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Exponential Organization: Paytm – A Review

– K. Balanagarajan*
Assistant Professor, School of Management, Presidency University, Bengaluru, India, balanagarajan@presidencyuniversity.in
– Kabaly P S
Assistant Professor, MBA Program, Faculty of Business Studies, Arab Open University, Azaiba, Sultanate of Oman, kabaly@aou.edu.om

Editorial Board Excerpt At the initial Time of Submission (ToS) submitted

paper had a 02% plagiarism which is an accepted percentage for publication. The
editorial viewpoint is of an observation that article had a successive close watch by the
Article History
blind reviewer’s which at later stages had been rectified and amended by an authors
Paper Nomenclature: (Balanagarajan & kabaly) in various phases as and when requisite to do consequently.
Case Based Study (CBS)
The reviewer’s had in a beginning stages mention with minor revision with a following
Paper Code (DOI): 22804 statement which at a small duration streamlined by an authors. The comments related to
Originality Test Ratio: 02% this manuscript are tremendously perceptible related to exponential organisation both
subject-wise and research wise by the reviewers during evaluation and further at blind
Submission Online: 26-Nov-2018
review process too. The authors be commendable of appreciation for writing this paper
Manuscript Acknowledged: 30-Nov-2018
as the fintech space in India is in exponential growth trajectory. The digital payments
Originality Check: 07-Dec-2018 space is experiencing a fast transformation all-inclusive and will grow four times by 2020
Peer Reviewers Comment: 07-Dec-2018 as highlighted by the authors in section 4. The objective of the paper is clear and the
discussions are well placed and open up avenues for future studies. All the comments had
Blind Reviewers Remarks: 20-Jan-2019
been shared at a mixture of dates by the authors’ in due course of time and same had been
Author Revert: 25-Jan-2019
incorporated by the author in computation. By and large all the editorial and reviewer’s
Camera-Ready-Copy: 29-March-2019 comments had been incorporated in a paper at the end and further the manuscript had
Editorial Board Citation: 31-Mar-2019 been earmarked and decided under “Case Based Study” category as its highlights and
emphasize the work in relation to use of Exponential Organization which is a case based
Published Online First: 15-June-2019
study particularly on Paytm.

Abstract The need for organizations to grow bigger and outperform the competitors is on the rise. The improvements
in digital technology in the form of enhanced computing power, storage and bandwidth is fueling exponential growth of
organizations. Many traditional business organizations are outperformed by new generation organizations. Exponential
Organizations are the ones which grow bigger by passing the incremental or linear way traditional organizations grow.
The paper uses the conceptual frameworks viz ExO attributes and 6D’s of exponential organization to examine and
understand the Paytm’s growth and its evolution into an exponential organization. This paper explores how Paytm as an
organization deployed exponential technology and exponential innovation to grow in short time.

Keywords Exponential Organization  |  Paytm  |  Six D’s  |  Digitization

*Corresponding Author
https://doi.org/10.18311/gjeis/2018.22804
Volume-10  |  Issue-3  |  July-Sep, 2018  |  Online ISSN : 0975-1432  |  Print ISSN : 0975-153X
Frequency : Quarterly, Published Since : 2009
©2018 GJEIS Published by Scholastic Seed Inc. and Karam Society, New Delhi, India. This is an open access
article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

34 Vol 10 | Issue 3 | July-Sep 2018 Online ISSN : 0975-1432  |  Print ISSN : 0975-153X
K. Balanagarajan and Kabaly P S
Case Based Study
www.gjeis.com

1. Introduction 2.1 Definition

Being an entrepreneur in the digitally connected “An Exponential Organization (ExO) is one
world is different from what it was 20 years ago. whose impact (or output) is disproportionally large—
at least 10x larger—compared to its peers because of
85% percent of Fortune 500 companies listed the use of new organizational techniques that leverage
from 1950’s have lost their way. Many companies accelerating technologies”(Salim Ismail, 2014)
who have performed very well in the past does not
exist today. About 40% of the S&P companies are 2.2 ExO Attributes
expected to be replaced by new generation companies Salim Ismail and his co-researchers have studied
in the next decade. The need for organizations to grow around 100 companies which has exponentially
bigger outperform the competitors is on the rise. The grown in the last five years and identified the common
improvements in digital technology in the form of traits across all the exponential organizations as
enhanced computing power, storage and bandwidth shown below:
is fueling exponential growth of organizations.

