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Healing The Startup Ecosystem: An Investor's Contrarian View | Dr. Aniruddha Malpani (Malpani Ventures)
137 Plays4 years ago
"At the end of the day, I only care about process. I can't care about outcomes."
This core philosophy from Dr. Aniruddha Malpani highlights a powerful mindset applicable to both medicine and angel investing. He emphasizes that while outcomes (like getting pregnant or a startup succeeding) involve uncertainty, focusing on a sound, ethical process is what truly matters and is within our control.
Dr. Aniruddha Malpani is a pioneering IVF specialist in India, co-founding one of the country's early IVF clinics over 30 years ago. Beyond helping build families, he's a prolific author, a long-term stock market investor, and an active, outspoken angel investor through Malpani Ventures, typically investing between ₹50 lakhs and ₹2 crores in early-stage startups. His journey reflects a unique blend of medicine, entrepreneurship, and principled investing.
Key Insights from the Conversation:
- Ethics Over Everything: Building a successful medical practice and investment portfolio without compromising on integrity or giving kickbacks.
- Information Therapy: The crucial role of educating patients and the power of transparency in building trust.
- Process Over Outcome: Why focusing on the quality of your actions is more important than worrying about uncontrollable results, in IVF and investing.
- Contrarian Angel Investing: Seeking learning over ROI, making contrarian bets with patient capital, and betting on the jockey (founder).
- Learning from Failure: Embracing early investment losses as "priceless learning" to refine future strategy.
- Adding Value Beyond Money: Acting as a 'kindergarten teacher' for startups, focusing on governance, discipline, and long-term thinking.
- Healing the Ecosystem: The responsibility to call out unethical practices in both healthcare and the startup world.
Chapters:
- (0:00) Introduction: The Founder Thesis
- (2:10) Meet Dr. Malpani: IVF Specialist & Angel Investor
- (6:09) Bringing IVF to India: The Entrepreneurial Start
- (11:33) Information Therapy: Empowering Patients
- (16:07) Building the Clinic Ethically: No Kickbacks Allowed
- (21:11) From Professional Income to Passive Wealth
- (30:56) Angel Investing: Failures, Learnings & Contrarian Bets
- (39:43) The Malpani Ventures Investment Philosophy & Process
- (54:04) Adding Value Beyond Capital: Mentorship & Governance
- (1:02:30) Calling Out the Ecosystem: Byju's & LinkedIn Controversy
- (1:08:07) Betting on the Jockey: Founder Traits That Matter
- (1:13:11) Legacy: Healing Sick Systems & Process vs Outcome
Hashtags:
#FounderThesis #DrAniruddhaMalpani #MalpaniVentures #AngelInvesting #StartupIndia #IndianStartups #EthicalInvesting #PatientCapital #IVF #HealthcareInnovation #Entrepreneurship #VentureCapital #StartupFounder #ProcessOverOutcome #ContrarianInvesting #StartupAdvice #InvestInIndia #ImpactInvesting #MedTech #EdTech #StartupCulture #Bootstrapping
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Transcript
Introduction to Hosts and Podcast
00:00:02
Speaker
H T Smartcast You are listening to an H T Smartcast original
00:00:24
Speaker
Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated sort of founders in the country. And we want to learn how to build a unicorn.
Dr. Malpani's Vision for Healthcare
00:00:38
Speaker
all memories are fabrications. So I would say I would like to be remembered as the guy who healed a sick healthcare system and hopefully a sick startup ecosystem. You know, that's where the healership thing comes in, that when you're a part of a system, you can see what's wrong with. Now, it's not that everyone in the system can't see what's wrong with, but because they make money by being wrong or by predating or, you know, taking advantage of people's ignorance and naivete, they refuse to call anyone else out. So I've criticized doctors, criticized corporate hospitals, criticized the government often enough and
00:01:06
Speaker
Why did you take? Because boss, that's our future generation. You know, our generation has messed up this country. We don't want the next generation to continue doing that. And you have a dividend, you have a demographic dividend, you have a sweet spot. Why can't you do good for this next generation? These are your kids.
00:01:27
Speaker
In a way, the role of an investor is very much like the role of a doctor. The investor support starts right from birthing the starter and like any good doctor, he will at times encourage you and at times prescribe you bitter medicine.
Career Overview: Medicine and Investment
00:01:45
Speaker
In this episode, Akshay Dutt has a candid and no false part conversation with one of the most famous doctor investors in the startup ecosystem.
00:01:57
Speaker
Dr. Aniruddha Malpani. Listen to this fascinating conversation giving an insight into both the world of medicine and the world of angel investment.
00:02:24
Speaker
Hi guys, I'm Dr. Aniruddh Malpani. I have the best job in the world. I get women pregnant and their husbands pay me to do that for them. So that's my day job as an IVF specialist. And I'm now an active angel investor as well. So it's like the best of so many different worlds. So, you know, I just have fun every day when I get up in the morning, look forward to what's going to be new.
00:02:48
Speaker
OK, so great to
Reflecting on Childhood and Family
00:02:50
Speaker
have you on the show. I want to start by bringing your childhood memories back to you. You know, what do you remember about childhood and what kind of family did you grow up in? Are you from like a family of doctors or? All memories are fabrications because we reconstruct all our memories. So, you know, I mean, obviously this is not going to be a very factual account. And with all of us,
00:03:15
Speaker
you know we reconstruct them so we remember the happy things we tend to forget but yes yes so both my parents are doctors so it was and remember in those day and age and i'm not going to tell you how old i am it is pretty much assumed that if you were bright you either became a doctor or an engineer and if you weren't bright then you did a b-comm and maybe became an accountant or a lawyer or something else no kidding apart so uh and you know i mean it's actually such a great profession or maybe i should rephrase that it's i think it used to be such a great profession
00:03:44
Speaker
It still is because the emotional income you get as a doctor is unbeatable.
Emotional Rewards of Medicine
00:03:51
Speaker
I'm not complaining about the financial income but quite frankly there are lots of other ways of getting richer quicker with much less effort. But you know when a patient tells you to your face hey thank you so much doctor every time I see my baby I remember you. You know what could give you more pleasure than that. Unfortunately what's happened is people
00:04:09
Speaker
have started discounting the emotional income and worrying too much about the financial income and then I think the medical profession is really not perhaps the best choice for very intelligent hard-working students and the reality is to get into medical college you need to be intelligent you need to be hard-working. So what did you do for higher studies like once you finished school?
00:04:34
Speaker
So this was after school you did your 10th and that's the time when we had the 10 plus 2 So went to Jihin College for doing your HSC 12 because I was pretty sure I didn't want to go abroad and I wanted to stay on and become a doctor in India which means you need to go to an Indian Medical College which in those days were pretty much only government medical colleges So you had to do well, but you know by the grace of God I did so went to St. G.S. Medical College or KEM Hospital in Mumbai and
00:05:02
Speaker
So that's five and a half years, did my MBBS, got lots of gold medals along the way. So then what you do is post-graduation. So I did OBGYN, that's gynecology, just like my mom.
Pioneering IVF in India
00:05:14
Speaker
Exciting field. You help new life come into this world. And it's a very happy specialty, unlike lots of others. Whatever you may say, these are kids who have 70 years of their life for 80 years, and now maybe 90 ahead of them.
00:05:31
Speaker
and you're helping them giving birth. So they, like I said, emotionally very exciting. And in those days, IVF was brand new. While I was a resident, there was the first IVF baby in India. And, you know, this was for all the medical journals and articles. There was a little mystique about it because no one spoke about what was involved, bit like black magic, if not like a black box.
00:05:55
Speaker
says, oh, this is great. You know, we should be doing this for Indian patients. And when I say we, by that time, after I finished, I got married. So my wife, Dr. Anjali, she was my batchmate in MBBS and MD. So now I know for way too many years now. But so we so we both of us did gynecology. And, you know, she was very sure that what we needed to do was IVF, which is what we did, which is what we've been doing, which I thought was a great decision.
