The Unmatched Magic of #SiliconValley: A Venture Capitalist's Perspective | Sudhir Kadam

In today's episode, you will meet our Bay Area innovator, Sudhir Kadam. Today if you see Silicon Valley, it's completely transformed. Now if you look at the money invested in the U.S. last year, more than 50% of that money is here invested in Silicon Valley. Sudhir is a venture partner at FIDA Growth Partners, prominent venture capital firm in Silicon Valley, where he focuses on driving growth through business innovation. Recognized as the top business innovation voice by LinkedIn. They went to the VC and said, you gave us so much money, some part of that money is left. I want to return it back to you because I don't think this company will go any further. The VC said, you're a good founder. I like you. I know you'll figure things out. I don't want my money back. Keep the money and find something that will work. Sudhir has successfully navigated several mergers and acquisitions, including the acquisition of Manosec by McAfee in 2019. People are very open about what they're trying to do. There are no secrets. If you sit in a coffee shop, you will see that all the discussion, 90% of the discussion around there is about my startup, my new technology. This is what we are doing. This is what somebody else is doing. It's all there in the air. That's exactly what's happened with Silicon Valley. Welcome to Bay Area Innovators. I'm your host, Steve Espas. Sudhir, welcome to our program. Thank you. Thank you for having me. Great to have you here. I want to ask you about the Silicon Valley. You've been very successful as an entrepreneur and a venture capitalist. Please tell us, why is Silicon Valley special? What makes it special? It's a long story. We have to get back to how Silicon Valley really started. You must have heard of a company called Fairchild, which was in Mountain View that has to make semiconductors. Few people from that company quit and decided to do things on their own. That was the birth of Intel. At the same time… Birth of many other companies, including the one I used to work for, LSLR. Is that right? That was also the start of HP. This all translated into Silicon Valley turning into a hub for innovation. This was the early stages, but that attracted a lot of people who wanted to do something different to Silicon Valley. But today, if you see Silicon Valley, it's completely transformed because it is not just a few people trying to drive Silicon Valley, but there is an entire ecosystem at play here. The ecosystem consists of people, that is the talent that you have, experience, the skills, the money, the funding, and the training schools, the academic institutions, as well as the accelerators. All of this put together creates an ecosystem which is very good for innovation. That's the reason why you see companies like Apple, which started from a garage. You see companies like Google, which are two people trying to work with algorithms, or look at a company like Meta, Facebook. All of them are trillion-dollar companies built in Silicon Valley. What happens is, once there is success, success follows success. Once your ecosystem gets developed, it gets better and better with time. That's exactly what's happened with Silicon Valley. Today, things are in the right place for the right people to come here and realize their dream. You've been involved in venture capital. How important is the money, the venture capital, going into Silicon Valley to maintain this leadership that it has? From some reports, I've seen that there's one-third of all of the investment from the U.S. happens here. How important is that? This is probably more than a third, actually. If you look at the money invested in the U.S. last year, more than 50% of that money is here invested in Silicon Valley. The term venture capital is very interesting because it is about taking risks, taking chances. Any new innovation is not a slam dunk. There is every chance that it will fail. But there are people who are passionate about pursuing their ideas and see if they work. Obviously, any attempt like this requires money because it requires people, it requires technology. If you go back to the 1990s or 1995-1996 kind of an era, to start a startup, you needed to buy big servers. These servers would cost you anywhere from a quarter million dollars to half a million dollars. You needed a space to operate from. You needed to rent or buy space. Then you needed to have the furniture, you needed to have people. It needed the entire infrastructure to be set up for you to start a startup, basically just get started. How does that happen? It happens because somebody is willing to put money in you. Will banks put money? Absolutely not because banks will not fund you without a proper collateral. They want to put your house on the line or they want to put some of your valuables on the line. That's not how innovation can happen. Somebody has to take a chance. That's where the emergence of venture capital happened. People were saying that we will put money, we will take the risk because we see bigger rewards. That's how the venture capital started. It's not just about money. A lot more than money comes with the venture capital. What we really do is, when you fund a company, you want to make sure that your money multiplies for your partners who are basically investing that money. VCs don't put the money from their own pocket. What we would do typically is create a fund. There are a lot of people who are sitting on idle money and want to invest that money. Either they can invest in bonds, stock market, or in a venture fund. They would have their strategies saying that part of the money I'm going to put in a venture fund. That's how the money comes. Why would they put in a venture fund where somebody like you or somebody like me is managing that? Because we can guarantee them certain returns. Typical ROI. We use a different term in the venture capital. It's called MOIC, multiples on the invested capital. But basically, can somebody give me more money than I can earn somewhere else? The venture capital will do that. Why would venture capital do that? Because high risk, high reward. But the most important thing along with the money is the mentoring that comes with it, the connections that come with it, because the VC is now involved