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Kunal Shah on winning in India, second-order thinking, the philosophy of startups, and more

Kunal Shah on winning in India, second-order thinking, the philosophy of startups, and more

42 segments available

Kunal Shah is one of the most well-known and admired product leaders in India. He is the CEO and founder of CRED, an Indian-based fintech startup valued at over $6 billion. Prior to CRED, he founded three other startups, including Freecharge, which he sold for over $400 million to Snapdeal. He has also been an advisor to India’s most influential organizations. In our conversation, we discuss: • The prevalence of successful Indian immigrants in top CEO roles across the tech industry • Why companies in India can grow DAUs but not ARPU—and what that means for building products for India • What most sets India’s market apart • Challenges and opportunities in the Indian market • The Delta 4 framework for building new products • Lessons from building CRED so far • The power of curiosity and second-order thinking • Lessons from failure — Brought to you by: • WorkOS—The modern API for auth and user identity: https://workos.com/lenny • Orb—The flexible billing engine for modern pricing: https://www.withorb.com/lenny • Dovetail—Bring your customer into every decision: https://dovetailapp.com/lenny Find the transcript and references at: https://www.lennysnewsletter.com/p/kunal-shah-on-winning-in-india-second Where to find Kunal Shah: • X: https://twitter.com/kunalb11 • LinkedIn: https://www.linkedin.com/in/kunalshah1/ • Podcast: https://www.youtube.com/@CRED_club Where to find Lenny: • Newsletter: https://www.lennysnewsletter.com • X: https://twitter.com/lennysan • LinkedIn: https://www.linkedin.com/in/lennyrachitsky/ In this episode, we cover: (00:00) Kunal’s background (04:22) The Delta 4 framework (11:00) The success of Indian CEOs in the U.S. (19:55) Challenges and opportunities in India (23:04) DAUs vs. ARPU in Indian markets (25:50) The perception of time in India (27:55) The curse of focus in Asian markets (30:33) Challenges and opportunities in India (continued) (33:23) Lessons learned from building CRED (36:40) Profit pools can provide valuable insights into the values of a country (37:55) Founders’ role in company growth (39:55) Profitability and Indian business culture (43:24) Advice for staying positive amid criticism (44:41) The promising market in India (47:35) The power of curiosity (52:59) Who Kunal looks up to (55:31) Kunal’s favorite sources of content (58:42) Asking great questions (01:02:54) Contrarian corner: Wealth is nothing but storage of energy (01:05:26) Failure corner (01:08:57) Closing thoughts: Share your learnings (01:09:38) Lightning round Production and marketing by https://penname.co/. For inquiries about sponsoring the podcast, email podcast@lennyrachitsky.com. Lenny may be an investor in the companies discussed.

Segments Timeline

1
0:00 - 2:29
2:29 duration479 words

The Rise of Indian CEOs in Tech

Kunal Shah discusses the remarkable success of Indian immigrants in top CEO roles across major tech companies in the U.S., including Microsoft and Adobe. He explores the unique challenges and opportunities faced by these individuals, emphasizing the importance of humility and adherence to the principles of the founders they represent. This segment highlights the cultural and societal factors that contribute to their success.

"Microsoft Adobe alphabet IBM H Alta networks even Starbucks the CEOs of these companies were all born in India and immigrated to the us a lot of CEOs have done well because they follow the Dharma of t..."

2
2:29 - 4:22
1:53 duration309 words

Introducing the Delta 4 Framework

Kunal Shah introduces the Delta 4 framework, a product development philosophy that emphasizes creating products that are significantly better than existing solutions. He explains how this framework can help founders understand product efficiency and customer satisfaction, using relatable examples like Uber and online shopping. This segment provides insights into how to evaluate product success and the importance of a unique brag-worthy proposition.

"after a short word from our sponsors this episode is brought to you by work OS if you're building a SAS app at some point your customers will start asking for Enterprise features like samle authentica..."

