Core Human Motivations - Kunal Shah - Knowledge Project 141

A summary of Kunal Shah’s insights in his interview Core Human Motivations - Kunal Shah - Knowledge Project 141

Insight and Success

You rarely meet successful people who are not insightful. Insight is believed to be the smallest unit of truth that is actionable. People who operate in the currency of insights tend to be generally more successful, especially in business.

Lessons from Growing Up in a Business Family

Growing up in a business family in India, I learned several key lessons. Our society has a deep-rooted caste system, and I belong to the Vaishya or Baniya caste, traditionally associated with business. Jobs are an unusual concept for us; instead, business runs in our blood. From this environment, I absorbed several lessons:

• Lower Shame: My community tends to have much lower shame and self-doubt, being hard to offend even if mocked, as long as business is good.
• Understanding Value: There’s an intuitive grasp from childhood about the value in everything—what people are willing to pay for and why.
• Spotting Trends: There’s a natural inclination towards spotting trends and sharing them regularly, which allows for early entry into promising businesses.
• Community Benefits: The community offers low-interest loans to each other, fostering an environment where people can try, fail, and try again with a softer landing.

The Fear of Failure and Shame

The fear of failure and shame prevents many from trying new ventures. However, being exposed to business from a young age teaches you that failure is part of the process. Those who have been shamed or mocked early in life often develop a resilience against such fears, enabling them to take risks without worrying about their reputation. Value vs. Price

Business also taught me the importance of understanding what people are actually paying for. Through various entrepreneurial ventures, I learned that people pay for personalization, status, and the chance to differentiate themselves. These insights have guided my understanding of consumer behavior across different markets.

Standardization and Business

Standardization is necessary for scaling a business once product-market fit (PMF) has been achieved. However, it can also make businesses easier to disrupt. There’s a balance between being hard to scale and hard to destroy, with unique, non-standardized offerings often being more resilient but more challenging to grow. What People Pay for

At its core, people pay for the satisfaction of their core motivations or the hope of such satisfaction. Products and services that help individuals increase their social status tend to have higher gross margins because they cater to a deep-seated human desire to improve one’s standing in society.

Kunal’s Startup Journey

My journey in the startup world began with my first company, which was a significant exit in India. This company introduced an innovative way for people to recharge their mobile phones and receive vouchers, tapping into the unaddressed needs of the market. After this venture, I took time to advise and invest in other companies, gaining a broader perspective on what drives startup success. My observations led me to develop a framework for predicting startup success, drawing parallels between startup evolution and biological evolution. This framework focuses on understanding human motivations and societal trends, which I found were often overlooked by other entrepreneurs in India.

The Value of Time in India

In India, the concept of the value of time is not as prevalent as in the West, primarily because people are not paid hourly. This lack of hourly wages leads to a cultural indifference towards optimizing time usage, reflected in practices such as spending hours deleting old pictures on WhatsApp to free up storage instead of paying for cloud services. Even the affluent, who can easily afford such services, engage in time-consuming tasks to save minimal amounts of money. This behavior showcases a significant difference in how time is valued, with many Indians working hard to save small amounts of money without considering the time invested.

Failures and Successes of Companies in India

The Indian market has witnessed numerous startups copying Western models, often without success. This trend is evident in the failure of many Indian startups to understand and cater to the unique motivations and needs of the Indian consumer. For example, laundry startups became popular in India, modeled after similar services in New York, despite the prevalent use of domestic help for laundry in Indian households. This misalignment between the service offered and the cultural context led to the failure of such ventures. On the other hand, startups that align with deep-rooted Indian behaviors and needs, such as the emphasis on weddings and education, find more success. However, the Indian startup ecosystem has seen a lack of original ideas tailored to the local market, with most entrepreneurs attempting to replicate Western business models without adapting them to local conditions.

Differences Between India and China

India and China differ significantly in their economic trajectories and societal structures. Unlike China, which saw a dramatic rise in its per capita income and economic status, India’s growth has been hampered by several factors. Notably, the female labor force participation in India is extremely low compared to China, where urban women’s employment rates were high even before the country’s economic boom. This disparity in female labor participation is a crucial factor differentiating the two countries’ economic development paths. Additionally, India’s strategy of targeting the DAU (daily active users) farm model has not translated into high ARPUs (average revenue per user), unlike China’s more balanced approach to monetization and user engagement.

Trends in India

India exhibits unique societal trends that significantly impact consumer behavior and market opportunities. Weddings, for example, are a major economic driver, with families spending a large portion of their income on lavish ceremonies. This trend presents a unique opportunity for businesses, yet surprisingly, few startups are addressing this lucrative market. Another trend is the emphasis on education, with Indian parents willing to invest heavily in their children’s education, far exceeding the investment levels of previous generations. These trends highlight the specific cultural and societal dynamics that shape consumer priorities in India.

US Companies Compared to Indian Companies

US companies often bring their business models and products to India, expecting to replicate their success. However, the cultural and economic differences between the two countries pose challenges. Indian companies, on the other hand, operate within these cultural contexts, giving them a potential edge in understanding and catering to the local market. Yet, the success of Indian companies is often hindered by a lack of original ideas and an overreliance on Western business models, leading to a disconnect with the unique needs and motivations of Indian consumers.

US Companies Coming to India

The entry of US companies into India has been met with mixed success. While India offers a vast user base, converting these users into revenue has been challenging due to the low average revenue per user (ARPU). Companies like Netflix initially struggled with their pricing models, expecting Indian consumers to pay rates similar to Western markets. This approach failed to account for the significant differences in income levels and the value placed on services. The cultural mismatch and misunderstanding of the Indian consumer’s value system have led to adjustments in strategy, such as introducing ad-supported models to cater to the Indian market’s sensitivity to price and value for money.

Efficiency and Wealth Creation

If you ask which product or service was more efficient 20 years ago than it is today, it seems impossible to find an answer. It feels like efficiency only exists in the future, suggesting that humans are constantly moving from inefficiency to efficiency. This progression, almost like the arrow of time, means that any product or service that changes from state A (inefficient) to state B (efficient) unlocks what is called wealth. The speaker proposes a framework for evaluating efficiency, illustrated by comparing the efficiency of booking a cab through Uber versus the old method. Most people would rate Uber significantly higher in efficiency, showing that when the delta of efficiency score is greater than or equal to four, three things happen: irreversible behavior change, high tolerance for the new method despite its flaws, and a unique brag-worthy proposition that people enthusiastically share.

Framework Application and Startups

Applying this efficiency framework to startups reveals that not all technology improvements result in a delta four change. For example, buying shirts online vs. offline isn’t a delta four change for people with odd sizes or preferences. This insight is crucial for startups, with the speaker noting that most startups fail because they don’t apply this framework, akin to building a dam where rivers don’t exist. The motivations behind consumer behavior are like rivers, stemming from core human motivations such as increasing social status, improving mating success, and ensuring success for progeny.

Building For a Target Audience

The speaker discusses building a second company with a focus on high-motivation categories and targeting the top 25 million customers in India, who can value time and afford to buy, rather than aiming for a broader but less monetizable customer base. This approach is based on the understanding that the Indian market is vastly different from China, and successful products or services must cater to specific, wealthier segments of the population to be successful.

Insight and Human Motivation

Insights are described as the smallest unit of truth that is actionable, with an interesting analogy to ancient Hindu mythology where wisdom was condensed into tight, memorizable lines. The speaker believes in seeking truths, even if the process is painful, as insights become building blocks for creating great businesses. A notable insight was the realization that products intended for the living room have a higher gross margin than those for the bedroom in India, reflecting the societal value placed on status and appearance to others.

Core Human Motivations and Maslow’s Hierarchy

The speaker touches on core human motivations, suggesting that they essentially revolve around improving our social status to enhance our mating success or the success of our progeny. The discussion extends to the differences in Maslow’s hierarchy of needs between the US and India, with the Indian version focusing more on status, belonging, and respect within the community.

Decision Making and Opportunity Cost

Towards the end of the conversation, decision-making and opportunity cost are discussed. The speaker suggests that good decision-making often comes from having a long-term mindset and constantly evaluating past decisions to improve one’s algorithm for making future decisions. Success, including retaining talent in companies, is linked to long-term thinking and avoiding short-term temptations or hacks. The conversation ends with an acknowledgment of the need for a follow-up discussion, highlighting the depth and breadth of topics covered.

