Money Trap: Why More Money Won’t Make You Rich & How to Escape | Alok Sama | FO540 Raj Shamani

Money Trap: Why More Money Won’t Make You Rich & How to Escape | Alok Sama | FO540 Raj Shamani

Author Name:Raj Shamani

Youtube Channel Url:https://www.youtube.com/@rajshamani

Youtube Video URL:https://www.youtube.com/watch?v=5UTkieEX-bA



Transcript:
(00:00) Tell me difference between Indians building startups in India versus Indians building startups in Silicon Valley. >> Someone put out some research looking at the unicorn creators in Silicon Valley and the number one category was Indians. So Indians have done brilliantly in the valley.
(00:19) The qualities what it takes to succeed there here is the same set of qualities which is they have to be smart, they have to be visionaries, they have to be resilient. Aloc Sama, former president and CFO of SoftBank Group International and author of the bestseller The Money Track. If you want to understand how the world's smartest investors and founders think, this episode is for you.
(00:42) Founders, startups, investor darings, they are very easy to attract money. What's the difference between a startup investor? For a VC there's three or four things that you have to look for. So the first thing you look at is market and there's this idea of product market fit to address some problem or some need that the consumer has entrepreneur quality resilience flexibility will he listen to me will he not listen to me you know young person is looking to start up a business you have to keep that in mind this is what he said about Steve Jobs
(01:18) he's a Leonardo dwinci of the technology world >> yes what does he mean by that >> Jobs's talent was as much design is anything else. He would not compromise on the design integrity of a consumer product. Which is why the world's faith in Apple devices is almost childish. Apple I just know will be the easiest way for me to interact with this technology. That's a rare talent.
(01:44) How much money is enough money? >> The answer is you don't. And even if you have a number in mind, I guarantee you when you get there, the number will change because you will evolve in your taste. You will be surrounded by people who have more >> billiond dollar opportunities in the startup world.
(01:59) Where do you see next young entrepreneur field startups versus US startups versus Chinese startups? Difference. >> So with China, >> if you have found anything valuable from this channel, please subscribe. It's free. It takes less than a minute, but it means a lot to us. And to listen to the audio experience of this episode, please follow us on Spotify.
(02:31) >> You know, most entrepreneurs are intellectually curious. They end up doing things against the windreneurs, right? >> What do you think is the biggest cage that they're suffering from? entrepreneurs. What do you think is the biggest if you have to put one challenge? Yeah. The most important characteristics I will tell you um maybe it's the same thing or not is resilience.
(03:07) >> Resilience. >> Resilience. If you're going to be an entrepreneur, you have to assume failure. You know, it's it's extreme, but you have to be prepared for that. At a minimum you will have extreme challenges. Let me let me tell you the the headline story of my boss Masayoshi son right you know um business distributing software Microsoft software in Japan business before the PC revolution great business then he foraw you know visionary then he foraw the internet revolution and he became for a while richest man in the world. M
(03:49) >> richer than Bill Gates >> for one week. This is at the height of the bubble in the year 2000. Right. Didn't cash in, crashed, burnt bal entry Guinness Book of World Records for having lost the most money ever. Completely crashed, burnt, right? Zero. Zero. I mean he was he was still a billionaire but he went from >> from richest to >> richest to I mean you know when you were richest you your net worth was you know I don't know what the number >> 60 70 billion >> 60 70 billion if you lose 95% you know >> yeah it's you almost crash and burnt
(04:34) >> you you crash and burnt so this is all relative right so had that happened to him no you would think he would learn a very powerful lesson He had almost the same thing happen to him again 2021. 2021 be market bubble particularly in the US >> massive inflation in value >> same thing one quarter soft bank losses were 23 billion 23 billion lost money >> so this now he's back bigger better than ever so this ability you know you pick yourself up you know or flying right I mean you know it is that's a essential quality most great entrepreneurs Nvidia
(05:20) Jensen Wang Stanford the most important message people asked them what do you wish for the students Stanford University >> sub graduate inspirational message what do you wish for them he says I wish you failure >> because that's the greatest gift to you if you want to be an entrepreneur so that resilience that bouncing back from failure >> is a it's the most powerful lesson you have to be prepared you have to assume it will happen to you have to assume it Yeah, you will suffer a lot as an entrepreneur. It is not an easy task.
(05:54) >> Not at all. >> Going back to there is a very strong selection bias. >> You only hear stories about big success stories. People who crashed and burnt exciting story but those stories are vastly greater than the big success stories. >> Why? Because I mean there's not those stories are not that interesting because people what sells books what sells movies success >> success huge success coming from nothing so success you know tell me more about Masa Yoshi son he is one of the rare people in the world country
(06:41) almost growing economy startup US, China, Japan, India like he's just there and you said he keeps coming back again and again. What makes him special? So um worked with him very closely one thing and one thing only term visionary loosely Hindustan history business let's just take the world of business you can think of who you would describe as truly visionary what do you MKkesh Amani MKkesh Amani Bay I would
(07:27) say you know I would say I would pick also MKkesh Amani also like he >> reinvented completely he's a visionary I would agree with you I agree with you what he's doing with with the world now reinventing from you know >> energy to now technology is a reinvention takes a visionary >> but the interesting thing is I would have said you said MKkesh but >> let's talk about first gen like you're talking about the first gen start right So the um this visionary aspect that it's very rare >> right I mean it's it's it's very very
(07:59) rare or you know once in 10 years you know one in a million right Steve Jobs must future you know futurist true living in the he describes himself exact words. I'm the crazy guy who lives in the future, right? And he has but he's proved it time and again from an investing perspective, right? future before the iPhone was invented.
(08:42) I mean, the seller actually lent him money >> to buy the business, right? And he bought that business only on the promise from Steve Jobs. Mr. loose handshake, no legal agreement based only on that handshake. He bought this company five times the size of Soft Bank, >> right? And Steve gave him that exclusive and on the strength of that he made $40 billion, right?