in the company and wants to make sure that he can get those multiples and return the money to his investors, to his LPs. So that's how the whole game works. And so that's why the venture capital industry is a very important piece of the whole puzzle over here. And some of the good VCs, Anderson Horowitz, Axis, all the good names, Sequoia, you name it. So they're all here. And they bring this value to the Silicon Valley. But what has happened now is apart from the venture capital, if you see there is a shift now. There are smaller funds, we call them seed funds, operate pretty much like venture capital, but they are smaller in size. They would be somewhere like 50 million, 100 million. I've even seen $10 million funds and so on. Then there are angel investors. So that's another piece of the equation. So a lot of times you're too early for a venture capital funding. And then how do you get funded? So you have people who are high net worth individuals, who are willing to put the money because they like you, they trust you, and they want to get you started, or your friends and families. So the entire equation today has gone beyond the VC. While the VC is the most important component, it's gone beyond the VC. People are working in Facebook, Google, and so on. They're making those big salaries, half a million dollars, 700K salaries. They want to put their money somewhere. You don't want to leave their job because they're making good money, but they want to put that money to some good use. So a lot of these investors come from some of these big tech companies. I want to follow up with a couple of questions. So what is the guarantee for the investor that they'll get their money back? You mentioned there's a guarantee, but is there really a guarantee? Very good question, because there's no guarantee in life. Even the banks may have FDIC, but that's very limited. That's very limited. You know what Silicon Valley Bank went through, so the FDIC wasn't a big question there. So how do you guarantee something like this? So when the VCs invest, so suppose I have a hundred million dollar fund and I want to invest. So I will split that investment into various buckets. So I will put money in companies. So first of all, when a company approaches me, the first thing that I want to see is, can I get a 10x return on this company when it exits? And how long is it going to take to exit? So there's a simple math that you run saying that, okay, if it's going to take about seven, eight years to exit, you know, if I'm going to get so much return, that means I get 10x in five years on an average. So that's the figure, magic figure that people usually run with. So when I pick startups, you know, some of them appear like safe bets, but there is an element of risk. Some of them are very risky. They're called moonshots. We don't know whether it will work at all, but if it works, it can change the entire game. Things like Slack. What happened to Slack? It changed the entire game, right? And the investors made 200 times their money. Slack is a very interesting company. It was started as a gaming company. Okay. And it did not work. Okay. So it did not work as a gaming company, but when Slack was founded, you know, they wanted to have all the people remote. So their entire workforce was remote. So how do you remotely connect and collaborate with people? So they had this homegrown stuff for collaboration. So we are able to talk to people, exchange messages, you know, and work on projects together. And so Slack was basically a gaming company. Okay. And when that failed, okay, they went to the VC and said, see, look, you know, you gave us so much money. Some part of the money is left. I want to return it back to you because I don't think this company will go any further. VC and that's Axel. Okay. The VC said, you're a good founder. I like you. I know you'll figure things out. I don't want my money back. Keep the money and find something that will work. So he went back and, you know, he discussed with the Steve and they said, see, look, we have this collaboration piece, you know, people love it. Okay. Why don't we try to use that to make a product out of it? So they made a product out of it. Okay. And that's Slack. Okay. But the interesting thing is not just making a collaboration tool, but the interesting thing is the way Slack was marketed. Okay. So they started a concept which is called product led growth. Okay. So usually when you bring a product like collaboration tool to the market, who has the budget? The IT has the budget, right? And for the collaboration tool. Okay. Who's going to use it? Even the non-IT people are going to use it. Okay. So are you going to leave it to IT to make that decision? It's going to be a long cycle, right? Now it's going to go through this evaluation process and so on. So what Slack did was they said, okay, we will push our product to the users. Okay. People who are actually going to use it and we're going to give this product for free. Okay. So we will use the freemium model and we will use product led growth. We will excite them with the capabilities of our product. Okay. So once the users get excited, they run through limits at times, right? And when they run through the limit, they go to IT. Okay. Then IT has to buy the subscriptions and upgrade. Okay. So this is a very classic example of product led growth versus, you know, the typical sales funnel cycle. That's very interesting. So first, I think that the trust the investor had in the founder, because he liked it and he wanted to keep going. And also how you look at these things and then you realize that it's, um, how to say it, it's, it's, it's the trust. And then the fact that you can change direction, you know, you have that capability to change to a different idea. So we have, we have a word for that. We call it pivot. Okay. And it is, it, you know, there's hardly any startup that I would have seen, which has not pivoted in his lifetime. Okay. And in, in most cases, what I found is a startup start with certain idea. Okay. As they talk to people, as they try the markets, you know, they have to come and keep pivoting, refining that so that they achieve what we call as a product market fit. Okay. In this whole process, what the idea you started with and the idea that is now taken up by the market is completely