Inside The Mind Of Sanjeev Bikhchandani Info Edge Naukri

TITLE: SF-9Ngg86cQ CHANNEL: Unknown DATE: ---TRANSCRIPT--- You know a lot of Dal Street investors on the show have also said that you know public markets is where the money and wealth creation really happens. How do you advise people to think about asset?

I realized that almost all thinking around public market investing traces it roots somewhere back to Warren Buffett and before him. One is invest in what you understand. Two is buy quality. Three is enter the right price. Four is hold for a long time. We invested first in policy bazaar in 2008 to 15 years still in there. From inception to IPO typically a company takes 12 to 14 years or more. It is possible now for a lossmaking company to public in India. That wasn’t the case early. You look at most companies it’s taken longer than the life cycle of most acquisition of blinket. At that time I think the food delivery business was also not profitable. It was definitely a risky proposition to go and acquire another company. I was on the investment committee board that time. I’m still am. We were very nervous. I told the are you sure? See, look at it this way. Your stock price is down. Investors aren’t happy. Main business is making a loss which is different. Blink is making a loss. The only thing you have going is money in the bank. In the US in the ’90s top 10 stocks were banking, retail, FNCG, which is what you know, one can argue is true for India today. Now with these new age tech IPOs which are coming up, there is a sense that you know these companies will get replaced by tech companies at large. Hello and welcome everyone to the India opportunity show. I’m your host Shrishi. Today I’m thrilled to welcome one of the architects of the Indian digital era, Mr. Sanjiv Vikchandani, co-founder and executive vice chairman of InfoEdge, the visionary behind no.com and Jan Sati and also the driving force behind India’s startup ecosystem. He’s the leader who invested in Zumato during the financial crisis and has backed several deep tech startups with a decade long horizon and has famously taught us that the best valuations might not be the highest. While all of Sanjie’s interviews have been focused on his entrepreneurial journey, today you’ll be able to see a different side of Sanjie. We go deep into his capital allocation skills and also his investing acumen. This is not something he’s ever discussed before in any other interview. He’s not just helped build businesses but also shaped mindsets and built true institutions. Hope you enjoy watching today’s episode. Good morning Sanji. Welcome to the India opportunity show. Thank you for calling me. I’m so privileged and honored that you chose to spend your day here with me. No, no, not at all. It’s an I feel privileged that you called me. You know, I’ve looked at uh the list of people who you interviewed in the past and I said, “Okay, there’s something happening. I thought you were in Bombay from the some of the names I saw there but I was pleasantly surprised to hear that you were in Google now. Yes, I actually spent a lot of time in Bombay because I’ve interviewed a lot of folks from Dalal Street. In fact, that is my first question that I wanted to start with as well because you know a lot of Dal Street investors on the show have also said that you know public markets is where the money and wealth creation really happens. uh on the private market side usually tends to be you know there’s a riskreward mismatch and also an ill liquidity problem that exists uh but you are someone who’s been a clear outlier return generator in the space what do you think has helped you and you know how do you advise people to think about asset allocation so I think we’ve been lucky I think God has been kind uh we’ve also been stupid but nevertheless lucky uh we’ve been patient Um but no but if I look at it rationally I look back uh so first of all uh I never regarded myself as a great investor. I’ll tell you a little story. So 1989 90 you know I was quitting my job. I was working then in a multinational corporation HMM it’s now called black smith pen. I was working on brand holics and um in marketing. Prior to that I had done my MBA I studied business at Aandawad management and prior to that I worked three years in advertising so roughly five years workx advert and marketing two uh two companies both multinationals uh I’m from a middle- class family father’s a doctor in the government mom’s a homemaker so no business experience or exposure in the family brother’s a professor uh sister’s in government right uh so I was quitting my job and I was petrified. So I really wanted to be an entrepreneur. So I was quitting my job but I was also addicted to my monthly salary check. I wanted that security. So I was really scared. Um I had a total savings of 68,000 rupees in my bank which is roughly one year’s post tax salary. Then for me in my job I was getting 55,000 a month post tax which gave me about 6 to6,000 a year uh savings and I was scared and I was saying you know if I tighten my belt I can make two years but what if I run out of money what will happen then I was also very stubborn uh saying that I cannot admit defeat and go back to a job now I had a qualification I am the one so I could get a job anytime I wanted but I didn’t want to admit defeat and go back to a job. Also in those days, you know, if you tried to do a business, in those days we didn’t use the word entrepreneurship. If you tried to do a business and you failed and came back to the corporate sector, uh you in the multinational corporations, you were regarded as a failure and you were condemned to a glass ceiling of middle management or you go and join an Indian company or you go to Africa or Middle East if you want a career. Yeah. And I said I will not do that. So I cannot come back to a job but I only have this much money so what should I do? Uh so uh in those days uh you know there were some 20 plus stock exchanges there was no nse there was uh no sebi I mean there was a semi act but there was no sebi uh you know and you know manual system of trading outcry method all of that you physical delivery of shares um now I had zero experience in the stock market zero so I had a friend uh who told me listen man there’s this uh you know bonus issue okay or price double so why don’t you buy this share then you will have 2 years of savings and I said sound like a good idea okay so uh I went to a friend’s father uh who was a subbroker with some big broker in Delhi stock exchange and I said uncle so I want to buy 66,000. I thought I’d keep 2,000 and invest the balance and you know see one year salary and invest and uh uh he tells me beta bonus why don’t you buy it on forward and use the 60 margin money then you’ll make 10 times so I said yes sounds like a good idea man 10 times post tax five six years of cushion then I can you know I have five years of cushion so Um, I bought 60,000 rupees worth of bind forward. Now, I learned the hard way two things. It’s the first time investing in stock market. I learned the hard way two things. Number one, uh, if you’re buying on a rumor, the rumor better be right. Yeah. Number two, you better buy early in the rumor. The rumor’s already gained currency and you’re the last guy to buy. Yeah. You’re stuck with it. So first of all, so see 8990 there was no equally researched, there was no nothing available. There was no online, there was no databases. You just saw the prices in the paper on the on the on the stock price page. Uh um and uh so I was wrong on both counts. Okay. Number one, the rumor was wrong. The bonus issue didn’t happen. Number two is the price had already doubled when I bought. So the price hedded. So after one week uh my friend’s father calls me on this beta. Now we are square. So out of 68,000 I was down to 2,000 rupees. So it was exposed of the only way to make money is public markets. It didn’t work for me. But what but what I what I did learn I learned a few valuable lessons. So number one I said listen stock market is not my area of competence. So stay away from it. Number two is uh you know I know my I know how to run a business. I know how to do I I know how to produce a product. I know how to sell. No, stay with that. So between 1990 and 2016 I did not touch the stock market as a consequence. Um so essentially I’m not a public market person but I got my fingers burnt very early. Right. Uh I’m sure there are people who make a lot of money. We are listed company you know our market cap is what it is and uh you know uh and people have made money on our stock and that’s great but uh I typically don’t make a lot of money in the stock market uh although I have tried dabbled since then and I have been moderately successful um but it’s not something I pursue seriously so even in your personal portfolio