Ninety percent of good investments dont raise capital People go to them saying Can we please invest in your company Stop building copycat products The best help you can do to a founder is to not help them at times. Hello friends, My name is Sahil Khanna and I welcome you in a completely new series. where we will directly learn from founders. How should we do business? They will share many business tips with you. The challenges that they faced. How did they solve them? How did they raise funding? How much did they raise? How does their business operate? They will tell everything. Also, there will be some fun questions so that you can know them well. Our first guest today is Mr. Ritesh Malik who is the founder and CEO of INNOV8. Recently, he has sold his company to Ritesh Agarwal. The OYO Company. So, lets talk with him about his journey. Let me ask the first question in this interview. Sir, tell me about your journey. The journey was very interesting. People consider me very in focused because I completed medical education. Became a Doctor. Then I was doing an internship in Gangaram Hospital following the trend. Then I observed that life was not worth enjoying. Life became so monotonous to see many patients sitting in a single cabin. I was not happy. And in my family, I call it APS – Ageing Parent Syndrome in which we have to fulfil the dreams of our parents regarding our career choices. So, I had to go against my parents. They didnt agree and I had to study medical. But, one day I thought that For the next 50 years, every day I didnt like to wake up in the morning. I felt that I should sleep again. I questioned that do I want this life for the next 50 years? If the answer is no, then you have to fight for your own desires. That was the day when I decided, Whatever I do, I will do it my way. Firstly, we started an Augmented Reality Platform called ALIVE which we built and transferred to Bennet Coleman. After that We launched a product in hospitality. It also failed. After getting many ideas failed, we observed that whatever money we have earned, we started to invest that in new startups. So, we started Project Guerilla We thought that if we want to change the country, then you have to create an ecosystem of Angel Investments. So, what will happen is It was the incident of 2015. Only those people could do it who had conventional money. they didnt knowhow Angel Investments work. And Silicon Valley was created because of one reason. Entrepreneurs gave money to other Entrepreneurs, whether in small amounts but, that capital came with a lot of mind in terms of power of thinking. They spent time with them. They used to guide others about their mistakes. So we planned to invest 5 lakh rupees in each company. And lets see what happens. So, the mission started and then it became bigger. After investing 50 lakhs in 10 companies, we ran out of money. We found it interesting as the value of those 50 lakhs increased. Now we didnt have money. So, we thought of how we could support more startups. We got an idea in 2015. Why shouldnt we create a physical platform where all the startups will collaborate with each other. And I have observed that there is nothing more powerful in this world than collaboration. You know about digital marketing. I know about business. When we collaborate with each other, we become 10 times more powerful. And further collaboration makes it 100 times powerful. Its a compounding effect. So, I think that if all the smart people stand together, and decide to develop something and put their best efforts in it. then they will do it. We had 4 conditions. First was, We will be at the heart of the city. There were many incubation centres till now. Manesar where land was not costly. Or Noida, Greater Noida where the land was at low price. We said, We will be at Cannaught Place for easy access. There should be a metro drive of hardly 20-25 minutes from any end of Delhi. People can come there. And we wanted it to be a collaborative platform. Collaborative platform means if we are doing an event, You will take half an hour from Rohini. I will take 25 minutes from Nirman Vihar. All the people can create an epicentre in Delhi when it comes to startups. So we decided that first of all we will start a location-driven mission. Second, We will create like unseen and unheard platform. I dont know whether you have seen the photos of INNOV8 or not. We were awarded as the second most beautiful co-working space by Fast Magazine in New York. We have been awarded with multitude awards when it comes to design. Third thing was, We will develop a community. We saw that anybody can create a location in CP and create a design. The intangible product is our community. Can we help our Entrepreneurs? And that was the whole idea. So what we did is All the smart business leaders like Vijay Shekhar Sharma from Paytm. We invited him and asked him to guide the Entrepreneurs. With this, People who have made it, they started coming and interacted with people who have a burning desire to succeed. And what happened with this We got the mindset of the people. For example We talk about Sahil Sahil may have 100 of flaws, but he is the best in digital marketing. So, he can tell about his skills to others. And due to this. We became a hub of knowledge. Many people in a small space. We created a massive source of knowledge. And we realised that Education is overrated. the thing you need for future education, it will cover under these 100 people. And the fourth principle was We have to scale now. So, we started this in the end of 2015. We started another centre at Chandigarh in 2016. After running these 2 centres we went profitable because it was becoming popular. But, we could not expand it as it is a capital intensive business. So, how did you get the initial investment? So, I took the first investment from my father. Second investment I got from my best friend Sumit. And third investment from Vijay Sir, the founder of Paytm. How much was the approx investment in the beginning? I dont remember exactly. But, we didnt invest so much money because we created it from the heart and the carpentry work was done by ourselves. So, was the space on rent? Yes, it was on rent. It was light. Yes, all the assets were light. Our only expense was the chairs etc. and we requested Urban Ladder to provide it at lower prices. Okay. Then, you achieved break-even after almost an year. we achieved break-even in 3-4 months. Means we didnt have any customer in the first 3 