How does Paytm earn money even after giving 40/50/60 percent cash back?

Now a days these new Startups have changed their Mode of doing Business & they are having a Long Term Vision to stay forever.

To run a business there are 3 ways

  1. TRADITIONALLY – In this you have a Short-Term Vision of earning quick money. Concentrating only on sales & profits and forgetting about building a Strong Customer Base & Market Reputation. In this case you can’t stand competition & can even loose your existence. For e.g – Local Retailers.
  2. ON FAT INVESTMENTS – Find big Investors & invest their money with a Mid-Term Vision to start generating profits in a year or two. In starting these companies work on either Zero Profit or on Losses & after that if it becomes successful then well & good otherwise the investors take over & its all gone. For e.g – Housing . com
  3. CALCULATIVE INVESTMENTS – Invest money cumulatively with a Long-Term Vision to build a Strong User base irrespective of profits. These Companies work on Zero or Negative Profits for few years, kills their competitors, but build a Loyal User base. And then either get Acquired by big companies or fine tune their business strategies to start earning. For e.g. – WhatsApp

Looks like PayTM is working on the 3rd business Model, and is currently in talks with Microsoft, and Bill Gates is showing interest in that area. So soon you might hear something big from them.

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