India's Largest Exit

Welcome to the Network State podcast. Today I'm here with my friend Bini Bansal, co founder and former CEO of Flipkart. Now, Flipkart is Amazon of India and it's India's largest exit. In 2018, Walmart bought a 77% stake in Flipkart for $16 billion. For context, Binya's co founders bootstrapped the company in 2007 with just a few thousand dollars. Getting from that to $16 billion was a huge result. And that exit was obviously big for anywhere, but it was massive for India. It put the Indian tech ecosystem on the map and it proved that global investors and local talent could build massive companies in India. Indeed, Binny's story in Data Flipkarts is a story of the rise of India on the global stage. Well, welcome to the NetworkSkate podcast. Binny, glad to have you here.

I'm super excited. Thank you for having me.

Awesome. So we just kind of gave the audience an overview of the rise and really the return of India, the return of Indian tech. And you personify that. You exemplify that India's largest exevver, proving that both local entrepreneurs and foreign investors could collaborate to build a technology company of global significance. With both Amazon and Walmart bidding over it. You were founder for a time, you were CEO. Now you're doing your next thing. We want to hear about the rise of Flipkart, the founding of it, how you got it to. To what it is, which is a very difficult environment in India at that time, and. And then what you're doing next. Why don't we start there? Tell us about, you know, the origins. Like, where was India when. When you got started? Like, early.

Yeah, yeah. You want to start there? Or maybe a little bit. Maybe even earlier.

Earlier.

Go, go, go.

Start with. Start where you think we should start?

Yeah, I think. Yeah. I think what is probably relevant is I was thinking about this, like, where to start. And I remember now we were. Remember the vivid sort of memory today morning where I'm in like fourth grade and fourth grade is when I saw my first computer. And that was in my school. So my school had these computers on which very early. You could sort of do stuff in logo and you could have. There were sort of. There was a computer course which everyone had to take.

This is like 91ish.

This would be. Yeah, this would be 91.92ish. Yeah. Very early. And I was an average student in class in all subjects. But when I saw the computer, I knew that that is something I'm going to be good at. Like, I just felt like this is something I love, I'm passionate about. And I remember when sort of the year ended, I had scored like the most in class, like by far, like there was nobody even closer. And I was an average student. So everybody, all the teachers were quite surprised, like what happened. And somehow that gave me actually confidence to do better in other subjects as well, especially maths and science. So I got more confident, sort of became better and better and sort of top of class in math, science. And that's how I got confident enough to sit for the ITJ exam. There is an exam for getting into.

Explain what that is for folks who know the IIT Joint Interest exam.

So I think one of the great infrastructure pieces that I think India really invested very early on since getting independence was these Institute of Engineering and technology called IITs. And there were, when I got into one, there were I think seven or eight and now there are 20 of them. And these are like in elite engineering schools with really world class faculty, world class sort of facilities. And obviously the best Indian students sort of compete every year, I think more than when I gave the exam. I think it was more than 2, 300,000 students giving the exam and only like I think 3 or 4,000 students get in. So it's pretty hard. It's pretty hard.

It's actually, it's a. We'll probably put up some like images of I T J questions, but it's math, it's physics, actually some fairly difficult integrals that they'll typically ask each year. Right. And it's also, you know, for 50 years being corruption free. Like I say, it's a very high integrity exam with the questions kept. And many of the technologists in the US like I think Vinod Khosa, I believe he was an IT grad. Yeah. And a number of them are IIT or Sundar as well. Yeah, Sundar, exactly. And, and he, I think he was like a civil engineering grad. But it's really just like a test of technical ability, Right?

Correct.

And so that means that actually some of the most ambitious and intelligent people in India become engineers. Technical training very early. Right?

Yeah. And I mean I came from a sort of middle class family. Low middle class, both.

Where'd you grow up?

I grew up in a city called Chandigarh. It's near Delhi.

Yep.

And it's also unique city in a way. It's the sort of only planned city in India.

Right.

Very new city. It was established in 1960. So after India's independence And a French architectally Caer designed it and he's gotten.

A lot of flack in the west because he makes these big, you know, boulevards and stuff like that that he doesn't have shade and stuff like. Yeah, yeah. But like, was it okay growing up?

Oh yeah. I'm very, I would be very grateful to him. I love the city. I still love it.

Interesting.

Okay. I go back almost every year.

Interesting.

My parents are still there. My parents still live in, in Chandigarh, so. And I have a lot of family there, so a lot of connection there. So. Yeah, so I was saying. So I come from a middle class family. Both my parents are working in government jobs. My father was a manager in national bank and my mom also sort of had a job in a government office. But I mean, I could sort of dream while growing up, like in the 80s and 90s, I could dream of going to like the best institute in the country right from there and then, I mean, working for the best organizations across the world.

Which, which IIT did you go to?

I went to ID Delhi. Okay.

So near home.

Yes. And I mean it had a good computer science department, so. Yeah.

And so that was, so that you. That was like with the early 2000s or whatever.

So that was 2001. Yes. I started, I went to ID Delhi 2001 and then I graduated in 2005.

And then. So after that you joined Amazon or. We went straight out of college. Amazon, is that right?

Yeah. So I didn't join Amazon right out of college. So I joined this small sort of company called Sarnoff Technologies and they used to be famous.

So that's atypical because lots of IT grads want to join like a, you know, elite international brand. So that's actually that. Was that always atypical then?

Yeah, yeah, yeah, yeah. So I think I was in college again. I was. Most of my batchmates were either going for a master's or PhD to the US and few of them were going to go to these management institutes which India has called IIMs. So I was one of the fewer ones who said, okay, I think I liked the IIT experience, but I was sort of done with education. I didn't find that spending two, three years more in an education institute was gonna be good for me. So was the right thing for me. So I thought I'll sort of. And I didn't want to go outside India. I somehow felt that India is right place to be. There is probably, I mean, energy and opportunity here.

So that was a non consensus. I mean like one thing that we, you know, have talked about is like, so I'm born around the same time as you and you know, we kind of like seeing some of the same phenomenon, but from, you know, 10,000 miles away. I saw the rise of the Internet, the digital infrastructure, but I also saw the decay of physical infrastructure in cities like San Francisco, where it's just far worse than it was 20 years ago. And that's true in Seattle, that's true in la, that's true in a lot of other places. In the US you saw the rise of the Internet in India, but you also saw the rise of the physical infrastructure. It's improved dramatically over the last especially 10 years, but certainly since the 80s or the 90s. Why did you make the relatively non consensus decision in the mid-2000s to stay in India where a lot of your classmates were immigrating and building things abroad? It wasn't yet known. You were one of the first to build a giant tech company. Right. So why, what made you do that? Was it seeing the rise? Was it just, just a feeling?

It was just a feeling. I wouldn't say, I mean, I mean at that time there was no plan to start a company or, or anything. I mean it was one of the things that might, on the back of my mind, but it wasn't like the thing, yes, I wanted to do. I just wanted to start working, I mean, just get my hands dirty, I mean, and apply what I'd learned. See how sort of working in a tech company feels like, or working sort of with technology feels like, and go from there and to do it from India. Because again, as I said, I think I could just see, I was sort of seeing, as you say, both the digital and the physical infrastructure sort of growing pretty rapidly in India in the 2000s.

But even in 2008, I think, if I'm not mistaken, there was still only about 5% of India had Internet connections. Right. Today with Reliance Geo and the rise of it, it's like I think past 50% or so on and we're going to get to a billion something, right? But you could see that this thing which had become so big everywhere else was, was rising there, like, you know, from Sarnoff. Then you joined aws. What did Sarnoff do?

Yeah, so, yeah, so Sarnoff was also sort of a big non consensus move because Sarnoff was a small sort of company out of Princeton. They were very famously known as RCA Labs. Okay. And I think they did a lot of pioneering work before machine learning became what it Became, I think they were sort of the early pioneers of computer vision and machine learning.

Interesting.

Okay. And all of that. And they'd come for a talk in our. And there were a couple of seniors from my department who worked there and they'd come and given a talk that this is what we do. And they were working on automotive vision, figuring out whether a car is driving in lane and is the driver sleeping and all that sort of stuff back in 2005.

I see. So it was like around the time that self driving was. I think the DARPA grand challenge just happened around that time was just.

Yeah, yeah, was just getting popular. Yeah, yeah, yeah, it was at the time. So. So I got quite excited about that. I was very interested in computer vision and graphics and all that sort of thing. So. So I basically got a job on campus in DE Shaw and. But I didn't really want to go there.

So you're like intern there or something like that?

Yeah, no, no, I got a job on campus. I mean in the last year you sort of sit for placements.

Got it. So they have a working interview.

Yeah, there's a placement process and you go and interview with companies and you are allowed to take one job. So that job I got with D.E. shaw, but I mean it was a hedge fund. It was a sort of, I mean, something I didn't want to do. So I applied to these seniors from IIT Delhi. I wrote to them that I would really want to work on these problems and went through their interview process and got a job with Sarnoff. And they had an office in Bangalore where I went and joined.

And so the thing is that something I remarked to many Indian immigrants is that for many folks just the level up, from especially lower middle class to upper middle class to the Google job or Facebook job media, it's like an IPO for them.

Oh yeah, absolutely.

They're, they're a very suitable boy. They could, you know, they're Varian and so on. You know, they can, they can have, you know, a good marriage, all that type of stuff. So it's like a huge level up for them. So the extra risk of actually going and starting a company is for many folks, at least until recently, not worth the reward. Right. Because you can take the relatively safe bet and that's like such a big level up over what it was that people will just kind of go with that.

Right.

So you went to Sarnoff and then you decided to join Amazon. Right. So it was Dshaw, then Sarnoff, then Amazon.

Right? Yeah, Dshaw was just an offer. I mean, I never joined them, so I never joined them. I ended up joining Sarnoff in 2005 and then I worked there for a year and a half on various projects. So the work was very interesting. But what I learned there was that while the work was interesting, I mean, there was no business model and it was never going to be an interesting business to work for. It was like if I could go into research, probably it was a good place to work and I could go to a PhD using sort of the work there. So then I decided to sort of move on, maybe join. Look at joining a company where I think Internet was really getting big at that time globally. And I think India was just starting to see green shoots as well. So obviously Internet companies fascinated, I think all of us at that time. So I decided to sort of join one of them and thankfully got into.

Amazon and also in Delhi. And then you. And you had. You were there for about a year and you could see Amazon India and you could see that. I mean, India was. Was it a focus for Amazon at that time or was just a satellite.

India was a satellite office. And they had teams working on aw. They had AWS teams, they had teams working on payments, which I joined and they had teams working on their A9 search engine, which was there as well. So it was all work for the US business. There was no India focus or it was too early. 2007 was, as you said, like 5% of people had Internet and it was like 256kbps at best. And that was called broadband at the time. And so it was very, very small percentage of the population, which. So it was very early for an Amazon to take a bet.

And when did Amazon.in launch much later.

That was like 2013.

Okay, so Flipkart preceded Amazon in by like six years.

Yeah.

Okay, so basically you were at Amazon, you were at aws, you're on. Basically it was like a tech back office, like a satellite office. And you got bored there and you said, okay, you know, why isn't there Amazon.com in India? And hence Flipkart. Right, that's like 070807.

Yeah.

Right. And you know, the thing is that for the Indian market, you had to optimize for the fact that most people didn't have Internet connections at the time. It was still very much a cash based economy. It was pre mobile, certainly pre Indian mobile. All those kinds of things meant the difficulty level was just much higher.

Oh yeah, yeah. I mean it was like Think about, like, what When Amazon started in the U.S. it was probably from an Internet standpoint, that era, but from an infrastructure standpoint, even, like, worse. There were no credit cards when you couldn't pay online. There was no UPS or FedEx to deliver your packages.

But then the offline logistics was also hard because. And so on. Weren't even built. Right. Yeah, exactly. So the digital was hard, but the physical was.

Physical was even harder. So no warehouses, no UPS, FedEx, no large distributors of books where you could just plug into a couple of distributors and get millions of books up and running within. So we had to do all of that.

So how'd you do that? Because, I mean, you're talking about. That's not just building Amazon, that's also building FedEx, pieces of FedEx. Right there. Some tweets. We might put up some tweets of you actually going and, like delivering packages and whatnot. Right, yeah. So you're delivering packages also. If it's a cash economy, what if they don't have the cash on delivery? Now you've taken the hit of delivery costs. That raises costs through the whole. There's so many logistical issues here. Tell us about kind of how you kind of dealt with that.

Yeah. So when we started, we were obviously, I mean, very small. Like almost any. Like any garage startup in the us just the two of us. We were bootstrapped. We had put in four or five thousand dollars each of our own sort of savings into the company.

So no venture capital, no angel investors.

Oh. So, yeah. So, I mean, to paint the picture again, 2007, like 20, 25 million people online in India. And I mean, you could count the venture number of venture capitalists on sort of your fingertips, literally.

Right.

So there were like six, seven of them with small funds, like 20 million, 50 million sort of fund sizes for the VCs. There were some PE funds, which are large, but they were not invested.

Had there been any Internet? I mean, there was emphasis. Right, right. That was like the big Indian tech story, I think.

And so there were these IT services companies, Infosys, wipro.

Right, yeah, but that's not what we think of as tech. I mean, because they were consult. They were not product companies. I mean, it was fine. And I respect, you know, them building the businesses at the time. They did. They helped kind of put Indian software on the map.

On the map, yeah.

Right. But they were not product companies. So that was the only precedent in India.

Yeah. The other precedent was, I mean, all these offshoring offices. Google had an office like Amazon, Microsoft had an office for a long time. Texas Instruments, IBM had like lots of hardware companies also did. So Nvidia had an office. So all these large tech, US tech players had important teams and Yahoo had a big office. We ended up hiring a lot of people from Yahoo. Yahoo had a big office in Bangalore. Aol. Yeah, all of them. So I think that's where the product and tech talent came from and that's where sort of it existed because they.

Learned what world class was and then, you know.

That's right.

And this is actually something, you know, people talk about like, quote, brain drain, but then there's this other concept like brain circulation or brain regain, where, you know, certainly a big part of India's rise is the diaspora. Going abroad, building the reputation, having capital and talent come back. Know how coming back, okay, an Indian successful in the U.S. okay, maybe we'll send up an office in India. Okay. Now Indians within India learn something. So there's like that kind of loop. And you saw that, right?

Correct. Yeah, exactly.

And so the logistics part, I'd love to understand that because. Okay, so you, I mean, I'm just thinking about level of difficulty. This is like scaling Everest without a map.

Okay. Yeah.