Insights

• “You rarely meet successful people who are not insightful.”
• “They have much lower shame than the other communities.”
• “The small talk is unit economics.”
• “Going all in is not scary for them.”
• “If you don’t know these words, we’ll probably not suffer them.”
• “River exists, and every time they discover that hey river is not coming to my dam, instead of moving the dam to river they make the dams even more funkier and cooler with AI and all of that stuff but the water never comes.”
• “Indians were very good at cracking an exam that existed versus creating an exam that does not exist.”
• “In India, nobody has ever earned an hourly salary in their entire life.”
• “Nobody understands what’s their value per hour.”
• “Every Indian family right now who have just got new kids are going to spend probably 100 to 200 times more than what their parents spend for their education.”
• “I see a lot of dam builders with no idea where rivers exist.”
• “India is the DAU farm of the world.”
• “The market is not deep enough to focus on one market and create a large company.”
• “India has the lowest female participation of labor.”
• “Nobody was thinking about human motivation.”
• “Focus is almost a curse in Asian markets.”
• “It’s easier to disrupt a standardized religion than a non-standardized religion.”
• “We’re building in dessert; you have to make sure you’re a desert-like, you have to really build the rivers the right dams in the right place.”
• “Cost to provide utility is dropping, and therefore the revenue expectation from that is dropping.”
• “The world is getting more and more like APIs.”
• “Gross margins exist when you allow human beings to jump their social status.”
• “If we train kids through shame, it remains as a long-term bug in them.”
• “You cannot develop substance, net worth, wealth, experience unless you’re constantly willing to risk your reputation.”
• “People pay or give you time or money where their core motivations are mostly met or there is a hope for their motivations to be met.”
• “The CMO of your brain is saying that, ‘Oh my God, if I crack HBS, I will be able to jump the social status.’”
• “Everything that feels soulful in life is inefficient.”
• “In India, nobody is really reading books.”
• “People who can feel extremely okay to risk up to 30-40 percent of their reputation, wealth, health are the ones who propel further.”
• “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.’”
• “Standardizing is the enemy of soulfulness.”
• “Efficiency exists in the future; we’re constantly moving from inefficiency to efficiency, like the arrow of time.”
• “Any product or service that changes from state A to state B, becoming more efficient, unlocks what is called wealth.”
• “When the delta of efficiency score is greater than or equal to four, it triggers irreversible behavior change, high tolerance, and a unique brag-worthy proposition.”
• “Most startups fail because they try to build a dam where rivers don’t exist.”
• “At the core of it, human motivations are about increasing social status, improving mating success, and ensuring success for progeny.”
• “We targeted the top 25 million customers in India, focusing on those who value time and can afford to buy.”
• “Insights are the smallest unit of truth that is actionable.”
• “Seeking truth is painful, but the joy of unlocking insights is worth the effort.”
• “The living room renovation became a major revenue stream because it tapped into the Indian society’s value placed on status and appearance to others.”
• “Core human motivations don’t change from society to society; they manifest differently.”
• “In Asian societies, we treat our kids like assets, making investments on them.”
• “Maslow’s hierarchy in India focuses more on status, belonging, and respect within the community.”
• “People are hired for years of experience, but in the future, they’ll be hired for experiences per year.”
• “All bad behavior is rooted in short-term thinking.”
• “A person’s value per hour is a crucial metric in understanding opportunity cost and making efficient decisions.”
• “Success is about having more choices than others in your field.”
• “All things funny are surprises; all jokes pivot on an unexpected pattern break.”
• “High performers want to work with high performers; talent density is crucial for innovation and growth.”
• “Being able to become multiple personalities allows for seeing blind spots from different perspectives.”
• “The concentration of high slope individuals in a company determines when a startup becomes a big company.”
• “Wealth is like energy stored temporarily in batteries of energy, increasing as we figure out how to convert all forms of energy to our advantage.”
• “The real challenge is not just attracting high slope individuals but retaining them by keeping them engaged and ambitious.”
• “The ability to keep secrets is a litmus test of an individual’s capacity for holding and managing information asymmetry.”
• “True insight comes from being willing to look like an idiot in the short term for the sake of learning and growth.”
• “The richest experiences and deepest insights often come from those willing to share their failures and vulnerabilities.”
• “Humans are the only species that have figured out how to store information asymmetry in forms of wealth, continually increasing our capacity for energy conversion.”
• “The best businesses are those that are relentlessly seeking truth, even when it challenges their foundational assumptions.”
• “Every piece of technology that significantly improves our efficiency is a step towards a more prosperous future.”
• “Startups fail when they try to force a product on a market without understanding the underlying river of motivation.”
• “Building for a niche, wealthy audience in a developing country can unlock more value than trying to cater to the masses.”
• “Understanding ancient wisdom and insights can provide powerful lessons in efficiency and innovation for modern businesses.”
• “Catering to core human motivations is the key to creating products and services that resonate deeply and spread widely.”
• “Decision-making is an art that benefits from a diversity of perspectives, experiences, and a deep understanding of human nature.”
• “Long-term success is built on the foundation of making choices that compound positively over time.”
• “True wealth creation comes from leveraging information asymmetry to reduce energy consumption and increase efficiency.”
• “Retaining high-slope individuals in an organization demands creating an environment where their ambition and talent can thrive.”
• “The transition from startup to big company happens when the density of high-performing individuals begins to dilute.”
• “The quest for efficiency and wealth is an ongoing journey that demands constant innovation, adaptation, and insight.”
• “Building a successful startup is about finding the delta four change that significantly improves efficiency and user experience.”
• “The essence of great leadership in the tech world is the ability to attract, nurture, and retain individuals with a high trajectory of growth and innovation.”
• “Envy is hyper-local”
• “It’s always good to change your network in life”
• “All bad behavior is rooted in short term thinking”
• “Reputation is a bank account where you can deposit only a dollar a day, but withdrawal is always nearly complete”
• “You can’t hack reputation”
• “All the people who are seemingly very good at decisions, they tend to have multiple personalities in thinking about situations “

Interview Transcript

0:00 Intro

Kunal Shah: You’ll rarely meet successful people who are not insightful. I believe that insight is the smallest unit of truth that is actionable. And therefore people who operate in the currency of insights tend to be generally more successful - at least in business.

00:27 Lessons Kunal learned growing up

Shane Parrish: You grew up in a business family, and i’m curious as to what lessons you learned through that?

Kunal: In india we have a deep rooted caste system, where we had four casts. And one of the castes of the four casts is the business cast. For multiple generations, everybody in that caste has only done business.

It’s called the Vaishyas or the Baniya caste, and for this group of people, jobs are an unusual thing.

They are - for lack of better examples - like the Jewish family. It’s quite common for them to be doing business. They started dabbling into jobs in a more recent history - that’s a similar thing that we had in India.

So the few lessons that were learned are that - actually - I have a longer list if i zoom out into what makes people do business successfully, but i think, first lesson was that they have much lower shame than the other communities. They have very little self uh doubt when it comes to being shameless. And i think naturally they are more they are very hard to offend.

They are okay that even if you mock them, as long as you are giving them business, they’re okay with that.

Not many people would be okay with that treatment, right? That makes many business communities not respectable, because they’re okay to be mocked, or have lower dignity, or lower status as long as they get the the financial upside of it.

I think that’s where the status and 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 piece is just natural understanding of where is the value in everything.

Why would somebody pay for somthing is almost intuitively taught from childhood You just know what are people really paying for, right?

And also, they have a natural understanding of which products would have higher gross margins, or lower gross margins.

It’s a very interesting thing that, when you grow up in a business family, they just naturally arrive at summarizing what’s the value in everything, and it’s sometimes very uncomfortable to do it.

I remember going to an MBA school in the early days to speak. They invited me, and I was only interested in knowing the economics of the MBA school, and understanding how beautiful that business is. They find that disturbing! But, for a business community, they love to break things down to unit economics. It’s a first thing they talk about. The small talk in the business community is unit economics, which is quite interesting.

The third lesson is a natural need for spotting trends.

I am part of the Gujarati community, which is the business community of India. They have a greeting, when the two business people meet: Normally, people say hey, hello, how are you - what’s up?

The business community people have one more thing, which is called “shu nawajuni”, which means - hey what’s trending? What’s new, what are the new trends? And they share that 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.

They love the new trends, because they believe that the value is going to be where they are less likely to have competition, and are constantly finding themselves to be at different places.

You will find Gujaratis in every single country having set up a business, because they will keep finding ways to not compete.

You will find them in a remotest African country. There will be a Gujarati family running a business multiple generations - you will see them across the planet!- because they will look for ways to not compete, and have a zero sum mindset.

One other thing is community benefits. One of the things i have noticed in the Gujarati community is that, just like Jewish communities, that they offer a significantly lower interest rate to people in their community, because banks are less likely to underwrite business - and obviously this is pre-venture capital.

The community gives them loans, which is a way to say - it’s okay, try to make something out of it, and try to return the capital when you can, but at a very low interest rate - just nominal. They love to see more people be successful.

And the last lesson was, constantly, having the need to make their community successful by giving them a soft landing if their business fails.

They would say - oh, it’s okay, come start doing a job, stabilize, and start again.

I think of the time when I started doing a job, in my early career. 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 a 30 dollars a month kind of a salary when i started.

There’s always this thing that, okay, you can start do the job right now. Stabilize the family, and then you can start some business, like, there is no shame that.

You are just helping the family settle down from a financial setback that the family went through.

I have seen within the communities people going all in, getting wiped out, becoming big in one lifetime again and again - and there is less shame attached to failure, because it’s business.

It’s fascinating. I have seen so many stories.

I’ll tell you about one particular individual, his name is Premchand Roychan - he’s the founder of Bombay Stock Exchange. And very few people in India know about this guy. What is the reason for that? 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 adjusted to inflation, 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 below a tree, becomes the wealthiest person, and gets wiped out, and literally 100 percent of Indians and Indian businessmen have no clue about this guy.

I just researched this because there’s a huge tower in Bombay which is made a Big Ben clock, and i was curious who the hell made this - because it doesn’t have a British name. This is the Rajabai Tower. So I researched, and found out that Rajabai was Premchand’s mom, and he made this clock for her because she could not see. It was for her to hear time.

Look at the flex of the guy! 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!

That’s crazy!

08:37 On the fear of failure and shame

Shane Parrish: I want to go back to the shame thing for a second here.

The fear of failure prevents us from trying. Do you feel we develop this as an adult?

Or do you feel, when you’re involved in a business at a very young age, that you get exposed to this because you could fail, and that’s okay - it’s part of business, and you just keep going, and iterating, and trying.

Whereas when we become adults, and we try something, we don’t want or we’re scared to look like an idiot.

Kunal Shah: I’ve thought a lot about shame as a topic.

I think a lot of people who have been bullied and shamed and mocked early in life develop an unusual superpower to not give a damn about being mocked anymore.

It would not be surprising if one would say to Elon [Musk]: Hey Elon, were you mocked a lot when you were younger, because you were not a normal guy and one would even say that you look like a guy on the spectrum. And Elon would probably say, yeah probably true - but he doesn’t feel that anymore.

What I noticed about is the training of kids - if we train kids through shame.

Let me give you an example. Let’s say you tell them - and in India it’s very common that people will say to kids: if you do not score well in school, all your friends will make fun of you, all the relatives will make fun of you, everybody is going to look down upon you, and they will say shame shame, right?

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 about how they are - and they constantly think their social status cannot be taken or risked.

But, according to me, you cannot develop substantial net worth or wealth experience unless you’re constantly willing to risk your reputation.

So i think people who can feel extremely okay to risk up to 30-40% of their reputation wealth are the ones who propel further.

