advantage to dominate any market that we decide to enter.” He further elaborates on the company’s origin and how and why it started off by selling books on the internet.

Talking about entering the cloud business, he says, “Amazon wanted to explore the possibility of selling web services because they realized most other firms weren't doing a terribly good job of it. From the start, startups flocked to AWS because we saved them a lot of time and effort. Once AWS had the startups hooked, it was easy to start selling to large businesses—the “enterprise” market—because they envied how well the more technically sophisticated startups were doing. That was good for us, because big companies are more lucrative. But they also have stricter security requirements. They tend to be in mature industries that are more heavily regulated, and regulators care about how they’re securing their data.”

With current difficult times of Covid, he says that new challenges have shown up. “Supply chains all across Amazon were definitely impacted. It was difficult to get hand sanitizer. It was difficult to get cardboard boxes. We got lucky in the sense that the beginning of the pandemic overlapped with the Chinese New Year. So we had already accounted for some slowdown, because we expected the Chinese New Year to impact timetables anyway. Overall, though, it seems like the pandemic compounded all of Amazon's advantages and significantly reduced the impact of all of Amazon's weaknesses.” He also talks about the appointment of the former NSA chief, Keith Alexander, to be on your board of directors, and how that has irked some of the employees.

4)  She turned 2020 misery into a breakthrough [Source: The New York Times]
In some way or the other, 2020 has been a mess for all people around the world. But, the veteran American distance runner Sara Hall seemed to be facing her own version of pandemic misery. She had failed to qualify for the Olympics, dropping out of her last two marathons. Now everything was canceled and she was caring for four daughters at home. She was 37, an age when many elite athletes’ careers start winding down. “My whole career has been learning how to say: ‘OK, I just missed out on what I wanted so badly. What opportunities do I still have?’” Ms. Hall said in an interview. “In the pandemic, it was the same. I had to think: ‘I know what I can’t do. But what is still on the table?’ It wound up leading to some of the best training in my life.”

After Ms. Hall lost what was probably her last chance to make the Olympics, she went back to her bathroom mirror, where she had written “Olympic Marathon Trials Champion” and replaced it with an even harder goal: “American Marathon record-holder.” And, at an elite race, few days ago, in Arizona called the Marathon Project, Ms. Hall ran the second-fastest marathon ever for an American woman. It was more than just a hard-fought victory. This year she has become a powerful example of how resilience — built from pushing through years, even decades, of setbacks — can reap unexpected rewards.

Ms. Hall didn’t have her fairy tale ending. She didn’t hit her goal — her time was 2:20:32, second best in history, less than a minute off the mark. But it was far better than a year ago, before the world shut down. “The pandemic drew something out of me I didn’t know I had,” Ms. Hall said. “At times I felt sorry for myself. But if there’s anything I learned this year, any opportunity is something to be grateful for. Take it while you can.” Likewise in our lives, whatever we do, we need to strive for the best and keep moving forward.

5)  Why China turned against Jack Ma [Source: Economic Times] 
Jack Ma is one of the biggest success stories in China. The English teacher turned internet entrepreneur is the country’s richest person. He founded Alibaba, the closest thing that Amazon has to a peer and rival. His success has translated to a rock-star life for “Daddy Ma,” as some people online called him. But lately, public sentiment has soured, and Daddy Ma has become the man people in China love to hate. He has been called a “villain,” an “evil capitalist” and a “bloodsucking ghost.” This loss of stature has come as Ma is facing increasing trouble with the Chinese government. Chinese officials Thursday said they had opened an antitrust investigation into Alibaba, the powerhouse e-commerce company that he co-founded and over which he still holds considerable sway.

Recently, authorities quashed Ant’s planned blockbuster initial public offering, less than two weeks after Ma castigated financial regulators for being obsessed with minimizing risk and accused China’s banks of behaving like “pawnshops” by lending only to those who could put up collateral. On its surface, the shift in Ma’s public image stems in large part from the Chinese government’s growing criticism of his business empire. A look beneath the surface shows a deeper and more troubling trend for both the Chinese government and the entrepreneurs who powered the country out of its economic dark ages over the past four decades. In an annual leadership meeting recently that set the tone for the country’s economic policies for the coming year, the party vowed to strengthen antitrust measures and prevent “the disorderly expansion of capital.”

Xi Jinping made no secret about what his ideal capitalist should be like. Ten days after the Ant IPO debacle, he toured a museum exhibition devoted to Zhang Jian, an industrialist who was active more than a century ago. Zhang helped build up his hometown, Nantong, and opened hundreds of schools. Business figures in the Xi era, the message went, should also put their nation ahead of business. In a July meeting with the members of the business community, Xi pointed to Zhang as a role model and urged them to rank patriotism as their top quality. But what he did not mention is that Zhang died bankrupt.

