Ep #23 | WTF are Consumer Electronics? | Nikhil ft. Carl Pei, Rahul Sharma & Amit Khatri

Today is for any young Indian boy or girl, under the age of 25, who wants to start a consumer electronic brand. Start? Okay, ready? All right. Hi, guys, thank you for coming home and doing this. I think Carl had to travel from further, further away. -Mm-hmm. -Amit and Rahul live closer in Delhi. So maybe we start by speaking about ourselves, giving my audience an intro of who we are, how we got to be where we are. Rahul is already a friend of mine, so I know a lot about him. But maybe we start with Carl.

Sure. I'm happy to be here. It took a while for us to schedule it back and forth, but we're finally here. So I'm Carl. I'm one of the co-founders of a company called Nothing. But ever since I can remember, I was always a tech fan. I grew up in Stockholm, in Sweden. I remember, my parents got me the first iPod. And I was only like 12 at the time. And the first-generation iPod was very complicated, because, I don't know if you guys remember, -it had the FireWire connection. -[Rahul] Right. I had a PC. It didn't

have the FireWire connection. So I had to buy... First, I got the iPod, I didn't know. -I couldn't connect it to the PC. -Right. Then I had to buy a PCI card for FireWire, install that, to even be able to connect the iPod. And back then, there was no iTunes, so it was RealPlayer to manage the music. Well, anyway, that product got me really hooked on technology. The scroll wheel was really cool, and managing the music library, fixing all the ID3 tags for each song, getting the album arts perfect. And a couple of years later,

I was probably... So I think I was the first to get the iPod in my entire school. So I was a cool kid among the nerds in the beginning. Where was the school, Carl? That was in Stockholm. What year are we talking about? iPod. When was the iPod? 2001? Yeah. You're 36 today, right? Yeah, I'm 35... turning 36. So when I was 12, I got the iPod. Really excited about that product. Then I got the first iPhone through a friend in the US, because the iPhone was only exclusive with AT&T. So I had a friend

buy it for me, and then we had to pay a $450 cancellation fee on the contract, and then got it shipped, and then jailbroke it, and installed my own SIM card. So I was the first among all my friends to get the iPhone. But I think those two products were super formative for me. I guess the third thing that happened was... Then I got the iPad. I forgot which year, but the first year the iPad came out. And I don't know if you guys remember, it used to have a skeuomorphic UI. So, basically, the UI

tried to mimic how things look like in real life. And when you swipe from the bottom, there was a control panel. And it was like metallic. So you had like a volume knob that was brushed metal. But when you tilted the iPad, the light source of the graphic also changed. So, I'm like, "Oh, my God, like, if Apple thinks about every little detail like this... I can trust them on like... They've figured everything out." So those three moments made me a big fan of this industry and of Apple. Do you still feel that way about

Apple? No, it's a very different company now. When did it change? I think the change has been gradual. I think the two CEOs have had a very different approach to running the company. I mean, the stock price doesn't lie. I think Tim Cook has done a great job on the shareholder value creation side. But when it just comes to inspiring a young guy or a young person to take a career in tech, I think the old Apple was way better at that. So really inspired by those products. And then, I was chronically online as a

kid. My parents were busy. They were always at work, but I got a laptop computer, and I got fibre Internet at a very young age because the infrastructure was pretty well developed in Sweden. -At 12, you had... -Fibre. -And phone, access to phone. -I had a Nokia 3210. -At 12 years old. -Yeah. So then fast forward to later, so I had the Internet. Started making friends online 'cause I felt like the friends around me, they only saw a very small part of the world. Whereas online, you can connect with anybody. So I made a very

good friend. We were chatting on MSN Messenger every single day about how to make money online. We were both writing blogs and making websites and all that stuff. And then, he then became the youngest founder to get into Y Combinator. And he's, like, two years younger than me. -Wow. -I was very jealous when he got in. He was probably 17 or something. And so that was also my plan. So after uni, I'm going to apply for Y Combinator. So it was a different time, when consumer Internet was still very, like, booming with Facebook and all

that. What's really working for Y Combinator? We're trying to start something like that called WTFund, which is a non-dilutive grant programme where we don't take equities. It's not too much like Y Combinator, but a different version of it. Why have they been so successful? I don't know. I haven't thought about it. When I was young, I just wanted to go there, because I thought that was the place you had to go if you wanted to become a Silicon Valley founder. They made a lot of... They've been a kingmaker in the industry, I think. I'm sure

they have some unique way of figuring out who's a good fit in terms of founders. And then they have their brand. And then they prepare the founders for, like... the subsequent funding rounds in a pretty smart way. Like, even when I'm raising money, sometimes, I reference the Y Combinator docs, like, the guides for how to raise money. Do you think it's network or access to capital? The capital is very little, actually. -Half a million. -Yeah. It was even less before. And they take a lot of stake for that money. But I think it's a branding

thing. Like, once you have that brand on your resume, your next round will be a lot easier. And your next, next round will be a lot easier. And they do have good content to teach. Maybe that's their user acquisition. Right? Having good content to teach young people why you should start a company, how you should start a company. And then once they're ready, they inbound to YC. Okay. And then? So I was planning to go to YC, and then I was playing a lot of games. A lot of League of Legends at that time. -It

wasn't very... -Games as in, like, video games? -Yeah, like online computer games. -Online games. So I was a bit lazy, so I didn't write my application. But then I got a phone call from the CEO of Meizu back then. He's like, "Hey, we want to become more international. Do you want to help?" So I had like two options. Either I have to write my application for YC, or I can go to China to join Meizu. I took the path of least resistance and didn't finish my university. I moved to Hong Kong in 2011. -For Meizu?

-For Meizu. Just for the... Meizu was the Apple of China at that time. They were the first one to come up with a phone. Yeah. -The first Chinese smartphone. -Yes, it was Meizu. They made really great MP3 players before. That's when I got to know the company. And then, yeah, to be a part of the beginning of something interesting, that's why I moved. And also out of laziness, to not have to write the thesis for university and the application for YC. And the reason why he reached out to me was because, after I discovered their

products in 2006, I made an online fan community about that company. And it got quite big. We got to like 70,000 users, members. We were updating, like, people on the new firmware updates and customisation, and all that stuff. And then I think he saw something in that and decided to call. So the founder of Meizu called you himself? -The CEO. -Yeah? -The professional CEO. -Wow. Okay. And you were in Nokia for three months? Yeah, that was before that. Just for like a summer internship. Right. And after Meizu? So I didn't stay that long. I think

I stayed, like, a year. I left because I quickly realised that it was a family business. So the key positions were all family members. And it's hard to build a very big company like that, I think. Was the professional CEO a family member? He wasn't. But imagine how hard it was for him to do his work. But head of finance, head of international. It's probably not gonna work. So I started applying for jobs. I applied for Xiaomi. I applied for OPPO. I applied for another company that's no longer here, called Smartisan. Yeah, yeah. Smartisan had

that... They had that... This is a Bangalore-based startup, right? No, no, no. This is based out of Beijing. Yeah, back in the day. With their Hammer UI and all that. -Is it? -Mm-hmm. Yeah. -Yeah, they did some good design. -[Rahul] Yeah. The Smartisan guy never responded to me. I interviewed at Xiaomi and OPPO. And to be honest, I think back then, Xiaomi was a rocket ship. Like, venture-backed. I think Sequoia and a bunch of really well-known VCs were backing them. -DST and all of them. Yeah. -DST. So I was actually quite intimidated by the people

I met there. Like, everybody that interviewed with me at Xiaomi felt very aggressive, like, results-oriented, very smart. Whereas when I interviewed with OPPO, I felt more like a traditional manufacturing culture. So selfishly, I thought that if I joined this less aggressive culture, I can shine more. Did you get a job at Xiaomi as well? I dropped out of the interview process after we made an agreement with OPPO at that time. Yeah, so then OPPO also saw the rise of Xiaomi. Because Xiaomi was selling phones online, they were the first to do that in the world.

And they could undercut other people because the distribution cost was a lot lower. So OPPO was also trying to find a strategy to hedge against the rise of Xiaomi. So they created a new brand called OnePlus. It was supposed to be online, by leveraging the supply chain that OPPO had built. Because Xiaomi was still building their supply chain, they didn't have those advantages. Is OnePlus still a part of OPPO? Yeah, yeah, yeah. So then, I had just joined. And I was like, "Hey, I can't just join and then you start a new company. Like, I

want to be a part of the new company." But then I was told that the new company is not for international, it's just for China. To fight Xiaomi in China. But I kind of made the case that it doesn't hurt, right? Like, if I can run international, it's all free money. Like, you guys can still focus on China, and everything else is just extra on top of that. So that's how I, in the beginning, got the opportunity. I was only 24 to run international. Were you more a marketing person at this point or were you

more the technical person at this point? I was more marketing, I think. I was kind of like a... 'Cause ever since I was 12 when I got that computer, I started making websites. And then I built traffic, sold advertising. So like just... I had a deep desire to make money when I was young. So more like business/marketing, just trying to make it work, hustling. So that's kind of what we did. After one year, after launching the product at OnePlus, China did $100 million in revenue. International did $200 million. China lost money, international made money. And

then we decided to pivot the entire company to be more focused on international. 'Cause the competition in China was too high. -Yeah. -So that was the OnePlus journey. Spent seven years at OnePlus. Very grateful because I was just a kid. Like, being able to participate in such a high CapEx industry without needing to use my own money. I didn't have money. So, very grateful for all those opportunities. Allowing me to fail with a lot of crazy ideas and learning from those. Ultimately, it's kind of like a CPG strategy where we buy components from different suppliers,

we package the components, and we have a unique position in the market, design, brand, and sell the product. I had done that for seven years. I didn't feel like that's what I wanted to do my entire life. I want to not only implement other people's technology, I also want the opportunity to eventually impact how people use technology. So I knew I had to go independent. So I left in 2020, in September. And on my birthday, that was like a birthday gift for myself. And started this new company called Nothing. It's been four and a half

years. We underestimated the difficulty in building this, but we're still around. So, very grateful to still have opportunities to build a company. But it was a bit tougher than we expected. Are you branding your phone by keeping it there? Yeah, it's free exposure. [chuckles] It has a very distinctive back, right? Yeah, so that's our entire thing. We... It's a very mature industry, and it's very hard to compete because everybody is at very high scale. So they have a lot of advantages. We're not reinventing the category. It was invented a long time ago by somebody else.

So, for us, it's all about carving out a small position in the market first. We don't have to have everybody love us. It's okay if 90% of people don't care about us or hate us as long as we get a niche group of consumers who really love us. That works in our industry because it's so big. Maybe it doesn't work for smaller categories. So, for us, we chose to differentiate through design because it was the fastest way to differentiate. If we picked technology, it would take years to play out. It's a lot of investment, a

lot of years. We also didn't want to reinvent the product category. Like, if we have crazy ideas on a new gadget, we might spend years on trying to build it. And then if we launch it, you only have one chance. If people don't like it, you're screwed. Yeah, so we start with hardware design, then we move to software design. Now we're investing more and more into the OS itself, into AI. So I think, for us, it's about building differentiation and modes over time. But in a gradual way. Don't move too fast because then you might,

kind of, fall off the horse. So, for a company headquartered in Sweden... -UK. -UK. The trade war will affect you how? Tariffs? So, now, the most direct way is... Trump had new tariffs for manufacturing from China. So we manufacture the earbuds in China. And that's like a 20% hit on our... -[Amit] Import. -...business plans for the US market. So now we need to look at alternative sources of manufacturing like India, like Vietnam, where it makes the most sense. It's the first time where, you know, every night, 10pm, I go on CNN.com. See. He must have

woken up. What is the new news? And then go to sleep. But it won't affect you as much if you're getting stuff from China and selling in India, right? No, it's not about that getting from... See, because the supply chain right now is there in China. And then all the manufacturing now is coming to India. But it's not about China, it's about India also. Because, you know, reciprocal tariffs and all those sort of things. But I would assume it would hurt you most if you're selling something in the US. Certainly, yes. But now we're talking

about the whole industry, you know, per se. So, you know, if you see the reciprocal tariff, even on mobile phones. It's, you know, it's 16.5%. Right? So if anything coming into India, there is a duty of 16.5%. Going to US as of now is 0%. So reciprocal means... At some level, doesn't it sound fair? Like, I'm just... I have no affinity to America. And I'm the biggest proponent of India built for India, supporting Indian product. But, if tomorrow I was selling to country X, Y, Z. And I was selling them something and they were charging

me 30% duty on it, if I was buying something from them, I would assume the same duty should apply. Yeah, I think so. Like, inherently, it's logical, no? -Yeah, but I have a different view. -Yeah. See, it's not binary. It's not, you know-- It depends: How do you want to bring up your country? What are your policies, for example? We've been discussing about China a lot. In China, way back, they decided that they are not going to allow the foreign companies. Foreign companies can only come with JVs because they want to build their champions. But

then, how can they do that, +but sell to other countries at the scale that they are selling and creating these deficits? No, but they created that scale, right? So, see, if you see examples how great countries are built. It's all about the companies that, you know... If you have great companies, the country will prosper. And the United States is the biggest example. Same thing, you know, China worked on that way back. And so, if Mercedes-Benz have to, you know... they want to sell and they say, "Do a joint venture with our company." Everyone, Hyundai, or...

all of them in the automobile. Softwares... Never allowed Google, Microsoft, you know, all those players. They build their own companies, and they... We all know about that. So, if it was like what we are discussing that yes, sitting across the table, okay, if you do this, I do this. Then all these things-- Then Google would have been there probably... Or Amazon would have been there. I don't think so whether they will be having an Alibaba or not or whether there was this Baidu, you know, all those players would have been existing or not. But I'm

making the presumption that classical economic theory suggests that free markets are the fastest way to improve quality and get competitive. Like, I do see your point. I remember reading somewhere in history that back in the day when UK was not doing well, they shut off from the world, isolated their domestic industry pre-industrial revolution and they didn't allow foreign products for a while to help their internal industry to grow to a point where it can be competitive. So maybe there's a point to that. But when I look at it very simplistically, if Nikhil is selling something

and Rahul is selling something, if each time Rahul is selling something, there is a certain additional tax outside of the cost of growth produced in Rahul's margin, the same should apply to Nikhil as well. Certainly. So as I said, likewise, it sounds very, it's simple, it's logical. But, you know, when you're building your countries, you know, the whole narrative changes in that. And that's how all these FTA treaties are being worked out. -[Nikhil] Yeah. -Yeah. They've supported the ecosystem also in a big way, if you look at all Chinese companies. I mean, all, like-- You're

talking about Internet companies, they never allowed US companies to come in. In fact, there is no Uber also there. Amazon also had to sell out their business there. I mean, somehow they're protected for the Indian-- their Chinese companies to grow, actually. That's how, I mean, that's how their whole strategy, you know, has been worked out. So, today, we talk about semiconductors here. They started working on semiconductors 20 years back. -[Carl] Yeah. -And now the results are coming. They're like 3,200 companies working on semiconductors. Most patents are being filed there. So... Carl, can I ask you

another question? Mm-hmm. For a kid who moved from China to the US with two PhD parents, and a deep desire to make money while young, where does that come from? I'm sure there's some childhood trauma, but I've never explored that path to understand more. What do you suspect it could be? I think just being... not fitting in, the feeling of not fitting in, you know, like... But you're a young, good-looking guy. Why not fitting in? 'Cause I grew up in white societies as a minority. Racist? Back then? I think it's not, like, explicitly racist, but

it's like, you're just not the same, right? Like, I could tell. I think there's something to do with that. US more so or Sweden? -I think both. -Is that all? Childhood? I think childhood trauma is a big part of it, but I haven't gone to a therapist to unpack all of that. There's also, I think, a fear of death. You know, I remember when I was very young, I was very angry at my parents for giving birth to me. Because now I have to die, and that's terrible. "Why did you do this?" -This is at

what age? -Eight, I think. So there's like this fear. And my best answer is, like, this is going to be a journey. Life is a journey. I got the conclusion from the movie Life of Pi. [Rahul] Mm-hmm. The kid is on a boat, meets a lot of animals, but actually it didn't happen. Just made it up to make the journey more pleasant. So it's all about the journey, and I think by doing something ambitious, doing something different, the journey will be a lot more fun. So that's also a driver, I think. Do you feel like

nothing has meaning? Are you nihilistic, stoic in your thinking? I think the journey has meaning, but I don't think there's much beyond death. Well, thank you. Rahul, would you like to go next? Tell us about your life. Start from the beginning, from Delhi. -You know... -I know, but they don't know. So, yeah, I grew up in Delhi. Born in a middle class family, father was a school teacher, mother was a housewife. Youngest kid in the family. Growing up, just wanted to do something. Nobody was doing business in my family. Because, you know, all... But I

don't know how I picked up that, but that I will always do something of my own. This was probably when I was... maybe, if I remember, around 10 years or 12 years, I just wanted to do something of my own. And I was pretty clear that I will not work for anybody else. Despite knowing that there is no capital. Why? No... A school teacher, how much capital will you have? No, why will you not work for anyone else? Because I just thought that I want to do something different in life, in terms of something meaningful.