months and we were at break-even in the 4th month. And what about Marketing? It is a very interesting story. In 2016, nobody had heard the name of co-working. Even if you search on Google Trends, there were less results. In fact, my wife. Her father is a Cardiologist. When he came to meet me, he asked, What do you do? I said, Sir, we create offices. He asked, Are you a contractor? I answered, No, we are building up the nation.We are creating Entrepreneurial communities. But, he didnt understand anything. Then I tried to explain it to my wife and she convinced her father. So, we got married. But, In the first 3 months, nobody knew what co-working is. So, we observed that we launched it. But, there was no customer in the first 3 months. So, I thought it would be a problem. Then we thought, the best way of marketing is if the demand is not generating, then minimise the supply. So, we started an ad campaign. Become the most aspirational entrepreneur in the country by joining INNOV8. But, it is not like you just come and you join us. You have to apply to join INNOV8. You created scarcity. Yes, and if you create scarcity in India, people go crazy. The seats that I was planning to sell at around Rs. 5000, I sold them at around Rs.15,000-20,000 each because we got around 800-900 applications and we had to select only 84. We took proper interviews. So, this was the first marketing strategy. And second thing we did was You have heard about segway. It is a vehicle of 2 wheels. I purchased it and roamed with branded T-Shirt, Bag of INNOV8 in Chanakyapuri. I went to all the foreigners and said we have an app INNOV8. If you are a freelancer or an entrepreneur, we will show you the community of India. People liked it because there were many facilities. We made it free for the foreigners. And there is an interesting fact in India. If a foreigner is visiting somewhere, we think that is is a premium place. So, because of these two strategies, we were sold out in the 4th month. In both centres. What was the cost of a seat at that time? At that time, it was not so expensive. Around Rs.5000 including rent. And we were making a killing of a profit. So, you started the journey. But, you would have faced problems also. Everything started after 3 months. What were the major issues faced by you after that? And how did you resolve them? If we talk about problems, There is a word in my life. I dont use the word problem or issue. Everything is a challenge. Challenge is a positive word, Problem is a negative word. Challenge is a positive word, Problem is a negative word. So, you see the troubles every day. So, you see the troubles every day. Sometimes cashflow management. Specially when your bootstrap is stuck up. And when your family has already denied that We wont give you more money. So, you are always afraid and our business is like our rental commitment is of 9 years. But, our customer commitment is of 1 month only. If the customer leaves us, we dont know how to manage the expenses of the next month. So, we observed that there is only one way to scale up this business. We will be present in all the meeting markets of India. And there will be an INNOV8 centre in every 3-4 kms. It will create a network effect. And due to this Basically we wanted to become like If you are coming from Rohini, then you should have a place in Cannaught Place. Another in Nirmana Vihar. Another in Skaet. Another in Rohini. Rajouri Garden. And in Punjabi Baag so that Wherever you go, you dont visit Starbucks. Keep your INNOV8 card Go inside. Have a coffee. Do your meetings and return home. So, we wanted to display Starbucks as a model. And nowadays, offices are redundant. Now, the concept is of move-in office. And in fact, COVID has strengthened our story. Like I have o visit my headquarter only 2 times a week. And for the rest 3 days, I can go to the nearest co-working space. Wherever you go, You should have an INNOV8 centre. So we calculated that we need almost Rs. 50-100 crore to execute this vision. Its a capital intensive model. The expense is around Rs. 2000 per square feet. There are rental liabilities. We got to know that we cant scale up without raising funding. So, we were very fortunate to get the first cheque from my mentor Vijay Sir from Paytm. He wrote the first cheque in the company. And, not only the capital was important. He guided us. He said, You should blitz it. Go in every 5 kms. There should be an INNOV8 centre in every 5 km like Starbucks. When INNOV8 will be everywhere, people wont have another option. You will constrict the market. You will own the market. So, he told a big thing Dont go to only startups. Because startups go up and down. they are bleeding businesses. Go to profitable path. Why cant Asian Paint has an office in INNOV8? It seemed far to fetch in 2016. If you talk about us today, our 80% revenue comes from profitable enterprises than startups. How much equity did you dilute in the first funding round? I dont remember exactly in figures. I have even sold the company. But, we didnt dilute so much. Means at the time of exit, I was the majority owner of the company. Okay. So basically, if we want to give suggestions to our viewers, if you are about to raise funding when it is required, how much equity should you dilute? I believe that it has a thumb rule. It also depends on the situation and industry. But, the thumb rule is that you should not dilute more than 10-15% in seed funding. The dilution should not be more than 10-15% in each funding round. Because I am a firm believer of Founders controlling their company. Because they know Anybody can invest the money. But, the most important thing is the time of the founder. He owes his life Just like a soldier has his family behind him, the founder has his wife only who hardly Means you know it very well. Your whole time is dedicated towards your work. So, thats a huge personal sacrifice to become a founder. Sir the funding rounds that you told right now, What are these? We have heard many times A, B, C but, what are these? The first funding round is seed. Seed means you are at the idea stage and you have an MVP which is called Minimum Viable Product. A product.based on which you can go to the customers and take feedbacks from them. Second stage is Angel in which PMF, Product Market Fit Here the customer tells what he wants and the price he would pay for it. Third is Series A Round. Third is Series A Round. Here your team starts to build. Because a founder cannot do everything