Ace banker Uday Kotak, MD Kotak Mahindra Bank, has expressed his wonder about the business model of emerging internet companies like WhatsApp, saying he is yet to understand it and may be in the future such companies will make money.
“In telecom, SMS is dead and there is Whatsapp. But I can’t figure out what is the business model of WhatsApp,” he said, adding that companies like it and others like Facebook and Twitter are first creating the user base to make money later.
“This long tail model has a phenomenal theory which has three parts — keep on getting user, get them to use more and only after that think about making money. That is the Facebook, Twitter, WhatsApp model,” Uday Kotak said, acknowledging that it’s difficult for traditional businesses to comprehend this.
Uday Kotak was speaking at the launch of McKinsey Global Institute’s book ‘No Ordinary Disruption’, which deals with four big changes that are sweeping the world, including rise of emerging markets, accelerating impact of technology on the natural forces of market competition, an ageing world population, and accelerating flows of trade capital and people.
Uday Kotak also expressed concerns about job creation in a digital world which is driven by technology disruptions.
