S3 E05 | How Anand Deshpande Built a $9 Billion Powerhouse: The Persistent Systems Story

[00:00:00] So at Persistent, we see ourselves that we are in the sixth orbit.

[00:00:03] Sixth now?

[00:00:04] Yeah.

[00:00:04] Oh wow.

[00:00:05] And we've had five different orbits. Every orbit has been very unique. You can feel the difference between what works in one orbit.

[00:00:12] Our first orbit was pretty much from 1990 all the way till 2000, almost 10 years.

[00:00:17] In 2000, we were a 100 people company, just 100 people company. We were doing very well.

[00:00:23] I don't remember about 6 million maybe, 6 and 5, 7 million, but we were 35% profit margin company at that point.

[00:00:28] And we pushed really hard and we got some amazing growth years during those two years.

[00:00:33] So we had like 35% growth for two successive years. And the stock got completely re-rated, market got re-rated.

[00:00:40] And then on the stock has really done very well. And I think understanding that market very clearly,

[00:00:46] I think that's where a lot of startups or small companies struggle.

[00:00:49] I think so too. They go underprepared or they don't invest enough.

[00:00:52] Yeah, they don't think enough about what is the ideal customer that they are going after, what is the ICP.

[00:00:56] How are we defining that? Do we have clarity on who the buyer is?

[00:01:15] Today, we have a true pioneer of the Indian IT industry, Dr. Anand Deshpande with us.

[00:01:19] Anand is the founder, chairman and managing director of Persistent Systems, a company he started in 1990

[00:01:24] with just $21,000 and has since grown into a global technology powerhouse.

[00:01:29] His journey embodies our theme of winning beyond boundaries in every sense.

[00:01:33] A distinguished alum of IIT, Kharagpur and Indiana University, Anand has been the driving force behind Persistent's growth

[00:01:39] from a startup to a publicly traded global company. His vision has not only shaped Persistent, but has also influenced the broader Indian IT landscape.

[00:01:48] Anand's impact extends far beyond business. He is a founding trustee of Persistent Foundation.

[00:01:53] He has served numerous positions at various professional and non-profit organizations.

[00:01:59] NASCOM's Executive Council, founding member of iSpirit, founding member of I4C, and a member of the Dean's Advisory Council in the School of Informatics, Computing and Engineering at Indiana University, among others.

[00:02:10] His commitment to entrepreneurship and education is evident in his roles as an adjunct professor at IIT Bombay and chairman of the Board of Governors at IIT Patna.

[00:02:19] Particularly noteworthy is Anand's dedication to fostering entrepreneurship at the grassroots level.

[00:02:24] In 2013, he established the Deyesra Foundation, a non-profit organization focused on creating self-employment at scale.

[00:02:32] Through initiatives like the Second Orbit Program, Deyesra has helped hundreds of entrepreneurs scale their businesses,

[00:02:36] truly embodying the spirit of winning beyond boundaries.

[00:02:40] Today, we'll explore Anand's journey from a programmer at HP Labs to a visionary leader, his insights on the evolving tech landscape,

[00:02:47] and his philosophy on winning beyond conventional boundaries.

[00:02:50] Anand, it's a pleasure to have you with us today.

[00:02:52] Usually, we'd love to hear a little bit of the backstory of what makes a great entrepreneur.

[00:02:57] So, if you don't mind, we'll roll the clock back a little and go to your days in Akola and BHAL Township.

[00:03:05] And how did that become a story that took you to IIT, Karakpur?

[00:03:10] So, a little bit of trying to capture what that childhood and that mind that took you to engineering was in the early days.

[00:03:18] So, thanks for inviting me. It's a pleasure to be here on this podcast.

[00:03:22] Yeah, meaning I was born in Akola in 1962, but I never really lived there.

[00:03:26] Okay.

[00:03:27] My parents…my father is an electrical engineer and he worked for Bharat Heavy Electricals, BHAL.

[00:03:33] And as part of his job, he was in Bhopal.

[00:03:37] And he was working there and we lived in the BHAL township in Bhopal.

[00:03:43] So, basically I was there pretty much till my eleventh standard.

[00:03:49] And at that point in MP, we had eleventh as the higher secondary.

[00:03:52] So, that was my last stay in Bhopal.

[00:03:56] Bhopal, of course, at that point was a state capital alright, but a very sleepy town in some sense.

[00:04:03] In the township, we were relatively isolated from the rest of the city in the sense that in a township, I don't know if you're familiar, but this was a very large township at that point.

[00:04:13] And there were several thousand engineers who worked at BHAL and they were government or public sector company with quarters that they had provided to all the people.

[00:04:26] So, the beauty of these kinds of quarters is that all your parents know each other.

[00:04:31] They know all the kids around.

[00:04:33] So, if you're hanging out with someone, there's some uncle, auntie who knows what's going on.

[00:04:37] And it's kind of very interesting today, even if we meet someone almost 50 years later, they will tell you intricate details about what you were doing as a eight-year-old and a ten-year-old when you visited their house or things like that.

[00:04:51] So, everyone was a very nice, comfortable environment.

[00:04:55] In the township context, what also happens is that you get groups of people who live in similar quarters and typically they are co-workers, they work in similar areas.

[00:05:07] They're same age group, their kids are same age groups.

[00:05:09] Lots of young kids my age around when I was growing up in Bhopal.

[00:05:15] And yeah, so the township was very good.

[00:05:17] We were all surrounded by engineers all across.

[00:05:20] Meaning all our parents are engineers.

[00:05:22] We were all working in one of the large engineering companies.

[00:05:26] And pretty much it was a science, maths, physics kind of an environment, not just at home but amongst friends as well.

[00:05:33] Everyone was in that category.

[00:05:35] And I went to school in a school called Campion School, Bhopal.

[00:05:38] Okay.

[00:05:39] Campion School was an all boys Jesuit school.

[00:05:42] And we would be about 30% of the class would be from the township.

[00:05:46] The rest of them were from the city and otherwise.

[00:05:48] It's connected to the same campion in Bombay?

[00:05:51] It is connected to them.

[00:05:52] But this was set up by the same group of Padres.

[00:05:55] So they came over to Bhopal in 65 and set up Campion.

[00:05:58] And I was part of that school and I did all my schooling there till 11th.

[00:06:04] It was a, as I said, very sort of a cocooned environment where life was pretty simple.

[00:06:10] So I guess like even a decade later when we were pushed into 11th and 12th grade, it was old parable of you either became an engineer or a doctor if you were smart.

[00:06:21] I guess you folks were pioneers of that a decade before.

[00:06:25] I wouldn't say pioneers.

[00:06:26] We were very much in the typecast and from the township, most people ended up becoming engineers as well.

[00:06:33] So that was pretty much the given thing in a way.

[00:06:37] And then there's a little bit of research that suggests that you were an aeronautical engineer, then you moved to computer science, you got into NDA.

[00:06:44] So how do you, how does, I mean, even today we have those challenges as an 18, 20 year old trying to make these choices which dictate your life.

[00:06:52] But how did you make those career choices back?

[00:06:54] So clearly I was very keen on becoming an engineer.

[00:06:58] That was very clear at that time.

[00:07:00] Everyone, at that point the choices were either local college, which would be MSCT in Bhopalachas and Regional Engineering College.

[00:07:08] And then depending on what grades you got, you got into one of the RECs.

[00:07:11] Otherwise you go to IIT. Those are the three options for going to engineering.

[00:07:15] But what happens is when you are in 11th and you are trying to figure out what to do as practice and otherwise you try to apply to all these competitive exams.

[00:07:23] So I applied to several of them.

[00:07:26] In school I was a very regular student, I would say.

[00:07:29] So I was quite well organized and yeah, meaning I was quite disciplined and I was in the top few in the class always, but not so much because of anything else,

[00:07:41] but for the fact that I was very diligent, did all my homework every day.

[00:07:45] I was a good boy in that sense.

[00:07:47] And yes, I did a study quite a bit for JE and then I got a fairly large rank.

[00:07:53] I also got a rank into NDA as you pointed out, but I really never wanted to go to NDA.

[00:07:58] It was a good experience though going to SSB, understanding how things happen and trying competitive exams.

[00:08:04] So I highly encourage people to try that experience, but it was not my first choice, meaning it would have been meaning many things would have had to go wrong to go to NDA.

[00:08:16] But I did get into IIT and at that point, you know, when, and even now if you get a JE rank, what you get, then you choose what you get.

[00:08:24] So I ended up choosing Aero in Kharagpur.

[00:08:28] So I did two years of Aero in Kharagpur because again, first two years were common.

[00:08:33] But when you start in IIT, you start with a department.

[00:08:36] So I was in Aero and after two years, I was able to change to computer science.

[00:08:40] And then I graduated from Kharagpur in 84 with a computer science B.Tech.

[00:08:46] My batch was the third batch in computer science in IITs.

[00:08:50] And actually IIT Kharagpur has the first batch of computer science amongst any IITs.

[00:08:55] Okay.

[00:08:55] So ours was the third batch in that sense.

[00:08:59] So not too many people before us who were doing computer science.

[00:09:02] So it's quite unique in that sense.

[00:09:04] And then I think there's this, you know, we extracted this from one of your interviews,

[00:09:09] but I'm curious as much as the audience would be.

[00:09:13] One of the reasons of all the colleges, I think the two things about your post as you graduated that caught our eye.

[00:09:21] One was that you hacked this algorithm to ensure that everybody got into the, you know,

[00:09:27] the universities that they're most capable of.

[00:09:29] This became of course folklore much later.

[00:09:32] And now there are, you know, consultants and gurus who try to do the same thing,

[00:09:36] but clearly a little bit of a pioneer on that front.

[00:09:39] So how did that idea come about?

[00:09:41] And, you know, you went to Indiana and it seems to be a choice which was made on the back of a book by Douglas Hofstadter.

[00:09:50] So it intrigued us on how those kinds of choices came to be sitting in Kharagpur of all places in the 80s.

[00:09:59] See, as I mentioned to you, I got into aeronautical earlier because my rank was pretty large, right?

[00:10:05] I mean, you get a four digit J rank, that's where you end up going.

[00:10:09] So many of the kids in class were much smarter and whatever.

[00:10:15] And I was one of the last persons to make it into computer science,

[00:10:18] because you get through again ranking and you have to, you know, new department got started,

[00:10:23] people got to change their departments, but they were already well established ones.

[00:10:26] So by the time you get out and you're starting to apply,

[00:10:30] it was very clear that there were a large number of my batch mates who were going to apply for masters and PhDs.