So 2017, you have no angel investment or venture capital. There's no like success stories that you can point to. At least domestically, you can point to it globally. Right. There's. There's very little in the way of physical logistics. Right, yeah. So while it's true that the Amazon.com business model has worked and you could also see that it being cloned in China. Right. And that that was starting to work at that time. Even the Chinese tech story only truly built out in the 2010s. But there were, there were some stories of Chinese tech success then. Right. It wasn't at total zero. India was even further back. So how did you manage, like the, the logistics of everything? Like, did you deliver yourself, you built your own, you know, network of drivers? How should I think about that?

Yeah, yeah. So for the first two, three years, we were selling only books. And there were some small companies like UBS and FedEx, local companies in India, courier companies, which would sort of were good at delivering documents and hence, I think with books, they were able to manage our business and scale. So we just partnered with them.

Take the Amazon model, started with books.

And started with books. And on the supplier side, we just went from small distributor to small distributor to publisher. Like we had to go to like 20, 30 of them instead of like one or two because there was no Large aggregator who was aggregating books at a large scale. So we aggregated that and we put that all online and we started with a very simple USP that what you see is what you get. I mean, even doing that in India was good enough because there was nothing else.

There's no, there's no hidden costs. There's none of that.

Right.

This like a WYSIWYG for prices.

Yeah, WYSIWYG for prices and for delivery, like you will get if you order, you will sort of get it within three to five days.

Explain why that was an innovation. It's because people were used to haggling, they were used to hidden costs or something like that. Is that what it was?

Yeah. So retail in India is at that time wasn't very well developed. It was completely fragmented market, no large retail brands. So Indians had never really seen customer service, so to speak. So if you went to a small Indian mom and pop shop, the sign on the shop would say once sold, no return. So that was sort of the level of customer service policy in India. So there was basically, since no brands were built, there was sort of lack of trust in the system from both the seller and the buyer. Right, right. So. So just launching something online and saying, yeah, what you see is what you get. Because online you really can't get a hold of the person if you've paid money and if you don't get what you wanted, then what happens?

This actually, I mean, in the 50s, US 60s US like big chains like McDonald's were actually today, people, you know, are tired of them or negative on them in the us but in India they're actually good. And they were good in the 50s and 60s because it was like, okay, this is a large multinational. I know I can get a consistent interface to them. Even if they burn their coffee, they're going to burn their coffee in the exact same way. So at least it's consistent. Right. They, they only accept cash, they have accounting practices, the person can't take a kickback at the counter, all that type of stuff, etc. Right. And so like, so the multinational model actually helped establish trust within India for kind of scale commerce. So is, Would you, would you. That's basically what I'm hearing from you.

Yeah, I think it sort of probably is a similar story, but happened in the 50s, 60s in the U.S. yeah.

This is a broader thing where I think in many ways like the US is becoming more like the India of my youth.

Right.

A lot of, you know, like a lot of smart people who Just can't get it together as a society, you know, and lots of, you know, communal stuff, all the type of stuff, unfortunately, in the U.S. conversely, India is becoming in some ways like the 50s U.S. where there's like a, you know, sort of ideology that has wrapped together a lot of different ethnicities, a lot of different languages into a coherent nation. Yeah, there's now like a highway system. There's like shared common infrastructure. The government is actually executing in like a surprisingly good way. You know, I said I'm. I'm only moderately bullish on the Indian state and extremely bullish on the Indian network, but I'm moderately bullish on the Indian state. They've actually executed fairly well over the last, you know, a few decades. And so in some ways, like the 50s usually is sort of a cognate where things that worked then are kind of working now. Like the big box, big multinational. That's actually good in India. It's novel. It's good. It's good customer service. So you took some of that playbook.

What else did you do? Yeah, so we took that and we implemented obviously at a very small scale. And we started growing pretty rapidly. After six months of launching Google sort of indexed our results and since we didn't have any money to sort of acquire customers, that was where it came from. Google SEO became our sort of free marketing channel. And once customers sort of started buying from us, they started buying regularly because all these were like early adopters looking for books online and they were sort of happy paying online with their credit cards. They were like really, really early adopters who had Internet and credit cards.

Right.

And all of that. So building the books business was a little bit of a breach from there because we had on the back end the courier services. We knew how to sort of then type with more and more distributors. We went to from bank. We started with Bangalore, we went to Delhi, we went to Mumbai. We tied up with all the local distributors everywhere. Then we also reached out to the US distributors, a couple of them, and got a lot of international books on the platform. And within two years, we were sort of obviously the biggest online book platform in the country and one of the larger E comm platforms as well. And that's when a couple of VCs started calling us. It was like late 2000s, this was 2009. Yeah, mid-2009. And we started talking to them to raise money.

So one thing about this, I mean, in, in the us I recall Bezos saying that the reason that he picked books specifically as a segment Was first there's lots of SKUs. So there's a lot of inventory. So the Internet offers an advantage over a physical store. There's only like, I don't know, a few kinds of soda. And so a physical store can stock one, you know, or a few SKUs.

And they're all replaceable, right? I mean.

Exactly. All replaceable. And, and so whereas books are non fungible, there's a very large variety, number one. So the Internet gives you advantage. Number two is shipping. You know, it's hard to like break a book.

Yeah.

When shipping it. Right.

And in India books are very cheap as well. They're like five to six dollars.

Yes.

Yeah. So it's easy to sort of put your use a credit card and buy it online. And you don't really need to put, you don't really need a lot of trust.

Right.

While buying a book, whereas while buying electronics, it's like $100, $200.

Then people, it's a bigger, bigger purchase in there. Yes. And so then the other thing is also like you could take an order and then get the cash and then you basically would, you know, where you could concede is on shipping time. You could say we will get this to you in four to eight weeks, but they might not be able to get it at all elsewhere. And then you can go and order from the distributor because this way you don't have inventory risk since you only actually get it from the wholesaler at the time that the orders actually come in. Right. Is that correct?

Yeah.

And then, then you can sort of cash because it'll be a long tail, maybe Harry Potter or something like that. You have enough orders that you'll have quicker shipping because you can keep the inventory. Right. And so it's funny, so that playbook worked in the US and also worked in India.

Yes. In, in a similar way. And India is a much smaller country. So we could actually do like two to three day delivery almost across like 80, 90% of India, even when we didn't have inventory.

Oh really? Why is that? Because, so that's actually surprising because I think international distributors to get the books into India and so on.

No. When international obviously took two, three weeks.

Okay, sure.

Yeah. But if it was there in India with somebody else, if we didn't have it in our warehouse and it was in our distributor's warehouse and we could still sort of get it to the customer within three, four days.

And that is actually a little surprising to me because the shipping I would have thought would be more expensive and less Reliable than I guess India did have a postal service.

Yeah, India had a postal service. And there were these, as I said, these companies which are good at documents, banking documents and stuff like that.

Yes, you leaned on that because the.

Banking system had a lot of need for couriers and.

Yeah. Everything must be in person.

Yeah, right.

Yes.

So there was that system which worked for books pretty well. So I think it became way more complicated once we launched electronics in 2020. That's where the whole logistics story sort of started to become a reality.

So tell us about that.

Yeah. So books was, I think, as, I think as you said, as Bezos also said, is probably the perfect category to start with an E commerce company. And we didn't. We sort of kind of looked at the lessons he had learned and also picked up the category, made sense and got lucky with it. I think it was when we launched electronics in 2010 that we sort of had to go back to the drawing board completely. Okay.

Because Amazon didn't go from books to electronics. That was not their second category. What did they do afterwards?

Sort of was, I think they did media and then I think they did electronics as well, is how I remember it. But for us it was very clear in India. Like electronics was a large category and we were always clear. Books was going to be the starting point. But it was a very small market in India. Right. Much smaller than the U.S. but it is.

But all the other advantages, it's an elite market. So if you can get like tastemakers, writers, engineers, etcetera to use you, then when you scale it to other things, they're kind of upstream, culturally of others. Sort of like Facebook starting in Harvard.

Oh, yeah, absolutely.

Right. Diffuse out. So. So if you're. That's the other good aspect of that is initial starting place.

Right.

But go ahead. So electronics, that was a big level up because now the value.

So we launched. Yeah. So we launched electronics in 2010 and our books business was growing crazy. It was growing like 20, 25% month over month, doubling every three, four months.

Wow.

And we were just struggling managing that scale. So that was great. We thought, I mean, okay, now is a good time to launch Electronics. We had just raised Series B from Tiger Global, their first large investment in India at the time.

Leaf, Excel, leafexel.

And, and we said, okay, we had a few new people to launch the category and we thought we'll launch and I mean it's going to grow as fast as. As books is growing. But after we launched, one month went by 2, 3, 4, 5, 6, six months went by and we were stuck. I remember almost like just 100 orders a day and it was not growing at all for six months while books was just flying. Flying.

Yeah.

So what was it was the hold up. Yeah. So then we, I think after four or five months of just waiting and watching, we said, okay, we need to do something, something about it. This is not, this is not working. It's not going to work without getting into it. So then we spent the next couple of months really looking at.

This is like 2010. Ish.

This is 2010. Yeah. Middle of 2010. We spent a lot of time looking at, okay, what are the barriers for the customers? Right. And we did a lot of work directly with customers, talking to quite a few of them directly, looking at our data and making sense of things. And three things really became clear to us. One was that as I said, books in India are like $5, $6 each. So customers were willing to pay online and they were sort of books don't break.

So their downside risk was low. Electronics, they wanted to do cash and delivery or something.

So electronics, no, first thing was so they didn't want. They were okay buying books then they were book buyers or early adopters. So they were okay buying a $5,6 book from an unknown brand. Like Flipkart wasn't the brand. Right. So they're okay like Flipkart. Somebody is there. But yeah, I'll get my book. So that's great for five, six dollars. With electronics, with $200. They were like, who are you?

Who are you?

Who are you? If something was wrong, what's going to happen? So we didn't really. So they wanted to buy from a little more trusted source than just an unknown brand. So one outcome was clear that we needed to start investing in building a brand that Flipkart sort of that you can trust us and you know. And thankfully in India there was sort of again a large, equally good sort of ecosystem of brands, local brands, Unilever in India, PNG especially Unilever had a large presence.

And so how could you leverage that? You just used some of their tactics like brand advertising.

So we use some of the tactics and people. So like we hired our first head of marketing and brand was an extunilever person.

So brand is something many people don't understand, especially technical people because it sounds like vague and marketing ish or what have you.

Yeah.

And you know, I've always thought of it or eventually I was able to think of it as the set of associations that come to Mind, when you mention a word or show a logo, that's brand. Right. So it's like the word cloud that pops around. Yeah, right. And if it's a blank that people draw, then there's no brand association. And if it's negative words, then it's a negative brand connotation.

Yeah.

And so you can actually do that empirically where it's like you give stimulus and response. Right. And so what you're doing is effectively installing in lots of brands this response, which is when you see Flipkart, when you, when you see the Flipkart logo, when you hear the Flipkart word, then you think online shopping trustworthy.

Right, exactly.

So, so how did you actually do that? Because it's actually unusual to hear a relatively early stage startups thinking of brand as their.

So yeah, so the India playbook was very different. Right. Like Amazon probably didn't do a brand ad probably for 10 years.

Yeah, exactly.

Google, I don't think Google did an ad in the US because for 10.

Odd years it was a long time. 2010 they did super bowl ad. It was like they made a giant company before the.

But in India since, I mean why we needed to do the ad was very clear that our branding was very clear because customers wanted to buy online. Buying online, there was a lot of mistrust in the consumer's mind in general. I mean, as I told you in India there was no developed retail. So customers were not very trustful anyway of retailers in general from people who used to buy stuff. So buying online was a step beyond. Right. I mean you're buying from somebody you don't know at all and you can't go and get a hold of them. So building a brand became like a big.

What did that mean? That mean billboards? That mean TV ads?

Yeah, I'll come to that. So that became the first one. And the second issue we found was that again books was being bought by early adopters, whereas we wanted to sell electronics to like the next set of users who mostly did not have good ways of paying online. This was very early days in India. So India again had 30, 40 million people online by that time 2010, or maybe 50 million people by 2010. 11. And credit card penetration was very, very low. So very few people had credit cards less than 10 million I guess at that time.

And in 2010 less than 10 million people had credit cards. Wow, okay.

And 10 million people who had active cards. I mean people would have cards, but people using cards was, was very low. And people using cards online would have been like less than 5 million for sure.

Yep.

So very difficult sort of to figure out a way to, for people to pay. And there was Internet banking, which was also prevalent at the time, but also not very ubiquitous. So cash on delivery, that you pay when you pay by cash.

This is the third, this is the.

Third big one, this is the second one. Using cash to pay became another big barrier to overcome that we needed to collect cash and do cash on delivery. And the third big one we found out was that customers were asking, what if I order and I get the product? But something was wrong. I mean, after I opened the package, you are gone. Either it's broken or it doesn't work. After a couple of days, what happens? So we had to come up with this thing called 30 day no questions asked return policy, which in the US is probably just par for the course. But in India it was like the innovation of the decade. Because I said in India, retail was once sold, no return.

Right.

So to go from unsold no return to 30 day no questions asked returns was like a huge, huge pivot. Right.

You get out of the low trust disequilibrium into the higher trust.

So this is basically just thinking of, okay, if we have to solve this at scale and what should it be? Right. And can we get it done? So obviously there was a lot of debate on misuse and how will it work, how much will it cost us to do that? And we went back and forth, but it was clear that without this, we wouldn't be able to sort of sell electronics online. So we did these three things.

Brand, cash and delivery, returns and returns, all of which are like trust building things.

Trust building, exactly. All of these were really trust building things. And then going back to your question on brand, then it was very clear what the job to be done was for the brand. It was to build awareness and trust on these parameters. So to first build awareness that, yeah, Flipkart is a place you can trust. Flipkart exists, Flipkart does. You can buy books and electronics on Flipkart. And the second was that you can trust Flipkart that you can, you can pay that if something goes wrong, we'll take care of you 30 day, no questions asked. So we created three spots. One on cash on delivery, one on this 30 day returns policy, and one just on the assortment that you can buy anything and everything under the sun.

We should play those ads.

30 day replacement guarantee on all products. Flipkart.com, the online megastore. These are iconic ads. I mean, we got lucky. We worked with a startup advertising agency which one we didn't go to. It was called Happy Creative Services. We talked to, I think three, four established ones, but ended up choosing these guys who had just started their new agency. And the concept they came up with was that buying online is. So we use kids as adults in the ads. And the sort of message was that buying online is sort of kids play. I mean, if kids can do it, you can do it as well. And that worked brilliantly. Brilliantly well.

Really interesting. That's so different than almost any American startup story you've ever heard that like advertising and brand building was like a core thing early on.

