Episode 100 / January 17, 2021

Inside the mind of Kunal Bahl, Co-Founder, Snapdeal & Titan Capital

01 hr 02 min

Episode 100 / January 17, 2021

Inside the mind of Kunal Bahl, Co-Founder, Snapdeal & Titan Capital

01 hr 02 min
Listen on

Our guest for the 100th episode of 100x Entrepreneur Kunal Bahl is best known as the co-founder of Snapdeal & Titan Capital.

He co-founded Snapdeal back in 2007 along with his high school friend Rohit Bansal. It initially started as a daily deals platform but soon expanded to become one of the largest online marketplaces in India.

Over the years, Kunal has mentored and invested in several early-stage entrepreneurs. In 2011, he decided to formalize it by setting up Titan Capital. Titan Capital has invested in the likes of Ola, Urban Company, Mamaearth, and Bira among others.

In this episode, catch Kunal talking about starting Snapdeal, guiding and investing in early-stage founders, having the drive to keep going as an entrepreneur, and much more.

For anyone looking to explore entrepreneurship, this conversation is worth its weight in gold. From learning from your own mistakes & failures to keep going even when you want to give up your entrepreneurial dream, this podcast will guide you through it all.

Notes –

01:43 – Launching Snapdeal after getting H1-B Visa rejected

03:59 – Pivoting from coupons marketplace to a marketplace for physical products

05:17 – “Identifying the type of businesses Rohit and I like to build”

12:01 – Why not fearing being wrong/failing is important

13:29 – “Our greatest powers will come from our greatest wounds”

15:04 – What drives Kunal even after 13 years as an entrepreneur

18:29 – Tectonic shifts in the Startup ecosystem over the last decade

26:42 – Investing in D2C companies; Beardo, Mamaearth, & OZiva, etc

39:02 – Investing in Urban Company based on their customer-first approach

43:32 – Investing in companies prior to Product-Market Fit

51:48 – Starting up as an Angel Investor and eventually setting up Titan Capital

56:59 – What has changed for Kunal after becoming a parent

Read the full transcript here:

Siddhartha 0:00

Hi, this is Siddhartha Ahluwalia, welcome to the 100x Entrepreneur podcast. This is our 100th episode. And it’s a pleasure to have one of the most respected entrepreneurs of India, Kunal Bahl, founder of Snapdeal and Titan capital. Welcome, Kunal to the podcast, today.


Kunal 0:19

Thank you. Thanks for having me. It’s a pleasure to be here.


Siddhartha 0:22

And I’d like to get started with, you know, the key milestones that you consider as an entrepreneur in the journey for you?


Kunal 0:28

Yeah. It’s been a long journey for me and Rohit. And, you know, getting started by itself is a key milestone for every entrepreneur. I returned from the US in 2007, after my H1B visa was rejected, and had the good fortune of starting the company with my closest friend from school, Rohit Bansal and, you know, while the milestone of starting the company was very exciting, the first two, three years were incredibly painful, where we were still struggling with what our business model was, struggling with, you know, why do we, you know, why do we do what we do, we’re trying out different products in the couponing space. And then I would say, the next big milestone for us was launching Snapdeal in February 2010, as a coupon site, similar to Groupon. And I recall, vividly that when Rohit and I were thinking about launching Snapdeal, we, while there is an excitement, exhilaration, nervousness of starting it, I think the big thing was, Will anyone even buy anything. And our goal was that if in three months, we can start doing 100 orders a day, that would be a big success, and that’d be a huge milestone. But within three weeks of launching Snapdeal, we started doing 100 orders a day. This is 100 coupons, 100 vouchers a day. And that was a phenomenal experience. Phenomenal milestone, because for once, after about three years of starting the company, we saw some progress and, and some correlation to input and output because earlier, it just felt like we were covering a lot of distance, but there was no displacement in the business. And then I would just fast forward maybe a couple of years, to the point where we actually had become quite successful in the coupons business. And everyone was celebrating our success there. And we had, you know, significant market share, mostly the only game in town left at that point in that space. And a lot of capital had come into the company. However, you know, we were very nervous about the business and where it was going. And so we did a pretty hard pivot on the business in early 2012, which was turning the coupons marketplace into a marketplace for physical products. And we weren’t the first e commerce company in India at that point in time. There were many others. And, and so the question was, you know, Why do this? Why do this at all, and everyone thought that this was going to be nearly impossible. But over, you know, an excruciating, 18 month period, successfully pivoting the business was a huge milestone for our team. I would say a couple of years after that, getting someone who I’ve truly admired such as Mr. Tata involved in the company was a very big milestone, I think, maybe more than even getting him involved the opportunity to meet him, which happened because of our business, not because he didn’t meet me, he met the person who was running this company.


Siddhartha 4:04

And I think I remember you mentioning in one interview that Mr. Tata asks, you have been able to grow so successfully. What’s your growth story and growth mantra?


