Harvard MBA Framworks: Career Growth, Negotiation & Building Wealth in India | Ashwin | FO522 Raj Shamani

33:43How many McDonald's mid-se-low ke bich men? Give me a numbers. Range. It's okay. There's no right answer. Okay. You're giving me like 100, 2 ,000, 5 ,000 stuff like that. Give me a range. Okay. Maybe like 10 ,000 something. See, you're struggling to give me a range. You gave me a number. You could have said 0 to 2 million. You would have been right. True. No, no. Just think about for a moment. What prevented you from saying, I don't know the answer to this question. Let me give you a very big range. 0 to 10 million. You'd be right. Your 10 ,000 is wrong. You express your ignorance through a range.

34:25First, you should know you're ignorant. Sorry, I don't mean it. Yeah, no. Fair, fair. Yeah, I like this. So I did this with Professor Neil, but my co-founder Chaitanya was with me. I was very confident. We did 20 sums. He beat me 18-2. It wasn't a competition, but he got 18. Because Chaitanya was willing to accept, I don't know, range is so big. I was like, Chaitanya, zero to a million is not fair. I said, yeah, but that's the game. I will give 10 ,000 to 12 ,000. The answer, I think somewhere 50 ,000, but that's immaterial. The answer is immaterial. So the first exercise, now see, you have to unlearn.

34:58Nice. I came back to this point of unlearning. I thought I was very good in decision making. Suddenly I realized I don't know the answer. Now, when I can operate in business saying, I don't know the answer, what will I do? I will ask for more information. First step for better decision making. Ask for more information. I need to get an expert in the table who might know. But that person may also be biased. Maybe I need multiple experts. I need to assemble a diverse thought in my team. Everybody cannot have the same background and the same view on life. I need diversity of thought. Then there's some signs.

35:31Better decisions are made in the morning versus in the night. Because cognitive load on your brain increases. Its ability to think through is less. So you do all of these things and you make your best educated choice. That's all you can do in life. Whether that result comes or not, then you go back to the Gita and you take a philosophical view on life. But these are the things that you can do. Starting from the simple fact that I don't know. There are cognitive biases. So by the way, there are biases also. So let's say I have this mug. I want to sell you this two mugs. Let's say I have two mugs like this.

36:08And it is 100 rupees. I have here three mugs, also 100 rupees, but one mug is broken. Which of these two will you buy? You buy the two perfect mugs or two perfect mugs and one broken mug?

36:26I don't know. just guess both are 100 rupees which one will you buy I don't know this one the two mugs and a broken mug okay most people will say I'll buy the two mugs that are not broken because something is wrong but the answer is actually it's different both are going to give you two mugs for 100 rupees our brain doesn't think like that you do this experiment 10 times 8 times 2 people will choose this 8 times people will choose the two mugs that are perfect but why because in their mind that's perfect but there were two perfects you are not being logical humans are not the biggest crime in economics is this assumption that consumers are rational such a thing doesn't exist I didn't get it I'm getting two mugs here you are being very logical in both cases there is no wrong answer I'm just asking why people choose that because in my head I'm getting extra here but a broken mug correct so you are thinking in a very different way but most people will select this because this is perfect this is flawed so in your mind you are not wanting to buy a flawed item it is not flawed but it is just how consumer behaves I will give you a different example maybe this will be easier for you do you know Tylenol in the US is basically a paracetamol okay if I gave you a paracetamol so which is like Krosin etc or Dolo whatever CVS so in the US you have a store which is CVS which is the common medical store so this is store branded so unbranded something like well being unbranded paracetamol wellness forever sorry and I give you Tylenol or Croce this paracetamol is 10 rupees this Tylenol or say branded dolo is 50 rupees both are paracetamol active indigate only one paracetamol written on the label which one will consumers buy 50 wala because they will trust it more you know the real thing in the US by the way data on this when people buy for themselves they buy the unbranded one when they buy for children their kids they buy Tylenol that's why today the largest selling part of Tylenol is baby Tylenol let's unpack that a moment what does that tell you the consumer's rational because he or she or they know that both are the same So when I have to buy for myself I will buy this But when it comes to my kid I'm not rational And I'm not really Because I want to be A little more careful It is the same drug I don't have kids That's why probably I chose that But I get your point So but this is Consumer science This is how people Make decisions This makes so much sense So you learn all this When you think about decisions This makes insane sense There's a whole course On consumer psychology Consumer psychology My parents do this I mean that's a science to it In fact we are We are being cheated by consumer brands every day because they do this to us all the time.

39:26Right? So anyway, so there's a whole science on this. So decision making is a big part of a toolkit of a need to do. The first thing and like you rightly said, fact that you don't know is a very important But I love that range part. Like I really love that. See, if I tell you this, you won't understand. So willingness to, no, go ahead. You were saying something. If I tell you this, see the point is, if I tell you theoretically that you should know that you don't know. You didn't make sense of it. if I teach you practically now you understood now you may remember after five days you seem to be a reflective character most people by the way will not remember so actually what they draw in this graph they actually draw a graph for you like this so people who are giving a bigger range will answer like this and it's called a red line many people go like this have you heard of the word narcissism somebody who believes they know they're right if you have a graph like this You're a narcissist.

40:21Such people don't change easily. Such people don't make good leaders. You can make out just through a simple, and he did 20 questions, and then he drew a graph for each one of us. I mean, negotiations. Take another part, you know, one of my best courses at Harvard Business School was Professor Jim Sabinias, who was part of the program on negotiations, Harvard, Harvard Law School, and MIT, who taught negotiations. I mean, Harvard, they broke down negotiation into concepts. Like, there's a concept called ZOPA, zone of possible agreement. BATNA best alternative to a negotiated agreement. Simple things.

40:57You're having a negotiation. Should you make the first offer or should you keep quiet? And there are some theories on that. If it is only price go first. It's called anchoring. If it is not price but it has many issues to do listen. Negotiation ask open-ended question. Why do you want this? Do you want this because of that? No. Why this? Why? What is the position and what is an interest? I don't want to. I'll give you an example. I don't want to sell this. You want to buy my house. Let's say I live in a nice bungalow somewhere. I don't want to sell this house. This is my position. I'll pay one crore.

