The Exchanges

Q That's fascinating. I want to go back to something you said earlier too about Um, how business helped you understand what the value of something is, and more importantly, what people were actually paying for. Are there any examples that come to mind when you think of that as a child?

A So I'll talk about three, four businesses that I did as a kid, and this is all before I had legal age to do anything at all. One was, uh, I built, uh, mixtapes which are downloaded music from the internet and made mixtapes for people on a CD and burnt it and give it to them. And I use somebody else's computer, somebody else's internet, because I had no access to any of these things and I would give them take rate. But I realized that people love the idea of being, making something personalized versus buying something from the store, which is mixtape of somebody else. And, and the idea of gifting They were okay to pay three to four X more than the normal mixtape that you would get from the market, because this is made by me, right? And, and I was very happy with this guy. So what I did is I started going to all the music stores and I said, I will make the mixtapes for your clients. This is my price to you. You can charge whatever you want. And they would make five X more profit selling my mixtapes than the music labels. And I understand that business was not Really legal. But as a 15 year old, I did not know better. I had to survive. Then I built another business, which was, I realized that people put henat to really differentiate themselves in Indian weddings, to really look better than I have the better design on my hands. Like, it's almost like a temporary tattoo that people …

AI assessment note: “So I'll talk about three, four businesses that I did as a kid”

Q You're on your second big startup now. How did we get here? Walk me through your first and what you're doing right now, and then we'll pick up where we left off here.

A So my first startup I built from 2010 to 20 15, um, probably the largest exit at that point of time in India. And that startup did the following. It, it allowed people to recharge their mobile phones. Uh, in India, 99% of connections are prepaid, which means they are not on any plan. People refuel their, this is again a low-trust society. Nobody giving credit to each other. So people just top up money. And use it and then top up again. But none of that was top up was done online. So I built that platform. But what I did is I allowed people to get some vouchers of retailers for recharging on our platform was called free charge. And it took off in a very big way because again, value of time, oh, I'm getting some incentive. People actually chose our platform versus going to somewhere else. And because it was more efficient, people just shifted in that direction. What I realized that I was going for the mass market through that, but it was impossible to monetize. They just did not have any money. So After I exited the first company, I spent a bunch of time. I was, uh, advising multiple companies, joining the advisory board or board. So one of them was a media company. Uh, one of them was Sequoia Capital. I spent a bunch of time understanding investments, and I was also angel investing in left, right, and center. I was probably, I'm probably an angel investor in maybe 200 plus compa…

AI assessment note: “So my first startup I built from 2010 to 20 15”

Q I want to go back to some of those human frameworks in Delta IV. When you're making an investment decision, what are the top lenses that you're thinking that through? So one was sort of the Delta IV framework, which we talked about. Well, what are the human frameworks that you're, you're thinking about that? What are the lenses that add the most value to your sort of filtering system?

A Yeah. I mean, it was more of a motivational, uh, lens, uh, but, uh, applying human motivation as a core loop, but there are other things that make it easy to detect startup success. For example, uh, a lot of founders who pitch to me are usually well prepared and make a presentation and come to me. And so I tell them that, Hey, I don't understand English very well. Can you explain this to me in Hindi? What does it do? Founders who really get what they're doing can switch language without a problem because they really get it. And language doesn't change anything for them. Many people who have just prepared their presentation and not really understand this very clearly, they struggle with the language change and their pitch goes for a toss.

AI assessment note: “I tell them that, Hey, I don't understand English very well. Can you explain this”

Q Do you think you get rewarded for creating almost like an asymmetry to creating an emotional connection versus a different type of value?

A People pay or people give you time or money where their core motivations are mostly met, or there is a hope for their motivations to be met. Let's take this example of, like, just imagine this. Let's say all of us are on some level of social status in life. Let's, let's say, Shane, you are at level 90, I'm at level 60, somebody is at level 200, and so on and so forth. And let's believe this is true. Now, products and services are also at some levels in life. For example, I would say Louis Vuitton is at level one 60. HBS education is at level 200. Let's imagine these things, and let's say fueling your car is at level 30, and so on and so forth. By design, gross margins exist when you allow human beings to jump their social status. And gross margins disappear when you do not help them increase their social status. For example, I will keep moving to a utility provider as long as they keep offering me lower price, as long as the time required and effort required is the same. The department of your brain that deals with that is the CFO of the brain who's only looking for cost cuts. But the CMO of your brain is saying that, oh my God, if I crack HBS, and I will be able to jump the social status, and my income will multifold, and therefore it is okay to spend years, time, money to get a chance to get into Ivy League, And therefore Ivy League can keep increasing the gross margin with n…

AI assessment note: “gross margins exist when you allow human beings to jump their social status.”

Q Yeah, I think that is. You mentioned Maslow's hierarchy of needs was different. Can you elaborate on that a little bit between, uh, the US and India?

A Yeah. So, uh, I, I actually Googled and I found there's an, I thought there should be any separate Asian Maslow, but in fact, there is a concept. Somebody's proposed an Asian Maslow and they have drawn a very different chart. But one of the interesting thing about the chart was it's all about status, belonging, respect, and in the community. It's not about self-actualization and, uh, uh, uh, having that, uh, kind of, uh, individual path to enlightenment. It's all about affiliation, respect, uh, status, uh, And that, and therefore you see that a lot in India, that, uh, people are constantly craving status and appreciate that a lot more, and, and these societies have, like, so many awards, and so many of these things, and face matters a lot, and, uh, uh, giving back, and, like, being valued in the community, and so on and so forth. You will not, uh, see, and therefore, like, uh, a funny story, like, I, I, I, I have a two-wheeler scooter that I move around with, and, and people with some affluence doing this kind of behavior are mostly considered to be weird or eccentric. Uh, I don't see any joy in having fancy things. I, I, I just managed to get a car for myself, uh, for long distances, but I still use my scooter all the time, and for most people, this is absurd. Because I'm not following the Asian Maslow, that you have to get a luxury car, and you can get so many more cars, and …

AI assessment note: “Somebody's proposed an Asian Maslow and they have drawn a very different chart.”

Q Do you record anything when you're making a decision? Like, do you keep a decision journal?

A I don't, but I have built a habit of tweeting my predictions and people do one funny thing. I don't know if you've seen this. Remind me of this in 12 months that people tag Uh, so I make a prediction that this is going to be this behavior in two years time. And people respond to that tweet by saying, remind me of this in 24 months. And that tool reminds you to check this tweet in 24 months and do that. And I found that to be very useful because if you make a prediction in public, And you say something in public. If you are right, people will find you and tell you Kunal, you were right. This turned out to be true. For example, I wrote something about dating and how it's going to mess up things and how things fast forward are going to give rise to certain behavior. And there's an article that came yesterday, which exactly talked about what I talked about in 2018. And somebody found that and said, Kunal, you said this in 2018. And that's one thing that works for me. Uh, and, and, It's awkward to make your predictions public and you make your connections public or whatever, but when you're wrong, people will find and say Kunal, you said this, but look at this is what happened. And it's a nice way of making the world. I crowdsource my decision making journaling and shaming because it, it, it, it reminds me more efficiently. I'm not a structured person. I can barely make a to-do list…

AI assessment note: “I don't, but I have built a habit of tweeting my predictions”