Kunal 4:16

You know, I have a fairly vivid memory of that first meeting I had with him, I think it is somewhere in 2014, middle of 2014. And it was quite a fascinating meeting. And I was obviously extremely anxious and nervous going into that meeting, not knowing what to expect, but he’s a phenomenal human being. He put me at ease and, and we had a great discussion. He was not intimidating at all. Not that he has a reputation of being intimidating, but it can be a bit overwhelming to meet one of your biggest icons, and then you know post that going through our own cycles of learning, just the fact that we discovered, the type of businesses we like to build was in itself a key intellectual milestone for us. Because it often takes entrepreneurs a while to figure out what type of businesses do they actually want to build, versus what type of businesses they end up building, or they are made to build, or the market pushes them to build. I think we, it took us a while to find our center of gravity, as entrepreneurs as operators, to understand, truly, deeply understand and assimilate in our bloodstream, that what type of businesses we like to build, and what are the attributes of those type of businesses. That was such a big milestone because suddenly, it’s almost like you achieved an intellectual Nirvana. And then it’s very easy for you to say yes and no to things thereafter. I would say that, I don’t think it happened overnight. That was more a process of ongoing discovery. But reaching that point was in my mind a big milestone for us. I think being able to build an incredible team that is truly extraordinary in their passion, energy commitment, was also a big milestone, it may not have been one person that we hired who was truly great. But just the ability to assemble an incredible team that has this passion, energy, commitment, resilience, in itself is a huge milestone, because essentially basis the words of another human being such an incredible group of other people assembled. I think that’s a huge milestone. But I think even at an overall level, more broadly speaking, most entrepreneurs lives are shaped by multiple small events, and multiple smaller milestones, then few large ones, we tend to associate you, you may have noticed that I didn’t point to any fundraise, or any acquisition or any of those things as a milestone, because I just think those those type of things give you pleasure, not happiness. And they are not really I won’t really call them milestones. People may have a different view from me. But I do feel that the vast majority of the milestones in an entrepreneur’s journey are relatively small, modest, sometimes even unnoticeable ones. But they are milestones nonetheless, it can be something, something as simple as meeting someone really fascinating, hearing a great idea in a meeting, one of your teams delivering on a great vision that everyone thought was going to be very hard to pull off, I think those are the type of milestones that tend to at least be more memorable for me, and cause enduring happiness for me, than, you know, what, potentially may be celebrated as milestones in the press.


Siddhartha 8:15

Kunal, you almost seem to be in a state of flow as an entrepreneur the path where you are right now, like very, very comfortable with yourself. Is that through the journey of internal discovery which got you here?


Kunal 8:34

Yeah, I think, you know, I don’t think I set out on a purposeful path, to get to that point. However, having a purpose in life is also very important to keep your energy levels up, right? I think what has helped us, you know, both me and Rohit is that you know, we both share this view, a very deep rooted view that having a strong purpose in life is very important. Else, you can get fatigued by all the burdens that are placed upon you, right, from potentially our family or friends, the environment at large and more importantly, by ourselves. So, at least what, you know, you talk about flow, and maybe that’s a good way to put it. But I think of it as drive, right? Like, what drives me is solving interesting problems every day, thinking of interesting opportunities, interacting with incredibly smart people, reading a lot, keeping my mind open to new ideas. I think those are the things that drive me. Right. And those are the things that give me a purpose in life. Also, you know, I think, at least in our society, I think it’s changing a little bit but I talk a lot about this. I talk a lot about it far more openly than most do and I do hope others also talk about challenges and failures more openly, it’s not a sign of weakness, it’s a sign of maturity. Challenges are also a great means to keep driving you forward in life, as they, you know, make you set up benchmarks in your own mind that you need to clear, you know, there’s a challenge that you’re confronted with, you set a benchmark in your mind that I need to clear this, challenges also give you a sense of purpose, right, they’re not necessarily a bad thing always. And, while exciting ideas and projects, generate a drive in most people you know, in doing something really new and that shiny new thing. It is also important to remember that not fearing being wrong, or failing is equally important to retain your drive because, in any entrepreneurs journey, there will be periods where everything will be going right and feel that nothing can go wrong, and everyone celebrating you know, Friends, family, colleagues, employees, investors, media, like magazines, awards, everyone celebrating you. Right. But one should also remember that it’s rare, at least, I haven’t met anyone who’s very successful in life, who hasn’t had a tough patch, or hasn’t had multiple tough patches, I should say. And, and, and hence also remembering that only the exciting positive stuff should not be the reason that you have drive in you, right, or you have a purpose in you. One must also remember that not fearing being wrong, or failing is equally important. As it’s very easy to lose your drive. You know, I feel people judge you anyways. So, irrespective of whether you’re successful or not, I think people judge you anyway, so why bother what they think, you know, we can’t be everything to everyone and yet be true to ourselves. So and also realizing that our greatest powers will come from our greatest wounds, you know, those, it’s very important, because, you know, especially at times when things aren’t going to plan, according to plan, it is critical to reassure yourselves, that is important to keep going forward. So, you know, having sort of clarity of thought that success, failure, you know, moving forward, moving backward, it’s all part and parcel of life in general, and definitely the life of an entrepreneur. In a dynamic industry, like technology, entrepreneurship, that’s so critical, I think it will, the direction of this boat will not only go in one direction and move sideways, it will go down, sometimes, turnover, sometimes it’ll go forward, back, we’ll go in every wave will go up or wave down a wave. It’s all sorts of directions and being mentally ready, that this is going to happen, allows you to pace yourself and maintain your energy levels. And your optimism and positivity as you go through this.


