From investing all his savings in Sahil Barua’s Delhivery in 2011 to becoming an angel investor in 130 Indian startups, the story of Abhishek Goyal, Co-founder, Tracxn is worth listening to for everyone in the ecosystem. Being an Ex-Yahoo & Amazon employee, Abhishek stepped into the startup investing ecosystem with Accel Partners in 2008. Traxcn aims to become the largest platform tracking Innovative Startups, Private Companies & Emerging Sectors globally. They track millions of companies, to enable Investors & global corporates to track sectors of their interest effortlessly. During the podcast, Abhishek talks about how to identify founders who’ll make category-creating startups, important signals to predict a brand’s success, starting as an Angel investor in the ecosystem. Notes – 03:06 – Background with Yahoo & Amazon, joining Accel Partners 09:58 – The story behind Accel’s investment in Flipkart 16:33 – Identifying patterns and traits in successful founders 18:09 – Unlearning your existing beliefs as an investor 22:01 – Explaining Unicorn startups and the general notion of ownership amongst investors 29:47 – Importance of customer signals at an early stage 31:28 – “Capital doesn’t follow fundamentals, fundamentals follow the capital.” 36:10 – “10 years later we as Indians won’t be celebrating Unicorns.” 37:44 – Sectors he’s bullish for this decade: SaaS, EdTech, and Banking among others 46:42 – Preventing forced exits being an Angel investor 49:36 – Advice to first-time investors in Startups 55:01 – Reading and keeping himself updated with Startup news Read the full transcript here: Siddhartha Ahluwalia 00:00 Hi, this is Siddhartha Ahluwalia, welcome to the 100x entrepreneur podcast. Today, I have with me Abhishek Goyal, founder of Tracxn, welcome, Abhishek to the podcast. Abhishek Goyal 00:13 Hi Siddhartha, really glad to be here. Siddhartha Ahluwalia 00:15 Abhishek, to describe your journey, you know, and then I will give over the mic to you. You started your journey in the startup world in 2008. with Accel, you know, you got Accel Flipkart, the India’s largest startup story, which has inspired I think, thousands of entrepreneurs, then you build your own venture after moving on from Accel, Tracxn which is again played a very pivotal role in, you know, how VCs approach to deals earlier, it used to be only excel sheets and manual processes, you automated it to a next level. And you have been like a biggest supporter of one of the I would say the oldest also in the biggest supporter of the Indian startup ecosystem, in terms of not of age, but of the time of you know, you have given, for example, you have been angel investing, I believe, since 2011. Abhishek Goyal 01:09 Yes, Siddhartha Ahluwalia 01:11 it’s almost been 10 years, and you have been very consistent with it. I know some angels who invested in 2011 to 2013 kind of timeframe and couldn’t see, you know, any hope of return on their money. Again, they have started back in 2020. Because the glamour is back, but you have consistent, you know, well I’ll pass over the mic to you Abhishek now and, you know, asked you to share your journey, your upbringing in your family, and then come on to the more professional side of it. Abhishek Goyal 01:49 So, so that I grew up in Jodhpur, Rajasthan, in a conventional large Marwari family. And where doing business was always cooler than doing a job and went to IIT Kanpur, I was top 100 banker in my batch, went to Kanpur computer science. Then after college, I went to Yahoo. So, I was a programmer for first 4-5 years, worked with Yahoo worked with Amazon. Yahoo was like, Crash Course to internet for me. Yahoo had like that time, Yahoo was the largest company and Yahoo tried buying Google multiple times during that journey. And in 2006, Amazon was at a point where I think EC 2 was launched for the first time and how it was very interesting to see how Jeff Bezos was ridiculed so aggressively by everybody in the ecosystem. And then one coincident, I ended up joining Accel, so I was a few programmers turned VC, I didn’t know what VC was before I met them. And they were not also looking to hire like it was very serendipity that we ended up working together. And so very interesting, I met both of them at an event. It was an open coffee club event that probably no other VC used to go. And I met Sachin, Binny and common floors founders in the same meeting. And these are the two companies I was most closely involved with Accel for three years. And then in 2011, I left and I wanted to be an entrepreneur, I realized that something very big is going to happen in an Indian startup ecosystem, the early signs were there. And I wanted to sort of be a part of that journey. Before I thought I was 27. When I joined VC, I thought it’s too early to be a VC, I wanted to build something on my own, and then re think about it later. And I started urban touch, which was into woman lifestyle, commerce. And this was back by Accel and Tiger. And then in 2013, we started, me and Neha started Tracxn together. And now it’s 600 people. We have customers in 40 countries. Today, more than 70 Fortune500 corporates work with us. And so that’s where we are today. And I kept doing angel along the side. Again, it’s a natural extension, all ex-VCs eventually end up being angels. And then I was very lucky that Delhivery was my first Angel. So, it did some of positive reinforcement to the whole journey. And then after that, a lot of my colleagues kept starting. So, I kept back, primarily backing them and some of the deals were some of my close friends or investing so I tagged along with them. And then I did the attraction labs in between where we raised at 20 cr Fund, and then we invested in roughly 60 companies through that. And then last two years, I’ve been primarily investing personally and so I’ve had the fortune of backing more than 100 companies by now across all these multiple instances. Siddhartha Ahluwalia 04:48 And that has been a consistent phenomenon. Like you have been backing, 10 companies every year, or how’s it? Abhishek Goyal 04:56 there have been variations but I think the pace has only increased over time. So, I think in early days, maybe I did 10 deals in first three years between 2011-12-13. And then during Tracxn labs, this was like 60 deals over maybe four years. And then recent times it has been higher because the startup activity has just gone off the roof. So, you come across a lot, many more interesting companies now than ever before. Siddhartha Ahluwalia 05:25 And Abhishek, when you joined, Accel, it was Accel or Erasmic? Abhishek Goyal 05:31 So, it was Erasmic, it was quite an interesting story. So, they had a $10 million dollar fund, they had