Kunal Shah on winning in India, second-order thinking, the philosophy of startups, and more

[00:00] Microsoft, Adobe, Alphabet, IBM, Palo Alto Networks, even Starbucks. The CEOs of these companies were all born in India and emigrated to the U.S. A lot of CEOs have done well because they follow the dharma of the founders quite well. These are the principles were given to me and I'm going to sustain this and make it even bigger. I want to keep talking about India and how it's different and how to build products that are successful in India. No Indian has ever been paid an hourly salary in their entire life. The concept of time is not the same. [00:30] startups. India is changing because now for the first time we're seeing founders being respected and unicorns being celebrated. We have a national startup day and probably the first generation that will have to prove ourselves to be very large profitable companies. I wouldn't want to be anywhere else in building. [00:45] Today, my guest is Kunal Shah. Kunal is one of the most well-known and respected entrepreneurs and product leaders in India and around the world. He shares endless wisdom on Twitter and LinkedIn. [01:01] where he's got over 1 million followers, [01:03] He's the CEO and founder of Cred, a fintech startup based in India, which was last valued at over $6 billion and as of a couple years ago processed over 20% of all credit card bill payments in India. Prior to Cred, he founded three other startups, including Free Charge, which he sold for over $400 million to Snapdeal. Kunal is a deep thinker, both about product and about life. His background is actually in philosophy, which comes across very clearly when you hear him share his advice.

[01:33] In our conversation, we get deep into what makes working and building in India different from the US markets and other markets, including why trust is so essential and why so many people are so much more risk averse in India. We talk about the biggest challenges and opportunities within the India market, why there are so many successful Indian immigrants in CEO roles across tech, and what we can learn from that. Also, why companies in India can quickly grow DAOs, but not ARPUs, and what that means for building products in India. [02:03] We also talk about how to stay curious and open-minded in the power of second-order thinking. Also stories of failure and lots of contrarian takes and so much more. If you enjoy this podcast, don't forget to subscribe and follow this podcast in your favorite podcasting app or YouTube. It's the best way to avoid missing future episodes and it helps the podcast tremendously. A big thank you to Sayan Ma'iti for making the connection to Kunal. With that, I bring you Kunal Shah after a short word from our sponsors. [02:33] This episode is brought to you by WorkOS. If you're building a SaaS app, at some point, your customers will start asking for enterprise features like SAML authentication and SCIM provisioning. That's where WorkOS comes in, making it fast and painless to add enterprise features to your app. [03:03] Zoom. WorkOS also recently launched AuthKit, a complete authentication and user management service. It's essentially a modern alternative to Auth0, but with better pricing and more flexible APIs. AuthKit's design is stunning out of the box, and you can also fully customize it to fit your app's brand. It's an effortless experience from your first user all the way to your largest enterprise customer. Best of all, AuthKit is free for any developer up to 1 million users. Check it out

[03:33] dot com slash Lenny to learn more. That's workOS dot com slash Lenny. This episode is brought to you by Orb. As a business, you care about revenue, but as a product team, the last thing you want to do is delay a product launch or pricing change because your team has to rebuild billing from scratch. Orb is a flexible, usage-based billing engine that lets you evolve your pricing with ease. The fastest growing product teams at companies like Vercel and Replit trust Orb [04:03] pricing changes and launches. Use Orb to ship product faster, stop worrying about billing, and evolve pricing with ease and control. Check it out at withorb.com slash Lenny and skip the line for a demo or sandbox by using promo code Lenny. That's withorb.com slash Lenny. [04:22] Kunal, thank you so much for being here and welcome to the podcast. [04:29] Lenny, thank you so much for having me and a huge fan of [04:33] everything that you do and and uh like i said before india is a huge beneficiary of what the stuff you do we are all [04:41] People who have learned the art of product by just [04:44] figuring it out and watching some content here and there and reading some stuff. [04:49] so [04:50] Kudos to everything that you do. And like I said earlier, that you do the fabulous job of [04:54] taking the information asymmetry of the part of product and kind of make it accessible to [04:59] many of us across the world. So thank you. [05:02] Wow, I really appreciate that. This is already feeling great to me. It turns out this podcast has a huge audience in India.

[05:10] As do you, and so I feel like this conversation is going to be really special and really meaningful to a lot of people. [05:17] I wanted to start with something very tactical. [05:20] There's a product framework that you came up with that [05:23] I absolutely love and I've shared it with at least 30 founders over the last couple of years. And this is actually how I discovered you initially is I heard about this thing and I'm like, "Who's this guy Kunal Shah?" And look at us now chatting. [05:36] Could you explain this framework briefly and then just how you've used it or how you recommend people apply it? [05:43] Oh, and by the way, it's called Delta 4. I don't know if I even said the name. Yeah, it's called the Delta 4 framework, but I think it's actually quite... [05:50] simple if you think about it. A lot of people say that your product has to be 10x better and it's [05:55] not very measurable. You don't know if you are 10x better or not unless you are delusional. [06:01] And the trigger for me was actually, I'm the unusual tech founder in India. I'm a philosophy. I'm the only [06:07] a humanities philosophy major founder in India who's got into tech. And I often wonder that most people who were my peers or people who were ahead of me were significantly smarter academically or otherwise. And why did I become successful with my first startup recharge, which I exited in 2015 for nearly like $450 million. And I was like, [06:29] What? [06:30] would make this happen because I would not qualify into this super league of really top IIT rankers that exist in India. And that got me under this philosophy quest to find out what makes things successful. So the simple framework is like an example that you often is that imagine the old way of taking a cab ride and an Uber. Right. And if I asked you, give me this score of efficiency on Uber,

[06:55] and let's say getting the old cap, what would you say, Lani? I'm curious, like out of 10, [07:00] Yeah, I'd give a cab like a 3 and an Uber like a 9. [07:04] Yeah, so every time you see that [07:07] the product efficiency delta is greater than equal to 4. [07:11] Three things happen. [07:13] It is irreversible. [07:16] Second is that you have very high tolerance [07:20] for it to fail. If Uber fails a little bit, will you say, "Oh my God, I'm going to really stop using it?" No. [07:30] And the third thing is that I call it the UBP, Unique Braggworthy Proposition. [07:37] So every time humans unlock a Delta IV product or service, [07:41] They cannot... [07:42] Stop. [07:43] talking or sharing about it. [07:45] And therefore all delta 4 products will naturally have lower CACs or sometimes zero CACs. [07:51] because people humans and and think about how you discovered uber definitely not through an ad [07:55] Definitely not through some performance marketing here and there. Somebody showed you the demo and you were like, [08:00] "My God, this is crazy!" And that's what I'm seeing right now, what's happening with everything on OpenAI and everything that is happening around LLM feels like magic. And it's kind of Delta IV because the efficiency of doing things before and after is now showing that. But the failure is the real problem. [08:15] Right. And making everything tech does not make things more efficient. [08:19] Let's talk about an example. Buying a suit for you, [08:24] online versus offline.

[08:27] all tech, cool stuff, all the features built in. What would you say the efficiency of buying a suit online is versus, let's say, buying a suit offline? [08:35] I've actually done that, and it was a terrible... It did not fit at all. And so, like, it's efficient, but yeah, the end result was not... It's probably often not [08:44] Not great. So it's probably... Overall efficiency score, what would you give? Of buying a suit online? [08:50] Yeah, how was it offline? [08:52] Like I'd probably give it five and five. Like offline is actually probably better experience. I'd probably give it a seven. That's crazy. Why? Because you've broken the principle, this is a tech product. [09:03] but the efficiency is better offline. And therefore, when the delta is lesser than... [09:09] for what you will discover is that it is reversible. [09:14] You will not see. [09:16] people bragging about it [09:19] and you have zero tolerance for it. So you are never going to buy Sulu online, I can tell you that right now. [09:25] So I think it's a simple framework. [09:28] I believe that if many companies applied, so I know now many VCs in the US use this [09:34] as part of the training program for the analysts i know about it that [09:38] Somebody in Sequoia mentioned this to me that they have this part of the thing. [09:42] In India we are like not [09:44] still applying many of these things i think it's a simple framework to at least know [09:49] And you can apply this to features. You can apply this to products. You can apply that to business. And oftentimes, this is a longer concept. We can talk about it in many ways because it's derived out of...