(09:31) The deal um I'm most closely associated with a company arm holdings UK >> UK company UK company headquarters UK but global business semiconductor semiconductor semiconductor design this is 16.0 designed by right >> so it is if not a monopoly it is it's a near monopoly situation completely dominate designed for chips that go into phones and chips are energy efficient it's a great company I won't spend too
(10:17) much time on the technology analytical mathematical banker type mindset you price earnings ratio. you know all your bankers think you know everyone's talking about AI now it's the it's the biggest hype in the world of technology >> but son was fixated on AI way ahead of the hype cycle >> futurist in future world when AI is in smartphones then the value of ARM the Bill Cole it will transform completely
(11:05) and again he was right his mark tomarket gain right now is 100 billion US I think that may well be in dollar terms the most successful venture investment ever it's not venture investment I shouldn't say that but the most successful investment in absolute terms >> he made like soft bank made hundred billion out >> mark to market but the marktomarket gain 100 billion Alibaba you know beast billion invest Alibaba is like Amazon of China 20 million invested his total game is $72 billion >> then what happened in vision fund vision
(11:44) fund >> so vision fund was largest technology fund ever 100 billion >> right >> and the issue with that amount of money so in a vision fund raise gear 2017 man. So uh 2016 total size of venture investment in the US was 67 billion. >> 67 billion billion right so up background on top of that with that as background 100 billion. It's a obvious point.
(12:20) >> Huge. >> His vision was AI. But this is the issue with being a futurist. Sometimes you can be ahead of your time. Vision fund you know vision fund 100 billion then things maybe would be a little bit different but at the time it to put it to work productively is very very difficult. And that's why Nezi himself admits he made investments.
(12:47) we work you know it's it's quite a story that's when things went wrong a little bit because ide was shocked I was like first time so I was amazed by it or I was like that I was idea is good because he is you are the perfect target market you know up generation business you know you know you don't
(13:31) need manufacturing plant nothing you know you need a place >> where >> and I don't need 200 300 people so it's like a small >> yeah yeah and you need an environment where I mean I've only spent like you know basement, you know, it's an environment where you can play golf that's a good that's what people want and that was a lot of Adam's inside create that and this is what people want what went wrong um it's straightforward one real estate company technology company technology company like Microsoft Microsoft office
(14:08) >> software piece of software Google, Facebook, then it scales. >> So you can use revenue multiples of valuation you can value that that's why technology companies are so highly valued no need to spend a lot more money. It's not like manufacturing or you know capital expenditure is is it's these are very capital efficient models platform models we work as a real estate business and it has to be valued like a real estate business technology business problem they grew too fast then of course the
(14:55) killer blow was came along >> and that exposed the other weakness leases You don't want to take risk mismatch ultimate downturn >> when people just business just stopped that becomes really problematic too. So that's the other problem there. So that this gap actually killed them. >> Asset liability mismatch and then um that combined with too much money, too much growth way ahead of Dear.
(15:36) >> Would you talk about Adam Newman? Do you think everything or did he get too greedy because that's the chap like that's the book that you are writing? >> Well, not really. I mean I described the my the most important point I mean you know it's the JP Morgan all Goldman all the biggest investors you start believing what you're saying you start off trying to sell something eventually start to believe it because everyone reinforces what you're saying at its height we were 40 48 billion company and then when they tried to go public it
(16:18) all unraveled. >> Yeah. >> What was special about him? You met him? >> Salesman. Best I've ever Yes, I met him. I met him. I've met a lot of time. First time I met him is in Delhi actually. I know I tell the story in the book. First time I met him was Vigyan Bhawan in Delhi >> and I describe how we met him and then um so no he was he was Vigan Bhan.
(16:39) >> He was um I described this in my book. My exact words were you know his vision real estate. He's wearing a Modi vest. Ka and a Modi vest. He's American. I don't think he'd ever been to India before. It's very handsome man, very tall, his hair down to his shoulders, looks like a movie star like Jesus Christ, right? Very charismatic or we work it will solve India's housing problems red.
(17:14) I mean you know to create housing problem middle class I mean you know we work doesn't solve that. That doesn't make it a bad idea, but I mean, >> but he made a he was such a big salesman. He was thinking so big. He made a big impression on uh on Son. So that was my first meeting with him. >> Then we met him. He came the next day.
(17:34) I tell the story in the book. He came to um you've heard, everyone's heard of Sunil Mal, >> one of India's most respected entrepreneurs. Um Delhi. This is the most expensive street I think in India. Okay. So he went one by one. Eventually he landed up. So that was the second time we met him and then we met him again and uh Masa met with him met with him privately and then eventually when the vision fund was raised Masa
(18:19) invested you know you talked about in like people like Adam Newman big salesman's big vision which founders startups investor darlings right they are very easy to attract money regardless of revenue revenue multiple technology business not technology business. You have we've seen this case like VW work was a classic example all technology investors invested and invested just on his word right no valuation was making sense so logically startups but what's the difference between a startup
(19:04) so I'm going to say something contradictory technology business at times you have to suspend the analysis I mean I'll I'll tell you a story so the I think might have been maybe first deal was Indian deal with capsy deal negotiate key very dynamic I mean just the great great entrepreneur to back Masa saw it I saw it very very impressive but valuation key you know when I started looking at numbers
(19:48) you know at the time you were actually being Indians you actually being paid to write >> not only were you not making money you weren't even making revenue >> right I mean think about that crazy idea you're not even making revenue to come and write. Not only free writing, you're being paid to write, right? How can I value this business? You know, when you do analysis the way I've been taught, you look at free cash flow discount and then you decide how much is the business worth.
