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I like reading mythology. And one reason for that is that I like funky monsters, there's a or half human and half horse, there's a Kraken, a giant squid or octopus or a primeval form of Tulu. There is a Manticore with the head of a human, the body of a lion and the tail of a scorpion. There is a basilisk, a giant reptile that can kill you with a single glance. There is a rock RLC, a giant predatory bird known for picking up elephants from the ground, dropping them from a height and feasting on the carcass.


Fun creatures, all of them.


And here all our mythologies and all our monsters are not from the past. There is a modern monster who can see into the future who plays something called the infinite game and who gives birth to unicorns. All hail the venture capitalist.


Welcome to the Scene and The Unseen, our weekly podcast on economics, politics and behavioral science. Please welcome your host of Vardaman. Welcome to the scene in The Unseen, my subject for today is a world of venture capital in India, but as you would expect, it's actually much broader than that. Good venture capitalists need to have an understanding of the society in which they live, not just at one moment in time, but how it is evolving, the need to have a sense of the human condition, our needs and desires and our problems that need solving.


They need to be able to build into the future and then they need to put their money where their mouth is. It seems to me that a good venture capitalist needs to be intellectually curious, empathetic and optimistic. My guest today to talk about all this and more is subject by a director at Bloom Ventures who spent a couple of decades in media, most of the time in the times of India before making a leap to venture capital. Surjit is a prolific essayist, and some of his think pieces have caused a fundamental shift in the way that people think about this industry and perhaps this country.


So my discussion with Surjit spanned much more than his investment philosophy or the startup scene here, and I'm sure you'll find it insightful as well. Before we get to the conversation, though, let's take a quick commercial break. The world is changing and you don't want to be left behind, one of the most fascinating subjects that I've been trying to learn about is machine learning. And I'd like to recommend an online course that is a perfect primer for the subject.


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So welcome to the scene in The Unseen, a thank you. Thank you for having me. So you've had for someone who's a venture capitalist, you've had an atypical and interesting journey. You have described yourself in the past as an accidental RISI, which is interesting because I've had other guests who called themselves accidental crusaders and accidental reformers and all of that.


So tell me a little bit more about you, your background, what we all sort of interests as a young person. And tell me a little bit about your journey. Group in Kerala and sort of had this not exactly peripatetic, but there was a fair amount of transfers, etc., because my father was in the central bank, I ended up doing my undergrad from GOA. And of course, the Goa of college in the 90s is very different from the go off the beaches and then ended up doing an MBA from Miami and then joined the group and worked for a fairly long time.


And I think one reason I kind of ended up working there was such an interesting place because all the conversations that really, really interesting to talk with a diverse set of people and I found a business guy and in the business side, I got along very well with that case. And I ended up working there for a long time across multiple kind of roles and broadly in the strategy of starting a few businesses. And the most interesting one was, of course, times now the so called EPB and Pakta one day, but sadly not in prison anyway.


So Pato and I were the first employees, so to say. We got transfer from the economic times and then I up with somebody who was employee number five and I moved out then briefly to work in another media company where Prakash I had with my boss and after what, a couple of years I joined the Times back and observed one of the 10 years. And so coincidently, the division that I joined times back was difficult and which was headed by category.


Not exactly, but he was one of the senior guys there. And as it so happened, he moved up to years to start Blue Ventures, which is an early stage venture firm, and it was really getting bored and it kind of made up my mind. Quit, wasn't it? He got a call from him and I said, look, what are you doing? There is a role. Would you be interested in like? Well, of course.


So I mean, I'm giving you kind of my timeline, really sort of it. But what it doesn't really tell you is kind of and you know, that I. And so I've always had this interesting trivia of Catholic interests, very diverse interests, and obsessed by lots of little things. And and to that extent, I think I bring in that journalist perspective. I mean, I don't think I could probably run a division as well as some of the founders or I can institute.


But it does give me a perspective of worldview and that that serves me well in this business. So that's kind of a little bit about me. I find myself, interestingly enough, in Delhi. And the funny thing is that I lived in Bandra, in Bombay for about 14 years. And then there's an interesting opportunity to start a university business for the Times. And I looked at it and into finding myself annoyed because the university was idea. And the interesting thing is I'm going to get my kandra bank account shifted.


And so the previous one is in Bandra and this one was in a small village called Bungil nearby. So I remember the lady looking at said Bundarra, that's bungil. I like it. So that kind of was the kind of transition that happened. But I find Neusner particularly interesting. And so I think I've given you a very, very long answer, very rambling answer, but it kind of gives you a perspective of the perspective of me.


And you probably stop you lose a delightful answer with many strands I want to follow because long I mean, our lives are long and rambling. So how could you why should we sort of simplify them of other? We're stuck by a number of strands. One, as you kind of mentioned at the start, that you grew up in Goa and the guava you studied was very different from go of the beaches. And, you know, in the years that I was a professional poker player, I used to spend tons of time in the offshore casinos.


And to almost all my friends would see that I am and go all the time. And I would tell them that, listen, in these last four years, I haven't been to a beach even once because it's a whole different sort of a city.


You know, one of the things that I was struck by, and this is something that's clear to all your writing, is your intellectual curiosity that you are always bringing wider freedoms to bear on in ways that we don't often think of them, which I found extremely fascinating. So here's a sort of broader question I had for a little bit. Since the subject comes up now, I'll ask it. I've kind of noticed it some of the most insightful people on social media that I've come across.


There's, of course, you in India, for example, but also, you know, people like Paul Graham, who started Y Combinator and so on. Some of the finest insights I have seen have come from venture capitalists or successful entrepreneurs who then go on to find other businesses and all of that.


And what struck me was that one eye should not be surprised that we are more insightful than others because their experience requires them to just look at a variety of businesses from a variety of perspectives. And really understand people and understand society, but also there might be some selection bias at play because of people who make for good wishes to begin with or choose that as a career track might be people who already have those kind of broad lenses and therefore suited to being VCDs and so on.


So where do you see yourself in that spectrum? I mean, it would seem to me that since you've become OVC pretty late, you are already someone who had those sort of broad worldviews which made you a perfect fit. But is there something to saying that it can also work the other way? And is it a sort of an opportune mentality, therefore, that OVC should have little prospectivity?


Should have?


Well, it's an interesting question, many facets to that question. Firstly, I'd say that there are many successful VCs who. Right and who have interesting views, but they're also equally as very successful VCs who don't write anything, who don't necessarily express it. And so it is a business which our success here can be reduced to a simple heuristic. But there is a strand of B.S. And the one reason why VCs do that is to compete for funders. So that one reason I write is to build a personal brand, a personal brand that I hope helps brings me to the notice of founders and when they are looking to kind of talk to someone, when they're looking to invest their own, I hope they will reach out to me like an email.


So this perspective is important and this kind of explains to a lot of this. So it is true that VCs are generally interesting, this huge intellectual curiosity. There's no doubt about that. That, I think is the second one of becoming a VC. If you don't have that, it's very hard. It is for the necessary and sufficient condition to express that intellectual curiosity to writing. Then you're fundamentally competing in the kind of an intellectual marketplace for ideas.


And the way it works is that in venture capital, typically in a fund and let's say Bloomberg does a hundred million dollar fund administered twenty five or twenty seven companies, up to twenty five point one companies. Invariably it is three to four of them that will kind of return most of the money. They bring in like 300 percent of with the money and the rest just lose everything that they put in, almost that kind of being. Very simplistic. So there's a lot to it.


And fundamentally, the top three or four companies are led by great founders. And of course, you're trying to kind of get the best founders to pick us much. So, unlike a lot of people feel that VCs, big founders, the best teams, the founders are picking the risks they want to work with because there's so much competition. Look back at all the big deals that happen, Facebook, etc.. Mark Zuckerberg decided who was going to come in and pretty much one of the top companies, the founders are doing the picking of.


Great. Well, I think if I'm not the one on the show, you should have him on the show. So Kenosha could pretty much could have picked anyone. And he picked Sequoia, for example, for multiple reasons. So this is a competing for attention of founders through interesting worldviews and interesting insights. And they look the founders of Naughties. So I belong to that one strand of that we see who's the content, right, to the person who's trying to contribute insights, etc.


. That is kind of one and one of the topics one. I do believe that historically we see I used to be much more of a financial kind of work in the sense that typically people who are strong in finance and or strong technical make semiconductors, et cetera, would typically find their way into a bridge of the to and physically have been very diverse perspectives. And you've been to very interesting people make their way to D.C. So this is getting democratized to that extent.


So I kind of give you the exact answer that you're looking for, but yeah.


Yeah, that kind of makes sense. And, you know, one of the sort of I had, for example, Santoshi this and also on people and later at different points on my show. And one of the things about both of them is that, you know, in their quest to become excellent at what they do, which is advertising, they also come up with they also came up with some surprisingly startling insights, at least to me, about Indian society.


Right. And while reading some of your work, I came across some of those moments.


Also, of course, the segmentation that you've done of India, when I'll find yoga in India to India, three will discuss that in detail later. But just one that kind of struck me was that in one of your essays, you have these three photographs of Starbucks in three countries and in the other two countries, which you pointed out, the menus are in the local language and in the particular the third one, which is India, it's completely in English where you point out that, you know, that there is like a separate class of people.


You call them Anglo Indians, you call them India, one Alpha, whatever, who are just completely apart from the. Most of the country, in a sense, and you mentioned also I think you referred to the same phenomenon in different words in a recent essay he wrote that got a bit of attention pointing out that, you know, Craig was targeting that sort of segment as well. So we want to have this conversation is that, of course, I want to talk about the Indian startup scene in the way it's evolved when you wrote this incredible 7000 word assume that which I learned from the show notes.


Plus also want to talk about how venture capital firms work in India and how you see the current scenario and all of that. We'll talk about all of that. But I want to go back to your personal journey a little bit, because you're basically the same age as me, right about in the 40s. And, you know, we've kind of grown up through that very interesting period when one is intellectually curious. But there is a limit to how much information you take in.


And like you pointed out, maybe working in the Times of India is an interesting step because you're meeting, you know, people with different kinds of specializations in the corridors and having those particular conversations. And then one day everything just explodes open like the whole world of information is at your fingertips.


And so what was that sort of process like in a dual way, one from making sense of the country as it was changing and evolving very rapidly through the late 90s and onwards. And two, from a sense of your own personal growth, as you begin to evolve the frame through which you look at the world like, you know, between then and now, is it possible for you to sort of pick those aha moments which kind of change the way you look at everything?


That's a hard one.


I don't know if there were a specific Aha moments, but yeah I think so. Clearly I'm a big beneficiary of liberalization, but what happened in 91, 92 certainly was, had a big role to play, even though I graduated like six years later because the economy had opened up and there was and not more consumer spending beginning to kind of like what's to the 70s where there's literally more socialist. So certainly that was a big kind of deal with my life joining times, of course.


And I was fortunate to get to work with some of the incredibly maverick, eccentric one out of the group. And I sort of became one fifth years. And every time I used to come to Bombay to come to Bombay in Windows because Delhi pollution, etc., he used to call for me and my bosses would make me drop what I was doing and say, OK, you can manage it. That's cool. And I think I owe a lot to him in and sense.


That is a fascinating personality and a lot of the conversation on the inside. So that certainly helped. So he was a big influence as well, even told us to move on. And the next was, I think, the early 2010s. I tried to start right and I started newsletter's, etc. and I think I was trying to distill the word so to see. And I think it came out of it. And generally I felt that I was getting left behind and I cannot compare myself to its victims, sort of maybe had male menopause, like you have these existential things, what am I doing?


And not earning as well as my friends, etc.. And I kind of got the sense at that point that increasingly and I don't know if it came out of specific articulate that I think I needed to take greater control of my destiny and I sort of needed to be good. And so sort of like 37, 38, I started writing a lot more and I kind of set up a website, started writing attrite newsletters. I had multiple things. But I mean, effectively, every month or so, one or two articles would come out and that helped, I think.


So these were suddenly asked to my life for to see and sort of if you kind of look to a lot of the hits that I've had really come in the last two or three years, I mean, the first 60, 70 percent, I mean, I don't think that people that each of those and I would send it to people and I'm sure there were some very nice, very nice like them. And so I think a bunch of the same thing from my point of view.


And the more you try to write, the more you distill, etc. and certainly helps. So I think again. So these are kind of the arcs on the tailwinds that have kind of propelled my life forward, so to speak, which finally led to articulate me reaching out and which kind of brought me here. Yeah.


Did you feel the writing helped your thinking? Like I often, for example, in my writing class, which you participated in.


In fact, I did talk about George Orwell's conception of how it is not just the case that a clear thinker is more likely to write clearly, but it is also the case that forcing yourself to write clearly helps you think better. What was that kind of the case with you, that you do become a different person because you forced yourself to write so much? Absolutely.


I think that's so true. I don't think I have to quote really mine now that it mentioned that I go back and such a thing. But I do think that writing. And what if it does help your thinking about those very interesting cause and if you actually go and talk to all the Army guys, they actually talk to you about this cause called lack written analysis and communication. All it teaches you and you actually get grades for that is very simple.


But the trick is that each sentence has to be connected to the previous sentence. And that's all you can actually get at the writing can be Felicitas, right? It can be very poor. And and what surprises you that the people who write the most lovely prose get the lowest grades and very quickly really go and talk to them what happened? And you look back to the sense that it actually doesn't matter in writing telegrams, but each sentence has to just connect to that.


So that's the first time I can face that thinking because structured thinking and structured writing seem to be linked. And certainly in the 2010 that started writing, I could actually see that better writing helped because this writing was just persuasive. That's what writing that is analytical and when you do think writing things down, etc., so it tells it like it is hard, it's painful. And I think writing is sort of sad, but thinking is even harder. So writing is the medium in which you can do thinking.


