Kunal Shah: Core Human Motivations

0:00 You will rarely meet successful people who are not insightful. I believe that inside is the smallest unit of truth that is actionable. And and and therefore people who operate in the currency of insights. Ten. To be generally more successful.

0:15 At least in business. Welcome to the Knowledge Project Podcast. I'm your host, Shane Parish. The goal of this show is to master the best what other people have already figured out. To that end. I sit down with people at the top of their game to uncover what they've learned along the way.

0:48 Every episode is packed with timeless ideas and insights that you can use in life and business. If you're listening to this, you're missing it. If you'd like special member only episodes, access before anyone else transcripts and other member only content, you can join at fs.blog slash membership. Check out the show notes for a link. Today I'm speaking with Kanal Shah. This is one of the most fascinating conversations I've ever had.

1:15 We talk about the lessons he's learned growing up in a family business and how that helps him today. Why dropped out of an NBA. Decision making. The differences between American and Indian culture, including the living room effect. And so

1:30 So much more. While the conversation seems long, the wisdom per word ratio is Off the charts. It's time to listen. and learn.

1:50 You grew up in a business family, and I'm curious as to what lessons you learned Through that. So um In India we have a A deep rooted caste system.

2:04 Uh where we had four casts Uh Uh and one of the cost of the forecast is The business cost. And for multiple generations

2:15 Everybody in that Has only done Business. Right. It's called the Vaisha or the Banya cast. And

2:24 For this group of people, jobs is an unusual thing. I think first lesson was uh They have much lower shame. Then the other communities.

2:37 They have very little Uh self uh doubt when it comes to being shameless. I mean they're very hard To offend.

2:49 They're okay. That even if you mock them as long as you're Giving them business. They're okay with that. Not many people would be okay with that.

3:00 Treatment. Right. And and makes Many business communities not Respectable. Because they're okay to be mocked or have lower

3:09 dignity or lower status as long as they get the the financial upside of it. So I think that's where the status in wealth driven societies mindset comes in that they are absolutely okay to reduce their status as long as they win the commercial side of the deal. That's one big lesson. The second Uh PC is just natural understanding of

3:30 Where is the value? In everything. why would somebody pay for it is almost intuitively taught from childhood. You just know. What are people really paying for?

3:44 Right. And a natural understanding of which products would have higher gross margins. or lower gross margins. Right. Interesting thing that

3:54 When you grew up in a business family they just Naturally. Arrive at summarizing what's the value in everything. And it's sometimes very uncomfortable because I remember going to an MBA school early days to speak and they invited me and I I was only interested in knowing the uneconomics of the MBA school.

4:13 and and understanding how beautiful that business is. And they Find that disturbing but for a business community they love to break things down to unit economics almost as if It's like a first

4:25 Like the small talk is unit economics. Which is which is quite interesting. The third lesson is uh natural Need for

4:35 Spotting trends. So one of the things that is there I am part of the Gujarati community which is The the business community of India. And They have this greeting.

4:45 When the two business people meet. Normally people say, Hey, hello, how are you? What's up? They have one more thing which is called Shu Nava Juni. Which means

4:55 Hey, what's trending? What's New. What are the new trends? And they share that.

5:03 On a more regular basis, which Makes them spot new trends. and be in businesses that other people would take a long time to enter into Because they love the new new trends, because they believe that the value is going to be where they are less likely to have competition. And they're constantly finding themselves

5:23 To be at different places. Gujaratis are also the people who have you will find them in every single country having set up a business because they will keep finding ways to not compete. So you will find them in a remotest African country, there'll be a Gujarati family running a business.

5:41 Multiple generations. Uh you will see them across the planet. Because they will look for ways to not compete and have a zero sum mindset. And the last thing is uh The community benefits.

5:55 Uh, one of the things I have noticed in Gujarati community is that just like Jewish community is that they offer significantly lower interest rate. to people in their community because banks are less likely to underwrite. And obviously this is preventure capital. It's okay. Try to make something out of it.

6:15 and try to return the capital when you can, but at a very low interest rate. Just nominal. Because they love to see more people be successful. And the last lesson was uh Constantly

6:28 having the need to make their community successful. Bye. Giving them A soft landing if their business fails. Oh, it's okay.

6:37 Come start doing a job, stabilized. And start again. My my dad had a startup that failed. So I had to start working since I was 14 or 15. My first job was a data entry operator. Which made like

6:51 thirty dollars a month kind of a salary when I started. There is always this thing that okay, you can start, do the job right now, stabilize the family, and then then you can start some business. Like there is no shame that, oh, you are just helping the family settle down from a financial setback. That the family went through. And I have seen within the communities people going all in, getting wiped out. Becoming big.

7:15 W in one lifetime, again and again. And that is Less shame attached to failure. Because oh It's business. And and

7:25 It's fascinating. So many stories. Like I I'll tell you about one particular individual. His name is Prenchan Roychan. He's the founder of Bombay Stock Exchange and very few people in India know about this guy. The reason he people don't know about this guy because he once upon a time was the richest guy in India. He still probably holds the Guinness Book of World Record for doing the largest ever trade, single trade.

7:49 Adjusted to inflation. Uh it's in his Wikipedia. But he lost all his wealth in trying to do a real estate project that bombed. So There is this guy who comes from nowhere, starts his business

8:03 becomes the wealthiest person And literally Like hundred percent of Indians and Indian businessmen have no clue about this guy.

8:18 I just research because there's a huge Tower in Bombay. Which is made like Big Ben and I was like, Who the hell made this? Because it doesn't have a British name. It is Rajabaya Tower. So I researched and found out that Rajabaya was Priem Chan Roychan's mom. And he made this clock for her because she could not see

8:38 For her to hear time. Like look at the flex of the guy that he builds a massive clock in British India. With a huge amount of spend by hiring British architects. Just to flex. to the community that I have built a clock because my mom can't see time.

8:55 That's crazy. I want to go back to the the shame thing for a second here. Uh the fear of failure prevents us from trying. Do you feel like we develop this as an adult? Or do you feel like when you're involved in a business at a at a very young age y you you get exposed to this because you're going to fail. If you're doing anything, you're gonna fail. And that's okay. And that's part of business. And you just keep going and you keep iterating and you keep trying. Whereas when we become adults and we try something, we don't want to look like an idiot. We we're scared to look like an idiot. I think a lot of people who have been bullied

9:29 And shamed and mocked early in life. Develop an unusual superpower to not give a damn about being mocked anymore. Right. Uh Uh it's not surprising if one would say that

9:41 Hey, Elon, uh the way you are. Were you mocked a lot when you were younger'cause you were Not a normal guy and and one would even say that you look like a guy on the spectrum and the guy would probably say yeah Probably true.

9:55 But he doesn't feel that anymore. Right. So what I noticed is the training of kids. In India it's very common that people will say, Oh, if you do not score well All your friends will make fun of you. All the relatives will make fun of you.

10:12 Eve's gonna look down upon you. And they will say shame, shame, right? And when kids are trained through shaming, it's an effective tool to make them better. The only problem is that it remains as a long term bug in them that they Constantly think about Other people's point of view.

10:30 about how they are and they constantly think their social status cannot be taken risk. But according to me, You cannot develop substance net worth wealth. Experience unless you're constantly willing

10:44 Your reputation. People who can uh feel extremely okay to risk up to thirty, forty percent of their reputation, wealth, health. But a lot of people don't do that because in their head

11:00 The will say I can't even risk one percent of my reputation. Again, going back to the Gujarati communities, I know so many families go bankrupt. All the time. Because going all in

11:13 is not scary for them. In fact, I'll tell you an interesting stat. Uh India has India is a very large country, but the total number of people who have invested in any kind of asset. uh stock, mutual funds, any of that is around thirty million, thirty, thirty five million.

11:31 I would go to the extent of saying that eighty, eighty five percent of people who are having more than two hundred dollars of investment in any of these assets. Are people from this community? That's how

11:43 Risk covers the rest of the society is Compared to these guys. That's fascinating. I wanna 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.

12:01 Are there any examples that come to mind when you think of that as a child? Mm. So I'll talk about f three, four businesses that I did as a kid and this is all before I had legal age to do anything. At all.

12:15 One was uh I I built Uh Mixed tapes which are downloaded music from the internet and made mixtapes for people on a CD and burnt it and gave it to them. And I used 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

12:35 Making something personalized. versus buying something from the store which is mixed tape of somebody else and and the idea of gifting. They were okay to pay three to four X more. than the normal mixtape that they would get from the market. Because this is Made by me.

12:51 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. Uh and they would make

13:04 Five X more profit. selling my mixtapes and the the music label thing. 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 have built Another business which was I realize that people put Hanat to really differentiate themselves in Indian weddings.

13:22 to really look better than I have the better design on my hands. Like it's almost like a temporary tattoo. Uh that people put. And I realized that the biggest need people had was design was not enough. The colour of henna had to change. So I figured out a way to build black henna, which I learned from some Arabic culture was possible, uh, and sold that in the retail stores under a brand that I made uh when I was 16, 17.

13:47 Uh and that Sold at ten X more price. Then the regular henna. because it allowed people to differentiate themselves have a superior status. So that's another thing I learned that people love to personalize and put a signature and get more value. People love to have higher status than others and pay more value and and they didn't even care about the price because What I did is I said this is short supply.

14:10 So what I did I said that I can only supply you two A day. It's complex process to make it. It wasn't complex process. I just artificially uh uh create scarcity in the market and I I had to learn all of this because I could really not make enough uh uh because I was having a full time job and doing other things. Right.

14:29 I also started doing some private tuitions for a kids to teach multiple subjects, uh whatever people would send. And I I realize that people love teaching their kids Exotic subjects. So I would like to teach them Excel and and I would not know these subjects. I would ask them, what do you really want to learn? I would learn that previous night and teach them.

14:47 Because people love the idea of having special skills given to their kids which were not available easily in the market. So they were looking for tuition teacher who would Say, Oh, can you teach this particular skill? Can you teach that particular skin? And I would learn that. And I realised that I learned the best when I had to teach. So I started doing that a lot.

15:07 uh uh and it was the fastest way to make money. It was a negative cack. A way of uh learning in life, right? Uh so I think lot of these concepts made me realize that the Indian society was a lot different. And I and in my career I did a lot of other businesses which were sold to the US and Western market. an Indian market. And

15:27 I think most Western companies do not understand Asian society. The masslows hierarchy Of Asian society is completely different.

15:38 To the Western society. But unfortunately the all the marketing textbooks are made in the West. And then they come to the Indian market and they get shocked on what people really pay for. In these markets. And I think therefore a lot of Western companies struggle to make monetize from these markets. They can get a lot of DAUs and MAUs from this market.

15:58 But rarely Arpu from this market because they don't understand what people pay for over here. So I think that was the big lesson I learned. So one of the biggest shocking thing for me when I'm during my first trip to the US was I figured that Almost everybody's first job Paid them an hourly salary.

16:17 In India. Nobody has Ever On an hourly salary in their entire life.

16:25 Now there is a dangerous Thing that happens because of that. Nobody understands what's their value. Per hour. You ask any Indian if you ever come to India and go to any store.

16:37 Any hotel, any restaurant, ask the guy what's your salary per hour? Cannot answer that question. Because of that, they take poor decisions with their time. And they don't understand the value of time. So products that sell convenience.

16:54 And save you your time. rarely monetize, which monetize a lot in the Western society. Because everybody understands the value of our Because their first job was I don't know, ten dollars an hour and then now they are doing well in life, but they can still do a math.

17:12 On approximate basis. Now my salary seems to be five hundred dollars an hour. And they just get it and therefore they take very interesting decisions. They will not try to optimize for a fifty dollar discount on their flight tickets. Uh

17:25 When they are Uh uh. making five hundred dollars because they'll say that's not worth my time. No Indian will ever say it's not worth my time. And that's true for many Asian societies. Because value of

17:37 Time as a concept was never taught. Efficiency is not a DNA you see in Asia. But Uh a flip side I have noticed is that Everything that feels soulful in life.

17:50 is inefficient. All the vacations that we find. very soulful are inefficient places. The food that we really, really like and find soulful are inefficient to cook. Right. So I always find these interesting things that Maybe

18:04 Soulfulness is a function of chaos and inefficiency. which Western societies figured out how to scale. And and let's compare this to our religion now. Uh Hinduism uh isn't I would say not as scalable as let's say many of the other religions because

18:21 It's not standardized. There is no one book. No ten rules, no one God So what do you really scale? It's an open source religion which People make and build on some principles and tenets which are constantly evolving and people are allowed to tweak it on their own terms. So it's like

18:39 Evolving very, very differently. Uh and therefore. Hinduism is mostly spread. Through birth but not through scaling to other societies because it was not designed, but it is something that you feel

18:52 more spiritual about and other things. And I think That's where the nuance comes in that Uh it is impossible to imagine Scaling in life without standardizing. And standardizing

19:04 Is the enemy. Of soulfulness. Do you think standardization is also sort of the opposite of value creation in some ways from a consumer point of view? I would Disagree with that.