[10:00] some study around entropy [10:02] and something about evolutionary biology which is the root [10:05] of how I discovered and thought about Delta IV, that when does a species get disrupted, and what is entropy, and why does low entropy require growth of high entropy. It's a day-long podcast on its own, so some other time. Okay, we'll save that for a future follow-up, just diving in on the psychology of Delta IV. Just to kind of summarize this, because I think it's such a powerful framework and I find it useful. [10:29] to convince founders why their product isn't taking off. They may feel like this is better than, like the classic example is a better Excel. Look, this is so much better than Excel. It can do all these things. You don't have to learn all these formulas. But the trick here that I love is just [10:44] What would people rate the existing solution 1 to 10? What would they rate your solution 1 to 10? And that's to be four points higher. Otherwise, no one's going to pay attention. And I think [10:52] I think it's pretty simple. People are busy. They have enough things to do. They have enough products and apps. They're not going to... [10:57] take the time to really dig into something if it's not that much better. Absolutely. Okay, I'm going to go in a totally different direction. I want to talk about Indian CEOs in the US. Okay, so today the CEOs... [11:09] Microsoft, [11:11] Alphabet. [11:12] Adobe, which is a $250 billion company, it turns out. IBM, which is a $170 billion company. [11:18] Palo Alto Networks, which is a $100 billion company, even Starbucks, also a $100 billion company, I was looking that up. And then also Twitter before Elon took over Twitter. The CEOs of these companies were all born in India and emigrated to the US.

[11:32] And I might be wrong, but I think this is the largest [11:36] ethnic group of CEOs of tech companies other than just white dudes in the US. [11:42] I'm curious why you think Indian immigrants are so successful in business and in tech in the US, especially in these very high positions. [11:51] I'm most curious, just what can we learn from that? What can we learn from their success? It's a great question. I often wonder about it. And I have had the good fortune to meet a fair bunch of these individuals and had a chance to really explore with them [12:06] what really went on. [12:07] So there are a few things that pop out and again, these are all conjectures which I can't prove in any ways, but it's a thought experiment anyway to talk about these things. First is, in general, [12:21] Immigrants. [12:23] that get out of the country are usually have chip on the shoulder in a very different way and the struggle that they have to go through to just get out and be successful and that hunger that got them there there was no privilege like they were we came from very very humble backgrounds and and literally no money to start with so i think the the that this force is real [12:45] Right, but I consider for many immigrants in general as well, but appreciation for math. [12:50] in general or logic which came to the society [12:54] in a big way, right? Kind of give, let's say for example, lots of engineering graduates come from only few countries because the society was bent towards, let's say, earliness of mathematics or earliness of this. And I think that kind of helps

[13:07] create status that what will get appreciated. For example, being an engineer, being a doctor, like philosophy major, I was a write off for the society. Right. So the reason I am the rare commodity over here because [13:19] you are not considered to be very bright unless you break into these very hard exams and very, very hard things. So the filtering criteria on its own is big. But there's another interesting framework altogether, which I have actually learned from this gentleman, Devadath Patnayak. He applies Indian mythology and management principles together. And it's an interesting thing that there are three [13:41] Major Indian god, one is the Brahma, the god of creation. Shiva, the god of destruction. I'm super generalizing, but that's the classification. And the third is like Vishnu, which is the god of sustainance. And the avatars, the word avatar comes from Vishnu keeps changing avatar, right? So we have had Rama, Krishna, all these guys are avatars. [14:02] So what you notice is that if you take a 2x2 of [14:08] People who are [14:10] high on values and low on values. [14:13] High on obedience and low on obedience. [14:16] Hmm. [14:16] You make an interesting 2x2, right? Now [14:20] Lord Krishna, which is one of the very popular avatars, which was non, I mean, suits the entrepreneurial category, which is high on values, but very low on obedience. He was known to be the naughty god and he could actually create lots of things. And there is Rama, which is known to be the one which follows principles and obedient. So they will follow Dharma.

[14:42] and scale on that. And then there are these notorious characters, there's Ravana, which is low on values, low on obedience, and there's Duryodhana, which says that, [14:52] is low or high on obedience but lower value right so these are the [14:56] people that you don't want to be. And what you notice is that [14:59] A lot of CEOs have done well because they follow the dharma of the founders quite well. [15:04] They have not diluted the Dharma. [15:07] of the founders who have started these companies and managed to sustain that. [15:12] And a lot of CEOs have this need to say, "Oh, I'm going to change the company forever and it'll be my identity and I will change the logo and I will change the name and I will... [15:22] Do all sorts of things. [15:24] But maintaining dharma, [15:26] right where i will say that these are the principles were given to me and i'm going to sustain this and make it even bigger [15:32] comes from humility of saying that [15:34] there is something built with some pure form factor. And I think, therefore, that character stays on. And therefore, the characters of [15:43] Brahma and Shiva are the founderistic, create and destroy, like that's the thing. But sustenance is the harder one. And therefore, avatars keep happening over and over of time and different hurdles come and different levels come. But when you think about [15:58] I think we will see a lot more of this in years to come because now they have the role models of these individuals who have kind of done well.

[16:21] But the key principle is that if you ask the founders, [16:25] They will love these CEOs if they are around. [16:29] Because they maintain the dharma of the thing. And for example, let's say what Tim is doing is maintaining the dharma of Steve Jobs. Because if he had tried to change the dharma of Steve Jobs and what the values the companies are, it's very hard to imagine it to be sustaining itself forever and ever. Wow. What an answer. What I love about this is this combination of using a two by two and Indian... [16:51] mythology is like the microcosm of you, which is philosophy and tech. And so I love that and makes a lot of sense. That's where your mind goes. Something else that makes me think about is, I read this book a long time ago, Jim Collins, either Good to Great or one of his early books about leadership. And he talks about level five leadership, I think is [17:11] and where level five leaders are ones where it's not about them. [17:14] It's about the business and they can disappear in the future and things will work great. [17:19] Yes. And, and, [17:20] I feel it is very hard. [17:23] if you believe that your identity [17:26] needs to have its own position and legacy. And therefore, a lot of time chasing status [17:32] So, you can see that the signature is not a signature. [17:36] and therefore becoming [17:40] accepting the religion and trying to be the [17:44] the Pope of it or the father of it is better than trying to say, "Oh, I need to have my variant of religion." And that's where [17:51] the creative destruction starts happening.

[17:54] Interesting. Okay, so you said that there's this good balance between Krishna and Rama that happens. Can you just, again, summarize where they are in that two by two? Rama is high on… [18:04] values and higher obedience [18:07] and Krishna is high on values and low on obedience, but they both are high on values which means they will follow Dharma. [18:14] And they will change the side. For example, let's say Satya, during the open AI crisis played Krishna. [18:22] and got things out, but he'll switch back to being Rama and continue to [18:27] Keep scaling it up. [18:29] Amazing. And just to close the loop on here, is your sense that they're actually thinking... [18:33] about this and they're religious or is this just like in the ether of growing up in India and this is just part of the culture? It's a great question. I don't think they're conscious to think about it, but I think if they ever heard this, [18:45] They would agree with this because that's what they grew up with. And the value systems are much more long term. For example, I believe all bad behavior in humans, humans come from being short term. [18:57] Right. [18:57] and being long term [19:00] comes in a very, it's a big choice to make. And a lot of times, a lot of people argue that, oh, we have arranged marriages and like it's 95% arranged marriages and less than 1% divorce rate. [19:13] comes from this whole long term thinking. [19:17] that people are married through values [19:21] versus [19:21] attraction or