I am not saying impact, because, at that time, it was not about impact, it was about survival. You said this to me personally at different points. Even when I sat with you and had the fund raise, dilution conversation. You always said, we won't raise X, because control will go away. Or we will have somebody else we are answerable to. Why did you never want to work for anyone else? And why do you never want to give up control or your position in that ecosystem? Yeah, so I think we will break up in these two parts.

First, not work for anyone, because I wanted, as I said, to do something different, something big, something meaningful. And I... -Jai, get me some coffee, please. -Yes, sir. I remember this conversation with my friends at that time, and we used to go and play in parks, that I will do something of my own. And they would also ask the same question. But I think there was a deep desire in terms of wanted to... wanted to be known for something. Why? This is the problem with him. No, but... So why? Maybe because when I was growing

up, I saw, you know... how people were and how things were going on in terms of whatever access. So because we were having very limited access to things. So you are 50 now. Your formative years were '90s? -When India was opening up? -Yeah. Yeah. You know, end of, let's say... you can say... When I started working, it was 2000, yeah. Right. What did you see then which made you want to do these things? So first, you know, I just told my dad... he said, "What do you want to do?" I said, "I just want to

do something of my own." -He said, "What?" -I said, "I have no idea. But buy me a computer." Because all my friends, whether they were doing civil or mechanical or electronics, everybody was going in software. So I said I want to do something in software. [Nikhil] Mm-hmm. And bought that computer. And I clearly remember when I bought that computer, I had no idea about computers at that time. Windows came, and Windows was there at that time. So I went to the guy who was selling the computer. He said, "What computer do you want?" I said,

"It should have lot of icons on the screen." It used to have shortcuts, actually. I never knew about that. I said, "It should have lot of icons on the screen." And that's how... So he laughed at me. "He has no idea." He gave me. And then I bought a book. "Learn VB in 21 days." -Visual Basic. -Visual Basic, yeah. I wrote a program in three days. Hello world, this, that. I thought, "Okay, I know programming now." My friend came, he saw the book. He said, "You've done this?" I said, "Yeah, I made a program." He

said, "Can I take this?" I said, "Yeah, take it." So he took that book away. That guy later became my partner. So the story... And he is a core techie guy. Coding only. So I tell him you become a coder because of me. So, by virtue of buying that computer, that decision, we started working on... So I started looking for opportunities in software. That, what can I do in software. 2000 was like the software bust time, no? Yeah, the dot-com. So, this is like '99 or so. You started Micromax in 2000. No, actually 1998. 1998,

with the three friends. -Four friends. -[Nikhil] Four friends. Started with three, fourth came from US and then joined here. Then started, you know, working on software, just worked on a lot of SAP. That went down. Then started working on e-commerce, that Y2K problems and all that. So, at that time, I was in US. So I was the BD guy, doing marketing and sales, and rest of the other guys were doing the coding and everything. So, at that time, we wrote a lot of B2B engines for e-commerce and doing all that. So, you know, that was

the time when Sun Microsystems was there, and it was like we had the dot in dot-com. And then that market went down, and then we realised that it is a very fast-moving market, and you have to, you know, constantly change yourself very quickly to be relevant. We moved on to embedded technology, started working with University of Irvine, California. They had an R&D centre on embedded. We started working together. And, at that time, Nokia, in India, was looking for a machine-to-machine partner, M2M. HCL was their partner for their mobile phones, and they were looking for someone

for a machine-to-machine. And we got introduced. And they said, "Would you like to do something?" You know, we used to write device drivers, doing, you know, work on a lot of different architectures. ARM, PowerPC and all that. Said okay, started doing that. And then, one fine day, I was just sitting with one of the guys from Nokia, Finland. And he showed me a product. I said, "What is this?" He said, "This is one of the products wherein if you put a SIM card in this, you can connect a telephone along with this, and it will

replace the landline." So I said, "Good. So why did you make this product?" He said, "In Finland, you know, because there are a lot of snow and everything, you can't lay the copper wire... the telephone. So you can put a SIM card in this and connect a phone and then you have a landline, because this phone is going to be fixed, nobody's going to take it." He said, "Can you do something with this?" I said, "India, how much would this... we don't have market for something like this." So I took that product from him. I

said, "Okay, let me just play." And we found an opportunity and I went back to him the next day and said, we would like to power the payphone machines. Yes. So we went to Airtel and all those guys... and all the GSM players, said, we can power payphones with one SIM card. At that time, payphone in India was only MTNL and BSNL, government companies laying down the wire. You mean the STD centre? STD centre, STD meets. So they said, "Okay, how can you do that?" We said, "This is, you know, with that phone," because we

were writing device drivers and everything, we took that machine, change the code and everything, put our software, attach the landline, and say, you put a SIM card, and you can work. They said, good. And then it was also a solution, good solution for corporates, because corporates, if they want to have a connection straight away, you can just, you know, integrate it with the EPABX systems and all. So it worked for them. And from a small Delhi-based company, we started growing to all the states and started supporting all the carriers. Airtel, that time, it was Hutch

and Idea and all. We started supplying to them. The business was started doing reasonably okay. From three, four crore rupees annually, we started doing around 100 crore rupees. -And, you know, very quickly we scaled up. -What year was this? This, I think 2003. Hundred crore then is like thousand crore now. More. A lot more. So we were happy. We thought that okay, we have arrived, something is happening. So that business was doing well. So one day I got a call from this Finnish guy. I remember his name, Henry. So Henry said, "Rahul, can we meet?"

I said, "Absolutely." Said, "Why?" He said, "I have good news and bad news for you." I said, "Tell me what?" He said, "No, come over to my home." Went to his home. He said, "What do you like to listen?" I said, "Tell me the bad news first." He said, "Bad news is that Nokia, we have sold the whole machine-to-machine business." What year was this? It's 2003. 2003, 2004. Back then they were killing it, right? Nokia was the market leader? Number 1 to number 10 was Nokia. Then started 11, 12, 13. Yeah. So I said, "What

is the good news?" He said, "Good news is that as Nokia, now we are coming into car accessories business. We want you to distribute our car accessories." So those car accessories, you know, they had speakers. You could put in those, that lighter socket. -[Nikhil] Mm-hmm. -Oh. And connect the wire with your Nokia phone and then while you are driving, the speaker, you know, you can talk. A pretty interesting solution. They had a speaker you can put in your seat and the mic and, you know, the speakers will come like this. So all those sort of...

So I said, "No, we are not interested in the accessories business." So the technology was there with us completely because we developed... So we made our own box, our fixed wireless terminal. Stamped Micromax on top of it and went back to Airtel. We said, "Nokia is no more, this is Micromax. Would you like to use it?" Same terminal. All of those guys, Airtel and Vodafone, they used to know me from Nokia. In their phone also, my phone number was saved as "Rahul Nokia". So they said, "Okay." Up north there is a shrine, Vaishno Devi, they

said, "You install it there." Because it works 24 hours, the pay phone, you know, it works 24 hours. -In "Vaishnav" Devi? -Vaishno Devi. Yeah? I have been there, that walk where you are climbing the hill and there are STD booths on that path, right? Yes, yes. So we installed our machines there. First machines in Vaishno Devi? -Yes. -How come? Because that's what Airtel said, that, you know, if you install-- Because the traffic is so high, that if it works there, if it can take the load, then it will work anywhere. We said, "Okay." We installed

it there, 20 days. The revenue from... Because see, for the operators, it was a killer product because their ARPU from one SIM card, multiple people are using one SIM card, the ARPU is massive. Thousands of rupees from one SIM card. With an individual, it's... Versus what did they have before that? Nothing. There were STD booths before that, right? MTNL... powered by MTNL and BSNL. Hmm. To run an... You know, to install an STD booth where there was no MTNL, BSNL line, where there was only... if there was a GSM signal coming in, you can power

that. And so then they gave us a contract. This is pre "people having cell phones", right? Significantly pre. No, cell phones were there at that time. In 2005-06, they were pretty much there. Yeah, the cell phones were there. No smartphones, all the feature phones were there. So, you are saying the difference was it got cheaper? Yeah, it was difficult to get. So, you have to apply to MTNL, get a license and then, you know, install. -Painful that time. -[Rahul] Right. The government. The government thing and then, you know, they will come, and if there was

no line... Imagine if there is no... If it is a village. See, they have to lay down the whole line. It was a costly affair and time-taking. And for us, if there is a signal coming, we will say, about five minutes, we will install it. So, that business started doing quite well and then we became a de facto number one on GSM fixed wireless terminal phones in India. And started operating offices pan-India, became a pan-India player, service network and everything. So, we learnt a lot there. Applying, you know, sale tax numbers and everything, you know,

like the whole... how the business works. This is till 2006. 2000, yeah. 2006-07. Mm. One fine day, I got a call from a senior guy from Airtel. He said, "Oh, there is a problem in a machine. Can you go and check it?" That, by that time, you know, our business grew to like 400 crores per annum. So, we were doing, like... Did you have liquidity? Did you take out money from the business? No, we were just keeping the money. But I still... I just remember that time BMW came to India. I bought a BMW 3

Series and thought, "Yes, this is it." In 2006. So, that time, then my... That was the first time when my parents realised that our son is doing something. Because otherwise, they used to ask me, "Son, what are you doing?" I said, "Fixed wireless terminals and all that..." Yeah, so coming back to the story, so that guy called me. So, I said, he said, "It's in Bengal somewhere, why don't you go and check?" I said, "I'll send some engineer." He said, "No, it's a senior-level escalation, can you go yourself?" I said, "Okay." Took a plane, landed

in Kolkata, took a cab, five hours drive near Bangladesh border. Saw, this all, Krishnanagar, Nadia and all... Just saw the problem, fixed it and then in the evening coming back... to catch a flight in late night in Kolkata. In mid, I saw, it's a village where there was no electricity. But there was an Airtel ISD PCO booth. So, I asked my cab driver, I said, "Bhaiya, can you stop the car?" I went inside the booth. And, because I knew that if it is an Airtel, must be using our equipment. So, I said, "There is no

electricity in the village, how are you running this booth?" He showed me a big truck battery there. He said, "Sir, you draw power from here." I said, "Fine." We were not making phones those days, I was having a Nokia phone. There was no signal in my phone. I said, "There is no signal in my phone, how are you drawing the signals?" He showed me a big 20 dB gain antenna, mounted on a pole on his terrace. Typical Indian jugaad. He said, "Sir, the signal comes from here." I got more intrigued. I said, "Fine, there is

no electricity, how do you charge the battery?" He said, "Eleven kilometres away there is a village, there is electricity. In the night, when I shut down my shutter, I go there, charge in the night and then come back in the morning." I said, "How much money do you make?" He said, "Around, let's say, 4,000 rupees a month." Now, 4,000 rupees a month in a village, there is no electricity, no entertainment, no TV, is big. Then I was travelling in the interiors of Bihar, and I saw people charging, you know, asking 25 rupees or 40 rupees

to charge your phone. Because at those days there were different pins for different phones. I remember, yeah. Different for Motorola and different for Nokia, those round pins and all... before everything standardised. I said, "Why is this?" He said, "Because there is no electricity at home, people come, pay and charge." It's very expensive, right? -For a charge. -Yeah. At that time it is very much. But see, those days mobile phones were not common like this because the call was not free. Today, probably you are paying for data. You know, that time the call was expensive. I

went back, sat with our guys, worked a lot on the GSM technology. I said, "Guys, why don't you make a mobile phone?" What year was this? This is 2007. So, the first reaction from everyone internally was, "Are you crazy? Who is going to fight these Nokias and Samsungs and Motorolas in the world?" And they said, "Why do you want to do that? I mean, we are doing so well. You are driving a BMW 3 Series, so why do you want to disturb the apple cart? Why? I said, "No, I think, you know, the food is

being cooked in different countries. We need a flavour in India. You know, it's somewhere in Finland or in Korea, but we need Indian flavours." Anyway, so fought a lot internally. And then they said... Fought with your co-founders, your partners. Yes, yes, yes. They said, "Okay, 10,000 phones you make. If it works, it's fine, otherwise our business is doing well." So, this is like casino money they gave me. They said, "You go and play, if it works, it's okay. Otherwise you pay." How much money was there? 10,000 phones, even if a phone was 2,000 rupees, you

multiply, it was what? -Twenty crores? -Yeah, all that, yeah. I said, okay. So, we sat with the team and said, "Guys, let's make a phone with long battery life, one month of battery backup, because of all these experiences." And... And that's how the first Micromax phone came. And the tagline for the phone was "Mobile ka Baap." Because the standby time was 30 days. Since we worked a lot. Now, herein, my philosophy is that whatever you are doing in life, nothing goes waste. Whatever we were, you know, I'm just, you know, scrambling my whole story here.

But in between, we worked a lot on SIM card, with Schlumberger and all those guys for one, two years. Nothing came out of it. Nothing came out of all those things. But all those things we implemented when we were making phones. So, normal phones take seven to eight milliamperes, you know, per second as power. We worked on embedded, we made it two to three milliamperes per second. And that's how we created the same form factor. At that time, the battery was 700, 600 mAh. We put some 1,800 mAh, 2,000 mAh that time. Same form factor.