00:06:22
Speaker
So like you decided to bring IVF to India in what capacity as an employee of a hospital? No, no, no. So that was very clear. So like I said, you know, my mom and dad ran their own nursing home. So in one sense, they were entrepreneurs and I definitely didn't want to work for a large corporate hospital.
00:06:41
Speaker
Again, in those days, there weren't too many, number one. So most of them were just trust hospitals, but a lot of political backbiting and all kinds of things, you know, so they all look very exciting and great from the outside. But on the inside, really all they do is clip your wings and you're pretty much a widget and they expect you to keep in line. So very sure we wanted to start for ourselves.
00:07:01
Speaker
And that's why Sanjali got a Bombay University Fellowship. She went to King's College. I went to California. Did a lot of stuff, hands-on, says, how do we actually implement this? We can't copy and paste what they do in the US and UK. We don't have that kind of infrastructure. Even if we bought the stuff, we wouldn't be able to maintain it. And remember, this was way back. So we finished about 85, 86, finished the MD then, and then said, OK, what do we do? So you need further training. None of this was available. And people were doing stuff in India,
00:07:31
Speaker
was very much behind closed doors. So therefore we started. So we weren't the first IVF clinic. There were other clinics also, but still one of the handful of the first few ones.
Challenges of Starting IVF Clinics and Sperm Bank
00:07:42
Speaker
I think what differentiated us was because we'd spent time abroad. How much time abroad? So all put together, I would say a total of about a year. So we weren't actually doing, you know, a lot of it was a clinical observership.
00:07:58
Speaker
And that's the other thing we decided because otherwise, if you want to train in the US clinically, then you know you have to pay your dues, which means you first have to spend four years doing a residency, doing all the Gagamajuri, which the hospital wants you so that then you can specialize in what you want. We didn't want to do that. So we said we have the existing infrastructure. And the thing is, if you learn, perhaps you'll end up learning all the wrong things because we can't replicate this. We said we need to go to multiple different centers.
00:08:25
Speaker
to pick and choose what we can learn and adapt and evolve. So you went to some very small centers because it's easier to copy and paste what they do. Why did they agree to allow you to come and observe? So again, that's again very difficult. A lot of hospitals are very academic. And unfortunately, that's not true in India, which is tragic in one sense. You know, people encourage you to learn for yourself. So as long as your credentials are fine and as long as you're not touching their patients because then that gives them medical legal liability.
00:08:53
Speaker
Hey, if you want to come and watch, come and watch, you know, you want to learn by osmosis, please go ahead. OK, so you would just like cold call them or write them an email or no emails, no emails in those days. Yeah, this was still on a typewriter and, you know, we'd like to come and OK. Yeah. And you had to think twice before making long distance phone calls because those were expensive. But how did you find it? Oh, like I said, you know, my parents are very supportive.
00:09:21
Speaker
So that's that's what they wanted. I mean, they were the ones who are pushing and said, you know, why don't you go learn, bring these skills back with you and then we'll see. So so there was a lot of advantages which to provide the provided that sound base that you had an existing clinical infrastructure. You could do things independently. You didn't have to worry about making ends meet. You had the money.
00:09:40
Speaker
and then they would give you the clinical freedom to be able to say okay fine let's see what we can do what we can't do what works what doesn't work and a lot of that is trial and error but because you're doing it in a clinical sitting with your mother being there you know who's a senior gynecologist so that makes a world of a difference so a lot of it is then okay fine this will work not work
00:10:01
Speaker
So you spent a year outside to absorb how the world is doing IVF and then you launched it in India when you came back? Yes, yes, yes. And again, so again, interesting history. One of the things when we'd gone abroad was there was a clinic in the UK called Midland Fertility in Birmingham, which needed Indian sperm samples, because as you know, in Birmingham, there are lots of Indian
00:10:26
Speaker
people staying there and lots of them are infertile. About 10% of the married couples are infertile and a lot of them needed donor sperm samples but they didn't have many donor sperm samples from Indians. So one of the things and the name of this doctor was Dr. Peter Bromwich from Midland Fertility. He says I need to you know source sperm samples from Indians. So I said yeah that's something we'd be happy to do and this was very early days you know where donor insemination was a taboo topic in India
00:10:55
Speaker
So when he came down he actually came down with a BBC crew which were filming you know what he was doing in order to get sperm samples for the couples whom he needed to treat.
00:11:07
Speaker
So then Indian journalists said, what's the BBC doing in this little clinic in the middle of nowhere? Who'd heard of us? No one. So then they'd found out. And then we said, yeah, we're starting a sperm bank. So whoa, what's that? We've heard of blood banks. We've heard of, not HDFC in those days, but we've heard of SBI. What is sperm bank? Why do you need a sperm bank? And therefore, we spent a lot of time, and as it happened, because we were the first doing the sperm bank thing,
00:11:35
Speaker
There was a lot of press and a lot of our time was spent in educating people about taboo topics about what is sperm man case and what IVF is and very very early days and Therefore a lot of our focus was on what I call information therapy on educating patients. So I always think In the healthcare ecosystem the patient should be at the heart of it How did you educate patients so great. So the first thing we did was write a book and
00:12:04
Speaker
many many years ago so now we've written lots of books our first book was getting pregnant how to have a baby and you know again did extremely well because like I said infertile really was a topic which no one wanted to talk about even though it was so surprisingly common because no one knew what to do and gynecologists honestly didn't have much to offer in those days and IVF was a big breakthrough but there were so many myths and misconceptions and there still are about IVF
00:12:35
Speaker
So we had, so the book was a big step.
Patient Education Initiatives
00:12:37
Speaker
And then those days, you know, the internet was opening up. So I had one of the first few, I don't know whether you remember those dial up modems on eight KPBS and and then I had a VSNL account. And so there was a lot of it in the first few days. And one of the things we started was a patient education library, which again, was the first in India and still is.
00:13:02
Speaker
that everyone knew medical libraries educate doctors. There's so much information for patient education, especially written in the US and UK. And that's the one thing we learned that doctors respected patients and took time and trouble to understand what their personal preferences were. In India, everyone has a very paternalistic approach. So we had a lot of these books, we started what's called the health education library for people which still runs. Like an offline library. It's a real world. Yeah, it's a real world library. And our hope and dream was
00:13:32
Speaker
that every hospital would have this patient education library because doctors are too busy they don't have the time and they don't even care stupid question yeah yeah go ask my assistant or whatever and we said you know it's not good it's not good for the patient not good for the doctor because if something goes wrong that patient will not forgive you so why don't hospitals actually start patient education libraries you know anyway patients and their relatives are hanging around they have questions no one's answering them
00:13:59
Speaker
And the doctor doesn't need to waste his time. There's a nurse or an assistant who will help the patient find the information they want. 80% of your questions will be answered. So then you're only asking the more sophisticated ones relevant to your needs. Again, very foreign concept. No hospital was entered. Yeah, great, Dr. Malpani. Great idea.
00:14:18
Speaker
And so I think that's one of my failures. So I learned a lot by what didn't work. But anyway, so that was one thing. Then we went to pharma companies saying, why don't you sponsor this? Yeah, Dr. Malpani, of course, you know, as pharma companies, we want to put patients first. All BS, all they want to post is their investors in the bottom line. And therefore, all they care about is, you know, doctors and how can we get doctors to prescribe our medicines, for which obviously all we need to do is bribe doctors. You know, what do we care about the patients?
00:14:47
Speaker
and it was it was just throughout you know through this thing which is fine you know i'm i'm a realist so i always think of what could have been and didn't so i think of myself as a failure you know what what didn't i manage to do in order to convince people that this was a worthwhile investment so we started the library which we still run we wrote lots of books and all these books are now available online for free the website is thebestmedicalcare.com so we wrote books on
00:15:13
Speaker
for doctors on successful medical practice, where the message was the most important thing in your practice is your patients, everything else is paperwork. The tragedy is that that's not what we're doing. In one sense, the medical profession has sold itself out, you know, cards, kickbacks, commissions, where is the professional integrity? You know, you bend over backwards for politicians. I mean, just look what's happening during this COVID-19.