It's an easier medium that just be thinking. So I'm kind of in yellow. I'm kind of scared by Mathemagician because they have no medium other than like God thinking. Right. Well, that must be really hard on maybe even calling. I don't know. But writing is a much more comfortable medium in which you can express your thinking. And I've taken huge advantage of that. And even now, when folks write tell me that I want to give a statement, I just tell them, please write out what you want to do.


And I have the standard deforesting things. Send said back enough that I find that typically writing it out helps you get more clarity. And typically I can say thank you for making me do that. So I totally agree with you and thank you for that. I'm going to kind of find that a future. Yeah, it's a new film.


It's like, you know, I've been adding slides on that team to my goals, so I don't know if or when if you were in an early bout, you might have missed it. But, you know, Jondaryan talks about how she does her thinking by writing, you know, the other mcclosky, the great economist and author, also wrote how writing was an essential part of that and just an asset for my readers, because this is something that I find myself having to repeat to more and more people.


Is that what you said about, you know, that no one, perhaps radio for 60 Pieces and then it's only in the last couple of years that they've started becoming popular strikes a chord? Because one of the things I noticed among young people sometimes is that their approach is that they want to start doing something. And if it doesn't work, they want to drop it. And I'm not sure that's a good approach. My advice would be that if you love doing something, you've got to stick to it, because whenever we start doing anything, we will be bad at it.


Obviously, you cannot be good at anything from the get go and it'll just be repeated iteration that you eventually achieve excellence, which is like a non-negotiable. Like I remember this video by the YouTube productivity coach Ali Abdul Guy in his mid 20s and excellent video where he talks about, you know, he basically reached one million subscribers. It took him a few years. But he said that at the end of the sixth month, he had made two videos a week and it reached exactly one thousand subscribers on the day of the fiftieth video.


So if any of us was to, you know, hit that lack of response, we might be disheartened enough to give it up. But he kept on and got to where he is. And his advice was, if you're starting a YouTube channel, just make two videos a week for two years flat, which is a, you know, two hundred videos. And only then look at the subscriber count, which frankly, I think is fantastic advice.


So I think people sometimes get you know, and it's incredible that I'm actually saying this to ABC because typically VCRs are considered to think in terms of their other metrics and show me the progress, but not that that's a stereotype. We get to that.


So since we were talking Ali Abdul unproductivity, I also want to ask about that, because one of the things that strikes me is that in all your public face and communication, you give your email idiot and say you actually invite people to write to you with ideas or thoughts or whatever that they might have. And you tell them you respond to them soon. And you've also elsewhere said that OVC, like you, has relatives. So like were you always someone who was very organized in terms of work or did you have to put a thought into how do I become more productive?


Because it's something I personally struggle with. So I'm very fascinated by how you managed.


Yeah, that's a great question. I really enjoy answering this because one thing that reaches a lot of curiosity, that obsession with connectivity hacks, because everything we see early stage, we see suspiciously. And so at this stage, we struggle with what's going through. Everybody's trying to. Reach out to them if you want 15 minutes and everybody is looking, etc., so it is challenging and I must tell you that it just hit me head on. I think before entering, we see I was actually, I think at this huge anthropological interest in VXI and a lot of people used to actually tell me that, see, how come you're not in this 17, 16?


So get this. Well, I think you did. I thought you were there because but still, it didn't prepare me for this kind of an almost assault on my time. So typically e-mail is one challenge. And these days, what's UPS? And you do stuff like time boxing. That's what it's called when you have specific hours of the week. But hey, not everything goes according to plan. And I do stuff like that day before things had to do, one of which was to send you a particular email which didn't get done by 12 or two or something, but it got done.


So you need to have a very clear idea of the five things you want to do for three or four things you want to do. But other than that, I think, you know, so you do also need to react a lot. And I think the best thing I've found is that the single best advice I've found and one that it's an advice, but at the same time, it's something that also worked out myself. Was that anything that you need to do, you need to calendarization.


And so that's what I do. I just categorize everything. And if it doesn't get on the calendar, sadly will not get done. But the challenge is also that you also need to give some free time, a time where people can teach you some serendipity happens. You can read what you want to. So I do plan for that as well. But it is stuff you have all the usual hacks aspect. For example, it's a life altering software that with a brief touch like, you know, for example, a lot of completed emails.


So, for example, somebody can write to me and I have a link for certain skills and I just type like an exclamation B.I. And that just appears and I just sent it off. So a lot of these hacks and different just have different things because you're super human, which is taking a lot of templates. I have a lot of email hacks, etc. So time hacking is what a lot of VCs do.


You're trying to get more out of it. You're trying to read more. Interestingly, you must hear this and that. I actually people have three freelancers. I been to transcribe podcasts so that I don't have to listen to it. I pay them like two hundred rupees for a thousand words. And typically a 15 minute podcast is like what, six thousand seven thousand words and end up paying them like fifteen hundred two thousand four hundred. And I find that that's actually worth it.


So I keep doing all of these. It also means that one thing you do lose serendipity and you do need to plan for that. That's a challenge. But I don't know if this helps the census.


Yeah, no, it's fascinating. I'm going to try out Alfred. I haven't used it yet, so that should be fun and planning for serendipity. Such a nice idea. Also, you know, one can sort of lose track of, you know, those free moments when pleasant accidents happen.


So before we sort of get to the start up space, tell me a bit about your time in media, for example. What was that like? Because, you know, I've been a journalist for a long time as well. I used to be. And, you know, one of the things I realized in all this time is that journalism has changed so completely. And yet most mainstream organizations simply don't realize it, simply don't get it right, especially over the last ten years.


People are filtering content and consuming content and discovering content in completely different ways. And yet pretty much all media organizations are stuck in the same sort of ways of gathering information and disseminating information and all of that. So what was your time in media like? How did you see that space kind of evolve? And what do you think of when you look at the Indian media ecosystem today?


So I in the Times late 90s, but 2002 was when I joined the Economic Times. I was in the music business before that. And so 2002, I think late 2015, 16 years, I saw Indian media and I worked for a long time in print. I did work in other divisions. But what's that? And because times have a lot of money from print, I don't feel that Indian media is historically, I think has systematically seen erosion of talent like that.


The best and brightest, I mean, sort of appreciating. I don't think they ever work in media. So the same, but at least, you know, a fair amount of bright people coming in. But over the years, I think the quality of people coming in has historically not kind of been the same. The other one is that specifically because the times of India and because of English, typically the Indian newspaper. Which in English historically got a huge advantage and the removal coming in early 2006.


Look at the number of times that time had like one fourth or one third of the times of India. But then again, you was one with and also so effectively and it was proportionate English premium. So to see. So specifically, the media business was largely a monopoly business. And typically that's when you end up making a lot more money. So so they've affected the monopoly profits, the times of India and all of that. And that kind of continued.


What happened is I think a lot of folks in the times of India groups saw the warning signs, there were enough notes, et cetera. In fact, it's very strange that nineteen ninety six I sort of discovered this or found something that belonged to nineteen ninety six, nineteen ninety six. They were seeing the Internet and talk to people like, you know, like in the US finally took the 2008 financial crisis to really kind of ram down a bit of steam and inject covid.


So I think the whole story shocked the largely monopoly's. There were not necessarily well-run hands, but that's fine. I'm sort of a genius comedian genius was to discover that monopoly and just milk it for flip the other one it as well as the other parts of the business. The TV one was reasonably better because Starkel became a monopoly and and exploited for democracy. And then they Chalco. So what I'm can of all the bad habits set in and what has happened now is that the print business got eviscerated.


I'm hearing like horror stories from the Times, etc. So give us a little bit of what it is creating problems there too. So yeah, so can click if you want it to specific aspects. But sort of. A double click into one aspect for me, like, you know, you're obviously someone it's part of your job to kind of keep easing into the future of 10 years from now. How will we be consuming media? Because, like you said, covid has changed things.


Things were changing before this. The whole sort of landscape is fragmenting and splintering and everything is changed completely, like what is a date? And years later from now, how is one getting one's information? What does one mean when one talks of journalism or the media? And yes, hard, but I can talk to a few trends, you see, so my friend, is sort of the depth of the rapper, so to say, all creation of new rap.


So, for example, the newspaper, the rapper, the newspaper kind of said, look, we'll give you sports, I'll give you some kind of fashion, I'll give you cartoons, I'll give you everything and financial news, wrap it up. And so, like, for example, if you actually go back and look at Esquire or GQ to strange compulsion, they have this fantastic three or four stories which are like incredibly well-written, takes six months to produce the pay.


The writer like twenty five. Thirty thousand dollars just to travel. That's extra what it's doing then and it's free. And I read every one of the stories free. And of course that's because there was a subscription base which kind of agreed with and so on. But as the business declines as advertising, please tell me that apples don't make sense anymore. So what I've seen over the last few years is the wrapper kind of breaking up and stories unbundled.


So you can for example, you see something on Twitter, you click on it, you go to some site after I come onto the site and you ask me such, it's very, you know, so you don't even remember. But so it's sort of the relationship with the writer. And that is what leads to Steck. So people are saying that people follow writers and people don't follow the. And that makes sense. But they're also very interesting to one trend.


And substract is like the new magazine. So this is a very interesting Bourke-White. Every Evvy are a collective collective of writers, of journalists when making a new magazine. So the joke that goes is, hey, they've discovered a magazine. So so that's the Internet. We're kind of bundling and unbundling to kind of to make sense of the word. So certainly I feel but the fundamental thing is that people want the written word. People are going to consume enough sort of the unit with the writer basically seeing the death of gatekeepers.


So, again, you know about the tech versus media battle that's going on, biology versus everyone. Yeah, it's great fun. But so increasingly and interesting brands like Woombye News, I think that's what's called citizen journalism. So we're going to see more and more vacance which of make more and more of us writers and producers, not necessarily text, but it can be multiple things. And that's a trend to as well more and more creators and without digital gatekeepers.


And if you look at tick tock, if you look at India category or what we call it, you're really seeing those folks. I also feel that I think it's got to Gutenberg parenthesis are can be a better word. But the fact that historically we talk about morality, a cultural authority, but Gutenberg meant that we became a world first. And so we like to see a lot more innovation and flameouts is one that cannot be many more around audiovisual media.


So sort of what McLuhan said, and he's an interesting man to look at the shift from hot to cold. So we're actually going to see a lot more coded communication. And if this print is largely hot because there's no point, it's lost when you read print, but you're going to see a lot more kind of stuff in means and cartoons. If you look at it. The most critical part of the times of India is Sundeep advert to the cartoonist because and that's where to get to actually see what the journalists think and what the liberal folks sometimes think.


It's cartoonists on Twitter and see what is it is brutal. But the Times of India, the way it reads because the owners are looking at it, it's make them. So today, as we can go into this really strange world, I think a lot more communication is going to go to Meems. It's going to go to the cartoons and stuff like that, as opposed to the word which can be actually reduced to something very cool. And people can actually also this is sort of what kind of feel I can give you more transept to summarise, which means the apple being broken up and maybe rewrapped.


Yeah, yeah.


That's fascinating. And just kind of thinking a lot from sort of my own learnings over the past few months. You know, on the one hand, it is it's very hopeful that the creative economy has bloomed, that creators no longer have to depend on platforms or advertising, and they can reach readers directly. And substate is, of course, one way of doing that. And you can reach what, Kevin? True fans, but on the other hand, the flipside of it is that that's true for creators who've sort of, you know, who in a sense are the top one percent of creators, people who have kind of built a brand for themselves.


Even someone like me that I'm fortunate to be in a position after all these years that I have the kind of brain that I can, you know, monetize that a little bit. I'm thinking of the young people starting out and the average person who is discovering new, you know, from the point of view of the young person starting out, at least for all its flaws with the earlier system gave them, was there there was an institution where you could join, where you could imbibe certain values, that this is how you do editing and this is how you do fact checking and all of that.


And this is how you do reporting and all of that. And there is that institutional structure which gives them all of that, which seems to me to be a good thing because there is a structured way in which they can grow rather than necessarily have to be self-motivated and find their own way because of incentives of being a creator who nobody knows is that you have to do things to somehow get noticed and to stand out. And those might not necessarily be the best incentives towards personal intellectual growth.


And the other aspect of it is that, you know, in the sense that earlier there was a consensus of the truth. You know, you read every day The Times of India is coming to your home or The New York Times, depending on where you are. And, you know, it might have one slant or the other and rightly might be slightly left. You might be slightly right. And both of them were only that on the opinion pages.


The reporting has certain standards and there is a broad consensus on the truth today. There's nothing today. It's you believe whatever adjective you want, all your information is through discrete links on social media. And, you know, we've seen the worst of Twitter. But, you know, whatever I hear about these alternative WhatsApp universes is completely crazy. And like you've pointed out in one of your very insightful comments that you've made on this YouTube talk you gave, which I was watching, were you divided India about India to India three.


And you pointed out that none of these apps or businesses that we recognize that actually reaching India three, which is, you know, more than a billion people, which you equated to sub-Saharan Africa, but WhatsApp is there because they cater to the most basic need of simple communication, which is also kind of scary in a sense that, you know, WhatsApp is basically the biggest. I mean, they're obviously not a media host, but effectively it's a bigger source of media for everybody kind of in the country.


But this is just unbelievable. Just kind of responding to you. I don't know if you have anything to say to this.


Yeah, no, I probably didn't double click on it, but I think I want to say I think historically we got to that point. We didn't select WRP.


Itis not so.


So what you can actually rapert it the way you want. And that's scary because certainly there is the Internet today. I don't think there's any doubt on that. It's it's very hard. And I actually do try and follow people of different persuasions. I don't want to kind of be considered for people who I would probably spend an evening with on Twitter, but I don't see very many people doing that. It's hard like cannot. So I do think that there's no doubt about it that is splintering and people are selecting the media that they want to consume.