[00:10:38] And it was a very easy thing at that point.

[00:10:40] Everyone pretty much was expecting a scholar to come through and it was all about getting a scholarship

[00:10:45] and going abroad rather than anything else.

[00:10:48] Nobody had the ability to pay for college education.

[00:10:53] Right. So at that point, you know, one of the things that was very clear was that, you know,

[00:10:58] there were 16, 17 people from my batch, my class were applying.

[00:11:03] And if all of us applied to the same place, then it would be a disaster.

[00:11:06] So what was important to make sure was to ensure that the professors who were writing applications

[00:11:13] or other endorsements or they call the recommendation letters,

[00:11:17] you want to make sure that they are not sending multiple recommendation letters in the same university for different students.

[00:11:24] Because then, you know, it becomes very tricky as to,

[00:11:27] then your credibility of that recommendation is compromised because if you're saying great things about whatever,

[00:11:33] then it would be very difficult.

[00:11:35] Yeah.

[00:11:36] So I did convince my batch mates to come up with a chart to say,

[00:11:39] okay, can you disclose where you're applying and we'll make sure that everyone gets a chance to get the choices of their own on their universities.

[00:11:47] And we'll make sure that the recommendation letters they're getting are unique enough that, you know,

[00:11:54] professor is not under pressure to rank people from within the class.

[00:11:58] And we were quite successful in getting that and pretty much everybody from the class did get a scholarship,

[00:12:04] you know, without much risk in essence.

[00:12:08] I got two or three scholarships actually and a couple of them were kind of admissions with,

[00:12:16] will delay, will deferred.

[00:12:19] Deferred.

[00:12:19] No, we will tell you later type stuff.

[00:12:21] Ah.

[00:12:21] But of course those who give you scholarship always want you to commit early.

[00:12:26] So at that point, you know, Indiana was one of my better choices at that point.

[00:12:30] And Indiana was a nice place in a sense.

[00:12:32] I knew some people who had lived in the Midwest and had recommended Bloomington as a nice town.

[00:12:38] Of course, Doug Hofstadter's book that you referred was, he was a IU prof at that point.

[00:12:43] And there was a pretty nice book that he had written which we had read at that point.

[00:12:48] So it just felt like, you know, it seemed like a nice place to go.

[00:12:52] And the other interesting thing that people told me and I used to swim a lot at that point.

[00:12:57] IU was known to be a very good swim school.

[00:13:00] So at that point, the number of Olympic medals that students from Bloomington or Indiana had gotten

[00:13:06] were more than any other country by that time.

[00:13:09] Oh wow.

[00:13:10] And Mark Spitz was an alumni from there and otherwise.

[00:13:13] Oh, Spitz is from...

[00:13:14] Yeah.

[00:13:14] And the reason is that there was a coach out there, a guy called Doc Councilman, who pretty

[00:13:19] much was the sort of the legend in the, from the about the late 60s to nearly early 80s.

[00:13:28] He was very well known as a swimming coach and he coached a lot of students who eventually

[00:13:33] went up to Olympics.

[00:13:34] Not that I had any chance of being a swim team person at all.

[00:13:38] I mean, when you look at Indian records or anything you can do in India and you know,

[00:13:42] I was swimming in IIT.

[00:13:44] So our numbers were just modestly okay for IIT standards.

[00:13:48] But the US swim team is a completely different.

[00:13:51] Different argument.

[00:13:53] Even this Olympics, I think there was a record, I mean, a tracker of how many medals each of

[00:13:59] the universities has won.

[00:14:00] And they could beat countries all of them, including Stanford, right?

[00:14:03] So they, I think they invest a lot in, even in ensuring the incoming batches have great

[00:14:09] sports faculties.

[00:14:11] From there to HP Labs and the beginning of what would have become the formation or foundation

[00:14:16] of what then becomes Persistent, which is what we're here to chat about today.

[00:14:21] What about the US and what about the experience that HP Labs gave you became those foundations

[00:14:29] of what transformed itself to Persistent?

[00:14:32] So, Indiana was a very nice experience for me.

[00:14:34] Meaning as I said, you know, I grew up in Bhopal, which is very cocooned.

[00:14:38] IIT was again quite wild, learnt a lot of things there, especially, you know, getting to hack

[00:14:43] your way through is one of the greatest skills you learn in an IIT context is that, you know,

[00:14:48] there's always, you know, it's very competitive, but if you manage you want flunk kind of a setup.

[00:14:53] So, you know when to optimize, how much to optimize.

[00:14:55] At Indiana it was very different.

[00:14:57] There was a very small number of classrooms.

[00:15:00] You were working very closely with a professor and an advisor.

[00:15:04] So I did a lot of work actually at that point, learning new things.

[00:15:07] And there was a, it was a very interdisciplinary place as such.

[00:15:11] Bloomington is a campus was very well known for logic, math, science, those kinds of things.

[00:15:18] And no engineering actually.

[00:15:20] We had, Purdue had all the engineering in Indiana and IU was all the liberal arts, fine arts type stuff.

[00:15:27] So I got a chance to be exposed to things that, you know, in IIT context you are always like,

[00:15:32] you know, all those humanities, social studies and all are not for, they're just a check mark.

[00:15:38] Yeah.

[00:15:38] Here there was a good opportunity to meet people who were doing PhDs or working in sociology, physics,

[00:15:44] economics, whatever else, and got a better appreciation for all these other areas at that point.

[00:15:49] And I feel, you know, we miss so much because of our unidimensional approach both in school and college,

[00:15:55] which was very nice in Bloomington.

[00:15:58] I started very early on to work in database areas.

[00:16:01] My professor, he joined, after my first year, he joined, he came over to Bloomington

[00:16:06] and I pretty much latched onto him fairly early on.

[00:16:09] And he, I was his first graduate student in a sense.

[00:16:13] So it was a young fellow, three years older than me and he had just joined.

[00:16:17] And I worked very closely with him.

[00:16:19] We worked a lot very closely and we were, we really, I really worked quite hard at that point.

[00:16:23] And it was a good, very good experience for me to do a PhD while I was there in Bloomington.

[00:16:29] And I learned many things, but also I was able to network quite a bit while I was in a PhD program.

[00:16:35] So I attended several data conferences during that period as a student.

[00:16:40] I met a lot of people and I found that, you know, as a grad student in an area,

[00:16:44] you get a chance to meet advisor, advisor's friends and other people.

[00:16:48] So I really built a good network at that period to the extent that some of those people I met during that time

[00:16:54] both helped me for getting business within Persistent and also are still good friends.

[00:17:00] And I stay in touch with that community quite a bit.

[00:17:03] This is typically known as the database community.

[00:17:06] And for, for example, about three, two weeks, three weeks back, I was in Guangzhou for the 50th International Very Large Database Conference,

[00:17:14] VLDB as they call it.

[00:17:15] And I'm on the board right now there as a trustee and I have now made it a point to attend VLDB every year.

[00:17:22] So it gave me a chance to sort of stay in touch with the data community in some sense and all that.

[00:17:27] And my first job that I got was at HP Labs.

[00:17:31] HP at that point was kind of one of the pioneers in the Bay Area already.

[00:17:36] It was a 50 year old company by then, but it was very well known for being ethical, being kind of a very special place in a way.

[00:17:45] And Bill and Dave, who were the founders of HP, were still around when I joined HP.

[00:17:50] And they would talk a lot about the HP way and HP was very different from IBM even in those days and especially in that time.

[00:17:58] And I had a paper in one of the VLDBs in Los Angeles in 88.

[00:18:03] And I was visiting the Bay Area before going to Los Angeles.

[00:18:07] And I visited IBM and I visited HP.

[00:18:10] And there was an opening for doing some data related work.

[00:18:14] And I got a job from them almost eight months before I started working with them.

[00:18:18] So, but it was a very nice experience for me to move from Indiana to California.

[00:18:24] All of a sudden you see a very different kinds of action and activity.

[00:18:28] And you see all the hustle and bustle, people trying to talk about various things.

[00:18:33] Like it's like a geek paradise to be in the Bay Area at that point.

[00:18:37] And HP Labs was a very nice place actually.

[00:18:41] The company was doing very well.

[00:18:43] It was a very engineer driven company, no MBA kind of situation in there.

[00:18:48] And my research lab was very nice.

[00:18:51] We had mostly, I would say only PhD guys there.

[00:18:55] And it was a very fun place in the sense my manager was very enthusiastic about what we were doing.

[00:19:02] And he really helped a lot in trying to get the team to happen.

[00:19:05] And we did some very good work while we were at HP Labs.

[00:19:09] But you know, while my job could have lasted for a long time,

[00:19:13] I was sort of very clear I wanted to come back to India.

[00:19:16] And I actually told my manager very early on within the first three to six months

[00:19:19] that I would not want to process beyond my 18 month of student visa, which I had for practical training

[00:19:27] to get into a permanent job.

[00:19:29] So I was very clear that I was there to learn, but definitely I was moving on.

[00:19:34] This was still the time when I think engineers who wanted to stay were very sought after, right?

[00:19:38] People would like hold you back.

[00:19:40] But when you said I was very clear I wanted to come back to India, I mean, it's a fairly radical thought for the 80s.

[00:19:47] I mean, even now people ask me how come you came back 15 years ago?

[00:19:51] And they feel like the US is still the mothership of all opportunity for someone who's made it there,

[00:19:57] especially using a good education background and has a good job.

[00:20:01] What prompted that in the late 80s of all times?

[00:20:04] No, so two things. One was of course, you know, family and other things.

[00:20:08] And I just felt like if we don't come back now, we may not come back later.

[00:20:13] So that was also another push to say that, you know, let me get back before I get entrenched into the Bay Area.

[00:20:21] So definitely that was the other factor that was driving it.

[00:20:25] And I felt that if I had to take a chance, I should do it early.

[00:20:28] And of course, you know, there was always the belief in a sense that, you know, I talked to my professor as well to say that,

[00:20:36] OK, if I do come back for some reason, will you give me a postdoc or a teaching assignment?

[00:20:42] And I knew I could get a teaching job and I actually liked teaching quite a bit.

[00:20:47] So I was quite OK about that option as well.

[00:20:50] But yeah, so I had decided I would at least give it a chance to come back.

[00:20:55] And somehow things worked out and it just the timing worked for me.

[00:20:59] And as soon as you got back to India, you seem to have started persistent immediately.