you don’t have any no no so I tell you see see I around 2016 or 17 2016 I think I it it began to bother me that uh look we are a listed company. Uh our stock is doing well. I go to investor conferences. There are lots of investors there. People are doing well in the stock market. You know I should shed my fear after getting my fingers burnt in 1990. Now it’s been 26 years. I should shed my fear. So I should maybe maybe start dabbling in the in public markets. So I did I had a scheme you know of my own a formula how to do it. I I bought stuff and it worked. So direct stocks or direct direct stocks. Uh so so you know what I did I went to Amazon I bought 30 40 books on public market investing and I didn’t have time to read them but I read the table of contents. I read the blurbs. I read you know contents. I know if something caught my eye, I would uh I would I would I would invest uh I I I would read it. And I evolved my own thumb rules, right? Uh and I realized that almost all uh thinking around public market investing traces it roots somewhere back to Warren Buffett and before him, Benjamin Graham. Yeah. Okay. So I figured that much out. Then I said now Warren Buffett has been written about a lot. So I said let me study Warren Buffett or one is uh invest in what you understand. Yeah. Which basically means have a narrow focus portfolio because you can’t understand too much. Okay. Uh two is enter the right price. I mean two is buy quality first buy quality franchise quality management quality brands quality business right uh three is enter the right price four is hold for a long time right there are a couple others but these are basically which one would argue you were already doing in your private market investing yes but uh we arrived it by accident not not because we read about Warren Buffett yeah Okay. So then I began to apply these four principles to public markets. And I said to myself, I don’t have time to do research also. I’m not good enough in it equally research. It’s a specialized job. Yeah. Uh I may not know enough. So I said how do I figure out what’s quality? So then I put one thumb rule which is uh okay if a business is largest cap or above it must be quality because to get there is taking two three decades and if they value so much in the market so first cut in 2018 I said if it’s 30,000 cr market cap first cut now was not large cap anymore but in 2018 it was decently large cap Yeah. Okay. Then I said, “Okay, fine.” Then knock off any companies where there’s been a question mark ever a whisper on governance. Then I said, “Uh, okay fine.” Now it must have had a track record of genuine runs. So I went to Google did a Google search into the names and said which has given 3x in the last 5 years or more. So or strategy I said the ones that we’ve taken out are the some I want to put back in on sheer reputation even if it’s less than 3x. So Asian paints got back in a couple of Tata companies got back in. Right. So eventually I ended up with 30 companies 35 companies. Okay. Okay. Then I said okay then what I did was uh I said what’s the right price? Uh who knows? I don’t know certainly and certainly if I go back P everything looks expensive so I said sometime the right price will be discovered in the next two years don’t know what it is in each of these shares so why don’t I do a weekly sip in each of these shares so I went to my direct account and on these 25 shares I put a weekly sip do you care to share the amount like did you start small or did you No no no I I said okay next 5 years I want to invest X divided by 30 divided by 3 years divided by 52 weeks so divid 156 next 3 years so this is the kind of thing I did uh and uh that thing gave me 47% uh return when the I think the uh the benchmark index gives 34%. So I beat the benchmark by 13% or 14% pure tuka right this is not pure tuka by the way this is pure first principles thing okay and then around 2000 see then I began to read uh articles my friend is going to contract balance sheet okay uh when I read that and I looked at all the p ratios of the shares I held okay I got scared and I sold everything everything. Okay. Uh and see, I wasn’t doing it to make money. I was looking to prove a point to myself that I’m smart enough to make money on the stock market. Yeah. And get over my fear. And also get rid of that chip on your shoulder on your personal. Exactly. That chip is over. Yeah. Okay. Uh that was my goal. Okay. That uh you know uh and so now I no longer do public markets directly. And you’re not tempted to as well. No, now I’ve given it to various uh managers. uh you know uh PMS’s or they run AFS or whatever in public markets right and I’m okay I mean I’m not going for a crazy return I don’t want 35 40% I mean I’m okay with uh you know 18 20% 17% that’s very good according to me yeah that’s fantastic if you think about if a fund manager can do that but you see if you’re doing large cap then maybe you can’t do that but that’s also fine yeah so do you do small and midcaps also not direct stocks no but but in some fund man got But I don’t uh see I’m not this great big scientific uh every quarter evaluate how my fund my performance is. I let uh I have wealth advisor. I let them do it. Right. I I think this is true first principles thinking in terms of how you arrived at No no no no. I’m just saying that look those have spent a lifetime doing it. Yeah. It’s a full-time job to do it. They’re specialists. Let them do it. I had to prove a point to myself that you know I’m not stupid. Yeah. That’s fantastic. And then you know you’ve also held on to some of your private market investments for 12 15 years. Yeah. That’s different. That is different. Yes. So, so you see uh if you look at uh now how did we get into investing? First of all, I don’t invest in my personal account. I mean I have one or two but I don’t typically do it. Uh that’s all company money going there. Okay. Uh now what happened was that uh we going public in 2006 right now. I was pretty hands-on on the DRHP. Hands- on to the extent that I you know based a conference room. Uh two two banker teams you know which is city bank and ISC there were two three lawyer teams lawyer banker lawyer overseas lawyer banker. Okay. And there was our finance team, our secretary team and we would project the draft on a mix screen and debate and discuss every clause. So we were very as a as amendment team we were really thoroughly prepared with the DHP because right so called objects of the issue. Yeah. So on that Q IPO you know on that I had a definite view. So I said I’ll write that section myself. So I wrote a section right point but we want to we want our stock to have liquidity. We want to use investor and exit. We want ESOP to have value. We want our stock to have currency. We want to uh you know be in a different strategic space from this thing. Right? So u those are what I wanted. That’s what it was. So the banker looked at it and he said boss not get past master with sebi. You’ve not written anything about how you lose the money. You said why you want a listing not how you lose moneyization of you how you use the money. Yeah. And as a pure primary it no secondary right. So he said this a standard cookie cutter thing. So organic growth, inorganic growth, general corporate purposes or very general and we need the money because we profitable and more money coming in every month. Anyway, I pro 55 times over subscribed, thrilled, we’re happy to uh but every quarter price for house would come back in the board meeting put use of IPO proceeds nil with you so cash rates we cash negative working capital we were accumulating money we taken the IPO money but not used it by third quarter board got started getting tense says you know guys uh you know se us up you’re not using the money for what you said you would why you do the IPO it’ be embarrassing but please start using the money for some of those five things that you talked about right so we looked at everything and we said yeah uh the only thing possible in organic growth so organic growth the business turning out money. You don’t need it. The corporate we don’t want to buy office space and building. Yeah. We want to be asset heavy and you didn’t want to launch more verticals with no we didn’t have the management bandwidth shelter. So then we went out there was nothing to buy at any decent valuation