00:15:41
Speaker
to make me get started breaks my heart but but but so and it's actually getting worse it's getting progressively worse because even these young medical students what are their role models what are they looking up and now you know everyone wants to buy a medical seat
00:15:55
Speaker
So you start off on the wrong foot. So anyway, I'll come back to that. So again, the books are there. So there's a book called Information Therapy. If you can, you know, take me through the milestones of the Dr. Malpani Clinic, like when did you officially launch the clinic and, you know, what was the growth like in that? And again, I'm like, you know, there's a business podcast. So to some extent, I'm also asking you how did it do as a business in that. So, you know, one thing you must remember is
00:16:23
Speaker
The past doesn't repeat itself. And therefore, I think the lessons which people should take, they should take with a very large pinch of salt. Because if I was starting an IVF clinic today, what I would do would be very different from when we started it 30 years ago, because everything was different 30 years ago. And you were the first movers in the market. Yeah, exactly. There weren't too many, a lot of your time. Now everyone at least knows, so your messaging is different. We were the first ones to have a website.
00:16:52
Speaker
run up you know this thing now to everyone copies and paste everything we put up so I always say yeah imitation is the best form of flattery but so so in those days as I said before our primary focus was on educating patients see we've never given a single neapasa as a cut or a kickback or a commission to any doctor now even in those in those days when we started you know this kickback system had become pretty rampant
00:17:18
Speaker
You started putting your parents clinic into like dr. Malpani. Yes. Yes. Yes So again, we said, you know, why are we doing OB-GYN? We don't want to do that. We only want to do IVF This is such a cool thing to do and there's so many patients and you know because of that Spumbank and because of all those articles We actually started getting direct patients directly from day one Which is very unusual. Trust me
00:17:41
Speaker
in retrospect you realize how unusual it was we didn't even realize because it just kind of you know when things fall into your lap you say but anyway so a lot of patience a lot of this thing it was the two of us we had to figure a lot of stuff out a lot of heartburn a lot of mistakes in those days even to import stuff
00:18:00
Speaker
was such a nightmare not even funny because you had to go to the customs officer and explain to him sometimes you had to bribe them we used to have liquid nitrogen containers not all this is very mainstream you can pick up a phone and order all these disposables and culture medium in those days you couldn't
00:18:28
Speaker
So a lot of it was on establishing things and a lot of it was Gadamajuri, which I think is true for everyone doing something new. It's like, you know, if you're an entrepreneur, you need to set up last mile logistics. There's lots of stuff you need to learn, learn by doing no other way by learning that stuff. But like I said, that so much is past history.
00:18:51
Speaker
There was a lot of mistakes we made, but I think the good thing is we could we could correct a lot of those mistakes because again, it was the two of us. We didn't have to worry. We didn't have to take shortcuts. So by when you like, you know, get the major part of your initial setup done and started like, you know, going into the scale up mode. So, OK, great, great question. So the question is what your definition of scale up is.
00:19:15
Speaker
So my definition of scale up and we've had lots of these questions. Why don't you start a chain of clinics? So many other people are doing it. Isn't that the right thing? You can scale up in breadth and you can scale up in depth. And our idea of scale up has been very different. Idea of scale up is what gives us pleasure, what allows us to provide the best care possible for our patients. And that's something we don't want to compromise on.
00:19:41
Speaker
So again, one way of doing it is to train lots of doctors, or the other thing of doing it is to start a franchisee kind of system, how we get all those requests. We said that's not the reason why, you know, I don't practice medicine for money anymore. God has been kind, you know, been investing in the listed space for donkey's years now, which has been doing very well. So my passive income is actually far more than my professional income.
00:20:08
Speaker
So I continue doing IVF because I enjoy it. And then I can tell people, look, this is the right thing to do. Don't cheat patients. Don't take shortcuts. And I'm not very popular amongst doctors. Let me tell you that. Because I call people out about cuts and kickbacks and actually say, you know, giving a kickback is a stupid thing to do. You're signing away 50 percent of your income for the rest of your life. This is a race to the bottom.
00:20:34
Speaker
what professional self-esteem do you have if you start doing things because the GP tells you whether that guy whether that couple needs IVF doesn't need IVF all kinds of things so you know interestingly there are two groups of patients who get terrible medical care in India the very poor because they can't afford it and the very rich
00:21:02
Speaker
because they kind of say, yeah, we're going to the best doctor. Now, the best doctor is a brand name doctor. I mean, not be the best, but anyway, so so many. So therefore, like I said, so we've we've been lucky in the sense, you know, we've been able to maintain ethical principles. We've been able to walk our talk. It's not just theory. So I want to know that, you know, you are an angel investor, which means that you need to start with money. How did you earn that money?
00:21:31
Speaker
So initially, all the money we earned was professional income. That's the only source of income for a doctor. The difference is that we didn't... doctors are daily wage earners, Akshay. Yes, absolutely. If you don't get paid, then you are terrible. And fortunately, a lot of my friends are stock market investors. I read a lot of books. A lot of that made a lot more sense to me. How do you generate passive income?
00:21:59
Speaker
And you know, you either do it through real estate, which I didn't like at all, or public markets, which I thought was great. So the value investing piece made a lot of sense, no black magic about that. And one of my friends Rakesh Junjinwala. So you know, okay, so blindly trusted him. Like I said, God was kind. The markets have kept on doing very well as the Indian economy has done very well.
00:22:22
Speaker
So whatever professional income we had, I didn't buy a new car or anything else, didn't need to buy a new clinic or buy a new house. So we invested that in the public markets, as a result of which that corpus has just kept on growing. And therefore, even the dividends I get from my public markets is more than a doctor would earn on their professional practice. And not that IVF doctors don't earn well, we do.
00:22:48
Speaker
and you could use you know so quite frankly to answer your question how many patients do we see we do about 300 cycles a year but you know what Akshay overnight I could increase that to 3,000 if I wanted all I would know is to give a kickback to every doctor to refer a patient to me this you know we have a great reputation we've been doing this for 30 years everyone's heard of us but I mean GP ultimately when you are infertile what do you do you either go to your GP or your gynaecologist
00:23:16
Speaker
who does your initial workout then the GP or gynecologist said okay you need IVF then the next thing is which of course they are not going to say so that same GP who will refer his own bhabhi to me for the treatment will never send a patient to me which is fine but so therefore then all our patients are either word of mouth
00:23:44
Speaker
or you know because of the online stuff and they appreciate the fact that we're open and frank and you know put our patients first. So it all kind of ties in. So I think this entire metric of how many cycles you do is ridiculous. And quite frankly Akshay is that if I wanted to maximize, see the trouble is vanity metric means what that's what you focus on. So if tomorrow my focus was maximizing my number of IVF cycles then every patient who walked into my clinic I would treat as a buckra and convert it to IVF
00:24:13
Speaker
and I could do that very easily Akshay but I don't I tell a lot of patients hey don't be stupid you don't need IVF you can make a baby in your bedroom why do you want to waste your money now some patients appreciate that some patients think this guy's an idiot and go to someone else you know good for them I don't care I don't need to do this for either a vanity metric or make money or any more so to that extent I'm blessed Akshay and that's always been true it's you're right it's not like my passive income was that much when we started
00:24:41
Speaker
It was significantly less. But I didn't need to scrabble for a living. Like I said, my parents are well off. And they said, do what is right. Forget about everything else. We don't care.
00:24:54
Speaker
So does that answer your question or? Yes, yes, yes. So why not look at an ethical
Ethical Healthcare Scaling and Investment Insights
00:25:03
Speaker
scale up? I mean, it could be. Great question. Great. So we tried that also. So we said, yes, what is an ethical scale up require? Akshayat requires patient capital. Right. Yeah. Capital is not available in this country. If you take money from a VC,
00:25:41
Speaker
You could have put your own money like if patient capital is not available externally that could have been
00:25:50
Speaker
Yes, a patient capital is now available with me internally, but I'm too old to do this now. So I don't want to do it. So for me, the most important thing in my life at this stage is my reputation.