(20:21) But you there is there is no revenue, there's no cash flow. So manag very close friend of mine you know kind of brilliant brilliant man brilliant man Indian from Delhi also now chairman CEO of Alter networks imagine a world where all cars are autonomous cars are autonomous there's no drivers and in that world right now if you go on Ola or Uber ride Right.
(20:56) Sharing fair might be 100 rupees, right? That's that that's just a leakage. That's like a you know the revenue is you know 70% gone right? So then everything comes to you. Now who will own these cars you know capital expenditure you know because they don't exist. So it really some of these models become you you just know evolution and these models will be worth a lot these business models in a in a world which is completely different from today future.
(21:38) So you have to suspend the analytics a little bit. So which is why you know why are people investing in certain entrepreneurs or in certain business models where they're not making any money right now. That's the reason you you in the world of technology if you're looking at the future you can't always predict the economics even if you have a broad idea you know to be specific and to come up with cash flow projects very very difficult.
(22:09) So you feel entrepreneurs investment versus people. Okay. Betting on the future or I will lead the I will change the I will lead people to the future. M that I was reading. very rare to find those you know if you make bets very very high risk version of future right
(22:56) probability >> so many things need to go right you know he will fail that's why we talked about resil he may have to change his business model maybe he will fail but at a minimum he'll have to change his business model very big investment from Son when he first came to Sonan >> Sonan had this vision China e-commerce you know Amazon US you know huge success story China maybe I say Hindustan maybe I say but at the time what Alibaba business was B2B >> it wasn't his his idea wasn't so he had to evolve >> so at times it's like okay macro vision
(23:33) you know how the e-commerce will evolve great entrepreneur let's start with this and then we'll evolve the business model >> then we'll see. >> Tell me difference between Indians building startups in India >> versus Indians building startups in Silicon Valley difference and blanket answer for you was no.
(23:58) So I want to put more nuance. >> No, it's not a it's not a blanket answer. Um my point is more subtle which is go into it with you know kind of eyes and ears open because the co the the issue of identity >> which we talked about is also issue of family and community which you will leave behind. >> Yeah. >> Right.
(24:21) I mean I left at a time in the 80s you know you can do WhatsApp calls you can do video calls when I went even to make one phone call cost $5 a minute right so communicating relationship with family my parents very very difficult and I paid a price they paid a price right so just just that's the only point I'm making that if you do it then just be aware the things that you don't value so much right now you will come back and you will reflect and maybe maybe even regret that that's my only point I don't I don't discourage people from doing it
(24:59) lots happening in the US is also not as welcoming to immigration particularly with Trump now also something to keep in mind you know because there's this America first attitude which is going to be quite difficult u Indians are coming back to your question someone did a u put out some research I actually saw it on LinkedIn.
(25:20) I think it's a Stanford professor. I forget his name. Looking at the unicorn creators in Silicon Valley and the number one category was Indians which is quite interesting. >> So Indians now not all of them are immigrants. Some of them actually are the next generation. I mean my son is 32 now. So that's literally the next generation.
(25:43) >> Wow. And um so it's that generation also. So Indians have done brilliantly in the valley and it's all the things you talked about which is while they're smart they're a lot of us and some of the smartest went to the US and they're hungry. I mean if they go there it's the immigrant ethic.
(26:06) They're determined they're resilient. they're determined that okay if I've come to this country or my parents came to this country you know I I will succeed so that it that those are standout qualities. So differences if you have to highlight one or two differences or three differences Indians they say you've met like and like marquee founders in the country you guys have invested in >> they are born here from the heartland roots you know honestly the characteristics the reason that they're successful >> will be the same which is
(26:43) they have to be smart they have to be visionaries is they have to be resilient. So it's the same set of qualities. So it's not difference near because the qualities what it takes to succeed there here is the same set of qualities. Maybe maybe you have to be to use your word you have to be a little more jugaru.
(27:01) You have to work around the system but you have to do that everywhere. I think maybe it's more the case in India. You have to like you have to navigate things a little bit more. >> There are more gray lines. >> There are more gray lines. So I think that is probably true and you have to be willing maybe to bend the rules a little bit to be a little more flexible.
(27:20) Maybe that's the only thing. >> Okay, let me make it more even like a bigger question. >> Okay, >> Indian startups versus US startups versus a Chinese startups difference know what do you need to succeed? >> So with China it's become a case of how you deal with a completely unpredictable regulatory environment, right? 10 years ago, 20 years ago, this famous Deng Xiaoping line to be rich is glorious.
(27:48) Right now, you don't want to be on that list of the richest people in China. You become a target, >> right? So, China >> target meaning what? >> Target meaning Jackmar is a great example. >> Vanished for a few months. >> Think about that. >> Think about that happening in India. One of the richest >> men in China, Chinese entrepreneur in the world.
(28:12) Sorry to be absolutely right to correct me. Disappeared. Think about that. Right. That happened to Jakma because he said a few things that were very critical of the government. >> Jessica um that he basically said governments messing around with with um um with fintech. They were they basically called them stupid >> so many words right I mean very harsh just crazy thing to do you wouldn't do that in India asking for trouble yeah >> and you shouldn't do that anyway right bad judgment so China the India is a beneficiary of that a lot of VCs have
(28:53) turned their back on China Hindustan alagar this is this is great for India collateral beneficiary >> geopolitically you know if you think about the consequence of this election the confrontation with Trump as president with China is going to increase. Again, India is a collateral beneficiary. This is a good thing.
