Latest / ContraMinds Podcast - Unlocking Personal Growth and Professional Excellence / Rajesh Jain on “Unicorns vs. 'Proficorns' : The Pragmatic Path to building Private, Bootstrapped, Profitable and Valuable Businesses (#044)

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Rajesh Jain on “Unicorns vs. 'Proficorns' : The Pragmatic Path to building Private, Bootstrapped, Profitable and Valuable Businesses (#044) · ContraMinds Podcast - Unlocking Personal Growth and Professional Excellence

• 0:00
  SPEAKER_01: When I was running India World Game for the five years, I was not thinking about an exit.
• 0:07
  SPEAKER_01: I will of course have conversations.
• 0:10
  SPEAKER_01: But it is not that I I'm desperate to raise capital.
• 0:14
  SPEAKER_01: I mean there was a time when uh uh there was an investor we were talking to and the difference in valuation was 50 lakhs.
• 0:23
  SPEAKER_01: I was I wanted 17.5 crores valuation, the investor was offering 17 crores and I walked away from it.
• 0:31
  SPEAKER_01: And three months later, I'd sold the business for 500 crores 30x.
• 0:38
  SPEAKER_01: Now, if I had been losing money, I would have I would have said, okay, let's compromise.
• 0:43
  SPEAKER_01: I said I was profitable, I was not desperate to raise capital at all.
• 0:46
  SPEAKER_01: And through my 30 years as an entrepreneur, I in the first meeting that I do with BCs and now Ps, I will tell my expected valuation.
• 0:55
  SPEAKER_01: I said there's no point discussing it later because this is always one of the sticky points.
• 0:59
  SPEAKER_01: I will save you time.
• 1:01
  SPEAKER_01: This is what my expectation is.
• 1:03
  SPEAKER_01: I will not budge from this number, and I'm not desperate for money.
• 1:08
  SPEAKER_01: What I need money is for expansion, for acquisitions.
• 1:11
  SPEAKER_01: I don't need money to fund my losses.
• 1:19
  SPEAKER_00: Welcome to another edition of Contraminds.
• 1:22
  SPEAKER_00: In this episode, I am talking to Rajesh Jain.
• 1:26
  SPEAKER_00: Rajesh Jain is a technology entrepreneur based out of Mumbai, India.
• 1:33
  SPEAKER_00: Rajesh was a pioneer in Asia's dot com revolution, creating India's first internet portals in the late 1990s.
• 1:43
  SPEAKER_00: Today he is the founder of NetCork Cloud, a bootstrap SaaS company that helps B2C brands and marketers create AI-powered new age customer experiences at every touch point of a customer's journey.
• 2:00
  SPEAKER_00: NetCork Cloud is a very successful global marketing technology company and what they offer is an AI-powered marketing automation and analytic solutions for customers globally.
• 2:14
  SPEAKER_00: They have over 5,000 customers both in India and in international markets and they send about 20 billion messages, emails and SMSs through their messaging gateway.
• 2:28
  SPEAKER_00: What's interesting about Rajesh is his view on how to build a business.
• 2:33
  SPEAKER_00: He defines Netcore as a Profon, private, bootstrapped, profitable, and valuable.
• 2:43
  SPEAKER_00: In this conversation, he talks about what does it take to build a Proficon, how the principles and mindsets of ProfyCon entrepreneurs are very different from that of Unicon Entrepreneurs.
• 2:59
  SPEAKER_00: And he shares his insights from his recent book, ProfyCon, and he is a phenomenal writer, thinker, and a leader.
• 3:10
  SPEAKER_00: Over to my conversation with Rajes Jay.
• 3:16
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• 5:57
  SPEAKER_00: Hi Rajesh, uh, thanks a lot for uh accepting my invitation and uh your book uh Proficon is absolutely brilliant, great storytelling, and uh it's a great privilege to talk to you, Rajesh.
• 6:12
  SPEAKER_01: Thank you very much, Swami.
• 6:13
  SPEAKER_01: Looking forward to our conversation today.
• 6:15
  SPEAKER_00: So, Rajesh, uh the first thing I wanted to ask you was uh what's your inspiration to write this book on Profon?
• 6:24
  SPEAKER_00: So, is there a reason why you thought this was an important uh uh uh you know important book to be published?
• 6:31
  SPEAKER_00: What was the uh idea behind uh writing this book?
• 6:36
  SPEAKER_01: So uh let me first define what a Proficon is.
• 6:40
  SPEAKER_01: So a ProfyCon is a startup which is or a business which is private, which is bootstrapped, profitable and highly valuable.
• 6:51
  SPEAKER_01: Now the perception is that you know you can't build a business without raising lots of capital.
• 6:58
  SPEAKER_01: And yet the reality is that more than probably 99% of businesses are actually self-funded.
• 7:04
  SPEAKER_01: You look at it from the Kirana store or the small teams, consulting teams to even some recent-sized businesses.
• 7:12
  SPEAKER_01: You saw it's possible to build a business without raising capital.
• 7:17
  SPEAKER_01: And that's the point I wanted to get across because in newspapers and all the online publications, all you read is fundraising.
• 7:25
  SPEAKER_01: Okay, everywhere.
• 7:27
  SPEAKER_01: And my point was that look, it is possible to do it, and it's not a theoretical thing, I've done it twice in my life, and there are others who have done it.
• 7:35
  SPEAKER_01: Like have four stories from other entrepreneurs also in the book.
• 7:40
  SPEAKER_01: So I think it's for entrepreneurs that your energies should be really spent focused on customers and the product rather than investors and fundraising.
• 7:52
  SPEAKER_01: Every time you spend with them, uh you're not spending with your customers, and it's actually possible to build good-sized businesses.
• 7:59
  SPEAKER_01: Starting up is one thing, but scaling such businesses also is possible without external capital.
• 8:07
  SPEAKER_00: Okay, so uh so clearly uh you know there is uh uh I think a crying need for something like this because uh uh headlines are all about uh you know unicorns and you know is about raising capital.
• 8:22
  SPEAKER_00: And uh so therefore, I think uh uh there can't be a better time than uh you know a concept like this because obviously uh this is very, very important uh point that you're making, which is to say headlines is one thing, raising capital is one thing, but getting a great product and getting it to a customer and serving a customer is the most important.
• 8:44
  SPEAKER_00: I think that's really the message that uh you want to pass on to this whole uh you know uh breed of entrepreneurs who want to do a startup and build companies, right?
• 8:54
  SPEAKER_00: Should I uh say that that's the kind of summary that you want to leave a message?
• 8:59
  SPEAKER_01: Yes, Swami, and I would add one more thing.
• 9:03
  SPEAKER_01: It is also about thinking how you are going to make profits.
• 9:07
  SPEAKER_01: So a business is really only sustainable if you are profitable, you cannot be relying on external capital all the time.
• 9:16
  SPEAKER_01: So bootstrapping is one thing, but also when you have to scale, if you're not raising external capital, the only source of capital or money for expansion are the profits that you do.
• 9:26
  SPEAKER_01: So it's a better way to build a business.
• 9:29
  SPEAKER_01: So when you're as a founder, when you start thinking about how I am going to build a model which is sustainable, which basically focuses on profitable growth, I think you build a better business, you have more longevity in your business, you have greater freedom and control in your business.
• 9:46
  SPEAKER_01: I think that's more fun being an entrepreneur than perhaps owning a small percentage of a large, potentially large business, you never know, but which is driven by investors, and their uh interests change, their thinking changes, and they are basically forcing decisions for you.
• 10:04
  SPEAKER_01: So you set out to be an entrepreneur, but you end up becoming an employee to the investors.
• 10:10
  SPEAKER_01: That's I think the sort of other part of the story which we don't normally hear about.
• 10:17
  SPEAKER_00: Brilliant.
• 10:18
  SPEAKER_00: So are you a first generation entrepreneur?
• 10:22
  SPEAKER_01: Uh my father was an on uh uh was an entrepreneur in his early years, he was started as an employee, but I saw him as an entrepreneur, but it was very small at a very small scale, uh, mainly by himself.
• 10:35
  SPEAKER_01: He had a consulting business in uh civil engineering.
• 10:38
  SPEAKER_01: He tried his hand at a couple of factories in Rajasthan.
• 10:41
  SPEAKER_01: Uh they didn't work out very well.
• 10:44
  SPEAKER_01: But I saw that he never hesitated from taking risks in his life.
• 10:49
  SPEAKER_01: And when I wanted to do something, I mean that was the sort of uh uh uh milieu at home, you know, that it's okay to try things, sometimes it'll work, sometimes it'll not work.
• 11:02
  SPEAKER_01: Uh and that's how I grew up in uh at home.
• 11:07
  SPEAKER_01: And when I went to the US also, what he told me was you work, you study, you finish your master's in nine months, work for two years, and you come back and start your own business, whatever you want.
• 11:18
  SPEAKER_01: You don't have to join me because anyway, my discipline was different, it was computers and electrical than his um was civil.
• 11:26
  SPEAKER_01: And uh I had the full freedom to do that, so that mindset was always there in me that I have to do something on my own.
• 11:35
  SPEAKER_01: Um, but yeah, I mean, after I came back first two and a half years, after failing a lot of times, I began to seriously doubt myself.
• 11:42
  SPEAKER_01: But he never told me that you have to go start working for someone else or anything that he said your it does things haven't worked, but you can keep trying.
• 11:50
  SPEAKER_01: That that support was always there from him.
• 11:53
  SPEAKER_01: How was the mindset of uh entrepreneur who is uh who's building a proficon different from that of a unicorn because I think the first thing we have to realize, and it's more general general for entrepreneurs, the common perception is that entrepreneurs are basically big risk takers.
• 12:18
  SPEAKER_01: And I think this is a fallacy entrepreneurs basically are risk reducers because the odds that your business will succeed are probably less than 0.01 percent.
• 12:32
  SPEAKER_01: 99.99% ventures actually fail or sort of become the living debt.
• 12:37
  SPEAKER_01: That's the reality, and when I say succeed, it means you achieve good scale in what you're doing.
• 12:43
  SPEAKER_01: Now yet every entrepreneur who's going out there believes they have a 70 or 80 percent chance of success, and that optimism is very important for getting started.
• 12:53
  SPEAKER_01: So you're going to work every day to ensure that your business survives one more day, one more week, one more month.
• 13:01
  SPEAKER_01: Because that increases your odds of success.
• 13:04
  SPEAKER_01: Now, the difference between unicorns, unicorn entrepreneurs, and sort of a pop uh entrepreneurs with a profy con mindset.
• 13:12
  SPEAKER_01: I think first is that the number one sort of uh uh uh uh sort of master, as it were, for entrepreneurs becomes the investor in the case of unicorns because you've raised multiple rounds, even if you have reached say a billion dollars, the odds are that the entrepreneur will probably own maybe 10% or so if multiple rounds of uh investment have come in.
• 13:36
  SPEAKER_01: So, in a way, your destiny is being decided more by the investors, and you hear a lot of these stories where you know the uh investors basically are calling the shots uh in the company uh in many of these cases.
• 13:50
  SPEAKER_01: So, in a way, the entrepreneur in a in a unicorn is more of a glorified sort of high-paid employee.