I don't think there's an easy solution here. I historically, I think the US can have platforms, largely US, but also China have kind of said look at user generated content and the section 230 that says we're not responsible for it, et cetera. But I think it kind of works in the context. You know, it's a country where the had that First Amendment in the 19th century was about, you know, about freedom of speech. But as our First Amendment was actually curtailing the freedom of speech in the 1950s, cetera.


So many different countries and they have institutions which can can handle this, but we don't have those institutions. Right. And which is why WhatsApp, for example, actually had to kind of create friction and product. If you actually see the US, you can actually feel what did it in the market for people. Whereas in India and some other countries, like maybe in Africa, because of how rumors can spread, if I wanted to five people to force them into a product, to go back and change features, to create friction.


And, you know, so and there is this joke that I see that all of these platforms get user generated content. We don't need editors like all the details that you lost in user generated content. You will spend on the materials that you need, not like, you know, and some 40000 moderators apparently figuring out what to do and then everything from child porn or whatever it is to the reference to Tianmen or whatever. So I think these friends are there, and I don't think there are easy answers and you can actually see some of those tensions come to light.


Yeah, so, yeah. And one probably to your numbers. So, yeah.


Yeah, I know this is a show of Rambo's, as it were. And of course you won't be listening to this episode. You'll be reading it once you get it transcribed. So which is fascinating. And the other thing that strikes me and again, just remember, I mean, you mentioned Texas is the tech media world, which is kind of happening. And they're completely on the side of the tech guys, because it seems to me that the big media there, which covers tech, does not get it at all.


They are completely clueless. And there's a word for this particular syndrome. I've forgotten what it is. Maybe you know it, but I think it's a three year term. And the last one is amnesia, where essentially what happens is that when you read a media story on something, on a subject that you know a lot about, you realize how bad it is because it is, of course, written by your generalist. But when you read everything else in the newspaper on subjects you don't know about, you assume that it is a truth.


It is the word of God. You know, without realizing that if these generalists have so badly messed up a subject that you know so well, then chances are they've messed up everything. And from whatever subjects that I might know, you know, whenever I read media coverage of that, whether it's, you know, Borkur or podcasting or whatever, and I'm like, oh, my God, you know, and at least on a journalist will get a lot of quotes from specialists and, you know, will not try to make too many assumptions themselves, but otherwise it's so messy.


And the delightful thing about, you know, what the Internet did was that it made so many specialists available to us. So we don't have to listen to the generals. We can just go straight to this specialists and therefore have someone like you explain the VC business to us instead of some random journalist whose research to talk to us. So I think it's time to kind of move on to that part of the show.


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Welcome back to the scene in The Unseen. I'm changing the subject by about about a whole bunch of things, but about the venture capital ecosystem in India, something that he's been observing keenly for a long time and has only recently joined. And he wrote the superb seven thousand word essay Returning from the Señores about, you know, right from the Origins story in 1985, all the way to the different waves of first wave, the second wave, the third wave and so on and so forth.


So tell me a little bit about sort of the origin of venture capital in India.


The mid 80s is really where it all started and really the come that I don't know if the term venture capital was very popular, then it sort of was called Risk Capital. And the ICICI had a small unit which can kick this off, probably could risk capital. And it wasn't even the typical VC as we know it, a subset of investor like product which I write about, and that a bunch of those folks kind of moved out to start what became DACA Technology Development and Investment Company of India, which tranny's actually ICSE, a venture which is not exactly I thought the name is Venture.


It's more of a late stage investment fund. And but really the leading piece of the strategy is really the origin of the Indian venture capital as we know it to businesses like Mastech. Software consultants are all businesses that today that exist because of venture capital. Unfortunately, fortunately, they didn't invest in stocks, which was incubated by the Tatas, Infosys. They didn't. And. Not even true, so they missed the big three, but they got a few of the others.


I think the most famous might well be a Fleck's, which I think I started my piece at later on. The reader wrote to me and said that probably was said. And I said, Whoops. Yeah, that's true. So so that's when it started. And up to the 90s, nothing really much happened in India. In the US, the late 90s was when the Internet revolution began in ninety seven. And there were all of this e-commerce boom which kind of go bust.


But late 98, 99 people got excited in India and that's when there was a mini boom in venture capital. But after the crash, they all kind of left the country. A few remained and then slowly in the knots and knots, some of the companies that we kind of know good found it. So MakeMyTrip PTM, that bus Naukri, they all kind of got rejected in that binet and that slowly and steadily a small flourishing venture capital industry kind of originated.


And in my kind of a same I think with the waves of venture capital and sort of talk about waves being up to two thousand four, the two thousand four to 10 second wave. And then that's just the part of the field that we refer to as a call it. And that's when I think we started seeing headlines about big funding rounds, et cetera. So all of a memory of venture capital really comes from that with of Flipkart and Amazon launching and the competition.


And the last few years, I think I do call it kind of a new game, which is being mobile first companies, and that's an Academy Award. So even Shafak, for example. So these are all companies that are really beneficiaries of the geo kind of launch and geo democratizing Internet access to India, too. So and 2015 16, it's really people like us who use the Internet more expensive. And 2016 is when everybody started consuming content drivers in a Blombos Capito's.


And that meant like an explosion and content consumption that the wave of startups came to that. So that's sort of the history of the Indian venture ecosystem. But it's interesting and I kind of look at different countries and I do feel for the income levels that we have. Two thousand dollars per capita. Of course, a lot of us have five, six, seven ICS that we have a both sized venture industry. So I kind of looked at Mexico, which is five times that's per capita income and Australia.


So it's a lot of whiskey. I look at took eight thousand dollars per capita. And all of us, when you go to Turkey, if you like, it's it's almost like Europe and Istanbul and we don't actually go to the poorer parts. But but for example, India is the venture capital industry of almost 22 exercice. So it's like, wow, this house is why we move into it. And of course, a lot of it has to do with brain drain of Naruse, creation of itis, which meant you created this extraordinary institution, which was too extraordinary for the for the for the country.


They could absorb them. So those guys went out. They became big folks there in the valley and they all said, OK, there's so much to draw. Alenka ISPA and a lot of their friends in venture capital to see how all the Indians are like you we should invest in. So so this is what kind of fun that venture capital and the startup ecosystem is kind of overdeveloped, developed for the nation as we have it. But thanks to that and also people like me.


And so.


Yeah, yeah. Fascinating. And in this time as a sort of the kind of companies have evolved in the market as a world has a mentality of evolved like, you know, 20 years ago, if you would have we see what you have been looking for, the same things or, you know, has it become fundamentally kind of different approach?


No, it has changed a lot 20 years from now. That's like a sea change. There's a lot of change in the state that we take, for example, how we work with top quality, the founders in terms of what we're looking for. I do think that I think if you look at, for example, the valley evolved historically, the value of of semiconductor investments, OK? And so necessarily investing in older people, late 40s, 50s, etc.


are very strong business-to-business use cases, which kind of took advantage of technology. But it's really the kind of the young 20s, early 20s engineering grad drop out all kind of began like in the late eighties, big interest. And of course, there have been dropouts ever since Bill Gates. Jobs secretary exceptions, large majority was REEXPERIENCE season founders because you needed to know your technical chops, you need to work with those customers, understand those problems today, for example, what's happened is thanks to us, OK, two thousand six.


Thanks to the rise of software, so you don't need to build all of it, you can use APIs. So like, for example, to screen readers that Inuvo, for example, all going through a service called tweeting, all you need to do is the engineer needs to know which apps to connect. And it's done so as a result of us making it. You don't need this. We need to set up your own data track or anything like that, your server space.


You can just pick it up and start off on Google Cloud, ready access to software tools, open source software, etc.. It's become easier for two kids out of college or to kind of come and stop so one and start in the US and it's come to India. And so I would see that. A lot of the founders that we're looking at today are in their 20s, they do have insights into something, but they're not necessarily the deepest B2B to be found of the consumer tech fund to the young and the way we've kind of evolved venture capital.


And this changed us when we play what are called long games because and this wonderful book, Longer and Finite Games by James Cox, qualify that an infinite games and actually see venture capital. It's an infinite game because you're fundamentally when you partner with the founder, you try not to take as much as possible. It's very interesting.


So I can read valuation things when I'm writing this piece on valuation now. And when I read, for example, The Damodaran, I find it like that. Obviously, I don't think you spent time in the industry as much. So if you try not to take a lot of stock because we know we got to leave it for the next round, we need to have incentives. So we're kind of saying that, hey, what does it take to keep him or motivated?


The founder for the next month we're thinking of, OK, how do we get the next round investor excited? So we're playing and what happens? And we don't, for example, punish the founder if things go back. In fact, there is very little stigma to failing and that's come to India as well. We are actually investing now in founders who feel like, you know, so and I sort of find these things fascinating. And if I were to go back the late 20s and get these, that was a very different ecosystem.


I don't think we respected these things. Even in the US, for example, the intent on defending us is desire to kind of display this infinite game. Love the realisation has come out of that experience and haven't done this. So these are some of the changes that have happened in the industry. I certainly think the power balance has shifted to the founders immensely and the good to recognize that. And they love the strategy for that. The bad news is, of course, get selected out of the business.


Yeah, that's fascinating.


No, before we go on to talking about some of your insights from that piece, particularly the forcing functions within India, as you call them and so on, you know what you wrote about India one, India to India three and India one Alpha to be a fascinating Frem, which I think is essential before one begins talking about all of this.


So tell me a bit about these different categories and sort of how you came up with them.


So. Think it's so I came across the top one in India, to be honest book, it happened in India and then I think before me Harishchandra wrote about this. But I do think that when the start of industry talks of India, when you go to India to take a look at my statement, because I did put a long time to it. So I looked at a bunch of reports and I kind of came up with the insight that everybody talks about India as this one monolithic, exciting layer of India, 400 million middle class.


And I found it nothing like that every day was from the founders. And that kind of wrote this as the interview process with Bloom was looking at us, looking at it every single app, every single product in India going to hit this eight to 10 million user milestone in just four. So I said, what's happening here? And all that we see, that's a stop to this. A key target market is a real market. And it's sort of like it's not like the voices, didn't it?


But I kind of give it this framework and I kind of articulated what internalised and what it said was that, yes, there is the India of you and me, people who use smartphones who live in Dubai, which is a verified version of that, people who use Apple, Netflix, Starbucks, etc. So they call India one in India. What I said is about a hundred million, but twenty, twenty five million households and therefore capital income is like ten thousand dollars roughly and roughly I said this like in Mexico, one trillion GDP, etc.


and increasingly all of the Internet Spens. We're coming out of this segment. That's the joke, some people inject venom and inject all of our drivers are Blombos and injured people, and when I say it doesn't mean that no one is bombing, that was me. Right. Know every city has in India one can get to. And yet there is an attack in Bombay or Tahtawi that is like like in India, one in India, one is probably Bandera's or whether we call it and get reposes.


We're not even on the Internet, for example, mostly just maybe just getting there. That number keeps going down. And I said that is one hundred million in Goa and that's like a trillion dollars of GDP out of the two and a half trillion dollars that we have. And this is about kind of just under 10 percent of the population in was 10 percent of the population. But the per capita income is like one third of one fourth of India, the Philippines.


And finally, I said, exactly, this is really people who have this a thousand dollars, but that's a huge number. So that adds up to, what, a trillion? And this asset is like sub-Saharan Africa and sort of a metaphor, which I think resonated with a lot of people. And the story was very popular. And I think I think I think the real challenge is that for the Indian industry to involve India, one is who pays your bills?


But India, too, is what everybody is betting on that market of India to get. Will, much like and I pointed out, certain kind of important fissures or challenges or frictions. I said India one is largely English, but India too is largely vernacular. And you may need to change that. You access wise Radian6 attract an increasingly looks to mean that you may actually have to change your business model. A lot of the companies are coming to cater to India, two very different than being from India, one company and increasingly next to me that there is a real market comfortable market for India, one in that they launch in India one year.


They kind of get a sense of the state and they can quickly expand to the US. They're beginning to see a lot of interesting startups which launch in India, just kind of system are going to expand to the US now. So this is sort of the framework and it can Double-Click more if you want. But this kind of gives us a sense of the lay of the land, sort of. Yeah, yeah.


I'll to Double-Click in different directions. But before that I wanted to Double-Click in a direction which you didn't actually mention in your essay. And I wonder if you're in the multiple pieces you've written on this and I wonder if you have any thoughts on that, which is I'm just wondering how this division would have played out in terms of numbers around liberalization, like what happened, what were the transitions and at what speed are people from India, three coming into India, too?


I mean, that's what we would like to see happening at the very least. I mean, to think that 80 percent of our country is sub-Saharan Africa, like is is depressing. It's something that, you know, people like you and me, you know, certainly people like me who live in a bubble and we just ignore it. It's it's invisible. And so what are those long term trends?


What happened after liberalization? How big was India won then? How big was India, too? And what have been the trends over time? Do you have a sense of this?


And it looks like it's specifically have liberalization, post-election data. But I can point to one interesting fact is that we haven't expanded in go on as fast as we should. A good proxy for this is Garcés.


What do me what environment? It's the end of the day, a great proxy for middle class ness of what we call discuss. And India is actually a very tiny market. And you can actually look at the number of cars that are driven in India and the size of India. One household explosion of proxy only thirty minutes late. Great. Why is it going and actually I studied economics and I do and following condoms and reading, I don't know who it was, but who said that India's biggest success has actually been introducing the absolute poor and not growing the of the middle poor or the upper ranks of the poor and the middle class.


And that's something that stuck with me. And in fact, even if you look at it, for example, the real growth in Google and a lot of the startups are doing really well, sort of it's the Matthew effect that as more and more will be given. So all startups and I'm beginning to see this really sad thing about startups doing really well, but in a few categories like travel and then actually seeing of the growth and then actually deconstructed it.


We said that if you actually see growth and let's say it's fifty five percent growth and we can offset that. Fifty five percent growth since Pleco Monthly. Forty percent of that fifty five percent has come from the user spending more, so people are saying, hey, I go out and get my groceries from this. Let's say this, you store or if you're in Delhi, you could come with this mall or whatever, but you say I just ordered a big basket of milk basket or whatever, you know.


