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Kunal Shah on winning in India, second-order thinking, the philosophy of startups, and more

Lenny's Podcast2024-03-24
5K views|2 months ago
💫 Short Summary

Kunal Shah, CEO of CRED, discusses building successful startups in India, emphasizing trust and market understanding. He shares the Delta 4 framework for product improvement, highlights Indian immigrants' success in business, and the importance of maintaining values in leadership. The video explores long-term thinking, risk-taking in India, and challenges faced by global companies. Shah also talks about profit models, internet-based businesses, and the significance of curiosity in personal and professional growth. He emphasizes the value of continuous learning, critical thinking, and overcoming challenges for success in entrepreneurship.

✨ Highlights
📊 Transcript
Insights on building successful startups in India by Kunal Shah, CEO of CRED.
00:47
Importance of trust and understanding market differences highlighted for startup success.
Rise of Indian immigrants in CEO roles discussed, along with challenges and opportunities in Indian market.
Shah's background in philosophy influences deep thinking about product development and life.
Advocacy for staying curious and open-minded, sharing stories of failure and contrarian takes.
Kunal shares the Delta 4 framework for product improvement in tech industry.
05:32
Kunal reflects on his journey from a philosophy major to a successful tech founder, challenging traditional ideas of success.
The framework emphasizes achieving significant product improvement, with Uber being used as an example.
Kunal's personal experience showcases the importance of innovative thinking and unconventional paths in the tech industry.
The Delta 4 concept emphasizes product efficiency and unique selling points.
09:09
Products with an efficiency of four or higher have irreversible effects, high failure tolerance, and generate buzz.
Offline experiences can sometimes be more efficient than tech products.
Using the Delta 4 framework helps in understanding the success or failure of products.
The concept is based on entropy and evolutionary biology, serving as a tool for convincing founders of product potential and training analysts in VC firms.
Success of Indian immigrants in business and tech in the US.
11:03
Attributed to humble backgrounds, hunger for success, and appreciation for math and logic.
Society's emphasis on mathematics and engineering contributes to their status and success.
Application of Indian mythology and management principles in business.
Prominence of Indian CEOs in the US tech industry.
Importance of Values and Obedience in Leadership.
15:10
CEOs should follow the Dharma of founders for company success.
Comparison between Krishna and Rama as different leadership styles.
Emphasis on humility and continuity in upholding principles for long-term success.
Sustaining values and principles essential for CEOs to ensure longevity and growth of companies.
Importance of Long-Term Thinking in Leadership
19:45
Cultural influences like arranged marriages in India prioritize long-term stability over short-term gratification.
Transitioning from a successful CEO to a founder requires different skill sets for sustaining versus innovating.
The value of long-term mindset is emphasized in personal, professional, and societal contexts.
Changing perception of risk-taking in India due to respect for founders, unicorns, and government support for startups.
21:55
Traditional views on marriage affecting willingness to take risks, with failed founders facing challenges in job market.
Importance of recognizing and celebrating risk-takers as a country, drawing parallels to historical explorers.
Discussion on the difference between acquiring users and generating revenue per user in India, with ARPU influenced by per capita income.
Global companies attracted to India due to cheap data and high smartphone penetration.
Challenges faced by global companies in India due to low ARPU.
24:21
Indian founders prioritize user numbers over revenue generation, leading to monetization difficulties for companies like Netflix.
Indian perspective on hourly wages differs, impacting time value and payment.
Understanding local market dynamics and user behavior is crucial for successful business operations in India.
Importance of brand reputation in low trust markets like India.
29:08
Established brands like Tata and Chavan Prash hold consumer trust due to lack of legal protection.
Trust in India often stems from the names of individuals behind businesses.
In contrast to the US, Indian brands are based on reputation rather than fancy names.
Tech companies face a challenge in building trust when entering the Indian market.
Challenges and opportunities for Indian startups.
30:52
Low female participation in the workforce is highlighted as a major challenge.
AI is seen as a potential creator of new business opportunities.
AI is emphasized as a tool to enhance skills rather than replace jobs.
Building Cred involved targeting specific customer segments and understanding customer needs.
Key highlights in building a successful company.
36:44
Founders must be willing to evolve and adapt in order to succeed.
Different investor expectations at various stages need to be understood.
Not everyone can scale into every role in a company.
Profit pools in a country reflect its cultural values and understanding these nuances is crucial for business success.
The importance of profit in business and its cultural significance.