41:33No. Five crores. No. Okay. So, see, very often we make it price. We pay price. It may end up being that, okay, on this house, somewhere in the corner, maybe my dog is buried. Okay. I'm not a dog lover, but many people are. And I have such strong memories that I somehow can't hand this over to anybody else. Right? If through conversation, open questions, you were able to discover that fact, you might give a deal that says it's one crore. I will never touch that. And you will have lifetime access to come to this property and visit your dog's grave. Anytime you want. I may still not sell, but I'm more likely to sell.

42:14My position is I won't sell because I don't care about the price. No, I won't sell any price. My interest is I want to protect that memory. So in negotiation, very often we say that, Baba, if you don't agree, you can never get a deal. In fact, actually, when people say they don't agree, they don't agree on the position. If you expand and understand the interests, you may be, look, not every negotiation you'll get to an answer. Being able to do that. For example, very often, I'll give a different example from a real world. VC, a term sheet negotiation, right? Everybody loves this. I, as a founder, believe my valuation is 1 billion.

42:46the VC believes the valuation is 500 million can a deal be done of course somehow how you be the VC I am the founder try I say no look this is the multiple you gave such multiple to some other firm I am worth a billion dollars below a billion I will not do a deal and you want to do the deal let's say so what will you do you will argue with me below a billion no why would you like education sector right nobody's willing to put a price why don't you speak for yourself you're not willing to a price how do you know nobody's willing to put a price you should not invest so we can have this argument it'll go out neither will win but that's my position what's my interest my interest is I want to be called a unicorn you understand could be I'm just making it up by the way it's not my actual interest this is an example you're role playing so supposing you as a VC said you could do many things So let's do one thing.

43:45We'll give you 90 % of a round at 500 million. 10 %? What did you understand? 10 % second round. I'll do a 90 % round now, 500 million. And six months later, just to make it look uptically. I'll do 10 million at 1 billion. Waited, I'll shake hands on that. See, I'm giving a very simplified question. But you understand the difference between position and interest. My position is I want to be a billionaire. I want to negotiate. My interest actually is I want to go tell 100 people. maybe Unicono da da da da So in negotiation you covered few tools you said position versus interest that's one lever second lever you said Zopa what is Zopa?

44:23Zopa is so you are offering me 500 million I am saying I am a billion but maybe I am willing to come down to 800 million Zone of possible agreement Maybe you are willing to go up to 600 So 600 to 800 is the zone of possible agreement How do you find that out? Through questions asking So for example, I'll say no, but 5 minutes, is that your last thing? Can you go to your committee and check? I'll see what I can do. No, this is my last thing, take it or leave it. Then also there might be posturing. So you have to, through conversation, explore, explore, see what happens. That's how you try and do it.

45:05And typically these are more, Zopa is more for a deal where price is the main factor. Then there's BATNA. What is BATNA? Best alternative to a negotiated agreement. What happens? I'm at a billion. This VC is at 500 million. Shit, if I screw around with this person too much and they leave, what is my best alternative? My best alternative is, there is somebody else at 400 million. So then I can play around. No, I have no money. I have two months of cash in the bank. So if I know my BATNA, I'll wag my tail accordingly. so suppose I have only two months of cash you may or may not know that as the VC then I'll take your 500 million I'll try all my tricks but I don't I'm not negotiating from a position of strength but if I have somebody else at 500 or 400 then I'll negotiate from a position of strength so you have to know very clearly what is your best you have to know also by the way as a VC you may be looking at other deals so if you have a very good BATNA and I have a very good BATNA chance of a deal happening is less but if one of us don't have a good BATNA chance of a deal happening is higher for that we need to know each other's BATNA give me one one anecdote from your life one story from your life where you have used any of the negotiation tactics which you have learned in Harvard Business School oh my god look I think we so one specific story so when I was where you either ended up winning negotiation or losing a negotiation both works so a negotiation usually the best negotiation by the way is a win-win negotiation.

46:43Of course. It's never win or lose. It's win-win only when you think you're going. So I'll give you this example. We had what was their name? NASPERS invest which is now they're called a different name. I'm forgetting the name. And this is a big South African fund so they were investing. SMR? No, not NASPERS. NASPERS. Damn. How can I forget the name? blanking, it'll come back to me. Arshu was the lead on that and they were based in the Netherlands and so they were to invest. Now they had something. So they wanted to put in a certain amount and get a certain stake. I didn't want to give them that stake at that valuation.

47:25But through conversation, so they realized very quickly, I realized very quickly, sorry, that they had some tax reason that they had to own 10%. now I didn't want to dilute 10 % maybe I want to only dilute 7 % now I also and the valuation they were coming in was about 750 million or two so we split the deal we said okay you put this money now at 750 but one year later you put the balance to get it and that one year valuation by the way we didn't write it as a billion crossed a billion dollars so it met my goal of saying okay chalo it's a much higher valuation I didn't know it crossed a billion it was based on revenue EBITDA multiple etc etc.

48:04And that actually is when we became, but it was, they had to put the money. So, they got what they wanted, but we structured it in a way that made sense for me, for us as a company also. To dilute less. Versus diluting it immediately. So, instead of 10%, maybe overall, we diluted maybe eight and a half, whatever. So, we diluted 10%, sorry, but instead of raising 100 million, maybe we ended up raising 200 million. We got more money for the same dilution. They got what they wanted. We got what we wanted, right? So, that's an, but when we started, they came a point where we said, okay, maybe we had an impasse.

48:33Because they want to put in a certain amount of money and get 10 % and we're like, no, that doesn't work for us. When we understood the interest better and they understood our interest better, we were able to get something that actually made sense. So that was one example of how we have done. But you know, there are many, many. And the nuances will be, it's not going to be as dramatic. Nuances are all. There are always nuances in all of the deals that we have done. There's another principle of framework or a class in Harvard which people take, which is FRC. You remember? Financial reporting and control.

49:05You're testing me.

49:09Yes. So what was interesting for me about this specific class in Harvard is you guys are taught to learn accounting by actually doing a postmortem on a lot of financial frauds. so it's not like you know it's very unusual like a lot of other business classes or companies or wherever you learn financial you know reporting and controlling and all of that you learn through this is like the big company and this is doing great what decisions will you make in order to improve this this and that usually people show you the wins and like really great outcomes or maybe complicated outcomes what you are shown is proper frauds like you've been I know at that time there's Enron, WorldCom, Theranos, like Theranos was a decent.