Exponential Organizations are the ones which

grow bigger bypassing the incremental or linear way
traditional organizations grow. These organizations
leverage the ability of digital technologies to create
exponential value (Bonchek, 2016). The digital
technologies have provided platforms for business to
connect, collaborate and communicate with people.
This paper explores how Paytm as an organization Figure 1: ExO Attributes
deployed technology and innovation to grow (Source: Exponential Organizations, Salim Ismail)
exponentially.
Organizations which adopts any four of the above
2. Conceptual Frameworks of mentioned 10 attributes can achieve exponential
Exponential Organization growth(Salim Ismail, 2014).
The Exponential Organization as concept was
proposed in 2008 by Singularity University, with the 2.3 6D’s of Exponential Organization
mission of helping a person or a company positively Diamandis and Kotler has conceived 6D’s or
impact the lives of a billion people (Salim Ismail, six phase that an idea, a product, or a technology
2014). The organization which has shown 10X (10 pass through a “chain reaction” to make a massive
times) performance increase than their industry impact (Kotler, 2015). This growth cycle takes
peers are considered as “exponentials”. Exponential place in six key steps: Digitization, Deception,
organizations make use of the abundant information Disruption, Demonetization, Dematerialization,
available with the help of technology for accessing or and Democratization.The first three D’s helps to
sharing work better. The exponential organizations understand how technologies are changing the
are built upon Information Technologies which business models and environment. The next three
blends both the physical and digital world. The D’s are more potent to foster exponential growth.
exponential organizations make use of the abundant The final three 3D’s can make companies obsolete
external resources instead of owing and securing and disrupt industries in short time. Inevitably
assets. organizations have to embrace technology adoption
and change their linear approach towards growth.

DOI: 10.18311/gjeis/2018/22804 Vol 10 | Issue 3 | July-Sep 2018 35

 Exponential Organization: Paytm – A Review

Global Journal of Enterprise Information System

This paper uses the above conceptual frameworks shops, fuel stations, cabs, autos, physical stores
viz ExO attributes and 6D’s of exponential etc. Mobile wallet firms have witnessed a surge in
organization to examine and understand the usage of their wallets and money loaded into them
Paytm’s growth and its evolution into an exponential post Demonetization by the Government of India.
organization. Paytm wallet customers went up to 185 million post
demonetization from 125 million wallet customers,
3. Drivers of Exponential and it has continued to grow (Wright, 2017).Many
Growth people argue that Paytm’s exponential growth in
In 2017 globally, there are around five billion recent times centers on the Government of India’s
unique mobile phone subscribers and India alone demonetization policy. But what contributed to them
is expected to add in excess of 200 million new is the exponential mindset on making something
subscribers in the next three years(GSMA, 2018). different and focus on 10X growth. They were
A study by US based agency Zenith predicts that prepared with the right technology, innovation and
China and India will have 1.3 billion and 530 million exponential mindset. Paytm’s exponential mindset
smartphone users in 2018 respectively (IANS, has helped them to become one among the biggest
2017). Overall Internet penetration in India as on m-commerce platforms in India.
December 2017 is around 35%, and is expected to
increase due to the availability and affordability 5. Paytm’s Business Model
of smartphones(IMRB, 2018). The omnipresence Paytm offers customers an e-wallet to store cash
of smartphones and internet connectivity are and make hassle free speedy payments. Paytm is a
empowering innovation in how product and services semi-closed payments instrument where customers
offered on the web. can store money in their wallets and make payments
to partner merchants(Ramani, 2015).Paytm wallet
4. Paytm’s Exponential Growth is used to make bill payments, transfer money, shop
online, book tickets and many more. Paytm started as
Mindset
a mobile recharge app then expanded to mobile wallet,
The fintech space in India is in exponential growth
e-commerce market place and now as a Payments
trajectory. The digital payments space is experiencing
bank with license from RBI. As a payments bank
a fast transformation worldwide and will grow four
Paytm offers digital savings and current accounts for
times by 2020(BCG & Google, 2016). The number
customers and businesses respectively with banking
of digital transactions will rise and the cash based
features such as real-time passbooks, deposits, debit
transactions will decline by 2023 as predicted by BCG
cards and online payment facilities.
report on digital payments (BCG & Google, 2016).
The digital payments sector has seen strong reception
from users since 2016post demonetization of high 6. Paytm as an Exponential
value currency notes(PwC & Startupbootcamp, Organizations (ExO):
2017).With over 200 million registered wallet users Entrepreneurs wanted to grow exponentially
and 3 million daily transactions, Paytm is India’s by offering products and services which can
largest Wallet(Times of India, 2017). According to be better, cheaper and more customized
data by RBI, mobile wallets grew by 500% between simultaneously(Mostert, 2016).Paytm has moved
the years 2014 and 2016; and the number of debit and from being an e-wallet to a payments bank who
credit card transactions grew by 25-50% in the same offers multiple solutions to multiple businesses. The
period. Mobile wallet companies have integrated table below attempt to compare the ExO attributes
digital services with PoS terminals for merchants with that of initiatives of Paytm in order to possibly
so that users can do cashless transactions at grocery establish Paytm as an exponential organization.