[19:24] lust and all of that stuff, but more long-term oriented and about building a family, building values or low divorce rate is about [19:32] will fix along the way versus trying to say, "Oh, I need to evolve and I need to move forward." So I think being long term, [19:40] about that mindset and that's why some cultures last for [19:45] Thousands of years because of this need for everybody to be more long-term and [19:51] versus Sharpton. The US could use a lot of that these days. You mentioned this interesting fact about how [19:58] In India, the fact that most startups fail, I think the classic stat is 90%, and that the risk is a lot higher to start a company and then fail. [20:08] Can you just talk about what impact that has? How do people try to avoid that? Because that'd be amazing if you can reduce the risk of starting a company, or is it just it happens and people get super in debt? [20:19] I think long term societies are naturally more risk averse. [20:25] Mm-hmm. [20:26] And not all [20:28] great CEOs can become great founders for the same reason. [20:32] In fact, I would say that it actually makes it very hard to be a founder if you've been a great CEO. [20:36] Because you've turned into this... [20:39] sustainer versus destroyer or creator, right? [20:45] So the nuance I'm talking about is [20:47] When you are thinking about [20:49] like risk appetite, India is changing. But now for the first time we're seeing founders being respected and

[20:56] talked about and these unicorns being celebrated and our our prime minister talks about [21:00] uh startup quite openly we have a national startup day and so on and so forth so i think there is a [21:06] thing that has changed this thing but [21:08] The core principle is the core human behavior basics. India still has large arranged marriage. [21:16] and if you are a founder and a failed founder your chances of getting [21:20] a person to marry [21:22] is still [21:23] a hard thing to achieve [21:25] So if this is all true, then the [21:28] appetite to take risk [21:31] will be controlled. Somebody gave an interesting example to me that there's a very large, let's say, a CPG company in India. And let's say you do a zero to one over there and the CEO changes in four or five years and your zero to one failed, but you were the best person. That's why you were given the zero to one. Next CEO is like, so what have you done in the last five years? It's like nothing. I just tried to launch this failed. [21:55] And you neither give a promotion in the company, neither a new company will say, "Oh my God, I'm going to hire this talent." [22:01] The guy who stayed on this stable brand within the CPG company kept growing, but that has natural tailwinds. All he has to do is nothing in that brand. And then suddenly what you see is that he or she's like managed to do well. And this guy has done a zero to one has not done well. So. [22:17] We do not celebrate risk takers as a country yet. And I think we will change that. I think it's changing already. [22:25] But we have a long way to go. One of the beautiful things I often talk about is that I was in Portugal once and I saw, I don't know if you've ever been and seen this, but in the church, normally, let's say only the royalties allowed to be buried or cremated or whatever, like they are there. Only one more category that allowed is the explorers.

[22:47] Vasco the gamma all of these guys who explored the world and took risk and [22:51] to the country forward they were given the same position as the royalty. [22:55] So when we give the highest status to risk takers, [22:59] the country appreciates it because ultimately we are all looking for markers of social validation. [23:05] Super interesting. I want to keep talking about India and how it's different and especially what may surprise people about the market, both building there and then how to build products that are successful in India. I saw in a different interview, you talk about how there's this big difference between DAOs and ARPUs, that in India, it's really easy to get DAOs, basically get lots of users. [23:24] really hard to make revenue per user. [23:27] and that changes the way you build product. Broadly, could you just [23:31] Talk about why this is the case. Why is it so much easier to get DAOs versus ARPUs? [23:35] So I think ARPU is a function of per capita income of a country. [23:40] right you cannot make hundred dollars [23:43] per user from a country for a product when their income is, [23:47] Let's say $2,500 per year as an average for the whole country. [23:51] Right? [23:52] So what happens is [23:54] uh many global companies love to come to india because we have the cheapest data [23:58] very high smartphone penetration. So if you look at a lot of global giants, they'll have 500 million users from India or sometimes a billion numbers coming from Asia and they don't have huge ARPUs. [24:10] but they help you show the user growth, which helps you in your public market and therefore improve your valuations. [24:15] Right? [24:16] For example, my guess is that, I don't know if this data is public or not, or talked about, but my guess is that Meta would not have more than,

[24:24] three or four dollars per user per year monetization in india [24:28] but if you look at the user growth in india it will be huge [24:32] Right? [24:32] So a lot of times, [24:35] For global companies, India becomes a great MAU firm. [24:38] but very low on ARPU and therefore a lot of Indian founders who [24:42] try to copy the Western markets and say, "Oh, I'm going to have 200 million users." Make a terrible mistake because they will need to then go abroad to find their ARPUs to balance the act. [24:52] You talk about how Netflix is a good example of that, where they launched in India, they got lots of users, but just couldn't make a lot of money. [24:58] Yeah, because for... [25:00] that users to find relevant content and pay for content when we have tons of free data, tons of free content like all over the place like [25:09] short videos which are competing with time, like so much going on over here. People actually paying for that by design is going to be less. And I'm not saying that it will not change in 10, 20 years, but [25:20] The expectation that many global companies come over here saying that, oh, I'm going to have like these tens of millions of users who start paying me as soon as I come. [25:28] for Spotify, for Netflix, for almost anybody, or Amazon Prime for that matter, has not panned out. [25:37] So one of my takeaways here is just when you look at a startup as an investor, especially, and you see like we've got 100 million users, don't treat that the same as, say, 100 million users in the US or other markets. Absolutely. One more thing is value of time as a concept. So one of the things you'll notice is that no Indian has ever been paid an hourly salary in their entire life.

[25:58] Hmm. [25:59] But let me ask you a question. What was your first ever job and how are you paid? [26:03] My first ever job, I was tutoring... [26:06] tutoring women on back computers and passing Microsoft certification test. And I was paid, I'm pretty sure, hourly. [26:12] Now, most likely you will remember what the hourly income was. And even though you've started making a lot more, you somehow have the concept of what the value of your one hour is. [26:23] But if you ask most Indians, and if you ever come to India and do this exercise when you meet them, ask them what's your income per day. [26:32] or income per hour. [26:33] nobody will be able to answer no matter what their job is. They could be staff at the restaurant, to somebody who's doing really basic work, to anybody in any fancy job because we've never ever be paid an hourly salary. [26:47] So when you are not paid an hourly salary, the concept of time [26:51] is not the same. [26:53] And then the concept of time is not same, paying for time. [26:56] is hard to do. [26:58] Right. And therefore, you see a lot of Indians who make [27:01] let's say, I don't know, maybe $100 an hour, [27:04] still [27:05] spend an hour to send $10 on a flight ticket because [27:09] That's what it is. And if you discuss that with many of the Indians in the West also, you'll realize that this is a common joke that [27:16] They will still fight for the $10 because the value of time is something that is harder to get used to unless you [27:23] from your childhood, [27:24] So the unit of time was moved smaller and smaller.

[27:29] That is really interesting. And you're saying that comes from just the fact that people never get paid hourly. It's always a salary and so people don't write down... The concept of valuing time. Many Indian languages do not have a word for efficiency. [27:44] Wow. [27:45] And that's true for many Asian languages. The word for efficiency does not exist. [27:50] So then how do you value it if it's not in your vocabulary? [27:54] Fascinating. There's something else along these lines of [27:58] DAOs and ARPUs and efficiency that you talked about that I love, which is this idea that focus is a curse in Asian markets, that in the US, there's often this advice, focus, build one thing that's amazing that everyone loves, try to make that work, scale that, and then only then build a new product or build something, build a new big feature, and you're [28:19] advice is in India and Asia markets in general. It's the opposite. And I think it's because you make so little per user. Could you talk about that? [28:25] Yeah, I think one is you make very little per user. So you have to do many things, but also [28:31] All low trust markets, let me define low trust markets as where [28:36] So, you know, you're not going to be able to do that. [28:39] Because there are no institutions that protect you against a bad behavior done by a company, right? So for example, if I ever had a fall [28:47] in a coffee shop in the US, I can think about suing them and making money off it. In India, you only worry about I'm going to pay my thing. You don't even think about suing the coffee shop or you're hoping that you will get any money for that. [28:57] So what happens is in a low trust country,

[29:00] All developing nations are low trust by design. [29:04] because the institutions are not strong enough to kind of really really take care of many things. What happens is there is concentration of trust. [29:11] So you will see that super apps, superstars, super companies all exist in low trust markets because the lack of trust creates concentration of trust. [29:20] Right. And therefore, you will see one app can do 400 things. For example, we have a company like Tata that can do salt to car to jewelry to anything. And people will buy because it's a Tata brand. [29:32] because it comes from a low trust society trusting the brand [29:35] and not being, "Oh, I'm going to cause preferred this new brand." And the joy for trying new things is not so high in low trust nations. [29:47] Wow, I'm learning a lot here. I didn't know all this. So essentially brand is even more, exponentially more important in Indian markets. It's funny, but the oldest brand in the world is a brand called Chavan Prash. It's by a guy named Chavan who built a prash, which is a sort of a place that you can have for good health. And it was built in India many, many, many, many centuries ago. [30:15] And therefore in India, trust still comes from a lot of people who are not in the world. And so I think that's a good thing. I think that's a good thing. I think that's a good thing. [30:29] names of people who had a lot of trust behind them and reputation behind them.

