All right, Hemeth, welcome to the Number State podcast.
So you introduce yourself, you're at lightspeed.
We worked here at a six and eight.
Go ahead. Yeah, thank you for having me.
Been looking forward to this for a long time.
Malazi. Yeah.
So for the folks that don't know me, I'm Amith.
I'm Malpatra and all the Parkers at Lightspeed.
ISP is a global venture capital firm that invests across
different regions. Basically, we are aware of our
pressure base. And India is like 1.8 bill,
something like that. India, yeah, you manage about
1.5 to 1.8 bill in the capital, very early stage focus.
You also have a growth front there, presence in China,
presence in Europe, presence in the US and the way that we don't
have an office or team, we certainly have investments like
in America and African Vicures. Yeah.
And then before Lightspeed, I would like to you and then I was
like, yeah, known you for maybe 7-8 years before that even.
Oh, it's a fun story that I don't think you would remember.
Yeah, go. I don't know.
So before it's the scene, yeah, I would like Google, Yes.
And I was part of this small team of people led by a guy
named David Glaser, the genius Lily guy who was trying to kind
of saw the wave of or his thesis was that in 10 years from then
the next noble laureate in Biome, PA by a statistician, but
not yeah, Marix not a not a bet lab.
Which just happened. With domestic, Yeah, yeah, just
happened recently, two years back.
So. And what was Google's all going
to be there? You're going to be the computer.
The computer for that. So he pulled together a small
group of people and they call you Google Genomics.
And one of the people you wanted to work with was a company
called Console. That's right, my first one.
Yeah. So if you were there, so I
remember getting on a bunch of phone calls, trying very hard to
get in touch with you and then getting on a full convalia kind
of convince you that we was build cloud to do all of the
analysis. I may remember this.
That's right. And I think we were, I think we
were using AWS at the time or something like that probably.
And I was just like, I mean, Google was great, but I was, I
remember actually, was that the time of App Engine?
App Engine was popular there, yeah.
And the problem is App Engine before Google Clive was
something that if you're just doing exactly what Google wanted
you to do, it works. And but then if it was almost
like A blog where like if you if you want to do just a blog, it
was fine. If you want to do something
outside of it, it wasn't right. It was just like Java, and I
think about Java is it'll let you not do anything stupid, but
won't anything smart either. Yeah, yeah.
That's right. That's right.
And I think, I mean, cloud has obviously evolved a lot since
then. And it it, you know, with the
whole genomics thing, by the way, what's funny about sorry,
were you going to say something more?
Yeah, So with the whole genomics thing, that is the space which
should be much bigger. And it's kind of being quietly
growing. Like, I mean, 23andMe recently
went bankrupt, unfortunately. But with 23andMe answersyou.com,
like sequencing has really radically increased, right?
But it hasn't increased as much as it should.
Like everybody should have a personal genome on their
computer. And so it should be an important
file. It should be an app that's top
of mind. And part of the reason it hasn't
is that FDA attacked a bowl space and basically said that
you can't offer interpretations of genetic tests and results and
so on and so forth. And we're now very fortunate
that it's gotten beaten back because with AI, you can now
interpret genetic test diagnostic, Softer can do that.
It can do that better than a doctor can, right?
The entire concept of, oh, you can't use AI to interpret your
own test results was the kind of thing that that FDA would have
blocked AI from doing and said it's an unregulated medical
device. All those things have to be
sensed or has to be bottlenecked through a doctor, right?
So we may be able to take another crack at that now that
the regulatory state can't block that anymore, right?
Or at least much less powerful than it was.
And so AI enabled medicine is going to be a big thing, but it
required so much infrastructure to sort of break past the
regulatory state, the American regulatory state in order to do
that on. And I don't know if you did you
guys, was that on your radar at that time?
No, not the, not the regulatory part, probably.
The regular part we did not care about.
Yeah, they try a lot to get to what you would call the baseline
study of human populations. So yeah, at least have a
baseline genome kind of right already.
And then, you know, because Google being Google, they tried
it in a way that people did not like.
Yeah, they're very sussed. Right, right.
Couldn't trust a big conglomerate like Google so
nobody would upload their genomic data.
This is a Google Health and they tried to, yeah.
Exactly right. So my team LED a lot of bad and
it didn't work out. And we want to build a Federated
data set that those could use at some time where a Pfizer could
use or a clinic could use for germline studies or specific,
you know, like rare diseases. And they're really matters a
lot. And we just couldn't get there.
That's the context of that. We met very briefly.
And I remember I've tracked your journey for many, many years
and, you know, glad you've paid in touch and yeah, finally.
Yeah, that's good. And I think in E6 and Z1 of the
reasons I got into BTC was because and crypto and so is
that only when I started a company did I understand how big
a deal the regulatory state was. And it was only it was DNA that
in in a sense made me get into BTC, right?
Because as as an academic, the government is basically friendly
to someofthe.edaddressonceyouvegota.com
they think of you as like an evil for profit company,
especially in a regulated industry, the regulators are
like the police, right? And if you understand how there
can be sometimes bad police, you understand how there can be bad
regulators, right? And so this was something where
I realized actually, you know, do you go and try and reform
this? Do you make this or that and
around the process? And certainly people have tried
that, but ultimately I, I realized it's actually easier,
just like it's easier to start Bitcoin than reform the Fed.
It's actually like actually easier to do that, right?
It's easier to get a new jurisdiction than to reform the
FDA, right? It's easier to start a new city
than reform San Francisco. That's fundamentally the press,
right? And there's a lot of people who
are working on a reform and, you know, reform, there's power of
it's 99 to 1, something like that, more than that 99.999
point 99. But we do need to be able to opt
out of the existing system and build something else rail.
And it's funny, there's all kinds of verbal tricks that
people will use, like to keep you within the existing system
and say, Oh my God, you're a traitor.
Why are you leaving? You're, you know, right Or you
know, you're a coward. Why don't you stay and fight or
something like that, right? Or, you know, you need to be
part of the process. You can't just, you know, leave,
you know, this kind of thing. And I understand where that
comes from. And sometimes obviously you
don't leave in a precipitate way, You know, you try to fix it
and some suffer. But at a certain point, and
everybody's points is different, you realize that system cannot
be fixed, right? And further capital, further
time for their energy going after it doesn't work.
That's what Elon just realized. Yeah.
He literally tweeted out. Did my best.
Yeah, right. So you know what comes to X-ray
anyway, Go ahead. Yeah.
This is interesting because it reminded me of and we should
talk about your Bitcoin journey which are curious about that
too. So it's what you were saying
about it is sometimes easier to create a new system versus
change an existing only system. It seems to be true as long as
mythology as almost as far back as Indian mythology has been
around. And even then it was easier to
build a new heaven versus to elevate yourselves into the old
heaven. So it makes sense that you're
planning to do what you're planning to do.
I admire you for. That yeah, I, I, well, thank
you. I appreciate that.
And I think, well, you know, one thing I want to do is actually,
so Speaking of India, let's maybe why don't we talk about
India for people who don't know anything about India and then
India for people who know something about India,
especially Indian tech, right? So you know, the thing about
India is for people who are Anglophones, right?
Like basically English speakers they could essentially,
especially Americans, not the British of course.
So they had a long history with India, but most Americans, many
Anglophones, could ignore India until pretty recently, right
until last, the Indians were more and more prominent in text,
starting being with vanilla, Khosla and so on and so forth
and more and more in the 2000s. But really India is kind of only
popped on the radar in the last few years.
For example, Ukraine is the first international issue where
I can recall Americans, Europeans and so on being
concerned as to where India's position was.
Nobody cared where India's position was in Iraq that I can
remember. And we care what's position was
on the financial crisis that I can remember, nor on Syria that
at least that I can remember, right?
Like, but it is now become enough of a global player that
people did care about it's position on Ukraine.
And so so because that people need to know something about
India, right? So obviously the basics will
import for a billion people. It's, you know, this multi 1000
year old civilization, one thing most people don't know is India
is actually a union like the European Union, like the United
States, right? Why don't you talk about that?
All these different cultures and so on there.
Yeah. So I'll go very far back when
very quickly come to the present day and tell you what's been
going on. Very old piece of land, lots of
complicated history. It used, it used to be a union
more around different religious practices that end up becoming
tribes and tribes end up becoming States and states end
up coming together to build a nation.
But from the very beginning, it was always 5 or 10 tribes that
were kind of dominating in India.
There were southern tribes, there were northeastern tribes,
there were, you know, northern tribes and so on eastern tribes.
And we expanded, you know, all the way out to Iran, Afghanistan
for the longest time. So the first and only 4000 years
ago, 2000 BC, 2000 BC, This is, you know, what Indian Qataris
parole looked like in ammunication of a variety of
cultures and and so on spreading, you know, all the way
to Afghanistan, Iran on the left and then, you know, to the
right. And at that point, and for the
longest time of II's history, we were almost 1/4 to 1/3 of the
global economy. That's that chart.
That chart, yeah. If it goes from 30% and then it
kind of very quickly shrinks in the last 500 years of 2% with
the with the rulers that have come from pretty much everywhere
around to occupy India. But the longest time China and
India were the dominant, you know, players in the global
economy. And the global economy was part
manufacturing, where the manufacturing meant back then
part trade and so on. And the country obviously was a
big part. And then that probably stayed
till that, you know, for about 2 to 3000 years that kind of
stayed very stable. It doesn't really change that
much. There's a bit of up and down
here, but it doesn't change much.
And that's been the history of India and also to a certain
extent Shia 4-5 hundred years ago, of course, and we'll talk
more about that. The bigger you get, the more
attention you grab. And India build roads to the
world, the roads also come to you and it becomes easier for
people to come to you. And that's what started to
happen. Peaceful and peaceful people,
not so peaceful people coming right?
Especially in the Northwest. Yeah, probably more ambition.
It's fine and fair to say they may have had more ambition to
occupy and they may have had more ambition to.
Terminology or going even further back, Yeah.
Correct. So cultural differences and
then. Northeast that much because it's
impassable to the Himalayas, yes, Yeah.
Yeah. So majority of it came from the
left and off and then the once a state like that, which is anyway
loosely put together a group of people that were somewhat
cooperating versus collaborating, when it starts to
crack, the cracks don't you know, disappear very quickly.
So we had, you know, 1 crack appear with the Islamic State
coming in and occupying and then that crack continue to reserve,
you know, extend from there. And then of course, the
Britishers came and at one time I remember the math, but then
they took out about $40 trillion of, you know, some very harsh
number in today's dollars back to, you know, dominions.
And then India basically is trying from being a, you know,
hyper capita GB country with manufacturing, trade,
agriculture to basically subsistence level GDP and
primarily a resource state for other countries.
And then that that was, this is Fast forward to maybe, you know,
maybe 100 years ago, like 5070 years ago roughly.
And then we got independent from independence to now.
And I had the story of how states change shape and
philosophy. I feel like, and, and maybe this
has happened with other countries and we should talk
more about that. You have this period of shape.
A country goes through a period of shame and a country goes
through a period of regret, a period of realization, a period
of hard work and then a period of a sentence.
Yeah. And these things can take 7080
and 80 years sometimes. It depends on a lot of factors
of. Course, it's usually say a
regret, right? Because I I'm not so the
realization I'd say in 1991 when India liberalized hard work made
the last 30 years and now a sentence right.
Why would you characterize regret as or is that not the
right word? I I'd call it socialism.
Socialism, yeah. I don't know if the population
regrets it. It's certainly think people who
could have taken decisions differently might regret it.
But it was the sure, sure. Certainly the limit of shame.
We were that stuff. Yeah.
Yeah, we were that, right. And look at our history and all
that. And you carry the video and then
you look at the president. Oh, my God.
Like I'm a 2% DDP country, right?
World War. And what was I in my own memory,
you would say, 100 years ago? You probably were in a powerful
state back then. So that regret leads to, you
know, hard work and eventually, eventually.
Hard work. Once there's acceptance of we're
not great anymore and we mark down and we're at 0 and kind of
people quit thrashing and screaming.
They're like, OK, we have to build our way back up.
Nothing but for it, right. Yeah.
