#1 Curated Podcast Transcripts featuring Daniel Ek, Benedict Evans, Ryan Petersen etc.
5 interesting podcast transcripts across tech, startup & VC.
Welcome to the 1st issue of The Visile newsletter.
The Visile curates ~5 most interesting podcast transcripts every week across the various startup + tech + VC podcast transcripts that release.
For why podcast transcripts, and not podcasts, click here.
This week features Karan Bajaj (WhiteHat Jr), Ryan Petersen (Flexport), Mohit Bansal (DeckRooster), Benedict Evans (ex-A16Z) and Daniel Ek (Spotify).
On to the newsletter then!
1) 100x Entrepreneur, featuring guest Karan Bajaj, founder & CEO, WhiteHat Jr, in conversation with host Siddhartha Ahluwalia
Karan Bajaj is founder & CEO, WhiteHat Jr, a kid's coding education co. WhiteHat Jr launched in early '19, grew massively during the '20 lockdown, and was soon acquired by Byju's for $300m. The challenges of scaling, and the spotlight that sudden success entails, led to many questions around the aggressive marketing practices that WhiteHat employs, as well as the effectiveness of the education model. Karan answers many of those questions in this podcast while also taking us through the WhiteHat Jr journey, and the sheer velocity of growth.
What makes the podcast even more interesting is his description of how his career evolved, his practice of taking sabbaticals every 3-4 years, and how meditation has helped him evolve. Karan's career is very different from the typical linear growth paths that most of us in India enjoy. He has had 3 annual (or near-annual) sabbaticals where he took time off for travel, yoga, meditation, writing (he has written 3 novels); and during this period, grew successfully in his corporate avatar as well. All of this makes for one of the more interesting Indian startup CEO podcasts I have come across.
Link to podcast + transcript. Link to the my public notes featuring a comprehensive set of highlights, scraped from the official transript, with minor edits for readability here. A subset of these highlights below.
On sabbaticals as investments for growth
Karan Bajaj: “I grew a lot in the first sabbatical. And traveling I grew a lot in the second sabbatical, with yoga and meditation. And I knew that each of these times, I was taking a major leap for growth, and eventually, life would reward me and I think that became a pattern that I’ve really figured out. Because after I came back, with yoga meditation etc, I realized that I was actually moving up, I moved up in my work very fast, right, I became, like a C-level executive very quickly, because… I changed a lot as a person. So, I felt each time that if you chose growth, I think life eventually will reward you. Right? It doesn’t come in the immediate moment, but it will reward you and I should just keep choosing growth all the time. So, each time I was like, okay, continue one more year doing the same thing or take a leap for dramatic growth opportunity, which will be very high risk, and it has now become a clear mental model. “
On marketing
“I think my biggest insight is one or two distribution mediums work. Once you figure out those one or two distribution mediums that work, you should go blitz scale on them. And just let go of everything else. In my writing days, it became very clear that Amazon advertising is working. And I would just go and really spend my own money to scale them.
In WhiteHat Jr., for example, very early, we figured out that Facebook was working, we built an entire ₹100 crores a month business just on Facebook advertising and referrals, right? And we did nothing else. And just did that and did more of that. And more of that and more of that. And so, I think with distribution, what I’ve seen is that every brand, which is good, we’ll figure out one or two mediums that really hit a chord, and then you should just scale them like crazy. Versus like diversifying too much. “
Mistakes made along the way
“So, if I were to prioritize the mistakes, I would say, number one is that the founder’s strength becomes a weakness of the company. That’s my key learning. So, I came from a brand management marketing background. So, I assumed I would be able to do it easily. So, I never hired Marketing Leaders at all, I hired all the things that I was not strong. And so, my tech team, my product team, curriculum, team, ops teams, they were excellent, right? I just thought that I would do marketing on my own. The reality is that the founder has no time. Right? The founder can’t be a vertical owner at all. The founder has to be somebody who owns the whole company, right?
The side effect is that it got no attention at all. Obviously, I had no time at all, right? The founder in a blitz scaling phase will always be extinguishing fires, right? That’s going to be the nature of the blitz scaling phase. And the founder has to let some fires burn obviously. Because if you start to extinguish every fire, then that, again, is not the best use (of time). And, you know, these functions that you think you will just do, because they’re so easy, they get completely neglected. So, you know, every intern could just post on social media, whatever they wanted, like, it was a free for all right? In marketing, there was a bunch of 20-30 teams doing whatever they wanted, because there was no oversight on them at all. Right? So, that was the consequence of that period.