Made a phone and then went to the distributors. Now, the real problem started from there. Because all the distributors were like, all big distributors. Like, even the Delhi distributor of Nokia was bigger than us. We were doing pan-India business, fixed wireless and all, but... Because Nokia was so successful. So, we said, "Now we make mobile phones, why don't you distribute?" And globally, it was only, you know, all those four, five international brand names. There was no local brand doing anything in the world at that time. Even if it was there, they were not like very,

very successful brands. So, they just offered us a cup of coffee and said, "Good friends, but sorry." We were not able to find a distributor after making the phone. In 2000? '07, '08 now. This is '08. And so, we went back to... After a lot of... there is no distributor, how do we... So, we went back to our fixed wireless. -Did you already make the inventory? -Huh? -Did you already make the inventory? -Yeah, already it was with us. And we went back to our distributors of fixed wireless terminals, payphone guys, who were selling payphones. We

said, "Now, we have this. Would you like to sell this?" He said, "Sir, give it to us, keep it, if it sells, we will see." Because they were not the mobile phone guys. We gave the phones to them. Ten days, the phones were sold out. Why? Because of the differentiation. There was nothing like that in the market. -Battery was the differentiation. -Yes. Which you learnt from travelling to remote places. Yes. And the form factor was nice, it was not bulky, so we didn't try to change much on the form factor and all. The repeat order

started coming in. That's the same-- And then everything went crazy. Things blew up, right? -Things blew up. -I remember seeing Micromax everywhere. Yeah, then things became crazy. And you started marketing like mad at this point, right? No, so then we sat and said, "Okay, what is it that we want to do? And how do we want to do it?" Because there could be a lot of distractions. So, and we were still learning at that stage, it's not that we perfected, we were still learning. So, one day I saw my cook using three SIM cards. This

is the time when all the new operators got license, and everybody was selling new schemes every day. Uninor and all the new guys came in. So, I said, "Why are you using three SIM cards?" He said, "Sir, one for local calling." I said, "Fine. Second SIM card?" He said, "To call my native village." I said, "Third SIM card?" He said, "Incoming is free, so I am not throwing it away." I went back to our guys and said, "Guys, why don't we make a phone with a dual SIM card?" They said, "No, two phones only rich

people can afford." I said, "That's not the consumer truth. These are the guys who are using two phones. So, can we make in a single phone, you know, simultaneously talking on the GSM signal?" So, with one single baseband, we created the dual SIM phone that time. And I still remember, I showcased it at one distributor meet, and everybody stood and clapped, and they said, "Sir..." That was the time when we realised that we have to find the gaps in the market. It's very interesting. You are finding your gaps from your driver, your maid, from going

to villages. Everyday life. It's like you are learning that, you are just observing and then, you know, finding those gaps. Do you see any gaps today? Multiple. Name one, top of the list. I can go on and on, but these are all different, different ideas. I went crazy, I will tell you, you know, in that in terms of finding gaps. So, we said, okay, we want to make a... So, that's how we made first phone for girls with Swarovski. At that time, the phones for girls in India was only by Dolce & Gabbana, by Motorola.

Now, how many people can afford a Dolce & Gabbana in this country? So, we made a phone, you know, with Swarovski. Now, again, these very interesting consumer stories here. We launched that phone because our team insisted, "No, this is Swarovski, it has to be expensive." And after a lot of, you know... I said, "No, just make it in the reach of, let's say, common people." We priced at 5,000 rupees at that time. Is that the way in India? I remember watching an interview of yours when I was researching for today. When you were talking about

the form factor on your phone, you said-- What was his name? -Jesper? -[Carl] Yeah. He said that whenever you look a product... at a product for two seconds and look away and you have to draw it, you should have that one distinctive design element. That's a very different school of thought from the more utilitarian school of thought here, right? Is this what works for India and that works for the affluent? No, see, this is a time when there were only feature phones, -there were no smartphones. -[Nikhil] Right. So, how do you differentiate feature phones? Right.

I think we're at a stage in the industry where it's hyper-competitive. -Yes. -Every user need has been fully explored. Now, it is all evolved, like in laptops, it's already at the ceiling. -How will you... You can't reinvent. -Right. This was a time when everything was evolving. [Nikhil] Right. We're at a different maturity stage of the industry, I think. -[Rahul] Yes, yes. -Right. Right. The phone was also a dream when you came in. Nobody had phones that time. 2008, by then, a lot of people had phones. Yeah, but the penetration was not high because the GSM

rates and everything was quite expensive. How big did it get in terms of numbers? From selling 10,000 phones a month, we were selling three million phones a month. How big was the overall market at that time? Total market less than 100 million in India. Put together, less than that. So, you were selling 3% of the total market a month. -No, no, no. -[Amit] 20%? [Rahul] No, no, no. -[Carl] A third? -No, no, no. When we were doing three million, at that time, our market share was around 25%, plus, plus. That's crazy. You were sponsoring cricket,

you were sponsoring everything back then, right? Yes, so our big bet was on cricket and music. Because that's what the youth was into. And you said, a blanket on whatever is... Yeah. And that worked also. -And this stayed for a while? -Yeah. For a couple of years? -Yeah. -This crazy growth trajectory? Yes. Interestingly, we come back to our tariff questions, the tariff conversation we were having earlier, because that kind of was the problem, right? The Chinese competition which came into India post. Yes, so that was a time... And again, I will answer a couple of

other questions which you were asking about why you wanted to and all. So there were a lot of learnings also in between. So for example, when Meizu was raising the round with Alibaba, we were deep down with Alibaba at that time. Yeah. Raising the round and... -So our paths have been intertwined. -Yes, and a pretty big one. At that time, we were raising, what, around 800 million dollars around at that time. This is in 2000... '14 and secondary, most of it. -Wow! -[laughter] So it was because the business was throwing so much of cash. -Right.

-Yeah, so we said we don't need money, but, you know, at that time, everybody wanted to connect. -You know, I remember... -You could buy a few more BMWs. Few more than few more. [laughter] So this was going well. And then we realised that... So we didn't take that money. We said, "Okay, no, we are doing quite well." We said, "We already have so much of..." Bad decision in hindsight? So we thought that, you know, if we have taken care of the Finnish and the Koreans at that time-- Later on, because that time we never knew,

but in 2016-17, you know, that was the time when the, you know, the Chinese brands started coming in. So we thought, you know, we have taken care of them. So we can, you know, we'll take care of this also. It's okay. We'll go head on. But, you know, that was a very, very different game. Because, you know, when the Chinese came, they came up with so much of gunpowder. And you never know that where the gunpowder is coming from. And whether there is an end to it or not. Do you think the government subsidised them

to come in that manner? -Their government? -[Rahul] So... Yes. So there, as I said, you never know, because, you know, there were so many schemes which were running there. And not only the central level scheme, but also the state level scheme. The companies were funded by the states also. So... So we said, okay, we'll see. And then we started fighting. It was a price, you know, price battle started going on. You know, when the Xiaomis of the world started coming in and then the... So before that, we were fighting, let's say, with the Samsungs and

the Motos or the Sony Ericssons of the world. Doing pretty well. And then you start... suddenly you start having a competition wherein if you are selling, let's say, at 100 rupees, somebody comes and says, hey, I'm 90 rupees. [Nikhil] And if you say 80, they'll say 70. [Rahul] They'll say 70. So that's how it's a race to the bottom. And then suddenly they were burning a lot of money. -But can I ask a structural question? -Yes. Yes. While it seems like a race to the bottom, because of the scale of manufacturing they have, is the

cost of production in China inherently so much lower that at 80 rupees you can't make money, but at 70 rupees they can? So that's, yeah, that's true, because it's the whole supply chain which is, you know, which is established there. So probably what we were discussing. That if their BOM is 100, your BOM is 120. But you would also be importing that time or manufacturing? No. So, see, we established our first plant in India in 2010. -So you started early. -Way before Make In India started. So, but the components was coming from there, right? And

at that time, all these brands what we see right now, they were not there. So they started coming in, for example, all the brands were there in DVD players or MP3 players, and then they started coming on that. And then the price war started. And so, and we also went into it. But somehow with the whole supply chain and everything, then you slowly, you know, access to all these things started getting restricted. So, for example, why Micromax became successful? Because in this... in the industry where we are in, you are already, you know, you're looking

for a differentiation. For example, if I was designing a phone, my question to myself was: Why will I buy, or somebody will buy this phone? What is different in this one? Why? Why... Why somebody will not buy another phone? So, you know, that's how the differentiators were coming in. And differentiator was not only on the feature, but also on who's going to come up with the latest chipset first. Who's going to come up with-- If there is a 50 megapixel camera, who's the first guy coming up with a 50 megapixel camera? If there was a

fast charging coming, who's the first guy to come up with fast charging? And the distributors used to look at, you know, look at us that, okay, they will come up with something new every quarter and... So when that access started getting stopped? Government stopped the access? No, no, it's not the government, you know, because the scale shifted somewhere else. Right. And they preferred supplying to their own companies than to you? Right. And so the numbers and everything, because their numbers started growing up in... Because China itself became a very big market and the scale was,

you know, became big. Because, you know, there are a lot of theories about... about Micromax in the market. This happened, that happened. Everybody can come up with their own. Yeah. What is the theory... the most popular one? No, I keep on hearing different one. Oh, they went, you know, into luxury segment or there was no R&D. You know, all this. But I don't know how many people know, we... When Nokia got sold, we had the... You know, we took all the top Nokia, they had the gold, you know, division. We got all gold guys from

Nokia and doing the R&D at that time. But whatever this was happening, all this, you know, coming from China, it was a global phenomenon. So it was not only that we were affected. All the other, let's say, there were other brands in Turkey or in Malaysia, other places, you know, everybody got affected. And I think in 2019 odd or so, we realised that, you know, you can burn money, but you know, you can burn money till the point you know that I'm going to win the game. Right. But if the other person is having an

unlimited supplies, like a bottomless pit. A bit like today, no? All the loss-making startups in India, all competing downwards. Yeah. And see, and we build Micromax, let's say, from day one, making money and doing that, you know, never raised any capital. Slowly, slowly, you know, build it and whatever, you know, we raised. Said no to $800 million in 2014. -So if you ask me in hindsight that. -You should have taken it. Yeah, because see, that time we never knew that you had to create a war chest. [Nikhil] Yeah. You create a war chest and say,

"Okay, now let's, you know--" Biggest bull run in Indian equity markets. Imagine you put that in equity. 2014 to today. Yeah. So, you know, with $800 million, you sit on the casino table and say, okay, now play. -Yeah. -[Carl] Yeah. Yeah, so, and then after... Yeah, in 2009, then we realised that, you know, either we'll, you know, if we keep on burning with this space, we will get finished. We'll get completely burned out. We will not have any capital left. So we said, "Okay, let's stop burning money. And wait for your turn. And start focusing

on manufacturing." And that's how we started building more factories in 19, 20, 21, and now. And that's how we, you know, pivoted on the manufacturing game. And the whole idea is that unless and until you have access to supply chain. For example, if today I have to make a triple screen fold... I don't have access to the screen. So how do you come up with the latest? -When you say access to supply chain... -Yes. ...you're talking about the company in China that gives-- That makes the screen. Okay? That makes the display. But the other bigger

company there, for example, let's say Huawei, has a triple screen. Huawei has already blocked that and said, "Okay, for one year you can't give to anybody else. Because I am promising you this much of volume." So, Nikhil, how it happens is all partners, like supply chain partners, screen, battery, or processor, they work with bigger brands, and everybody has an alpha customer on their list. Let's say Huawei would be the alpha customer on the list. So every first technology would go to Huawei. He will block the capacity, and when it is over, it will come to

us. New technology means all resources they will depute to Huawei. And then it will come to the market, and Huawei will take the first leg of new product, which is launching, which goes for chipsets, screens, sensor, across. But we will never be able to make that on our own. For anybody wanting to start a consumer electronic company, you can't make that triple-fold screen that this supply chain vendor is making for Huawei. No, if you are, like, a "startup" startup, it is too hard to make. It requires a lot of money and probably-- [Amit] He might

be making it. -It's at a later stage. -He can answer. -Yes, later stage. -It's at a later stage. So if you look at Apple's strategy now, they feel like they're bleeding too much margin to their suppliers. -[Amit] Yeah. -So they're doing vertical integration. So they are developing their own technology, their own screen, their own whatever processor. I thought they're outsourcing more to Foxconn and-- -For manufacturing. -It's only for EMS. -What is EMS? -Assembling. -You would attempt better. -Just for assembling? -Really? -[Rahul] Yes. So Apple used to be a consumer-focused company, right? So in the start,

they were very small. They were competing against IBM, and, like, big PC companies. So they targeted a niche consumer, the creative consumer. And they positioned the personal computer as a bicycle for the mind. So if you have an idea, you can use your Apple computer to manifest that idea. In the '90s, they started acquiring software companies to then create their own suite of content creation tools like iMovie, GarageBand. It's all to cater to the creative, right? Beautiful industrial design, great software that helps you take your ideas into reality. After some time, they really captured the

creatives. -Like, they had a partnership with Adobe. -Yeah. Adobe worked better on Apple computers. So once they got the creatives, the brand became really cool. So normal people, they also wanted to feel creative. So therefore, "I buy Apples 'cause I'm a creative." But then... So they won the consumer battle. And then to keep growing the share price, they needed to take the value back from their suppliers 'cause they had outsourced a lot of the components. So in the recent ten years, it's been a vertical integration strategy. Now they do their own processors. Actually, what we

talked about before, they get the TSMC latest... There you need allocation. Yeah, they get the first batch before everybody else. They get the latest technology from TSMC for Apple silicon. Now they're doing a mini... Is it mini-LED or micro-LED? They have their own display technology. It's deployed on the Apple Watch already. The mini-LED. [Carl] Mini-LED. So it's very hard for anyone to compete, right? It's a very tough industry. And everybody who is an incumbent today has been around for 30, 40, 50, 100 years? Apple is, like, 50, I think. 50-ish. -Samsung is older. -Yeah. But

Samsung's smartphone business should be similar, maybe 25 years. The Chinese brand, maybe 15 years. So every ten years, the cards will flip. [Rahul] Yeah, so I think this is a very interesting thing... if you're talking about competing, or nobody can come up. -We came up at that time. -[Nikhil] Yeah. Defying the odds, you know. Globally there was, you know, no brand, like a local brand who came and became... Like, we were top ten in the world, and that's how it was going. I still feel that can happen. Right? But we never realised that governments have

to, you know, play a role in it. Because at that time we never thought about the governments and the countries. Now we realise about countries, governments, and everything. -What should the government do? -Yeah. For example, you take our automobile industry in India. I think we have done a great job there. All the Hondas and Suzukis came initially, did joint ventures with the Indian companies. Created a lot of ecosystem of supply chain. -You see all the component players. -Yeah. Right? And now if you see our automobile industry, we are supplying to the world now. We are

a very mature industry in automobile. And if the same thing were true for mobile phones, what happened to Micromax would not have happened. Maybe, you know, the world order would have been different in terms of the brands. -Right. -Yeah. So, any industry, you need to see that you want to make local champions. So for example, today in the worldly order, imagine if there are two, three local champions coming out of India who can make a global impact. I think it would be great for the country. [Nikhil] But if we... There's a flip side to that

argument that if we become protectionist of local industry... do we continue to get foreign money into the country? So I'm not saying that you stop. I'm saying you allow collaborations. Collaborations where you need to learn. -Collaborations with technology transfer. -[Rahul] Absolutely. -IP transfer. -Yes. Work on IP transfer, and then you learn. So in four, five years, you will learn. Right? See, I said, "Auto happened, you know, at that time." Now today you have all the local companies ruling the roost. Similarly, you learn here, five years, six years. So, a lot of people ask me, "Okay,

can you do this? Can you make a, you know, very complex phone?" We said, "Yes, we can make a very complex phone. But maybe it will take five years, six years in India to do that. But with collaboration, I can start learning right away. And then can do it very, very quickly." And how much did this three million phones a number fall to when things went bad at Micromax? No, no, it totally started coming. Every year it started coming up, we started losing. At that time, all the Indian brands were more than 50% of the