Siddhartha 13:38

Yes, it is said that entrepreneurship teaches you more about life than anything else. And you know, would like to understand, Kunal from you is in 2007, you started. It’s 2020. It’s been 13 years. You know, you talked about purpose, you talked about drive, but what has been, you know, the reason behind the persistence and patience, you know, a combination of these 13 years as an entrepreneur, you are wiser, but still as excited to build business as on the day one.


Kunal 14:15

Yes. You know, I’ve been asked this question very often that, you know, how do you still keep yourself going? You know, on a daily basis, I would meet or many times a week I would meet really energetic, bright, incredibly hard-working 25 year olds, 28 year olds, you know, maybe 9-10 years younger than me, who I can see why they have so much drive because they’re starting something new, they want to change the status quo in a particular industry or they want to introduce a new product or change, you know, bring efficiency to a particular market and I can see why they are so excited. And hence, I can understand why folks may ask a question that, you know, it’s been 10 years, you’ve been running an e commerce company, how do you keep yourself motivated and avoid the monotony? It’s a question that I get asked more often than you think. And I think it’s partly to the point I was making earlier that it’s very easy for folks who don’t approach, building a business as a constellation of interesting problems, opportunities, you know, interactions and relationship building with smart people, my sense is, you know, even one year is too long for them to probably stay interested in an opportunity. So, so I don’t think it’s a function of you know, is 10 years too long, or is five years too long? My sense is, if you have the right attitude, if you have the right approach, if you always believe in building forward momentum in your mind, in your life in your business, you got to see the positives in everything. And keep yourself engaged and interested at ait, there is I must also say that a big part of this is also having just an incredible co founder, I don’t think it would be possible to maintain one’s energy levels, one’s excitement, one’s intellectual curiosity is one’s ability to deal with challenges. If it weren’t for a very, very, very high quality, but more importantly, a co founder who is almost like a soul mate, it’d be impossible to do that. So I think there is there are both things. One is obviously aspects such as, you know, just keeping your intellectual curiosity going. But then there is also the aspect of having the right people around you in that journey, I don’t think doing it solo, for that long is, would be easy if it weren’t for all of these factors to come together.


Siddhartha 17:17

And what has changed in India since you started Snapdeal and now?


Kunal 17:52

So you know, when we started about 13 years ago, startups weren’t really a positive word, or even a phrase that was well understood. I think most people didn’t understand what a startup was. They just said, this person is starting a company, right? Like they, they didn’t say this person is doing a startup. there is a subtle difference between the two. But 13 years ago, when we were starting our company, we were seen to be strugglers, not creators. Right. And that is probably the fundamental thing that has changed in India in the last 10-12 years. Founders of startups and their teams are now seen as creators in the India of 2020. And not people who struggle through life or adversely selected entrepreneurship as a career path, because there was no better option or they didn’t get a job or it was you know, due to some adversity, etc. This mindset of startups are the creators of this new India or India of 2020 and beyond, is, is such an incredibly positive association with our ecosystem and all its participants, entrepreneurs, the folks who work at these companies, the investors who invest in these companies, that which you can feel around you, right, like when someone in your family does a startup, there is a pause of awe


Siddhartha 19:24

The talk in the family the positive talk.


Kunal 19:27

Yeah, there is a pause of awe for that person of positivity have, you know, everyone for a moment pauses and it flashes to their head, or knowing this person who is a really talented person. Maybe they can build a really large company. Maybe they’ll build a company like the ones I have heard of, in the press that have become so large and impactful and touched the lives of millions and millions of people. There is this picture in everyone’s mind now, that of what a startup can become and the impact it can create on our country, if it works out. And when you hear of someone doing a startup in your friend circle in your family, the first thing that goes through your mind now is not oh they will fail or, or, you know, you don’t brush it away anymore. The first thing actually, that goes through your mind is, oh, wow, if that works out, it could become like one of those big companies I’ve heard of that were nowhere to be found a few years ago, and in a few years, they went from zero to, you know, impacting lives of millions of people in our country. It’s a subtle point. But it’s such an incredible shift.


Siddhartha 20:45

You’re right, Kunal, whenever now a family member meets an entrepreneur in the family. So there is a thought that this person could be the Kunal Bahl, the Sachin Bansal, Bhavish Agarwal of tomorrow, so they don’t dismiss him.