I think marketing, legal compliance, I think those things became the weakness of the company. Second, I think, is that the founder’s role, I now have a very clear sense. In 0 to 1, the founder’s role is the product, they should not hire a product manager in 0 to 1. You are the founder, the owner of the product, right? 1 to 100 the founder’s roles are business system scaling. Your whole system should be instrumented and architected so that they scale. In 100 to 1000, your journey changes to becoming a culture person, who’s really just championing values, cultures, and the business is doing well, you are just doing reviews. “
2) Colossus / Founder’s Field Guide, featuring Ryan Petersen, founder & CEO of Flexport, with host Patrick O’Shaughnessy
If you have read The Box, the story of how the cargo container transformed trade and globalization, then this is a good follow up read to that. It covers the perverse economics and the fractured landscape of cross-border shipping at length. Ryan knows his space well. Importantly he also brings a strong finance + economics lens to it and is able to show how the fissures and breakpoints constitute opportunities for Flexport and their peers.
If there is one highlight you should check out that is the one on the four attributes of a finance business. It is really the meta of a fintech or finance business. No one in all of the years I have been in VC has explained the meta of a fintech play so simply.
Link to transcript. Link to comprehensive highlights here.
Parcel v Freight
Ryan Petersen: “A parcel is just small and light and a freight is heavy. And I think the threshold is around 100 kilos depending on the network. The threshold is really determined by the parcel carriers. What can fit in those UPS and FedEx trucks, and now Amazon, what can fit down their conveyor belts? How heavy is it? Can the driver lift it up? Once it crosses that threshold, it goes into the world of freight. So that's the fundamental differentiator. Now, why are these so different? The parcel world, you can have an end-to-end network that's all the same company, it's all FedEx from door to door. A FedEx driver picks it up, puts it in a FedEx truck, puts it on a FedEx plane, FedEx agents clear the customs. It's all FedEx from door to door.
In the freight world, no company's big enough to do that themselves. It's just the scale of these industries is really, really remarkable. The modern container ships carry 20,000 TEUs or more, TEU is a 20-foot equivalent unit, it's kind of like a half a truck load. A 40 foot is the standard containers. So a half a truck load. So 10,000 trucks need to meet that ship when it arrives at the port. And of course, you have multiple ships arriving every day. Every port needs to be connected to every other port in the world every day to run the modern world, no company is that big to have 10,000 trucks in every single port every day or 100,000 trucks. And so what you get is a federation of companies and the role of what's called a freight forwarder, it's these sort of antiquated businesses that coordinate that. I often call them freight email forwarders because they're just pushing paper around, making phone calls. And yet you'll have as many as 18 companies involved in a single transaction from door to door. It's a really complex network. Global trade is like half of global GDP, and it's run on these very antiquated systems.”
Contracts in Ocean Freight
“…the one that seems the most broken to me and it's really causing problems for the whole world is contracts in ocean freight are not enforced in any direction…On average, 30% of all the ocean container bookings that are placed with ocean carriers are canceled, they don't show up. You have a book to show ratio 70%. If you're an ocean carrier, you're going to go bankrupt if you sail at 70% full, you've got to be at least 85% full, probably. I don't know what the exact number, it depends on the vessel and the carrier. But like 85% and up, the rest drops to the bottom line, but below 85%, you're going bankrupt. So if you're an ocean carrier, what do you do? You must overbook your ship. Now, if I'm someone booking freight, and if you're not Flexport, if you're a traditional freight forwarder or a big customer that ships a lot of freight, you're going to place two bookings because you know that ship is overbooked and you don't want to be what's called rolled, that's like getting bumped when you find a passenger plane, so you double book.
So you have this terrible vicious cycle that transact, and it leads to whenever a cargo gets rolled, probably another week before it arrives, so now we're having to stock too much inventory, you're creating all these safety stocks. You can't get the kind of quality, quality in the sense of repeated, predictable results from a system. Instead, it's really stochastic and all over the place. “
Why freight forwarding is a great finance / fintech business
“…there's four attributes of a great finance business, it's low cost of capital, cheaper customer acquisition, underwriting advantage through some kind of data or like understanding risk, and then fourth is collections.
As a freight company, you actually have three of those four. You don't have a cost of capital advantage, but you do have collections, as I just mentioned, you have first lien and protection of the merchandise, so it's not hard to collect. You have an underwriting advantage because we're seeing, as a customs brokers, we're seeing the wholesale price of what you're buying this stuff for and you're seeing the trends, is this business growing really fast? Do they pay their vendors on time? Do they pay their freight providers on time? And the customer acquisition, well they're already your customer. “
3) The Story Rules Podcast, featuring Mohit Bansal, DeckRooster w host Ravishankar Iyer
Ravishankar Iyer runs Story Rules (he helps companies tell better stories / narratives) and Mohit Bansal founded DeckRooster (they help startups craft better pitches). Good combo and they do a deep dive into how Mohit / DeckRooster work with startups to help them tell better stories. All text below as spoken by Mohit, unless specified otherwse.