different. It's completely different. And that's primarily the reason why any investor will look at the founder first. Okay. How good is, are the founders. Okay. And you want more than one founders because you want a team, right? So you want somebody who can lead a business, you want somebody who can lead technology, you want somebody who can lead product. Okay. So you need a team. Okay. And this team has to have good chemistry of working together. Okay. Because in a lot of startups fail, because, you know, there's a problem amongst the founders. Okay. And, you know, you don't want that. So you want to make sure that there's a good chemistry, the founders are capable, the founders are emotionally well balanced, you know, because you are going to go through this very rough journey. Okay. And the founders can think on the feet. Okay. If there is a challenge, they know how to figure it out. Okay. And they're able to connect the dots. So if we see this characteristic in the founder, he can probably take any idea and take it to market. Okay. So it's very important to look at the founder. So and that's what that's what most of the reasons we do you want, you may have the best of the idea. Okay, you may not get funded, because they don't trust you as a founder. So it's a it's a trust relationship that you build with investors, which is really important. Tell us a little bit about your story. You know, you're doing you're not from the US, you came here, you pretty much lived the American dream. How did you get to where you are? What are some of the key elements that made you successful? And you would recommend to others to follow? See, you know, my journey started right when I was in India itself. Okay. And, you know, having worked for this few months in a company, and you know, I was demonstrating some product that I had built in an exhibition. And chairman of a very big company came there, he looked at the product and he said, you know, you've done a great job. So I said, Yeah, you know, do you want to buy this? Do you want to use it in your company? You know? So he says, No, you know, what are you doing tomorrow? Tomorrow, Sunday, today's the last day of the show. They have lunch with me. I was really excited. They said, Okay, I'll have lunch with you. So when I had lunch with him, he said, See, look, I don't think you should be working. You can be running your own company. So I was literally pushed into entrepreneurship. I had no desire of being an entrepreneur, you know, I had to take care of the family and things like that. So I literally got pushed into this. And, you know, I went back after the meeting, I spoke to my dad. I said, you know, this guy is telling me, you know, we shouldn't be doing a job. Let's do a business together. You know, I will invest in you kind of thing. So I said, I could ask my dad, you know, I said, I've not done this before. So I have no experience. He says it is not about your experience. It's about his confidence in you. What you cannot see in yourself. So take the leap. So that's how I took the leap. I built a product, it became internationally very popular, it got translated into French, German, many languages. And that was the start of the journey, you know, and as things would have it, my first award I won in the US and not in India. Okay. And after I won my award for the product in the US, okay, people back home realized, you know, I got national award. I will got celebrated as a young entrepreneur and everything. But the music community was not there in India. Okay. And obviously, you know, you, you need to have some support, you know, and you go to the bank, and like I told you, right, no collateral, I don't have a house, you know, I'm not going to fund you. Okay. What happens if I invest in you and fail, right? Then the VCs were not ready. India was not a product company, it was a services company. So this is the only option, right? And so I said, okay, you know, let's go, let's go to US and check it out. So that's how, that's how you get here. Please tell us about the levels of investment. You mentioned VC is pretty much the last level. So before you, the seed and angel investment. I'll tell you, I'll tell you how it starts. Okay. So first is if somebody comes to me and says, you know, I invested in my company, I'll first ask him, how much have you put in the company? So it starts with the founder, what's your skin in the game? Okay. So it starts right there. Then we look at friends and families. Okay. So, you know, you may go to your friends, families and tell them, see, look, I'm starting something like this, get them excited. And they say, okay, you know, your, your brother, your nephew, you know, I'm going to put this money in you. So that is second thing. It's very important from my perspective, at least because I believe that if the founder is not able to go and ask for money, he's going to have problems later on. And there are a lot of people who are very shy. Okay. They will never be able to go and tell somebody, give me money because I want to build, I want to build my dream, my vision, you know, so that's the other friends and family. Then come the angel investors. Now here that there are two things that can happen. A, you get into an accelerator program like Y Combinator, Plug and Play or 500 Startups. They make an investment. Okay. This is a very early investment. And what that investment does is it exposes you to a lot of other investors. So they have something called as a demo day or a pitch day where you pitch your idea to people and show what you have built. And then investors will put money in you. So now come the angel investors. Okay. And the seed money. See earlier, what used to happen in Silicon Valley, because you needed this large investment to get started, you know, it is to start with seed capital, which was or series A itself. Now series A is very far off. Okay. Now series A comes, you know, when you have seemingly got a product market fit and you're ready for growth. That's the time the VC is coming. Okay. Until that, all the funding is by angels, the acceleration programs, as well as the seed capital. It's probably also because there's a lot more startups now than there were 20, 30 years ago. Correct. Exactly. And the other reason why there is a level of investment that happened before venture