Complying with India’s labyrinthine business rules is far from easy. But the Australian software company behind the collaborative list-making tool Trello has put a number on it. And if you thought the whole madness around non-fungible tokens couldn’t get any crazier, sorry, you were wrong. Finally, the new restaurant etiquette certainly has something to do with menus, or the lack thereof.
Is 2% the cost of complying with Indian regulations?
If you work in tech—whether in a startup or large company—chances are your company uses at least one of Australia-headquartered Atlassian’s suite of products aimed at developers, product teams, and project managers.
Atlassian’s most popular software products include Jira (project and issue tracking), Confluence (collaboration and knowledge sharing), Bitbucket (code collaboration), and Trello (collaborative list-making). With over 200,000 global customers and an annual revenue of over US$2 billion, Atlassian is really good at what they do.
And India has been a significant market for Atlassian—both in terms of revenue and talent. Since setting up office in Bengaluru in 2018, it has been upping its headcount steadily in India—currently at 700. Its customers include some of India’s best-known tech giants like Ola Cabs, Reliance, Walmart Labs, and Flipkart.
Clearly, India isn’t a mere checkbox for Atlassian and the company is genuinely invested in the country.
But if you’re an Atlassian customer based out of India, you’re going to be paying 2% extra on your monthly bills starting next month. (With an additional 18% GST on top, that will be 2.36%.)
Because, Atlassian says, India is one of two countries globally where it is imposing an additional administration fee on customers “to address increasing regulatory operating costs imposed by governments in certain jurisdictions.” The other country where this fee will be applied is Turkey, where customers will be charged 7.5%.
Complying with regulations is something most companies have no choice but to do. If you’re a global company with operations in numerous countries, all the more so.
In almost all cases, the cost of complying with these regulations is baked into the cost of doing business. Which means, it is baked into profit margins.
For Atlassian to take the unprecedented step of imposing an additional “cost of doing business in India tax” on its customers, there can only be two explanations. Either, the revenue it derives from India isn’t enough to cover the fixed cost of complying with regulations or the cost of compliance is so high that it sees no other way.
Either way, this is more of an issue for India and its desire to be seen as a great place to set up and do business, than for Atlassian. Because 2% is unlikely to be an amount so significant for customers that they change to different software providers (especially since Atlassian’s products are really well regarded for their features, not for their low prices).
But for India, there is the risk that more global companies see this as an option. Why sweat with the cost of complying with India’s regulations if you can just pass it off to your customers?
The road to riches is starting with jpegs
First there were Kitties. Then came the Punks and Apes.
I’m talking about non-fungible tokens (NFTs) that are taking the internet by storm.
Let me explain NFTs first.
They are a way to create digital works of art (and a bunch of other stuff that could be termed collectibles) into unique, verifiable assets that can be traded on the blockchain. Sure, you can right-click a jpeg and save the image yourself but that’s like hanging a print 0f the Mona Lisa at your home when everyone knows the original hangs at the Louvre Museum in Paris. Only one person owns the original (though the artist still owns the reproduction rights).
Okay, back to 2017.
CryptoKitties, a blockchain-based game that allowed players to purchase, collect, breed and sell virtual cats, was developed. And people spent crazy amounts of money to get their hands on some (digital) cats—US$113,000.
But the mania around it slowly died down, and in 2020, other NFTs started being popular—like TopShots, which are like collectibles of the best moments from basketball (BFO#230).
Cut to 2021.
CryptoPunks and BoredApes have taken over. While CryptoPunks began in 2017, it has reached a new dimension now. It seems that over the past month, everyone’s Twitter picture is either a pixelated punk or an ape doing some cool thing. People are spending thousands and thousands of dollars just to get their hands on these NFTS. Even millions.
What’s going on?
It’s easy to theorise why this is happening, but let’s be honest, no one really knows. All that we know is that there is plenty of chatter on Twitter that attempts to rationalise this behaviour.
As Bloomberg’s Joe Weisenthal put it, “It’s all so new and weird, so everyone is excited to show off their multidisciplinary understanding of behavioral economics and markets and McLuhan and art history and sociology and all that.”
But CryptoKitties didn’t lead to people changing their social media avatars into pictures of kittens. Again, there are multiple theories for that but here’s mine—the crypto community is still very much a boys club and cute kittens don’t really reflect what they want to project on social media (apart from making money trading CryptoKittens maybe). And BoredApes has more cultural relevance that way in the cryptoworld, since in crypto speak “aping” means jumping into something with abandon and holding on to it. Anyway, that’s just a theory.
But there could be a wider significance as the digital economy meets the real world. As the team at investment firm Three Body Capital writes, the money in crypto is not just from a “bunch of nerds in their basement”, but huge money coming in from institutions and other rich folks. So this isn’t “cartoon” money. And it’s making people very rich very quickly who then end up spending that money in the crypto-economy—because traditional finance is too boring anyway.
What yachts and jets were to one generation of billionaires, jpegs could be to the next set.
Imagine, even the centuries-old luxury auction house Sotheby’s—where the rich shop for art—changed its Twitter picture to a BoredApe; it’s also holding auctions for this weird and meme-y digital art.
Yes, it’s all well and good to sit on the sidelines with a masters degree in finance or a CFA charter and scream that none of this makes sense. That BoredApes and the hype around these jpegs will crash like the Tulip Bubble of the 17th century, and that it’s just history kind of rhyming with itself.
But what if the change in patterns of investing and consumption just reflects the fact that the culture and beliefs of this generation are poles apart from the prior ones? Which means that anything to do with the blockchain and the crypto economy, even if it isn’t a traditional project that delivers earnings, could be the future playground for minting billionaires like Warren Buffet.
Digital x Fan base = rich?
What’s that QR code in the restaurant doing?
If you visited a restaurant over the weekend, chances are that you didn’t receive a physical copy of the menu. Instead, you probably scanned a black and white, square shaped, 2D barcode—the quick response or QR code.
With QR codes linked to web-pages, there’s really no need to print voluminous menus. The biggest pandemic-related benefit is that you don’t need to thumb through something that plenty of people have touched, and which has never probably been sanitised. And according to Bit.ly, the link management provider, QR code downloads have jumped by 750% in the past 18 months.
But for restaurants, it’s more than just the convenience they afford to customers, or the labour costs that they might be able to cut down on with fewer servers and staff.
So, maybe, just maybe, this could mean that you find your favourite dish priced differently if you visit a restaurant on separate occasions the same day.
It also gives the restaurants a chance to “up-sell” via simple nudges and to do more in real-time, without the need of a server to do the hard task of making a sale.
All this is great. But, the privacy that allowed diners to enjoy a meal in relative anonymity is now disappearing.
And while QR providers claim that each restaurant’s customer data is available only to that specific restaurant, it could only be a matter of time before your dining data in some form is sold to third-parties.
There’s also the added problem of spy/ad/mal/ware. Because who would suspect an innocent QR code at a restaurant?
Think restaurants provide you with anonymity? Think again.
PS: One segment where QR codes are being frowned upon? Fine-dining restaurants where whipping out a smartphone is a no-no and calling for the ‘check’ or the ‘bill’ at the end of a meal is considered classy.
That’s it for today.
Don’t forget to write in with your thoughts and observations on the reshaping of businesses, societies, and economies. We will be back tomorrow.