267 / June 29, 2024

Break Down Of The Real Money Gaming Industry with Dilsher Malhi Zupee Founder

41 minutes

267 / June 29, 2024

Break Down Of The Real Money Gaming Industry with Dilsher Malhi Zupee Founder

41 minutes
Listen on

About the Episode

Why is Real Money Gaming Successful in India and NOT Everywhere?

In this episode of The Neon Show, we dive deep into the serious world of casual gaming in India with Dilsher Malhi, the founder of Zupee.

We discuss the uniquness of Indian gaming market, why entertainment is a feature and not a bug, India’s trillion dollar digital economy dream and how will regulation affect the gaming industry.

If you are serious(or casual) about gaming and startups then this episode will offer a range of insights to you.

Watch all other episodes on The Neon Podcast – Neon

Or view it on our YouTube Channel at The Neon Show – YouTube


Siddhartha Ahluwalia 01:12

I have the founder of Zupee with me, Dilsher Malhi. Welcome to The Neon Show.

Dilsher Malhi 01:15

Thank you so much.

Siddhartha Ahluwalia 01:17

Super excited to have you today and discuss a broad range of topics on the gaming sector in India. So let me start by what’s the gaming overall in India which is being played online or on mobile? And how do you slice and dice that market? And who are the players in that market?

Dilsher Malhi 01:32

Got it. So thank you so much for having me here. If I have to start at a very high level, like you said, there can be so many slices and dices. Let’s just focus on the mobile side of it because we don’t have that kind of console penetration that is in Western markets. So mobile, if you look at it, I’ll say I’ll divide it into two broad segments. One is free to play. Second is pay to play.

Free to play. Then there could be further various segments. You can have your strategy games, first person shooter games, casual games, like Candy Crush, Ludo King, board games, etc. So as per my estimate, there will be 500 to 600 million gamers in India overall.

Siddhartha Ahluwalia 02:19

Half of India’s population plays online games.

Dilsher Malhi 02:22

If you have a smartphone it’ll have games and you will play a game. And I think in terms of revenue, if I’m not wrong, this free to play has two major models of monetization. One is advertisement and second is in-app purchases. And if my estimate is not wrong, it should be doing around 800 million to 900 million per year revenue. And the metric which is ARPU per user is quite abysmal when you look at the US and other countries.

And according to me, there are two major reasons. See, ad rates are directly proportional to what your attention is worth. In any place where there is lower GDP per capita, where there are a lot of you, your attention is not going to be worth a lot of money.

That’s why ad rates are not as high as in India. In-app purchases as a behavior is still getting very nascently developed. Earlier, in-app purchases were also on the basis of Western markets, you know, 4.99, 2.99. But now because UPI is coming, there are micropayments.

Siddhartha Ahluwalia 03:28

10 rupees, 20 rupees.

Dilsher Malhi 03:30

Exactly. But still that behavior of paying for content is not very, very natural to Indians.

Siddhartha Ahluwalia 03:39

I would assume it would be among the top 1% of the gamers. Let’s say if you’re saying 600 million, 60 crore people are playing games on mobile. Only 1% of that, like 60 lakhs or 6 million people are.

Dilsher Malhi 03:50

Yeah, very, very strong concentration on the top side. So that is the broader free-to-play segment. And then there is a pay-to-play segment. So the nuance is pretty clear. You can pay to play only if your game is dominantly skill. There’s clear legal jurisprudence on that.

So the key, again, emphasizing the key point is the game has to be dominantly skill. Everyone knows there’s nothing such as pure skill and pure chance. There are so many random variables. Even let’s take a game like cricket. Toss is a random variable. Even in chess, who moves first, you decide it randomly.

And there’s a slight first-mover advantage. So the idea is always to look at the game holistically and see whether skill dominates or chance. So in this, I’ll say there are three major categories. One would be, I say DFS, Daily Fantasy Sports. Then the second would be card games. You will have poker and rummy there.