Yeah. Internet companies. So then we said that listen you know investing in startups is also in organic growth because over time you could acquire those companies and get to majority and so on so forth. So we went back to the board and saying we want to include investing in startups as uh you know organic growth. They said no problem that makes sense. So out of a need for compliance we decided to start investing. It was not this great vision strategy you know all of that you know you were fantastic but not true right it was need for compliance right uh so the board told me that listen um so you can invest 160 crores up to next 5 years 3 years or 5 years you can invest 160 crores in startups uh don’t go overboard Don’t go crazy. Don’t miss how you take your time. You’re not a fund. You don’t have a timeline. U so you can take your time and invest. Um and I took one person from the business and said it started off as a side activity, right? But between 2007 when we first invested 2012 pile we had invested about 250 crores. Okay. in about eight or nine or 10 startups, right? Amazing policy was 2008. Zamato 2010 first 2012 it didn’t looked like anything would succeed. Okay. uh and one of them already. You see the thing about early stage investing is that uh we are in a business where the lemons ripen early. Yeah. So the blowouts come early, successes come after 7 10 years. So things look very bleak initially very often in our situation. Uh you know nothing looked like working. Meanwhile we’re a public company. We are public shareholders. Yeah. So public shareholders, institutions are coming and talking to our investor relations person, our CFO and others saying you know Sanji has gone mad. Uh you know this is the problem we need entrepreneurs. They are mealomaniacs. They over diversify. They think no end to themselves. Sanji was not that good. He just got lucky in he thinks they can do it again. You can’t do it again. Please ask me to stop wasting money. How did you respond to that? So they weren’t telling me to my face. They were telling others and this feedback was coming to me. So my board asked me I said listen guys this is the feedback that’s coming. So B was about concerned. We hope you find no problems and you what you should do is maybe you should uh stop investing take heed of the feedback. So I said okay we won’t do any new companies but at least we should support the current portfolio it deserves and needs more money because you can’t let them use them. No problem. 2012 or 15. By 2015, it was clear that Zamato and Policy Bazar would succeed. Because they had emerged. Yeah. Meanwhile, we’ missed a number of good companies, really good companies because we were not investing new companies. Okay. So, the same investors came in. Why are you wasting 4 years? Yeah, because 12 to 15 was a great time to invest also. You know, Sanjie Sanjiv has lost his mojo. He doesn’t take risk anymore. Okay. So, I went back to Okay. How did that make you feel? No, no, I was relaxed about it. See, see the thing is we’re not a fund, right? You know, so I was pretty relaxed about it and you know this company or this it was keeping me busy. I stepped as CEO right okay in 2010 so it is keeping me busy so I was occupied uh now suddenly I had more capital to play with again right so 2015 to 19 we invested in a whole bunch of companies and by now I had built a team and I was building a team so Titaral joined and 2015 19 portfolio has largely her imprint Right. Bishop Katy joined a bunch of people joined. So we had a actual investing operation. Um and uh is this when you set up a fund also? No. Okay. Now what happened was around 2018 it was pretty clear that Zamato and Pulse were actually huge successes much bigger than we ever imagined. And do you remember valuation wise where they were? You see my CFO got began to get nervous. You see you know if you exit both in the same year then in might become an NBFC because you have financial income and you become NBFC. So NBFC means to open a new sales office you need permission and that’s a not a good idea. Okay. You don’t want to be you don’t want to become an NBC when you’re not an NBC. Yeah. Actually, yeah. Technically, you So, so then it became that okay, how investing is a serious business now for this company. Uh is yielding results. We seem to know how to do it. Um market seems good. Um if you set up a fund a venture capital fund at least the investments will not be on the balance sheet of the company. M so anything that does well it doesn’t make info in NDF right that’s entity so we did that we uh floated in ves 2019 of course the older investments could not be uh transferred all fresh investments are going to go and we committed $100 million that time $75 rupees to that fund info inventures fund one to Now we had a fund and now we doing all those things that funds do um 2020 code over here. Now we we were written we did not have a second LP right all the money was coming into it we not we said we’ll not be in the business of raising money we’ll be in the business of investing money right uh lockdown April June 2020 no sales no billings degrrew by 44% yus we’re still profitable but - 44% every at home uh you or um working from home or praying hard, hoping for the best. Um no treatment protocol in sight, no uh no vaccine site. No, nobody knows when this land. No light in the air. Board is again nervous. Uh for a board called I think in April 2020 and they told me s we’re very sorry but uh there was 750 cr commitment in the fund. We are having it to 300 crores. Okay. Okay. I said no problem. I understand. But are you okay if I go out and get this because we have hired people. We have committed you know term sheets. You know we have planned for our profile. So it’ll be a problem if you suddenly have it. Yeah. No problem. Go out and get the money. Now we had a great relationship for a long long time. They had anchor QIP. They had been shareholders. They had invested we had brought them into policy bazar and u and zomato okay we had a very good relation with them and we had always talked we should do something there and because one of say ha we’ll do it we’ll do it but never got around to talking seriously about it so that’s when I picked up the phone and rang up and I said listen uh we’ve always talked about doing something together this is what has happened uh we have a $100 million fund and our board has the commitment to $50 million so there’s a $50 million opportunity a whole softly for are you interested? He said yes we are very interested. Uh I think within two weeks we had a informal commitment and it was about 6 months to do all the documentation and everything. So they came in for half the card. So it became an info at customer kind of fund although AMC’s subsid fund is half and half almost we’re slightly more than they have less than half and uh we began to invest right so now we’ve got four funds with tamasic uh so that’s how it is uh meanwhile the balance sheet investments continue to be remain invested about 1200 they’re doing all that yeah I would love to go deeper on this point because you know now that you’ve run a fund you’ve run several funds as well as done balance sheet investing um you know uh one argument for the VC fund cycle is also that you know 10 years is too soon because you know you see the real returns being generated after 12 to 15 years which has been your case because yours is my favorite example to give when it comes to you know private market investments and balance sheet investing. uh would you say that you’ve been able to return uh generate such high returns because of the life cycle and you know does the I think I think it helps to not have pressure of a deadline driven exit right uh we invested first in policy bazaar in 2008 we are still in there it’s 17 years we ined first in the 2010 15 years we are still in Um if we had your typical 10 year BC fund life we’ have become nervous around 2014 15. Yeah. In in in policy in 2016 17 in in in in gamato we got decent returns but not crazy returns right. uh you know I was talking to Rakitala on on Zoom a few years back during COVID and uh just shooting the he’s also a founder at Shok University so and he’s you know I met him a few times ever since he went public um and u he told me something he says Sanjie uh if you ever meet or come across So invest in a truly great company then why why don’t you hold forever says I’ve made my most money in in in in init and that for me is a hold forever investment right uh and therefore if you have a couple of truly great companies and hold forever is what I’d say um so I I some can in the back of my head and uh I see it’s important to have the flexibility to hold for a long long long time. Yeah. Now, which is why our funds are not 10 year funds 12 plus two years holding your funds. Okay. Okay. Yeah. Um and beyond that you see because it’s not 50 LPS, it’s two maybe three LPS. M you even have to inspection of your best companies rather than sell them. uh you could talk to your two LPs or one LP and say listen would you prefer shares or would you prefer us we sell and you get the cash. M yeah because I have often thought about this a lot of uh VCs and GPS do feel under pressure and there are example of strip sales that start happening even your winners right because at that point