And you know, it's funny, like Argentina seems to have maybe
bottomed out and may finally be there El Salva or maybe bottomed
out. And now it's like on its way up.
China bottomed out. It's on its way up.
You know. Well, it seems really improving.
I think. I don't know if it's bottomed
out. Yeah, like, but they they
definitely have crashed, right. Vietnam bottomed down as long as
the way up. So yes, OK, so basics India has
so one thing it's it's a union, right?
So a lot of people don't know that India has like in a sense,
the difference between a like a 2 million or a Telugu person and
a Gujarati is like there's between a Italian and a Finn,
right? Because like, you know, the
North and South like these are pretty different cultures.
There is certainly now an Indian union and people travel from one
part or another to India, trade across India and nobody really
thinks about it. There's a currency union with a
repeat. There's transit links.
You know, English and Hindi have become nationalizing languages.
People marry across various religions and, you know,
regions. And so and so was actually
pretty pretty frequently. And so all of that it actually,
the union has actually become a real thing in the sense India is
more unified than any quintessary in its history, I
think. Would you say?
You know, I feel like it's a little bit, having lived in
Europe for a while, I feel like it is like the European Union.
Yeah, with. More nationalism than Europe?
Yeah, more nationalism. So European Union with more
fluid and weak memory of individual cultures that don't
go as far back. Interesting.
Because I'm from Orissa, but I know that is a culture like from
Kalinga days like thousands of years ago or Ashoka was part of
that and all that. I would have such a strong
memory that attaches me to Kalinga.
Interesting. But a German would probably go
by thousands of years and remember.
What, you're in Italian as Rome and stuff like that, So that's
less cultural memory. Less cultural memory.
Even though it's loosely put together Union states, it has
less cultural memories specific to the state.
I guess language is the main. One language is the main one,
Gujarati, Mali Ali. And there is the literature that
is more specific. And I would say maybe even the
last 50 years that memory has faded.
Fifty, 60-70 years ago, Bengal used to be the literary hub of
the country. I would not.
Tagore was part of that and something the rain was part of
that. And today, I don't know if I
mean, there's a S that has a Bollywood type industry called
Tollywood and there's whatever. But then I I still personally
don't feel like there is that much dense cultural memory that
used to exist, probably ended 200 years ago.
Why is? It do the British and then the
Mughals. Before them, yeah, English has
played a big part. It's becomes a common time
thread and you know, over the last 30-40 fifty years, like you
said, trade has become a little bit more easier between States
and you know, travel, you know, it's you don't require a fast
boat to travel anywhere in India.
A currency is the same and you are you basically still Hawking
back to a single citizenship. So you have that, you know, that
kind of thing that ties it together.
So it feels like a a more tightly put together European
Union with less cultural memory of individual states that create
that union. That's why I.
Compare it to it's closer in some ways.
I I would never believe this in the 1980s, nineteen 90s, when,
you know, we were growing up. But I assume you're like also
roughly. Yeah, yeah, yeah.
So I've never have believed this, but in many ways, India is
now more similar to the America, the 1950s, where it has like a
unifying national ideology. And many like, just like you
have Poles and Italians and, you know, English and Germans and
all these different European ethnicities in America.
But there was like a common creed, economy, culture, common
currency. That's kind of what India is to
a, to an extent that I wouldn't have actually believed have I
not seen it with my own eyes. And one of the consequences is
even though sometimes it's like 2 steps forward, one step back,
like the public infrastructure has radically improved radically
to an like an unbelievable level.
Like, you know, Bangalore airport, the airports are
basically like world class. They're world class.
They're step clean. They're, they're beautiful.
And then you step outside and there's paved roads and they're
new and, and they're stop. I mean, this kind of stuff
sounds so basic, but the basics are actually hard because you
have to coordinate a lot of people.
You have to get permissions to build.
And then, you know, the government can't be corrupt.
And so, so sometimes it feels 2 steps forward, one step back.
But for anybody who's like part of the Indian diaspora who
hasn't visited India in the last five or ten years, you
definitely have to visit India and just see how much it's
improved. It's radically, radically,
radically radically better than the 80s in the 90s and hours of
the thousands. Absolutely.
And I remember growing up and I mean there are things.
So coming back to your question about what is this, Where did
you grow? I grew up all over India and I
thought I was in the military. So we kept out in particular.
You have military jaw. Jaw in the letting festive okay
the. Chad the Chad.
Jaw. Thank you.
I appreciate it. But yeah, I grew up in the 80s,
and I frankly grew up without, you know, I grew up in a small
village called the Ocean Market, which is, you know, like as a
crow flies maybe 60 kilometers from the border somewhere.
Where, where, Where is that? When you were race called, it
used to be called Uttara Kand. That's a guy's called a Ton
chow. Obviously this was part of UP
earlier. OK.
So a bit, yeah. And it's not northeast, it's
more like closer to Jammu and Kashmir and.
There. Oh, OK.
North, north, yeah, north, north.
And you know, if you know buzzy enough that that religious place
building up, it's it's the last stop before you got to start
walking or take a meal, OK to get to that place.
The roads don't really show. Take cards.
I didn't used it at the time. Yeah, at the time.
So group there. You know, we would have
basically no hot water and gonna boil it.
We didn't have heater so we would have wood in a thing
called Bukhara. But you put wood in it had a
chinny, it goes out of the house.
You don't die of monoxide, but twice a day just.
Literally growing up, no hot water that was low.
In a very cold place and and no electricity because you remember
used to use this thing called Petromex to study at 9 and stuff
it was a beautiful part of my life I remember I'm in a
heartbeat retire in the Himalayas because.
The thing The thing is that like because of that, because so many
Indians have an upbringing that's like that they are in
general like I'm there's a daily set back or something like that,
but in general the trajectory has.
Just been up. Yeah, you're actually valued 2
steps forward, one step by sometimes 2 steps back.
But there is absolutely a crediting for us that's
happening in India. Like gradually you are
ferociously moving up and up and up and from.
No hub order to finding hot start-ups.
Yeah, yeah, finding hot start-ups.
Yeah. So now let's Fast forward a
little bit from the 80s, nineties, which was I would say
maybe the transition treated for India when in the 90s Manmohan
Singh kind of opened up the economy.
And then, you know, foreign companies come in, you know,
create competition in the local economy before what was called
license Raj, like to get a license to do a business, you
had to get a license from the government.
It was kind of ridiculous. I'm glad I'm not, I was not ABC
back then. I don't think you could ever do
anything like that. But risk taking was essentially
not allowed, likely a lot more socialistic.
And I think we opened up and then I think since then, you
know, we were, I don't know, maybe 5 hundred $600 million GDP
country. And now we are sitting at
roughly 4 trillion. And a lot of that growth has
happened in the last, you know, 10 to 15 years.
And we've gone through multiple regime changes and demographics
have changed. And now I feel like now it's
coming together in a way where society is hungry.
There is a government that is not a group of politicians were
politicking. It feels like in good pockets,
good number of pockets. It's a government that is
interested in administrate because for India.
That's that's a big thing like the the government is actually
now interested in building the platform that Indians can build
on, right? As opposed to just taking the
money or we have you like they've come in a positive
direction, which is it's way easier to have a government that
goes corrupt than to one have one that actually ascends and
becomes, you know, better. And it's, you know, it's a, it's
been a journey, I can tell you very openly as corruption is
still a problem in India. And maybe the low level stock is
still hard to do. But again, the whole point of
being, you know, stepping forward or slowly by stepping
forward but not moving back, I think that feels like it's in
monotonically increasing pace that India is AT.
And I, I was in the USI grew up in India.
I was in the US from all three to 2018.
And I moved back in 2018. And I remember writing about it
online, a piece that, you know, if you Google return for India,
this still shows up in the first page.
And I was quite shocked that it showed up because I was getting
so many people thinking on LinkedIn, like, oh, you're
fighting space. I remember moving it out.
This is actually become a popular piece.
And I remember talking about it that when I moved back from US
to India in 2018, I had to change very little about my
life. I replaced Hulu with All Star.
Netflix worked in the US the same way in India, Amazon worked
the same way it worked in India. I had to replace Lyft with Ola
and Uber works exactly the same. I still have my US credit card
and my Uber because there's no ADP stuff going on.
It just goes through and what else?
Like, you know, I what'sapp as payments and all those things
just worked out completely fine for.
Me. That's because I think Internet
first is actually the way I think about the world versus
country first in traverse, right?
Yeah, that's a great point. I was living in it.
I didn't realize it. I was not living as much in the
physical infrastructure as I was living in the vigil
infrastructure. Yes in the US And all I had to
do was I literally moved back at 2 backs.
It's 2 bags of 15 years of light.
Two big bags would have to. Buy it or known it.
It was the offline stuff, the Fiat stuff that took longer, the
cloud stuff you could just log in and get back to work.
Right, I had no how then? No car, no scooter, no
motorcycle, nothing. Yeah, The only thing you have to
change, like maybe you have to get residency right, you have
OCI or? No, you always see here.
Yeah, I was an H1B for 15 years in the US.
OK, got it. And I just didn't have a green
card, OK. But I just ships it.
So that was easy. That was easy.
Yeah. Yeah, but even if I were a green
card holder, OCI now is easy to get.
So you basically have a digital passport of sorts and you live
in two countries. But yeah, overseas it is, yeah.
It was a very smooth move. Now, again, I'll talk more about
the India move if you're interested.
But yeah, it felt like a pretty straightforward move to me.
And then, yeah, there was a bit of this, you know, 20 years ago,
10 years ago, you would feel this culture shock.
I didn't feel any culture shock. You were 20 years ago, you would
feel an infrastructure shock. I felt a lot less of the
infrastructure shock. So there's pollution in India.
And if Delhi is much worse than Bagalore and Goa is much better
than many cities here in the US And, you know, there is traffic,
of course, but I remember being stuck on 101 in SF for many
hours. So it's not that better than
different, except somebody drives you but more cheaply in
India versus in the US And politics is is nowhere in the
world is is good or great. So India is basically no better
or worse than any other country. I you know, The thing is, I I
disagree. I actually think India will be
India is going to be I think a dark horse in terms of it's
surprisingly well run. What's one example the votes for
the recent election, they were counted in a day right for a
billion person country. And so while the US, it took
like weeks, months to get it done right.
And that just shows that steep capacity is on some axes
actually flipped, right. UPI is very, very good, other is
very good. You have criticisms of these
systems, but an identity system that works for a billion people
on a payment system that works for a billion people, a voting
system that works for a billion people, that's pretty good.
Yeah, right. I mean, ISRO is landed a probe
on the dark side of the moon. We have these new, you know,
trains, we have these new, you know, highways and stuff in
India, all this kind of stuff that, you know, the airports,
right. And and yet it's still it's
still at the J curb. It's still at the bottom of the
of the upward trajectory. And the way I think about that,
and I'd love to know your thoughts on it is now that it's
overlands Geo, we have cheapest, you know, the cheapest 5G
Internet service in the world, right.
And all of these things we observe in India, and that's
actually quite new. Yeah.
You know, what else am I missing?
Those are pretty. There's a whole tech ecosystem
there, right? Yeah.
Good. Help me also.
Yeah, so absolutely right. You're not missing anything big.
Maybe what I would add to that is India a bit the Geo thing
that happened nine years ago. Now, I think India has one of
the most digitally awake population in the world in terms
of volume in the time this. Past you see a few periods about
Blastia. Yeah.
So, so in 2015, Vocation Ambani, who was, you know, one of the
main guys that, you know, the biggest controller in India
called Reliance, basically took this generational bet.
He said that I'm going to spend 10, fifteen, $20 billion and
literally put it in blue brown. He dug up places because you
know you can't when you're that big, you can take anything you
want in the government relationship to it.
But he did it in a way that actually was quite strategic and
really has changed the nation's trajectory.
He essentially provided literally free Internet to, you
know, the entire country, Indian in India.
For those that, for folks that don't know, the price of 4G and
L5G is let me tell you what I what I pay.
I pay about ₹170 per month and that about two and a half, $2.00
on roughly. For 5G Internet.
For 5G Internet and I have a three GD per day limit.
So you don't hit. That basically I never hit that.
