Nikhil KamathInside Silicon Valley’s VC Playbook | WTF is Venture Capital? - 2025 Edition | Ep. 24
EVERY SPOKEN WORD
150 min read · 30,000 words- 0:00 – 0:58
Intro
- NKNikhil Kamath
How you guys see different sectors evolving? Where can me, as either a investor or somebody looking to start my career as a young man or woman, have enough tailwinds that it makes sense to spend the next decade in? [upbeat music] Ready?
- DDDeedy Das
Yeah.
- NKNikhil Kamath
Yeah, start. [upbeat music]
- 0:58 – 5:10
Deedy’s journey & the Anthropic story
- NKNikhil Kamath
So maybe we start with small introductions. Maybe two minutes on who you are, how you got to be where you are, and what you're doing now. Would you like to go first?
- DDDeedy Das
Sure. Um, you know, I, I started-- Well, depending on how far back you want to go, I was, I was from India-
- NKNikhil Kamath
Why DeeDee?
- DDDeedy Das
Why DeeDee? My real name is Debarghya Das. In the city of Kolkata, that's not as uncommon a name as you'd think, but even in the city of Kolkata, where I'm, where I'm from, nobody could say that name. So very quickly in high school, we had to call me something else, and my initials are DD. But then that didn't solve the problem, because then you have to explain what my name actually is anyway. And so then I just came up with the moniker DeeDee, and not DeeDee, the Dexter's sister. Um, and so I spelt it a little bit differently, and that's, that's what stuck. So that stuck in high school, and it's been DeeDee ever since.
- NKNikhil Kamath
So what did you study? When did you come here? What do you do now?
- DDDeedy Das
Awesome. So twenty eleven, uh, got to America for the second time. I was here as a kid for a bit. Um, I went to Cornell. I just studied computer science. I did my undergrad and my, my master's. Uh, first job was Meta in New York. Did that for a year, then went to Google in New York, traveled a little bit. So I spent some time in Israel, Bangalore. Uh, and then I was on the founding team of a company called Glean, which is a GC-backed company as well, and spent a good four years there. Towards the end of my time at Glean, I went from doing engineering to managing to, uh, running their AI product line.
- NKNikhil Kamath
What did Glean do?
- DDDeedy Das
Uh, Glean started as an enterprise search business. Um, happy to dive into what that means. Um, and then it evolved into generally an enterprise assistant and knowledge-finding tool for bigger companies to figure out, hey, like, answers to questions like: What do I do for onboarding? Or what is our holiday policy? Or even very specific questions about: What does this person do at the company, and how can I find this doc? All of that stuff. Um, Glean is now, like, a seven billion dollar company. It's done fairly well so far. After four years there, I decided to try something else. I'd-- My, my friends would joke, I, in a span of two years, I went from engineering, management, product, and then venture. Um, but I was just looking for something fun to do, and so I joined Menlo about a year and a half ago, and, uh, I'm at Menlo right now.
- NKNikhil Kamath
And what does Menlo look at specifically?
- DDDeedy Das
So, you know, Menlo, to give a background, it's been around for quite a bit of time. It's a forty-eight-year-old fund. Um, we are now investing out of a one point five billion dollar fund, but we have, like, about seven billion under management. Our focus right now is, you know... Our maybe landmark investment today is we're big investors in Anthropic.
- NKNikhil Kamath
Mm-hmm.
- DDDeedy Das
Um, but our focus right now, and my focus at least, is seed and Series A, uh, deals for AI, SaaS, infra, sort of all over. Now, nowadays, everything is a bit of AI.
- NKNikhil Kamath
Mm-hmm.
- DDDeedy Das
Um, but the entire fund does everything up to, like, a Series B and sometimes Cs and Ds as well, so-
- NKNikhil Kamath
Right.
- DDDeedy Das
Uh, we also do have a good biotech practice and a consumer practice, and the rest of the stuff we do is primarily, like, software adjacent.
- NKNikhil Kamath
What is the Anthropic story? Can you summarize for us?