19:16 Because once you have figured out what is called as PMF. You need to scale it by Standardizing it to a great extent. Right. And that happens all the time. However

19:28 Uh standardized things that Easier to disrupt than non standardized things. Just a way a standardized religion is easier to disrupt than a non standardized religion. Right. Uh one is hard to scale, one is hard to destroy. Oh I like that continuum. Go deeper on that, the hard to scale versus hard to destroy.

19:46 So if you think about A hard to scale businesses. Let's say The Great restaurant. You can't make a chain out of it.

19:54 It's just impossible. Right? Because the guy can't teach all the skills To build five chefs. Ten chefs. Right? But they're also hard to destroy because if it really works, there are so many restaurants that work for hundreds of years because

20:09 They have just perfected that. But they can't build branches. They can't do. But but there is a McDonald's which has managed to scale the version, right? Which is very easy to attack and say, Hey, it's unhealthy and guys we need to move away from this and uh break that whole concept or or the sugary drinks which have scaled so much. And we can all agree and say that hey, it may not be healthy for you and we need to move away from that.

20:30 But something that is built inefficiently is harder to destroy uh because what do you destroy? And and how do you destroy him? There is nothing to attack. There's no Areas of attack that you can really say that okay, these are the three points on which we can attack. You can't.

20:47 So it's slower to take hold. And then it's harder to get rid of. Yep. And And I

20:53 Pink up A lot of things that are non scalable. Let's say uh movie making some directors. who are really known to make successful movies back to back. Really don't care about timelines.

21:05 You can't Tell you. I don't know, the best director said, Oh, we need to ship two movies Uh every two years. They will not do that.

21:14 Right. And I'm not saying that the others who ship one movie a year do not create value, they do. But they will never create something that is memorable and will create an experience that you will never forget. So I think that's where

21:27 I'm I would disagree with the idea of value creation happens in both. But the question is that what do you enjoy and what creates a memorable experience? What Creates an emotional arousal. Is rarely through efficient. uh methods. For example, trips to inefficient places will be more memorable than the efficient places by design.

21:45 Do you think you you get rewarded for creating almost like an asymmetry to creating an emotional connection? versus a different type of value. People Pay or people give you time or money Where their core motivations are mostly met

22:03 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 ninety, I'm at level sixty, somebody is at level two hundred, and so on and so forth. And let's believe this is true. Now products. And services.

22:23 are also at some levels in life. For example, I would say Louis Vuitton is at level one sixty, HBS education is at level two hundred. And let's imagine these things and let's say fueling your car is at level thirty and so on and so forth. But 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

22:53 moving to a utility s provider as long as they keep offering me Lower price as long as the time required and the 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

23:08 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 no trouble. Because B.

23:29 Promise. Or even if they give you hope, let's give example of Vegas right now. Vegas does not assure you that you'll become rich. But the hope lottery Which is a chance of being level thirty jump into level two hundred.

23:43 I'm okay to go all in. Once in a while. Especially poor people get sucked into that a lot more because Imagine it's like being on a poker table with the smallest stack, the best strategy you feel to be on the table is to go all in all the time. So When we went through pandemic

23:59 Uh I believe that The whole World had this amygdala hijack moment where they thought Oh my God, I have to really survive and I need to take more risky behavior because I think the amygdala probably uh flared up during this time and and therefore risky behavior. Uh seems to happen.

24:17 uh right after crisis because people just Go all in. Ninety ninety five percent of all Coins. that were traded on all crypto exchanges were not in the top five.

24:28 Not even the top ten. Because who wants the normal returns? I I just want a chance to just play the and therefore I think the the world is getting more risky and then obviously there's a huge correction that'll happen, uh, which will kind of flow in the next stage. Uh, because uh like the Spanish flu, we went through Spanish flu and then the roaring twenties and the Great Depression, we're gonna go through those cycles faster now.

24:51 Because we have Fast forwarding everything. Almost like a fast forward button to future and and accelerates eventualities because we go through that. But Coming back to what I was saying is that value therefore

25:05 is utility and vanity and and chance of increasing social status, which is constantly sucking all the gross margins. And world is seeing a very interesting pattern. All the businesses that are providing utility. are losing gross margins to the point of becoming zero. Because many companies that offer vanity or social status or a chance of dealing with the CMO are making those businesses almost free.

25:30 Because you get a chance to make cross sell a high gross margin services. Right. Uh if you look at Amazon, a bulk of their revenue is to be marketplace, uh, but if you see all the avtars of Amazon in different countries, the marketplace revenue was made to be zero. Alibaba chose to not charge the merchants to sell.

25:48 But they made money on advertising. And fintech. Which are skin in the game businesses. But does not charge you rent per se because it was easier to disrupt eBay and Amazon and China by saying Oh it doesn't

26:02 You know commissions. If you have to sell an art store. Right. This is where I see a lot of the utility providing businesses. getting constantly disrupted by somebody, at least in their technology businesses because

26:16 You you don't need a license to provide utility. You can just offer it. It's not like electricity company that can keep charging you forever because nobody can compete with electricity companies for the networks that they're but internet businesses can simply offer utility for free. And and Google has mastered this. Many companies have mastered this. I believe uh the future of SaaS companies is going to be that where the next SaaS company will just say, Oh, just use our tool for free. But by the way, we'll charge you and cross sell you some lending, some loans, some technology, some Um Some value added services.

26:46 Uh which could disrupt. lot of utility creating businesses uh by design. So I think Cost to provide unity is Dropping and and therefore the revenue expectation from that is dropping. And we're going through a very interesting cycle of how business models will evolve. And they all will have to be more skin in the game.

27:06 In nature. uh versus rent seeking that they used to be because nobody could easily compete because the world is getting More and more like APIs. Uh and and and and businesses when they become APIs, it's much easier to plug them into larger ecosystems. Shin, one of the interesting things I always wonder about is that

27:26 Uh it's very easy to find super apps in Asia, but rarely you find super apps in Uh Western societies. But it's also true for superstars and and super companies and conglomerates. So every low trust society, which is usually non Western society, a lot of them are low trust, there is always concentration of trust. Every low trust society will have concentration of trust.

27:49 And When that high trust entity launches twenty five things, people just use it. For example, in India Tata Group is This concentration of trust and they can launch a car To a refrigerator?

28:03 To salt. To furniture and people like Oh Tata Group, we'll just buy it. Uh Mm I would say eighty, eighty five percent of Bollywood's revenue comes from like Ten, fifteen people?

28:14 Again, concentration of trust and and therefore, by the way, we w even watch their kids' movies. So nepotism is very rampant in India because you're like, Oh, is this guy's son? I trust him. To do a good job. But I'm not risking my money on this new actor. Uh and therefore super apps also emerge a lot more over here. I'm like, oh Cred is offering this, or they're launching this new service, boom.

28:37 Start using it. And And but you might be doing completely different business in the past, but people just say, Oh I I know these guys. The familiarity creates huge amount of trust over here.

28:48 And therefore You'll see Concentration of market cap. In fewer and fewer companies.

28:56 Preto. might be extremely skewed in Asia versus West. And nobody has obviously studied that. I I I would love to fund a research which shows this, but I do believe that market cap of top companies would be different. then uh what you will observe uh At least in each category. Like tech may be an exception, but any other every other category will see huge concentration.

29:18 uh revenue from the Bollywood industry, revenue from uh anything else. It just becomes more and more and more concentrated. And I think That is it. I think Increasing trust in a society, and I've been obviously uh obsessed with what creates trust. For example, the most

29:35 Simplest answer I have found is Trust is natural in societies that have Very low diversity of ethnicity. And that is a scary thought because All sorts of

29:46 bad behavior have happened in human history because we tried to attack the minority and and always try to uh make the society one uh I but it's unfortunately Seems to be true that trust is biological.

30:02 And and we seem to trust people with common belief systems. And and and ethnicity plays a huge role. So you'll notice an interesting pattern that uh I think there's a study by some Stanford professor which showed that uh Almost an opposite Connection or correlation to

30:19 And high trust of a society. It's not surprising that any s most societies that are not multi ethnic, as they're becoming more multi ethnic, the trust is declining. And you see emergence of authoritarian leaders To be mu much more frequent.

30:35 Uh because On Low trust societies always want somebody who with strong backbone to create peace. And that's also the concentration of trust point which which seeps in from that, which which is

30:48 Constantly repeating itself in many, many themes. We trust people who are like ourselves. And so the the more diverse society is. The fewer people that are like us, the more low trust we are in general. That's is that a good summary of sort of Paraphrasing of what you said.

31:05 I mean I think it's a good summary, and there's one more nuance. If it becomes too similar, the innovation dies. If it becomes too dissimilar Trust dies. So it seems to be in an interesting spectrum that you can only have a certain mix

31:18 That Keeps driving things to move forward versus become stagnant. And boring. And too chaotic.

31:25 I think there is this healthy mix that needs to keep happening. And I don't know what the number is, but it sounds like a scary concept because you're trying to say that hey, you have to cleanse a society to reorganize itself to have eighty twenty on ethnicities, which is a problematic concept to start with. And then one of the interesting things that you said there is sort of in low trust societies You sort of have these big companies that get this this Almost like trust grant, right? So I can I can create products in adjacent marketplaces that people will just naturally trust.

31:57 on their own because they don't know who to trust or what to trust. But if like Facebook were to make a car, people would be pretty skeptical. The trust of of the platform would not necessarily carry over. Yeah, and and it's such a fascinating concept in India because It just works. And and and my company I've seen that And and we are in a fintech business, we launched an e commerce platform and it just becomes so big in a month's time. much to most people's surprise, including our investors who are mostly from the Western market. They're like

32:31 Focus. Focus is almost a curse. In Asian markets. Oh go deeper on that. The market is not deep enough.

32:39 to focus on one market and create a large company. the poor capita income, the total economy and all of that. So you have to do cross sell more things to the same set of customers. Uh I'll give you some

32:52 Interesting stats about India, which should Well. Outside India. Less than six.

33:00 percent of urban Indian women have financial income of their own. Ninety four percent of them are currently uh taking care of kids or taking care of the family and not contributing to the labor force, but they're all educated. They are probably undergrad or grads or or even higher. But not contributing to the labor force.

33:21 Another interesting thing is ninety five percent of all financial products in India. are bought by men. Credit cards. Car loans, home loans. All investments.

33:33 India has now nearly two thousand dollars per capita income uh annually But if you remove the top thirty million families or thirty million individuals. the per capita income would drop to maybe six hundred dollars. And therefore a lot of Western markets love to come to India and say that oh India is the next China. It's not

33:53 Because our poor capital income is never going to be And grow like China because at before China started becoming affluent, ninety six percent of Chinese urban women were working. because of the one child policy which forced it to become a general neutral society. Uh and and got them all on the labor force.

34:11 Uh which never happened in India, in fact, it's going down. That's a scary trend. Uh across the region, India has the lowest female participation of labor. Now The per capita income is not going to grow and therefore A lot of foreign companies love to come to India because

34:26 India is the DAU farm of the world. All the big Internet giants will say, Oh, I have five hundred million billion users in India, but if you look at the RPU and peel the RPU, it'll be less than a dollar or two. Uh but it's great. Like for example, uh uh

34:41 If you got a lot of Indian followers on Twitter, uh your Twitter count follower count will go like crazy. your monetization question might go down. And I think many companies like Snapchat, Twitter have worked Very hot. to grow user base in India.

34:56 Facebook is the classic example. YouTube, my bet would be that It would be probably making less than two dollars RPU annually in India. Uh, with probably more than five hundred, six hundred million active users. In India alone. But they don't mind that because

35:12 the global RPU compensates for the RPU mix. But the user mixed. And therefore the market will reward like Netflix made the mistake of coming to India and say, We'll charge you for it. nobody is gonna pay that and therefore the projections did not meet because

35:27 India is a country where you give them freebies and and you get all your DIUs you want, you do not get your ARPU. And I think that's the lesson they learned and I think they're saying now we'll launch market with advertising. India is perfect for that because value of time is not a concept for us. So we'll watch Uh in India when a series plays on T V of thirty minutes.

35:47 Approximately nine minutes his ads. Oh my gosh. By the way, it used to be more The government regulated and made it nine minutes. So if people aren't paid hourly. How are they how are they compensated? How does that work?