And if I don't hit it, it's sometimes there are some plans
that Eddie rolls over to the next one.
Signal and watch TV on Netflix on.
It's like basically 100 X that amount in the US, yeah.
Yeah, so it was crazy for me and I don't.
Want the XI? Don't know something like that.
Yeah, and Netflix in India is 699 versus whatever it is in the
USI mean, so on and so forth. Sure.
So digital infrastructure has become so cheap, and cell phones
cost maybe less than $100 in the. 699 in the sense of zero
₹90.00. Rupees.
Yes, Rupees. That's about less than $10.
Yeah. So when?
When? When Jio essentially digitized
the entire country, they became the rails on which everything
else kind of got built out. Quasi public, quasi private
infrastructure. Quasi public, quasi private,
they had the spectrum and kind of and all that good stuff.
And now, now we've got world's cheapest phones and then most
people have several phones. Like, you know, I know people
that are in the up and coming part of society that actually
have two phones. You drive in a, in a Orangash in
India, it'll have two phones, one for roll out, one for Uber,
and it can take the rides on both.
And these are both phones that probably cost us in ₹10,000.
So that's been very interesting to see.
And on top of that, you could then, you know, then you get
distribution, mass distribution, you can build interesting
companies and extend them more quickly and learn what, you
know, what works for a consumer versus not.
So we started to see this venture ecosystem come up and
take more bets and funders coming up and, you know, going
on building riskier, riskier things.
And then, you know, then we saw, you know, essentially this
massive amount of entrepreneurial energy sort of
just really coming out and just like bursting at the seams.
So the last 10 years, India, I've just been there six years
now. I think it's been a remarkable
shift in terms of the risk appetite the nation is going to
take in terms of the infrastructure build out the
country is doing. We spent more in infrastructure
bent out in the last five to six years than we spend in the last
70 years since independence. And we are spending more than
what we spend in the last seven years in the next five years.
Well, the nuclear reactors are coming online.
That's a really big one. Brats will be a thing of the
past. Hopefully, if that, if those
come, India is actually either number 2 after China or it's
either there's a graph of nuclear reactors we can put on
screen, but plain nuclear reactors.
I think India's number 2 actually on lots of graphs, for
example, steel production, China's far number one.
But then when you delete China from the graph, India is the
real distant but real number 2. So that's on steel, that's on
nuclear, solar, solar, some the number of unicorns, for example,
it's US, China, then India's like distant China.
But it is #3 solid, right? So it is actually really rising
and really I think underpriced in a sense and on on the world
stage, right? And of course it's possible to
over hype it. It's possible, but it's also to
under hype it, right. And you know, in a sense I'm, I
think I said to you, I'm moderately bullish in India, but
extremely bullish in Indians, right.
So India as a system is getting good enough to be a launchpad
for the world. And you know, one of the things
I think a lot about is this is a very and maybe you have some
astronauts. So there's about 7 million or so
Indian Americans, right? I think that's a rough, rough
number. And they're doing pretty well,
right? Like they are, you know,
producing now, now that the second Gen. has kind of, you
know, started to grow up a bit. You've got, you know, people in
politics like, you know, Vick or or Chervence or or Cash Patel.
You have people in in media, like lots of, you know, like,
and I shot in love was on the 1st, but lots of other folks,
obviously tech, very, very gas based, finance and so on and so
forth. But but there's like weight and
of course medicine and lots of other professions, engineering,
blah, blah. But there's an interesting and
the diaspora has done pretty well in other countries and it's
certainly in Dubai and and the UAE, like that's like about 80%
Indian. And that's a country that's
doing extremely, extremely well, right at the UAE.
And but the question is how much potential is still in India,
right? Because there's a degree of
selective migration, right? There's, you know, not many
people are coming to the US or places they have an engineering
degree or there's some qualification somebody back in
India are at that talent level. And even if it's 5%, I don't
know the exact number, right? If it's 5%, that's like 70
million people out of 1.4 billion, right?
That's like 10X what the Indian American population is.
So that's a massive new economic disruptive force on the global
stage. So that's like a new Germany
coming on Geo, right? A New Japan kind of thing, you
know, like at that scale coming online and, you know, maybe you
have some thoughts on that. Yeah, I think look, I mean we
obviously are very bullish idea. I mean we have continued to
double down the last 10 to two years in India.
We we feel like this is where you know the maximum alpha is
right now. And you're right, I think India
feels underpriced even at this point in time for.
Indians. Indians are under underpriced,
yes. Where are the finished you
saying I'll say something? What do I think about the
potential of India? What of it is it's time to get
realized. What it is, is still latent and
will be realized. Oddly enough, I have been a
lifetime skeptic of governments and in the context of India, I
came in skeptical. And one interesting thing thing
that I realized is that two things, One is if you are a
government who is not proud of your country, you're not going
to improve the country, right? If you are a human who is not
part of your body, you're not going to improve the body.
If you're somebody in a relationship, you're not part of
your relationship for partner, you're not going to improve your
relationship. For the longest time, I think
India suffered. They were, they were.
They didn't have a sense of national self and.
Pride and never had a sense of national self.
And there are Shades of Grey in there.
There's a lot of, you know, places you can slip and fall in.
But I think it is an important thing that ties India and
Indians together wherever they are.
And I think that sense of national self was not there for
the longest time when I was growing up.
People just woke up and complained about India all the
time, Right? Buried.
In 80s and 90s, yeah. 80s and 90s that was working.
It took two years to get a telephone in your house and for
ATV or a sand line somewhere, blah blah blah.
Now I think there is a sense of rising optimism.
There are pockets of pessimism for sure, but a sense of rising
optimism as a whole. And so for So where am I going
with this? I think for a country as large
as in the eye, 1.4 billion population, you have a challenge
that requires a platform level change to happen.
Duo may have been a platform level change.
Policies of the platform level change the kind of governance
and administration. 1981 liberalization.
So I see that was a moment for people to don't know from
independence till roughly 91 India was they actually wrote
socialism into the constitution any like the socialist state of
India or something like that. And so of course, Fabian
socialism arguably was the second colonialism, right,
because Fabian socialism came from Riven.
And so it was something that kept India poor.
And it was, you know, all these NGOs were handing out arms like
the whole Mother Teresa thing is meant for country.
That's prostate, right? And like basically, you know,
it's not actually meant. It's investment is more
investment is real charity in a sense, because charity keeps
somebody dependent and investment makes them
independent, right? So charity, you know, like I
said, if you give a man a fish, you keep them independent.
But if you invest in their fish company, they might actually do
something, right? So until basically the late 80s,
early 90s, Europe or India was essentially socialist and you
have the license Raj, and it was impossible to do anything.
And talented Indians were just either like cat poor where they
left, right. And then 1991, because of the
crisis, you know, the Soviet Union fell and so on.
And socialism was clearly not the way to go.
India made the right turn. Now, by the way, that wasn't
guaranteed, like Cuba remain communist, North Korea being
communist, right? So is the right leadership who
saw the right opportunity at the right time and took the right
door. And India, it went at least
somewhat capitalist. Yeah.
And there's still a million criticism you can have like air
conditioning is taxed and it's by the way, if there's one thing
we should get all Indian VCR founders and so on, basically
repeal the tags, the luxury like the Indian air conditioning tax
of all the things. That's a very simple line item
thing to repeal will completely transform idea, right?
Yeah, the dog, you have a new thing where you could not, where
you cannot put your air conditioning to 19°C.
There's some something. Something stupid like this,
right? But, but at least that one is a
little harder to enforce or whatever, right?
The the AC tax though, is just, you know, Lee Kuan Yew knew air
conditioning was necessary, right?
It wasn't like an option in that like a sub, you know, like a
like a tropical kind of environment, right.
But why, why did I get on that right?
So Oh yeah, so after 91 capitalism hit India and started
to grow, right? For China, it was 1978.
So that's why China is in some metrics roughly about 10 years,
13 years ahead of India, roughly other metrics.
That's why we had other metrics. You'd argue it's even behind in
some metrics. But like, China's diaspora
doesn't do as well as India's diaspora.
China plays a better home game and India plays a better away
game and vice versa, I'd say, right?
But so that was the moment that India turned capitalist.
That's why India's actually rising now and I think over the
years to come. You know, China was always the
number 2 communism after the Soviet Union for, you know what,
decades. But then the Soviet Union made a
bunch of bad decisions and basically tried to ideologically
reform for economic reform. And then it just blew apart in
the late 80s, early 90s. And then China in a sense became
quote, the leading brand of communism, right?
Even if it doesn't export communism, even if it doesn't
think it's system is the ideal system, it became the leading
brand of communism and Vietnam and and others, you know, like
basically all look to China. Are we happy?
And now I think we're on the verge of something similar
happening in the Western world where the US and the Western
countries on like what they call democracy is going to
financially, socially, politically, physically
meltdown, right? The sovereign debt crisis is
going to hit. And I think that if India can
weather that, that it actually will keep in a sense the flame
of monarchy of life. It'll be like like China was the
number two that then became effectively the most
pragmatically run country. Whether it's actually quote,
communist or not, it preserves the name of communist, right?
So. India becomes, I think, the
world's leading democracy by the late twenty 30s, early twenty
40s or the thereabouts. I think really the Internet is
also a big part of that because the Internet allows us to do
cryptographic verifiable voting. It allows us to do, you know,
like votes where you cannot just, you know, your vote
counts, but you can count all the votes.
So the Internet also is a big part in kind of guarding, quote,
democracy because communism will be very strong.
Chinese communism think will be a lot of people will think
that's the way to do things after this sovereign debt
crisis. And I think it's going to
overcorrect in that direction and we'll have to have a
counterbalance to it. I don't know if you have any
thoughts on that. Just the fact that India can
count all the votes in a day, for example, not a small thing.
It's like in detail though, that shows that operationally it's
actually able to do that and it's somehow on net, it's
working within India. Yeah, I was there.
Yeah, I think so. I mean back to your point, I'm
going to more to do about the potential that India has been
realized in the potential that was latent.
I I do think some of these big ships happen when big bets are
taken and some of these some of these big bets can be taken by
large alumni rates and lot governments and policies and all
that. And I think that's what's begin
to show some promise and results in India.
And the kind of stuff you see in India different from 20 years
ago is this is over by and because the government and, you
know, the globalists have done well, it is creating a sense of
optimism and is becoming a Petri dish where ambition and risk
taking can survive and thrust. 20 years ago when I was in
college, if we were to start a company and on a parole, on a
parole, you would not get married.
Now, if you're on Tinder, I think if you're a founder, you
get all updates is what I hear. So that control shift, I think
allows ambition and it doesn't tap it down that he says, yeah,
you could do this and, you know, go on that journey and there are
people who back you and if you come back failed, you're not
gonna be a joke and all right, simply get packed on the back in
a bar so that the. Failure tolerance.
A cultural shift is apparent. Yeah.
As opposed to only taking the safe job of engineer doctor.
I mean, of course, being an entrepreneur is a kind of
engineer, but yes. Correct.
So now I think that that that Petri dish is somewhat ready.
It's still take a decade plus, multiple decades perhaps to get
it ready to. That will be what we need.
But now I think we are starting to see ambition and risk taking
happen, get back and then get results.
And we're probably in the first cycle of that.
And I could argue the first cycle was 20134014.
And now it's like showing up in public markets in India.
Where good companies you just hung out with Beanie Bonsil
Flipkart, right. And so we put up a clip use
from, you know, a friend of both of ours, he's on the pod before
and basically the, you know, he, he was the first large exit in
India, right, $18 billion for for Flipkart and kind of showed
it was possible, right. And you know, now, you know, one
thought you have a thesis and why don't we get to Indian tech
for a second? You have a thesis on Indian
tech. I have a thesis.
I'd like to hear yours and I'll give you mine.
Yeah, yeah. Thesis on India tech.
That was a broad question. Yes, thesis on India tech.
Should I give? You mine in the group first?
Yeah, Yeah. So.
My view is that India itself is a market, yes, but it's I'm
actually morched in India for the producer side than the
consumer side that say I'm morched in India as a source of
talent for engineering, for finance, for media, for
basically Internet first. Basically all of the you know,
AI is amazing, but AI needs prompting and it means verifying
that's actually the new bottleneck, right?