capital is because now you don't need so much money to start a startup. Okay. I get cloud credits from Amazon or GCP, Google, okay, or Azure, Microsoft. I can sitting at home, just one laptop, I can start cranking. And you're going to see something very interesting, you know, now in the future, because of AI earlier, you know, you had to have teams to make startups, you know, I'm seeing now a drastic shift in that. Okay. We are going to have a lot of solopreneurs. Okay. Single entrepreneurs, single people company built purely on the strength of AI. You're going to see a lot of that happen. Okay. So, you know, for me to look at something like a GPT. Okay. And say, okay, I got this fantastic idea. They have opening has made it so open. Okay. That I can go there, customize things. Okay. And get a product out. It may not take more than a week to get a product out for testing, what we call as an MVP, okay, minimum viable product. So that's where we are headed right now. And you know, we're talking about innovation all the time, right? So the thing about innovation is the time for innovation is reducing now. Okay. So longer cycle, shorter cycles. Okay. So that's what is happening. Okay. So going to happen at a much faster pace. Okay. Look at AI itself. Okay. There was something called as GAN. Okay. That is Generative Adversarial Networks. Okay. Within six years from that, you had chat GPT-3. Okay. Just in six years time. And look at when chat GPT was released to where it is now. Okay. It's several multiple in just a few years. Would you say there's enough room for all this new innovation, all this new stuff, or many of them fail, right? And many don't go through, but there's still a lot of room, yes, you know, see, because innovation is all about experimenting. Innovation is all about understanding that there'll be failures. Okay. But not get stigmatized by failure. Okay. Because failure is a stepping stone to success. That's how we see it here. Okay. Failure is a process of learning. Okay. So we have this classic example of Thomas Edison in the Silicon Valley. So Thomas Edison tried 10,000 times to make a bulb and he failed. Right. So what did he say? He said, see, look, I didn't fail 10,000 times. I learned that what I was doing 10,000 times is not correct until I came to the right thing. Okay. So that's the attitude we have over here. And yes, even today, you know, because now it's so easy to do a startup. More than 90% startups will fail when they get started. Okay. And a lot of them, because, you know, the founder sometimes are very stubborn and arrogant. They think their idea is the best in the world. Okay. Sometimes they are unwilling to change, you know, even if other people give advice. Okay. Sometimes, you know, the idea that they're pursuing, they do not know what are the pitfalls in this idea. They do not know that there are others, you know, who have already developed similar ideas and are way ahead in the game. Or they don't have correct mentoring to take their idea to the market. Okay. So there are a lot of things which can cause this failure. But, you know, I look at failures. Sometimes the failures happen even with good ideas and good people. Okay. And that is okay. Okay. Because that is the part of experimentation. Okay. He's not stubborn. He's dependent on many people. He's got ideas from many people. He's got validation from many people, but he failed because maybe the timing is not right. Okay. Maybe the economics don't work out. Okay. Maybe people, there's so many elements to that failure, right? This is extremely useful and insightful information. I want to ask you next to give us some examples of some stories that you are familiar with the people that you work with, and how they made it successful and how that happened. Yeah, I can give an example of a very interesting startup that came to me. We accepted them three years ago. Okay. And it's a very interesting story because I was judging a demo day, you know, so demo day is where startups come and pitch and you sit there on the judges chair and give them comments. And if you like some startup, you might just fund them there. Okay. So I was sitting there and the lady who was comparing that whole session. Okay. At the end of it, she came to me and said, look, you know, I saw you asked some very interesting questions. My husband and I, we have a startup. Okay. And we want to come and talk to you about it. I said, why don't you pitch it here? She said, I don't, he's a very shy person. He will not be able to pitch over here, but can we meet for coffee? I said, why don't you come home for dinner? Okay. So they came home for dinner and so they started explaining their idea to me and the husband wife team, and they had about two people working for them. So they said, so I asked him, I said, tell me, see, this is, this is one very critical thing that we look for is, can you pitch your idea in one or two sentences? If you cannot, then there's a problem. So he went around about and telling me that I have this project expense software and I have a digital signature software. So I said, is it something like DocuSign? He says, yeah, you know, we're trying to get there, but yes, you know, we have something like that. So I said, yeah, what do you want in life? You know, we live in an apartment now. Okay. I'd like to have a house like you. Okay. So I said, okay. Give yourself another four years and you should be able to get it, you know. So what piece of advice do you have for us? So, you know, when we were talking about this, I asked him, you know, you have two things that you're doing right now. Okay. I want you to do just one thing. I can't have your mind divided. Okay. So we have to pick between the project and the digital signature. So how much revenue on the project? So the revenue that he was making on the project was about a hundred K and how much revenue on digital signature is 22. That's what you have to shut that down, the project part of it, because I don't see a future there. But digital signature, I certainly see a lot of future, future. It was a very hard decision. He went back and forth, back and forth. And one day he comes to me and says, how confident are you that, you know, I should really shut this. I said, it's your call. Okay. I can only show you, you can ask me questions. I can tell