[30:33] I want to zoom out a little bit before we go in a different direction. What do you see as either the most pressing challenges... [30:40] in India right now for tech or the biggest [30:44] and/or the biggest opportunity for Indian startups? And then just generally, where do you think things will evolve in the next few years? [30:51] Sometimes I wonder if the challenges and the opportunities are exactly the same. For example, one of the biggest challenges we have is [30:59] We have very low female participation of labor compared to many markets. [31:04] But I also believe it's an opportunity because you can, let's say, use AI and create many new types of business and opportunities because now work from home is not an alien concept anymore. You can actually create very interesting businesses for that. [31:16] number two is a [31:18] uh, [31:19] We are... [31:22] low on per capita income. So what AI can do instead of taking our jobs away, just make us brighter. Because now, like Satya talks about that now expertise is available in the air. [31:34] So you can actually just kind of ride on that and really make the world very equal in many, many ways. Right. So that's massive opportunity. And also the challenge, because I often make this joke that the largest employer of the world is inefficiency. [31:48] And if you take that away too quickly, we'll have a very, very jobless world. Right. So the thing is that it can be an opportunity for a country like India and also potentially a threat because we don't start becoming great at AI. [32:01] I was actually just telling somebody today that [32:03] maybe all of our interviews should become

[32:06] about [32:07] giving a task that they can only perform if they were very good at AI and [32:11] And no matter what the job is, [32:14] You make that the minimum criteria that [32:16] If they cannot use that, leverage that, they will become a liability in five years anyways. [32:22] And the last one is... [32:25] We have a very young demographic [32:27] very well positioned with [32:30] access to technology, access to smartphones and so on and so forth, a lot of hunger. [32:34] But our challenge is also that [32:36] It's also the first generation that is truly learning what is entrepreneurship, what is risk. [32:40] and we'll make all sorts of mistakes, get there and I hope we don't [32:45] go into shell after having these large-scale failures that you have not seen before. India is not used to layoffs. [32:53] like startup world is used to layoffs but in india if you started to layoffs it becomes the national news and [33:00] all sorts of discussions happen over here so we are not there yet so we are stuck between like [33:06] Being a [33:07] somewhat of a collectivist or some of our individualistic societies we are somewhere [33:11] India is a great remix of everything. [33:14] I love this line you just shared of inefficiency is the largest employer in the world. [33:21] I totally get that. Okay, so let's talk about Cred for a bit. So you had, I think, three startups before Cred? [33:30] Okay, and then you've been building Cred for about six years now. I'm curious just on this journey of Cred, what

[33:37] you've learned or changed your mind about [33:41] during this phase of your career versus [33:43] previous phases? I think creds insight was actually quite simple. We realized that [33:49] So, we have a lot of time to do that. So, we have a lot of time to do that. [33:54] Therefore, focusing on them is important and they are a lot more global in their approach versus the rest of India. So you have to build them very differently. [34:04] And I realized that [34:06] ability to [34:08] focus on a customer set which is not historically [34:11] possible to do because everybody every investor expected us to be the next China and the only similarity of India and China was the population and nothing else was similar. [34:19] So I think [34:21] Having that conviction that I'm going to build only for this folks and this large enough market [34:25] Uh... [34:27] Thankfully, I had one success for somebody to bet. So, like, our Series A was $25 million. I would have not had that luxury if I had no success in the past because I had no product with any monetization to prove that I'm doing the right thing. [34:39] It turned out okay, but I think I could get a lot of people to take risk behind my insight or my thesis is because I focused on [34:48] the right customer category and built on it. [34:51] But I think the few things I've learned differently is that companies that are very, very good at 0 to 1 [34:57] will not naturally become greater 10 to 100 [34:59] There are lots of different lessons to learn. The founder has to evolve. [35:03] the biggest thing that has to happen. Most people are [35:06] Cred are people who have not seen a bigger business than Cred.

[35:10] which comes at its benefits and costs. So you have to gentrify the org every now and then to make people understand the value of many of these reliable things. And I often tell people that entrepreneurs are uncertainty absorbers. [35:24] for everybody, for employees, for investors, for customers. And therefore, they get rewarded for being those people to remove uncertainty from people's lives. [35:38] So, you know, the kind of expectations keeps changing at the company of scale. [35:43] let's say a [35:44] a seed stage investor, they are very used to very high uncertainty and they're happy with some absorption. But as you get a growth investor and as you get sovereigns on your cap table, [35:54] the amount of stability you need to provide is significantly more [35:58] And therefore you need to evolve very, very differently. [36:01] So I think those are the few lessons I've learned. Talent, you start realizing that not everybody can scale into everything. And you cannot expect that you can give up the 0 to 1 DNA just because you're building 10 to 100. So how do you kind of coexist with those things? How do you react to big changes in the market and not become this slow company? And every company goes through that. I mean, if you look at what Zach went through in the last three years was that he had to, [36:27] I offered that he had to play the Shiva, come and do a lot of destruction [36:32] to become [36:33] big again. So I think that's what founders can do and it's not easy to do. [36:39] One of the things I have learned is that

[36:41] Profit pools. [36:43] of a country [36:45] tell you a lot about what the country values. [36:47] and trying to [36:49] So, you know, you can't get a lot of money, you can't get a lot of money. You can't get a lot of money. You can't get a lot of money. [36:57] Let's take an example. [36:59] In the thousand most [37:00] profitable companies in India, the number of retailers would be probably two. [37:04] or 3 [37:06] But if you look at the Western market, you will see a bunch of them because it's a consumption market plus [37:12] very high divorce rate means you are always peacocking again in the market again [37:16] You're trying to be fit and be cool and all of that. India has very low divorce rate, less than 1%. [37:22] Arrange managers [37:23] uh and fashion spend and because we have a lower female participation of labor india is probably the only market where female fashion spends is less than men's fashion spends [37:33] Everywhere else it's probably 5, 6x more for them. [37:36] So what happens is you start appreciating what the country values. For example, I have noticed that many patriarchal societies have very significant market cap in financial services. [37:47] versus consumption. [37:49] And these broad patterns you start thinking about very, very differently. [37:55] So many lessons there. I love this idea of a founder being an uncertainty absorber. [38:00] This other point you made about Zuck becoming the Shiva in destruction touches on something Brian Chesky and I chatted a bit about is how founders often start in control, giving very micromanaging, just driving the ship. And then as the company grows, they delegate and empower. And then things start to...

[38:18] slow down, and then they come back, play the Shiva, and take control again. Is there anything there that you've seen? Yeah, but that's the universe. The universe goes through the exact same phases. So, [38:29] If you study Indian mythology, you'll see that there's a Brahma [38:32] Vishnu Mahesh cycles and every yoke is called goes through these three phases all the time. [38:38] Beautiful. I see. So this is just inevitable. This is the circle of life. Absolutely. Amazing. I love this. All just ties back to your philosophy background. I love it. It's beautiful. [38:49] This episode is brought to you by Dovetail, the customer insights hub for product teams. Are you working in a feature factory building filler that nobody wants? Probably. Because the sad truth is that most SaaS features are rarely or never used, costing the industry billions every [39:08] Product managers, Dovetail is holding their first industry conference. It's called Insight Out, and they want you to come. Over one day in San Francisco, the product community is coming together to learn how to better leverage customer insights and build products that people actually love to use. [39:38] business needs. And here's the kicker. It's absolutely free for online tickets. Just go to dovetail.com slash Lenny to register. This is thanks to Dovetail, the best way for product teams to get the most out of customer insights. Check it out at dovetail.com slash Lenny.