50:00So you're taught by these things. Why? Why do you autopsy cops? Why do you autopsy something which is a proven financial fraud? So look at Harvard Business School, not just in FRC, in many of our case studies, we learn from successes, but we learn from failures of people as well. And of course, the word failure itself is a bit misleading, to be honest, because failure is a part of life. but you can learn a lot from failure it's like the human body also it's when you have some illness that you will go to the gym very often to people or something starts hurting then you realize shit I need to take better care of it so failure is actually the best teacher in fact very often in life if you have failures early in your life you'll make a better leader there's a Stanford professor who once said look if I'm given an opportunity to invest in a first time entrepreneur or a second time entrepreneur whose first venture failed 10 out of 10 times i'll invest in the second entrepreneur because he or she has learned so much and there will be a better entrepreneur if i have to learn to build let's say my financial health audit or my career finances health checklist okay and which gives me a good understanding of whether i'm doing good in my life or not?

51:21Do I need to upskill, change myself, learn better? Or do I need to continue taking the path? You know, whatever. There are a bunch of decisions which people in the mid-career will be thinking about. What would be those five questions or things which can help me audit myself? First, define for yourself what is happiness, what is success. You assumed it is financial. And it may be for many, many people. But first, define for yourself what is happiness, what is success. That is very important to do. Okay. Okay. Now, once you have a good sense of what that is, your choices will become somewhat obvious.

52:02Right? For example, somebody might say, look for me, success is being very famous. You can be very famous and not have a lot of money also. There are ways to do that. Somebody might say, I want to be famous. I want to leave a legacy. I want to have money. I want an OBA option and there are ways to do it. Somebody might say, no, my family is very important. So I may not want to be an entrepreneur. See, by the way, many people think entrepreneurship means better time management. Bullshit, the biggest bullshit ever in the world. Entrepreneurship means you have no life. It's a 24 by 7 thing. For me, I would always say, first, optimize what happiness is.

52:37Okay. That's question number one. If you're very clear about that, for example, I will not do something that is against the law. It may be a dollar, billion opportunity. I won't do it. So there are certain sections like gaming. I don't understand. I'll never be in it. Because for me, that's not me. Education is beautiful for me because I really feel I'm serving somebody. So even if I don't make money, I don't care because I'm doing something that I love. I will be happy. So happiness and success, define that. Question number one. And then once you define that, you know the weightage. How much of that is financial?

53:06So if that number is very large for people, and by the way, it may be large for people. Nothing wrong with it. Nothing wrong with it being loved. Everybody will act very cagey. I don't want to be a unicorn. Just say something. What do you want? right so agree okay it's financial then you work towards that now work towards that means what so i gave an example for a career person right so the difference between a 15 lakh and a 20 lakh salary between difference between somebody starting at 20 lakhs and somebody else also starting at 20 lakhs but three times in your life you make a jump because you invest in your education what does that lead to so think about that if you're a salaried person if you're somebody looking at going into entrepreneurship please don't become an entrepreneur thinking you're going to become a billionaire.

53:49See, how many startups are there in India? As per DP, IT, there's about 7 lakh. Okay. How many unicorns are there? 150 to 100? It's like that. Do the math. The odds are against you. And unicorns is equal to not billionaire. I was going to say, perfect. Of those, how many are actually? Billionaire. Billionaire. So, very few. I know few unicorn founders, they don't make bare minimum salary. now they have great valuation and they're struggling at this point. And somebody who's one of, somebody who's 10 years in the career mid-manager is making more money than that unicorn founder at this point. Perfect.

54:28So you figure out your path, but just don't start a startup saying I want to become a billionaire. Start a startup because you say, I deeply believe that I'm going to solve a problem and I care about that. Actually, by the way, there are more chances you'll become a billionaire if you take that route because that is how a startup will succeed. But most people say, okay I want to be this person and today now Shark Tank has made starting up more popular which is a good thing but they see these billionaires you know also our media covers these billionaires so much they don't write about all the other startups that have failed but which is a good thing you always cover aspirations so that more people can actually try to believe in something which is not their current situation yes and no so aspiration phenomenal but also understand that path is riddled with skeletons of people who have also aspired and then perspired.

55:17So just be ready for that. End of the day. Don't think that it is easy. And therefore, what I'm saying, don't get me wrong, Raj, what am I saying? I'm saying start up because you want to solve a problem. I'm not saying don't start up. Why would I say that? But don't start up because you think work-life balance will be good or I'll become a billionaire. That's the wrong reason. Those are extraneous reasons. Start up for an intraneous reason, which is that I want to solve a problem and that will work. So if your financial thing is your big motivation, is it a salaried career is it a startup if it either one of these especially if it is salaried please I would really say what is the one thing that you can do so you're already 35 you can't change your undergrad grad invest in upskilling invest in building your social capital invest in building your brand capital you may be the best performer I gave you that framework already you may be the best performer in your company but the CEO doesn't know you will grow 12 % year on year you're the best performer an average performer the CEO things you know I'll give you an example in my own life so I was in Citibank I was 22 23 working in Chennai and I was rated E1 L1 which is the highest you can be rated and in all of that operations team I think there were some 50 managers only 2 got that rating and I was one of those I was very happy but I was a guy who would come do my work and go home on this in building a business or actually exploring an opportunity there's another Harvard class right Salman's Oh, you know about Bill Solomon?

56:43I'm already liking you very much. Bill Solomon is a rock star. Okay. Honestly, he's invested himself personally in about thousand startups. He and Howard Stevenson created the Center for Entrepreneurship Harvard Business School. He's a professor of entrepreneurship. I credit my wanting to be an entrepreneur to him. What did he teach you? Entrepreneurial finance. But forget teach. He just inspired the shit out of me to become an entrepreneur. I mean, the kind of stories that, like I said. See, again, that's what I'm saying, right? He has invested in 1 ,000 startups himself. Maybe at that time it was 500.

57:17God knows. Yeah. Right? So, he has worked with founders. So, his ability to relate to it. He knows when you're bullshitting. That insight and just this whole... I never went to Harvard Business School thinking I'm going to become an entrepreneur. But I very often say this. But since you know Bill Solvint, I'm so happy because you can relate to the world. He was a key part of my decision-making saying... And he doesn't... I may not even know. It's not like he counseled me to go become an entrepreneur. That class just like was so fascinating because an entrepreneur, Raj, you're dealing with all issues.