(29:16) Um, so China, that's the big difference. The regulatory environment, government attitudes are so volatile. They can make you break you. In India, it's a big deal too, but in China, it's it's binary. You you could just disappear. DD, for example, right? the equivalent of uh of Uber great case study equivalent of Ola more like Ola though Uber merged with near monopoly situation great company but again Chinese government decided these all these tech entrepreneurs they think teach them a lesson right so they started scrutinizing their app they
(29:56) weren't able to get any customers at all for a period of 9 months stock went from public company US listed public stock went from I think all the way from $12 to two or $3, right? So that's that's the big difference that unpredict India there's there's not you have you know kind of changes in attitude but but but there's no discontinuity >> like that right um >> so that's China >> that's China the US is the infrastructure there is the one big edge that the US has which will not go away in my lifetime maybe it will last through your lifetime
(30:38) is the edge they have in education right so the Stanford University ecosystem Caltech MIT they're great in India >> but that whole ecosystem for example that's been nobody in the world can compete with that that's been created in Silicon Valley it's it's the it's it's a it's an ecosystem with with Stanford as its son and with venture capitalist that community that's being created and how it fosters startups and entrepreneurs is uh that's that's just really because you're surrounded by them.
(31:30) Everyone's thinking about startups, startups. There's so many stories around you. Whether it's Jerry Yang who started Yahoo or um the Google founders Larry and Sergey, all students working out of someone's garage. You're surrounded by stories like that. You're surrounded by VCs, by investors who funded those companies, professors who've taught those people.
(31:57) That's what creates what you call an ecosystem. And that is people have tried to replicate that. The UK for example in London they're trying to replicate it. Rishi Sunak when he was prime minister you know he's telling people you know Andre Harowitz Joby please what can we do for you up London Mau people are trying to do that soft bank my experience was the same dealing with the government please why don't you set up set up the vision fund here which was incorporated you know regulated in the UK.
(32:27) So governments can try and do a lot of things but it's very very difficult to create that infrastructure where you're just part of that mindset you know you're just like everyone around you is consumed by this whole startup culture >> um Bangalore >> Bangalore you know people tell me it's um it's it's it's either Delhi broadly Delhi Gura NCR or or Bangalore andor Okay, tell me startups.
(33:00) Okay, forget this. Tell me about this key. Underfunded startups or overfunded startup. What would you choose? What's better? Oo, underfunded any day. Why you have too much money? My experience um you have too much money, you tend to spend it usually not wisely. Business is also true.
(33:20) You have too much money, you lose sense of the value of money, you make bad decisions, sub decisions. Absolutely. >> Absolutely. psychology you're just more likely to make mistakes. >> But in startups usually it is key one of your biggest modes is capital. >> Yes. >> So >> can be can be. So you bring up a very interesting point which I talk about in my book >> that with Masasan being seen as a crazy guy >> can actually be a very very smart thing.
(33:49) This sounds very contradictory. I'll give you an example. >> What do you mean by that? >> I'll tell you exactly what I mean. I'll give you the example when we invested in Ola >> at the time there was one competitor to Ola was taxi for sure >> so when the crazy guy Masasan invested in Ola you know the size of his checkbook you know this guy's crazy >> if you're taxi for sure what do you do nobody's going to back them >> right >> who's going to go up against a crazy guy >> like Ma >> with a huge bankroll So they come to you
(34:25) and they said, "Sorry, boss. We're folding." >> And they fold. So your competition is gone. >> Right. So being seen as crazy turned out to be very very smart. >> Exactly. >> And that's what I mean. It's just the smart competitive strategy. >> And that's what >> the crazy guy is the smart guy basically. >> That's what I was telling you.
(34:44) Like if you're crazy and you're you have tons of money, >> it's usually better. So overfunded with like tons of money is usually like much much much better than being an underfunded startup >> until you have like a product mode. >> Yeah. Yeah. Well, when you we work's a great example to some extent. Oo is a good example too, right? Oo rooms.
(35:06) When you had too much capital, you started to make suboptimal decisions. You know, you start thinking, okay, being a platform, great business model, you start to own real estate, you start to lease real estate. You're going from platform capital-l like to capital intensive, right? So, you lose sight of what you why you started.
(35:26) >> Yeah. Exactly. Exactly. The the product market fit which was brilliant no longer is is it's it's it's you you you doing a different kind of business. You start to expand internationally. India you had a great product market fit because there's no organized hotel sector at the lower end of the market. Right? You go to the US you've got or Europe you've got in Europe you've got Echo in the US you've got Holiday in.
(35:53) There's so many chains that serve that end of the market. Uh you've got Airbnb growing at breakneck speed. It's just a different ballgame and you're trying to do too much too soon and you're changing your business model. So that's when having too much money can go against you.
(36:12) Which startup give me two three startups apart from Vivo and Oo Capital? Um those are probably the most prominent ones I can think of in my soft bank experience. Those are the two that come to mind to be quite honest. There are others who should again never been you know kind of zoom pizza for example. It's a great example and I mean you know we have robots making pizza.
(36:38) This is just a pizza delivery company but that's more a case of you know kind of I'm not sure it's a company that should ever have. >> Do you think BU had the same problem? >> I mean you know accounting problems. I mean you know this that's >> what do you mean by that? explain I'm just you know more about I do but my my my Kenneth it's it's the the the exposure is with respect to cook books financial statements that's a different problem >> so it's like they cook books to yeah >> that's misleading people I mean that's a you know >> you don't you guys invested in
(37:06) >> you don't come back from that no when you say you guys me I mean I'm not >> like >> five years out of South Bank now South Bank was not an investor no >> okay so coming back let's say Olaf For example, Ola Bhavish has been an entrepreneur was attracted capital like right I don't know key nittygritties details what was the deal but from the outside it looks like he attracted capital right a lot of times and at every time of his journey startup like so which is very
(37:55) contradictory to the VC world all like he is treating like and I'll keep changing and still attracting capital right don't you think so business related you know kind of going from >> how come like Ola electric is related to Ola nowhere. >> Okay, fair enough. Fair enough. Fair enough.