6)  Category leading brick and mortar retailers are likely the biggest long term Covid beneficiaries [Source: gavin-baker.medium.com]    
Many of the perceived Covid winners such as e-commerce, videogame and streaming media companies have simply been pulled a few years forward into a future that was inevitable. Their destiny did not change. The future for those businesses simply accelerated whereas the future for category leading “brick and mortar” retailers has changed dramatically as a result of Covid. The future was always going to be omnichannel. Pundits have been prematurely predicting this for many years, but it is finally happening. There is a strange belief in certain circles that the future will be e-commerce only and that brick and mortar stores have no value.

This is strange because the world’s largest, most sophisticated e-commerce companies are all opening stores. Amazon opened dozens of “Amazon Go” stores in 2019 and is reportedly planning on opening up to 3000 of these stores by 2021 in the United States alone. Amazon already has multiple store formats in the United States: Go, Whole Foods, Book Stores and others. The largest e-commerce share gainers in most categories have been category leading physical retailers as well as the DTC businesses of most brands.

The in-store experience will also continue to evolve and likely be more informed by online learnings. We will all eventually pay by face in stores, there will be personalized marketing while we are in stores, technology should significantly reduce shrink, knowing what customers near stores are shopping for online for should eventually help optimize instore inventory and distribution systems will be optimized for e-commerce, BOPIS and in store return in addition to simply shopping in the store. The more data driven cultures that are emerging at these retailers will be helpful to all of this. Frequency also really matters online and omni-channel drives more frequency, which creates more data, which will drive a better customer experience both online and offline.

7)  What is driving Asia’s technological rise? [Source: Project Syndicate] 
Over the last decade, Asia has accounted for 52% of global growth in tech-company revenues, 43% of startup funding, 51% of spending on research and development, and 87% of patents filed, according to new research by the McKinsey Global Institute (MGI). How did Asia get here, and what lessons does its success hold for the rest of the world? India has fewer large tech companies than other major economies. Still, four of the world’s top ten technology companies by market capitalization are Asian. China, home to 26% of the world’s unicorns (startups valued at $1 billion or more), leads the way in tech entrepreneurship in Asia, though it still relies on foreign inputs in core technologies.

New opportunities are also opening up for Asia. While the region’s consumer markets are expanding and digitizing rapidly, there is still a great deal of room for growth and innovation in consumer-facing technologies. Similarly, Asia can expand its role in the growing market for digital information-technology services, such as big data and analytics, digital legacy modernization, and “Internet of Things” system design. After all, the region has a huge pool of tech talent: India alone produced three-quarters of the world’s science, technology, engineering, and mathematics (STEM) graduates between 2016 and 2018.

Asia’s rapid development as a global technological leader over the last decade is a testament to the power of collaboration. And yet, in much of the world, the tide is turning toward isolationism and protectionism. Indeed, after years of relative openness, rising trade barriers threaten to disrupt global flows of technology and intellectual property. This will sap potential in many frontier sectors. According to MGI’s simulation, $8-12 trillion of economic value could be at stake by 2040, depending on the quality and level of technology flows between China and the rest of the world. Many high-tech markets – including electric vehicles, battery storage, and advanced displays – depend on Asian investment and market growth to achieve global scale. Asia is likely to continue to forge ahead with its technological development.

8)  How I created a culture of storytelling at Drift (And Why It Matters) [Source: drift.com]
In this article, David Cancel, CEO of Drift, shares five core lessons for building an internal culture around storytelling. 1) Adapt your story to (Asynchronous) film and focus on internal training: Alongside their conversational marketing and sales platform, the Drift team has cultivated a community with Drift Insider, a free, on-demand online forum with classes, videos, and exclusive content. “It’s basically like Masterclass for marketers and salespeople,” says Cancel. “It’s a bunch of courses and videos that we’ve created internally and with third parties, but it was first built for internal use, all around this type of training that we put everyone who joins the company through — we try to teach a lot through internal video courses.”

2) Great storytelling requires painful pruning and the sharp sting of an editor’s pen: While these good storytelling habits are well-established, Cancel is quick to admit that the Drift team is still building this muscle. “We continue to live that and try to push it — but that doesn’t mean that we’re great at it. It means that it’s constantly an activity that we have to focus on,” he says. For Cancel, this consistent focus brings a metaphor to mind. “I compare it to growing an English garden. The garden doesn’t get built by just planting the right kind of plants. 99% of the work is pruning.