57:48It's not one silo. It's like 100 issues. You're raising capital and you're creating something new that changes lives of many, many people. Right? So, yeah. But anyway, what were you saying about build some POCD? Yeah. People, you're testing me. I went to business school in 2003, 2005. It's a long time back. But that concept has stayed with me. People, opportunity, context deal. Yeah, exactly. It has stayed with me as well. I really loved this concept and my loose understanding with people. I mean, you can explain or I can explain. I'll tell you and you correct me because you've attended the class.

58:21I only got the loose framework, which is POCD with people and opportunities and context and deal. Okay. What this essentially means is whenever you are starting a business, you would rather work with exceptional people on a mediocre idea than on an exceptional idea than with mediocre people. So can I give you an example? People just come first. Doesn't matter what you're doing. So exceptional people is the foundation. So actually, the POCD concept is actually not when you start a business, but when you evaluate a business. Okay. The framework to evaluate how good a business is, is used on POCD.

58:59It can be when you are as an entrepreneur thinking of starting up how should I evaluate this idea versus that idea also you can use POC So I did that But let me give an example of people What you just said P is best illustrated with a simple example So Raj let's assume you and I are going to row or both Have you ever done rowing? Yeah Damn Are you an expert in rowing? No not at all You're a novice I'm horrible So then you and I are both novices both horrible at rowing You and I are going to row and we are going to compete with say the rowing Olympic team of say the US. They're the experts. Do you think we have a chance?

59:39I think we do. So the only difference is, we are going to grow downstream. And they are going to grow upstream. Of course we will. Are we better people? No. But we have a better opportunity. You understood. So to your point, even if you don't have the best team, but if the idea is so meritorious, if that opportunity is so large, I will back that. versus maybe they have the best team, but they're going against the current. Maybe it's a dog eat dog business. They will only go that far. So anyway, that's just to illustrate that. Yes, of course, people are important, but that next one, opportunity.

1:00:19Opportunity, exactly. That is even more important. So that was coming. The first is you actually assemble the great people together and maybe work on mediocre idea. Okay. But it just changes the context the moment you come to second, which is opportunity, right? So imagine that Olympic team guys actually rowing downstream. That is people plus opportunity. So that helps you understand. Exactly. And opportunity, my simple framework of understanding was, my takeaway was from that concept was, opportunity is not what is available in the market out there for everyone to go take away. Opportunity is how much can you win in this opportunity market?

1:01:00there can be a big time that in India education business needs to build how much of that can you win that is the real opportunity that you should assess addressable time not time correct and the one that you can win like what are your rights to win that that's one form of opportunity the other form of opportunity also as you think about opportunity is what are the new S-curves may you be able to create later on so I started a university okay Okay, later I can do student housing. Later I can do a medical college. Later I can do something else. So that opportunity actually can become larger. When you start, you don't know how big it is.

1:01:37But is there room to expand and play? I'm selling a subscription product to a certain person. Let's say to buy groceries. But I can also sell medicines. I can also sell this. I can also sell that. So the ability for an opportunity takes time. I'm only selling one product to a finite set of customers and the opportunity size is small. Then the opportunity size is small. small. People like large opportunities. We always say, go after a large opportunity. If you're a small fish in a big pond, you're still better off. Go for aspirin market, not vitamins market. That's what they say. That's a very famous saying, right?

1:02:11Okay, so we covered people, then opportunities, and context. This is really interesting. Tell me context. See, context is, okay, you're in the higher education business. I'll give you my example. Today, two years back, the Indian government allowed foreign universities to set up in India. Context changed. Since independence, this was not allowed. Suddenly, an opportunity has come because the context has changed. And India is the youngest demographic. I gave you the numbers. Hardly 27 % of people who finish college go to higher education. There are hardly any Indian universities in the top 100.

1:02:45Perfect. Now, let us say the same context I tell you that, okay, the Singapore government has opened up for foreign universities. Okay, that has also not happened and they got independence around the same time. but population is 5 million. There are already very good local universities in the top 100 in US, NTU. Context there is different. Which presents a bigger opportunity. So India with the opportunity size and this context is a much bigger opportunity. So context gives you a sense of whether this will be a breakthrough big idea in the future. It reinforces the opportunity size. It also has a lot to do with the environment and regulation, politics and stuff.

1:03:25A lot of top conglomerates actually use this as if they just understand the back of their head. They try to align their business interests with national interest. And the moment you do that, your chances of succeeding becomes much higher than it would be otherwise. Context is, yes. So regulation is part. Aspiration is also context. Right? So for example, I mean I can example where somebody got it wrong which is a Tata Nano where they said cheap but the point of the context is nobody wanted cheap they wanted something that was aspirational right so context is regulation context is also aspiration context sometimes is technological breakthroughs you know so if you look at again this was Clayton Christensen so this whole size of the chip becoming smaller smaller smaller that context allows you to now have devices like this.

1:04:20So, technological innovation creates disruptive innovation. That was his whole book, Leighton Christian, on disruptive innovation. So, it can be any one of these or sometimes all of these. So, that's context. And context, by the way, just to be clear, it doesn't change overnight. Regulation may. Sometimes it changes over a period of time. And that's why very often disruptive innovation ideas initially don't seem to be going anywhere. And suddenly they go through the roof. And then D, deal. Yes. Have it in writing. Sorry? Have it in writing. No, have it in writing is not the part of it. What he says deal, again, in that thing, they don't say value.

1:04:58They say deal. Deal has a valuation and it has many, many, many terms to it. And that is relevant, of course, in the context of fundraising. And again, most people don't realize this, but valuation is one part. You have in a term sheet, you will have LICPREF. You will have anti-dilution. You will have something around rights called reserve matters. What are all the things that you do that the investor has to say yes to? Okay. And you will see Indian VC's reserve matters are long list. US VC's reserve matters are small list. Why? I see it. I think Indians, actually I don't know if it's even true, but US VC is very little.

1:05:34You can't change the share capital, issue new capital, da da da, except without me. You can't hire key employees without me. You can't create a subsidy without me. New line of business without my approval, da da da da. It's a long list. So those are also part of things. so then as an entrepreneur you have to ask yourself do I like all of this some Indian funds global funds are very entrepreneur friendly go work with Accel most entrepreneur friendly fund right I mean they really because see end of the day on the deal part in most VCs you never make money when things go down very rare so you can write whatever you write you can't see might as well not write have a good relationship with the founder and work with them I suspect in India, some examples are there where people have burned their fingers, etc.