you why I'm asking you to make that decision. Okay. But you are the one who has to make the decision. It's your company. You are the entrepreneur. Okay. And I can advise you on that. So husband, wife, they had a lot of discussions and one day he said, okay, I will take your advice and I'll go with digital signatures. Okay. The very heavy heart, you know, so I said, okay, you know, slowly, gradually phase it out. And if you don't go on adding customers, you phase it out and put all your attention here and all your people to work here so that we build this particular product. So he said, okay, you know, I need to raise money. Okay. Nobody's going to find a husband, wife team easily. Okay. Because, you know, we want to be sure that there's nothing that distracts them from the work, right? From the mission. Okay. And husband, wife, you know, you know, we are, we all, you know, fight and love each other. Okay. So you don't want that to impact the business. So I said, it's going to be very difficult for you to raise money with husband and wife and you don't have any other co-founders and things like that, you know, it's your company. I want you to keep it that way. I said, we have to figure out how to fund your company. Okay. So how do you fund a company like this, which VC is not going to find, right? So we looked at the revenue and we said, you know, let's try to do what we call this revenue based financing. Revenue based financing means that if you are running with a certain revenue, the companies were willing to give you money based on your projected revenue, but they will take a chunk of your revenue every month. If you get to the revenue or no matter what it is. No matter what it is. Okay. And, but the beauty is there is no dilution. Okay. You don't part with their equity. So we did that. Okay. So he could add some more features. Okay. The business started growing there, you know, it went to 200K from 20K. So I said, great. So now what, you know, he says, no, the revenue based financing company is asking me, I'll give you more money. I said, take it. Okay. So he took more money from them because the revenue is growing. Right. So he says, you know, I'm struggling to grow my revenue now. I've grown it so much. So we looked at, looked at it and said, okay, you are going on a SAS model. Okay. Use the SAS model, but go to enterprises. Okay. So you want to take a verticalized approach. You want to say that, yes, you know, I have DocuSign, I have PandaDox, I have HelloSign. I have so many companies, you know, who are trying to do the same thing, but I'm going to verticalize it. And so we came to a vertical, which is education. So we said, okay, you know, you want to go to all the schools. Okay. And tell them that I'm going to implement this for you because they are the ones who are ignored by the big guys. They want to go after big money. Right. We started going after that market. Okay. And he started building what we call an enterprise SAS and good revenue coming from there. So it comes to me now, okay, I have built this revenue to a million bucks. Now, what do I do? I said, great. Now you need partnerships. Now you want to find good partners who can actually promote you, you know, who need your, you are the white space in their business. So he said, okay, you know, he started looking for partners and found one partner in China. Okay. And it comes to me, you know, this partner in China, I said, this is a very big company. You know, it's like the Adobe of China. Okay. Foxit is the name of the company. We started doing partnership with them. And then as luck would have COVID hit. Okay. So COVID hit, this is, you know, you're talking March 2020. Right. Moment COVID hit, the document signature business went down. Okay. It just went through the roof. Of course, because people can go out. People can go out. Right. So he's like laughing, you know, it's the, you know, we are in such a great situation right now. There's so much business coming. Foxit is all over me and stuff like that. So one day he calls me and says, I have something interesting to discuss with you. I said, what? I said, Foxit has made me an offer to acquire. I said, that's what partnership is about. Right. I said, what's the deal? So we figured out a deal. Okay. And we are in a seller situation at that time, because, you know, the buying company is desperate to have you. Okay. You have this beautiful pandemic, you know, which is creating big issues. Exactly. So we had, we had an amazing exit and the beauty is, you know, except for people like me having a small percentage in the company, because we want all of the founders to carry a good chunk of the business. 95% of the exit value he took to his bank. Okay. Today he has a private plane. Okay. So forget, forget, forget about a house like me that he wanted to buy. He has a private plane. Right. So these are the stories. Okay. And there are, there are several stories like this. You know, one thing that strikes me, I think, is that sometimes people, individuals invest, not investors, but entrepreneurs, they want to copy, you know, a story like this. In hindsight, it's easy to say, okay, this is the right way to do it, but everyone has their own path. Right. So you have to make the decision on the spot. You can't copy someone else. Right. It's not going to work. Absolutely. And nothing repeats. Yeah. Okay. Every context, every startup, every situation is entirely different. Okay. So if you say that, okay, I'm going to copy Facebook and try to do something like that, you will never succeed. Okay. So I will give, I'll give a very interesting example. Okay. What, what people do. Okay. So there's a good example of Amazon was trying to enter India. Okay. And obviously people would want to copy. Right. So we call this as cloning, but you can copy, but you should copy it with some twist, then it will work. Okay. So the problem with Amazon is Amazon came from an economy of credit cards. There were no credit cards in India. Okay. So there was, there was a founder who had worked in Amazon earlier and he said, I can build something like Amazon without credit cards, without credit cards. Okay. So he introduced a concept of cash on delivery. You order goods, the goods come to your home, you pay cash. Yeah. This was very common many years ago in the US. Exactly. So cash on