• 14:00
  SPEAKER_01: That's the unfortunate reality because the board control is with the investors, the rights are with the investors.
• 14:06
  SPEAKER_01: If there is a down round, entrepreneurs are the ones who lose big time, and as we are seeing down rounds over the last one and a half years because valuations had reached uh unsustainable levels.
• 14:17
  SPEAKER_01: The other case for a Proficon entrepreneur you actually need to build a company at a hundred million level, and if you're owning most of it, you have the same wealth creation that a uh Unicorn would have at say a billion dollar level for for founders.
• 14:32
  SPEAKER_01: So I think that's very important one.
• 14:33
  SPEAKER_01: It's easier to do a hundred million for a valuation company than a billion dollar valuation company, first second is that I and I I say this in my book that in times of crisis, and we have seen quite a few of those in the last three years, the pandemic, the sort of startup funding, downturn, etc.
• 14:55
  SPEAKER_01: Uh, is that the on investor basically pushes entrepreneurs to cut costs immediately?
• 15:02
  SPEAKER_01: And it's a diktat.
• 15:04
  SPEAKER_01: You have to cut 20-25% costs because you're not still profitable, and you have to then increase the runway or whatever it is that they want out there.
• 15:13
  SPEAKER_01: In the case of a profiton, okay, because your A, you're profitable, B, you don't have investors, you can afford to take the longer view.
• 15:22
  SPEAKER_01: And we went through that in the pandemic time.
• 15:24
  SPEAKER_01: We froze salaries, but we never fired anyone in netcore.
• 15:29
  SPEAKER_01: And my approach was that you see, you can't have fair weather.
• 15:32
  SPEAKER_01: See, the people have memories.
• 15:34
  SPEAKER_01: I mean, while you're in in good times, you can hire, but when you fire people at bad times, it's not easy also for them to get a job outside, and you are firing them for your mistakes because you guessed wrong on the market.
• 15:47
  SPEAKER_01: That's not right.
• 15:49
  SPEAKER_01: So I think the mindset is very different.
• 15:52
  SPEAKER_01: I think the third one angle which I would say is that profit con entrepreneurs tend to have a much longer horizon.
• 16:00
  SPEAKER_01: Yeah, because for me it's about you know, you're on a highway with no exits.
• 16:05
  SPEAKER_01: I'm I'm here to build a business forever.
• 16:07
  SPEAKER_01: I will always look at options for exit which come.
• 16:10
  SPEAKER_01: But I'm here to build a business, it's an infinite mindset, as Simon Sinek uh puts it.
• 16:15
  SPEAKER_01: But for the unicorn uh with investors with significant stake held by investors, it's always the next round of investors when is the exit because funds have limited time.
• 16:26
  SPEAKER_01: Okay, uh so you're always building a business for the next round of investors rather than for customers, rather than for your employees, rather than for your core stakeholders.
• 16:37
  SPEAKER_01: Okay, who are the wealth value creators for you all?
• 16:40
  SPEAKER_01: I mean, you can only create value if your customers are willing to pay you more than what it costs to create the product, that's value creation, and your employees are critical in making it happen.
• 16:52
  SPEAKER_00: In this section, Rajesh talks about some key tenets of a ProfyCon.
• 17:00
  SPEAKER_00: He talks about entrepreneurs who have a mindset to build profitable but valuable businesses.
• 17:10
  SPEAKER_00: They are the ones who build these profit cons, which are about hundred million dollars in value and in terms of the scale that they can build.
• 17:22
  SPEAKER_00: He talks about them being bootstrapped, but they have a very very strong mindset around how to build cash flows and profits.
• 17:33
  SPEAKER_00: And these profits being reinvested with a long-term view of their business and therefore the need for having an infinite mindset to take independent decisions that will have a long-term implication on the business.
• 17:51
  SPEAKER_00: The other key point that he makes is ProfyCons really focus on the customer first.
• 17:59
  SPEAKER_00: Therefore, the need to look at the customer problem, focusing on how to solve customer problems, being in the market, solving for the customer, working with the customers rather than spending time on funding, looking at valuations and cap tables is something that Proficons don't do so easily.
• 18:20
  SPEAKER_00: So if you are having a mindset as an entrepreneur to startup, these are the key tenets that he advises entrepreneurs to look at, and that's what differentiates a profy con from a unicorn.
• 18:37
  SPEAKER_00: Uh, if I were to actually go back with your experience and say, how do you spot a profy con?
• 18:44
  SPEAKER_00: Okay, uh, what would be the key things that you would say, hey, this could be a profit con in the next uh you know decade or so because I think that's really what you are talking about.
• 18:56
  SPEAKER_00: So, how do you spot a profy con?
• 18:59
  SPEAKER_01: I think it's a hard making a decision early on is always very difficult when it comes to any startup.
• 19:06
  SPEAKER_01: But I think I would distill it down to the founder's mindset for a founder, a profy con founder will always put profits first.
• 19:18
  SPEAKER_01: What is a sustainable business model?
• 19:21
  SPEAKER_01: Okay, the business model is not raising uh series A and then going out and raising series B after X months because you're basically then you can't raise series B until you've spent series A.
• 19:34
  SPEAKER_01: That's the mindset.
• 19:34
  SPEAKER_01: I've got to spend my money as fast as possible to have the opportunity to raise the next round of funding.
• 19:39
  SPEAKER_01: In the case of a ProfyCon, it's basically how am I going to focus on my customer because they're the ones paying me.
• 19:46
  SPEAKER_01: How do I solve the problems?
• 19:48
  SPEAKER_01: As a book by Uri Levin puts it, fall in love with the problem, not the solution.
• 19:53
  SPEAKER_01: You're focused on really what is the gap in the marketplace that by solving I will build a business where the revenues are more than the costs.
• 20:05
  SPEAKER_01: So I don't I am not reliant on external capital.
• 20:09
  SPEAKER_01: So the mindset of a of a of a profy con entrepreneur is always how am I going to uh create a value proposition and a business model which basically makes money at the unit level and not at adjusted or whatever Ebital levels that everyone keeps coming up with.
• 20:27
  SPEAKER_00: So uh when you say you know uh this entrepreneur has got an infinite mindset, right?
• 20:33
  SPEAKER_00: Uh the real challenge uh that I find uh is uh you know uh the Profycon entrepreneur looks at a journey, uh, but there is a money contradiction with the employees that they want to attract.
• 20:47
  SPEAKER_00: Okay, so how do you really resolve this uh you know, I would say, conflict or uh you know the fact that there is a money needed, there is a long journey, but today if you want to attract talent, you need the money.
• 21:02
  SPEAKER_00: So, how do you really balance the journey with versus the money?
• 21:07
  SPEAKER_01: Very good question, Swami.
• 21:08
  SPEAKER_01: So I'll tell you what we've done in Netcore.
• 21:11
  SPEAKER_01: Okay, in Netcore, we have 25% uh stock held by employees.
• 21:17
  SPEAKER_01: Okay, now uh we had wanted to look at an uh IPO last year, but market conditions were such that we could not basically make it happen.
• 21:25
  SPEAKER_01: And since then we've increased our investments in markets outside India, which means our profitability will not necessarily grow, but uh our opportunity size will grow.
• 21:36
  SPEAKER_01: So, what we did was we created the because we are profitable, we created a perpetual employee liquidity, uh, ESOP liquidity program.
• 21:46
  SPEAKER_01: So employees can basically sell back the stock or the options that they have at any point of time, and we can buy it because the company is profitable, we have cash reserves which we can use for this.
• 21:59
  SPEAKER_01: So I think.
• 22:00
  SPEAKER_01: Uh obviously it's not it may not be at the market price, it's a little bit lower because you also give out stock at a lower price.
• 22:06
  SPEAKER_01: So it it's it balances out both ways.
• 22:08
  SPEAKER_01: The delta which really matters for for people.
• 22:12
  SPEAKER_01: So our approach really has been that uh uh I think for most employees uh money is of course important, uh, but beyond that is also the culture.
• 22:24
  SPEAKER_01: And I think what profit counts can basically do because you can actually put employees at the center because you're not firing them.
• 22:33
  SPEAKER_01: People know that I will not be made a scapegoat for mistakes, overspending by by the founding team or by some decisions which they've made.
• 22:43
  SPEAKER_01: As long as I am performing, there is some level of security uh that is there because we are thinking long-term, we can make bets where the payoffs may not be very short term.
• 22:54
  SPEAKER_01: I don't have to worry about necessarily uh showing rapid growth on a quarter-on-quarter basis.
• 23:02
  SPEAKER_01: I can afford to do some of the investments, which will uh yield outcomes after some time.
• 23:06
  SPEAKER_01: I mean, we today we invest netcore, for example, again, we are investing in the US and Europe because we believe those are large markets, it will take us time to succeed, but there's a commitment that we've got to make these happen.
• 23:17
  SPEAKER_01: So that's where the next sort of growth is going to come from.
• 23:20
  SPEAKER_01: However, if there was an investor potentially, they could say, look, you've been trying for a couple of years, nothing has worked out, stop that investment.
• 23:28
  SPEAKER_01: And then because they have veto rights on many of the decisions, my big financial decisions, I would have no option.
• 23:36
  SPEAKER_01: So I think because the entrepreneur has a lot of independence in a profit con, I think it works out well for the culture of the company and also for employees from a longer term.
• 23:48
  SPEAKER_01: In the short term, obviously, if you are funded by uh investors, you know, you can afford to pay more.
• 23:53
  SPEAKER_01: But we've seen this story pay out in the last couple of years.
• 23:57
  SPEAKER_01: People were paid very high, but they were also the early ones to get laid off in difficult times.
• 24:02
  SPEAKER_01: And then if your lifestyle sort of rises to meet the higher level, it becomes it's a very hard uh thing to come down.
• 24:10
  SPEAKER_01: Uh, what is there?
• 24:11
  SPEAKER_01: So I believe that you have to motivate people by the vision, the problem you are going to solve, rather than by just short-term measures on money, etc.
• 24:21
  SPEAKER_01: I mean, I think because you are profitable, I think you can uh I think every Proficon technically can introduce liquidity programs for employees.
• 24:29
  SPEAKER_01: So they benefit as the company grows.
• 24:32
  SPEAKER_01: Now, of course, it's an internal measure with the stock price, but there's also upside which is there for people.
• 24:38
  SPEAKER_00: Uh, here is a unicorn which is looking at hockey growth, and here is a profycon, which is probably looking at a shovel shape growth.
• 24:48
  SPEAKER_00: Okay.
• 24:48
  SPEAKER_00: So uh, you know, I'm looking at two different models, right?
• 24:53
  SPEAKER_00: So here uh the shovel shape growth may not look as attractive in the short term, but in the long term, it beats the hockey stick growth, right?
• 25:04
  SPEAKER_00: Because of the profitability, because of the commitment to customers, and employees need to understand the you know the fundamentals around it rather than the hype around uh the unicorn.
• 25:18
  SPEAKER_00: So is that something which is uh you know people need to understand the fundamentals of this philosophy?
• 25:25
  SPEAKER_01: I think you've put it very well, Swami.