36:01 So we have a concept of monthly salary. Uh, we are not even paid weekly, so we are paid every month. And everybody thinks in month? Right. Uh it's a flawed concept because they never solve about think about being efficient in life.

36:14 unless you know your salary an hourly basis you will never really know what the value of time is. Uh one fascinating thing I've seen in India is that Uh, you you fly in the US and many people are reading books or doing something else in India nobody's really reading books and uh many of them I've seen a very peculiar behavior in India. is they are going to WhatsApp and deleting old pictures so that they can clear up the memory instead of buying a one dollar pack that will give them a cloud access.

36:39 Like that's the value of time. And these are by the more the most affluent people in India fly. So Uh there's no way Uh, they can spend two hours deleting pictures on WhatsApp, but they do. Because the value of time.

36:53 It's not understood. Intuitively. And and I've seen this all the time in people around me. Uh people who are multi millionaires will work so hard To save fifty dollars is not even funny. That's like my parents, they'll they'll drive forty five minutes to save two cents a liter on gasoline. Yeah, but they they never worked in a society. They did not grow up in a society where value of time was a concept, right? So I think it's a more phenomena coming from those world and Western society, like oh, we have to be efficient, industrialization, value power, productivity.

37:25 Uh if I ask Ten people in India what productivity means, I don't think I'll get a good answer. But then it th then if you try to sell something based on sort of saving people time, it's not gonna resonate because you have to not only convince them that this worth doing, you're really trying to change something that's inherent. in the culture right now. Which I would imagine is slowly changing.

37:46 as wealth becomes More? I it's not uh it's funny you you're saying that but Uh India is After the US maybe in the top three markets of SaaS providers, SaaS.

37:58 Business software providers, right? On revenue. But none of them. have any revenue from the local market. 'Cause no no business pays for software.

38:10 They don't they're like, Oh, I'm just gonna hire three more people and they'll just work because they don't understand the software could make them so much more efficient. And and I I I wouldn't be able to find one company that makes more than ten dollars annu ten million dollars annual revenue by selling software to Indian Businesses. That's crazy. Which is scary if you think about it how large our economy is and and how many businesses we have and and how internet savvy we are. We are probably uh uh more savvy in using smartphones and digital payments

38:41 Uh in fact uh one of the things that is talked about India's digital payments have overtaken China and we have like taken off. Most people don't tell you that It took off after government made it free. Right. Money transfer is instant, but nobody makes any money.

38:56 That's when it took off. when we had charge one percent, two percent MDR for do that. Never took off. So the thing is that this value of time, understanding credit, value of time and uh this math of thinking of Of

39:11 Time, energy, money in one equation. It's extremely hard. You're on your second big startup now. How do we get here? Walk me through your first and what you're doing right now, and then then we'll pick up where we left off here. So My first startup I built from twenty ten to twenty fifteen, um, probably the largest exit at that point of time in India. And that startup

39:33 Did the following it. Yeah. Allowed people to recharge their mobile phones. Uh in India ninety nine percent 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.

39:50 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, or 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 do not have any money. So

40:20 After I exited the first company I spent a bunch of time I was Mm. advising multiple companies, joining the advisory board or board. So one of them is 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.

40:38 I'm probably in an angel investor in maybe two hundred plus companies now in India. What I learnt was that Everybody was building these businesses by copying Western models. Free charge was one of the few original ideas. The reason I built an original company because I had no engine background, I had no friends who had built tech startups.

40:56 In fact, I didn't even think I was building a tech startup. uh I thought I was building a marketing company, which turned out to be a one of the largest payments company in India. Uh because I had never read Tech Crunch in my life. In fact When Sequoia reached out to me, I'm like, Who are all these guys? Why are wasting my time? I had no clue who they were.

41:13 I ignored their emails for months. Till somebody told me, Hey. they are really big deal, you need to check them out. And I'm like, okay, I'll win there. And and I remember they're asking that so Kanal, what's your CAC?

41:25 And I had no clue what that word meant. And I think it's a superpower. I think vocabulary He's A unique curse that we suffer every word we know. If you don't know these words, we'll probably not suffer them.

41:37 Uh and and I think uh Uh what I learned from that experience was that you need to focus on the right market because you can be the greatest founder. If you meet the bad market, you will die. But if you find a market that has used tailwinds to it. Even a mediocre founder will do really, really well.

41:54 Right. market is like laws of physics and I saw a very interesting pattern in India was that Lot of smart people We're building great companies that wouldn't go nowhere. And and I saw some people who are not so smart who do really well consistently.

42:09 and serial entrepreneurs, right? And I found that as an interesting pattern that I I I I refer to the analogy that I see a lot of dam builders with no idea where rivers exist. So I see them building dams in hope that river will show up, but river never shows up, river exists. Every time they discover that hey, river is not coming to my dam Instead of moving the dam to river.

42:30 They make the dams even more funkier and cooler and with AI and all of that stuff, but the water never comes. And I saw that Some people were natural at finding where the rivers of motivation But flowing.

42:45 And even the mediocre dams were making profits over there versus These fancy dams. But Nobody ever used. That's a very sort of like Western idea, right? Build it and they will come.

42:56 Yeah. It never happens, I think. And and it's a great idea to build in Western markets where there are so many rivers and there is such a big economy that even Some accidental rival flowing through you will make a lot of money. In India there are no accidental it's like you're building in dessert, right? So you have to make sure you have a dessert Like you have to really build the rivers the right down to the right place because there's no unlimited rivers flowing. Uh nobody was thinking about human motivation.

43:24 Because All of our education system in India was Not teaching humanities. I accidentally learned humanities because of philosophy. But

43:33 Every single tech founder in India has hundred unicorns. I would go on to say that I'm the only founder in the Hundred Unicorns. Which has A humanities background.

43:45 Everybody else's stem. And and another thing in India is that we Never had dating culture. So we never learn human motivation through the game of dating as well. So we have extraordinary builders.

43:58 But we don't know what to build for and therefore. How many Indian products are used in the West right now? Very few. But how many products are built in India, which are used in the US, made by US product managers? maybe hundreds and hundreds of thousands of them. How many co founders of many unicorns in the US are Indians? Probably a lot of them.

44:19 And this is where I found this to be thinking that Indians were very good at Cracking. an exam that existed versus creating an exam that does not exist. Like everybody knows Indian spends a lot on weddings. Like it's a known thing. People love to go to the Indian weddings and they they keep hearing this.

44:36 I'll give you an interesting data point. Like I I checked in my office. Uh most people spent close to six times their annual salary for their wedding. Wow. But

44:48 Zero. Unicorn startups. Solving Wedding problems. But that's the scary thing about the market. I I met

44:56 a a founder who runs us a luggage company, a suitcases they built it, one of the public listed companies and they wanted me to join their board and I'm like okay, I'm happy to meet but I'm not joining a traditional business board, but I'm happy to have a conversation and And I was just giving them some suggestions they should do something branding on the airport and they're like What are you talking about? I'm like, Yeah, you are a suitcase company, you should be at the airports, like what am I not

45:19 Saying correct over here, is that canal? Eighty to eighty three percent of all suitcases in India are bought for weddings. The bride takes new suitcases and goes to the new family. There are four point four million weddings that happened. Every year and on an average close to three to four suitcases move with her to the new house.

45:40 I have no clue about these things. I I met another founder who was building up interesting biohacking kind of a startup and there's a non treatment uh which improves the uh mitochondria growth rate in your thing and such expensive treatment which is done usually for cancer patients or somebody with diabetic situation or whatever. And this guy goes there that I want to try this for bio biohacking and the guy's like

46:05 Oh you're here for cancer? He says no. Are you here for diabetes? I said no. The third question was Are you here for because it's your wedding? And like why is wedding important over here? Because that treatment makes your skin lighter for six months. So a lot of people are doing that treatment which is so expensive. usually done by cancer patients or severe diabetic patients.

46:25 To improve the skin tone. For their wedding. And that is the fascinating thing about India that So much of the economy is running through that because in India We are

46:35 Saving every penny all the time. But we'll splurge on weddings. We'll splurge on medical events, will splurge on Uh Education of our kids.

46:47 Every Indian family right now who have just got new kids. are going to spend probably hundred to two hundred times more than what their parents spent for their education. Because that's what we spend money on. The consumption is just not there. So I think when you study these patterns. Yeah.

47:03 What I realize that These patterns were not understood by Indian founders, they were just building Western copies. And therefore at one point of time. I saw there were ten startups that were funded For doing laundry startups.

47:16 Which but popular in New York. But in India we had Maids coming at home, why do we need a laundry startup? But there were ten companies that got funded.

47:25 So they were So many f F investors who were clueless. So many founders who are living in India who are clueless. So

47:34 During that period I started working on a framework. Uh I call it the Delta Four framework. on predicting startup success because my curiosity was that How am I able to be successful more often when I'm not even one tenth the academic smarts that some of these guys have demonstrated in the past. But why am I able to do it more successfully?

47:55 So I built a framework and I and and because I was between two startups, I had a time to read up on physics and biology and evolutionary biology and trust. So I was going all over the place. Obviously I was on on your blog and like I'm Connecting all these dots in my head.

48:10 And I found that The evolution of startups was very similar to biological evolution and and nobody was thinking like that. So I I'll give you a Sneak

48:21 preview of like that framework it's easier to understand, but I'll tell you for example if I asked you Uh Which product or service? was more efficient

48:32 Twenty. than it is today. If you are if I've asked you this question, which product or service was more efficient twenty years ago than it is today. It's really impossible to find an answer. All the efficiency exists in the future.

48:48 So humans are constantly moving from inefficiency to efficiency. In one direction. and like almost like arrow of time. Uh and and Therefore, Any product or service that sh changes you from state A, which is inefficient, to state B should unlock something that is called as wealth.

49:06 Uh so I I built a simple framework which It sounds simple, but most people still don't use it. Is let's say I I asked you that What do you think is the efficiency score of booking a cap through Uber?

49:18 On ten. Or versus the old method that existed. Of booking cabs, whatever that method was. Most people would say Maybe this is seven, eight on ten.

49:28 That is maybe two on ten. One on ten, three on ten. So the framework was very simple that every time the delta of efficiency score is greater than or equal to four. Three things happen. It's

49:40 An irreversible behavior. Once you experience a delta four product or service you cannot go back. Uh there is obviously very, very high tolerance. Uh that's the second thing that uh you will hate Uber but you're not gonna like

49:54 Damn it I'm gonna delete this app and I'm gonna move to A more inefficient behavior. The third thing. Is Which I call it the UBP, uh

50:03 unique bragworthy proposition. Humans when they discover something Delta four They can't stop bragging about it. Everywhere. Almost like a secret code that all humans have with each other, that every time we discover Delta 4, brag about it and tell everybody about it.

50:21 and move the entire humanity from state A to state B, which is more efficient. which reduces their local entropy, uh and and moves them forward to a more efficient medium which burns Less an energy uh then in any form, time, money, uh or or or wealth, uh to move forward to more efficient methods. And I realise that most startups were not looking at this. I'll give you a simple framework uh to think where it doesn't work.

50:45 Uh let's talk about buying shirts. Online versus offline. It's not Delta Four if you have let's say odd sizes or and you have the challenge. And therefore shirts have not moved completely online. Because just by adding tech, it doesn't become Delta 4. Right? It has to improve the efficiency score of the desired behavior.

51:06 And I think that framework Uh I I talked about it in India. Uh uh funny enough, I I was told by Secoya in the US they've actually introduced this framework in the onboarding of analysts in the Sequoia US uh team. Which was interesting because in India, even if I've spoken about this framework, still startups

51:24 Don't apply that and I see ninety percent of them fail all the time. Back to the analogy of Building a dam where rivers don't exist. And and reverses are nothing but motivations, right? Like at the core of it, we all all humans have the same core motivations.

51:39 And then it's goes into streams and creates more rivers. From that stream. Constantly, right? But At the core of it, it's the same thing. You want to increase your social status, you want to improve your mating success, you want to have success for your progeny, and so on and so forth.

51:54 It all boils down to the same motivation things and then you can put them into so many different rivers that flow. So when I started building my second company I realized How to make things more successful. also look at more high motivation categories and so on and so forth.

52:09 Uh I had the luxury to take the continent bet and say that I told my investment I'm building a startup that will only focus on the top twenty five million customers of India. Because Only they can value time or will buy

52:24 acquiring hundreds of millions of customers which cannot be monetized because they can barely have money to even eat. Right now we are a poor nation. And it's a controversial idea because India is always this country which sold this dream of hundreds of millions of customers like China. But Nothing

52:39 between India and China is Common except. R Population. That's where the similarity ends.

52:45 But Global companies love to With India, because They lost on China. So public markets will bash them if they lose India again.