delivery, that worked, he took off. Okay. Airbnb, you know, trying to get into India. Okay. We don't have houses like this. We have apartments. Okay. And some of them are very, very small. Right. So how can you rent out an apartment, which itself is so small? Right. So another company in India got an idea. Okay. And he started a company called Oyo Rooms. Okay. What he did was he went to the hotels. He says, you have 30% occupancy. You have 35% occupancy. I will take this. I will guarantee you 60, 70% occupancy. And he built an Airbnb kind of business with established smaller hotels. Okay. Which had no chain. So, you know, so this is, this is what people do. You can clone, but you have to have a twist. Okay. But otherwise every startup story is different. You cannot, you cannot say, you know, because he was successful, he did this. I should exactly do the same thing. No. So, you know, I, I, I take a lot of acceleration programs to help founders. What we do is we present frameworks. You see, this is the framework. This is how a business model is done. This is how a value proposition is done. This is how a go-to-market strategy is done. This is how a funding pitch is done. But then the entrepreneur has to use his thinking, his style, his strategy, you know, to do it differently. So we, we, you know, the idea is to show you all the rules so that you can break them. Yes. Okay. And everybody who has been successful has broken the rule someplace or the other and tried to do something completely different. And those are the companies we will become stars. Let me ask you, how does it feel to have your finger on the pulse of technology of where Silicon Valley is, you know, for so long, because you're so involved with this, how does it feel personally to you? It's such an excitement for me when I get up every day in the morning, I know that there's something new that is going to come into my life, you know, because I have a portfolio of about seven companies, all from different areas. Somebody is working on ethical AI, you know, somebody is working on disinformation, you know, somebody is working on real estate, you know, somebody is working on carbon sequestration, you know, all from different areas. So, you know, you got to keep switching, you got to keep studying the technology and you want to see what's coming next. Okay, because you want to play on that horizon of what things are there in future, you know, and some of the things that you bet on may fail. Okay, and that's okay. Right. But you know, it's not be for the want of trying, you should always try. Okay, so it's a really, it's a really exciting thing for me, because I get to mix with a lot of young people. Okay. A lot of them are Gen Z. Okay, and slightly older, millennials and Gen Z, majority of them. Okay. And, you know, their way of thinking is, I learn a lot from them. Okay, I learn a lot when I interact with them. Gen Z has completely different style of behaving, you know, they are more worried about sustainability, eco friendliness, ethical processes, and so on. And when you tied down to that, you know, the millennials are a different breed completely, you know, because they are not as much of digital natives as the Gen Z has been. Okay, so they are slightly on the edge there, you know, and so their thinking is also completely different. So when I get to work with these people, you know, it's, it's a fresh breeze of excitement every day. You know, so I always look forward to talking to one founder every day. And, you know, once a week, I see about 25-30 startups. Okay, five minutes each. Okay, so you see that because now you know, you know, what people are trying to do, you know, where there are opportunities and some of them might be really good. Okay, because the VC funnel is very different, the investor funnel or the advisor funnel or the mentor funnels are very different. Okay. So there are so many startups coming in. So you look at something like 100 startups, okay, and you might pick up one or two of them and talk to them. Okay. Out of those startups you pick up, you know, you might just pick up one in 10 and say, I want to do a deeper dive. Okay. And out of those 10 startups, you might pick up one and say, yeah, he's really good. I want to work with him. Okay. So does he need funding? Does he need support? You know, does he need strategy? You know, what does he need? Okay, you can work with them on that. Now I want to change gears a little bit and talk about the depth of how Silicon Valley is so much the leader in the world. So you've been working with Ferrari, the car company, and when we think of the Silicon Valley, we think more of the transistor, the silicon that's been used into microprocessors and chips that run the electronics all over the world. But now we see someone like Ferrari coming here to get advice from you of how to run their company. Talk to us about it. How, how did that happen? You see, it's, it's, you know, so that's, that's something that people have misunderstood about Silicon Valley. It's not purely tech, but if you see tech is the underlying paradigm for every innovation nowadays. Okay. So everything is tech driven. Okay. So if you, you know, would you believe that there are about 150 innovation scouts from across the world here in Silicon Valley, 150 innovation scouts, Audi, Toyota, Ferrari, Porsche. Okay. The whole automotive industry, the agricultural technology industry, all of them have their innovation scouts over here. Okay. The construction industry, you know, all of them, you know, some people like Kazima from Japan. Okay. They have the rep here trying to find out what's happening in Silicon Valley. Okay. Because, because a lot of things are tech driven, right? You look at IOT. Okay. You look at these devices, they are all tech driven. Okay. So a lot of those are tech driven, AI tech driven. Okay. So tech is becoming a major component of innovation. That's where it is. Okay. And, but it can be applied to automotive. It can be applied to biotechnology. Okay. You can see the impact of AI on biotech. You can see the impact of AI on pharmas. You can see the impact of AI on health tech or the impact of IOT on health tech impact of robotics. Okay. All of them finally converge and lead to tech. Okay. So that's where Silicon Valley becomes even more interesting because