3
4:22 - 6:58
2:35 duration514 words

Understanding Product Efficiency

In this segment, Kunal elaborates on the concept of product efficiency and how it relates to the Delta 4 framework. He discusses the importance of measuring how much better a product is compared to its predecessors and the psychological factors that influence consumer behavior. Kunal uses examples from everyday experiences to illustrate how product efficiency impacts user adoption and satisfaction.

"Lenny Kunal thank you so much for being here and welcome to the podcast Lenny thank you so much for having me and a huge fan of everything that you do and and uh like I said before India is a huge ben..."

4
6:58 - 9:57
2:58 duration551 words

The Psychology Behind Delta 4

Kunal dives deeper into the psychology of the Delta 4 framework, explaining how consumers perceive product improvements. He discusses the significance of achieving a Delta of 4 or more for a product to be considered a game-changer. This segment emphasizes the need for founders to understand consumer expectations and the importance of creating products that exceed those expectations.

"curious like out of 10 yeah give a cab like a three and then Uber like a yeah like a nine yeah so every time you see that the the product efficiency Delta is greater than equal to four three things ha..."

5
9:57 - 12:15
2:18 duration477 words

Cultural Insights on Indian Immigrants

Kunal shares his observations on why Indian immigrants excel in the tech industry in the U.S. He discusses the unique challenges they face, including the drive to succeed and the cultural emphasis on education and mathematics. This segment provides a thoughtful exploration of the immigrant experience and how it shapes the success of Indian CEOs in high-stakes environments.

"talk about it in many ways because it's it derived of some study around entropy and something about evolutionary biology which is the root of how I discovered and thought about Delta 4 that when does ..."

6
12:15 - 15:28
3:12 duration609 words

The Role of Dharma in Leadership

In this segment, Kunal discusses the concept of Dharma and its relevance to leadership among Indian CEOs. He explains how successful leaders maintain the core principles of the companies they lead, emphasizing the importance of humility and respect for the founders' vision. This segment highlights the philosophical underpinnings of effective leadership in the tech industry.

"thought experiment anyways to talk about these things first is uh in in general immigrants that get out of the country are usually have chip on the shoulder in a very different way and the struggle th..."

7
15:01 - 16:43
1:41 duration340 words

Krishna vs. Rama: Leadership Archetypes

In this segment, Kunal Shah elaborates on the archetypes of Krishna and Rama in Indian mythology, relating them to leadership styles in startups. He explains how Krishna embodies creativity and non-conformity, while Rama represents adherence to principles and obedience. This duality is crucial for CEOs navigating the complexities of business growth and sustainability.

"they follow the Dharma of the founders quite well they have not diluted the dhma of the founders uh who have started these companies and managed to sustain that uh and a lot of CEOs have this need to ..."

8
16:43 - 19:04
2:21 duration459 words

Long-Term Thinking in Indian Culture

Kunal Shah emphasizes the significance of long-term thinking in Indian culture, contrasting it with short-term behaviors that often lead to failure. He discusses how societal norms, such as arranged marriages, foster a mindset focused on enduring values rather than immediate gratification. This perspective is essential for understanding the entrepreneurial landscape in India.

"itself forever and ever wow what an answer this what I love about this is this combination of using a 2 by two and Indian mythology is like the microcosm of you which is philosophy and Tech uh and so ..."

9
19:04 - 20:20
1:15 duration228 words

Risk Aversion in Indian Startups

Kunal Shah addresses the high failure rate of startups in India and the cultural implications of risk aversion. He explains how societal expectations and the stigma of failure can deter potential founders from taking risks. This segment provides insights into the challenges faced by entrepreneurs in a market that has yet to fully embrace and celebrate risk-taking.

"of times uh a lot of people argue that oh we have arranged marriages and like it's 95% arranged marriages and less than 1% divorce rate comes from this whole long-term thinking right that people are m..."

10
20:20 - 22:00
1:40 duration311 words

The Value of User Growth vs. Revenue

In this segment, Kunal Shah discusses the disparity between user growth and revenue per user (ARPU) in the Indian market. He explains how global companies often achieve high user numbers in India but struggle with monetization due to lower per capita income. This insight is crucial for understanding the unique dynamics of building successful products in India.