And that's come from frequency you by a little bit more, maybe your your intuition becomes easier, for example, and five percent has come from new uses, that is said was not consuming it. OK, so there are many reasons for this, but I think it's to do with the fact that. Got real things to do it, this comes very well and good economics, this wonderful book is about regularity of income, and I feel that the one big privilege we we can we actually can see our income streams if you're in the middle class, a regular salary coming, which many government jobs.


So the future is still uncertain. We don't have that and could get that massive shock to that. People suddenly like John, they were happy and then suddenly they got some advance and most had no jobs. Of course, a lot of them have got jobs back, but that experience has shaken up and they saying, hey, we're not going to have so many people like us and this wonderful double generation to my left engine, my life improved. I got more time with my family.


Like, I got to eat really good food, like, you know, so I got to like what they can. So the ad improved so I can never travel. So the quality of my life improved. And why do I think I'm going to want to see is that I don't think the speed of India to to India one is happening as fast as it should be. I don't have answers there, but the continuing success of Indian startup ecosystem depends on that.


Yes. In Japanese, which is a good sign and that was great. But the challenge is India is not someone who can sustain a very large business or hence invent startups in India are actually looking at abroad in a big B2B startups and even detect consumer startups are beginning to think that so, so busy. These are macro patterns that you'll see. Yeah, yeah.


No, just thinking aloud. And if any listener has interesting statistics which, you know, you can shed more light, only show them, because my assumption would have been that around liberalisation you would have a tiny sliver of elites which would have been your India, 131000, India, one alphie in relative terms. And then, you know, more than 90 or 95 percent would have been basically what we call India three today. And just that growth of that middle class India two in India one.


I think there was sort of a lot of that happening. But what those of us who benefited and realized that, you know, in general terms, yes, the absolute poor were lifted. You know, there are statistics like some 300, 400 million lifted out of absolute poverty and at least knew where their next meal was coming from, which is a staggering achievement. But it is still a matter of great, what are you, 50 percent of the country, sub-Saharan Africa?


Now, there are a number of counterintuitive sort of insights you've shared in your different pieces about these Indians would ask you about them one by one and one you kind of referred to earlier, which is you spoke about how many entrepreneurs are now see building for India, one or even India one alpha, and then expanding abroad instead of expanding to India, too, because that direction of expansion from India one to India two seems to be very difficult. You know, I think you've spoken about how as far as B2C is concerned, you know, India one is like the first state of the US.


So it's easier to go into the other 50 states in other ways. And similarly, you know, you've spoken about it like the English tax. And I think that's the context in which you shared those three Starbucks photographs. That is someone from India to go into a store where they only see signs in English. It's intimidating. They don't belong there. It's a different country for them. Right. So tell me a little bit more about how harsh this gap is and why many people don't realize this gap is even there and therefore can make mistakes in investing or starting businesses and so on.


Yeah, I think over the last few years, I think there's been a lot more education in the startup industry because sort of there are very bright young men and women who come in and sort of study this like, say, Margaret, we studied some law, for example. So there are writings that interesting blog post, etc. But yes, there is a gap. For example, this is, for example, a lot of times in the credit line of credit card transactions is to fail because there's actually an intermediary page where the handshake, the bank very strict and that's what it is in English.


So a lot of startups actually went to the payment so they can change it. And this is not can we go to the bank that doesn't listen to us? And one thing that startups are good at is encryption payment. Right. That's that's really what world class that that if there is friction, we don't find it to reduce it. And and one way in which we can do that is looking at one another. And this is an interesting learning.


So it is a one. Is actually not needed. Apparently, he does have an intuitive sense of what this English word means ET. And so to Mike it's me and I was like a big proponent. I got a lot of interesting product managers and designers saying that, hey, English work if it's in English. But there are certain things that you need to do to kind of give them, for example, some of the iconography, like a shopping cart.


So very Western concept. So, I mean, we probably have taken those design wins and kind of kind of use. And you probably don't need to. And this is very interesting kind of a piece. And I didn't think that none of the people the search bar, for example, with its magnifying glass is something that a lot of people just didn't know what it meant and ping pong match. So I think the big learning for me is that it's not so much English and and I can read a lot about that, but it's sort of about English design, this sort of thing.


And that's sort of the need to rethink those ways from forward. So be interesting. So there's a battle at the Times. And if you see the Times, for example, versus the WASC, WSJ or New York Times, they clean a lot less. Story six or seven times is the complete opposite of actually sort of saying this was actually driven by some Yujin, because you see that the French or the Americans, even causus one after the other, the Indians eat in Italy, which is all at once.


So they'd like to have the smorgasbord of offerings and they like to pick and sort of said the types of the French basically like that. There's so many little little pieces. So so and that I thought was I mean, we talk about clever design in terms of startups, but this is a 150 year company which is actually thinking very cleverly about this. So I think today I would actually rework the English tax to an English design tax. And I would say that I think the way you lay it out, we give comfort to a person and sometimes it may mean just rethinking a very small mind of the child.


Like, for example, live streaming in China. Live streaming is hugely popular in China because it's when China has a China one, China with China TV. So, of course, not China to be as good as it gets. So a like streaming has actually helped people get more trust and kind of consume very rarely buy those products. And in Guelph, it's been really very interesting models like the Michaux model, which if you sell a model, so e-commerce, the beat is that everything is laid out.


I click on this. I don't look at this. Computer industry is going to show up and think, guy. So what is going to happen is you may very well have distribution channels emerging distinct for India, one, which is Internet and modern retail India to India, for example. So think of microcredit, some handset guys. I've had a lot of success selling phones through the microcredit concept and we're beginning to see microcredit and in my view, resellers that we meshugana.


So we actually valuing a company which sells apparel and they've started selling other things, too, that this company sells pharmaceuticals to resentence. So I'm beginning to see very interesting distribution channels emerge to remove Friction's. So they've got this conclusion that it's not the website that matters. OK, you may actually need to rethink the very vain wish the consumers interacted with. So the reseller model by your neighborhood IP sells your product may actually work better than making you look at a screen flat screen and click on it.


So so some interesting learnings. There are many, many interesting thoughts.


And especially, you know, in one of your articles you wrote about how many people thought that that magnifying glass was a ping pong bad, which it's one of those moments where you sit back and realize how much you take for granted. And there is this sort of design tone, which ones, at least when we used to be a pejorative consumer freak design, which is basically that you make something online, a representation of something that is offline. So people are familiar with it.


Like the worst example of it, which was really ugly, was, I think when Apple did an e-book reader or something and they made it look like a physical bookshelf. So that's how the screen looked. And I thought that that was just too ugly and there was no need for that. And it strikes me that even if you have that one, you might need skeuomorphism design where language is a problem. So you have a symbol which tells the person what it is.


But that symbol for a shopping cart for, you know, in the small town India will not be a shopping cart because you've probably never seen a shopping cart. So there's a there's a need to rethink that. My other question to you is this, that I would imagine that that, listen, we solve problems which we experience and which we know. Right.


And I would imagine that a lot of startup founders would come from India. Even in the organelle alpha, as it were, so the problems that they would be intimately familiar with or would have experienced viscerally and want to solve would be would be more likely to be problems of India and India, one alpha. And therefore, any understanding they have of India, too, would be a little deficient. And equally, I guess, I mean, you need a fair amount of privilege to become a founder in the first place.


You need some kinds of networks. You need to have access to books and information and knowledge and all of that. So as a VC, when you're looking at founders, is this something that bothers you, that you wish you had a way to get past, or is it the case that there are in the open from those who have the humility and who apply themselves to these problems?


So I think you hit upon this and you expect really well to start up the quest privilege. You're absolutely right that I don't think a startup is something that you should get into if, you know, your family's worried about the next paycheck and certainly the founders that we have our privilege in every sense, socially and economically. Education, of course, that's it. They don't come from diverse backgrounds. And a lot of them have the Indian founders. And there's a fascinating Internet startup which caters to families like Jackson, not portfolio.


And the founders are like the one of the Filipino and the other, the South, Bombay, also Bombay and Thorbjoern. And they want me to send them and they kind of want to stop the sub. So you get very interesting kind of these bakun busting founders as well. And the one thing that we see in the street, there are patterns, but you shouldn't be prisoners of your patterns. So strong views weekly is certainly one of the month as I go by.


And so this was a pattern, for example, which is very interesting. But yes, there are a lot of founders who grew up in smaller towns who get into a great engineering college, typically oligarchies, and they've seen like the world of their fathers and grandfathers, they have relatives who are working in small businesses, sitting in wholesale market, etc. So they're able to marry these two worlds together, that all this is like how my grandfather used to work in the family business, etc.


, the privilege that but that's sort of what it was. And then the suspect and those founders as well. So if you look at the founders of these two Carnatic apps, they don't get on acting like Dukan because they cut the book, etc. There's a lot of those founders that as people who have grown up seeing their family businesses and who understand tech solutions, etc., so you get both diversity and when I would like to say that the founders are bringing down problems, not necessarily so.


I think the Indian engineering college is a great unifier and you can actually come into it from the small town because it's socially privileged. All of that quickly can understand what it takes to succeed. And so so you see very interesting patterns and yeah. So I hope that gives you a sense of the fun to provide. Yeah, you're pretty good.


Just elaborate on that phrase. For the sake of my listeners, which you used earlier, strong views weakly held.


Yeah. So in fact, I kind of joked that if I were to get a phrase, that would probably be that.


So you do need a strong view going into a meeting, going into a sweat, because end of the day, my views are what make me know. But at the same time, I don't want to be president of those views. So I change those views. And I think that's been a super power for me. I have no and in fact, I've done enough that people are actually quite emulating the past meeting. You said this, but this meeting is saying this.


Doesn't that look, it's like this is a joke that you came and asked me what the time was and I would come and ask me at 3:00 for the time. And you can say that you give me different times. So detail and perspective, I'm very happy to change my views to that. And one of the things I've trained myself is to not be afraid to say you're wrong. And I don't think I'm a very ideologically wrong because I do.


But I'm wrong because I don't have data and I quickly change my views. And that's sort of something I've trained myself for. And I think that helps. So I'm kind of interesting. I remember reading Thalib and Talibe talks about this very interesting George Soros story about George Soros talking to someone saying that he thought the dollar would fall. And I'm betting everything. The dollar will fall and next year the dollar rises like. And so the person was talking to George Soros, said, hey, George, you get wiped out.


He said, no, I. My strategy and tell me what happened. I spoke to you, and after that I felt like I was wrong and I did that or something like that. So so I think this is a key requirement in our industry that you do need to have a forward looking thesis, but you do need to have the ability to kind of revisit that because you don't have all the data, like the founders have much more data than we have if you're on the ground and things change.


Right. So there are a bunch of things that have changed and had to kind of revisit my views, for example, very early on. Very interesting that we had just reached out to us and let them make multiple reasons. But one reason maybe be not as strongly committed to the deal was we felt that coding in India, you know, coding so small and so kind of very little money and how we can expand beyond this. But what we didn't factor in was the momentum of those events.


And we would, of course, give it to Dorkus, give it a pandemic market or the market for it. So, so, so, so much more than that. The momentum that winning in India, one game would help them actually get more money and would help greatly expand into other categories so that they could expand to the US. And so every incentive to do something. And one of the things I've said is like a lot of different things from that.


But that's a perfect example of where two strong views would need you. So there's are some levels of what is interesting, such effect that if you see a surgeon who looks like a barber or a plumber or something like that, that's a switch it should go with because that person is beaten. So many backups to get there.


So I think that you need to kind of keep all of these in mind. You do get most things wrong at the same time. You don't have a strong thesis, strong view. Then you don't get that respect and you don't get the you miss out on provoking someone. Like if you have a strong Eurofound that you have a strong view and have a strong view through that something interesting emerges. But if I don't have a strong view and enough change everything and you lack respect for me, I'm not able to inform you of something, etc.


. So these are this is, I think, a core core philosophy of my not having strong views, but very weakly.


Yeah, you're not very wise words and sort of an analog of this. I mean, my my approach to, for example, politics or ideology or whatever really is that I am completely open to changing my views on facts.


If you show me my facts are wrong, I'll accept that I'll have that humility.


But my views and values are strongly held in the non-negotiable. So there will be certain principles I will value and I will not budge from those like the importance of individual autonomy and freedom and all of that. But as far as facts are concerned, you know, I'm always open to being shown a different way of approaching the same problem, not to sort of get back to that frame of these different scenarios. Another thing that fascinated me was where you pointed out that it's likelihood for a foreign app to make an inroads into India than it is for an India app.


And the examples, of course, you gave was gave WhatsApp, which are sort of very universal problem, which, you know, really could have been founded anywhere and started anywhere. They needed a new start. And also, Tick-Tock, I mean, I think you also participated in the course. I don't want to talk. So an Indian society and Tick-Tock also just hit that nerve. Of course, it came at a time and you exploded and all of that, but it sort of hit that.


No. So tell me a little bit about these Indian three's a whole different ball game where it is 80 percent of the country, but they have no money. How does one think about this?


Ticktock. And that's a fascinating essay by Eugene V., one of my favorite thinkers about how to talk abstract sculpture. Like, you know, you don't necessarily have to understand a lot. And this is utterly fascinating essay which can share the link with you, but you can have the readers which answer the line that the 40 guys, moderators or whatever in Beijing and then all actually working on an iPad app. And it's actually a very successful app news app, and none of them have any clue of what language is and anything.


So it's it's something that kind of can have a look at something to my memory. And so what reason for that is verbs become very important verbs as a lot of the apps which are big industry are really verb apps. Watch not it's just YouTube or talk. It is like WhatsApp. It's very simple and very interesting. I think WhatsApp is very good at moving S.R.O. things like WhatsApp being the easiest Beatts in people's lives because it's built into WhatsApp. So so I think a lot of the platforms that appear to spend a lot more on artificial intelligence design saying that maybe that.