Those who go through this will find eerie similarities between the principles of good deckmaking as stated here, and the principles of good writing. The more you try to explain your business from the customer's perspective, and the more you simplify it, the better is your deck, it seems:)
Transcript link. Transcript organized by @sajithpai. Link to complete highlights. Partial highlights here.
The importance of titles
Mohit Bansal: “…many of the decks that we come across, have very standard problems… For example, titles are mostly wrong, right. People don't get the right titles. Start with the title, put the titles, let the story flow from the titles and then see what data has to go in the slide.
…standard things like, cut down a lot of text, make it more visual.
We tell them not to follow templates. Many people are so confused about how to make a deck, they go out on the web, look for a template, replicate their deck into a template, and try to put out the story there, but never comes out. And hence, when you tell them that, forget about the template, don't start from the template, here is how you have to think about the story that you want to tell, the questions that your audience has. And then think of the answers. So we don't have the answers for them. But we can make them think, we can give them a framework to think. It's largely helping them tell that, hey, you know.
And many times people are confused between whether they're pitching to a customer or to an investor because while they think of making a deck for one specific use case, they end up you know, the language that they use in the deck sometimes confuses whom they're talking to.
Right from the cover slide, somebody might say something, or tagline on the cover slide, if you read, if you just think about the tagline for a second, you will realize that while the deck is for an investor, the tagline is for the customer.”
“It is not always easy to understand what the company does from the deck!”
“So once this data gathering is done, then we spend a lot of time to put our head around this. That's where we start sort of creating a mental model of the business where we are trying to see what are the various pieces of this engine the business is and how does it work with each other? Who are the various stakeholders? And how do they engage with each other? Who sends what to whom, where's the value-added? How does the money come back? You know, and how are the various product lines sort of fit in, all that. Basically, we realize that once we are clear about this information, it becomes like a mental model, which we can explain to someone and someone can get what you're doing.
Many a time, many people feel that they go through an entire deck or entire pitch, but they can't figure out what the company does. It's like, you know, karte kya ho bhai? So I think we spend a lot of time trying to figure out that exactly, very, very clearly, what are you doing… Visual Thinking is also one of the tools we end up using, which is basically simply sketching out things when you're thinking about, you know, how does the money flow from the customer to the company, and if there are multiple stakeholders. That's the second part.”
On breaking a story into layers; and importantly, explaining it from the customer lens
“ So I feel that most concepts actually, at a very fundamental level, they're fairly simple to understand. If you can break down a concept into a few pieces, I think most people can make sense of it. That's what we have come to realize, I think what makes something look complex is typically because you know, somebody is trying to say too many things.
And, you know, if you build out a complex system in a way as layers, let's say, where you explain the most fundamental layer to understand, and, you know, so to give example, let's say, if I have to talk about Swiggy, as a company, it's easy for someone to understand Swiggy as a food delivery company.
But if you start looking more closely, you know, because now we know the narrative, we can think of the simple one, but let's say if you have to understand Swiggy, we'll start seeing them as more of a transportation company, right. They do a lot of other stuff. So they become like a transportation layer. But if you have to now explain that transportation layer to someone, it becomes very hard.
But what we are seeing while we are able to understand Swiggy is because we understand the first basic layer. So we understand Swiggy as someone who will pick up an order. Once the order comes to, so we can go to an app, as a consumer, you can go to an app, post an order from a restaurant, they will send that order to some other guy who's a delivery boy, he'll go pick up the order from that place and send it to us. It's a food delivery app. And then on top of that, you can say, hey, by the way, now we have all these people roaming around in a city, they can also help you pick up stuff from one person and drop it at another person. And that's how, if you understand this in layers, you will start understanding what Swiggy really is, or any other business for that matter, right. I think in most cases if you can break down into layers, anything, I think it becomes really simple to explain to anyone.”
4) The Jason & Scot Show featuring Benedict Evans
Interesting perspective from Benedict Evans on seeing ecommerce as trucks vs (refrigerated) vans vs bikes.
Link to transcript, though riddled with the usual machine mistranscribed typos. Detailed highlights here. A subset of the same below.
Parcels (Vans) v Trucks v Bikes
Benedict Evans: “I think the other thing that’s happening right now, is there’s now a wave of sort of 1 and 2-hour guys on the back of a bike grocery delivery startups… one of them is his Turkish company called Getir, there’s like three of them, and they’re all basically dark stores in light industrial areas around residential areas. and it’s guys on bikes bringing you a bottle of milk, a pack of Pastor, a bottle of olive oil and you know whatever they can fit in the bike and it’s sort of topping up…so you do the big weekly shop which might move to delivery but then you’ve got this I need it is a £50 pound, $75 spend top up which is also happening, and that’s also of course about density and how often you need it and what you wanted to pay, and logistics for that.