Exactly. It was a core thing early on, which is like very different from. So if he had a lot of mentors, let's say from the US and kept getting their advice, we would have never done that.

Yep.

So it was very, very, very different from the US way of doing things. And then it took off. So we again went From I think 10 million to like 100 million run rate within a year. And at that time we hadn't built our own logistics, our own delivery fleet. And we were doing cash on delivery. And our partners, third party partners, the sort of UPS FedEx equivalent in India, were sort of not able to manage the complex cash on delivery process at scale.

Because there's a million ways that can go wrong.

Yeah, there is this. A million ways cash on delivery can go wrong. So we were again back to the drawing board. Okay, now we figured out how to sell, but we need to figure out how to deliver at scale. And then we start said, okay, let's. We tried working with them for four or five months.

This is now 2011. Ish.

This is 2011. Yeah. But we were clear that they didn't have, they didn't have sort of the right expertise logistically and especially around, I think more importantly, from a technology perspective, they didn't have any platforms or technology to help them sort of manage complex operations at scale. And this was a very complex operation, much more complex than they were used to. So I think our intuition was that you would need to really leverage technology to do that. So we started an experiment within Bangalore in a couple of areas. And we had a team of like 20, 30 people to deliver products within Bangalore. And we did that for two, three months. And then we looked at the data. The data was just like very obvious. I mean, we were seeing 45% more repeat rates in those areas. We were seeing. We used to measure NPS very religiously across the Business NPS rates were again, 20, 30 points higher. So, I mean, within three months, the data was clear. So we then and there decided to just basically scale it up to like 20 cities in the next. In the, in the next one year, we. By end of 2011, we had 1,000 people in 20 cities in India delivering packages within our team, in our own team.

So that's really interesting. Basically, if I can play that back, one aspect is you almost did like a case control study, right? Like, you've got all your cities and then you have an intervention here, and then you're seeing that NPS is up and so on, and you know, how much capital you invested to do that. And you could probably even say, we invested X of capital, or our sales is up 45%, our NPS is up, you know, our return or our return customer rate is up. Therefore we're investing extra capital, we're getting Y out, Y is much greater than X. And then scale it out, right? Like essentially kind of calculation that one can do. And when you've got geographically isolated markets, you can run those kinds of experiments. The other thing that, you know, also came to mind for me when you were talking about returns and COD is, you know, there's way more code paths when you have returns and when you have cod, because, like, oh, you send it. Oh, they send it back. Oh, you send it again. Oh, they like, you know, they don't give the cash this time or whatever. Like now you can have ping pong back and forth, and every single one of those, you'll have somebody who returns it like five times or something like that. And it's not just code, but it's also logistical thing of making sure that you have some cutoff rules. They can't return it like three times in a row or something. Right. All that type of stuff you have to figure out.

Yeah, exactly. I mean, since you had to figure out all that type of stuff, nobody else was gonna do that for you.

Yes, exactly. So you couldn't outsource that.

Yeah, you couldn't outsource that.

India's in the line for outsourcing. You have to insource it. Okay, go ahead.

Yeah, yeah, yeah. And that became a huge competitive advantage for us, right over and it probably last. I mean, that advantage lasted us for like more than a decade. Almost like seven, eight years at least. Because Amazon came in 2013, had to go through the same issues, try to copy a lot of what we had done, but took them a lot of time and money to do that.

Yeah, The Thing that's interesting about this is I've also helped build a clinical genomics factory. And one thing I observed at that is that I think there's two kinds of innovation. I called them the rhino's horn and boosted metabolism. Right, so the rhino's horn is what it sounds like. It's like a big perceptible horn. Oh, Google has page rank. That's its big innovation. And because it's legible, because perceptible people.

Can be like, oh, I'm gonna see it. Make sense of it, make sense of it.

Right. Whereas boosted metabolism, it's like, why is it cheetah fast? Okay, maybe you can point its legs or something like that. But it's, you know, just a thousand metabolic changes where, you know, it can stretch more and so on. It's, it's, it's not like any one.

Thing, Thousand things coming together to.

Yeah, exactly. And it's not like it's got wheels for legs. You know, it's not got a rocket for a tail or something like that. Right. So it's not like very visible or legible. And therefore it's harder to copy. And therefore it's a more durable competitive advantage. But it's also harder to articulate. And so you have to just see it in the graph.

Right.

And you can see that it's faster. But the fact that you can't easily explain it is actually an advantage. It's illegible. Yeah, right. So you guys had a kind of boosted metabolism where it was the hard to copy thing, where in a sense, sometimes the fact that one can't just bullet point the innovation, I mean, you can now, you know, you've got these three things and you know, the returns and so on, you can explain it, but it's not just like a one liner.

Oh, it's not one liner at all. I mean, if you go back to the logistics problem again in India, like addresses are not really geocoded. I mean, the address could be, especially in a tier two, tier three town, could be like as amorphous as behind this temple.

Oh man.

This person's name.

And this is a pre ubiquitous iPhones. Right.

So behind this temple. So all that information, all that knowledge sort of got encoded in our own systems. Right. Because our system knew where this address would be and could sort of deliver more efficiently as it learned over time.

So you're actually mapping India in part. In part because as, as you start going from 1 million and then 10 million and more Indians, you start hitting locations that are more off the grid. Right. I see. Especially that first delivery to a spot. Right.

So, yeah, so that's the sort of system that got. That got built and became like one of our big enablers.

You must have been a big, you know, a big part of that. Electronics must have been people buying their first phone or something like that. Right?

Yeah.

So people must have had to buy a phone for somebody else because many people didn't have phones. Right?

Yeah.

So probably a significant chunk of those orders, because how are you going to buy online if you don't have a phone? Right. And it probably meant that your interface was like more Android first and more mobile first or what have you. Right. Tell me about that.

Yeah. So that shift started happening in 2013 and 14. Yep. Till then, it was mostly on web.

Okay. Okay.

Yeah, it was mostly on the web and then Android and mobile. So that was the time when mobile phone prices became like $200, came down to $200. A good mobile phone started costing that much. And then it really took off. And with. I remember Xiaomi and Motorola were really the two big sort of beneficiaries of the takeoff, and both of them worked very closely with us. So in 2013, we had a huge innovation which changed sort of the way mobiles were sold in India. So before we did that, 95% of mobiles were sold obviously offline in India. And there was this whole chain with multiple people in the middle. Right. Middlemen. So it started with obviously, a brand and there was a national distributor, then you had state level distributor, then you had a city level person.

All these guys take the car all the way down.

And then you had sort of a retailer like, all the way down. And it was a pretty inefficient sort of supply chain. So what Motorola and then Xiaomi did with Flipkart was they said, okay, if we can sort of design a phone which is 20, 30, 30% cheaper but with the same quality, and we can sort of sell it direct to the customer online only. Like, this phone won't be sold offline. Can we make a dent in the market and can we increase sort of the share of the market? Can we increase the number of people buying phones? So we did that and in 2013 and just took off like crazy. I mean, I remember we launched it at like, why did that go 12pm in the night?

Yeah.

And everything crashed. Like, all our systems, we hadn't seen a spike like that for a long time and all our systems crashed. The first time we did it, it became a rage because you were Getting a really high quality Samsung, like really good phone, but at almost half the cost.

Because you cut out so many steps.

Because you just Cheaper. Yeah, because you cut out all the steps and sort of all the inefficiency in the system.

That's what I always say. Going direct.

Yeah.

Awesome. And so, and then how many phones? Do you know how many phones you sold? Like total? Do you have any number? It's got to be millions for sure.

Today. I mean, I think one out of two phones sold in India sold online. So it is like phones is a heavily penetrated category, Is the most penetrated category online. I mean, we would have, I mean, we would have sold upwards of, in the first two, three years, upwards of 10, 20 million phones. I think now we would have hundreds of millions, hundreds of millions of phones.

Now the thing that's interesting about that is basically. I remember. So this is something that happened around 2013, 2014, the whole free basics thing, right? So for those who don't remember this, basically Facebook, you know, came in and they were saying, hey, we will subsidize your connection to the Internet, but we're going to gate it through Facebook. And you know, this is something which will get a lot of Indians on the Internet. And what's interesting was at the time, the Indian tech ecosystem resisted this because it was all going to get centralized through Facebook. And I remember thinking from the outside, I was like, you know, because I was, I was in the US at that time and so. And I was like, well, you know, look, isn't something better than nothing, right? And the thing is that, you know, what would happen? India actually did something that China also did, which is they said no to free basics. And. But then they also built something better, right? With Reliance Geo and so on, they built something domestic better. And just like, you know, China, for example, they did ban foreign social media, but then they built their own thriving ecosystem. And I think a lot of the sort of industrial policy or protectionism type stuff, they. People will, you know, be quick on the ban, but they don't realize how hard it is to build.

Yeah.

And you actually, that's, that's actually the real hard part. It's easy to ban, it's hard to build. And if you ban without being able to build, you just lower the quality of life for everybody, Right? So it's sort of like asking for the ball. You know, you're in sports, right? Okay, I'm asking the ball. You better dunk the ball if you're asking for the ball. But India's tech ecosystem did dunk the ball and you, you were kind of watching the whole free basics thing on your side.

Right.

So it looks like absolutely the right decision from 10 years later now the whole thing is not choke pointed. I mean I respect Zuck, I respect Facebook, but I'm also glad the Indian ecosystem is not choke pointed through Facebook. So how did that look like in 2013? 2014?

Yeah, so 2013, 2014 was sort of the pre Geo days. Internet, mobile Internet was growing, but growing like at a steady pace, not like growing very, very fast. It was still expensive. I think one GB would still cost you like more than a dollar and a half.

Tell people about by the way, like for global viewers. What is Geo, what is Reliance Geo? How did that come on the scene?

So yeah, so Reliance Geo is now, I think the largest telecom player in India are in the top two. The other one is Airtel. But Reliance Geo came in at a time when There were already eight to 10 players. They were the last ones actually to enter. But they took a huge bet on 4G and on mobile Internet and the crash prices. That basically business model was to deliver very, very high speed Internet, 4G Internet at prices which were 1/5 to 1/10 of the market pricing.

And the concept was they get a subscription and they just, you know, you can build so much wealth on the Internet that crash the cost of that and build the market and so on. Which seems to have played out, right?

Yeah. And yeah, and before they came in, I mean Maybe there were 100 million people using mobile Internet and not using it like as a daily part of their life. Like it, it was mostly chat and search and maybe some commerce. It wasn't really a lot of video or. And it was, it wasn't sort of, you were not like living your life of your mobile. Whereas today, I mean you can get, you can do your work, you can get, you can sort of get education classes, you can obviously get all your, you can live online, you can get all your entertainment. I mean just become, became a part of people's life after, after JIO came in.

Yeah. And you know what's, what's happened here by the way? Something I remark on is I think Jio really started going vertical. Like it came out 2015, 2016 and then, and then it was like huge by 2018 or thereabouts. Right. And, and I think we've crossed a billion Indian mobile phone users now and we'll get to 1.3 or something. I remember the exact number last I looked was like 860 or something. Like that. Right. So one thing that's happened, I think, is that the people don't know is Indians are or soon will be the majority of English speakers on the Internet. Yes, Right.

Maybe they already are, but they'll soon.

Be soon be depending. Depending on whether you define how many English speakers there are in India and are they first or second language. And the thing is that you have these amazing, like, YouTube channels which are like villagers from rural India and they're just online. You know, the one. The guys who are making food and stuff like that. You've seen that, right? And the thing is that a gigantic part of social media audiences actually are Indians who, Who are lurking. And you know, one of my friends, you know, Akshay, has this line which is, you know, that Indians don't need the H1BVs anymore. We have the TCP, IP, Visa. Right. Because you're basically online, you know, and. And Indians are getting acculturated to the west or more generally, the global Internet. Right. They're able to see the memes and they can type without an accent. Right. And a good chunk of the pseudonymous accounts online are actually Indian accounts. So you saw a bunch of that. Right. And like, of course, Flipkart was more on the E commerce end. Right. But you start to see the growth of Indian culture. I mean, you were kind of, you know, Indian Internet culture. Tell us about that if you have any thoughts on that.

Yeah, as you said, I mean, we were very sort of focused on the commerce side effect. So I think on the culture side, probably I'm not the best person to. To comment. I think I can. What I clearly saw was that after JIO happened, I mean, before JIO happened, there was actually a little bit of a lull in the whole industry. I mean, I remember 2015, 16, the numbers for all Internet companies, including like YouTube, Google, everybody was static. Nothing was growing. And we were all scratching our heads that if the market doesn't grow, what's going to happen?

Right?

What's going to happen here?

You just see it in all your numbers. GEO is just like a huge. And gasoline.

Then Jio sort of comes in and 2016, 2017, 18, 19 were just. We saw crazy growth, traffic growth leading to obviously conversion growth eventually for all businesses. And in parallel, I think the big story, the big other story, which started in 2016 along with the Jio Revolution was a UPI was a payment revolution.

So talk about that because basically there's.

Demonetization front sort of seat as well.

Well, so talk about that because tell People first. What is upi? It's like unified payments interface. And tell people about that.

Yeah. So UPI is this sort of amazing innovation by, by the sort of Indian, you could say system and government is a big part of it. Where they created this platform where all the banks had to connect into and be available to make transactions between bank accounts happen. And then this platform was made open for entrepreneurs and tech companies to build, to build customer facing, merchant facing apps and use cases and businesses. And that's.

And it was a government project that actually worked or it's actually is a quasi government project. It's like, it's like government aligned.

It was a government aligned. Yeah, that's the right way to put it. It was a quasi sort of. It's a government aligned project. It is run by NPCI which is owned by the top 10 banks. Shareholding is the top banks of the country. But the regulation obviously and comes from, from the government and the government has been a big supporter of, of driving this forward.

See, this is the thing, the thing about India is I had to kind of retrain my machine learning model, right? Because it's almost like being on a planet where the gravity is pointing in the opposite direction. Okay. And the reason is in the US like over the last 10, 20 years, what you've seen is the government just failing harder and harder with more and more money at the local, state and federal level. At San Francisco, at California, at the federal level, like healthcare.gov, massive software failure. Despite all this money, California, their giant, you know, high speed rail train. Hundreds of billions of dollars. Total disaster. San Francisco, $12 billion a year for the city. It's covered in poop and needles and syringes and it's a disaster. And people are just leaving the city. You know, 500,000 people left. California, San Francisco, all these people. There's a little bit of a bounce back, but it's like a, I think it's a dead cat bounce, but still it's like way down from where it was. And so you see this just basically what you're trained on in the US is the state simply cannot ship software. It can take huge amounts of money. It just blows it all and so on. And that was actually also frankly my mental model of India in the 80s and the 90s when I visited, right? Because it was, you know, it was the ambassador and it was, you know, there's Ambassador and Limka.