Because the prompting is actually writing programs in a
higher language. You have to be verbal enough,
you know, to to be able to do that.
So I'll say Indians winning, selling beasts as a so you heard
it right. So you have to you have to be
able to know all kinds of crazy vocabulary terms actually, like
for example, art history is now an applied subject.
You know why? Because if you can say Cezanne
or Picasso or something like that, then you can invoke that
as a library call when you're using using AI up, right.
And so every subject, the more vocabulary and not just
vocabulary, the more terms concepts, because using them
correctly, you can prompt it better, you get a better result.
And then verifying it is if you have expertise in there.
So yeah, it doesn't take things away, but take jobs away.
But what it does do is it shifts them to people who will have
time to do prompting and verifying.
And sorry to reject you back. I don't know if you saw that
recent video by Karpati where he kind of does this analysis of
get up code. Yeah, and more and more now they
get up. Repositories have English
embedded in the code, because now the code itself is becoming
natural. Language for more, yes.
Similar board dense. So back to your point about
yeah. That's right.
And exactly like prompting programming, assembly, like, you
know, right, and, and India is good in English, or at least a
lot of Indians come to English. And it's in some ways, depending
on the numbers, you can argue India has already actually
become the number one source of English speakers on the
Internet, right over the US, which used to be at the default,
right. And I think as more and more
Indians acculturate to English, that will become completely true
by 2035 or 2040 or thereabouts, right?
Because they can learn languages quickly around.
So my view is like, if we're sitting on this chair, this
chair doesn't feel like a Chinese chair, right?
It may be made in China, but it doesn't feel like a Chinese
chair in the same way, I think like what is a thesis for Indian
Internet entrepreneurs? They'll build software that's
just globally competitive software that happens to be made
by an Indian or even in India. But it is Internet first.
It's not India first per SE, It's Internet first.
It's almost a little bit like Europeans who if they're in a
small country in Europe, they have to actually think Internet
first if they're an entrepreneur because the whole market is just
not not big enough. And so like the translation has
to be there from the beginning and you know, they have to be
intranet first. That's got its problems because
that's a tax if compliance and stuff you have to do, but it's
got its benefits because you have a holistic view on the
world, right? And so like, you know, build in
India or build by India and sell to the Internet.
That's the kind of business I'm interested in investing in,
which is an Internet first business that happens to be
founded by Indians. Now, of course, sometimes it may
turn out that something like Olaf, for example, is
necessarily got a very local and geographical component, right?
Some businesses will be built which are, you know, necessarily
going to be domain or Geo lock and you have to start there.
And I'm not saying India is a pretty big market.
You can definitely get to a pretty large market over there,
but I do think Internet first is the way to go.
And I think crypto is going to help with that a lot because it
means global rule of code, right?
So an Indian may be a second class citizen in America where
you know, H1 BS and so on, sort of becoming much more attacked
and so on in the US. And they're, they're basically,
they haven't eliminated them, but they made them so much more
of a pain in terms of forcing people to go back every year
rather than every few years and making the renewals more longer
and uncertain. That's not a small issue.
That's a big issue because it means you can't, first of all,
just the fact people may not know this, but as an H1B, you
have to periodically go back to India, wait for a council
appointment, then come back. Now, if you're just working at a
job, this is like, OK, I need to pause.
I need to take an international flight.
I need to wait for an uncertain duration and then come back.
And that that is a pain, even if it's like a day on both sides.
If it is an uncertain multiple month thing over here, you can
easily just lose your job in the US.
It makes hiring an H1B something where the bureaucratic overhead
means you wouldn't do it. Right.
So their point is to make it their goal is to make it
disadvantaged enough for the program still exists in neem,
but not in substance, right. So as that door closes, and I
don't think that Indians should go to American.
I think if you're it's just like a big not welcome sign is being
put there. If you're ACEO, the much of the
American left hates you. And if you're an Indian
immigrant, A Guchenko American right hates you.
So just listen, you know, to the the signals there, right?
And just don't go to America anymore.
And it's true for many other countries as well.
Like even German tourists are getting strip searched and what
happy, right? America does not want immigrant
entrepreneurs to come there anymore.
It just doesn't right. So where do they go instead?
Somewhere else, right? And so we have network school,
you know, we've opened that. There's Dubai, there's tons of
other countries that have digital nomad programs.
And of course, there's India itself.
And finally there's the Internet, right?
Which you can be on from anywhere, you can be a digital
nomad, right? And I think that shift, I'm
starting to see that shift. Somebody posted the other day
that like there was two really great entrepreneurs that just
chose to, you know, not take their US offers, just, you know,
stay in India instead. And I'd love to hear your, or go
to Dubai or go to Singapore, go to something like NS and so on
and so forth. I'd love to hear your thoughts
on that. Yeah, that's what I grew.
Agree. How hard you get back.
I came back. Yeah, over to you.
And you're an early adopter or? Yeah, that's right.
Yeah, I came back before it was. I mean, yeah, but there were a
couple of waves in India that people have returned to.
I1 was in 2010 I think 29/20/10 1910 and the next one probably
began around the time I moved back for Bell but mine was not
really in late there just moved back to I want to move back but
I do remember how hard it was to get my H1V standby.
Got stuck in Mexico in a place called Matamoros for six days to
get my visa appointment and it just kept getting delayed and
that place was literally bombed out.
It'd be before because people had stayed and hidden there,
drug dealer than hidden there. So the Mexican police had
literally had to bomb them out. So the far of the hotel was
actually a big circle or hole in there as we were living there.
Anyway, that was an interesting time.
But yeah, it is getting harder and harder to stay in the US or
enter the US. And we're all about thinking
about the five and 10 year and 15 year horizon, right?
So you make investments, see, you think about where the world
is going to be in 10 years, correct?
Is America going to be more or less welcoming to immigrant
entrepreneurs in 10 years? I think it's going to be much
less welcoming. Much less what?
That's what about here. I have friends.
What? You mean worse than today?
Yeah, worse, right? Yeah.
So if it just is getting worse, you never want to bet on a curve
that's going like this. You want to bet on a curve
that's going like this? Yeah, it is.
It is much harder now. My friends that are living in
the US 10-15 years are afraid to come back to near to see family
because they feel like when they go back to the US or
legitimately stand back for B, they will be stopped at the
border. And so I think it is getting.
I was surprisingly back. I was quite shocked to hear that
just a couple of months back, and that was.
In the US it's also The thing is just the randomness of it deters
a trip. Yeah, right, right.
Because if you have a 10%, like you're spending money on this
plane flight, on this hotel, all this kind of stuff, and then you
can be just randomly stopped at the border.
Why? It's almost like an investment.
Why'd you make an investment or can randomly go to 0, right?
Why'd you have a conference in America, like a tech conference
if you can't have international guests, right?
Tech is an international thing. You wouldn't base it there,
right? Yeah.
So it has lots of knock on effects.
Yeah, I mean, the the debasing of the institutionalization of
our institutional, our houses of the US is quite and it's quite
sad to see because I kind of really benefited from it and it
was probably one of the things that made it a superpower to
begin with. So, yeah, I think it's sad to
see. And I don't know the trend line
is ever going to reverse, but it seems to be accelerating and
going downwards. Yes, yeah.
Now coming back to your question on India and tech thesis on
India, I mean, it's a hard question for me to answer
because like at the end of the day, we are in the people
business and a lot in the business of predicting what
future needs to exist. That was the business of this
understanding the motivations and intentions of a founder
that's trying to create a future of certain kind.
And you know as any, you know as well as anybody else, they are
primarily the people business. So my intention is to keep the
best people in India, stay in India and build in India or even
the best people from around the world to move them back to India
somehow. That's why primary interest.
Interesting. OK.
So now what's interesting about India?
Do you only fund Arthur's in India?
Itself, there has to be some connection to it from the India
fund. We we have the back
entrepreneurs from Southeast Asia and India.
OK, got it from a viewable fund. You know, different, different
regions are different funds for us.
So what is interesting what India, I think you was you
mentioned this earlier biology that India actually lives in the
cloud a lot more because it's much cheaper for us to go live
in the cloud than any other country.
Everybody literally lives in the cloud and India has all free
time and they watch the same movies as the Americans do and
they play the same games as, you know, all around the world.
And you know, they are all sitting on Reddit and shit
posting everywhere. They're on Twitter and all that
stuff is happening. So the more unplugged you become
from the physical infrastructure, the more plugged
in you are. The digital infrastructure, that
is a very fundable thing that you can move people around with.
So they are much more at home because they speak English.
They are culturally, you know, easy to assimilate in any other
culture and they can move around.
So what you might be seeing, and I would love to hear how you're
seeing in that school. I think you began with the idea
that you can literally put together a set of people that
believe in a similar vision, that have similar culture.
And the culture is not regional related.
It's more about a digital culture that exists in the
clouds and sorts. You can institutionalized that
and create a movement around it. And I think Indians are actually
a really strong and a great perfect fit for this new world
that is emerging, which is going to be this network state of
sorts where the other the other native citizens already.
Yes. And they will have the least
friction to get a passport and get citizenship in this new
world that you are creating. And comparing me with that, by
the way, is it's a little bit like people understand Fiat
currency and cryptocurrency now that there's like an Internet
native version, there's a land native version.
And I think the next step, which we've kind of altered in the
middle of is Fiat identity and crypto identity, because for
example, your Google login, right, is in a sense a digital
identity, right? A very important one, in fact,
right. Your, your crypto wallet is
another one. Your pass card to your, you
know, hotel room, your Tesla, you know, digital lock that
opens it with the use of phone app and your two FA right.
All of these kinds of things are pieces of digital identity that
eventually I think will get consolidated into like
effectively A crypto passport, digital passport that gets you
into online and offline property seamlessly, right.
And India's part of the way there with author and other
things, right? Like that actually can log into
online services, but it also gets you offline, right?
Yeah. And they have what's the thing
at airports where it's just like face recognition, you get a lot
of. Digi Outro.
Yeah, Digi Outro, does that work?
Yeah, that works beautifully. Yeah, I don't have to carry my.
It's. Not talking about it so digital
entity that you know it's essentially scans your face at
the airports and then now you are you know you are in the
system and then you don't have to carry your passport for
international travel. You still have to but domestic
travel you are to carry any NDD for proof.
So what do you do is you just stand in front of the screen and
then it takes your it scans your face and you are the door open.
Then you you get into the airport and used to be you know
a few years back and still is there for majority of the
airports in India. You're for sure and you take
your wallet out and you carry if you forget your I need a card,
then you got to go back home and pick it up.
And today I don't really carry anything to be card with me.
I think don't really carry my what I do really remember
carrying my wallet when I'm in Singapore right now or the US
and I tend to forget. You don't need a credit card,
debit card. We saw digital UPI and QR code
base. You don't need to carry a ready
card. I have this thing called digit
locker which keeps my duty and it's a legal as a legal way to
show your needy to people. You cannot be denied entry if
you show that and so on and so forth.
So now when you combine this digitally native cloud native, a
population of, you know, very, very young people, really
hungry, really ambitious and you combine that with the
infrastructure the government is providing recommend them with
the venture money that is didn't take risks with really young and
unproven founder. And also pretty capital
efficient there. Very capital efficient.
Then you get this. That's where the future of India
is. And on top of that you have this
fast growing mini floss with higher and higher disposable
income. And frankly India has obviously
multiple parts. That is a really, really rich
part of India has very high per capital GDP.
There is this middle part that behaves differently and there is
a bottom. That bottom is really quickly
coming out of poverty and below poverty line.
It's coming out of poverty, some disposable income and then they
are already you know we are spying to be somewhere the one
or the middle. What does that mean?
What it means is they want to go take, you know, take their
girlfriends and boyfriends to a movie once in a month.
Once in six months, great. Take them out to a lunch or
dinner in a small restaurant. Consumption is starting to
increase, yeah. Yeah, if you look at the number
of iPhones India buys a real, it's quite massive,
surprisingly, a state that's another.
Important stat that I was surprised at seeing recently.
India's risen from 1% to 20% of iPhone manufacturing.