And these are universal use cases, if solved in many of the countries, and they kind of see that as a special case of that being cited for the fact that they have very deep pockets also helps because indeed, companies at some point want to make money by these absolute universal apps and because they can take the profits of what they want in the US and invest it in India and India can do that. So on. But is that if there's an Indian app that has to work in India, it has to be something which helps them own.


So it could be something which gets them a job, something which helps abseiled and get better prices. So we have one company and it sort of looks like microcredit, like microcredit does give credit. These guys say you don't give credit, but lives is not really. But they also make some money. And we want to make sure that they're able to own so they have mutual funds for the extreme poor. And I've actually been to these Bihar event and I have spent about three days with them and actually met a family which owns the poorest family on the thing.


Thirty two thousand rupees in your. Wow. Like, I went to the house and they actually are I think they must be the poorest family in India to actually transact and actually transact on the app. It's a very different kind of transaction since that like that, someone who does it for you, but they actually have a savings rate of it. So and they also have insurance, et cetera. So I think these are ways in which you have to.


So I think in the app, which will be a hit, will be something which helps them on extra money. It could be by selling, reselling to see how it is. But I don't think there is very little capacity for industry to spend. So it will be a spend up. It will be help me on my money app. What it is, I don't know. It would be something like a craft, something that they create craft and that someone is able to pick that and sell it to people like us and some money reaches them, etc.


So they'll be variants of this or it could be getting them get jobs or getting them jobs or getting better money for the agricultural produce to be that sort of thing. I can't see very many startup opportunities exactly because it's challenging go far enough.


And the stream of India one, two, three is quite fascinating to me because many of these insights that come up are counterintuitive and they're not only relevant to venture capital or investing. I think there's the you know, even if one has no interest in debt itself, I mean, this is our society and there's a lot in there that's fascinating. No. To sort of go back to your essay about the industry in this valley is, of course, your term for India's start up ecosystem.


So what you say is, you know, you've spoken about how it's spread out in Bangalore, good. Go Noida unneighborly, blah, blah. And you've said it's it's not just geography. It's an attitude of mindset, coat of invention, jugaad or DCG and hutzpah. Stop. Good. OK, tell me about a sort of again to sharpen the frame for my listeners. Tell me about the five sort of forcing functions which define the venture capital ecosystem in space.


If you look it up, I think I alluded to one of them, which is this how the Indian venture ecosystem is overjoyed. When I said and I described how that is, it is thanks to the fact that we developed tertiary education infrastructure specifically that is resulted in a brain drain, which has had interesting consequence of people going there, kind of settling down and then coming back, etc.. So certainly the the fact that there is a sizeable experience to collect, you know, a workforce who's good at English and who can actually walk into any Silicon Valley for a module that will be out of place then.


So that's really helped. So that's certainly one of the forcing functions. I also talk a little bit about the fact that India is just one poor country and the consuming class is not very, very, very large. It's put 25 to 30, 40 million allsorts, which is really India, one percent all of India.


So this is what I do, the forcing functions. Then I can talk a little bit about the fact that not just the consumer base, but even the business segments, which kind of could adopt technology, are not very large. So there's actually a great interview which the I had with money supper one somewhere in the middle of June or July, etc. and very good stats. It just statures we of him. And he talks about how, for example, generally BORSTAR plus twenty thousand businesses which are freed up capital and.


So if you actually look at it even for business products, you can't really bring a large subscription product in India. So we very formalized that and this is something that comes to mind as a forcing function. So these are somewhat confusing functions that I can allow you to. And sort of the way to look at these are the constraints within which they can start economies. And I describe five of them and the definition. But it's sort of the fact that I think everybody can look at it, that we are not very rich as a country.


We have a undersize, consuming class, business consuming class. But hey, we are like we have like a large enough elite, even absolute percentage, a small the size of the 25 to 30 million is like a.. And if you look at English, for example, we have I would say about 140, 150 million people speak English, passable English, but they probably can't write good English. But about 25 to 30, 40 million of us can actually write good English.


And so that's actually makes us what I think the opposite of the US, UK, maybe Canada, Canada. We have like the third largest English population in the world. And so sort of these are what I can. And of course, the diaspora, the fact that a lot of Indian diaspora can easily navigate between Silicon Valley and us and and specifically, I think a lot of this should be seen in light of the startup ecosystem. I mean, I don't think probably more and opposing functions which have implications for the alliance of the world, et cetera.


Right. But that's fine. OK, but I'm talking about forcing functions that impact the startup work and I can identify fight this fight. And I said this creates room constraints and driverless and opportunities like, for example, English. It's interesting, the Delhi gang won an Emmy like tomorrow. Nothing's going to stop an Indian person coming here. I can have seen all sorts. I've seen friends, I've seen and did other things. I want to like this thing, which is universal, which is a story about singing on set in a crowd.


And I think we'll have these characters coming up and really Indian stories. So I don't know if there is a writer who's like that. I think a lot of the great writers are uniquely Indian stories, like a chimpanzee, for example. And she said, I think they are universal in theme, but they are certainly Indian, Lou. But at some point you're going to see someone who writes like like like a story which is which could be like something that Updike is written, for example.


And that's going to happen. And I feel like that's going to happen in the next 10, 15 years. We're going to have breakthrough art fiction writing that's coming out of India already. For example, Salman writes for The Guardian and Travnik, I mean, it could be anyone, for example, Anthony struttin would vaccine sensitivity. So a lot of the non-fiction stuff is beginning to go into that. And so I certainly see opportunities like that coming out thanks to our large enough English base.


Yeah, yeah. No, no, that's fascinating. And someone, of course, is a fellow who was on your show. So, you know, not for my listeners. Before we started recording, you told me that he first met me at the, you know, maybe 12, 13 years ago. Then it must have been at meetings of the Bombay Quiz Club where I was a founding member. And we used to have quizzes every Sunday till I kind of retired from that scene because my memory already then was getting kind of bored.


And as far as sort of Indian writers writing in English is concerned, I mean, there are people like Jhumpa Lahiri or the fine Pakistani writer Daniel Dean, who hasn't written for many years. I wonder what happened to him, who you write about maybe local circumstances and local characters, but using a sort of form which is very Western. You know, Jhumpa Lahiri may write about Bengali characters, but her short stories, for example, I would consider classic American short stories in that sense.


And I guess part of that comes because you write what you know, sort of the diaspora will write about the immigrant experience. It's not really a cliche. You write what you know, and that's perfectly fine. But you write that, you know, there is nothing that stops anyone from here, from making something universal, which, again, feeds into that whole thing of if you can make a product for India, one, there's no reason it, you know, going to translate to the rest of the world.


No quick question. You pointed out earlier that, you know, given that this India one is going to like Mexico, and yet we have 22 times the amount of venture capital that is in there because of various reasons, the diaspora, English speaking, the notion that India is a counterbalance to China and people just look at the overall numbers of India and don't really do the kind of division that you've done into India. One, two, three. So if so much of venture capital also a problem for people such as yourselves, like what has certainly happened in the last.


It also is that there's been a lot of easy money coming in from the West with the, you know, the low interest rates and all of that in the US and a lot of that easy some of that easy money. I mean, it's a small amount relatively, but in overall terms, it amounts to quite a lot has has come this way and it doesn't distort the system for you guys. Like you said, that, you know, venture capitalists like you have to compete for founders.


Does that distort the system in some way? And does it distorted in harmful ways where a founder who might have gotten a good deal and been able to grow in a slow way instead gets a lot of money pumped in and then has to find ways to spend it and go for hypergrowth and all of that which actually come in? What would otherwise have been the sort of the organic route as it would? I mean, I'm sure those pressures also must apply.


So so what's your sense of the key questions there?


So just take it one by one. So, yes, in fact, I was joking with someone that the single biggest factor that's influencing my life, how good I am, how successful it's not my picking skills, but the quantitative easing that's happening in the US. So I keep telling that all VCs should put a photograph of Janet Yellen and I in the money they got. Who are the Fed sweatiness? Because the easy money policy of that is what is driving a lot.


That is another factor, too, which is that that is as a US and Western countries, each dimension are struggling to meet contributions. And what is happening in the pension fund is very interesting. And all of them are saying we invested in Treasury bonds or they cannot say for once, but we actually have to get higher returns. And then actually seeing some of the family offices, endowments, universities certainly doing very well because they invest in venture suddenly.


So let's just balance it out. So the money goes to venture like large pension funds or daddy or teacher scalper's and firemen like Dellec 400, 500 billion. And if the rebels buy one percent, that's a billion dollars venture. This is not that big like you're not. So I think the venture industry every quarter, I think is, what, 150 billion dollars? So I don't know I don't know the exact numbers and probably kind of have to find out.


But it's very small and that actually does, as you put it. The second point. That's the answer. And I know to be very careful with the market, I want you in digestion problems. But sort of it does create a situation where there's a lot more money flowing in. And that creates one interesting situation. So now in our industry, valuation is not an absolute no valuation is a function of what the startup needs and the state that we need to see.


A lot of people say what the startups value to a million dollars ET. OK, so but actually nobody sitting and saying, let's do the mathematics of value to 200 and then we'll take 10 percent. What has happened is that let's say the startup needed 10 million dollars and I needed a 10 percent stake. So 10 million by 10 percent gives us a hundred.


So we want the startup needs of what I give is one important factor in valuation. The second is to speak. What has happened is as a result of the money coming in, there's also been a competition for good quality founders and there just aren't that many good quality founders. So assets to get stuff. So venture capitalists have come in and out of the fold. This thing has an easy right and so good assets have got a lot more premium than in an ideal world.


But looking at it doesn't mean anything. So it's just a hypothetical theory that, yes, we do feel it, although not that much. So, for example, two thousand and one bloom started to bloom, started the seed round was like 250 to. And then, of course, the CDC was willing to be a seed round when I joined became like a million and it became five million, but very fast in the last two, three years.


High quality companies are continuing to see. So what's happening here? And if you actually look at it, the cost to start a business that actually caught them tremendously in US, software tools, etc., of course, we have gone up price of high quality Fata's and that it has gone up. So there are these these countervailing forces, even though the cost to start going down, labor costs are going up. There's a lot more money coming in, but the fund has expanded.


So much does lead to, I think, pricing up of assets. But it's something that we I think the industry is trying to be very honest with you. It's not what you do with venture capital. It's public markets, too. If you look at public markets, for example. I mean, I think the public market are even more overvalued adventure. And that's been one of the challenges as well, that the last few years what's been happening is quantitative easing has created a world where interest rates are effectively net negative, like inflation isn't very high.


So it's actually led to a switch for and of course, there's been a V into the space private investments specifically because they demonstrated great returns. So as a result, I have to agree with you on the second one that it has created kind of a bidding up of asset prices. The third question is that creating distortions. Yes and no, I mean, one thing I say is that sometimes you get these very unpleasant statements that all venture capitalists like giving money in the hands of giving guns to kids effectively.


Well, I mean, I understand where it's coming from, but I would have to say that all those are smok end of the day founders of ambitiousness and that they do use money wisely. But there are cases where if you give too much money early, it can lead to kind of specific issues that are examples like it. Obviously, I think there's a small market. They want a lot more money. They should have expanded abroad much faster. I think it's so hard.


It's a it's a it's a beverage and the gold chain and a lot of issues. So I think there are cases where careful husbanding of money are carefully kind of calibrating the fluid, often hard to come up with universal themes. But I think a broadly answered all three of your questions. Yeah, yeah.


Yeah, very illuminating. And I have a couple of sort of follow up questions, like I'd done an episode with the book Shenoy on Investing and his thoughts on investing and life recently, which give me lots of food for thought. And one of the themes, of course, that emerged from there was that one easy money is funding what is the stock market boom. That's why it's kind of happening. And, you know, my sort of line of inquiry that was read, listen, there is so much easy money.


There should be inflation that hasn't been that much inflation in the real world. To which the thesis, of course, was that what has also happened is that technology has been growing and all of that and, you know, rises in productivity and all of that have kept the prices of things seemingly the same. But they would have been cheaper had there not been all this easy money around. Now, it seems to me, and I'm thinking aloud here and I'm sort of a new this, so correct me if you've got more nuanced perspectives, but then what it seems to me is that one, what is easy money is doing is that it's not about raising the cost of things.


It's about lowering the value of money, which is where it starts from. And there is something called the Cantillon effect, which kicks in, which is the first people to receive such easy money, benefit more from it than people who receive it later down the line.


And it seems to me that what is happening is that because this money goes into the stock markets or venture capital or whatever, that if you, you know, everybody else who is not a participant in these specific domains are actually losing money by doing nothing because it'll be in their wallet is diminishing in value and therefore they have no choice but to get involved. Like, that's why, you know, you mentioned the pension funds abroad who are now saying that, hey, we have to get into this market now.


And it's a rational thing to do because there's no choice because of money that they have is just losing value. And all the value is coming in these particular domains. No know. And what therefore it strikes me is that, you know, as a normal person who is not part of these markets, let's say one, if you don't want what you have to lose value, you have to figure out a way to take part, which becomes difficult because it is, of course, you know, dangerous to randomly enter the stock market when you haven't started it.


And often who has that kind of time. And it seems to me that that increases a pernicious kind of inequality. Like very often when people talk of inequality in the economic domain, they actually mean poverty, that, you know, inequality can often come from the rich getting richer and the poor also getting richer, but at a slower rate, which is not a bad thing. I only care about where the poverty is going up or down. Inequality can be whatever.


And they're often you'll find that poverty reduces, but inequality goes up. But what it strikes me in this domain is that it's a little more Zero-Sum than that in the sense that there is inequality here, in the sense that it's a Cantillon effect. The first, you know, these domains where the easy money comes in benefits more. And if you're not part of it, you're kind of you're losing out by default. These are just sort of rambling thoughts.