alone. Here your team starts to build. Because a founder cannot do everything alone. You need to use the power of delegation. You invite many smart people and make the company mission driven. And create a model of unit economics. Then we come to Series B when you try to fetch profitability. Then you go to Series C where you plan for global domination. where you plan for global domination. If not global, at least you plan a regional dominance like If not global, at least you plan a regional dominance like in the Indian market, we will own at least 10% and above of the entire industry. And the D, E, F there are further rounds and finally comes the IPO. But, I have not taken any company to IPO so I also dont have much idea. But, I have the idea that how to grow companies till Series C. But, I have the idea that how to grow companies till Series C. Okay, You took INNOV8 till series C. Okay, You took INNOV8 till series C. I have sold the company. So, I have sold the majority of the company to Softbank backed OYO. So, have you sold all the stakes or?? I have a very small equity in the parent company now. Yes Then you went to Y Combinator. What were your learnings there? So, YC is the worlds largest accelerator program and I read an article in 2016 that only 5-6 companies from India went to YC. And I was like whats different in YC that its hard to enter there? So, we applied and we were very fortunate that we got a place in YC. So, it was like When you stay in Silicon Valley for 6 months, your mind opens up a lot. In India, it happens that you live with you family and friends. Your mindset becomes very narrow. You think that your ceiling has a specific height. But, when you go to YC, you think that why cant I become the worlds largest? Because there is no bondage on aspirations. If you observe human psychology, if I tell you that there is a roof just above your head, you wont stand up because of the fear that your head will get hurt. If I tell you that the roof is at the height of 2 km, you can stand up immediately. So, the question is where is your ceiling? And YC removes that ceiling. It says, if you are doing it in a co-working, I was asked in YC, How big do you aim to be? I said, I want to become the largest co-working brand of Delhi. They said, Not well enough. So I said, I want to become the largest co-working brand of India. They replied, Didnt sound good. I said, You tell me what should I become? They said, You should become freaking. The largest co-working brand of this universe. If an alien comes tomorrow, even he should work there. I laughed in the beginning because I didnt believe it. The thing that is missing in each and every Indian which is hope and belief. We dont have strong beliefs. Sahil, If I tell you that you can create a 5 billion-dollar company, Okay? Maybe you agree. You might have that belief. But, very few people will believe this. There is always a doubt in their mind. We need to remove that. The day Indians get rid of self-doubt, The day Indians get rid of self-doubt, we will achieve everything. we will achieve everything. Our education system brings our ceiling down. If you ask a child, What do you want to become? He says, I want to become an astronaut. Ask the same person in his 12th class, What do you want to become? He will say, I want to become an Engineer, a Doctor, or a CA. The role of the education system should be that the curiosity the waves that develop in a curious mind, it should let it grow instead of suppressing it. So, I believe that all of this removes in YC. Like when I went to Palo Alto, I was sitting in a cafe and suddenly I saw Brian Chesky, the founder of Airbnb. And in India, we become a fan of people. Like we treat celebrities like God in Bollywood, I treat Brian Chesky and Mark Zuckerberg as God in Startups. So, I went to him. And I talked to him. We had a general conversation. He said, We are also from YC. I said, I am also from YC from this batch. So, he came to give us a lecture. And What happened in that lecture is when you see Brian Chesky And I was a backbencher but, I sit on the first bench in all the lectures of YC. I was Brian Chesky told about all his flaws. Still, he created Airbnb. Then you think, If Brian Chesky can do it, why shouldnt I? That belief is what YC gives you. And I urge everyone to apply for Y Combinator because it is a beautiful experience. Sir, how to apply? It has a link. If you go to Y Combinator application, you will get the link. Okay, I will give the link in the description. You can apply if you want to. All the startup owners face a problem in the beginning in handling the team, or to hire the founding members. So, how did you resolve this problem? I have a solid belief in this that you will meet two types of people. First, who are very smart. Their IQ level is high and they can solve the tasks very quickly. the others are whose intent is good. They are trustworthy. They might not know the work well. But, they can learn very quickly. Always go for the second one. I have seen when you create the early team, your company is nothing but the first 20 team members. If you dont properly set the right culture in the beginning, then your president becomes wrong. And I have personally failed there. And I realised that if only one fish in a bowl is stinky. it will spoil the whole bowl. it will spoil the whole bowl. So, my belief after doing so many startups, So, my belief after doing so many startups, investing in almost 70 companies is that culturally fit people who are trustworthy, who can learn quickly and at the same time who are mission-driven. If a person is associated with money, dont bring him into the team because what will happen is If you are giving him Rs. 100, he will leave you if someone else gives him Rs. 200. we need those people who are mission-driven. We had a solid mission in INNOV8 which was that We will provide the most productive and beautiful co-working spaces the world has seen. Not India, But the world has seen. And Everyone in my company they used to dream about that. And we used to ensure that there are few principles. And we wont go out of these. People approached us to open a co-working space in Greater Noida. They were ready to invest money. We simply denied. We would get more presence but we didnt do that because fundamentally we had these 4 strict principles. Location Design Community and Technology that we will not barter with these. And we aligned all the team members based on these principles. And youll be