• 25:27
  SPEAKER_01: I think I uh your analogy of the hockey and the shovel is is very well uh taken.
• 25:33
  SPEAKER_01: See, I think uh what's very important also is that when employees are making decisions to join companies, they also need to look at the the the the mindset that is there of the core team.
• 25:54
  SPEAKER_01: I think it's very important.
• 25:56
  SPEAKER_01: See, because there are always business ups and downs.
• 25:59
  SPEAKER_01: Many times you come out with new products, they may not work, okay.
• 26:03
  SPEAKER_01: Uh or there could be a competitor who does actions which could hurt, there could be external factors which also come into play.
• 26:09
  SPEAKER_01: It's how the entrepreneur responds in tough times, which I think also matters a lot.
• 26:17
  SPEAKER_01: Okay, um so from when you're when people are making the decision as to what company should I join, where should I make my career?
• 26:26
  SPEAKER_01: My belief is that even though sometimes the growth may be slower, okay, but I think it's much more solid growth.
• 26:35
  SPEAKER_01: Uh it's it's growth which is much more sustainable.
• 26:40
  SPEAKER_01: Okay, uh the culture in the company is going to be much more better for learning.
• 26:45
  SPEAKER_01: Okay, because if I have to be profitable, I just can't have lot hire lots of people to solve the problem.
• 26:50
  SPEAKER_01: That means individuals have to be given greater responsibilities because I cannot pay uh you know whatever uh uh you know, two I can't 2x salaries uh overnight.
• 27:02
  SPEAKER_01: So it's I think almost it works both ways in a way, just as uh companies also, of course, want the best uh employees uh even in Profit Counts, of course, and that is there.
• 27:15
  SPEAKER_01: I think employees also, the right type of employees also come to profit cons where it's not just about money, but it's about the learning, it's about the culture, it's about the long-term growth, and that is there, it's about the focus on customers and products, and it's not about short-term uh decision making, all of which can hurt careers going forward, you know, for for people.
• 27:36
  SPEAKER_00: Absolutely.
• 27:36
  SPEAKER_00: So, what you're really saying is uh I keep saying don't be an overvalued employee in an overvalued company.
• 27:44
  SPEAKER_01: Excellently put, very well put.
• 27:50
  SPEAKER_00: In this section, Rajesh makes some very interesting points.
• 27:57
  SPEAKER_00: He says if you really want to identify a ProfyCon at its early stage, you need to look at the entrepreneur and the mindset of a ProfyCon entrepreneur.
• 28:12
  SPEAKER_00: He says the mindset of a ProfyCon entrepreneur is about the need for independence.
• 28:20
  SPEAKER_00: The way he or she build the culture within the company, which is to say, hey, I don't have all the resources and the money to keep recruiting people.
• 28:31
  SPEAKER_00: They look at solid, sustainable, and valuable growth.
• 28:37
  SPEAKER_00: They look at how they serve customers and they inspire the team to solve customer problems and they're all motivated about solving a problem and not just about mindless growth.
• 28:53
  SPEAKER_00: That seems to be one big point that he is making if you really want to build a long-term business with a profy con mindset.
• 29:03
  SPEAKER_00: He also says that there are very interesting financial models that a profy con looks at or an entrepreneur can look at in the journey to be a profy con.
• 29:17
  SPEAKER_00: The liquidity models of having a e-stock or a shareholding that he talks about uh in the way he's done it, where there are liquidity opportunities for for their employees depending on the value that gets built, is another point that he makes.
• 29:37
  SPEAKER_00: The other key thing that a profit con mindset helps startups or entrepreneurs is the fact that they can take really long-term decisions, which is to say, you know what, I want to invest in that market, I want to invest in this product, but it may not happen overnight.
• 29:56
  SPEAKER_00: And they are not swayed by the short-term decisions or market environment, but they are saying, Hey, this is going to take some time, it may eat into my profit, but I believe that this can help.
• 30:13
  SPEAKER_00: But then, because they have a profit mindset and they are looking at cash flows in a very very detailed manner, the ability to take those bets is something that differentiates a profit con from a unicorn.
• 30:27
  SPEAKER_00: And of course, unicorns can be made if they also think like profit cons and therefore they become more and more valuable.
• 30:36
  SPEAKER_00: So the fact that the business model is built around sustainable, solid growth is something that he talks about.
• 30:45
  SPEAKER_00: Finally, he talks about the fact that employees also need to have a mindset to say, you know what?
• 30:51
  SPEAKER_00: If I'm joining, if I'm joining this company, uh the fact that it may be a slow growth, but solid growth is something that they need to make up their mind and join because obviously there is not the excitement that uh Unicorn might give them.
• 31:10
  SPEAKER_00: Therefore, what motivates you as an employee to join these profit cons or businesses that you believe are valuable is also as important as the profit cons entrepreneurial mindset.
• 31:24
  SPEAKER_00: So when employees really uh you know are being moved by these uh, you know, what I would call it, uh, you know, uh storm, as I would call it, which is, you know, everybody is giving you 40% hike, everybody is giving you 20% hike, you're being promoted beyond probably your capability, you're being promoted too fast, and then you end up uh in a very interesting manner.
• 31:47
  SPEAKER_00: You talk in the book saying that you then start having a lifestyle, which you are then not able to come down, and even the entrepreneur actually then starts having a lifestyle, and that then starts to affect the organization, the people, the business, and that is a serious point that you're making, and you have seen that across, right?
• 32:08
  SPEAKER_01: And we have seen this in in many startups in India in the last I think uh 12 to 18 months also.
• 32:15
  SPEAKER_01: Because you're coming into work, you have artificially high targets which are set, and then you take shortcuts to meet those targets.
• 32:23
  SPEAKER_01: So we also run Netcore, we have targets, okay.
• 32:27
  SPEAKER_01: We have weekly targets, monthly targets, quarterly targets, annual targets.
• 32:31
  SPEAKER_01: I have an advisory board which we are reporting to in some ways.
• 32:35
  SPEAKER_01: Okay, they don't have fiduciary responsibility, but I have external oversight also in what we are doing.
• 32:40
  SPEAKER_01: But I think this has to be built on rational grounds.
• 32:44
  SPEAKER_01: Okay, there is uh you can't fudge numbers, for example.
• 32:50
  SPEAKER_01: You can't do creative accounting practices, okay.
• 32:53
  SPEAKER_01: There's no logic in doing any of these things.
• 32:55
  SPEAKER_02: Correct.
• 32:56
  SPEAKER_01: Because see, the mindset is what when I was running India World for the five years, I was not thinking about an exit.
• 33:05
  SPEAKER_01: I will, of course, have conversations, but it is not that I I'm desperate to raise capital.
• 33:12
  SPEAKER_01: I mean, there was a time when uh uh there was an investor we were talking to, and the difference in valuation was 50 lakhs.
• 33:21
  SPEAKER_01: I was I wanted 17.5 crores valuation, the investor was offering 17 crores and I walked away from it.
• 33:29
  SPEAKER_01: And three months later, I'd sold the business for 500 crores.
• 33:34
  SPEAKER_01: 30x.
• 33:36
  SPEAKER_01: Now, if I had been losing money, I would have I would have said, okay, let's compromise.
• 33:41
  SPEAKER_01: I said I was profitable, I was not desperate to raise capital at all.
• 33:44
  SPEAKER_01: And through my 30 years as an entrepreneur, I in the first meeting that I do with VCs and now Ps, I will tell my expected valuation.
• 33:53
  SPEAKER_01: I said there's no point discussing it later because this is always one of the sticky points.
• 33:57
  SPEAKER_01: I will save you time.
• 33:59
  SPEAKER_01: This is what my expectation is.
• 34:01
  SPEAKER_01: I will not budge from this number, and I'm not desperate for money.
• 34:06
  SPEAKER_01: What I need money is for expansion, for acquisitions.
• 34:09
  SPEAKER_01: I don't need money to fund my losses.
• 34:20
  SPEAKER_01: What is the at the core?
• 34:21
  SPEAKER_01: You know, Fred Reicheld in his book, uh Winning on Purpose put it very put it very well.
• 34:27
  SPEAKER_01: He said the best way to build a business is about getting your existing customers back for more, back for more, and getting them to get their friends and family.
• 34:40
  SPEAKER_01: It is not about raising large capital and spending it on big ad tech platforms to acquire new customers in a leaky bucket, which is what really has happened to a large extent in many B2C businesses, who after 10 years are still called startups and are still losing capital or still losing money, basically.
• 35:01
  SPEAKER_00: Uh so as an entrepreneur, as a profit con entrepreneur, uh you know, you have to constantly hand uh manage and handle uncertainty, right?
• 35:12
  SPEAKER_00: And as an employee, I want to de-risk, I want to be secure, and I want certainty, right?
• 35:19
  SPEAKER_00: Yet there are times when there is not enough capital and you just get a feeling that there is noise in the market, that somebody is growing fast, you know, they are getting promoted, people are getting uh, you know, uh more business.
• 35:31
  SPEAKER_00: So, how do you really balance that in the culture?
• 35:34
  SPEAKER_00: Because you talk about a very interesting uh you know point in the book where you say that you know you've got a great storyteller in Bhavna, okay?
• 35:43
  SPEAKER_00: You are the story writer, and there's a great story builder in Kapil, right?
• 35:48
  SPEAKER_00: So, therefore, a ProphyCon, in my view, has got a great story writer, has got a great storyteller, and has got a great story builder, right?
• 35:56
  SPEAKER_00: And many of these unicorns probably may not have all of this, and there is this whole spinning the story which is there, and then there is this challenge of then uh you know uh ending up uh uh you know being a very fragile organization.
• 36:11
  SPEAKER_00: So, what is the importance of these three roles in a profon?
• 36:16
  SPEAKER_01: I think at the heart of it, what is an entrepreneur doing?
• 36:21
  SPEAKER_01: An entrepreneur is basically imagining a new world two to three years hence.
• 36:27
  SPEAKER_01: Okay, because whatever problem you're gonna solve, you can't come out with a solution right away.
• 36:31
  SPEAKER_01: You have to imagine.
• 36:33
  SPEAKER_01: And then you have to tell a story to attract your first employees, your first customers.
• 36:39
  SPEAKER_01: Okay, that look, this is what's gonna happen if you use the product that I'm building or we are creating, or this is why you should join us for what we are doing.
• 36:47
  SPEAKER_01: So I think world building and storytelling are two very important elements of an entrepreneur.
• 36:56
  SPEAKER_01: And capital is an important I mean, some businesses will of course need capital to begin with, you can't uh do without it.
• 37:06
  SPEAKER_01: But if you think about it smartly, you will not require too much of capital.
• 37:12
  SPEAKER_01: Uh in many businesses, I'm saying, you know, like if you're obviously doing a manufacturing type business, you probably need some amount uh uh capital because there's land, machinery, etc.
• 37:21
  SPEAKER_01: to be acquired.
• 37:23
  SPEAKER_01: I think the story is a very important element because what is there in the beginning to get the first customers, an entrepreneur has to basically has only he is the product.
• 37:38
  SPEAKER_01: When I was uh in in India world uh uh when we were doing uh uh when I was uh uh selling websites, and my first customer at that time was Kotak.