- DDDeedy Das
Oh, my God! What is the story? [chuckles] Um, the Anthropic story was... And me, I'm probably not the best person to tell this story, but a few people left OpenAI, wanted to do, um, a foundational model company somewhat differently, and they built a-- and both of them hadn't figured out a business. And now Anthropic has sort of built a model that eventually became very good at coding, and it got a, a ton of recognition for that. And then it sort of, now, Anthropic, I would say, is a company that's, you know, trying to solve AGI, but they believe their route there is through reasoning, coding, and things like this. Um, they very distinctly do not really do much outside of text-to-text models. Um, so less audio stuff, video stuff, um, things like that, and that's really their primary focus. And in terms of a business, they just serve enterprise customers primarily. They do have a consumer app, but that's not, not really the, the prime business.
- NKNikhil Kamath
Thank you.
- 5:10 – 11:32
Nikunj’s background
- NKNikhil Kamath
Would you like to go next?
- NKNikunj Kothari
Sure. Um, I'm Nikunj. I, I moved to the States half my life ago. Niko and I were just chatting about it. Seventeen years ago, uh, I went to Urbana-Champaign to do electrical engineering and computer science, uh, and then I moved to the Bay thirteen years ago, which... When you meet-- I don't know what happens to both of you. When you meet new people in their twenties come here, I feel like a boomer. It's like, feel like, legitimately feel old. They're like: "When did you move here?" "Thirteen years ago." And they, like, look at me, and they'll start eye-rolling. [chuckles]
- DDDeedy Das
Like, three weeks ago.
- NKNikunj Kothari
[chuckles] Exactly. Um, and then, yeah, I was an operator for eleven years. I started, um, my career at LinkedIn. I spent two years there and then quickly got the startup bug, um-... did four startups back to back, where I was the first PM at a few of them. I joined a company called Haul, which did enterprise communication. I joined, and one week later, Slack launched, which was a tough one year, but, uh-
- NKNikhil Kamath
I heard of that one.
- NKNikunj Kothari
Uh? Yeah, yeah.
- NKNikhil Kamath
[chuckles]
- NKNikunj Kothari
It was... I picked the-- as, as venture capitalists say, "You picked the right area, but the wrong horse." Uh, but-
- NBNiko Bonatsos
You guys had a great URL back then, right? Haul.com.
- NKNikunj Kothari
We still have Haul.com, yeah.
- NBNiko Bonatsos
Amazing.
- NKNikunj Kothari
Yeah. Uh, Atlassian bought the company. Didn't want to go back to a large company, and then I joined a company called Ship. Uh, they did first-mile parcel delivery. I got really enamored by the physical world. This was peak Uber days. Uber was crushing. Um, spent two years there. Really loved, enjoyed, like, you know, how do you build end-to-end products, iOS, web, but with a large operations angle? Um, and then my best friend worked at Opendoor, which is a real estate company. He said: "Why don't you come join the team there?"
- NKNikhil Kamath
Can you tell us a bit about Opendoor? We were discussing earlier, but it's interesting.
- NKNikunj Kothari
Yeah. It's, it's in the news right now because it's become a meme stock that's, like, [chuckles] growing really well. But, um, I still fundamentally believe in the mission. So I think unlike other countries in the world, where a transaction cost for buying or selling a home is 1% or lower, in the US, it's 6%, which means when you're-
- NKNikhil Kamath
Mm
- NKNikunj Kothari
... trying to sell a home, agents take 6% of the commission.
- NKNikhil Kamath
Mm.
- NKNikunj Kothari
And that's crazy. Residential real estate is the second-largest asset class in this country-
- NKNikhil Kamath
Mm
- NKNikunj Kothari
... and there's a 6% tax to doing that, which is just mind-boggling to me as, like, uh, someone looking at the space. And so the company was founded by four founders: uh, Keeth Rabois, Eric, uh, JD, and Ian. And their model was, "We will buy your home unseen." So every home that's bought and sold in the country is on a register called the MLS. And so using machine learning, they said, "Hey, we could figure out what the true value of this home is." So you enter an address, answer a few questions, and we give you an all-cash offer to buy the home in one minute, which is very different than you having to stage your home, and list your home, and pay an agent a transaction fee.