But a lot of people don’t do that, because in their head they will say - I can’t even risk one percent of my reputation, which makes them not propel in life.

But some people, on the other extreme, are very happy to go all in.

So, again, going back to the Gujarati communities, I know so many families go bankrupt all the time because going all in is not scary for them.

In fact, i’ll tell you an interesting stat. India is a very large country, but the total number of people who have invested in any kind of asset - stock, mutual funds, any of that - is around 30 million. Coule be 30, 35 million.

I would go to the extent of saying that 80-85% of people who are having more than $200 of investments in any of these assets are people from this community.

That’s how risk averse the rest of the society is, compared to these guys.

11:55 - Value vs. price

Shane: I want to go back to something you said earlier - how business helped you understand what the value of something is - and more importantly, what people were actually paying fo.

Are there any examples that come to mind when you think of that, as a child?

Kunal: Because I had to start working full-time, I had only an option to do a morning college, which would offer me a graduation for, maybe, attending 7-9 AM, because I had to do a full-time job. And I was a Science student who switched to Philosophy as my major, because that was the only class that allowed me 7-9AM.

So I would go for my Philosophy classes, and I would do a full-time job. But that was not enough money to take care of the family. So, I had to do a lot of side hustles.

I’ll talk about three, four businesses that I did as a kid. This is all before I had legal age to do anything at all.

One was - I built mixtapes. I downloaded music from the Internet, and made mixtapes for people on a CD, and burnt it, and gave it to them.

I used somebody else’s computer, and somebody else’s internet, because I had no access to any of these things.

And I would give them take rate, or fee for service, but I realized that people love the idea of being making something personalized versus buying something from the store, which is mixtape of somebody else

The idea of gifting they were okay to pay 3-4x more than the normal mix tape that they would get from the market, because this is made by me, right?

So what I did is, I started going to all the music stores, and I said I will make the mixtapes for your clients: This is my price to you, you can charge whatever you want. And they would make 5x more profit selling my mixtapes than the music labels.

I understand that the business was not really legal, but as a 15 year old I did not know better. I had to survive. So I did what I had to do.

Then, I built another business which was henna. Have you seen that people put henna on their hands?

I built that business where I realized that people put henat to really differentiate themselves in Indian weddings, to really look better. “I have the better design on my hands”, they would think.

Henna is almost like a temporary tattoo that people put on their hands.

And I realized that the biggest need people had was that design was not enough. The color of henna had to change. So i figured out a way to build black henna which I learned from some Arabic culture was possible, and sold that in the retail stores under a brand that i made when I was 16-17. And that sold at 10x more price than the regular henna, because it allowed people to differentiate themselves, and have a superior status.

That’s another thing I learned: People love to personalize, put a signature and give more value. People love to have higher status than others, and pay more value, and they didn’t even care about the price because, what I did is - I said this is short supply. I said that I can only supply you two a day, it’s a complex process to make it.

It wasn’t complex process. I just artificially created scarcity in the market, and I had to learn all of this because I could really not make enough - because I was having a full-time job, and doing other things.

The other thing I learned was - I started doing some private tuitions for kids, to teach multiple subjects - whatever people would send.

And I realized that people loved teaching their kids exotic subjects. So I would, like, teach them Excel. And I would not know these subjects.

I would ask them, what do you really want to learn? I would learn that the previous night, and teach them, because people loved the idea of having special skills given to their kids which were not available easily in the market.

So they were looking for a tuition teacher and would say - Can you teach this particular skill? Can you teach that particular skill? So I would learn that.

And I realized that I learned the best when I had to teach.

So I started doing that a lot, and it was the fastest way to make money.

It was a negative way of learning in life.

I think a lot of these concepts made me realize that the Indian society was a lot different.

In my career, I did a lot of other businesses which were sold to the US and Western market and Indian market, and I think most Western companies do not understand Asian society.

The mass laws hierarchy of Asian society is completely different to the Western society, but unfortunately, 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 monetize from these markets.

They can get a lot of DAUs and MAUs from this market, but rarely ARPU, because they don’t understand what people pay for over here.

I think that was the big lesson I learned.

So one of the biggest shocking things for me, when I’m doing my first trip to the US was - I figured that almost everybody’s first job paid them an hourly salary.

In India, nobody has ever earned an hourly salary in their entire life.

Now there’s 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, any hotel, any restaurant - ask the guy, what’s your salary per hour? They 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, and save you your time, rarely monetize - which monetize a lot in the Western society, because everybody understands the value of an hour - because their first job was, I don’t know, $10 an hour - and then, now, they are doing well in life, but they can still do a math on approximate basis: now my salary seems to be $500 an hour, and they just get it and therefore they take very interesting decisions.

In Western societies, they will not try to optimize for a $50 discount on their flight tickets, when they are making $500 an hour, 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 time as a concept was never taught efficiency. It is not a DNA you see in Asia.

But a flip side I have noticed is that everything that feels soulful in life is inefficient - all the vacations that we find very soulful are inefficient places. The food that we really really like and find soulful is inefficient to cook, right?

I always find these interesting things, that maybe soulfulness is a function of chaos and inefficiency, which Western society has figured out how to scale.

Let’s compare this to our religion now. Hinduism isn’t, I would say, as scalable as, let’s say, many other religions, because it’s not standardized.

There is no one book. no 10 rules, no one god.

So what do you really scale, with Hinduism, is an open source religion which people make and built on some principles and tenets which are constantly evolving, and people are allowed to tweak it on their own terms.

It’s evolving very differently, and therefore Hinduism is mostly spread through birth, but not through scaling to other societies, because it was not designed for efficient scaling - but it is something that you feel more spiritual.

20:15 Standardization of businesses

I think that’s where the nuance comes in that it is impossible to imagine scaling in life without standardizing. And standardizing is the enemy of soulfulness.

I do you think standardization is also, sort of the opposite of value creation in some ways, from a consumer point of view.

Shane: I would disagree with that because once you have figured out what is called as PMF (product-market fit) you need to scale it by standardizing it to a great extent

Kunal: Right, and it happens all the time. However, standardized things are easier to disrupt than non-standardized things. Just the way a standardized religion is easier to disrupt than a non-standardized religion.

One is hard to scale, one is hard to destroy. And I like that continuum go deeper on that the hard to scale versus hard to destroy.

So if you think about a hard to scale businesses, let’s say this great restaurant - you can’t make a chain out of it. It’s just impossible, right? Because the guy running it can’t teach all the skills to build five chefs, ten chefs.

But they’re also hard to destroy, because if it really works - there are so many restaurants that work for hundreds of years, because they have just perfected that. But they can’t build branches.

They can’t do it, but there is a McDonald’s which has managed to scale the version - and which is very easy to attack and say, hey, it’s unhealthy - and, guys, we need to move away from this, and break the whole concept 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.

But something that is built inefficiently is harder to destroy - because what do you destroy, and how do you destroy them? There is nothing to attack. There is no area of attack. You cannot really say that, okay, these are the three points on which we can attack.

You can’t. They’re slower to take hold, and then harder to get rid of.

And, I think that works for a lot of things that are non-scalable - let’s say, movie making.

Some directors who are really known to make successful movies back to back really don’t care about timelines.

You can’t tell the best directors that - oh, we need to ship two movies every two years. They will not do that.

I’m not saying that the others who ship one movie a year do not create value. They do. But you never they will never create something that is memorable, or create an experience that you will never forget.

So I think that’s where 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 methods.

For example, trips to inefficient places will be more memorable than to efficient places, by design.

23:19 What people pay for

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

Kunal: People pay or people give you time or money where their core motivations are mostly met, or there is a hope for their motivations to be met.

Let’s take this example. Just imagine this - let’s say all of us are on some level of social status in life. Let’s say you are at level 90, I am at level 60. Somebody is at level 200, and so on and so forth. Let’s believe this is true

Now products and services are also at some levels in life. For example I would say Louis Vuitton is at level 160, Harvard Business School education is at level 200. Let’s imagine these things and let’s say fueling your car is at level 30, and so on.

By design, gross margins exist when you allow human beings to jump their social status. And gross margins disappear when you do not help them increase their social status.

For example, I will keep moving to a utility server 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 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 they promise… - or even if they give you hope. Let’s give example of Vegas right now.

Vegas does not assure you you’ll become rich, but gives you the hope lottery - which is a chance of being level 30 jump into level 200. You think - I’m okay to go all in once in a while. Especially poor people get sucked into that a lot more. It’s like being on a poker table with a smaller stack - the best strategy you feel to be on the table is to go all in all the time.

So when we went through the pandemic, I believe that the whole world had this amygdala-hijacked moment, where they said - Oh my God, I have to, really survive, and I need to take more risky behavior. Because I think the amygdala, probably, flared up during this time, and therefore risky behavior seems to happen right after crisis, because people just go all in.

I was shocked when I got to know that 90-95% of all coins that were traded on all crypto exchanges were not in the top five, not even the top ten - because who wants the normal returns? I just want a chance to just play that. And, therefore, I think the the world is getting more risky.

And then obviously there’s a huge correction that will happen, which will kind of flow in the next stage, because like the Spanish Flu we went through, Spanish Flu was followed then by the roaring 20s, and by the Great Depression.

We’re going to go through those cycles faster now, because we have fast forwarding for everything.

In fact, crisis it’s almost like a fast forward button to future, and accelerates eventualities - because we go through that but coming back to what I was, saying is that value therefore is utility and vanity 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 because you get a chance to make across sell a high gross margin services.

If you look at Amazon, a bulk of the revenue used to be in the Marketplace, but if you see all the avatars of Amazon in different countries, the Marketplace revenue was made to be zero. Alibaba chose to not charge the merchants to sell 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 in China by saying, oh it doesn’t charge commissions if you have to sell on our store.

I think this is where i see a lot of the utility providing businesses getting constantly disrupted by somebody, at least, in their technology businesses. You don’t need a license to provide liquidity. You can just offer it.

It’s not like an electricity company that can keep charging you forever because nobody can compete with electricity companies for the networks. Internet businesses can simply offer utility for free, and Google has mastered this. Many companies have mastered this.