• 37:50
  SPEAKER_01: Okay, uh and I talk about the story in the book, you know, Stuart Mishra, who had faith in me.
• 37:55
  SPEAKER_01: I was telling him that look, and that time the internet was not even really known.
• 38:00
  SPEAKER_01: I mean, people used to mistake it as for another TV channel.
• 38:02
  SPEAKER_02: Correct.
• 38:03
  SPEAKER_01: Um, and I said, look, by creating a presence on the internet, this is what will happen.
• 38:08
  SPEAKER_01: Okay, people will be able to reach you, etc.
• 38:10
  SPEAKER_01: And these were very early days of the internet in India.
• 38:12
  SPEAKER_01: We had barely tens of thousands of uh subscribers in India.
• 38:15
  SPEAKER_01: So, but what I had was passion that this is going to be transformative.
• 38:20
  SPEAKER_01: I'm telling a story.
• 38:22
  SPEAKER_01: You need someone on the other side also who will buy into that story.
• 38:26
  SPEAKER_01: So they may be working in a company, but they are in a way as entrepreneurial as you are.
• 38:31
  SPEAKER_01: Absolutely.
• 38:32
  SPEAKER_01: Okay, but that is the story I have to sell to people.
• 38:37
  SPEAKER_01: I have to do that for my employees.
• 38:39
  SPEAKER_01: Why should you join me?
• 38:41
  SPEAKER_01: My first employees, you know, you have to have faith that one day we are going to change the world, and that's what I tell I when I when I meet with entrepreneurs, I tell them take a big problem to solve.
• 38:52
  SPEAKER_01: The odds of failure are pretty much the same, whether it's a small problem or a large problem.
• 38:58
  SPEAKER_01: But they'll work on big problems.
• 39:00
  SPEAKER_01: Like today in Netcore, when I what I tell people is that look, one of the biggest challenges that uh consumer-facing companies are facing e-commerce companies, B2C, D2C businesses, profitability.
• 39:13
  SPEAKER_01: How can we solve that problem?
• 39:15
  SPEAKER_01: What is the folly that they are committing?
• 39:18
  SPEAKER_01: And that one is ignoring existing customers.
• 39:21
  SPEAKER_01: And there is a$200 billion opportunity.
• 39:24
  SPEAKER_01: Half of the ad tech spends in the world are basically being wasted.
• 39:28
  SPEAKER_01: That is what we can help solve through what we are creating.
• 39:34
  SPEAKER_01: My thing is not about oh, we are going to basically grow the business, and in two years you're gonna sell it off to someone, and we are all gonna make money.
• 39:42
  SPEAKER_01: It's the journey which matters, the destination.
• 39:44
  SPEAKER_01: So you know that you have a broad destination in mind, you have a compass, not a map.
• 39:51
  SPEAKER_00: In fact, I'm coming to that uh you know point that you make in the book, which is you know, the analogy of the map and the compass is a brilliant analogy, and why don't you talk about it?
• 40:04
  SPEAKER_01: So, when a business starts off, if you're a manager, so let's start let's start with the map thing first.
• 40:11
  SPEAKER_01: When you're joining a large company, you typically know what needs to get done.
• 40:15
  SPEAKER_01: There is a process in place, you know, as uh the large companies solid always put it is there's people, product, and process.
• 40:24
  SPEAKER_01: There's a process you've got to fit in there, we are sort of a cog in the wheel.
• 40:28
  SPEAKER_01: It's designed and there's structures in place where you've got to do it.
• 40:31
  SPEAKER_01: There's a clear path.
• 40:32
  SPEAKER_01: Okay, we are at X percent market share, your goal is to grow that to X plus Delta, and that's how your incentives will be there.
• 40:39
  SPEAKER_01: But when you're starting off on your own, you're building for a future which has not yet been created.
• 40:47
  SPEAKER_01: You have a vision and it's you want to make as an entrepreneur your vision materialize over other visions which other competitors have in the world.
• 40:58
  SPEAKER_01: Now, to make that happen, you generally don't have a map, there is no terrain which is defined.
• 41:06
  SPEAKER_01: Okay, take the third left after the second right, there's nothing like that.
• 41:09
  SPEAKER_01: All you have is directionally, this is what I feel we should go.
• 41:13
  SPEAKER_01: And then combined with the fact that every day I'm going in there to reduce my odds of failure.
• 41:18
  SPEAKER_01: Compass directionally, I mean, I may I want to go there, but I may make some wrong turns on the way.
• 41:24
  SPEAKER_01: And I did enough of that when building India World.
• 41:27
  SPEAKER_01: Okay, we tried, we we we knew websites uh for NRIs would be very important.
• 41:32
  SPEAKER_01: I built 13, four worked, nine did not.
• 41:36
  SPEAKER_01: But I hadn't I did not know before which four which ones would work.
• 41:42
  SPEAKER_01: But you keep the odds, you keep the costs low for experiments.
• 41:49
  SPEAKER_01: Okay, like Samachar.com, which I started at that time, all the news on aggregated on one page with the headlines.
• 41:54
  SPEAKER_01: I did it because I felt you know this is a very convenient thing for us to do internally.
• 41:59
  SPEAKER_01: I always thought that the search engine or the cricket site would be the dominant ones, but it turned out that Samachar, just the providing the headlines on one page, single page site, save people a lot of time.
• 42:15
  SPEAKER_01: That became the gateway to all other properties that I had.
• 42:20
  SPEAKER_01: So I think it's about a bit of experimentation directionally.
• 42:24
  SPEAKER_01: I knew that these were needs in the lives of people abroad because I had lived that life in the US.
• 42:29
  SPEAKER_01: When I wanted to come back to India, I could not get information easily on India.
• 42:33
  SPEAKER_01: I missed cricket news from India, I missed Amarchitragata comics, I missed the Lakshman cartoons, and that's what I created.
• 42:42
  SPEAKER_01: But what when we launched, I had 30 sections.
• 42:45
  SPEAKER_01: I did not know which ones would do well.
• 42:47
  SPEAKER_01: It's like a Thali.
• 42:48
  SPEAKER_01: You know, some parts will do well, some people will like these ones, and that's the X.
• 42:52
  SPEAKER_01: You need to do fast experimentation, and that is much easier to do when you are not spending half your time trying to talk to investors or trying to send MI statements to them or trying to then raise the next round more for them than for you.
• 43:09
  SPEAKER_01: That's the sort of key point which I say.
• 43:11
  SPEAKER_01: That's the freedom which I think leads to better businesses being built.
• 43:18
  SPEAKER_00: Rajesh is talking about what does it take to build a Profon.
• 43:24
  SPEAKER_00: And this, in my view, has applications in any startup or uh entrepreneurial journey that you are planning to build or you're running a company today.
• 43:37
  SPEAKER_00: He talks about three key skills that you need to identify and see if you have one in your Profon or in your company or in your startup today.
• 43:50
  SPEAKER_00: Who amongst you, and if there are multiple co founders or if you're only one founder, figure out who is a great story writer, somebody who is able to imagine.
• 44:00
  SPEAKER_00: The future, something that's not been seen, a problem that's not been solved.
• 44:06
  SPEAKER_00: The second one is a great storyteller because since this has not been imagined and the story writer has the ability to imagine the future, the storyteller has to attract the right talent.
• 44:22
  SPEAKER_00: And there's a lot of ambiguity and uncertainty if things will happen as planned, and therefore the storyteller's job is to constantly motivate the people around the problem and keep reassuring them that we are on the path towards the destination we are we are looking at, and we are in the path towards that journey.
• 44:45
  SPEAKER_00: That is something that a storyteller does.
• 44:48
  SPEAKER_00: And finally, you need to have a very strong person who can actually execute the story, which is really about being a person who is actually looking at the story, looking at what needs to be done, and who can execute it operationally well.
• 45:07
  SPEAKER_00: And these are three different skill sets.
• 45:09
  SPEAKER_00: Not as an entrepreneur, you will have all of them in you.
• 45:14
  SPEAKER_00: So therefore, identify in your team who is a storyteller, who's a story writer, and who is somebody who can execute the story very well.
• 45:23
  SPEAKER_00: The second point that he makes is having rational targets and not running with you know creative accounting and figuring out that you know this is a budget or a number that can never be achieved, and therefore that creates problems.
• 45:43
  SPEAKER_00: So that's something that he says ProfyCon founders really look at it and say, Okay, I may be growing slowly this year, but we are in the path towards actually going and solving it.
• 45:56
  SPEAKER_00: Finally, he also talks about the importance of ensuring that the problem that you are attempting to solve is something that the market really needs, and therefore, it's a very large opportunity that you need to go behind, and you know that you know if you solve that problem, that's a big opportunity that can be made.
• 46:20
  SPEAKER_00: Therefore, the fact that you need to do it in a most optimized manner, and therefore, he says, if you are starting up, the entrepreneur is the product, therefore, when you're going to the customers on the other side, you need to find an entrepreneur on the other side who is willing to take risks on your idea, the fact that he's willing to back you because his job or her job is on the line.
• 46:46
  SPEAKER_00: Therefore, the entrepreneur in you is the product.
• 46:49
  SPEAKER_00: Remember that.
• 46:49
  SPEAKER_00: And if you're an employee working for the entrepreneur and the ProfyCon, you are also the product because obviously things may not be clear, processes need to be built, and that is something you need to be ready for.
• 47:04
  SPEAKER_00: So when these businesses need to be built, I think there's a need for some great talent, right?
• 47:10
  SPEAKER_00: So therefore, I come back to uh, you know, if great uh proficons need to be built, uh, you know, great talent needs to be uh, you know, uh attracted.
• 47:20
  SPEAKER_00: And the great talent uh needs to understand the difference between a map and a compass, right?
• 47:27
  SPEAKER_00: And many a time you are not taught that in schools, right?
• 47:30
  SPEAKER_00: Because you said, you know, oh, you should be A grade, you should be top, you can't fail.
• 47:35
  SPEAKER_00: And here in the book, you talk about you know 30 years, 30 different experiments, two have succeeded, 30 failures, okay, and being honest about it and saying, you know what, I made my mistakes, there are failures.
• 47:48
  SPEAKER_00: And I think if you want to attract talent, a failing talent does not mean you don't have the talent.
• 47:55
  SPEAKER_00: I think the fact that your ability to be accepting that and working with an entrepreneur itself is an art, and how do I get ready for it?
• 48:04
  SPEAKER_01: Yeah, so I think what's very important to understand is that a lot of people, even employees, I think do not always want a fixed type of role where you're part of a large organization where your role is very narrow, and at some point of time your learning also tends to be slower.
• 48:32
  SPEAKER_01: You may have some security, okay, because you're sort of a cog in a large system, and what I've always encouraged people, and even now today netcore is a thousand people, netcore and unboxed put together.
• 48:45
  SPEAKER_01: I always say that what I value most more than college degrees or previous work experiences, is the entrepreneurial mindset.
• 48:59
  SPEAKER_01: I tell them think of working in netcore as working in a place where you can take the risks but you also have a safety net.
• 49:08
  SPEAKER_01: I failed many times.
• 49:10
  SPEAKER_01: I did not know, I mean, I did not set out to fail.
