All VC firms want to invest in potential Monopolies.
All Monopolies need partners that will help them become and remain a monopoly.
Well you might say: What about Google?
Absolutely. I am not talking about the monopolies that arise from technological advancements or network effects.
But there are hundreds and hundreds of different monopolies in countries, states, cities and sometimes even of international scale, that have nothing to do with technological advancements.
I am talking about legal monopolies.
In India, starting a liquor bar, hookah bar (hookah lounge) requires a permit/license from the government.
Building apartments on a piece of land requires various permits from the government.
Selling liquor requires a license.
Selling tabacco requires a license.
It should require a license after all. You might say. But who decides the allocation of these licenses? Well now we come to the point:
Political Parties eventually form the government.
Government has the right to form laws and thus create legal monopolies.
Wouldn't it be a match made in heaven, if political parties could invest in companies. Form governments. And then create laws so that the company in question could become a monopoly!
The allocation of licenses is done on the basis of who sells equity into their companies to the political party at the cheapest price!
This way of organizing corruption can first be seen in Sharad Pawar's Maharashtra.
Therefore, political parties could could come up with (now huge) organizations like the Bharti Vidhyapeeth (Medical Colleges and Hospitals), The huge chains of Sugar Factories owned privately by mostly NCP (Sharad Pawar's Party) politicians. Most Co-operative banks even.
Did you know: Until recently, there was no RBI supervision on Co-operative banks! So they could do whatever they wanted.
Well, you guessed it right.
Sharad Pawar wielded tight control on the supply of licenses to the most important money-printing institutions. Not money printing in the sense of central bank (or the federal reserve). Money printing in the sense of Monopoly businesses.
Also, magically Sharad Pawar banned the sale of tobacco products in the state. And turns out the largest players in the tobacco business in Maharashtra (the Sanjay Ghodawat Group and Manikchand Group) are huge fans of the Sharad Pawar party!
How could this be?
Have you ever heard of a fisherman promoting a political party that banned the sale of fish?
Well I have! And it turns out, people don't stop eating fish.
When the sale of fish is banned, it just means that the regulation of that business has shifted from the government to the political party in power. The political party in power then will use all the powers of the state as private tools of itself to control and tax the business.
For example, the monopoly of violence. The state has the monopoly of violence (through police). But we have police who are more like private dogs of the politicians. Because the police dedicate less time working for the state and more time as collection agents for businesses owned (through VC investments) by political parties.
PM Modi always says that he learnt politics from Sharad Pawar. And I always wondered why would say so! Why would PM Modi praise a man known for corruption?
Turns out Modi speaks the truth!
Modi learnt the trick from Pawar's books and replicated it on a huge national and international scale.
A number of coincidences happened when the Reliance Industries launched free Internet for the entire country.
Like the simultaneous launch of Aadhar Authentication (digital government identity verification). This thing alone helped Jio gain a massive head start. But there were a number of other things done by the government that helped Jio gain the scale that it has today.
Thus creating a Duapoly with Jio coming out in front as the absolute winner. But to help Jio not look like a Monopoly, the government has made huge efforts (with tax payers money) to keep alive two other businesses in the telecom space. Government owned and run BSNL and privately owned Vodafone - Idea.
Obviously, BSNL just remains as another way to leak money into the political party's pockets through tenders and employment contracts.
Also one of my recent observations was that the Indian Government through CCI started extorting money (around 1000 crores - USD 100 Million ) from the likes of Google - one thought sprung up: Maybe Google was not co-operating enough to help Jio in whatever space they wanted help!