Vivek Wadhwa On The Dark Side Of Technology, End Of Bitcoin And More

As India leads as the third largest ecosystem in the world, the country is exemplifying its growth story through its numbers before the global stage. As per a 2017 report, the Indian startup ecosystem added over 1,000+ tech startups in 2017, taking the total number of tech startups to the range of 5,000-5,200.

However, we have a lot to achieve to scale up against Silicon Valley. Inc42 caught up with Vivek Wadhwa and tried to learn more about the tech world through his lens. He has been at the forefront of tech and whose work has been instrumental in shaping the minds of young entrepreneurs as well as policymakers in the US and around the world.

He is a technology entrepreneur, a researcher and academician whose work had a major impact on shaping the startup industry around the world. He is a Distinguished Fellow and professor at Carnegie Mellon University Engineering and Harvard University and a director of research at Center for Entrepreneurship and Research Commercialisation at Duke.

Vivek is also a co-inventor in four patents, he was named among the top 100 global thinkers by policymakers magazines and is one of the top 40 influential minds in technology by Times magazine. And has also authored four books including: Innovating Women: The Changing Face of Technology and The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent.

In a conversation with Inc42 during a Facebook Live AMA, Wadhwa talked about the pros and cons of technology, what he thinks about Indian startup ecosystem, the death of bitcoin and a lot more.

Rapid fire

Inc42: Tech company that you admire the most?

Vivek Wadhwa: Tesla, Elon Musk. Elon is the greatest. He is Thomas Edison, Einstein, everything into one.

Inc42: Most frequently used app on the mobile phone?

Vivek Wadhwa: Email and Twitter. I don’t trust WhatsApp so I rarely ever use it, it’s annoying waiting to be notified through an Android.

Inc42: Who do you look up to?

Vivek Wadhwa: I look up to people like Elon Musk, I look up to good leaders who are setting up good examples and it’s not based on fortune, it’s based on the humility to give back to the world. For that, many people in the world invest a lot to give back to mankind.

Inc42: What’s the most crucial skill for the success of an entrepreneur?

Vivek Wadhwa: Learn that you can’t do everything on your own, you have got to have good people around, you have got to hire people better than you. You got to narrow your skills to one area, so you have to have people who are better than you in every other area.

Vivek Wadhwa On New Age Technology, The Conundrum Of Blockchain And More

Inc42: You have always been optimistic about new age technologies like social media. But in your recent articles, you have said that too much technology is ruining our lives. Tell us why you think so?

Vivek Wadhwa: Social media was supposed to uplift us, bring societies together, make the world a smaller place and wonderful. Now, if you look at the revelations we have been seeing over the past three to four months; about election hacking, Cambridge Analytica, you read about teenage depression suicide rates, you look at happiness indexes; it seems everything has gone wrong. The way Facebook, Twitter and Google have hijacked technology is ripping us apart. The trouble is the technology industry has weaponised the social media.

They have taken data from us and you know this because of the free email, free video conferencing that you get. Because this is allowing these companies to catch the data and spy on us. What’s worse is that they are using the information gathered on us to tear us apart, basically to sell the information to the highest bidder.

Now they can do whatever they want to do with the data while they are getting filthy rich. And this is my big worry and this is what my next book is about “Your Happiness Is Hacked”.

Inc42. Which of the next generation tech will be dominant in the future?

Vivek Wadhwa: It is blockchain. Cryptocurrencies, bitcoin, etc. are just overhyped. There’s a saying in India now that bitcoin is fake. Bitcoin died as a cryptocurrency two years ago, it became a scam and it became a way of speculating. So, stay away from bitcoin because it’s a disaster.

And then that leaves you with blockchain. It has many good kinds of stuff, however, when bitcoin value falls, it goes to zero; so these ICOs, 99% of which are fraud, also go to zero and then you have a few which are gonna be worthwhile, which are gonna be massive as happened with dot com. As a result, blockchain itself is going to get a bad name because it became a casualty of that.

So, it’s not that blockchain didn’t have good uses, but you have to find those use cases and we haven’t come across that yet.

My advice to Indian startups is to stay away from it right now because then we are going to get caught up in a ripple which is coming in the next one month. Save this recording and challenge me on this a year from now if bitcoin doesn’t collapse.

Now let’s talk about what’s valuable. Artificial intelligence. AI was a myth like 10-20 years ago, then it changed and then there was AI winter because overhype of AI led to its demise.

It changed in the last five years or so. But that’s the cycle it has gone through, so that’s what ICOs, blockchain, bitcoin, etc. are going to get through in the next year or so.

Every entrepreneur needs to understand exactly what AI is, because it’s in all the applications you use. You need to learn to use it. So, data is everywhere and AI is an application, AI lets you understand it and make better decisions with it, so learn AI.