• 49:14
  SPEAKER_01: Uh but I tried a lot of different things in my life and they're not working, so I absolutely recognize it.
• 49:18
  SPEAKER_01: But what I will not want them to do is to shy away from taking risks because only when you're willing to break out of the ordinary, you're willing to take bets which have a maybe a small chance of success.
• 49:32
  SPEAKER_01: That's how all the big ideas come.
• 49:35
  SPEAKER_01: And it's never that okay, I failed and therefore I need to just step back and not go down that path again.
• 49:42
  SPEAKER_01: And that's part of where the compass thing comes in.
• 49:45
  SPEAKER_01: I know the direction, maybe I took this one path, maybe it didn't work out, but doesn't mean I go back and I start looking for a map.
• 49:52
  SPEAKER_01: Maybe there's a different path that I can take to get to the same destination.
• 49:57
  SPEAKER_01: That is the mindset which I try and inculcate even in the people in the companies where I've I've built, you know, India World Netcore.
• 50:06
  SPEAKER_01: Because I think if we get this going, that you see most of the times, Swami, and you know it, you've been an entrepreneur, it's not failure as much as the fear of failure, exactly, which holds people back.
• 50:22
  SPEAKER_00: Yeah.
• 50:23
  SPEAKER_00: And the other thing, Rajesh, what I find is people think you know all the answers and therefore you can't make a mistake.
• 50:30
  SPEAKER_00: And the fact that uh, you know, I have to tell people I'm vulnerable.
• 50:34
  SPEAKER_00: Okay, I think I make I maybe I am I know my uh you know uh strategy, I know my uh execution, but I I I'm happy to fail.
• 50:43
  SPEAKER_00: So I think the fact that people have to accept it when you work with an entrepreneur saying, okay, he gets up in the morning and says, you know what, or she gets up in the morning and says, you know what, no, maybe this is not the right strategy.
• 50:55
  SPEAKER_00: We need to so therefore the ability to be open, work without bias, which you write in the book, okay, is what I think each one of us needs to have if we have to make a profit on it, right?
• 51:06
  SPEAKER_01: Absolutely right.
• 51:07
  SPEAKER_01: See, I think just to adding to adding to what you've said, I think the way entrepreneurship really has been through the years.
• 51:20
  SPEAKER_01: It's really about building businesses for the long term, but not shying away from offers which come.
• 51:27
  SPEAKER_01: You know, it's uh as Ayman Rabbi Kotari told me, once it's more important than knowing when to enter a business is knowing when to exit a business.
• 51:36
  SPEAKER_01: But to get to those moments, okay, you have to build the business right for the long term.
• 51:43
  SPEAKER_01: And in there, there are always going to be things which are not going to work.
• 51:48
  SPEAKER_01: I think uh for an entrepreneur also has to be able to identify and accept failure.
• 51:53
  SPEAKER_01: People in the company have to know that they will not be fired if they fail, otherwise, the risk taking is just not there, the breakthroughs are not going to happen, the new ideas are not going to come.
• 52:06
  SPEAKER_01: And I think that's really what entrepreneurship is about.
• 52:08
  SPEAKER_01: It's about pushing the envelope.
• 52:10
  SPEAKER_01: We are not going into an MNC saying that I have 23% market share, I want to make it 26%.
• 52:15
  SPEAKER_01: I'm saying you're what are the new products by which we can make people's and businesses' lives better.
• 52:23
  SPEAKER_01: And I think that is where the world moves forward.
• 52:26
  SPEAKER_01: Entrepreneurs are really what drive the world, and good news overall, actually, in India now, is that India uh for the first time I think in India, there's capital available, there are first generation successful entrepreneurs there who are willing to make these pets.
• 52:46
  SPEAKER_01: This stigma of failure is no longer there.
• 52:49
  SPEAKER_01: There are mentors available to help.
• 52:51
  SPEAKER_01: I think it's phenomenal because entrepreneurs are what will solve India's various problems, whether it's in education, whether it's in manufacturing, it's not government.
• 53:01
  SPEAKER_01: It's really the the power of entrepreneurs is really really the future of the world today.
• 53:06
  SPEAKER_01: And there are so many problems to solve.
• 53:08
  SPEAKER_01: But for entrepreneurs, they have to look at the big problems.
• 53:11
  SPEAKER_00: So so, Rajesh, you uh you touched upon a very interesting point about entrepreneurs, and in a ProfyCon, uh you talk about planning for worst-case scenarios.
• 53:23
  SPEAKER_00: And in in a typical Western thinking, you know, you treat it as a pessimism, right?
• 53:30
  SPEAKER_00: But here you talk about a worst case scenario, and the worst case scenario you talk about you're hedging your bets so that you reduce the risk of failure.
• 53:41
  SPEAKER_00: So, therefore, what how important is you know thinking about worst case scenario and planning it for a Proficon or an entrepreneur?
• 53:52
  SPEAKER_00: And how is it how different is it when you think of a Unicon and that itself makes it a fragile organization, right?
• 53:59
  SPEAKER_00: So, is that something important?
• 54:00
  SPEAKER_00: And therefore, how do you really look at the thinking of the worst case scenario?
• 54:05
  SPEAKER_01: Yeah.
• 54:05
  SPEAKER_01: So worst case scenario becomes very important, especially when an entrepreneur is starting off.
• 54:10
  SPEAKER_01: So there's an opportunity cost.
• 54:11
  SPEAKER_01: So if I go to work for someone in two years, three years, I will make so much of money.
• 54:16
  SPEAKER_01: But as when I'm starting up here, there's always the risk.
• 54:19
  SPEAKER_01: Okay, I'm not able to probably pay myself a lot of money.
• 54:23
  SPEAKER_01: Okay, so there is uh uh and I and and there's a high risk of failure at the end of a couple of years.
• 54:29
  SPEAKER_01: So I think from an entrepreneur's perspective, factoring what is the worst scenario that I could end up in after two years.
• 54:37
  SPEAKER_01: Let's say I have a certain amount of capital which I'm investing into the business, and after two years it the business fails.
• 54:46
  SPEAKER_01: So there's a very high probability that a business will not succeed.
• 54:49
  SPEAKER_01: Now, what am I what is my situation at that point of time?
• 54:53
  SPEAKER_01: If I have a family to look after, uh then obviously you know you can't take that level of risk.
• 55:00
  SPEAKER_01: If you have debt for whatever reason, you cannot take that level of risk.
• 55:05
  SPEAKER_01: Okay, because at that time, then you also have to look at if I go back into the workplace and I want to become uh join a company as an employee, what is gonna be my salary?
• 55:16
  SPEAKER_01: Because so many times we look at the positive scenario.
• 55:20
  SPEAKER_01: So I contrast it with everyone looks at the upside.
• 55:24
  SPEAKER_01: I always, when I when entrepreneurs come to me and I tell them that look, you're building this thing out.
• 55:30
  SPEAKER_01: Uh if this venture fails in two years, what is the situation for you personally after that?
• 55:39
  SPEAKER_01: And in these two years, please factor in the fact that the product development cost will take double the money and double the time.
• 55:48
  SPEAKER_01: Do you have adequate capital for that?
• 55:53
  SPEAKER_01: Because things take time.
• 55:54
  SPEAKER_01: I mean, you because it's only when you take a you go now and ask every potential customer, will you buy if I create everyone else says yes, but it's only when you take the real product out to them and they have to pay for it from their ballot uh PL statements from their bank account, will you really know whether your product is is solving a problem or not?
• 56:14
  SPEAKER_01: And then if it doesn't, then what happens?
• 56:18
  SPEAKER_01: The business plan is only good enough to get you to start on the entrepreneurial journey.
• 56:25
  SPEAKER_01: The business plan is is done once you are on the journey.
• 56:30
  SPEAKER_01: When you meet your first potential customer and they tell you what they think about your product, is when you know the real uh learnings start happening.
• 56:40
  SPEAKER_01: So I think for an entrepreneur, it's very important to say that okay, if what happens if my venture fails?
• 56:46
  SPEAKER_01: Personally, can I afford that failure?
• 56:51
  SPEAKER_01: And therefore, you have to work within those limits.
• 56:54
  SPEAKER_01: I think that's very critical because in many cases people are putting up their own surplus capital.
• 56:59
  SPEAKER_01: So time is one thing, but they're also investing capital.
• 57:05
  SPEAKER_00: So if you are an entrepreneur or if you're working for a startup, the fact that you probably will be operating on a compass model is something I found a beautiful and an interesting analogy that he makes.
• 57:22
  SPEAKER_00: So, what is it that a compass does?
• 57:25
  SPEAKER_00: Compass broadly tells you the direction, but it doesn't tell you the destination.
• 57:30
  SPEAKER_00: So, if you're working for a Proficon or a startup, or if you're an entrepreneur, you probably have a compass kind of a mindset, which is to say, hey, this is the problem I'm trying to solve.
• 57:43
  SPEAKER_00: I think this is the beginning of opportunity, and I believe this can take me there.
• 57:48
  SPEAKER_00: And during the process, you may make several changes to the plan.
• 57:53
  SPEAKER_00: So you may take one route, you may hit a dead end, you then come back and then try something else.
• 57:59
  SPEAKER_00: So if you are working for a profit con, be ready to accept this as the reality.
• 58:06
  SPEAKER_00: If you're working in a very large established company, a multinational uh large Indian company, they go by maps because it's an established business, you know what you have to do.
• 58:17
  SPEAKER_00: Getting up every day in the morning, you know what needs to get done, you need to know what is the process that you need to place, you need to ensure that uh you know you get things done.
• 58:28
  SPEAKER_00: How do you get people the clarity to ensure that you know they achieve their numbers?
• 58:34
  SPEAKER_00: But here there is absolute ambiguity.
• 58:36
  SPEAKER_00: So the fact that there is a difference between a profit con and an established business or an entrepreneur who's building a business, I think the compass and a map analogy is very interesting, and that is something that one needs to keep in mind.
• 58:54
  SPEAKER_00: The other point that he makes is because you're passionate about the idea, the fact that you always keep thinking about the upside.
• 59:04
  SPEAKER_00: So if you are a profit con, most often what these entrepreneurs do is keep thinking about even when they are starting up, and more importantly, when they are starting up, the fact that they really look at worst case scenarios saying, Hey, if this fails, will I be, you know, what will be my you know final loss or the impact that it will make.
• 59:28
  SPEAKER_00: So he talks about the fact that when you think of worst-case scenarios, what it helps you do is to reduce the options of you know how you will fail, or if it fails, where will you be at that point in time?
• 59:46
  SPEAKER_00: I think that's something that he talks about.
• 59:49
  SPEAKER_00: Therefore, you look at how much of risk can you take, what is the appetite for the risk that you want to put in into the venture, and therefore you keep optimizing it.
• 1:00:03
  SPEAKER_00: Therefore, what I really liked about what he said was normally people tell us that entrepreneurs are risk takers, and he says entrepreneurs are risk optimizers, so therefore, a profy con by its nature and the entrepreneur working there is a person who basically looks at how do I reduce the risk in this venture, and that's really what differentiates the Proficon from a Unicon.
• 1:00:38
  SPEAKER_00: So uh, which makes me ask a very important question in terms of your values and beliefs.