fully deployed the fund. And I didn’t know about VC. And hence also, they were also not hiring. But one of my close friends, Nitin Rajput, they were backed by Accel. They were founders Gaurav and Nitin, and they recommended me to meet them, and they also recommended them to hire me. So, one thing led to another, and I ended up joining them, and after eight months actually became Accel. So that’s why I said there’s a lot of serendipity because like they were not hiring, I was not I know, I didn’t know VC existed as an asset class. And I left my job to do a startup, and then I ended up meeting them. And I thought something very interesting is going on. So, I should give it a shot. Siddhartha Ahluwalia 06:18 And you were already like, out of the job at that point in time. Yeah, so Abhishek Goyal 06:22 I’d left the job, I had started a company, it would have been a very interesting startups, it was early version of no code, I wanted to build a software where business people can come and build their own software. And I wanted to meet them to see how what they thought of the company and what they thought of the idea. So that was the brief context with which I met them. Siddhartha Ahluwalia 06:43 And in the book, by Mihir Dalal, is mentioned that you kept on, you know, Flipkart seem to be like a ludicrous bet for Accel, but you kept on pinging them again and again, to the partners. This is this one, they should take this one they should take, what was your belief back then, when nothing was created, actually, at that point in time in the ecosystem? Abhishek Goyal 07:08 So, I think the market was really tiny at that time. So, they were doing books, and the entire online books market was less than 20 million. And the winner could take 10 million in GMV, and probably a million dollar in revenue. So, market numbers were very small. And then like every investor, everybody said, No, actually, practically, they met every single investor in India for over a span of eight, nine months. The questions are really genuine internet or small, transacting users were small. They were two programmers trying to build a startup, and which requires a lot of warehouses operations, how would they scale themselves? So, all of that very large, meaningful, right questions? I and I keep thinking about it that why did I kept pushing them for them? Right. So, I think one of the things was that I worked for Amazon. So, I knew how large Amazon can eventually become. And so even when I was a personal user, I always thought that I can go to a bookstore, on MG road, spend, like half an hour going spend, like half an hour there and then buy a couple of books and come back. So that was not me. So, I knew I wanted that service. And when the launched, the initial reviews were insane. There were multiple tweets every day, every time I go to a party to a friend’s place, they would talk about it. So, there was signals all around. And I think I’d seen how large ideas can also get ridiculed through Amazon journey. And I think I always thought that hindsight, that learning gave me that feeling that people can get misunderstood initially, even if you’re a large idea. People may not get it initially. And hence, it was easy to sort of take them back again and again. And I was 27. Right? So, you’re not that smart at that time. So, you, you keep sort of pushing for the same thing again and again. And I think questions were, like all invested, rejected them for the right reason. But I’m really glad eventually it happened. After like, six-seven attempts, I told them that I would probably just put person money personally. And that my friend Nitin Rajput, this is the same person. He told me that why don’t you put that money, there is a fair chance that you might not lose your job for that. So, but I went internally, I took ask for approval, and then they said, Look, if you are that serious about it, why wouldn’t you put 50 lakhs from the fund. So that’s how it started. And we ended up getting like first investment was 70 lakhs for 10%. And then we put in another money and so we then the deal was to put another 2 CR for 10%. And then we had another option of getting 5% additional investment, but by then Tiger came in, and then we renegotiated the deal. We give them a million dollar for 25%. Well, it’s a quite a story. Siddhartha Ahluwalia 09:53 And I think that turned out to be like an $800 million return or a $1 million return. Abhishek Goyal 09:59 Probably in that range I had left by then. So, I don’t know the exact details. But I think it was quite a meaningful return we, as a fund, we invested only, I think two and a half, 3 million in that company. So, we did the first seed round, and then the tiger round, I think invested two and a half million. So that was the all the money because it was $70 million fund. We could not put a lot of money after that. And we didn’t sell anything till I think the entire exit Siddhartha Ahluwalia 10:28 Wow. And do you regret not putting personal money? in Flipkart? Abhishek Goyal 10:37 personally, I think it’s what have you had? You’ve took a decision during those circumstances, right. And I would probably would have done the same thing. That’s what, who I am right. I can’t change who I am. Yeah. So, I had conviction. But I also always wanted to follow the norm. Yeah, I have always done that. And but I think if you keep doing the good work, some something else would come up. Right. So, I did get some portion of the exit when it happened in Flipkart and then probably that karma came back and I became the only Sahil was again not raising Angel round during Delivery, and I was only person who invested. So, I see some of that, like, good karma getting paid back in some other form. Siddhartha Ahluwalia 11:20 Yeah. And you also mentioned that, you know, you pushed, like Delhivery to other VCs that take a bet on me. This is the second Flipkart; you’re going to come on. Abhishek Goyal 11:32 Yeah. You know. So that’s a very similar story. So, I thought in Flipkart, the reason everybody invested eventually was because I said I will invest personally. Yeah, price and delivery to everybody. I like I wrote to all the funds; I knew everybody said again, no. So, I thought I’ll pull that same stunt again. So I told them that I’m investing. I actually didn’t have money, I had very little money in the bank. But this time, fortunately, for me, nobody took the bite. So, I ended up in actually investing in them. And I’m glad that eventually worked out well. Siddhartha Ahluwalia 12:02 Right, there is an anecdote which Harpreet Singh Grover from Cocubes shared on the previous podcast, he says that you make the best investments when you have the least amount of money. Right? So, it