36 Vol 10 | Issue 3 | July-Sep 2018 Online ISSN : 0975-1432  |  Print ISSN : 0975-153X
K. Balanagarajan and Kabaly P S
Case Based Study
www.gjeis.com

ExO Attributes Paytm

Paytm wallet: To offer comprehensive payment
Massive Transformative Purpose (MTP): services for customers and merchants.
Purpose of the organization to solve a major issue Paytm Payments Bank: To extend banking and
financial services unserved and underserved
Indians.
Interfaces: ExOs configure customized interfaces for their Revamped app and websites for customers and
customers and other organizations merchants.
Sell on Paytm Market Place: Easy and intuitive
Dashboards:ExOs use real-time metrics to control, measure
dashboard that simplifies day to day activities
and track their performance
for merchants
Build – Measure – Learn
Experimentation: ExOs implement rapid experimentation, Zoom Out Pivot – Product expands from a
very fast feedback loops, fast customer and product single feature to multiple features. Eg. Paytm
development cycles expanded from mobile recharge to mobile
wallet to e-commerce to payments bank
Autonomy: ExOs distribute authority down to the last level
Paytm has a very flat organizational structure
with flat organizational structure
Staff on demand: ExOs instead of owing employees utilize Hired more than 10,000 temporary employees
the external resources for KYC compliance
Paytm – Build for India - ‘Open Source Project
Incubator’ is launched to build and share open
source projects worldwide on areas such as
Community and crowd: ExOs develop communities to Financial Inclusion, Education and Life style
connect, collaborate and work beyond organizational etc.
boundaries ‘Each One Teach One’ initiative invited
volunteers to inform their neighbourhood
merchants and consumers about the benefits of
digital payments.
Algorithms:ExOs use algorithms to understand data and Paytm labs build powerful technologies with
make better decisions paytm’s real time data
Paytm constantly engages professionals and
students through the incubator. Outstanding
Engagement: ExOs uses digital feedback, gamification and contributors to the open source project are
incentive prizes to engage markets. awarded ‘Paytm Scholar’ certificates and few
will also get an opportunity to join the Paytm
team.
Table 1: Exponential characteristics of Paytm (Author’s compilation)
(Source: Exponential Organizations, Salim Ismail)

7. Exponential Technology unique QR code which can be read by the phone’s

adopted by Paytm camera via paytm app and the money is transferred
Paytm succeeded by simplifying the user to the recipient. The use of this technology paved
experience and managed to create value for way for venturing into new sectors such as tolls,
the customer. Paytm made use of the existing hospitals, pharmacies, diagnostic centers, canteens
technologies like Quick Response (QR) and and parking among others. Paytm has strengthened
integrated them on a single platform to offer multiple their security features like logout, fingerprint scanner
seamless solutions to the customer. Paytm has and password protection for the app. Paytm design
facilitated offline transactions with the help of the and build solutions using the new age technologies

DOI: 10.18311/gjeis/2018/22804 Vol 10 | Issue 3 | July-Sep 2018 37

 Exponential Organization: Paytm – A Review

Global Journal of Enterprise Information System

such as block chains to experiment with use cases, decades have seen dramatic decrease in the cost of
machine learning, augmented reality and virtual computing power, storage and bandwidth relative to
reality (Paytm Blog, 2017). Paytm’s annualized gross their performance (John Hagel, 2013). The increase
transaction value (GTV) have increased fourfold in affordability of smartphones, wireless networks
from March 2017 to reach $20 billion in February and platforms to connect and interact with customers
2018 (Bhakta, 2018). The major impetus behind the have provided opportunities for Paytm to innovate.
increase in value comes from consumer spending for Some of the innovative ideas comes from the R&D
travel and movie ticketing. Paytm’s rapid increase in arm of Paytm i.e. Paytm Labs established in 2014 at
transactions are the result of driving offline business. Toronto. Paytm labs helps paytm to analyze the real
The below table gives us an idea about the existence time data and help them to provide safe, secure and
of 6D’scharacteristics in Paytm in order to establish customized services to the customers. In pursuit of
the qualification of an exponential organization. innovation, Paytm launched ‘Indian Open Source

Six D’s Characteristics Example – Paytm

Product transition from

Digitization Paytm – virtual money or e-money
physical to digital

Rise in smartphones and mobile internet usage fueled

Period when exponential use of e-wallets like Paytm.
Deception
growth goes unnoticed. Government’s move of demonetizing higher
denomination notes in India.

Create new markets by Paytm has disrupted the payments industry with
disrupting the existing technology and innovation by venturing into new
Disruption
ones with technology and sectors tolls, hospitals, pharmacies, diagnostic centers,
innovation. canteens and parking among others.