Kunal 21:07

So this the support that one now sees in the ecosystem, whether it is from the investor network, expanding massively government leaders, celebrating startups, a large base of very talented professionals and recent graduates preferring to work at startups than traditional companies. All of these are nothing short of tectonic plate shifts compared to when we started. I remember when we, when we started even convincing someone who was making 15,000 rupees a month selling credit cards, and was between jobs, right the person was not even in the job that we were convincing them to leave. The person was in between jobs. It was still a major challenge. Rohit and I will work, our first office, if you could call it that was the basement of a house in Delhi’s furniture market Mansarovar Garden. And it was an incredible challenge getting someone to even come in, give an interview, let alone convincing them to join us. That has changed now. The best and the brightest talent in our country, whether they are just graduating from some college or they’re working at some really great multinational company. Everyone is dreaming about starting a company or joining a startup. There is not a single person I’ve met in the last, you know, few years, who at some point or the other has not thought about doing something entrepreneurial of their own or joining someone’s entrepreneurial journey. And that is just such an incredible and such a positive shift that has happened in our ecosystem. Also, I would say the entire early-stage investment ecosystem has grown so massively. And I often say that you know, the first money into startups is often the most important given it determines whether the egg even hatches or not. When we were starting, someone had made an introduction to some investor who was a real estate person who had returned from the US. And he wanted to back some startups, or, you know, young guys looking to build companies back then. And after the meeting with that gentleman Rohit, and I thought that we had really convinced him and he was like, just nodding his head vigorously to the meeting, we thought we’ll get our check, first check from him. At the end of the meeting, he says, Look, I really like you guys, I think you guys will build something interesting. You have something here. And I am happy to invest five lakhs into the company for 60% of the company. And obviously, we didn’t take him up on that offer. But that, I would say that was probably the norm. 10 plus years ago, it wasn’t like, I’m sure we weren’t the only ones who got exposed to such a conversation. Because it is the riskiest time to invest in a company. But it is also incredible, now that in the last few years, that domestic capital is flowing into this space into early-stage tech investing. And along with the general rise in the entrepreneurial spirit and risk-taking in India, I feel the combination of these two, the confluence of growth and domestic capital investing in the earliest stages. And just more entrepreneurs taking the plunge in India into starting companies, there is the future of our ecosystem is tremendously positive, tremendously positive.


Siddhartha 27:02

So Kunal just to iterate, right, to what you said is like 2010, people didn’t understand the ecosystem at all, they were thinking there’s some foolish guys or they don’t have any other options. And today is so much more respected to start a startup to even join an early stage startup because we have seen, you know, even the side effects of starting up so much wealth creation, which has happened in the last five years, new entrepreneurs, new investors from, you know, the early-stage startup of 2010, who have come up now, it’s been a phenomenal decade, the 2010 to 2020 and we are almost sitting at the end of 2020. And you are super bullish about the next decade. Am I right?


Kunal 27:52

Yeah, absolutely. I think it is unimaginable today to us the size of businesses, the impact of these businesses, the profit pools of these businesses that got started in last few years, and that we’ll get started in next few years on the coming decade. I think seeing will be believing, but I already believe that we will see some incredibly large companies, technology companies come out of India with incredible global impact in the coming years.


Siddhartha 28:38

So, Kunal, you are the first check in one of the largest b2c brands MamaEarth right, what are the other DTC brands you know, you have invested and what are the some of the promising D2C brands you know, you believe exists in India today.


Kunal 28:53

Yeah, I think we obviously are fairly active investors across categories of you know, companies and sectors etc. But direct to consumer is a category that we started investing in before it was called direct to consumer. I recall our first investment in that space was Beardo, which is a male grooming company. This is back in 2014 or 15. And, you know, back then it was a company that made male grooming products and there was no tag associated to it, whether it’s a direct-to-consumer brand or you know, new phrase around this as a digitally native, vertical brands. There were no tags attached to these things. We just felt there was a need, you know, Virat Kohli was in Vogue. And we saw in our office all the young guys were growing beards and we almost I mean it was a no brainer and mark in our mind and from there on I think just from our learnings of obviously running our own e-commerce business, but also understanding in general that India is a highly under-penetrated market when it comes to brands, and our viewers, there’ll be hundreds of more than 100 million dollars each brands created over the coming, you know, 10-20 years in our country. Consumers want newer brands, high quality brands, brands that talk to them in their language and not through, you know, somewhat unbelievable television advertising, right, I think the game has changed considerably. So it’s a category that I think we had a natural affinity and inclination towards, and hence, we’ve invested in probably 20, plus really high quality direct to consumer brands. As you said, we’ve all heard about the MamaEarth story. It’s a fascinating story, how we ended up making the investment. I mean, the brief version of that is, I saw a bottle of MamaEarth Shampoo about three and a half plus years ago, in my daughter’s shower, I asked my wife, what is this? I never heard of this? Why are we using an unheard of brand for our daughter, who was at that point about less than two years old. And my wife said that she had been looking for a more quote unquote, safe brand for my daughter. And she posted somewhere on some moms group on Facebook. And she got like some 10-15 responses, everyone saying MamaEarth, MamaEarth, including some of her friends who are also part of this group, so it clearly was not paid responses. And we literally looked at the label, called the number. Varun picked up the phone, Varun, the founder of MamaEarth picked up the phone, and we did the meeting and we became investors, it was literally just keeping your eyes and ears open. But since then, there are a quite a bunch of other brands, quite a few other brands we’ve invested in one brand recently we invested in is called Anveshan. We’re quite liking it as consumers ourselves. It’s really healthy, high-quality products like ghee, oil, etc. You know, these are things that you put in your food practically every day, and especially when you have young children, you take extra care, started by a very strong team of young entrepreneurs and feel they have a very bright future. And the trajectory is quite has been quite incredible. Over the last few quarters. Another brand, which we had invested, I think maybe a couple of years ago now is called Oziva, again, you know, more healthy living space, they are in the supplement space, plant based supplement space for women where we were an early investor. And Arti is a fantastic entrepreneur. She scaled the business really, really well. They have a very bright future as well. Another business we invested in, called JIVA, which is in the fashion jewelry space. You know, again, you think that there is so much fashion jewelry already available online. Why is there space for one more? I think just their focus on design, the focus on quality is gaining a lot of traction. And so that is also the fairly promising business. So I think there are, there are actually many, many, many, to be honest, it’s hard to pick, which one is better or which one is not. But I think they’re all really, really good businesses. And what we really like is that all these businesses have high gross margins, they’re all profitable companies, and hence are quite self reliant and not as dependent on external capital.