52:54 So a lot of them are in India. To win the holy war. But the market is not Big enough. I would say the total

53:02 GMV that Amazon would make in India would easily be done by a small European nation. after being here for like maybe seven, eight years that they have spent over here. Because the people who can spend. Just do not exist.

53:15 And I think That was the genesis of focusing on startup to build for the top More thing and and what we said is that Uh, we'll focus on those customers because nobody's really building for them because everybody's building for this Lowest common derometer that does not exist.

53:29 And I will focus on this customers and Uh, we said that we will focus on more trustworthy individuals to increase the trust of the system. We said that for these group of people, I'll give you a small example. Um India

53:43 Even if you are on the top Zero point zero one percent of affluence. You're Passport is ranked maybe one fifty in the world. And therefore every country

53:52 It's extremely hard for you to get a visa to. because there's no way for you to differentiate yourself, which is very similar to a lot of stuff that is done digitally in India for any service you encounter. And we said We will make their life Better by Allowing them to have an identity that at least makes their life slightly more frictionless.

54:13 This sounds a controversial idea, hey, you're trying to kill a society which is like more uh friction. But the thing is that it's that's what capitalism is. I'll I'll give you a small example. India has this unique concept called m MRP. I don't know if you know about this, but I said this bottle over here. It says that maximum retail price of this bottle is Ten rupees.

54:34 And Even if it's sold in Extremely affluent neighborhood. Or the most poor neighborhood. The price is ten rupees.

54:42 Because the government thought this is the greatest idea ever. That we'll have the same price for everybody. But I could easily pay thirty rupees for that and somebody else could pay five rupees for that and increase the market overall. But we enforce an artificial concept of MRP. Which is stopping

54:58 But the core tenets of free market and capitalism to grow. And it's a very unique thing about India where You come with these things that oh I'm gonna have this The seven eleven will charge thirty rupees and this one will charge five rupees and the Costco will charge this.

55:13 Guess what? All of them have to charge the same price. I think I realized that The only way you can differentiate is by service and all of that is just create a separate layer. to build for them and and and that was the genesis of the second startup. Uh

55:27 The reason I also did a startup is also because I realized that I I while I was doing well as an investor. And I'm still doing decently well. As a part time gig. I love building way too much.

55:39 Uh and and I think uh I've been working since I was Fourteen, fifteen. I do not know How to live a non intense life. Uh uh while I can predict patterns and see things and I could

55:53 technically generate better ROI of my time through investing. But Uh The joy I unlock by building. is coming much higher by building my own companies versus just being predicting and being right a lot.

56:09 uh uh in predicting future trends which can ha generate the highest ROI of time. uh it doesn't generate any joy. So I I found no joy in investing. Uh I I it's just like, Oh, I told you so, I was right and I was right and and Guess what? It gets boring because you're right.

56:25 In the market like this, when you can predict Delta 4 frameworks and you can apply all the human insights you've learned, it's not a big deal that you've for you to be more right. The problem is I felt really empty. I I wanna go back to some of those human frameworks in Delta Four. When when you're making an investment decision W w what are the top lenses that you're thinking that through? So one was sort of the Delta Four framework, which we talked about.

56:51 What 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. Yeah, I mean it was uh more of a motivational uh Lens uh but Uh uh applying

57:06 human motivation as a core loop, but There are other things that make it easy to detect suc start up success. For example Oh. 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.

57:23 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. 'Cause they really get it. And language doesn't change anything for them.

57:37 Many people who have just prepared their presentation and not really understand this very clearly, they struggle with the language change and their their pitch goes for a toss. One way that you can do this without switching languages is switch level of the conversation. So often people prepare at one level And it's like, oh, can you go deeper or can you go higher level and keep that in contact, which is sort of like the same idea. And I've seen that. People who are really good, you change language, you change medium, you tell them you I don't want to read your presentation, they'll still be okay. Uh uh some people tell them I can't I'm not gonna look at your PPT and they'll be like

58:16 How do I explain this to you? The other framework that has worked for me is uh I tell them I don't understand anything what you're saying. Imagine I'm a user of this product. I could tell a friend.

58:28 Over dinner. To try this. What do I say? Only rule. I cannot use any jargon because I don't speak to my friends in jargon.

58:39 So tell me what do I say? And I tell them to take ten minutes break. Before telling the answer. I would say ninety percent of Founders fail at this.

58:49 Because They can't really distill. it to that simple transmissible Message. From a friend to friend.

59:00 If you cannot distill your idea to a transmissible Conversation at dinner. It's not going to spread. And things that don't spread will have a huge cack. 'Cause nobody really understands what the hell are you doing.

59:15 That's one framework that has worked. The other one is uh Asking them what is the real motivation people will use it. A lot of times the real motivation is different than what people say is the real motivation.

59:27 For example, buying expensive headphones. They are not really to make you hear better. You want to signal to the world that you are affluent and you have good status and good taste. most founders cannot distill that. That is the real reason people will buy it. they'll keep going to the functional utility and not the emotional benefit. of the product.

59:49 And that's another framework I've seen that good founders always know. functional and the emotional benefit of their product or service. Market sizing. Most Found.

59:59 cannot imagine how will they start from here and go on to build a very large thing from here. They they get stuck in Uh This is what I do, but they can't imagine how will this become a large company ever. They they just don't think they don't even think they they don't even they cancel their own idea. And then I've seen the opposite type.

1:00:18 Which is I call it the Swiss knife problem. They believe that they have to build a Swiss knife. when the consumer only won is looking for a knife. Uh because they love building. So a lot of them are usually with engineering background. They love to build s they write so much software

1:00:34 that consumers are confused when they talk to them because Uh They don't have a foot in the door strategy that okay, let me sell a knife and then eventually become a Swiss knife in their life. They start with the idea of Swiss knife and you're like Hold on.

1:00:46 I can't even process what you guys are doing. And Swiss knife becomes cool, nobody uses it. Like everybody seems to have a Swiss knife at never being used. Uh so I think that's the other pattern I've seen. Uh I've never really thought about this from a

1:01:01 human framework problem, but uh Uh another thing is that why would somebody pay for this? And and It's surprising how most people do not understand that Nobody's gonna pay for that. Like Like will your dad pay for this? Will your mom pay for this? Will your CFO pay for this? Will

1:01:19 Your kid pay for this. Like They're just off. On that. Uh

1:01:25 The last one is uh Do they have Inside that. Is not obvious but when you see them talk about it you're like Uhhuh, that makes sense.

1:01:53 Can you go deeper on that? The smallest unit of insight that's actionable. Smaller unit of truth. That is actionable. Truth. Truth that's actionable. Yeah. Go deeper on that for a second. If you Go to ancient

1:02:07 Hindu mythology and and you study the Sanskrit Scripts and Sanskrit was a very condensed language, right? Because uh it was invented before paper was invented. So Knowledge was transmitted from human to human through memory. So they had

1:02:20 To dis Did a The wisdom. in the smallest unit possible that could be memorized and transmitted from human to human. And in the earliest scriptures were also tight. Like you'll you'll read in Sanskrit Yoga

1:02:34 line and like in one line they'll condense like really a lot of wisdom in it. So I think the n concept of boiling something to the core units of it and you cannot divide it further. becomes a powerful unit that is also the building block for what we call as first principles. That can help

1:02:58 build businesses, right? And I think a lot of times Uh Then th it's a painful process. Seeking truth is painful. Uh, Shane, you've been doing this for a while. Like how many more blogs will it take to get close to the truth? You will probably not find it, but the joy of seeking truth. For the sake of it.

1:03:18 Uh is not natural and therefore a lot of people do not appreciate it enough and but Insights become this nice building block through which you can create great businesses unlock great success

1:03:31 Uh Because That is something that is not commonly available. Everybody seems to be seeing some pattern, but you see something else. For example, I had this

1:03:40 View that you're going to be able to do Oh. India cares about status so much more than the Western society. Let me do one thought experiment. I reached out to my friend who is to be a buyer of a Top retail chain in India.

1:03:51 I asked her to check, can you check? If the gross margin on all products sold for living room is lot more than the gross margin of all products sold for the bedroom. And nobody had ever analyzed data like that in retail ever. Because it's like

1:04:07 kitchen and sofa and furniture and all of that. Nobody thought living room and bedroom as two separate concepts. But I said can you please make somebody crunch it and Turns out the gross margin was three X more. The reason is in a society we care more about showing to others, so all the products which are showing demonstrating status were put in the living room, our bedrooms are terrible in India because nobody comes to them. And and therefore it was not surprising that bed sheets

1:04:34 were not bought expensive in India and bathroom products do not Sell a lot. We don't have a lot of bathtubs in India. Because It's not about me. It's about showing social status to others who come to my living room.

1:04:48 And therefore you apply that insight now. And I told this insight to uh A home renovation company. I told them don't keep saying home renovation, launch a product line which is living room renovation. And today seventy, eighty percent of that

1:05:04 Revenue for them is living room renovation. Because that's the insight. And that's the motivation button that you can press. And people. Well well, I think in the in the Western world it's about treating yourself. It's about you're worth it. It's about We still have the status thing.

1:05:21 Individualism versus collectivism, which is how Asian societies are. And therefore. You don't deserve Things to be special, but

1:05:30 You have to Short. And then for weddings. are really big and very high gross margin, it's for others. So let's go back to the the we talked about this a little bit earlier, but I I wanna go into more detail on You you mentioned some of the core human motivations that transcend

1:05:47 Culture. The core human game is to constantly improve our social status so that we improve our mating success. Or our success of our progeny. The easiest way to answer this question is that

1:05:59 If we could really create designer babies. Would people spend most of their income? on that or not. And and let's not go into ethical debate of is designer babies a good thing or not. If it was possible. That you can tweak their IQ, their looks, their

1:06:16 Help their Chances of uh terminal diseases to be lower and all of that. Or let me put it this way, let's say I could really invent a pill that could make you younger.

1:06:28 Or healthier. Wouldn't me you give me fifty percent of your net worth? And I think that's where the core motivations are. Like what would you S give half of your net worth for. What is that?

1:06:39 Core human motivations. And they don't change from society to society. They remain the same. They manifest differently. For example, the Asian society is unlocked that oh education is everything, so they're they're disproportionately optimized for that. But they don't they save pennies, like you said, like your parents talked about travelling

1:06:57 Uh miles for saving Sense. maybe they were also the parents who would be okay to spend more on your education. And if you told them I'm gonna cost it's gonna cost two X more. they would probably suffer and give you that money.

1:07:11 But they would not buy an extra shirt for themselves. Those are the interesting motivations. So in Asian societies we treat our kids like assets. So we are making investments on them because A lot of time we expect the kids to take care of our family. So I don't know if you know about but India is the largest market which sends money back to India.

1:07:30 Amongst all markets that does remittance. Indians remit the highest amount of money back to their family then it comes to Mexico and others. And that's the sign that the kids Were raised as assets.

1:07:42 You invested in them. In hopes that when you make it back big, you will give it back to the family and take care of us in our Later life. So

1:07:53 Kids in these societies are treated like Assets. versus oh You're on your own now. That's is not in our culture.

1:08:04 Because They will tell you that I invested so much money. In hopes that you will take care of me later on. So there's a whole societal structure or or social contract that exists in Asian societies.

1:08:16 Of taking care of parents. And taking care of them. Uh Even after you don't have And your obligation to do that, but people do it f till they die.

1:08:26 uh and really take care of them. Asians will not even flinch one bit. to uh sometimes even wipe out fifty percent or hundred percent of the net worth to take care of their parents. Uh

1:08:38 But just Hard to imagine concept for many people in the West. Yeah, I think that is. You you mentioned Maslow's hierarchy of needs was different. Can can you elaborate on that a little bit between uh the US and in India. Yeah, so uh I I I actually Google and I I found there's an I I thought there should be any separate Asian mascara, but in fact there is a concept somebody's proposed an Asian mascara 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.

1:09:08 and in the community. It's not about self actualization and Uh uh uh having that Uh kind of uh individual path to enlightenment is all about

1:09:19 Affiliation. Respect. uh status 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 a like so many awards and so many of these things and face matters a lot and uh uh uh giving back and like

1:09:40 valued in the community and so on and so forth. You will not Uh C And therefore like Uh a a f funny story. Like I I I

1:09:49 I I have a s 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 I just managed to get a car for myself.

1:10:05 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 mass law. Okay. you have to get a luxury car and you can get so many more cars and why aren't you having this fancy uh house for yourself and why are you staying in a rented apartment like

1:10:25 It's just absurd to the point that they want to believe that maybe I'm not really affluent. These choices just don't make sense to them. Right. Uh and and I'm not saying that the West does these differently, but it is lot more for the people.