- NKNikhil Kamath
Mm-hmm.
- NKNikunj Kothari
In one minute, you get that fee, so...
- NKNikhil Kamath
And Opendoor held the inventory. They owned it and then-
- NKNikunj Kothari
Opendoor held the inventory. So yeah, we'd buy the home...
- NKNikhil Kamath
Mm.
- NKNikunj Kothari
We would refurbish it, and then we would s- buy... From the buyer perspective, you could enter any home, any time you want, and you can buy the home. All online, all transaction. It was a great journey. I... Like, you know, some of my formative learnings came from there. I spent four years there and had to, like, you know, saw the company... Twenty twenty, had to fire 35% of the company, and then we went IP- IPO six months later. Yes, craziest six months of my career. Uh, but then I only like doing early stage, so I joined a company called Meter, which does networking hardware, uh-
- NKNikhil Kamath
I'm meeting him tomorrow.
- NKNikunj Kothari
Anu?
- NKNikhil Kamath
Yeah.
- NKNikunj Kothari
Yeah.
- 11:32 – 13:31
Niko’s story
- NKNikhil Kamath
Niko, how old are you?
- NBNiko Bonatsos
Um, I'm 40.
- NKNikhil Kamath
Okay.
- NBNiko Bonatsos
So I'm a little bit older, yeah.
- NKNikhil Kamath
Yeah. Tell us about yourself.
- NBNiko Bonatsos
I spent all of my time with, uh, technical young founders.
- NKNikhil Kamath
Right.
- NBNiko Bonatsos
Like, my real passion is to obsess with technical founders who are building products for themselves. Um-... I'm originally from Greece, made in Greece, grew up between Greece and the UK. I've been in this, uh, part of the world, Silicon Valley, since two thousand and nine, when the App Store was about one year old. Got lucky upon graduating from Stanford to join, um, General Catalyst. Uh, spent the bulk of the previous fifteen years there, uh, and have been mostly investing in first-time founders who have bold ideas. They are the customers of their own products from all over the world. Uh, I split time between here and New York.
- NKNikhil Kamath
And is there a sector that you look at?
- NBNiko Bonatsos
I, I used to look more into consumer stuff, but then what happened is, um, over the last few years, made it hard to not turn towards very young founders, Gen Z-ers.
- NKNikhil Kamath
Right.
- NBNiko Bonatsos
Uh, and a lot of them have been AI curious, and most of the interesting ones the last few years were, like, enterprise-y.
- NKNikhil Kamath
Right.
- NBNiko Bonatsos
So honestly, I wouldn't care less about the sector. For me, it's like, if you're as smart as you sound at, like, sixteen, nineteen, twenty-three, twenty-five, how much smarter can you be in five years? 'Cause the idea will change, the product will change, the market will evolve, and what do I know? Pre-seed or seed, my own, you know, perspective on the product or the market, I'm not that smart.
- NKNikhil Kamath
Is that also Neeraj's team? Do you work with Neeraj?
- NBNiko Bonatsos
Uh, Neeraj, uh, joined, uh, us with, uh, the Venture Highway team a couple of years ago. Yeah, I've worked with Neeraj, of course.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
Yeah.
- NKNikhil Kamath
Hemant and Neeraj are really good friends of mine.
- NBNiko Bonatsos
Awesome, yeah.
- NKNikhil Kamath
And we end up hanging out a lot-
- NBNiko Bonatsos
Awesome
- NKNikhil Kamath
... also because they have the India connection.
- NBNiko Bonatsos
Absolutely, yeah.
- NKNikhil Kamath
Great people.
- NBNiko Bonatsos
Great people.