Siddhartha 33:54

Kunal, I must say you have great observation powers. You pick up a trend, for example, when you invested in Beardo that most guys in your office were keeping, you know, well groomed beards. You invested in MamaEarth based on an insight or very early what your wife shared, she’s not using Johnson, she’s not using Himalaya, she is using some other product recommended by other fellow moms? What do you attribute to having such a phenomenal you know, picker or having such insights on consumer behavior?


Kunal 34:30

You know, a few months ago we had a town hall at Snapdeal, and every month we have a town hall at Snapdeal where we are you know one of our values as a company is just an acute amount of transparency. And one of the questions that was asked by one of our colleagues in open forum was that you know Rohit and Kunal, can you each say one thing that you really, really admire about each other. And it’s just, it put both of us on the spot. But it was quite memorable actually that question. And I had mentioned my answer, I’m sure you’ll ask me what was my answer? And then I’ll answer. So my answer was that I said, it’s not one thing, it’s two things. There are actually many things, but I will limit myself to two for now. And I’d said, you know, number one is just Rohit’s ability to go super deep in anything. It just parse through the layers of complexity, in any problem, and layers of opaqueness in any problem, and go deep into it, looking at numbers, looking at facts, you know, giving consideration to his intuitions is truly incredible. The second thing I said is, you know, Rohit’s ability to stay cheerful in the toughest of situations. And, you know, anyone who knows, right would know that, you can’t sit in a conversation with him for five minutes without him bursting into a big laugh. And that is truly infectious. And it doesn’t matter if it’s a high stakes meeting or a, you know, stressful meeting or, you know, any kind of meeting, it’s just who he is. He knows how to keep his spirits high and spirits of those around him. And for me, Rohit had said, you know, one is around just resilience, just the ability to keep going. The second thing he said, and and maybe that first one, because it’s been said so many times. You know, maybe we had all heard it before. But I think the second one I didn’t realize but when he said it, maybe I started paying a little more attention because we’ve known each other so well, right? We used to sit next to each other in class 11th and 12th.. Well, second thing he said was curiosity. And maybe just these things are a bit innate, I think. I don’t think you can read up to become curious. I think it has a lot to do with your upbringing, your maybe your brain’s biochemistry, I don’t know how that works. But I think there’s just some innate curiosity I’ve always had since I was a kid also. And continue to have like read absolutely voraciously, every day, and read all kinds of things, listen to all kinds of things. Talk to various kinds of people. You know, there must be people out there who know what I’m talking about. Because sometimes I just feel someone’s doing something interesting. I’ll just reach out to them myself, and no context and just say I just want to chat. I just want to hear how you do what you do how you think? And if there’s anything I can learn from it? And is there anything else I can do for you? And I think that’s been there for a long time? And maybe that’s probably the answer to your question.


Siddhartha 38:31

Fantastic. And, you know, just to mention in a couple of your super breakout companies, for example, we already covered MamaEarth. The other which I want to highlight Ola, Urbanclap. Can you pick up one of these and talk about what got you to invest in them like really super early? And how things work out after that?