[39:55] Okay, so on cred, so here's a funny thing that happened. I asked people on Twitter what questions to ask you on this podcast. And one of the most common questions was, when do you think you'll become profitable? Which is interesting because when I have other CEOs that are [40:09] founding a company that is, and most companies aren't profitable. Nobody's asking that question. So I'm just curious why. Why is that such a common question that comes up? It's fascinating. It's fascinating. [40:20] as a country, most businesses were trading. [40:25] You buy something at low cost, sell at a higher price and you make profit. [40:30] Most of our businesses, most of our family businesses were trading. [40:34] right but building a capex heavy distribution monetizing it later on focusing on high revenue growth rate versus trying to get profitability first [40:44] is not known to us. [40:46] Right? [40:47] So when they see these large numbers of losses, like there's a shock that why would somebody give you this kind of money? [40:56] like and then by the way my my own dad wouldn't respect [40:59] So it's not surprising that people in India have these comments, but it also comes from not understanding how businesses are built. [41:09] an internet world where VCs are giving you the capital to kind of build distribution, unique product, edge, brand, all of that stuff. And then monetize later on and monetize big. [41:20] and then have very large profit pools to go after. [41:22] But a lot of times, [41:24] This comes from

[41:26] Not understanding this business and I feel it'll change because many internet companies are now Getting very profitable public listed. So we'll have a decade of [41:38] Let's understand one thing. In the US, maybe 27-30% of US market cap is now tech companies. [41:46] India... [41:47] tech companies would probably make less than 2-3% of the market cap. [41:51] So we are mostly and I'm not saying India has this fabulous history of building very, very profitable tech companies. We are probably the first generation that will have to prove ourselves. [42:00] to be very large profitable companies. [42:02] We are still figuring out. [42:04] what this means and the fact that this question, I can tell you one thing that I have [42:09] been asked this question by [42:12] people on Twitter way more than any of my investors ever asked me this question, which also creates an arbitrage for entrepreneurs who can actually build businesses and able to raise capital. [42:22] uh and prove their business model with very revenue high grass high revenue gross rate and and build large brands and so on and so forth but [42:30] I find fascinating as well. Also, one thing we'll see fascinating in India is that there is like... [42:36] immense amount of trolling and doubt that will come in your comments, no matter what you do. So if you see any founder in India, they'll post something about their thing. [42:45] the comments. [42:46] will rarely have [42:48] appreciation. [42:50] So it feels sad because when you see global companies do stuff like India will lose their shit on Apple Vision Pro and all this stuff and like the Twitter will go gaga over it. But I think when it comes to and I believe.

[43:04] Uh... [43:05] NV is hyperlocal. [43:07] We do not envy Elon Musk for all the stuff he does because he's so far away. But we envy our own because they were just like us not many years ago. And therefore, [43:21] Envy is like Wi-Fi. It's like a [43:23] It's like a hyperlocal service. How do you stay positive and focused and not let that stuff bring you down? And do you have advice for founders in India that are dealing with the same sort of [43:35] It's funny, the number of calls I've got from founders who start getting hit and the go-to person to get this call because they've seen me get it for many more years. And I tell people that. [43:46] We couldn't have made it this far. [43:50] If he cared about criticism of everybody, [43:54] versus [43:56] people who've done better than us. [43:58] if somebody who's done anything better than me gives me any amount of criticism [44:04] I will absolutely flip and make all the changes and evolve. [44:08] and I seek feedback all the time from people. But if I start taking feedback from everybody who do not understand and nuance and empathize with what I'm doing, I'm not saying that we should not take customers' feedback. That's very different. But [44:20] let's say somebody commenting about your business, [44:22] who does not understand the nuance of it, you can't be reacting to everything. And I often tell people that there's a reason elements with [44:32] Lower valencies are called noble gases.

[44:35] because they are hardest to get reaction from. [44:37] That's over my head, but I love it anyway. It's so interesting. I love all these different elements you're pointing out of how different building in India is that I think people in the US have no idea about. And so I appreciate you getting into all these little elements. [44:53] Is there anything else around the Indian market that may surprise people before we go in a different direction about building a startup there? [44:59] For all the challenges, India remains the most promising market that one can be building for right now because everything is going our way. We have all sorts of digital public infrastructure, government support, all these great people doing extraordinary things, apart from the Twitter noise. And Twitter is designed for outrage getting likes, so I wouldn't read too much into it. But I think all of us are doing well because [45:26] We have... [45:27] an audience set [45:29] an evolved ecosystem that is fully supporting us and really [45:33] taking it forward so i think i wouldn't want to be anywhere else in building because of this [45:39] extremely vibrant, crazy opportunity that one can learn from. However, I often wish that I wish I could get a one month internship, [45:48] with Brian [45:49] and learn how to do things. And I've never had the luxury, I can only watch his podcast with you to learn a few things, but what if I got a chance to be there? And I missed that part that I've never been... [46:01] Really trained by the extraordinary product brains or even observe them make decisions

[46:07] So I recently posted one thing that, you know, the word operation theater comes because operating used to be a public process and people used to pay money to watch surgeries and see all the bloody gory stuff. Even before anesthesia was born and and and. [46:23] There's so much joy in seeing somebody do their action. And I wish there was theater for [46:29] Brian take a product decision, Zuck take a hard call on killing a product or seeing Tim rejecting all the ideas that they have before the GTM of a product. [46:42] we could benefit so much from that. And unfortunately, it remains in very small circles. And like I said, I said, [46:49] You do a fabulous job of removing some of the information asymmetry and kind of making it more democratic. [46:54] but there is so much more that we all could learn and I feel extremely [47:01] NWS too many people have the opportunity to kind of work with the best of the best because many of [47:05] of us from India never had the luxury. We had to figure out everything on our own. [47:10] Wow, how cool would that be, just to have a camera in some of those meetings just as a learning experience? [47:16] because very few people are in those rooms. [47:19] And there's so much to learn. I think, though, people will find, holy shit, this one, this is how decisions are made. What is going on? And two is like, I don't want to work for this person. This sounds very difficult and stressful. Those are probably some takeaways that will emerge. [47:36] Kind of along these lines. [47:37] Something that comes up a lot in your

[47:40] talks and work is curiosity. You have a show called Cred Curiosity. You often talk about the power of curiosity. I'm just curious, why is curiosity so important to you and why is it important for other people to always stay curious and what value is there? [47:56] I think a curious person... [48:00] is somebody who is constantly demonstrated [48:03] So if you have a client, you can see that they are not proud of their expertise. [48:08] and they will demonstrate extraordinary amount of excitement when they face a problem which they have no clue how to solve. [48:17] And therefore a lot of people stop growing [48:20] because they want to constantly demonstrate their expertise [48:24] versus demonstrate their curiosity. [48:27] right because curiosity should come from security because you [48:31] Imagine I was in a, I'm the founder CEO of this company and this group of 60 people on WhatsApp, somebody posts something and I ask a dumb question, what does this word mean? [48:41] you need to have the security to feel okay with it. [48:45] But a lot of people out of insecurities try to demonstrate expertise and do it. Or Google not ask these people. I think that slows down the compounding growth. And I think. [48:56] It keeps you very good at adapting. [49:01] Right. So it's funny. I was recently GPT is my favorite thing to keep asking random questions because now I don't need to really worry about Google having those questions answered around because I can ask the GPT. So I recently asked the question that which.