this tech can now be applied across industries. Tell us about your interaction with Ferrari. How do you help them specifically? So, you know, Ferrari basically came for an immersion program in Silicon Valley and wanted to understand innovation. Okay. And then I had the opportunity to talk about, you know, different ways of looking at innovation. Okay. See, ultimately, you know, if you come to me and say, you know, I have this business and tell me how to innovate. What I can do is, you know, I can show you how innovation works. I can show you how others are applying that. Okay. And you will get ideas from that and say, okay, can I do this? Can I do that? And then you get to this situation where you have ideas on your plate and you now need to decide which one should I prioritize. Okay. So that's how the whole program works. Okay. So there are, you know, first of all, you have to have, you know, most companies in Silicon Valley, the most large companies they have a model of three horizons. Okay. And for their planning, the first horizon is always about what is my core? You know, how do I improve? So it's called improve. Okay. The second one is about expand. How can I expand this into different areas? You know, what I can, I will give you some examples also. And the third one is disrupt. Okay. Where should I have my eyes on that is going to cause disruption in the future. Okay. So that I don't get disrupted. Okay. So these are the three horizons on which the entire planning happens. So let's take the case of somebody like Toyota. Okay. So what is Toyota's core? Toyota's core is the cars that they make. I want to make good cars. I want to make good hybrid cars. Okay. So their whole focus is on Tizen and, you know, their whole focus is on smart manufacturing, lean manufacturing and so on. So that improve that process. Then look at their expand situation. What do they want to expand into? They want to expand into hydrogen fuel cell cars. Okay. So they're going to focus on that. So that's their expansion. You know, what do I do next from hybrid? I will go to the hydrogen fuel. Okay. And the third disruptive thing that Toyota kind of company looks at is the whole car ownership might vanish completely. People may not buy cars. Okay. So, you know, so I don't need a car. I can have a car whenever I want. Okay. So the car ownership will completely vanish. So they are working on a model, you know, that could possibly disrupt the entire car industry. Okay. They're also working on another interesting model of smart homes. Okay. Now, you know, people will often think, you know, what a smart homes got to do with car. Tomorrow the cars are also going to become smart. Right. The whole smart home paradigm can move into the car also. Okay. So they have so beautifully designed their three horizon strategy. Okay. So similar thing, you know, if a company like Ferrari comes in, okay, what do you do? What is your near term goal in terms of innovation? How do I make my cars better and things like that? Right. What is my expansion strategy? You know, I need a hyper electric car. Okay. But it has to be a racing model. It cannot be a normal model like a Tesla. Right. Okay. What is my third horizon? You know, so what else can I do? You know, is Ferrari going to be only a road phenomenon? Can it be a phenomenon going into the waters? Can I take the sporting paradigm into waters? I have these very powerful engines, you know, can I make yachts, racing yachts, which are very powerful, luxury, and I can take the entire formula racing into the waters. So those are the ideas that you open up people's mind to. Okay. So we have, we have various ways of innovation, we have what we call is six degrees of innovation. You know, how do you how do you innovate? You know, is it a product innovation? Or is it a process innovation? Is it bringing new users to your product? Okay. Is it a business model change? You know, so there are a variety of things that you can do really, you know, defining new industry standards, and you know, there are so many things. And so, you know, it's very hard to summarize this in few sentences, because it's an entire process that one goes through. And the way I I start my innovation programs usually is, you know, I give them some examples, which opens their mind, you know, I show them things which look impossible. And I show them, look, this is possible. Okay, because the first thing you want to do is open their mind to think differently. Okay, because you we all carry baggage with us, okay, baggage of what we have learned, what we've experienced, you have to break all those barriers and say, Okay, you know, none of this is going to impact my decisions. Okay, I'm going to look at, look at it with a clean slate, with a fresh mind and with an open mind. Okay. So I go through that exercise first, then I, you know, seemingly show them, you know, see, this is what Porsche is doing. This is what Toyota is doing. Okay. And I said, Okay, forget about automotive industry, look at Nvidia, how Nvidia is planning themselves on this three horizon scale. Okay, how Nvidia is exploiting the six degrees of innovation, okay. And when you start bringing these things, you know, the mind starts thinking, you know, how could we do it? How could we do it? And in the end, we come to that, okay, we say, Okay, now let's look at Ferrari, or let's look at Toyota or whoever is the customer, right? How would you now think about this? And you'll be amazed the ideas that you get on the table are phenomenal at the end of it, you know, and then they can carry them home and decide, that's probably worth years of school and education, right? Because in school, you get all these concepts that in many ways, they, they block your mind, right? And then you tell them, forget everything, you know, let's let me open your mind. That is why some of the startups, founders of successful startups, like Meta and Apple, they never went to school. Okay, but this is one thing that happens, you know, when school can actually discipline you into make thinking in a particular way, okay, and you want to be a wild thinker, you want to be a very wild thinker, if you're going to come up with breakthrough ideas, okay. But you know, all the startups don't need to be breakthrough ideas, like Apple or Meta, and so on, you know, there are