Yeah, which is, again, it's like it's rare that something keeps
surprising me to the upside. Yeah.
You know, like I said, like governments, things tend to, you
know, somebody said something like India.
Disappoints about the pessimists and optimists yes, that could be
right. That's that's true true.
It's true for, it's been true for India for the longest time
and probably don't be true forever.
But that, that's what's interesting about India.
Now, why is that happening? Look, 1020 years ago, my parents
really saved up their entire savings to buy a house or for
somebody's marriage, or they would buy gold or they would buy
a vehicle. India, the new India, doesn't
care about that. Nobody wants to buy a house.
The kids don't want to buy a house.
Interesting. Physically don't.
They don't care. They don't want to have
possessions. They want to rent.
Yeah, now to where gold in public is tacky for the young
people. So they don't want want to buy
gold and keep it in their locker.
So where the money go? They don't want to buy a vehicle
because they want to just take Ubers everywhere.
Like oh so they are Internet first, they leave projects.
Yeah, they really, Yeah, they want to have, they want to plug
in, plug out of infrastructures, banking infrastructure, you
know, vehicle infrastructure. So it's a.
Lifestyle of sort of the San Francisco tech guy is actually
the default lifestyle. I'll get a much lower price
point. But actually comparable quality,
honestly, it's like maybe 10 or 100 X in some cases cheaper than
California, but it's comparable or better quality in many cases
like food delivery, like Uber, all that all that stuff exists,
right. You know you can you can be
completely productive with great coffee, MacBook Air
conditioning, everything there. And, and it's not like like
super expensive or anything. It's like accessible to a very
large number of people. Yeah.
And you can. Get all of this stuff in 10
minutes in the big cities, yeah. And pretty soon in the K2K2
cities in 10 minutes. Yeah, because economics doesn't
work out. Now, the one thing I will say is
when people go to India, they they'll find places and there
are plenty of places that are still, you know, filthy or, you
know, those like terrible streets and something like that.
And that's absolutely true. And we have actually started to
express it is. India's like California in
reverse. And what I mean by that is
California is fractally getting worse, right?
So everything that's old is like beautiful and it's got like
amazing, you know, Spanish roof architecture or its speeches.
But everything new is like in California, it's like a homeless
encampment. It's like a burn downtown.
It's like a way most set on fire or something like that.
It's like the new stuff is bad. Most of the buildings that are
new are bad because they're not buildings.
They're destroying us really, right?
And in India, it's opposite, the older it is, with some
exceptions like the Taj Mahal, which are really, really old,
right? But in general, the older stuff
is like, it's like a slum or it's like a, you know, bad St.
Though poverty is radically reduced in India.
Like the rate of extreme poverty is dropped off a lot, right?
So it's like, you know, it's like a messy street or
something, but the new stuff, it's like a shiny new Apple
store or it's a, it's a new restaurant or something like
that. And, and, and importantly, a lot
of the people are very especially English speakers and
of course not already speaks English.
And so it's sort of, but a lot of people do are very okra with
Internet memes. You know, they're like, they're
extremely conversant with everything that's happened in
the English Internet, right? And so that's surprising to
people if if they haven't had, you know, time to, they may, you
know, because people type without an accent.
Yeah, right. You type with an accent and it's
their complete conversant in written English.
And it is like a slight accent in within India.
But even then, like, you know, because Indians learn languages
recently fast. So it's fractally getting
better. That's kind of how I think about
it. Let me know.
Yeah, and there's that because. You've also lived in California
and India for. Absolutely.
I think in India you can. You can visit three to four
countries in a day if you wanted to go to Mumbai.
You can Tier 1, Tier 2, Tier 3. Yeah, talk about that.
Pretty much, right? So you go to.
As I can all shaws, I think. Formulation, yeah.
I think he mentioned that perhaps and then our friends at
Bloom Ventures and I mentioned that in his recent, I think it
was last year, a couple of years back in his publication.
He does a really good job on that.
That's called Indus Valley Files and I think he's, he's got this
really, really interesting observation that, you know, in a
single day, I don't know whether he said this or not, but it's a
minor reputation of it. You can a single day.
You can if you go to Mumbai or Bangalore, or you can land in a
in a airport that looks like a seven star hotel drive on a
highway that looks like absolutely brand new and flowers
and trees on both sides and feels like you've come to
Singapore. So you've landed in Singapore.
You can then reach a city that feels like Mexico in the middle
of a sweaty afternoon. And then you could you could
pass by something that looks like a Brazilian Fugela.
I probably I'll find it a bunch of big countries in a single
statement because that's interesting.
In India, this is what you know, there is a pocket of massive
improvement and there is middle, the messy middle, and there is a
yeah. But if we look at the graph over
time and like, so there was a tweet on Indian infrastructure
that I put up that actually Prime Minister Modi retweeted
that show the like, you know, for example, illumination, like
lights or highways or, you know, plumbing, all this stuff just
radically improving. Absolutely.
And your cycle, it's completely different, yes.
So can your cycle, the connectivity, the electricity,
you know, consumption. If you look in those graph, you
look at the road network that you put this up, I remember
seeing that a train network, the flight networks, the airport
infrastructure, we're looking at 10 to 15 year graph.
It looks like it's erratic in different country.
Yes. And you can still go, you can
find whatever you want to find. In India, the optimist will go
find the Singapore. In India, the pessimists are
going to go find something. Else, yes, well, but the
pessimists have, if you look at the graph over time, it is, it
is very hard to be pessimistic on it, right.
And that, that I think is unless you're calibrated on the trend
line, right. It's kind of like people can
take a beautiful photo. There's still beautiful areas in
California. But the trend line from, you
know, because I was there almost 25 years, right?
From 1997 to 20/20/2019, so 22 years, something like that,
right? The trend line was just
definitely like it hadn't yet hit zero.
But Ann, how old are you there? You were there from 15 years, 15
years, so 2320, eighteen, right? So you definitely saw it towards
the end. It was like much, much, much
filthier. It's different work, right?
So it's funny because we're in a time where I think previously
these sort of civilizational level changes happened over
decades, but other happening over years.
Yeah. Or they're they happened over
centuries and other happening over decades.
You know, the rate of change is so ridiculously fast.
And we can quantify that actually.
Like have we seen the graph of, for example, I think it was
whether it was Internet adoption or actually, no, it was
e-commerce. E-commerce spend had been
growing as a percentage of total spend X percent a year until
COVID and then it actually literally increased 10X in a
year, right? So that's like the the Lenin
thing, like there's years where decades happen.
That actually was a year where a decade happened where the rate
of change just went like that, right?
Things that people have known were happening just went
vertical like this. Now COVID in India actually, I
mean, interesting macro thing, COVID in America after that,
like the site is just felt worse off.
Like people say, people often post about this, like
maintenance quality has dropped off, you know, polarization is
increasing even further service quality.
Like you know, it's, it's like everything in terms of
maintenance, all that stuff is kind of broken down.
And whereas in China, for example, somebody went there and
they said post COVID and you know, China was really ruthless
during COVID. They locked up on rooms and so
on. But they also a lot of the
things that people used to do in China, like, you know, spitting
on the street and stuff like that, like a lot of that is
actually dramatically being curtailed.
And China feels more Japanese, like there's a greater degree of
public, you know, cleanliness and some sort of perhaps as that
the system got pushed into a new state as a function of COVID.
And I actually think India on balance, because of the
internetification on balance, it actually feels stronger after
COVID, like the sites come together more and so it's over.
I don't know if you have any thoughts on that.
Yeah, as a funny tweet somebody put out a few days back that the
world has not been the same since somebody ate a bat.
Yeah, so. It actually appears to have come
out of the wet lab as more than one.
Well, OK, yeah. Yeah, because there's enough
data on the NIH funding of on the COVID, you know, like the
COVID-19 labs that it's more than incidental.
There's too many different connections for it to be I
think. Too instructive?
Yeah, I could. Go through all the genetics of
it, but it looks it looks positive.
So yeah, I think look, India and COVID was brutal time and it's
very hard to compare which country had the worst of it.
India suddenly didn't do well and the first wave was fine.
The second wave was brutal. People did come together quite
nicely the society, which was really great to see.
Many of us. And I remember like being part
of a lot of this COVID drives in the line.
We would call off hospital and figured out the bends and I
think, yeah, it was a tough time.
It does feel like it did not change society in a way that you
could pinpoint pre and post and say we are a different world
now, like what you're saying with China or perhaps, you know,
the US. It doesn't feel like it's very
different. So I think we did come away not
getting too deeply impacted culturally or economically or
recovery. It could be because India by
itself is a little bit conservative across, you know,
pistol policy and monetary policies.
So we kind. Of soon do the big big print in
the same. Way we didn't do the same thing
that we did and and the healthcare infrastructure, you
know, it's not as massive as it is in China, but it, you know,
it gets the job done. You know, and you did have its
own vaccine. You did have your own vaccine,
and I took the Iranian vaccine, not the Pfizer one.
And and, you know, felt like, you know, I think we came out of
it OK. Yeah, I'm glad.
I'm glad to see that it didn't lead to a lot of like the
demonetization wave made sure that people don't really care
about carrying money anymore. I think it did lead to a lot of
the digitization of services, you know, that one company, you
know, like you could get people to cover your house and clean up
and you know, you could get, you know, quick commerce picked up
during that time and of all kinds of things.
And I caught COVID in the US and it was so hard to get medicines
delivered to you. You just couldn't get medicines
delivered to you. COVID and any IE just comes to
your doorstep, even doing COVID, you will come to your toaster.
So I think those things start to get adopted.
And one of the funny things that happens during COVID is, you
know, even grandparents were were had to learn all the stuff
because many times they were living by themselves or if their
kids were, you know, then they had to take care of them.
They learned how to how to use digital services at 7080 years
of age. So it led to this mass coaching
of the entire country to learn to take classes online, to
transact online, to get services online and so on and so forth.
So I think that led to a behavior that has stuck around a
lot, lot, lot more. So on the whole things like it
did accelerate our digitization journey, which is already kind
of really getting there, but it's really accelerated.
I think the digital part is what really accelerated after that.
I think if if you looked at a few graphs so society is at
least the same if not there, but really doesn't seem to be badly
correct. No the digital part radically.
Improved and we have a much younger population so.
It was like a big deal. That's right.
So going to hit this hard. That's.
And it did. Frankly, that's a.
Good point. Actually the demographic aspect
of it is under appreciated. Yeah, yeah.
And and frankly, here doesn't listen like it is don't listen
right. It wasn't like people are still
walking around and getting beaten up by the police like a
bunch of funny tweets coming out and but people just began to
mingle like in other countries, people protesting against during
So part of it was India are both docile and don't listen and
severe operation and tell people to wear a mask and many people
lose as well. So that was good.
And then sometimes people just don't care just mingle around
anyway. And both of it kind of worked
out in a way that the country came out of it OK.
It was quite weird to see. Interesting.
So OK, let's see other things. I mean you basically you left in
2018 for India and so and when did you, when did you come, when
did you come back to India? When I come back to India.
You came back in like January. 20 No, I came back in August the
2018. OK.
So it's only a year and a half before.
COVID yeah, yeah, yeah. So then, yeah.
And So what was the like the venture environment at the time
was, I mean, 2021 just talking about that for a second, right?
A lot of deals that got done in 2021 in the US had this giant, I
mean, like markets are just going like bananas at that time.
Valuations are out of control, all kinds of stuff.
And then, you know, inflation obviously went vertical towards
the end. And finally they acknowledged it
was doing so. And then they had to hike rates
and not had to. I actually think both the
printing and the hiking were both disastrous policies, but
they felt they had to do fine. How did that like?
To what extent was India's economy also connected to like
the Western gyrations of of markets versus how much was it
kind of its own thing? Not very, not very much.
Yeah. So if you look at the, if you
kind of go back and maybe you can show that in 2020 and the,
and the COVID shock happened, the market's going to drop in
the US by what 2030% or less few months.
And India was probably more like 78%.
So the shock because the first rate wasn't?
As bad in India? Yeah.
Also Vietnam is as connected to the US stock market, you know,
as perhaps other countries might be.