"think uh long-term societies are naturally more risk overs right uh and not all great CEOs can become great Founders for the same reason in fact I would say that it actually makes it very hard to be a..."

11
22:00 - 23:01
1:00 duration201 words

Cultural Perspectives on Time and Efficiency

Kunal Shah explores the cultural differences in how time and efficiency are perceived in India compared to Western countries. He notes that many Indians do not have a concept of hourly wages, which affects their understanding of time's value. This segment sheds light on how these cultural nuances impact consumer behavior and business practices in India.

"brand within the cpg company kept growing because that has natural Tailwinds all he has to do is nothing in that brand and then suddenly what you see is that he or she's like managed to do well and th..."

12
23:01 - 24:43
1:42 duration328 words

Focus as a Curse in Asian Markets

Kunal Shah argues that in Asian markets, including India, the advice to focus on a single product can be detrimental. He explains that due to low revenue per user, companies must diversify their offerings to succeed. This segment challenges conventional wisdom and highlights the need for adaptability in product strategy within the Indian startup ecosystem.

"ultimately we're all looking for markers of social validation super interesting I want to keep talking about India and how it's different and especially what may surprise people about the market both ..."

13
26:25 - 27:55
1:29 duration279 words

The Concept of Time in India

Kunal Shah discusses how the lack of hourly wages in India affects people's perception of time and value. He explains that many Indians struggle to quantify their income per hour, leading to a unique relationship with time and spending. This cultural difference highlights the challenges of valuing efficiency in a society where the concept is not embedded in the language.

"and if you ever come to India and do this exercise when you meet them ask them what's your income per day or income per hour nobody will be able to answer no matter what their job is they could be sta..."

14
27:55 - 30:00
2:05 duration438 words

Focus as a Curse in Asian Markets

Shah elaborates on the idea that focus can be detrimental in Asian markets, contrasting it with the U.S. approach of building one successful product before expanding. He explains that in low trust markets like India, companies often need to diversify their offerings to build consumer trust, leading to the rise of super apps that cater to multiple needs.

"fascinating there's something else along these lines of Dows and arpo and efficiency that you talked about that I love which is this idea that focus is is a curse in Asian markets that in the US there..."

15
30:00 - 32:49
2:48 duration530 words

Challenges and Opportunities in India

Kunal identifies pressing challenges in India, such as low female labor participation and low per capita income, while also highlighting the opportunities these challenges present. He discusses how AI can help bridge gaps in the workforce and the importance of adapting to a rapidly changing market landscape.

"it's a by a g name guy named chaan who built a prash which is a a sort of a place that you can have for good health and and uh it's it was built in India uh uh many many many many centuries ago uh uh ..."

16
32:49 - 34:50
2:01 duration374 words

Lessons from Building CRED

Reflecting on his journey with CRED, Kunal shares insights about focusing on a specific customer segment and the importance of understanding market dynamics. He emphasizes that successful startups must adapt their strategies as they scale, particularly in navigating the transition from early-stage to growth-stage challenges.

"which You' have not seen before India is not used to layoffs like startup world is used to layoffs but in India if you startup to layoffs it becomes the national news and all sorts of discussions happ..."

17
34:50 - 36:39
1:49 duration365 words

The Role of Founders in Uncertainty

Kunal discusses the evolving role of founders as companies grow, highlighting the need for them to absorb uncertainty for their teams and investors. He draws parallels with the challenges faced by other tech leaders, emphasizing the necessity for adaptability and the ability to manage change effectively.

"it but I think the few things I've learned differently is that uh uh companies that are very very good at 0 to1 will not naturally become greater 10 to 100 uh there are lots of different lessons to le..."

18
36:39 - 39:00
2:20 duration405 words

Profitability in Indian Tech

In this segment, Kunal addresses the common question of profitability in Indian startups. He explains the cultural context behind the skepticism towards unprofitable businesses and discusses the evolving landscape of tech companies in India, emphasizing the need for a new generation of profitable tech enterprises.