There was a licensing regime you had to get a license for even starting a small business. It was hard to import Things it was exactly backwards.

Exactly. That's right. Like, you know, there was like, there was one car. The Ambassador was like the one car in the entire country. Right. And there are a few things. You had some like Coca Cola, there's Limka or things like that. But it basically seemed like it was frozen in time. Static. Right. And then post 1991, you had liberalization after the fall of Soviet Union. Again, people, you know, may not know this, but just the. I'll probably give a quick like history of India to open the thing, but liberalization. 1991 start. India's economy started taking off. And now what's amazing is I'm actually starting to bet on. I remember actually in the 2000s, you may remember this. Do you remember the golden quadrilateral?

Yeah.

Okay. So I remember seeing that announced in the 2000s and I was very, I was like, okay, it's not going to go anywhere. I haven't seen any government project or work. But we have highways now in India, right? There's, there's like. I remember getting off the plane. I think it was like 2019 or something. And you know, I come back every few years now. I've come back much more frequently. But I was like, this is incredible. There's, you know, the streets are quiet. There's like modern traffic lights and stop signs. People are breaking at stop signs. And so I couldn't believe it. Like the India of my memory had just completely transformed. And you kind of lived through that and probably it made some of the delivery and logistics easier.

And so.

So when did you start to see that the government was actually able to execute or at least, you know, I'm not saying it hits it every single time. And there's things like demonetization, which one can argue, but that it was like actually it had a non zero batting average. When did you feel that like start to happen? Because that's a relatively new thing.

Yeah, no, I think that had sort of. Yeah, start. I had sort of started feeling that it had started to happen since I think early 2000s, I think for sure, with as you said, the golden sort of quadrilateral thing came.

Was that the first. Was. Was there anything else came at.

Came at the time and I mean in memory of more recent, recent examples.

But what was the first? It was like the early 2000s. I mean, was it just like capitalism came in and so on? But like what was happening in the early 2000s?

What was happening was that some of these new industries were, were sort of starting to boom and you Were starting to see some of the western brands also enter India and things starting to modernize, like food and beverage restaurant. Like you talked about McDonald's. McDonald's sort of came in from a food standpoint. You obviously had the big tech companies coming in and setting up satellite offices. You had the Indian IT services sector starting to grow really fast. You had Indian telecom. I think telecom was a major sort of boost for the whole economy and the social fabric as well. So you started to see that happen.

So that kind of infrastructure prerequisites. And then like, you know, now we have there's Golden Quadrilateral, there's upi, and then more generally India Stack.

There's India Stack, there's gst. There's a uniform sort of now tax code for goods and services, which was very complex when he started flowing Flipkart.

So why is that better? It's basically just like much easier to calculate now. Your code is just way.

So when we started Flipkart, it was almost like the Indian tax code was almost like you're living in Europe with every country before the European Union. I don't know how it works, but every country having its own sort of tax laws and tax taxation rules and slabs. And to get that sort of down from like 25 different rules and regulations to like one unified GST regime was I think, a major big boost as well.

And when was that? That was 2010s.

This was no middle of 2010s. Yeah. 20, 15, 16.

See, what's interesting about this is, you know, I'm big as a quote, decentralization proponent.

Right.

But I'm a pragmatist and I think there's centralization, decentralization recent. And India and actually also arguably China are in the middle of their. Maybe China's past this now, but India is in the middle of a positive centralization arc, right. Where all of these different languages and cultures and so on are now kind of unified. Like, you know, rather than having 25 different, you know, payment codes, it's e plur bassunum. And the US is in the opposite phase of the decentralization arc, where the states are increasingly pulling away from a federal government. Right. So that's why I'm saying it's like gravity is reversed and many things are happening in opposite in India than they are in the US which is like a really useful contrast of the two systems. Right, Go ahead.

Yeah, So I think that. And with the. You touched upon the India stack. The India, I think India stack has been. And the India stack team has been also a major reason for some of this digital infrastructure to really come about and be successful. So the first success was obviously Aadhaar, which is like a digital ID for more than a billion people. So getting a digital ID working at that scale in a country like India was huge, huge challenge. And that was sort of the first digital win for India. And that created, I think, a massive confidence that you could do it, you could do it at scale in many other areas. I think second one became upi talk.

About that, that was a big one also.

So on upi, the philosophy was that in India, India was a cash economy obviously for the longest time and it was obviously inefficient from that standpoint. There was inefficiency, tax leakage, all sorts of problems because of that. And a lot of people were not also part of the banking system in India. So there were sort of a two pronged approach. The government was taking that trying to get hundreds of millions of people to get a bank account. But you can get a bank account, if it's not useful or usable, then it's not, doesn't help. So UPI was sort of an answer to make it useful. Right. If you can get money in, get money out into your bank account in a very easy way without opening hundreds, thousands of, hundreds of thousands of branches all across India for a billion people, that was really critical.

So the mobile phone infrastructure enabled.

So they said, okay, let's ride on the mobile phone infrastructure, mobile phones, I mean more than a billion people are going to have mobile phones, more than 7,800 million people are going to have Internet enabled phones. So how do you leverage that and get banking for everyone onto their mobile phone versus going to a banking branch and getting it done? So they forced all the banks to come onto this platform and be available. And the entrepreneurs and Internet companies could sort of build applications, banking applications and payment applications on top of the stack. And so there was a company started by two ex Flipkart colleagues which had started building on the stack which we acquired very early on 2016, called PhonePe. And Google in parallel was building an application called Taste, which means fast in Hindi.

Oh, Tez, yeah, actually I know some of the people.

So basically that you can transact very quickly from bank account to bank account. And PAYTM was another established payments company which was obviously also working, had started working on this stack and all of this launched in 2016. And six years sort of forward, I think there are now more than, I don't have exact numbers but Definitely more than 300. 350. 300 to 350 million people monthly. Active transacting users on UPI.

Oh, it's gotten like voosh like this.

Yeah.

I mean, the thing is, in 2016 there was the demonetization episode where a lot of cash was just turned off. And at first it seemed like, oh, this is a disaster. There were long lines and so and so forth and electronic payments were not uptaken before then. But this is kind of what we're talking about where there was like a, a ban and then a build. Right. There's many aspects of demonetization which I would disagree with from a philosophical or whatever level, but the stimulus that it caused in terms of electronic payment uptake, that definitely juiced it within like two years. There's an enormous, enormous jump. Right. Is that correct?

Right. Yeah, it was definitely, I think a. I think a big sort of boost for the digital payments industry. But I think.

Could it have happened?

I think it was going to happen anyway.

Yeah.

Yeah. So I think it was sort of. I think this was just a coincidence that. Yeah, those two things sort of happened during that time. Probably for different reasons, but I think it was definitely. Yeah, I think it's probably at the right time for that. But today, I mean, UPI has become so ubiquitous that we were just talking to our friends who just came back from Bangalore. They spent three weeks in Bangalore and they've been living in Singapore for 11 years. So they don't have a phone number in India. And if you don't have a phone number in India, it's hard to use upi. And they were telling us that how they had such a hard time during this trip because nobody was accepting cash. Like auto driver was not accepting cash and was saying, Give me UPI.

What a flip from 10 years.

And then this guy had to call his father in law every time that can you transfer 50 rupees to this phone number or to this UPI ID so that I can get a ride? So what a flip from like cash and Flipkart cash and delivery days that customers are not willing to pay.

You've discontinued cash and delivery now?

No. If you still do cash and delivery, it's going down fairly rapidly.

That's amazing. That's actually.

And it's not cash on delivery now, it's actually payment on delivery now. So people basically do UPI when they receive the product. So it's a lot of UPI on delivery.

What's. That's. So, you know, that reminds me of like Uber Also actually in 2015, even they Uber India had cash. Right, right. That was actually a big launch for them. And then because it was a bottleneck in the market and now like just like less than a decade later, it's probably flipped, right? I don't, I don't know exactly. They've just continued. It reminds me of actually Netflix doing mailer DVD and now it's completely flipped to streaming and they've kind of discontinued it. So like it's like the step ladder that you need to get to the destination. Then you kind of, you know, you don't need anymore. That's really interesting. What other stuff is like that? I mean like obviously you know, India is now in many ways a mobile first like Flipkarts, like you know, so that flipped over where mobile was an edge case and then it's the main thing. It went from cash and credit cards being an edge case to like UPI being the main thing. What are things that kind of flip like that in India? You know, obviously the consumers become much more sophisticated. They're all, you know, they're conversant. You've seen your social media traffic and so on become thing where things have kind of inverted like that in your view?

I think the other inversion obviously is happening on the media side. I think on, on consumption of media. I think a lot of it is now on mobile, mobile as well. And it's sort of I think becoming. I think people are spending way more hours on, on their mobile phones for entertainment than on TV as well. I think that that is also happening especially after. Especially because the mobile Internet rates in India are the lowest like across the world. It's probably like 10:12 cents a gigabyte.

Oh, you mean the cost, the cost.

Of mobile data is very low. So it enables you to sort of get your day's entertainment for a very affordable rate.

This is another just enormous flipping where India went from like Internet you couldn't get for love or money to some of the cheapest high speed mobile Internet in the world. Like from like all the way in the back to all the way in the front. This giant leapfrogging.

So India's. Yeah, like I think India's infrastructure. Poor word. Data, very data rich. So yeah, that's where we are. It's a very different, yeah, it's a very different environment than anywhere else in the world.

I guess it's really interesting. I mean the, the. Okay, so that kind of takes us through like the rise of flipkart, the 2010s, GST, UPI, other. Do you guys use other as a login mechanism on the site. You know, like with SingPass, for example, in Singapore, you can like log into banks with SingPass.

Yeah.

How does other work? Is it like Facebook login? How should we think about.

Not really. Aadhaar is mostly used for stuff like KYC and those things.

Banking and things like that.

Yeah, it's your digital sort of id. You don't. It's not like your sort of. It's not like your Internet ID in that sense. So it makes all the processes where you need to identify yourself and get registered with financial institution or with a government institution easier.

Yeah. You know, one of my theses is just like digital currency is sort of converged currency. Stocks, bonds, every other kind of instrument. I do think that we are getting to eventually a digital passport where your other. Your Google login, your ENS id, all those things converge into a single electronic id. So this way you don't have to keep typing in your information over and over again. You can just like your social profile and your government profile and so on. You might choose to have different profiles.

Right.

But if you want to have one like main profile, you can hit a button and just kind of log in with that. Right. Go ahead. Yeah, I think, I think, I mean, something like that is a systems integration problem where you need somebody who's got a lot of, for lack of better term, political capital, social capital appeal to drive it. But this is something I've been thinking about.

Could be something which happens in India first.

Maybe.

Yeah. Given again, the. I think the way I think these things. It's a green field and. Yeah, it's a green field. And there is a process now to imagine something like this and get sort of build it and get it delivered now in India that. Yeah, with India stack thing that I feel. Yeah, it could be.

Now, one of the things, one thing that's also pretty impressive. So, you know, you built Flipkart over the 2010s we've kind of gone through and you. Electronics was the second category. And then after that there was. I mean, what should we know about the mid 2010s? Because eventually by 2018 or so, it was a big enough thing that Amazon, Walmart both vied for it. Amazon or Walmart eventually paid 16 billion for a majority stake. And that was like the first gigantic Indian exit. I mean, 16 billion is a lot even still for the U.S. so that was absolutely gigantic for India. Put India on the map. Tell us what you can about that. That's now five years ago, but, you know, maybe you could talk about it because I'm sure there's all kinds of things, but you can't.

Yeah, yeah, no. So I think going back to, I think the 201112 electronics story. So after electronics, we launched fashion, which was sort of the next big category. And it took us two, three years to sort of become fairly large in that. We ended up acquiring a company, vertical fashion retailer, retailing company called Mintra at that time as well. And fashion became one of our biggest categories and one of our biggest differentiators, along with logistics for the longest time, especially versus Amazon, because Amazon was sort of never really good at selling fashion, even in the US and then Amazon.

Why fashion? Because that, so that is definitely like a new. You know, I would not have thought of that as a. I would have thought it like, I don't know, something matrimonial. That's education and matrimonials are like the two big spends or whatever in India. Right. So, so why, why, why? Fashion is a third thing.

Fashion was a big and growing market in India. I mean as the economy was growing, people are spending a lot more on these, on these categories. And with again, global media and exposure and all that, I think the fashion. Fashion industry in India was growing much, much faster than the overall retail industry in India was growing. So fashion became, I think a very important category for us. And we were also looking at China when we were doing a lot of this. So we drew a lot more parallels actually. To China. Yeah, like JD and Alibaba, then like Tmall and JD and Alibaba, then to. Then to the U.S. because it was in the U.S. exactly, the U.S. the market structure was very different. There were already established retailers and brands in the U.S. and like building a fashion business in the U.S. i can see why it would be so hard because there was already a lot of established players in the market and strong brands in the market. Whereas in India, I mean it was like Nike's business in India was like $100 million, like very, very small when we started fashion. So there were. Nobody was really established. Everybody was looking to figure out the right way to scale and online. And we were seeing that fashion in China, online fashion in China was also taking off. So that gave us a lot of confidence. And then fashion became a major, major, big sort of category and reason for us to succeed.

And so, so talk about that for a second. For a long time. I think India was copying China and China was copying the US I think post 2020 I feel like that has somewhat changed where folks, you know, China is kind of on its own path and I feel India's also gotten a lot more confidence recently. Right, but, but tell us about that. So, like, aspects of the Chinese economy were things that Indian entrepreneurs look to. This is the pre G times to some extent. Right, so tell us about that.

Yeah, I think there were more similarities between China and India from an Internet and E commerce standpoint than the U.S. so one, as you said, I think China was also developing economy, obviously way ahead of India. But if you look sort of 10 years back, it was sort of in a similar position. So you could kind of correlate and see where India could be.

It's about 13 years, like 1978.

And the cost structures were pretty similar. So the margin structures, the cost structures, what, what a delivery would cost, what would it cost to make a delivery in India would be sort of similar to, to China, whereas in the US it would be like an order of three to five times more than that. So. So a lot of the models could be similar and there was a lot of cash on delivery in China as well in the early days. JD had to also do a lot of cash on delivery as well. So some of the inspiration and models, we sort of looked at China and we used to go to China almost every year, every other year and meet founders and companies there and try to sort of learn and see where. What was applicable to. To our business. Yes.

And that was, that was when China was more friendly and open for. I mean, people now Forget this in 2023.