• 1:00:46
  SPEAKER_00: Uh, where this thinking, uh, how has it been inspired by your father and by your mother, which you write in the book on cash flow and uh you know things like that?
• 1:00:57
  SPEAKER_00: So, what has been the inspiration and is this value instilled very early in your life?
• 1:01:05
  SPEAKER_01: Absolutely, Swami.
• 1:01:07
  SPEAKER_01: So I I still memories I have uh because my father was in his very early days as uh when he was working uh and when he just started off, uh his earnings were very small.
• 1:01:23
  SPEAKER_01: I mean, this is India in the 1970s.
• 1:01:25
  SPEAKER_01: Yeah.
• 1:01:26
  SPEAKER_01: We are staying in a small place in um in Mahim, uh Matunga at that time.
• 1:01:32
  SPEAKER_01: And every month uh he would give uh uh you know, whatever the the money which would come into my mom, and then every day she would write down how much we spent okay, on food and whatever else because we had to make the ends meet uh in that money that was there.
• 1:01:49
  SPEAKER_01: So cash flow becomes very important.
• 1:01:52
  SPEAKER_01: That's today the number one killer even for companies.
• 1:01:56
  SPEAKER_01: Okay, you may have uh you know someone uh willing to pay you in the future, okay, is not important as important as having the money in the bank now because all your costs are upfront.
• 1:02:09
  SPEAKER_00: Brilliant.
• 1:02:10
  SPEAKER_01: You cannot tell your subjeewala or your uh uh uh landlord that I will pay when my next salary uh when my next uh sort of uh paycheck uh from my customer pays.
• 1:02:22
  SPEAKER_01: You can't do all of that.
• 1:02:24
  SPEAKER_01: So the importance of understanding cash flow I think comes in there, number one.
• 1:02:31
  SPEAKER_01: Second is you know, one of the things that my father also told me when I started off is at that time there was no sort of venture capital, this was in the early 90s, uh at least not in India, uh, was that do not lose other people's money, do not take on debt, do not lose other people's money.
• 1:02:48
  SPEAKER_01: And what he was very clear, he said, Whatever you do, I don't want to hear any person say that because of your son, I lost money.
• 1:02:59
  SPEAKER_01: He was very clear on that.
• 1:03:00
  SPEAKER_01: He said, Do whatever you want in life.
• 1:03:03
  SPEAKER_01: Now once that that was the starting mindset, I had basically two sources of capital, I had money which I had saved from the US, and then I had to figure out how to make my business profitable very quickly.
• 1:03:14
  SPEAKER_01: And even though my primary business was websites, and we tried to get some subscription business going in the beginning, I realized that I had to get a services business for the short term.
• 1:03:27
  SPEAKER_01: It was building websites for brands.
• 1:03:29
  SPEAKER_01: I had not that was not there in my original plan.
• 1:03:33
  SPEAKER_01: My original plan was very simple NRIs have a need for con great content, and we're gonna provide that to them.
• 1:03:39
  SPEAKER_01: But that plan sort of became a problem when I realized that all of GE employees in the US had one subscription.
• 1:03:46
  SPEAKER_01: Everyone was sharing the password and I had no way to control it.
• 1:03:51
  SPEAKER_01: You know, we'll economize.
• 1:03:53
  SPEAKER_01: I mean, what Netflix is realizing now with all the password sharing.
• 1:03:58
  SPEAKER_01: So I think it's very important really to know how you are going to build the business right.
• 1:04:07
  SPEAKER_01: Building a business right is basically you may need to make short-term decisions to ensure cash flows are there in the bank because every one of your employees is has to be paid, every one of your payouts has to happen in 30 days.
• 1:04:20
  SPEAKER_01: In countries like India, it takes 90 to 150 days to get money, and you need cash flows to support the 60 to 120 day period.
• 1:04:28
  SPEAKER_01: How are you going to make that happen?
• 1:04:30
  SPEAKER_01: Many times this is not taught.
• 1:04:32
  SPEAKER_01: I mean, you uh uh we can see all of this on a PL or an uh but uh you know when you have to live through this, this becomes very, very important.
• 1:04:40
  SPEAKER_01: You don't pay your employees, they want to walk away.
• 1:04:42
  unknown: Correct.
• 1:04:43
  SPEAKER_01: So cash flow, I think, is very important.
• 1:04:46
  SPEAKER_01: This is what I think you have we have to learn, or we have to even teach our kids at an early age, you know that uh uh living within your means becomes very important because there are no easy sources of external capital.
• 1:04:59
  SPEAKER_01: You can't banks don't give you money easily.
• 1:05:02
  SPEAKER_01: Where else are you gonna get money from?
• 1:05:04
  SPEAKER_00: So so if I'm a profit con and if I'm not uh you know uh raising money, and if I don't have external investors, and the normal uh you know story that you hear is uh you know, you get you get some great advisors, great mentors, uh they you know give you direction as a uh you know as a promoter or as an entrepreneur, and uh and if I'm a profy con, uh how do I balance uh you know ambition?
• 1:05:33
  SPEAKER_00: Okay, especially when nobody is there to push you.
• 1:05:36
  SPEAKER_00: So, how do you really then build the hundred million scale that you talk about?
• 1:05:41
  SPEAKER_00: And what did you do to ensure that you know the ambition was reset every year?
• 1:05:48
  SPEAKER_01: So I never set out to build a hundred million dollar company.
• 1:05:51
  SPEAKER_01: Okay, so when I started Netcore, I my first goal was for India World was about a couple of crores in revenue.
• 1:05:58
  SPEAKER_01: I want to build a 10.
• 1:06:00
  SPEAKER_01: crore company and then when I reach 10 I said okay that not too bad now can we do hundred when we did 100 I said okay the next horizon is the thousand crores how do you make that happen so it's one step at a time where I reset the goals with every crore now the thing is that what you have to do is really you think of this as basically mountains beyond mountains you talk about it in the book so you can I I could not see the hundred crore mountain when I was at say four five crores in revenue I can see the 10 crore mountain and then the the company also the people who are there the processes who are there they keep changing okay sometimes I wake up and say you know we've got all of these people processes how did we ever make this thing happen but we didn't grow from zero to thousand we went zero to ten to hundred to three hundred to five hundred and you learn at every step there are people who come in who have done these things before they know those processes I it's not that I have to know them.
• 1:07:08
  SPEAKER_00: But you're basically getting in people at different stages so you've got to get the right talent also at the right stage of your company and at times you know we've made mistakes where we've got a person with a large enterprise mindset too early on and there's a mismatch because at the early stages you've got to hustle so for example when you're entering a new country like in the US for example US we are a startup I can't work like a hundred million dollar company in the US because we have to build out the business one customer at a time you got to think like an entrepreneur out there or like on how an entrepreneur would think uh hustle you know think out of the box how do you get my first five customers ten customers all of that has to be done and therefore you need a leader like that you can't have a person who comes in there expecting everything in place and now I'm going to grow the company there is nothing to grow you've got to build it organically you also talk in the book about having uh you know an advisory board that asks you those questions right so which is very important so at one end it's not about the ideal world of not raising money but it's also about saying okay how do you behave like a unicorn yeah and having the right advisory board which you know uh uh you know which fuels your ambition and questions your ambition right very good point I missed that earlier on so one of the things uh I was very lucky with I think is that while I had never worked anywhere else I had just worked at one company in the US for a couple years before returning I was able to find and I read this somewhere you know this idea of creating an advisory board uh because the board has too many sort of fiduciary responsibilities and so on so uh uh Ram Raj was my first uh advisory board member he had bought my company at SEFI he knew me and for many years uh we didn't even pay him anything I mean he would just come and I think the guidance that we received from him was incredible at the early stages because here's what happens when I when you're involved in the business okay you also get a little bit of tunnel vision okay because you got to worry about day-to-day problems okay if someone is not doing very well okay it's not easy for you to question them because you're supposed to know everything you're there correct but an advisory board can take a step back and ask you tough questions and ask the uh team tough questions which sometimes you sort of miss out on it also creates a discipline of what a public company is used to where you come out with now okay here is what I'm gonna deliver here are my targets for the next quarter and then you allow yourself to be measured until I got that it was oh we did our best efforts this is the best numbers we could do okay okay you did your best no problems but now there was someone else they had to answer to that you know because uh uh there was Ram Raj questioning them and I mentioned I think in the book also that you know we were trying to grow international for a long time and we were not succeeding and he said is it like Minka an attractive distraction for all of you guys just making your international trips and that hurt yeah of course we never thought like that but I could not have said it the way he did it correct and it was that time that we said no Ram we are going to make this thing work and show it to you and we did but you need that little uh little friendly pressure and push from someone from the outside because if you're a ProphyCon there are no investors there's no technically uh a formal board i mean it's family members or friends whoever there were their early investors uh if they are there uh family and friends will be there on the board but getting in two or three people I think can make a big difference to making the entrepreneur see a world which is beyond you know a much longer horizon asking the tough questions and positioning the business better for long-term success.
• 1:11:21
  SPEAKER_00: So uh I come back to the point that you were making uh you know when you started this US business and you know a big enterprise mindset uh is one thing that you're talking about which uh you know uh you can't afford you have to hustle your way through uh most of the times uh you know people underestimate the effort required okay to build a business right and in large companies uh the momentum takes them along but in a in a in a company like what you are trying to build uh you know there is almost this feeling when you actually ask them this question this is not what I was hired for and you talk about this mindset in the book this is not what I was hired for mindset and that is something that people should be ready for and and the advisory board then allows you to ask these kinds of questions to these people and that is a very important uh I would say radar that uh helps a profycon right oh absolutely right see in the early stages of a company there are not many clear job descriptions okay because you're there's a lot of unknown like we talked about earlier you know it's a compass it's not like a perfectly well defined map no customer has a problem there's a fire to be fought you've got to fix that problem okay there is no uh there is no manager or uh uh someone up to report to you know the buck stops typically uh the stop buck stops with the entrepreneur and I think see this is really where it's the mindset which is very very critical that I am not I'm going out there if I survive today my odds of success improve if I survive tomorrow it's even better it's not that oh I'm gonna now work for the next two years I'm gonna sell this company for 20 million dollars and live happily ever after because then the decisions that you are going to make are very different from the one that look I am in it for the long term this is what I'm gonna do for the rest of my life that mindset again is very very different from that exit oriented and that's why I also say that that for an entrepreneur while they're reaching the destination is one thing the journey is very important.
• 1:13:45
  SPEAKER_01: You have to be in it and there are there are going to be more down days than up days you know you are going to come into work okay these are 20 things to do some customer has a problem something is down you've got to look at it and you've got to spend your time in that and then you look at the end of the day and you say look out of the 20 things I want to do today I could barely manage to do five and you've got to like this feeling so that is how life is going to be in the early stages of an entrepreneur of an entrepreneurial venture till you are able to grow to a certain level you you have to you know uh accept what you said earlier also the uncertainty that goes with the terrain okay the comfort with the compass okay the mountains beyond mountains that are there all of this is very important in building a business and but what you're what you're what really drives you is the fact that I am going out and solving problems for my customers because that is the core of an entrepreneur entrepreneur is identifying a gap in the marketplace and saying that I'm going to solve that problem and if I solve that problem for enough people I will get revenues and if I keep my cost low that's how I get profits.
