Insights from Cred founder Kunal Shah

Interview by Farnam Street. Video here.

• Business communities in India (like Bania) are shameless, hard to offend. They’re okay to be mocked or lower status as long as?as long as they win the commercial side of the deal.
• Growing up I intuitively learned to find the value in things. In business families you naturally understand why somethings have high gross margins
• Spotting trends: In Gujarati community, greet with "Shu nava juni". Open to sharing ideas about where new value is being created and where there's less competition
• Premchand Roychand: in Gujarati community there is no shame in failing. People going all in, getting wiped out, becoming big in one lifetime again and again. "It's business"
• I think a lot of people who have been bullied and shamed and mocked early in life develop up an unusual superpower to not give a damn about being mocked anymore
• People who are able to risk up to 30%, 40% of their reputation, wealth, and health, are the ones who propel further. I know so many families that go bankrupt all the time because going all-in is not scary for them.
• In India, no one understands the value of their time because no one has been paid hourly wages. Efficiency not part of societal DNA
• All soulfoul things in life are inefficent
• Standardization makes things easier to scale, but also to disrupt
• Gross margins emerge as you help people unlock social status
• Business boom in pandemic: risky behavior seems to happen right after a crisis because people just go all in
• A crisis is a fast-forward button to the future and accelerates eventuality
• The cost to provide utility is dropping, and therefore the revenue expectation from utility drops: future SaaS will be free, but cross-sell financial services or serve ads
• Business are becoming pluggable APIs
• Why do super-apps work in India but not in West? Concentration of trust in low-trust societies. Allows nepotism, authoritarianism to thrive
• Trust higher in societies that have a very low diversity of ethnicity. We trust people with common biology, belief systems. Study shows as societies become more multi-ethnic, trust declines.??
• If too similar, innovation dies. Need a mix to avoid stagnation
• Conglomerate business model in India: market is not deep enough to focus on one market and create a large company. Per capita income extremely low. You have to cross-sell more things to the same set of customers
• Western companies have high DAU but low ARPU in India. So launch advertising because value for time is low. It's why in India there is 9 mins of ads for every 30 mins of TV
• Even affluent Indians will spend two hours deleting photos on WA during a flight rather than reading because they don't understand value of their time
• India is a top-3 SaaS market but no one pays for software domestically
• Have seen less smart Indians build more successful businesses: building dams where no river exists. Instead of moving dam to the river, complain that river not coming to dam. Some people are natural river-finders and can make profits with mediocre dams
• Indians never learned about human motivations because never taught humanities. And never dated. Indians can crack the exam but cannot create the exam
• People spend 6x annual salary on wedding, but there are no startups solving wedding problems. In collectivist culture you want to put on a show, so you'll decorate your living room but your bedroom's sheets will be terrible quality
• Indians save every penny to splurge on wedding, health issue, education. Different pattern than West
• Switch investor pitch from English to Hindi to test whether they deeply understand the human motivation. Or ask to explain how product works as if we are friends at a dinner party. If can't explain it to a friend without jargon, CAC will be too high. Good founders know the functional and emotional benefit of their product
• Swiss Knife Problem: technical founder builds so much where a simple knife would do and is less confusing. Swiss Knife looks cool but never ends up getting used
• Sanskrit passed down through memory so had to distill to smallest unit of actionable insight
• Kids as assets. Parents invest everything for education, and later kids will spend entire net worth to take care of their parents. Societal contract different than the West
• Maslow's hierarchy for Asia not about self-actualization: status, belonging, respect in the community
• Shameless people make more conjectures without any fear of judgment. I get bashed for my tweets but it helps me sharpen my insights and connect dots
• Lou Brock: show me a man that’s afraid to look like an idiot, and I’ll show you a man I can beat every time
• Truth seeking is not part of education, instead we learn to accept what's taught. Keep asking kids the why question.
• Truth seeking not preferred because it burns more energy. People are not more intolerant, just out of processing power. No bandwidth for nuance
• All jokes are surprises. Surprises dive a dopamine hit. TikTok is a surprise machine
• I've never met a wealthy person who can't keep a secret. Wealth is stored energy. The best companies are constantly increasing their information asymmetry
• Don't try to hack reputation, grow it slowly. Otherwise you won't have the muscle to retain it
• All scammy business are around tourist places because don't need long term NPS
• Decision analysis: use mimicry. What would Steve/Warren/Elon do? Best decision makers see it from 5 people's perspective. The word "unusual" starts dying for people who travel the world
• Historically people hired for years of experience. In future, people will be hired for experiences per year. High slope people in your company will demand more. They want to work with other high slope people