those are the companies that you can return uh LP money with so and unfortunately then the VC model is actually at a disadvantage so I’ll tell you see differences from inception to IPO Typically a company takes 12 to 14 years or more. M typically. Yeah. Right. Some run it faster but by and large that’s the time frame. Now it’s possible now timeline is going to be getting compressed because it is possible now for a lossmaking company to go public in India. Yeah. That wasn’t the case earlier. uh but look back on it we took 9 years from inception and 6 and a half years from our series A info edge we were fast look at uh just died I think 16 18 years look at uh India I think 18 20 years look at mammia I think 18 20 years I think uh you know you look at most companies it’s taken longer than the life cycle of most VC funds Strategic sales don’t happen in India at any kind of price that will give you which give a VC investor any kind of joy. Yeah. If you leave a side flip card, right? There aren’t so many strategic ST valuation. M right. So that becomes a challenge. So how does a early stage VC exit and how does a early stage see now look at it this way. uh for a VC fund of 10 years or 12 years to say return four or 5x right you have to go into every company thinking this could be a 20x right that’s how you average four or 5x because one or two will give you 20x right but to get 20x if there’s no strategic sales happening it’s got to be an IPO IPO So India becomes a hard market for your typical VC fund to get exits in if they’ve gone in early. Now if you go into series B level then perhaps which basically means that your seed to series A becomes a tough exit to generate crazy returns or or decent returns. Uh so you know all these VC funds which say they’re early stage the truth is more than half their money has not gone in early stage. It goes in the later rounds, growth rounds. That’s right. Yeah. Because they’ve got to run Q LPs within the deadline. Yeah. So, but it’s it’s it’s very hard to get 20 year money from LPS. No LP is going to get 21. Yeah. Especially with LPS who are tasting this asset class for the first time, right? Well, actually Indian LPS maybe but overseas LPS are not and but even they would not give you 20 and not in India. Yeah. So that too endowment funds used to do that but now even they’ve come under scrutiny and and scanner even Yale and Harvard uh endowment funds which have been backers of some of the largest funds across the world but now they all have downside pressure because uh you know they haven’t been able to exit some of their illlquid position. So so so uh so India is different in that sense but but to do early stage investing in India whether you’re an individual angel or you’re a family office or you’re a Indian fund I I think uh you’ve got to be patient for early stage and uh uh you know uh and you see we don’t play the IR game we got to understand our limitation. We’ve never actually really exited any company. So we don’t know how to exit. Uh because our fund was launched in

2019. So 12 plus 23 31 is when we want to exit,

right? We don’t even have a person in our team who will look at exits as of now. And you could look at opportunities fund or another fund. Well, we have uh got a onemon one follow on fund but uh but look all this is taking time but I’m just saying that uh maybe in a couple years time we’ll start hiring people one or two people to look at how we can exit some of our positions. Yeah. Yeah. Let me ask you this. You know, holding companies for 15, 17 years is no is not for the week, right? Because there’s so many cycles that a company and you’re a company. The truth is analyst behavior and people forget that you’re in your analyst. Don’t they don’t put pressure on you, right? Because in their heads that’s cash on the balance sheet. That’s how they look at it. Yeah. They start looking at it again when one or two companies start coming onto the horizon into the imagination. This will go public. So suddenly the amato policy is looking good. It can go public in next three years. Let’s keep let’s start tracking it. Then it becomes part of your share price some of parts. Yeah. and and that’s when you know sort of you get some uh scrutiny on that by investors update companies. So nobody asks us about any other portfolio company there as of now. So in that sense we are free to take time right that’s that’s the nature of investor behavior and what about on the board and your personal side because don’t you feel that you know I read um that when policy bazar was going through a regulatory shift first you pulled out some money and then you invested more 4 5x and so that’s what this uh we have a team the team often has differing views M okay. Uh so when we sold partially impulse that I pushed it and I was saying key you know look this regulation is iffy at that time there’s a price cap on you can sell a lead for maximum this price and max so many people I a price cap I said here is the market listed right uh and I wanted to sell and uh we sold some But some members of the team are not happy. I think you’re making a mistake. So Kitty said, “You’re making a mistake.” Okay, don’t sell. Might be sold anyway. Right. But she kept pushing. Okay, look at this number analysis. And she even met the chairman of the company of our board saying earlier on we should go back in view that we should perhaps go back in. So that’s how we went back in and they were right. Right. But it’s important to have different points on the table to discuss and debate because you can’t always be right. Yeah. And uh now let me ask you about the indices in India right like in the US uh in the ’90s um most of the majority top 10 stocks were banking, retail, FMCG which is what you know one can argue is true for India today. But now with these new age tech IPOs which are coming up um there is a sense that you know these companies will get replaced by tech companies at large. See actually see India is different. um some one or two tech companies may come on to the inter nifty but it’s not as there’ll be widespread I don’t expect it widespread dominance of nifty 50 by these new age tech companies I don’t think so for the simple reason that India with a large population and so many parts of India are underserved in so many indust I mean India is underbanked India is you know uh you know all those so there’s scope for growth for everybody and so it’s not as if these I mean certainly Zamato might make it there uh but it’s not it’s not as if the you know 10 years from now or nifty50 35 companies are going to be new H companies I don’t think so I mean they might but I I I doubt quite simply because all the other stuff is also growing yeah because in the US also still I think mag 7 control 30 to 40% of their market cap. Uh so I guess you know one can expect some kind of concentration in some of the biggest companies but might not necessarily be that many tech companies. Yeah that uh I don’t know see it’s hard to predict the future. Yeah. Uh but lame growth is going to be fairly secular and universal across all industries. Right. So when you when you know let me ask you about Zamato’s acquisition of blinket because at that time I think the food delivery business was also not profitable. So it was definitely a risky proposition to go and acquire another company where quick commerce at that point everyone was saying the unit economics are not sustainable and this is not a model that can work. Walk us through the debate that happened. So I was on the investment committee of of Zamato board at that time I’m still am and I don’t recall but maybe I was chairing it I don’t recall but maybe I wasn’t. Uh and this proposal came sponsored by the Pinda saying what do I jet uh and we were very nervous because and I told Deepinda Deepinda are you sure see look at it this way your stock price is down the stock price had dipped it at the time of the you know it was below IP price your stock price is down investors unhappy uh your main business is making a loss which is your food delivery. Blinket is making a loss. The only thing you have going is you’ve got money in the bank, right? Uh but you have two big loss-making businesses if you buy this the same time while while your share price is down. M while the market is giving a clear signal you want to see profit. Yeah. Okay. And Fed is contracting Bit and you know all the things. Okay. So he said the food delivery business will make profit two quarters from now. I said why don’t you wait two quarters before drinking. He says the window auto is now if you don’t do it now we’ve lost it forever. to are you sure you back and for finally said listen I know how to turn it around blinked it I know we can do it and uh I said uh okay but uh finally boiled down he said trust me so we trusted him and took a leap of faith