[49:14] animals have managed to survive, which species or animals have survived for more than 100 million years without changing too much? And what is common in all of them? [49:22] So GPDK was an interesting answer which says that it shocks [49:25] Uh, um. [49:26] like horseshoe crab, like [49:31] crocodiles and all of these people have survived to do this thing so three distinct traits were one ability to reduce metabolism at will [49:41] Mm-hmm. [49:42] Okay, it's fascinating. [49:45] I can bring down my metabolism by [49:48] So, you know, the first thing that you can do is to take a look at the same thing. So, you know, the second thing that you can do is to take a look at the same thing. So, you know, the second thing that you can do is to take a look at the same thing. [50:02] The second thing is about [50:04] And if you think in companies context is the same. If COVID came, did you could you could slow down your metabolism? [50:09] and survive. [50:11] Thank you. [50:12] right or you burnt your way out of the [50:15] and disappeared. The second thing that was interesting was [50:18] very high conversion rate on every attempt to secure food. [50:23] They don't go around chasing randomly and doing things. They have a very high conversion rate, which means high judgment. [50:31] and the deadliest byte. [50:34] So they will not chase many options but if they chase something they will have the biggest bite on it and they will convert it [50:41] And the third thing that was more interesting one was they have survived all sorts of crazy

[50:47] environmental changes. [50:49] just adapting and adaptation comes from curiosity [50:54] right uh uh and and you could see those people in covert there were two sets of people who were completely gone into shell [51:01] And they were like curious, "Okay, so what do I do with this? What happens now?" [51:06] do i need to train something do i need to tweak something so [51:10] Ableitums change very quickly. [51:13] so i often feel that curiosity is that demonstration to adapt [51:18] and learn and and [51:21] you only create more information asymmetry [51:24] To me, wealth is nothing but information asymmetry. [51:27] All the best companies. [51:29] in the world have unfair information asymmetry [51:32] And, and [51:33] That comes from curiosity because you're constantly collecting dots. [51:38] connecting dots collecting dots connecting dots [51:42] and end up creating this unique edge for yourself [51:45] and information asymmetry for yourself. [51:47] And if you. [51:49] Assume that I have collected enough [51:51] I mean, no human life is going to be enough to connect and connect all the dots. Right? We never [51:57] be able to get... And sometimes I envy the stuff that you do because you're like... [52:02] you are efficiently connecting and collecting dots. [52:05] by having luxury of all these people to talk to, [52:09] and you are making more dots getting connected. So your information asymmetry is growing. [52:13] Wait till you IPO and then someday maybe leave credit and then you could start this podcast of your own like this.

[52:21] Connect all the dots. And I think that's a reference to Danny Meyer, who's the founder of all these fancy restaurants and big on hospitality and has this phrase, always be collecting dots, I think, A, B, C, D. Nice. I've linked to that. Yeah. Okay, wait, this is really interesting, this list of what are the common traits of the most long-lasting products. [52:40] Animals they can lower their metabolism at will they have a high conversion rate to get food and [52:46] And they've survived many types of environments. And I think there's a lot you can... [52:50] transform as you've done to startups and leaders. This could be its own. If you haven't written about this, this would be a cool blog post. [52:59] I'm curious who you look up to in business, either in India and outside India. Who comes to mind where you're like, I really... [53:08] inspired and inspired by these folks i often tell people that i hate the word favorite because it tells me to become limited in my mind so i stay away from being favorite but i i learn [53:20] all the time from everybody and there are so many people to learn [53:24] across the world and in history in recent past and and every time you will discover fascinating extraordinary [53:34] things about them. So I don't think I have [53:37] a person, I am this person about how did they solve this heart problem. So many of the things that we started doing recently and not very ritualistic about it so far is [53:48] I ask, [53:50] myself and my key reportees every month, we go around the table and ask ourselves what are the hardest problem we solved last month.

[54:00] and it's very hard to come up with an answer. [54:03] And if you do this with the product, [54:05] Leaders. [54:06] Just go around and ask what are the hard problems you solved last month? [54:11] you will realize that we all stay very busy. [54:14] displacement is hard but if you notice extraordinary successful people [54:19] they will have a lot more content to talk about every month every quarter. [54:25] because they are obsessed [54:27] about making that big displacement. [54:30] And does not come. [54:32] by being busy. [54:34] And that's another thing that you cannot chase the big thing. You don't see a crocodile being busy. You see a crocodile just waiting patiently at the watering hole. [54:44] for that best meal and have the deadliest bite [54:48] for that. [54:49] so the beautiful destination of predators i read was [54:53] the one who burns the least amount of calories to earn the most amount of calories. [54:59] Thank you. [54:59] So how do you become that? And I think when I meet people who are extraordinary at that, and it comes in all shapes and forms, [55:05] I learned something from them. [55:07] Thank you. [55:07] So in these meetings you have, are you judging people's success based on how many hard problems they solve? Now that they've heard this, they're going to be like, I need more. Because if you're a senior, what is... [55:18] What is the role of a senior person? [55:21] You have to be the chief problem solver. [55:23] I love that. I often think of leaders as professional firefighters or just endless fire to put out.

[55:31] Kind of along the lines of people and where you learn from, is there any sources of content? This is actually an audience question on Twitter. Anurag Verma asked this. What are your favorite sources of content to learn from in terms of what's happening in the world and what to pay attention to? [55:47] I wish I could think of an answer. My method of collecting information is mostly about [55:53] I come up with conjectures in my head. [55:56] and then i go all over the place to find out if there are [56:00] proofs [56:02] of what I'm saying is true or not. [56:04] For example, I recently came up with a conjecture that everybody who's been successful in the history of business or vices, [56:11] have historically done a lot of philanthropy to create a good image for themselves and therefore being treated as a respected citizen versus [56:20] being treated as a person who did vices to make wealth. [56:23] And then I asked this to GPT and GPT came up with like, [56:27] So, you know, you can see that there are 50 people who did what and what were the devices. [56:33] philanthropy and all of that stuff and [56:36] then a thing happens. And then I research in all sorts of directions. And I have no boundaries to, if I go to chemistry or physics or, [56:44] a human behavior to some universal principles so my method of learning is [56:50] Constantly come up with conjectures from the dots that you have connected and then you [56:55] like [56:55] Absolutely work hard. [56:57] to find proof of it and then use that to connect to the next dot. Right. So I often tell people that everything that you

[57:05] Every book you read, [57:06] makes your brain porous to read the next book. [57:09] That's the purpose of books. [57:11] But that's true for every single thing we learn. It makes our brain more porous for the next thing that we are supposed to learn. [57:17] Is there a recent example of that where you got super sucked into some topic? It's my daily life. I get sucked into topics every now and then. For example, I've been thinking about second-order effects of... [57:30] AI and what happens to countries and jobs and how to expect some of these things to change, not change, rate of change, rate of skill change. [57:39] I got recently obsessed with [57:41] What happens to lab-grown diamonds? If they become big, does it kill diamonds? Does it make diamonds bigger? And then I looked at parallels, so pearl industry was very big before [57:50] culture, uh, uh, [57:53] pearls came and the high status of pearls disappeared because everybody could have pearls. But not too long ago, pearls was to be a very royal thing. Every prince and princesses used to have pearls around them. But as soon as it was easy to manufacture in a lab, it lost its value. So then should I be shorting? [58:15] or going long on diamonds, thinking about what happens. But there'll be a temporary period of making a lot of money on lab-grown diamonds, which will kill, it will become parasitic on the status of diamonds and destroy all its profit pools. [58:31] You heard it here first. Time to buy some diamond futures. I feel like there's no one in the world ChatGPT impacted more than you, considering how much you want to spend digging into random topics. I often wonder, Lenny, if you took the most serious people and made their...

[58:47] gpd searches public a lot of people will learn because the problem of gpd is now it will give it [58:54] It'll make the people with great questions do well versus people who are [58:58] are looking for basic answers. So I think the world is going to be unfair to people who ask great questions. Interesting. Okay, well, I got to ask you, is there any advice you have for asking great questions that has helped you in your work and career and life? [59:14] whenever somebody has [59:16] many choices and they make the right choice. [59:19] in whatever domain they have. For example, let's say you could hire anybody, but you hired great people. [59:25] or let's say you could [59:27] Marry anybody but you married a great person and so on and so forth. I only want many choices to make. [59:32] How do they make choices? [59:35] for that domain of expertise. And I think that is the most and many times they cannot be, they'll not be able to explain how they make great choices. So they will really go in into that because they don't really have their mental models figured out. [59:48] uh they cannot articulate they cannot coach they cannot explain but if you can figure out a way how they make great decisions in general in whatever domain of [59:56] Work that they are doing you will find many interesting insights coming over there and [1:00:01] the other good questions [1:00:03] to ask is about [1:00:05] Second part of thinking, what do they think will happen [1:00:08] to the world and why did they come to that conclusion and you see that full chain of thoughts [1:00:14] For example, second-order thinking is known to be the most powerful trait to predict success of somebody.