- 13:31 – 23:17
Sectors to avoid as an investor
- NKNikhil Kamath
So what I was looking for today is, we seem to be at some kind of a crossroad where the rate of change seems to have got- gone up in the world around us. I allocate money. Uh, I have... I don't know what I would call it, private equity, venture capital, uh, whatever the term might be. And I've been in the US for a large part of the last two months, trying to get allocation to different companies here. So I'll share with you which those companies are along the way, and maybe we can debate them together, and if it's the right valuation or not. But more importantly, I want to arrive at how you guys see different sectors evolving, not today, but ten years from now. Where can me, as either a investor or somebody looking to start my career as a young man or woman, have enough tailwinds that it makes sense to spend the next decade in? Yeah, interesting exercise?
- NBNiko Bonatsos
Sounds fabulous.
- DDDeedy Das
Sounds great.
- NKNikhil Kamath
Okay, so should we start with... Maybe I'll go one by one and ask you guys to name one sector that you should absolutely stay away from as a investor or as somebody starting up for the next decade. Let's start with Deedy.
- DDDeedy Das
All right. Put me on the spot. Um, you know, it- this is a hard question to answer because I have such a venture lens on this. And, you know, w- when you invest as a venture capital fund, there are certain attributes of a business you're always looking at, and you need a certain return profile for this investment to make sense. Um, so typically, sectors that are really tough to invest in are, you know, very high CapEx sectors, and it's not to say that those businesses are not good businesses. They're phenomenal businesses in some cases, but it's just not- it does not s- have the return profile that most venture investors want. And there are exceptions to that, and there are certain ways it can be very different. Um, but broadly, I would say it's, it's hard to disentangle myself from, from that bias. Like, usually when you're buying up, like, I don't know, you're buying up tons of real estate, that's... I mean, open door is a separate story, but then it's, it's a tough, uh, thing to invest in, for example, as a, as a venture capitalist, so-
- NKNikhil Kamath
Forget the venture lens.
- DDDeedy Das
Okay.
- NKNikhil Kamath
Just as a investor or somebody starting a job in a industry, which do you think has the most headwind in the next ten years? Like, somebody emails you from a particular industry, you'll be like: "Okay, I'm not gonna open this email."
- DDDeedy Das
I mean, I don't, I don't think I have a very strong bent against any particular industry.
- NKNikhil Kamath
No.
- DDDeedy Das
I'm trying to say, like, all industries are actually pretty important. Um, there are some that are maybe falling now, but it's impossible to know how, how they would do in, in ten years, right? Like, you-- like, I'll give you an example, maybe, it's probably not really gonna answer your question, but if you take something like manufacturing, which is a pretty traditional industry, which may not have much takers in, in the venture community, there are some fantastic manufacturing businesses that are going to be built, um, especially in the next ten years, that have a whole other set of interesting problems to solve. Like, how do you solve, um, a labor problem? Um, how do you manufacture in certain countries? If- can you even do that? What does tariffs mean for manufacturing in different places in the world? So I, I think there's interesting businesses in all sectors. It's really hard, and I don't know if- well, I'm curious, actually, what you guys think, is often when you, you, you have to have an open mind as an investor to hear out the idea in a certain sector, because often it's from the places you least expected that an interesting idea shows up.
- NKNikhil Kamath
So you don't have a sector bias, really?
- DDDeedy Das
Not really. Like, I can hit you with some of the pithy lines of, like, "Oh, who knows what's gonna happen to software engineering?" But, like, it's, it's not really a bias against, uh, a sector. It's just so hard to tell in the, in the future what's gonna happen.
- NKNikhil Kamath
Nikunj?
- NKNikunj Kothari
Yeah, I don't think... I think to- I think some, [coughs] some industries don't have the-
- NKNikunj Kothari
... exponential rate of progress that you need to be a venture capital, like, ven- like, a business that can attract venture capital. And so I think those, you have to realize, like, venture capital is like an accelerate-
- NKNikhil Kamath
I think I, I think we should not fixate upon the term venture capital or private equity.
- NKNikunj Kothari
But then I don't think... I think every industry is very interesting.
- NKNikhil Kamath
Let's say, let's say you have a hundred bucks, a hundred dollars.
- NKNikunj Kothari
Yeah.
- NKNikhil Kamath
Where would you put it? It's a very binary outcome, and where would you not put it?