[00:21:03] So you knew in your mind you wanted to be an entrepreneur, build something from the ground up, especially.

[00:21:08] I mean, now it's very easy for someone to throw a resume, throw the IIT degree, some work experience and look for venture capital.

[00:21:16] But that's the last 15, 20 year phenomena.

[00:21:19] This was an era where there was hardly anything called venture capital.

[00:21:23] You might have seen some of it in the Bay Area and been appalled that there's nothing like that in India.

[00:21:28] And again, some of our research suggests you managed to finance this with some form of a tax refund.

[00:21:34] So how did that and never easy to build with no capital.

[00:21:40] So I would love to hear how do companies of this nature when we feel the relative ecosystem today is spoiled with too much capital.

[00:21:49] How come it was built with almost no capital and literally 20 plus thousand dollars of capital?

[00:21:54] So actually what happened was that, so that one of the triggers for coming back also was that N. Withel, who was the secretary of the Department of Electronics at that time.

[00:22:06] He visited the Bay Area and he spoke at a group called SIPA, SIPA, which was Silicon Valley Indian Professional Association.

[00:22:14] This was before Thay became the main state.

[00:22:19] So he came over, he did a talk there.

[00:22:22] He explained that they're trying to look at India as software export and are trying to set up a software technology park.

[00:22:29] And one of the first ones that they were looking to set up was in Pune.

[00:22:32] And that all felt like, yeah, it made sense.

[00:22:36] So this was happening in February, March of 1989, I would say.

[00:22:42] 1990 is when he came to the Bay Area and he spoke about all this.

[00:22:46] And yeah, so he was there and we heard him and said, well, looks like I should be thinking about exports rather than looking at Indian Mart.

[00:22:55] So that became very clear to me by, say, by, you know, April, May that year.

[00:23:03] And when I was trying to do this, I asked my father to go check out with CDAC, which was here, which was the nodal agency for that,

[00:23:10] to see what would it take to set up a software technology park.

[00:23:13] And they said that for you to start into the software technology park, you must have a company incorporated.

[00:23:20] So my father actually incorporated the company in March of 1990.

[00:23:27] And I was still in the US at that time.

[00:23:29] So I wrote to HP, my boss, and told him that, you know, I was thinking about this.

[00:23:33] So I got permission to, I just let him know that I was going to join a company that my father had started.

[00:23:39] And I got an approval from that.

[00:23:42] So that was how that thing got started.

[00:23:45] My first two contracts that I got were actually quite interesting.

[00:23:49] And they were, I laid the seeds for them, so to say, before I got back.

[00:23:53] So when I came back, I had two customers potentially who were willing to work with me once I got things set up.

[00:24:01] So that was a good benefit for me.

[00:24:03] Yeah.

[00:24:03] And the first one that I got was a company called Data Parallel Systems.

[00:24:08] And this was a friend in Bloomington, in Indiana.

[00:24:12] He was working on parallel computing and functional programming and parallel SIMD machines, as they called it.

[00:24:21] Single instruction, multiple data and things like that.

[00:24:24] And he wrote many SBIRs, these small grants that you get from the government.

[00:24:29] He wrote seven of them.

[00:24:30] And he wrote one of those which was written with me.

[00:24:34] And of the seven, only one got funded.

[00:24:37] That was the one I wrote with him.

[00:24:39] Which was to build a database on a machine of that kind.

[00:24:42] So by the time I was coming back, he had gotten an affirmation that he was going to get the money.

[00:24:49] And he had identified Masspar as a potential company that manufactured the hardware.

[00:24:54] So he felt that, okay, I'm not getting money for the hardware.

[00:24:57] Let me build a database for this particular massively parallel 64,000 processor machine.

[00:25:05] Right?

[00:25:05] So it was, that's how that happened.

[00:25:08] And then I was going back.

[00:25:09] I said, hey, you know, I would have loved to join you in your business.

[00:25:12] But now that I'm going back, I will still be willing to work with you from India.

[00:25:16] And he was okay about that.

[00:25:18] So that is how one contract was in place.

[00:25:22] And another one that happened was another company called O2 Technologies.

[00:25:27] It's a French object database company.

[00:25:30] And I had met the founder Francois at a conference in Austin when I was a grad student.

[00:25:36] And he was doing a summer sabbatical during June, July of 1990 in the Bay Area at HP Labs.

[00:25:44] And I mentioned to him that I was planning to go back and asked him if he would give me work.

[00:25:49] And he said, yes, if I actually went back to India, then he would find work for me.

[00:25:54] And he lived to it.

[00:25:55] So those were the two earliest projects that got started.

[00:25:59] Or at least I had assurances that I would get that work going.

[00:26:02] But before I got things going, I had to get set up.

[00:26:05] So I came back to India actually in October 1990.

[00:26:10] And yeah, from then on, you know, it's been a...

[00:26:13] But you know, life in 90 was quite tough actually, you know, for...

[00:26:17] A lot of people ask you whether...

[00:26:19] Is this a good time to start a business?

[00:26:22] Yeah.

[00:26:22] Why should you do that?

[00:26:23] A lot of these businesses get set up not necessarily thinking about all those things.

[00:26:28] If...

[00:26:29] You can time things to...

[00:26:30] Yeah.

[00:26:30] To suit them up.

[00:26:31] So I came back to India in mid-October 1990.

[00:26:37] And within a week after coming back...

[00:26:39] So when I came back actually, Vishwanath Pratap Singh was the Prime Minister of the country.

[00:26:45] And within a week, the Rathayatra started.

[00:26:49] And by the end of October, it was very clear that the government was not going to survive.

[00:26:55] And early November, the government crashed.

[00:26:59] New government which was led by Chandra Shekhar started.

[00:27:02] India was in a pretty sad situation at that point, right?

[00:27:06] Meaning...

[00:27:07] It is very hard to imagine to believe at all what India and IT can be.

[00:27:13] To give you some examples.

[00:27:14] We were set up in the first software technology park, which was in Pune.

[00:27:20] The reason we needed to do these software technology parks, and this was modeled after SIPs.

[00:27:25] Is that we had 300% duty at that time.

[00:27:28] So importing any equipment, we were completely not competitive.

[00:27:32] So they had to create these SIPs like things where you can import equipment and do work out of there.

[00:27:39] Without having to pay duties because within that period you are considered being on a foreign territory.

[00:27:44] Yes.

[00:27:45] So they were following that model and so you had to work from the place, you had to go in.

[00:27:50] Customs official would be sitting outside the thing, at least conceptually.

[00:27:54] Yes.

[00:27:54] And he has to let you in, check everything, where you go out, all that stuff.

[00:27:58] Yes.

[00:27:59] So software technology park, Bhosri, which is where it was set up in Pune, they took 8,000 square feet.

[00:28:05] And distributed to 14 companies.

[00:28:08] Okay.

[00:28:09] I didn't get any space in that because we didn't have a company incorporated when they did the allocations in, you know, March of 1990.

[00:28:17] But then they took the place, gave everyone table seat, two seats, four seats, kind of incubators, very small ones.

[00:28:25] And clearly from that point of view, you know, India IT software, total India software export was less than $30 million.

[00:28:33] Yeah.

[00:28:34] So, you know, for the government to imagine what it would be, you know, small things here and there.

[00:28:39] So it was pretty small.

[00:28:41] And then if you think about it, you know, India getting a telephone line would take six months to a year or two.

[00:28:49] Correct.

[00:28:49] I got my telephone line in, landline in three months because, you know, I was able to bring in some foreign exchange and there was a foreign exchange quota which gave priority.

[00:29:01] And my father's classmate was the head of Pune Telephones.

[00:29:04] So double benefit, I could get my phone in three months.

[00:29:08] Okay.

[00:29:08] So India at that point was not a very friendly place for doing anything, 300% duty, software, equipment were pretty hard.

[00:29:17] Though I must say that we had a lot of very innovative companies building everything, including assembling PCs to building, you know, mini computers.

[00:29:32] Yeah.

[00:29:32] We had our own operating systems, you know, HCL and Bipro and all.

[00:29:36] They had their own complete systems that they had built from scratch.

[00:29:39] It was before the PC days.

[00:29:41] Yeah.

[00:29:42] But yeah, meaning it was a very difficult time to imagine doing software in 1990.

[00:29:47] And again, what we read about you is like you were someone who wrote code, enjoyed it, shipped to customers yourself.

[00:29:58] And of course, we've reached 2024 where you're like, you know, the founder but more like a chairman, don't like, you know, operate.

[00:30:05] This has been a long journey.

[00:30:07] Yeah.

[00:30:07] And how does that, maybe walk us through the first steps of that evolution where you realize that suddenly this is a, I know we're going to talk a little bit about second orbit down this chat as well.

[00:30:20] But what, how did your orbit start shifting from being that original, you know, coder mindset, coder CEO to, you know, to who you've become today?

[00:30:31] So as I said, you know, I have a computer science degree.

[00:30:34] I have a PhD in computer science.

[00:30:36] I was a coder when I was working in the Bay Area.

[00:30:39] And I still like coding and I still track technology.

[00:30:42] I track computing.

[00:30:43] I track algorithms.

[00:30:45] I still read books on meaning pure computer science stuff.

[00:30:48] And I, if I get a chance to talk about it or teach, I do pick up on, you know, what is happening on algorithms or other things like that.

[00:30:56] So, so very much still quite hands on.

[00:30:58] I, I'm just reading a book and my advisor gave me last two weeks back.

[00:31:03] I met him on, it's called, you know, it's a deep learning sort of more like an algorithms type books.

[00:31:10] I'm trying to read that.

[00:31:11] So, so things like that.

[00:31:12] Yeah.

[00:31:13] I mean, that's part of what I do.

[00:31:15] It's in your blood tones.

[00:31:16] Yeah.

[00:31:16] I mean, it's what I'm trained to do.

[00:31:18] It's, I'm still very hands on technology related wise.

[00:31:21] Now, if you look at the company, yes, the company we started in 1990.

[00:31:25] So it's been 34 years.

[00:31:26] And this is a theory that I've, I've realized and I've found is that business growth is not a sequential thing.

[00:31:34] So you can't just draw a straight line or imagine there are 20 companies that start at the same time.

[00:31:39] I mean, all of them over a period of time will eventually grow to a certain size.

[00:31:43] Some grow faster, some grow slower.

[00:31:45] But the fact is, all businesses go through these S curves as I would call them.

[00:31:50] You do certain things, right?

[00:31:51] You see growth.

[00:31:53] And at a certain point that growth tends to flatten out.