Then the third category, and this is just a terminology we use, is casual games. So as per my estimate, in fantasy sports, you will have anywhere between 150 to 200 million users playing annually. In card, I’ll say maybe 40 to 50 million users playing on an annual basis.

The largest segment is casual gaming. So let’s try to define casual gaming. Casual gaming is like, as it’s in the name, it’s casual. It’s like easy to play, light touch, not heavy first-person shooter games. It’s like done something like a very casual entertainment, time pass, easy to play. So that’s where the largest base is.

Our estimate is 400 to 500 million gamers are actual casual gamers. They play at least a few casual games. So when we started in 2018, we were seeing daily fantasy sports, which has been dominated by Dream11.

So a lot of other players were also coming into the fantasy space. And similarly, a lot of people were just launching similar products in rummy, poker. What we’re looking at is that everyone is launching the same product. So what is happening is that CAC is increasing because everyone is targeting the same user and LTVs are also getting split because of the same cashback.

Siddhartha Ahluwalia 06:05

So for our audience, CAC is customer acquisition cost, the cost to acquire one customer to play your game and LTVs lifetime value of a customer is that how much you can earn from this customer over a lifetime let’s say the customer stays over 3-4 years.

Dilsher Malhi 06:18

Yes, precisely. Then we were like, let’s look at this casual gaming space. When I say 3 games were working in the skill-based digital space, I mean at least 100 million plus kind of revenue. So we were very curious that why no one is making a game in this. So we took it on ourselves. It’s not like the games haven’t been tried.

So once Dream11 became a big success, everyone thought, oh, this looks easy. Go to the play store, buy the most popular game, add a payment gate, acquire the user and voila. I’ll also build a billion-dollar company. It’s a bit like saying that I have a camera, I’ll make a Disney movie.

So for us, it was more like why these 3 games have worked so well. But there are a lot of these other games that have been tried that haven’t scaled. So we went really deep into understanding the game mechanics. And it was more like instead of making a plane, understand why things fly. What are those fundamental mechanics at play which make these games tick.

And the other very important thing was for us to understand what is a game of skill. And when we were starting, the game of skill was always defined very subjectively. Principle based like mental alertness, memorization, analysis, hand-eye coordination. These are good principles to start with.

But if you really want to commit your life to it, you need to understand a bit more scientifically and objectively what is a game of skill. So the first thing we did was let’s study all the literature out there.

So we studied every research paper that has ever been written. Every legal judgment that has been done globally around game of skill, game of chance, consulted various professors. And we ended up building a very objective criteria, which we can discuss in detail maybe.

What is a game of skill? So the three tests that we figured out were, I’ll just quickly walk through. One is that in any game of skill, there is a learning curve. That is, the more time you spend on the game, your skill should improve. So that is again, all of these has to be statistically correlated.

Second is persistence of skill. That is, if you’ve played enough number of games across two seasons, the performance can’t widely fluctuate. Like I’m a big football fan. So Manchester City, if it’s a skilled team, so its performance over two seasons can’t be wildly different. Their champion’s score is 90 points, next time they score 15.

So again, you put statistics correlations there. And the third very interesting test was, are you able to show certain users which have demonstrated skill levels, which is almost impossible to be in a game of chance. Like let’s say, if on your platform, let’s say users have played 10,000 games and there is someone who has actually won 9,000 games. The probability of that happening in a pure game of chance comes out to be 10 to power minus 90 minus 100.

So it’s like saying, if you put a monkey on a typewriter, what is the probability it can produce a Hamlet? It is that next to impossible. So there are way more nuances that go deeper into how these tests are conducted, what is the right environment, other subjective principles. But this would be the high level idea of how to think about this.

Siddhartha Ahluwalia 09:47

One school of thought is that the entire real money gaming ecosystem in India is pulling the society down. Because people are, even if it’s a game of skill, people are getting addicted to gambling. And only like 90% of the people will lose for 10% and the house to win.