- NKNikunj Kothari
I think anything that is not technology, like, forward, I would not put it, but that's my bias because I've been an engineer, I've been here seventeen years. But does that mean that you can't make money off a traditional- Like, my dad's a textile, in textile industry. He's doing really well. Like, you know, But would I put a hundred dollars or would I put a dollar there? Like, it's probably not, because I just don't understand that business very well. Uh, and he's surrounded by, like, mills and other... Like, you know, those are all traditional businesses with very little technology. They're still all printing money. Uh, but it's, it's, this is the bias. It's like, this is why we can't, I can't disassociate venture capital or technology from the way I view the world-
- NKNikhil Kamath
Right
- NKNikunj Kothari
... because that's what I understand. You put me in a traditional business, put me in my dad's business, I will like, you know, bankrupt the business the next day [chuckles] because I don't get the whole... But I do think, like-
- NKNikhil Kamath
Are tariffs helping your dad?
- NKNikunj Kothari
Oh, I mean, it doesn't hurt. Most of his customers are Indian.
- NKNikhil Kamath
Right.
- NKNikunj Kothari
Most of the mills are in India, so it doesn't really affect him at all. Um, but I think from a... So I think for me, it's very hard to disassociate technology or venture capital from, like, how I would invest, because that's what I do, or and that's how, like, how I view the world. But to, to Deedy's point, actually, AI has actually made most industries that were uninvestable suddenly investable.
- NKNikhil Kamath
For example?
- NKNikunj Kothari
For example, like any industry that's collecting large amounts of data was, like, you know, priorly, prior-- like, you would, wouldn't invest in them because you were like, "Oh, there's no clear way for you to understand this data, no clear way to take action on this data." Now, that's become an actual, like, asset, because now you can either fine-tune models or you can actually do something interesting with them, uh, that, that suddenly unlocks, unlocks, um, value out of those. And twenty twenty-one interest rates spiked up a lot, with- and ChatGPT launched at the end of twenty twenty-one. It was the literal perfect intersection, because when interest rates rise up, everybody's costs went up. Everybody's costs went up means everybody wants efficiency. Everybody wants efficiency, what is the only boat that is lifting, like, you know? What is the only tide that's lifting all boats? It's AI. So factories are now asking and coming and begging for solutions. That never used to happen before. Long sales cycles, nobody wanted to invest there. Agriculture, people were like, you know, traditional industry, nobody wants to touch, be like: What's the tailwind there? And so all of those industries that felt a little bit archaic, a little bit that, hey, nobody wants to touch, suddenly the buyer is waking up saying, "Hey, I want a solution." And so people are rising to the occasion and building things. And I actually push... I mean, I'm on the opposite spectrum of DD. High CapEx is actually okay because there's ways to finance it, and we're finally finding a way that everything is getting cheaper. Robotics is a good prime example of that. Um, but I don't think CapEx is the big problem anymore. It's just like, can you find a tailwind in that industry? That's what makes it good for venture capital. It's very hard to, like, dissect the two. I wouldn't know. I don't know even what I would do without technology.
- 23:17 – 27:31
Today’s hottest sectors
- NKNikhil Kamath
And Niko, what is too hot today that everybody's going after?
- NBNiko Bonatsos
Do, do, do you want to give some ideas? There's so many. [chuckles]
- NBNiko Bonatsos
[chuckles] Reinforcement learning. [chuckles]
- NKNikhil Kamath
Okay.
- NBNiko Bonatsos
Reinforcement learning environments is a hot space. Reinforcement learning as a service is a hot space.
- NBNiko Bonatsos
How about some, uh, AI code gen tools?
- NBNiko Bonatsos
AI code gen is, uh-
- NKNikhil Kamath
App builders.
- NBNiko Bonatsos
App builders, yep.
- NBNiko Bonatsos
Receptionists. AI receptionists, multiple applications of voice for, you know, the same sort of ten things are, are pretty hot.