So, so the shock was there, but it was it was less and and then
it just continued on. So yeah, on the venture side,
there was a massive gold rush even in India like seat drowns
were getting done, you know, 20-30 post money and the six
months ago they were happening at 10 and 15 post money.
So really double all night. See these days were happening
102 hundred post money, half $1,000,000 of revenue,
especially in SAS. So SAS category kind of really
blew up massively India and majority of these that happened
there were probably SAS and software can deals.
And so the snap, the snap up into COVID frenzy, lots and lots
of capital went into different companies.
I think at that, maybe don't quote me on this, but about 30
to $40 billion of capital went into India across early maiden
grow. What's funny is that's a large
amount for BC, but it's a small amount in the grand scheme of
things. You know, like because so many
hundreds of billions a dollar. But yes, this is a big jump for
BC. Cool chunk of money and for why
you were the world's second largest full of venture capital
going into the market and China was sort of 4th at the time.
So I think now we've kind of stabilized in the snapback out
of COVID is also very brutal. Many companies, you know, going
into COVID, especially if they're offline, really struggle
and then they use the time, the good ones, the good management
teams use the time to really, you know, get leaner and get
more hungry and powerful on the way out of COVID.
All the companies they were building into the COVID way,
what people used to call pandemic market fit, they also
lost that and lost a lot of capital and you know, kind of
lost the thesis and they eventually died.
So that all, all that happened in India in two years and I had
a few of my companies blow up to a billion dollar and then blow
down to 0 gain in like 2 years time.
It was crazy at the same time crypto it was happening and you
probably know this and then tons of tons of companies and then
NFTV was picking up. It was it was a frenzy, feeding
frenzy and the, you know, D5 was picking up and the selling lot
for you in India. So we saw a lot of that lots and
lots of gold rushes all happening simultaneously and it
was really hard to keep this straight ahead and figured out
what kind of entrepreneur you want to back and what kind of
companies and wage you want to back and what we'll sustainable
and lock. So we'll be looking at the best
we could have the most investors around the world struggle with
that period. We'll see what that vintage
looks like in the next 10 years, but it'll be challenging if
you've been a bit, you know, more indiscriminating deploying
capital within that time and didn't care about valuation and
resume the but there were days of stay and I think they, you
know, lose a lot of money. Yeah, interesting.
I think, I think in general the the one thing that is good about
those boot times is, you know the Carlo Perez thing that we
talked about a lot of these. Is he going to talk about that?
Go. Ahead, right?
He's good, yeah. It's like in a sensethe.com
bubble was a global search to find Google and Amazon, right?
So all the capital that went into it, if it, it did more than
that, but if it just did those two, you can also add Netscape
and a few other things, right? Which obviously Netscape's very
important. It adjusted that it's worth it,
right? Like all the cap, right?
And so if that 3040 bill, if it generates $1 trillion company,
even $100 billion company, you can argue it's worth it, right?
And and it probably will probably will do do quite a few
like, you know, you didn't, I think I don't know, of course
you responded in that, but that'll probably be there,
right? So and you know, it's because
The thing is that entrepreneurship is hard and
rare. And so you kind of need to take
the whole thing and, you know, toss it on the table.
Another example is you remember the chat bots boom of the mid
twenty 10s, Is it rather the time of Tay and Microsoft and so
and so there's like. 2015 ish 26 and like floor type stuff like a
like a programmatic do this step one step if else check yes, yes,
that's right and. And there was Microsoft Tay,
which was like an R like AB0 AI chat bot.
And I remember seeing all that and I remember, I'm not sure if
I wrote it as an AC and Z memo or something, but I remember
writing something like for people to make this work, what
they're actually what they really want, as people are
talking about with chatbots, I'm like, what they're asking for is
iterated Google. Like what they want, and it's
full generality is to say something in natural language,
get back a response that uses the entire Internet to make the
response, and then do another query, right?
That is iterated Google. So if you can do that, of
course, it's amazing. It's more valuable than Google,
but that's the scale. The problem we're talking about
is like beef Google, right? And I remember writing that and
that's actually what happened. Like ChatGPT has actually
iterated Google and it's actually better than Google has
actually taken share away from Google.
That was the scale of the challenge.
And actually, Greg Brockman actually got interested in AI
because in part of the chatbot boom, he's written about that,
right? So in a sense, all the capital
that went into that, if all it did was get Brock and then
interested in chat bots, it paid for itself.
Yeah, Right. So that is like a really right
tail way of thinking about some of these bubbles or what have
you know. Crazy how powerful the power law
is. Yeah, exactly.
Or actually DACA bubble when also it is did PayPal, right.
So it did Netscape, it did PayPal, it did Epinions, which
novel, you know, Ebid's a real company, but you know, it, it it
did Google, it did Amazon, right?
So PayPal gave Teal and then LinkedIn and everything else
from that, right. And YouTube and blah, blah.
Then there's Google. So.
So just that search for those entrepreneurs was kind of worth
it. Yeah, that's right.
And that's so funny because that's not the way that people
normally think about it. They want to score every
investment independently. And of course that's worth worth
doing, but it's sort of like no bubble actually goes to waste in
the long run. I shouldn't say no bubble, but
you know what I mean. Many of these ostensible bubbles
actually are search function which actually paid dividends in
five or ten years. So man, we.
Had a look at it. Yeah, I, I agree.
I think if, frankly, if I were to redesign the venture world, I
would sort of say it's going to become if she were a lot more
bimodal, where the extreme right of these absolute dual shots,
you know, no shot in hand working.
But if it does work, it's like, you know, you cure cancer.
Yeah, do a lot of stuff on the extreme left is, I don't know,
roll up companies, guaranteed performance, but you know, 15%
coupon year over year and everything in the middle may not
be as interesting. That's one way to think about
that. That's interesting.
I mean, The thing is I think it's hard to do the left hand
side company nowadays. It is very hard.
And the reason I think it is hard to do that is like the
argument, you know for example the the so-called lifestyle
business argument that 37 signals made for a long time.
The problem I always have with that is if you don't intend to
scale a business, then you intend to run the business for
the rest of your life. So the lifestyle business is
actually the rest of your life. Whereas it's actually easier to
build a business that is a gigantic thing because then you
can sell a piece of it at some point.
Unless, and yeah, sometimes it's a project you do want to run for
the rest of your life, right? But unless you want to run it
for the rest of your life, you want to actually build it as a
company that you might be able to sell and then do something
else in life. If you want to do something else
in life. Number 2 is a lifestyle business
is not necessarily more competitive in the market than a
scaled business. Because it is attracting almost
definitionally less ambitious people, right?
That's the bigger problem. I say that's right.
And so the ambitious people who want to conquer the world will
optimize the heck out of every screen and every flow and so and
so forth. And Even so we think of as you
know, simple like a like AI don't know nowadays people
because something is easy to them.
They sometimes, unless they're experienced, they think it's
easy to build like WhatsApp or Discord.
You don't necessarily feel like you're doing something very
sophisticated when you're using it.
You're just typing in some chat stuff to somebody on the other
side. It seems basic.
When you want to implement it and actually make it work at the
scale that it works, it's actually quite challenging.
I thought quite hard, but just video uploading from, I don't
know, Brazil and having it viewed in India and America and
Japan all at the same time seamlessly with replies coming
back and you know, deliver at least one semantics and 500
other kinds of things. It's hard, right.
So the the lifestyle business kind of thing isn't thinking
about Polish. I think I was right.
So that's my my counter argument is I'm not sure the low risk
business exists as much. You know, you're right.
Low local capital, though, to edit what you're saying to, to
let me, let me let me take part of what you're saying, which I
do agree with. I think the small business
exists. The small business with a few
people that with AI and with crypto and with interest rate
distribution can do really well. Like telegrams, only 30 people,
right? And WhatsApp is only 55.
Instagram. This thing was only about sub 20
people. That business definitely exists
and that business will continue to exist.
So it's just an edit on what you're saying.
Perhaps not low risk, but low. Capital, yeah.
And then I guess the thesis that some people have and I don't
know how it's going to play out, but you're absolutely right.
I think what you're saying is court and code, you put 10B plus
people and put them together, they could be 10 companies, less
ambition, less finesse or whatever.
The combination becomes AC minus automatically.
It doesn't become 10B plus. There's not even stay B plus
anymore. It's become less exactly.
But I, I totally get that. I think what I think you're also
right that if the job of a business is to suck in $1.00 and
and you know, spit out $3 through productivity gains and
high margin work or high value add.
But they are maybe you suck in half a dollar and come out with
five and maybe possible because all this sprinkle magic of
productivity and quality and scalability now finally gets
sold with AI. So instead of 1 coming out with
four, you have half coming out with five.
And we'll see. I think it's, it's, it's, it's
showing promise at small scale. The challenge is that when you
add 1020 of these .5, you know, capital suckers and will 50 come
out of the other end? We'll see.
That's good. Yeah.
I mean, the big thing about AI is, I mean, there's a lot of big
things, but the fact that it has scalability and consistency and
low price, even if it does make errors, is still so insanely
valuable because you are just hyper deflating the cost of the
legal console from a lot of, you know, from a lot of people.
So yeah, I think I don't. Know and you have a lot more
resilient you know what happens today if you're building these
some of these old school businesses you are more people
heavy. So then if you don't control
demand with small businesses don't have a lot of control on?
Actually just go ahead and say I'll say sorry.
So you have a fixed cost, you have people sitting on the bench
and there's nothing to do, you know, figuratively speaking.
But with AI and if you have agents doing the job and what
one point they'll be able to do pretty much end to end of a
variety of things. OK.
I'll come back to OK here. And then what happens is you can
then you can just purely focus on scaling demand because supply
can scale infinitely with demand.
So you shift your fixed cost into an operating cost, you lose
operating leverage, but you are essentially scaling a business
with exact same, a reputable, scalable, predictable cash flow
profile. You know, the moment you get 10X
demand, you can copy paste 10X agents with the same quality of
service and the cost will become variable because now you're
paying more for infrastructure for 10 times more agents.
But you are essentially in lock step with demand.
The demand goes out, the customer says you're not good,
I'm gone. You can kill the agents and
you're, you're back to lock step with the demand.
So your revenue and margin profile stays pretty much in
lock step. You're but but you are a lot
more resilient through the cycles and which is important
for a small business. Large businesses always need
control over the stuff. That's what we're starting to
see now happen because of Yeah, please.
Yeah. So I think the only part I may
discreetly on that is the end to end part.
I think it depends on the task. So if it's a robot placing
things, that is something where the verifying of whether it's
placed is easy. But many other tasks it's
actually it's actually middle to middle so you will have to
prompt it and you have to verify it.
I see. But AI is mil to mil and then
you take care of the. Ants you do then you can't scale
that what you say. Yes, it's a the not so basically
all the depending on how much the middle part takes in any
process, the part after prompting and before verifying
that now compresses to prompting and verifying.
But it means, for example, as a coder you have to specify and
then you have to review the code at the other end and then
integrate it, right. And that's like the job of an
engineering manager is actually higher skill than job than
somebody who's an engineer. And so I'm not saying it's not a
productivity winner, It is, but it is amplified intelligence in
many ways rather than artificially eugenic artificial
intelligence, right. So the smarter you are, the
smarter it is. But I will give one analogy
you're going. To say something, I was saying
that that verify prompt to verify loop.
I think it's a shifting window where things you have verified
prompt to verify enough times we get auto verify and auto
confidence. So the question, I mean in the
last 2 1/2 years of AI since chat, the chat shift team
moment, I don't feel that's true yet.
Of recording it's bidding to be true well I.
I don't think, I think the verifying part is still hard
because actually I learn to be more precise on the front end
for images and for video and for for front end code that you can
verify with a different thing, which is you verify with the GP
us from your eye for your brain. You can instantly see something
is wrong because it's like 2 hands or it's got a messed up
button or something like that. So that's where verifying is
cheap. Put on the back end for logic,
for database code, for crypto code, security code.
That is actually where verifying is expensive.
Maybe we can turn it into something which is visual.
And so you can visualize almost like, for example, an audio
file, you can turn into a spectrogram and you can see if
there's some giant spikes of amplitude and that looks broken.