just could relate to it. Right? If you have to bet if you have that, like 10-15 lakhs in your bank at that point in time. And if you could bet on one company only. Right. Right, that requires a lot of conviction. And they have a very high chance that you will never see that money again in your life. Abhishek Goyal 12:30 No, I think so. I when I wired the money to Delhivery. So that month I had to I couldn’t pay the rent on time, because the meaning five lakh was in FD’S. And then I didn’t put they couldn’t break them. So, I had to borrow some money for the rent that month. But I think when I met Sahil for the first time I knew he is somebody you should back, I think there was a lot of depth in the character, there was a lot of thought process. There is a lot of ambition, or a good background. So, you know, if you don’t back, like I could see that if I don’t back this person who else would I back? Yeah. So, it was very obvious from that perspective that he is somebody who I should back? Siddhartha Ahluwalia 13:14 Get a holding on to this thought for a second, right? You saw a spark intuitively, in Sahil. you when you met Binny and Sachin? Though there were a lot of signals in our market? You also saw similar spark? Can you define it is possible in words today, like thinking that has this path been consistent across you know, if you try to you know, buy 1000s of entrepreneurs, right? Whenever you see some somebody launch to a great journey? Sure. Abhishek Goyal 13:48 So, I think founders’ successful founders have been somewhat different from each other, I think Sachin and Binny are very different from Kunal and Rohit. And they are very different from Vijay Shekhar. they’re all three in the same market at the same time. So, venture investing is also about unlearning some of these patterns that you see, but I will tell you the common traits within Sachin and Sahil that I saw. So, they were very methodical and thinking they were thinking very big, they were taking right decisions. They were very focused on customer. So, whenever I would meet them, they would take some decisions for customers, which made a lot of sense. But these were brought early signs. Having said that, I think venture in angel investing is all about constantly unlearning these patterns that exist between different founders, because every successful founder has a lot of anti-signals that you would have seen so far. And that is a constant struggle. And you have to do a lot of pattern matching, but on the founder character, I believe that they will all look very, very different with coming time and I constantly see that in the coming days also. Siddhartha Ahluwalia 14:57 coming on to unlearning which you mentioned, right? If you can share example of you know, a pattern which you have unlearned personally, because now you have bag like 130 companies and things that you can keep on reminding yourself, the same thing will not happen again This is like Google will not be created again Facebook will not be created again. Similarly, Delhivery or Flipkart will not be created again, it will be something different. Abhishek Goyal 15:22 So, Flipkart was a very conventional combination, right, two founders equal, they have known each other for a while. Delivery was like five founders. So, it was at antipattern on day one. And they had all equal equity. So, by that definition, their equity holdings are significantly lower as compared to others. Then Rupeek is a single founder company. And so that was again, an anti-pattern, everybody used to say that we won’t back single founders. It’s just a very hard journey. But Sumit was single. And I think he did a phenomenal job at building teams around him. Airmeet was, again, a different pattern 2 founders initially, in different cities, again, considered a huge anti pattern. So, I have constantly realized that the more biases you build, the harder it will be for you to be a winner. winners will look very different. And you have to accept a lot of these anti patterns. Siddhartha Ahluwalia 16:22 So, it’s just about now if I talk about Abhishek Goyal, looking at companies where to invest, you are more not matching anything previous in your history of 130 companies that this matches to this, this matter, your more i would say allow serendipity to come in and focus on that interaction. Abhishek Goyal 16:43 So, I look at market depth. So do I see. So, one thing that has definitely changed over the years, my expectation of size has increased dramatically. So, when I was attacked in 2008, if I, if my bottoms of math would say that this company can become $100 million revenue company, I was okay, not GMP, revenue. So, by that definition, you need to be a billion-dollar GMV company to be $100 million revenue company. Broadly speaking, now, that expectation has increased significantly now, like, I need to see at least a $500 million revenue or my average expectation is like $2 billion revenue companies. So that has definitely changed. So, market depth has definitely increased expectation has increased a lot. And second, I think I like in Flipkart, there was a lot of exhibition bottoms of signal out there. So, I take I care a lot about that. So, whatever you have done so far, are there things which I can pick up, which gives me a feeling that you guys will do a great job at execution? So, these two things that I these are the patterns that I’ve learned over time, and everything else is somewhat more negotiable. Siddhartha Ahluwalia 17:49 You mentioned these things, right? A bottom up and top, can you help explain what are these frameworks? top down and bottoms up? Abhishek Goyal 17:57 So broadly speaking, I think top down you when you look at you, when you look at a startup, you think about market, you think about the team you look at is it the right space or not? What is the mode? So, these are all like very top-down thinking? And these are all these four things I care about a lot. But outside that, I think one other thing that I care about, which I call a bottom-up signal is that our customers really happy or shouting about them are really good employees joining them. So, if these are two three execution rated signals, if they are they have a lot of there are big highs in that. So, I take that company very seriously. Siddhartha Ahluwalia 18:32 And one of your recent tweets you mentioned, right in the SoftBank era of venture world, strategies like minimum ownership pro-rata, portfolio construct, single stage focus would be like bringing a knife to a gunfight. A startup would either not become a unicorn on won’t stop there, can you share more light on this. Abhishek Goyal 18:59 So, I will take you little back to the history. Many people