I believe the future of SAS companies is going to be where the next SAS 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 loan, some technology, some value-added services which could disrupt a lot of utility creating businesses, by design.

So I think the cost to provide utility is dropping, 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 bring more skin in the game, in nature versus rent seeking, that they used to, because nobody could easily compete - because the world is getting more and more like APIs. And businesses, when they become APIs, it’s much easier to plug them into larger ecosystems.

One of the interesting things I always wonder about is that, it’s very easy to find super apps in Asia, but rarely you find super apps in Western societies.

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, and when that high trust entity launches 25 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, to salt, to furniture, and people like - Oh, Tata Group! We’ll just buy it!

Iwould say 80-85% of Bollywood’s revenue comes from, like, 10-15 people - again, concentration of trust. And therefore…

By the way we even watched that kid’s movie, so nepotism is very rampant in India, because you’re, like, Oh, this guy’s son! I trust him to do a good job, but I’m not risking my money on this new actor.

And, therefore, super apps also emerge a lot more over here.

I’m, like, oh, Credit is offering this, or they’re launching this new service: Boom, start using it - but you might have been doing completely different business in the past. But people just say, Oh, I know these guys!

The familiarity creates a huge amount of trust over here, and therefore you see concentration of market caps in fewer and fewer companies, and therefore I believe Pareto might be extremely skewed in Asia versus West.

Nobody has obviously studied that. I would love to fund a research which shows this, but i do believe that the market cap of top companies would be different than what you would observe at least in each category.

Tech may be an exception, but every other category you’ll see huge concentration revenue - from the Bollywood industry revenue, from anything else - it just becomes more and more and more concentrated.

And that is the reason, I think, increasing trust in the society - and I’ve been obviously obsessed with what creates trust.

For example, the most simplest answer I’ve found is - trust is natural in societies that have very low diversity of ethnicity. And that is a scary thought, because all sorts of bad behavior have happened in human history, because we tried to attack the minority and always try to make the society one.

But it, unfortunately, seems to be true that trust is biological.

And we seem to trust people with common belief systems. And ethnicity plays a huge role.

So, you’ll notice an interesting pattern that - I think, there’s a study by some Stanford professor which showed almost an opposite connection or correlation to number of ethnicities and the high trust of a society.

And it’s not surprising that most societies are not multi-ethnic.

As they’re becoming more multi-ethnic, the trust is declining. And you see emergence of authoritarian leaders to be much much more frequent - because all low trust societies always want somebody with strong backbone to create peace.

And that’s also the concentration of trust point, which seeps in from that, which is constantly repeating itself in many themes.

32:51 Who we do (and don’t trust)

Shane: So 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.

Is that is a good summary, paraphrasing you?

Kunal: I think it’s a good summary.

There’s one more nuance. If it becomes too similar, innovation dies. It becomes too dissimilar, trust dies.

So it seems to be in an interesting spectrum, that you can only have a certain mix that keeps driving things to move forward, versus become stagnant and boring - and too chaotic.

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 the society to reorganize itself to have 80-20 on ethnicities which is a problematic concept to start with.

Shane: And then one of the interesting things that you said there is, in low trust societies, you have these big companies that get this - almost like - trust grant right? So, I can create products in adjacent marketplaces that people will just naturally trust on their own, because they don’t know who to trust, or what to trust.

But if Facebook were to make a car, people would be pretty skeptical. The trust of the platform would not necessarily carry over.

Kunal: Yeah and it’s such a fascinating concept in India, because it just works - and at my company, I’ve seen that. We’re 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 were mostly from the western market. They’re, like, focus!

Focus is almost a curse in Asian markets.

34:38 Focus in Asian markets

Shane: Go deeper on that.

Kunal: The market is not deep enough to focus on one market, and create a large company. Reasons are - the per capita income, the total economy, and all of that.

So you have to cross-sell more things to the same set of customers.

I’ll give you some interesting stats about India, which should be mostly not known by most people outside India.

Less than 6% of urban Indian women have financial income of their own.

94% of them are currently 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, undergraduate grads, or even higher - but not contributing to the labor force.

Another interesting thing is that 95% of all financial products in India are bought by men: credit cards, car loans, home loans, all investments are made by men.

India has now nearly two thousand dollars per capita income, annually. But if you remove the top 30 million families. or 30 million individuals, the per capita income would drop to maybe 600 - and, therefore, a lot of Western markets love to come to india and say, Oh india is the next China.

It’s not because - our per capita income is never going to beat and grow like China. Because before China started becoming affluent, 96% of chinese urban women were working, because of the one child policy, which forced it to become a gender neutral society - and got them all on the labor force - which never happened in India.

In India, in fact, it’s going down. That’s a scary trend 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 India is the DAU farm of the world.

All the big internet giants will say, Oh, I have 500 million users in India, but look at the ARPU, and peel the ARPU - it’ll be less than a dollar or two.

But it’s great, like, for example, if you got a lot of Indian followers on Twitter.

Your Twitter account follower account will go like crazy. Your monetization quotient might go down, and I think many companies like Snapchat, Twitter have worked very hard to grow an user base in India.

Facebook is a classic example. YouTube, my bet would be that it would be probably making less than two dollars ARPU annually in India, with probably more than 500, 600 million active users in India alone. But they don’t mind that because the global ARPU compensates for the ARPU mix. But the user mix cannot come from anywhere else, and therefore the market will reward you.

Netflix made the mistake of coming to India and say, we’ll charge you for it. Nobody is going to pay that, and therefore the Netflix projections were not meet. Because India is a country where you give them freebies, and you get all your DAUs you want. You do not get your ARPU, and I think that’s the lesson they learned - and, I think, they are saying now they will launch a market with advertising. India is perfect for that, because value of time is not a concept for us.

So we’ll watch in India, when a series plays on TV for 30 minutes, approximately 9 minutes is ads. By the way, it used to be more! The government regulated and made it nine minutes.

38:10 Value of time in India

Shane: Io people aren’t paid hourly. How are they compensated? How does that work?

Kunal: We have a concept of monthly salary. We’re not even paid weekly, so we are paid every month. And everybody thinks in “month”!

It’s a flawed concept, because they never think about being efficient in life.

Unless you know your salary on an hourly basis, you will never really know what the value of time.

One fascinating thing I’ve seen in India is that - you fly in the US, and many people are reading books, or doing something else. In India, nobody is really reading books.

I have seen a very peculiar behavior in India. They are going to WhatsApp, and are deleting old pictures, so that it can clear up the memory - instead of buying a one dollar pack that will give you a cloud access. That’s the value of time, and these happens with the most affluent people in India. There is no way they can spend two hours deleting pictures on WhatsApp, but they do - because the value of time is not understood intuitively. I’ve seen this all the time in people around me.

People who are multi-millionaires will work so hard to save fifty dollars, it’s not even funny.

Shane: It’s like my parents. They will drive 45 minutes to save two cents a liter on gasoline.

Kunal: But they never worked, or grow up in a society where value of time was a concept.

So I think it’s a more a phenomena coming from Western society like oh we have to be efficient; we talk of industrialization, value for our productivity. If i ask 10 people in India what productivity means, I don’t think I’ll get a good answer.

Shane: But then, if you try to sell something based on sort of saving people time, it’s not going to resonate. Because you have to not only convince them that this is worth doing. You’re really trying to change something that’s inherent in the culture right now, which I would imagine is slowly changing, as wealth becomes more prevalent.

Kunal: It’s funny you’re saying that. But India is after the US, maybe, in the top three markets of SAS business software providers on revenue. But none of them have any revenue from the local market, because no business pays for software. They don’t they’re, like, Oh! I’m just going to hire three more people, and they’ll just work. Because they don’t understand that software could make them so much more efficient.

And I wouldn’t be able to find one company that makes more than $10M dollars annual revenue by selling software to Indian businesses. Which is scary if you think about how large our economy is, and how many businesses we have, and how internet savvy we are.

We are, probably, more savvy in using smartphones and digital payments than many other countries. In fact, one of the things that is talked about is - India’s digital payments have overtaken China, and we’re taking off!

Most people don’t tell you that it took off after government made it free! Money transfer is instant, but nobody makes any money! That’s when it took off.

When we had charged one percent, two percent MDR for do that, it never took off.

So the thing is that this value of time understanding, credit, value of time, and this math of tying time - energy - money in one equation is extremely hard.

41:40 Kunal’s startup journey

Shane: I meant to ask this as the second question of our interview. You’re on your second big startup now. How did we get here? Walk me through your first, and what you’re doing right now - and then we’ll pick up where we left off here.

Kunal: Sure. My first startup I built from 2010 to 2015, and exited, probably, the largest exit at that point of time in India.

And that startup did the following: It allowed people to recharge their mobile phones.

In India, 99% of connections are prepaid, which means they are not on any plan. People refuel their phone. It’s a low credit society, nobody giving credit to each other. So people just top up money, and use it, and then top up again - but none of that 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. It was called Free Charge.

And it took off in a very big way, because, again, the value of time, 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.

But what I realized was - I was going for the mass market through that, but it was nearly impossible to monetize. They just did not have any money. So after I exited the first company, I spent a bunch of time - I was advising multiple companies, and joining their advisory board.

One of them was a media company, one of them was Sequoia Capital. I spent a bunch of time understanding investments.

I was also angel investing left, right and center. I’m probably angel invested in maybe 200 plus companies now in India.

And what I learned 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 engineering background, I had no friends who had built tech startups. In fact, I didn’t even think I was building a tech startup. I thought I was building a marketing company, which turned out to be one of the largest payments company in India - because I had never read TechCrunch in my life.

In fact, I remember meeting Sequoia for the first time. First of all, when Sequoia reached out to me, I’m like - who are these guys? Why are they wasting my time? I had no clue who they were. I ignored their emails for months, till somebody told me they’re really a big deal, you need to check them out.

I’m, like okay… I went there, and I remember they’re asking, so, Kunal, what’s your CAC? And I had no clue what that word meant!