00:26:02
Speaker
You're right. If I had that same amount of money, maybe 20 years ago, which was personal money, which I could afford to invest without this thing, then I might've thought about it. But you know, I'll tell you another thing. All this stuff requires a lot of energy and running around and stuff that requires a certain temperament as this is what I want to do. And I don't think I necessarily have that. I want to do what is right for my patient and whether it's one patient or a hundred patient, so I care much more about depth and quality than I care about quantity.
00:26:30
Speaker
So it'd be great if I could find someone else who thought the same way, you know, who said, yes, this makes sense. This is what I want to replicate. But it's not easy. A lot of people think I'm a crackpot. So have your children followed your footsteps in terms of joining them? No. And I told them don't do medicine. That was very short about. So both, you know, so my older one
00:26:53
Speaker
She got into medicine, we said, don't take it. And I'll tell you why. The writing on the wall is what? Does anyone respect a doctor anymore? What have we doctors done to our own medical profession? The first thing is everyone, yeah, we have to take a test order. Tragically, people trust Dr. Google more than they trust their doctor because we doctors have let our patients down.
00:27:18
Speaker
we've lost their trust. All these are open secrets. The step number one is acknowledge the fact that there is rubbish going on, which we conveniently turn a blind eye to. It's the only leaders in our own medical profession are often the most corrupt, which is how you become the president and the chairman of all these societies. Because you know, you keep each other happy. And okay, this year, you get elected next year, you elect me. And then you have this nexus with the pharma companies who
00:27:44
Speaker
Why do doctors require pharma companies to sponsor medical conferences? Can you please explain that to me? I'm going to ask you a webinar. I mean a webinar is free. So why the hell? I mean no self-respect. And the general standard is, why do you want to sponsor medical conferences?
00:28:10
Speaker
you know obviously there's money changing hands but hey they refuse you know this is a complete ostrich in the sand attitude no one dares call anyone else out because they all equally corrupt and if i try doing that dr malpani you're a anyway so uh you're what what all kinds of things uh you're uh
00:28:32
Speaker
you're a snake in the medical profession you are you're stabbing your colleagues in the back I said how by telling the truth yeah aren't you like passing on your bias to your kids I mean you know this is great question so I told him this is the writing on the wall we've been blessed and we've been very fortunate and God has been tined
00:28:57
Speaker
and you know but look the whole point is you need to skate to where the puck is going to be this is not what the situation is going to be when you guys are going to start practice
00:29:07
Speaker
which is, you know, my older one is now 30. Sorry, she'll kill me for saying that anyway. So this is when she would have started practicing medicine in 2020. What would she do, poor thing? You know, she'd be filling up forms, she'd be answering what some government bureaucrat in their wisdom decided should be done, shouldn't be done. Pretty miserable life. And she's done very well for herself. So he said, forget it.
00:29:32
Speaker
So she did her undergrad, got a scholarship, went to Oxford, did a BSc in immuno- masters in immunology from Oxford, then said, I don't like this. So then she did a master's in environmental science from Cambridge. So I don't like this. So then she worked for five years in London in a social impact fund of funds called Big Society Capital. They said, that's great, but you know what, I need to do something else. So then she went to Stanford to do her MBA.
00:29:59
Speaker
and got married in the process and now she's an entrepreneur and she makes films so I'm very proud of her you know if she'd done what I told her to do she'd have got stuck in a rut and she'd have cursed me every single day of her life I did this because you told me daddy and now look where I'm stuck yeah and and that's true for my younger one she did our undergrad in Bombay we said please do your undergrad in Bombay because you know sometimes you do your undergrad in the US we can afford to send you
00:30:25
Speaker
But then it's mostly party time, so you need to be a little mature. Then she did a master's at the Yale School of Forestry and Environment on environmental sciences. And then, you know, she worked for a green tech company in
00:30:39
Speaker
San Francisco, work for one in Nairobi. So lots of things happening. And I'm so happy. And you know, the great thing is I learned so much from them because I know nothing about what they're doing. That's one of the reasons I'm an angel investor. I need to keep up with my kids so they can't B.S.V. I said, yeah, show me your avatar and show me your business plan and what's your MVP so they can't take me for a ride. So I think that's fine anyway. So I think the great thing is you need to keep up.
00:31:09
Speaker
You know, you started building passive income by investing in the stock market. So when did you switch from doing that to taking more risk and investing in startup? That's exactly my point. I haven't switched anything. All these are parallel tracks. So most of my money is still very much in the public listed markets. Thank you very much. And whatever surplus income I generate from that, I use for angel investing.
00:31:37
Speaker
My professional income I would never put in a startup. Trust me, that's hard earned income by just sweat and blood and tears. But I mean, I understand money is fungible. But I'm not saying money is easy come easy go. And I don't burn my money. I'm a Marwadi. But I'm kind of much more willing to risk that if you know what I'm saying. So most of my money is still very much listed space. But I also understand what I don't understand.
00:32:07
Speaker
So I you know I don't have the energy to sit listen to investor calls and I can read a balance sheet and this thing but I don't want to sit and read annual reports and look at the fine print of what the auditor's qualifications are. I know enough to do that but I don't want to do it. I find it boring. So my money gets managed by my family office which takes all the decisions. I'm terrible at pulling triggers with a lot of that stuff you know behavioral economics
00:32:32
Speaker
all this stuff and doctors think they're over smart anyway so that i outsource and then whatever the money you generate uh will then get deployed and i have an analyst who keeps me honest plays devil's advocate saying Dr Malmani don't be an idiot because then what happens is every time as an angel investor hat you fall in love with the entrepreneur because entrepreneurs are charismatic and they're going to change the world it's very easy to fall in love
00:32:57
Speaker
and then very easy and I burn my fingers often enough so I try not to fall in love so quickly and anyway my analyst keeps me honest. When did the first such investment happen? How did that happen? Long back and didn't turn out well at all. So like I said, I've been blessed, lots of friends. So one of my friends is Rajesh Jain. He ran one of India's first digital things called India World and he sold it to Satyam and made lots of money.
00:33:24
Speaker
and this was in the dot-com boom days where we said healthcare needs to be fixed you know all doctors are dinosaurs we need to provide patients with personal health records this was in the good old days so we would effectively give them clever cards with sim cards and you know you'd put all the medical records and this was a company we funded in Bangalore
00:33:46
Speaker
messed up completely because you know two hands off different geographic locations so learnt lots of things but that was way back when was it 2000 dot com yeah 99 yeah so that burned my fingers once then there was an other company in which I was the board of directors this is very high profile they said Ramabhijapurkar and Ashok this is the guy who Ashok Vadwa
00:34:16
Speaker
who runs a very successful P form, which this is the .com days. So we need to create a portal. Everyone's creating portals. And if it works in the US, it'll work in India. But that was like a good investment, or again, it went bust. No, no, none of these. See, I measured investments by learning on investment, not return on investment. I don't expect to make any money on all this stuff. So learning on investment, great. Return on investment, big fat zero.
00:34:45
Speaker
And that was a lot of money for me in those days. But Tika, you know, live and learn. And then so I said, I can't afford to keep on burning my fingers like this. So one of my friends introduced me to Mumbai Angels. And by, you know, then there's a network and a lot smarter people who understand a lot more. And, you know, at least I don't make the same mistakes twice. So sign some checks, learn from them, read the few books. And now I do most of it through my family office. And part of it is also now
00:35:16
Speaker
Part of what I think is one of the things which the Indian startup ecosystem doesn't do well is share information. Entrepreneurs don't blog enough. Investors don't write enough. And that's one of the things I wanted to change. And that's why we had all that LinkedIn stuff and a blog and, you know, what's an investor's perspective. I said, we need to walk our talk. We need to be open and transparent. And that's very good because then entrepreneurs can call me out.
00:35:41
Speaker
I can't afford to do that because if I do that I'll get into trouble which is good so we want to be open transparent this is our process this is what we expect from you anyway so then there was there was still a third investment which went down to zero very quickly this was a friend who said yeah yeah this guy is great he's an IIT grad he's done this clever thing
00:36:11
Speaker
The initial checks, the first one with net courting in 2019 was fairly large, was about 2 crores. The portal one was smaller. The one, I think this was about 7-8 years ago in this company, it was called Urjas, which was biofuel kind of company.