won’t realize that unicorn term was coined only in November of 2013. So, it is less than 10 years ago that Aileen Lee of cowboy ventures. she was with kpcb Earlier. she termed this word called unicorn. And the way it was defined was that VCs were chasing something and she put a word to it, and says that the unicorns are something that we should chase. And you need to be having so much ownership in a unicorn to be actually able to run off return often. And we’ll go deeper into this article literally very funny because it says that US creates four unicorns in a year. And you need to have at least two of them with 20% ownership to be able to give good returns to your LPs. And this is less than 10 years back in Valley. So, it clearly talks about the fact that the pie is so small that somebody is saying that look you need to eat enough of that pie to be able to like fulfill Your goals. Fast forward like few years later, now there is a fund that says that look, I can invest 3 billion into a company called Coupon and get 33 billion out. Which basically clearly tells us that the game has changed. Now, the pie is much, much larger now. So from four unicorns in a year, they are talking about taking 33 billion out of a single company. Which means that you don’t have to worry about how much how much part of the pie you are eating now. All you have to care about is that are you in some of these large vendors or not? So, the depth of a startup has gone all the way from becoming Unicom to much larger number now. And actually, this is not a new playbook. DST was the pioneer of this playbook. DST started with saying that a lot of these consumer companies can go very deep. So, we will start at like three $3-4 billion market caps only. And they invested like, I think in Facebook at larger number, I think maybe $3 or $4 billion market cap. And SoftBank actually made it into a factory. And so, when companies are expected to grow to like 50-, or 100-billion-dollar market cap, think about like Airbnb Door dash, then how does it matter if you enter at seed stage of a 5 billion-million-dollar market cap, or a series A at around 20, or Series B at around 60 million, or even 100 million, right? And how if the company is going to grow to 50 billion, then if you own 20%, at CDC or 2%, at series A, it doesn’t matter. The most important thing is that were you part of that rocket ship or not, whenever you get an opportunity, you become a part of that ship. And that is why I believe that if you have minimum ownership requirement, and hence, you will lose out on a winner because of that, then you are even at 100 million pre there is an upside potential of 100x. Now, which will which didn’t exist in 10 years back when Aileen Lee’s sort of define what a unicorn is. So hence, the playbook has completely changed. Now you need to be a part of that company which will gross into such a depth and then not then be not. And I think the other thing that people ignore is, if even if you let say, enter this company 100 million pre. If you put in let’s, say a million dollar, what are you going to along this journey, you will get a chance to learn how this company grows from very close quarter. A lot of people are not seeing like a $20 billion or $50 billion company they know they don’t know what success looks like they’re very utopian image of what successful company looks like. They feel that everything is perfect. They hear from outside stories, right. So, a lot of people have not seen like a lot of these large companies closely. They always feel that they’re all the board members align all founders an employer aligned, all employees are happy, everybody feels that this is a clear winner. That’s not how it is. When you see success closely, you realize that how much self-doubt exists between founders how much board members actually doubt success of these own companies, how much employees are sometimes unhappy. So, a lot of times though, once you see the success closely, you are able to realize that there are a lot of things which are not as you would have expected, like the same time you get this whole positive, you are able to see the brighter side that in the middle of all this crisis, there is light at the end of the tunnel. And you have to have a Dhoni like nerve to give, actually hold your knob during this entire journey and just come out. Right. And that is the most important thing you realize that what kind of negativity you should care about and what you should completely ignore. I think that is one crucial learning that a lot of funds will miss out if they don’t get involved with some of these journeys. So I think the new playbook In my opinion, where the depth is going to be very crazily deep is this, whenever you find a rocket ship, whatever it takes, you get into that boat, you get into that rocket ship and ride it through. And that is what will matter most. Siddhartha Ahluwalia 24:01 And just sharing an anecdote on this statement, lightspeed entered BYJUs at Series B or series C, and it took only 2% ownership 2% ownership today, actually 100x Abhishek Goyal 24:18 No, absolutely, I would like I have seen this journey again and again. So we have as an ecosystem, we have to learn to trust our winners, we have to come out of this utopian image of what success looks like. And companies which are scaling, we have to trust them and we have to double down we should we have to stop selling that iconic companies. That is another thing I keep talking about now. There is so much negativity around BYJUs now. But I think that they are scaling well, they should work on what needs to be fixed. But I think we should sort of support them and make sure that they see the you help them reach their peak potential. That is very critical now. Siddhartha Ahluwalia 24:59 And thanks to Mihir, he wrote all details in that book, it was a complete chaotic journey I could see right, those companies moving in a very fast paced Flipkart. The Chaos is, nobody would be pleased if what you said, is not an ideal rosy story at all, inside. Abhishek Goyal 25:21 So, I would also say that book was slightly more than what reality might have been because I was out from Accel at that time. So, I kept in touch but I was not. So, during Accel days is three years, I probably, like visited that their office like twice a week or twice a week, my home was very close to the officer in the evening, I would go there and visit very regularly. So, after 2011-12 Well, I didn’t meet them so often, but my sense is that it is still like, as most of them say that sort of straight line, there is a lot of noise. You see Steve Jobs movies, you see Mark Zuckerberg movie, you will know how much chaos existed in even in