Indian market share. -Right. Right. -Which completely got decimated. What was the low for Micromax as a company? Which year was the low? I think that time in 2019, 2020, in terms of the brand-- -Just before COVID. -Yeah. -We said, "Okay, no more..." -And then COVID could not have been fun. [laughter] -Right? -Yeah. When you go from a peak to a low, what is the one lesson that we can learn from your experience that you have learnt already? Today, our manufacturing is bigger than, you know, the revenue is way more bigger than what we used to

do in our brand. Which probably not most of the people will know. But we are doing way more better than what we used to do earlier. No, I know the Micromax comebacks. No, I know. But I am coming. So, in between, you know, you are trying multiple things. I think what has worked for us, you know, we later realised that, stick to your core. What did you realise is your core? So my core was to remain with tech. So, for example, I'll not start a real estate company. Real estate is doing good, go there. Or

something else is doing good, go there. Or something. So this thing was already there. The whole manufacturing, the factories what we created, you know, for Micromax, was already there. So why don't we build on that? And start doing for others. That helped, and that's how we... So at Micromax time, we were having probably one or two factories. Now, we have four large factories, fifth coming up, and then-- You just acquired a new factory as well. And now you are scaling. Do you feel like you are stronger the second time around than you were in the

beginning? Less oblivious, more aware. Like, I feel like once somebody is scarred, the next time they're a little bit more differentiated in their approach. This weekend I was thinking that. -Believe me. -In Goa? Yeah. [chuckles] I was thinking about that. About something I used to do earlier. And then I again thought, "I am still doing the same thing." Which is? Taking big bets, going risky, and all. Like, you know, once you start doing, I said, "Okay, no, no, no more, no more. Stick, stick to your, you know..." -But-- -Risk is intoxicating, no? It is. While

you are taking it? Yeah. -It gives you a high? -Yeah. And believe that, "Okay, no, no, no, this is something I think you can do, you can crack it." And then you go for it. And because it has worked earlier, then you start thinking. Then you know every time it is going to work, which is not the case. So, yes, while, you know, we are doing this, I am more aware. But the core is that, nah? So once your core is that, you will want to take bigger bets, thinking that, "Okay, nothing happened earlier. You

know, you came out of it, see?" So I think that's the DNA. As long as the bets don't go wrong, they always get bigger, -organically. -Yeah. If you had to bet money on some entrepreneur today, wouldn't you pick somebody who has screwed up a couple of times versus somebody who is doing it for the first time? Screwed up a couple of times, but eventually made it. -Yeah, that is important. -[Nikhil] Yeah. Yeah. If eventually made it, then, yeah, that's fine. I feel like this prophecy is true for all life. I like people who are a

little bit screwed up in all domains. When I meet a man and I don't know what his vice is, I assume the worst. I'd rather know, "Okay, this is my friend, he is [bleep] up like this, I am aware. I am [bleep] up like that, he is aware." This friendship is good. When somebody comes to me and projects the idealistic mask, then I worry. Because we are all the same at the core of it, you know. We are all inherently flawed as people. -100%. -[Nikhil] Yeah. Yeah. But thank you for that. [laughter] All right, Mr.

Amit, you're next. -Tell us. -I think-- I'm very interested in your story 'cause both of their stories-- -Him, I know firsthand. -Yeah. And his, I have read a bit. But your story is not so much out there. So I come from a small town, Bikaner, Rajasthan. And typical middle-class family. Father used to work with bank. Which bank? State Bank of Bikaner & Jaipur, if you would have heard of. SBBJ. Later on they got merged with SBI. And Grandfather was an advocate. So typical middle class. And when you're in a small town, the only dream is

you become a doctor or an engineer. But I think I was not geared up for that. I was a very mischievous kid. Academically not very strong. I mean, 60, 70% scorer at that time... where people were, I think, 80, 85, or... I was the eldest one in the family. No, no. He's fit. -[Rahul] Yeah? -And he went to NIFT. -NIFT ones are the cool ones. -Yeah. I have some colleagues who are from there. Sometimes, over-smart. Right? [laughter] Fashion college. Yeah, it's like where all the cool kids go. So anyways-- See, his shirt has a very

differentiated colour. It's not white, right? [chuckles] It's not white. [Nikhil] What colour is it? Somewhere off-white, beige-ish. So I went... My parents wanted me to become a doctor. And actually, I was pushed towards that career because in small towns, I think those were the two choice. And apparently went to Kota also for PMT preparation. Medical test at that time for crash course. But eventually realised that I think I can't do that. And fortunately what happened that... My father was very, you know, bold that he wanted to get out of Bikaner and move to a bigger

city. And he moved to Kanpur, actually. He got posted there. And when he moved there, I realised that it's just not this as a career. There are people who are securing 80%, 85% marks and going to Delhi for B.Com. So I realised that Mass Com is a course. B.Com is a course. Arts people are doing because of passion. And well-familied, good-educated kids. Then I realised that medical I don't want to do. I enjoyed maths, physics, those kind of subjects where I don't need to mug up. And definitely a small-town kid going to a bigger city,

so you get a little bit buoyed away by what's happening there. I realised that. Then parents said, "Do an IIT." Then I realised it's too late for me to do an IIT now. Otherwise you'll ask me to bunk for three years. And I think it's '98, '99. And eventually, after graduation, started preparing for competitive exams. And formally landed into NIFT. So I think NIFT Hyderabad was a real-life learning for me. First time hostel. Getting out of home. And I was into fashion management, not design. But maybe all the peers were design guys. And again, Dad

took a loan for me to go to college. So I had always limitation that I should not be spending more. And then my friends had higher pocket money. So I think my entrepreneurship stint started from there. Tell me things about yourself that I can't Google. Or watch in another interview of yours. 'Cause that's boring. I don't wanna know. I mean... notorious kid, definitely. And, I mean, I always had hunger to do something different. And in college, like I said, I used to look for alternate sources. I was again, let's say there was... high-tech city was

all call centres if you look into it. Hyderabad that time. Convergys and all. So I thought of maybe doing a job at a call centre. Maybe pick some project at Convergys. Not Convergys, maybe, Infosys was there. Went to ISP to pitch something. And maybe just started picking up some projects at our college only, where, you know, there was a fest happening, "Could you bundle the T-shirts?" So I think my first entrepreneurship time happened from there on. I started making a little bit of pocket money from there. But I was always insecure in life that I'll

not get the job. Otherwise I was like... So you've finished college, and what did you do first? When did you finish college? So I finished college in 2004. And I got placed in the manufacturing setup, Orient Craft, if you would know. Based out of Gurgaon. So that is one of the largest export house out of India. I thought I would not get a better job than this. So I stayed there. And I worked for three and a half years there. It was typically merchandising. And two years I did merchandising, I found it very boring. And

I thought of leaving the job that time because... If you would know, merchandising is... buyers say you something and then you copy paste. I used to work for Ann Taylor, Gap, all those brands. And then I started giving interviews actually everywhere outside. I went to Barista. "Can I do job in marketing?" Coffee Day was big. There was... I went to Air Deccan for an interview to apply for marketing. I was fed up of my career that time. Ironically, three people who have proficiency in marketing are running consumer electronic companies. So maybe that's a prerequisite. We

could catch the market pulse well, actually. And maybe I didn't get a job anywhere outside. And I started taking on all special projects at the company. What all the pain problems of the company, I could take that. -And you worked with your brother? -No, no, no. So my brother is ten years younger to me. So he came in maybe... ten years ago. Twenty-five. For 15, 16, he came in. -So I was-- -So he's 28. So we are talking about 2005 to 2008. He is 28 years old. No, he's 35. 34, 35. You're 38. No, I

am 43. -You're 43. -Yeah, yeah. I'm 43. So anyways, I worked there for three and a half years and then started picking up. You look very good, yeah, for 43. [Amit] Trying to. Working with young founders, you have to stay true to that. Anyways, so I worked for three and a half years. They moved me to... I saw a huge gap in the international product development. I picked up that piece, and that's my journey started. I moved to Hong Kong for the first time. And I think it was 2007 era where I saw global brands

were there. And whenever I used to travel, people used to ask me, "Go and buy this thing for me, that thing for me." I used to import a lot of BlackBerrys from there. I think it was BlackBerry time. So I used to buy and trade off for 1,000, 2,000 bucks and sell it in India in my office. -It was like jailbreak phones. -[Rahul] Yeah. So every time I used to go buy ten phones and bring it here. And eventually I realised that I'm solving a bigger problem, not electronics, but textile. Let me do it myself.

And I started my first business in 2007, which was fashion accessory, textile merchandising, basically. Buying house, quasi concept. And I had 60,000 bucks in my pocket. And again, how could you do a business with 60,000 bucks? So I started it in '7, based out of Hong Kong. And I think that's where my journey with H&M started. H&M was my first customer. I worked with them very closely with the design team. So that's how I realised, man, there are brands which are built at centre. So India was, I think, fashion... Big Bazaar time that time. It

was Micromax and Big Bazaar which were at the bottom. And H&M was right at the centre. Not cheap, not luxury, but selling to the... to the world. Uniqlo, H&M. And that's how, I think, my roots got levelled at good-quality product at an affordable price. Not the cheapest, not the expensive. I did that business for seven and a half years, eight years, travelling a lot. And then Gaurav, my cousin, actually, he was 21, he became commercial pilot, I think, Air Deccan time or Kingfisher or Jet Airways, something tanked. No job. And he asked me to get

an iPhone that time. It was just launched. And I said, "Are you mad?" [Nikhil] What year? I think '14. -What time iPhone-- -[Carl] The first one? -Yeah. -2007 or '8? -'8. -2007, '8. So I think he asked me to get the iPhone 3 sometime. So I got an iPhone 3 for him, and I said, "Are you mad?" It is 25,000 bucks. And I got a jailbreak phone from Hong Kong for him. And I got a phone for him. He said, "Then I need to buy a cover for this." And there were no covers for that

phone. And that's how our journey started. He said, "Let me get... I have a problem, can you solve it for me?" If I have a problem, my other friend should have a problem. So we started mobile accessories that time. In which year? I think 2014, '15. I think Xiaomi came to India that time. We launched iPhone covers, we flopped. All stocks are at home. -Under the name Noise? -Yeah, it's under the name Noise. So the company started in 2014. '14, '15, we started doing mobile accessories as a side job. He was, as a hobby, doing

it. I was doing my business, what I was doing. And then, iPhone, we had a huge failure, because the market would be, what, .5%? We were the only few customers buying iPhone. And then we flipped to Xiaomi. He was doing a side project, and that's how our journey kicked in. And then what happened? The business started becoming very big. The phone, all Chinese guys came in. The business started becoming very big. You sold accessories for the Chinese phones? Yeah, we sold accessories. Because, see, please understand, we couldn't do tech. I was coming from a fashion

background. I just knew designs. And mobile cover is just an accessory. I mean, it's like a T-shirt. It's such a simple product. You get it, you print it. We had a small setup also manufacturing in a factory where we used to ship thousands of cases every day. And then we realised that this market is getting super commoditised. And then when did Noise blow up? -I think-- -COVID? No, no, no, not COVID. I think we started picking up in '19. I'll tell you the trajectory, what happened in between. So we were doing cases, which was fine.

And we realised that the pricings are going down. I mean, we started selling for 500 bucks, and eventually it landed to 150. And 150, whatever case you sell, you can't make a big company. So we were growing, but we were some 100 crore revenue company. Then we thought of starting doing different categories. We launched, everybody said marketplaces, Flipkarts of the universe. "Why don't you do headphones, neckbands, or whatever categories?" We did that, we failed. There was no differentiation. There was no differentiation. And then, out of interest, we realised what categories to pick. So our thesis

was clear, we'll not fight the big boys. Like, Sony was selling wired earphones, or Philips. I said, "Why would somebody buy us?" Till that time, we were cheaper, and you can't be cheaper. Till that time, you cut cost. And we were searching for smartwatch for ourselves that time in '19 something. I don't remember that time. And only Fitbit was available for 20,000 grands. Fitbit Blaze or something. We got a refurb watch for 10,000. We realised, "Is this a gap in the market?" And that's how we started doing watches. The market was two million units that

time. Maybe two million in a year. Nobody was doing watches. We started, then it picked up in three, four years. And COVID, it picked up. So I think there was a tipping point of-- So, watch was the tipping point? Watch was the tipping point for us. Because you were able to buy refurbished for cheaper and-- No, no, no. We bought refurbished for ourselves. But then we realised that there is a market which exists. "Can we do in our brand where we could do a 5,000, 8,000 rupees watch, which is affordable to a mid-level consumer?" Good

part, Gaurav was 25 that time. So he had that young taste. He never wanted to buy cheap. And he never wanted to buy the most expensive one. And all India market was Chinese knockoffs. So that was the desire to build. Can we use something for ourselves and gift it to friends, family? And today you are more known for earbuds? No, no. We are not known for... We are less known for earbuds. We are dominant share for watches. Watches is more tough category. How much is your share now? We would be north of 25% for last

three, four years. So watches are more complicated. How big is the market? -Close to a billion dollar market revenue. -Wow. So how much are you selling now, Noise, in terms of revenues? We would be... Watches we would have close to 10, 14% of the revenue share. [Nikhil] So about 100, 140 million? [Amit] Close to 100 million of revenue. [Nikhil] And the rest of the products in Noise? Are audio devices. So as of now, we were very clear that we have limited capital. We bootstrapped the business. So we couldn't go very widthwise. We never had the--

Have you raised money now? Last year, we raised a strategic investment from Bose Corporation. And now how big is the business, revenue-wise? We would be somewhere sitting... 150, 200 million, that kind of revenue. Hundred in watches and fifty to two hundred in others. And we were very clear, we'll go deeper in the category because we never had capital to experiment multiple ways. Crazy, huh? Super impressive. To have been able to bootstrap to that scale, right? I didn't know that. I thought you guys had raised the venture. No, we didn't. I think it became a blessing

for us because, first, we never had to dress up our company for any external benefit. Like today, sometimes investors says chase GMV, second day they say chase market share, and sometimes profit. So we were in that luxury of taking our decisions, which were right for the business in long run. So having less set of people, having less products, go deeper in the categories where you are in. -Nikhil, this is what the difference is. -[Nikhil] Yeah. These are the real businesses, because, see, if you see all old, you know, businesses, they were all coming from their

own capital or having access only to the banks, you know, and taking the debt from the banks and doing those things. It was not, like, raising an insane amount of capital and say, "Okay, you go and experiment with somebody else." -Yeah, yeah, yeah. -Right? So... -I think, yeah, these are the examples. -No, no, crazy impressive. I like pushing people to see how they defend themselves. Yeah. [chuckles] I'm trying to figure out how to push Amit. -Yeah. -Okay, so... what is today for? Today is for any young Indian boy or girl, under the age of 25,

who wants to start a consumer electronic brand. It could be cell phone, it could be TV, it could be speaker, it could be earphone, it could be smartwatch. We want to, like, plot a road map of what they need to look at, how to identify the opportunity, which vendor to go to, how to test the product, and how to finally take it to market. We'll go into do you sell on quick commerce, do you sell on Amazon, do you sell through physical distribution? So the first thing we thought we might do is establish market size.