amazed. None of our team members was from IIT. None of them had a prior work experience. None of them had a prior work experience. No team member was from IIM. No team member was from IIM. All the people were average. The founding team members of our company had an average of Rs. 26000 monthly salary. And now, they are means they have a lot of money because of the ESOP they got. I was about to ask this. Did you give ESOP to retain them? Of course. You know what? I always believe that is better to have 50-60% of a huge pizza than to have 100% of a very small pizza. So, go and increase the size of the cake. Dont be stingy. I have seen that many people run behind valuation and equity etc. they dont have a value. Until and unless your company becomes large, these have no value. So just focus and get the most most mission-driven people in the world. give them equity and tie them with you on your mission. Like Gandhiji was walking forward in Dandi March. When Gandhiji id Dandi March, he didnt eat anything and the people with him also followed him. Obviously they didnt eat because he didnt. The first role of a leader is that you display leadership by actions, not by words. So, if you are working 18 hours a day, you can expect your colleagues to work 16 hours a day. If I work for only 8 hours and ask other to work 16 hours, it wont work. So as a leader you need to display courage. You need to display boldness. You need to display transparency in terms of failure. transparency in terms of failure. Accept wherever you are wrong. Accept wherever you are wrong. Accept wherever you are wrong. and then and then give freedom to the best people in the world. Give freedom to the people. Just say that Go and fail now. And this is not a corporate job. And have Zero bullshit politics in your organisation. Create an organisation like this that in the morning they are willing to go to the office. Enough of it. We had… Pre-COVID we had almost 4200 seats at INNOV8. All the people had just one mission. Monday Blues. We Indians are garfields. Garfields means they are afraid of Monday. They get loose motions in the Sunday evening. Shit, Tomorrow is Monday. they dont like to wake up in the morning. And when its Thursday, people become happy that weekend has arrived. It is because they dont like their word. I feel so weird on Friday. that now what would I do on Saturday and Sunday? No office. The idea is that The idea is that we make the offices so appealing we make the offices so appealing we make the offices so appealing You just look once You just look once our offices are so mundane.Although they are better than before. If you visit an office in Kanpur, you cant enter into its washroom. Its so stinky. Basin not working, the water is dripping from the ceiling. Coffee is not good. We observed that if offices will be good, People will actually feel to work there. Collaborative open offices are the future of our work. So our mission in INNOV8 was two prompt. Firstly we defined a moment for our team. We will invest capital only for two things. Either our cost will go down with that capability or it will become difficult for or customer to leave us. Focus on adding value to your customers life. Just go behind your customers and consumers. They are not God, they are much more than that. People dont understand this. If Lord Krishna comes from one side, and my INNOV8 consumer comes from another side, I will go to my consumer first. Because Lord Krishna will understand me. He will say, Its fine But, if customer is coming today.Maybe he wont return tomorrow. My kitchen runs because of them. People dont understand that our only job as founders is that we should give so much value to our customer that he becomes overwhelmed. and people say that customers dont have brand loyalty. Its not true. Customers are loyal especially Indians. We are so emotional. If a brand has given us respect, we open our hearts for them. Yes But, the day they start disrespecting us, then we can treat them completely opposite as well. we can treat them completely opposite as well. People smash that brand, whether on Twitter or People smash that brand, whether on Twitter or and we should understand India. I think that as Indian customers and as founders, we should know who our customer is. and we should just… means we should worship our customers. They… They should never experience any kind of problem while using your product. And if it happens, say sorry by joining hands. If you do this, your customer will And remember that he is giving you money. and if he is giving you money, then its your responsibility. It is your moral ethical duty to make sure that he gets the maximum value and that is the secret of business. what people do is they play short term. they play short term. People ask me, Why is your marketing cost very low? People ask me, Why is your marketing cost very low? We have a simple fundamental. Our marketing cost is low because our product is good. Great companies are built on great products. We have three fundamentals for our product. First is our product should be worlds… pick any of our competitor. I cant say if there is a slight difference. I cant say if there is a slight difference. But it would be always better than them. But it would be always better than them. Second our product should be 50-60% cost-effective than our nearest competition. and our product has an Indian touch. We observed what people do is, they copy the West. like if their competitor offered liquor for free, it is happening in many co-working. They provide alcohol for free. We said, We wont do this. We will follow the Indian culture. because an Indian citizen cant manage alcohol at night. You are serving him in the day. He is an Indian. How could innocent people manage alcohol? We said, We have simple fundamentals. Whenever you go to INNOV8, we have a concept which we call Break the Coconut. This is also our trademark and hashtag. When you come, we give you a coconut. We give you an urn of worship. Do a tilak on your forehead. We create positive vibes in the beginning of your business. If you want to give blessings in someones work, support them thoroughly. That is what INNOV8 is. We are not a co-working space. Our fundamental thesis is if you want any kind of help, we will help you out. So, that is what we believe that whatever your work is even if you sell Chhole Bhature. It should be like people lick their fingers out. The beginning of any company whether it was MDH, or Reliance, or Godrej