3) Lean on inversion and spotlight the hero’s journey to create compelling stories: When asked for the storytelling techniques that have most influenced his skills over the years, Cancel offered up two: the practice of inverting, and sticking to the hero’s journey.

4) Brush up on your storytelling skills by looking for outside inspiration: Mr. Cancel shares a few tech and business leaders with internal storytelling chops that he admires. “We’ve long admired Yvon Chouinard. That story of how they founded the company and the ethos behind it had a big impact on us when we were starting Drift. Obviously, it’s a very different form of storytelling in the consumer product world, but it's clear that with that brand, you are buying a story more than anything else”, says Mr. Cancel. 5) Cultivate rituals that reinforce the story: “Another important move we’ve made is embracing the idea of rituals — it’s one of the best things that we've done within Drift. They give people comfort that there’s a place where things are going to be discussed, that there is a format to something that they can count on. Rituals ensure that we stay true to our vision and culture, and have a place to tell these stories internally,” says Cancel.
  
9)  In the hot seat with Forbes Advisor India: Rashesh Shah [Source: forbes.com]
In this short interview, Rashesh Shah, talks about the value of people, capital, culture and technology in building financial services and the ethos of learning and evolving constantly. Starting with his experience in the industry, he says, “30 years is a long time. The Indian economic liberalization and the evolution of financial services has coincided with the opening of the economy. At a very broad level, all parameters are almost 30x in 30 years. We are slowly moving away from a very product-centric industry to truly being customer-centric because customers have choices now, which wasn’t the case earlier.”

He also talks about diversifying from being a product-centric to a customer-centric company, and from being a Rs1 crore to Rs8,000 crore company. On challenges faced by the diversified financial services companies today, he says, “Being in touch with customers and innovating is the biggest challenge we all have. The financial services industry is a commodity-based industry; all products are commodities. Even if you differentiate on a product, others can copy it. Your biggest challenge is how do you stand out. Because it is a services-based business, your people and culture are very important and are your main differentiators. The other is understanding customers, customer needs and their experience. People are now keen on experience, they just don’t want a product.” 

The thing that motivates him to run the business is the ability to learn and ability to be around some great individuals in the organization. Finally, for his company, he says, “Our aspiration is to build a high-quality company, which does great businesses. If you look 20-30 years down the road, all of us should feel we have our fingerprints on this; we’ve built something that is long-lasting and has quality, which is as important in size and scale.”

10)  They think it’s all over: Ex-footballers on life after the final whistle [Source: The Guardian] 
Career of a sportsman is very short. Many think once their time on field is over, they are over. But no, here are some ex-footballers who have managed to build careers by adapting and relearning. From a detective to a former convict, ex-players talk about their second life. Stuart Ripley (47), winger with Middlesbrough, Blackburn Rovers, Southampton and England, Premier League winner with Blackburn in 1995, is now a qualified solicitor and prospective law lecturer, Ribble Valley, Lancashire. He says that the only thing he knew he wanted to do when retired was to go to university. “So, after taking a bit of time out, I enrolled at the University of Central Lancashire. My first intention was to do a foreign languages degree, but that meant a year abroad and I couldn’t just up and leave; by then, the kids were in school. So I ended up on a combined course: French, criminology and law.”

David Hillier (45), Arsenal midfielder, First Division title winner in 1991, is now a firefighter in Bristol. “I left Bristol Rovers in 2002. I didn’t want to start going on trial at clubs at the age of 33. I could never rekindle what I had at Arsenal, where I’d won the championship, the FA Cup, the League Cup and the Cup Winners’ Cup, so I thought I might as well just bow out. I’d been at a club that had gone into administration [Portsmouth, in 1999], I was a bit disillusioned. I definitely needed to work. I wasn’t struggling, but the money couldn’t go on for ever. Then, one day, my wife and I heard on the radio that they were recruiting firefighters in Bristol.” He failed thrice, only to get in on fourth attempt. “Firefighting is a team job. You eat together, you drink together, you’re always in the gym together. It’s just like being a footballer, but on about 100 grand a year less.”

Arjan De Zeeuw (45), captain of Wigan Athletic and Portsmouth, led Wigan to the 2006 League Cup final, is now a police detective in Alkmaar, the Netherlands. After hanging his boots, he came across an opportunity to be fast-tracked as a detective with the Dutch police. “I’ve always wanted the world to be a fairer place. I’ve always encouraged people to get along – that probably explains why I’ve captained a lot of the teams I played for. Before I became a professional footballer, I had a nickname: The Peacemaker. I’ve been involved with burglaries, robberies and human trafficking cases. In future, I’ll be working on murders and kidnappings. I lean towards forensics, so hopefully I’ll be dealing with crime scenes.”