[1:00:23] I often wonder, [1:00:25] What happened in [1:00:27] And that question is not to be a good question. [1:00:32] fully discovered or discussed yet. [1:00:33] And I've found some loose examples of, did you play strategy games or only physical games? It has a strong correlation to building. So, rigor came from physical games, but second order of thinking came from playing strategy games as a kid. [1:00:48] and if you had both you could do [1:00:50] really well in general because you have a discipline and second round of thinking together. Then did you ever have an exercise [1:00:58] Uh... [1:01:00] So, I think that's a very important thing to do with the kids. [1:01:06] I call it the Wi-Fi school is... [1:01:09] Ask them a one why question every day. [1:01:11] every meal and let them come back with the answers next day for example [1:01:15] Why do humans wear jewellery? [1:01:18] And why... [1:01:20] is something in a certain way and let them go into the full depth of history and find out. [1:01:28] Why is it so expensive to advertise on Super Bowl? And so on and so forth. You just take one question and if you train them on why, [1:01:37] they evolve at a very different rate because how what are the questions which do not evolve at you at a much higher rate because why is the deep question and and it breaks a lot of things in your head or another question about origin stories that how did [1:01:50] How did elevators come into being and what made

[1:01:53] your phones happen what made microphones why is it called microphone and why is it called a phone and if you just moment when you go into those depths you see people kind of build second order thinking automatically because either you go in history [1:02:06] and see second order thinking coming along with that, or you play games that [1:02:10] train your brain for second order things with a spectrum. But that's a broad range of things that I think people should be asking. [1:02:17] I'm looking forward to Kunal children's raising book, like a book to help you raise kids. This could be your future. I don't have kids, so I can run experiments on everybody else's kids. So it's a great thing to do. [1:02:28] I feel like with these questions, I think the rule has to be you can't just ask ChatGPT for the answer. [1:02:34] Actually, it's not bad. I think you should encourage it because we have to assume that we are going to be all co-pilots of AI now. What you have to do is [1:02:43] Derive the second-order insight that okay, this is true. Where is the similarity of this in somewhere else? Like give me an example of this found somewhere else. Hmm. [1:02:52] and so on and so forth. [1:02:54] Amazing. Okay, I have just a couple more questions before we get to our very exciting lightning round. First, let's visit Contrarian Corner. [1:03:03] I'm curious, what's something that you believe that very few other people would agree with you on? [1:03:09] and why [1:03:10] Do you hold that belief? [1:03:12] Our understanding of wealth is flawed. [1:03:14] and what wealth is to me wealth is [1:03:18] Nothing but storage of energy. And therefore... [1:03:21] The reason wealth is not zero sum because energy is and we are just finding all ways to convert energy enough

[1:03:27] advantage you're the only species that have managed to convert all forms of energy to advantage [1:03:32] kinetic energy and fuel and sound and solar. No other species have done this. [1:03:37] and therefore since industrial revolution are [1:03:39] wealth has gone like this and continue to be like that AI and nuclear fission and all the stuff will kind of take us right there. [1:03:48] I have a strong view that we will never, never have... [1:03:53] equality of wealth. In fact, chasing that is [1:03:57] actually a bad idea but if you let people [1:04:00] do [1:04:01] well and chase well you have enough well for everybody else and we could take a lot of people out and i think it's complicated because we can have all this democratic arguments that oh the wealth is concentrated and all that but that's the physics of that [1:04:16] will always be concentrated. It changes mediums, companies, countries, [1:04:22] They're all, to me, well-tentic but an endroptic complexity that will keep changing its form and shape. You can keep fighting it or accept physics and take the benefit of that physics. [1:04:34] I think Elon had this interesting point that [1:04:36] Wealth is just a database where everyone's... [1:04:40] that wealth, I guess, is just a row in the database, and here's how much everyone has, and you're just transferring numbers around, and that's the whole economy. - No, but the one that is important is that you can actually increase the database size [1:04:53] infinitely and therefore his vision of

[1:04:57] uh sun's energy like if we really convert all the energy to our advantage the amount of wealth we'll [1:05:03] disproportionate. [1:05:04] And all the species that have managed to [1:05:06] collaborate and cooperate. [1:05:08] to create wealth. For example, let's define wealth as biomass. So let's say ants and bacteria and humans are the only few things that have the [1:05:17] largest biomass, [1:05:19] on this planet because we forgot how to make energy work to our advantage. [1:05:22] Thank you. [1:05:23] Wow. I love all the directions we've gone. [1:05:27] Probably the last question. Is there a story of failure in your career that would be... [1:05:33] interesting to share, something that taught you an important lesson? It's just a series of failures. I think there is no escape for anybody who's [1:05:41] anything in life not failed a lot like every day every uh thing but i would say that uh [1:05:48] Many initiatives, many products, companies that I've built have absolutely failed. [1:05:56] Hiring that I failed. [1:05:58] trust broken betrayals. So I think there is no end to it. But I think [1:06:05] Entrepreneurs have this weird [1:06:08] ability to [1:06:09] forget [1:06:11] about failures. [1:06:13] Thank you. [1:06:13] And [1:06:15] Almost turn that into a lesson that you hold and [1:06:18] and you forget the story, [1:06:19] I [1:06:21] And for example, COVID is literally no memory for me. I just don't remember. [1:06:26] What was proven? [1:06:27] It's just a blank in my head right now. And I think we humans are great at forgetting

[1:06:32] the memory of failure, but remember the lesson from failure, but I think I'm constantly learning and and [1:06:40] I often believe that life is too short to make all our mistakes ourselves. So we should be learning from other people's failures as well. [1:06:45] And a lot of times we don't do that because we believe that we are special nothing like that will happen to us [1:06:51] But as humans, [1:06:54] we should be learning i would say that my life started from a failure my my [1:06:59] family went through severe financial crisis. I had to start working from age 15 and I [1:07:05] I feel [1:07:06] till date I am just trying to escape [1:07:08] that failure. [1:07:09] that happened in the family. So I think many of us are just [1:07:13] fighting that [1:07:16] initial large failure that we've had and don't want to be anywhere near that when although we are significantly far away from that but the feeling [1:07:25] is exactly that. [1:07:27] circles back to one of our first few questions about the chips on shoulders, driving a lot of motivation. There's this phrase chips on shoulders. [1:07:36] drive chips in pockets. That's interesting. [1:07:39] Yeah. Is there anything more you want to share about that early... [1:07:43] challenge you ran into or is that something you've shared often no I mean I've shared not enough but I just see I should not talk about it before because I think that I would get to some sympathy for that and [1:07:54] And I only feel like recent past I speak about it because I want people to realize that I was not some gifted kid who had some rich parents who made me extraordinarily bright and put me in great school and colleges and I made my way through that.

[1:08:10] I should start talking about earlier because there's a lot of tendency to give sympathy to those people that, "Oh, this guy has struggled." And I don't want to be given... [1:08:19] any credit [1:08:21] for [1:08:23] playing that [1:08:24] Poverty card or this card or [1:08:28] Struggling for food card like that's not an excuse. There are so many people in the world who've done extraordinarily well because they had the gift of struggle and [1:08:37] And I often tell people that this is the biggest curse of successful parents that [1:08:40] That's the only gift they will not be able to give to their kids, the gift of struggle that they had. [1:08:46] Well, I think about that a lot. We have a kid, he's eight months now, and so I'm trying to figure out the balance of struggle versus making life easy and great. A new challenge for me to figure out. Before we get to our very exciting lightning round, is there anything else you wanted to share or leave listeners with? Anything else? [1:09:02] Any last nuggets of thought? [1:09:04] Well, I would love for the listeners from different fields of product is that please share what you are learning without being... [1:09:13] fearing judgment of your peers because there are many, many people who are [1:09:18] learning only because you share your evolution and [1:09:20] and your thoughts. And I believe that a lot more could be contributing and a lot of your listeners are really bright people. [1:09:28] if they all shared [1:09:29] Many people from many... [1:09:32] places in the world would learn and and [1:09:36] achieve some amount of success. [1:09:38] Thanks for your sharing. [1:09:39] Amazing.