[00:31:57] And then you have to do something different.

[00:31:59] In your own journey, I think the question I was asking is what are the usual challenges when you reach that plateau of the first S curve before you graduate to the second and the third and so on?

[00:32:10] Yeah, I mean, you have these plateaus at all levels, okay?

[00:32:13] Even large companies go through these plateaus.

[00:32:15] So if you look at Intel, for example, it's not growing right now.

[00:32:20] Boeing is going through some of its own issues.

[00:32:22] So every company goes through phases when, you know, you find that despite doing the same kind of things or doing everything that you might think you are doing always,

[00:32:31] company growth tends to flatten out, you run into difficulties.

[00:32:34] And at every stage, you have to reinvent yourself and change yourselves from moving from one orbit to the next orbit.

[00:32:42] So at Persistent, we see ourselves that we are in the sixth orbit at the moment.

[00:32:45] Sixth now?

[00:32:46] Yeah.

[00:32:46] Oh, wow.

[00:32:47] And we've had five different orbits.

[00:32:50] Every orbit has been very unique.

[00:32:52] You can feel the difference between what works in one orbit to the next orbit.

[00:32:56] What you do, how you behave, what team you have to have.

[00:32:59] And all of those things are sort of necessary, necessarily different.

[00:33:03] And you can feel the difference even within the company.

[00:33:06] And I can definitely see it.

[00:33:07] But not only me, if you sort of think about and ask the people, hey, it wasn't that different?

[00:33:12] People in the company will be able to show you the difference that happened.

[00:33:16] So every orbit goes through their own, its own nuances and idiosyncrasies.

[00:33:21] I know it's challenging to walk through all six, but if I may request you to use the persistent context to talk about what are the parallels be for an early stage founder?

[00:33:32] Correct.

[00:33:33] Who is going from first to second, max second to third kind of a thing.

[00:33:36] And then I'd love for you to think about the same question as a growth stage founder, which also you have been through.

[00:33:44] And maybe you want to take a pause at when the IPO happened.

[00:33:47] Maybe that was the true graduation for yet another orbit.

[00:33:51] But as a private company, we've seen the biggest challenge for founders in some sense is when the shifting has to happen.

[00:34:00] What you said is logical and something they understand is what I sense.

[00:34:05] But somehow, what are the external and internal elements that have to come together to make it happen is not very apparent.

[00:34:11] People say coaching, people say look at peers, but it's not as easy.

[00:34:17] So I'd love to hear your experiences on this.

[00:34:19] So yes, I'll share with you what happened at Persistent, but just want to make a comment that for the last almost.

[00:34:27] So I got invited by NASCOM at one event in 2009, where everyone was starting to focus on startups and large companies.

[00:34:35] So what happens to graduate small companies?

[00:34:38] Every company is not going to become a very large company.

[00:34:41] So what does it take?

[00:34:42] So I was forced to think about it and I created a program which we call Second Orbit right now.

[00:34:46] And I run this program quite systematically now.

[00:34:50] We have more than four or five hundred companies that have gone through this program.

[00:34:54] This is once a year, twice a year?

[00:34:56] No, so I have right now a one year program.

[00:34:59] Oh, so four years.

[00:35:00] So I teach once a month for a year.

[00:35:02] And then through NASCOM we are doing two day workshops that we repeat after six months.

[00:35:09] So this is something even our companies can access.

[00:35:12] Yes, very much.

[00:35:13] So that's what it is.

[00:35:14] Let me comment a bit on what happens in the first orbit and how it starts.

[00:35:19] So normally what happens is that companies start with founders and their energy and passion.

[00:35:25] Yeah.

[00:35:25] So the early stage company, your job is to do what comes your way and you're basically trying to find product market fit.

[00:35:32] So during the finding of the product market fit, you have to respond to the situation and basically do what it takes is really what the goal is in the first orbit.

[00:35:44] Yes, you have a plan.

[00:35:46] You go through all of that, but you really are driven by energy and responding very quickly to changes in the market conditions.

[00:35:54] And what happens is that the founder, when he starts the business, he has a network or a set of easy business that will come his way.

[00:36:05] And some of that will come his way, but at a particular point, you know, like Jeffrey Moore calls it, you reach a chasm and you're not able to grow beyond that.

[00:36:15] So what happens is that you reach a stage where the what the founder can do on his own.

[00:36:21] He has done and the company reaches a certain plateau where, you know, it can't grow anymore.

[00:36:28] The founder has pretty much maxed out.

[00:36:30] So the goal is how do we help founders build their capabilities and skills so that they can build a muscle that they need for growing from first orbit to the second orbit.

[00:36:42] Now, let me tell you what are the most important things that you need to do to move from first orbit company to a second orbit company.

[00:36:50] So as I said, in the first orbit, your goal is to do what you can or what you must.

[00:36:56] You are responding to requirements.

[00:36:58] By the time you come to the second orbit situation, you know that you're not going to just die that easily.

[00:37:02] You're going to be fine.

[00:37:04] You have a product.

[00:37:05] You are selling some things, but you have maxed out.

[00:37:07] So at this point, sometimes people start to think, oh, maybe I should do this or that or whatever else.

[00:37:12] But the reality is that, you know, it is very important to be a leader in the market.

[00:37:18] And the way I look at it is that in any market, right?

[00:37:21] And there's enough theories about it from management books to everyone else that says that in any market can have three leaders.

[00:37:28] They get typically 70% of the market share and they dominate the market.

[00:37:32] Everyone else gets the rest.

[00:37:34] So for any business to be successful and really get the benefit of the market and the tailwinds, you really need to become a leader.

[00:37:42] You need to be in the top three in some sense.

[00:37:44] Now, if you're running a smaller business, what does it mean to be a top three?

[00:37:48] So we think still leadership is very important.

[00:37:51] Creating that clarity where you define the market so that you have 20% market share is what we define as creating leadership.

[00:38:01] So what I recommend to companies who are at this first orbit is to be very clear about what is the market that you think you can win in, that you can dominate to establish a leadership position.

[00:38:13] By leadership meaning you should, so let's say you are doing a, let's say $20 million business and you aspire to, let's say be $50 million at the moment.

[00:38:23] So you say, okay, I need to be clear to understand what is the $250 million market that I'm playing, where I get the 50 million that I'm looking for, where I'm 20% market share.

[00:38:35] Trying to go after a trillion dollar market when you are at that size just doesn't work because if you know the market, then you know what your offering is, you know why people are buying from you and why people come to you.

[00:38:46] So that works out as a very important thing.

[00:38:49] So leadership is the first thing that we tell people.

[00:38:52] The other interesting thing that we have found, which is something I saw as well at Persistent and I can explain the leadership thing.

[00:38:59] Even in the Persistent context, we had to do that. Not having done that would have hurt us.

[00:39:04] So when we treat the transition to second orbit, we are very clear that we want to establish leadership in a product area.

[00:39:10] The second thing that we tell companies is that you have to move from my company to our company.

[00:39:16] When you are a founder driven company, everyone works for the founder.

[00:39:19] It's the founder's mission and the founder's vision.

[00:39:22] But when you get to the second orbit, everyone needs to work for the company.

[00:39:25] The founder also must work for the company.

[00:39:27] Yeah, I agree.

[00:39:28] And it's the company's vision and the company's mission.

[00:39:31] And as you look at that kind of a situation where it's the company that comes first, you as the founder, if you want to be the CEO of the company, you should be the CEO of the company as long as you're the best person to be the CEO of the company, not because you're the founder.

[00:39:46] Absolutely.

[00:39:47] So that particular transition where you move from my company to our company is sort of very critical.

[00:39:52] And that's what we help people in the second, by the time you get to the second orbit.

[00:39:56] The third thing that we tell companies is, and we help them do this, is to help a set of governance that is needed.

[00:40:03] Because when you are a small single person company, typically you can hack your way through and you are the board, you are the boss, you decide.

[00:40:11] And if you feel like doing something else, you just do it.

[00:40:14] And that's what is the energy that brings speed to the small businesses.

[00:40:18] By the time you get to the second orbit, you want to have structure, you want to have governance, you want to have board, you want to have independent directors.

[00:40:25] All of those kinds of things start to become very essential.

[00:40:28] And we help companies set those kinds of things.

[00:40:30] And of course, there are many other things we tell people.

[00:40:32] But these are the three, I would say, the most important things that I would tell any startup founder about what they need to do to scale.

[00:40:39] It's remarkably similar to what we kind of advocate.

[00:40:42] We've learned the hard way as well.

[00:40:43] I don't think we knew all this when we started a VC firm 14 years ago.

[00:40:47] But as you see through the conditioning of what succeeds, what fails, what your entrepreneurs did well, we didn't have as structured a framework as yours.

[00:40:57] But we try to teach it, but not in a structured framework.

[00:41:01] I would love for some of my founders to get exposed to the program.

[00:41:03] Yeah, sure.

[00:41:04] We have enough videos and also we have a course as well.

[00:41:08] Relating to sort of persistent and I think this is relevant here.

[00:41:11] So I'd say our first orbit was pretty much from 1990 all the way till 2000, almost 10 years.

[00:41:19] 10 years, okay.

[00:41:20] In 2000, we were a 100 people company.

[00:41:23] Okay.

[00:41:24] Just 100 people company.

[00:41:25] We were doing very well.

[00:41:27] Approximately what scale revenue size at that point?

[00:41:30] I don't remember about 6 million maybe, 6, 7, 5, 7 million.

[00:41:32] But we were 35% profit margin company at that point.

[00:41:36] We had at least six PhDs out of the 100.

[00:41:38] I'm going to ask sort of an obvious but delayed question.

[00:41:41] Just so that people can contextualize persistent.

[00:41:44] Now, at that juncture, if people ask what does persistent do?

[00:41:47] What is the business that…

[00:41:49] What we were doing in the early days?

[00:41:50] Yeah.

[00:41:51] So early days, I had a database background and we were working with Silicon Valley data

[00:41:57] product companies.

[00:41:58] Building product engineering work for them.

[00:42:00] But not necessarily knowing that we were doing product engineering.

[00:42:03] And when did the term OPD kick in?

[00:42:05] I'll explain back to you.

[00:42:06] I'll be pleased, sir.

[00:42:07] But we were working…

[00:42:08] So, as I said, you know, my thesis was on query processing and query optimization

[00:42:13] database systems.

[00:42:14] There were a lot of database companies at that point.

[00:42:16] So, I would go and convince people that, you know, hey, you have this need for a product.