1:10:39 It's a lot more living room than bedroom. Even in the affluent households. Right. And I think Uh therefore you see Extraordinary effort.

1:10:50 And money spent on weddings. It doesn't make sense that you And spend five X or ten X of your annual salary on two days event? And just splurge it on people who you mostly don't even know? And therefore

1:11:05 Like it's not surprising when you go to weddings there are thousands of people who come for a wedding. How can you know them? But it's all about Demonstrating to them that I've made it. And life.

1:11:18 And that's the Asian mass law. Therefore The start ups, the rivers are different. Uh. versus the reverse that exists. And therefore uh very few SaaS companies making Millions of dollars of revenue, but there are enough wedding photographers.

1:11:32 I know. Who make more than ten million dollars of revenue. Oh wow. I wanna switch gears a little bit to some of the stuff that you've said over the years, uh and I wanna get more of a an elongated take on it, and they're they're concentrated doses of insight. And I'm wondering maybe if you can just riff on them a little bit.

1:11:53 Um, so one of the things that you've said recently is that your group of f uh your group of friends impacts how fast you can pound. So insights are Usually Connected from random dots getting connected, right? So uh

1:12:10 But The process of Collecting dots. has to be efficient for the process of connecting dots to be more efficient. And and then

1:12:21 Collecting dots. Is easier if your friends are also Collecting dots to connect dots. So what happens is that Compounding naturally works better when

1:12:32 you have a lot of people from different domains of life who are constantly collecting dots. For example I spend a lot of time with lot of different people from different fields. T.

1:12:42 See how these these words connect. For example, I will sometimes speak to a influencer to a stand up comedian, to a music director. Uh uh to uh an entrepreneur in a completely different space because Uh

1:12:57 When you distill inside, things connect. On the surface level they look like very, very different businesses. Right. For example I can't tell you how similar education and gambling businesses

1:13:10 Crux of it. and and why people do what they do and why the gross margins seem to be high. Why luxury goods businesses Is similar to education businesses because the crux of it, the principles are remaining the same. And only when you ask and go deeper into some of these things, they connect. I've seen a pattern Um

1:13:30 Uh They're People from these industries don't talk to each other. Usually the luxury guys are talking to other luxury guys and other luxury guys. Like

1:13:39 Look at I mean the reason I'm envious of you Because you have like made the most efficient machine of connecting dots. Like you are talking to people from such diverse backgrounds and the amount of things that are connecting in your head from different things is

1:13:58 Like something I really envy. I and I when you Ping me I said. Shin, I wish I had what you do in life. I'm so envious of you. Because what you're able to do is

1:14:08 Get such And and I think that Things connect when you go really deep. Or you go really wide. And and things just

1:14:18 Then start connecting with each other. Right. Uh and therefore One of the things that I do uh a lot is uh Constantly look for origin stories of Why certain things exist.

1:14:30 I was curious about Shampoo. as a product. I'm like, who the hell came up with this name and And then I found that the origin story of shampoo is An Indian trader who went to Europe to sell a shikaka, which is a different product in India.

1:14:44 and sold it as a chumpy, chumpy is like head massage. Which creates foam. And that was called shampoo by European guys and it became the product. Uh and no Indian who uses shampoo knows that the word shampoo comes from champi, which we use as a word for head massage.

1:15:01 And then I see these things and I'm like When you go to origin stories of many, many things are so many First principles that connect. And then you say, Oh, Indian traders used to make these kind of trips and all of that, for example I was studying

1:15:16 I'm like, let's study all the history th so Priemton Roychen was a rich guy. I was like, Okay, who are the other rich people of India? And I found this guy called as David Sasan, who was an Afghan trader who made it big in Bombay. And I'm like, how did he make it big? Then I found out that he was The largest opium trader For the region and British made the entire rail network to support his opium business, which grew opium across the world, uh India and shipped it through Bombay.

1:15:44 To guess where China. And David Sason had a huge role to play. In the opium war that happened, where British Attack China. Because they stopped David's supply to go to China because of banning opium.

1:15:59 And Hong Kong was born out of the settlement of opium war. Uh and and many of the banks that we know today from Hong Kong are actually the banks made by the opium traders. And I'm like blown away by all of these things because nobody has any interest in

1:16:15 Going to the history and origin stories, we just accept things to be that way. But when you go to the first principle origin stories, building blocks. Things connect. And they they they just see p you see patterns again and again repeating. For example the Boston Tea Party in the US which triggered the the civil war of or whatever.

1:16:34 was not just T, they were also taxing Uh Tobacco. They were also taxing stamp papers and and you like realize that how It was a beautiful model of Inventing stamp paper which is

1:16:46 Justice API. That if you use my stamp paper, I will give you justice. Which is a great scalable way for governing people when you say that I will only be helping you in courts if you signed on my stamp paper or paid my stamp duty. Uh to give you Justice. So I think I find these things super fascinating and I I and I

1:17:08 I'm I I I sometimes I believe that I do businesses only to hunt more insights in life. Uh looks like my core purpose of life is to hunt insights. And sometimes I have to build things to find insights. Sometimes I have to talk to people and find insights. Sometimes I have to read people and find insights. I I I I am I can do this

1:17:27 Oh. All day long nonstop and I'm constantly trying to meet people. I write to professors all the time. I will uh write to authors all the time to get Uh uh uh uh them to respond to me on some hypothesis I have or some question that I have.

1:17:44 I think being shameless. is most important ingredient in Ability to connect dots. Go deeper on the Shameless people make more conjectures.

1:17:57 Without Any fear of judgment. What I do on my Twitter. Hypothetically is that I will make a conjecture randomly.

1:18:07 And write as if it's some law of physics. And people Bash me. And correct me. And sharpen my insight.

1:18:15 Or Connect even further dots for me. And then I'm like Wow. I have a new insight on top of that. Because I just put a conjecture out there without giving a damn of people thinking that how the hell can he say like this?

1:18:29 How can he For example I put a conjecture out During Covet that Maybe the new variants. In wait.

1:18:41 Therefore they can spread faster, but they're less fatal because Viruses seem to have a correlation of weight. Uh But how potent they can be

1:18:50 Like for example, HIV is a much heavier virus than common cold. And therefore it spreads through blood transmission or sexual transmission. But it's a lot more potent. Uh versus common coal. Which can spread through air.

1:19:03 And I just put that conjecture out there, and people just bashed me saying that you are making a medical statement, whatever, whatever. But I realized that. Actually this is damn good. This applies to startups that spread faster Uh Usually have a very light trojan that spreads. Versus a very heavy thing. And therefore, you're if you really want to be a high distribution startup, you have to build which very light, spreads like a virus. And therefore the word viral.

1:19:28 Is born from virus. Which talks about how a light content and therefore TikTok becoming What it is. Is because it's the lightest possible virus that you can create.

1:19:39 That spreads. Like a wildfire. So I don't fear judgment of like how are you making a medical term connecting it to viral videos to this. And I think shame plays a huge role. I'll I'll give you another example. I I made a comment once saying that

1:19:54 Um In elementary table, uh elements that have a lot of valencies, which is uh the there are more ways for them to bond with other elements, are called reactive elements. And maybe people who also have more valencies are the ones who are more reactive and they form bonds easily and they are uh likely to be more thing and Therefore

1:20:16 People who have lesser valencies. And that's what also call noble gases in the elementary table. And I will make this conjecture. In public. And people are like, How can you connect human behavior to elements? And I'm like, Why not?

1:20:34 I'm not trying to Right in a scientific journal. I'm just trying to make a conjecture and what if this leads to something else. And I think s shame plays a huge role. Uh in fact uh

1:20:45 Double click on shame. I found an interesting hypothesis that The fastest way. To make somebody feel okay.

1:20:56 is to make them feel proud about it. For example, the path to sh from shame to normalcy is through pride. Uh which has obviously used and misused. In different ways. So

1:21:12 Gay pride. And It you are a man if you have tobacco and you are a classy person if you have this whiskey. So Every vice

1:21:23 becomes normal. Or every shameful behavior becomes normal. When you convert this into Pride. And I think you can make human humans do anything uh bad by just making it a matter of pride.

1:21:37 And it's an interesting hack. If you think about it, uh on how you can make people not feel ashamed about certain things, you can say You have to be very proud of this, right? And I think Uh by the way, uh uh I also know that everything that we are proud of Are the

1:21:54 handles that we give to other humans to manipulate us. So everything everything that I write on Twitter as things that I'm proud of. Like People's Intros and descriptions are

1:22:05 The trigger points put in public. For example if you write I don't know Proud father, proud American. fastest way to manipulate you is the things that I have shown in public what I'm proud of. uh because it I'm demonstrating my social identity in public and I'm like giving myself exposed.

1:22:25 Uh And and I I do believe that humans create these identities to belong and fit in because it's very uncomfortable to say I have no identity. So I removed everything from my Twitter. I have no nothing written on my Twitter as my identity. Uh And and and I I believe that one day we should give up your name also and profile picture also and and and get into that zone because

1:22:46 Uh that's when you become impossible to manipulate or impossible to trigger because You are nothing, nobody, and and you just exist in the background, right? And I think a lot of people when they are trying to say, I'm this proud, this proud alarm of this, proud of this. U a or Manchester United fan. In fact

1:23:05 Uh The word fan probably comes from the word fanatic and and fanatics are the easiest to trigger. In fact I believe that's the one. All the people who demonstrate the need to be fans.

1:23:16 A People who are Easiest to offend. Uh in life. I think being fan or having favorites

1:23:24 Is telling the world that you're extremely easy to offend. A a couple of points coming out of this. There there's um I have a belief that there's so much advantage in life that comes from being willing to look like an idiot in the short term. And I think that goes to something you said earlier, and that there's this quote by Lou Brock that always stands out to me, which is Show me a man that's afraid to look like an idiot and I'll show you a man I can beat every time.

1:23:49 Love it. Love it. And and I think those those are so insightful because uh w we're y you have a huge Twitter following. And I mean, if you're willing to put yourself out there and uh be wrong and uh hone and sharpen your insights, then I think that speaks um that everybody can sort of take a step in that direction. And And I think to your s your second point about We show others what we're most proud of. I think we also show others what we're most scared of.

1:24:17 And and and I mean that in the way of some of the Unhappiest couples. that I know of in real life. Are on social media. The happiest couples.

1:24:28 They have an acute need show that they're happy and then they hope that showing that will make them really happy. Uh, but the real people don't feel the need to show it to anybody else. I think that's where the locus of control matters, right? Is the locus of control external or internal, right? Like what controls your happiness and what controls your joy or pride.

1:24:51 And a lot of times when people put it in other people's hands. But If you like it, if you like, you appreciate it, I need your applause. uh they build less and less substance within themselves because They are optimizing for somebody else's metric, not realizing that nobody gives a damn about anybody else except themselves.

1:25:09 So that goes to sort of Buffett's idea of this inner versus Outer scorecard. Talk me about that. I think people genuinely are Benchmarking. Externally because

1:25:22 the scores are built externally. I think that uh academics. For example, uh I have a unique curse of not being able to memorize things. An Indian education system expects you to memorize very long answers and say them as it is without Understanding one bit of it.

1:25:40 So as a kid, I always thought that I was a poor student because I could not be able to score marks compared to Indian students. who were able to remember more. And therefore memory tests is what Indian education is all about, versus understanding, which I was doing well on. So I would score very high marks and practicals Projects, presentations, but very less in theoretical writing exams.

1:26:04 So I always thought I was dumb. compared to many students. And It took me After my first exit of my startup I

1:26:14 Started believing that I'm not so dumb. So I think I'm not going to be able to When we create any mechanism of scoring people outside IQ test, EQ test, whatever that is. Right. We are

1:26:28 Removing Dimensions that We could be better at Uh and and I think Uh

1:26:36 But If you constantly think about am I better than But I was six months ago and and Constantly improving that. It doesn't matter what you define as better.

1:26:45 than what you were at. And I think you can make wealth by being better on some things which is solving problems, but you can be healthier or whatever, but not by comparing, but just looking at am I better than the previous metric. And I think uh most people are not Keen.

1:27:01 In looking at that because it feels boring, they want to compare. And and the need to compare is acute. Uh And I think uh I've not seen uh

1:27:11 Uh people come out of that trap. Uh, for example, many people who are very smart in India. uh who are in their forties are still comparing to other people in their college batch In the reunion if they are better or not.

1:27:25 I'm like but it was Twenty years ago. Like why are you still in this race to compare just with your batch. And I've seen that Therefore envy is hyper local. It's like Wi Fi.

