Core Human Motivations (FREE PREVIEW) | Kunal Shah on The Knowledge Project with Shane Parrish

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Key Takeaways

  • “According to me, you can not develop substance, net worth, wealth, experience unless you’re constantly willing to risk your reputation” – Kunal Shah
    • India supports a business culture of going all-in and has a community to provide you a soft landing if you fail
    • Many cultures reject even risking 1% of your reputation to pursue a goal or dream
  • The question “why would somebody pay for this?” varies greatly across cultures
    • Example: Many people in India have never worked for an hourly wage, so they don’t know the exact value of their time. So as a result, convenience products do not perform well as they do in Western culture.
  • “Everything that feels soulful in life is inefficient” – Kunal Shah
    • Emotional arousal rarely happens with efficient metrics
    • Standardized things are easier to scale, but non-standardized things are harder to destroy
  • When you have too much similarity, innovation dies. When you have too much dissimilarity, trust dies.
    • Businesses operate on a spectrum of chaos and stagnation
  • Like what you’ve read so far? Get the FULL NOTES by becoming a PODCAST NOTES PREMIUM MEMBER!
    • “The wisdom per word ratio is off the charts” – Shane Parrish

Intro

  • Kunal Shah (@kunalb11) is the founder and CEO of CRED, a reward-based credit card payments app that is considered the second-fastest-growing unicorn startup in India.
  • Kunal and Shane discuss lessons from India’s business caste, soulfulness vs. standardization, and the balance of innovation and trust
  • This is just a FREE PREVIEW, see the FULL NOTES HERE
  • Host: Shane Parrish (@ShaneAParrish)

Lessons from India’s Business Caste

  • India still operates under a deep-rooted caste system. Kunal grew up in the business caste, where everyone in the family does business. And this doesn’t just mean having a job, it means being an entrepreneur—here are the 4 lessons he learned:
  • 1. Willing to reduce social status in return for commercial success
    • “According to me, you can not develop substance, net worth, wealth, experience unless you’re constantly willing to risk your reputation” – Kunal Shah
    • Most people across the world are not willing to risk even 1% of their reputation. In the Indian business caste, going all-in is not scary for them.
  • 2. Natural understanding of value – Why would somebody pay for this?
    • Maslow’s Hierarchy of Needs is much different in Asian culture compared to Western society
    • Example: Many people in India have never worked for an hourly wage, so they don’t know the exact value of their time. So as a result, convenience products do not perform well as they do in Western culture. Saving people time does not resonate. Continue reading for more on this topic.
  • 3. Natural need for spotting trends
    • In addition to “hey, how are you,” business encounters also start with “what’s new”
    • Always looking for more value and less competition
  • 4. Constant need to make the community successful
    • Community creates a soft landing for you if your business venture fails
    • Less shame attached to failure

Soulfulness vs. Standardization

  • “Everything that feels soulful in life is inefficient” – Kunal Shah
    • Emotional arousal rarely happens with efficient metrics
  • Standardized things are easier to scale, but non-standardized things are harder to destroy
    • Standardizing is the enemy of soulfulness

The Future of Business

  • “People give you time or money where their core motivations are mostly met, or when there is a hope for their motivations to be met” – Kunal Shah
    • The best gross margins exist when you allow humans to jump their social status
    • Utility alone is being priced out
  • Since the cost to provide utility is dropping, business models are evolving from rent-seeking to skin-in-the-game
    • Instead of just providing a service (utility), companies need to invest in their customers (vanity)
  • When you have too much similarity, innovation dies. When you have too much dissimilarity, trust dies.
    • Businesses operate on a spectrum of chaos and stagnation—successful ones need a mix of both

Time is Not Money in India

  • Many people in India work for a monthly wage, so they have no concept of how much they are worth per hour
    • This creates a culture that does not value the balance of time, energy, and money
  • Only free products work in India; subscription products fail miserably. They refuse to pay extra for convenience or entertainment.
    • Anecdote: Kunal says that even wealthy people spend hours shifting around their phone storage as opposed to purchasing a couple of dollars worth of cloud storage
    • Business example: Netflix initially failed in India by attempting a subscription model. Indians are much more willing to give up their time watching ads than paying a subscription. In fact, India had to regulate ad companies because they were taking advantage of this so much.
    • Western businesses love to come to India to pump their DAU (daily active users), but none will convert to ARPU (average revenue per user)
  • India may never supersede China economically—here are two reasons why:
    • Less than 6% of urban Indian women are part of the workforce, even though most of them are well educated. They never had the one-child policy like China to support such a workforce.
    • India is in the top three markets of SaaS providers, but none of their customers are local. No Indian business understands the concept of efficiency.

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