All the good companies the started with one product. And they added so much love to their product that they become so big today. So, you were telling about ESOP. Is there a rule in ESOP? How much percentage can be dilute? There is no such rule. I believe that the more you give the better it is. because people should be motivated. Approx 0.1% or 1-2%? Actually, it all depends on the type of employee. employee. Right Right And, I dont use the word employee because it seems like servant. Employee is not a good word. They are colleagues, partners. I had propagated a thesis in my office that if I am the founder, then the whole L1 team will be my partners. We will not call them employees. Because they are connected with me since I even didnt know where to get revenue from. If INNOV8 is successful today, it is more because of their efforts than me. The day you realise that you cant do anything individually. If you are creating this video today, you have this man with you. You cant record this video without him. You cant record this video without him. Individually, you cannot do things. Individually, you cannot do things. As a team, as a family, you can achieve anything and break mountains. So I think that people are stingy in ESOPs. Don’t do that. How much did you give? Our ESOPS were of around 15-16%. Among how many members? I think 9 or 10. OK So, it was a decent-sized ESOP structuring. and it was and it was very good for us. very good for us. I am very grateful to my only partners. Ankush Hemant Aishwarya Vivek Shraddha Sheil, who actually made this company. I can proudly say if I worked for 16 hours, they did for 18 hours. So, So, the company was built because of their passion. the company was built because of their passion. Sir, you were telling about Project Guerilla. So, if anybody needs funding from you, Yes So, how can they approach you? Actually, I tell people, If you need funding from an investor, the best way is to not approach any. You just approach only one person and all your problems will solve. That is your consumer. The best angel investor is your consumer. First of all, do research. What is the core need? Best products come from founders own needs. We created INNOV8 because I was fed up of my office. My first office was in Noida Sector 63. It was so bad. I had to manage many small tasks by myself. If water was not coming, my job was As a founder, you are not CEO. You are not Chief Executive Officer. You are Chief Everything Officer. I worked as a janitor. So I observed, this need was solid and we built an empire out of it. Now you see that if you are facing a problem that means you are personally touched with that personal challenge. think that is that challenge a relevant challenge for a lot of people? and talk to people and we need 48 hours in the age of the Internet. The problem is that people dont jump. You start the business. Many people come to me. Because of the nature of my business, its a co-working space. So many people come seeking ideas. And they ask, How is this idea? How is that idea? I tell them, Ideas are a commodity. Everybody has an idea. Nobody is executing. People dont jump. They dont start. And starting is magic. When you start, you will fail in the beginning. And secondly, I will talk about it later. Before that, you asked a very pertenant question. How to raise money? The best way to raise money is by building a good product. for the right consumer and going out in the market. And if the consumer gives you money, then you dont need all this. Secondly, this is very interesting Ninety percent of good investments dont raise capital dont raise capital People go to them saying People go to them saying Can we please invest in your company And the only secret source here is build a great product. Add value. Add value. And dont build copy cat product. And dont build copy cat product. The trend in our country is like This worked in America, we will do this. This worked in America, we will do this. That worked in Europe, we will do that here. That worked in Europe, we will do that here. Stop building copy cat products. India has so many needs that you cant even imagine. Let us think, how can we build why not from India? It didnt happen till 2015, but now we can Why cant India create technology products for the country and the world. Let us become the largest exporter of technology products in the world. Let us become the largest exporter of software in the world. Let us become the largest exporter of software in the world. And And I think that and obviously if you want to reach out, I am I try to respond to as many emails I can. But, The easiest way is dont reach out investors. They will not invest in you, if you dont have a Product Market Fit. Have a basic product. Go to your customers. Try and get money out of that And secondly, the thing a lot of people ask is How do you become humble? Humility is one thing That humility ends after people get money. That is the worst thing that can happen to a person. I always tell this thing. The only way to be humble is to do sales. Every school should teach sales in 4th or 5th class. If someone doesnt know sales, he cant do anything. Even a beggar also sells his pain on red signals. Every person should know sales. And sales is the most genuine work of the world. Sales bring money. And money runs the kitchens of many people. It generates employment. In our medical community, there are MR, Medical Representatives. People treat them very badly, He is just a salesman. He is like God. Salesman is We all are salesmen. And you should know how to sell. And the easiest way to sell is to build trust. Focus on building trust. If you have built up a trust with your customers and partners, If I talk nicely with you, you will like talking to me. But if you develop trust in me, you would like to do business with me. But if you develop trust in me, you would like to do business with me. So, focus on building trust and learn sales. So, focus on building trust and learn sales. That will make you extremely humble. Sir, we have created a series on Sales. Very nice. Its a complete course. Basically, I purchased a few paid courses. Very good. Expensive. I learned. And moulded them with an Indian touch. Very good. Because many techniques work internationally, but not in India. Right Right So I created a free course of that. So I created a free course of that. So basically, we created this series so that it can help people. so that it can help people. Those who cant go to