But I thought I'll get you to respond because I'm sure you've also thought deeply about this stuff.


Yeah. So lots of nuances there. So let me just try and find one or two strands. I do think that we're veering towards sort of if I kind of see from a macro perspective where there are a few winners and a lot more like this, for example, I think like America, for example, they've actually actually seen the hollowing out of the middle class that's happening at the increasing going to happen because of the nature of it, because it's interesting.


It allows scalability as a microphone. It allows me to scream. And if you have a good voice, it's like the same thing, like live performances. And when they're speaking, they'll be meant that you only listen to the top performer show interest and drops what the superstar effect. And that's exactly what's happening today. A good accounting feature can scale up the whole world right now. Everyone in the world is done with it, right or wrong or heard of it.


Right. So the number two accounting for a lot of Estragon, you don't know the number two valuation's guy who's like, no, she knows. So I think this X role as enabling easy scaling and is is a big factor. And it's increasingly creating a world where I feel I think it's a highly liquid, but I also think there's a quality of opportunities and equal opportunities. The same opportunities don't come to you. So it's like the very interesting things that like, for example, like the huge advantage that if you're recording and if not just not coding, but if you know what it means to code in a certain way, what it means, you can communicate, build a profile on GitHub, etc, etc.


you can outside riches. So I do think there's a lot of talk about universal basic income and all of that. I think things badly need it because I don't think that any easy solutions, the creative economy has no middle class. Probably there will be outsize winners. I don't think it's historically I think the 40s, 50s, 60s, 70s were kind to the middle class that kind of help. For example, a large middle class to much. And even, for example, when you get this wonderful example of Choco's and all that and sustaining all of that today, for example, like, I think it's just one person or two people sitting and creating something.


So it's just not enough jobs. So this is something that is a challenge. So if you kind of look at describe this kind of an effect, etc., and what has happened is there is increasing desire because tech and tech stocks have been delivering the most outsized returns you get into it. And it's created interesting distortions. Like I talked about, pension funds are investing in venture capital. Also, hedge funds historically invested in stock markets were actually coming in saying let's invest in the hot startups.


And for example, Softbank is a great example. If you actually looked at, for example, Amazon, this launched in ninety nine. So there might be three years. If you look at what Amazon probably was looking for, 30 or 40 million dollars was the value that they listed today, one point five trillion. So the value has been captured by the public market. Right. But if you look at Google, Google, almost similar numbers will come within like Twin Peaks that would be captured by the twenty three billion today.


Again, one point something trillion. So if you look at, for example, Google, I think I'm giving 10 percent of the value has been captured by private actually have listing. It's gone down, you know. So what has happened is capital has come in to hot startups and help them stay late and lead and late because they're saying, look, Amazon made the mistake of going for an IPO. I mean, I don't think they made any mistakes, but they made the mistake when IPO fast.


As I said, you didn't capture any of the value. Now, let's just get in fast, capture more and more of the value. So this is another force that's coming in and actually creating distortion. I'm not to make it negative, a positive. It is creating a distortion in the way it's getting Savannakhet used to this philosophy that they can stay later for an IPO. There's lots of innovation coming in IPO it accommodate existing specs as well. So so I do feel that I get what you're seeing.


And fundamentally, I agree with you. I think not only is inequality growing social inequality opportunity that it's going to be, people like us are able to take advantage the tech tools that we're using and must be able to use them, combine them to create grants that you don't think you can actually. I mean, you have these business in a box tools like, know, August, for example, or using what do we use? So we're trying to create a new business on it at very cheap prices across the board, probably access to this, but they don't even know what they can do with it.


So I do agree with you and. Easy answers, but these are worrying and the governments of the world tomorrow, enough to kind of focus on some of these and the Dubai things may actually be a temporary solution or one of this to kind of sustain the hollowed out middle class and the poor.


I mean, ideally, what should happen and what you see happening is that you see new technology. You know, anytime there's some new technology, there's fear that their jobs are going to go and what's going to happen and who's going to whatever. But inevitably, all new technology raises productivity so much and create so many more opportunities that it works out in the long run. But, you know, whether or not there might be a temporary solution and how do we get past some of these distortions which are being created by a lot by quantitative easing is something that I do think about.


I mean, you know, there's a lot going on on Twitter, I think is at home. So he put out a tweet today about, you know, that Bitcoin has reached 50000 and what will the one point nine trillion quantitative easing due to Bitcoin. So, you know, and so another question for you, based on, again, something that came up in the book and I was chatting where, you know, George Soros going to stone-Cold reflexivity, he pointed out that the perception of something can change the reality of something.


And one example that the book and I agreed with, or at least I think he agreed with me. But this is certainly what I feel, is that Flipkart is an example of that, that, you know, at one point it really should company with so much money goes into it, goes into it, goes into it. And that money is eventually used to make it a much more solid company than it was. Now, it strikes me that even in this business where there is so much money chasing what you said, there aren't enough quality founders, I think you mentioned at one point.


But whatever there's a lot of money chasing these sort of founders. Is that also a possible effect that someone who whose company may not merit the valuation you're giving it to begin with because you pump in that money, he can then use that money with, of course, your guidance, because in your part of the equation, you use that money to actually build something that merits that valuation or much more. And therefore, you know, when you choose out of A and B, you are not only choosing the necessarily the better company, but you are actually by the act of choosing making them the better company because now they're going to have money to play with.


Yeah, this is great. And so a venture capital is sitting there as much as capital. And you could also call adventure segment because you're absolutely right. When you get capital from Sequoia or like Amex. So Lightspeed or Bloom or for us are probably just other examples of like a benchmark or a sixteen set. It's also sending mixed signals out there. So it's sort of the signal that, hey, the high price of the venture capital might have off kind of giving a signal that this company could be a like a big one.


Right. And yes, that signal then effectively, that is huge dependence on our business. Bob, depends in many things, not just in how the VC select. So you could also say that if a particular startup could have succeeded only because, like last week invested in them. Yes, I would say possible. You get lucky by selecting you because of that could make things interesting, etc.. But the very fact that the ABC thinks you're worth it and the market now thinks gives you a higher valuation.


That also means great talent comes and joins you. Right. Which means you, because you can track the talent and you see that maybe not every now and then, you probably cannot improve with that. And one hundred percent of venture capital. I think this the flexibility that I think venture capital is a great example of reflexivity. There probably are many examples of signaling and signaling. There is a great kind of job that ecology is the one field where we have a lot to learn from.


So I keep trying to read about ecological principles and significant water ecology. And I think the economics has a lot to learn from ecology. And so I think certainly is something that I think we do. And I think signaling through capital investment and the fact that a prestigious name brand like putting in the state can actually kind of create like that, like the virtuous cycle sort of sea of more money, better talent experiments, better metrics, money and so on and so on and so on.


And yeah, I completely buy what you're saying.


Let's actually talk about investing and sort of this almost implicit assumption that many people seem to have that startup as a startup. All startups are the same, which is of course not the case. Now, it strikes me that because of the VC model you're doing, in a sense, what I used to do in Pocho, where you have an edge, but it's a very slight sort of real easy edge. You have to put in volume and you don't know, you know.


And InFocus, an interesting study in a couple of online sites once look. A set of a few million hands and found that the people who win the most hands lose the most money because it's not about how many hands you win, it's about how much you make of the winning hands. And that's a little bit like it's a little bit like the VC model where you're investing in 20 firms and, you know, 12 of them made four of them may.


Okay. Orchids, one of them that will go one hundred two hundred X and make some money. And therefore all of them have to be chosen according to their capacity to make one hundred X. So what you're looking for is that sort of that super scalability, as it were, that this has to be able to grow hundred x I loved in one of your presentations, you used a code by Benedict Evans where he talks about how much that money is like rocket fuel.


And so if you're building a rocket ship, you need the rocket fuel. But if you're building a lawnmower, you don't. And your whole point was that, listen, we are funding a particular kind of startup which can only scale that much and therefore you should not judge us by the standards of other startups, how we do valuation, how we kind of figured out whether investing in them makes sense or not. Our parameters are completely different. And most people, especially in the media, for example, do not get this.


So can you elaborate on this a little bit for me?


Yeah, of course. There are many founders out there and many entrepreneurs. So if you started this term, you are an entrepreneur, you are a founder and full credit to you. It's a tough business. How there's a difference between found that we fund and infrastructure. OK, so the difference is that we are trying to discover scale. We are trying to bet on someone we grow very big and who will also take advantage of. Take a look at these and these two combine the reason they combine this that has very interesting property.


Once you write code, then you don't have to necessarily write more code to serve. So in Facebook they have a new joint Facebook. Mark Zuckerberg minions are not sitting inside the cave. If you like one more line of code because this new person is coming that could Gorski's. Whereas if you go to a restaurant and you ask for a Doussa, there is someone who is actually taking out the back door and putting it under the signal and picking those up.


So what is interesting is that businesses have high fixed costs, but the variable cost of serving next Christmas next to zero. So there's a tendency to drive scale because scale brings huge profits because you costs which legitimacy. The other interesting thing that businesses have is the cost of acquiring the next customer tends to zero effectively because like affects everybody is on WhatsApp. So I mean WhatsApp too. So whatever's not spending money on the next customer, the more customers it gets, the more easy it gets to acquire.


So these two necessarily mean that it typically tends to skin and scrape, you know, scales both the service and the customer acquisition. And so as the businesses grow very fast, very large, and sometimes there are genetical effects, that one company just runs a major success. Sometimes two to three companies can survive. Now, the fact is, venture capital as an asset class got product market fit in its own way for these kind of tech companies. They were semiconductor companies and the software companies, etc.


. So as a venture capitalist, self-selecting for high growth and high scale high tech startups. Now, there's a note along the way in the 60s, 70s with venture capital was being discovered in the US, they hit upon one very interesting kind of know what the word is part of the Discover venture capital as a very interesting political act. If you invest in twenty twenty five companies. And in part one, if I should succeed, but I end up in that five or six just fail 10, 15, just muddle along and five, six will do really well for one or two companies that do so well that to make up for the sins of all of that.


So basis, these two venture capital started and the finance gets fundamentally once they discover something interesting, something that works, that is more of the same. Now, they can have said that, hey, this is interesting asset class that has this property that if you go after these kind of high tech companies and hence not scale, very fast scale is very important to us because that one company has to grow so fast that it makes so much revenue and so much money that it pays for everything else.


So scale matters. If the scale property is there, then the power can applied. One can do well and for all the sins, which means every company we select for has to have that. And I love obviously about Pokot that it's not the number of hands you want. And how much do you win? That's absolutely right. So they're actually very interesting models out there that we talk about how the more successful funds and we fund is for 10 years.


We raise funds every three to four years. The interesting cycliste, the Yosemite Lodge, the next one, but typically everyone years in every fight, typically 25 to 30 companies, sometimes more of them, since they found one very interesting thing, which is very similar to what you said, that the most successful farmers actually had very few of us, but they had concentrated winners. So like the Facebook won the actual fine, which on Facebook with so much money from Facebook that they could have just the last two weeks.


I wonder when you and others really lose one, next two and yet would have delivered the most successful front of all time. So I am completely in agreement that what you're seeing. And so now coming back, hence venture capital is a protocol to discuss. Risky venture capital is a set of rules, norms. What are we called? By which we kind of discovered high skill companies, and that means that they are very good business out there, which probably make money like a printing press or whatever we call it, but they don't have this high school quality and which means they're not suitable for venture capital.


So we don't get a lot of pitches like twenty. Twenty five percent of a picture are very interesting businesses, language schools, publishing houses. And I kind of wish once in a while it's very hard to explain. You know, I like the sound, but maybe I haven't yet completed the play, but maybe I should make it a political play now. That it's a great business, but these are the qualities of the business that you're looking for.


And so so I would say amongst all that venture capital is a very narrow subset of high tech and high skill. I would try not to do anything to commit suicide, but you can kind of share with you and you can kind of link to and a venture capital is just that one narrow sliver. And but as in some interesting innovation is now coming in into like, for example, new models of venture capital are not exactly venture capital. But I like to talk about revenue based financing, for example.


So they're saying that, hey, how do you how do how do you create. How do you make it easy for a small business to get capital? They will have go to the bank or they go to connect. How do you make it easy? And so that interesting innovations coming out of the fact that venture capital is going to it's growing very fast, but it's not relevant for that. So we're going to see a lot more innovations in these alights.


So I hope and I've given you a sense of the industry, and I know that that's going to be absolutely fascinating.


And you've also you know, you wrote a controversial Twitter thread recently and you spoke about valuations and you pointed out that because of this facet of, you know, what a venture fund does and the kind of startup start it looks for the traditional accounting has to go out of the window. You have to figure out a new way to sort of value a startup.


Tell me a little bit about this, because it is this conventional folksy wisdom out there that, you know, that there's just too much money out there. Venture funds have gone mad. They are just funding companies which have absolutely fundamentally they don't make any money. They don't do anything. Why are they doing this? You're creating these massive unicorns.


It's all a big scam, but it's the truth. It's not quite that. So tell me a little bit about, you know, how you look at it.


Yeah, the fact is that. It is hard for us to think a set of protocols, rules, norms that came up in the 1940s and capitalist gas and the kind of company that you want Moslehi skin, it's like a cement company started small or had enough capital and CapEx, for example, can be capitalized. That that's the stage. So, you know, industry doesn't show up on the profit and loss, the balance sheet. But what has happened in the last business that has been more and more spent on intangibles?


Now, the problem is intangible says you can capitalize like, for example, that is a company that we've invested with assets to, for example, it incorporates and certain kind of situations. But the fact is that the company adopted the detail of its users as thumbs on this. Now, they kind of give an interesting stat that, Anderson, and that they got down 73 percent of all computer science engineers graduating out of India. And I was looking at this in on what one of these companies will get 100 percent.