- NBNiko Bonatsos
I mean, it's honestly amazing, you know, when you open up your email as a venture capitalist or, like, you know, your X or any other inboxes you have, like, honestly, nine out of ten, um, inbound requests you receive, they all sound the same.... like, so if you're trying to do something, is to break the pattern of, like, everything sounding the same, and try to find something that's like, "Huh, maybe this is different." Of course, it's hard to decide yes or no to take a meeting without knowing, uh, the founders. That's where, you know, warm intros matter, or, like, founders that don't have a resume, uh, could be the ones that could thread the needle. Because a lot of the very young founders who are, like, sixteen, eighteen, twenty-three, they might not even be on LinkedIn, because Gen Z is not on LinkedIn. Or if you go there, have bunch of random internships. And some of my favorite, you know, social media posts that I love seeing, uh, are like, uh, the NVIDIA CEOs, where before NVIDIA, you know, he was-
- NKNikunj Kothari
Dennis.
- NBNiko Bonatsos
Dennis.
- DDDeedy Das
Dennis, busboy.
- NBNiko Bonatsos
And you see some of these, and you're like: "Yes, how can I find one of those people?" You know?
- NKNikhil Kamath
Right.
- NBNiko Bonatsos
Yeah.
- NKNikhil Kamath
Which are some of the popular companies which are doing the things you said, AI code gen, reinforcement learning, AI receptionist? Name some names.
- DDDeedy Das
I mean, uh, there is Anthropic doing AI code gen, but they're pretty good at it.
- NKNikhil Kamath
Mm.
- DDDeedy Das
Um-
- NBNiko Bonatsos
There's also Cursor, right?
- DDDeedy Das
Biased. [laughing]
- NBNiko Bonatsos
There's also Cursor.
- DDDeedy Das
Cursor. Cursor is also doing AI code gen, of course.
- NKNikhil Kamath
Mm-hmm.
- DDDeedy Das
So these are both fairly successful companies, at least so far. What else did we talk about? Um-
- NKNikhil Kamath
AI receptionist, voiced applications for the same.
- DDDeedy Das
I mean, there's-- I can't even remember some of these names, but, I mean, it's not trivial to find a hot space. I mean, you just have to... [chuckles] If you go on, like, say, the YC, um, list, I mean, you're gonna find every year has some patterns. And, um, and I guess what Nikos is saying that, you know, those patterns are n- maybe the, the hot ones. I, yeah, I don't want to put words in your mouth.
- NKNikhil Kamath
What's the pattern this year?
- 27:31 – 38:37
Emerging AI trends
- NKNikhil Kamath
If you could each identify a trend in AI that is changing, that somebody who is unaware like me does not know, uh, what would you say? One nuanced trend that is changing in AI.
- DDDeedy Das
Well, there's a, there's a couple I could say. Well, I don't know, hard to guess what you may or may not know, but-
- NKNikhil Kamath
Imagine nothing.
- DDDeedy Das
Well, [laughing]
- NKNikhil Kamath
[laughing]
- DDDeedy Das
Well, one is, like, talk of the town is, um, how much Zuck wants to pay people. Um, so the... Some people call it, like, engineers being athletes of today, which is interesting. Um, it's not really tech, tech-focused, but it is a theme. The second I would say is, um, you know, we've run out of public data. Um, and, you know, we talked about RL in a different context earlier, but, you know, reinforcement learning has been the primary technique, w- uh, for with which models get better over time. And acquiring data to do good reinforcement learning is quite different than how you would acquire data otherwise, so that is another trend.
- NKNikhil Kamath
So when everybody runs out of data, they create synthetic and keep improving the models?
- DDDeedy Das
It's not exactly like that. I mean, in reinforcement learning, you basically want an environment where there is certain rewards you can get. Sometimes they're extremely verifiable rewards, in which case it'd be RLVR. Sometimes they're more nuanced, where it's like text, like how do you verify that? But there are- you can use an LLM as a judge to verify that. So there's various kinds of rewards, but it's... You know, one way to think about it is, yes, you are generating an environment where there's rewards, and you're making the model become better at f- that task.
- NKNikhil Kamath
Mm.