I think it’s a superpower - I think vocabulary is a unique curse that we suffer, every word we know! I truly believe that! If you don’t know these words, we’ll probably not suffer them…

And I think 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 a bad market, you will die. But if you find a market that has used tailwinds to it, even a mediocre founder will do really well.

I think market is like laws of physics.

And I saw a very interesting pattern in India. It was that a lot of smart people were building great companies that wouldn’t go nowhere - and I saw some people who are not so smart would do really well consistently, and being serial entrepreneurs.

And I found that as an interesting pattern.

I referred 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 the river will show up, but river never shows up.

But the river exists! And every time they discover that the river is not coming to my dam, instead of moving the dam to the river, they make the dam 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 were flowing, and even the mediocre dams were making profits over there, versus these fancy dams, which nobody ever used.

Shane: It’s a very Western idea: Build it, and they will come!

Kunal: It never happens, I think. 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 river flowing through you will make a lot of money.

In India, there are no accidental rivers. It’s like you’re building in dessert. So you have to make sure, you’re a dessert, you have to really build the dam in the right place, because there’s no unlimited rivers flowing.

So, what I noticed is that nobody was thinking about human motivation, because all of our education system in India was not teaching humanities. I accidentally learned humanities, because of philosophy - but every single tech founder in India - India has 100 unicorns, I would go on to say that I am the only founder in the 100 unicorns which has a humanities background. Everybody else is STEM.

And another thing in India is that we never had a dating culture, so we never learned human motivation through the game of dating as well.

So we have extraordinary builders, 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? Hundreds, and maybe hundreds of thousands of them.

How many co-founders of many unicorns in the US are Indians? Probably a lot of them, and this is where I found this to be. Thinking Indians were very good at cracking an exam that existed, versus creating an exam that does not exist.

So that created an interesting option that you can build startups a certain way.

Everybody knows an Indian spends a lot on weddings. It’s a known thing.

People love to go to the Indian weddings. And they they keep hearing this - I’ll give you an interesting data point. I checked in my office: most people spent close to six times their annual salary for their wedding, okay? But zero unicorn startups are solving wedding problems!

That’s the scary thing about the market. I met a founder who runs us a luggage company - a suitcases they build. It’s a public listed company. 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 I was just giving them some suggestion: they should do some branding on the airport, and they’re, like, Kunal, what are you talking about?…

I’m, like, yeah you’re a suitcase company! You should be at the airports! What am I not saying correct over here?!

And he says, “Kunal: 80-83% of all suitcases in India are bought for weddings. The bride takes new suitcases, and goes to the new family. There are 4.4 million weddings that happen every year, and on average, close to three to four suitcases move with her to the new house!”

I’m, like, I have no clue about these things!

I met another founder who’s building an interesting bio-hacking kind of a startup. And there’s a new treatment uh which improves the mitochondria growth rate in your cells… It’s a expensive treatment which is done usually for cancer patients, or somebody with diabetic situation, or whatever.

And this guy goes to him and says: I want to try this bio-hacking… and the founder says, Oh you’re here for cancer? He says no. Are you here for diabetes? I said no. The third question was: Are you because it’s your wedding?

And it’s, 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 patient, or severe diabetic patients - to improve their skin tone for their wedding.

That is the fascinating thing about India, that so much of the economy is running through that - because in India we are saving every penny all the time, but we’ll splurge on weddings, we’ll splurge on medical events, we’ll splurge on education of our kids.

Every Indian family right now who have just got new kids are going to spend probably 100 to 200 times more than what their parents spent for their education.

That’s what we spend money on. The consumption is just not there.

So i think when you study these patterns, what i realized 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 10 startups that were funded for doing laundry startups - which were popular in New York. But in India, we had maids coming at home.

Why do we need a laundry startup?! But there were 10 companies that got funded, so there were so many investors who were cluelessm so many founders who are living in India who are clueless…

So during that period I started working on a framework - I call it the Delta 4 framework - on predicting startup success. My curiosity was - 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?

So I built a framework, 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 your blog, and, like, I’m connecting all these dots in my head.

And I found that the evolution of startups was very similar to biological evolution. And nobody was thinking like that.

So I’ll give you a sneak preview of that framework. It’s easy to understand, but I’ll tell you:

For example, if I asked you which product or service was more efficient 20 years ago than it is today? It’s really impossible to find an answer. There was nothing more efficient. All the efficiency exists in the future.

So humans are constantly moving from inefficiency to efficiency in one direction, almost like arrow of time. And therefore any product or service that changes you from state A which is inefficient to state B should unlock something that is called wealth.

So I built a simple framework, which sounds simple, but most people still don’t use it.

Let’s say I asked you that what do you think is the efficiency score of booking a cab through Uber, on a scale of 10, versus the old method that existed of booking cabs, whatever that method was. Most people would say maybe this is seven eight on ten - and the old method is maybe two on ten, one on ten, three on ten.

So the framework is very simple - that every time the delta of efficiency score is greater or equal to four, three things happen:

It’s an irreversible behavior: Once you experience a delta for product or service, you cannot go back there.

It is obviously very very high tolerance - that’s the second thing: that you will hate Uber, but you’re not gonna, like, damn it! I’m gonna delete this app and i’m gonna move to a more inefficient behavior!

The third thing, which I call the UBP - Unique Bragworthy Proposition is: Humans, when they discover something delta four, they can’t stop bragging about it everywhere.

It is almost like a secret code that all humans have with each other, that every time you discover delta 4, brag about it, and tell everybody about it. And move the entire humanity from state A to state B, which is more efficient. Which reduces their local entropy, and moves them forward to a more efficient medium which burns less in energy, in any form: time, money, or wealth.

You move forward to more efficient methods. And I realized that most startups were not looking at this.

I’ll give you a simple framework to think where it doesn’t work: for example, let’s talk about buying shirts online versus offline. It’s not delta four.

If you have, let’s say, odd sizes, or you have the challenge and therefore shirts have not moved completely online uh and many products will not be found because just by adding tech it doesn’t become delta four right it has to improve the efficiency score of the desired behavior and i think that framework uh i talked about it in india funny enough i i was told by sequoia in the us they’ve actually introduced this framework and the onboarding of analysts in the secret u.s team which was interesting because in india even if i’ve spoken about this framework still startups don’t apply that and i see 90 of them fail all the time back to the analogy of building a dam where rivers don’t exist and and rivers are nothing but motivations right like at the core of it we all humans have the same core motivations and then it 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 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 i had the luxury to take the continent in bed and say that i told my investors that i’m building a startup that will only focus on the top 25 million customers of india because only they can value time or will buy and rather focus on them versus 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 between india and china is common except our population that’s where the similarity ends but global companies love to win india because they lost on china so the public markets will bash them if they lose india again 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 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 and i think that was the genesis of focusing on startups to build for the top more thing 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 denominator that does not exist and i will focus on this customers and 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 uh india even if you’re in the top 0.01 percent of affluence your passport is ranked maybe 150 in the world and therefore every country is 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 now this sounds like a controversial idea hey you’re trying to kill a society which is like more friction but the thing is that that’s what capitalism is i’ll give you a small example india has this unique concept called mrp i don’t know if you know about this but let’s say this bottle over here it says that maximum retail price of this bottle is 10 rupees and even if it’s sold in extremely affluent neighborhood or the most poor neighborhood the price is 10 rupees because the government thought this is the greatest idea ever that we’ll have the same price for everybody but i could easily pay 30 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 the 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 711 will charge 30 rupees and this one will charge five rupees and the cost core will charge this guess what all of them have to charge the same price and i think i realized that the only way you can differentiate by service and all of that is just create a separate layer to build for them and and that was the genesis of the second startup uh 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 in my investments as a part-time gig i love building way too much uh and and i think uh i’ve been working since i was 14 15 i do not know how to live a non-intense life while i can predict patterns and see things and i could technically generate better roi of my time through investing but the joy i unlock by building is coming much higher by building my own companies versus just being predicting and being right a lot uh in predicting future trends which can generate the highest roi of time it doesn’t generate any joy so i i found no joy in investing uh 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 in the market like this when you can predict delta for frameworks and you can apply all the human insights you’ve learned it’s not a big deal that you’ve avoided to be more right the problem is i felt really empty i want to go back to some of those human

1:00:35 What predicts startup success

frameworks in delta iv when you’re making an investment decision what are the top lenses that you’re thinking that through so one was sort of the delta iv framework which we talked about 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 so one i mean i i i’ve never thought about it from a human framework but i’ll still maybe give you a few things that i do uh that was your word i think you used the word human framework yeah i mean it was more of a motivational uh lens but applying human motivation as a core loop but there are other things that make it easy to detect startup success for example a lot of founders who pitch to me are usually well prepared and make a presentation and come to me and so i tell them that hey i don’t understand english very well can you explain this to me in hindi what does it do founders who really get what they’re doing can switch language without a problem because they really get it and language doesn’t change anything for them many people who have just prepared their presentation and not really understand this very clearly they struggle with the language change and their pitch goes for a toss uh that’s so so hold on one way to i just want to add p back on this because like 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 context which is sort of like the same idea yeah yeah 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’m not gonna look at your ppt and they’ll be like how do i explain this to you uh 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 and i have to tell a friend 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 so tell me what do i say and i tell them to take 10 minutes break before telling me the answer most i would say 90 percent of founders fail at this because they can’t really distill it to that simple transmissible message from a friend to friend 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 because nobody really understands what the hell are you doing that’s one framework that has worked the other one is 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 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 and that’s another framework i have seen that good founders always know functional and the emotional benefit of their product or service uh what else i have seen uh market sizing most founders cannot imagine how will they start from here and go on to build a very large thing from here they get stuck in uh this is what i do but they can’t imagine how will this become a large company ever they just don’t think they don’t even think they don’t even they cancel their own idea and i’ve seen the opposite type which is i call it the swiss knife problem they believe that they have to build a swiss knife when the consumer only was looking for a knife because they love building so a lot of them are usually with engineering background they love the builds they write so much software that consumers are confused when they talk to them because 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 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 but never being used uh so i think that’s another pattern i’ve seen uh i’ve never really thought about this from a 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 just that basic test nobody’s gonna pay for that like uh like will your dad pay for this will your mom pay for this will your cfo pay for this will your kid pay for this like they are just off on that uh the last one is uh insights do they have an insight that is not obvious but when you see them talk about you like aha that makes sense uh and and uh you’ll rarely meet successful people who are not insightful uh i believe that insight is the smallest unit of truth that is actionable uh and and therefore people who operate in the currency of insights tend to be generally more successful at least in business can you go deeper on that the smallest