on on what he was And uh thus far at least uh you know they’ve got it right. So um that’s what the is uh full marks to the team. And uh do you believe in the verticalization of quick commerce uh happen across sectors or do you think these existing platforms will tend to go deeper? I think a bit of both will happen. Uh we’ve invested in one uh quick commerce of fashion right apparently right. Um now but that is not 10 minutes that’s 2 hours. Okay that’s quick in fashion. M um that is also using existing inventory of stores in the neighborhood of that. Okay, not just their own inventory. Um so look in some sectors I think credible attempts can be made to verticalize it and it might work. We certainly believe this one will work which is why we [Music] right and you say I will supply only one thing I’ll supply shoes in 10 minutes let’s say okay it had there had better be enough density of demand where you can reach in 10 minutes with enough riders service had density now which may or may not happen with the vertical you see you got to understand with blink they’re selling 2,000 items maybe more now right much more yeah okay and so the density demand is there and therefore the riders can ride network can service it now you cannot have 500 riders in a draft store shoes and deliver in 10 minutes the demand will not be there so it’s and therefore You may say shoes maybe 3 4 hours is quick enough. Yeah, maybe it is, maybe it’s not. What we certainly see might happen is that B2B quick commerce they happen as opposed to B2C inverts. Right. Right. And and now with uh you know some of these things because you know now people are saying you know you can get a maid in 10 minutes and you can get uh baby services and you know uh diapers etc. those kind of use cases I think still there is demand but are there any sectors that you think uh this use case can still work for vertical yeah see I think the consumer behavior is now so inclined towards 10 minutes yeah but in 10 minutes you start servicing people to let’s say I will supply you a watch in 10 minutes right will there be enough demand for watches that you can sustain that dark store with that many riders Yeah. Or you will not promise. Maybe. Yeah. But maybe don’t know. There has to be enough assortment of products density of riders have density of demand. Yeah. In that 10 minute service area. Yeah. I agree. In fact, that’s why I always think and say that you know maybe it’s the reimagining of the logistic space like same day delivery, next day delivery, those things can work much better than your quick commerce use cases which some of them are no verization. Now, now, now you see u now what is it I mean look it’s great to get made in 10 minutes okay for some people right but then they have to variability within 10 minutes so that becomes a challenge and are there any uh red flags that you secretly register in when you evaluate a founder that makes you walk away from the deal so look we do we do ref checks Uh and uh if the rest are bad, we are very very careful. Okay. Um we uh uh if if the guy is running two businesses but taking money in this one but spending half the time there, it’s a no no. If uh the guy is not full-time yet, he I will become full-time the moment I get a check, it’s a no no. He’s not committed. Uh one important question we ask often is uh what salary would you like to pay yourself? See we very often the first trick. So what salary would you like to pay yourself after we invest? Now we’re not interested a specific answer but the way the founder approaches that question tells us a lot. So I’ve heard answers like uh you know uh I need a 40% higher than my salary in my last job. Why I’m taking a risk and our answer is but you’re in equity with that risk and you shouldn’t be an take a risk. Yeah. Okay. Then we answer is so you know I want parity with my batch from business school because that’s fair. Uh you know we don’t know that’s the right answer. And the other guy say listen I want enough money to live on a little bit more u and I don’t want to raise too much money because I don’t want to I value my stock I don’t dute too much. It’s a much better answer. Um we we uh see you’re going to have to uh assess across the table at uh how committed they are environment is bad. Can they tighten the belt and carry on or will they quit? Uh um we got to understand what is how good is the understanding of the of the customer and consumer. M right. Um you ask a question like um idea is it based on a customer inside based on a market inside what is it based on or is it that you have to be watchful. So um you know I met Deepinda for the first time he was 28 and uh the thing about Zamato it was then called Fuy Bay uh was that there were many restaurant listing sites but this is the only one with all the menu cards. So the Pindal had and and and and you know the Pinda and his co-founders had taken the troubles to go on weekends and motorcycles to every restaurant from Delhi pick up the menu cards and scan them. That’s foot slogging. That’s not a engineer sitting in a on a desk and doing some programming. Yeah. Okay. Uh it’s also useful as a user. I found the many cards very useful. So I asked when I met him, he said I was working in B consulting after finishing my mostly young, mostly male, mostly single, many living away from their hometowns. Okay. Um and often had a cafeteria which would not serve food given the demographic profile of the office almost nobody would bring food from home. So we had to order in consulting hours were long. Uh so invariably I ended up with two meals in the office lunch and dinner. See lunch time pay you know to make life easy for for the team the the admin guys had collected the delivery menu cards of 80 restaurants that download that location and kept them in a file folder says long line to access that files in the cafeteria. You you get 30 seconds to look but the next time wants it. You decide what you want very quickly. Then you follow the restaurant then you place the order. Then you go back to your seat and come back in 45 minutes. The food comes, you pay, then you eat. It’s huge pain. I I got deadlines to meet. My boss is jumping on my head. I got presentation to do whatever you know. So, you know, it’s a huge pain. There’s one weekend I came in uh to the office and I scanned all those menu cards and uploaded them on my personal page on the office and run it. And within 3 days the IT infra guy came to me and said hey what have you done? Why is 95% of internal traffic going to your page? So he said the market had given me a signal. My colleagues had told me that there’s value in aggregating menu cards. So I went agging many cards. So his essential product feature was based on a customer insight not key Rhab is doing it in this government copy it his customer told him now this reflects one of two things it reflects an orientation towards understanding the consumer and customer it reflects that the idea is rooted in a customer insight and therefore chances are it’ll succeed [Music] Let me ask you one question here because a lot of people leave their corporate jobs and this has happened over the last few years since entrepreneurship has become sexy in our country. Um you know they might sit with a list of 10 ideas and be like okay let’s try which one we want to attempt uh rather than going through going the organic way and actually through customer insight. Right. So then do you automatically reject those founders? See we look so the water close it. We we we look for evidence of what we call natural attraction. App download [Music] the number of downloads increasing every day, every week without spending on right there’s some hook. So even if you didn’t get the idea from a customer inside, have you stumbled upon something because it got legs? Yeah. Of course, if if you got it from a customer inside, you know, it’s so much better. But let me give you an example of we invested before even a PowerPoint. We invested on a conversation 20 kores right? Yes. Yeah. So that was so basically u Yashish sat across the table in my office and told me I’m willing to bet you’re paying 60% more for your car insurance than you need to. And I said don’t be dafted. You know I’ve got a standard car bought from a well-known dealer who has sold me a insurance policy. uh from a public sector company. New India shows or new India shows. Yeah. There’s no way I’m moving. Okay. Take out your show me your take out your car details. So I had I carrying my backpack my car insurance took it out filter. He logged into five six insurance company websites. Put in some details. came out with six quotes and sure enough the lowest court was 40% less than what I was paying. Wow. I said how is this possible? He says the real thing is that different insurance companies will price the same risk differently