"the things I've learned is that profit pools of a country tell you a lot about what the country values and trying to uh copy somebody else's profit pool to your country will not be a wise idea because..."

19
39:55 - 41:01
1:06 duration198 words

The Profitability Question

Kunal Shah discusses the common question about profitability in Indian startups, highlighting the cultural differences in business expectations. He explains how traditional Indian businesses focus on immediate profits, contrasting this with the internet business model that prioritizes growth and market capture before profitability. Shah reflects on the shock that many experience when faced with the losses of tech startups and shares personal anecdotes about the pressure to be profitable.

"Lenny okay so on cred so there's a funny thing that happened I asked people on Twitter what questions to ask you on this podcast and one of the most common questions was when do you think you'll becom..."

20
41:01 - 42:03
1:02 duration190 words

Understanding India's Tech Landscape

In this segment, Kunal Shah elaborates on the current state of India's tech market, noting that it represents a small fraction of the overall market cap compared to the U.S. He emphasizes that India is at a pivotal moment, being the first generation to build large, profitable tech companies. Shah discusses the evolving understanding of business models in India and the potential for future growth as more internet companies achieve profitability.

"company so it's not surprising that people in India have this comments but it also comes from not understanding how businesses are built in Internet world where VCS are giving you the capital to kind ..."

21
42:03 - 43:03
1:00 duration201 words

Navigating Criticism in India

Kunal Shah addresses the unique challenges faced by Indian founders regarding public criticism and trolling. He shares insights on how to remain focused and positive amidst negativity, emphasizing the importance of filtering feedback from those who truly understand the business. Shah encourages entrepreneurs to seek constructive criticism from experienced individuals rather than reacting to uninformed opinions.

"figuring out what this means and and the fact that this question by by the way I can tell you one thing that I have been asked this question by people on Twitter way more than my any of my investors e..."

22
43:03 - 44:42
1:38 duration288 words

The Power of Curiosity

In this segment, Kunal Shah highlights the significance of curiosity in personal and professional growth. He explains how a curious mindset fosters adaptability and continuous learning, contrasting it with the tendency to showcase expertise. Shah shares his experiences with curiosity-driven learning and how it can lead to better decision-making and innovation in business.

"believe uh Envy is hyperlocal we do not envy Elon Musk for all the stuff he does because he's so far away but we we Envy our own uh uh because they were just like us not many years ago uh and therefor..."

23
44:42 - 46:01
1:19 duration259 words

Lessons from Nature: Survival Traits

Kunal Shah draws parallels between the survival traits of long-lasting animal species and the qualities needed for success in business. He discusses three key traits: the ability to lower metabolism at will, high conversion rates in securing resources, and adaptability to environmental changes. Shah emphasizes how these traits can inform strategic thinking and decision-making in startups.

"interesting like I love all these different these elements you're pointing out of how different building in India is that I think people in the US have no idea about and so I appreciate you getting in..."

24
46:01 - 47:00
0:58 duration191 words

Learning from the Best

Kunal Shah expresses his desire to learn from successful leaders in the tech industry. He reflects on the lack of opportunities for Indian entrepreneurs to observe decision-making processes in high-stakes environments. Shah advocates for greater transparency and knowledge sharing in the startup ecosystem, emphasizing the value of learning from the experiences of others.

"really trained by the extraordinary product brains or even observe them make decisions so I recently posted one thing that you know the the word operation theater comes because operating used to be a ..."

25
47:00 - 48:02
1:02 duration196 words

Curiosity as a Growth Driver

In this segment, Kunal Shah reiterates the importance of curiosity as a catalyst for growth and innovation. He discusses how curiosity leads to better problem-solving and adaptability, allowing individuals and organizations to thrive in changing environments. Shah encourages a culture of inquiry and exploration to foster continuous improvement.

"uh envious to many people who have the opportunity to kind of work with the best of the best because many of us from India never had the luxury we had to figure out everything on our own wow how cool ..."