And skill wise, the people that would have dedicated time to building higher skills, daily one or two hours they’re spending on betting on real money gaming in India. What’s your take on it? Is it uplifting the society or is it because it’s such a lucrative opportunity? And like gambling has been in India, right? If you see Mahabharata, the largest war or the largest epic from India or worldwide was caused due to gambling.

Dilsher Malhi 10:35

Thank you for bringing this up. I think that’s where industry and we have to do a much much better job at differentiating gaming and gambling. It’s actually a bit sad that we read articles in which two lines there is a switch. First it’s gambling and then suddenly it’s gaming. First you think, is it a typo? But no. It’s so interchangeably used. See, the definition of gambling is that it’s the exchange of money in and money out is happening on a game of chance. Gaming is anything that is dominantly skill based is gaming.

And our entire life, we are taking calls, right? Which college to go, who to marry, which city to live in, which job to pick. All of these are calls, choices we are making. So skill based gaming is not gambling. That is the simple nuanced viewpoint.

That again I think we have to do a much better job so that there’s a clear distinction between what is gambling and what is gaming. Now, I’ll give you my broader viewpoint on… And I’ll maybe tell a bit about myself also.

So I was born and brought up in Rajasthan. My dad was in police, now retired. So small, small cities. I somehow had a huge love for philosophy, psychology. When I was a kid, I started reading philosophy, psychology very, very early. So and all those big questions like what is the point of life, what is the meaning of life, all those questions. Then I went to IIT Kanpur.

I graduated in chemical engineering, but I had a love for psychology. So I did a lot of projects, courses there. And just a lot of it is just self-taught. My thesis is that you can break business in two buckets. One are vitamins, second are painkillers. Painkillers are like, you know, Ola, Amazon, Swiggy, Zomato.

Siddhartha Ahluwalia 12:33

You can’t survive without them.

Dilsher Malhi 12:35


Siddhartha Ahluwalia 12:36

Life is dependent on them.

Dilsher Malhi 12:38

Yes. And then there are vitamins, which enhance the quality of life. Which is like gaming, music, fiction. We are not born to work 9 to 5 hours and then go to sleep and work the next day. Imagining a world where fiction, entertainment doesn’t exist. It is going to be a very very depressing and dark world.

So that’s where I think it’s super important that humans have this fundamental need to be engaged and entertained. That serves them. That brings the moments of joy and happiness in them. So that’s our thesis that, you know, you need both. The society needs Edison’s as well as Beethoven’s. So and it’s very, very nuanced.

What I’ve seen is, and this we can track it over history. Any new innovation or tool that comes in is seen as, What is this? Why did this happen? And this goes as back as to fire. With fire, you know, you could kill bacteria in your food. Cook food. You can digest earlier. It was a source of light. You can drive wild animals away.

But also, with this, you can burn a neighbor’s house. You can burn a village. All of that.

Then so many examples. I can keep going on. The same debate now is happening in AI.

You know, AI, you can use bio weapons. But at the same time, AI can be used to do so much good. So in many ways, it’s the same with gaming.

Any tool has a spectrum. It almost always comes down to the right usage of the tool. So I’m not at all saying that there are no challenges. There are challenges. But let’s look at the challenges. Let’s try to solve those challenges.

Let’s try to retain the good part of it and manage or address the potential side effects of anything that is out there. It could be any possible thing in certain dosages if you engage in has side effects. So if you want, we can go through the challenges and how we think about addressing them.

Siddhartha Ahluwalia 14:39

Sure, would love to. And especially, you know, how do you prevent people? I’ve heard stories that people have lost their life savings. And these are like poor people. 2-3 lakhs of life savings in real money gaming come in severe debt. And this is akin to, you know, what happened in real life.

If they were gambling with that kind of money. So how does the RMG industry prevent that from happening? Because it’s a game for entertainment. And 90% of the people will lose money for 10% to gain. Not to hold away or lose away your life savings.