for risk assessment. So therefore and people you know people don’t ask enough question before buying insurance. Yeah insurance add so you never question but there’s huge variability variation in price of insurance I said man this is the case this is a market insight. Yeah. And if this is the case, so then there’s an opportunity to kind right and then I say how much money will you looking to raise? I’m going to make 20 coursees. So I said 2020 course because you see it was a lot of money for us then you know in in 2008 for our first investments but I was feeling brave. Okay. Cuz the board has 160. Yeah. That’s one year 35%. No although one would say that invested in 20 25 companies. See you see so in a sense we were foolish. I had the confidence of ignorance and I had a board section of 160 crores. I said but but then he said I’ll give you 49%. Okay. So IR okay that may make sense. So we you know bit our run and agreed for 20 crores 49%. And the reason why we still at 12 and a half% is because that first check was 49%. Amazing. That’s such a fantastic backstory. But here let me ask you you know because when these typically these first rounds are happening there’s actually no basis on what you arrive at the valuation right like here also on a deck or before a deck even 40 45 crores what are you asking for as a founder? So sometimes I feel the founders don’t have the right guidance in terms of how to think of what valuation to ask for. Tell how we look at it. Well, as investors, we don’t look at the market size. We don’t look at uh what’s the comp. We look at what percentage of their lives Do we deserve tomorrow? See, we are betting our money. The founders are betting their lives. Okay. Uh we have we have more money than we can want to put in one company. So we have a portfolio of investments. Yeah. The founders don’t have a portfolio of lives. They have only one life. So they’re writing the lives. What percentage of the lives do you deserve to own for this much money? Okay, that’s one question. The next question we ask is okay, so if this company works or even if it doesn’t work or it half works, how much money will they need to raise over the next 5 years, 7 years, 3 years? So at the end of five years, what percentage will they own of the company. Now if that is too low then they won’t be motivated enough to carry on then everybody’s money is at risk. The founder is saying boss I don’t I have no single million. So you got to ensure that after 5 years or 7 years the founders own enough that they feel motivated to carry on. So don’t get too aggressive on that. Um and then you look at your conventional metrics which is okay how big does this become then if I put this much money okay what will I and how valuation become what will I get it was very hard to actually project that one so I’ll give you an example um so um year was 99 we were trying to raise money in no Indian marriage right I didn’t have a banker I didn’t hire a lawyer I wanted to save money so I’ll do it myself so I met VC myself I met four bubble time I bought three time sheets the fourth guy said he would not invest he said you’re a great salesman you make a great pitch and you know what you say is compelling but I’ll not invest so I was curious I said why I was curious why says look it’s like this let me ask you a What is the total size of the appointment ad market in the newspapers in print? So I said [Music] okay what is the difference in price of a listing versus apartment I said 1 is 2,000 1 is 200 we are much cheaper that’s why I keep it up to us so he says then boss if you convert every appointment I had insia and Hindu and economic times and business India to no you will contract the market by 100x so you will only be 4.5 crores so the maximum size sale you revenue is 4.5 crores that’s the limit of your business right why should I invest said no IC invested me 28.5x in 6 um today are 2 and a half thousand core company sales. So it’s very you know when when when new categories are being created when new markets are being developed from scratch uh sometimes the market can surprise you on the upside. Yeah. uh when we submitted our business plan to ICIS late in the early 2000 when we raised around we were doing uh three lakhs a month sales we have projected that four years out we’ll do one a month now we thought that was an aggressive prediction four years out we did 84 cores the we we we were wrong by 7x. We had said twice a year we did 84. We’re wrong about 7x because the market surprised us because a new car got created because it penetrated because you know software boom I mean so so all of that we had a great value prop we had a great sales team. So so when new caring being created the market is surprisingly upside. Let me ask you you know what are some of the principles that you learned from Warren Buffett that you apply in your private marketing? So I think the first principle that you learn from Warren Buffett is that you invest in what you know and understand. Don’t invest outside your circle of competence. Now that is clear from what you want to do from the beginning that we will invest in internet startups cuz that’s what we know and understand. Now I didn’t read Warren Buffett to to come to that but it’s what we decided anyway. I think that matches. Uh then he says invest in quality quality businesses, quality people, quality brands. Now when you’re investing in startups very often pre-launch or just launched, there’s not enough data to figure out what is quality. Yeah. And what is not quality. So you meet customers, you take refs, you try the product yourselves, you you get your tires in in 100 different ways and then you pray hard. Okay. Uh the truth also is whether or not something is quality is something the customer decides after launch. Yeah. And if you invest at pre-launch, you understand a lot of assumptions but very little evidence. So there’s a good chance you might get it wrong. You understand that risk. You live with that risk. You accept that risk and therefore you have a portfolio. Saying you’ve done 10. If three work it’s good. He says enter the right price and so entry level valuations matter. We are careful about that. That instinctively we are careful about okay hold for a long time. Uh you know if you go in early stage companies you have no choice but to go for a long time in India because IPO and what we have learned also from our experience is that the companies that have done best for us Zamato we’ve been in there for 15 years policy 18 years. So that’s how it work and then I kind of more or less uh uh there’s a footprint overlap with um you know the core principles of what Warren Buffett says. M I I think even he says that you know even the management doesn’t know how good the good shall be you know and sometimes what you were talking about the upside that happens and the tailwinds that suddenly turn in a company’s favor you can’t uh know those going into an investment but by these filters at least you get to the best short yeah but you see it works the other way also uh you can be hit by something yeah on negligence very unexpected uh I mean who would have thought a year ago of the Trump tariffs M at least three or four of our companies have backed how do you advise those founders now conserve cash get to break even never mind topline growth just conserve cash and get to break even so write this out hopefully near toward this change but but nobody else will give you money right now so you have to survive in the cash you have and what about founders who might be running out of runway We will evaluate to give them more money to keep them alive. Yeah. Because there’s so much uncertainty not only with the tariffs but also geopolitical uncertainty. See your current investors are the ones who have to back you uh if you’re going through this kind of crisis uncertainty. There are a lot of LPs will tell VC funds and GPS to not invest in those companies which will get potentially. LPS typically don’t uh go so into deals because you give them a quarterly update and afterwards. Yeah. So uh now coming to the AI wave because I know InfoEG is also doing deep tech investments uh I think you’ve done across space tech uh and a bunch of other interesting spaces. Um I want to first start by asking you where do you see the value getting captured in the AI value chain? Is it LLM infra or application? So I think NLM and infra right you’re not making your own chips for examples uh million own very few um really it’s about uh vertical AI really it’s about uh applications use cases uh so two things one is where we are investing in other startups other is what info is doing internally so at info we’ve got about 150 AI engineers. We’ve got one of the largest or one of the best teams of uh AI capabilities in India among tech companies among Indian tech companies and