those large companies. So why are we going to be any different, it is going to be a mix of a lot of colors. And we have to learn to live with that and make sure that we still support them and make sure that they grow to their peak potential. Siddhartha Ahluwalia 26:08 And one more important thing, which you mentioned in a podcast, is signals right? Oh, I want to learn in this conversation, what are the importance of those signals? Because see, as usual, right, we are very biased in a view especially as investors, right, these things, these checkboxes should be met. But every day new kinds of signals emerge, right? So how is your experience being? Right? Those were the early days of Flipkart signals; can you share some recent examples of any companies? Abhishek Goyal 26:42 So, I think in my head, customer signal is the most interesting single than everything else. So, if you are able to, so customers will have multiple options in front of them. And we have to worry about that. Who are they going to pick today? And who are they going to pick tomorrow. And secondly, I think how happy they are with the service. If they are, then that’s great, but if them are to work on more specific things and make it happen. So, I think from my perspective, customer signal is one pattern. The second is execution ability. So, whatever they build, they build a product, they build a customer service, whatever it is, you make sure I care about some of those signals that how well they are executing. It can mean just like even if it’s about packaging, what kind of packaging have they design? Have they raised the bar there? So, customer related signals and exhibition bar are two things that I probably care more about number Siddhartha Ahluwalia 27:40 one VC, you know, which has been most instrumental and VC today in you know, 2021, where we have seen like nine unicorns, or 10, unicorns in our quarter, whereas in in last year 2020, we saw like 11 unicorns being made. The common name is Tiger among all the unicorns, right? I would say Tiger has been one of the most instrumental VCs in India. They got Flipkart and Delhivery off the ground. And I believe speed is their mood, like what, what’s your close quarter your Tiger was on your board? What is your close quarter observations with tiger? Like, why are they so you know, able to pick up the ability to pick up winners so high? Abhishek Goyal 28:24 Right. So, I think there is an interesting twist to this theory. So, I heard from somebody that capital doesn’t follow fundamentals, fundamentals follow capital. What that means is that if you are building a company, if you build a phenomenal company, then you assume that capital will come to you at something. I think a lot a lot of successful investors see the other way around, they say that if you have an early sign of a winner, you give them enough money so that they can actually build fundamentals after that. And actually, SoftBank does exactly the same thing. That’s why every time they invest money, people say that, oh, this company doesn’t deserve so much money. Why are we giving them so much money right now it will over capitalize them? But guess what, I think once you give them money, if the founders are good, they will use that money to actually build a fundamentally strong company. So, in my head, I think that is the theory, a lot of these large investors and the fallen so once they spot a winner, they give them enough money so that they get in the Fed way enough runway and build a firm build enough fundamental so that it creates a great company. And I see this pattern across a lot of late-stage investors, they understand that really well and they do a great job but they will always be example where you give them too much money and then they blow it off. But that’s I think, a reasonable side effect of what positive in brings to the company. So, if I were a late-stage investor, I will always do that give provide them enough capital and I think India is a country that will still keep saying that there’s too much money but I think we are still very, very capital stock. We’d require like at least by 5X more money than what the and then we will, it will take the startup ecosystem in India to a much different tech trajectory. So, I think we are still very capital starved and we need many more investors like Tiger to come in actually invest in the venture. Siddhartha Ahluwalia 30:19 on contrary to you know, this, you know, you have been accessed from India has been a very steady story, nothing glamorous about it, only eight or nine unicorns in Indian SAAS, but you are a big believer of Indian SAAS built for global. Why is that? Abhishek Goyal 30:37 right. So, I think if you look at them. So, I’ve seen this pattern in every country, you start as a back office, then that helps you build capability. So, for example, India has done has been delivering IT for the world, right, so you have TCS, you have Infosys. And what that has helped us to build sort of our plumbing. So, it allows us, it allows us to create a lot of engineering schools, it allowed us to train a lot of programmers, they also learn how to work with global 2000 companies, they also figured out what it takes to make a customer happy when you deliver. And when this entire learning came into the picture. Then we have a lot of excess talent now. And that talent will create now startups. And the same thing has happened in other countries, right? If you look at South Korea, they were back office of cosmetic manufacturing. Now South Korea produce a lot of brands and beauty which eventually became large. So, this is a repetitive pattern, it has happened IT in India, and that will generate a lot of software capability. And similarly, I think, and we are starting to see early signs, right? If you look at airmeet, it is probably the best product in the market in the world today. Even if you look at Myntra, I have seen a lot of shopping experiences. But nobody has made that kind of experience like Myntra in fashion. Take postman. So, they’ve all given early signs that because of this talent development, we have been able to bring products which are going to be sort of best in the class in their own markets in the world. And if you look at global, like US market investments, I think enterprise software is much deeper than everything else. But I have a lot of customers who proudly tell me that look, we only do two categories, enterprise and healthcare. Because these are two real large markets. So in my opinion, global enterprise software opportunity will just like 100x of domestic consumer markets. And hence, I think, all the plumbing has been done. We have good early signs of great products being built here. We