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Kunal Shah on winning in Indi…

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Kunal Shah on winning in India, second-order thinking, the philosophy of startups, and more

Lenny Rachitsky

Mar 24

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Kunal Shah is one of the most well-known and admired product leaders in India. He is the CEO and founder of CRED, an Indian-based fintech startup valued at over $6 billion. Prior to CRED, he founded three other startups, including Freecharge, which he sold for over $400 million to Snapdeal. He has also been an advisor to India’s most influential organizations. In our conversation, we discuss:

The prevalence of successful Indian immigrants in top CEO roles across the tech industry
Why companies in India can grow DAUs but not ARPU—and what that means for building products for India
What most sets India’s market apart
Challenges and opportunities in the Indian market
The Delta 4 framework for building new products
Lessons from building CRED so far
The power of curiosity and second-order thinking
Lessons from failure

Some takeaways:

Indian immigrants excel in American tech companies for multiple reasons. Kunal credits their success to a robust work ethic shaped by the need to prove themselves, a cultural emphasis on math and logic, and inspiration from Rama in Hindu mythology—a character known for obeying existing principles. Indian tech CEOs often emulate Rama’s values by prioritizing principles from the founders of their companies over personal interests. Notably, Satya Nadella embodies this ethos, carrying forward Bill Gates’s vision in his modern leadership at Microsoft.
The Delta 4 framework says that for a consumer product to have a chance at gaining traction, it must be at least four points superior to current solutions. The score is assessed by users ranking your product against alternatives on a scale of 1 to 10. If the difference (delta) is ≥4 compared with existing solutions, it’s indicative of a highly engaging and “sticky” product.
Founders can draw insights from Hindu mythology’s universal cycle: Brahma (creation), Vishnu (maintenance), and Mahesh (destruction). Like Brahma, they innovate and take risks to create; like Vishnu, they adapt to sustain their creations; and like Mahesh, they discard outdated practices to transform and grow. Embracing this cycle helps founders understand how to operate, given the stage they are at.
In India it’s easy to get high DAUs (daily active users) but hard to get ARPU (average revenue per user). With India’s low-income demographic, convincing users to part with their hard-earned cash is difficult. To account for India’s cultural differences, founders should pursue freemium models, tiered subscriptions, in-app purchases, or ad monetization to build trust and convince Indians of their product’s value proposition.
In India, there’s still a prevailing societal mindset that tends to favor stability over risk-taking. Failed founders may face challenges in societal acceptance, including difficulties in marriage prospects. This cultural dynamic shapes individuals’ willingness to pursue entrepreneurial endeavors.
In regions like India where hourly wages are uncommon and people are more accustomed to fixed salaries, the perception of time and its worth differs significantly. Consequently, businesses relying on time-based transactions may encounter hurdles in monetization.
Asking great questions involves understanding how people make choices and thinking about second-order effects. By delving into how individuals actually arrive at their conclusions, you can gain valuable insights.

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