Y Combinator or cant afford expensive education, Those who cant go to Y Combinator or cant afford expensive education, they can also get learning. directly via founders. Very cool. So, you told in the beginning that you give Rs. 5 lakhs in Project Guerilla. Yes, In the beginning. Okay Okay So, if my idea is good, So, if my idea is good, Product is Market Fit. So, how will you calculate my equity? See, there are many ways to calculate valuation. Now, we have increased the amount. Plus we decreased the number of investments. Not meety invests Because we have seen that it is better to invest in companies where the founder pedigree is very good. So, we have revamped the whole structure slowly. And, its very difficult to comment on equity. But, we take anywhere between 0.1-0.5% We dont do more than that like our goal is that we dont want to We want to take equity in just points so that we become a very small part of that entrepreneurs dream. And the smaller portion we have. We dont negotiate on valuations and all much because It is a very simple concept.If the company is going to rise, we will get a solid exit it even less stakes. If company will not grow, then its our loss even in 5%. So, we dont negotiate and our only focus is that become the most founder-friendly investor because So, do you provide strategic help also if somebody faces an issue? If there is any problem, they can keep on coming to me. But, I dont intervene. Means I dont intervene in their day to day business. We give them the power of attorney also after giving money. like Burn that money.We dont care. We want to be The best help you can do to a founder is not to help them at times. because what happens is that the founders have their own dream. We may have different opinions. Now, if I have 0.5% of the company and you have 99, you should not run the company with my thoughts. You should run it with your thoughts. Whenever you get stuck, come to me. I can tell you my opinion only. But you should I always urge founders that you should not take… You should take advice from everyone with a pinch of salt. Because everyone has their own biases. So, it is very important. Sir, the next question is about personal finance. Sir, the next question is about personal finance. How do you manage your personal finance? How do you manage your personal finance? Basically, there are many standards running in the market. I have seen many things on YouTube. Many big personalities say that we should invest 20-30-50% or 20-20-60% What should we do? Is there any rule? Or… How do you manage it? I try to do what others are not doing. So, first of all I managed my personal finance. For that, there is a principle of my life which is compounding. I am a firm believer of compounding. Not only for money, but for my skills. If I have to learn anything, So, I dont learn it in one go. I do it everyday I do it everyday like 1%, then 1% again 1% like 1%, then 1% again 1% and finally, Mathematics has a magic. So, compounding is a thing that I think You might know that is you save Rs. 20,000 every month and invest them in stock market, so these Rs. 20,000 will become Rs. 35 crores after 40 years. So you can invest small amounts. And fix a time frame. The mistake that people do is they are impatient. People want that I invest Rs. 5000 in stock market and get Rs. 15000 in return. I am very risk-averse in personal finance. Startups are the most risky bets. We take significant risks also. But, everything has a science. If I tell you to buy HUL stocks, Never do that. because you should do your own research.Follow the science. because you should do your own research. Follow the science. Follow the science in personal finance also. Follow the science in personal finance also. Many people tell me, Buy bitcoins. Bitcoin prices will go very high. And this, and that. May be possible. But, I will purchase bitcoin if I understand the science behind it. And maybe I have to purchase it costly. I accept that also. But, my first rule in personal finance is I never ever do anything that I dont understand. Second rule is that compounding is magic. If you Whenever you invest anywhere, wait for at least 3-5 years. Because you wont get any returns in the first year. Then you will frustrate and take your money out. You have heard about the bamboo tree in China. and it grows up to 80m. In the first 4 years, it grows till 1m only. And 80m in the fifth year. That is compounding. We dont see it. But, it is building its roots underground. So our focus should be completely on one thing which is that keep patience in your investments. And second thing deposit small amounts every month. And if you want to invest in stock markets, if you want to invest in stock markets, so, you can start. But, so, you can start.But, pick large-cap companies. In which capital erosion, Return of principal is more important than return on capital. Return of capital is very important. What people think, I am getting 36% interest here. I will invest in this. You should control your risk. Mitigate your risk, and allocate small amount every month. And diversify it. Like in my case. There are 7 categories where I invest. I invest in metals, Share market, Startups, Real estate, I invest in commodities also. In future, it may be possible that I even invest in bitcoins. I purchase bonds also. So, I purchase bonds also. So, the idea is the idea is the idea is you should not have only one investment. Build a you should not have only one investment. Build a blended portfolio. Myt portfolio target is 15% pat per year. So, 15% pat per year If I do that, After 10 years, Ill be one of the richest people in the ecosystem. So Sir, how much percentage do you invest? And other things like If our viewer earns Rs. 1 lakh per month, so how much should he allot for his expense day to day? Because he can spend all if he wants to. How much should he keep as savings? Or how much should he invest in different options? Actually, I create frameworks. And my very first framework is that I dont purchase a depreciating asset. Means I can buy a lot of good cars. But, I dont buy it. This is my thought process. Maybe its wrong. Many people say, Are you mad? I can buy good clothes, but I dont buy. My thesis is My thesis is that buy appreciating assets. that buy appreciating assets. My second thesis is become absolutely, absolutely a miser when it comes to money. Because money is a thing. Because money is a thing. Do you know why money is called currency? Do you know why