1:27:37 It works only in a local radius. Right. Uh I don't feel envious with Elon Musk. It's not even in my network. So humans have this unique thing of having envy in a hyper local network.

1:27:51 We don't feel envious of people who we don't belong in. And therefore Uh Yeah. It's good to constantly change who your network is to really do well in life because we are all gonna be driven by the

1:28:03 Wi Fi network range. Or our comparison. And therefore you're and and people like I I think Naval tweeted today and I had also responded back to that that we outgrow

1:28:15 Um the price of growth is outgrowing people. Is is this because if you really change your wifi network all the time to people with better ambitions, better goals, uh You will not feel that need. Uh to win within that

1:28:31 local league uh of yours. So so hold on, I want to explore this a little bit more. Envy being local. Is it you're not envious of Elon Musk because uh there's multiple status levels between you and him or perception of that. Whereas if if there's only one degree of status level, then that creates sort of uh a situation where envy can take hold because it's like I could be that Whereas like if I look at Elon Musk, I'm like, I can't be Elon Musk. I don't want to be Elon Musk, but like I can't be the the gap is so large. And and that relates sort of to what we were talking about earlier, where we're trying to elevate that status by like one level.

1:29:12 And I'm wondering if that plays a role here with N V. So I think In in the game of leaderboard and whatever the leaderboard is of, we are constantly Playing. In our local

1:29:23 zone of people who are just below us and just above us and we are constantly trying to beat that. And therefore Uh Let's say I have I don't know some hundred thousand followers on Twitter. Uh I will not compare myself to somebody who has I don't know a hundred million followers like

1:29:38 It seems unachievable. Or or I'm not gonna compare myself in a sport. Let's say I I'm I'm decent at swimming. I'm not comparing myself to Phelps who's won like I don't know twenty five gold medals, hypothetically. Right. I'm looking at within my group of people, am I beating them or not? And I'm constantly moving up in the rank. So I think the need for This hyperlocal thing comes from that oh I'm gonna beat my batch of college mates. Or my neighbors or my

1:30:04 uh family members. I'm the best cousin. who did well and and And I think That's where we form some of these leagues. And and we're happy just beating those leagues versus saying that hey, I just need to be keep moving up and maybe benchmark myself to a slightly different level. And I think a lot of people self limit themselves

1:30:23 Because they never ask the process that what is the process to beat Elon Musk? You may not beat it, but you know the process of beating Elon Musk. And therefore nobody's interested in the journey of Elon Musk. Everybody's interested in the end state of Elon Musk. That I and there's a lot of people behave like him. Uh

1:30:41 when they have achieved nothing in their life. Uh or a lot of people try to behave like Steve Jobs when They have not been through the journey of being Steve Jobs or Elon Musk. And I think that's where the disconnect comes, that we love to copy end states. And never copied your news. Well, it's so interesting because like it i if you want to improve

1:31:01 You you almost want to copy tactics. And ignore results, right? So y you don't want to compare at a macro level. You wanna compare at a micro level. And the micro level is what can I do better? What can I learn from you that's gonna make my process better? That's gonna make what I'm doing better. And I don't wanna compare the comparing outcomes is a recipe for unhappiness, but comparing A tactical because you're imitating and then you create, right? So we all copy things before we end up creating on our own. And and imitation is the quickest way to get to sort of average in any domain or discipline, right? You join the workforce, you copy your boss, your boss is probably an average boss, and you you eventually become average. And if you imitate beyond that, now you can start to differentiate and you can go beyond it. But you can't really you can't really

1:31:52 um innovation. Well, you can do it blindly, I guess, before you copy, but it helps to copy first, but you need to copy at a micro level. And then the other nuance here that I think a lot of people miss is you you need to copy at the Somebody who's At the next level And a recent next level. So not like a distant. So we often go into these organizations and I did this when I was twenty, twenty-three, twenty-four, join this organization. I get this mentor

1:32:20 My mentor is amazing, brilliant, super smart. twenty five years older than I am, full of insight, but they're not full of insight at a tactical micro level. They're full of insight at a macro level, uh, at politics, at life, at because the skill that got them to where they are. Are not the same skills necessarily that are gonna help me and my job today, because they might have done what I did, but they did it twenty five years ago. The odds of those things being relevant and useful are are a lot less. So you wanna find somebody who's done the same thing that you're doing.

1:32:55 and just did it. So next level success. Somebody who just did your job got promoted out of it. I think the reason we don't do that is Truth seeking is not something that is Thought. Actively.

1:33:09 in our education system because we want people to accept what we teach them so that they can crack the curriculum or the exams that we've created for them and we But we're not teaching truth seeking. uh truth seeking, for example, I would say that philosophy should be mandatory in all Uh

1:33:28 school education. Because it teaches you how to seek truth. And question everything that you even studied. And I think that's not actively encouraged. Uh one experiment may I I don't have kids, but I love experimenting on other people's kids. Uh uh it becomes a good uh a testing thing. One of the things I've seen work really well in growing maturity of kids is or making them insightful is something I call as the Wi Fi school. I I like

1:33:53 W H Y F I which means what you do is at Every Day at dinner. uh tell them ask them a why question or they can propose a why question.

1:34:04 And the next day they come up with the answer. uh on why it is the the case that way. And like why is the sky blue? Or you can take anything. They can take uh why is this team called this name? Why Is It's so expensive to advertise on Super Bowl, whatever it is, you can just choose any Y that they are interested in. And you do this enough

1:34:25 the compounding just goes like this because most people are stuck in what and when and how and all of that, but why It makes you more insightful. And I think Doing that early hack.

1:34:39 in kids just makes them very interested in saying that why is Elon Musk? Why are some people Able to Be m Successful.

1:34:51 Why is this athlete able to win consistently? Why is this director able to get more revenue in movies versus this guy? Why is this guy artist all the singles all the time hits Why is This artist. Uh

1:35:06 Why did Michael Jackson work for two decades or whatever? Like I think the moment you Encourage that and it doesn't matter what the topic is. If you get them hooked early on On why? Uh first of all they grow.

1:35:20 Mature, much more mature than most of the Which is which is a side price of it because you're they don't get along with their kids in their school and and people st start calling them as nerd or geeks or whatever, but the thing is that they just compound faster by one type of question versus other. So I think The input metrics or input levels

1:35:40 Of Any excellence or any growth seem to be consistently same, but most people are not interested in that. And therefore they're looking for shortcuts. Like What can I buy this crypto this and like get to My Ferrari like like and and and and therefore a lot of people get fooled.

1:35:57 Uh because the analytical behavior to understand that How can you really become that? Like what is why Why does Bitcoin exist and why do we have so many coins? Like I I often tell people that crypto is like religion that there are multiple religions, but the True test of religion that is there is that Is it adding more DIUs every day?

1:36:15 Like look at Christianity or Islam or Hinduism, it's adding more DAUs every single day and it's market share and therefore they're much more robust compared to many other religions. When they uh what if uh like Snapchat had a user growth decline, what if Christianity has a user decline on growth. Would it Uh start uh giving power away to something else. And therefore, how are the organized religions figured out a perpetual DIU growth with many ancient religions did not, and they

1:36:43 God Yeah. So I think these things are not something that people are curious about. The answers are usually very simple and basic. Uh and that's another thing. We don't like basic answers.

1:36:55 Yeah, like Oh that seems super simplified, but the truth is that when you really go and distill that things will become simple and basic. But we don't I think when you're in a high IQ zone that it feels like cheating when you get simple answers. Uh And you're like

1:37:11 tweet or you tweet people like Oh you're like oversimplifying and grossly non nuanced, but it's not. Uh sometimes the truth is uh as simple as it gets. I always think of things as being, you know, there there's

1:37:26 simple, but not necessarily simplistic. And so when when you're a novice and you look at a problem It's simplistic. I can solve world hunger. I can do this. And then as you dive in, it's really freaking complicated. Right. There's All these things you didn't think of. And then on the other side of that complexity is simplicity. And I I think of that as simplicity on the other side of complexity, but it's not a simplistic.

1:37:53 So simple doesn't mean simplistic in this case. And then that is like true insight and mastery and understanding. Uh, I wanna go back to something you said earlier,'cause I I think this is a point w worth sort of Maybe coming back to your empath. emphasizing a little bit more, which is truth. Most people aren't

1:38:12 And the truth business. They're in the story business. Whether it's the story they tell to themselves, the story that they're telling to other people, that they don't want the truth. They want the story. And I think that there's very few people, entrepreneurs specifically, are rewarded for being in the truth business. If you if you can't figure out the truth, you go out of business. And and so it's a unique subset of people who are actually driven to sort of find the truth. And if they're blind to it, it has huge consequences. Whereas a lot of people can sort of be blind to reality and blind to the truth. And And focus more on the story. Yeah.

1:38:49 I think that's a very interesting point you just made. Um If you really spend time with entrepreneurs who are successful and and let's say successful for consistently successful You're almost

1:39:05 And and what is philosophy? It means philo plus sophie, which is love for knowledge or love for truth. Right. And and therefore The reason they are successful consistently because they are in the business of seeking truth. Sometimes they just find something and use it and apply it and build something out of it. But they are in the business of seeking truth. And the frequency of

1:39:28 how things are disrupting and getting quickly disrupted is the truth is constantly evolving at a different level. Right. And if you can't keep up to it, you will get irrelevant no matter who you are. Uh And I think Uh Surface level truth seeking therefore does not create enduring businesses.

1:39:46 because you really don't know why the hell are people really using your product. What is the real problem are you solving? Not what you're saying what it is solving. There's an underlying three levels deeper thing which should give you a much larger market and time to operate in, but you don't really go seek that. And I think the reason uh truth seeking is not preferred because it it truly burns more energy. Uh And energy saving is a human trait, right? So uh I I often

1:40:13 Make that comment that people are not More intolerant. They are just running out of processing power per day. more than anybody else in the humanity ever did. So it's not

1:40:25 Unusual. To like authoritarian leaders because I can't process all this information. So we are not awake. That that the super interesting the the sorry, I I didn't mean to interrupt you there and

1:40:39 Uh but you You said something I I think I've never heard it put that way. We're we're not less intolerant than we were before. We're just running at a processing power. And and if we sort of overlay that to the media, which is designed to hijack our attention and manipulate our emotions. Which would be taking away that processing power. The byproduct of that would be that we appear less tolerant

1:41:05 in in all other aspects of our life because we're sort of like getting all of this energy sucked out. Uh From social media and media, which is designed to sort of hijack us. And there is no time and energy to go to nuances. It's not

1:41:23 Needed. It's not required. Everybody has an opinion And they're a lot more opinionated. Because the nuance is lost, right? There is no need to go into nuances. Uh

1:41:37 Because there is no processing power and therefore we like authoritarian leaders a lot more in these chaotic times because Seems about right. Right. I I I remember hearing from somebody that nobody people don't back people who are right and wrong people back

1:41:54 People who seem to have a backbone. Uh because I can't process all this information. And I think look at this. Like The

1:42:02 But people like all of us who were born before internet and now like the younger generation, like they just have so much coming to them. Right. Eвріd Constantly that they

1:42:15 R Therefore just want to click and say yes and no and all the polls have become yes and no versus all the nuances and like nobody has time for nuances. So I think the world is gonna become more and more

1:42:30 Intolerant. Because the processing power of hardware is not growing. At all. But the amount of information that is coming to us. is growing disproportionately and I think the ability t of few people to go to nuances to basic principles will keep creating more and more wealth, power

1:42:50 Anything that you can imagine is important and and as a metric of success. Because They are Traders of nuances.

1:42:58 Uh And and all the people who are not traders of nuances are gonna be this Transient A source of Energy that

1:43:08 Money will flow through them away. In fact I'll tell you one interesting thing I've observed. You'll rarely meet A wealthy person who cannot Keep secrets.

1:43:20 So I believe that Welcome. is like energy that stores itself in Entropic complexities that seem to hold the information in symmetry in them. versus be these transient sources and and therefore that I believe that the world has become this

1:43:36 Superconductor. Where one meme Goes to hundreds of millions of people quickly, information, gossip. Um

1:43:46 Fake videos. w uh content about uh Johnny Depp's divorce, like it's just spreading so quickly and and all of that. And there is nobody no interest in going to nuances and going into these things because you have to be connected to this global thing of being connected to the narrative. If I go for dinner and people talk about this, I need to not be looked like an idiot.

1:44:08 Things like Netflix or YouTube are just making the world one. at a levels we cannot imagine because people are trying to be relevant in the context of like What percentage of human popul I actually I did an interesting study. Uh you'll you'll love it, by the way, you should look it up. When Will Smith's had that event at Oscar's.

1:44:27 I looked at Google Trends. And saw on the heat map of the world. Where did Will Smith Pick off.