You can quickly see it with your eye, but you can't quickly
listen with your ear, right? So it's possible we might be
able to, for example, generate some visualization of the code
so you can quickly visually verify it.
So that generation itself has to be deterministic code rather
than probabilistic. But that's why I divide.
I'd say the front end stuff, the images, videos, that's what AI
is amazing for because the verifying is cheap and but but
the back end code verifying is expensive, which is a non
obvious division. I think that, I don't think I
tweeted about that, but I don't think people have made exactly
that division. And give another analogy, which
is many businesses for a long time until, you know, basically
the the 80s, they were doing their accounting with piece of
paper, not spreadsheets. So the instruction of
spreadsheet compressed that whole middle step of adding up
all the numbers. They used to have a mailroom at
companies rather than e-mail. And then the instruction of
e-mail just basically tipped that completely away and it
pushed it to other things. And it's our example when
running a clinical lab because we started it in such a way that
it actually had a database at the core.
I could run a query and it could just give out all kinds of
analytics and stuff like, you know, which variants were
present with which other variants and which insurance
companies and all this kind of stuff that it cost millions of
dollars for a traditional clinical lab to try to find
those analytics on some process. I could, for example, bottleneck
identification worked as follows because every station in the
click lab, when you when you create a record in Postgres, you
get a create an AT timestamp for free.
That meant that later when we had, you know, we wanted to
prove turn around time, we could take every station, station one
through station, let's say 20. And these were in a complicated
order because sometimes you have to revert back to a station.
You can take a sample and you take it's created at timestamp
at all these stations and you can make a graph of the sample
moving through stations. Then every edge between them,
you have the time that it took. And you can start making the
histogram of like, oh, did this have a long delay at times,
right? Or does this have a high
variance? So you can make the edges wiggly
if they're high variance, you can make them red if they've got
a long delay and so on and so forth.
And this fashion on a big monitor, you can instantly
visualize all the blaze and you're like, oh, right, there is
the highest variance and slowest step and we need to add 3 more
pico greens or something to paralyze, right?
So that kind of analytics you couldn't get.
And so that's how I think of Ki becoming the brain of many
companies, right? Lots of processes that were
previously as manual as a mail room or previously as manual as
count to get numbers though. Yeah, it just takes care of that
middle part. Then you still have to kind of
do the end caps. Yeah, interesting.
Yes, I'm just going to look at it.
You've been thinking about this quite a lot, but I think of
again, as that I'm not diving into AI.
The course is fantastic. You're familiar with formal
theory, right? It's almost like like formal
verification, formal verification, right?
So you almost can verify the output within the system itself.
So you know, it's actually accurate.
And I think it's an NB hard problem because you don't know
what other accuracies are there that you're not covering because
you're not programmed to to to measure it.
But, but I think I think of AI systems because they're
probabilistic, it is much harder to measure accuracy.
And how do you measure accuracy for a poem that you write as six
PL. and you don't know it is accurate or not?
It's a feel, it's a why. But I think the IT will be, I
think the next revolution of AI will happen when you are able to
formally verify output and quality of output in a way that
is, that is that closes the loop on the prompt that begins the
production of the tokens that you see as photos, videos or
whatever. What does that mean mostly as
systems today are actually open loop systems.
They are not closed loop systems.
Take for example, Clay dot Ayani, fantastic company.
We, many of our companies use Clay dot AAI.
It takes inputs from, you know, CRM, May 6th sense sort of Zoom
info. It'll do some research.
It can figure it out, you know, this person, even there's AVC
here, age, whatever gender, whatever, living here or there
and write me a beautiful customized e-mail to me.
It'll write a million copies for a million people and then pushes
into a offspot, and Offspot does the programming and has the
campaign. Management, but the problem is
now I don't want to read those emails.
That's another problem to solve. That's the AI to sort of fix
that. But where does the loop get
open? Is that now there's these, Even
the God lost spot, hot spot puts a tracker in there.
It puts a headline in. There No, I know, I know.
But what I'm saying though, is when it increases the generation
of stuff to such an extent, it'll break that Channel that
was working and I don't even read e-mail anymore.
And then and then I kind of don't already basically seems
like, Oh, I sent you, you know, I'll go and look a grabber.
And so instead you go to other channels that are high trust
channels. If people don't have the number
two or something like that, right?
And that's where actually where your true messaging is now AI
can't get in there. The whole point is not AI,
right? So, so I think that there's
there's a, there's a window right now, yes, where generated
stuff from AI will overwhelm all kinds of missing channels and
there'll be a reaction against some Shamali scene where people
are like. But the reaction is where the
loop is closed. OK, go ahead.
Because when you send this out to a spawn and you say I don't
care, I'll never open an e-mail that looks by the other e-mail.
That information is not coming back to Clay today.
It's staying in WhatsApp. It's staying sure, sure.
Yes. So they have put the trackers
in. They don't know what kind of
subject lines people open and what times when you send it
people open or do you have it in STML or with NVIDIA made it in
it and hotspot knows. So Click does not know how to
improve its AI, how to make it better.
So you open it tomorrow day after one year later.
So that loop never gets close and these are softer loops that.
Either layers there, that's true.
So so one part of that I do agree with, which is the closing
of the loop in terms of open rates and so on.
But the other part is just that systemically rates will trend
down when as people are increasing the number of their
AI, you know, like emails getting sent out and I think
you're going to start. So the the complement to that is
going to be crypto because you can charge cryptocurrency for
emails. Yeah, right.
And we could do that. And I had a company and I and I
wanted to use a more wanted company.
How is that? Well, so I want to do the V2 of
that right, basically because I think tasking is going to become
a big thing. But the the reason for that is I
think and makes everything fake. Crypto makes it real again.
Crypto sets up hard digital borders that AI can't cross.
Like AI cannot fake the private keys for a cryptocurrency.
AI cannot pose as something with a crypto identity.
AI cannot manipulate on chain data for all of that.
This is like it's like a hard deal border that these AI agents
can't bust, right? So that's where you can count on
on the Internet are block chains that are unhackable.
And then that because it's like a hard surface that actually
becomes the verifiable Internet, which is Web 3 and or the
verifiable web and then Web one and Web 2.
Web 1 is like, you know, the World Wide Web.
Web 2 is like, let's say it's social web, right?
Web 2 is becoming closed because X and other things need to stop
AI scraping. And then web one is becoming
spam, right? And so you get spam or paywalled
closed. And then you have Web 3 be the
open web, the cryptographic signed web, right?
And I think that's where we're going to go.
What's the intersection of AI in book three that you'll see like
a use case section? Like it's kind of yeah.
So there's a few, well, some that we're working on it, right?
But so the, the one that's out there in public that everybody
knows is AI agents using crypto to pay for things because the
crypto is currency of the Internet, right?
Since it works across borders. And an EI agent can boot up an
address, pay another AI agent who can receive it, right?
So just that alone is like clearly a big thing.
And EI agents can sign smart contracts with other AI agents.
So any kind of automate trading, you know, or, or transactions,
cryptocurrency will be the way that AI is, you know, going by
things. So an intelligent agent, you
know, which people talk about in the late 90s, you need to book
the AI and crypto to be at scale.
You need crypto so that everybody could accept the
transactions across borders on Internet AI agents to be able to
go and swim the web and, and find, find those things.
So that's one piece. A second piece is, and I think
this is most interesting for me is on chain data as the thing
that AI can't falsify. So like the verification step
and so on and so forth. So that to me is what I call
like the Ledger of record, like rather than the paper of record
where just argument from assertion, you have
cryptographic verification. And right now that only works
for financial facts because financial facts are going on
chain. But the block chain is actually
the crypto more generally is the #4 market in the world.
Do you know that like #1 I see #2 NASDAQ #3 Shenzhen #4 crypto,
right? And it's quickly gaining.
It's going to become the number one, like Internet capital
markets will also be Indian capital markets, right?
Like the way I'd look at this, and this is a 5 or 10 year
thing, but it's not more than that, right?
We now finally have the on chain dollar, right, On chain Fiat.
That's going to mean you also have on chain, not just
currency, but on chain equity and on chain fund interests.
So very soon every Internet company will have an Internet
equity. For almost 10 years.
This was pathologized because of the SEC and their jihad against
crypto and so on and so forth against and all discuss and
they'd all be like you said, a security and so on.
They'd like, you know, and but the obvious point is you wanted
a legal pathway to put a security on chain.
Duh, right, And that's not dishonest or anything like that.
It's like saying don't record your securities in an Excel
spreadsheet. You need to do on a piece of
paper. So you went from, you know, a
piece of paper to a cap table, right?
Why can't you go to a coin table?
Obviously you should because that is kind of like, you know,
the intermediate step is like Carter or Angel list, which are
great, great things, right? So you go, it's almost like the
the sense of man. You know, the caveman is like
actually the caveman doesn't have the company at all, right.
Then you've got piece of paper or you know, then you've got the
cap table and spreadsheet. Then you've got Carta writer
Angel of sugary companies and then you've got Bianchi and coin
table. The advantage of this is, you
know, something I didn't actually realize arguably until
crypto international law, international trade did not
exist. You know why I say that?
So let's say you've got you're an Indian company and there's a
there's like a Brazilian company that you want to acquire, right?
How many people speak both Portuguese and Hindi?
Not that many, right? OK, maybe speak English on both
sides, but how many people have done Indian Brazilian
acquisitions or Indian Paraguay or something like that?
Not too many, right? So what people end up doing is
they use AUS company as the adapter between the two because
US did enough business with both them.
They use U.S. law and so this way they they they make it work.
So the US actually turned out to be the central hub.
They reduced it to a hub and spoke problem rather than a
peer-to-peer problem. The other country that
increasingly you could not one could the Chinese people could
use is China where they can use that because that also does
enough business with both countries that there's some
bilateral thing a Chinese company can buy this one and
sell this one or some something along those lines, right?
But now with crypto, you have global rule of code.
So eventually that just like when you came to India, you had
global mail, right? Because your mail just worked,
right? And you had global movies and
you had global media, your your Twitter just work.
Everything else just worked. You will have global money.
And global entity and global. Instance exactly because if you
think about what is an entity, first you have Bitcoin, then you
have stablecoins and you say you have all the transactions on
share and then you have all the transactions on share of a
company. Once you have all the
transactions, you can generate financial statements.
Once you can generate all the transactions, you can also have
the cap table there. So the collect, you know, the
cap table plus all the transactions, plus all the smart
contracts, that is what a company is, right?
So you have an on chain entity and it actually lives on chain
and that floats above and you can port it between
jurisdictions, right? Just like you can port
everything else. The reason that's harder to do
than all the other things we've done before is it is like a
group of people. It's like law, it's money, it's
like high stakes stuff. But we're getting there, right?
And I think that's going to be one of the most important areas
for Indians, but actually anybody who's not in the US or
China to really invest in actually, frankly, lots of
Americans and Chinese will benefit from as well.
But especially if you're not in a quote in a, in a country that
is contending for being the global number one, you want
crypto because it protects your rights online.
You know what I mean, right? And it protects your rights
abroad. It gives you like currency that
can't be seized, gives you contracts that can't be
unilaterally abrogated. You're like a first class
citizen on the Internet. Even if you're a second class
citizen in America, that's like a really deep point.
Like, you know, people can mess with your H1B visa, they can
make it hard for you to start a company or something like that
in the US. They cannot make it hard for you
to move your Bitcoin. Yeah, you're saying, I think at
some point in time if what it is your possible.
That's right. And yeah, I wouldn't look at it.
I think it's starting to really play out.
What's exciting you in crypto today.
I mean, we keep you think about stables a lot.
We'll see it to be so. You know what?
You know I launched your CC at Coinbase, right?
Well done. Well, yeah.
You want to see something we we can put up, we'll put that on
screen or whatever. We're launching support for a
new stable coin called USD coin. We call it a stable coin because
one USD coin can reliably and stably be exchanged for exactly
one U.S. dollar. So October 23rd, 2018, like we
put in the 25 mil, we collateralized the consortium,
we launched the like that whole thing doesn't exist without.
Old blotch. Wasn't that the like a massive
bull period in 2018? Oh.