Kunal 38:52

Sure. Maybe I’ll talk about, Abhiraj will kill me if I say Urban clap. So, I will say Urban company. And, you know, Rohit and I met Abhiraj, Varun and Raghav, the three co founders of one company very, very early. I think this may have been maybe early sometime in 2015, I think more than five years ago. They had just left their jobs or had returned to the US, you know, they were all in different places. And they were all considering various ideas, right? To pursue them together but different I but various ideas. Like for instance, they were considering putting screens at the back of seats of buses, intercity buses, right. That was one idea they were pursuing. They were also pursuing you know, they have been thinking about like a marketplace for services as well. And given and by the way, this is something we do often right we’ll just brainstorm with others really smart entrepreneurs or aspiring entrepreneurs about ideas because there’s what we find exciting, right? It’s like, you’re being a very small part of creation of something that may eventually touch the lives of millions of people. I mean, that’s such an incredible privilege is how we see it. And so given be ourselves back then and now, we’re building a marketplace for physical products, we did believe that a marketplace for services would be of great value and service to the consumers. I think what really got us to invest in them was obviously the idea had merit in our view, we originally had thought that the market size may be limited. And operationally it may be very hard because you would have to deal with a lot of blue collar and relatively less trained or only vocationally trained workforce. So how do you bring homogeneity of service quality, but their thoughtfulness from day zero of approaching their business, keeping customer love on top of the list of things to build towards, has been truly inspiring, as I said, in a particularly tough category, to build an e commerce company in, and you know, we’ve been quite impressed. I think all of us as their customers have been quite impressed as how they have executed and brought so much predictability and otherwise low trust set of services. It’s quite amazing. About a month or so ago, I got my house painted. And I wasn’t even in the house, I’d gone to the hills for a week for a break. And while I was away, I got my house painted by Urban company, there was no like special privileges, there was no intervention by anyone, it was purely like retail buyer like, like any other consumer. And when I returned home, there wasn’t a drop of paint anywhere. There wasn’t a wall hanging that was misaligned, there wasn’t a chair that was out of its place. It was an incredible experience. I’d like when was the last time we ever any of us got our house painted without us being there in the house when it was getting painted. That shows the type of trust and consumer love they’ve built in their service, it’s truly inspiring, I think inspiring for me inspiring for anyone building a consumer service out there.


Siddhartha 42:30

I can imagine India has been said to be a very low trust, a low trust country, right. And it’s just the quiet a debate on Twitter, that building for a low trust economy like India, and essentially rather than services, I would call them, you know, a Trust Company where as you mentioned, you know, creating trust in, in a service category, which has always been very, you know, considered that you have to sit on top of it, to inspect it even getting plumbing done or getting an electrical job done.


Kunal 43:09

right, absolutely.


Siddhartha 43:14

And, you know, you share some of these journeys from MamaEarth to Urban Clap. But in 2020, when an entrepreneur reaches out to you, how do you evaluate investment, even before product-market fit? Because all these companies when you got the product-market fit was not there?


Kunal 43:33

Yeah, I think at the earliest stages, there is very limited information available. As you know, there isn’t one metric that usually would get us to commit. But at a meta-level, I’ll give you a more specific answer also. But at a macro level, businesses that tend to lack focus on a singular, very sharply defined problem statement tend to be tough for us to wrap our heads around. You know, we’ve invested in now over 150 companies over the last nine years. So I can say that, you know, while you know, good judgment comes from experience, experience comes from bad judgment. It’s so we have made our share of bad judgments also in the past, which have given us an experience which hopefully we believe now gives us good judgment. So we are look broadly sector agnostic, right, so we’ve invested in everything from b2c marketplaces, to b2b marketplaces, to direct to consumer brands to FinTech companies, computer vision, Ai, and dozens of companies in SaaS. And, and mostly in India, but many in Southeast Asia and the US also now. I think overall, there are largely three big areas we tend to focus on, one is the team business that this is arguably the most critical, you know, what they have achieved in their personal, academic, entrepreneurial professional lives? Can one point to success that they may have had, even if it is a small success, but some success? Where they had they created some impact, particularly in an unstructured or, you know, completely new or blank slate environment? Also, can they inspire people around them? Can we visualize that few years down the road, can they be standing in front of 500 people in their company at a town hall and inspire all of them to pursue a common vision? You know, we’ve interviewed 1000s of people, met 1000s of entrepreneurs over the last decade, I do believe that if an entrepreneur can sort of mesmerised me in a meeting, they likely will be pretty successful in mesmerizing many others in joining hands with them. You know, being able to bring people on board your journey is such a critical element of being a successful entrepreneur. Because in the beginning, it’s only that is all you will have, most likely you won’t have a product, you won’t have revenues, you may not even have investors. The second thing is just the attractiveness or the potential of the space that they are going after. This is a tough one, because at the earliest stages, many of the spaces are very non obvious, right? Like, we were talking about the urban company, a company like that didn’t exist before them. Right? So how do you even know whether this space is good enough or not? Stitching together a bunch of plumbers and electricians. I mean, it’s hard to tell what that business looks like. So, however, I would say that the best entrepreneurs tend to be great at helping the early stage investors gaze into a crystal ball with them about what this business can become when it grows up. And I think that’s a skill some of them have, and, and, you know, I can just, I can feel the tingling in my brain, the moment I meet someone who I know, knows how to make me gaze into the crystal ball with them. And it’s actually a magical feeling, in my view, it’s almost like you’re getting transported into another world. And third is the ability to generate unit economics. This has been through our own learning, of running an e-commerce business, which has been like a business that has required a lot of capital to build, just you’re also creating the market, while we were building our business, while there were not enough third party services available that you could stitch together. So we realized over a period of time, the criticality of the ability of a business model to generate unit economics. Now understandably, a while many of the companies at the earliest stages of pre-revenue, it is important to determine what the unit economics of that business model looks like. So, because the margin structures of a business determine what kind of business it is right, they truly determine what the soul of the businesses, it is tough to go from a, you know, being a 20% margin business to a 60% margin business and still being the same business, you can go from 20% to 60%. But chances are you are now in a different business. So we don’t tend to will believe a lot of the things that entrepreneurs will tell us in the absence of data, what we will always have a tough time to believe is that we are a 20% gross margin business today, but we will become a 60% gross margin business, but being in the same business that that we have never seen happen. And also because I think how the unit economics break down for a business, determine a lot of the decisions, actions, strategy, focus of time bandwidth, the type of people a company hires, it determines everything in due course of how business should be built. And look fundamentally the chances of building a lasting enduring company will only go up if you have a clear path of being completely self reliant, which cannot happen without positive unit economics and the unit economics are not positive. You can’t pay for your fixed operating costs. If you can’t pay a fixed operating costs you will perpetually be dependent on external capital. So in summary, that team, the size of the business opportunity and ability to generate unit economics, while ensuring you’re very focused on one high impact problem is probably what we would look for.