Dilsher Malhi 15:19

So a fair question. So a bunch of stats, like if I remember correctly, 95% of our users engage in an average entry fee, not more than 7 rupees, which is less than a chip packet. But I totally get it. How do you address where there could be even 0.1% of the users who can engage with it more than required.

So let’s look, let’s define the challenges and let’s think of potential solutions. One is this responsible gaming part of it. Then the second is age gating part of it. Like RMG clearly is for 18 and above. Then third is the fair play part of it.

Like how do you ensure all the platforms are providing fair opportunity to all the players? The fourth part is again, which I’ll say is the responsible advertising part of it. How do you advertise? Then there could be other things. On top of my head let’s pick I think the biggest one is responsible gaming.

So, so there is, there are various ways in which it can be totally addressed that we have such nuanced AI ML algorithms right now that can tell when you are engaging in any kind of behavior, which might not be good for you.

So one of the simplest things to solve this, which has been done in the UK is at the time of signup, you have to enter the amount which you are okay playing in a session, in a week, in a game, in lifetime.

So, because when you’re in the flow state, it might be hard for you to set those limits, but the moment you are coming on the platform, you define your entertainment budget. I mean, I’ve just started playing, I will set my limits and those are .. my loss limit is 10,000 rupees. Whatever. Yeah, it’s, it’s for you.

It’s, it’s, it’s totally for you. It could even be one rupee, two rupee, three rupee, four rupee, thousand rupee, whatever works for you. Then but I’ll, I’ll tell you the bigger problem is, and that’s why like most entrepreneurs are against regulation.

I, again, regulation is such a tricky topic. It’s a fine balance. It’s never pro or anti.

See, if you tightly couple it, innovation runs away. If you leave it open, then wild, wild west, all those things start to happen.

Siddhartha Ahluwalia 17:33

And the most unethical players tend to win.

Dilsher Malhi 17:36

That’s the biggest problem in free markets. That, so there is a story, I might be paraphrasing it. How the market evolves, how the regulation comes.

Let’s say a fisherman gets a part of the sea where he catches fish. Suddenly, the rest also discover it. They also come and start catching fish. Then… The first one may be responsibly disposing the waste outside. But all of them start disposing of waste there which affects everyone. Then regulator comes and sets up the guidelines that this is okay and this is not okay. So in many ways, every new industry evolves in that way.

So the thing is, even if let’s say top four or five platforms are able to follow all the most responsible guidelines, that doesn’t mean the entire ecosystem follows it. There is no authority I have over you to ensure, hey, this is how it should be done. So I think the better analogy is like stock markets, stock markets, the same things happen. Like, uh, the ratios are actually, uh, the stats are actually worse in the stock market.

And, uh, uh, that percentage of people who actually make in the stock market is abysmal. The reason it’s much more controlled is there’s a regulator sitting there that which sets up the guidelines which stops misleading advertising, unethical behavior by platforms, all of that. That’s why any trading platform has to align with those.

Yes. So the bigger solve is like everything is actually solvable. You know, you can put strong AI/ML checks, limits. You can have a blockchain-based solution, which we have pioneered to ensure fair play, that there’s no tampering going on behind the scenes of algorithms, RNGs, bots, nothing like that.

All these things are very, very solvable, but you need someone who comes and say, yeah, this is the way it should be, which we don’t have the authority to ensure every player follows it.

Siddhartha Ahluwalia 19:33

Yeah. And are you in favor of pro-regulation? And how will the regulation and regulatory body impact your industry?

Dilsher Malhi 19:43

So again, it’s such a nuance. It’s such a nuanced answer. Like, see, it’s like I said, very fine balance. Maybe it is the trickiest balance to strike between innovation and regulation. Which I just said, if you tightly couple it, innovation dies. If you leave it open, then it becomes wild wild west.