40:42
Traditional trading model of buying low and selling high contrasted with modern strategies prioritizing high revenue growth.
Challenge of convincing investors to support ventures with initial losses due to cultural expectation for early profitability.
Significance of profitability in gaining respect and recognition, especially in the Indian context.
The shift towards internet-based businesses is supported by VCs providing capital for distribution and brand building before monetization.
41:32
Indian tech companies must demonstrate profitability to compete on a global scale.
Trolling and lack of appreciation are prevalent in Indian comments sections.
Founders are advised to stay positive in the face of criticism and not react to every piece of feedback, especially from those who do not understand their business nuances.
India remains a promising market for startups due to digital infrastructure and government support.
45:10
There is a supportive ecosystem for entrepreneurs despite Twitter noise.
The speaker expresses envy towards those who can work with the best in product development.
There is a desire to witness decision-making processes in high-level meetings for learning.
Curiosity is emphasized as a valuable trait, with continuous learning and humility being key characteristics of a curious person.
The importance of curiosity in personal and professional growth.
50:53
Prioritizing learning over showcasing expertise is crucial for development.
Drawing parallels between animal adaptation and human behavior in facing challenges like COVID-19.
Emphasizing the value of information symmetry and curiosity in creating a unique edge in business and life.
Curiosity is a key driver of innovation and success.
Importance of efficiently connecting and collecting information for information symmetry.
52:30
Reference to the concept of always collecting dots from Danny Meyer.
Discussion on common traits of long-lasting animals and their relation to startups and leaders.
Emphasis on the value of solving hard problems and staying focused on making big achievements.
Comparison of successful people to crocodiles patiently waiting for their next big move and defining predators as those who burn the least calories to achieve the most gains.
The speaker discusses their method of learning through forming conjectures and seeking proof for validation.
56:53
They delve into topics such as AI effects and lab-grown diamonds, drawing parallels to the impact of cultured pearls on the pearl industry.
Contemplating shorting or going long on diamonds based on the potential influence of lab-grown diamonds.
Suggesting the idea of making GPD searches public to promote learning and knowledge expansion.
Emphasizing the significance of continuous learning and growth in knowledge.
Importance of asking great questions and second-order thinking.
01:00:01
Emphasis on asking 'why' questions and exploring history for critical thinking skills.
Examples of how strategy games and intellectual exercises build discipline and analytical thinking.
Significance of understanding origin stories and exploring complex questions for developing second-order thinking abilities.
The speaker emphasizes wealth creation as a storage of energy, highlighting the non-zero-sum nature of wealth accumulation.
01:03:21
He argues that equality of wealth is unattainable and predicts that wealth will always be concentrated.
Elon Musk's comparison of wealth to a database for transferring numbers is mentioned, illustrating the potential for disproportionate wealth creation through energy harnessing.
The speaker discusses the collaboration of species in creating wealth and provides insights on failure in career development.
Importance of learning from failures and turning them into lessons.
01:07:08
Speaker's personal experience of overcoming a financial crisis and starting from a young age.
Value of struggle in achieving success and balancing it with providing a better life for their child.
Encouragement to share knowledge and learn from each other without fear of judgment.
Emphasis on how sharing experiences can benefit and inspire others.
Recommendations for books on human behavior, evolutionary biology, and learning from setbacks.
01:11:07
Importance of continuous learning and deep understanding in personal growth.
Value of asking hypothetical second-order thinking questions in interviews to evaluate critical thinking skills.
Emphasis on evolving perspectives and avoiding repetitive reading habits.
Mention of enjoying 'Inception' and 'Tenet' by Christopher Nolan, with no recent favorite movie or TV show.
Discussion on second-order thinking and training the brain for critical thinking.
01:13:21
Examples of predicting outcomes based on events and the concept of wastefulness and status, including animal behavior.
Product positioning strategies, focusing on uniqueness over efficiency, with Apple as an example.
Insights on collecting experiences for meaningful stories and the impact of leading an interesting life.
Importance of overcoming challenges and achieving goals through hard work and perseverance.
01:17:20
Criticism of fake motivation schemes and emphasis on the necessity of pain and struggle for true success.
Advocacy for self-love through continuous evolution and problem-solving, viewing life as a game for personal growth.
Encouragement for listeners to engage on social media, share discoveries, and moments of learning.
Conclusion with a thank you message and invitation to subscribe to the podcast for more valuable content.