1:06:20But look, I think it's happened in the West also. It's part of the ecosystem. There are good apples. There are some bad apples. There's a class in Harvard again where you're taught to actually pick up a country and analyze countries' balance sheet as an organization. Biggie. Business, government, and the international economy. You did that? Yeah, yeah. That's a required class. So you have to do all of these classes. You're saying are, by the way, required classes. There was also a class in Harvard which I took Joe Badracko as a professor They're called moral leader. Okay, what is it? Which is just very interesting.

1:06:49You know, for example, you're Fred Truman. Should you drop the atom bomb or not? Every day, 1 ,000 American soldiers are dying. But if you drop it, 80 ,000 innocent civilians will die. Should you? These are known as dirty hand situations. Meaning, whichever thing you do, your hands will be dirty. So, they put you in moral dilemmas. Yeah, and what do you do? How do you answer that? Framework is also in that. I mean, no, no. It's an interesting one. When you are in a moral dilemma and no matter what you do, there are going to be lives at cost. Every decision is a wrong decision. In some context.

1:07:24Here. Right? How do you take a decision? There is a framework which is self, style and situation. So, Ashwin doesn't like confrontation of hiring people. That's myself. Situation is Expedia walked away. 30 % has to be fired. Abhi, style is can I do it? Right? so I'll come to the moral dilemma later so one of the things we learn the most is when these three align self so let's say Ashwin Damara Expedia bought the company you have to hire 100 people perfect self, style, situation all three align beautifully I will flourish so also the time when I will learn the least all three are aligned it is when either one of these three are not aligned that actually you will have the greatest dissonance in your life and you will learn the most so anyway so that's one thing to keep in mind for people who want to build a career put yourself in situations where your self style and situation your self style and situation don't align you will learn the most self is your self-interest you're not self-interest your way of thinking your intrinsic value system your way of behaving that's yourself style is how you go about doing it right so this is my value system so my so my value system is i have to respect everybody be be very mindful.

1:08:39So my style is aligned to hiring people, giving them a promotion, being nice to a VC in a negotiation, not being a bad boy. Because your self is, your value is being a good human being. Correct. So my style is reflected in that. Situation is whatever it is. But if the situation demands a different style, that's when you will learn the most. That's when it will be the hardest for you. And over time, you learn to deal with these various situations because your style improves. You learn more styles of operating, right? But coming back to that model, does that make sense? it makes but then at see where every time when there's self style and situation aligned so situation will be so complicated so you'll have to change a style which doesn't come as a natural self correct how at in that situation do you be the natural self or do you actually end up becoming an which you think according to you so the point is as a leader you want to evolve your style to get closer to alignment.

1:09:39It doesn't happen naturally. So for example, when I'm in this situation where I had to let go of people, obviously I went through tremendous dissonance. Through that experience, have I said, okay, look, if I need to have a very tough conversation with somebody, let me frame it in a better way. And therefore, for me, it became more palatable. So my style started improving. It's not like yourself changed. We never say change yourself. You'll never change yourself the situation is in a way extraneous it is the style that adapts right so how do you have that leadership skill set to adapt that for example if today i were to have a conversation by somebody i had to let go of somebody i would do it way better than i did it at that point of time why because i have adapted i have now figured out how to go about doing it right am i still perfect no because that is still a challenge for me but i think i would be bad i would let go of people senior people you know it happens not all the time but happens but on the moral leader side Raj just coming back to that look there's no simple answer there is a and I'm now again making me remember sometimes 20 years back there is something known as you optimize for your individual values I think it was Kant who said this or Nietzsche that said for societal good so that one way in which you can think about decision is is it optimizing based on my duties these are my duties so Truman says my duty is to protect American lives I'll optimize for that or do you say no it's overall good of the society it's not my duty my duty is not just what i am supposed to do but let me take a decision that benefits most number of people in which case you cannot be bombing that right it depends on which one you give more weightage to because there is by the there is no right answer of course no the second question is would a different president with a different value set made a different decision this is that self-styled situation thing right If I was sitting there, there's no way I would have dropped on that.

1:11:28Just not possible. If your value system is societal good and people, then you can't. So ultimately, also you have to make decisions that sit well with yourself. Like Shakespeare said, to thine own self be true, then thou canst be false to any man. But some people don't believe that. So they would make different situations. So anyway, the moral leader class I think was helpful because very often in life you go through these moral dilemmas and how do you make decisions fascinating chapter by itself okay so there's one concept you learned it after Howard and you've quoted this before as well and I love this framework and principle what is this I've put in three boxes in front of you you can open one by one and you can actually talk about a specific principle that you've taught let me try and see this is yesterday this is box two can I open all three?

1:12:29it will be easier to explain this how do I make that stay?

1:12:39so there are three boxes by the way Raj you didn't realize this but the way you arranged this tells me something about you that you arranged it this way and not this way I think you understood there was a subtle science you can pick up about people explain what did you pick it up no wait you arranged this so that I could read it not that you could read it you're not a self-centered person you thought about the other person and you thought it happens subconsciously that's the key point right so again 70 % of leadership communication is not what you say it's non-verbal you can make out things about this person just the way they behave subtle thing right?

1:13:26True. But it's very natural it comes down easily so that that tells me more about it. Fair. And imagine if it naturally came the other way that also tells me about it. So anyway so much about life is small small tidbits but it builds that anyway so Professor Vijay Govindarajan I mean he's an inspiration and he actually did our first online course. Okay. And he was at Dartmouth and I got the privilege of sitting in his classes. And he had this construct about how one should think about life from a business perspective. But it can also equally apply to you as an individual professional or even in your personal life.

1:14:05And he said, look, life is basically, business is basically should be thought about in three boxes. And that's the name of his book, The Three Box Approach. Box one is today. Okay. Today is what is the business doing today? It is typically the part of the business that's most successful. It's spitting out cash. It's what got you here. But then if you only focus on today, you will not create tomorrow. Tomorrow is box three. So I'm going from box one to box three. Box three is about creating the future. For my company, today we are mostly doing online courses. Students come from across the world.

1:14:39We work with a certain tier of universities. But for tomorrow, we are creating foreign campuses in India. This is a brick and mortar business. This is dealing with students who are 17 to 25. My core business deals with students or participants who are 35 to 45. Very different. But this is our future. We are creating the future. And to do that, you have to create a different kind of a mazit. But to do that, you also have to forget. And forget is yesterday. What is that song? Chhodo, Kal Ki Baat, Kal Ki Baat Pur. Something like that. Right? So forget about. Meaning what? You challenge your assumption.