1:06:42 On insight

unit of insight that’s actionable a smaller unit of truth that is actually truth truth that’s actual yeah go deeper on that for a second so if you go to ancient hindu mythology and and you study the sanskrit scripts and sanskrit was a very condensed language right because it was invented before paper was invented so knowledge was transmitted from human to human through memory so they had to distill 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 you’ll read in sanskrit yoga line and like in one line they’ll condense like really a lot of wisdom in it so i think the concept of boiling something to the core units of it then you cannot divide it further becomes a powerful unit that is also the building blocks or what we call as first principles that can help build businesses right and i think a lot of times uh then it’s a painful process seeking truth is painful uh shen 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 is not natural and therefore a lot of people do not appreciate it enough but insights become this nice building block through which you can create great businesses unlock great success 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 view that oh india cares about status so much more than the western society let me do an thought experiment i reached out to my friend who is to be a buyer of a top retail chain in india 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 kitchen and sofa and furniture and all of that nobody thought living room and bedroom has two separate concepts but i said can you please make somebody crunch it and turns out the gross margin was 3x 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 therefore it was not surprising that bed sheets were not bought expensive in india and bathroom products did 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 and therefore you apply that insight now and i told this insight to a home renovation company i told them don’t keep saying home renovation launch a product line which is living room renovation and today 70 80 percent of that revenue for them is living room renovation because that’s the insight and that’s the motivation button that you can press in people so i think distilling things to these points and that’s when you realize that oh western society is exactly different people will buy so many of these products for their bathrooms and bath bombs and candles and all of this stuff none of these exist in india but in fact the bathrooms are even smaller 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 a status thing individualism versus individualism versus collectivism which is how asian societies are and therefore you don’t deserve things to be special but you have to show it and therefore weddings are really big and very high gross marginalized for others

1:11:02 Core human motivations

so let’s go back to the the we talked about this a little bit earlier but i want to go into more detail on you mentioned some of the core human motivations that transcend culture core human game is to constantly improve our social status so that we improve our mating success or our success of our progeny in some ways right uh so we are trying to get into a game where biologically we can create more and more healthy and smarter and like for example the easiest way to answer this question is that 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 baby is a good thing or not if it was possible that you can tweak their iq their looks their health their chances of 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 or healthier wouldn’t you give me 50 of your net worth and i think that’s where the core motivations are like what would you give half of your net worth for those are the core human motivations and they don’t change from society or society they remain the same they manifest differently for example the asian society is unlocked that oh education is everything so they disproportionately optimize for that but they don’t they save pennies like you said like your parents talked about traveling uh miles for saving cents uh but 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 2x more they would probably suffer and give you that money but they would not buy an extra shirt for themselves so i think 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 times 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 amongst all markets that does remittance indians limit the highest amount of money back to their family than it comes to mexico and others and that’s the sign that the kids were raised as assets 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 kids in these societies are treated like assets versus oh uh you’re on your own now that’s is not in our culture 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 social contract that exists in asian societies of taking care of parents and taking care of them even after you don’t have any obligation to do that but people do it till they die and really take care of them which is i’m not going to the point of right wrong these are just structures through which society has evolved western society uh made it a lot more about you and yourself and love yourself and you deserve it and uh consume more and all of that versus like go and take care of your dad’s operation and pay for the whole thing uh asians will not even flinch one bit to uh sometimes even wipe out 50 or 100 of the net worth to take care of their parents uh which is hard to imagine concept for many people in the west

1:14:55 Maslow’s Hierarchy of Needs in America vs. India

yeah i think that is you mentioned maslow’s hierarchy of needs was different can you elaborate on that a little bit between uh the us and in india yeah so i i actually googled i found doesn’t i thought it should be in a separate asian mask but in fact there is a concept somebody’s proposing asian master and they have drawn a very different chart but one of the interesting thing about the chart was it’s all about status belonging respect and in the community it’s not about self-actualization and uh uh having that uh kind of a individual path to enlightenment is all about 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 like so many awards and so many of these things and face matters a lot and uh giving back and like being valued in the community and so on and so forth you will not uh see and therefore like uh a funny story like i i i have a two-wheeler scooter that i move around with and and people with some affluence doing this kind of behavior are mostly considered to be veer eccentric uh i don’t see any joy in having fancy things i i just managed to get a car for myself for long distances but i still use my scooter all the time and for most people this is absurd because i am not following the asian maslow that you have to get a luxury car and you can get so many more cars and why aren’t you having this fancy house for yourself and why are you staying in a rented apartment like 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 so uh and i’m not saying that the west does these differently but it is a lot more for the people uh it’s a lot more living room than bedroom even in the affluent households right and i think uh therefore you see extraordinary effort and money spent on weddings it doesn’t make sense that you i don’t spend five x or ten x of your annual salary on two days event and just splurged around people who you mostly don’t even know and therefore 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 in life and that’s the asian mass law and therefore the startups the rivers are different uh versus the rivers that exist and therefore very few sas companies making millions of dollars of revenue but there are enough wedding photographers i know who make more than 10 million dollars of revenue oh wow i want to switch gears a little bit to some of the stuff that you’ve said over the years and i want to get more of an elongated take on it and they’re concentrated doses of insight and i’m wondering maybe if you can just riff on them a little

1:18:06 On your group of friends and compounding

bit um so one of the things that you’ve said recently is that your group of your group of friends impacts how fast you compound so insights are usually connected from random dots getting connected right so but the process of collecting dots has to be efficient for the process of connecting dots to be more efficient uh and and then collecting dots is easier if your friends are also collecting dots to connect dots so what happens is that compounding naturally works better when 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 a lot of different people from different fields to see how these these words connect for example i will sometimes speak to an influencer to a stand-up comedian to a music director or to an entrepreneur in a completely different space because at 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 are at the crux of it and and why people do what they do and why the gross margins seem to be high when 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 where uh 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 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 like something i really envy and i when you ping me i said shane i wish i had what you do in life i’m so envious of you because what you’re able to do is get such and and i’ve seen that things connect when you go really deep or you go really wide and and things just then start connecting with each other right uh and therefore one of the things that i do a lot is constantly look for origin stories of why certain things exist for example uh 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 original story of shampoo is an indian trader who went to europe to sell a shikakai which is a different product in india and sold it are the chumpy champions like head massage which creates foam and that was called shampoo by european guys and it became the product and no indian who uses shampoo knows that the word shampoo comes from chumpy which we use as a word for head massage and then i see these things and i’m like when you go to origin stories of many many things there 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 i’m like let’s study all the history so premature and reichen was a rich guy i was like okay who are the other rich people of india and i found this guy called david sasson 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 opm trader for the region and british made the entire rail network to support his opium business which grew opium across the world india and shipped it through bombay to guess where china and david sasson had a huge role to play in the opium war that happened where british attacked china because they stopped david’s supply to go to china because of banning opium and hong kong was born out of the settlement of opium war 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 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 just see you see patterns again and again repeating for example the boston tea party in the u.s which triggered the civil war or whatever was not just tea they were also taxing tobacco they were also taxing stamp papers and you like realize that how it was a beautiful model of inventing stamp paper which is 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 and i am i i sometimes i believe that i do businesses only to hunt more insights in life it 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 will read people and find insights but i i i am i can do this uh all day long non-stop 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 them to respond to me on some hypothesis i have or some question that i have i think being shameless is most important ingredient in ability to connect dots go deeper on that um shameless people make more conjectures without any fear of judgment right hypothetically is that i will make a conjecture randomly

1:24:29 Sharpening insight through public discourse

and write as if it’s some law of physics and people bash me and correct me and sharpen my inside 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 conductor out there without giving a damn of people thinking that how the hell can he say like this how can he for example i put a conjecture out during covert that maybe the new variants are lighter in weight therefore they can spread faster but they are less fatal because viruses seem to have a correlation of weight uh with how potent they can be like for example hiv is a much heavier virus than common cold and therefore it spreads through blood transfusion or sexual transmission but it is a lot more potent uh versus common cold which can spread through air 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 are usually have a very light trojan that spreads versus a very heavy thing and therefore your if you really want to be at a high distribution startup you have a build which is very light spreads like a virus and therefore the word viral is born from virus which talks about how a light content and therefore tick tock becoming what it is is because it’s the lightest possible virus that you can create that spreads like a wildfire so i don’t fear judgment of like how are you making a medical term connecting into viral videos to this and i think shame plays a huge role i’ll give another example i i made a comment once saying that um in elementary table uh elements that have a lot of valencies which is uh 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 likely to be more thing and therefore people who have lesser valencies are noble and that’s what also called 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 i’m not trying to write in a scientific journal i’m just trying to make a conjecture and what if this leads to something else and i think shame plays a huge role uh in fact uh double click on shame i found an interesting hypothesis that the fastest way to make somebody feel okay about what they’re ashamed of is to make them feel proud about it for example the path to from shame to normalcy is through pride uh which is obviously used and misused in different ways so gay pride and if you are a man if you have tobacco and you are a classy person if you have this whiskey so every vice 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 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 by the way uh uh i also know that everything that we are proud of are the handles that we give to other humans to manipulate us so every time everything that i write on twitter as things that i am proud of like people’s intros and descriptions are 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 getting myself exposed uh and 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 i i believe that one day you should give up your name also and profile picture also and and get into that zone because uh that’s when you become impossible to manipulate or impossible to trigger because you are nothing nobody 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 alum of this proud this or manchester united fan in fact uh the word fan probably comes from the word fanatic and fanatics are the easiest to trigger in fact i believe that all the people who demonstrate the need to be fans are the people who are easiest to offend uh in life i think being fan or having favorites is telling the world that you’re extremely easy to offend

