Kunal Shah: prediction

Transcript context

…I want to keep talking about India and how it's different and especially what may surprise people about the market, both building there and then how to build products that are successful in India. I saw in a different interview, you talk about how there's this big difference between DAUs and ARPUs. In India it's really easy to get DAUs, basically get lots of users, it's really hard to make revenue per user, and that changes the way you build products broadly. Could you just talk about why this is the case? Why is it so much easier to get DAUs versus ARPUs? I think ARPU is a function of per capita income of a country. You cannot make $100 per user from a country for a product when their income is let's say $2,500 per year as an average for the whole country. So what happens is many global companies love to come to India because we have the cheapest data, and very high smartphone penetration. So if you look at a lot of global giants, they'll have 500 million users from India, sometimes a billion users coming from Asia and they don't have huge ARPUs, but they help you show the user growth which helps you in your public market and therefore improves your valuations. For example, my guess is that, I don't know if this data is public or not to talk about, my guess is that Meta would not have more than $3 or $4 per user per year monetization in India. But if you look at the user growth in India, it is huge. So a lot of times for global companies, India becomes a great MAU farm but very low on ARPU. Therefore a lot of Indian founders who tried to copy the Western market saying, “I'm going to have a few hundred million users” make a terrible mistake because they will need to then go abroad to find their ARPUs to balance the act. You talk about how Netflix is a good example of that, where they launched in India, they got lots of users, but just couldn't make a lot of money.…

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