[1:09:40] With that, we've reached our very exciting lightning round. Are you ready? [1:09:45] All set. Let's do it. First question, what are two or three books that you've recommended most? [1:09:51] to other people? It keeps changing a lot, but my books are usually around understanding human behavior, and I keep changing based on the person. But I think it's the biggest subject, all our customers, all our investors, all our [1:10:06] All our relationships are all humans and the subject that we are weakest on is human behavior. [1:10:11] How do we live this life? We are playing life on extremely hard mode. [1:10:15] if you don't learn human behavior. So I would say that's one thing. The second thing in evolutionary biology, it teaches a lot about how species evolve and how do they make decisions and what are the core motivations that drive [1:10:27] everybody. So that's another one I would [1:10:29] I don't want to make recommendations because I can barely finish a book to be honest. So I believe in drifting and going deeper into topics. So understand the topics versus trying to say, [1:10:41] Give me these three books and I'm going to be good. [1:10:43] And the last one I would say is that [1:10:46] uh any thing that can make you learn something about their journey versus their success right so uh [1:10:55] Sometimes autobiographies are too celebratory in some ways, but if you can just kind of understand how [1:11:01] If any book can teach you how people recovered from a setback in great detail, [1:11:08] is a great book to learn from.

[1:11:10] An audience member on Twitter actually asked a similar question along these lines. If there's one book that you could... [1:11:16] read over and over and over [1:11:19] what would that be? Is there one? I absolutely don't believe in reading over and over because... [1:11:26] I believe that we are evolving things. You might discover the same stuff coming from different books. [1:11:32] And you will say, oh, I can categorize this in my brain again and again, but I think we should [1:11:38] We tend to become [1:11:41] believers [1:11:42] and it becomes too religious if you repeat. [1:11:47] Yeah. [1:11:48] Thank you. [1:11:48] Thank you. [1:11:49] Next question. Do you have a favorite recent movie or TV show that you've really enjoyed? [1:11:54] I love Oppenheimer because of these struggles, but, and Nolan's craft of making the movies, but... [1:12:01] Nothing in the recent past that I feel is right up there. [1:12:05] Do you have a favorite interview question that you like to ask [1:12:08] candidates that you're interviewing. [1:12:10] I like to ask a hypothetical second order of [1:12:14] thinking question. For example, if everybody who has taken a COVID vaccine dies tonight, what happens in 12 months from now? [1:12:23] Can you explain the world from [1:12:25] What happens to money? What happens to law? What happens to countries? What happens to military? What happens to... [1:12:31] stock market, what happens to order of things, [1:12:35] and and [1:12:36] I would say less than 10% of really smart people can really have good answers.

[1:12:43] So it tells you how good they are in second-order thinking. [1:12:46] uh, [1:12:48] But the questions can keep changing. For example, if you said that what if range managers were banned in India, made made made [1:12:54] got capital punishment for doing alleged marriages [1:12:57] what happens to the country. [1:12:58] How do we change from there? Like some absurd scenarios, but then what happens after that? Not to give away your secret sauce, but what do you look for in an answer that gives you a sense there? A range of things that they could go into. [1:13:13] and think about if this happens, B happens, and then C happens, the leaves they could make. [1:13:19] And just so people understand when you're talking about second-order thinking, what's the simplest way to describe? [1:13:25] that concept. I think the simplest way to think about this is that being able to [1:13:30] correctly judged [1:13:32] the butterfly effect of an event [1:13:35] for example, if you have a new one, [1:13:39] Okay, a lot of people in stock market use that to say, "Which stocks will go up and down?" Like, there's something that has happened in the market. Oh, there is a war now. [1:13:48] in with [1:13:50] Russia, then what happens to the market? Like, can you be good at predicting that? But in everything in life, like if this happens and a lot of people hate this because it's very taxing to the brain. Brain absolutely hates second order thinking unless you've trained your brain with second order thinking all the time that it looks forward to it. So you can convert this into a hate versus a reward cycle.

[1:14:14] And that comes with [1:14:15] probably doing it probably early on in your life. [1:14:18] Later on people hate doing second order thinking. Yes, that sounds like a lot of work for the brain. [1:14:26] Okay, just a few more questions. [1:14:28] Do you have a favorite product that you've recently discovered that you really love? [1:14:32] I'm looking forward to my Vision Pro that is coming soon. It's a future favorite product. We have actually Boz from Meta coming on as the next guest in my recording. I'm not sure when they come out in sequence, but we're going to talk about his thoughts. [1:14:48] The most fascinating thing that I saw was Zach talking about the utility of Meta being better than Vision Pro and their product. And that's exactly going to work well for Apple because when you try to make the product more utilitarian, it loses status. And if you study animals, you realize that the one which gets the highest mating success is the one which can demonstrate ability to waste resources. [1:15:17] and not be very efficient with resources. [1:15:19] And therefore, people who are known to buy a product that is wasteful, [1:15:24] will actually earn higher status. And I think Zuck made it actually quite easy for Apple to demonstrate their superior positioning by saying that, oh, we are not as efficient, we are not as cheap, we are not. [1:15:35] for everybody. [1:15:36] Wow. Just continue to blow minds even on our lightning round. [1:15:41] Do you have a favorite life motto that you often...

[1:15:46] Come back to share with friends and family, find useful. [1:15:49] in Work or in Life. [1:15:51] It's not a favor to monitor, but I think we truly are transient. [1:15:55] And we are very lucky to have this life that we have and we have to make the most out of it. [1:16:00] and all these struggles will mean nothing. I often tell people that [1:16:06] So, if you want to make a video, you can see that you can see that you can see that you [1:16:12] You have no end to the stories that you can talk about. [1:16:15] That reminds me of a book I once read that really had an impact on me where somebody was trying to make a movie of their life and the producer was like, there's nothing, there's no good movie here. You have not done enough interesting things. I love it. And so he actually became, he turned his lens into what to do in life by thinking what would make a great movie. [1:16:34] story. [1:16:36] And so he just started doing, and a great story is something where you overcome challenges and achieve something you wanted. And so that became his life mottos. I'm going to try hard things and overcome them. And that's going to be my life. I love it. [1:16:47] I love it. [1:16:48] I'll link to that book in the show notes. [1:16:51] Final question. You have this series on Twitter that you call Monday Motivations. [1:16:56] I'm curious what's motivating you these days. I find it's filled with all these people trying to give this fake motivation and make money off that stuff. And like it's almost like a drug for people to feel, oh, my God, there's motivation. I'm going to do well. I just want to remind people that all success comes from [1:17:14] extraordinary amount of pain

[1:17:17] and struggle and hard work and there is no shortcut to anything material coming in life. And so the Mandavish motivation post comes as the anti-motivation post because the world is filled with [1:17:30] I think it's a very good thing to do. I think it's a very good thing to do. I think it's a very good thing to do. [1:17:41] I think the best way to love yourself is to keep evolving. So my motivation comes from [1:17:46] evolution, connecting dots, solving harder problems than I have solved in the past. And I think life is ultimately a game that you want to feel that your levels have changed and your skills have changed. [1:17:58] Constantly. [1:17:59] Good night. [1:18:00] You are wonderful. [1:18:01] Thank you so much for being here. Two final questions. Where can folks find you online if they want to reach out and follow up on some of this stuff? And how can listeners be useful to you? [1:18:09] You can find me on social media. Look for Konalsha. You'll find me everywhere. I usually have different personality on each social media. And in terms of being helpful, keep tagging me on interesting things that you discover that gave you that moment of, oh, my God, I did not know this. I would love that. [1:18:27] Amazing. Kunal, again, thank you so much for being here. [1:18:31] Thank you so much for having me. [1:18:32] Bye, everyone.

[1:18:54] See you in the next episode.