How big is the consumer electronic market, A, in the world, B, in India? How fast is it growing there, and how fast is it growing here? Should I start with smartphones? Yeah. Smartphones globally is about 1.2 billion units every year. In India it's 120 to 140 million annually, depending on what number you look at. So if you assume that the ASP is $300, then 1.2 billion, that's over $300 billion, just on the hardware side. ASP is... -Average selling price. -Average selling price. Very different in India compared to the rest of the world? Yeah. Every country

is different depending on the market dynamics. -Per capita as well. -Yeah. Where is the sweet spot? If I want to start making a cell phone today, where would I price it? Personally, I don't think there is any more opportunity. Oh, man, I wouldn't recommend any of my friends to go into this business right now. The market is very, very tough to compete in. But you need to understand that what exactly, if you want to make that, what exactly are you trying to solve? Are you trying to, let's say, make a luxury brand, or are you

going to make a mass brand? Basis is that you need to figure out your TAM. That what is the market I'm going to address. And basis is that you can define, "Okay, this is that, you know," then you can find the sweet spot. Because otherwise the category is like, if you see mobile phones, iPhone is $1,000. And then your, you know, the average selling price, as he said, is right, between, you know, $250 to $300 in India. So maybe let me break it for India market perspective so that at least viewers could understand it well.

In a category like truly wireless, for an example, the India market would be like 60 million units. In a category like? Audio devices, for an example, like this. This market would be like 60 million devices, which is six crores. Yeah. -And 90% of this-- -And value-wise? Around a billion dollar market value. Can you just tell me for India specifically? Yeah. Yeah. How much is smartphone, how much is TV, how much is earphone, how much is watch? So, like this... Phones would be about $150 million, phones? One-fifty million devices in India, am I right? One-fifty million

smartphones, and let's say still there are like around 50, 60 million feature phones. Feature phones. So on a broad level, India has a penetration of 600 million smartphone users in the country. That's the right base to look at it. Sixty crore people use smartphones, is that right? -More or less. -Yeah. More or less. I think you gotta look at the annual, like, 120, 140 number. [Nikhil] They broadly say that 72 billion is the consumer electronic market in India. -[Carl] How much? -Seventy-two billion. Per year. Total consumer electronics? USD or INR? No, billion dollar he is

talking about. In that they say cell phones, smart plus feature is 50 billion. Very true. I think large market would be smartphones only. -[Nikhil] Right? -[Carl] Yeah. So in all the consumer electronics in India, because you make TVs and everything else, and you make earphones and watch and all that, where is the opportunity? For me, say I am a 20-year-old kid who has managed to raise some money from somewhere, and I want to compete in this space. Where is the opportunity? Tell me anything, tell me wired earphone, tell me... No, so first of all, I

think anybody who wanna enter a space, first of all, everybody should enter to a space which is growing and has a larger time. There is no point to enter to a space which doesn't grow or doesn't have a future. For an example, it's not large enough because-- You are saying first you make a box of-- I mean, if the segment is big and growing, then it's a point to go because if you're a 2% player also, you will be a sizable company. Let's say if you go in a market which is 1,000 crore overall revenue,

you become 5% also, you would be a 50 crore company. -It doesn't make sense. -Which one is growing? The fastest. No, so, okay, in our space, let me take you through top-down, you might understand. Let's say in this case, this is a 60 million-odd devices we sell in a year, which is six crores. And interestingly, 90% devices get sold below $25, which is sub 2,000 rupees. You're talking about Bluetooth earphones? Bluetooth earphones. And that is 60% of the market revenue. Which is what 5,000 crore is like, this market. And $25 to $75, which is medium

segment, entry-mid premium, that is close to 7%... and would be 15% of the market. And then it is all $150 plus, majority Apple, 1% market share, and then... [Nikhil] So are you saying it's a good market? If I want to start, say I have raised one million dollars. Should I start a earphone, earpod company? So I personally think technology works in a very different way. It's not like fashion, where you just create a product and sell it at any price point. Technology you need an access to partners we were talking about, a lot of proprietary

things. So I think it's a very tough space for somebody to enter. Yes, somebody want to enter into sub $20, yes, they can. But that's the race to bottom. And 20 to 50, which is a sweet spot, like a 1,000 or 1,500 crore market, it's tough, and bigger brands are sitting there. And when you say partner, everybody's partner is China? No, no, it's not about those partners. We have partners. So one is partners who are giving us chipsets, but then you need to have your own app teams, you need to have your own algorithms we

were talking about. So those expertise is also needed. -Mainly supply chain. -Supply chain. Yeah. For us, we have US partners, Chinese partners, Japanese, Korean. Yes, it's very international. So how do I... Say I have an idea to start an earpod company, how do I connect with these partners? I'm a newbie, I have no track record. You have not worked in this industry? -I've not worked in this industry. -Completely coming from outside? I personally think, Nikhil, it's really tough until and unless you're getting to a segment which is fairly new and not being cracked by all

of us. I mean, a niche space. But, see, you guys started recently, right? -You started-- -I'll give you one example. So I did OnePlus, so I'm relatively known in the industry, right? In the electronics industry. And when we started this new company, Nothing, we wanted to make phones. Nobody wanted to make phones for us. They said, "Hey, look at the past ten years. So many startups have come and failed, and why are you different? You raise money. They also raise money. You have experience. They also have experience. We're not gonna make a phone for you.

Like, go away." And then we're like, "Okay, we can't make a phone. Maybe we can make earbuds first to prove ourselves, to prove the skills of our team." We go to the earbud factories, and they also tell us to go away. They're like, "Hey, just go on Amazon. There's 2,000, 3,000 earbuds brands. Who are you? What's your differentiation? What's your strategy? How much money have you raised? Go away." We were shocked. We thought we had some reputation in the industry that some of the factories wanna work with us. So what changed? How did you do

it? We went to the worst factory. Like, the factory, if they didn't take us on as a client, they would go out of business immediately. In China? In China, because they were on the blacklist of a lot of other people for quality issues. And how did you find this factory? One of my co-founders, I think he... yeah, he knew some of the salespeople in the supply chain and found this factory. But this was a factory that had been put on the blacklist 'cause of quality issues. But we had no other choice. Nobody wanted to work

for us. That's where we started. That's true for all of us. We had to start work with factories which were less known. People don't want to work because bigger factories don't want to touch you also. They are saying we are happy making Apple, Boses of the universe, and we don't want to-- But how do, I as a 20-year-old, find this factory? Like, you had somebody. I think you can't. Like, they won't-- What if I just go to China and look for them? There is no reason for them to engage. Like... Nikhil, these are the large

businesses, for example, if you see the size in terms of value, automobile and mobile phone will be similar. -In terms of value. -Very right. So if I reach out to one of you guys, if I happen to know you, and ask that you connect me to a factory, is that the way to do it? If we connect also to the factories, factories has no motivation to work with you because everybody works with MOQ, certain processes. -[Carl] Yeah. -They find you working with... I would need to pitch who you are. I will go to this founder

of the factory. "Hey, I have a friend who wants to talk to you. This is this person's background and credentials. Can I make the intro or not?" So... So I have a recent example going on right now. So right now we have this technology of making connected glasses. Right. Because we feel that's the future, that's where buyers are going to move. We are trying to find out who are the right brands who can do these glasses and established brands in the glasses space, right now who exist, pitching it to them that, "Hey, look--" Like Meta

glasses? -Exactly same. -[Nikhil] Right. Exactly same. Actually, with Meta, along with Meta. When you say along with Meta-- Meta, the operating system, for example, the whole AI is from Meta. So, for example, they have done the same partnership with Luxottica, -Ray-Ban, similar. -[Nikhil] Right. Right. Do you guys think there is an opportunity there? The form is changing, and it moves from cell phone to something else? No, I think, interestingly, our industry is evolving every decade. So, like, nobody thought that Nokia could be disrupted, for an example. So any of our devices could be disrupted, and

form factors are definitely changing. People are working aggressively on glasses. So that is one form factor to look into. But like he said, it's a game of people who have... For glasses, I think all mobility is working. Entire mobile brands in the world are working towards that. So it becomes very difficult for a young company to still compete. Glasses, you can do. Glasses, you can do. [Amit] You got one... one gap. No, there is. Because, see, look at the glasses industry. Last year, Meta, with Luxottica, and these are public numbers, they sold two million glasses,

two million. And the number what is being projected in the next four years is around 30 million. That's a CAGR of, let's say, more than 43, 45% on an annual basis. Right? And... since we have been working on that, so the tech is... So earlier the glasses came with only speaker here. -Yeah, yeah. -Right? -Old. Yeah, yeah. -Yeah? Gen 2, there was a camera. Yeah. And let's say Gen 3 with this whole AI engine coming in there. Gen 4, you have a heads-up display. Correct. Now once you have a heads-up display, then whatever, for example,

is going on my cell phone, I have a display here. On the frame? No, no, not on the frame. It is a heads-up display like you have in your cars. You are projecting onto a wall. No, no, not on the wall. -Just like in a car speedometer. -Yeah, yeah. It is a heads-up display. You can see. So here I can see. So today, for example, if it is in, let's say, black and white, tomorrow it will be all coloured. It will evolve. And then, for example, if you are watching your Instagram Reels, you are just

flicking it. Just sitting, and then you are not taking out your phone because rest of... See, in your phone, you have a display, you have speaker, mic, and a camera. All things are solved. Then why do you need to take out your phone? Do you think that will be the future of form? Cell phone will move to glasses? See, nobody can just firmly say that, "Okay, this is..." Although, for example, Zuckerberg has said that this is going to be. But he said the Oculus and all of those things were the form as well for a

long time, which didn't play out, right? [Rahul] You're correct. So, as I said, see, it is nothing right, nothing wrong. You have to go out in the market and test it out. -Hmm. -[Rahul] Right? But looking at the tech right now, what exactly is it going to solve? I think I've seen all the new glasses coming up. I seriously feel that this will be the form factor to watch out for. -[Nikhil] Right. -[Rahul] Yes. So if somebody new watching this wants to get into the industry, this is the industry. -Right. -I have a different approach.

If somebody was young and watching this and wanting to get into consumer electronics, I would urge them to first become a content creator. Bang on! -Marketing. -Because the barrier to entry is very low. Everybody can do it. And that is the arbitrage opportunity now. Like, the millennials and the older people, they're gonna have a harder time to learn the latest algorithms, latest trends. 100%. If you do the content well, like MrBeast, now you can do anything. You can make chocolates, you can make a TV show on Amazon. When you have the traffic, you have leverage

to sell any product. Then when I do the intro to the factory, they will, "That's MrBeast, of course." He's just some random kid, it's impossible. But I feel there are very niche spaces which are coming up which none of us are solving as bigger companies. When you look at our space, this product... hearing aids, is a decent space. But right now it's like 150,000, 1,50,000 rupees or $2,000, there is a hearing aid, it looks ugly. I see industry working in a space which is over-the-counter hearing aids, way affordable, looking better. That is one market. And

when you look at our category, wearables, I see now penetration has happened in wearables. Like, as parents, we have used, Rahul. Now the problem is we have aging parents. We need a device for them which could monitor their health. And more importantly, we live in urban cities, we have kids. And you won't believe, I get a message from five people every day, "Do you have a kid's watch?" Because none of us are looking at this space, the space stands at zero. You're saying for kids and senior monitoring? I mean, we have two spaces, because, see,

first market-- But can't an Apple Watch do that? Apple Watch does it, but it's 50,000 rupees. Will India price point get solved with 50,000 bucks? India would need a watch for a parent, maybe at eight to ten thousand rupees. Not a 50,000, 100%. So coming up to his point of hearing aids. Again, anybody watching, there's a space to disrupt. Because all the hearing aids, if you see, are, like, one lakh rupees, two lakh rupees, -close to three lakh rupees. -Two lakh rupees. I, you know, went to buy for my dad to a doctor. It's 1.5

lakh rupees, hearing aid. And I said, "You have a better one?" He said, "Yeah, it's two lakh rupees." I said, "What is the difference?" "Software difference." On phone. With this, we give you three more extra features which you can unlock. -It's very uncompetitive market. -Yeah. I said, "Why?" He said, "No, no, with these features, you'll be able to understand if the voice is coming from behind or front, all these things." Then I went into why these hearing aids are expensive. Because back then, putting something in a small form factor was expensive. Was expensive at that

time. But not today. I think, no, it's not about this also, Rahul. So cost would be cheaper for the manufacturer who is selling it brand. But it's just about only one or two brands doing that business, selling at maybe 80%, 90% gross margin. -There is one company I'm just forgetting. -They have the majority market share. They have all the three big brands -in the world. -Yeah, yeah, yeah. -Hearing aids? -Yeah. There is one company who has bought out all others. Three to four big brands in the world. Is it a big market? It's a narrow,

not big. -But-- -Is there another advice? Pick narrow markets where the large incumbents are not going after? -Yes, if you're passionate about it. -[Amit] Yeah. Passion has to keep you going. Explain, like, why would I be passionate about hearing aids? That's what I mean. If you are not passionate about a business you're starting, like, businesses are tough. There are some good days and a lot of terrible days. So if you are not really in love with what you are doing, it's hard to persevere when it gets really difficult. But can I be passionate about hearing

aids? Some people are passionate about it. Some people are, by the way. They are trying to solve real problems. No, we are. If somebody wants to do it, you know, crack the code, go out of it. So, for example, you are saying you want to introduce someone and all. I mean, we can introduce to them all the chipset players, you know, all whatever. Because nobody is there in that space that's available for somebody to take on. And we are ready to fund them. 100%. Think I am not interviewing you guys. Think I am a 20-year-old

boy sitting in a room. I have had the great opportunity of sitting with three of you. I have a million dollars. I want to build something in consumer electronics. I live in Bangalore, in India. So you three have a conversation, and I will try and learn along the way. And intervene once in a while. What else? We have already given the cards, for example. You know, the glasses, hearing aids. -[Nikhil] What else? -What not-- I'll be very clear. If somebody is trying to go to a commodity market, it's no-go. It's a race to bottom. There