1:44:36 Because Google trends went like this, like this. But On the global heat map Only a f Some places went really dark, most places had no search.

1:44:46 Jump. And I was like, This is perfect. This is a final map of to knowing where the Western media has huge influence. You can predict. accurately in India, in Africa, in Morocco, in in in in Indonesia. Their Western media has

1:45:03 Important. Where do where do people care about Will Smith? And and you can see these patterns emerge very clearly when you create these contrast events. Right? And I think uh The processing

1:45:18 Power is therefore. reduced Uh I no, I I I read something interesting once where it says that uh kids love watching watching animated movies again and again. They watch it six times and still happy. They watch it ten times, they're still happy because their brain has not evolved to find patterns and they're constantly finding new things all the time when they watch the same content.

1:45:39 But humans like we don't like watching the content again because we figured out all the patterns. So we like m watching movies which are unpredictable and we can't solve the patterns and and therefore the the Christopher Nolan genre like becomes very interesting because you're like, Oh I couldn't grasp it, watch it one more time or whatever. But The the nuance of this is that Uh we're also perpetually bored because of that. Right. Because

1:46:01 Nothing seems to be Causing any unusual pattern and they were look constantly looking for new pattern breaking things. Uh And and therefore TikTok is no surprise because it's constantly breaking patterns on and and

1:46:14 Uh one of the most interesting things that I learned is that All things that are funny. Are surprises. All jokes are surprises. Go deeper on that.

1:46:27 If if you think about a joke, it's a it's building a pattern and then it switches to a pattern that you cannot anticipate and therefore it creates an emotion in us, it makes us laugh. And now now that I've said this, if you see Every stand up joke, everything you will see surprise, surprise, surprise, surprise all the time.

1:46:45 So the brains is constantly looking for surprises versus going to nuances because we are like It's giving us this dopamine shots of here and there. And TikTok is Surprise.

1:46:56 Super machine. You can spend Hours on it. And Your brain will not

1:47:02 Stop getting surprised. But in life, we tend not to like surprises, right? So I'm thinking specifically, you know, the wor uh oil shoots up. We we come up with this simple that's a surprise. It it it disrupts the way that we thought something was going to happen. And our perception out of the world And then we ignore it, we talk ourselves out of it, we dismiss it.

1:47:25 Instead of exploring it. Interestingly The human brain Which lights up. In fear

1:47:33 And humor is Because It's A surprise that does not cause harm to us.

1:47:41 But it causes emotional arousal in us. Right. So the thing is that that's where We like surprises that don't harm us. Because it it it creates an emotional arousal and takes our dopamine anticipation levels very high. But we don't like for example we love a gift that is wrapped

1:47:58 And We know Uh by the way, we'll not love a gift that's come randomly to our house with no name on it and we are like scared. But Let's say a your loved one gets you a surprise which is packed nicely.

1:48:12 You are just excited because you do not feel the threat. Attached to this. Looks the same. feels the same, weighs the same, and causes different emotion, you're like, Oh, has somebody sent me a bomb? You're not thinking that oh I have a secret admirer who sent me this beautiful gift. Let me just open it. You're mostly assuming that, oh

1:48:30 I have somebody who's causing harm to me. But the same thing it's given in familiar context where You've removed the fear. You're like, I'm so excited to open this. It doesn't matter. We we could be sixty year old, we are still happy to open our gift wrap.

1:48:44 I I wanna go back to something you said earlier that that's sort of like Uh lingering in my mind a little bit, which is you said you've rarely met a wealthy person that can't keep a secret. Go deeper on that. I do

1:48:58 believe then and more and more you study about concept of wealth, we often say that wealth is not zero sum. But it actually is. Because wealth is nothing but Energy stored. So according to me, wealth is nothing but batteries of energy where energy is stored temporarily and keeps increasing because we are humans are the only species that have figured out how to convert all forms of energy to our advantage to reduce our local energy consumption or local entropy.

1:49:26 So we are the only species that have figured out nuclear energy, solar energy, kinetic energy every form of energy we convert to our advantage. And therefore our wealth keeps growing. And if you look at since industrial revolution and invention of electricity, the wealth and GDP of the human population went up like this. It did not go like this, it went up like this. Right. And and if Elon really cracks away to get solar to come to ourselves, the world's wealth will go disproportionately as well. Because guess what? We figured out Free energy, unlimited energy.

1:49:54 Right? So the thing is that There's an interesting thing that was uh was called the Maxwell's demon. problem which was the only thing that said Uh prove that entropy is not

1:50:06 concept which was basically Maxwell Demon has this class box. Uh Maxwell is the scientist who came up with this uh theory that Entropy is not a law because it can be proven to not be true by Maxwell's demon experiment. It was a glass box with a door in the middle, and there are two chambers, one with cold molecules and one with heated molecules. And this demon could open the window selectively based on when hot one was trying to move in this direction and left cold one moving. And it just reverse it. So basically it says that Maxwell's demon is able to reverse entropy versus

1:50:39 all increasing the entropy of the system and therefore entropy is not a law. then people after many years figured out that the brain of the demon is part of the system and the overall entropy of the system is growing and therefore human brain and and therefore the information theory and all of that comes in saying is that entropy is constantly increasing. Because of the information asymmetry in the demon's head.

1:51:02 No. If you extend this idea further, you'll realize that all the tech companies that are disproportionately growing in wealth and net worth and Revenues. are also the ones which have more information asymmetry or they are more Maxwell demon like Same for humans.

1:51:19 People who have natural information asymmetry. Uh uh are constantly creating more and more wealth. Therefore they because you have to burn less energy Compared to others.

1:51:31 Uh the molecules here and there. And I think Therefore, when you see a wealthy person, so a lot of people become rich but not wealthy because they do not know how to manage the information asymmetry. So a lot of athletes Become very rich and very poor. quickly become poor.

1:51:47 Uh and you will see a pattern that they're very bad at holding information in a symmetry and Ability to keep secrets is a good Litmus test. Of And information.

1:52:00 Asymmetry seeking brain. And this is where I'm making these leaps saying that how do I know somebody can keep information in symmetry? The first test is ability to keep secrets. But how do you know somebody can keep a secret? Well, uh w we all somehow humans know intuitively If you Think about ten of your friends.

1:52:21 Uh, can you think of what three of them who cannot keep a secret? Totally. I'm not gonna name them though,'cause they're probably listening to this. You should not name them, but you can also name the three people who will keep the secret. Yeah. Also. And sometimes they are trusted by wealthy people and therefore their wealth grows. Because Wealthy people love to associate with people who can keep secrets. And and secrets doesn't have to be nasty. It can be just about

1:52:44 knowing something about the world and and and all of that. For example, like if people really cared about information asymmetry, they would have heard every podcast of yours and Got there. It's just not natural for humans to do that. Seeking information asymmetry. Is not natural.

1:53:02 I I think humans have scaled. as a society because we've figured out that the way we grow our energy or our biomass is to constantly store information is symmetry one form or the other. Uh. Uh and therefore I was reading an interesting thing that the biomass of ants

1:53:19 And humans Is the same in the world, uh, which is the number of kilograms of weight that we have on this planet, because both of these species figured out how to cooperate. And he this information structure growing. Right.

1:53:33 And and and others don't and and they're constantly stuck in the status society and not cooperative societies, uh, because language is one way of thinking keeping things more efficient and burning less energy compared to others. And and many species don't do that. So the thing is that Humans are the only Species that I figured out how to Increased the entropy of the system, like

1:53:52 We are the best agents of entropy because we've heated up the entire ocean. Thanks to our activity, right? Uh and and and and and and global warming is a function of us creating more wealth through the process of inefficiency and therefore Going after sustainable energy is a great way of being richer without causing the environmental damage that we can create with that because of the side effect of other methods of creating energy. And I think

1:54:16 Therefore. Uh this concept of wealth Yeah. rarely like uh and generationally like you will see that Uh

1:54:24 A lot of time. two, three generation later wealth does not stay because you will always create somebody who's not very good at keeping secrets or holding the ground or uh keeping and there'll be always people who like manipulate them.

1:54:38 uh into these schemes and all of that and they will lose it, right? And I think That's where Um Information asymmetry is an interesting concept. Uh

1:54:48 If you see all the companies that are doing well, they are constantly increasing their information in symmetry about knowledge about their customer. or knowledge about their industry or the flow of system and so on and so forth because otherwise this energy just keeps moving to places that can hold it. Uh. And it can keep

1:55:07 getting destroyed. For example, a lot of social media uh stock market tanked and revenue tanked when Apple announced a way to not be able to keep more information in symmetry. And boom. You can't predict many things about people and therefore your revenue

1:55:22 will tank because you can't predict their behavior. Uh and I think that's where I'm going to do it. uh uh uh the power of uh understanding this simple concept can can be very useful in Understanding where the wealth is going to move. Constantly.

1:55:36 I like that. Let's change gears a little bit here. Um, talk to me about decision making. So I have seen that One good framework of decision making is Doc.

1:55:51 Somebody who has more choices. Usually has ability to make better decisions than people who have lesser choices. Let me explain what I mean by that. A person who's less Person who's like likely to be able to get anybody to marry them.

1:56:04 And they have the ability to do that. Are likely To be better at taking decisions on How to marry somebody right. It sounds weird, but

1:56:13 Choices just make them better. Right. Uh or an investor that can invest in any company is likely to become better. on how to pick companies, right? So I think The expertise of decision making is usually In people who have more choices than others.

1:56:29 In fact, according to me. The simplest definition of success is also about having more choices than other people. In that Despect of

1:56:39 And I think uh that Usually does not fail. But Uh I believe that

1:56:45 Lot of people are Taking decisions through emotion which is a But Mm. Problems to solve are

1:56:56 But to feel our through emotions, right? So for example a lot of times Uh founders uh Are like parents. who sometimes just know intuitively something is wrong with their

1:57:06 kid or their startup or their company. But emotions are not good enough to solve the problem, but they are very good at to knowing intuitively something is off. And you Like even doctors will struggle when a mother feels something about the kid and like they're like We can't find something and then something is off. And and they just feel it.

1:57:25 And and It's a great place to find something to be fixed, not a great tool to use how to fix because emotions will make you do stupid decisions on how to solve that problem and you'll overcorrect or uh over destruct in trying to solve that problem if you use emotions to do that. So I think using emotions to diagnose sorry, using emotions to Detect symptoms?

1:57:45 Is great using emotions to solve Or make decisions is terrible. Everybody has different framework. I I know about the Bezos framework of regret minimization framework and and you can talk about uh many of these things. I think A lot of times. Having just a long term mindset.

1:58:01 Around decisions even if it's short term decisions is is useful. So I've seen that some people are naturally good at long term decisions then uh many people who are very good at short term decisions, right? So I think using a lot of those people as APIs in your life. for long term decisions is a good framework. And and we all of us know some people who are very good at long term decisions. And and they think

1:58:26 Twenty years, forty years, sixty years, eighty years, hundred years. Uh on everything, right? For example, I've always told people that uh All bad behavior. is rooted in short term thinking. Every bad behavior in human beings comes from being short term

1:58:44 About everything. Right. And I think if you play a long enough game, it doesn't seem like a bad thing. And I think therefore Uh It's not natural for humans to think thirty years out. And therefore people do stupid things with their reputation.

1:58:58 or their trust with people or all of that because they don't think It matters. Ten years later. Uh And

1:59:07 But if you do grow your reputation slowly. uh it gives you huge powers later on because compounds quickly. Uh in fact I remember Um This beautiful one of our investors told me that no Kunal reputation is an

1:59:22 bank account where you can only deposit a dollar a day. But Every time the withdrawal is almost nearly complete. So if you d make a mistake on a repetition, the withdrawal will be complete. But Oh in terms of deposit, you can only almost deposit a dollar a day. You can't hack reputation. In fact, everybody who tries to hack a reputation is penalized badly by the society.

1:59:44 Uh and they get corrected. quickly. But slow reputation usually gives you more currency to outlast. And I think uh d w when it comes to decision making, like thinking about what is the slow currency of life. Reputation, wealth.

1:59:58 All of that. Like don't Uh Try to hack it. Uh uh anybody who's trying to hack it will always lose it quickly because uh uh they will not have the muscle to retain it. For example, a lot of people who get rich

2:00:10 quickly without really building substance. Uh are exactly the people who get to play advanced sport without building the muscle for it and they get injured. Because they have not built the muscle to Handle that.

