"I had started talking, maybe 2 - 3 years ago, that the aspiration is not a billion dollar company which is a unicorn; of course it is. But again, that's the 1-10 journey. The aspiration is a billion-dollar profit per company and fortunately, I think we have 4-5 in our portfolio heading in that direction; our peers also have some. I was reading about a firm that has probably 20 times our capital to manage, plays across all stages and they have a total of 12 such companies over a 25-year history. So that to me, is infinity. Billion dollar profit over I have now 20 companies; that would be nice." shares Avnish Bajaj, our Founder, and MD, on the latest episode of Matrix Moments. Watch him with MD, Rajinder Balaraman. 

Rajinder:         

Conversely, I was thinking we didn’t talk about culture and everyone there’s the famous whatever culture eats strategy for lunch or breakfast and it’s key to scaling an org but we didn’t really talk about it, I'm surprised. 

Avnish:            

I'm a bit confused on this because if I look at some of the – and I can't name those companies and I'm not talking about Indian companies. If I look at it globally in the bull markets all that culture seemed great but when the tide turns you hear New York Times articles come out about the culture in a bunch of these companies. So I don’t know, I feel that these traits we spoke about, let’s take customer obsession, maybe that becomes the culture and at Amazon maybe there wasn't a focus on culture creation but customer obsession is their culture. 

You and I were discussing about Apple, also is the do these things have to be measured over a very long period of time or a short period of time. Tesla is obviously clearly innovation and breakthrough speed and scale. So the reality is there are many examples of infinity entrepreneurs and of infinity companies which have over some measurable period of time not demonstrated great cultures.

Personally, I think it’s very important but we have to look at data also, I don’t know what you think. 

Rajinder:         

I think to be very honest I think culture is a very tricky topic to discuss and over the last like 5-10 years one can argue that there is a culture of entitlement also in the startup industry with startup industry companies ending up like doubling pay versus traditionally you know sectors.

Avnish:            

But it was created by the companies, I mean some of the freebies that used to be considered great today are being panned.

Rajinder:         

I'm not entirely sure like most people say culture and then automatically you think of Foosball tables and whatever playstations. I'm not sure entirely like what exactly good culture is but I think -- 

Avnish:            

We have a token culture here, those small ping pong tables. 

Rajinder:         

There used to be some people who would play but as we were talking about this but like Apple hasn’t launched a new product in 5-7 years. 

Avnish:            

You were saying that's very big.

Rajinder:         

And somewhere culture does get defined by founders and the founding team. 

Avnish:            

I think that's a good one to double click into. So Steve Jobs came back ’96-’97 let’s say took about two years to settle in and then he kind of became ill 2009 plus. In those ten years how many products came out, iPod, iMac, AirPod, iPad, NewMax, iPhone of course. You're right, there’s no big -- 

Rajinder:         

Breakthrough products.

Avnish:            

I think the only thing they’ve done which again it’s interesting because maybe it’s the CEO’s personality that reflects in the culture. What Apple has done the best and all of us who have switched to the Apple laptops with their own chip that's a non-incremental shift. Now they’re going to make their own LCD screen. So I guess the question is how much of a personality of the leader tied into the culture and what it values and therefore what do you see coming out. 

Rajinder:         

I'm not a hundred percent sure but yeah, one can argue that it matters. In closing I was thinking we’ve talked about founders, VCs invest in founders. And for founders we’ve kind of drilled deeper. How should one think about infinity VCs because we are also part of this eco system. 

Avnish:            

Yeah. And you know the last 4-5 years what’s dawned on me and I used to joke with the founders I’ve worked with that every time we’re telling them something like I often look back and I say why doesn’t it apply to us and I do think it does apply to us. So I think there is a concept of infinity VCs ultimately to be in business with infinity founders if you're lucky an infinity founder will take you if you're not a infinity VC or I think you have to be a infinity VC.

So let’s just talk about like just I think this will be useful maybe for people who are looking at venture capital as an industry, the frameworks we have borrowed and we use internally we say thesis, evaluation, network, winning which in this new world and which is where I think an infinity VC really counts is very critical, winning the deal. Does the founder want to work with you and then value creation and exit. 

Importantly this external framework which we borrowed from Mark Souster which is personal brand network and pull. So if you were to map the same three stages of a company and a founder with the three stages of a VC I think it’s very simple, 0-1 you find your first few customers, you find some product market fit. So you hustle and you get into some good companies. 1-10 you demonstrate a method where it’s no longer just hustle, it’s scalable repeatable. 

What is the flywheel, and typically that flywheel is based on sectoral expertise -- .

Rajinder:         

Franchise building.

Avnish:            

Network building, franchise building and stuff like that. How does that demonstrate itself you start getting maybe in the first phase you get one or two mark ups, in the second phase you start getting more and more mark ups within the same sector. So we spoke about internal flywheel and external flywheel, I think the internal flywheel becomes more complete and the external flywheel starts turning, you start getting recognized. Okay, there are people where whether it was Vikram with Fintech, okay, he’s become the Fintech guy, you were doing commerce – so we start getting recognized that is very important when you come to the third phase. 