is no winning there. What is a commodity? I mean, let's say somebody says, "I want to do a earbud which is 1,500 bucks." No go. How will you win? I mean, what's your right to win when there's overcrowded market? And when large players are there. I am a content creator. I have distribution. Let's add that. I'll tell you, content creator also has a shelf threshold of, let's say, whatever million followers they have. They could reach to 5,000 units, 10,000 units, not beyond that. Did somebody, a content creator, recently sell a watch, and he sold a

lot? -Yeah. -What was his name? Shlok, nah? Anarc. Layers. -Yeah. -Shlok. -Yeah, yeah, yeah. -Tech Burner. So they did it, but if you look into it-- What if the kid is ten times or hundred times bigger than Tech Burner? MrBeast has done that. But I'm just saying. Tech is very different. Tech, they failed because the product was not up to the mark. They were new in the town. See, it's not like selling T-shirt. You can just stitch it and sell it. And there is no tech to it. A same factory makes a 300-rupees T-shirt and

a 30,000-rupees T-shirt also. Tech is not like that. But if you're outsourcing the tech, the production, if you're going to a co-packer almost-- No, it's not like this business. So, like all of us, we choose what components to get into. That will get into it. It's a super customised business. Some of the software layers are being customised at our level in our teams. Some are outsourced. -Am I right, Carl? -Yes. And then we design a product, and then it comes out. It's like a CPU. It's just not you buy from it. You choose specific components,

run software on it, develop software. It's not that easy. That's why companies are failing. So I had the same idea before trying this business. There's a bunch of factories. They all know how to make it. We just go and order and then pay them. It shows up. Done. That can't be further away from the truth. Like, these factories, sure, they have the common models that you can buy off the shelf. -But everybody can buy those. -[Amit] Yeah. And they don't have the best engineers. Like, the best engineers, they're not gonna work for a factory. They're

gonna work for Apple or Samsung or, like, a brand, right? So they don't have good engineering. So what is happening in China, and what is happening at Apple? Explain the engineering process. We just were discussing when we went on a break. About the camera. -Yeah. -Yeah. Yeah, camera is a great example. Like, if you wanna create... There are so many fields within these products, right? There is a radio antenna, there is industrial design, there is camera, there is software. It's like so many different things. Everything requires a lot of investment and time and energy to

do it well. So I think maybe taking a step back. One piece of advice is to really also respect whatever new thing you're doing. Like, "Okay, now we are making earbuds. Let's learn about how to make earbuds, how everything works. Well, now we're doing camera tuning. Let's really learn about how that works." So we just have a very simplistic view and outsource it to other people. If we don't even know what the underlying principles are, it's gonna be very bad. So just for camera, we've been struggling with camera. This year, it got a lot better.

It's not that we are not smart enough. But the camera is a very hardcore resource investment. The way it works is you make the phone recognise the scene. The scene could be two people sitting here. It could be nighttime. It could be city. Fruits. Fruits. The more scenes you can define, the better your pictures will be. The more you can define, then each scene will have its own tuning. The team will tune it differently depending on the scene to make it as beautiful as possible for this specific scene. So if I have a big team,

I can define a lot of different scenes. So then there's a very high likelihood that the phone will tune it in a way that's nice. If I have a small team, I can only define a few scenes. So if I only have a few scenes, then I'll miss a lot of the long-tail potential use cases for the camera. And customers are not gonna be happy. Yeah, I think identifying gaps, and as I said, you know, in terms of passion, you were saying. So still so many categories are there. Example. Let's take example of Dyson. Can

you disrupt? Bang on. So if you look at India as a market, there is no Dyson. It's just Dyson, which is like 40,000 bucks, and there is Bajaj to buy. No. So there is a company called SharkNinja. The number one in USA. -[Amit] There. -Disrupted as in completely. By Dyson, do you mean vacuum cleaner, hair blower-- Home. Home. Home. You see, if you look at it, there is no young brand in home. Look at the customer. Our parents grew up buying Bajaj. We aspire to buy Dyson, but Dyson is too expensive. So look at that

25 to 35 age group, what they would buy. So, for example, if I have to use an analogy, -if Dyson is the Mercedes-Benz... -[Amit] Yeah. No, Toyota is there. Yeah, a Toyota, a Honda, or a Hyundai. We have Maruti. So Maruti is Bajaj? I mean, those kind of companies, yeah. So, you know, these are the segments. So you have to really identify those gaps and say, "Yes. Is there a market?" And I think, go for it. And if you have a passion and all, you will figure out a way, you know, find out the right

people. Maybe take a step-by-step approach. Instead of starting your own company, work for somebody else, -like me. -Learn it. If there are so many mistakes you can make in our industry, if I did not do it, like, once before, the chances of failure would have been way higher. It's, like, eight to nine months of a cycle when you're committed. And when you're committed, you are committed with few million dollars. You cannot get out. Carl, you have said the easiest way to differentiate is design. In a bunch of interviews. Can't I look at the same devices,

but relook design altogether? And do what design? Like, relook my design philosophy altogether. Why do earbuds have to look like this? What if I change the form factor completely? Then there is PMF risk. What is PMF risk? Product-market fit risk. So if you look at our products, that product and this product, design is different, but actually there is very low PMF risk because these are products that consumers already know how to use, what to use it for. They already buy a lot of them every single year. If you deviate too much from the current product

definition, then you have to take care of the risk. And then it's a question of whether the risk versus the reward could potentially be worth it. But there's no way to test it? You can test it, you can do a mock-up, you can even use AI to generate a picture and then go and speak to people. But I think besides mock-up, it is all about functionality, usage, so that also plays a bigger role. So I think we don't want to change people behaviours the way they are doing. Little changes-- It is a different business strategy.

I think we're in the fast follower strategy or late mover strategy. Explain. So we're coming into an industry that already got created by other people, and we're just trying to carve out our space within a big industry, a billion-units-a-year industry that was created by other people. So then we do not take the risk. We come into a very mature category, and then we can differentiate through design. But if you're creating something new, like, back in the day, drones were new, or now electric vehicles are new, or robotics, then you do not have to differentiate on

the product because the technology is fresh enough as a differentiator. But then you have the execution risk on the technology and also the PMF risk on whether consumers will wanna adopt this product or not. I personally think late mover is easier for me. That requires a different way of thinking, more survival-focused, more capability-building, more long-term thinking. Whereas the technology approach is more like, you have one shot. If it works, it works. If it does not work, you gotta start over again. -So just asking Carl on... -[Nikhil] Yeah, yeah. So, Carl, on the phones, for example,

where do you think... some disruption can happen? I think the disruption can happen on the OS side. I think the hardware side is very hard to differentiate on because all these suppliers that we have, they're all very concentrated, and they're very strong, and they're investing in their product road map, upgrading their batteries and processors incrementally every year. Like, we cannot really differentiate. And as a supplier, you wanna sell to everybody, right? But if the form factors are changing now, foldable phones are coming in, don't you think if we can bring the cost by innovation of

the foldable phones down, it will have a mass adoption? Because relatively, it's a game-changing thing because from a single screen, you're going to a bigger screen. -Yeah. -Or maybe a triple screen. That's also not up to us, right? 'Cause the screen manufacturer is the real decision maker for that product. It's not us. Also, just to add onto it, the screen manufacturer is also booked, and he also wants to take advantage of it because he knows after three years, there's gonna be the same price as a normal screen. So he will also not reduce the price.

And you wanna go with the biggest vendor instead of a startup like us. So I think for us, our biggest opportunity to differentiate in our next phase -is through the OS. -OS. I think the next differentiation for all of us would be through software only. But aren't you using one of two softwares which are in the market and operating your devices on that? [Amit] So we... So phones is a different universe. They're Android or iOS. But in our case, we work on open RTOS operating system, where we build our operating system there. -Right. -And what

I mean is, more softwares would come in like, "Could I fine-tune my audio based on my hearing capabilities of my ear?" Like, Apple is doing it now. It's pure software. "Or could I have AI capabilities in this so that I could interact it?" A lot of companies are working on a friend kind of a concept. So it's all software, what I see is happening. And the same is gonna happen on the... Today we're based on Android, but I see some disruption opportunities to become the next Android. Like? I think there's a couple of trends, right?

The one trend is... if you look at the current big OSes, iOS and Android, they're very successful already. Android has three billion-plus users. iOS has one billion-plus users. So they can't really change the product that much. If you change the product, a lot of people are gonna be confused. They have too many users. And it's very profitable. They're making a lot of money on the software and the services. I don't know the number for India, but in the US, Apple makes $100 per year on each iPhone user, just on non-hardware stuff. It's a very high

margin. It's very profitable. Very big. Now the disruption moment is with GenAI -and large language models. -[Amit] Correct. If you look at the recent news around Apple, they announced Apple Intelligence at WWDC. And still today, almost a year later, -there's nothing... -Still the same. ...nothing there to use. Now they are reshuffling their management team. And this is like four years after ChatGPT. It took a long time to implement this. So I think, one, they're too big and too successful. So then the question is, like, how do you disrupt? Like, what is their biggest moat? I

think, at least for smartphones, their biggest moat is their developer ecosystem, right? If today we launch our own OS based on Android or a fork of Android, we don't have any apps on the phone, no app store, no apps, nobody is gonna buy the product. Like, I wanna use my apps. But again, if you look at AI, there's a disruption moment for app development because now with AI coding tools, you just need to write what app you want, and then it shows up. In the future, you can just speak what app you want into the

phone, and that app shows up. So then that gives a smaller company like us the ability to compete with iOS, which has, I don't know, a million, two million apps already. But we can empower every normal person to also be an app developer. If you have an idea, you just speak your idea into the product. Therefore, we can also quickly develop our ecosystem of developers and apps. So I think that's the main opportunity that I see, that a younger, more nimble company can navigate a changing world way quicker. And the big moment that's enabling all

of this is the advancements in AI. How else can AI present opportunities if I were to want to build something in consumer electronics as a 25-year-old? It's kind of like the personal computer. The example of it enables you to manifest your creativity into reality. The personal computer allows you to go to Photoshop, GarageBand, iMovie. Now, creating stuff is easier than ever. Like, we talked about creating apps. You can create graphics, create advertising, create content, create product design, code. It's really, in one way, lowering the bar to creativity being manifested. [Rahul] I think that is one

segment which will... Again, a great idea, you know, for all the youngsters. For AI, in terms of training the models, you know, we all see that you will need these many GPUs, you know, hundreds of GPUs, thousands of GPUs, to train all your models and all. I think all those things, you know, will change. There will be a time where you will be able to train the largest of the models using one single server. You will not need a farm of servers. We have seen a trailer in form of DeepSeek already. And I think very

soon we'll... What, you know, it implies is that how it is going to change. This means that the access to technology will be massified. Right now, it is with only a few people who are working on these LLMs. For example, running 405 billion tokens, or now the new model is 788 billion tokens, which only big server farms can do. But, once there is a technology wherein within a single server you'll be able to-- You can run your models. I think, then all the youngsters, and they are way more creative, they will be able to come

up with, for example, an operating system. They can just come up with an OS and then... and figure it out. Maybe then find a MrBeast and say, "Okay, hey, I have this." And then, so... But, there will be numerous opportunities coming out of that once it is massified. One trend that I see in the market is the youth of today does not want to buy from the corporations of yesterday. I feel like things like Louis Vuitton, Gucci are not cool today like they might have been ten years ago. Everybody wants streetwear, the new independent brand--

Look at how you are dressed, for example. Do you think there is a play there? If I start a consumer electronic company where I will use the narrative of not a corporation? [Carl] I think there is an opportunity, but I think you would first need to start in a different category. Like, make a fashion brand, make that successful. Then you have the credibility to go to the consumer electronics suppliers to get them to want to work with you. 'Cause they have seen so many... These guys have seen so many failures and so many pitches. They

are very pragmatic. That is an interesting idea. So, you are saying start an independent design-themed brand, start elsewhere, succeed and then transition into this? You have to have volume. That is the core of the consumer electronics industry. To be able to work with these suppliers you need to show the numbers that they can believe in. So, look at our case. We did not come from electronics or consumer electronics background. So, in my wildest dream I could have never thought of working in a space which is led by mobility brands or other brands. So, we started

with mobile accessories. It's like... I still say it is a T-shirt business. It is just simple cases. You just print designs and designs are a character. And we started understanding the user, consumer pattern, and knowing and started building volumes. Our partners saw a confidence in us, like, "They are doing good volumes. We could test something with them." So, maybe our entry also was not on day one here. We learnt consumer from a basic business. But, by the way, I have a very fundamental question which I have realised as a founder. What is the segment of

the market you want to chase? Like, what customer you want to... I am asking you that question. I don't have data like you have. No, it is not about what I want. It is about what you want to build. I'll tell you for an example, the game what he is doing. He is saying, I'll not fight the cheapest in the market, like, he is not doing the Xiaomi play. But what he is doing, he is in the mid segment, which is super painful, which needs time. His gestation would be... Success will not be short term.

He would have a patience of three-to-four-year capital to build it. And then he-- There are chances he might see and might not see success. So, as founders or whosoever, young people want to start, they need to be very clear what segment they are trying to build. Because different segment-- When you talk about design-- What, if I come to you with a blank slate, what segment would you recommend I build in? No, if you ask me, I would say don't go for the mass. Mass is important, but have some brand aspiration, have your identity, have your

brand uniqueness. No point to fight for a commodity, that's a race to bottom. You sell for $20, somebody else will sell for 15, 12, 11. Have your own community, one narrow cohort of users who you are selling, and that community should be your evangelist there. And that always happens at somewhere little above, not to the basics. You are not solving basics of anyone right now. How does India build the supply chain? Great. So, it's a process. So, the process is that you start with initially... to start with EMS. EMS is? EMS is the electronic manufacturing

services that you start the EMS process. Then you start getting the design out there in country. Then after design, you start working on the supply chain, the component ecosystem. Right? So, this is... This all is a process one-by-one. If I am 25 and I want to start a component company, I've raised a little bit of money, put up a factory. How will I ever compete with somebody in China who's manufacturing millions of units? So, you can do that. So, there is so much of material which goes inside. For example, a glue on a glue machine,

on SMT, it's a glue. That glue-- So, I just found out that that glue, the particular glue is still coming from China. We can-- Why can't we make that here? And I studied, I said why the chemical companies can make that glue out there. You can do that. Probably there is-- Maybe somebody has to find out and get into that. I know someone, you know, who said, "Okay, after finishing my engineering, what should I do and all?" And then went on search that what India is importing a lot and he found out all the coin's

material... Right? For the coins, currency coins, the material, we still import. He started making that, he started supplying that. So, you just... Is that an opportunity for me? I think US will, in the tariff world, not buy from China like they once did. Components is a huge opportunity. So, for example, now India is projecting a market of 500 billion dollars by 2030. It's a huge market. 60% of that is components. And we are also incentivised to use the locally manufactured components. If manufacturing is coming here, 100% components will come here, like batteries... -That's an opportunity,

too. -100%. Like, I want to make money, I'm 25, in this industry. -Component is part of-- -EMS is a... I think next ten years is EMS. So... And the component PLI scheme is coming. Maybe by the time this podcast is out, the scheme will be announced. How do I go about starting that? Let's say an EMS company, an EMS manufacturer. Great. So, take a mobile phone, get into each and every component. There are so many. There are-- So, in a mobile phone, there are, let's say, 700-800 components. Maybe in his phone, maybe it will be

more. iPhone will be way more, right? Get into that. How do I find that out? Like, I want to know... I'm assuming US, China are going to hate each other for some time more. Apple phones are made in the US. They can't buy that particular product that they have been, from China anymore. How do I figure out what that component is and then how to build it? Just tear it down. Nikhil, these days, it is actually simpler. You know, you go on ChatGPT. There are so many sites on the Internet where you could just see

tear down of every phone. Tear down, you can find out what are the components and then you find out, okay, how many components are there in India. Go on the export list, import list that what all are getting in the country. Right? What is the volume? What is the-- These days, you can get access to all the customs data easily. [Amit] Yeah. So, huge opportunity. You should also work at EMS to get some... industry knowledge. -Experience. Yeah. -[Carl] Experience. There is somebody working with him for a year. He would know everything where this opportunity lies.