And that has value. And I sort think I can share that with the balance sheet that there's nothing about it uses, because we know in an industry that if you own one hundred percent of the town, all the students that can be monetized by selling them new products or selling the data, of course, ethically. But unfortunately, the rest of the industry, it doesn't allow me to kind of capture this. So I sell the venture capital industry said let us develop our own NOM's metrics, et cetera.


But hey, we want to publish it because just all of us we understand and is actually interesting is what book. But Alex Dunkel wrote this wonderful piece called VCI Bridge, which is the one thing I'm jealous about because I tried that bridge in the middle and I actually said that he can bridge is very similar, but he wrote this piece and I'm immensely jealous of him and that businesses can have something very interesting that if you have to kind of look at the bridge convention, the bidding conventions, in many respects, because I what's of these conventions, so to speak, to evaluate and bid on this thing?


And the way we've kind of evolve that is to create an entirely different kind of framework. So we use metrics like IRR, which is annualized revenue, because, look, if a business is growing. Fifty percent month on month, two percent, that's next month, it's 50 next month after do that, maybe schools are under 40 that. If I were to look at last year, because it's zero, so, I mean, how does I make this that if you actually go to a company like L.A. last year, because industries are largely somewhat routine as much as the industry with so much is changing with and revenue in this month's revenue and multiplied by two at an annualized revenue.


So, I mean, I'm simplifying it, but there's a lot of these markets that the much bigger you elect if you're so much active user.


So you have kind of kind of kind of created up that language, parallel set of frameworks to evaluate and understand these companies. Unfortunately, what is shouldn't in a balance sheet is not terribly useful going forward, because in that venture capital is actually kind of like fundamentally it's a bet on the future investing in a company. And I'm seeing that 18 months from now. It could be at this stage. So what it was passed matters, but not terribly bright.


So probably rambling a bit much. But that is the reason I said that venture capital is not all businesses and venture capital is a specific set of high skill, high tech, high growth businesses, which means venture capital is. We talked about how venture capital companies have a lot of intangible investments which are not easily apparent. Language of accounting as it was developed can capture it as a result, he said. Venture capitalists and startups have created a parallel capital, a set of intellectual and verbal and mathematical angles to kind of make more sense.


Increasingly, the world is now kind of split by what has happened is because venture capital has become the sexy thing you're seeing, because all of us are using venture capitalists, product, start products, etc. Everybody thinks venture capital companies have happy with the same metrics that they're not. It's a very different world. It's just that they have been changing impacts of these. Everybody uses Google, everybody uses Facebook, etc. And we get that. I think we get the coverage really doesn't matter for us how it's covered back.


And I was really reacting to, like, I think it's unfortunately quite a bit out of hand. But as we react to the fact that there's two different worlds out there and all the different actions and you can judge this work by the metrics of that work. Yeah, I couldn't agree with you more.


I think one example you gave at one point was that if the first person who invested in Uber was to judge it by the amount of people who did not hail a taxi by raising their hand and saying, cabbie, stop that, then, you know, because there's no prior you you're really betting on the future. And in that sense, it's a lot like Google. It's a game of probabilities. You're betting on the future. And with whatever information you have, you make the best bets that you possibly can.


And it strikes me that it is vital that somebody does right. That you know, you know, otherwise we can't, you know, how do we even progress? So I completely buy. Now, another question. You know, I won't go too much through sort of the methodology of sort of the flow of how, you know, a company goes from seed funding all the way to IPO or wherever it goes. I mean, I've done an episode before on the startup ecosystem with my sit down, and he outlined this a fair bit.


And I'll also link to one of your videos on YouTube where you'll go through the whole process with the PowerPoint.


What struck me there was that in many ways at each phase, whether it's if you're the seed funder, you're obviously not taking the company to IPO. You're taking it to see this one. If you're the serious one guy, you want, you know, five out of your 20 companies to get to Christou and so on and so forth. Now, it strikes me that this might in some way affect the incentives as well. Now, obviously, in many ways, you know, if you were to see this one guy, the crystal guy, would be looking for all the things that you want the company to do anyway, to find that product market fit and so on and so forth.


But at the same time, you might be playing as much to perception and reality.


You know, if you have a sense that these are the values of S.O.S Bank or the Sequoia or whoever that is for you down the line or whatever the general community might look at, while there might be other possibilities that exist for your company in question of growing in a different way, do you think these incentives become a problem where you're sort of looking for, you know, what the next buyer down the line might want? Like some uncharitable folks have even described the whole thing as a Ponzi scheme.


You just said to the greater fool down the road. Now, it is obviously not that we live in a world which is shaped by technology and venture capital. We are speaking today because of it. And everyone who is listening to us will be listening to it because of a world enabled by both of these. But our perverse incentives possible. And is there something that you keep in mind when you're, you know, sitting with the founders, helping them with strategy?


Do you just keep the ultimate growth of the company in mind or do you keep Christou in mind at. This is what we need to do to get serious, to know this is a great question. It's actually a fantastic question and actually biting and trying to answer this question.


So the most interesting thing is that so you talked about Sead, Chris Christie, you know, all of it.


When I feel the fact is you're absolutely right, then I must admit I don't know if it's going to be an IPO. I hope for God sake of an IPO seven years down the line has worth changing. Impact makes a lot of jobs, makes me and the founder lots of money. All of that is true. But the fact is, the way we do structure and there's a reason for that, I am the best understanding of risk from sea proceeding CDC.


So Blum wants to say that we are fundamentally about understanding and taking a company from seed to Chris. We understand this with the best. We understand see the same mindset. We know that they need a market for credit markets. That means you need to make a product which is which the customer think. Plus, there is a clear go to market and a bunch of other things. So we know that and we can know what it is. We giving them money, all the money that they need to go to cities.


So we give them one million dollars or two billion dollars or whatever it is, we take our 40 percent stake or 50 percent stake and we say, look, here's the money. Go run experiments, growth experiments and skiting experiments run the state.


In 18 months, we broadly know that you need to hit if it's an active company, we know that our company, you know that around a million dollars, you get your good with a certain kind of growth velocity and we know it so well, accepted norms, conventions, sort of celebrity conventions, they want see what it means, etc. so effectively when we can find them maintaining giving a signal.


So Sequoia also has a company that looks in the suit and its pipeline. So it's saying in this company. So that's a signal that goes to the market that 12 to 15 months down the line will get in and out of one million dollars. So now the start up then says, hey, let me take this, let me run this experiment. So start startup Fire-resistant does as the markets not as large except by 400, 500 gates, not able to grow enough excitement in the market.


Typically, what happens is if the good founder one does have high opportunity cost them earning 12 15 Lache trying to make this work, that batch meets with the same batch of computer science equity or whatever, only to turn off groups working in a hedge fund or working in Facebook, etc.. So this is what I'm doing here. So now look at this. What we are actually telling you, there's no stigma to failure, but we certainly want them to feel fast.


Filibuster is very critical because you save a lot of money in 15 months, it's very fast and typically a lot of the times and the fail fast, we actually there are cases where some startup founders are growing very slowly and like, for example, gum roadside buffalo, which I have scheduled down the street and all that. So in those cases, the venture capital business sold it back at one dollar or a little bit on the stick because you're fundamentally saying, hey, take this, it's not for us if you don't need money.


We already make money in other things because of the problem. So you please take it and it's fine and to feel fast. We certainly want them to stress and feel for us because that opportunity costs. Right now they're running at 12, 15, 20 lacs, trying to build something that they match needs and order the same program to take the computer science program of setting it Google or Facebook or a hedge fund. I'd like to do enough growth, et cetera.


And they're thinking, what am I doing in my life except skating, etc.. So at that point, sometimes they come back and tell us who is going anywhere. And I want to just take a peek. Mentally tired. So we have a couple of fun to scream at the city. We've been building this for the last two, two and half years. It's been struggling and it means and I just want to breathe. I want to be with my family.


And that's perfectly fine. We get it right because we're playing the infinite game with them. If we make it very hard for these photos to make their life miserable, they'll go to the market and their friends blow on someone in a very unfriendly tomorrow, for example, with their friends building the great business. They don't want to it to me. So what we do is we then we solved this by removing all kinds of stigma and generally making things it very comfortable and distinct to the extent that sometimes you've got the business to them for like a hobby or even just what you know, because it just doesn't make sense.


Now, this is very important. So there is an infinite game being played with the founders where it doesn't matter, actually. Very interesting. Sometimes the founder can actually make no money for you, but they get more different. And that's happened to us. And that referee turns out to be. So if you don't play in the infinite game, then you will not have this happen. The other one is a game being played with wishes down the line.


Like, for example, for a week down the line is a classic we see like a matrix of these days or Sequoia or something like that, or even the classics like a Northwest or Bessemer that actually looking at these eight guys because the pipeline comes from there. Historically, there is a brand that we object with them because we've been playing the infinite game with them because they're the best prices of risk and the best understanding of risk. We complete from Series B to C, C and D, they are the guys who say, hey, you're going to see these B now we need to have a proper staying in a certain place.


You have these policies. You need to prepare for an IPO. You're going to see off of the scalpel. They know that you don't know that would work in a venture into being they know how to understand it would. OK, so now what happens is if I overprice something, if I bring them and give them a stake tomorrow, they're going to say we had a bad experience with these guys. These guys give us the single once a minute.


I don't want to touch them. Boom, I'm shut out of that because tomorrow I think my companies to that. So over time, protocol is the most. And I keep using the word absolutely for the word by which we've agreed on a bunch of rules saying I will bring the best companies to you, I will not price it. I will not create perverse incentives for founders. I will not take a very large stake like 40 percent, 30 percent.


I would take a reasonable stake, which I found it gives in the game so that you have enough capital, you take another 20 percent, so that each day you get that twenty five percent, so that by the time of the night, beautiful customers, eight, 10 percent, seven percent stake. So all of these so it's like, oh, gods of the world. Well, not of interlocking things, except that I don't know what the right word is, but it is not a Ponzi.


It is a Ponzi. If I'm just selling to him and I'm walking away. But in this I'm dead tomorrow I'm under the investment company, which I have to give to that person. So people will call it Ponzi. I don't think understanding how it works. These are infinite games being played between two parties and these are the best kind of games that we want them to win and they want us to win as well. So I would say that typically for your readers, I think, but typically from an every stage, from a seed to series one, typically there are clearly a.


We need metrics like SUV sales or five to seven million dollars sales be supported. Fifty million dollars. Typically, there is a clear benchmark for what kind of valuation happens. There are clearly agreed they are being revenue Norns. And that is a very clearly understood set of conventions within the industry and which is very democratized. Once you come into the industry, you would be getting all these things because everyone is just get and you get it fast. The faster you understand this, the less time there is.


Unfortunately, we don't have a lot of time to spend trying to talk and a lot of things change very fast. So that does create a set of issues. So, yes, if you roll this out fast and if you spend time communicating, that's fine. But there are no incentives so that visitors can communicate to what's outside because it really does matter. Yeah. So there you go. Yeah, no, no.


It's all very fascinating. And eye opening Internet protocol, I guess another word, the word that came to my mind was convention.


So, you know, I don't know if that convention is good and sort of conventions, you know, and just thinking aloud, what also sort of strikes me is that No.


One, you are right that playing an infinite game changes the incentives radically. For example, if I'm going to the same restaurant for lunch every day, I am much more likely to tip well. I am much more likely to not misbehave with the waiter. So, you know, he doesn't spit in my food every day. All of those incentives are there because it's like an infinite game. I'm going back. It's a repeated game. But equally, the interesting thing is that we have evolved where our genes are playing an infinite game, even if we aren't, as it were.


And which is why, for example, when conventions like the ping evolve, even if we are in a city where we know we'll never come back to the city, will never come back to this restaurant, we still will because it is the right thing to do. And it strikes me that there are ecosystems which eventually reinforce such conventions, which are the right thing to do in their ecosystems, which don't reinforce them. Like it strikes me that, you know, I've often chatted with different guests on the show about how, you know, while I think Jagdish Bhagwati first pointed it out that China has a profit seeking mentality, well, India has a rent seeking mentality.


And certainly I think it's true in, say, India toward India three where you are out to, you're looking to scam someone, you're looking to exploit someone. You think of a wealth as a zero sum game. And the point is, you can't blame those individuals who think like that or you can't say that this is our culture. My own thesis is that these conventions and this way of thinking evolved as a rational way of thinking because of the institutions and our systems of government, because for so many decades after independence, we had an all powerful Maibaum state.


And really rent seeking was the optimal way to actually make some money where there weren't other opportunities through voluntary interactions. But anyway, so that's that's a random aside from me as well. Another question. I know I'm taking a lot of your time, but another sort of question I wanted to ask, which I think for a lot of listeners who wouldn't already know, it would be quite sort of fascinating is on the on the term product market of it, like you've referred earlier to this old essay, which, of course, linked by Marc Andreessen.


Very. Which is called The Only Thing That Matters, where he talks about how, you know, there are sort of these three aspects that venture capitalists can look at that what is a team, what is a product, what is a market? And to him, only one of those really, really matters. The others, you know, don't matter so much to expand a bit on that, especially because India is particularly fascinating regarding the aspect that matters, as we've already spoken about in terms of India, one, India, too, and so on.


Yeah, that's one of the seminal essays that sort of deaths squarely in the stack up. And it's a market that it's it's self described and there's no clear definition of it. But fundamentally, it means two things. One, that there is a strong customer problem, a problem that is important enough for the customer to be. This product or the solution that you've created a technological solution solves for that one. And. This is a customer part of it, and that's a product to market, part of it is that this product now can be there's a scalable monetization model in place by which you can see this product fits a Mets need.


Well. OK, now I'm one it and magnified in the whole of Bombay and all of that. But I love India. So there's a real playbook by which I can rinse and repeat. And I have discovered that these times, this approach. So let's say I'm a user of content marketing, plus I will use a subscription method and to acquire customers and amortize them, that broadly will help us covid so, so broadly, the product and the playbook would need to be kept in place for BMF to happen before this happens broadly, but is an important one because I bmf something interesting happens after BMF if I invest in the growth machine.