Enabling merchants to accept money directly into their

Removal of money from the
Demonetization bank accounts using Paytm QR codes i.e. Accepting
equation.
Offline payments

With one Paytm account you can do a lot - Shop, Pay

Vanishing the goods and
Dematerialization Bills, Payments Bank, Mutual Funds, and Insurance
services themselves.
etc.

Mobile Internet becomes cheaper, Transaction cost

Goods and services becomes becomes cheaper. Faster and reliable instant payments
Democratization cheaper. Becomes accessible backed by UPI, Aadhar Based Payment Systems
and available to everyone. etc.Expansion of offline network to over 7 million
merchants.
Table 2: Exponential Technologies adopted by Paytm

8. Exponential Innovation by Paytm

Advancements in digital technologies are driving Project Incubator’ to provide opportunities for
exponential innovation. Blend of technology students and developers to collaborate, build and
and exponential mindset creates opportunity share open source projects worldwide (Anupam,
for innovation (Bonchek, 2016). The disruptive 2017). Paytm has personalized user’s experience
potential of exponential technologies amplify when and money transfer to Paytm payments bank, wallet
they coalesce with open platforms and ecosystems and any bank account free of cost with its revamped
in innovative ways (John Hagel, 2013). Last two app.

38 Vol 10 | Issue 3 | July-Sep 2018 Online ISSN : 0975-1432  |  Print ISSN : 0975-153X
K. Balanagarajan and Kabaly P S
Case Based Study
www.gjeis.com

9. Conclusion 6. IANS. (2017, October 16). Retrieved from https://

The phenomenon of Exponential organization is indianexpress.com/article/technology/india-
here to stay. Understating Exponential organizations, set-to-have-530-million-smartphone-users-in-
its drivers and business models will continue to 2018-study-4893159/
inspire researchers across the world. 7. IMRB, I. &. (2018). Internet in India 2017. New
Delhi: Internet and Mobile Association of India
Understanding what and why of exponential & Kantar IMRB.
organizations is of prime importance for the
organizations and researchers. This work attempts 8. John Hagel, J. S. (2013). From exponential
to uncover some understanding of this phenomenon. technologies to exponential innovation. Deloitte
This work also explored the underlying drivers, Insights.
technologies and business models by analyzing 9. Kotler, P. H. (2015). Bold: How to Go Big, Create
Paytm as an exponential organization. The limitation Wealth and Impact the World. Simon & Schuster.
of this study is that it is pivoted in one case of Paytm.
There is a good scope for further research by looking 10. Mostert, M. (2016, April 28). Book Review on
into similar exponential organization in India and Salim Ismail’s Exponential Organizations. (Finweek
across the world to unravel the understanding of Magazine) Retrieved 2018, from http://www.
exponential organization. pressreader.com/south-africa/finweek-english-
edition/20160428/281758448466925

10. References 11. Not Listed. (2018, February 11). Retrieved from
1. Anupam, A. (2017, December 26). Techstory. What’s Driving India’s Fintech Boom?: http://
Retrieved from Digital Payments Unicorn Paytm knowledge.wharton.upenn.edu/article/whats-
launches Incubation Program for Technology driving-indias-fintech-boom/
Developers in India: https://techstory.in/
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paytm-incubation-program-2017/
Retrieved from We are empowering developers
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Boston Consulting Group & Google. blog.paytm.com/paytm-aims-to-empower-
open-source-developers-with-build-for-india-
3. Bhakta, P. (2018, March 20). Paytm transactions
initiative-960e3c0e37fc
reportedly grew four-fold to $20 billion in February.
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reportedly-grew-four-fold-to-20-billion-in-
Mobile Wallets in India. Retrieved from Social
february/articleshow/63375003.cms
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4. Bonchek, M. (2016). How to create Exponential mobile-wallets-in-india/
Value. Harvard Business Review. Retrieved from
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https://hbr.org/2016/07/how-to-create-an-
Organizations: Why new organizations are ten times
exponential-mindset
better, faster, and cheaper than yours (and what to do
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GSMA Intelligence.

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 Exponential Organization: Paytm – A Review

Global Journal of Enterprise Information System

16. Times of India. (2017, February 17). Paytm m i l e s t o n e - o f - 2 0 0 - m i l l i o n - wa l l e t - u s e r s /

crosses milestone of 200 million wallet users. articleshowprint/57372043.cms
Retrieved from https://timesofindia.indiatimes.
17. Wright, C. (2017, November 29). How Paytm
com/business/india-business/paytm-crosses-
went big on Indian demonetization. Euromoney.

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Annexure 1 Citation
K. Balanagarajan and Kabaly P S


    
“Exponential Organization: Paytm – A Review”,
Global Journal of Enterprise Information System. Volume-10,
Issue-3, July-Sep, 2018. (www.gjeis.com)
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40 Vol 10 | Issue 3 | July-Sep 2018 Online ISSN : 0975-1432  |  Print ISSN : 0975-153X