money is called currency? Because its life. Its current. So, it is my request to all the youngsters that money is very powerful. Save as much as you can. Dont waste money. I see many people spending in weekend parties, many people spend in having food at premium places, And spend in branded clothes like Gucci, etc. I dont believe in all that.Many people might find it weird. But, it is my firm belief. Money is Every single penny is valuable. If you can save them, Those hundred bucks collectively become a big amount. And its easy to spend money. Earning money is so hard. People think that its nothing. Its actually very tough. You also know. Earning money is very tough. You can earn more money by just one method. You can earn more money by just one method. If you do smart investments. If you do smart investments. And I believe that you should be on bear bones. You just see For example, this is a pair of shoes. I can purchase a black shoe from Louis Vuitton or from Bata. I prefer Bata. The quality is comfortable for me. I keep them polished and I dont have to show off. A car, you can purchase an Innova, or a Fortuner, or a Fortuner, or you can purchase a Rolls Royce. or you can purchase a Rolls Royce. But, because I belong to a small village. I have a belief that money is like You can purchase gold. Purchase metals. Purchase stocks in companies that keeps growing. Because I tell ou one more thing that inflation is a mess. Todays Todays 100 crore rupees if you put them in a bank., it will become Rs. 16 crores 90 lakhs in 2030. So, you can see that todays 10 lakh will become 16 lakh 90 thousand rupees. So, this inflation is a mess if you observe when Starbucks was new in India, the price of a coffee was Rs. 150/-. Today, the same brand serves a coffee for Rs. 350-400. Because inflation is rising. People dont understand currency in our country. People dont understand currency in our country. They dont understand what finance is. They dont understand what finance is. They dont understand what finance is. They think, We have become rich because we have started earning 1 lakh per month. They think, We have become rich because we have started earning 1 lakh per month. The value of 1 lakh rupees has degraded today. It was huge 10 years ago. So, we should remember this also that… Actually, this is a myth. And the governments of all the countries want that you remain poor. All the rich people want that you remain poor. They want you to spend all your money on expensive restaurants, consume alcohol and enjoy. But, money is very powerful. You should keep a record of each buck. The first rule of personal finance is keep the record of every single penny. Maintain a diary for that. Write everything in it. after that try to bear minimum. Whenever you have 2 options whether you can buy this or that. And if you can postpone that purchase, its better for you. Because the goods you are getting for Rs. 100 today, you will get the same thing for Rs. 70 because of inflation. So, we think that it is getting expensive. But, if you see cost to cost, it is getting cheaper. Secondly, taxation. You should know taxation. You should know finance. Means your assets should be on numbers. The problem is if I ask you today that how can you do smart taxation in 1 lakh rupees? That does not mean that I have to steal the tax from the government.But, the government gives many rebates. It gives you the benefit of indexation. You should understand those things. Dont rely on your CA only. Because you are just an account for a CA> And this is my rule since childhood whether I earn 100 rupees or 100 crores, my concept is that the money available in my bank account. I have to secure that. Its easy to spend money. I tell you one more stat. In the last 70 years, around 8000-1000 people got a mega lottery in the world. OK? After 7 years, it was observed that they spent all the money and became poor again. The reason behind that is the easily they get money, the quickly they spend it. Because they dont have a skill of managing finance. Thats why since childhood I have a daughter and you also. I want to inculcate one thing to my children from the beginning saving money is very important. Nothing is more powerful than it. Save money. Invest it in the right place. Protect your money. In future, it will help in bad times. And And where money can help, nothing else can. where money can help, nothing else can. I disagree with everybody who says there is no power in money. I disagree with everybody who says there is no power in money. Money cannot bring happiness and all. Money cannot bring happiness and all. This is all bullshit. Money is so important. I agree that money cant buy relationships. But, money is important for your life. The first rule of being an entrepreneur or even an employee is make money. Making money is not a crime. It is important for you. Saving, Investing is important for you. This money will come in need your family. Or if your relatives need to have heart surgery.Do you know the major cause of bankruptcy in our country? Personal bankruptcy. It is healthcare. In Kidney transplants, Liver transplant, people have to spend up to Rs. 50-60 lakhs. India is a country where the coverage of insurance is very low. So, you can see what the value of money is. Firstly, it is important to know that money is important. Secondly, you should keep the record of every single penny. And third dont buy things that you dont need. Just go into your room. You will see there are 90% things that you leave after using 1-2 times. So, you should have an index framework. is this actually valuable? If not, then remove it and set your goals Its an interesting story. When I was 25, I set a goal and I keep it in my wallet. I have to earn Rs. 100 crore by the time I turn 30. And, I did that. The reason is that you keep thinking about it in your mind. Many people ask me Was this exit in your mind from the beginning? Many people have this question. I also have this question. Yes. So… Actually, our mind is very agile. We see whatever comes in front of us. We see whatever comes in front of us. People tell me that People tell me that Netflix was free for 2 days. I said, Netflix was not free. I said, Netflix was not free. Your time Your time is more than the subscription cost of Netflix. You should actually pay Netflix to not put you inside it. People dont know the value of their time. Spen whole day in it. These are all drugs. People dont understand it right now. Internet is a drug. Facebook and all that. People waste 2-3 hours daily in it. Sends inessential messages to their Whatsapp contacts. Your focuses that you have only one moral duty. I tell you one more interesting thing that we all are jugglers. I tell you one more interesting thing that we all are jugglers. I had heard a very nice thing. I had heard a very nice thing. Do you know juggler? Those 5 balls Do you know what are those 5 balls? 