- DDDeedy Das
In a similar way that you would do, for example, when Google did AlphaGo, uh, and you train an AI to learn a game, you have a reward, which is winning the game, and then you figure out the steps in the middle. Um, so it's not really synthetic data, um, per se. That is also used, but it's a different, uh, step. But that's, that's what I meant by reinforcement learning. Um, let's see, what else? Number three, I think is not talked about enough, is, um, China, which is... You know, the, the, the, the narratives around China are interesting, um, because most people in America, I feel, don't want to even recognize how good these models can be with perhaps far less capital expenditure, right? Like, they're, they're not spending that much for talent. They're not spending that much in even GPU resources. They don't have the, the latest cutting-edge GPU resources, yet somehow they're able to come up with models that are not perhaps the best of the best, but they're quite good. Um, they're frontier, as, as, as you, as you say. And so those are some. Those are just some to-
- DDDeedy Das
... Niko, would you like to add?
- NBNiko Bonatsos
Did you mention evals?
- DDDeedy Das
I did not mention evals.
- DDDeedy Das
Can you explain what it is?
- NBNiko Bonatsos
So, uh, when, let's say, you know, you're an attorney or you're a doctor, and then there is an AI or consultant, and there is a AI model that is trying to, uh, replicate some of the day-to-day tasks that you do, there are always, um, some corner cases, some exceptions that the model by itself, even after you train it, you know, with all the, uh, world's data, uh, that's available out there, won't get to. Uh, so when, um, you recruit a consultant or, uh, uh, the doctor, uh, to take a look at it, uh, they could come up, you know, with some of the, uh, exceptions and further, you know, refine, uh, that model. And I think that's a very big market opportunity that's opening up, uh, right now. It will be going on, you know, for a long time because you can bring in, uh, entire new professions, um, and model them that you couldn't do, you know, as well today, and it's just as coding, basically.
- DDDeedy Das
Mm-hmm. Nikunj?
- NKNikunj Kothari
I think the recent news that, uh, everybody was jumping on was that, you know, OpenAI won the IMO Gold, and then DeepMind also did that as well. I think that was interesting, but I think a lot of people missed in the details was, um, OpenAI also had this competition where they just barely came second, where they had a single model running for ten hours straight, where no direction whatsoever. And it was able to reason, figure out, plan, go ahead, ten steps back, but for ten hours straight, it was able to do something. And I think that just, like, blew my mind. That shows, like, what the future capabilities will be, where we're no longer... Like, you know, we already-- even if you stop all AI development today, these models are already phenomenally good to think, and reason, and give us interesting solutions for a long period of time. And that's, like, mind-blowing to me, that we've already reached here, and everybody's kind of just like, "Whoop-de-la!" [chuckles] And kind of like walking away next. And so imagine you can throw these models at, like, problems for ten hours straight. Like, you know, whether it's the bare minimum of doing research on DeeDee's every tweet on Twitter, to, like, studying thousand technical papers by the best researchers and trying to find hidden connections between them. Um, and it's-- that, I think that's mind-blowing. I think the, this was not the case even two years ago. That's why agents, AI agents sucked, is because they couldn't reason, they couldn't understand. And in two years, just with the models getting better, all of these things are now unlocked. Where, you know, whether it's research in the biotech space to like, you know, astronomy, like, we'll be able to find new stars. I think we're, we haven't even touched the frontier what these models can do, and, and we're only limited by, like, compute energy and, like, essentially data, which I think continue to be the three moats that kind of continue along from the models perspective.
- DDDeedy Das
Anything else?
- NKNikunj Kothari
I, I, I just, I think we just... You, you know, I think the, everybody talks about AGI and ASI as this, like, one moment. I think my hot take would be, like, AGI is kind of already here, but, like, humans, like, when we take a Waymo ride, with the first time, it's mind-blowing to us, and then the next time, you're just kind of, like, on your phone checking Twitter. I think we're already there with these models today, where these models are smarter than most humans already. Uh, and we've kind of just been like: Whatever! And kind of, like, walked away. And I think this is why it's going to be a continuous spectrum where we will claim AGI is not here maybe ten years from now, but it's already kind of here. In the not theoretical definition maybe, but in a capabilities perspective, it's already better.