00:36:31
Speaker
which was about 50 lakhs but I was the sole angel investor and didn't understand march anyway so burned my fingers and then like I said did it through the network and and now I'm much more comfortable and and I'm looking for contrarian bets I'm kind of saying I have no right to win against VCs they have far more money in the far deeper network but the right I have to win is I can take contrarian bets with patient capital
00:36:56
Speaker
why didn't you give up after burning so much money like you burnt close to three crores maybe like you know what made you say i want to continue but that learning is priceless i said now that i've made the mistakes the least i can do is learn from them and you know not repeat them again and if nothing else i'll make some new ones so my wife has been married too long to me too
00:37:19
Speaker
divorce me for doing stupid things. So okay, you know, she turns a blind eye. This is so that's okay. And again, like I said, some of it is also because of my daughter, you know, she was doing all this angel investing in this fund of funds and big society capital in London. So I said, Yeah, social entrepreneurship makes so much sense. Hey, you're doing in London, why they do not try doing this in India.
00:37:44
Speaker
So, so many things and you know and I'll also tell you one thing when you reconstruct some of these things in Apshe, you often reconstruct them incorrectly. Like I said, my mind will play all kinds of games. So, but when, and you know, the only reason people become angel investors or the only good reason they should become angel investors is for emotional reasons. Again, people think I'm an idiot when I say that.
00:38:14
Speaker
I said where is that replicable? I mean if Sequoia and Matrix can't replicate and you know they have to take so many portfolio bets because they don't know what's going to happen what gives me the right to do any of that
Qualities of Successful Entrepreneurs
00:38:32
Speaker
stuff. So I don't pretend life is probabilistic full of uncertainty these are complex adaptive systems and answers will emerge.
00:38:39
Speaker
I don't care. I just want an entrepreneur who has integrity and will not shaft me, who has humility and will be willing to learn from me, who has curiosity and is willing to learn for himself and is willing to teach me. And we will try to live that and you know this thing. So therefore we will therefore we're very vocal about you know so all this stuff is available on our website which is malpaniventures.com
00:39:06
Speaker
we've created startupmentors.in because the reality is there's so much rubbish which happens in the startup ecosystem just like it happened in the medical profession and I'm happy to call people out and you know the good thing is I can afford to do it Akshay I don't have to keep anyone happy you know no VC dares talk aloud
00:39:25
Speaker
You give them four drinks and then you talk to them in a bar and they'll tell you a completely different story about the politics within VCs and how they shaft each other and all kinds of stuff. But on their face, you know, the most charming people you could possibly meet. The reality is very different. And I can say what I want because
00:39:43
Speaker
You know, I mean, I'm just being honest. I've burned my fingers often enough for saying what I want. We'll come back to that afterwards. But my wife says... So how much do you typically write as Jack now? A very comfortable writing between 50 lakhs and 2 crores.
00:40:06
Speaker
And again, our philosophy is all online. We prefer doing it in tranches. And a lot of it, we let the entrepreneur run. I hate micromanaging people. I'm very lazy. So I think of myself as a catalyst. And because we are open and transparent, this is what we expect from you. And we assess two things. One is attitude, and the second is performance.
00:40:37
Speaker
Attitude is very easy. Does this guy send us MISs? Do I have to keep on thinking and reminding? Does he hide stuff? You're doing very well, great for you. You sell out, I'll sell out. I don't have the patience and the energy to deal with people whom I think are toxic and who don't respect me.
00:40:58
Speaker
uh performance like i said before i'm much more forgiving because at the end of the day i only care about process i can't care about outcomes because i know that in my daily life as an IVF doctor no matter how good a doctor i am and no matter how much i do i can never predict which patient will get pregnant and which don't because the i can make great quality embryos in the lab they can implantation is a black box i can't control that
00:41:27
Speaker
the startup system as well. That's an amazing way to look at this, that you are birthing startups as a parallel to the way you work. I do a lot of presentations. I actually tell people doctors make good angel investors. And one of the things you're taught is empathy. I mean, by the time you finish medical college, it's already been squeezed dry out of you is a completely different thing altogether. But part of the reason you became a doctor is you want to help people, right?
00:41:58
Speaker
So you care, you want to be kind, you want to be seen as someone who's helpful. So I think doctors have that empathetic streak in them. And because, like I said, I've been fortunate, I see patients on a daily basis, and I don't have to do a lot of rubbish, which other doctors are forced to do. I can still afford to put my patients first. So in my angel investing hat, I'm putting my entrepreneurs first, plain and simple. So we want our entrepreneurs to win.
00:42:26
Speaker
My hope is that if I'm good to my entrepreneurs, they will help me to win also in the process and they won't shaft me. And that's a leap of faith. And some of them will. And my hope is that my ability to identify good entrepreneurs will progressively increase over time, which is why I will continue doing this Akshay. My hypothesis, I'm getting better at identifying them. I have a higher public profile, so it's easier for the right entrepreneurs to come in touch with me.
00:42:54
Speaker
We have a much better defined process which we learned the hard way. We have a brand which stands for something and we made so many mistakes that we won't repeat them again, hopefully. Let me ask you on details on these things. So you said you're getting better at identifying entrepreneurs. So tell me about that. How do you.
00:43:17
Speaker
We all renewed ourselves and we're getting better, don't we, I'm sure? You know, I always tell people the easiest person to fool is yourself. I'm a big believer in what I call metacognition. That I need to think about the way I'm thinking and am I fooling myself? And often I am, and I'm fairly kind with myself. I allow my entrepreneurs to get away with stuff. I allow myself to get away with stuff too. So yes, what do we do? So we follow a process.
00:43:43
Speaker
We actually put hurdles in their way and we see how they respond. So effectively, we will expect a certain degree of discipline on their part. Do you want to talk to me? I'm very happy to talk to you, but I want an email. I want it in writing. I don't want you to charm the pants away from me and then get the check. I want to see if you're disciplined enough to formulate your thinking.
00:44:06
Speaker
because if you can write clearly obviously you can think clearly and if you can't be bothered to write clearly then maybe you think clearly but i don't want to take that leap of faith and i've had so much flack and criticism about this oh you're so snooty what happens to all the guys who can't write english well you know all kinds of this thing but i said look that's a basic skill
00:44:26
Speaker
I don't know, you better learn it. And therefore, I want everything documented. If you can't be bothered to understand what a pre-money valuation is, then why are you coming to me as an angel investor? A, I want proof that you've done your homework. I don't understand spoon feed you for the rest of your life. So stuff like that. And sometimes I won't say we're deliberately rude, but the reality is email is very black and white.
00:44:50
Speaker
Sometimes we don't intend to be rude but people could misinterpret us and people who choose to interpret my actions as rude or again red flags.
00:45:03
Speaker
comprehensive pitch which has like a business protection and a business free money value and then a lot of people will say the fact that you're asking for an NDA itself means I don't need to give you my money so A you come with a business pitch and no revenue I'm not the right guy for you
00:45:28
Speaker
then you need to convince me that you know why I should still invest you as a pre-revenue and remember I make my rules I break my rules I'm very happy bending them but then I need you to prove to me that you know they're worth breaking in your case and you have the revenue then share with me and you don't want to share with me then go find someone else because if you don't trust me enough you trust a stupid piece of paper called an NDA and not my word you know then obviously you don't respect me enough
00:45:55
Speaker
And if you're going to treat me like you treat all other investors, then don't come to me, go find someone else. And if you're going to ask me for an NDA because that stupid incubator or your mentor who's charging you $5,000 or $10,000 for giving you advice is telling you what to do, then I don't want to talk to you. So that is step one, that you want a detailed... Yeah, so that's great because, you know, that acts like such an effective filter to 90% of how you are there. Then what's next step?
00:46:21
Speaker
Ah, so then we say, okay, these are the guys who fit what I think makes sense. And you know, I don't care about, I mean, that's all rubbish. How do you shortlist? Like say you've received, let's say maybe 50 pitches in a month, which are detailed enough to cross your first hurdle.