• 1:15:08
  SPEAKER_00: Exit is not the drive that has to be removed from the equation in this section Rajesh talks about the importance of cash flows and how he learnt it from his parents and he makes some points which I believe are very important.
• 1:15:34
  SPEAKER_00: The fact that you need to live within your means so if you are running a business the fact that you know how do you estimate the bet and therefore know that you know this bet can help you still live within your means I think that's something that he talks about and therefore he understood the fact that cash flows are the lifeline of a company therefore you need to find the gap between the money needed versus the money that flows in.
• 1:16:10
  SPEAKER_00: Therefore profit cons have a great way of identifying this gap between the inflow and the outflow therefore understanding cash flows becomes very very important.
• 1:16:22
  SPEAKER_00: The other thing he talks about is the fact that if you are building a company the profit cons and the people there need to understand the entrepreneur also needs to reiterate this fact and be ready that there are going to be more down days than updates.
• 1:16:43
  SPEAKER_00: Therefore you walked into an office on a particular day you may come with a plan but the plan does not get solved at the end of the day or you're not able to address that problem but you may be addressing a different problem.
• 1:16:57
  SPEAKER_00: And that also happens with the people who work with the entrepreneur.
• 1:17:03
  SPEAKER_00: So he wants to solve the problem or she wants to solve the problem and that's the problem that has hit them that day and therefore there are no clear job descriptions.
• 1:17:12
  SPEAKER_00: So when somebody comes in and says give me a clear job description the fact that at an early stage and as the company keeps growing the job descriptions get a little better but the fact that you may need to do multiple things and therefore he also reiterates the importance of identifying leaders or situations.
• 1:17:32
  SPEAKER_00: So therefore if you are trying to start up something and you hire a leader with an enterprise mindset the fact that he or she may not be able to do it because they are used to having resources to execute something versus the fact that you may not have the resources but yet you need to achieve the vision and the plan.
• 1:17:54
  SPEAKER_00: And that I think is an another interesting point that Profons seem to be getting better.
• 1:18:00
  SPEAKER_00: And if you're an entrepreneur you need to have this thought in mind as you move forward.
• 1:18:06
  SPEAKER_00: So uh so the other uh important point Rajesh you make in the book which I thought was interesting was uh the way uh Proficon identifies a customer is very different from a Unicon identifying a customer that's really what I understood right say for example you mentioned the name of Srida Suraj okay O Turk where you identified an equivalent entrepreneur on the other side who's willing to take the risk and when you are a Profon your ability to have a note for such people on the other side okay is also very important because you know you may do hundred meetings but you need to know whether this client is able to take a decision with your uncertainty because he is answerable okay to a large organization and a prof a proficon entrepreneur in my opinion has to have a nose for such clients.
• 1:19:01
  SPEAKER_01: Very well because both sides what is happening is the entrepreneur is selling a vision for what the future will look like I don't have success stories.
• 1:19:14
  SPEAKER_01: I don't have case studies for the first few customers I'm basically showing them that look if you took if you bought my product or my service this is how your life will become better.
• 1:19:25
  SPEAKER_00: This is the problem I'm solving okay the other person who's buying also has to believe in you and that look they have to they are also making a bet not on a map but on a compass in a way yeah because what if you don't deliver yeah we so in a way and they are you're right this is not and sort of you need a matchmaking almost you have to you have to find the equivalence on both sides and therefore early especially when you don't have enough capital and when you actually have to then win every day you need to identify those risk taking people on the other side who are willing to say you know what I'm fine if I fail because I can handle it internally.
• 1:20:10
  SPEAKER_01: Absolutely right and I even before handling it internally I can persuade my management that they should make the bet on this unproven company an entrepreneur who is selling them a dream about how their tomorrow will be better.
• 1:20:27
  SPEAKER_01: As we talk about this journey of yours uh Rajesh you talk about your wife Bhavna who's been uh you know a kind of a light for you and she keeps asking you the hard questions and uh uh you know how important is that been and how do you how do you ensure that you balance uh you know this when you actually start uh looking at the business in an unemotional way so um Varna and I have worked together for most of the uh 30 years that I've been an entrepreneur ours was an arranged marriage and uh she is a CA and when my first businesses did not work uh when I and I had the idea of India world I had to reduce my team and I asked her to start working with me because uh I said I don't have enough money to pay other people and it was the uh the the work that I made her do in the company was work which was very different from her CA background.
• 1:21:39
  SPEAKER_01: In fact she still reminds me that the first thing I told her to do was to we had scanned a book the scam by Suchida Dalal and uh Devishi's Pasu.
• 1:21:48
  SPEAKER_01: We had put that up on the internet and she had to proofread it.
• 1:21:51
  SPEAKER_01: Because the scanning machines were not perfect at that time.
• 1:21:54
  SPEAKER_01: And it is like the most I mean now I feel sort of I mean how could I have made her do that but but I mean in in that sense we have worked together our domains are very different.
• 1:22:08
  SPEAKER_01: Okay I am excited by tech uh and forward vision she loves interacting with people she can do pretty much everything except tech um our discussions at home have always been more about the business and about the company because that's really what uh what our lives have been about and I think having that kind of support system I think is very very important because there is no what I would call as work-life balance it's work-life integration for an entrepreneur okay even when I'm on when we used to go on vacations I would try and set up meetings most of the time with people there uh uh in the early years uh um and it's something which both have to accept because if uh if your spouse does not support you and they don't it is not it's not about working together in the same business.
• 1:23:04
  SPEAKER_01: Correct but if you cannot you're already fighting a battle in the marketplace you cannot be fighting the home front battle.
• 1:23:11
  SPEAKER_01: Exactly so I think that kind of understanding is very important and Varna has stood by me through the failures through the worst of times and she gave me the best advice after I'd done my India world deal when she said that forget after we had the big check that we got he said forget the past because if you think about the money in your bank you will never do anything again in life what you are best at is building things from scratch doing startups get back to doing that and even after that for the next seven eight years I failed multiple times and she accepted all of it trying lots of different ideas she knows in fact in many ways she is the bigger entrepreneur because she bet on me as an entrepreneur uh your work ethic and discipline around what you write right which is to say you know how you really prepare yourself.
• 1:24:13
  SPEAKER_01: So tell us a little bit about how that helps you take the right decisions so I've been writing daily for uh for the last 20 plus years in the middle in the middle when I was doing work excuse me on the political side I stopped for about seven years because I could not write about the work I was doing and especially after the pandemic again I started in April 2020 so a couple of things which I do in my writing is I first write for myself and I write on a blog it's sort of semi-long 500 odd words a day I do not care about vanity metrics I'm not on social media because for me one of the most important things is contiguous time to think and because I am forcing myself in a way to have something new to post every day I have to constantly think about new ideas.
• 1:25:09
  SPEAKER_01: So what which means I have a flywheel going reading learning new things thinking writing and reading and I I call it in a way iter writing it's iterative writing I'm not waiting for the perfect ideas and I'm willing to be completely open and transparent with my ideas because I know that the idea is a small part of what I have to finally implement.
• 1:25:32
  SPEAKER_01: It's the execution it's the 19 other things not just the one thing that I'm putting on which are there in my head which no one else will be able to replicate easily and I think that more entrepreneurs founders should write and it's not about tweeting it's not about vanity metrics saying I put this post on LinkedIn and I had so many people read it.
• 1:25:55
  SPEAKER_01: Write for yourself because it helps clear my own mind.
• 1:26:00
  SPEAKER_01: My new ideas have come when I'm in that writing zone you know on a weekend morning for two to three hours okay uh where I let the mind roam free the words sort of flow out because they're there in the subconscious and I go to bed the previous night when I have to do my blog writing with a broad outline.
• 1:26:22
  SPEAKER_01: So I'm not waking up in the morning with a blank sheet of paper in front of me.
• 1:26:25
  SPEAKER_01: I'm waking up knowing that I have these four or five key points which I need to build on.
• 1:26:30
  SPEAKER_01: And once I start the words just start coming.
• 1:26:34
  SPEAKER_01: Even the book was written in a way like that.
• 1:26:37
  SPEAKER_01: Even today I write and post something every day on my blog and I think it's just made me a better thinker a better entrepreneur okay a better leader and I think uh now I find that you know when I want even for uh customer acquisition I can send links to my writings there's a body of work which I can show to people that look here are the ideas read them we've had uh employees who have come by reading some of the writings saying I I I buy into this vision I want to work with you on making this happen.
• 1:27:12
  SPEAKER_01: I think too often we get caught up in you know the the the the tweets and the pure LinkedIn post wondering about how many followers I think two things I would advise people is maximize the contiguous time because you can't write uh you know essays if you are constantly distracted with uh WhatsApp messages or whatever that's coming in and second is write for yourself don't worry about other people because it's going to make you better as a leader manager entrepreneur you know everything you need to have a nose for looking at the client on the other side or the customer on the other side saying is this customer willing to take the risk given that we don't have too much
• 1:28:00
  SPEAKER_00: Of a reputation to back them inside the company, and therefore, being smart about acquisitions is something that ProfitCon entrepreneurs and startups really need to look at, and therefore, if you want to build a ProfitCon, the fact that you need to identify such clients and customers and also help your employees think around this and ensure that they execute it on the ground is important.
• 1:28:30
  SPEAKER_00: The other point that he makes is about his own ecosystem, which is really people who he worked with, which is really his wife Bhavna, his CEO Kapil, and many people, and the point that he makes here is that the need for having people with complementary skills.
• 1:28:53
  SPEAKER_00: So it can be your you know own family, but it could be your co-founder.
• 1:28:59
  SPEAKER_00: But the fact that do you have complementary skills and do you respect the complementary skills and do these complementary skills add up?
• 1:29:07
  SPEAKER_00: I think that's important.
• 1:29:08
  SPEAKER_00: You may have complementary skills, but if you don't have a common value and belief, then the fact that it may not work is something that he talks about, and therefore the fact that you need to have an emotional yet a non-emotional relationship is something that you see the ProfitCon entrepreneurs have, and the startups that need to have this kind of a mindset.
• 1:29:37
  SPEAKER_00: Finally, if you are a founder and if you are an entrepreneur, he talks about the importance of contiguous time to think.
• 1:29:46
  SPEAKER_00: The fact that do you have a body of work to think, write, and share it with the society or the community at large?
• 1:29:55
  SPEAKER_00: Because this body of work allows you to think about your ideas, put them to practice in writing.
• 1:30:02
  SPEAKER_00: It therefore gives yourself a clarity to actually look back and then say, Am I thinking it right?
• 1:30:10
  SPEAKER_00: Am I having clarity of thought in how I see it and how I want to execute it?
• 1:30:15
  SPEAKER_00: And therefore, he talks about taking time to think, read, reflect, write, and that is something that he strongly recommends.
• 1:30:26
  SPEAKER_00: And that he says will make you a better thinker, a better leader, and a better entrepreneur.
• 1:30:34
  SPEAKER_00: Rajesh, what does success mean to you?
• 1:30:37
  SPEAKER_01: Solving problems for others.