[00:42:22] Your product can be improved if he helped you do this and that.

[00:42:25] So, we were working with many database companies building components that would go into the query

[00:42:32] engine or the data processing engines of the companies.

[00:42:35] And we did some pretty esoteric work actually.

[00:42:37] We implemented bit vector indexes for the first time into red brick systems and other places.

[00:42:43] We did…

[00:42:43] As I was saying, we started out building out as query processor for a 64,000 processor machine.

[00:42:48] So, a bunch of, you know, fairly complicated projects but mainly in the database query area.

[00:42:55] Working with database manufacturers, not users.

[00:43:00] And one of…my third customer was Microsoft.

[00:43:03] There actually we did not start with databases but we worked with their compiler team.

[00:43:07] Or maybe another time I'll tell you what we did for them.

[00:43:10] But moving to this sort of thing, what happened in 2001 was two tail headwinds, very strong ones.

[00:43:17] One was that dot com which was…so, most of the companies I was working with were all Silicon Valley

[00:43:24] startup or data companies basically.

[00:43:28] And all of a sudden everyone ran into trouble with the dot com bust.

[00:43:31] Yeah.

[00:43:32] And all of a sudden market just slowed down.

[00:43:35] The other thing that happened is that Y2K which was a big thing for everyone in the industry at that point.

[00:43:43] Y2K got done.

[00:43:44] Yeah.

[00:43:45] So, very smartly most Indian companies were able to reposition the folks who were doing Y2K to doing other work and offshoring started to become an interesting idea.

[00:43:56] IT partnerships, all that stuff started to become very important.

[00:43:59] So, when the market started to come back up everybody was talking IT, IT and all that.

[00:44:05] And Y2K had completed.

[00:44:07] We had not touched Y2K at all.

[00:44:08] I just didn't…I just felt it was below my dignity to work on Y2K projects.

[00:44:13] Yeah.

[00:44:13] So, we never touched it.

[00:44:15] Yeah.

[00:44:15] But anyway, so when market started to come back we were about 125 people and all of a sudden everybody was trying to come in and say IT this, that, I can do that.

[00:44:25] So, we decided that we had to differentiate ourselves from everyone else.

[00:44:31] So, we went through a fairly sort of couple of years we spent trying to figure out how to do this and we created this category around outsourced product development and got called OPD and all that.

[00:44:42] And we defined the category.

[00:44:44] We got MR Rangaswamy, you might know him.

[00:44:47] MR was big time on India Spora but he used to run Sand Hill at that time.

[00:44:51] So, it was investment plus marketing plus…he used to run conferences.

[00:44:57] So, he helped in creating a conference called Software.

[00:45:00] So, instead of talking about IT outsourcing, we created product outsourcing.

[00:45:03] And we differentiated it by defining it differently saying that in an IT project you have well defined requirements and you do tradeoffs between time and money.

[00:45:14] But in a product the first thing you decide is when you want to ship the product.

[00:45:19] Then you decide how much you want to spend.

[00:45:21] And you build the best possible product within the time and money.

[00:45:24] So, your requirements are the variable and everything else is fixed.

[00:45:27] Now, if you go tell this to an IT person who is running a ERP implementation, he doesn't get it.

[00:45:34] But if I go to a product company and tell the product engineering guy that this is how I do product development, he immediately gets it.

[00:45:41] And this is sort of eventually got called Agile and in the early 90s they had other names for this evolutionary software, all these other things.

[00:45:48] But in the 2001 to onwards it started being called Agile Development.

[00:45:53] But software product companies have always been in this model of build to a timeline rather than to the requirements.

[00:46:03] And was it unique to Persistent and India that there weren't too many shops at that juncture and you took this, that same approach that you spoke of getting a big market share of something that you could uniquely.

[00:46:13] It is a smaller market but a unique and different market where you have leadership and you can claim leadership.

[00:46:20] So, yeah, there weren't that many companies.

[00:46:22] Most companies at that point were trying to sell to banks or to large companies doing the ERP implementations or this implementation or that implementation.

[00:46:35] And it was mostly IT projects.

[00:46:38] So, we stayed away from completely IT projects and implementation projects at that point.

[00:46:42] We were focused predominantly on product engineering.

[00:46:45] So, I will help you build the product.

[00:46:46] So, even in many companies, we would work on the product engineering side, the CIO.

[00:46:51] So, my customer would be a VP engineering or CTO in the company.

[00:46:56] And most of the IT India was selling to CIOs.

[00:47:00] And we found that they were two different worlds actually.

[00:47:04] And that really helped us in creating that.

[00:47:06] And the other interesting story, and this is something that if you look at Innovators Dilemma and all the other places they talk about it.

[00:47:12] See, what happens is that if I am a large company like HCL and Wipro who were both very large by then.

[00:47:18] Yeah.

[00:47:19] And also had much larger presence in the product engineering space, even by any means.

[00:47:24] They would never go out and say that we are product engineering companies.

[00:47:28] Because it would have compromised their other business.

[00:47:31] So, we could claim that we are the leaders in outsource product development because that's all we do.

[00:47:37] And the other thing at that point we did was we were only hiring computer science people.

[00:47:42] And we were hiring programmers.

[00:47:44] And we would not talk about being analysts and all those kind of things.

[00:47:48] We said we are geeks.

[00:47:48] We roll the sleeves.

[00:47:50] We write code with you.

[00:47:51] So, that was our unique point.

[00:47:53] And that really helped us in positioning us in a little differently from most of the other traditional IT companies.

[00:48:01] We were one doing a lot of body shopping if you might call it that.

[00:48:05] And it was mostly driven by IT projects.

[00:48:09] And we actually, I did my first H1B for our sales guy in 2003, almost 13 years at the company.

[00:48:16] We were not sending people on H1 visas and all that stuff at that point.

[00:48:21] And so, would you say that today as well, the persistence of 2024 is exactly that?

[00:48:27] It's not exactly that.

[00:48:29] We are now a $1.4 billion company.

[00:48:31] No, no, meaning in terms of how you define your company.

[00:48:34] But the DNA of the company very much continues to be driven around engineering and product engineering work.

[00:48:39] What we now do is full life cycle.

[00:48:41] We do digital engineering and all that.

[00:48:43] So, the transition in a sense that I must say, I would claim is that, you know, say it was our fourth orbit.

[00:48:50] And how much did the, so going back to the orbits, the second orbit lasted for how long?

[00:48:54] Well, second orbit was going doing fine till 2008 when we ran into another glitch in some sense because of the global financial cancers.

[00:49:04] Yeah.

[00:49:05] And, you know, during 2001, I had a kind of a playbook of how to handle the bad times.

[00:49:14] Hmm.

[00:49:14] So, I sort of picked that playbook and really ran with it.

[00:49:18] Is that public?

[00:49:19] Yeah, I mean, I can share with you what the simple thing in there was.

[00:49:22] So, see what happened was in 2000, and I'll give you the story behind it.

[00:49:26] So, in 2000, I was struggling to find new work.

[00:49:29] All my customers were slowing things down or shutting things down because that's how what happened in the white just after the dot-com burst.

[00:49:37] So, I was talking to my friend Ravi Venkatesan who is kind of now well known.

[00:49:41] Yes.

[00:49:42] He used to be here at Cummins and I was mentioning this to him.

[00:49:44] And he said, you know what, going after new customers right now, you'll not get them, but you'll lose your old ones as well.

[00:49:50] So, I started to think a little differently.

[00:49:53] I said that instead of thinking about customers as companies, I should think about customers as people in the company.

[00:49:58] And let me work with them and work with them till the end and basically not necessarily go look after new work, but be more willing to accept what comes from the ones that we already had.

[00:50:10] So, double down on the existing customers rather than go after new ones.

[00:50:13] A little counterintuitive, but really helped us a lot.

[00:50:16] So, after the market came back up, all those people I worked with at that point, they felt like we lived with them.

[00:50:23] So, when they moved to other companies or whatever, they took us along with them.

[00:50:28] And that really helped us seed up many projects that happened because of that as well.

[00:50:33] So, in 2008, I sort of very quickly said people are starting to come back for discounts and all that.

[00:50:38] So, I told people that, you know, in the company that don't give discounts without meeting CEOs.

[00:50:43] So, I used that to get 150 CEO appointments.

[00:50:46] Now, if you had to think through persistence business at that point, our customer was VP Engineering and CTOs, not CEOs.

[00:50:53] We didn't know, CEOs didn't know what we were doing for them.

[00:50:56] Go to them and say, oh yeah, it's great to know that you guys are working with us.

[00:51:00] And yeah, VP Engineering, John is taking care of you.

[00:51:03] I'm sure everything is fine.

[00:51:05] But it's still all the same, I decided to go meet 150 CEOs.

[00:51:09] And I learned a lot from there.

[00:51:11] And we really transformed ourselves a little bit to move beyond the second to the third orbit at that point.

[00:51:17] So, the learning that I got from meeting 150 CEOs, which I found very interesting, was that CEOs think very differently from non-CEOs.

[00:51:26] And how do CEOs think differently?

[00:51:28] So, the first thing that I find is that CEOs are very interested in one, the top line, not the bottom line.

[00:51:35] You might say whatever you want to say, but no CEO will say that, you know, I don't care about the top line.

[00:51:41] I need new business.

[00:51:42] That is his number one priority.

[00:51:44] The second thing I found is that the CEOs typically are very good at picking those small number, let's say five to seven areas that are their personal projects.

[00:51:57] Everything else they delegate.

[00:51:58] So, if you are not in those five to seven projects or whatever, then the CEO is not interested in meeting you or even following up with you.

[00:52:07] And the third thing I found is that the CEOs want to network and are willing to make introductions and meet people just for the heck of it.

[00:52:18] Even if, you know, whatever, they may or may not help the business directly, whatever, they like to network.

[00:52:23] That's a superpower.

[00:52:25] They like to network.

[00:52:25] Yeah.

[00:52:25] They are in the middle of things.

[00:52:28] So, I found these three observations to be very interesting and I said, well, this is good.

[00:52:32] This is one for me.

[00:52:33] If I am the CEO, I need to be aware of these three things.

[00:52:37] But more importantly, it changed our business in different ways.

[00:52:39] The first thing I realized is that the product engineering work, while it's very important and critical, the CEO doesn't care about it.

[00:52:47] It's the VP engineering.

[00:52:48] Only in the startups you get the CEOs who are also VP engineering, but large companies typically, the VP engineering is someone else.