00:46:42
Speaker
I wish entrepreneurs were that. So, you know, a lot of the guys who've reached that stage will not even want to come to me. They'd rather go to a VC. There are lots of advantage of going to a VC as comparing to Dr. Malpani. And there are lots of advantages going to an angel in network as compared to going to Dr. Malpani. So I tell everyone upfront, hey, you know, I don't think I'm the right investor for you, which is fine. So whom are you the right investor for? I am the right investor for a social impact entrepreneur.
00:47:14
Speaker
who cares about doing stuff on the long term, who is looking for an angel investor, who thinks of himself as being a partner in the journey, who doesn't care about an exit in five years, who doesn't want to burn his money either, but is happy to let you be the captain of the ship. You know, actually, I'm very happy when people have gone and tried raising money from other people because then they appreciate the fact that we can provide large sums fairly quickly.
00:47:42
Speaker
so effectively again and so we usually share stuff with them we say read this book this tells you where my what my philosophy is or where i'm coming from and if you think this makes sense and we're not right for lots of people lots of entrepreneurs create startups which are vc designed they're designed for vcs to invest in because they want to grow on 10x on this thing so that's great but that's obviously wrong for me so very easy to say no to lots of those
00:48:08
Speaker
Easy to say no to the ones who are obviously lying, hiding information, using vanity metrics like GMV and stuff like that. And then of the ones I find interesting, so then I share some emails. As in you ask them for more information or something, and then you see how quickly they give that to you. Absolutely. And you know, I don't know how to say it, but I don't know how to say it.
00:48:36
Speaker
maybe I'm being unfair but you know I mean come on at the end of the day I have to use some heuristics to be able to sort out I'm not saying my heuristics are perfect but they work for me I mean could I develop a better set yes will I continue developing a better set yes trust me but as of now this is what it is and you know five years from now I may look back and cringe what an idiot I was but Tika all of us are idiots and I'm showing 2025 I'll be an idiot of a different sort that's all
00:49:05
Speaker
So then once I've done that, then I will, so then like I said, and then I hand off to my analyst, who then has a strict process, which he follows, which we share with our entrepreneurs. So he can't let the ball drop. The analyst has got like, for the due diligence he needs data.
00:49:24
Speaker
Yes, absolutely. These are the 10 steps we need to follow. We need to look at your accounts. We need to talk to your customers. We need to talk to the rest of your team members. That's all good stuff which you already know. I mean, that's very generic, but it's shared. It's shared with the entrepreneur. So he can prepare for all this stuff. Because we don't want to waste our time chasing people who are not right for us also. All this consumes bandwidth. We'd rather focus on because the poor guy has enough to do managing the existing portfolio.
00:49:53
Speaker
which typically in an existing portfolio, 80% of entrepreneurs are good. It's just 20% who will drain all your energy, not sharing stuff, partly because they're ashamed, partly because, you know, Dr. Malpani, you know, shit happens. I understand that. But, you know, trust me enough that I will not give you a hard time. I may not sign another check. That's a different issue. But if the only thing you see of think of me as a source of funds,
00:50:22
Speaker
And obviously, you know, I've done a bad job. OK, so how do you invest? Like you give them like what percentage of money up front and what what is the so, you know, all rules of thumb. And like I said, all very, very flexible. So again, a lot of this is going to be very misleading because the beauty, you know, the thing is about being a VC is everything is written in stone because you made promises to your LPs and then the analyst has to go and convince his boss.
00:50:49
Speaker
which is usually the GP key, why this is a good idea. And then the GP has to convince an investment committee. So a very, very constrained. My constraint is the size of check I can write. But you know, fortunately, I have a lot of dry powder. Markets have been kind.
00:51:09
Speaker
So, we bend rules all the time. So, again, in Gautamoti, we've written what our sweet spot is and we share it. But that doesn't mean that, you know, so, for example, a sweet spot for a company would be, let's say, pre-money valuation of about seven or eight crores if you're earning revenue. Now, obviously, if you're earning more revenue, then that's no longer a relevant metric. Use your common sense. And it's perfectly, and the good entrepreneurs will say, yes, Dr. Malpani, I understand this is Falana Dikana. And they earn my respect because they've done their homework on me.
00:51:39
Speaker
And they know, okay, this is why this is what it is. But I think this is why we deserve to be made an exception of for the following reasons. And then ultimately, every everything is a negotiation. You convince me you're right. And you know, big picture. But show me how well you negotiate that. That's what I meant about, you know, putting guys through hurdles. You negotiate well, you try to create a win win where I stand to benefit. Then, you know, boss, okay, if you if you want to keep all the gravy to yourself,
00:52:09
Speaker
then at some point you will shaft me when it's your next round or whatever else. I don't want to talk to you. Those are some of the things. So we'll make an offer, wait for a counter offer, teach them how to negotiate. What is the stake that you look at? About 20%. But again, like I said, all very, very variable. It should be enough that it makes a worthwhile, it should affect my needle one way or the other. Why the hell am I wasting my money?
00:52:36
Speaker
So like say you commit to a startup that you'll invest one crore for 20%, then how do you disburse this? Typically, we say take it in two tranches because I always think having less money makes you smarter. Having too much money makes you do dumb things. So we said, look, you know, I'm a man of my word for giving you that you tell us what metrics you're going to meet with six months of funding.
Investment Strategies and Entrepreneurial Initiative
00:53:02
Speaker
You decide, I'm not telling you how to run your business. You meet those metrics, I'll disperse a second check. Suppose you don't meet them. I'm not Shylock. I'll still go ahead most probably because we don't want to kill you. And you'll have to explain to me, but at least you will be much more focused and much sharper. And I think especially for young, fragile startups, they need a lot more hand-holding and monitoring. So ultimately, we say, look, we're doing this in your best interests. If you think it's not in your best interest, then don't come to me.
00:53:32
Speaker
because we think it's in your best interest because having that kind of oversight in the 30,000 foot view so we can pick up where you're going wrong early on so you don't burn too much money doing the wrong things so cost correction is that much easier we tell people look I'm on your side I've got skin in the game I've given you a check but you know what happens is afterwards people distort perspectives then some mentor will come and tell them
00:54:11
Speaker
So we see a lot of this also, which is fine.
00:54:14
Speaker
So like, you know, what is the value addition that you provide to an entrepreneur? One, of course, you is that you're giving money, no doubt about that. And then you are giving them some targets to chase. Besides this, what? No, no, they're setting their own targets and not me. So what we tell them is a simple operational stuff. You do it yourself. But this looks way out or this looks this thing because, you know, we've seen other businesses.
00:54:41
Speaker
One good thing is my family office invests in the listed space also. So because we're investors in listed space in that same domain, there's a lot of cross-learning. So we can tell entrepreneurs, look, this is what a listed space guy thinks of. This is the way he thinks about his industry at his perspective. So they may not respect me, but they will respect the CEO of a 100 crore company, which you understand what I'm saying?
00:55:10
Speaker
So therefore, and we encourage them, you know, buy a share in the company, listen to the investor calls at some point, you know, you want to be in disguise shoes 10 years from now. But so we have we bring that perspective as to what you need to be looking at as you grow over five to 10 years. So we focus a lot on corporate governance, but kind of we think of ourselves as kindergarten teachers. We're making it ready for middle school or junior school or whatever they call it these days.
00:55:38
Speaker
uh you know so that by the time you're ready for your next round you know the next round of investors whether it's a VC or whoever else will have no problem signing a check he'll mostly have a problem signing a check because Dr Malpani says such terrible things about VCs but not about that particular VC no sorry kidding apart but uh but uh but you know so therefore okay yes you know all your paperwork is in order you filed everything because a lot of startups entrepreneurs haven't done this before they're so focused on
00:56:06
Speaker
revenue targets and stuff like that. They forget about things like company culture. They forget about things like, you know, filing returns on time and stuff. And we tell them, boring stuff, but needs to be done. So as your team would be doing calls with them where they would discuss. Yeah, of course. So we expect certain stuff from them. So we expect after we sign the check, we expect a monthly MIS.