(38:22) At least at least mobility and transportation. >> Go on. Go on. Okay. I agree with you. I agree with you. I agree with you. I mean Uber, for example, they got out of this autonomous cars business. So I like to they're not making it like you're right. It is a different business. Point well taken. So different different businesses, right? So fair shot over overfunded because he's >> just like becoming a darling to attract capital.
(38:48) >> Yeah. Yeah. >> Let's just put it this way. >> It's if you become if you become as successful as he has and he's identified the right sectors then yeah you can do that. That's no bad thing. >> It's not a bad thing. I'm saying then funding like funds become crucial. >> Funds are always crucial for any startup.
(39:12) I mean yeah my my debate is much more in the contextreneurion to execute my business plan that's one mistakes mom and that's the point I'm making >> that's why you're talking about okay >> you know I give I give both those examples you know because little extra money is Okay. But having excess amount of money is bad. Yeah.
(39:39) Yeah. That's when you make suboptimal decisions, easy money. Yeah. The moment you hear softion, but then you shop. But to be fair, the ret saying okay you know has so much money let me see if I can get a billion out of him. He didn't do that. Masa himself said you know >> I like you whatever. I love you. I mean, you know, >> why why did he love it? Reminds me of me. Exact words.
(40:11) >> He is the one entrepreneur I met who reminds me of me when I was his age. Exact words. >> That's a real compliment. Like >> with him this this this not just being bright, not just identifying an opportunity, but thinking big at a very young age. How big? >> He would tell, by the way, he would tell, this is this is in public, by the way.
(40:37) I don't know if I mentioned this in my book. He would tell Adam Newman, "You look at your little brother Riches. He's thinking bigger than you." His exact words were, "He's crazier than you. You're not being crazy enough. You're not thinking big enough. Look at Riches." >> Really, >> he was pushing Retesh to go head-to-head against Does that describe in the book? To go headto-head against ABND.
(41:00) be global, be big and >> and he was he was real affection. He came for ret's marriage. How many you know kind of VC coming to like India for like a founders's marriage? You don't see VCs doing that. >> He's really fond of him. >> Yeah. Even today I'm sure he is. So I I really really really love Resharal and I he was one of those first entrepreneurs from India who inspired me because I read his story in Forbes for the first time and I was like if he can do it I want to do it.
(41:30) I want to become an entrepreneur. Right? So he's one of those entrepreneurs who I really look up to purely from a point of inspiration. And when I met him and we recorded a podcast and we spoke about so many things he was telling me at that time it's this is couple of years ago. Okay. and we have recorded a clip and okay right so when the news was around you don't even know whether company will survive or no believe he said that hey so to me That level of uh conviction
(42:20) even in the times when everything is uncertain is very was very it's rare and inspiring to see and in that closet shouldn't have done it right but still that and he said it like he believes in his second nature like it was not even like he's trying to make up. >> Yeah. Nice. Yeah. The the the thing about those characters, those people is you can't really teach people, >> right? I mean, >> you can't teach people how to think big.
(42:54) >> You can't Well, you can teach people. >> Yes. And no. I mean, you can think big, but to have that level of conviction is very unusual. >> It's an unusual quality. I admire it. I don't have it. That's why I admire it in others. So, entrepreneurs, what do you think in them? doesn't mean you'll back them. >> Yeah.
(43:22) Um you have to have so for a for a VC there's three or four things that you have to look for. First is as a VC you as a substantial VC I mean if you've got a billion dollars to deploy you have to assume you know 100 businesses total failures right they'll go to zero the majority will be okay they'll muddle along some will even be successful maybe go public.
(43:59) Your upside is going to come from one maybe two that'll be huge that'll make up for the duds and make up for all the middling you know 99 others one will make up. >> Yeah. So which means if you're counting on one to make up for all the others that one has to be has to turn into something really really big. So the first thing you look at is market addressable market size of the addressable market.
(44:25) So you start with that but usually market addressable market calculate impossible >> depends on how you define the addressable market. If you're Google you know you have to it wasn't clear but you know the addressable market was all the money that's spent on advertising and then Google would gradually displace them.
(44:49) So there has to be some sense of how you're going to make money initially. You have to right if you don't have any sense then you shouldn't be investing but there has to be some addressable market then there's this idea of product market fit not enough to have a big market but to address some problem or some need that the consumer has so product market fit entrepreneur quality I mean as a VC you have again same qualities resilience flexibility will he listen to me will he not listen to me that masan quality that like I'm going to back you whatever you
(45:22) want. That's not how most VCs think. You know, most VCs do think about rightly or wrongly about okay things go wrong. >> Flexibility important quality. >> So for any, you know, young person who's looking to start up a business, you have to keep that in mind. You have to show you have to convince a VC that you're not stubborn.
(45:44) You'll work with them as partners. Partnership think stubborn founders usually end up winning more than I agree. I agree. I agree. I'll give you an example. Bavish, >> my good friend Nikesh is a force of nature. Brilliant man, very strong personality. I remember telling him telling Bavish and telling Kunal that you should pivot towards profitability.
(46:05) Bavish stubborn mana headto-head against Uber. Kunal listened to him probably more than he should have. And I think he got left behind a little bit. So that that self-belief is a very very important characteristic too. >> Yeah. Because I've I've seen this often just by reading and talking to entrepreneurs that people who are stubborn in times when they were expected to be flexible usually they win like Steve Jobs or like let's say you read about Elon and Steve Jobs and you even read about India like so many entrepreneurs have made it big. They
(46:43) were stubborn on the times when they were expected to be. But again, this goes back to what I said selection >> because you're not hearing the stories of entrepreneurs who weren't flexible, didn't listen, and who didn't make it. >> Who's the most inspiring entrepreneur you've met? Um, I'm going to say something strange because I'm no longer a fan, but I'd have to say Elon Musk.