Siddhartha 50:10

And India has been considered a tough country for internet businesses to break positive unit economics. So, that’s even, you know, more hard for entrepreneurs to grasp. I think 2015-2016 was a time when, you know, entrepreneurs could say that, we will fund this through the venture money. But as you mentioned, by 2020, the story is not saying that they can’t play the story out, when they are pitching,


Kunal 50:38

You know, what I find really, really amazing. And positive, in general, is that now that’s probably because, you know, I’ve written some blog posts about how we think about investing on LinkedIn, etc. And maybe entrepreneurs, and they come to meet us, they have read those. And so I think nine out of 10 entrepreneurs I would meet, they would have a slide about unit economics when I would meet them. Right? So now, whether that’s because they are catering to an audience that is sensitive to unit economics, or because they have an innate belief in the importance of unit economics, either which way, I think it’s a great trend.


Siddhartha 51:21

And Kunal, you started angel investing back in 2011-2012. It was not an asset class then. Hardly I could count on my fingers like 40 to 50 angel investors, and only active 10 to 15. Among them, you were among them, what was the purpose of starting, you know, back then, you know, for almost a decade ago?


Kunal 51:42

Yeah, I think, look, when we started seeing a little bit of entrepreneurial success of our own, you know, some media stories started coming about our business about us. You know, entrepreneurs, in general, started reaching out to us for mentorship. Some of them were introduced to us by others in the ecosystem. And few of those discussions turned into investment discussions. So, we started investing in 2011. And for a few years, it was primarily us reacting to inbounds as much as we could, right? Like, whatever our time bandwidth allowed. Over a period of time, things snowballed a little bit. And we realize that Rohit and I just don’t have the time to screen and review the hundreds of inbound emails you’re getting every month, combination of cold reach outs, by entrepreneurs, introductions by people, we know, venture capitalists introducing entrepreneurs who they thought were promising but too early for them. Or maybe in some cases, companies they were investing in, and they wanted us to join the round, which happens often. So we set up a team a few years ago, which is now the driving force behind Titan capital. But fundamentally, like Rohit and I think of ourselves as entrepreneurs, not as investors. And our motivation is to help entrepreneurs, right, and maybe that’s why entrepreneurs like working with us, because we bring that empathy, because of our own journey and the many twists and turns along the way. You know, when we were starting, there wasn’t much of an ecosystem to support entrepreneurs as I’d mentioned earlier, even the VCs, were figuring out, you know, how to help these early stages, this good team sounds interesting, the space but we’ll give them the capital. But what next, because many, they themselves hadn’t had enough experience with investing in India, I think venture capital, really most of the first generation funds, the first funds have most of the existing VCs in the market are the 2006 2007 vintage, right. So, they hadn’t seen full cycles. Now they’ve seen two three cycles. So that’s good. But things have changed a lot in last 10-12 years. And, you know, just our own experiences of growth challenges, opportunities of all kinds, have I think lent us to have the experience judgment, skills network, to help companies and whether it is finding product market fit, retaining talent, replacing talent, in some cases, raising funds, or having difficult conversations with shareholders or board members. You know, while we are also still learning as entrepreneurs, many of the challenges that entrepreneurs run into, have been faced by us at some point or the other, in either our own business or in a business we’ve been involved in. And for us investing behind these entrepreneurs while Yeah, we would want it to be a commercially viable activity for us to continue It into perpetuity. But it is also very much a pay it forward for us, where we do believe this is our way of giving back to the ecosystem. I don’t want to mistake it as charity, it is not charity. However, we are taking an incredibly high amount of risk because we are in vast majority of the companies we invest in more than 90% of the 150 plus companies we’ve invested in, we are the first check in sometimes we are the only check in the company when we invest.