00:56:36
Speaker
Uh, yeah, of course. And we say, look, don't do the MIS as a favor to me. You should do the MIS because it's your company. You need to manage it. And then we will tell you, you know, these are the assumptions we made. That's the first spreadsheet on your distinct. What are the assumptions right? Wrong. What are you tweaking?
00:56:53
Speaker
then your financial spreadsheet which is the easy bit but which often a lot of them find very boring but we teach them how to do that but the more important thing is the operational metrics and what are the leading indicators so how do you break up your channels how do you think about them do you break them up by geography do you break them up by domain which are the important ones are you focusing too much energy on stuff which is actually not relevant do you follow the Pareto rule
00:57:17
Speaker
you know because we're not in the trenches and we won't we don't want to be in the trenches and we won't tell you and if you think what we're telling you is you know we're being idiotic please call us out we're happy to learn that's why we're giving you the check okay so can you give me an example of entrepreneurs who really impressed you you know going through the process that you've laid out
00:57:41
Speaker
So don't forget the process itself has also changed over time. I didn't have such a detailed process when I was a part of Mumbai Angels. We had no process. You put your hand up. Yeah, this sounds great. I'm signing. So you learn a little bit. But yeah, it's a lot of my entrepreneurs. Trust me, two steps ahead of me. And I love that. And you know, entrepreneurs often don't respect investors, but they respect other entrepreneurs.
00:58:11
Speaker
so we will tell them you know fine why don't you talk and we tell we tell all incoming uh these things you know do your due diligence on me talk to the investors or talk to the investors we co-invested with talk to the entrepreneurs we funded you know are we good guys bad guys maybe we'll you know maybe we'll give you less money than you want but we'll help you
00:58:33
Speaker
deploy it far more intelligently you know what you actually don't require two crores to do what you think you're doing don't dilute so much at this stage we'll show you how you can do it frugally in one crore so many things but some of that is intangible but yeah so i have a soft corner for certain companies all of us do so one of the ones i love is multi bhashi and you know i always tell the founder of multi bhashi was anuradha agarwal your problem anuradha is you've spoiled me
00:58:58
Speaker
because now every entrepreneur comes I use your yardstick so in in what way did she so what what did you like about her yeah she she actually cold called me from linkedin uh didn't bother to get a warm introduction and i love that you know i mean who cares about iit and iam networks and stuff what will they do maybe they'll open a door but you know after entering the door bus you still have to do your work for yourself
00:59:24
Speaker
And all the groundwork was in order and she knew as much about me as I share online. And she was doing something I found extremely attractive, you know, basically teaching people how to speak English and how to do that. And you had a paid model and a free model, you know, 50 different things. And she's always been two steps ahead and remarkably frugal and remarkably willing to let her team members grow.
00:59:50
Speaker
So love that culture about her. And she's a woman and, you know, any woman entrepreneur has to be 10 times as good as a man to be able to get to any stage. So 50 different things. Okay. And how is the venture doing? So, you know, am I happy? Absolutely. If she goes belly up tomorrow, will I feel sorry? Yes. I'll feel sorry, not because I lost money. I'll feel sorry because the potential impact she could have had.
01:00:14
Speaker
But having said that, financially, she's doing very well. She raised the next round and stuff. But honestly, I don't care about one way or the other. I think they're all distractions. OK, but I mean, I mean, my essential thing was like revenue wise, like, you know, I mean, at the end of the day, that she's doing well. But what do I know how I don't care.
01:00:42
Speaker
I would rather my entrepreneur made less revenue serving the right customers.
01:01:11
Speaker
And that's exactly what's wrong with our entire ecosystem. So, I mean, the reason to do a business is to, I mean, sell your, sell your product or service and... Do it unethically. Is that what you want to educate people? No, I mean, you can... I don't have a three year horizon. I don't need to raise my next fund.
01:01:37
Speaker
I can take a decadal perspective and that's the difference between that's the thing the stock up market investing has taught me. That companies in the listed space will do well if you give them five years to do well. If you keep on churning your portfolio every six months or every one year, you're doomed to lose money. So my point again is I've learned a lot of lessons from listed space, which I can now apply to my angel space.
01:02:05
Speaker
i don't care if he loses money in three months or six months because they're trying an experiment which didn't work but i'm not telling you double your revenue every three months or years because hey guess what now i've got a series d investor who wants to see these metrics
01:02:30
Speaker
I'm messing up my geography. See, all these people do all what I think personally are very stupid irrational things. But you know what? When you're a billionaire and you do them, they all seem very rational and stupid. Until of course the bubble bursts, which it always does. Tell me something. Why did you take on Baijus?
01:02:47
Speaker
I did not take on by use, please Akshay. So you know, look at my LinkedIn post. I've been posting on LinkedIn for 10 years. Of course, now that LinkedIn has taken me off, you'll have to go to my other site, which is IndianAngel.in to see the archive of all my posts. So I'm an equal opportunity critic, okay? Now let me explain about that. I only criticize stuff I care about. I don't criticize stuff I don't care about. So would I criticize a luxury company like
01:03:14
Speaker
Sorry, I don't even know the names. Versace or not? Of course not. I mean, they're doing what they're doing. Who cares? They're making money from people who can afford to give it to them. Great. Let's learn from them. But I will criticize companies like Practo. Because Practo had an opportunity as a digital healthcare startup to fix the entire healthcare system. No vested interest. You didn't have to give cards, kickbacks, worry about pharma, all the rubbish which was going on.
01:03:41
Speaker
You had tons of money. You could have created a breath of fresh air. And what did you do? You sold out. You know, putting patients first, you went and put, you know, you maximize revenue. The only way of making revenue was by creating a platform and selling the listings to doctors and hospitals. So that's why I've criticized practice. I've criticized doctors. I've criticized health. Like I said, criticize corporate hospitals, criticize the government often enough.
01:04:08
Speaker
And why did you take? Because boss, that's our future generation. Our generation has messed up this country. We don't want the next generation to continue doing that. And you have a dividend. You have a demographic dividend. You have a sweet spot. Why the hell can't you do good for this next generation? These are your kids. And then you hear about by Jews. So multiple things. One is the work culture is extremely toxic.
01:04:34
Speaker
fire, hire, get all these young graduates, promise them the earth in 10 lakhs, zero experience. And then when they come, treat them like shit. But the trouble is that they expect to be treated like shit. And they think that every company treats everyone like shit. So when they become managers and when they become managers for your son or your daughter, as the case may be, how are they going to treat your kid? They don't know any better. So toxic work culture propagates like a cancer.
01:05:03
Speaker
So completely sick system and the trouble is you see the cancer and you keep quiet. What does that say about people like you Apshai? Because you want to be politically correct. You don't have any courage of your convictions. You don't have the backbone, the spine to speak up because you're invested in that company and you're encouraging and a standard pass the buck corporate speak. And then you're cheating the students and parents.
01:05:26
Speaker
Come on, tablets in this day and age, we talk about online learning. Okay, let's forget. So all that stuff and so much misselling in pressure and FOMO. You obviously don't care about your kid, you're a useless parent and who does that target? They will not target Akshay Datta, Dr. Malpani.
01:05:48
Speaker
will target your driver who doesn't know any better poor guy and it's so easy to fool him and cheat him and you know create all these dummy questionnaires and offer 100% scholarships and so I said what I wanted to say and you know I actually told them look you have the opportunity to fix this you didn't do this with bad intent presumably you know making money is great please make it in all the more respect for you for making money but don't sell your soul just in order to make money
01:06:17
Speaker
because you are a role model for all the other entrepreneurs who look up to you by you. And you actually have the opportunity to fix this by saying, you know, we've healed a toxic work culture by making the following changes. So they reached out to me, the Chief People Officer actually publicly said, thank you, we're fixing the problem. And then they stabbed me in the back. So LinkedIn comes up and says, you know, you're making deformatory posts. We're kicking you out. No thank you, no buy or leave, no
01:06:47
Speaker
no process to be followed, no principle of natural justice, no chance for appeal. You find that terms and conditions and in our wisdom we think you know you're a useless guy. You contaminate our healthy professional network by saying all these things even if they're true. The toxic, we don't want toxic truth. We just want you to say nice things about people. You can say lies if you want but as long as they're true you know as long as they're nice that's okay. So I said that's PS.