(47:15) >> I haven't met Elon Musk. I haven't met him in person. So, but I think the answer is still valid, right? >> And I tell you why. Because if you agree that climate change, a couple of reasons. One is if you agree climate change is the biggest change we face and I think it is, right? You only have to spend a few hours in Delhi to realize that with that pollution and for a whole variety of reasons which I won't get into.
(47:39) He's done more to address that problem than any government out there. Al Gore Nobel Prize you know documentary I mean you know what have governments done right and what he did the degree of difficulty people don't appreciate that you know electric cars is not as simple as you know battery is nothing like that he had to completely reimagine the automotive industry right he had to no dealerships right so that intermediary which added It's created so much inefficiency.
(48:14) You have to buy Teslas direct. And then you start up with the mentality that this is a computer and I'm going to put a motor and a wheels around it. Right? To to to have that degree of conviction, everyone telling him you're a crazy guy, you can't do it. I find that quite amazing and I really really admire him for that.
(48:34) Now I'm a little bit saddened that he's now kind of become >> a politician. Why is that a politician? And like come on man, you're such a I mean you're such a great brilliant mind, brilliant execution as an entrepreneur. Stick to that. There's so many problems you can solve. >> Just he's a one of a once in a lifetime >> kind of >> kind of talent and you really want him to do to solve the biggest problems we have.
(48:59) He said the same thing with SpaceX >> video rocket just you know which comes back. Amazing to watch. Amazing to watch. >> Yeah. I'm not a physicist, but you know, I can appreciate >> I can marvel at what he's done and he saved NASA billions and billions of dollars. >> But who is who have you met and you found inspiring? >> Um, I've actually found Riches very inspiring.
(49:27) Ironic, half my age, but I was so struck by his maturity. the fact that as you said didn't go to IIT didn't go to IM um I found that very inspiring I found uh Brian Chesy very inspiring for a different set of reasons because he his humility been as you know you could sit and spend two or three hours with this guy and you can talk about everything and enjoy it just such a nice downto- earthth human being and the fact that he's been able to retain that I found that characteristic very inspiring.
(50:01) Um I find MASAD really inspiring. >> Yeah. >> Because this ability to just not be no matter what happens to bounce back to fly again to to you know the the audacity of hope it's a beautiful thing right to believe in the future so much and to believe that this AI for example will change the course of humanity. These are like that's very very inspiring.
(50:27) Who are the other people who would say you would say that masa Elon established visionary futuristic give me three four more names you feel give me two names from the world and like around the world and two from India who you feel genuinely already >> well Mkeshani we talked about right it takes a lot of vision to break away from what he's doing he stands alone uh Sunil Mittal is also he's he's stuck to his business.
(50:59) I respect him in a very different way. You've done one thing and you've done one thing exceptionally well to create this business come at it. Uh >> out of new entrepreneurs like not these generational people. >> I actually rank Bavish at the top. I do because a little bit of what you a little bit of what you said you do you you find unusual because he's now a serial entrepreneur >> and he's kind of in some ways become you know kind of the godfather of the startup community by doing things one two three and he's again got that ability to solve really really big
(51:36) problems transportation now see what he does with AI >> is it do do you think I like that ambition. I admire that ambition. >> See, there's a there's a difference between being a visionary and being an opportunist. >> Yeah. >> What do you feel? >> So, you think he's more of an >> I'm asking you what do you feel? What do you think he is? >> I am not even at a level to even comment or question him.
(51:57) >> I think he is both. >> And that is no bad thing. Uh I I think you have to be both. >> You have to be pragmatic because you're not a scientist, right? You're not a priest, >> right? So, you have to be to yours your word again which I really like. You have to be an opportunist system. How can I get the government to cooperate? How can I raise capital? How can I put all of these things together to solve problems? And God bless him to make money for myself.
(52:37) You have to be opportunist. >> Okay? You know in Masayoshi's son said about this is what he said about Steve Jobs. He's the Leonardo da Vinci of >> left brain right brain. >> Yeah. >> He's a Leonardo dwinci of the technology world. >> Yes. >> What does he mean by that? >> So what he means by that that he is not just a technologist but he's also creative because if you go back to the origins of Apple this idea of two people starting having complimentary skills.
(53:08) Steve Bosnjak was the technologist. He was the coder with Apple computer, the original Apple computer. >> Jobs's talent was as much design as anything else. >> He would not compromise on the design integrity of a consumer product. Which is why my faith, the world's faith in Apple devices is almost childish.
(53:33) Apple I just know will be the easiest way for me to interact with this technology. They're not even when they're not the first. I know they will come up with what looks really neat, right? Simple, sleek, easy to interact design. That's a rare talent, right? It's it's almost and and this is what he means by Leonard Vinci.
(53:55) You're not only a scientist, but you're an artist. >> Artist. Yeah. M talking about artists when I was reading the notes that you really want to talk about >> line mentioned about passion >> you said passion why why did you say that yeah I say >> because I believe in something similar and I'll come to that okay well this is very interesting to talk about you know just when you um passion you know you know people like to older people like me tell youngsters follow your passion, right? I mean, this is very, you know, kind of cliched advice.
(54:30) >> I think that's terrible, terrible advice for two reasons. >> One is, you know, if someone had told me, you know, follow your passion and most people don't have a passion. Let's be real, right? Normal people, not everyone has like, you know, I'm passionate about writing or making art or whatever or podcasting or whatever, right? I mean you know it's u so you have to assume that the lot of the time when you tell someone a young man a woman follow your passion you leave them feeling a little bit inadequate I'm like everyone else that's one two is
(55:05) let's say you do have a passion right let's say your passion is to be I want to be the next raj shamani now how do you go about it is there a playbook you can follow you know, you know, you graduate from college, can I apply somewhere to be Raj Shamani? I mean, you know, it is you could, you know, you could go shoot yourself.