1:15:15So we have to challenge the assumption that we are an online company. We have to challenge the assumption that we will not work with. So today we're working only with working professionals. We have to challenge that. We have to build a muzzle for placements. We have to build a muzzle to deliver student experience, student housing, etc. Challenging assumptions, box two. So any company has to always be doing box one, box two, box two. So take an example of companies that don't do this. You can take Kodak. Very strong in the film business. Completely miss box three, which was digital. Gaya. in fact I'll give you a better example of box 1, box 2, box 3 easier for viewers to release this is box 1, box 3 box 1 today, box 2, yesterday, box 3 tomorrow tell me Raj, if I asked you to do a high jump so let's say I put a bar that is this high hopefully this is not too high and asked you to jump, how would you jump?

1:16:07just run from backward and jump and that's how till about the 1950s people used to jump, that was box 1, you come and you jump both feet and you land you take off on both feet and you land on both feet right and if i wanted to beat you i would train a certain bunch of muscles mostly your glutes your quads all of that and get slightly better incrementally we can get better but you'll go need certain high today you know how the world olympic champion jumps for a high jump they actually come running and jump with their back first. So the head crosses the bar. So they come running, they jump this way and they actually land on their body.

1:16:51That is box three. And by doing that, they could jump about a foot and a half more. To do that, they have to challenge the assumption that you have to take off on two feet and land on two feet. Just imagine the person who thought about that, who said I come running and jump backwards. Now, the reason that works, it lowers your center of gravity. And so you can go a little higher. For that box three to happen, you have to train a different bunch of muscles. Your back muscles become very important. Your neck muscles become very important. What got you here won't get you there. Your box one today will become obsolete if you don't have box three happening.

1:17:33So the whole idea is any business must have maybe 20 % of their time, attention, etc. invested in creating the future box 3 right if you're in the newspaper business today you need to be thinking what your box 3 is I mean you should be thinking 10 years ago if you are in higher education today today with AI coming etc you have to ask yourself is my computer science degree which is my box 1 today still or what do I need for box 3 maybe you need to ask yourself also as a podcaster whether your box 1 today is the box 3 5 years from now and so everybody has to every business has to ask herself and by the way even professionals individuals individuals.

1:18:08Today, I'm very good. I'm a VP finance. I'm very good in my role. I have a certain bunch of skill sets. Will I become the CFO, CEO, MD of a company, box three? What do I need to, what assumptions of mine do I need to challenge? Sometimes education can help you overcome that. Sometimes coaching can help you. Sometimes just new experiences can help you. But every six months, one year professional has to ask themselves, and you know, what does box three mean? Do I have the right personal brand? Am I doing the right things? Do I need to be a little more spiritual? I'm getting very stressed in my life.

1:18:40My current skill sets will not get me where I want my future to be. In most cases, in some cases, it maybe is not required. Therefore, by the way, you first, to do this well, you need to know what your future is. You have to imagine what your box three is. How many of us sit down and say, look, I have a good sense. 10 years from now, I will become this. right we all talk about it but really really imagine sit down and think about it and make it part of us that's box three imagining the future and to get there you have to challenge assumptions that is the key part so the whole framework works on that basis interesting you know here's what i would do if i was an audience if i'm listening this right now and you have these three box you know if i'm listening this and i understand this concept right maybe you correct me i'll take three pieces of paper i will write on one piece of paper what is that imaginative future that i want to create for myself what is my dream what is my goal where do i have to reach i will write like two three four five lines whatever i i need my future to be i'll and then i'll put it in one box then for that what is something that i need to do today in order to reach there i'll write a bunch of things and i'll put it in box number two which is i'll put it in box of today and then i'll make one more list what are the things that i need to forget and what are the things that i need to maybe challenge about me my skills my situations my learnings my experiences that is stopping me to reach to tomorrow and i'll put that it here and i'll actually put it in front of me and maybe go through it every week and try to analyze my life and audit if i'm on the right path or no perfect and let's make let's give some examples of that right so let's say i'm a um mid-level manager in a bank i want to become the ceo of the bank my box three is i want to become a ceo of a bank in 10 years right first question i'll ask myself is how many ceo of hiring happens through headhunters like say hydrake or russell reynolds or egon zender how many people in those firms know me my first to-do is i will get in the face of those firms that hire CEOs for bank.

1:21:10I will research first, I will write names and in the next six months, they all must know me. It's concrete. Life is concrete. Once I know my goal, see, very often in India, we're all very interested in running fast. Tell people, first figure out which direction you want to run, then run fast. Otherwise, you may be going further away from your goal. So once you figure out that, that's just a simple example of what do I need to forget if I'm this person and I want to become CEO? You may need to forget for example a challenge. No, so one is let's say today you have a if you're in this company at a mid-level you will have a network that is probably within that small little function and you think that that is good enough.

1:21:53Build your network more broadly in this company who decides the CEO? Must be the board maybe a CEO there'll be how many of those people do I know? So forget that my network in my little pond is sufficient. Just because I know five VPs and two CXOs in my bank is actually... How many did I do in the next bank? Most likely your job will be in the next bank. That is one thing. Second thing is you challenge your own skill set. You might be very good in this domain of what you have. As a CEO, you have to do 100 other things. You have to manage a board. Have you ever done that? Have you ever demonstrated managing stakeholders beyond?

1:22:28You have to manage the regulator. You have to do so many things. so can you take on some more roles or responsibilities or some experience that can show that now I'm a lot more all around than just this function that I'm managing so that is also an assumption of yours that you can challenge so there are many assumptions if you sit down you may be a person who's very good at getting things done and you're hands on this is a very much lauded skill in India always very hands on as CEO may you cannot I mean hands on to an extent but you can't be getting things done so you may have to let go. In fact, very often people get stuck because they're hands on.