26
48:02 - 49:47
1:44 duration293 words

Connecting Dots: The Role of Information

Kunal Shah elaborates on the concept of information asymmetry and its relation to wealth and success. He explains how curiosity enables individuals to collect and connect information, creating unique advantages in business. Shah emphasizes the ongoing journey of learning and connecting dots as essential for achieving long-term success.

"demonstrated demonstrating that they are not proud of their expertise and they will demonstrate extraordinary amount of excitement when they face a problem which they have no clue how to solve uh and ..."

27
49:47 - 51:28
1:41 duration282 words

The Art of Problem Solving

Kunal Shah discusses the importance of solving hard problems in business and how successful leaders prioritize significant challenges over mere busyness. He shares insights on how to cultivate a mindset focused on impactful problem-solving, drawing parallels with the patience and strategy of predators in nature.

"or like crazy crazy scale they can bring the metabolism down the second one is by the way a lot of in ancient uh yogis have demonstrated this as well uh it comes from the same yogic practice the secon..."

28
51:28 - 54:02
2:33 duration434 words

Learning from Others: The Value of Diverse Insights

In this segment, Kunal Shah reflects on the importance of learning from a wide range of sources and experiences. He emphasizes the need for leaders to engage with diverse perspectives to enhance their problem-solving capabilities. Shah shares his approach to gathering insights and the value of collaboration in driving innovation.

"companies in the world have unfair information asymmetry and and that comes from Curiosity because you're constantly collecting dots connecting dots collecting dots connecting dots and end up creating..."

29
53:53 - 54:49
0:56 duration149 words

The Art of Problem Solving

Kunal Shah discusses the importance of identifying and solving hard problems in a business context. He emphasizes that extraordinary successful individuals focus on making significant displacements rather than just staying busy. Using the metaphor of a crocodile waiting patiently for its prey, he illustrates the value of strategic thinking and patience in achieving success.

"month we go around the table and ask ourselves what are the hardest problem we solved last month and it's very hard to come up with an answer and if you do this to the product leaders like just go aro..."

30
54:49 - 56:59
2:09 duration401 words

Curiosity-Driven Learning

In this segment, Kunal shares his unique approach to learning, which involves forming conjectures and seeking evidence to validate them. He explains how this method has led him to explore various fields, including philanthropy's impact on business success. Kunal highlights the importance of continuous learning and how every piece of knowledge prepares the mind for the next challenge.

"beautiful definition of predator Predators I read was the one who burns the least amount of calories to earn the most am of galleries so how do you become that and I think when I meet people who are e..."

31
56:59 - 1:01:12
4:12 duration795 words

Second-Order Thinking

Kunal Shah delves into the concept of second-order thinking, which he believes is crucial for predicting success. He discusses how childhood experiences, such as playing strategy games, can foster this skill. Kunal also suggests practical exercises for parents to encourage their children to think critically and deeply about the world around them.

"and then use that to connect to the next do right so I often tell people that everything that you every book you read makes your brain porous to read the next book that's the purpose of books but that..."

32
1:01:12 - 1:04:34
3:22 duration648 words

Wealth as Energy Storage

In this thought-provoking segment, Kunal presents his contrarian view on wealth, defining it as a form of energy storage rather than a zero-sum game. He argues that wealth concentration is a natural phenomenon and discusses the implications of this perspective on society and economics. Kunal draws parallels with historical trends and the potential for future wealth creation through energy conversion.

"back with the answers next day for example why do humans wear jewelry and why is uh uh something in a certain way and let them go into the full depth of History and find out uh or why why is it so exp..."

33
1:04:34 - 1:07:25
2:51 duration489 words

Lessons from Failure

Kunal reflects on his journey as an entrepreneur, sharing insights from his numerous failures. He emphasizes the importance of learning from mistakes and the ability to move past them. Kunal discusses how his family's financial struggles shaped his drive for success and the value of resilience in overcoming challenges.