(55:26) >> Yeah. >> You know, so I I think it is simp what you call serendipity if you want to use a more complicated word, fancy word that you have to let things happen. Put yourself out there in the world. Um, make a living. You have to make a living. You know your friend uncle has a wonderful way of saying it which is money buys you things but the most valuable thing money can buy you is your freedom.
(55:54) >> Yeah. >> And if you find the way I did late in life that I did have this passion to write at some stage in life you can indulge that passion. Yeah. Right. >> But if you go and pursue it you know your your likelihood of getting hurt is high. And that's why I think that advice is even if you do have a passion it's dangerous.
(56:16) Yeah, that's I I also have a take on this. I feel absolutely could not agree more. That's the first thing you should think about. Could not agree more. India it's unique country will take care of them you have that
(57:01) burden nothing so you have to take care of yourself your family and live up to the pressure. That is the first side >> and second side is as you rightly said I think majority notion for example podcasting or Let's say becoming an entrepreneur because it's cool now entrepreneurship.
(57:49) You just feel it's cool to be entrepreneur. You want to be there's no harm in it. >> There's no harm in it. But >> you can do yourself harm. You can do your family. We can do like at least sort that out and once you've become that then you keep trying multiple things and then do it and make call that >> but before you sort that out just because of glamour >> don't get into something >> talking about >> the money trap you said money and you're mentoring these relationship I have a question >> how much money is enough
(58:28) How do you know that? >> It's a very individual thing. You don't. The answer is you don't. And even if you even if you have a number in mind, I guarantee you when you get there, the number will change. >> It has happened already >> because you will you will you will evolve in your taste, right? And you will be surrounded by people who have more. So I'm not saying it's easy.
(58:49) I say like I am because sometimes I question myself that am I getting in the money trap which 99% of the times I like to believe that I'm not >> because I don't chase money now >> but 1% of the times I question myself and be like hey am I in the money trap >> well the question you have to ask yourself is what you just said okay would you be happier staying in bed and not doing what you're doing now when it starts to be compromise conflict that's what creates stress that's when you start compromising your health. When you realize that I am doing
(59:23) this because I can't break away from this much money even though I'm compromising my health might be suffering my family life might be suffering my relationships might be suffering um my mind is not developing I'm not doing the things I enjoy that's when you start you should be worried and that's when you at least have to ask yourself the question it'll still take a lot of courage maybe you have a very supportive wife, your family, someone around you who tells you we're all with you. You need that.
(59:58) That's why family, wives, you know, kind of husbands, you know, kind of don't want to genderize this. Um, uh, it's just two guys talking, but, you know, this applies. This applies to everyone. If you have support from your spouse, that is usually helpful. So, if you want to break away, I'm with you. >> Those relationships are really important. Friends are really important.
(1:00:20) I want all my relationships to support me. Okay, you're being obsessed, then you want to work work. >> Well, you know, that's not healthy. I mean, we're telling you if if if obsessed, you know, if if that's the word you use, that's not healthy. >> That's actually the case with me. >> But you're enjoying it also.
(1:00:36) It's a healthy obsession. That's a healthy obsession. >> Artists, musicians can be obsessed. That's a healthy obs. You're enjoying it so much. >> That's fine. Let it ride. That's fine. >> Yeah. You know there is this one just like on a fun side I want to ask you a question right and take care of your health why you letting work or relationship or drugs or substance abuse or alcohol taking over your body and I usually have a question being healthy is goddamn difficult >> yeah it's not it's not that you're trying to to you're choosing work over health.
(1:01:19) >> It's not like that. It's just health is so difficult. >> Usually people end up avoiding it and extra sleep, extra alcohol, extra friends, extra party, extra work because >> as much as it sounds great, I'm compromising on my health. >> It's not because of the choices. It's because we are lazy and we procrastinate.
(1:01:44) Like for large majority of the people, this is >> No, this is true. This is true. You know the beauty of it I notice you've got I won't I won't we won't promote individual brands but you know these days we're very technology and data driven >> so you actually get real time feedback is it working for your body or not. This is this was life-changing for >> Yeah, it is. It is.
(1:02:04) It's >> I I used to sleep for like 4 hours, 5 hours max. I >> Now you're getting daily data. It's exactly and then it's pushing me. It's it has not gotten like optimal >> but it has gotten better from 4 hours to 6 hours >> and now from 6:00 to 8 and I'm like great. >> Yeah. Yeah. Yeah. >> This is >> now it can become an obsession also you know now like you know first time in the morning like first thing in the morning Good for you. Good for you.
(1:02:35) >> I know there's a word for it. I forgot. Osmo some word for it. How did you sleep? Let me check. This usually happens. >> Usually happens, you know, I do I do it. I do it literally. Yeah. How would I know? I have to look. >> Yeah. Like now you don't want to answer out of your gut. >> Yeah. Exactly. >> You want to answer out of oh let me see.
(1:03:12) And you know worst thing which happened the first time. >> Yeah. >> Usually when there are as an entrepreneur there are days in your life. >> Yeah. Yeah. You have to power through it. Power through it. This is a very normal day in my life where every 3 months every 6 months I'm functioning and next day I get by it and then I crash next day okay I'll do that very normal and I wore this and next day I saw this 9% recovery automatically I started feeling lazy And I'm like >> But this is my point. You can't let this
(1:03:58) dictate your life either. >> Like it just so in the beginning it started happening and I'm like this Raj like this can't happen. So and that was the day I shifted from weekly versus daily. >> Good good smart. >> That's how it happened. Okay. Our last question for you. >> Yeah. >> And the last question is where do you actually second last question? Second last question is billiond dollar opportunities in the startup world where do you see next young entrepreneur field give me two three feet >> so the um it's it's all about AI these
(1:04:38) days right and um VCs are funding that only >> yeah so that's where the buzz is maybe it's a little bit overdone but let me simplify this um every business today is an AI business let me tell you I mean um the when the internet came along, this is what people used to say. Every company is an internet company.