So it’s going to be that I think is the trickiest thing to do to come up with guidelines or frameworks, which allow innovation to happen, but also sets up because everyone wants to, all the real players want to operate very, very responsibly and contribute to the digital economy of India. If you look at any serious platform, most of the platforms are already doing the things that are going to be part of regulation.

So in many ways, we welcome it because it provides a sense of clarity because you see a lot of investors sitting out there who are just waiting to see this issue get resolved and the kind of capital you will see getting into the ecosystem will be absolutely crazy. And that opens so many opportunities for the entire ecosystem.

See, I think we have to look. I’ll give you an analogy. The analogy is, in many ways, you have to look at gaming like the automobile industry in the 20th century. It’s not just that a lot of cars were made, so car manufacturers got jobs.

Look at the second, third, fourth order effects. It made roads. It made the manufacturing of your rubber and steel industries. It opened your services. Fuel on top of that car washes, etc. Mobility came.

So people could seek employment, travel, hospitality. So in many ways, gaming is that one industry, which we believe is that 10 industries are going to originate from, whether it’s the interoperable assets, digital assets in the blockchain space, whether it’s the VR/AR, whether it’s the Metaverse, whether it’s just the creative storytelling, whether it’s, I don’t even remember there are so many things that this one industry is going to let…

That’s why our Honorable Prime Minister Modi Ji says that this is going to be a pivotal part for our trillion dollar digital economy dream. And then just the applications of gamification. So gamification is again, a very poorly misunderstood word.

Gamification is seen as setting leadership, points, leaderboards, badges, all of those things. But gamification is more about how can you take certain things and make it enjoyable. Everyone knows working out is important. Meditating, eating healthy is important.

How can you leverage those principles from games and actually leverage in things that make your life more prosperous, fulfilling, etc. I’ll just give a quick example on that.

So this was done by our genius hunter and gatherer, ancestors. I give this example a lot because I love it. Even the games kids play today, which is tag, hide and seek, they were designed by them. What did they want to teach? How to hunt and how to avoid being hunted. Now tell a kid to run 100 meters in the morning, he is not going to run. So it’s dreadful. But he will do it in tag, hide and seek. That is the power.

We can take something and make it super engaging and fun for you. And you deliver skills through that. And in many ways, with this crazy revolution that is happening in Gen AI, the most important skill in the 20th century is going to be acquiring new skills. And acquiring new skills is very, very stressful. That too, when you get past a certain age. So we will have to figure out a way to make it fun.

So that’s where I can go on and on. But you get the idea. We have to look at it. This is going to be the bedrock over which a lot of capital comes in. A lot of highly talented people work, go out and create even more powerful businesses. So even right now, I think the total gaming segment would employ 5 lakh people, directly or indirectly.

But these are the top jobs. These are the businesses which have the most amount of amazing data scientists, data analytics, design, animation, engineers. All cutting edge stuff is happening on this.

And this is where all the innovation happens. And that’s where like each problem you solve ends up becoming a business line in itself. Like just the example of Flipkart. Flipkart business to build it, what all needs to be solved. Logistics, which become proper businesses in itself.

Siddhartha Ahluwalia 24:32

You are right. Flipkart is a 40 billion dollar company. But the offshoots that came because they built this industry. There are so many unicorns like Shiprocket, Delhivery. They all started some second or third order effect of Flipkart. Today it would command, let’s say, 200 billion dollars of market cap in the overall Indian market.

Dilsher Malhi 24:57

Yeah. That’s just amazing. I was looking at your podcast the same way you were mentioning Infosys Mafia. So it was just one company. But what has it done to the net export of software from India? It has changed the trajectory of our country.

Siddhartha Ahluwalia 25:13

Yeah, I think India’s GDP runs on IT services. And the offshoot of IT services is that once that today, 20 years ago, this Indian IT exports were 5 billion dollars. Today it’s 200 billion dollars. But it’s just not 200 billion dollars of IT exports. It also created parallely the SaaS industry in India. Because once people started trusting Indian companies for IT services.