"I think of Elon had this interesting point that wealth is just a database where everyone's wealth I guess is just an a row in the database and here's how much everyone has and you're just transferring..."

34
1:07:25 - 1:09:40
2:14 duration427 words

The Gift of Struggle

In this closing segment, Kunal Shah discusses the paradox of struggle in achieving success. He argues that while many successful individuals come from privileged backgrounds, the gift of struggle is often missing. Kunal encourages listeners to embrace their challenges and share their learning experiences to foster growth and understanding in others.

"exactly that circles back to one of our first few questions about the chips on shoulders uh driving a lot of motivation there's this phrase chips on shoulders uh Drive chips in pockets that's interest..."

35
1:09:42 - 1:10:35
0:53 duration172 words

The Value of Human Behavior

Kunal discusses the significance of understanding human behavior in business and relationships. He stresses that many people overlook this crucial aspect, which can lead to challenges in navigating life and work effectively.

"exciting lightning round are you ready all set let's do it first question what are two or three books that you've recommended most to other people it keeps changing a lot but uh my books are usually a..."

36
1:10:35 - 1:11:07
0:32 duration107 words

Second Order Thinking Explained

Kunal introduces the concept of second-order thinking, explaining its relevance in decision-making and predicting outcomes. He provides examples of hypothetical scenarios to illustrate how this type of thinking can lead to better understanding and foresight.

"to be honest so I I believe in drifting and going deeper into topics so understand the topics versus trying to say uh give me this three books and I'm going to be good uh and the last one I would say ..."

37
1:11:07 - 1:11:58
0:50 duration137 words

The Butterfly Effect in Decision Making

In this segment, Kunal elaborates on the butterfly effect and its implications in various aspects of life, including the stock market. He emphasizes the mental effort required for second-order thinking and how it can be cultivated over time.

"detail is a great book to learn from an audience member on Twitter actually asked a similar question along these lines if there's one book that you could read over and over and over what would that be..."

38
1:11:58 - 1:12:45
0:46 duration132 words

Anticipating Future Trends

Kunal shares his thoughts on anticipating future trends and the importance of being adaptable. He discusses how understanding the implications of current events can help in making informed decisions and preparing for potential changes.

"and Nolan's craft of making the movies but uh nothing in the recent past that I feel is right up there do you have a favorite interview question that you like to ask candidates that you're interviewin..."

39
1:12:45 - 1:13:35
0:50 duration145 words

Life Lessons from Movies

Kunal reflects on his favorite movies and how they resonate with his life experiences. He discusses the importance of storytelling and how narratives can inspire personal growth and resilience.

"questions can keep changing for example you said that what if arranged marriages were banned in India made made got capital punishment for doing arranged marriages what happens to the country how do w..."

40
1:13:35 - 1:14:24
0:48 duration156 words

Life Motto: Collecting Stories

Kunal shares his life motto about making the most of experiences to create a rich tapestry of stories. He emphasizes the value of overcoming challenges and achieving personal growth, encouraging listeners to seek out meaningful experiences.

"as possible for example okay like a lot of people in stock market use that to say how which stocks will go up and down like that's there's something that has happened in the market oh there is a war n..."

41
1:14:24 - 1:15:52
1:28 duration261 words

The Reality of Motivation

In this segment, Kunal critiques the notion of superficial motivation found online. He stresses that true success comes from hard work and struggle, advocating for a mindset focused on evolution and continuous improvement.

"for the brain okay just a few more questions do you have a favorite product that you've recently discovered that you really love I'm looking forward for My Vision Pro that is coming soon it's a future..."

42
1:15:52 - 1:18:02
2:09 duration428 words

Connecting with Kunal Shah

Kunal invites listeners to connect with him on social media and share interesting discoveries. He emphasizes the importance of community and collaboration in learning and growth, closing the conversation with gratitude for the opportunity to share his insights.

"transient uh and we are very lucky to have this life that we have and we have to make the most out of it uh uh and and all these struggles will mean nothing uh I often tell people that wish for your l..."