So to see the sales infrastructure and the customer acquisition. So there's a customer acquisition, customer servicing, AQUATA, customer service, the customer collect the money and then kind of that to the machine I want to be invested in the growth machine won't necessarily give me one point one X or one plus, but once BMF is hit and be in, that gives me incremental money back. So that's very important. And so so the second part that you're talking about is a two with three buckets, which is a team, product and market.


And those are evaluation frameworks for us in the venture capital world. And team, for example, is the single most important one. That team, when we say it means really the founder of the quality. How good are the there's also the team like set up with a problem. For example, if it is something in its Arctic, for example, and these founders know the domain or they have worked on problems like this before, that is like a team found the market from an effort to find a market for their product is really the solution.


Market is actually the most interesting. One has multiple meanings for people. I used to be very market focused and it's interesting that there's a whole philosophical divide between founder of a team first investors and market first investors. Sequoia famously is about market first. And for example, Arthur Rock, who invested in Apple, was only the founder of all VCs. Balance it out, but fundamentally a better way to describe the market. One would be I would see problem.


So how big is the problem? And and the product that's created for the problem be expanded enough, like, for example. So what it means is sometimes problem itself, maybe not as large like my captain is a great example, coding not the senior people in Manhattan or down to coding. But if let's say this coding thing works and you communicate, you communicate to the rest of the world that I can create a brand, this wonderful tweet which went out and all great brands expand the definition of the consumer like Apple says you want to create.


They can also you want this. Steve is getting knocked off with that Apple logo on it. Nike sees it as an athlete. So you expand the definition. So so you've been able to understand the problem. And so I think for the better from the under the universality of the problem, is it a problem that just so very large market, but is a universal need and do that you need and then it can be scaled across the world? And so I think my learning has come to that.


And today I would probably get to define it that way so that these things, product and market, are the investment criteria that we employ. And increasingly the early stages of the product quality matters, which are interesting, the head of the product. So then what does the problem and how you solve the problem is? And yeah, so I think these are I hope I've been able to kind of give you that picture, you know, that's fascinating.


And you know, Anderson, the CEO, of course, is there. The market is the thing that matters. That's a non-negotiable. The rest can be solved if that there's a product market fit. One of the fascinating things that you mentioned was about how a good brand can expand the consumer of it universally. And it strikes me that one of the areas in which you've spoken of being a focusing right now when you guys are investing heavily in debt is a tech or education technology.


So tell me, what's the vision of that? Because on the one hand, we I mean, our education system is kind of broken now. It's broken in multiple ways. One, it is, of course, broken and delivery, which we all know that. But people throughout India aren't getting good education. It also strikes me that it is broken in terms of conception, not the conception of what a good education should be is an early 19th century conception that these are the subjects we learn all the way through school.


And this is how we kind of do it. And it seems to me that when I look around at sort of the tech start ups and all of that, they all seem to be solving more for the first, which is that you find different ways of delivering the existing conception of education and not so much for the second value, having something disruptive. Because to me, one of the fundamental problem with education in India, and you are, of course, a a lot, lot more about this than I have.


So forgive me if I'm so naive, but one of the fundamental problems to me about education in India, which goes beyond delivering into conception, is that people who do get educated in India do not have any skills that are of any value to them in life, which is why you have so many thousands of bodies will apply for, you know, a vacancy for one billion. And that seems to be a deeper, fundamental problem, which also requires disruption.


So tell me a little bit of your view of the space and what makes you so passionate about it.


Yeah, so I think I must say that what makes me passionate about space is that it's one of the few products where there is a almost universal willingness to be and you can't say that about too many products. It's one product. And I and many others liken it to what e-commerce is to China. Some sort of tech is the one which can kind of pull that bad economy of startup economy up. And we've seen about 15 percent of our pitches that educational.


And it's it's it's interesting. I do agree with you that education and the one what I would say is one thing it is doing is largely classified as being sort of access new ways of delivering and talk, like I said, best levelling or flattening the field, so to speak. OK, so to say that classic example is if I'm in Delhi or Bombay, I get access to very good things. But if I was growing up in Sethna or erode and you know, I'm really dependent on how good the teacher then is, actually, thanks to online I can get access to.


And we saw historically how the web is a microphone, right. So you can talk to someone can skate. So Wharton and Academy or a top one or two, all of them have done is really make that feature available. And so it's really all for access and it's all for access at a decent enough quality, sometimes even better quality than what you get, but it's online at much lower price. So this access quality price is largely what the most successful Indian companies are going to do.


And what they've done is really take the content structure, the content on the phone, make it easy, etc.. So all of that is true. Yes, we haven't been able to kind of really rethink education, and I think the reason for that is, is a very highly regulated industry. And so I think India is maybe one of the most influential education in designating products. And I think it came across as a wonderful opportunity to have somewhat limited.


It talks about how India is education is getting you just want X number of people. And I think, you know, I'm fascinated by this that you can you describe as a great economy. There's about rent collection. And I think it's something to do with the fact that and again, it would be interesting to talk about how wages are so high. They do not have to employ a lot of police. Case to state capacity is not the because I'm glad we had such a theory around it.


But fundamentally, it seems to me that that is a almost a need to have enough for certain parts of the economy or certain parts of the job market or certain parts get it and kept out so that we have this for ourselves and we can compete. And what we've done is use either cost or English as the new cost marker to kind of keep certain parts of the economy to ourselves. And we find new and innovative ways to kind of keep the economy out of the huge number of hordes of masses supporting it anyway.


So for various reasons and the fact is, yes, there will be no evidence that that's coming. But the challenge is the people been. I'm very happy to compete within the boundaries set by the state, just competing with getting the movement independence, and at some point we'll see that they see we want this kind of approach that they'll be informed is willing to do that then, I mean, for those of great innovative products. And we begin to see evolve into one products, which is very interesting.


If, like, for example, like my daughters, then of course they are two children, but I can't see them sitting and in front of me to give them the energy that is required, the hunger that is required. I don't know. But then it's like hunger in a small town, India, but different of it, and get the feel of a creator the right way to communicate well. They know what means work extra. And when they apply to US colleges or UK colleges, increasingly what is important for them is unit that provide the reality for listicle and.


That, for example, you need a lot of this, you need to be good at telling you to be good at math and coding, et cetera, et cetera. So a lot of the stack up to the coming out to some of this community is actually what life as a CV they want you they can offer you critical thinking. And so there is some innovation happening. Home schooling in the US, for example, having this interesting startup, because that's just three percent of the US home school for religious reasons or safety reasons or whatever, they can go to it being very interesting.


Innovative products come out that they're seeing that I'm a teacher, I forget the name of the startup, but it's saying you want to create your own board, which is giving a boost to that. You create your own unique waterflood for blankets in your neighborhood, really give you a teacher. That person will come online and talk about interesting stuff, etc. This talk about probably they use that as a way to talk about what the dinosaurs and stuff like that and make learning interesting.


But it's sort of like a suspicion of the rich from what is being taught. They can also education. This thing will break down not so home schooling and sports like home schooling and steroids and teach the kids. But now that's an interesting feature. The best teachers, these are being carved out and they will up of people. And sort of the thing that's happening is much more of the US and India has been literally fondness, innovative on discount. If you very never do a distribution chain to China and India are great examples for getting the nine million.


Take that exam every year. If you're in China and, you know, success or failure of one marketing department, which university would win what you become? So so some countries have this challenge. And in getting a lot of innovation, because the state is so strong in India and China, a lot of the innovation has been around. Distribution and access set has not been done on the product in countries. Let us believe that the state is weak in education, like veritably like.


So there has been a lot more innovation. I'm very hopeful that in India the customers are willing to pay. We will likely see a lot more innovation. So that's what's holding us back is my view that they can only do so much. You know, it's very poignant, I mean, like you said, that, you know, Indian parents are willing to pay, but they're willing to pay for something that will get them further within this gated system, within the system of selecting and sorting rather than actually educating.


And it's working because, you know, for years we've had so much literature on how the poorest of parents, you know, definitely from India to win, perhaps from India, three slum dwellers and so on, people who work as domestic auto drivers and all of that, instead of sending the kid to a free government school to be a little bit, which is still a lot for them in terms of proportion of income to send their kids to a budget private school.


So there is that hunger. So it is at least good if there is one. We give it to companies which can figure out a way to solve for that hunger before you can go further and talk about changing the system. And thirdly, coming back to that about the problems that a big state can create and obviously in the field of education is perfectly obvious because this is the route you have to follow. But in general, what does the environment like in India for venture capitalists or just the regulatory environment and having to contend with the state and all of that?


You know, is it harder than elsewhere or do you have to account for it in all the investing and valuations you do that there will be friction with the state. Is it greater in some areas than others? How do you think about it?


Yeah, I would say that there is I mean, in the sense that there are actually irritants which come up like the injured tax was. One of them will go into too much of the detail. But effectively, it created a lot of hardship for startups, which took money. And they're faced with like, you know, like large tax bills. And there are occasional challenges for certain sectors which suddenly see regulation exits. Upward mobility is one. And but by and large, if you are in the digital space, that is largely intangible, that is much less of a regulation.


It's a little bit more like fintech is one that patristic. Also strange that the government actually becomes an innovator in creating the Investec and the two big innovations, both of which happen for the year of each of the 16, 17 and Giel and the they effectively. So and if you look at the two, the two of them really give wings to the startup economy, because if you look at it for the economy to take off, you need like three conditions that this Chinese talking to me, that you need a smartphone in every pocket you need, like the bandwidth so that can consume and you can watch and find the frictionless payment system.


So suddenly, over time, the bottom to gain thanks to you and the investor. The first one wasn't even happening. And so so it'd be nice to give banks to the startup economy so the state can also benefit you in that sense. And I would say that's that's helped our recognition. We do mean the startup ecosystem does have dialogues with the government because the startup ecosystem has been one of the shining star. So to see and give staff talking points and there are lots of them.


And I mentioned something interesting that of founders once said that there are a lot of bureaucrats who said in startups are, you know, and so so they also understand the challenges, etc. and they understand that something interesting is happening here and sort of startups today. What would the premise of Infosys wants to work? So they are supportive. There are, of course, irritants. And, you know, and I mentioned Angel, Texas one and all. I would say that this is not other than this and certain sectors which are highly regulated like morbidities, one fintech is one.


I don't think that is a lot of regulatory overhang in that sense, or at least not negatively what they've tried their best, including this gift SIPI that's come up. It's trying to kind of help us in creating more startups to kind of have an office there. So all of that is good for on the whole, I would say that thanks to the fact that this has been a success story, a lot of it is intangible in digital. So it's it's hard to kind of list what it's being broadly able to support.


I mean, I'm probably not the best person to answer on this, at least for the sectors that I handle. And this one does very little. Everybody, what the government is trying to reach out. I get a lot of emails from investors and folks like that wanting to kind of engage, etc. I typically have to buy a part of my. So I can get into it, but so broadly, I would say that the good points and there are some irritants, but on the whole I would say probably good, excellent.


I've taken enough of your time. So I will. And, you know, we could just continue having this conversation for another hour or two. But, you know, perhaps we'll leave that for the cities episode sometime.


Let's consider this episode a final question. You know, tell my listeners about what you do. You know what you do. It bloom. What are you interested in? What kind of ventures are you looking for? And you can, you know, should they write to you? And if so, with what kind of ideas?


So love to hear from your listeners. My email ideas speak for such a fine speech at Bellevue immediately. See, it's very short. You can write to me and also you can also do me on on Twitter and LinkedIn so all channels are open. So I would say that blue in the face of what it would look at blue. I'm 20, but I'm also involved with certain other functions. I think about marketing a lot in bloom. I also write a lot.


So I'm sort of like the content man inside. No, I must have a certain set of skills, so I take exactly one of them, Agritech, the senator, and then a few B2B sectors which I focus on. You can practically with any if I'm not the right person. I forwarded what typically we've seen this idea. So and there's actually a great fun and street podcast episode, which I can share the link with you and I have to say it and I send it on ideas execution.


So do actually mean nothing actually. So we don't fund ideas, we find ideas in action. And the reason is that it's like it's actually the part of that idea. Getting at least an MVP in place at is getting some customer feedback. That's the speed at which we think we the right people to talk to. If it is just an idea, then I think you should just at least build something. And I don't think ideas on stage at which you.


Right. I probably reply to you for sure. I if you like it. But increasingly it'd be great if you reach out to me or are blue more typically we see. Do we see when I think you have a minimum viable product then you understand, for example, let's say you the A service like you want to hire people, but you find that the best thing that works is the difference and you want to create a process of having the opposite.


I want to call someone, press three buttons and two different will be done and it'll come back to me. That's it. So you certainly don't want someone coming this idea. So what you wanted was to build a basic product it doesn't have the most detailed work can be messy, but at least has injected one to customers and one person with the copilot. Dickerson So that's the stage at which I think it's best to contract. But otherwise, you know, I'm very happy to answer specific questions.


A, people reach out to me with very specific this you can help me. So sometimes it works. So that's what I do. A lot of my time is spent writing and thinking. And like I said, writing is a medium in which I express my thinking. And I think I have the most interesting job in the world. I get every day I wake up and I get emails which are postcards of the future, their visions of possible startup, possible worlds.


And I feel like I'm at this vantage point to look at and see all of these different visions of reality. Which one of which no, not I don't know. But and so sort of this vantage point, the future is what makes, I think, my job so exciting and so interesting. And I just wish there were more hours in the day. Yeah. So so they were. Thank you so much for that. That's a fantastic phrase, postcards from the Future, and I feel like I got a postcard from the future myself during this episode.


So thanks for your time and insights.


Yeah. Really enjoyed the summit. Thank you so much for having me.


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