1:29:55 On signaling

a couple points coming out of this 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 could beat every time love it and i think those those are so insightful because where 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 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 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 uh they have an acute need to show that they’re happy and then they hope that showing that will make them really happy but the real people don’t feel the need to show it to anybody else i think that’s what 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 and a lot of times when people put it in other people’s hands that 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’re optimizing for somebody else’s metric not realizing that nobody gives a damn about anybody else except themselves so that goes to sort of buffett’s idea of this inner versus

1:31:47 Inner v. Outer scorecard

outer scorecard talk to me about that i think uh i think people genuinely are benchmarking externally because the scores are built externally i think that academics for example i have a unique curse of not being able to memorize things an indian education system expect you to memorize very long answers and say them as it is without understanding one bit of it so as a kid i always thought that i was a poor student because i would 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 in practicals projects presentations but very lesson theoretical writing exams so i always thought i was dumb compared to many students and it took me after my first exit of my startup i started believing that i’m not so dumb so i think when we create any mechanism of scoring people outside iq test eq test whatever that is right uh we are removing dimensions that we could be better at uh and i think uh but if you constantly think about am i better than what i was six months ago and constantly improving that it doesn’t matter what you define as better than what you were at and i think you can make wealth by being better on something which is solving problems but you can be healthier or whatever but not by comparing but by looking at am i better than the previous metric and i think uh most people are not keen in looking at that because it feels boring they want to compare and and the need to compare is acute and i think i’ve not seen [Music] people come out of that trap for example many people who are very smart in india who are in their 40s are still comparing to other people in their college batch in the reunion if they are better or not in their success in life i’m like but that was 20 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 it works only in a local radius right 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 we don’t feel envious of people who we don’t believe in and therefore it’s good to constantly change who your network is to really do well in life because we all are going to be driven by the wi-fi network range of our nv or our comparison and therefore you and people like i think naval twitter today and i had also responded back to that that we outgrow uh the price of growth is outgrowing people is is this because if you really change your wi-fi network all the time to people with better ambitions better goals uh you will not feel that need uh to win within this that local league uh of yours so hold on i want to explore this a little bit more envy being local is it you’re not envious of elon musk

1:35:15 On jealousy of different levels

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 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 that 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 and i’m wondering if that plays a role here with nba in in the game of leaderboard and whatever the leaderboard is off we are constantly playing in our local 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 was i don’t know 100 million followers like it seems unachievable or i’m not gonna compare myself in a sport let’s say i am i’m decent at swimming i’m not comparing myself to phelps who’s one like you know 25 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 hyper local thing comes from that oh i’m going to beat my batch of college mates or my neighbors or my 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 keep moving up and maybe benchmark myself to a slightly different level and i think a lot of people self-limit themselves 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 is interested in the journey of elon musk everybody’s interested in the end state of elon musk that i and therefore a lot of people behave like him uh when they have achieved nothing in their life 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 copy journeys well it’s so interesting because like if you want to improve you you almost want to copy tactics and ignore results right so you you don’t want to compare at a macro level you want to compare it a micro level and the micro level is what can i do better what can i learn from you that’s going to make my process better that’s going to make what i’m doing better and i don’t want to 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 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 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 do that sort of 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 need to copy at the somebody who’s at the next level and a recent next level so not like a distance so we often go into these organizations and i did this when i was 20 23 24 i joined this organization i get this mentor my mentor is amazing brilliant super smart 25 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 at politics at life at because the skills that got them to where they are are not the same skills necessarily that are going to help me in my job today because they might have done what i did but they did it 25 years ago the odds of those things being relevant and useful are a lot less so you want to find somebody who’s done the same thing that you’re doing 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 taught actively 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 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 don’t have kids but i love experimenting on other people’s kids uh it becomes a good uh 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 it the wi-fi school i like 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 and the next day they come up with the answer uh on why it is the case that way and like why is the sky blue or you can take anything they can take why is this team called this name why is it so expensive to advertise on super bowl whatever it is you can just choose any why that they are interested in and you do this enough for one or two years 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 in kids just makes them very interested in saying that why is elon musk rich why are some people able to be successful 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 artists all the singles all the time hits why is this artist 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 much or much more mature than most of the kid which is which is a side price of it because you they don’t get along with their kids in their school and people start calling them as nerds or geeks or whatever but the thing is that they just compound faster by one type of question versus others so i think the input metrics or input levers 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 therefore a lot of people get fooled 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 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 like look at christianity or islam or hinduism it’s adding more dius 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 start giving power away to something else and therefore how about the organized religions figured out a perpetual diu growth many ancient religions did not and they got replaced so i think these things are not something that people are curious about the answers are usually very simple and basic and that’s another thing we don’t like basic answers we are 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 and you’re like and therefore when i tweet or you tweet

1:43:46 Most people aren’t in the truth business

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’s simple but not necessarily simplistic and so 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 think of that as simplicity on the other side of complexity but it’s not a simplistic so simple doesn’t mean simplistic in this case and then that is like true insight and mastery and understanding i want to go back to something you said earlier because i think this is a point worth sort of maybe coming back to or empath emphasizing a little bit more which is truth most people aren’t in 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 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 can’t figure out the truth you go out of business 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 this story yeah 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’ll almost feel that they are philosophers yeah and and what is philosophy it means filo plus sophie which is love for knowledge or love for truth right 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 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 and i think uh surface level truth seeking therefore does not create enduring businesses 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 tam to operate in but you don’t really go seek that and i think the reason uh truth-seeking is not preferred because it truly burns more energy uh and energy-saving is in human trait right so uh i often 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 unusual to like authoritarian leaders because i can’t process all this information so that that this super interesting sorry i i didn’t mean to interrupt you there and uh but you you said something 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 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 that would be that we appear less tolerant in all other aspects of our life because we’re sort of like getting all of this energy sucked out from social media and media which is designed to sort of hijack us yeah and there is no time and energy to go to nuances it’s not needed it’s not required and and therefore 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 because there is no processing power and therefore we like authoritarian leaders a lot more in these chaotic times because seems about right right and and and therefore uh i i remember hearing from somebody that nobody people don’t back people who are right and wrong people back people who seem to have a backbone uh because i can’t process all this information and i think look at this like the people like a lot of us who were born before internet and now like the younger generation like they just have so much coming to them right every day constantly that they are 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 going to become more and more 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 of few people to go to nuances to basic principles will keep creating more and more wealth power anything that you can imagine as important and and as a metric of success because they are traders of nuances uh and all the people who are not traders of nuances are going to be this transient a source of energy that money will flow through them away and in fact i’ll tell you one interesting thing i’ve observed you will rarely meet a wealthy person who cannot keep secrets so i believe that wealth is like energy that stores itself in entropic complexities that seem to hold the information asymmetry in them versus be these transient sources and and therefore i believe that the world has become this superconductor where one meme goes to hundreds of millions of people quickly information gossip uh fake videos uh content about uh johnny depp’s divorce like it’s 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 and i go for dinner and people talk about this i need to want to be look like an idiot who’s not knowing the common topic and therefore things like netflix or youtube are just making the world one at a level we cannot imagine because people are trying to be relevant in the context of like what percentage of human popula i actually i did an interesting study uh you you’ll love it by the way you should look it up when will smith’s had that event at oscars i looked at google trends and saw on the heat map of the world where did will smith as a keyword take off because google trends went like this like this but on the global heat map only if some places went really dark most places had no search 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 and africa and morocco in in in indonesia their western media has 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 power and therefore reduced uh i know 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 they’re still happy they watch it ten times they’re still happy because their brain is not evolved to find patterns and they are constantly finding new things all the time when they watch the same content but humans like we don’t like watching the content again because we figured out all the patterns so we like watching movies which are unpredictable and we can’t solve the patterns and therefore the the christopher nolan general like becomes very interesting because you’re like oh i couldn’t grasp watch it one more time or whatever but the nuance of this is that uh we’re also perpetually bored because of that right because nothing seems to be causing any unusual pattern and they will look constantly looking for new pattern breaking things uh and therefore tick-tock is no surprise because it’s constantly breaking patterns and and one of the most interesting things i learned is that all things that are funny are surprises all jokes are surprises go deeper on that so 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 and makes us laugh and now now now that i’ve said this if you see every stand-up joke everything you’ll see is surprise surprise surprise surprise all the time 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 tick tock is surprise super machine you can spend hours on it and your brain will not stop getting surprised

1:53:45 On getting surprised

but in life we tend not to like surprises right so i’m thinking specifically you know the oil shoots up we we come up with this simple that’s a surprise 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 instead of exploring it so interestingly the the human brain which lights up in fear and humor is in the same region because it’s a surprise that does not cause harm to us 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 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 and we know uh by the way will not love a gift that’s come randomly to our house with no name on it and we are like scared but yeah let’s say your loved one gets you a surprise which is packed nicely you are just excited because you do not feel the threat attached to this the same gift looks the same feels the same way is the same and causes different emotion you are like oh has somebody sent me a bomb you are not thinking that oh i have a secret admirer who sent me this beautiful gift let me just open it you are mostly assuming that oh 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 could be 60 year