still need to do learn a lot more on distribution and monetization. We are still very shy as a country to ask for money from customers. But I think it’s a matter of few years. And I expect to see a lot of large category defining categories in our companies coming out and global enterprise software from India. Siddhartha Ahluwalia 32:59 What are what are the days that you can you know, predict right now that India will have 100 SAAS unicorns? Abhishek Goyal 33:06 I think I can predict something else. I think 10 years later, we won’t be celebrating unicorns to small a milestone, so there is no social media so people can’t see what we used to celebrate in 2008–10. And I there might be a day when people would laugh looking back 10 years later that Oh, you guys used to celebrate unicorns how uncool is that? My but my sense is that India will be producing in 10 years or less or near will be producing one hectogon a year. And at least five decacorn in the year. So the scale of the game will completely change, unicorns will become good, too good to celebrate event. It’s like how you celebrate $20-30 million round today. But I think if you look at the pace like 10 years back, we were creating, we were creating like one unicorn a year, then it became three to four. Now it is last two years has been 10 this year probably will be much higher. But it may also be an aberration because we are printing so much money globally. But the scale is all constantly jumping up very regularly. And my sense is that when you are creating one hectogon and five decacorn in a year, you might be creating like 30-40 unicorns in a year. Siddhartha Ahluwalia 34:21 how many of them are using a percentage of that will be enterprise software or SAAS built for global? Abhishek Goyal 34:29 my sense is that at least 1/3 of them will be global enterprise software companies, if not more. Siddhartha Ahluwalia 34:39 And any three areas that you want to make bullish between for this decade, like e commerce for one and the e-commerce plumbing was like I would say Flipkart is ecommerce and e-commerce plumbing is logistics, Delhivery. These beds work for you very well in the last decade. What are the three areas that you are bullish on for this decade? Abhishek Goyal 35:01 So, I tell people that I’m like irrationally optimistic, I’m bullish about a lot, many more things than just three. So clearly, as we mentioned, global enterprise global SAAS will be a very big wave, we can create like 1000s, at least 1000, large companies in that market alone. And in US, I think there are companies which can grow from zero to 100 million revenue in three years. And I expect a lot of those companies to come out of India as well in coming time. So, this speed will become very different than what it is today. Another wave I’m very excited about as global consumer. So, the last two, Uber was built out of new out of Silicon Valley, I think next large consumer global company can be built out of India, they can build it from Valley by not by country build the same thing from India, and I’m seeing some early signs of that. So Accel has been backing some global consumer companies in their portfolio. I am very excited buddy two banks play two banks, like when IT came to the world, there are a lot of companies which helped digitize the bank. There are many other things that new technologies that are coming, so there’ll be a lot of companies which will work closely with the bank and give them the technology powerhouse. So Rupeek is in some ways helping banks transition the loan portfolio to more technical system, but there are going to be many more. So, helping banks transition into technology world is a very big play. In my opinion banks globally today are they command a market cap of like 50 trillion or more something like that. And there are 1000s of services are 1000s of plays that can be built around them. India will teach the word that globally detect is very interesting, we’re filming. During this whole lockdown period, we realize that India is also have a lot of pharma and healthcare manufacturing. So just like IT, I expect a lot of activity to happen there. I am not very close to that market. So, I can’t really relate to what will come out. But if there is manufacturing, which happens in a country eventually produces brands, or it produces startups in that market, that is something that will happen. There is one dark horse in the IT space that I’m very excited about. So TCS, Infosys, they used to do like projects. So, they would take like a $400 million project and then outsource and then do something, I see that India will produce like subscription services. So instead of selling software, you will take a part of the work and like this is defined like software or product. So good example is that instead of giving you an ESOP software, I will just run your entire program. So, it is a predefined services play. But you will build get build like a SAAS company. So, I will like charge like $1000-2,000 a month, and I will run your entire program. So, a lot of these like packaged or defined stuff, subscription services will become interesting. I think that is the early sign like what x to 10x does for startups, I think you can build 1000s of such services, and just completely outsource these are like packaged like products, so they can scale very well. So, I’m very excited about that also. So, we saw some early signs, like Mu Sigma did something on those lines. They were like, it was a little bit of subscription services. But I think we will I like I’m I think that some of those will happen in coming time. So these are like five, six interesting plays. And so, there are way too many opportunities out there. I think it’s more important for entrepreneurs tomorrow to find a box, which is unique for themselves. And when they’re like think about e-commerce wavelengths. So, but waves are way too many into this and everything looks like a white space right now from the top. Siddhartha Ahluwalia 38:48 You have been angel investing for the last 10 years. What’s your take on angel investing is a wealth creation mechanism? Abhishek Goyal 38:59 I think for any asset class, there are two ways to approach it. One is being passive investor; one is being active investor. So, if you’re a passive investor, like in public markets, I’m a passive investor. So, I just buy index funds and then send it out or I put money into mutual funds or like mutual funds where I know that somebody reasonable person is sitting behind, I think same is true for startup world. You can either become an active angel investor or institutional investor or you become a passive, passive, just invest in two, three good funds, and then let them