Yeah, it was very different.

It was just totally different thing.

Geopolitical thing. Yeah, yeah.

I mean, like there's that, you know, for example, there's a probably photo in 2015 or 2016. Xi was taking smiling selfies with David Cameron of the UK. Yeah, right. She was visiting the US and going to where he was. He had, he had done a thing in Iowa, like where he had been an exchange student. He went and visited like an American family in the mid 2010s. So there's a very, very different posture, like less than a decade ago that people forget today because of, you know, all the geopolitical, you know, stuff.

So, yeah, so then, yeah, so then Amazon came in India in 2013, started really investing heavily in 2014. 15.

How'd you think about them as competition?

We took them very seriously. I mean, so till Amazon came in, we did have some local competition, but we never took them very seriously because although they'd raised Snapdeal. Snapdeal, yeah, and couple of other vertical players and they Raised enough capital, but we could sort of see that our customer experience was way more superior. So we looked at them more tactfully. But Amazon obviously is the world's sort of most feared competitor and they were very serious about India. And we could also see they were serious from India, from the top. I mean, Bezos, very serious about India.

He's announcing in his letters.

He was announcing it. He came down to India twice. So he's really backing it with his time and money as well. So we were taking them very seriously. It was almost, I wouldn't say an existential threat, but we knew that they had your attention. Yeah, they had our attention and that we had to figure out our place in the market once they came. It took sort of jostling for about a couple of years between the two of us and then nothing.

Where's it at now? What is like the relative.

After a lot of the jostling, there's a lot of shares settled, somewhat like 60, 40, 60 US 40, sort of Amazon. And then over the last, I think few years, we have been gaining share pretty steadily now after the acquisition, which speaks like, I think which speaks to one, the team that we have team in the culture at Flipkart. And also I think the way Walmart has managed to.

Yep.

The acquisition, that's not easy to do. Yeah, it's. I mean, it's very, very difficult. The hardest things to do is to manage a acquisition of the scale and make it successful against the biggest competitor on.

Yep.

On planet Earth.

You're getting two things that have been dancing in very different things to move in coordination. Yeah, that's really interesting. And so tell us about that. So basically, I mean, the thing is that one thing I wanted to actually ask you. Well, first the acquisition, but like 2023, what are the best practices for getting money into and out of India? Like, where do you incorporate all that type of stuff? Because like is a gift city. But in 2018, before we even get to that, it was totally unheard of to have a multi billion dollar, you know, us like acquisition in India. To my knowledge.

Yeah, there was nothing.

There's no.

Right, yeah.

So. So first, like just the international complexity of the legal system, because India's legal system is fairly complicated.

Yeah.

So just that alone was a big thing. And then having multiple bidders and so on. Tell us what you can say about that.

Yeah, no, so, yeah, so 2016, 17, we had, I mean we had this obviously battle going on with Amazon and both Amazon and Flipkart were scaling pretty rapidly with The JIO sort of effect and rising consumer Internet growth in India. And we were constantly in the process of raising money. I mean we had just raised capital from consortium of Internet companies, eBay, Tencent and then SoftBank in 2016 and in 2017. And we were in discussions on and off with Walmart since 2016. I think at that time Walmart was very focused on turning out to US business but was looking at India in a very serious way. And so we were on and off in discussions and by I think 2000.

Late 17, did Walmart have any presence in India?

Walmart had a small presence in India. They were in this. They had a B2B business where they serviced the Indian Kirana stores, the mom and pop retail stores through their.

But they weren't doing something like Amazon.

But they were. Oh, they were definitely not doing anything in E commerce and they were not doing anything in, in sort of physical retail because it's not in India that is a restricted area and foreign companies are not allowed to do.

Right, so that was physical.

Physical retail.

So how did Amazon manage to do that? Oh, because Walmart of course starts with the physical plan. Physical stores. Yeah, Amazon Marketplace business is allowed. Could get around that. I see. Got it. Okay.

So. So yeah, so. So Walmart was. Had a small presence. Walmart had tried retail with, along with a partner before. So Walmart did have history in India.

But McDonald's and other things are allowed to operate.

Food is sort of allowed.

Food is allowed.

Retail, different retail.

I see. Okay, interesting. Just like random regulation. Is there any logic to that?

Yeah, I don't know. I think retail is a huge industry. So retail is way more important.

It's protected.

And to be protected, food was very small. Like food. Food industry in India, organized food industry was very, very small because people didn't eat out.

Yeah, I see. Interesting, interesting. So there's, there's a small shopkeeper. So retail was protected but the small going out to eat actually is very small. Yeah, it's relatively modern thing even in the US actually by the way, like restaurant culture was you know, in the 1950s. Maybe you go to like a, a deli or you'd have like a truck stop. But it wasn't like all these fine restaurants of Thai and this and that food. Like restaurant culture is actually relatively new in the US So it's probably at like like very low there.

So then we were in discussions with Walmart and Walmart had in China also done an investment into JD and was a large shareholder on the board of JD.com and they were looking in India to do a similar sort of strategy. And they started talking to us. And as things sort of progressed, I think they really probably liked what they saw. And the discussions sort of got converted into more of an acquisition discussion than an investment discussion from their side. And I think for them, they really wanted to take a big bet on a few markets.

Right.

I think in hindsight, I can see that now because after the India acquisition, Flipkart acquisition, they ended up sort of selling most of their businesses in other markets. Even in the uk, they sold their business to a local entrepreneur and they partly own it, but they don't run it.

So they're just like, us, China, India.

Yeah, so they're like us, China, India. I think Canada and Mexico are also big. So. So, like it's the Americas and then China and.

Interesting.

And India. So I think with that sort of focus, they wanted to then obviously take a big bet, which is, I think I can see in hindsight. And so that discussion started then, obviously. I mean, Amazon was also in India in a major way and was also part of the discussion, but we ended up sort of partnering with Walmart for that. And at that time it was. And that was the biggest. It was the biggest, I think, E commerce deal globally, not just India. So, I mean, if you look at E commerce, it was the biggest E comm deal at that time globally. And in India, it was, I think, the biggest M and A deal again, till that time. I mean, across all sectors, like, not just Internet of commerce. Like, it was the biggest sort of.

Yeah, I mean, it's a scale of WhatsApp. I mean, WhatsApp is the only thing that I can.

WhatsApp was like 20 billion, right?

Yeah, it was in that. It was in that ballpark.

Yeah.

And that's actually interesting also because WhatsApp is also an international growth story of a different kind.

So that really, I think, put India and India tech on the. On the map globally. And I think after that, the. The amount of capital which has come in after 2018 into Indian tech, not just Indian consumer tech. Like now there's a big part of the Indian ecosystem which builds for the world. SaaS is a big software service is a big area as well, where there are quite a few unicorns now. And a lot of money has flown into that side as well.

And the. Actually India is now number three in unicorns globally.

Yeah. After the US and China. Yeah.

Yep. Which also happened pretty fast. And, you know, so what's interesting is the. The whole. The whole story Somewhat reminds me of Uber and Didi. Like Uber tried to kind of make inroads into China and then it didn't and then had to basically sell its stake to Didi or what have you. And so like this is a little different where for Walmart to actually have, you know, Amazon I think would have had a defensive buy.

Right.

Where then they just kind of lock up the whole market. But I'm actually even surprised they were allowed to bid because you know, I would thought Indian regulators say oh, it's anti competitive or something like that right now.

I mean maybe private, there was no bidding or like there was all discussions.

So I see. Okay, it makes sense. So now you know, of course like India markets continue to grow. Flipkart's a big part, like it's juul and you know, the whole Walmart thing. But they only bought, they didn't buy 100%. Why? They only buy 77%. Was there some limit, like statutory limit?

No, there was no limit to it. I think their strategy was to. I think it was really smart thing to do. The strategy was keep some skin in the game to. Yeah, exactly, keep some skin in the game. To still like so to be an owning shareholder but to still run it like a venture capital owned technology startup.

I see. So this way by having some points they could sell them to other investors at some point and maybe the thing grows enough.

More importantly, from a talent perspective, from a talent standpoint, it still needed to sort of feel like you were working for Flipkart and not Walmart.

That's interesting. So that's actually very enlightened of them. I mean I know that Walmart's had like a great data science thing and so on, but that's surprisingly enlightened. It's kind of like, you know, the YouTube acquisition by Google and they kind of allowed to keep its own brand and a lot of its own, you know, offices and stuff.

Yeah, it was exactly similar actually. Even beyond that.

Right.

Because YouTube got 100% acquired and if you were employing YouTube you got Google stock and.

Right.

And maybe the culture was a little different, but I don't know, mostly similar. But if, but Flipkart is sort of a different company within the Walmart ecosystem and has completely different culture, completely different compensation sort of policies. And employees in Flipkart have Flipkart stock, not Walmart stock. So it is managed in. Exactly. So for an employee the experience really didn't change. There's sort of leaders and managers in change and none of the policies change for them. The culture didn't change. So it continues to be sort of.

That's very enlightening.

The same thing. And that's been, I think the. I think 80% of the reason for that. It's been. The acquisition has been sort of pretty successful and it's probably a good case study for such. For such acquisitions.

That's really interesting. Yeah. For. It's like when it's that big, you don't want to break what built it.

You want. Actually, I had sort of personal experience doing this twice in the Flipkart journey. So we bought. When I told you, we bought this fashion company called Myntra.

Yeah.

And it was online fashion. Right. I mean, Walmart buying an E commerce company in India is like. Like two degrees removed because it's one. I mean, they don't know as much about India. Second, they were not the best in E commerce. So sort of being hands off makes sense. We bought this company called Myntra, which was in E commerce and fashion in India. Right. But we kept it separate for.

Why did you do that?

Six, seven years. Our reasons were bit similar and bit different. One was, again, it was clear to us the reason we bought Myntra was because it was very different from Flipkart. The culture was very fashion first, Flipkart was very technology and logistics first. And the customer segment that Myntra was serving was much more premium and Fashion forward. Whereas Flipkart was trying to serve like everyone and anyone in India. And the most important thing objective for the next five years for that company was to grow. Right. It wasn't synergies and the costs were not the most important objective. The most important was growth. So keeping sort of this context in mind, we just kept it completely separate. Actually, the Flipkart fashion teams and Myntra teams almost competed and clashed quite regularly.

Well, that's the tricky part, right?

Yes, exactly. And it was always like a conversation in management meetings and sometimes on the board that, oh, why are your internal teams fighting? And all of that. So it was interesting to manage that dynamic, but it worked really well.

It worked. So why didn't you just shut down, like, you know, the fashion vertical on Flipkart and direct it all to Myntra?

Oh, again, because it was so different. I mean, the reason we bought Myntra was because Myntra was serving high end clothes. Yeah. Fashion forward, sort of premium customer, whereas Flipkart was serving.

It's like a Walmart.

Exactly, the Walmart. Sort of kind of an experience.

Mass market.

You're trying to serve mass market.

So but there is some overlap in.

That and there was a little bit of an overlap, so. Which you had to deal with. But these are different businesses and had to be managed with a very different rhythm and very different culture.

It's interesting because, you know, I remember, I'm not sure if this is still true, but I do remember the 2,000 people would say, oh, McDonald's own Chipotle. And I think they just had like a large take in it or something like that. But, you know, I believe like one way of thinking about it, it's almost the same company. The reason they have these different brands is those brands just stand for something and they can't stand for everything. And that's why, like, it's almost like a different user interface.

Exactly.

Right. Yeah, yeah.

And then we did the same with the payments business, PhonePe, where we acquired this like 20 people, 10, 20 people company very early on. And we just kept them completely separate in a different office. And we acted like what Walmart did is doing with Flipkart. We acted almost like a VC owner with them and we just gave them sort of the capital industry support required and we just let them sort of again, build their own company with their own policies and with their own HR with own sort of.

Even when they were a small company. I mean, this is something I've also like Instagram is like 13 people when Facebook bought it. I mean, it's much bigger now. But there's an interesting aspect where sometimes a company or a government that's like the US is 300 million people and Singapore is like 7, 7 million, 8 million people. But Singapore still a, you know, the, the prime minister still ahead of state and gets a state visit. And so they still interact with them as like CEO to CEO. Right. Similarly, like Zuck and Instagram or Zuck and WhatsApp when they required. Even though it was a much smaller company. Instagram's like 13 people. WhatsApp is like 55 people. He still. And Facebook was this giant Goliath interact with them as CEO to CEO and respected that kind of internal boundary because he knew that there was a formula that made it work. It wasn't about absolute size. It was about like execution, given that. Right, yeah.

And it was about potential size. Right. I mean future size.

Yes.

So, yeah. So I think that playbook made a lot of sense. And when we were discussing with Walmart, I think that sort of continued Playbook, we saw that Walmart was also thinking of the same playbook.

What was a relative scale when you.

Guys were acquired Scale off?

Yeah. Like, how many people did Walmart have? How many people do you guys have?

Oh, really? I don't know how many people. Walmart would have, like hundreds of thousands of people. I think Flipkart had about 25, 30,000 people.

Oh, that's still pretty big.

Yeah. Okay. Flipkart is pretty big because you had.

All the logistics people.

Yeah, yeah.

That's including all the drivers.

Oh, no, including drivers and all, it would be probably 100,000 people.

Wow, that's. So you were managing like, I mean, so. Okay, now this takes us from Flipkart to the next thing that I want to talk about. Right. So the. I mean, you were essentially managing something that it was on the scale of a small country. Right, right. They're saying, you know, I've got this graph we'll probably put on screen, which is there's. There's 12 countries in the UN that have less than 100,000 people. Right. There's another 26 that have between like, you know, 100,000 to like a million and there's like another 60, something that have between a million to 10 million. I may be slightly off, but that's where I kind of remember the numbers we can put on screen. And so I mean, essentially those hundred thousand people folded up to you. Right, Right. And so you cannot give. I mean, with that being a small country, you could not possibly give instructions to every person. Right. You might be able to have one on ones with, I don't know, 10 executives. Right. And maybe you knew the names of 150, maybe even a thousand people within the thing. Right. How did you manage this gigantic thing? Right. Because it all folded into you. Ultimately they would have to kind of listen to you. Go ahead.