Because by the third phase you're not picking founders, founders are picking you and that's a big shift. And that is not going to happen unless you yourself are able to transcend and get to the infinity flywheel journey. At the infinity flywheel we’ve discussed this before you have to be recognized by the founder, you have to have the pull where people want to come to work with you. You know, I’ll just on a lighter note talk about some of the matrix that one could actually associate with each phase. 

So some mark ups in 0-1 consistent mark ups maybe a unicorn or two in your sectors in the 1-10. I think the 10-infinity is where it’s IPOs, IPOs, IPOs it’s realized gigs or maybe not IPOs but exits, exits, exits. Funnily enough – so, you know, I’d started talking about a few years ago maybe 2, 3, years ago that the aspiration is not a billion dollar company which is a unicorn, of course it is. But again that's the 1-10 journey, the aspiration is a billion dollar profit per company and fortunately I think we have 4-5 in our portfolio heading in that direction, our peers also have some. 

I was reading about a firm that has probably 20 times our capital to manage, plays across all stages and they have a total of 12 such companies over a 25 year history. So that to me if you really want infinity that's infinity. Billion dollar profit over I have now 20 companies, that would be nice. 

Rajinder:         

Amazing. I wanted to just to bring this together like also share one or two case studies because I think it’s helpful especially on the traits. I think most people and I was also surprised to connect the dots on this one but OneCard and Ola Electric both companies in our most recent in fund 3 both actually didn’t launch their first product for 18 months or maybe even longer after they raised their first round of capital. And through that period the clarity with the founders.

Avnish:            

Jupiter also took -- 

Rajinder:         

The clarity with which the founders were building, forecasting where regulation was trending, where government policies were trending, figuring out what the right org would be to scale those companies once they hit market. All of those things literally I can't imagine like in the past folks would have been wondering hey, what is this company doing. 

Avnish:            

Yeah, by the way we were wondering and we learnt how to work with them and if you ask me Anurag was here yesterday, Amit is here today, Revant was here last week, Chirag interacting on Saturday, we had learning from them all the time, Ashish like, you know, Pathy. One of the things we learnt is that hustle is not the right metric in the infinity stage. And remember even in the US there is this concept of hustle culture and this that. It is the thoughtful hustle, you do need to hustle, ultimately you have to hustle but it’s a thoughful well directed hustle. So definitely something that is different. 

Rajinder:         

You’ve talked about habits, maybe something for the entrepreneurs listening or others how can one cultivate some of these things, any learnings from your own personal journey?

Avnish:            

Yeah. Well, it’s not so much from my own personal journey I think some of this is theory which I believe and I try to practice but I think others do very well. There is this concept of neuroplasticity of the brain, you know what that is?

Rajinder:         

Yes, I’ve heard of it but I don’t want to venture a guess. 

Avnish:            

Neuroplasticity means you can change your brain the way you want to. So what are the parts of the brain that often get talked about?

Rajinder:         

Lower brain.

Avnish:            

No, no, that is separate. Left and right. That's it, we left it at that. For the last centuries left brain, right brain. Actually it is lower brain, middle brain, upper brain. They had this neuroplasticity there is the single line that summarizes it, neurons that fire together wire together. So essentially you create new pathways. So now if you look at Malcolm Gladwell’s Outliers 10,000 hours. Why are those 10,000 hours people successful, they have gone and connected certain dots or certain neurons in their brain where they become an expert in it. So I personally believe you have to treat your brain like a muscle and you have to – and sadly for my children this is what they hear almost on a every day or a second day basis and actually simulated from all sides, there is no left or right brain. There are only three parts, best judgment comes from the highest portion of it, and there are absolutely practices that you can follow that actually unlock it. 

So I think I will only encourage people that this is something that is very much a acquired skill and the traits that I have seen and you should add to this like for these infinity entrepreneurs how do they actually exercise their brain, voracious appetite for learning. Whether it is I mean with many of these we’ll get grilled when we meet them. And constantly learning and then following up saying can you send me this, that. So voracious appetite for learning, unbelievable curiosity, serious personal growth mindset. I think if you have this then you start practicing these things that kind of put it all together and create this infinity entrepreneurs. 

I did want to go back to one of the things we didn’t cover fully in the VC conversation is ultimately for an infinity VC don’t lose sight of the fact that you're still an investor. And an investor comes with an investor mindset and how is an investor different from everybody else investor thinks a lot about unknowns and what do I not know and doesn’t take things at face value and then tries to become an expert in the subject. And I really wanted to bring this out just because it was interesting that in the bull times 2020-2021 I read so many articles how Warren Buffet has lost his edge.

Now again last five years again Berkshire returned the best, he didn’t get swayed by the FOMO, by the noise. So I think that clarity and by the way infinity entrepreneurs, infinity VCs, both need this clarity. And I just have patience, zero FOMO, clarity, become a domain expert and I think some of these are similar. I just think what the founders do is much more much harder and inspiring.

Rajinder:         

Thanks, Avi, enjoyed doing this with you.

Avnish:            

Super. Thank you.