How big is the incentive for someone like Carl? Say, you are selling Nothing phones in India. You source from me in Bangalore versus a Chinese component manufacturer. Is the incentive enough to warrant the change in price? So, right now, we have to pay duties on components that are sourced from other countries like China. So the more we can source locally, the more we can lower the prices of our product to then be more competitive on the market. So, we are very incentivised. And if we are able to tap into PLI, and I think the PLI

regulation will also be more and more requiring of the brands to source locally. And they will raise the bar every single year. We are very incentivised to source locally. As a business, we just need to make the best decision for our shareholders. So, till now you have told me, go to ChatGPT, figure out... No, no, just... Just as I said, these days, there are a lot of avenues where you can go and find out multiple sort of information. Right. So, I figure out one component which is going into US cell phone manufacturer which is coming

from China. And then I go about figuring if that raw material is available in India. I identify that there is. What do I do next to set up a factory which makes it? Okay, let's take an example. Carl, can I use your phone? Let's say this is a USB socket. [Nikhil] Yeah. This USB socket is the most abused component here because, let's say a million times you are going to... Right? So, this means to say that this will require a special sort of material. Study that material. Where that material is available? Who is manufacturing it?

At what cost? And absolutely go to the root of that. And then see what are the... If you can go and visit these factories by tapping someone, getting into a network-- These factories in China? Wherever. Wherever. If possible. See, and then understand the standards. See, why this is not happening? Why I gave you a glue example? Because people said, "No, India can't make that." Why can't we make that? We are fantastic in chemical-- Our chemical industry, our pharmaceutical industry, they are doing brilliantly well. Probably there is maybe, there is not awareness of that, or the

volumes and everything, but I think if we are going to go, let's say from 100 billion to 500 billion dollars, it's a massive opportunity. Similarly here. What else can be done? Like, see, the outcome of this is we want, even if it's five kids who start... solving for the supply chain problem dependency that we are talking about, if that is the go-to action that happens because of the time we have spent today, I think we can all say today was worth it. Also, like, we spoke-- And I think we will need 5,000 of those kids

because it's a huge universe. And we don't have it here. We have to bring it in. [Nikhil] Yeah. And, by the way, brands like us are desperately looking for people to do it for us. I mean, it's our need also. What is the biggest need? Say two things that you want me-- Let's say for us, for an example, in watches we do, the largest component is the screen. The screen is like $5 or something. And if I import, there is a 15% duty, which means every screen I am paying, what? One and a half-- Close

to $1. If you say, make it in India, it's a huge volume. It's maybe half a million, one million screens a month. What is the margin in screen business? I'm sure if we cost arbitrage, if you look at it, it still makes 10% or 7%. It's just one SKU, you have to keep producing. Oh, you know the smartphone screens from China, those companies are losing money to sell the screens. Because they have policies that subsidise the creation of that industry. So, at least for the smartphone screens, it's very hard for... So you're saying our import

duty has to be higher than their subsidy, at the least? At the least, if-- Yeah. Yeah. So, one is import duty, and second, of course, the PLI schemes coming on components will incentivise to use more Make In India. Any advice to the government, because I'm sure somebody will be watching. How should the PLI scheme be structured for components? It's already structured. It's just going to be announced in two-three days. -He would be a part of it. -[Rahul] So... It's a good scheme. Yes, it's a good scheme. It's a good scheme. But see, the larger point

here is... that you have to ensure that locally-made products make more sense for anybody who wants to, you know, who's selling, let's say, in India. I'm not even talking about export. If Carl wants to buy a, let's say, a middle frame, he should be able to source it locally and it should be cheaper for him, not because he's forced because of a regulation. It should also make sense economically for him to do that. And that, in today's world, because of scale, it can only happen with custom duty or the tariff. So, tariff-- No-- -Depending on

the component. -Yes. I think plastic should be very easy, right? -To replicate here. -Yes. Plastic, and second, as I said, the government incentive schemes. Because, you know, if you see how China was built, because of all the government schemes only. And why their exports went up because their export schemes are, like, massive. You three continue talking. Like, I'm a 25-year-old. I'm trying to learn from three stalwarts of our consumer electronic industry. I want to make money. End goal. The biggest moneymaker is, like... The industries with fewer competitors, right? Like NVIDIA. If you look at the

NVIDIA share price, it's insane. Taking a huge example. But even for our industry, like, I think the chipset makers, their margins are way higher than the EMS factories, right? NVIDIA, I don't know, is it 40-- Qualcomm is 40, 60-- They're 45%, I think, they just declared, yeah. [Carl] 45% gross margin. But Foxconn is, I think, 10%. So... Like, eventually we also have to move upmarket, right, into, like, more and more difficult, lower competition areas of the stack. Yes, but, Carl, again, Nikhil's point is that how do we inspire the young generation out here to start

doing something? You know, how do they spot opportunities? Yeah. So, as I said, if you tear down the phone, what are the easiest five things, ten things you can just pick up and say, "Hey, this I can do. That is a little-- Is not that complex." By the way, you know, he's right. You know, so making these mechanics, for example, precision mechanics is not that easy. We still, you know, a lot of things are getting imported, even on precision mechanics. -Yeah? -[Rahul] Yeah. But once there are a lot of incentives and all, we have ample

people here who can take a shot at that. I'm curious to hear, like, how does the next Qualcomm... Like, if a kid is watching this, like, say, 30 years later, they've created Qualcomm, the next Qualcomm. Like, how does that path happen? So, you know, Carl, you just straight away talking about a moonshot. But instead of a Qualcomm, one Qualcomm, I'm saying, can we make, for example, if I have to take an example of automobile, let's say, in terms of components, can we make 300 or 500 Mindas here? Minda is a good example, you know. -Auto

is all making money. -[Rahul] Yeah. -Makes sense. -Yeah. I think that's a very large opportunity, knocking on our door. How much money would I need to start a factory around, say, the USB port? I think it will be very less, right? [Amit] For USB port. It's not easy. -You would know it the best. -[Rahul] Yeah, it's a... You know, Molly and all, they are like specialised Europeans who are working on this. But again, it was just an example. But once you go inside, Nikhil, as I said, you can find out... For example, inside there is

a... You have battery. On battery to dissipate the heat, you need some mechanism to dissipate the heat. You need a graphene, small film of graphene, which you can put, which can dissipate the heat. You can make it here. It will go in every phone. So, I am not saying straight away you go and target, okay, I am going to make the next Sony camera or something like that. And the PLI scheme will incentivise all of this? So, as of now, they have structured it for, let's say, components which are high in value, let's say, which

cover 70% to 75% of the mobile phone. These are all B2B businesses then. I mean, everybody has a different inclination towards what they want to build. No, anything is fine. I just want to build something in this space where I can actually make money. Is there financing available? Let's say, I figure out a certain product which is under PLI that I start building. But I don't have too much initial capital. How does one go around getting that initial funding? If I come up with a business plan and come to somebody like Rahul, will you give

it? Yes, if I see that your product works, working as per the standards, and then... Would a bank give it? I think yes. But, of course, banks work on collaterals. I don't have collateral. There are a few banks who might, you know... Is there some startup scheme, some government subsidy, where I can get the initial capital? Yes, you can. There are multiple schemes. Again, yeah. Very good point. There are so many schemes which people are not even aware of. For example, for MSME sector, you know, from Invest India, from Startup India, there are multiple schemes

going on which people are not even aware of. I am not aware. How do I find out? You will have to make this much effort. Then you need to go after that and find out how many schemes are available and then one by one... Which one applies to me. Yes. For example, there is a PLI everybody knows, but there is a DLI, which is design-led incentive for the chipsets and all. You should know that. There is a grant for that. You need to show your designs. Government, you know, they will come, inspect and see what

you are doing and then you can do that. For a right idea, you will knock on 100 doors, one door will open. But you need-- You need to knock. You just can't say, okay... As you also said, either a bank will come up or a VC will come up or a government scheme will come up. Something will come up for a right idea. I was reading this thing. Somebody had sent me an email saying semiconductors, something drastic is happening in India. Is that a possibility? "Drastic" means? Like, so the backstory goes that at one point,

India was really focused on semiconductors. There was one particular factory which burned down. But in the last 20 years, we have been left behind or 30 years we have been left behind, and they are restarting the effort... to manufacture more semiconductors in India. Is that possible? With TSMC and all of that? The whole world is relying on them, right? You mean like start a new TSMC or get TSMC to... Like both semiconductor design and manufacturing. Can I-- -So you can't create a TSMC... -[Nikhil] Can you compete? I think it comes down to, like, the depth

of the thing, right? Like how many millimetre... So we are working in one of the companies on semiconductors. And what you're referring is, there was one fab in India, only one fab which was in Mohali, government owned, long back... [Nikhil] Yes. Doing probably, you know, 100 nanometres or something like that. Today TSMC is doing two nanometres. Two-three, correct. So, of course, I mean, you can't catch up with two nanometre. Even, see, China started their semiconductor programme 20 years back. They are still not able to compete on that. But it is very, very important. All four

of us, like, 15 years back or so, have you ever thought that semiconductor will be more valuable or important than oil? Not even a thought came across to my mind. Back then. But if you see today, it is. And I am assuming the same thing. I am assuming US, China continue to fight. And Taiwan becomes... I don't know, maybe our friend in that fight or maybe not our friend. If our supply chain gets disrupted where we can't get those 2mm semiconductors, what does India do then? It is a tough question because, you know, it is

divided in multiple parts. So it is not only about two nanometres. Two nanometre is only one segment. Then you have-- So, government is saying, you start with, let's say 35 nanometres right now, is good enough. Because you have to start coming slowly one by one. Right? So even that, you know, if we can start at 35, because those are larger components, which can go into you know, other things. You know, refrigerators, TVs, vacuums, cars and all. And then slowly, slowly you start coming in for the ITs and the mobile phones. But at least we start

attacking the, you know, the 35, 40 nanometres, 25 nanometres, start attacking that. So that is the opportunity. I mean, straight away, you know, you can't leapfrog. As I said, China has put billions and billions of dollars and still they are not able to achieve that. And there are-- Again, it's a country play. A company can't build something like this. Country, you know, has to come into it. For example, to do a, let's say, anything less than 10 nanometres, you need to have lithography. What is that? It's a machine. It's a technology. That technology is right

now with Holland, Netherlands. There is a company... This company name is... -ASML. -ASML. No competitors. So, ASML has those machines. You need to have access to that. In those machines, the software actually is coming from the United States. So it's a-- It's all a-- Because it's a game where you need to work on this technology and need to stabilise the technology. So the government has to come and play into that. So, it's way more deeper than what we feel. Because, you know-- But, you know, semiconductor is a vast range. It's not only that, only doing

a TSMC, because when we talk about semiconductors, you know, we always talk about TSMC. Memory. Why can't India have its own memory? Can we design our own? Let's, for example, in your IT, there is Gen 4, there is Gen 5, now there is Gen 6. Why can't India come up with, I'm talking about, let's say, Gen 8 or Gen 9? End of the day, you have to have that. So these are all opportunities-- I'll ask you a question on top of your question only. Why is it not happening? Because in India, we were good in

services. So we were-- Our services sector was doing good. So people said, okay, let's build on the services business. So if you see all these Gen 4, 5, half of their manpower will be sitting in Bangalore and Hyderabad and designing for the other bigger brands who are somewhere in US or other countries. But not for us. Because A, we were not having those government programmes earlier. They were not, right-- Not focused on creating something like that. So, where the buck was going was, okay, services is an easy business, let's go there. Half of the people

working on those technologies will be from India. He was talking about Qualcomm or MTK, their biggest R&D centres are in India. -Mm? -Yes. So the focus-- But now we have, you know, with the current government, all the new schemes coming in, people are becoming more aware of that. See, today we are discussing about semiconductors. Otherwise, if it was a consumer brand or electronics and that, why will we be discussing about semiconductors? Because now, all of us, because of the policies and everything, and whatever happened, we are more aware of that. You are doing a bunch

of very new things, right? Like with television, operating software. There is one company that we are both part of. -Around television, as well. -Yeah. What's happening in that world? Would you like to tell us? No, that's more on the aggregation, because the way we consume content is completely changing. Can you tell us your thesis around that? Thesis is that, you know, you buy a product, and then you start getting multiple apps, and then you start paying different apps. Then your user experience is then, that whatever recommendation one is showing something else, the other is showing

us some different recommendation, third is showing something else. Why can't I have an experience wherein I switch on my TV, and then I don't have to go in any app? There is one user interface, and all the apps are stitched into that. You just type in your, let's say, username. Let's say nikhil@gmail.com, and then everything from your Netflix to your Zee to your Sony, as per your choice and recommendation, everything starts coming on one screen. You're not going in an app. That's one area-- Because again, it's an evolving space. And then you bundle it along

with the hardware piece, wherein you move on a SaaS model. How do you... I'm pretty interested in this business model, because as a content platform, you don't want to be unbundled, right? You want your own app, your own user experience. Yes. How do you get their stuff? Like, it's not in their incentive to unbundle their content. Like, you're saying, how do you get access to that content? Yeah, for instance, Netflix. If I'm Netflix, and you say, you just want to take the content... Apart from Netflix, you take some other example, because that's a different animal

altogether. -Hotstar. -Let's say Hotstar, yeah. So, I have my own app, I have my own users, I don't want to give you my content, because then I lose my competitive advantage. Then my content becomes a commodity on your platform. So, I mean, the platform, the content, the platforms, they will try and hedge against this, right? So, if there are like, say, 25 apps, which are the most widely used apps out there, and out of 25, 90% of the apps, you're able to get inside the app and get the permission for recommendation and everything. And then,

you know, put it on your screen for the user. I think it's acceptable. -So, for them, it's like incremental. -Yes. If I don't work with you, I won't make this money. Might as well make the money. -Because they also need distribution. -Yeah. So, then you have a few big ones that are harder to negotiate with. They will come with scale. So, once you achieve scale, they will say, "All right." -"We also want this." -I get it. It's a bit like cell phone and app store, right? Yeah. So, when there's a new OS on the cell

phone, the big app makers are not going to adopt, right? They're going to wait for the distribution to come first. So, I think it's about that adoption. Yeah. But when you bundle, I think it gets cheaper. Yeah. Why don't you guys speak like I'm not in the room and there are no cameras? Yeah, isn't... We're trying to. [laughter] Carl, what opportunity exists in the consumer market besides phones? What do I want to have exist? No. I mean, what are the opportunities which-- Oh, what opportunities exist? Not for the large players. I'm only thinking about, like,

very big categories all the time. I'm thinking about, like, EVs and robotics stuff. But I agree, like, if you're young, you have to start with something more simple. [Nikhil] What is China like? What else do you think we can learn as a country from them? I don't spend a lot of time thinking about policy. But I do think the PLI is set up... You probably know more about PLI than me, but... We are very keen to be a part of the next generation PLI scheme. I think if India wants to develop its own smartphone ecosystem,

starting from the factory, EMS side is very good. That's already happening. Incentivising foreign and domestic players to build here. It's already happening. I think to reach the next stage, it can't just be manufacturing and exports. Because ultimately, that's not the highest value add. The next stage will be to design and engineer here as well. So, what is the next stage policy after the goal of PLI has been accomplished? What is the next stage plan? I'm not sure. I'm just starting to spend more time and learn more about this. So, I think, to your question that,

what can we do? If you see what they have done in last 25 years, in terms of all the government policies, so... We are discussing about incentivising, that is one. That is one incentive. But rest of the other enablers, for example, the whole supply chain in terms of materials and everything, they have worked a lot deeper on that segment. In terms of logistics, they have created logistics parks to enable that. Today, if we are talking about, for example, now we have, let's say, iPhones going and exporting and doing all this sort of things. The way

we are expanding, you will need two full, bigger, you know, large aircrafts every week to ferry the product from here to Chicago. We need to have that. We need to, you know, build bigger ports, wherein you can reduce the time. Because they have taken all that measures, not only in one segment, because we talk only about this, but every segment, they have done with all those policies. I think consumer electronics is a very expensive and difficult thing for somebody without experience. -All of a sudden going-- -Experience is key, I believe. Without that you can't do.