• 1:30:40
  SPEAKER_01: Because if I can solve problems, and there are lots of problems in the world, not just in business.
• 1:30:44
  SPEAKER_01: I tried it as a political entrepreneur also.
• 1:30:47
  SPEAKER_01: So I love solving problems, especially big problems.
• 1:30:52
  SPEAKER_00: Uh what is one piece of advice?
• 1:30:55
  SPEAKER_00: You would have got lots of advice, but what is one piece of advice that stayed with you for your life in whatever you do today?
• 1:31:04
  SPEAKER_01: I think uh what I had said earlier, the uh the advice that Himendrabai gave me more important knowing when to enter a business is knowing when to exit.
• 1:31:15
  SPEAKER_01: Because at that time I genuinely had second thoughts about whether I should sell India world because I had built it up from scratch.
• 1:31:21
  SPEAKER_01: Bhavna and I had worked five years and I said, Hemendrabai, this is like giving up a baby.
• 1:31:27
  SPEAKER_01: And if I had not done that, if I had not sold Swami, my life would have taken a very different course because I don't because the crash.com crash happened after that.
• 1:31:35
  SPEAKER_01: I don't know what I would have what would have happened to India, but they would have survived that long winter which came after that.
• 1:31:42
  SPEAKER_00: Uh what would be uh your advice for an 18-year-old in college today?
• 1:31:49
  SPEAKER_02: Experiment.
• 1:31:51
  SPEAKER_02: Try out new things.
• 1:31:53
  SPEAKER_02: Okay.
• 1:31:54
  SPEAKER_01: And it's a great age.
• 1:31:56
  SPEAKER_01: My son is 18, uh, he's going to undergrad.
• 1:32:00
  SPEAKER_01: And I think that's an age when people have to be have to go in there with an open mind.
• 1:32:08
  SPEAKER_01: So it's not just the world in the call in the in the classroom.
• 1:32:14
  SPEAKER_01: There's a world outside the classroom.
• 1:32:16
  SPEAKER_01: And today when I look back, again, the crucible moments which made me.
• 1:32:21
  SPEAKER_01: Yeah.
• 1:32:21
  SPEAKER_01: Like I write about a little about this in the book in IIT.
• 1:32:24
  SPEAKER_01: I realized after the first semester that I'm not cut out for the academic time.
• 1:32:27
  SPEAKER_01: Everyone is a topper here, and I cannot match them.
• 1:32:30
  SPEAKER_01: But I found my calling in the cultural activities.
• 1:32:35
  SPEAKER_01: Um, and I was at least I experimented, I tried different things.
• 1:32:39
  SPEAKER_01: Otherwise, I would have been probably miserable in the middle or lower half of the class and uh not learned anything else.
• 1:32:47
  SPEAKER_01: I made the best of friends, I learned lots of new things by just going in there with an open mind and realizing that education does not happen only in the classroom.
• 1:32:56
  SPEAKER_01: I think that's I would say is what an 18-year-old should should think about.
• 1:33:01
  SPEAKER_00: If you were to invite uh three or four people for your dream dinner, who would you want on the table and why?
• 1:33:12
  SPEAKER_00: Oh, great question.
• 1:33:17
  SPEAKER_01: I'd say number one would definitely be my father.
• 1:33:22
  SPEAKER_01: Okay, because the amount I've learned from him through the years I think has been enormous.
• 1:33:32
  SPEAKER_01: I mean, I know we have dinner every day, but I have to look at the people, influential people I think in my life.
• 1:33:39
  SPEAKER_01: I think he and of course my mother, but my father as an entrepreneur who continued to try despite failing multiple times.
• 1:33:50
  SPEAKER_02: I saw failure firsthand, of course, in uh in his uh I think the other person uh would definitely be uh Warren Buffett slash Tali Mangar.
• 1:34:07
  SPEAKER_01: I think their vision of building long-term businesses have just been phenomenal.
• 1:34:14
  SPEAKER_01: I mean, the way they think about modes, for example, in a business, uh and the ability to make decisions, how do you avoid biases?
• 1:34:22
  SPEAKER_01: And other person is, of course, Jim Collins.
• 1:34:25
  SPEAKER_01: I think his books have been phenomenal.
• 1:34:27
  SPEAKER_01: Uh especially the last book, which is not as well known beyond entrepreneurship 2.0, where he talks about the map.
• 1:34:34
  SPEAKER_01: He has basically given us a vocabulary uh bullets before cannonballs, the 20 mile march, the flywheel, and so many other things.
• 1:34:44
  SPEAKER_01: Who, first who, then what.
• 1:34:47
  SPEAKER_01: And they really uh because I think as an entrepreneur, really what your goal is is how you have to think just how can I build an enduring great business?
• 1:34:56
  SPEAKER_01: Now, like I said, the acquisitions or exits can happen on the way, but the mindset has to be that, and that's what uh Jim Collins sort of uh talks about uh uh uh at length in his book.
• 1:35:10
  SPEAKER_01: There's another very good new book come out in a similar vein called The Centennials.
• 1:35:16
  SPEAKER_01: It's by Alex Hill.
• 1:35:17
  SPEAKER_01: Okay, uh he talks about the 12 habits of enduring great organi enduring organizations because what I look at is that when I'm building a business, how do I make it last beyond me?
• 1:35:30
  SPEAKER_01: It could be a business, it could be an institution.
• 1:35:33
  SPEAKER_01: It should not sort of die with me.
• 1:35:36
  SPEAKER_01: So, how do I build something for the long term?
• 1:35:39
  SPEAKER_01: And I think that's the best legacy that we can leave, whether it's in the business sector tomorrow, uh uh in the social sector, which I'd like, or in uh institutions you know, beyond the business space is what I want to be able to build.
• 1:35:53
  SPEAKER_01: So, I mean, these are people who've uh whose writings uh have had a big influence on me.
• 1:36:00
  SPEAKER_01: I've not met uh any of the others, of course, besides my father.
• 1:36:03
  SPEAKER_01: In fact, when the pandemic started, I did an exercise with my father.
• 1:36:08
  SPEAKER_01: I mean, I we uh because he was sitting at home.
• 1:36:10
  SPEAKER_01: I mean, you could not go to office, and I saw him feeling very active person all his life.
• 1:36:16
  SPEAKER_01: And I told him to tell him and uh uh uh uh um my son and nephew and niece the story of his life, he and his uh uh and my mom.
• 1:36:28
  SPEAKER_01: You know, they are hundred years.
• 1:36:30
  SPEAKER_01: How was the India?
• 1:36:31
  SPEAKER_01: How how did he grow up in a village?
• 1:36:33
  SPEAKER_01: Okay, what were the decisions that he made, which turned out to be pivotal moments in his life?
• 1:36:38
  SPEAKER_01: Because we are all made by those four, five, ten decisions.
• 1:36:41
  SPEAKER_00: Exactly.
• 1:36:41
  SPEAKER_01: That's what I call them decadal decisions.
• 1:36:43
  SPEAKER_01: You need to get one or two of those big decisions right every 10 years.
• 1:36:46
  SPEAKER_01: I mean, Warren Buffett's basically career, if you see there are probably six or ten stocks which have delivered the maximum returns for him.
• 1:36:52
  SPEAKER_01: He got those decisions right, not just to buy, but to not sell.
• 1:36:56
  SPEAKER_00: Correct.
• 1:36:57
  SPEAKER_01: Okay, and that's how if we start thinking, you gotta because otherwise we spent a lot on these small decisions, you know, which are probably inconsequential, reversible, but we we waste our time on a lot of these things.
• 1:37:08
  SPEAKER_01: But these are people who got the big things right, big ideas, right, big decisions, right.
• 1:37:12
  SPEAKER_01: I think there's a lot to learn.
• 1:37:14
  SPEAKER_00: And my final question, Rajesh, is uh what is one thing that uh you know you believe that others don't agree with you on?
• 1:37:24
  SPEAKER_01: That it is actually possible to build large businesses without capital.
• 1:37:30
  SPEAKER_01: Okay, I mean uh I'll tell you a small story.
• 1:37:34
  SPEAKER_01: You know, a few years ago when we were trying to raise PE money uh about four years ago.
• 1:37:40
  SPEAKER_01: Uh we couldn't raise it because many of the potential investors said we don't want to invest in you because you are profitable.
• 1:37:47
  SPEAKER_01: Look at other companies, they're growing so much faster than you.
• 1:37:50
  SPEAKER_01: We'll give you money, but be ready to spend on growth because your growth is much slower than what they are growing in.
• 1:37:59
  SPEAKER_01: We want growth.
• 1:38:01
  SPEAKER_01: And a few months later, uh one of them called me up and said Rajesh, you were right, we were wrong.
• 1:38:09
  SPEAKER_01: Your model of profitable growth is the better one to follow because we are now seeing the troubles in the companies where we invested only focused on growth.
• 1:38:19
  SPEAKER_01: So I think it was contrarian.
• 1:38:21
  SPEAKER_01: I mean, many times even my own uh colleagues in Netcore said, Look, look at those companies, they are growing X percent, and we are much uh we are growing.
• 1:38:31
  SPEAKER_01: But I said for me to get to that growth, I will have to use up all the profits and more, which I don't have.
• 1:38:36
  SPEAKER_01: That's not something I will do.
• 1:38:39
  SPEAKER_01: So that it even today, I think it's a contrarian approach because the mindset for everyone is you the first thing you write a business plan and you've got to go out raising capital.
• 1:38:49
  SPEAKER_01: And I think there's alternatives.
• 1:38:52
  SPEAKER_01: Uh they are not they are the harder path in many times.
• 1:38:55
  SPEAKER_01: But I think entrepreneurs, if they follow this path, and that's the purpose of the book, to at least show that there is an alternative way to build large businesses.
• 1:39:05
  SPEAKER_01: It's not just about staying small, but it's about building at scale, and that's what I've tried to do through India World and Netcore through my career.
• 1:39:13
  SPEAKER_00: Thanks, thanks, Rajesh.
• 1:39:15
  SPEAKER_00: Uh I always thought the book brought in the contramind in you, and uh, therefore, you are a perfect fit as a guest for the Contraminds podcast.
• 1:39:25
  SPEAKER_00: And this conversation was absolutely fascinating.
• 1:39:28
  SPEAKER_00: Brilliant thoughts, uh, great things to learn from you.
• 1:39:31
  SPEAKER_00: Thanks, and I really enjoyed the conversation.
• 1:39:35
  SPEAKER_01: And Swami, I think a conversation is only as good as the questions and the commentary.
• 1:39:40
  SPEAKER_01: You were fantastic.
• 1:39:41
  SPEAKER_01: Thank you for asking and bringing out the best in me in terms of answering.
• 1:39:46
  SPEAKER_01: Thank you very much.
• 1:39:47
  SPEAKER_00: Thanks.
• 1:39:47
  SPEAKER_00: Thanks, Raj.
• 1:39:49
  SPEAKER_00: Thanks for listening to this episode.
• 1:39:52
  SPEAKER_00: Select the link and details or not, click www.contramines.com slash com.
• 1:39:59
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• 1:40:04
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• 1:40:17
  SPEAKER_00: Thanks for listening and stay up here.