3 balls out of 5 are us. 3 balls are of rubber and 3 are of glass. The 3 rubber balls are Property, Money, and Friends. These are rubber balls. And the 2 glass balls are very fragile. One is health And another is our family. We treat all the 5 as rubber balls. And we consider Friends and Real Estate as the glass ball. And the others as rubber balls. If your health and family went bad once, it will not become normal as before. If your wife once loses trust in you, it will never build again. We should juggle like this that we can leave the property. Its a rubber ball that will bounce and come back in our hands. But, if your health your focus should be your family and your health. I have created a few principles of my life. I have only 10 people in my life with whom I can share. And thats it. I dont allow any 11th person in that circle. Because those people will waste my time. And that is the thing. You need to say no to a million things to say yes to the important things which is your family. And we think that success is important. Definitely important, but not more important than your health. Focus on your health. Focus on your family. Focus on being a better human being each day. Write down things. The best skill that you can have is… Write down. Write down your goals. Do you know? I go to IIM. I go to Harvard. I go to IIM. I go to Harvard. I have seen people all over the world. I have seen people all over the world. Successful people are the ones who write down. Make smart goals. specific, measurable, adorable and realistic time bomb. People dont create time bombs. People say, I want to earn 100 crore rupees. When? On which date? Till what time? What is its game plan? What will be your actions? What will you do today? What in these 3 hours? What in the next year? You need to make that. Until you do that, you will not be successful. Now, we will play a fun quiz game with Sir. So, Sir will not get time to explain anything. He have to pick any one option out of two. He have to pick any one option out of two. And there will be quick answers of a few questions. And there will be quick answers of a few questions. We dont need any explanation. It may create controversies. But, he has to give answers rapidly. Android or iOS? iOS Funding or Bootstrap? Funding or Bootstrap? Bootstrap Bootstrap Angel Investment or Venture Capitalist? Angel Investment Debt or Equity? Debt Family or Business? Family Veg or Non-Veg? Veg Fame or Money? Fame Street Food or Fine Dining? Street Food Winter or Summer? Winter Beach or Mountain? Beach or Mountain? Mountain Mountain What is the perfect holiday for you? If Sunday is off day, then? With my family and my grandfather. Be at home. Yes Best food that you have eaten anywhere? I eat Punjabi Cuisine. I love Any restaurant? Kaake Da Hotel Kaake Da Hotel Chandni Chauk? Chandni Chauk? Not, the one at Connaught Place. Which is the best feature that differentiates you from others? apart of humble. We already say that you are humble. I am trustworthy. I will never betray you. I think this is the best quality. If you can be trustworthy, you will… Best startup in India? Paytm Best moment of life? Moment Having a daughter. Favourite movie? 3 Idiots If any book would be written on you, or a movie? then whom do you want to be a writer of the book? Or whom do you want to act in your role if its a movie? Vicky Kaushal.If its a movie. Vicky Kaushal. If its a movie. Basically, you want a movie or a book? Basically, you want a movie or a book? I want a movie. Movie Yes Which is your favourite book? Amm Favourite book is White Tiger Morning person or Nightout? Night I sleep at 4 O Clock. After having a daughter or…? Consistently 4 O Clock. What is your hobby? I play Guitar. Lets play a song then. We will post this on Instagram. Because here we might get a copyright claim. So, follow on Instagram. Link is in the description. Si, what do you think about the future of India in the upcoming years? Which industries will grow? Complete focus on Industry 4.0. I call this RANIA 53. Complete focus on Industry 4.0. I call this RANIA 53. Robotics, Artificial Intelligence, Machine Learning, Nanotechnology.Internet of Things, Robotics, Artificial Intelligence, Machine Learning, Nanotechnology. Internet of Things, Autonomous Vehicle, and Electric Vehicle Infrastructure, 5G, and 3D Printing. Sir has told all of them. Industry 4.0. What advice do you want to give to a school going student? Those who are in 9th, 10th, 11th, or 12th class. What is the thing you want to It doesnt matter… It doesnt matter whether you have a dark complexion or fair skin. It doesnt matter whether you speak Hindi or English. Speak sweetly. It doesnt matter whether you perform well in class. I asked my father, What should I become in future? Every child has a question, What should I become in future? I asked my father, What should I become in future? Every child has a question, What should I become in future? My father said, First become a good human being. My father said, First become a good human being. There are very less good human beings in the world. First of all, be the one. Final – A message for our viewers that you want to convey which they can apply in their lives. Consistently focus on building relationships. Long-term relationships. Long-term means dont think, What can I get from everybody? Think, What can I give? How can I help person? How can I help this cause? Think, What can I give? How can I help person? How can I help this cause? And be a giver. And be a giver. The world has very few givers. Every person thinks that I should build relations with him to get tihs. Become a giver. Give people whatever skills you have. And be trustworthy. Be honest, loyal, and Be a good human being and then find your passion. And just focus on that area. And by the end of the day, honestly doesnt matter how many networks or friends you have. It just matters if you have even 10 people in your life who can give life to you, you are extremely rich. Thank you Sir, It was a great experience talking to you. Sahil, thank you very much. Thank you.