[00:52:56] So, I figured what can I do that would be relevant to get the CEOs interested?

[00:53:00] Hmm.

[00:53:01] So, we started to move from being responsible for building the product to saying, we'll do everything around the product.

[00:53:07] So, we'll help you deploy it.

[00:53:08] We'll take you to customers.

[00:53:09] We'll give you information about what's happening in the market.

[00:53:12] A bunch of other things that CEOs are more interested in.

[00:53:14] So, that is one important thing that I changed.

[00:53:17] And we said, okay, we'll be full service.

[00:53:20] We'll not just do product engineering part, but we will do the entire lifecycle including deployment, testing.

[00:53:26] We'll take on end of life products.

[00:53:29] We'll do whatever the CEO also cares about.

[00:53:32] Understood.

[00:53:33] So, that was very, very valuable and that I found very useful.

[00:53:36] The other thing what happened was before that, when we would talk about persistent, I would be very careful about mentioning who we work with or what we do with anybody.

[00:53:44] And the fact that I know other people who are their competitors and all that.

[00:53:48] But after meeting CEOs, I realized that they really want me to know.

[00:53:51] They want to know who I know.

[00:53:53] Yeah.

[00:53:53] And my Rolodex at times can be far more effective than their Rolodex.

[00:53:58] Because, you know, I'm meeting all my customers who are all the who's who are the large tech companies.

[00:54:03] And within a trip of two weeks to three weeks, I would go meet all of them.

[00:54:07] So, I was in touch with what's happening at this company, that company, third company and all that.

[00:54:11] So, that was very useful for me.

[00:54:12] So, I found that my ability to network CEOs of mid to large companies was better than other channels that they had.

[00:54:20] So, I really used that also to get to know them.

[00:54:24] And the other thing that happened was, you know, I sort of could see what's happening.

[00:54:28] So, at that point, I called out that cloud analytics, mobility and collaboration would be the top areas that picked up into smack later on.

[00:54:37] And we sort of doubled down on that.

[00:54:38] So, a lot of benefits of the global financial crisis and meeting the hundreds of CEOs that I met.

[00:54:44] And this was the beginning of the third orbit.

[00:54:47] Third orbit.

[00:54:47] At that point.

[00:54:48] And the fourth orbit, what happened was that we realized that, you know, product engineering was doing well.

[00:54:54] But Mark Andreessen had written this article about the software retail world and all that.

[00:54:59] So, everyone wanted to become a software company.

[00:55:03] So, what we realized is that, hey, we have been working with companies whose business is software.

[00:55:09] Let us also start doing the same kinds of things for those who want to become software driven businesses.

[00:55:15] So, we migrated from being just working for software companies to working with companies who want to be a software business in a sense.

[00:55:25] So, that's how the next orbit happened.

[00:55:27] And today you would say that mixes how dramatic has it gone to like 50%?

[00:55:35] I think, say, we still have about 40% of our business coming from pure product companies, building products for them.

[00:55:41] For the rest of the companies, we actually build products or software like a product.

[00:55:49] But they're not in the business of selling that software.

[00:55:51] They use that software for their businesses.

[00:55:53] These would be in healthcare, insurance, banking, all these kinds of companies.

[00:55:57] Understood.

[00:55:58] And now quickly, the one thing that I didn't touch upon and I would love to hear a little bit about before we move towards the end is you did actually take venture capital somewhere along the way.

[00:56:09] How was that part of the journey?

[00:56:11] What is the kind of scale?

[00:56:12] Just to give people a sense of how tiny numbers were back then, early 2000s.

[00:56:18] So, my first round of VC investment happened with Intel capital.

[00:56:23] This was in 2000, 2001.

[00:56:25] So, that was the first orbit to second orbit transition as well.

[00:56:28] And we took 3.5% equity from Intel for a million dollars.

[00:56:33] Okay.

[00:56:34] Which is not bad, you know, because we were a very small company, 125 people at that point.

[00:56:38] Yeah.

[00:56:38] $50 million valuation.

[00:56:39] Yeah.

[00:56:40] We got good branding because of that.

[00:56:44] We got, you know, we became part of the Intel portfolio.

[00:56:47] Intel had a lot of companies in their portfolios.

[00:56:49] We got to meet a lot of companies who would attend their shows.

[00:56:52] So, that was very, very valuable.

[00:56:54] And that was my first one.

[00:56:56] The second time I did the equity was in 2005.

[00:57:01] At that point, I was again trying to scale and business was good, but we had certain other challenges.

[00:57:08] I was trying to recruit more in the US and I thought having someone who is US based who could be part of the board and the company would be good.

[00:57:17] So, that's when I went to Pramod and Naveen.

[00:57:20] Yeah.

[00:57:21] So, Naveen Chadda was at that point with Gabriel Venture Partners.

[00:57:24] He came in and then I said, man, you have to…

[00:57:27] This was before you went to Mayfield.

[00:57:28] Yeah, before you went to Mayfield.

[00:57:29] And Pramod was…

[00:57:31] And Pramod was…

[00:57:32] Norwest.

[00:57:32] Norwest.

[00:57:32] He has always been Norwest.

[00:57:34] He was the Midas number one that year.

[00:57:36] Yeah.

[00:57:36] And he agreed to be on the board.

[00:57:38] So, he took a bigger chunk of those two.

[00:57:42] And we took about, let's say, $20 million, roughly a $100 million valuation.

[00:57:48] Wow.

[00:57:49] And some of it was secondary, some primary.

[00:57:53] Understood.

[00:57:53] And then you went straight to the public market.

[00:57:55] Yeah, we went to the public market in 2010.

[00:57:58] Yeah.

[00:57:58] So, once we had an IPO, once we had the VCs, it was very clear we had to do an IPO.

[00:58:03] In 2008, I tried it and we pulled back.

[00:58:07] So, we were in the midst of the global financial crisis.

[00:58:10] I had filed for…

[00:58:11] I had actually filed the papers.

[00:58:12] We were ready to go.

[00:58:14] But every time I would go to Mumbai to check, it was the stock price was going down by 10%,

[00:58:19] 15%.

[00:58:20] So, we just decided to pull it off and we tried again.

[00:58:23] We were really ready.

[00:58:24] We were the first company to go IPO after the global financial crisis in 2010, April.

[00:58:30] Okay.

[00:58:30] Our issue was very well subscribed.

[00:58:32] We got 93 times over subscription and all that.

[00:58:36] And which actually is not a good thing in a way.

[00:58:38] Meaning you left a lot of money on the table.

[00:58:40] That's the only time you get money in the company.

[00:58:42] That's true.

[00:58:43] But yeah, all the same it was…

[00:58:44] I'm guessing you haven't raised ever after that.

[00:58:46] Company has always almost been profitable then.

[00:58:48] No, company was profitable in the first quarter.

[00:58:50] Yeah.

[00:58:51] That's what I meant.

[00:58:51] We have never been not profitable.

[00:58:52] Yeah.

[00:58:53] So, you just raised for growth along the way.

[00:58:55] No.

[00:58:56] So, when we did the IPO, there were two or three drivers.

[00:58:58] One was many other companies were already public at that point.

[00:59:03] Second, the VCs who were in there were very keen to eventually get liquidity and IPO seemed like a reasonable way to get out.

[00:59:12] And overall, there was a belief at that point that you know, you're demonstrating good governance.

[00:59:18] Then you have access to…

[00:59:19] You're better seen by the market as a credible player if you are a listed company rather than a private company.

[00:59:26] You said you had a phenomenal IPO debut but then, you know, I was looking at the stock and maybe I'm…

[00:59:33] I don't know if I have perfect information around this but it looks like there's a remarkable compounding journey that's kicked in over the last five, ten years in the company.

[00:59:42] Actually, if you look from that point onwards, 2010, our stock appreciation has been more than Google stock appreciation.

[00:59:49] I saw some crazy growth.

[00:59:51] Over the last…

[00:59:52] No, meaning while…

[00:59:53] Okay, so let me explain.

[00:59:55] So, 2010 we went public and of course the company did well for… till 2018, 19 things were fine.

[01:00:02] Yeah.

[01:00:03] And then when the market slowed down, we slowed down as well.

[01:00:05] And in 2020, I sort of decided to move off from being CEO to chairman.

[01:00:10] And this was before COVID, 2019 is when I moved off.

[01:00:14] I would say that would be our fifth orbit.

[01:00:17] And when the market…

[01:00:19] So, I moved off and COVID happened.

[01:00:23] And all of a sudden, you know, during COVID, we had a new team, fresh team in place.

[01:00:28] And we pushed really hard and we got some amazing growth years during those two years.

[01:00:32] So, we had like 35% growth for two successive years.

[01:00:35] And the stock got completely rerated, market got rerated.

[01:00:39] And then on the stock has really done very well.

[01:00:42] So, again, you know, I must not take much credit for it.

[01:00:45] I was sitting in it for all through.

[01:00:47] But the CEO and the team actually grew up.

[01:00:51] The foundations are amazing.

[01:00:51] And you know, we had a good setup and the company was in a good position.

[01:00:55] We had good capability.

[01:00:56] So, now…

[01:00:58] Amazing transition now, you have like 10,000 crores plus of revenue,

[01:01:02] 80,000 crores plus market cap.

[01:01:04] So, again, congratulations on the journey.

[01:01:07] You know, I know you said you've got a lot of money.

[01:01:09] You've graduated out of the CEO role as you transitioned in 2019 to the Swift Orbit.

[01:01:16] I would love to hear what all has been happening in your life post that.

[01:01:20] So, I know that…

[01:01:22] The one we know of is a little bit of your teaching.

[01:01:25] You just love teaching.

[01:01:26] You've been educating founders.

[01:01:28] The second is, you know, I think trying to democratize entrepreneurship at the grassroot level with Diasra.

[01:01:35] Anything we've missed, I would love to get a peek into what's going on in Anand Deshpande's side.

[01:01:41] Right.

[01:01:41] So, you know, one of the…

[01:01:43] You know, as a founder, I was very hands on, completely doing nothing but persistent for almost 29 years, early 30 years, I would say.

[01:01:52] And, you know, when you move on and you get a new CEO, you want to give him room to operate because otherwise was the point.

[01:01:59] Right?

[01:02:00] Yeah.

[01:02:00] And I spent a lot of time talking to other potential CEOs and founders who had made that transition.

[01:02:07] And in the IT industry, you know, we had…

[01:02:08] I'm sort of the one and a half second generation in sense.