2:00:21 So Uh I I do believe that Some people are just naturally good at judgment. Uh

2:00:30 And and The the reason they are very good at that because they love to be right a lot. And I think Uh I I'm sure you had talked about this concept of decision journals and all of that, but the thing is that that intuitively

2:00:46 People who are very good at decision making Mm. constantly journaling without even sometimes not writing, but constantly evaluating everything that did in the past. Objectively without feeling emotional about it. And

2:01:01 Constantly reflecting on it. And improving their Algorithm. Right. And I think uh Uh

2:01:07 In terms of decision making Uh You know, there is this thing that you say, What would Steve do? And what would Bezos do, what would this do? Actually sounds stupid, but it's not. Uh or what would Jesus do, right? These are good frameworks to say that Let me try to think like them and see if they would do it or not. And I think uh Uh sometimes just

2:01:28 Creating this mimicry of sorts. Uh Mm. That would

2:01:35 this person do this. What this and and and I think the only good use of reading a Autobiography or biography. Is to be able to answer this question that would Elon do this? Would Steve do this? T two comments on on sort of what you you just mentioned there. One is when you think long term, you eliminate a lot of poor behavior.

2:01:56 I if you think like we're gonna be in a relationship for thirty years I don't want to take advantage of you. uh even if it means I'm gonna get paid more tomorrow or do anything. So it just eliminates all of those uh incentives, even if you just think about all your relationships. on this generational basis, you eliminate a lot of behavior that may be You sort of I I'll tell you a funny thing. All the scammy businesses are usually found around tourist places. Oh dude, yeah.

2:02:25 I remember the kids and I went to this place in Vienna and we we got the cake, the famous Vienna cake. And the cake was like three Euros and then the kids ordered Uh water. And the water was eighteen Euros. And we had this amazing conversation around like how is it possible that they can charge eighteen euros for water and still have a thriving business?

2:02:47 It's very it's very simple. All the places that are built around Tourist places. are designed to optimize for short term behavior because there is no repeat customer behavior. Exactly. So

2:03:01 All the scammy people will self select themselves to be around tourist places. Because I don't need to optimize for my long term. N BS. Yeah. So they self select themselves. Mm.

2:03:13 In these One in many and then there is no thing that oh buy this Vienna cake. Nobody's gonna no friend is saying that Shane, when you go there, buy from here. Like nobody's saying that as well. So the it self selects itself into scammy businesses. asking yourself, like what would Steve do or what would Elon do

2:03:32 One of the reasons I find this so helpful is that it The source of all of our biases are blind spots. You know, we we can only see through our frame of reference, but the world exists outside of our frame of reference. And and when you ask yourself like what would Warren do or what would Steve do or You know Uh w what would can all do? What you're really doing is

2:03:54 Is you're getting out of your own head. And you're seeing the world through a different lens. And that in and of itself starts to reveal blind spots. And the source of all bad decisions is blind spots, because if you knew what was going to happen, you would obviously never make a poor choice. Everything makes sense based on how you see the world. And so what you're really doing is you're shifting your frame of reference. Which is the only thing that I've ever seen helpful at avoiding cognitive biases. in the future, because cognitive biases are so good at explaining why we made a mistake, but

2:04:27 retrospectively in the past. Here's why you screwed up. And it's like, well, that's great. How do I use this information to make better decisions in the future? And it's like, actually, that's really tricky. The smarter you are, uh the more likely you're not gonna be able to do that. Checklists don't matter. You know, when I talked to Daniel Conman, he said the exact same thing. He's like, I've studied this for 60 some years, and I'm no better at avoiding them. And I'm like throwing my hands up going, Well, what the heck? But what I have seen being super useful at avoiding them is to think less of them as cognitive biases and think about frames of reference. And am I in do I have the right frame of reference to see this problem? And how can I shift my frame of reference to see it through a different lens, through somebody else's eyes? And that comes down to curiosity too, right? And truth seeking. Because I want to see the world through your eyes. I want to see what it looks like. See what you think. I don't have to agree with it.

2:05:18 And I think that's where people people instantly like tune out to oh I don't agree with the way that you No, I wanna understand how you see the problem, what interconnections you see, what variables you see. And it's through that reflection that I'm going to get more insight into the problem. It's funny you're saying this. All the people who are seemingly very good at decisions, they tend to have multiple personalities In thinking about situations.

2:05:46 They can almost think like five different people at the same time. And they can become different people. And see blind spots of that. And explain the problem exactly through the lens of that person.

2:05:59 Or instinctively just able to reject things. For example Let's say we are trying to hire a senior person in our startup and let's say we have read autobiography of five successful people in life. And we can really live through that thing. Or let's say movie characters. that we've seen and we have built that reference in our head on what they would do and say

2:06:20 Would This person hire this guy. And it's weird. We'll be able to instinctively see feel from there and say no. There is no way this guy would touch this guy. Why? Because he's not smart enough to meet that level or he's not creative enough and and and and does not have the slope like

2:06:39 the way this guy did it. And we always can come up with that. And therefore uh Thinking being able to become multiple, getting multiple perspectives. Uh so two things I have seen, right? People who are thinking well read, well travelled. is nothing but acquiring more lenses in life. To see things.

2:07:00 The word unusual starts dying. As you travel more, as you read more. You are less shopped. You're less surprised. Because nothing seems unusual.

2:07:13 You've seen it all and therefore you have acquired different frames. And therefore most intolerant people who have not either read or travel because they don't know alternate realities. If you ask American, is this the best culture ever? They'll say yes. But they have never travelled to know and

2:07:28 Test if other cultures are better. Most Indians would do the same thing. They're like so proud of their religion, their culture. They're saying there is no framework to go test it, right? The other perspective is philosophy, right? Like when I studied philosophy, I had to study Indian philosophy and Western philosophy together. As eighteen, nineteen, twenty year old and these are

2:07:47 Completely different things like it's almost like trying to I don't know. uh trying to mix uh uh uh a Japanese cuisine to like Italian cuisine to a an and British cuisine. And then you're like it doesn't make sense, but the moment you acquire these Lenses and it they all exist.

2:08:07 And you can see this from a perspective of that, oh, let's say you make a decision, will Japanese people love it? Will British people love it? Will Indian people love it? And and you can come up with this ways to adjust to that based on some of these nuances and and We we have this amazing ability to come up with these answers again from our biases. But we have to be able to tap into multiple biases that coexist in us.

2:08:33 by creating all these multiple personalities in our head And saying that would this guy like it? Would this guy like it? And I'm like can see it and therefore all the people who are really good at their craft. Can predict. almost like omaka say of life and like like they'll just know that you will love this and and and therefore some people can get applause every time they go on stage. Some people can make music that can get applause every time. Some people can just do this consistently.

2:08:59 Because they can just figure out the constant shift and nuances and they don't get stuck. In a type. Do you record anything when you're making a decision? Like do you keep a decision journal? I don't.

2:09:12 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 twelve months. There people tag, uh so I make a prediction that this is going to be this behavior in two years' time.

2:09:27 And people And that tool reminds you to check this tweet in twenty four 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, p if you are right people will find you and tell you, Knall, you were right.

2:09:45 This turned out to be true. For example, I wrote something about dating and how it going to mess up things and and how things fast forward are gonna give rise to certain behavior. And there's an Yeah.

2:09:56 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 Uh it's awkward to make your predictions public and you make your conjections public or whatever. But uh when you're wrong, also people will find and say, Kunal, you said this, but look at this, this is what happened.

2:10:17 And and and it's a nice way of making the world I crowdsource my uh decision making, journaling, and shaming because it it it it reminds me uh more efficiently. I I'm not a structured person. Uh, I can barely make a to do list in life. I can Uh in fact the day I make a to do list I I somehow lose that to do list uh because I just can't keep up to that. Uh and I think Uh Being more

2:10:41 Connected in the moment. constantly connecting dots is the my method and therefore I document them in public. Because I'll I'll trust people to come and correct me on my decisions. How do you think about opportunity cost? It it comes to what metric you're optimising for uh if it's let's say wealth for the sick

2:10:59 Oh of making argument or opportunity cost. Uh Uh not All things create

2:11:06 the long term ROI that you think it does, right? For example Uh you'll say I'm gonna do a startup or do this job in consulting and I I might just miss out the opportunity to make some money in consulting and lose that. Early day. in the start up I think uh

2:11:22 Constantly thinking from a lens of Value per hour and and uh cost per hour. So so one framework I use is Uh.

2:11:30 Every now and then we should figure out a way, what is our value per hour. And we should figure out any mechanism, DCF, salary, whatever and then you say Hey. Whatever work I'm doing. Is this generating more market cap per hour?

2:11:45 than I am doing right now. And it doesn't matter what that work is. If it's causing that then you will do well because you disproportionately beat the index Uh of your salary per hour, which can be predicted very quickly. Good thing about jobs is that you can make that clear prediction. And and that's not bad. You can say that hey, this is gonna create this and and people are very good at doing the CAC LTV match saying that if I do this MBA, I'll unlock a consulting job and then I can get placed into Amazon and this is what my career trajectory will look like and this is what I can be in net worth or whatever basis. And that's a very safe path that many people take.

2:12:18 Uh Many people Take the unusual path and and tend to do better because they unlock More experiences and the feedback loops dramatically improve. So I believe that historically people were hired for years of experience.

2:12:32 I think in the future people will be hired for experiences per year. Right? And I think that is going to create this that Uh is your DX by Y is your slope. Really, really high.

2:12:44 And I think that's where Uh uh if you look at when does a startup become a big company? It's a good question to ask, like when does a startup become a big company? Is Amazon a startup or a big company? Is Uber a startup or a big company? Like Is one billion dollar valuation makes you a big company? I think the answer is very simple. When you reduce

2:13:04 the concentration of people with very high slope. In the company. Yeah, trajectory matters more. Correct. So if you inc reduce the concentration of people.

2:13:17 Who are Not high slope. Constantly. Then you become a big company because By design preservation.

2:13:25 does not come for people with high slope. They will demand more from the company. They will push it. They will not uh uh want things to be in a certain way. And then therefore uh uh And and by the keeping the high slope people in a company is the hardest thing to do because Every ambition of yours will look

2:13:46 Silly to most people. And therefore, sometimes I wonder like Elon is gonna probably have I don't know, five five hundred billion dollar plus companies? Maybe six? I think

2:13:57 The biggest thing he's done he's just Extraordinary at Collecting Strong slope people. All the time and keeping them.

2:14:06 Engaged. to feel excited and ambitious about doing what they are doing. Because they they just will push everything and all you have to do is orchestrate those people uh to do great things.

2:14:20 Well, it it's so fascinating, right? Because there's attracting a high slope. individuals. There's retaining high slope individuals. And then there's a sort of natural selection where if you allow a certain number of people who are average or low slope, if you will.

2:14:37 permeate the organization, it changes the environment in which pe like high per basically another way of saying high performers want to work with high performers. And if people see I if you're working with somebody who is

2:14:51 A high performer. you are better, right? The the standards are raised, even if you're an average, you're you're slightly above average now because you want to work harder, you're learning more, you're excited to go to work, it becomes less of a job and you're more all in. But the minute a high performer is surrounded by people who are mediocre performers. They want to leave, they get frustrated, they get cynical.

2:15:16 There's a clock on how long that they stay in that organization, or a clock on how long they stay engaged. Yeah. And therefore companies who obsess for Revenue per employee. naturally retain talent density a lot more

2:15:33 By design because they do not Kind of Regress to mean. If you will. Uh In many, many ways.

2:15:41 Because mean is unfortunately very, very boring for high performers because imagine you are in a all hands or or a town hall and The quality of questions have become so terrible. You're like Whose company is this?

2:15:54 Yeah, exactly. Yeah. Right. And I think Uh It sounds Like Almost like

2:16:02 You're trying to build up That's the truth. US historically constantly brought a lot of the bright mind to come uh to them and and honestly uh India has lost a lot of

2:16:17 uh smart brains because we could not do a good job of retaining these people and still struggle to do that and and all US and and and but the you trained a law and you stop the high slope people to come to you, some other country is gonna benefit from that and they will eventually in the long run fix that because the high slope people are constantly changing every environment they go to And and the funny thing about The high slope people is that uh

2:16:44 They recognize other high slope people. Almost In Literally five minute conversations. Yeah, we're definitely gonna need part two, maybe part three.

2:17:01 Uh but this this is a great place to end uh this conversation canal and I really appreciate you taking the time. And I'm already excited. Uh for next time. The Knowledge Project is produced by the team at Furnham Street.

2:17:20 I'd love to get your advice on how to make this the most valuable podcast you listen to. Email me at shane at fs.blog. You can learn more about the show and find past episodes at fs.blog slash podcast. To get a transcript of this episode, go to fs.blog slash tribe or check out the show notes. Can you do me a small favor?

2:17:41 Go online right now and share this episode with one friend who you think would love it. Thanks for listening and learning with us. Till next time.

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