Yeah. No, I think we learned very early on that the only way to scale the business and to manage the complexity was to have really great leaders in the company. And I think our first two sort of hires in the company became like very core sort of leaders. The first one was Sujith, who was our head of operations and sort of business development. Second was Mekhin, who was our first cto. And they sort of became part of the core leadership team along with me and Sachin. And it became like a four people sort of leadership group. And then, I mean, they ended up hiring more people. So it expanded over time, but I think that kind of stuck with us. That first experience of getting these two guys in and being able to scale the business, being able to scale the number of people we could manage. I think it became sort of A formula for us. And at that time I think the talent story is also interesting because in India, I mean to build E commerce you needed a lot of different types of talent. So an E commerce company is like five companies in one. It's not like one company. Why I say that because it's an Internet company. You have to, you have to know how to do digital marketing. You have to get users, you have to have a web interface, mobile interface. So anything which a normal Internet company would do. So that's one you need to, you are a retail company where you need to manage sellers and you need to manage pricing and merchandising and what sells and what doesn't sell. Then you need to be a logistics company as well because in India we had to deliver packages so we had to be a logistics company. We also had to be a customer support company. So we had like thousands of people working in, in customer support, answering queries for sellers and customers and whatnot. So. So you have to be like many companies.

And what was the fifth? So there's website, logistics, sellers, customer service.

Yeah, let's say four.

Let's say four is still.

It's not one.

Sure, sure, yeah.

And interestingly in India the talent for most of these things to do this at scale was like almost zero. I mean the only good talent which existed was probably technology because of companies as I said, like Yahoo and Google and Microsoft.

Do you have the call centers and stuff though, didn't you?

We had call. Yeah. So call centers, call centers existed but they were mostly serving us customers. So again building something which could serve Indian customers at that cost sort of point was again a little bit of a different ball game.

Yeah. Now they could actually use, they could call themselves by the Indian name rather than Sarah on the phone or whatever, you know. Right. It's Saraswati.

So retailing as I said was not a big industry in India. So retailing talent was really not non existent then you didn't have logistics talent. Logistics. There were no large logistics companies train everybody. Exactly. There was no large digital.

So that's the fifth business education. Flipkart University. Yes.

Oh, that's funny you say that. I was talking to one of my, one of the founders of a company called Acco which is into. Which is a tech digital insurance company in India. And we were talking about edtech and what's happening in edtech and all that and he made this exact same comment that oh, you know, which is the biggest edtech company in India? I was like which one? I said Baiju. No, Flipkart. I'm like, why do you say that? Like, I just hired my last three leaders. The last three leaders I've hired are all like Flipkart.

Yep. So that's the other thing in which you did for the ecosystem is like, you know, sort of like how early tech executives, many of them actually Yahoo in its day was actually like a big deal, right? Google and it's, I mean Google's still a big deal. A lot of people came from there. So there's a kind of DNA that you guys installed that's really interesting.

So what happened in Flipkart was that the DNA became sort of very, very entrepreneurial. So because the talent did not exist, we had to hire really young, smart, raw talent with very high potential, but who did not have experience. So all these people from elite engineering colleges, Berts Iits and management colleges, IMs and the other ones, we had to sort of bring them in and just throw them into the deep end.

How hard was that? Because in India there wasn't an example of startup success. In the US People are, I mean people know that startups exist, but people are often cynical. My equity is worth nothing. So in India without that track record like recruiting these folks who are like, why should I work at this startup, which I've never heard of, versus maybe they'd heard of Flipkart by the time. Right. But basically, you know, this seems to have higher risk than, you know, Google or what have you. Right. So how did you do that?

So there are two parts of this story, I think. One, I think there's the first part which is before we built, before Flipkart became a consumer brand, before we did our advertising and then there is after we became a consumer brand. Right. So before we were a consumer brand it was super hard. There was absolutely no models of success. People wanted to work for obviously more stable jobs either in these global companies, in their product and technology departments or for IT services companies. Those jobs were looked at as much more stable and much more safe. I remember in 2009 we had hired three or four software engineers and one of them didn't show up on the date it was supposed to show up. And we called him and he said, sorry, I can't join. I said, why? When I told my in laws that I'm joining this company called Flipkart, they were like, why would you go and work for a bookseller when you're working for this large IT services company? Makes no sense. And he just could not convince his mother in law that's so funny.

Well, she probably regrets that now.

So that was the culture, right? I mean, that's where. That's what we were sort of. So we had to get a lot of these. I think before Flipkart became a consumer brand, it was really very passionate people who wanted to.

Atypical personalities.

Yeah, atypical personalities who wanted to build the biggest sort of consumer brand, consumer Internet brand in India, like that. People with that passion. It was, I think, great self selection because we didn't need a lot of people. So if you could sort of still tip somebody over with that passion, that was absolutely the right person to have. So that happened before. But after we became a brand it became much easier because then you were joining a company which was probably going to make, probably going to be one of the large success stories. It was going to be a consumer brand, which was, I mean, it was really sexy to work with one of the biggest upcoming consumer brands in India and be part of the journey. So I think the USP for talent became a little easier after we became a consumer brand.

It helped not just with customer acquisition, but talent acquisition.

And by that time we had raised a lot of money as well from like global venture investors. Global venture investors. So I think this. It became a little bit easier to take that risk.

Got it. So basically it's something where your brand advertising the outside investment boosts your brand, not just among consumers, but also with the recruiters.

And for anybody, I mean at that time, for anybody in India who had sort of the passion to build for the Indian ecosystem and build at scale, like Flipkart was the place to be.

So. So that's also interesting because the WhatsApp acquisition was kind of surprising in the US because so much of its energy was global. Right. And everyone's like, WhatsApp, what's that now? Now, of course, people kind of know WhatsApp or what have you, but at the scale of the acquisition, the amount of money and the relative unknownness of it was, I remember, was a huge shock in the American tech system. But with India, Flipkart was basically the, you know, the, the best known tech company by, by a certain point, by the early 2000 and tens or thereabouts. So then it became something by 2012.

13.

2012. 13. Yeah, got it. So it was the foundation stone of kind of the space. Yeah.

So it changed. Yeah.

One question I have for you is like, you know, if we look at like the American tech ecosystem, it built out a certain way. You know, there was. First it was Microsoft and Apple and Then it was Google and you know, Amazon and then Facebook and then you know like Uber and Airbnb. And in, in China it's like, you know, the Galapagos Islands where the, the animals are all just different. Right. Or, or there's this place called Socotra, this island in like it's like near Yemen where they've got trees and species that are like nothing else.

Nothing else. Yeah.

Right. So the ecosystem is different. It's like Air Gap from the rest of the world. So China has this ecosystem where for example, like Meituan, the Chinese Groupon is much more successful than the American Groupon. Right. That is an analogy of it. But like imagine if Groupon had become a multi, multibillion dollar company. Right. So you know, or WeChat, you know, the, the chat interface, the entire society just, it just like grown differently. Right. So if you think of India as like a third ecosystem like that, it also has certain Galapagos Islands aspects to it where it grew similarly. It grew differently. Like its flagship company was like an Amazon equivalent. I mean Flipkart was like, you know, Amazon cognate early on. What things are kind of the same and what are different in your view? Kind of having seen the Indian tech ecosystem build out like versus the American.

Yeah, yeah. I think India was somewhere in the middle of China and the US because I mean language is the same and sort of culture would be somewhere in the middle as well. So it kind of, it used, I would say learnings from both, both the sites. Right. And kind of ended somewhere in the middle. So it's early days. I mean it was obviously a lot more like the US So Flipkart E Commerce ride hailing with Ola and stuff I think was very similar. I think food delivery is probably more similar to China with like why Swiggy and Zomato again, because of cost structures.

And what is the difference for the American audience? What's the difference India and China?

I think like India is again, a lot of most of the deliveries are on motorbikes and two wheelers versus like I think us would be mostly still two cars and much higher sort of cost of delivery. Right. So that way I'm much more similar to similar to China. But I think only in the, I think only in the last two, three years we are sort of seeing newer models sort of emerge which are very sort of India specific now that there are more than half a billion people with mobile Internet access. So it's a large enough market to really build India first type of products and upi is a great example of that. Like Phonepe and the way some of the fintech companies are coming up, very unique definitely than what's happened in these markets. There's this company, InsureTech Co. An investor in called Acco, which is I think which is probably a model which is getting success in India. But I think in the US quite a few companies tried it. A few of them went public as well. What's the model? It hasn't really helped. So again, digital sort of. So in India a lot of the insurance is sold through agents. So somebody sits in the middle like a solo entrepreneurs. It's sort of in the middle of you and the insurance company and is a big part of the transaction, just intermediac. So one is that. And then also on the delivery side, if, let's say, I mean you bought auto insurance and something sort of goes wrong with your car, then the insurance experience is also over an app and digital and like at click of a button versus going sort of through people and, and being inefficient. So it's sort of leveraging technology and digital infrastructure and, and both the sales side and delivery side.

Well, so, so on that point, like you know, some of the earlier Internet things that worked in India were like Baiju, which you've mentioned, which you know, for you know, American viewers or Western viewers that don't know, it's like a multibillion dollar Indian education startup. Also Shaadi, which was like a matrimonial. Right. So like education and matrimonials, those are things that Indians do pay money for they value culturally. Right. So the demand even on a small base was there. And so things kind of built out like you know, the first kinds of things that happened.

Right.

And you know the, so those are things that were I think distinct in the Indian marketplace that were perhaps relatively bigger probably proportionately than they were in the U.S. right, right. The other thing that I've thought a lot about, I'd love to get your take on this is you, you know, I think India is okay as a market, but it's not. I think it's going to be more about digital production than consumption. Like, you know, all of the AI training data, a lot of that type of stuff, you know, the digital assembly line with a billion Indians on mobile phones doing a lot of that kind of micro task type work feels to me like it's going to be a big thing. India is a nation of content creators in English, which is a totally different thing than China. Right. Because China creates, is a massive Ecosystem, but it's only for its domestic, you know, kind of market. Right. India's the biggest, you know, aspect of India. It's not just on the Internet. It speaks English and it's almost like, you know, nafta, you know, NAFTA is. No, nafta. North American Free Trade Union. Right. So it's like Canada, us, Mexico, in a sense there is now being formed, though people don't see it yet, a gigantic Indo European Union. Right. Or Indo American Indo Western Union of all of these English speakers on this gigantic global Internet. And all these bonds are being created very quickly that are not visible. It's as if like the continents have sort of docked near each other. Right. And so this is the source of a lot of digital labor, a lot of, I think, you know, telemedicine or what have you happens here.

Oh, it's many things. I think it's interesting you say that. So I think the two or three sort of trends here, right? One is as you say, a lot of English speaking, a big English speaking population. Probably it's going to be the biggest English speaking Internet population very, very soon. Very young population. So I think in a few years 25% of, 25% of the world's workforce is going to be in India. Right. And with COVID and with remote and what's happened in the last 2, 3 years especially anyone sitting in a tier 3, tier 4 town in India today can sort of be working on for any company sitting anywhere in the world. And any, any. And this company can be any size or shape, right? So it can be a one person company to, it can be like the IBM or Walmart of the, of the world.

So, so explain that by the way, for the viewers. So like Kunal, Indian investor has this concept of like India 1, India 2, India 3. Do you want to talk about that? People may not know about that.

Yeah. So I mean India's obviously 1.3, 1.4 billion people. So there is this sort of India one which is more like, which behaves and acts and has access to money and to products and technology like anybody living in the west would have.

And that's how many people?

That's maybe, I think not more than 50 million. Like 20. Somewhere between 20 to 50. Okay.

So like a European country basically.

Like a European, yeah.

Which is still pretty big.

It's like, it's, it's like pretty big, yeah.

France or the UK or something like that, right? Yep.

And then there is this India too.

Which is, that might be a little larger than that. But in the ballpark.

Yep. And then there's India too, which is sort of at the middle and emerging and has high aspirations, has access to all the digital content, knows all the brands, but probably does not have enough money to sort of do. To buy everything and do everything today, but is educated and has a lot of potential to. To sort of get connected into the global economy. And then there is the India three, which is probably in rural and tier four cities, which still is starting to get access digitally and probably comes into the mainstream or India too, maybe in a few years.

So it's like roughly what, like 200 million in the second category and like a billion in the third or something like that.

Is that maybe more? I think maybe. I mean, if you count households, then maybe it's like more than 100 million the first one, then 4, 4, 5, 3, 400 million at least in the second, and then maybe half a billion or more in the third.

Yeah, I mean, it'd be great to actually, like, literally track that over time, like once you've established those numerical measures, because you should see, because, you know, for example, there's a lot of infrastructure numbers. We'll put these up. Like, I actually tweeted something the other day that just showed the incredible growth in, you know, public toilet infrastructure, in electricity, airports, roads, all that type of stuff. Like, the growth in India on infra has become incredible. And actually, you know, the Prime Minister Modi retweeted that. Right. And so something like that for this, where you'd see folks Moving from India 3 to India 2 and India 2 to India 1, India, if those numbers are kept absolute over time. Right. And so it'd be great. I mean, maybe there's some graph. Maybe we could find that afterwards.

But going back to your original point. Yeah, so. So. So a lot of these people, especially, let's say in India too, living in like a tier 2, tier 3 town, which is 500,000 to sort of 2 million people, sort of a. A town.

That's funny. That's a town. Yeah, that's like a big city.

I mean, the city. Yeah, Tier two, Tier three city in India, which is not like the top five, which you hear mostly about.

Right? It's not Delhi or Delhi, Mumbai, or.

Sitting in this town is today, sort of is equally aware, equally sort of educated, equally, has sort of equal talent to anybody from these top five cities and can be working for. I mean, anyone sitting in that town, sitting in town, city can be working for anybody across the globe. Right. And maybe not today, but definitely Tomorrow, right? Yep. So there is this whole potential and potential energy of these hundreds of millions of English speaking people with a lot of potential talent. And if you can sort of, if you can get them sort of to work on problems across various disciplines and you can sort of train them and today you can train people remotely, which was again not sort of the case even like two, three, four years back. It's not something that we could think about. But I think a lot of those barriers got broken in the last two, three years. So I think it, I see sort of a lot of shift in the production side, as you said, and I think it's going to be very exciting place.

Yeah, I think like, you know, one way I sort of think about it is if China, if you look around the world and you say, you know, this, this table or this shell, probably a lot of these physical things were made in China. Right. Or have a margin there. Right. And I think in about 10 or 15 years a very large fraction of the digital world will be made in whole or in part by Indians or in India. And so obviously there's software engineers, there's tech CEOs, but there's also lots of actually Indian digital artists and graphic designers and you know, all of the AI stuff on both senses of the term, both AI content creators and AI training and so on and so forth. A large chunk of digital value add, because that's just something Indians just get that culturally. Right. You know, I can stereotype Raleigh did here, but basically there's something about it where, you know, just like less physical, more digital, you know, you call it spiritual or what have you. We're just, we're, we're good on the computer. Right. Like Indians just naturally have a knack for the computer. And then what that also I think means in the medium term. So you funded Gray Orange, right? Actually, one of my friends, Ajay Roy is also. So Indians are also, I mean, in terms of labor. Right. I think in the medium term robotics is, you know, I built a, you know, robotic, you know, clinical, you know, sequencing and genomics factory. There's gray orange, there's mithra robotics. Actually diapers.com was also robotics. All those had Indian founders, Right. So there's definitely something there where there's quite a few Indian founders who are associated with robotics and it feels like that turns labor into software. And so China's had a huge labor advantage for a long time. Their labor productivity has been higher. A lot of labor wants to move to India. And maybe the way that circle is squared is you just have a lot of robotics. India maybe you have a thesis on that because you probably saw a lot of the logistics stuff with Flipkart.