do all the work and you get the reward. If you want to be an angel investor, that basically means that it’s an active investing. So just like any other asset class, then you will need to spend a lot more time and energy into it. And everybody knows that it’s us. It’s an asset class which has a longer cycle, which basically means that in public market, you can like sit for three years and know if you’re a good investor bad investor. So, in this market, you will have to locate at least 10 years of cycle to be in to sort of be sure that if you should be a passive investor and instead of being an active investor, or at least budget for investing in 30 companies, because that is how much diversity it will take for you to win in that market. And by the very nature of that you, which basically means you will take slightly smaller bites than usual, because you want to sit out, you want to have fuel for 30 investments, or 10 years, that is the thing. Other very interesting thing about angel investing is that, your winner will eventually like give most of the return, which basically means that you have to be very cognizant about not selling your winners expectation is really high, a lot of people get very excited when they get an 10X return on their winner in the sell. So, I think, when I started 100x sounded like a great return, but then I started feeling that oh, I saw 500x also. So, I realized that that is possible. Now 1,000x has become an aspiration. And 5,000x is like dream come true. But that is the magnitude of that one can think about. So more important part is that if you find a winner, find a way to get in and then just sit it out, that is the main thing, it is not the timing, it is about spending time in the market. So that is also to startup world. So, you find a winner, you find a way to get in, and then you sit out until as long as you can sit, sit in them comfortably. Siddhartha Ahluwalia 41:27 I would turn you, you know, Abhishek Goyal as a Warren Buffett of India’s startup world. Abhishek Goyal 41:35 That is very kind of you say Siddhartha Ahluwalia 41:37 you been like, you know, just if, you know how, if you can share how many exits you have taken, right? That would be something aspirational for angels who are looking at this podcast. Abhishek Goyal 41:49 So, I think I have so far, like, made money broadly into companies like Flipkart exit gave me something. And then in Delhivery at taken some secondary, other than that I have largely holding positions in all the companies. Unlike earlier times, now, almost every company will reach out and say that there isn’t somebody is looking to buy a secondary would you be keen to sell, earlier that didn’t used to happen. So now you can stay put in the company by choice, not by not because there is no opportunity. But what I have stayed put in most of that assets. And I continue to do so there have been cases where I’ve gotten like, there was an option to select 20 times the holding, but I prefer to stay put for as long as possible. And this is also from my learning from Flipkart and Delhivery most of these companies that they have a lot of times where you felt that the company is significantly ahead in terms of valuation with respect to progress. Or maybe things are not looking as rosy but then 12 months later, suddenly they break all the barriers, they grow significantly faster. And then the current round looks the last one looks very inexpensive now. And that has happened like five times in Flipkart or five times in Delhivery. So I’ve learned that companies continue to over deliver then what looks possible today. So now I sit out as long as I can I sell only when I have to sell just wait it out. Siddhartha Ahluwalia 43:18 But you’re not coming from the shoes of angel investors who are not well known and what happens I have seen in Series B-Series C or D in series D, large VCs want to maximize their ownership to thereby angel investors are forced to exit, how can they prevent getting forced exit? Abhishek Goyal 43:44 Right. So, I think one is typically companies now at least I have seen that founders don’t come in like founders generally given option they’re not they generally usually don’t push very hard. And if you politely mentioned that there is 20 to 50 side x upside left, why would I sell now something they’ll generally allow you to stay. I think the other big things to worry about as an angel is not to sort of constantly ping founders for no good reason. So, if you take a lot of time from them, then obviously they don’t want to spend that time. But the easiest way is actually to bring some unique proprietary value and that you can provide it can be just one or two late-stage investor relationship where you have good relationships with them and you can put an intro at a later stage or if you have seen one experience which others don’t have some of those like proprietary value add and if you think about it, almost everybody has something to share with others in their capital may not. So, I think if you work towards that, define it and then help fund companies that you will not with forced out. Typically, at least I have seen that you get an option if you are politely declining, people but it’s important to sit, like really wait it out in your winners Siddhartha Ahluwalia 45:04 So, 10 years is a good period that you believe that you should make out in your winners or even more than that, Abhishek Goyal 45:12 sure, think about if you were seriously invested in Apple, it doesn’t make sense to even sell till today. So that is one thing that has changed, the winners have continued to grow deeper and deeper and deeper. So, think about Salesforce, things about Cisco. Like even after 30 years, you put it could have still made sense to stay put, I can add closer to home, like think about in faith in probably Wipro, not doing a private market, if you’ve bought Infosys feel like 20 years back in public market, you will still make a lot of money. So, I think when the companies are on growth trajectory, I think the depth will surprise you significantly more than ever before. So that is one of my learnings in last 20 years. So set as long as you have to spend, you have to do the time. There’s no shortcut to that. Siddhartha Ahluwalia 45:59 For somebody who’s looking at it, as a liquid wealth creation, also, how do they aspire? If to create? Abhishek Goyal 46:08 as little as possible as needed. So, if you need money, you sell some of it, but hold as whatever you can. That is the whole thing. Siddhartha Ahluwalia 46:17 And, you know, if you can share like this advice that only you should expose 5% of your wealth to startups 10%-20%. Right? What’s your advice to people who are looking