many in betweens. Okay, so you need the workforce. Yeah, so there are, there are a lot of startups that we can build without actually disrupting anything. Okay, you can just, so I, you know, a lot of startups that come to me also, I tell them, see, look, you know, don't always think of disruption or transformation. Okay, look at how can I improve on certain paradigms, and you will make money right there. Can the Silicon Valley be reproduced somewhere else in the world, like in Texas, you know, how do you feel about reproducing? So there are a lot of attempts to replicate the Silicon Valley elsewhere. Okay. And a lot of people have tried and they are trying. Okay. Some are successful in some ways, but the entire model of Silicon Valley to replicate is very hard. Because, you know, if you look at the three giants sitting over here, like Apple, Google and Meta, okay, that itself is so much of talent, sitting in Silicon Valley, so much. Nvidia now, yes. And so much of experience, so much of skill that is sitting over here. And the energy that comes from past entrepreneurs, okay, or existing founders, that comes to the table. The mix of the ecosystem, as I explained to you earlier, it's a virtuous cycle. Okay. And that virtuous cycle will take time to develop elsewhere. Okay. So that's why you will see that a lot of the companies, you know, whether it is India, Israel, you know, and Silicon Valley is helping. Okay. So, you know, we are helping companies, let's say, in Bangalore, we're helping companies in Tel Aviv, we're helping companies in Berlin, okay, we're helping companies in Switzerland, okay, to develop their own systems. Okay. So like, you know, I have a friend, you know, who does the programs for Scottish companies. Okay. So what we tell them is, okay, this is how Silicon Valley works. And, you know, this is how you could make it work. You'll be very surprised. I was surprised. Why can't people do it? Because, you know, all this information is available on Google, on YouTube, and everywhere. So, you know, it's very surprising, because you can straight away clone it, right. But it doesn't happen like that. It doesn't happen like that. It is, it takes certain momentum for it to happen, a certain way of thinking. Okay. The risk taking attitude here is very high. Okay. So that's number one. Number two, the companies that are willing to adopt the new technologies are right here in Silicon Valley, companies like Cisco, I can approach Cisco anytime and go there, right. And I can tell them, see, I've got something new, and people are willing to listen to me. So early adopters are here to find. So those are the things, you know, we change the equation completely. So we have a lot of these ecosystems in Switzerland, Scotland, Berlin, you know, they all come here. They want to spend some time here. Okay. Even if you sit in a coffee shop, okay, in a place like Mountain View or Palo Alto, you will see that all the discussion, 90% of the discussion around there is about my startup, my new technology, this is what we are doing, this is what somebody else is doing. It's all there in the air. Okay. Because we sleep, talk, walk, drink, eat, innovation all the time. Well, you know, I can see on your face that, you know, you really enjoy, you're smiling, you're happy what you're doing every day. And, you know, any thoughts on that? Anything that would you change your work for anything else? I would not at all, at all, you know, having tasted the blood of innovation, okay, the real, in the real place, you know, there's nothing I And it's not that, you know, I have not gone through my challenges in life, you know, there have been ups and downs, you know, there have been lessons learned, you know, there have been pushbacks, there have been failures, you know, but at the end of the day, you know, looking at what you've achieved, okay, and the way you have been able to change things in life, okay, makes, gives you that feeling, right, that yes, you know, I contributed this, you know, I'm not just a cog in the wheel, you know, working for a large corporation, I have contributed my bit to the whole world. And it's not just my making money, or my being successful. It is how I give back. That's another important thing in Silicon Valley. You know, how do you give back? How do you give back to your school? How do you give back to the people who helped you? How do you give back to your friends? Or you give back to your community? It's all part of the Silicon Valley culture. And finally, you know, since you asked that question earlier, the openness in Silicon Valley is what makes Silicon Valley what it is, okay. People are very open about what they're trying to do. There are no secrets. There are only few companies that might run in stealth mode. But if you look at look at Nvidia CEO, talking about Nvidia, he talks to you openly about his future plans, what he plans to do, he's not afraid that somebody will clone and copy is not because he has built a system in such a way that he's built modes, he's gonna get more support. Exactly. It's very hard for people to clone and copy and be successful. So there, thank you so much for your time. I really appreciate it. Any concluding thoughts, any advice for the younger people? You know, the secret of your success and any other advice you have? So advice is very simple, you know, once take the leap, okay, don't be afraid of failures. Okay. And, you know, celebrate failures, okay, because look at them as an opportunity to learn. And go ahead, you know, pursue your passion, pursue your vision, your dreams, you know, because at the end of your life, you don't want to carry that feeling, you know, that I could have done this and I did not do it, right. So always take time off, try something, you know, maybe you fail and come back to a job, that's okay. But that experience that you get in the startup journey is a very memorable experience, which will teach you so many other things in life, even if you are working somewhere else. Thank you so much, extremely educational, extremely insightful. Thank you for your time. Thank you for watching another episode of Bay Area Innovators. If you have a suggestion for someone who should be on our show, we would love to hear from you. Please send us an email at sfbay.epochtimes.com. Thank you and see you next week.