01:07:17
Speaker
But effectively, what LinkedIn has done is it has usurped my constitutional right to free speech. Okay. Was it like a permanent? Yeah, yeah, permanent. No response, no reply. They've not even escalated it internally. It's the same guy saying no, no, no finished. We don't care. You do what you like. Okay, so I'll do what I like.
01:07:42
Speaker
And to that extent, again, a lot of people, my wife said, I really you bothered. I'm not bothered. But I care about free speech.
01:08:01
Speaker
You know, if you'd asked me five years ago, would you be criticizing by Jews? I wouldn't, because they won't turn my radar. If you'd asked me six months ago, will you be having a fight and filing a writ petition against LinkedIn in the High Court answer? Obviously not. Could I have predicted any of this, Akshay? No. But I will not back off from a fight when I think there's a cause involved.
01:08:21
Speaker
You know, there is this terminology of hearts versus jockey in investments, like, you know, the horse being the entrepreneur or his team and the sorry, the horse being the business and the market in which it operates and the jockey being the entrepreneur and his team. So what do you bet more on?
01:08:42
Speaker
Everyone always bets on the jockey because in such an early stage enterprise, really the reality is that business plan which he shows you today is not going to be relevant two years from now because he'll be different. The market will be different. The environment will be different. Competition will be different. And therefore you need someone who's resilient, who can think on their feet and respond to it. So what is the importance of then making a business plan when you know that probably it will be like 90%
01:09:13
Speaker
It shows me the guy can think if he can't plan. OK, fair enough. You're saying the plan is a work of fiction. So my point is, it's a basic competence which an entrepreneur needs to be able to display. And if he can't do that, then I have no confidence in him at all.
01:09:41
Speaker
Right. Got it. Okay. Okay. And so one last question, which I want to ask you. So what is like, what are some companies which you have not invested in, but you are a fan of those founders? In the real world, demod, a lot of respect for Mr. Damani and his CEO. They've done such a great job and such a straight shooter. And they walk the talk. And I always tell all my entrepreneurs, this guy should be your role model.
01:10:11
Speaker
Not the buy Jews and the flip cards and all these guys. Because that's what you really want to create. You want to create a legacy. I'm also very fond of bootstrapped startup success stories like Zoho. OK. And Veerodha. Yeah, yeah. So again, a lot of that stuff, I don't know enough, quite frankly. But I'm just saying, you know, so the demart story I know quite a lot about.
01:10:37
Speaker
So that I can definitely say, you know, this is what you should be looking at. And the great thing is it's all public domain. Get the annual reports for the last 10 years, study them, figure out where they started, where they're going to find out what the magic sauce is. You may wonder, you know, where is the magic sauce in running a retailer, a grocery? But there is. How are they doing it? And why haven't they got on to the latest bandwagon and lots of things, lots of things to be learned.
01:11:03
Speaker
And how do you keep yourself sharp? How do you stay abreast of trends? I'm very unsocial, Akshay. So I'm not very great at attending conferences. And of course, I'm not a social person. Books, books and more books.
01:11:27
Speaker
I think, you know, if I had to choose everything, anything, I read fiction, very eclectic, I read about social impact, I read about, and the great thing is I always tell people, if I had to choose between meeting the author of a book face to face for 60 minutes and reading the book, I'd rather read the book. And people say, whoa. And I said, part of the problem is then when you talk to someone, half the time you're thinking about what am I going to say next to impress this fellow. So you're not spending enough time listening to what the guy has to say.
01:11:57
Speaker
And I'd rather be a fly on a wall listening to him having a conversation on a podcast rather than conversing with him. What kind of books do you like? For a social impact entrepreneur, one of the books I recommend is called Worthless, Impossible and Stupid. It's like the best of them. Lovely title, isn't it? But honestly, the books I recommend change every two years or three years because it's always a new book around. And again, we share a lot of this stuff on our websites and I always tell them one book I'll recommend.
01:12:24
Speaker
I will only recommend the second one after I read a book review by you on the first book. Because the reality I recommend is that you should earn the right to ask people for help. And again, people get so pissed off when I say that. But there are lots of people who hate my guts.
01:12:50
Speaker
lots of people say great Dr Malpani so happy LinkedIn kicked you out you deserved it how did they send you this like through email or twitter or something is it yeah I am okay I said yes I'm not I'm not I'm not a politician my job is not to keep as many people as happy for as long as possible I'm happy that you're happy to see me go I'm happy I added that happiness to your life
01:13:18
Speaker
Okay. So in terms of a long term aspiration, like say, how would you like to be remembered 50 years, 50 years from now? Legacy issues are extremely important. So I would say I would like to be remembered as the guy who healed a sick healthcare system and hopefully a sick startup ecosystem.
01:13:43
Speaker
But I don't know, you know, that's where the healership thing comes in, that when you're a part of a system, you can see what's wrong with it. Now, it's not that everyone in the system can't see what's wrong with it. But because they make money by being wrong, or by predating, or, you know, taking advantage of people's ignorance and naivet, they refuse to call anyone else out.
01:14:03
Speaker
But do you not believe in the power of free market to fix all problems? Of course not. I'll come back to that and I'll share some books with you, Akshay, to read why a lot of this free market thing is all rubbish. There is no such thing as a free market. You know, any government who sets the rules and decide what the playing field are, like the TRAI, for example, and then you tell me the telecom industry is a free market, then you're fooling me or you're fooling yourself. And I don't know what it is. So let's I understand the theoretical construct of a free market, but in real life, that definitely isn't one.
01:14:34
Speaker
So the point is that there are lots of people within the industry who know that the industry is sick. Like a lot of IRS officers will tell you, you know, everything we do is wrong. But they'll only tell you that after they're retired. So I always tell people the sound of silence speaks far louder than anything else. So the fact that I chose not to file a deformation suit against me in the High Court, which they easily have the money to, says a lot about what they think about it.
01:15:02
Speaker
And truth is the best defense against deformation. And why? They chose to use a backdoor entry and got LinkedIn to do their dirty work for them. And why LinkedIn doesn't care? Because, hey, what? You know, we are owned by Microsoft, which is a billion dollar US MNC. Who cares about Indians and their rights? What did your lawyers tell you about the probability of getting success in this case?
01:15:28
Speaker
You know, I don't even care if I win or lose because the outcome is not in my lawyer's hands. Does he follow the right process? And if he followed the right process and I lose, so be willing to live with that. But did I create a certain degree of awareness about why these systems suck and what's wrong with them? Fair enough. Was that my intended outcome? Perhaps not. But what can I do about it?
01:15:49
Speaker
Possibly, I think for me, the biggest takeaway from this conversation is about process versus outcome. I guess this must have been a major part of being a fertility doctor that you learn to accept that outcome is not in your hands. I think life teaches you that all the time. We choose to learn it or not. I mean, even as a parent, you learn that.
01:16:14
Speaker
No matter what you want, your two kids aren't going to be carbon copies of each other and they all have a mind on their own. So many different things. And I think part of the problem is people who are successful, that success goes to their head and they overestimate how much they contributed to, you know, their skill contributed and they underestimate how important luck was. So I am no diligent. A lot of people ask me to, Dr. Malwani, what do you think?
01:16:45
Speaker
I don't want any of my startups to become unicorns. That's not the reason I invest in them. You know, while zigging if you zag or banthai, I'm not going to be unhappy about it, but that's not my goal. That's a secondary outcome. So that was Dr Malpani talking about birthing humans and startups.
01:17:12
Speaker
He's a prolific blogger. If you like this conversation, then you can read his posts on IndianAngel.in and if you want to pitch a startup to him, then visit MalpaniVentures.com
01:17:33
Speaker
If you like the Founder Thesis Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit the podium.in that is t-h-e-p-o-d-i-u-m.in for a complete list of all our shows. This was an HD Smartcast Original.
01:18:06
Speaker
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