they are producing a whole bunch of innovations every few weeks and improving the product and making it work better. So I think we are using AI very well for our for loop for Jim Sati for like all our internal businesses. The other is of course we’re investing in AI startups from the investing arm. Uh and uh there you see there the challenge is how do you know which one will have a vote cuz if he can do it maybe next year can do it as well. Yeah. That becomes a challenge and that’s something you’re grappling with. Yeah. Because like even I’m finding it hard to keep up with the pace of the rapid innovations literally happening every week, right? So, how do you wrap your head around that? I mean, so we’ve got 15 people investing team whose job it is to, you know, figure out future. Uh, and it’s hard. It’s not easy. We could get it wrong. We navigating this, you know, every day. Yeah. Okay. Uh, deep tech is different. Uh, see now deep tech is not one tech. Deep tech is of 500 different technologies across various sectors which people have put in one bucket and call it deep tech. Yeah. Uh and and that is a you know a different thing. Now there the way we’ve done it is obviously we keep leading companies right but what we did was u so we have uh Vibhor Sharma who heads our deep tech fund. Now vibbor has been with info edge since 2001 that’s from his son uh as a techie we his last job at info was CTO of info edge so all technology right uh now he told us in 200 19 that you know I’m for and he quit and he joined Amazon. So we stayed in touch with him keep talking to him very good guy. So we told him the boss Amazon is a large company so ocean here your CTO your top guy uh when you find us what you talk to us and sure enough in 6 months he sort of indicated that he’s not too happy. So he said come back by then the CTO job had been well no longer available. So he said what will I do? So you come back we’ll why don’t you start pottering around and maybe we can invest in a few deep tech startups. Deep tech was just been talked about in 2019. Yeah. Uh and from a balance sheet subsidiary not a fund he we gave him a small corpus about 3550 crores and said invest in really early stage stuff that you like and enjoy. And so he was a he was pretty sort of very very uh interested in tech all tech we keep reading up about it. So he he identified some I think 13 or 18 companies which we over the years invested in and some of them began to do well. Well, 2021 uh we said why don’t we do a fund and over the 22 I think uh we we did a fund focused on deep tech right now see I have a hypothesis you got to go today in an area that’s not sexy or fashionable and invest and it becomes sexy or fashionable after two years if you can do that you’ll succeed because it was getting cheap and two years later so you could go today with the her follow tomorrow. Yeah. So we got fortunate and we identified deep tech as an opportunity when we did and for the first 2 three years we were really worried because it didn’t look like the herd was following right but now suddenly uh deep tech is or see extraction among investors And several of our companies have now worked all on rounds at a markup which was unimaginable maybe two years ago. Deep tech companies also require very different kind of patience right like for first 2 three years of their life they might just be in R&D and not putting out a product or commercializing. So we’ve gone in very early into several companies uh you know a TRL3 or something. Mhm. Okay. Uh but that’s because we have someone like Vivore who can understand that whether tech will work or not because he’s deeply interested in tech right so he has that capability uh and thus far at least it looks like he’s getting enough right to give us hope so the IRS are climbing the network what do you think are the most interesting use cases that you’ve seen so each one is different there’s a company which uh you know is um trying to solve see deep tech usually tries to solve seemingly unsolvable problems. So there’s a company that is trying to find a cure for vitiligo vitiligo the skin disease. Yeah. Uh which is also called dukodama. It’s almost impossible to treat using conventional methods. Very limited results. We’ve done one of that. There’s somebody else that’s doing some drug discovery somewhere, you know. Uh there’s somebody else who’s converting uh I think uh uh waste into methane. Okay. Okay. Um okay. There’s a whole bunch of stuff. So So each one is different. Each one is different technology. There’s a we invested in e-lane company which is um you know like electric car electric planes. Uh we’ve invested in a couple of battery tech company invested in something called matter motors which is motorcycles electric and and a bunch of others and so the range of deep tech robotics [Music] in deep tech in what could be all clubed under deep tech. Got it. And where would you say we’re in the AI cycle right now? Are we early in the cycle or are we because there aren’t too many our our strengths as a country. Our strength is data. It’s not LMS. you know we do not have the compute power or access to GPUs to build uh L&Ms or the or the kind of capital required to build LMS the Indian market may not yield sufficient returns to just investment uh now having said that uh we have data 1.4 4 million people. So we got to leverage our data which is our strength to get on the global table of AI and then move forward. We are unlikely to build infrastructure of that brilliant scale. Yeah, that’s interesting that you say that you know this week there semicon happening uh and so many other No, we need to we need to do some stuff there. We need to do some stuff. We investing in semiconductor company also. Uh we need to do some stuff there. Uh but look you can’t is compete with NVIDIA. Yeah. But it’s hard. You can’t really compete with some of the stuff China is doing. Yeah. But can you leverage your data? So how do we how does India improve its competitiveness in the AI? No, I think u on on on vertical air on uh the application layer I think we are okay. I think uh if we can uh you know safeguard our data and say listen I’m going to use Indian data to produce an IP then you know we Indian companies better have a share in the ownership so the team of 150 AI engineers that you have at info edge what are some exciting use cases that they’ve been so some of the problems that we trying to solve is you know so it’s a non-trivial problem see if you’ve got see we’ve got what 90 lakh 80 lakh Right? So when you do a search on the resume database, a problem is that you get too many CVs and the right one may be on the 14th page. So it takes a lot of your time to go through the series till you reach the right one. Right? So now that seems to an out it seems like a simple problem to solve, but actually it isn’t. It’s a non-trivial problem to solve. If we just solve that problem and put the right person to the right job right u in a manner that the productivity improves I think that’s a significant movement forward we are making good strides on that that’s just one example uh you know of course resume writing of course uh you know whole bunch of things happening or for example uh so we were we were one and a half that clients recruit to We’ve got a call center which calls up these clients. So at the top level we have field sales people going to meet clients. But beyond you have a call center. You know beyond the top 10,000 you have a call center and the bottom 40% you don’t call because it’s not even worth the cost of a person calling. So you’re having voice bots call those bottom 40 50%. Best needling results more revenue. Uh so I I think some of these things are pretty pretty interesting and you don’t even know you’re talking to a voice smarter. Yeah. Yeah. And they’ve gotten really good. I think that’s the first use case that a lot of founders are attempting in the space also. Customer service BO kind of use cases. Uh interesting to see how that plays out. But um you know Sanjie you’ve also seen a lot of founders on their IPO journeys. You’ve been through it yourself. Um how do you you think founders have to evolve personally and even the management teams have to evolve to be able to get their mindset to governance everything right? So governance it has to end pretty early okay right in the beginning because it becomes a habit and you acquire bad habits then shifting is hard okay and it starts and ends in the founders’s heads fundamentally you have to be want to be keen and honest fundamentally you have to want to say listen I’ll take care of minority shareholders I’ll follow the law I’ll comply I’ll pay full taxes. You have to want to be that person. So at one level, it’s also that listen, I will put a good board together. Therefore, I will subordinate my powers to that of the board. The