Science of success

Back when astronomer Carl Sagan -- "America's most effective salesman of science" -- was making the universe easier for the world to understand, Rohan Mahadevan was busy working on his doctorate in astrophysics. A promising career in academia beckoned, but he heard the calling of business instead.

Science and salesmanship might seem like two completely different planets, but a scientific mind -- curiosity combined with a conviction that there is always a need to look deeper -- has served Mr Mahadevan well in his chosen field.

Now a senior vice-president of PayPal, the money transfer website that has become a global payments giant, Mr Mahadevan is now busy applying his scientific and mathematical knowledge to decode the world of financial services and make them easier for people to use.

"I used to do a lot of coding," he tells Asia Focus, recalling the days when he was studying for his bachelor of science in physics at the California Institute of Technology, before going on to pursue a PhD in astrophysics from Harvard University. "You are either a theorist, an observer, or you're doing experimentation. I was a theorist at that time."

Most people thought that Mr Mahadevan would end up at a university somewhere, explaining the Big Bang Theory to the next generation of undergraduates, but there was something else cooking inside him. He had a passion to work and understand the challenges of growing a business, to create something that belongs to him alone.

"In hindsight, it was a stupid but a lucrative move," he says with laughter. "I was in England and I didn't know anything about the dot-com era at the time. A friend of mine wanted to do a startup and I made the decision to quit science. But the day I landed in San Francisco, they decided not to go ahead with the company." It's a fate that most entrepreneurs experience at least once in their life.

"I was in Silicon Valley without a job," Mr Mahadevan continues with his story. He ended up looking for work for over nine months and he could not find anything that suited him, until a brainstorming session with friends one day in 1998 turned into the idea for a software company specialising in aftermarket protection. Aftermind Inc lasted just four years but provided a learning experience and spurred him to continue exploring opportunities in the internet business.

"I had a few ideas with some friends and went on to raise to capital and was fortunate enough to get it," he says. Quitting science was a tough decision but one that he would gladly repeat. At the same time, his thirst for discovery is such that he would never completely close the door on his former life.

"I would quit again and I would do science again," he says. "I had the opportunity to study with some of the best minds in the world who are now Nobel Prize winners, deal with some of the best scientists from the best universities. It was a beautiful experience."

NOMADIC CHILDHOOD

Mr Mahadevan was born in India while his father was in the Middle East and the family travelled a lot before his father passed away when he was 11. His mother went back to school when she was 33 years old to find a ways to support her three sons. As a result, young Rohan and his brothers, one older and one younger, spent most of their childhood with their grandfather who was working with the United Nations in Barbados at the time.

He spent three years in the West Indies before moving back to India to attend boarding school prior to enrolling in the University of California, Berkeley. After for one year, he applied to the California Institute of Technology as a transfer student.

"We didn't have any money at the time and we were fortunate enough that they actually gave me a grant, which took me about fifteen years to pay off," he says of the tough years he and his family experienced. "It is paying off right now," he adds with a warm smile.

These days Mr Mahadevan is pursuing a mission to apply his scientific knowledge to information technology for profitable use in business. In his view, there are a lot of capabilities and skills that a person can learn, and if you are good at any one field, eventually you will develop certain skills that can be "transported".

"In the case of science, one of things I tell my team is that things need to be kept simple," he says of his role as senior vice-president of Asia Pacific. For PayPal. Based in Singapore, he provides strategic direction for one of the company's fastest growing regions that comprises large commerce markets including China, Japan, India, Southeast Asia and Australia. Overseeing these markets, home to most of the company's 230 million customer accounts worldwide, means that things need to be kept very tidy indeed.

PayPal separated from eBay in 2015 and is currently the larger of the two companies with a market capitalisation of US$103 billion, while eBay is valued at $42 billion. PayPal in February reported fourth-quarter 2017 earnings that beat market expectations, with $3.71 billion in revenue, up 24% from the same period a year earlier. It added 8.7 million customer accounts, an increase of 61% from the fourth quarter of 2016, with transactions increasing to 33.6 per account for the full year.

So how exactly does an astrophysicist apply his exotic knowledge to running a business?

"If you think about the complexity of the mechanical universe, everything in the mechanical universe can be simplified into Newton's three laws. Everything," says Mr Mahadevan. "So if you can simplify everything in the universe at the fundamental level to three laws, there is no reason a business problem cannot be solved and simplified into three bullet points."

If a business problem cannot be solved in three bullet points, then "you haven't taken the time to understand the problem", he says, quoting Albert Einstein to stress the point that "if you cannot explain it simply, that means you do not understand it".

As well as understating the problem at hand, clarity of communication is another key area where science can help improve one's chances of success in the business world. When there is a clear communication, what happens is that one idea will become other people's ideas, and once that happens, good ideas have a way of evolving.