That was a bear period that was a bear period 2017 was a bull to
this was extreme bear period yes yes, this is what these are in
crypto had fallen Bitcoin had fallen down to like 5000 or
something from 20 is down 75%. But you know I'm an old weather.
You know I believed in this. You know, there are multiple
bubbles and cycles and so on and so forth.
And so, yeah. And basically the the graph on
that, that that was October 23rd, 2018.
And I'll show you the graph actually.
And was it called 17,000 or something like an increase 17?
I remember I was lost. In yeah, they heard 20,020.
I've got the the price graph is harmed in it's like a tat.
I don't get any tats, but I do have that as a tat in my brain.
So here is like so UCC. Let's see if I can show the
exact area. October 23rd, 2018, Zero.
Wow. Right.
Is that cool? That's amazing and.
Now it's at 60 billion dollars, $10 billion.
Right. Crazy, Crazy.
Right. So mine good, mine good, right?
That's only seven years ago and it's now like a few percent of
transactions for the dollar globally, right?
It'll become everything in a few years, right?
So why don't we just wrap up Lightning round and so and so
forth. I'll just go through a bunch of
different areas, get your thoughts on just give you a one
word and you can be in a few, you know, so on.
Let's see, we did a bit of AI, so biotech.
Have you talked about that at all since your group cloud is?
A little bit of it, a little bit.
What is interesting to being biotech now is, is it a long
answer you want or a short answer?
Give me the Medium library, yeah?
OK. So in the context of India, what
I didn't know is that if you think about imagining new
molecules that we cure diseases to building chemistries for it,
to testing it and then deploying and launching and scaling it.
If you think about the thinking of new molecules as a head,
India has the body, you don't have the legs yet.
The body is turning those ideas into chemistries, trying it out
and then doing animal tests and then first layer of human tests
and then Cushing it back and they cushion back to a Pfizer or
whatever in the US and they they cover legs.
They have the brains that tell an Indian company what to build
and the other 5 or 1015 chemistries they should build
and then go test out. And then it's a near, you know,
second stage human trial or the approval stays and it respect
the US. They finished the process and
for cancer is like 5 years for something simpler like a few
months and then they go prioritize package cells
manufacturer and sell. The LLM is now if you're
starting to see is there's a recent paper that came out of
Stanford two months back is that they tried out 7576 different
modalities and figured out, you know, I don't know, binding
efficiencies for each of those of certain diseases and all of
that. And then they came up with two
chemistries in six weeks, what it used to take two to three
years and then they actually had successful lab rat tests.
So what's interesting to me right on biotech is that India
did not have a head, but it had the body, it didn't have the
legs. Now we have a head.
So you could then build a fully integrated biotech company out
of India that does not yet know how to product, personalize and
sell and package it. But what they would do is, you
know, what used to be called what I think mostly like
contract. Yeah, CCRO.
Clos, no you don't have. You can take the CR of that, you
can design your own drugs, manufacture as you put it, push
it back to the US. This is this is similar to how
China started as like just main, you know, just like a low end
thing and then eventually it went up the value chain and
actually the CEO around China. And so correct.
That's right. That's interesting.
OK, that's good. So media.
So one of my theses is India becomes a media superpower but
in the following sense. Not in the sense that Bollywood
takes over the world, but rather that Indians are very good at
content creation and become a larger and larger and larger
percentage of content created online.
Let me hear your thoughts on that.
Yeah, they're starting to see it.
We actually have backed a few companies that are essentially
current creators, young kids creating content and then
publicizing it. So and they're so big native
that many people are choosing to go to as their primary job.
YouTube is becoming, you know, a country phenomena.
I do think like I said earlier, Indians are the best exports.
So we I'm trying to see Indians show up in movies and TV series
and never have I ever and blah blah, blah.
And that was not normal 5-10 years back.
Nobody popping up in big movies. So this familiarity with the
culture and staying in the face I think is quite interesting.
And all the content that is getting created in India, it can
potentially get wider in the US. You're seeing it in gaming as
well. You know, they are culturally
relevant games about Mahabharata and Ramayana.
They are getting popular in India.
And the question is can like the way Tankai's popular everywhere
in the world and we play games with the North Star teams and so
on, can that ever go expand beyond India and become a
popular theme in the US or in Japan or Korea?
I mean, that could be interesting to see.
Same with comic books. And he has a really nice, nice
comic culture. It's kind of died out over the
last 10-15 years, but it's picking up a game that have two
like companies coming up and AI is the thing that wave and then
they're all very culturally Indian.
And then can you find, can you export that to the world, right.
Indian stories. You have a company called Pocket
FM and the guy essentially was travelling in Indian Railways
and then Indian Railways have, you know, these are all 7-8 hour
journeys. You will have these tale Lawas,
you know, the guys that sell pocketbooks, pocket bavillas.
There are spicy stories, romance, horror, love, adult
fiction and endemic fiction. So he was reading, you know,
realized that should I could convert this stuff to audiobooks
and he converted these to short, short form but long episodic
audiobooks and it just took off Company called Pocket FM and
they make 7250 million revenue an hour. 70% of it is in the US
Indian company building designing new short form
novellas. You know, spicy stories.
And it's basically though at global quality.
It's not like Indian accents. It's not Indian only.
That's the key thing. It's yes for audio.
And now they're waiting on AI because initially you would have
to have humans sitting in a podcasting room like that to
capture their voice and tone. And there's 4050% gross margin
takes a long while. There are contracts that you
have to do over time. You just get to 90% gross margin
by just using AI to create different synthetic voices in
any language. And then the interesting part of
that is you can experiment in India because the population is,
is large. And interestingly, if something
spikes in India as a story actually spikes in Germany,
except when you convert Germany, you get to Germany.
But it's the same same several stories in the world that keep
playing out Love, loss, grief, it all.
Ambitious, it's culturally similar enough.
See, what's interesting about that is I do feel China's a
Galapagos Islands where the you know, like the animals are
different there, you know, the, the ecosystem is different,
right? Like, for example, Meichuan is
like a huge, the equivalent of the Groupon in the US became a
much bigger company in China. So they had a almost like a
different evolutionary tree. Have you ever been to, like
Socotra? No.
Scotra is like this island in the Middle East.
Yemen, right? Yeah, near Yemen.
Yeah, that has a totally different like set of trees.
And the ball walk trees and all that, Yeah.
Exactly to anywhere else in the world, right.
And so it's like a different use of.
So China is like that where stories that take off from China
or vice versa don't necessarily happen the rest of the world and
etcetera. It's relatively rare.
There's a story, but but India's connect enough because it's
English that it does. It is correlated with, let's
say, Germany. Yeah.
And that's a 95. Yeah, that's another thing
that's happening in India. It's pretty interesting.
OK. All right, let me do two or
three more space. ISRO has actually done
surprisingly well, low cost launches or a thing and so on.
Sort of tell me, you know, have you thought about space or
actually Adnicol me and Sriram and several other people invest
in that, you know that one that could we?
Know very well, yeah, fantastic company Adnicol, Skyroute, we
invested in a company called Pixel Space.
We could raise about 1995 million.
They're building hypospectral satellites.
They can, sorry. And if they're a competitor with
algae colors? Oh no, they're not.
Yeah, they might use Adnicols, OK to go launch because they
don't do the launch stuff, they do the satellite and payload
stuff. But yeah, very cutting edge.
And we were the first institutional investors in any
space company 4-5 years ago in 2019 and now we, I think we have
hundreds of companies building space.
And again, if you think about. Hundreds of companies building.
Hundreds of companies building in space across launch vehicles,
reusable launch vehicles. There's a company called
Ethereal X that tells the Ukraine Mall incredible stuff.
That is propulsion systems. There's Drown Station, that is
telematics. There's satellite building.
So this is a place that you this is sector U investor fair been
there or this road whereas. Yeah, we are very much we are
really. I don't think I can rattle off
all of those different subsections.
Like you just said, yes, yeah. So we yeah, be able to pretty
deep and sophisticated thesis around space tag because these
Rd. talent base is so strong. And then the young entrepreneurs
coming out of the world can join hands.
And then you know, you know how much any government base this
road is peanuts. So you know, once they once
they've done their duty, they've learned their lessons, they
learn their skills. They they are very happy to go
work for a private company now. Interesting.
And yes, you know, they throw as institution is also very
supportive. They are offering labs for free
to test out, do turbo testing, vibration testing, space
weakness testing for satellites and rocket is quite amazing to
see. So, OK, that's interesting.
I learned something and and I knew ISRO was doing well and and
and when I know that hundreds of companies that's really, really
cool drones. Drones.
Yeah. It's a very interesting space
the company should check out. It's called airbound.com.
They're building V tall blended Bing body.
So it's a single, single blended body.
There's no moving parts and it takes V tall, It takes off
vertically and then gyroscopically navigate itself
to a horizontal light path with bings and it can cover about 6
to 70 kilometers. This is a company, the investor
and the preceded this raise from from a bunch of investors in the
US large seed round. They're doing the I think door
is an interesting space in India because you know when traffic is
just such a pain in the ass in India, you if you really want to
offer things of different varieties and quick commerce
space, you have to take the aerial route, the the the road
routes. That is too slow and too
expensive and regulation has been, you know, generally quite
positive in India. What doesn't exist yet is a
technology that can scalably, reliably go get anywhere things
that are not 500 grams. You know, you got to get to 3 to
5 KGS for you to cover forty 5060% of the overall volume of
deliveries you want to do presumes.
So 4050% of consumer deliveries are some three KGS.
So this company right now is building a drone, one of the
most advanced roles in the world that can that has an LED ratio
almost matching the best aircrafts in the world.
And what he wants to do is to just build the best aircraft in
the world and just use it for grown deliveries.
So the goal is to build the best aircraft, the best lift and rag
ratio, the best. I mean like aircraft, aircraft
or drone or delivery drone, delivery aircraft.
He's building the best aircraft that is shaped like a drone, the
size of a drone for delivery, for delivery.
It's got a custom bill for a custom.
Airport air rules, but the goal is to build the absolute best.
And is drone delivery, I know drone delivery is actually live
in China now, yeah. Is it there in India?
Yeah, he's doing pilots in India right now, but they with a large
healthcare system. What what is happening in India
that people don't know about tech wise?
India is not coming to a point where people are building real
world class 1st in the world technologies.
The drone was an example of that.
The satellite company and rocket companies are examples of that.
And there are many more coming semiconductor stuff that we're
looking that seems like it's very cutting edge.
So there is, there is absolutely intent and there's capital
available and there's talent that we believe is going to land
India in a place where we are didn't know what we're doing,
didn't know what innovation that if it works, it can actually
really reshape industries. That wasn't true 5-10 years ago.
And I would argue we still are a minuscule, minuscule percentage
of what I think the contribution to global ID is.
That needs to change. And I would love for that to
accelerate and I'm trying to do some things to make that much
faster. But there are small pockets or
fewer pockets. So they are very deep pockets of
innovation that are absolutely mandatory.
But this company that we just talked about, you're coming with
people that are that are leaders and you know, senior developers
at Tesla, at SpaceX, Google's wing, which is let's try to
build exactly this 10 years ago and equipment annual.
And it was drone team leaders with us in this one at, you
know, a bunch of so this this, this stuff is really cutting
edge. So I think there are more and
more pockets of that with the young first time founders.
This kid is in 19 now. When we invested, he was 17.
There are more people like that coming out of the woodwork.
I think there's quite people don't know this and I would love
for that volume of people to be much more and back them more and
I would love for more people to know that there is stuff like
this coming out of India. You're not a software
automation. We have a back office anymore.
We're not just take consumer masks, consumer Internet and
e-commerce country get all of that and that's also deepening
and broadening, but we're also this now.
That's really awesome. I think.
I don't think people again, I think it's still underpriced.
I think we that that story like this kind of stuff is awesome.
This is that's like world class, right?
And I think the world class stuff, people kind of knew
Indians individually were doing that kind of stuff, you know,
but I don't think they realize how much of A for lack of a
term, not even bench isn't even the right term, how much in
reserve there was for an idea. Yeah, OK, awesome.
Maybe with that by me? Absolutely.
Great. Cool.
Thank you, Bob. Yeah.