Inc42: So, when do you think there would be a massive adoption of AI, even by small startups?

Vivek Wadhwa: The difference between AI in business and AI for company tuning into this videocast for business is that they have databases, they have designed massive databases which is unmanaged, unfiltered data and to keep them up and analyse them is very hard.

For startups, they are now capturing new types of data, which can be labelled and it can be sorted out quite easily. If they start applying some of the new AI technologies, they can use it.

For big businesses, what’s essential is they need a lot of help in cleaning the data, after all, the technology is still in its nascent stage. For the business world, I want to lower the expectations and for the startup world, I want to raise the expectations that you can do it.

If you have learnt various types of AI, lots available online, so learning it will give you a big advantage.

Inc42: In this age of continuous disruption how should companies decide which new technologies to adopt first?

Vivek Wadhwa: It’s not first, it’s all at the same time. In large companies, each division looks after their own interests, each division focusses on one type of technology. But they are going to be out of business. Because technology comes from everywhere and disruptions happen at the expense of technologies. And one industry encroaches upon another. This is why startups are such a danger to the big companies because they look at multiple technologies and they don’t know the barriers between the industries.

So, one has to start learning about everything. You can’t say I will only learn AI, sensors or networks or robotics. You will have to learn all of this at the same time. And rise above with these technologies and see what problems you can solve. That’s the way to go.

Inc42: In one of your blog post you said “Digital currencies surely are the future, but other options make more sense than Bitcoin”, why not Bitcoin and what other options were you referring to?

Vivek Wadhwa: Bitcoin is a fraud. Bitcoin is not a digital currency anymore. If you have Bitcoin you are not going to buy anything with it because the transactional cost is too high. If you look at UPI in India, WeChat in China. In China, digital currencies are a $10 Tn market, all without Blockchain. Digital currencies do not need Blockchains. So get over it.

 

Inc42: What are our thoughts on Electric Vehicles?

Vivek Wadhwa: EVs are the future. I drive a Tesla Model S, it’s an electric vehicle I drive. I tell you they are amazing. Once you go electric, there is no going back to the internal combustion engine. In the next 5 years, you are going to find that EVs are going to be dearth cheap in India. It’s actually a very good idea for entrepreneurs in India, start building EVs in India. Six to seven years down the line, pollution is going to be a bad problem in India, cities are going to ban these carbon fuelled cars just like how three-wheelers are required to have the CNG. In a few years, they will have batteries that can go a 100 to 180 km and local governments will start mandating that vehicles should be powered by batteries. EVs are going to take over the roads.

Batteries and solar panels are getting cheap. So, a few years from now, houses in India are going to be solar powered and cars are going to run on batteries. I am 99% sure that this is the future.

Vivek Wadhwa On Why Startups Should Lean Forward And His Concept Of Copy And Steal

Inc42: What do you think is stopping India from becoming the largest startup ecosystem of the world? And what do you think we should be doing to achieve that?

Vivek Wadhwa:  First of all, I have been saying that India’s ecosystem is going to become huge. I have been saying for the past 5-7 years that by the end of the decade, India will have a technology boom which will make America’s dot-com boom look small.

Literally, a billion Indians are getting smartphones and they are now getting access to the Internet. The rate at which they are getting the access is exponential. Pushing that opportunity in India is unbelievable; you have an entirely new digital interface for the entire country.

When I said years ago that there would be at least a dozen billion dollar companies in India, people laughed. Now, there are a dozen billion dollar companies and that’s already happened.

So, over the next five years or so, there would be several more dozen billion dollar companies, maybe 100-200 more companies which are worth more than $100 Mn because the entire digital infrastructure in India needs to be built now, so if there was ever a time to be an entrepreneur, it is now.

But what’s the bad news? So, the bad news is public policy, so the government handicaps startups in every way they can, everything from bankruptcy laws to these raids on startups. When every obstacle is being thrown at the technology companies, startups in India falls prey to the predators in the West.

You have the Amazon, Google, Facebook and Whatsapp, who are now eating India’s young population. It is not a fair competition because they have massive amounts of resources, they have massive data, massive information, with which they can cannibalise the Indian startups. This is why I have advocated that India needs to have startup-friendly regulations because if not, India’s startup ecosystem is going to be in big trouble.

Inc42:  Do you believe the next Facebook or Google can come out of India and why?

Vivek Wadhwa: Facebook and Google know that the Indian government is stupid enough to know that Facebook, Google, Uber and Amazon has come to India to eat everything from the inside. The government isn’t doing all it can to protect the ecosystem from these predators. None of these technologies are evolved but that doesn’t matter.

There will be Facebook and Google size companies coming out of India. We saw the importance of India in the developing world. For example, we started using sensors for automated culture, we started using AI to automate the entire process, and we have started building IoT sensors and putting them across cities to build smart cities. There are trillion dollar industries that can be built by entrepreneurs in India and these industries have seen big problems.