One of the points I wanted made in the presentation I did in January with that instead of thinking about e-commerce by product category and saying well books are different from makeup which are different from shoes which are different from consumer electronics which are different from something else instead you should split it into Parcels versus delivery versus bikes.
On that basis, everything that can go into a brown cardboard box which is basically the airway Amazon sees the world and everything that can’t, which is either a refrigerated truck (perishables / grocery) or you go to the grocery store or it gets brought to you on a on the back of a bike, and in that category you basically have Grocery and restaurant.”
5) The Twenty Minute VC, featuring Daniel Ek, Spotify with host Harry Stebbings
High signal to noise ratio on this one where Daniel describes his decision-making frameworks, on how he delegates, as well as enables a culture where failure is not punished and learning from failure encouraged. Particularly useful is the construct he shares on how founders should senior leaders – ensure that you are clear about the specific role that you expect the leader to fulfill, and hire for that role and your context.
Link to transcript, and detailed highlights.
Decision-making frameworks that Daniel Ek uses
Daniel Ek: “…at the very, very top, my way of approaching a problem is to try to understand if we're dealing with a high-variance or a low-variance problem. A high-variance problem is a problem where it has both lots of upside and lots of downside. A low-variance problem is one in which you have a lot of potential downside if you can't figure it out, but where the upside is limited. It's important to understand which is which.
An example of a high-variance problem would be if you design a product. You can either achieve a tremendous lot with this product, or you could go bust if you design it the wrong way. That's a typical high-variance problem. A low-variance problem would be paying salaries. Unless your business is about paying salaries, you don't necessarily have to be the best in the world at it. But trust me, if it comes a point where you're supposed to pay your salaries and you're not, and you're delayed for a week with that, you're gonna pay a very, very high price for it. So you want to make sure that you don't do that. And that's a typical low-variance problem. So you better understand first and foremost if you're dealing with one of those high versus low variance problems.
The second good framework that is worth understanding is, Is this a one-way door or is it a two-way door? Knowing if the decision is easily reversible or not forces you to think more about how much time you should allocate upfront to the decision.
Those are typically good frameworks you can use when you're thinking about a problem and how much you should delegate in that process. I try to approach it from the standpoint that with most things, it's really about finding leverage in the organization at the highest number of points. “
How to hire better
“…one of the hardest things for a founder. How do you know how to hire world-class people if you have never seen world-class? And the truth of the matter is, sure, you can read up to a certain amount on the subject, but I don't find that you would then know what someone who's pretty good versus world-class looks like.
I think the very, very key is that a lot of people just don't spend enough time trying to understand what the role is that they're asking the person to fulfill. They think about the function, but not the actual task at hand that the person is supposed to fill, and so trying to figure out what world-class looks like for that function might be totally different to what is needed for that task.
Take the role of the CFO. Are you looking for an operational CFO? Are you looking for a financially driven CFO? Are you looking for a strategic-level CFO? The truth of the matter is, we're gonna say we're looking for all of it. But that's not necessarily what's important in your organization at that particular moment. If you think about the difference between an operational CFO and a financial/strategic-type CFO, they couldn't be further apart, and so what's world-class is completely different.
….founders need to think more about what success looks like for the candidate after a year or two, and be able to articulate that. Then they need to work backwards and ask, Okay, what kind of skills does that mean that person needs to have? What kind of experience would probably prime the candidate for having those types of skills? And then get into the depth of trying to see if the candidate truly has that type of experience and learnings.”
Dealing with failure
“In Spotify's case, I like to believe that smart people will make mistakes, and if you're pushing the envelope that's going to happen. And I will tolerate that. What I don't tolerate are two things. One is I don't accept that you fail, and I'm the one who finds out about it. You need to be able to find out for yourself that you're about to fail, and you need to tell me in advance of it happening. And the second thing you have to do is at the point when you're telling me, you need to have a plan for how you're going to find out what we can learn from that failure.
I think the natural instinct in people is not to talk about the bad things, but to promote the good things. That's true in Spotify, too. But you need to create an environment where not only should you feel safe to do that, but where you know that everyone's got your best interests at heart when we're looking at these things. It's not about pointing fingers, it is about how can we actually become better, and become better as a team?”
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Thank you for reading. Please do share feedback. You can be as terse as you wish. You can mail me at thevisilenewsletter@gmail.com or DM me on twitter @thevisile