In fact, you can't do also, I personally think. [Nikhil] You're making dessert? -Yeah-- -[Amit] Doing is expensive only. I mean, you will 100% make mistakes. I think we found a couple of themes, you know, where people could start. Something more focused, something more niche, lower risk, lower capex. Start from there, evolve from there. It could be on the consumer side, with clothing or accessories. It could be on the supply chain side with parts of the stack that are easier to make. And then just evolve from there. It could be on the distribution side with content

creation as a means of distributing information. But, Rahul, what is your thought? We have seen all brands across the globe coming to India in consumer electronics. Hardly there are brands who have gone out. -To have gone? -To have gone outside India. -Indian brands? -Yeah, Indian brands. Forget Southeast Asian countries for a while. But none of the brands have gone outside our home turf and played a game there. Do you think world needs some new age brands? I have solid thesis for that. So, I personally think India as a country... I mean we all work with

scarcity mindset. So, what has happened that, what a US or an European entrepreneur would try to solve a problem by throwing a dollar. A dollar is 90 rupees for us. So, what I'm trying to say, for us every penny counts. And for something what they are producing for $100, a similar great quality product, Indian entrepreneur could build for, let's say 30-40% cheaper than them. We have captive consumption. Entrepreneurs now are very smart, they are very evolved, travelled, done across. Why can't we take that arbitrage and take these brands to the globe? I mean, we are

good at marketing by the way, Indian entrepreneur. Software, we are good at. Hardware, we can learn from our peers. Why can't Indian brands-- Why can't we build brands who are based out of India and move to global scale? There are no brands existing everywhere, there are old traditional brands. -It's starting now, right? -Yeah. With you guys. [Amit] So, that's what we are trying to do. We believe that it is a right platform for us. We have gained decent experience and international markets we could do justice. But I'm generally talking. We need more brands. One brand

can't do. I mean, I have seen we all buying international brands. Are you talking about-- You want me to answer in consumer electronics? I am talking about consumer electronics, specifically, yeah. In consumer electronics, you can go into those markets where your products are relevant. -Bang on. -[Rahul] Okay? So, for example, in Indian demographics, whatever products you are making, you are going to take the same product because you have scale and you go there. So, that's what I am saying. So, when... I mean, I want to cater to a market which is, let's say, mid. Because

I don't want a cheapest product. -Which is fine. So-- -[Amit] Indian demographic. So, those products you have taken into those similar categories and similar... -you know, geographies. -[Amit] Yeah. -That you can do. -[Amit] Yeah. Southeast Asia, all other, you know, so, for example, all the SAARC countries, then this side, Russia, Eastern Europe. These are fantastic markets. -[Amit] Yeah. -Right? Then second, if you are saying that you want to hit the upper deck. I am just staying middle. See, upper, I am very clear. Let Sony, Samsung play the game what they are playing, or Apple. We

don't want to touch them. The consumers are very loyal. They have an ecosystem. They have advantages of whatever they could, so... You already have a scale in India. And then when you are going outside, you know, you go with that. Same scale and cater to that. Create one or two more brands. And use-- Leverage the scale what you have. And, you know, you can attack the markets-- No, that's what I am saying, we can do it. -India need those brands. -Yes. We are just no more about basic necessity brand, where we are just solving for

features. And you'll be surprised, I'll tell you, Rahul, where I'm coming from, When we-- We just launched in Dubai in Virgin stores. Traditionally, Indian brands would have gone and launched a $20 product. We launched ourselves at $75 to $100 pricing. And we're getting a great response. I mean, look at the kind of response people are giving for a decent-price-point products. -Again, innovation is one. -100%. Innovation is needed. You can't enter a commodity space. Innovation and then you can have-- Create different brands for, you know, different needs. One brand can't serve all, that's true. [Rahul] Look

at... Here you have OPPO, then you have OnePlus, then you have Realme. Under one umbrella only. -We have two brands. -[Rahul] Yeah. He has to come up with CMF because... -We need the scale. -Yeah. The scale, 100% is needed. I think you can build mid-market with the scale. -Yeah. -Otherwise, nobody gonna support you. Yeah. But I think it's-- The Indian economy has got into a point in time where there's entrepreneurs with a skill-set to go global. And it's already the language advantage, the language and culture advantage. -It's easier to do marketing. -[Amit] Yeah. Right? It's

easier to do US or Europe. But on the product definition side, it's easier to go to more similar markets first. There will be more risk going into... You need product market fit, which I am aligned. You go to-- Like, we also are going to similar markets, which are easy acceptance. And then try to go in territory-- I respect all territories. So, I mean, let's say US, these are all tough markets. It's easy to go and break there. So, I would like to go small there, do little trials, fail, and then take on. Yeah. So, they

are, as I said, going to SAARC countries, going to, you know, Russia, Eastern Europe, which are all, you know, great markets for you to do your trials and all. And then also tweak. We should start, like, a hub. Like, start a place where we fund young entrepreneurs to build some of the stuff we spoke about. 100% Right? Like, get some land, give them the resources. You guys all have the know-how. Like, start one place where people can-- Like, an incubator of sorts, with real estate. And it's easier to do. On... And it could be anything.

You know, you can-- If somebody comes up with an idea with a diaper, which will have some connectivity, which tells that it is wet or not or whatever. Same tech you could be using, let's say, in the ring. I just found out a tech where my daughter-- My wife wanted to monitor my daughter about fever. And you can't measure every time for a kid. So, there was a socks she could wear when she was six months or a year. It could track the sleep, the temperature and everything. So... These are micro-niche markets, but yeah, innovations

are there. What's the deal with these rings that you are wearing? Why are they growing so much? Why is everybody buying them? So, I think market moves in different form factors. And market need newness. This form factor, like watches, are maybe mass-adoption phase, whatever phase you want to call. Rings are a new category, early adopters. And people are getting more health conscious, also. So, they are pairing it with their watches, by the way. They are not a replacement for a watch. Is that an opportunity, health-related consumer electronics? You guys seeing any trends there? So, I

wear a WHOOP on my feet. So, what I have realised, I am into, I mean... I am little bit into this space, so I understand it. So, consumer is saying it's good to have. Meaning, I want a fitness device, but I will not track fitness. I mean, you would see a guy wearing a WHOOP-- I was talking-- and eating a McDonald's burger and a cola and a 100 kilos. So, it's just visual cues to tell people that I belong to this universe where I know. I want to know what I am, but they are not

cautious. I think they are little bit aware of it, but not that-- India is a market, internationally, yes. People are more and more health conscious. Preventive healthcare is... -You know that patch which measures-- -CGM. -Insulin spikes. -Yeah. I have always been thinking that at some point an Apple Watch can start doing that. Do you think that's an opportunity, if your watch has a CGM monitor in it? So, if you look at use cases, so I think these devices-- Okay, diabetic is a very big used case, this problem. And this doesn't work, by the way. Nobody

uses it. For us, we have used for wellness, but diabetic patient also doesn't use it. It is 5,000 bucks, it's too expensive. And nobody wants to break it every time. So, we feel wearable gonna divert towards health side, like we were talking about. Health is a segment. Thirty-five plus, you start getting those problems. Apple is 100% working on it. But Apple will only come when it becomes really solid, mainstream, proven, because it's health. Is there no opportunity unique to India? What do we want in health that other people don't want? No, I think, no. This

is a good space if somebody is working on it. Honestly, I would like to invest in a space where people are working on CGM. So, Apple is working. Samsung has a huge R&D centre in Bangalore, where they are working on blood pressure and CGM on device, where it's non-invasive. So, I think in two-three years time we will see it there. I believe in health. Health has PMF in consumer electronics. And another field that has PMF is children's education. Parents are always willing to invest in the future of their kids. What would that look like? We

have a common friend who is building this company called SuperLearn, where-- He is trying to build a tablet which costs $150, where you can't, like, really browse the net and go to YouTube and Netflix, but replace your school bag with that device. You mean learning like that? Do you think something like that could work? That could work. It could also be, like, some form of smartwatch for kids, for learning, maybe with an AI companion. It could also just be a teddy bear. That's there, no? The toy is there. Miko-- Miko is doing good. I just

know that it's a space where people want to spend money and are not price sensitive. So, you-- Wherever you are spending, you will spend for your parents, you will spend for your kids. And your health. And health. What do you guys think of Elon Musk in Neuralink? I like the thesis. It's trying to make the communication more efficient. Efficiency is always beneficial to humanity. But maybe there are other ways to get to higher efficiency. I don't know how long it will take for that to really work for mass market. Do you think people will be

willing to do that? Like, put something in your body, not on your body? If the benefits are there, I think so. But currently... I don't think the benefits are there. Just dovetailing into his question. Wherein, these days, people are talking more about organic. They don't want to take unnecessary medicines and... I mean, for somebody who is disabled, then they get a lot of benefit from using that product today. But at what point does it become beneficial for a normal person to use that? And why? I think there is still some time to go. Wouldn't you

suddenly become so much smarter if you have something in your head which is telling you everything? You can almost have that already now if you have earbuds with ChatGPT. You can speak to ChatGPT voice. -With the AI glass also coming. -[Carl] Yeah. You are sitting in front of this. This is the setup. This is happening-- That's way easier to adopt than operating something into your body. What happens to the world? Like... If intelligence is on call, traditional intelligence is on call or information is on call, we still have to differentiate. How do we do that?

I think most people are going to... I think 80% of the population will just chill and receive income from the government. And a small group of people will leverage the new technologies to push society and humanity forward. Like universal basic income. Yeah. I think that will happen for sure. Yeah? I think you can't replace, you know, emotional quotient out of that. You know, that's what makes all of us unique. All of us-- You give us the same piece of information to all four of us, all four of us will behave differently and will have different

actions. I think that is something which... you can't take away. Do you think? A little bit agree on this. Basic, I think 80% of the jobs will be done, for 20% you would still need human... The productivity will increase so much. But I think he is also right that we all will become more lazy. Like, kids today don't need to use their brain. They will be doing everything on... You need to be very self-motivated, but those people can really leverage the technology to create so much more productivity. I wonder if a kid will think tomorrow

if I can just regurgitate a book from my device at any point, then why read the book? That's how I was thinking when I was in school. -Like, I can just Google the information. -[Amit] Yeah. Why should I memorise this? Okay. Last part. I want each of you guys to give one advice to me, the 25-year-old, having watched this today. Tomorrow morning I want to wake up and figure out what to build. One piece of advice. Would you like to go first? I think if somebody needs to plan something in this space or whatever space,

I think, definitely a thorough research is needed. I mean, why you're going in, and-- I think you need to have that fuel or patience also to build it. That passion we are talking about and do pick up a narrow niche instead of going too broad. I mean, pick up a smaller subset of whatever problem you want to solve. Go double down and then move on. Definitely there are going to be failures, learnings-- But I would term them as learnings and you keep pivoting with that. So that would be one thing. I would say be really

sure that you want to do something. It's not always fun. I think most people should not be entrepreneurs. Most people have a much higher quality of life doing other things, specialising in a tech field or working for somebody else. Very inspiring advice to wannabe entrepreneurs, Carl, I must say. It's better to say it now, right, rather than finding out down the line? [Rahul] He is scaring us. Just be really sure. I think, like, it needs to come from a deep passion around something because it's going to be hard. There will be euphoric days, but there

will also be terrible days. Like, lack of sleep for weeks. Like-- I mean, we've all been through that probably. Why are you going to keep pushing forward when you face those difficulties? I think you've got to be sure that this is what you really want to do, that you're passionate about it. I believe in the potential of every individual person. Like, if you really want to accomplish something, you can. But there's a cost associated with it. And I think for most people, the cost is not worth it. Rahul? My only advice will be show me

your five friends. Because... if you have to build a successful company, then you have to keep a good company. So, if you have-- And you will become like that. So, if you have a good company of people, who are like-minded, then even if you have, you know, there's certain qualities and things which you don't possess, you can, you know... A, rely, learn, and do, and, you know, come up with... come out of various difficulties. So, basically you will become, like, whatever your company is. So, if your company is, like, there are guys who are doing

other things, you will eventually, you will go that way. But if you have five people reading biology, you will certainly go down that path. Even if you are not-- You don't want to learn, you say, "No, I am not a bio person, I am a physics person." But, at least, you are doing physics. You are not just doing anything else. So, just keep a cohort of those people... and I think you will-- A lot of things will get resolved. Fair. My fleeting thought, I am quite excited about this component incubator. I would say let's each

of us put in a little bit of money, not care too much about the upside, and try and get not too many. I think we should find four kids, support them in building a component company with time, money and all of that. And maybe other people can learn from what we have done and replicate. And I hope we are successful. But, thank you to each one of you for flying into my home and doing this. Very kind and I will reach out to you for different kinds of advice at different points of time, and also

to help all the young wannabe entrepreneurs in India. But, thank you. No, no. Thank you so much. Thanks for the great food. -[Amit] Good food. -[Rahul] Loved it. Thank you guys. Like a high protein... It's protein powder, yoghurt, and dark chocolate. -Very nice. -Yeah. It's all, like, really clean food. Did you guys have fun? Was that okay? -[Amit] Yeah, yeah. -It was superb.