Brief Summary
This podcast features Kunal Shah, the founder of CRED, sharing his insights on sales, hiring, company culture, consumer behavior, and funding. Key takeaways include the importance of persuasion skills, creating a culture of open feedback and continuous learning, understanding Indian consumer behavior, and the need for a large total addressable market (TAM) to attract funding. Kunal also stresses the significance of high agency, compounding, and truth-seeking in building a successful organization.
- Persuasion is a core skill missing in our ecosystem.
- Culture is defined by what you tolerate.
- High agency is the ability to make the change to universe and bend it the way you want it to be.
- Compounding is the ability to learn, change, break their beliefs, improve their skills, constantly evolve.
- The only purpose of capital is to accelerate growth at the cost of you giving up your equity.
Intro
The podcast intro highlights Kunal Shah as a fintech philosopher and one of India's sharpest minds. The episode promises to explore his views on hiring methodologies, creating a learning environment for sales, and understanding the percentage of compounding individuals at CRED. It also touches on handling feedback, instilling creative confidence, and observing differences in Indian and Western consumer behavior.
What you’ll learn from the episode
The host outlines the key topics to be discussed with Kunal Shah, including selling to the Indian consumer in a trust-deficit society, hiring the best talent and understanding CRED's culture, spotting gaps in the market, and learning essential lessons for founders building a business. The aim is to create a first-principle oriented podcast that founders can revisit for reflection.
Kunal’s early life and financial issues
Kunal shares his early life experiences, growing up in a large joint Gujarati family that faced financial challenges. He started working at a young age, taking on various jobs like being a delivery boy, data entry operator, and selling mehendi cones and pirated CDs to make money. These experiences taught him valuable lessons in sales and understanding human motivations, particularly the need to differentiate oneself and the willingness to pay more for perceived value. He emphasizes that constraints can drive innovation and resourcefulness.
How to learn sales today?
Kunal discusses the importance of persuasion skills, noting that many Indians are not good at sales because they haven't had to persuade others to survive or thrive. He suggests that individuals can deliberately learn sales by observing and mimicking those who are good at convincing others, understanding the other person's expectations, and creating win-win situations. He also highlights that people who are not good at sales are often terrible at asking for help, which stems from insecurities and fear of looking small. Overcoming the fear of shame and rejection is crucial for improving sales skills.
How to handle feedback and judgment?
Kunal explains that people who are secure in themselves are harder to offend because their perception aligns with their substance. He advises getting rid of the worry about what others will say to compound faster. He expresses concern about the youth getting easily offended due to social media bubbles, which can hinder their growth. Shamelessness, humility, and continuous learning are essential for becoming a good salesperson. Good people are always seeking feedback, while others get defensive.
Feedback Kunal got from a new employee
Kunal shares an example of feedback he received from a new employee regarding the onboarding process at CRED. The initial intent was to give new joiners a comprehensive overview of all teams, but it turned into a broadcast of information with less context, leading to a lack of attention span. This feedback helped them realize the process was not very helpful and needed tweaking. Kunal emphasizes that he doesn't get offended by feedback but sees it as either useful or useless, with curiosity being a core personality trait that makes feedback valuable.
Does culture depend on the founder?
Kunal asserts that a newcomer's confidence depends on their upbringing and past experiences, but the environment created by the leader plays a crucial role. Leaders should encourage questions, respect different viewpoints, and explain the reasoning behind choices. He suggests holding separate feedback meetings with the intent to listen and not defend, demonstrating curiosity and understanding the impact of actions.
How culture spreads in a growing company?
Kunal discusses how culture spreads in a growing company, emphasizing the importance of defining and living by core values. At CRED, values like "earn trust" are used in interviews, appraisals, and daily vocabulary. He stresses that culture is defined by what you tolerate and that leaders must consistently demonstrate the desired behaviors. He also compares culture to an app that needs constant updates and distribution.
Cred’s values
Kunal elaborates on CRED's values, including "earn trust" and "being right a lot," which is inspired by Amazon's focus on judgment. He explains that people follow leaders with good judgment and the backbone to stand behind their decisions. He shares examples of CRED's IPL campaign during peak COVID and focusing on the top 30-40 million creditworthy customers as instances where trusting his judgment paid off. He also highlights the importance of good judgment in hiring.
A players vs B players
Kunal discusses the concept of A players versus B players, noting that it's harder to change states but not a permanent state. He mentions that failed founders can suddenly become A+ players due to their life's motivation being unlocked in a different way. He emphasizes that the reaction to setbacks is a good sign of A and B players, with A players consistently risking their reputation and willing to take on challenges beyond their current capacity.
Ex-founders: wrong belief vs wrong market
Kunal distinguishes between two types of ex-founders: those with rigid belief systems and those who had the right values but were in the wrong market. He suggests that the easiest sign to differentiate them is how much they externalize blame for their startup's failure. He emphasizes that entrepreneurs create wealth by removing uncertainty from people's lives and that winning against uncertainties is the prize.
How to spot compounding employees?
Kunal introduces the value of "compounding," which refers to individuals who are continuously evolving, learning, and improving their skills. He emphasizes that compounding is a skill that cannot be taught and that these individuals are able to react to environments faster. He suggests that compounding people are like protecting against inflation of the rate of change of the world.
How to track compounding at work?
Kunal explains that compounding is a relative term and that compounding people are also good at teaching. He highlights that clarity often comes when you explain, not just when you learn. He also points out that if all metrics are in the red and not improving consistently year-over-year, then people are also not compounding. He emphasizes the importance of converting fear into curiosity to create a learning experience.
Steps to grow steadily
Kunal outlines the steps to evaluate compounding in an organization, starting with living the value and doing stuff that reflects it. He emphasizes the importance of encouraging good questions and making reviews a learning experience. He also suggests asking "why" questions to encourage curiosity and never judging what people are curious about.
How to find a problem solver?
Kunal discusses how to evaluate high agency, which is the ability to get stuff done despite obstacles. He suggests looking for people who do things that were not asked of them and solve problems with huge headwinds. He also introduces the value of "truth-seeking," which removes hierarchy and encourages fresh perspectives.
Indian vs Western consumer behaviour
Kunal shares his observations on Indian consumer behavior, noting that Indians value efficiency differently due to their perception of time and imprecise language. He suggests that Indians value entertainment more than productivity and that society gets shaped based on what gets appreciated and applauded. He also emphasizes the importance of demonstrating curiosity and interacting with different cultures to become more worldly.
How to get funding
Kunal provides a framework for entrepreneurs to evaluate whether they need funding, stating that scaling anything requires capital, which can come from profits or external sources. He emphasizes that the only purpose of capital is to accelerate growth at the cost of giving up equity. He also highlights that investors look for businesses with a big TAM and the right team to solve the problem.
How to measure market size
Kunal explains that there is no fixed method for calculating TAM but that it's about thinking where the starting point is and what it can become. He emphasizes that the real test is whether the core offering solves a significant problem, using the example of MBA schools needing to provide placements to justify their fees.
Selling to Indian consumers
Kunal discusses selling to Indian consumers, emphasizing that every sale is an act of solving someone else's problem. He highlights the importance of understanding the problem and how much it matters to the person's life. He advises having empathy, building relationships, and becoming a person that others rely on for solutions. He also draws parallels between sales, relationships, and entrepreneurship, emphasizing the need to understand what others care about and want to solve in life.