to invest in startups, how much of their assets, and if you can share your portfolio of how much you are exposed in your wealth to startups. Abhishek Goyal 46:36 So, people who are not familiar with this asset class, I say, invest whatever you are happy to lose, because there’s a good chance it won’t come back. In my case, personally, I think I ended up doing a lot more, because I knew I was part of the ecosystem. So, it was less lesser about, I didn’t never see it as an asset class, I always saw it as being a part of ecosystem. So, because the all these companies of trade getting created near to me, it came naturally as a as a thing to actually back some of them and work closely with them make these networks connections. So, but I didn’t necessarily always see it as a way of investing. It’s sort of it’s a way of building being a part of the ecosystem more than asset class. In fact, this for me personally, and a lot of initial investments for people who I knew first and they wanting to start, so it was like helping a friend, they would have anyways taken time from me. So, you might as well put in some money and make sure that it is successful, you also get the benefit. So, if you’re not familiar with this asset class, or if you’re not part of the ecosystem, then put as little as what whatever you’re happy to lose. It’s an experiment, it’s a lottery. It’s easier to do it when you are younger than when you are older. Because then sanity takes over. Initially you do a lot later on that you like you find something interesting and you don’t overthink it, and then it’s easy to do. And but I think it’s not a replacement for public market and FD for mutual funds. I don’t think that’s the right way to think about it, you should take some batsman think it’s a lottery, but if you are in the ecosystem, and if you know a lot of people, then you can sort of invest a lot. And then eventually, at some stage, if some of your companies do succeed, you can actually take full time doing investing along with the management of funds. That can be another way to think about it. Siddhartha Ahluwalia 48:44 And from your portfolio, how many think companies you believe will go public? between 2021 and 2022? Abhishek Goyal 48:53 I think though, maybe couple not more than that. So, I think the whole thing will change once the first 20 companies go public and there is a good upside. So, I think Naukri and India Mart has shown some path to founders that look after going public also you can continue to run the company will still enjoy it and then continue to grow. So, then that has become an inspiration for next set of companies. So, I think next one or two years, I think probably one or two companies Delhivery has been in news that they might go public. And one or two more may go public. But I think once these companies go and like become successful, that’s when floodgates will open. Like when Flipkart became successful, then it opened up the floodgates for other people to lose his new jobs and do startups. But I think similarly, when some of these company first initial companies will go public and then they build a case study then it will become a norm. I expect lot many more companies to go public in the subsequent five years, if the market continues to hold, because then it will become a norm Siddhartha Ahluwalia 49:57 and any point in time you know you Believe that you should retire. Abhishek Goyal 50:04 I think that I personally I think it has become a way of life now. I like as long as I’m in good health, I’m fit and I’m in good health, I think I would continue to do what I’m doing. I love building a company I love solving in my head, like each founder should take a piece of puzzle and like this solve that box for everybody. So, I’ve picked up my box and I’ve picked up my piece of puzzle I want to build it out for like, whatever next 10-20-30 years, I become more cognizant of my fitness than ever before. So earlier, I would slog for 15 hours. But today, I would make sure that I do my fitness I do my dues for fitness also along with along the way. And Angels is something which hasn’t organically kept happening. Now I call myself a tag along angel because a lot of my friends have been investing and they keep pinging me that I am investing why don’t you come along and a lot of my first-degree friends are investing. So, it takes doesn’t take as much mindshare and time. But I think building this company and doing some Angel along the side, I hope I can keep I will keep doing it as long as I’m fit so and hence, I put a lot of my energy into that so that I can keep doing it as long as possible. Siddhartha Ahluwalia 51:14 Just one last question. Before we conclude, you read a lot, right? through and you have been quoting article from 2013. Can you share any structure of your reading? Abhishek Goyal 51:32 So, I think I earlier used to go to TechCrunch and then read there, that has changed over the years now. Whatever is interesting comes on my social media. So, on Twitter, somebody will share on LinkedIn somebody will share. So, I depend on a lot of those social media signals to find interesting content instead of directly going to their websites now. Because that is that content is way too much. But other than that, I keep a weekly recurring task on my calendar to and which is linked of these 5-10 websites I need to visit regularly. And so, I would probably block like 15 minutes over the weekend and then go through all these websites. And whatever I can do a few minutes I read that. Similarly on books front, I used to like try, I would try and read like two to three books every year. But obviously, that becomes harder and harder over time. So now I did a lot more audiobooks. Because in the evening, when I go for a walk, I would have like 20-30 minutes where I can just plug in my headphone. And so I started to read a lot more audiobooks and Book Summaries. So that has been emphasized First read a book summary and if I like it, then I would sometimes pick up a book and then now and so this has been to large ways I’ve been reading Siddhartha Ahluwalia 52:47 thank you for much appreciate for this wonderful conversation. I wish that I could keep on podcasting you for the next 10 hours and take out more gems inside your mind what this summary of of one hour i think is too less to explore. But I think it gives a lot of value especially if it’s a given value to me. I believe it will give a lot of value to other entrepreneurs, investors who are listening to it. Abhishek Goyal 53:15 Thanks Siddhartha I’m really glad you invited me and that’s very, very kind of you to say that. I’m really glad we could do this today.

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