Now they are trusting Indian SaaS companies like Freshworks, Zoho. And this is just the start, right? Indian product commands like Freshworks, Zoho 14 billion dollars and expected to reach 50 billion dollars. So massive second, third order. This is amazing.

Now I want to cover some part of it, right? How does the Indian gaming market differ from the rest of the world? Like A16Z in the US has a 1 billion dollar gaming fund. How big is the US market? And how is it different from India? Similarly, how is one of the pioneers in the gaming industry, the Korea market? How is it different from India?

Dilsher Malhi 26:13

That’s such an interesting question. I think many ways it comes down to, see any society or culture, if I were to break it down, it has its social factors, economic, cultural, psychological, bunch of these factors and technological.

So in many ways, like what US companies enjoy is just a huge domestic market. What would be their GDP per capita? I think 30K, maybe. I don’t know.

Siddhartha Ahluwalia 26:45

It’s more than 30K. The overall economy is like 40 trillion dollars. India is at 4 trillion.

India’s GDP per capita is 2000 dollars. US GDP per capita is like 40-50 thousand dollars.

Dilsher Malhi 26:54

Got it. Got it. Yeah. So in many ways, it’s a very interesting way to put it is, if you look at the top grossing sports leagues, I think 4 out of 5 would be the US. And those are NFL, MLB, Major League Baseball. And then you will have NHL, National Hockey League, NBA. So, and you look at these games, and there is football, which is played across, watched in 150-160 countries.

And like these 3-4 leagues have an audience dominantly in the US. So that is just the power of the domestic market, right? That you make a league just for the domestic audience, then there are leagues, football leagues, which are watched by 170 countries. They still dominate in terms of revenues.

So just a vast profit pool, spending capacity, high GDP per capita that exists is just amazing. So that’s why… And that directly reflects in your ad rates, in app purchases, and you are more open to spend. So in many ways, a lot of US companies enjoy that a lot. It happened to the normal, to the local profit pools, then they use those profit pools to expand.

So while we still as India are getting there, right? So similarly, I think like, I think specifically Korea and Japan, that’s where more cultural nuances come in. So again, high GDP per capita, being more tech savvy, tech adoption has been on the earlier side. And like, just like anime, stories, games, have just been a more celebrated integral part. And also maybe how societies are structured.

I think average friends per population is on the much lower side in Korea and Japan. So in any case, your digital communities or digital ecosystem becomes more of a place to go to. So I think that’s where all those macros, social, economical, cultural factors come in.

So like even in the US, so a lot of you will see 15, 16 or even 14 year olds, both parents are working. So kids come home, they have nothing to do, they engage in games. But most of us, most Indians.

So what I mean is it’s how community looks like if there is less community, less friends, less family interactions. So in any case, you engage more in digital communities. So all these factors come into the play and how it reflects them in the numbers.

Siddhartha Ahluwalia 29:29

I think what has happened is RMG hasn’t taken anywhere off in the world, right? Except India.

Dilsher Malhi 29:35

So see, that’s what I’m saying. India is unique in that standpoint. So there are various kind of nuances. There are certain countries where everything is allowed, whether game of skill, whether game of chance.

And there are certain countries where nothing is allowed. So India has that amazing unique distinction between games of skill and games of chance, which is absolutely phenomenal and amazing.

And that is something we need to protect so that it allows a lot of amazing skill-based companies to come out of India and build for the world. Because raw materials are all there. We have amazing engineers.

We have an amazing culture full of stories, full of myths, just deep, huge amounts of content that is out there. So all the raw materials are there. But it’s like you have to crack a profit pool first. That’s only when you can start reinvesting and developing the ecosystem.

Siddhartha Ahluwalia 30:35

It’s almost like the Tencent story in China, right? Tencent has become so big that it started as…it’s one of the largest investors also globally.