1:23:03Only that many hours in a day that you can work. So if you have to supervise every damn thing that somebody under you is doing, there's only that much work that will get done. You will never be CEO. But get used to that. I've given this to the person, don't follow up, give them two days, let them succeed or fail, then I will go and guide them. So you may need to change that part of you. So it depends. The answer for forgetting challenge will change for different people. And if you're, let's come to if you're a student. who wants to maybe study now can't decide should i study should i take a degree should i just follow online classes should i just go out and start building my own thing how would you put it here see i think that's actually it doesn't need such a big framework it's a very straightforward answer if you are finished or finishing school i will always tell value go get a solid high quality college degree college education okay and i'll answer that there's only one caveat that i will put to this only one caveat which is if you are in school and if you have figured out a brilliant idea to start up right and you are passionate about that idea and you want to go do it go then it's a different thing that's a different thing because then you don't have to get a college degree you can you will learn along that way look there are data on this is very clear Raj you take the unicorns in India right and there are about 120 odd unicorns there are about 230-250 unicorn founders except for three all of them have completed college only three are college dropouts okay so for all of those people including some of your good friends who say college is a waste of time go start up immediately the data and we all have to be data driven doesn't support that hypothesis at all.

1:24:53Yes, there is one Bill Gates and there is one somebody else who dropped out and created things. But storytelling is different from data. Even at Harvard Business School, they've done a research of entrepreneurs. So Harvard Business School graduates are six times more likely to be successful as entrepreneurs than the general population. So there is something to be told about education. Now, second caveat. All education is not the same. so go get a college education from one of the best colleges that you can get right but India may be best colleges are very little and there is so much fight like there's so much fight probably the best college would be let's say an IIT right or for post like that's like IIMs NIITs IIMs also like post graduation now they're starting one or two are starting but look there are foreign universities who are coming to India also top 100 rank top 500 rank there are now about 15 foreign universities in India.

1:25:49So look at them very closely. Look at the options in India. What's the benefit of studying in a foreign university in India? I mean, you go to a foreign university because you want to probably be in US and you want to get exposure of America. You go to UK or Australia. Like, you know, you go to these places because that's where it actually inspires you. See, there are two kinds of people who go to study abroad. One who go to study abroad to become NRIs. non-returning Indians. Right? So they want to go abroad. They want to get a job and they want to work there. Now the good news or bad news for them depending on which side you are is those jobs are not available.

1:26:2850 % of the people first of all 50 % of the people who are applying to the US don't get a visa. Canada may it is 60%. I think UK Australia is also similar. Let's assume you got a visa. Half of the people who go there are not getting jobs. In the US today I'm just back. They are not willing to hire people on OPT. Why? They don't want to, because that's the mandate, local mandate, for whatever geopolitical reasons. That's the mandate. They don't want to hire people on OPTs. Half the people are coming back. You're paid two crores for your four-year undergrad, or maybe you're paid one crore for your master's program, and you're coming back to India.

1:27:01It's the worst ROI decision ever. So that's the people who want to go there, migrate, work, pay back the loan. Then there's one more part which is saying, look, I really am going for the education. I have rich parents. I don't care about ROI. Upjow, please. That is a good place because it is a great place to learn. But how does the size of the campus matter? End of the day, you're going for a great education. In the Indian universe, foreign university setting up in India, half the faculty are foreign faculty, similar to what you would have got on campus. Half maybe local faculty because local India context is also required.

1:27:32You're getting the exact same degree. So if you're getting a UNSW degree or a Bristol degree or Aberdeen or Illinois Tech, this degree is actually coming from the home campus. and all of the universities are offering you the chance to spend one semester or one year on the home campus included in the India fee. India fee is about 10 lakhs 12 lakhs which maybe they have scholarships anywhere from 2 to 5 lakhs if you apply early. So isn't it the best of both worlds that you can study in India India cost of education get a job here startup here build here your cost of education is a little more than the private universities in India but much it's one third of what if you spend there but your degree is being taught half by foreign faculty exact same curriculum of the foreign university exact same degree of the foreign university what are the top four or five universities foreign universities that are coming to india and then i'll come back to this thing that university of new south wales in sydney australia is top 20 ranked in the world it's a group of eight universities that's coming to india that is already in india they're taking admission so they're starting in bangalore in september okay so that's already there they've Appointed director, which is their head.

1:28:42All of that. Faculty hiring is happening. Half the faculty coming from Australia, from UNSW. It's a brilliant institution, right? You have University of Liverpool that's coming to Bangalore as well. And Liverpool is like world famous. I think eight Nobel laureates. You have the University of Bristol. 51 rank in the world coming to Bombay. That's one. And Aberdeen, 525 years old. Scottish University also coming to Mumbai. Illinois Tech. And they're teaching courses, hardcore tech, computer science, AI, data science. They're also coming to Mumbai. You have the University of York, which has a very interesting program, the Business of Creative Industries.

1:29:22I think you can come and lecture in that program as well, but a bunch of other programs as well. That's a top 150 ranked university, Russell Group. It's one of the few universities that is ranked in the top 10 in research and teaching, others being Oxford, Cambridge and Imperial so that caliber university is now in Mumbai right and then Victoria University from Australia which is there in Gurgaon. So now okay now let's go back to your debate so these are the universities I have option of either going and studying there in those universities or I have an option to study in their Indian campus. Obviously getting an Indian campus would be a little bit easier than.

1:30:02No they have the same admission standards? It's the same degree. Why would the standard be lower? Why would a foreign university lower standards for Indian students? Because just by enrollment numbers. No. They're not driven only by enrollment. They're not top 500 rank or top 50 rank by doing that. See, that's the mindset. That's why I'm saying you should think about a foreign university. I understand the question. So standard is same. If you're a, let's say, C grade, D grade student, you can't get it in any of it. You won't be able to get it. This still is acceptance criteria. is 85th percentile.

1:30:36Same as home care. In fact, I'm working with all of these universities. The acceptance criteria is the same. There is no difference. Their academic council and senate will not approve any reduction in admission standards. If you could not get into the US university, you would not get into the India campus. So that is one. So let's say students who are going there is going to be same caliber wise. Okay, that's one. Second is, what's the fee? anywhere from 10 lakhs to 15 lakhs per year and then scholarship there will be anywhere from say 35 to 50 lakhs per year okay so that's a huge difference massive one third and then living expenses in the us and uk versus living expenses in india but now the one thing which they offer is actually the diversity and the people and so many other expert people which you end up meeting which we spoke about, right?

1:31:29Weak ties, like your friends and network and acquaintance which you actually end up meeting in your university and helps you so much in your life that you can't even imagine. Those people I won't be able to find here. Why do I need to study here then? So look Raj, if it is that you want to build your career abroad, then going and studying abroad is a good example because you build your networks, etc. there. If it is that you want to build your career in India, yes, you have one option of going there and coming back. But then the ROI will never make sense. You spend two crores there and you start working in India at 20 lakhs.