Go ahead. Yeah, yeah. I think it is sort of already happening a little bit as well that as you said, I mean there is a lot of talent, robotics talent. And naturally in India and it is, it is being implied but on the other side, I mean labor is also pretty cheap in India. Right. So. So I think there is some tailwind. There is some headwind. So yes, I don't see it happening.

That's a, that's a good point actually.

Very, very quickly because on entrepreneurs, business owners can always sort of throw people at the problem. Yep. As well.

So you can employ people for a.

While, make it work till a certain scale. So I think managing really large scale with quality is where it's sort of starting to happen. Definitely in our business, like in E commerce and like the little and large manufacturing. I think there's a lot of automation. India is a big auto manufacturing hub as well. So there's automation coming in in a big way. One of my friends runs sort of.

This.

Electric two wheeler company called Ola Ola Electric and he's built this new factory near Bangalore where I think it is heavily, heavily. The whole line is heavily, heavily automated. Very much fewer people than I would have expected like five years back. So. So I think starting to happen. Yeah.

So that's interesting. I mean basically, you know, like diapers.com has that, you know, famous videos of these Roomba like things, but they're big and they move around the factory and they move things around. So you're not, you didn't do that yet at Flipkart, but. Or you're starting to do that or.

How should I think about starting to. Yeah, starting to do that is how.

You don't need to because the labor is there.

Right, Right. Yeah. But I think that is, it is going to become mainstream and definitely in the next five to ten years.

Got it.

Yeah. I think it's not. Yeah, it's a matter of five to 10 years.

Okay, that's cool. And then. Okay, so now switch gears just for a second. Now we're kind of talking about the future of India. You post Flipkart, you and I are investing in lots of stuff around the world. Tell us about like x to 10x and what you're doing there. It's not 0 to 1, it's x to 10x.

Go ahead. Yeah, so back I made my first sort of angel investment back in 20, I think 13, 12 or 13. And I've been investing sort of ever since alongside sort of building Flipkart and trying to sort of, I mean, because one, I mean I was just very passionate about the entire startup ecosystem and also I got a lot of energy from helping other entrepreneurs as well. So by 2017, 18, the ecosystem had blossomed. There were a lot of unicorns, there were a lot of money pouring in into the ecosystem. Tiger, SoftBank, Naspers like were pouring a lot of money into Indian startups and JIO sort of effect had also happened. So I could just see the entrepreneur energy like exponentially and and then I was probably mentoring, like probably talking to five to 10 entrepreneurs every month on sort of different issues that they would be having. And I started seeing a lot of patterns, especially with entrepreneurs who had sort of facing growth challenges, like who had figured out a zero to one, who had built a good product, their business was scaling, but they were sort of facing all these challenges of managing scale. Like how do you, once you get to like 150 people, how do you build an execution engine where people are aligned and how do you manage performance, how do you create the right sort of ESOP policies like the nuts and bolts which need to come in, how do you manage customer experience at scale, operations at scale, how do you build a brand? I mean for consumer companies in India that was also and way better to.

Get that from founders who've actually just done that in India.

Yeah. And they were all struggling because none of the regular sort of models would apply. Right.

So India's laws are different, conventions are different. Right.

Yeah. And there were some success stories, some sort of people binder done that in India, but not enough. And most of the people who were most of the successful entrepreneurs still building their company so they didn't have time, a lot of time to look like give to other founders. So that's when I thought that I can only help like 5, 10 people at a time.

Right.

This clearly will need to help like hundreds at a time very soon. So like I should institutionalize something like this.

Like there's the next Flipkart University, next generation. That's right. Yeah.

There should be an organization to do that, to just make scaling easier. And zero to one is a very different ball game. And then going from 1 to 10 is a very different ball game. I had seen that through my journey at Flipkart, through journeys of these other, let's say 20, 30 entrepreneurs as well. And I was pretty convinced that there could be many things which you could sort of Help them on. So. So I got a couple of ex Flipkart colleagues with whom I'd worked very closely to sort of come and partner with me on that. And we started this in 2019, 2018. 2018 and with a very simple mission that we will just basically exist to make scaling easier. Scaling a company easier. And we started working with like three or four, three or four startups at that time, almost in a consulting mode. Like how a consulting company would sort.

Of you make probably make an investment and then you help or something like that.

No investment as well. So it's sort of a very different animal. I mean it is. We wanted to keep the brand very founder and operating centric, not like keep it actually away from being look like an investor. Because when the founder is talking to an investor.

Right, right.

The founder is posturing.

Yeah, yeah, sure, right, right.

You don't want, you want to help the founder really improve their business. You want, you want him to tell everything that is wrong.

Yes.

For the business. You don't want the founder to be scared.

Yeah, yeah, yeah. Well, it's funny, I mean I. So at least what I found on this is as an angel, right, like you or I can write a check and we're kind of take it or leave it. We're basically there, you know, we're there to help. Right. And so I find at least I get usually an honest.

Oh, yeah, as an angel. Yeah, exactly. So we wanted to keep that angel.

Right.

And that operate. So why do you not be style interaction. That's right, exactly. You're an angel and you're an operating angel. Right, so. So they'll sort of. It's a very different conversation versus the institutional vc. I mean if you're talking to an accel Sequoia. Yeah, yeah, Tiger like it's a very different conversation. So we didn't. We were very clear that like the brand is not an accel Tiger Sequoia. The brand is very angel. Like we are sort of your operating partners and it's a team of people who've been done that and who understand the nuts and bolts of building and operating versus investing. So yeah, so that's what we started building and so we just started working with a few companies that let's try and help a few of them in a consulting mode, almost not strategy consulting where you just tell them what to do, but actually go and work with the teams and get shit done. So we did that with the team.

So that doesn't scale. Well, you just mentioned being like a parachute in executive you have to really get detailed.

So this was just to get patterns, right? Yes.

Okay, got it.

So we worked with a few companies, the team worked with a few companies to get those patterns in. And then we figured out, okay, we defined these 10 pillars for 10x for success that we wanted to build and tools and services around. So first one was like business design and strategy, how to think about sort of big moves and strategy in a startup context. Then how do you do your org design and org structure?

So what's the right org chart for.

Again linked to your strategy and business design and how do you operate? What is your operating system? Okrs, Business finance performance reviews, how do you set that up when you reach 150, 200 people and more when everybody's not on the same floor, how does communication work? Then how do you manage customer experience at scale? Then how do you do branding if you're a consumer company? How do you think of the brand, whether you need to invest in a brand, if you need to, then how does that work? Because that is something which most founders have no idea. Unless you come from that world, from a world of brands, you don't have much idea around that. How do you manage culture and culture at scale? How do you manage operations at scale? So again, very sort of operating nuts and bolts of the business. And we started defining sort of services and tools around these 10 pillars and productizing some of them and serviceifying some of them. Like some of them are products, some are services. For example, we just built an operations practice where there is ops, design as a service, there is now an academy for operations leaders. We just launched. What's that called? Academy program for 10x academy or something? Yeah, so Operations Academy. So that is the latest one. We also, when the first things we launched actually after working with this few startups was an academy program for these 10 pillars. Like these are the 10 pillars. And we launched an academy program which was six months long and the founders of eight company cohort would sort of join the academy. And these would be all series B sort of plus founders, either 50 million to 200 million valuation. And they would be every other week we would sort of pick one of these topics and discuss the topic among the founders with an expert either from x2 10x or from the startup world coming.

And, and this is all remote.

This was all in person in the first two batches because that was pre covered.

Well that's okay because I mean that's actually a big ask because I mean you're founder, you're running like a Scaling business and so on so to come and kind of do in person classes. Must have been a very like a significant commitment at that point.

Yeah, exactly. It was significant commitment of founders time. And if I look back like first two batches, 16 companies, I think almost 10 are unicorns.

So it helped.

So yeah, no one, I mean there was a lot of self selection and help. Right, right. Because founders were really keen about growing and learning who were self aware and who really wanted to sort of take the business to the next level and were clear where they, that they need, where they need help. I think said okay, we will commit this much time.

So it's like yc. It was like YC for growth companies.

Almost like YC parallel for growth companies. And it worked, the model worked pretty well. And so now there's this founders Academy where like 50 companies are now gone through that and We've worked with 300 growth startups in India in various shapes and forms through these 10 pillars. Some have sort of worked with us on like one, some have worked with us on five, some have gone to the academy and now we have almost a program which you can almost call like co founder as a service program where we bring.

That's hard. That's hard.

Yeah. That's not scalable but yeah. So we do it with only a few companies at a time where now we have 100 people in the company and all these 10 different practices. So where like all these 10 practices sort of are available to you over the next two, three years and wherever are the biggest sort of challenges at this point, like those teams get involved and work with the founders very closely and get stuff sort of either implemented or organized like let's say you know.

The big one on that cfo.

Yeah.

For any growth company like the organization of all the books and so on and so forth is like the big thing where the. It's really great to have someone who's done that there before and usually the tech founder doesn't have experience in that. Right.

So that's something. Also we are in the process of.

Building parachute in the CFO or the series B series C company. A lot of them go off the rails because of that.

Yeah, that's good. So we've done a lot of work on the HR side, on the people side, a lot of people practices. How do you hire, how do you do ESOPs, how do you do performance, how do you. Leadership training, management training, all of those, a lot of that stuff. How do you know your employees are happy? Culture, all of that.

Are you Putting that online slowly. Yeah, because that seems like it'd be a great piece of content. We'll RT it, we'll put in the feed when you're ready. That's great.

Yeah. So yeah, so as I said, we've worked with more than 300 growth startups, mostly in India, a little bit in Middle east and Southeast Asia as well through these different sort of engagements and it's been quite fun and satisfying. I think for me it was really about how to little bit give back, how to have a large sort of surface area of impact, how to have fun. So I think all of these things come together for me through, through this engagement to X2DX. So I think that's how I see my place in it.

And so you're also. So I mean some of Those are like SaaS and those kinds, the bread and butter. I mean I don't mean to downplay that because it's important, it's difficult and so on but you're actually also interested in some of the hard tech type stuff or deep tech type stuff which you don't have to do for the sake of doing it, but you are doing, you are seeing some of that. Right? Tell me, tell me about that, about.

The deep tech stuff.

So I, yeah, you'd mentioned something along those lines. Right. Like if I, if I'm not mistaken it was like you know, like stuff where 3D printing of organs, biotech, Agritech. Right. You know you'd mentioned something.

Yeah, this. Yeah, I don't, yeah, I, I'm deeply, I think definitely interested in that but it's not something I do proactively. I think it is if I find something of that sort and if I like the entrepreneurs who are doing that then I'm definitely interested. I think one of the latest ones was this company building a consumer robot to, to make Indian food. So that was pretty home robot or like for restaurants. Home robot. Home robot, yeah, consumer home robot. So it can now make like there's an Indian dish called poha and they can make pasta as well and Indian curries. It can make Indian curries and stuff like that. So that sort of thing has been interesting. Early on we funded this company called Ather which is electric two wheelers and they are doing really, really well now. They're unicorn as well now in a big sort of two wheeler brand in India now. So that is probably another example then the 3D printing one is very, is probably the most sort of moonshot.

What are you doing there?

So there the company has built this technology to 3D print tissues. And I think the first application they've been working on is 3D printing the cornea, eye cornea. And for example, in the US There are a lot of corneal diseases which are not big enough to sort of. For large companies to sort of probably do research on. And that's one area where if you can sort of 3D print a cornea and do corneal replacement, it obviously can give vision to like, way more many people than. Because corneal transplants are difficult to. Difficult to pull off because donors are not really available at the time you need the transplant.

So seems, I mean, there are folks who are working on that, but that is definitely challenging because it's not just like plastic, it's very, very complicated tissue.

Exactly. And yeah, again, the point was that, yes, I mean, I would completely, I could completely imagine somebody in Boston, so someplace in the US Working on something like this, but somebody working in a small sort of office out of Bangalore and with the ability to sort of actually do something which works well, it's.

Often an Indian person in Boston doing that. Right. So like, like a good chunk of American tech talent is in. Right.

But yeah, the ability to get it done in India.

Of course. Of course.

Right, that's right. Was just mind blowing.

That's right.

For, for me. And now they've been able to like hire experts from, from the US and they've sort of. They're building a lab in the US now as we speak so that they can do it faster. But it, I mean, it started in India and for the first three, four years just they kept chipping away and, and then after the race, like more money, they've moved to the U.S. ah, interesting.

So, but showing that you can actually at least get started in India. That's right. So, you know, maybe last thing and then, you know, give. You say so, you know, we talked about how Flipkart is basically the size of not just, I mean, not just a tiny country, but a small country. Like bigger than a bunch of countries in the world. 100,000 people is actually in, you know.

Now it's much bigger. I think it's probably a hundred thousand when we, when Walmart bought it.

Right. So it's like several hundred thousand. Right. Okay. So now, you know, you would have a dashboard that is actually representative of the Indian economy at this point. Right. Like a good chunk of just commerce happens through it. Right. So, you know, how do you think about like the interface with policy? You know, you mentioned GST that actually simplified your life Amazingly, in some ways at least, you know, upi, GST to some extent. Other perhaps, like, you know, the government also made Reliance Geo. It was feasible to do it. There's probably regulations that were cleared out of the way to allow all those towers to get set up. So amazingly, the government is actually making your life easier in some ways. Right. How do you think about the interface between like Flipkart and like the state and so on? What are your thoughts on that?

Yeah, I think the interface is I think now becoming relevant. I think till like even four or five years back we were sort of, I would say recipients of some of these changes and we sort of rolled on them. But I guess now you can influence some of it. Yeah, it wasn't as big an industry to sort of influence a lot of it. I think today with on the payment side and on the E commerce side, I think there is definitely, I think the size is big enough that there is I think fairly good interface on a lot of these things. And there are various sort of different committees and organizations which are working on various aspects where the interfaces sort of matter.

Okay, so somebody who has contributed more economically to India than most, perhaps all, but certainly in the very top echelons. What do you think is the top things India should do in terms of tech policy, specifically, economic policy more broadly? What is next? What is a low hanging fruit, which is the obvious thing that they should do?