Dilsher Malhi 30:44

Yeah, so that’s very interesting you bring it out. So in many ways, we have seen there are three pillars. If you are able to crack that, you have really made it. One is the, I’ll say profit pools. If as a company, you have profit pools, then your distribution, and then you build a great brand.

So in many ways, Tencent did that. So Tencent, their distribution came from WeChat, messaging apps. The profit has come from the games. So, when and they built a very strong brand Tencent because their products are the most well adopted. So, when you have profit pools and when you have a large distribution, you can practically go and win the internet ecosystem.

So, if I remember correctly, they own like 18% in Meituan which is like food delivery for China. Now, a gaming business has no…why are they in food delivery. But that’s the power of, you know, having large profit pools and large distribution, great brand, you can practically go and win the ecosystem.

Siddhartha Ahluwalia 31:44

Yeah. And do you have similar success stories? Like in India, like Nazara is just on the starting of it. I think Dream 11 just started acquisition, they’ve built their own $250 million fund, right and started acquisition. But you are seeing these kinds of companies build ecosystems in India now, the gaming companies.

Dilsher Malhi 32:02

I think the one company in my head that could be an analogy could be Reliance in many ways, it has a profit pool, it has the distribution, it has a brand. And in many ways, they are building the ecosystem, right?

So, practically, if you look at any domain, you will see Reliance there, like if you now all the key marquee properties are there. So, Jio is a perfect example that they are practically creating and winning the entire ecosystem. So, that again, goes back to the power of profit pools, distribution and brand, if you crack this holy Trinity, you are like unstoppable.

Siddhartha Ahluwalia 32:43

And how is GEN-ai changing the landscape of gaming, and especially, you know, building apps for consumers in India?

Dilsher Malhi 32:50

So, that’s something we contemplate a lot on. So, like, very simple way to put it is, it’s just democratizing creativity. So, you already see Sora and all those tools coming out that from a text prompt, I can create a video, it’s not going to be very far away from text you can create game mechanics and actual games.

So, what that allows us and this is like such an interesting discussion that happens in our company, and also I learned happens on film sets as well. That screenwriter thinks that he is the most important. Director thinks that he is the most important. Actor thinks that he is the most important. But all three can be replaced. Now a screenwriter can produce movies end to end. A good director can use chat GPT and GenAI to create amazing scripts and create avatars or whatever assets to create a movie. Now the actor might say I have the biggest because I have the IP. Everything works because of my face.

So, it’s the same thing in gaming, like, is it the game designer who designed the mechanics or is it the product manager, which is like the director or is the engineer, which codes. So, that is just sheer amazing and blows my mind.

If that trajectory follows, what is there that can’t be done. Like and just you see like any, any smart 19-20 year old sitting in a tier three town just who has amazing ideas, just the abundance of creative ideas, abundance of creativity that’s going to come out is going to be absolutely bonkers.

Siddhartha Ahluwalia 34:25

Zupee is quite a young company, right? You’re six years old, you have achieved massive scale. If you can share some numbers on the scale, whatever is possible, and then we can go deeper into like, what’s the culture of Zupee like?

Dilsher Malhi 34:36

So, I’ll say, I like to keep it very high level, because I really believe in operating in stealth. Stealth is a feature, not a bug. As far as… so we would have 100 million registered users.

So, in the casual gaming pay to play segment, we will by far, be the market leaders.

So, we have raised around 130 million dollars profitable, even post the GST 28% shift, because we have built a very fundamental robust business model, and an amazing team and culture we have built of innovation that allows us to do that.

Siddhartha Ahluwalia 35:20

And how big is your team right now?

Dilsher Malhi 35:22

So, we are a team of now 300 people. We are based out of Gurgaon.

Siddhartha Ahluwalia 35:27

Okay. And what’s the culture tenets at Zupee that you have?