1:55:28 Wealthy people keep secrets

old we are still happy to open the gift wrap i i want to go back to something you said earlier 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 so this is now a rabbit hole topic so we’ll go we’ll go into it uh i do believe that 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 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 so we are the only species that i figure out nuclear energy solar energy kinetic 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 right so the thing is that there’s an interesting thing that was was called the maxwell’s demon problem which was the only thing that said a proof that entropy is not increasing it can be reversed because it was a concept which was basically maxwell demon has this glass box maxwell is a 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 other heated molecules and and this demon could open the window selectively based on when hot one was trying to move in this direction and left cold was moving and it just reverse it so basically it says that maxwell daemon is able to reverse entropy versus or 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 oral entropy of the system is growing and therefore human brain and therefore the information theory and all of that comes in saying that entropy is constantly increasing because of the information asymmetry in the demon’s head now if you extend this idea further you 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 people who have natural information asymmetry are constantly creating more and more wealth and therefore they because you have to burn less energy compared to others in diverting 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 quickly become poor uh and you will see a pattern that they are very bad at holding information symmetry and ability to keep secrets is a good litmus test of an information 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 we all somehow humans know intuitively if i asked you shin think about 10 of your friends uh can you think of what three of them who cannot keep a secret you will not totally i’m not going to name them though because you should listen to them but you can also name the three people who will keep the secrets also yeah 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 yeah and and secrets doesn’t have to be nasty it can be just about knowing something about the world and and all of that for example like if people really cared about information instantly 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 i i think humans have scaled as a society because we 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 and therefore i i was reading an interesting thing that the biomass of ants and humans is the same in the world which is the number of kilograms of weight that we have on this planet because both of these species figure out how to cooperate and keep this information structure growing right and and others don’t and and they are 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 are figured out how to increase the entropy of the system like we are the best agents of entropy because we’ve heated up the entire ocean thanks to our activity right and and and global warming is a function of us creating more wealth through the process of inefficient thing 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 therefore uh this concept of wealth is rarely like uh and generationally like you will see that uh 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 they’ll be always people who like manipulate them 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 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 and store it and it can keep getting destroyed for example a lot of social media uh stock market tanked and revenue tang when apple announced a way to not be able to keep more information asymmetry and boom you can’t predict many things about people and therefore your revenue will tank because you can’t predict their behavior and i think that’s where the power of understanding this simple concept can can be very useful in understanding where the wealth is going to move

2:02:32 On making decisions

constantly i like that let’s change gears a little bit here um talk to me about decision making [Laughter] uh it’s a another rabbit hole uh so i have seen that one good framework of decision making is talking to champions of that field of decision making for example um i don’t know how to make uh 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 and they have the ability to do that are likely to be better at taking decisions on how to marry somebody right and it sounds weird but choices just make them better right 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 in fact according to me the simplest definition of success is also about having more choices in other people in that respective field that you think about and i think that usually does not fail but i believe that a lot of people are taking decisions through emotion which is a hit or miss thing but uh problems to solve are or to feel are 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 kid or their startup or their company but emotions are not good enough to solve the problem but they are very good at knowing intuitively something is off and 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 they just feel it 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 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 is great using emotions to solve or make decisions is terrible in terms of uh uh everybody has different framework 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 around decisions even if it’s short-term decisions is useful so i’ve seen that some people are naturally good at long-term decisions than 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 we all of us know some people who are very good at long term decisions and and they think 20 years 40 years 60 years 80 years 100 years on everything right for example i’ve always told people that all bad behavior is rooted in short-term thinking every bad behavior in human beings comes from being short-term 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 30 years out and therefore people do stupid things with their reputation or their trust with people or all of that because they don’t think it matters 10 years later and but if you do grow your reputation slowly it gives you huge powers later on because compounds quickly in fact i remember this beautiful quote one of our investors told me that no canal reputation is a bank account where you can only deposit a dollar a day but every time the withdrawal is almost nearly complete so if you make a mistake on your reputation the withdrawal will be complete but 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 uh and they get corrected quickly but slow reputation usually gives you more currency to outlast and i think uh when it comes to decision making like thinking about what is the slow currency of life repetition wealth all of that like don’t uh try to hack it uh anybody who’s trying to hack it will always lose it quickly because uh they’ll not have the muscle to retain it for example a lot of people who get rich 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 so uh i i do believe that some people are just naturally good at judgment uh 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 intuitively people who are very good at decision making are constantly journaling without even sometimes not writing but constantly evaluating everything that did in the past objectively without feeling emotional about it and constantly reflecting on it and improving their algorithm right and i think uh 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 is 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 sometimes just creating this mimicry of sorts uh would be very powerful that would this person do this what this and and i think the only good use of reading a autobiography your biography is to be able to answer this question that would elon do this would steve will do this two comments on sort of what you you just mentioned there one is when you think long term you eliminate a lot of poor behavior if you think like we’re going to be in a relationship for 30 years i don’t want to take advantage of you even if it means i’m going to 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 maybe i i’ll tell you a funny thing all the scammy businesses are usually found around tourist places oh dude yeah i remember the kids and i went to this place in vienna and 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 18 euros and we had this amazing conversation around like how is it possible that they can charge 18 euros for water and still have 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 all the scammy people will self-select themselves to be around tourist places because i don’t need to optimize for my long-term nps yeah so they self-select themselves uh 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 it self selects itself into scammy businesses to the other point about asking yourself like what would steve do or what would elon do 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 when you ask yourself like what would warren do or what would steve do or you know uh what would canal do what you’re really doing 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 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 going to 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 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 and i think that’s where people people instantly like tune out oh i don’t agree with the way that you no i want to 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 are saying this all the people who are seemingly very good at decisions they tend to have multiple personalities in thinking about situations they can almost think like five different people at the same time totally and they can become different people and see blind spots of that for example and explain the problem exactly through the lens of that person or instinctively disable you 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 let’s say movie characters that we have seen and we have built that reference in our head on what they would do and say would this person hire this guy and it’s weird we’ll be able to instinctively 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 does not have the slope like 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 so two things i have seen right people who i think well read well traveled is nothing but acquiring more lenses in life to see things the word unusual starts dying as you travel more as you read more you are less shocked you’re less surprised because nothing seems unusual you’ve seen it all and therefore you have acquired different frames and therefore most intolerant people who have not either read or traveled 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 traveled to know and test if other cultures are better most indians would do the same thing they’re like so proud of their religion their culture this thing 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 18 19 20 year old and these are completely different things like it’s almost like trying to i don’t know uh trying to mix a a a japanese cuisine to like italian cuisine to an and british cuisine and you’re like it doesn’t make sense but the moment you acquire these lenses and say they all exist and you can see this from a perspective of that oh let’s say you make a dish will japanese people love it will british people love it will indian people love it and you can come up with this ways to adjust to that based on some of these nuances and 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 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 uh like almost like omakase of life and like like they’ll just know that you will love this 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 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 but i have built a habit of tweeting my predictions and people do one funny thing i don’t know if you’ve seen this remind me of this in 12 months that people tag so i make a prediction that this is going to be this behavior in two years time and people respond to that tweet by saying remind me of this in 24 months and that tool reminds you to check this tweet in 24 months and do that and i found that to be very useful because if you make a prediction in public and you say something in public if you are right people will find you and tell you know you were right this turned out to be true for example i wrote something about dating and how it’s going to mess up things and and how things fast forward are gonna give rise to certain behavior and there’s an article that came yesterday which exactly talked about what i talked about in 2018 and somebody found that and said kunal you said this in 2018 and that’s one thing that works for me uh and and it’s awkward to make your predictions public and your conjectures public or whatever but when you’re wrong also people will find and say canal you said this but look at this is what happened and and it’s a nice way of making the world i crowd source my decision making journaling and shaming because it it it reminds me uh more efficiently i’m not a structured person i can barely make a to-do list in life i can in fact the day i make a to-do list i i somehow lose that to-do list because i just can’t keep up to that and i think uh being more connected in the moment constantly connecting dots 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 okay we’re definitely gonna have to do a part two of this because i think i only get through four questions uh so next year i i’m we’re going to reserve this now

2:18:35 Opportunity cost

how do you think uh sort of last question for this one i think we’re hitting up to a good time here how do you think about opportunity cost it it comes to what metric you’re optimizing for if it’s let’s say wealth for the sake of making argument or opportunity cost not all things create the long term roi that you think it does right for example 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 startup i think constantly thinking from a lens of value per hour and and uh cost per hour so so one framework i use is uh 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 than i am doing right now 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 that’s not bad you can say that hey this is going to create this 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 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 i think in future people will be hired for experiences per year right and i think that is going to create this that is your dx by why is your slope really really high and i think that’s where 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 the concentration of people with very high slope in the company yeah trajectory matters more correct so if you reduce the concentration of people who are not high slow constantly then you become a big company because by design preservation does not come for people with high slope they will demand more from the company they will push it they will not uh want things to be in a certain way and then therefore and by the keeping the high slow people in a company is the hardest thing to do because every ambition of yours will look silly to most people and therefore sometimes i wonder like elon is going to probably have i don’t know five 500 billion dollar plus companies maybe six i think the biggest thing he’s done he’s just extraordinary at collecting strong slow people all the time and keeping them engaged to feel excited and ambitious about doing what they are doing because they they just will push everything and

2:22:10 On hiring high performers

all you have to do is orchestrate those people uh to do great things well it’s so fascinating right because there’s attracting 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 to permeate the organization it changes the environment in which people like hype basically another way of saying high performers want to work with high performers and if people see if you’re working with somebody who is a high performer you are better right the standards are raised even if you’re an average 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 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 by design because they do not kind of regress to mean if you will in many many ways because mean is unfortunately very very boring for high performers because imagine you are in all hands or a town hall and the quality of questions have become so terrible like whose company is this yeah exactly right and i think uh it sounds like almost like you’re trying to build up some kind of a divide in society but that’s the truth u.s historically constantly brought a lot of the bright minds to come uh to them and honestly uh india has lost a lot of uh smart brains because we could not do a good job of retaining these people and still struggle to do that and and all the u.s europe and and but you change the law and you stop the high slow people to come to you some other country is going to 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 slow people is that uh they recognize other high slow people almost in literally five minute conversations and and they just love showing up uh and i i call it the uh the test of like if you get stuck with somebody for three hours without work but you still look forward to having a conversation like shane you mentioned that most of my podcasts end in 60 minutes 19 minutes like the length is a function of am i getting more value per minute i’m incrementally spending with this conversation uh and therefore you put some hard stop in setting expectations and that hey it might be just be an hour but if it improves the quality of conversation and you feel that you’re going through a high slope yourself you’re like this conversation will need part two and that’s exactly what happens with high performing people yeah we’re definitely going to need part two maybe part three but this is this is a great place to end uh this uh conversation canal and i really appreciate you taking the time and i’m already excited uh for next time you