India with its big number of people has bigger problems to solve. The West particularly America has 5% of the world population. The rest of the 95% of the population lives outside America. So, imagine companies that do not overlap with companies like Google and Facebook right now, because that’s a hopeless cause right now.

There are far more problems in India. So, these companies in India are going to be bigger in size and value than Facebook and Google and no one is going to touch you. Silicon Valley doesn’t even know about your problems. Which is fine for you because this means you can solve the problems and build the next Google and Facebook which would be much bigger and valuable than these companies are. Lean forward, my friends.

Inc42: Have you invested in any Indian startups or plan to?

Vivek Wadhwa: Generally, speaking I don’t invest in anything. I am not rich like my friends are. Even though I live in the Silicon Valley and hang out with my billionaire friends I am not rich. My life’s ambition hasn’t been to make money, it has been to give back. So, I am well off but I am not rich. These days, I am occupied with doing talks and all that for companies where whatever I do is for free. So, generally, I don’t invest in startups. But I do make some exceptions now and then when I see something that is world changing and which desperately needs help.

There are two companies I have invested in. One is called AIC which is working on clean water drinking technology that could impact the world. This was technology that could impact the lives of hundreds of millions in the world bringing them clean water. The entrepreneur is from Santiago, Chile. They faced the same problem as startups are facing with Indian investors now. Because Indians won’t invest in India just because you think someone in the Silicon Valley is smarter than you are. That’s stupid. Indian entrepreneurs are as smart as anyone else is.

And there is also a technology born out of New Delhi with which I got involved with as well. The Healthcubed is a company that makes a medical device which does the same medical tests as hospitals. This device is already catching up like a fire worldwide.

In India, people haven’t taken it seriously. When Indian investors saw it, they didn’t trust an Indian technology. So, I invested in his product. And what I did was I got my Western friends to put money into it. They said that the fact that you have a technology that gives you the same effect as tests done in a hospital is world changing stuff. The technology cost Rs 50,000 now. Then the sensors and the strips cost INR 30 to INR 40. So, its dearth cheap to provide an instant diagnosis.

So, we are taking it all over the world. Right now there are hundreds of units in Africa, Bangladesh, and Mrs Rajashree Birla has set up an NGO through Idea Cellular and she is taking this to hundreds of districts in India. I have a device on my smartphone which has all the medical records and this device in the Silicon Valley which provides the same results as any hospital and this technology was made in New Delhi India. And none of the VCs in India invested in this technology.

So, the who’s who of the Valley have put their money in this. Even, firms like Gates Foundation and Acumen fund is interested in it along with a bunch of other people because they saw potential in it.

So, in order to make an Indian company successful, you have to have foreign money coming into it. This will happen for the next two to three years until Indian entrepreneurs prove they are as good as anyone else and the VCs will come begging you to make money. This has happened in the Silicon Valley. Now entrepreneurs can get their funds from crowdsourcing, an angel network, they can now build their own technology. In three to four years, everything in the Indian ecosystem will change.

Vivek Wadhwa On How Rote Learning Has Failed The Education System In India

Inc42: How do you think we should be revamping our education system to foster entrepreneurship?

Vivek Wadhwa:  India’s education system, majorly engineering education, is stuck in the 1960s. It is antiquated, rod learning and based on the old curriculum. But this is a time to lead forward. If you look at the industry of artificial intelligence, networks, sensors or robotics, these are growing speedily in India. But not just engineers, we should have school children using these technologies as well. There’s no reason why you cannot get 3D printers, tablets and smartphones to design new objects in schools, there’s no reason why they cannot make robots, lead the advances that are happening and lead forward.

So, there’s a chance for India to now jump ahead a generation in technology and not be the catchers. It’s too late to catch up because technology is now at an exponential curve.

Inc42: You have researched engineering education in India, China, and the US. What are the major similarities and differences in all the countries’ education sector?

Vivek Wadhwa: If you talked about engineering education, the common thing is that you have brilliant engineers. That’s the only common thread. And when you come beyond that, they are all stuck in the past. Engineering is based on the past, they don’t seem to understand how rapidly technologies are evolving. What’s more, is its role in memorisation. So, what can engineers do? It’s not hopeless, you can learn about technology advancements.

Inc42: Are universities then relevant given the problems in learning and job readiness and lack of innovation?

Vivek Wadhwa: You need to have the basic education. The problem is if you don’t complete your Bachelors you will not have a foundation source to learn from. You have gained a very narrow education if you go to the first year and drop out. This is why Facebook is in such trouble because Zuckerberg dropped out of school, he never learnt the social skills, he never learnt the social values, he never learnt the damage that can happen with technology.