Dilsher Malhi 35:30

Yeah, I think one of the biggest culture tenets we have is this first principle thinking. So, and this, I think is the biggest learning I’ve had in my life might seem very simple. Doctor is a doctor, lawyer is a lawyer, because they’ve just acquired knowledge, just not having those mental barriers that anything can be acquired.

If you can just ask questions, anything can be learned, anything can be done. So, that is one of the most powerful tenets we have in our company. You’re not just a designer, you’re not just a policy person, you’re not just an engineer, everything is just out there.

So, attracting those kinds of people and breaking those mental barriers, if you’re able to do that, because all of these are just societal barriers we’ve created. That my work is just this. I’m only good for this. But if you are able to break those mental barriers, people can do amazing things.

Siddhartha Ahluwalia 36:23

What are the five, ten books that have you gone back to again and again, which have helped you build Zupee?

Dilsher Malhi 36:30

Oh, I’m quite an unstructured learner. So, I’ll tell you my framework. So, if you want to understand the human mind, I’ve realized like there are five, six domains you can marry very nicely.

So, one is you start like what happened like a billion years ago, that is evolutionary psychology, how we have evolved from a single cell to a multicellular organism, because a lot of our genetic software is hardwired. That’s very powerful to study. Then you study what happened, let’s say, 10,000, 100,000 years ago, which is anthropology, how societies evolved, how religions were formed.

So, that’s again, a lot of it is conditioned hardwired behavior. Then you study genetics, early parent-child relationships, hormones, neurotransmitters, neuroscience, even studying how language, linguistic is insanely powerful, because everything is just happening in terms of words. And if my vocabulary changes, everything changes.

So, on top of that, there’s a lot of amazing work that is happening on the computational psychology side, because it’s very powerful to see the brain as a neural network. And that offers you just a lot of plethora of insights.

And that doesn’t help you just on the designing product side, but helps you massively on the EQ side as well. That once you because I think that’s one thing I would love to change that we as Indian society, we don’t have a culture of humanities. See, being in an engineering college while others were doing robotics, you couldn’t take psychology courses. Yeah, I was ridiculed for that. Why kind of engineer he is.

And so, but but that’s, that’s what I say is we are country of engineers. We are great at what and how of it, but why doesn’t make that much sense to us? So, that’s why you won’t see many B2C or vitamin businesses that have come out of India that have worked at a global level. There are none. People say it’s Bollywood, but it’s okay. Bollywood is that one example of a vitamin that has worked at global scale.

So, I think that to me is immensely important that we build that culture of, of understanding the why because your customers are humans, your investors are humans, your other stakeholders, everything is human, your teammates are humans. So, if you are able to understand that, and more you are able to break out through your loops or fears, insecurities, you can just become an amazing leader and can bring the best out of them and can just be a good human being to be around. So…

Siddhartha Ahluwalia 39:07

And what has been the source of these learnings that you had on psychology? You study a lot of videos or papers or books?

Dilsher Malhi 39:13

I think it’s just a crazy inherent curiosity. So, like I said, it has been very unstructured. So, I basically have read lots of things I’m reading since I was 10 and 11. I’ve read all the great thinkers, Socrates, Aristotle, Buddha, Guru Nanak, anything and everything.

And the beautiful part, which I’ve realized is a lot of their learning starts to converge, Osho, even that the fundamentals are actually the same. And in many ways, it blows my mind, like you read Rig Veda and everything, they had already figured everything out.

And like years and years ago, now we are sitting here. So, it has been mostly research papers, some books, videos, it’s just like hodgepodge of everything.

Siddhartha Ahluwalia 40:04

No, wonderful. It’s been an amazing conversation Dilsher. I learned a lot about the gaming industry and how it got built in India. It’s very unique. Thank you for sharing your story. Thank you for sharing the story of Zupee and how you build an amazing company.

Dilsher Malhi 40:18

Thank you so much.

Siddhartha Ahluwalia 40:19

Really glad that we could do the podcast.

Dilsher Malhi 40:20

Thank you.

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