board has a right to overrule. It’s not that I’ve got a rubber stamp board. And if the board decides to overrule me, I will listen. Yeah. Okay. Uh which means importance in the right board. Okay. Uh I will uh so I’ll give you some early conversations I had. So we raised money from ICS venture in April 2000. Right. Uh so the first thing they said was that we want you to change your auditor. We want a big five. And I said don’t be ded. I wasn’t taking a salary. If I taken a salary profit been wiped out um and they said he bought it our profit will be wiped out. I fought for a month and finally I gave in um so then I went shopping. Finally I met Koshin Da who was a partner at Price Waterhouse Delhi said then he said look I like you tell me what you want. So I say I want to audit in one lakh. I’m willing to spend 50% of my last year’s profit not more or auditor fees. So is it okay? Uh I’ll do it on a couple of conditions. Uh number one we’ll raise audit fees every year until we hit our normal fees. So from next year onwards you will not negotiate hard with me. You’ll allow me to get Yeah. to work my regular visa and in in maybe 3 years time I said okay next thing he said was that listen now at one lakh rupees I really can’t second guess you right so you have to promise to me totally open transparent and honest so I don’t have to second guess you I promise that might be clean anyway but you won’t have a problem there with us third key he said is you will internalize the understanding saying that your auditors and your independent directors are there to save you from yourself. We are on your side. We’re not policemen. You have to let us in. Yeah. So we we are there to save you from yourself. So this is one thing he said. IC said a few things said you can’t decide your salary. we’ll decide your salary. I said sure I don’t have a problem with it. My salary was zero anyway, right? So uh it won’t be a high salary. So that’s fine. Uh because you can’t get rich on our money. You will get rich when we get rich when the company becomes valuables because that’s when you will set and your shares will be valuable. Until then, you’re on a modest seller and you can’t sell your shares as long as we’re shareholders because uh your company isn’t actually worth that much. We’ve given you a high valuation because you know that’s how easy works. Your company Yeah. So no related body transactions those kind of conversations happened. So we we embied all this pretty early on and those are important conversations to have with founders. Well founders might also feel that investors are putting too many restrictions on them. Um yes and no. I mean the the the better ones the smarter ones the one they like more understand this and the ones who are not in it for the right reasons will obviously Yeah. But you see, you’ve got to be able to understand who’s gaming it and who actually means it. Yeah. And you, you know, you’ve had fantastic successes. Uh, but let’s also talk about some failures and some of the darkest moments where, you know, things weren’t going in your favor. How did you deal with that? And are there any spiritual or religious beliefs that have helped you and served you well? Uh, so I tell you, um, we raised money on April 8, 2000. the market melted.com bubble bus just then. Yeah. So in a way we got lucky that we got the money, we got a high valuation, we didn’t have time to spend it foolishly. So we got lucky. U however there was no hope of getting any more money. This is the only money you want to get because the market had melted down. We knew it. We had 7.3 crores. Now you also have to grow the company which means right you need servers technology. So so com bubble burst in April 2000. uh the tech meltdown, general tech meltdown. I think November, December that year and September 2001 911 happened right at that time we had about 16 months of money left with no hope of getting more money and our monthly u salary bill was four times our revenue. Yeah, just a salary was 4x of our revenue. So that was a pretty bleak period. It looked like we’re going down. We had 16 months. Okay. But we just went out of the market on sales calls ourselves and you know the sales team sold and we sold our way out of troubles like we we just went down selling. I don’t remember October around October 2001 I did about 64 sales force myself. founder mode as they call it now. Okay. U so I think a a good entrepreneur has to be able to sell to customers to investors to co-founders to employees. You’ve got to be able to sell. Um so that is one sort of tough period. Um I think another tough period was was co so April June 2000 no degree buildings deg by about 44%. We had no light at the end of we didn’t know what will happen right uh but we had enough cash in the bank so I spoke to the CFO Chinhan I said if we would do a little you know stress testing of our P&L manage um if revenue goes to zero revenue growth revenue was zero uh and marketing expenditure is zero and increments are zero. Uh how long can we make our money last just paying salaries? He maxing 3 years. Now we took a decision that we not sack anybody on the m of that we said. Yeah. Uh we said our companies will bish by people our own people. they as distressed about COVID, we started letting go of people. Okay, it’ll be really bad. So, we didn’t sag anybody. Instead what we did was that uh we allocated six floors for COVID relief and said we have to provide COVID relief to our own people and we reoriented our call center to just service our employees and their families uh you know uh in CO for CO that you know you have you’re unwell to doctor hospital bed ambulance medicines operation So our admin now we’ve got offices in 45 cities. So our admin guys in those cities go out and get it from a chemist and ship it. Uh we were running this concentrator and oxygen in operation for our people. You know we had bought some concentrators we from overseas and made them available to our employees and families and we were shipping them from here to there uh and then picking them up after you know and elsewhere most of the so I think co uh you know was a very difficult period uh we’ve u but but but you know we’re very fortunate that no has got the margins it does company has got the market share the company has got the clients it does because that certain 93% gross margin profit money in advance so um that working capital and having cash in the bank gives us greater and as they say adver adversity reveals a true leader right I think that’s comparable what you did no no no see if he didn’t have cash in the bank if no wasn’t there he wasn’t gross margin if it wasn’t negative working capital and I’m passing you I don’t Yeah, that’s the truth also. I guess you you’ve also spent your life building institutions uh you recently you know bagged Ashoka University, Plaka University and so much more. So Plaksha I’m not personally involved in but although a corporate CSR is uh donating there plus Hesh our CEO my partner he’s a a donor there. Got it. But you know as someone who’s built institutions uh how do you think about legacy and you know also making companies thrive uh from their second third gen on because so you know first of all this is not a family business so so none of nobody else in my family is involved okay this is a professional company that was a call you took early you can’t be in tech and be a family business in my view okay um second is uh I don’t think at all legacy but I do think about building institutions. So there’s nothing named after me although I’m one of the larger donors like just like there’s nothing named after okay um so if you build an institution that outlives you that legacy enough whether or not it’s named after you right u I know in my life I have been I benefited from what I’ve learned at great institutions my school my college my business school even the companies where I worked those companies still exist they are still leaders in in the in the markets um and I have learned from them. So I think it’s important to build institutions uh it’s important for a founder to build in institution that outlives him. Are you happy with everything that you’ve accomplished? I would say so. Yeah. I mean I’m on the plus side. Yes, I was I’m so far on the plus side. What’s the northstar metric that you’re working towards now? Um, I think tomorrow if I vanish, what will happen? Best to work without me. Incredible. I think that’s a profound note to end the episode with. Thank you so much, Sanjay, for spending time with me. Thank you. It’s not every day that you get to sit across from your icon and ask them all the questions that you wanted answers to. And that was the day for me today. If you enjoyed watching this episode, please remember to subscribe to our channel so that you get notifications every time we drop another one.