I think from my standpoint, I think as we talked about this whole piece around the talent, right. How do you leverage all of this potential talent in India at scale? So I think that is definitely one and not, not just on the digital side, but even in manufacturing. So I think how do we get a lot of this talent into sort of the, into like an organized economy and get them, I think a lot of that, it is underemployed. So how do you get them to sort of full production, complete employment, whether digital production or physical? I think that's probably my biggest, would be my biggest wish list.

Interesting. So explain that last bit. How do you get people to full employment from digital to physical production to digital or physical? Okay, got it.

Yeah. I mean it could be digital, it could be physical. I think manufacturing is also a huge area, potential sort of area of opportunity. And there is a lot which has happened in the last three, four years. A lot of mobile phone production, a lot of electronics production is now happening out of India. And I think with again the geopolitical sort of headwinds on the China side, I think India can become good Alternate on the manufacturing side as well. So there is huge opportunity there. And then I think digital production, Indians sort of producing a lot of digital goods and, and working remotely on for businesses across the globe, I think is. Is also, I think, a huge, huge area.

Well, so I agree with all those. I, I have three concepts which I'd like your reaction to. I've written about like India's crypto policy. And so, and I actually still think a lot of that will be important because otherwise India is subject to sanctions. It can be cut off. You know, the west has threatened cutting off India in various times. So that's important. Just have its own sort of network for international transactions. Leaving that aside for now, I think a remittances and more generally corporate setup. Right. So as somebody outside India, if you want to do business in India, what is the Delaware of India? Is it Gift City?

Do you.

Do you incorporate in Gift City? Do you incorporate in Singapore and do business in India? Like, what is the best practice as of 2023? What should it be?

Right.

For example, there's a LRS liberalized remittance scheme to get money in and out. But it's like pretty hard still to get money in and out of India. You have to like give the birthplace of your ancestors on the forms and stuff for sending in like $25,000 or what have you. Right. They've got these old banking forms still. And you as somebody who got $15 billion, $16 billion into India, has probably dealt with that more than maybe anybody else. Right. So. So just on that first part, remittances and more generally corporate setup for international trade, what is the best practice? What should be the best practice?

Yeah, I think Gift City is more for. For funds and investors to sort of set up shop. I think it's the. It's sort of an answer more to. To sort of allow Indian managers to also manage foreign money and also to be able to invest globally. So so far there was an AIF sort of regime where Indian fund managers could raise money globally, but there was a restriction of only allowing 25% of the money to be invested outside India. So Gift City sort of allows Indian managers to become global fund managers. So I think it's more in that way. And money obviously can flow from anywhere into Gift City.

So it's more for the fund manager, for the operator.

Right, okay.

Still still a step forward? Potentially?

Yes, absolutely. Yeah. I think for operators it has been. I think. I don't know if there's much of a change, but in general, I mean, it's not obviously India's not the easiest place to do business. I think with this whole, I think India stack and digitization of even the government services, I think it is improving a lot. There's definitely a lot more to do. But I think if you come to remediate remittances for businesses, it's not as difficult. But for adding individuals is more difficult because of capital controls. I think it's got to do more with control rather than, rather than efficiency. I think. I think efficiency is not the challenge. The challenge there is more sort of India wants to definitely control how much money goes out because it is still not very sort of.

Did you find that an issue when operating?

No. So that's what I'm saying. So it's not a. It's not. It used to be an issue like 20 years back.

Okay. But by the time you guys.

It's not an issue at all for it doesn't come in the way of doing business at all.

So is the answer then just incorporate as a business and just do it like that rather than individual?

Yeah, absolutely. Yeah, I think it is like, like.

For example, in the US people will set up a consultancy, they'll set up a personal company and you know, if you're a plumber or something, you'll book business through that.

Right.

So maybe the answer is, you know, the JZ line become a business common something to look at. I'm not.

And there is. Yeah, I think there is now that you can also form LLCs in India, which is. Which was not possible even three, four years back. Limited liability sort of partnerships.

Lightweight LLC.

Yeah. Ye have also been made possible. So there is, there is I think progress on the corporate side. Corporate lord side as well.

Okay. So that's remittances. Get city number two. A big one is that I've tweeted about a bit. But visas, right. If you know, like the west has a lot of asks from India for, you know, foreign policy and so on, wants to be a bolster versus China, all this stuff. So, you know, one thing, one point I've made love to hear your take on. This is just like the visa situation for Indians. Forget about just permanent immigration, just for business travel, for tourist travel, for attending a conference for someone's keynote speaker, for bringing a remote engineer in for an offsite. And also actually, conversely, India sometimes makes it a hassle for some countries for people to get into India. Right. Like that seems like an obvious target. Where, you know, for example, this recent deal where, you know, a bunch of Airplanes were bought from the US Right. Biden is saying is going to create a million jobs in the U.S. well, okay, those airplanes are Air India airplanes. It's going to be flying people out of India. How are they going to get into the country if they don't have a visa? Right. So this seems like an obvious thing for the US to lean on countries and say, you know, in India to also make this ask and put at the top of the, right, the, you know, the chart, which is get us a very large number of business and tourist visas for every Western company, every Western country that wants India to do something. Help us help you. Right. And it seems like, you know, that that leads to talent, especially given, you know, a good chunk of engineering talent in American universities, as you're aware, was Chinese and Indian. Right now, like, it's like a plane with like one of those engines is just conking out because a lot of Chinese engineering talent is not allowed to come. Or, you know, both. Both on the Chinese side and the American side. So a lot of Indian talent will have to kind of surge to replace that. And so there's a lot of reasons why I think visas are a big thing. I mean, I'm probably speaking to the choir here, but.

Oh, absolutely. I think that's sort of part of the, I think the talent vision that I was talking about that I think at the highest end of it, I mean, a lot of that talent can actually get visas and go and work in these markets directly as well and add a lot more value. Right. So I think. And visas is definitely like a huge, huge bottleneck today. And not just work, I think even. Yeah, as you said, tourists. And I mean, as India is sort of growing as an economy, there's a lot more people wanting to travel and. And aspiring to do that. And it is very. It is difficult. I think visa is definitely, if you think globally, I think this. This definitely. I think something they're working on. But, yeah, it needs.

I'm a big fan of some of, you know, Minister J. Shankar's videos, and if he sees this, please put visas at the top. You'll get a lot of retweets and likes. A lot of people will focus on this. And actually within the U.S. you know, Joe Lonsdale is a VC friend of mine, wrote an article in the Wall Street Journal about opening up visas. Noah Smith, also friend. I think there is a significant coalition of folks from the foreign policy side, from tech CEOs, from folks within India and so on to do something here about this. And Vault, the Indian passport from where it is to at least like a decent mid level. And again, I'm not saying of the billion Indians, all of them, you know, go and move to all these countries permanently. But like 90 day business visas should not take, you know like years and years and years to approve, you know, in my view. Yeah, okay, so that's something I think we probably both agree on. So the menses and visas. And the third is kind of an interesting one which is ip. Okay. So India's drug industry, generic drugs is phenomenal because India takes a less restrictive view of IP than the west does on this. And that's why India can produce, you know, it is this very sophisticated generics industry is able to build a vaccine in India. It has the biochemistry and molecular biology talent to do the stuff, genetics, all this type of stuff. Right. And so one thing I've thought a lot about is in the age of AI, I think there's going to be, you know, very early, right? But there's going to be I think three clusters. There's the current centralized American cluster where they're licensing all of the stuff, right. And then there's going to be the Chinese cluster where you know, they just got to have access to WeChat, they pull all the data. But I think that a lot of the most interesting things to train on for an AI are like every Hollywood movie or every book, right? Every, every piece of music, lots and lots of content that you want to train on is something which in the US has these extreme and insane copyright restrictions, right? It is possible to train, eat well for all kinds of things. For example, Google books, there's this whole thing where Google showing snippets of the books, there's this whole thing. And so now like, you know, Getty has hit stable diffusion with this massive lawsuit.

I saw that.

Exactly right. So there is this counter reaction within the us, within the west of all these white collar jobs, whether it's. And this also within medicine, for example, you know, if an AI doctor is better. Oh my God, is that going to take a lot of jobs, right? AI is maybe better at writing than many journalists. Is that going to take jobs? How about AI art, AI videos and movies, AI music, right. AI books, like not everything certainly, but for many different white collar industries within the West, AI is quote threatening jobs. And so be, you know, now you can make the argument that it'll make the folks who are good at these jobs even better. That's certainly true for for example, engineers or for designers. We are okay with AI improving our workflow. AI and Notion, AI and Replit, AI and GitHub. We're already doing that. That's great. That's going to work. That's going to happen. I'm pretty bullish on that. AI and industries that are not used to using AI, they're probably going to fight it in the West. I think there's a massive, massive opportunity for India to build something like its generic drugs industry. Let's call it its generic AI industry.

Yeah, okay, right.

Where everything from Libgen to Sci Hub to, you know, all the academic papers just say that copyright is like one year, it's six months in India. India is not going to enforce copyright on these things. Right. And just like drugs is just simply not going to enforce those laws. It thinks that, you know, every, every time copyright's about to expire on Mickey Mouse, for example, Disney goes and like gets it renewed for everything. Right. This is like sort of corporate capture of copyright in America. India is a large enough economy and it can see a massive benefit out of this to just sort of liberalize all this IP stuff and become a third huge cluster for AI. Not the licensed Western side, not the Chinese controlled side, but the more freewheeling side, just like its generic drug industry, which contributes an enormous chunk to GDP and to and frankly national security. Right. So I think that's a third cluster potential. That's a policy ask potentially we could do. What are your thoughts on that?

Oh yeah, I mean, I hadn't thought about it from that sort of analogy and perspective, but yeah, I can. I mean, my head is already spinning with the possibilities of what it could be. Especially I think if you think about 10 years from now, most a lot of jobs are going to be AI plus that job. Right. If you're not using AI in that job, you're probably not going to be a very relevant person in the job. And I think as you're saying, India can use that sort of as a superpower.

That's right. That's the next leapfrog. Yeah. Right.

To leapfrog. Yeah. Where others are stuck.

They're stuck because the white collar job, the entire council of the US medical system, they want everything to go through a human for a billing event. Right. Everything must go through a lawyer for a billing event and so on. Right.

But we could so other regimes which are sort of stuck and won't budge very easily with these sort of old regulations. Exactly. India can be a very leapfrogging approach.

And because it's Greenfield, we don't, you Know the conventions, the laws, everything can be written. You know, for example, maybe it's something where you have like teleradiology, you know, you get the images, you go and do them remotely. There are obviously Indian lawyers, Indian doctors, Indian actually less well known illustrators. You know the movie Tenet, right. So if you go and look at the end of Tenet, right. The credits looks like a New Delhi phone book. Okay. It's, you know, all these Indian names, right. And, and the reason is that a lot of illustration has been happening, right, like the cell animation stuff, right. For many years and now it's graphic design and so on. So what's interesting is there's a lot of the talent in India for graphic design, illustration, copy editing. A lot of white collar talent is there. And then with AI they could potentially leapfrog because these industries. And then you have like the Indian American or Indian immigrant bridge, for example, you have like a licensed American MD who can have 100 Indians who are helping scale teleradiology. So you have enough of license here where they're doing the final review of it. Right.

So you're still not assisted by this exactly. Sort of India stack of India, Italian stack.

That's right. And this is actually. Now the thing is white collar people will look at this like oh my God, this is so bad. Bosh. But actually this is how you hyper deflate medical costs, legal costs, all that type of stuff is just wildly expensive in the US Educational costs, these things are like wildly, wildly, wildly expensive. And that's because you get all these billing events that are just baked into it. People call the so called Baumill's cost disease, if you heard that term, and it's supposed to be this. Oh, it's just those sectors that have a lot of labor and the cost of labor goes up.

It's just inefficiency. It's inefficiency, systematic inefficiency.

That's right. It's like at Stanford for example, I think there's more administrators than there are students. Okay. Something like that, right. In medicine of course, there's tons of administrators. Law, of course, right. If you can automate these in a quote compliant way. And you would need. That's the thing is you need a gigantic pool of people and laws and so on. That's strong enough. You couldn't do it in Switzerland, right. What would happen is the copyright industry would just go and lean on Switzerland too hard. It'd be like Napster, right. And so on. So you need something, I mean that's Actually, why, You know Spotify. Right. You know why they actually started in Europe?

No.

Because all the US companies that tried couldn't get license until Spotify, being fully Swedish and genuinely Swedish, wasn't, like, American overseas. Right. They had enough leverage. Right. Because, like, Sweden, I think, also had, like, the Pirate Party and stuff. I may be misremembering some of this. Right. But they had enough, like, local leverage as being, like, purely Swedish, that the. The RIA and so on just couldn't shut them down. So there was a negotiation that happened there. Whereas, let's say Groove Shark was just shut down in the U.S. right. So it feels like this is kind of the right kind of thing anyway. I know, I'm digressing, but feels like an interesting concept.

Oh, yeah, no, yeah, no doubt about it. Yeah.

So a maybe AI Indian or a Indian. Okay. Okay, so those are some thoughts. I leave you the floor. I mean, we've gone through tons of stuff. We went through the rise of India, the return of India, really, to the world stage, the rise of Flipkart, and how you went from just like, basically bootstrapping the thing with $4,000 in India, from a time when less than 5% of Indians were online, to one of the largest exits, perhaps the largest exit in the world at that point, certainly the largest exit in Indian history, to helping mainstream this thing within India and. And now helping entrepreneurs, you know, with X to 10X. And I'd like to know, just give me. Give me what? The last. You have the last words. Go ahead. What else would you say?

No, Yeah, I think. I mean, if I look back, I mean, I've seen sort of the journey of India's transformation, so as to speak, right through my. Through my life. And I guess I was lucky to be born in 1982 and just when India was sort of liberalizing. I was a teenager, and then I started working when the digital age was sort of happening upon us. And I think today India's. I think I can see that India is sort of sitting on a big potential opportunity in a pivotal sort of moment in history. And I think my focus is to continue to sort of, I think, drive forward the entrepreneurial ecosystem as much as I can. And then I'm very bullish about this, I think, building this whole new talent ecosystem as well, how to convert this potential energy into kinetic energy, so to speak, at scale.

That's awesome.

Yeah. So I think those are probably the two big opportunities or thoughts I'm looking at.

I look forward to actually working with you on some of the stuff. And same with you. Same thing. Yeah. Yeah. And with that, we thank you.

Thank you.

This is the Never Shame podcast. Thanks for coming on.

Thank you. Great.