And with all this, he became so successful, that he became narrow-minded and focussed. The same thing happens to a lot of college dropouts. Education is not just about rod learning, it’s also about learning social skills. You develop friendships, you learn what rejection is and what failure is. You learn a lot about important social values in the four years that you go to college. You learn what to learn. You go to the source of the knowledge. So, you build networks.

The Bachelor’s degree that you pursue will influence almost everything that you do. Yes, there are going to be a lot of changes. There will be Virtual reality and we will be learning with virtual reality.

Inc42: Could you let us know the best examples of universities fostering entrepreneurship?

Vivek Wadhwa:  The best example was Stanford. The difference was that Stanford professors were encouraged to get involved with the local communities. They would reward the professors for getting involved with startups. So at Stanford, VCs would hang around, meet the professors and find out about the greatest ideas. So, this why the Silicon Valley is so successful because you can see the academia and the businesses coming together. Now, there are even entrepreneur clubs in universities but the academic hasn’t changed as such. Professors are discouraged because of the traditional university system. What my advice to my academic friends is to forget about the tenure and focus on doing good in this world.

Vivek Wadhwa On Data Privacy And Aadhaar

Inc42: What are your thoughts on Aadhaar issue and the implementation of the programme by the government of India?

Vivek Wadhwa: Aadhaar is a brilliant concept but the implementation is lacking. There are security issues, it needs to be improved and the problem in India is corruption. It’s a great concept for the country, however, it’s implementation needs to be looked at. And it’s understandable why petition happened, its the first of its kind and it needs fixing and entrepreneurs need to help.

So, the likelihood is that it will continue. They will fix it and improvise it. There’s gonna be security breaches, put that aside because for the entrepreneurs in India, it is a major opportunity as suddenly India has a base to create digital infrastructure on and now you have the ability to have an identity and you can build on top of that, and now you have a legal way of trading currency (not talking about bitcoin here) India has bypassed all of that, so what they did conceptually in UPI and so on is brilliant, and the government is providing that.

However, a huge opportunity for entrepreneurs is to build on digital infrastructure and start transacting commerce because the UPI won’t be possible without the unique identity.

Indian entrepreneurs have a lot of business to build on and how to protect from data leakages, but data security and all aside, to make sure the data is not hacked by the Chinese or the Russians.

Inc42: Do you really think we need new regulations to protect us from Facebook? If yes, what kind of regulations are you talking about?

Vivek Wadhwa: Yes, Facebook is a predator, even WhatsApp which is a subsidiary of Facebook. WhatsApp tries to show that it’s clean and say ‘hey we have encrypted all the communications’ however WhatsApp is feeding Facebook all the data. So, there need to be regulations that say that we own our own data.

You need to have restrictions on what Facebook can export from India because what Facebook will do is take away the data and market Indians to unscrupulous organisations anywhere in the world. Imagine if they had data to foreign agencies which would be in turn used to divide India. They will incite racial violence and communal riots to increase hate. Facebook won’t care as long as its making money. And that’s why Facebook needs to be regulated because if it’s left unchecked, you will have the same types of dangers in India as the US had as India gets connected.

Inc42: What are your views on a truly decentralised peer-peer social network? Do you believe the time for this has come considering everything that’s happening around data identity, privacy, security and this sense of users having no control over their personal data?

Vivek Wadhwa: Peer to peer networks have a role out there but they are overhyped. If you know how to use it and work on your problem, you can do a lot with it. But nothing is simple. Stay away from all the noise and the hype. And solve real problems. Technologies like Blockchain, AI, peer to peer; they are just buzzwords. What counts is developing real solutions. Be very cognizant of the dark side of technology, about the dangers and the privacy risks.

Vivek Wadhwa On Gender Equity And How Women Can Dominate The Tech World

Inc42: What are your thoughts about gender equity in the tech world?

Vivek Wadhwa: It’s a boys’ club, its bad everywhere but its worse in India because you not only have boys’ club in the tech industry, you have boys’ club in the society itself. They discriminate against women, so the system is bad. Women have a disadvantage. So, Indian IT is as bad if not worse as American IT. What has to happen is that women have to come together and realise the magic is in bringing together and help each other. Entrepreneurs help women.

The way is to get together with your friends and help each other and then you have to put the boys at disadvantage.

As for Indian IT companies, that’s not going to change. The best way is to put them out of business, start the companies which are worth billions of dollars and then acquire the leftover of Indian companies.

Inc42: Do you think, the tech industry is fixing its diversity quagmire?

Vivek Wadhwa: No it isn’t. Because the tech industry is managed by a bunch of boys and boys are always boys. The women have to realise that they have to help each other.  Men also have to realise that they need to help the women because they are smarter and more sensible and also more balanced than they are. They have to work together to fix this problem.

So, get together and fix the problem and fix it at the ground level. And let’s make sure that we not only reach to men and women but also people of different races and values.