1:32:06ROI will never make sense unless from a very rich family. In which case, you can do that also. Right? Or you take on a very big loan and then you pay it off over years and years and years and then you get lucky which happened to me so which is still okay. But if you want to build your career in India then why would you not study in India at a foreign university? build your network here in India but then use the study abroad opportunity that they're giving you. So every foreign university is saying for a semester or one year you can come and study in my home campus and get all that diversity that you want all that labs access you want all that great faculty you want and it is in your India fee of 10 to 12 lakhs versus spending for 30 to 50 lakhs.

1:32:47So you're not getting three years of that. Sign up three years here in Illinois Tech. Yeah. Four years. Lena Tech is four years. Up to one year, you can spend time in Chicago on their campus. So not in year one, but year two or year three, you can do it. You come back and graduate in India, you got the best of both worlds. So classes will be same. The curriculum is the same. The classes start and finish on the same date. Admission criteria is the same. The exam and the assessment is the same. Half the faculty are coming from there and teaching. It's a game changer. But will the exposure be different?

1:33:22To some extent, yes. If you're spending four years in Illinois Tech, four years you're in that environment. Exactly. Which has been built. Again, if you take Aberdeen 1495 or if you take Bristol built in the 60s. So yes, that environment is far richer than what you're offering in India. But that is a 2 lakh, 2 crore type experience. This is a 40 lakh, 30 lakh cost. And what about private universities here then? What about them? Like, why should a person not study in a private university in India? Depends on which one. So, depends on which one. So, which private, so depends on what your consideration set is.

1:34:04So, first of all, how many private universities do we have in India that are in the top 100 or top 500? Number one, right? Are they going to give the exposure of half your faculty being foreign faculty? Are they going to give the exposure, guarantee that you can spend six months to a year on the home campus? is their curriculum a global curriculum are their faculty teaching from research the University of New South Wales spent 600 million dollars every year on research entire India's research spending in academic institutions 1 billion the University of Bristol has built a 1 billion dollar AI supercomputer which through cloud is accessible to the India students Liverpool has a biomedical lab being built for their students in India for doing research with Unilever, which every year is an 80 million pound investment.

1:34:56Will this college education and degree matter? Your guess in next three, four years? Absolutely. Not next three, four years, 30 years. But why with the rise of AI and stuff, probably anything that I'm studying is going to be useless. Look, we just discussed this. You have intellectual capital, you have brand capital, you have social capital. Maybe AI will disrupt some parts of intellectual. How you code may get disrupted. How you build your network as a computer engineer to become a CTO, AI will not tell you. You will have to build that. How you negotiate, how you influence, how you have difficult conversation, your listening skills, your reflective skills.

1:35:34AI is not going to do all of this for you. You have to do it. The value, and the reason you're asking this question, I understand the context. In India, education is very theoretical and very directional, right? Right? Binary. Right? Wrong. But in the West, that is not the education. The education is it depends. It could be this. It could be that. Right, wrong, AI can answer for you. It depends. You need a brain to answer that. You can use AI as an input. The true value of an education is that it makes you think differently. It makes you act differently. If you go into an education program and come out the same person, then you're the only fool because nothing in your life will change.

1:36:16But true education, there will be a delta between the person who came in and the person who graduated. From that delta, your career will see change. So that to me, an undergrad, a good undergrad, again, I keep saying good undergrad education when you meet peers who come from different backgrounds, you learn about it. Somebody like me who never thought, I don't come from a family of entrepreneurs, but in that peer group, I suddenly dare to dream big. My life changed. AI couldn't have made me dream big. Now, somebody can debate that also, but I doubt very much. So that quality of that education, it's not just what you learn, it's who you learn with, how you learn with, the opening of the mind.

1:36:53That is invaluable. And again, I go back and say, look, if you start your career with a 15 lakh starting salary or a 20 lakh starting salary, it may seem small. That number worth 20 years is 3.6 crores. So don't make that mistake of saying, look, AI will do everything for me and I don't need an education. a lot of people say this please ask them for data back up their claim that a college education has no ROI data from a good college education they'll show some tier 3 tier 2 college from India and give some data that's not what we are talking about I'm talking about top 500 universities show me the data interesting well you make sense and obviously your your life work revolves around that so no matter how much I debate it's going to stand true like that but it makes sense and what we just covered in the first half of the podcast was around the way you think and a lot has to be credited to a good college education I give a lot of credit now obviously it's my point of view I can understand others have other point of views but I am where I am I would say 90 % is Harvard Business School 10 % also I give it to my school education I went to a Krishnamurti Foundation School, Jiddu Krishnamurti.

1:38:10We had no exams to late standards. We were also taught there's no right answer. You think about it. A lot of culture classes, nature classes, a lot of activity. See, that is the core of education. Whether you get an undergrad, grad, school system, those are the kind of experiences that change and shape personality. So I'm grateful to that education, but definitely Harvard changed my life. And my life now is to make sure that Harvard-like institutions come to India, teach people and then they go on to create the next thousand unicorns in India perhaps in the next 30-40 years and the country develops and that is an opportunity we want this brain drain to stop smartest people in India should stay in India and build in India and then that ecosystem will change it will take time and we all by the way we all are doing our small little bit it's a very small little bit it's too big a country for one or a few people to do but that's the big vision that's the box three well I hoped and I believe that you will be able to actually do a lot of it.

1:39:10So thank you so much for actually coming here, explaining things, teaching us, giving us a masterclass and walking us to an opportunity that is going to change a lot of lives. Thank you so much. Thank you, Raj. I really enjoyed this. And by the way, I think you'll make a very good teacher. So please come to one of our campuses to teach. I will, I will. I want to teach at some point in my life. So I'll definitely do that. I love teaching. Perfect. Thank you. Thank you. Thank you so much for watching this episode till the end. Now you have to do three things. Number one, subscribe to this channel right now.

1:39:44The more you subscribe, the better the guests we will be able to get for you. Number two, please comment and let us know what did we do wrong and what did we do right? Because the more you give us feedback, the better we will be able to make episodes for you. And number three, please share this episode with at least one person because one conversation can change someone's entire life. I'll see you next time. Until then, keep figuring out.