[01:02:11] And many of the senior people who run companies, I met them and learned a little bit about how to make the transition happen.

[01:02:18] And one of the key things they told me is that you should have enough other things to do.

[01:02:23] Otherwise, you'll keep interfering.

[01:02:24] Yeah.

[01:02:25] So I had to make sure I had other things to do.

[01:02:27] And so in 2013, you know, when I was sort of after IPO and all that, we felt that we should be looking at giving back as well.

[01:02:36] So I spent some time reading through what was going on with other philanthropists like Bill Gates and everyone else.

[01:02:42] And I found that they all suggested that you should pick a problem that is big enough, so big that it'll last for a long time and you don't have to keep looking for new things.

[01:02:51] So when you're doing personal family philanthropy, you want to think about long term projects rather than activities.

[01:02:58] So sitting from where I was, it was very clear that in India, and I see this even more that see if you think through it, we have about 25 million people at every age in India.

[01:03:08] We need about 16 to 18 million jobs every year.

[01:03:10] Yes.

[01:03:12] The statistics on jobs are very kind of very tough in a way in the sense that 98% of all businesses in India are less than 20 employees.

[01:03:20] 95% or less than one crore.

[01:03:22] So the Indian economy, 70% of all the jobs that happen in India are happening in these smaller businesses.

[01:03:29] Yeah.

[01:03:29] So the reality is that, you know, it's this, we talk about any large business, government, all this stuff.

[01:03:34] Real jobs happen when people find jobs for themselves.

[01:03:38] And for that, we need job creators.

[01:03:40] So how do you help job creators happen at scale?

[01:03:42] So that was a mission that I could relate to.

[01:03:44] Of course, we have spent now 13 years working on it.

[01:03:48] So it's called Deasra Foundation.

[01:03:50] And Deasra is D is for Deshpande.

[01:03:52] And ASRA are the initials of the family members.

[01:03:55] So Anand Sonali, our daughter Ria, and our son Arul.

[01:03:59] So that makes ASRA, so Deasra.

[01:04:02] And it's like giving ASRA support is what the Hindi connotation could be or Indian.

[01:04:08] But we call it Deasra Foundation and we are focused on nano entrepreneurs.

[01:04:12] Nano entrepreneurs being, we define them as those between 5 lakh rupees and 1 crore.

[01:04:18] And our job or our mission is to make sure that we get, we help these small businesses succeed.

[01:04:24] And we have so far 300,000 in our network.

[01:04:28] And the goal is to see how to get to, you know, 10 million actually.

[01:04:31] But the most short term goal that we have defined is we need to build systems in this, in what we are trying to do so that we can get half a million new businesses to come to the platform every year.

[01:04:42] So at that scale, how do we get to that?

[01:04:44] Can you give us one example to highlight like the best example of this work?

[01:04:46] Yeah, so these are food counters, beauty salons.

[01:04:50] And your work would entail actually?

[01:04:51] I'll tell you what we do for them.

[01:04:53] So beauty salons, food counters, dance class, you know, people selling things all over the place.

[01:04:58] So those are all the kinds of businesses that we look at.

[01:05:02] And these are, we want to go with more than 5 lakhs.

[01:05:05] So that's sort of the goal.

[01:05:06] So what we have done is that we find that all these small businesses have five kinds of challenges.

[01:05:11] One is access to capital or loans, credit.

[01:05:15] Second is access to markets, access to technology, access to teams, meaning people who work for them.

[01:05:22] And compliance.

[01:05:23] Those are the main five issues that we have.

[01:05:25] And we can distribute them into multiple sub-issues.

[01:05:28] So within access to market, it could be how do I be online?

[01:05:31] How do I brand myself better?

[01:05:33] How do I do packaging?

[01:05:35] So these are sub-processes in that.

[01:05:36] So we have identified about 75 to 80 hundred processes across these five broad areas.

[01:05:44] And you work with partners too?

[01:05:46] Yeah, so Alex Lane.

[01:05:46] So what we have done for all of these is we have four things at every process.

[01:05:51] One is checklist.

[01:05:53] Are you there?

[01:05:54] Second, DIY information, how to get there.

[01:05:57] Three, partners will make it happen for you.

[01:06:00] And four, benchmarks.

[01:06:02] So I'm a photographer.

[01:06:03] I want to be online.

[01:06:04] Yeah.

[01:06:05] Am I visible on Instagram?

[01:06:07] This, this, this.

[01:06:08] When I look you up on Google, do I show up?

[01:06:10] These are things that we ask in a checklist.

[01:06:12] You can go through it and you find that you need to be online.

[01:06:15] Then we have DIY information to help you get online.

[01:06:18] One process at a time.

[01:06:20] And you pick what you want and most of what you get from us is free.

[01:06:24] But if you want to use a partner, you pay them a fixed price that we have pre negotiated, so to say, that you can work with.

[01:06:32] And since we are trying to scale all across India, we are starting to partner with other groups, such as we have a partnership with AWA, which is Army Wife Welfare Association.

[01:06:41] We work very closely with the Swadeshi Jagran Munch, which has a group called Swavlambi Bharata Bhiyan.

[01:06:47] So these are people who are interested in entrepreneurship, grassroots entrepreneurship all across the country.

[01:06:53] And we help work with them.

[01:06:54] So that's one big part of what we do.

[01:06:56] And the mission is that everyone needs to feel like gig is going to happen.

[01:07:00] All of this stuff is going to happen.

[01:07:01] People need to feel empowered to be self-employed.

[01:07:04] Yeah.

[01:07:05] So that's the job creator network that I'm working on on Deasara Foundation.

[01:07:09] And this is a family foundation.

[01:07:11] I'm the only one who funds this.

[01:07:12] We have a 40 people team.

[01:07:14] I'd love for an introduction just to see whether some of our companies again can partner.

[01:07:18] No, I think you guys are much bigger.

[01:07:20] No, no.

[01:07:20] Partner not to be a part of it but to enable.

[01:07:22] But the ecosystem we might find.

[01:07:23] Yeah.

[01:07:24] So we actually have companies which help.

[01:07:26] Sell these kinds of these.

[01:07:27] Independent photographers, for example.

[01:07:28] Canvara under Printo does that.

[01:07:30] So yeah, those kinds of places we should definitely connect.

[01:07:33] Yeah.

[01:07:33] And then the second part that I've been working on has been mostly related to second orbit, which I

[01:07:38] say, is to help companies scale.

[01:07:41] So what I decided at that point was that I have three broad areas in which I'm working

[01:07:46] right now.

[01:07:47] One is around entrepreneurship because I can relate to that.

[01:07:51] Second, I've been a techie, data guy, computer science, who I like the ghis kujli of doing

[01:07:56] something.

[01:07:57] Yeah.

[01:07:57] Engineering, research, all that.

[01:07:59] So that is the second bucket.

[01:08:00] Yeah.

[01:08:00] And the third bucket is that I find that people are too stressed about careers, managing careers,

[01:08:07] what happens, continuous learning.

[01:08:08] So those are three broad buckets in which I've been spending my time.

[01:08:11] So on the entrepreneurship side, I shared with you about Deasra and second orbit.

[01:08:16] Yeah.

[01:08:16] On the research side, I got introduced to a few people and some of the circumstances

[01:08:21] and otherwise also.

[01:08:22] I got to meet a lot of cancer people and I realized that.

[01:08:26] And see, today if somebody has cancer, the kinds of treatment you get is based on data

[01:08:32] that is coming from Western studies.

[01:08:35] True.

[01:08:35] We have no data of our own.

[01:08:37] It's very sad.

[01:08:38] You know, we are one sixth of the world population.

[01:08:40] We should be deciding how the world is treated, not the other way around.

[01:08:43] Yeah.

[01:08:44] So I've worked with a bunch of people to set up something called the India Cancer Genome

[01:08:48] Atlas.

[01:08:49] It's called ICGA Foundation.

[01:08:51] So it's icga.in.

[01:08:54] And the idea is to build a data set for cancer data.

[01:08:57] So we're starting out with breast cancer.

[01:08:59] In fact, on Saturday, 21st, we are launching the first portal that will allow people to

[01:09:05] get access to publicly access data about Indian cancer patients, a full DNA sequencing of breast

[01:09:13] cancer patients and then being able to do analysis and research against that.

[01:09:17] I've been also working with a similar group around the diabetes folks.

[01:09:21] So there's a group called the RSSDI, which is the Research Society for Study of Diabetes

[01:09:27] in India.

[01:09:28] And I'm trying to see how to help them with technology and data so that we can find cures

[01:09:33] for our people that are dependent on what we do, right?

[01:09:36] Yeah.

[01:09:36] We have a different lifestyle.

[01:09:38] Different genome, different lifestyle.

[01:09:39] We have different kinds of things.

[01:09:41] So we should have our own medicines.

[01:09:43] We should have real data about our people to be able to answer that.

[01:09:47] So that's the other group and that got me interested in working on.

[01:09:50] So what I found is that clinical doctors in India are very different.

[01:09:53] They are doing mostly clinical work.

[01:09:55] They don't have that much time for research.

[01:09:57] So how do we bring them to close to the computer science people that I was connected with through

[01:10:02] ACM and VLDB that I do?

[01:10:04] And then bring in philanthropy and government to see how to bring this whole change across

[01:10:09] this whole stuff.

[01:10:11] And so that got me interested in working with some government people.

[01:10:14] So right now I'm also the co-chair of BRIC, which is Biotechnology Research Innovation

[01:10:19] Council.

[01:10:20] So you know a lot of very interesting research related work that I'm, I shouldn't say I'm

[01:10:24] doing the research but I'm facilitating, contributing.

[01:10:29] Keeping more than busy.

[01:10:31] Fascinating.

[01:10:31] And then managing careers is another topic that I have been working on and I have a book

[01:10:36] I'm trying to write on how to manage careers and that's another one that will come out

[01:10:40] one of these days.

[01:10:41] Lovely, lovely, lovely.

[01:10:42] Now great to get all those facets of you out there for our listeners.

[01:10:49] I'll just end with maybe two quick sets of viewpoints.

[01:10:53] One is we have now plenty of product companies who want to build globally and you've not only

[01:11:01] managed to address this huge American opportunity but also started going to other geographies and built out of multiple geographies outside of India. Philippines and Sri Lanka and

[01:11:14] Well, they are Malaysia not in Philippines.

[01:11:17] Sorry, Malaysia, got that wrong.

[01:11:18] Thanks for correcting.