(1:05:02) You have to find a way to integrate the the internet, integrate AI into your business because it is a monumental productivity tool, right? I guarantee you, you will be integrating AI into your business, right? Podcast, you're already doing that, right? But it'll get better and better. Hindi this will be an impediment to you by the way you have to think about that podcast the models that are powered or trained on Hindi language will be more effective for you this is something you have to keep in mind actually so you know simplifying distilling producing this is
(1:05:35) all you have to integrate that because if you don't somebody will be doing it more efficiently and as good as you are you will have to you will be at a disadvantage right so the as an entrepreneur you want to look to create businesses that are able to leverage this technology. That's what you have to watch out for.
(1:05:58) So AI doesn't mean you have to come up with the next open AI >> because open AI is the next open AI. You know, there's two or three models like that. You know, same way like Google's the next you don't have to reinvent things. You know, you have to build on top of that >> to to come up with with business models that address problems that that people have.
(1:06:21) So yeah, there's this company um that I just heard about this week which um Jensen Wang talked about called Gani Gani.ai. And what they're doing is it's a voice-based AI platform and they are leveraging that technology to help financial institutions originate and correct loans. Voice-based but very sophisticated. And you might say financial institution, bank you should build this within the company.
(1:06:47) >> But people are typically slow to do that. >> Yeah. >> So technology solutions that help address make a business more productive. That's where the action is. >> Okay. Here's the last question I have. >> First question. Last question. >> Okay. Money trap. trap. Is it bad to be in money trap? You're making it much deeper than it is.
(1:07:20) So, I'll I'll tell you the answer. >> Why did you write it? >> Because that's the that's that's the broader question. So, I wanted to be a writer. You could call it a closet ambition, right? if not a passion. >> So finally came out of the closet. >> So finally came out of the closet when I had the luxury as we discussed when I had enough money in the bank to >> indulge that passion.
(1:07:52) So I actually at age 58 I went to I got a master's degree my second master's degree and it was probably the happiest period of my life since school because I didn't have any worries any cares I was learning uh satisfying my desire to read to learn all the time and I did that with the intention of writing not this book but just writing I thought I would write maybe I would writeiction And then I decided as I experimented school I wrote a story in the voice of a dog if you can believe just for fun experiment with different things and then I
(1:08:37) realized there's this six year period of my life where I saw so much professionally meeting interesting people dinner with Mark Zuckerberg, a meet with Narendra Modi, um people like Adam Newman, visionary entrepreneurs, crazy guys, Bason, one of the greatest technology investors of all time. Um, crazy things happen.
(1:09:08) The book starts with me meeting with two secret agents, Mossad agents. >> Someone's trying to There's even a honey trap, sexual blackmail if you can believe. So, Then I had a lot happen in my personal life >> within a period of sen 3 month three three and a half month period lost both my parents lost my dog also both my kids graduated from college to make it there's so much happening that this this can be turned into a story.
(1:09:49) >> Mhm. >> And the fact that this is a real story that is non-fiction makes it in some respects even more powerful. So that's why I wrote the story. It's it's more to kind of satisfy my writing ambition than anything else. And I this is what I want to do. So I want to write more books. And >> are you happy about it? >> I am.
(1:10:10) I tell you what I'm happiest about. lots of great reviews, sales, but what I am overwhelmed by is I describe to you message from people who tell me the way you wrote about your parents or the way you write about your relationship with your father or your son. Um or I found what you wrote very inspirational. You young man came up to me in Gura and said, "Sir, I just want to he came to a book signing.
(1:10:41) you couldn't make it but he came to an evening event sir I had to tell you that you are now my role model I found that very you know kind of it's very sweet very touching that the book has been has touched people in ways that I didn't think >> it it you know that was that that's what you aspire to as a writer and that is really really rewarding and and >> I admire what what people like you do because um >> you know with a very fresh kind having been through this experience I now see how rewarding it is which is why this is so great to be interacting and I why I
(1:11:16) wanted to reach out to people more broadly is things that you say or people that you have discussions with and they affect people's lives and that's very rich and that's very rewarding way more than making money I would say true >> yeah I I wouldn't I wouldn't disagree I I think touching people's life in any way possible either through money without money through words through actions through just >> uh by just being an example whatever it may be >> it's the single greatest thing which people can feel in themselves.
(1:11:59) >> It's beautiful. You can >> it's just amazing. It can you can touch five people at your house >> or you can touch the world >> but touching even one soul and one life >> is it you can't compare that feeling with anyone. >> No, it's beautiful. >> No amount of money is going to give you that feeling. >> It's be it's beautiful and that is uh I I really respect what you do because this technology this world has given you the ability to reach out and impact people's lives.
(1:12:28) And you're fortunate enough to be in this country at this time where people the desire to learn the thirst that's the other thing I want to say the thirst for knowledge >> this I have to tell you the story Twitter X >> came from Chundigar which is my grandparents from Chundigar >> um I won't tell you the name to protect his privacy but um he's a sik obviously I can tell from his name message beard some very nice things about the book but he also sent me a photograph and he said in his message and he said >> sir I read your book and I have learned
(1:13:04) so many new words >> photo he scribbled down very neatly >> I counted about 150 words that he had learned >> wow >> and this is I don't see that happening anywhere in the world this desire for self-improvement to constantly learn when he sends a followup message said wow this is amazing >> nice >> I don't see that anywhere in the world you kind of this is this is like if you want to be a reason to be optimistic about India forget governments forget
(1:13:49) these GDP demographics that's the reason I mean that kind of hunger for upward mobility knowledge self-improvement is phen Phenomenal. >> Yes, agreed. 101%. >> Well, thank you so much. >> Thank you. Thank you. >> Thank you. It was pleasure talking to you. >> Yeah, it was fun. >> Thank you. >> Thank you. >> Thank you so much for watching this episode till the end.
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