Kunal Shah: evaluation

Transcript context

…I think CRED's insight was actually quite simple. We realized that unfortunately the value of time and per capita income is concentrated with 25 million families and therefore focusing on them is important. And they are a lot more global in their approach versus the rest of India. So you have to build for them very differently. And I realized that the ability to focus on a customer set, which is not historically possible to do because every investor expected us to be the next China, and the only similarity of India and China was the population and nothing else was similar. So I think having that conviction that, “I'm going to build only for these folks and this large enough market.” Thankfully I had one success for somebody to bet. So our series A was $25 million. I would've not had that luxury if I had no success in the past because I had no product with any monetization to prove that I'm doing the right thing. It turned out okay, but I think I could get a lot of people to take a risk behind my insight or my thesis because I focused on the right customer category and built on it. But I think the few things I've learned differently is that companies that are very, very good at zero to one will not naturally become great at 10 to 100. There are lots of different lessons to learn. The founder has to evolve. That’s the biggest thing that has to happen. Most people at CRED are people who have not seen a bigger business than CRED, which comes with its benefits and costs. So you have to gentrify the org every now and then to make people understand the value of many of these reliable things. And I often tell people that entrepreneurs are uncertainty absorbers for everybody- for employees, for investors, for customers- and therefore they get rewarded for being those people who remove uncertainty from people's lives. But the kind of expectations keep changing at companies of scale. For example, if you have, let's say a seed stage investor, they are very used to very high uncertainty and they're happy with some absorption. But as you get a growth investor, and let's say you have sovereigns on your cap table, the amount of stability you need to provide is significantly more, and therefore you need to evolve very, very differently. So I think those are the few lessons that I've learned. Talent, you start realizing that not everybody can scale into everything. And you cannot expect that you can give up the 0 to 1 DNA just because you're building 10 to 100. So how do you kind of coexist with those things? How do you react to big changes in the market and not become this slow company? And every company goes through that. I mean if you look at what Zuck went through in the last three or four years was that. I often say that he had to play the Shiva, come and do a lot of destruction to become big again. So I think that's what founders can do, and it's not easy to do. the last three or four years was that. I often say that he had to play the Shiva, come and do a lot of destruction to become big again. So I think that's what founders can do, and it's not easy to do. One of the things I've learned is that profit pools of a country tell you a lot about what the country values. And trying to copy somebody else's profit pool to your country will not be a wise idea because the country's values are demonstrated in what profit pools exist. Let's take an example. In the thousand most profitable companies in India, the number of retailers would be probably two or three. But if you look at the Western market, you'll see a bunch of them because it's a consumption market, plus a very high divorce rate which means you're always peacocking again in the market, you're trying to be fit and be cool and all of that. India has a very low divorce rate, less than 1%, are arranged marriages. Fashion spends, and because we have a lower female participation of labor, India is probably the only market where female fashion spends is less than men's fashion spends. Everywhere else, it's probably five, 6x more for them. So what happens is you start appreciating what the country values. For example, I have noticed that many patriarchal societies have a very significant market cap in financial services versus consumption. And these broad patterns, you start thinking about very, very differently. So many lessons there. I love this idea of a founder being an uncertainty absorber. This other point you made about Zuck becoming the Shiva and destruction touches on something Brian Chesky and I chatted a bit about, how founders often start in control, very micromanaging, just driving the ship. And then as the company grows, they delegate and empower and then things start to slow down and then they come back, play the Shiva and take control again. Is there anything there that you've seen- Yeah, but that's the universe.…

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