[01:11:20] And so how and when is the right time to think about dealing with multi-country complexity?

[01:11:27] Is it, you have to wait till the third orbit comes or is it?

[01:11:30] It depends on what your product is, right?

[01:11:32] Sure.

[01:11:33] So I think it is important to think market.

[01:11:36] Yeah.

[01:11:36] It is important to think customers.

[01:11:38] And if your product is such that all your customers are outside India then you have to sell outside India.

[01:11:42] That's the given.

[01:11:43] Which was the case that we had when we were trying to sell.

[01:11:45] That's why we have you on this podcast.

[01:11:46] But on the supply side, why did it, what prompted to move outside of India?

[01:11:50] No, so a lot of those came in through acquisitions and other places.

[01:11:53] So we ended up acquiring a company that would have people already in these areas.

[01:11:58] Got it.

[01:11:58] So we were already there.

[01:12:00] I think for small businesses in the first and second orbit, I don't think there is any real need to go outside of India for just pure engineering talent.

[01:12:10] You can always do it but it's not necessary.

[01:12:12] It adds to complexity.

[01:12:13] However, if you are selling in a market then you need to have people in the market who may be also contributing to the project because you are also learning what the market is.

[01:12:25] The market decides what happens in a lot of these cases.

[01:12:28] And I think understanding that market very clearly.

[01:12:30] Yeah.

[01:12:31] And that's where a lot of startups or small companies struggle.

[01:12:34] I think so too.

[01:12:34] They go underprepared or they don't invest enough.

[01:12:36] Yeah, they don't think enough about what is the ideal customer that they are going after.

[01:12:40] What is the ICP?

[01:12:41] How are we defining that?

[01:12:43] Do we have clarity on who the buyer is?

[01:12:45] We kind of joke about it that post our term sheet one of the conditions subsequent should be to apply for the L1 visa.

[01:12:52] Effectively if you sit here for too long you are building for the wrong audience.

[01:12:54] No, it depends on where your product is.

[01:12:56] So if you are selling the product.

[01:12:57] I meant for folks who at least pitch us that they are going to build for the US market.

[01:13:01] You can't be here and build for that market.

[01:13:03] Well, I must say that I did not file for L1 or an H1 or through.

[01:13:08] I was traveling to the US every other month for two to three weeks at a time.

[01:13:12] It was cheaper, better and also it worked well for me.

[01:13:16] That's amazing that you put in those very years of that kind of travel.

[01:13:19] No, I think whatever simulates that is what I mean.

[01:13:21] Yeah, but you are right. Understanding the market is very critical.

[01:13:25] In small businesses you cannot afford to lose deals.

[01:13:29] You have to win most of the deals.

[01:13:32] And also you waited for the right time to take venture capital and you were profitable all through.

[01:13:37] If you are not, there is always this pressure of delivering to those targets every quarter.

[01:13:42] So the last question is I think given this implosion of new tech that's the buzzword of course is generative AI,

[01:13:51] which is of course there's been AI for 10, 15 years.

[01:13:53] Nobody spoke about it.

[01:13:54] Suddenly because you can type into a, you know.

[01:13:57] No, but there is a transformation.

[01:13:59] Of course there is.

[01:14:00] The current AI is very different from the previous AI.

[01:14:03] And therefore, is there a bigger opportunity or a bigger risk to Indian IT,

[01:14:07] which was built on the rails of predominantly human arbitrage, I would say?

[01:14:12] So here's what I've been thinking and I find actually is that it's not just the AI that's going to disrupt,

[01:14:19] it's people with AI that are going to disrupt people without AI.

[01:14:22] Sure.

[01:14:22] So the question is if we have people who understand AI better than anyone else, then we will be able to do more work.

[01:14:31] And AI will give you significantly enhanced productivity for people who understand how to use that productivity.

[01:14:39] It's not a given.

[01:14:40] So I think that's really what the key is.

[01:14:42] So on one hand, if I'm an employee in the company or anywhere who is sort of in the, already in the business,

[01:14:50] then I would definitely want to be a good AI.

[01:14:53] I mean I must learn enough about AI so that I can actually get things done using AI.

[01:14:59] And if I do that right, I can be far more productive than everyone else.

[01:15:04] So that is very clear.

[01:15:05] And from a persistent lens you see the company entirely moving to that paradigm.

[01:15:09] Yeah, absolutely.

[01:15:10] Meaning, yeah, I mean that is definitely going to happen.

[01:15:12] Now the other question which is very tricky is the fact that yes, if all people become very productive,

[01:15:20] do we need so many people to do the work?

[01:15:21] Of course.

[01:15:22] And that is a very hard question and it's very clear that some jobs will go away.

[01:15:28] Meaning some people who do those jobs will not be needed.

[01:15:31] But again who will be needed and who will survive is those who have better ability to handle the tools.

[01:15:38] And handling AI than those who can.

[01:15:40] Now AI will also create new sets of opportunities, new things to happen.

[01:15:45] And I think that's an opportunity for us in India as well.

[01:15:49] And also you know if you look at it from the software standpoint, there's a huge opportunity to refactor old code, redo a whole bunch of things.

[01:15:57] And then you look at my entire asset base depending on how can I take a fresh look at it considering that my cost of conversion or cost of translation has come down significantly.

[01:16:08] So I think the market in the next five years will be very different from what we have seen in the past for sure.

[01:16:15] Amazing on that note, you know again you've given us an incredible amount of insights and thanks for double clicking on a lot of things today.

[01:16:21] I appreciate your, you know, I think the teacher in you, we try to evoke into giving the right lessons for the startup audience who predominantly listen to the Bloom podcast.

[01:16:35] Before we let you go quick attempt at a rapid fire question just to get some other facets of you.

[01:16:43] The most important quality in a winner according to you?

[01:16:46] Persistence.

[01:16:47] Persistence, yes.

[01:16:48] The name is written.

[01:16:50] It's very true actually.

[01:16:51] It's true.

[01:16:52] That's what I really believe.

[01:16:53] It's a very common answer we get from people who lived through it for 2030.

[01:16:58] Yeah, so what we tell people as well at Persistence is we are not just persistent by name but we are also by value and reference.

[01:17:05] Fantastic.

[01:17:06] Favorite way to relax after a long day?

[01:17:08] Sleep.

[01:17:10] One word to describe the future of tech?

[01:17:12] Exciting.

[01:17:14] What's your go-to productivity hack?

[01:17:16] Oh, I have lots of them but if I want to learn something I like teaching is the best way to learning.

[01:17:21] Fantastic.

[01:17:22] Most exciting project you're working on amongst the ones you chose?

[01:17:25] Yes.

[01:17:25] So I'm really excited about what I'm doing with the biology related stuff.

[01:17:29] Lovely.

[01:17:30] And your favorite coding language or platform?

[01:17:32] For the last several years been Python.

[01:17:34] Okay.

[01:17:35] And what's hidden talent or hobby that you have that not too many people know about?

[01:17:39] I don't know man, I'm a very boring guy.

[01:17:42] No but you know I think I can make connections.

[01:17:46] I can network things.

[01:17:47] I can connect the dots quite well whether it's people or other things.

[01:17:50] It's kind of what we do, we think we do well at venture capital as well.

[01:17:54] So great to hear that.

[01:17:56] What's the most interesting thing that the students in your classroom have ever told you?

[01:18:00] I don't know.

[01:18:02] No, they're not regular students as such.

[01:18:04] These are professionals.

[01:18:06] Yeah.

[01:18:06] No, they're grateful actually.

[01:18:07] You know we have been able to open their minds to think very differently and they're grateful.

[01:18:15] Lovely.

[01:18:15] And favorite city in India and outside India?

[01:18:18] I like Pune where I am you know for sure even though it has all kinds of issues but life's comfortable.

[01:18:25] I've optimized my distance to work.

[01:18:27] And when you travel?

[01:18:28] I used to like San Francisco a lot but I'm very disappointed with what's happening there at the moment.

[01:18:32] They seem to have cleaned up okay in the last year but yeah.

[01:18:35] Yeah I haven't been there for the last six months.

[01:18:36] Yeah I think that they seem to be holding on to what they did in the last year's clean up so.

[01:18:43] Yeah I was last there in June but.

[01:18:45] Lovely.

[01:18:46] Thanks again for taking the time and it was a pleasure hosting you.

[01:18:49] And I wish Bloom and Bloom companies all the very best.

[01:18:53] No, no and we'll send a few your way just given the span of things you're trying to accomplish both with what Persistent does of course if there's ways to partner for some of our companies we would love to.

[01:19:02] But definitely on all of your sort of endeavors around coaching around.

[01:19:09] Sure happy to help in whichever way it makes sense.

[01:19:12] Thanks again.

[01:19:12] Yeah.

[01:19:13] Anand, much like your pursuits in going after healthcare we actually have an investing company called Ultrahuman.

[01:19:20] So they're about four years old but they've done remarkable work on using the ring as a proxy for other wearable devices.

[01:19:28] And today actually following in your footsteps in terms of trying to build a global product.

[01:19:33] And like you rightly said they're not going and chasing one market because everybody in the planet needs it.

[01:19:38] They're going where the markets are and today they've sold in over 150 countries.

[01:19:43] 60 plus million dollars of revenue run rate.

[01:19:46] Profitable.

[01:19:47] So that's a unique surprising fact about this startup.

[01:19:51] And they would like to partner with you as a customer.

[01:19:55] Amazing.

[01:19:55] I've heard about Ultrahuman so I'm glad to.

[01:19:57] No, please size yourself and we'll connect you to them.

[01:20:01] Sure, I'll introduce them to other people in my network as well.

[01:20:04] And they're based in Bangalore and building for the world.

[01:20:07] Very nice.

[01:20:08] And kind of, you know, some of our portfolio companies inspired this year's episode and you rounded it off well.

[01:20:14] It's about Indian companies winning beyond boundaries and they're a great example from our side.

[01:20:19] And of course trying to follow the footsteps of what you've built at Persistent.

[01:20:23] Thank you.

[01:20:25] Thank you.

[01:20:25] We thank IDFC First Bank for being our annual partner.

[01:20:28] IDFC First Bank is deeply engaged with the startup community in India.

[01:20:32] The commitment to fostering innovation and supporting entrepreneurship has made them a valuable partner in the growth journey of numerous startups,

[01:20:38] including many, many Bloom portfolio companies.

[01:20:41] This partnership helps us in a mission to back the next generation of revolutionary founders in India.

[01:20:46] Maybe we will take a day.