"The idea becomes independent from the person who generated it and therefore you get a network effect from it, and then you can actually make a different," he says to describe how keeping things simple and communicating them clearly can improve the value of a good or service. In the business world, a network effect happens when your product increases in value when more people are using it. For example, the internet in its early days had only limited use in academia and research until enough smart people started putting more information that was useful to more people on it.

Mr Mahadevan expands on the concept. "The whole idea of structured thinking, analytical thinking, how you break a problem into small parts, how to make sure what is important, what is not, what you focus on, what you do not ... a lot of this stuff also helps you as it gives you the foundation, but it still requires a lot of ongoing work and today I'm still working on it."

The same rigorous approach can be seen when he goes about hiring people at PayPal.

"When I hire people I look for three main things: Number one is curiosity, number two is drive, and number three is perseverance," he explains.

Intelligence is not of critical importance in his view because it is not how well you know the subject matter that counts, since you can be trained. Some people, he says, can "substitute intelligence for hard work, but I cannot force somebody to work hard".

"Curiosity is something you cannot teach. You have to have it and scientists are inherently curious. But you can have a very curious scientist who does not have a lot of drive, so being driven is also very important because it gives you a sense of purpose.

"Still, even that is not enough because everyone wants to do a startup and thinks they can do it but perseverance every single day is hard and you need to have that in order to be successful."

SCIENCE OF STARTUPS

His time in the startup world means he knows how hard it is to create a business, and to understand that "unfortunately 98% of startups make the same mistake", which is focusing on too many customer segments.

"They end up not focusing," he says, explaining that startups often think that they can get five revenue streams when in reality, they will be lucky if they can get one, which is difficult enough. "Focus is one of the biggest challenges I find that startups face."

Mr Mahadevan believes that most startups get bogged down in discussions about how important each function is, be it finance, IT or human resources, and forget that the most important thing is to think about what is motivating or driving people, and how to structure their business accordingly.

"If you do some basic stuff, you will get ten times the runway and you get more focus … and if you're going to fail, fail in a way that you can learn something from it. Don't make the same failure that everyone else does, because you're not going to learn anything from it."

Now working for a company that is "fuelled by a fundamental belief that having access to financial services creates opportunity" as the PayPal website puts it, Mr Mahadevan is looking to apply that belief in Asia.

He joined PayPal in 2004 and held various leadership roles in California, Latin America, the Middle East and Africa prior to moving to Singapore in 2012. During his tenure at the San Jose headquarters, he improved consumer and merchant protection policies which allow customers to use PayPal safely. He then led the Global Risk Analytics team which was responsible for standardising PayPal's risk categories, and led pioneering work on understanding good and bad customer behaviours.

He also opened PayPal's first offices in Mexico and Brazil, with Portuguese language support, before moving to Asia where the company is looking to make financial inclusion a cornerstone of its mission.

"Financial health is about three things," Mr Mahadevan explains. "One is about control and cost of ownership of money. Second is how you develop a portfolio of revenue so that when one country is not doing too well, you need to have a portfolio of other countries or customers so that you can withstand any financial shock.

"The third involves the advent of all these new platforms, and how does it create economic opportunity for the individual."

He believes that as more people embrace digital services, it will become a lot less expansive to manage money. For example, if you have to pay a bill and still do it by mail, it will cost you time and money, and you don't know for several days if the money reached its recipient on time, or if there is any delay. With digitisation, these problems are solved. A PayPal survey shows that 80% of people who pay bills online actually save more money than the people who pay cash.

Creating economic opportunity for customers in Southeast Asia -- call it a financial network effect -- is an important part of the PayPal mission. It can enable any individual, within a minute, to sign up for a PayPal account and then be able to accept debit and credit card transactions from 200 different countries. But risk management is essential, cautions Mr Mahadevan.

"That is very powerful and very risky as well because a lot of the time you don't know if the merchant is committing fraud or the merchant doesn't verify the goods they are selling, or the merchant might go into bankruptcy. You really don't know but entrepreneurs don't have a history from the beginning, and that is where PayPal comes in," he says.

Mr Mahadevan says he's "very excited" about the prospect of helping entrepreneurs achieve greater economies of scale in Asia Pacific, so that they can realise their financial opportunity and potential. "That is one of the big areas of focus: How do we help the Asean market reach the 230 million consumers we have globally?"

As part of that effort to help entrepreneurs do business with nearly everyone in the world, PayPal has signed a deal in China with Alibaba-owned AliExpress in China, a platform used by thousands of small businesses. It has also teamed up with Baidu, the country's largest search engine, which allows consumers with Baidu wallets to complete the checkout process with PayPal.

"Now Baidu users can access our 18 million merchants anywhere in the world and it is great for us because we can go to our merchants and say that without any more integration you now have access to China," he says. "It is fantastic for the entire ecosystem because this is a way in which we can keep people safe."

PayPal also entered India last year and is now looking for similar partnership there.