Siddhartha 55:37

And this is your own capital like yours and Rohit’s capital no external capital?


Kunal 55:41

No external capital, maybe that’s why we can be a bit more, you know, seemingly irrational about taking outsized risks at the stage at which we invest, but someone’s got to do it, right. Like, I think if our ecosystem has to grow, there has to be a cohort of people in the market, who have the capital, have an irrational belief in the ecosystem and the entrepreneurs in the market, and have the ability to help these companies to graduate to prepare to progressively higher orbits of success and growth. And we believe that we have all of those attributes from our own learnings, mistakes, you know, successes, etc, that we are well placed to assist the next cohort, or the next generations of entrepreneurs in our ecosystem to just, you know, probably enhance their probability of their success.


Siddhartha 56:42

And Kunal. Now being a parent of two wonderful kids, does it affect your choices of the entrepreneurs you work with?


Kunal 56:51

It’s a great question. It probably has a far more pervasive impact on one’s life and judgment than just in the eyes of entrepreneurs one chooses to work with, I think that too, but not only that, I think that maybe one of. So I think folks sometimes ask, right, like, what changes like I have friends who don’t have kids, or are soon to have kids, and they ask who are also entrepreneurs, right? So they asked me, Kunal, what changed after you had kids or your first kid? And I respond and say, you know, ask me, What didn’t change not what changed. And everything changes. Absolutely, everything changes, how you think about the world, how you think about yourself? How do you think about the prioritization of your needs, your aspirations, your desires, from your life, change, at least for me, it has been emotionally incredibly transformational, to have children, I think, in a way it has brought about a healthy level of detachment to purely, you know, purely economic outcomes, or business outcomes. Where it is clear to me what my purpose in life is, and it is not only excelling in business, or, you know, making money or starting businesses or investing in businesses, I think that’s what I do, but that’s not who I am, I am very clear that I am here to take care of my kids, give them a great life, give them the gift of education and good upbringing and good values. And I spent an incredible amount of my time doing that, right. You know, in some ways, in Gita, there is this saying which is, you know, what we take owns us and what we give sets us free. In a way the beauty of having children is that you will likely be just giving for the most part, they also give back their love, but you will be giving to them till they grow up and you get old. But that sets you free in such an incredible way that you can only experience once you are a parent. But, you know, keeping some other philosophy aside? Just to answer your specific question. I do believe that once you have kids, your empathy your patience does go up, your desire to also pick the type of people you want to work with also changes where for instance, You know, we tend to like, I think, or for both me and Rohit, he also has two young kids, I think, for both of us, working with those people who care about relationships, or in general, you know, warm people has increased, I think our tolerance for people who are too sharp-elbowed, too transactional, I think it just has gone down over a period of time to be honest. And I think because we get so much joy, purpose, happiness, love from our families and our children. Today, we’ve over a period of time, try to index our relationships, our business associations, more with people who we like, right, and there may be cases where there may be some great business deal you can do with someone, but you don’t like the person, and there may have been a time we would have done it also, in a few years ago. Now, I think we are past that point, I think not because that commercially, it’s not a good decision still, it probably still is commercially a good decision to work with someone like that, but I just don’t think we can do it anymore. Because what we care about has changed a lot after we’ve had kids and, there are absolutely no regrets attached to that, we think that’s a very positive change, where we are a lot more discerning about our relationships than before. And also what is really positive is that we have become a lot more empathetic and patient with our colleagues, with our business partners, with the entrepreneurs we have supported.


Siddhartha 1:01:55

Just to add to that Kunal, you know, I and Nansi, my co-founder of 100x Entrepreneur podcast, have a one year three-month-old son. And one change, you know, as you mentioned, is we take more choices, which will brings us peace, you know, because somehow your business or job tends to overflow into your personal and family life. So if you work with good people, you know, cheerful people and those, as you mentioned are not transactional but are more relationship-oriented. It tends to flow into the peace of your own life. Right. And the more transactional people you have, or you’re working with, it just ends to slightly reduce that. That has been my observation on that.


Kunal 1:02:42

Completely concur. I think you put it well, I think we’re all at, you know, while everyone during this pandemic says that folks with children at home are pulling their hair out, I actually feel that it’s been the health concerns and the anxiety related to it aside. It’s been the most beautiful period for me personally because I don’t know when I would have gotten to spend this type of time with my kids when they’re still young and in their formative years.


Siddhartha 1:03:14

It’s been a phenomenal conversation with you Kunal. Thank you so much for sharing, candidly, your life experiences, your insights. I enjoyed it a lot. I hope the listeners, the audience enjoys it a lot too.


Kunal 1:03:29

Thank you, Siddhartha and Nansi, thanks for having me. Really, really appreciate it. And as I said earlier, you guys are doing a fantastic job.


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