- NBNiko Bonatsos
Yeah, and I think another area that's, uh, becoming critically important is, like, what is the data set and the models that we can use to, uh, recreate the physical world? So in a world where we can have a lot of the robots that would do a bunch of the manual labor, that it's hard to hire people for because they don't want to or it's expensive, um, how do you get to the five nines that you described? Um, and, you know, there are not that many companies use the example of, uh, autonomous vehicles that have been taking photos, videos, and other inputs of the offline world, like, uh, Waymo, Tesla. There are a few companies. So where else, you know, can you find other sources of such data, either real-world data or synthetic data, on the cheap, that's labeled and e- easily readily to use? Uh, this is a very important space and has applications that, uh, can be in defense tech and for all sorts of robotics. Yeah, so many, many. This embodied intelli- intelligence space, how you feed them with data, is gonna be one of the most amazing ones to do business in the next few years.
- DDDeedy Das
Do you think there's a use case in India for that?
- DDDeedy Das
Uh, for, for specifically what Niko said?
- DDDeedy Das
Yeah.
- DDDeedy Das
Oh, oh, yeah, that's a, that's a complicated one. In terms of, like, use case in India, how do you mean? Like, will self-driving cars make it to India, or will there be labelers?
- DDDeedy Das
Let's say a robot has to make a sandwich.
- DDDeedy Das
Yeah.
- DDDeedy Das
Does it have to train on some visual data that will be a job for someone else?
- DDDeedy Das
The, the training part?
- DDDeedy Das
Yeah.
- DDDeedy Das
Um, it depends. There's a couple of different ways that people do it. There's this whole technique called sim-to-real, where, you know, you try to simulate it as much as you can, but then it's impossible to simulate the physical world, and so then you typically get other sources of data. And yes, there are some... As, as far as I understand, maybe, maybe you know more, there are labelers that will label this data in, in various companies, and those labelers can be sometimes in India, sometimes elsewhere. Yeah.
- 38:37 – 48:19
Declining birth rates + AI’s role
- NBNiko Bonatsos
so you think-
- NKNikhil Kamath
What else do you think is changing? Like, if you had to predict... Think of me as I am an idiot because I know nothing about this, but-
- DDDeedy Das
You're not an idiot.
- NKNikhil Kamath
I'm asking you to, like, prophesize five years ahead and paint a picture of the world for me.
- DDDeedy Das
One thing I think about, probably, I don't know how much you guys think about it, but one thing I think about that is not talked about in this regard, and maybe five years is a bit short for this, probably ten to fifteen, is, um, is just birth rate decline. I think that's a very real problem. Um, I know it is also a funny problem because in-- there's all these sorts of reasons why it's happening, but it's especially stark in... Even if you go as far as, like, South Korea, you know, i- in two generations, that country may be, like, a tenth or less of the population it is today. Um, it, it's really bad, and it's-
- NKNikhil Kamath
But that has anything to do with AI?
- DDDeedy Das
It has a lot to do with the economy, and it has a lot to do with AI. I mean-
- NKNikhil Kamath
How?
- DDDeedy Das
I mean, this is a-- I'd love to explore this with all of you guys. It's not a very well-formed thought, and I'm not an, an expert in this by any means, but a lot of economic growth is subtly tied in with the growth of the population, the growth of consumption overall. I mean, AI is no good unless you have somebody using something at the other end. Um, like, transactions have to be done for economic value for everyone to be prosperous. And so if we see a world where there's this rapid decline in population, what does that mean for the economy? What does that mean for, like, clothing stores? Are you going to be able to sell clothing anymore, or are you going to sell much less? Like, what happens to the stock of that business? So I, I don't know. I think that's a less explored problem, but it's going to be a slow burn, but it's something that, you know, has-
- NKNikhil Kamath
Do transactions have to go up for productivity to go up? What if the value of the transaction goes down?
- DDDeedy Das
It's possible. Um, I, I think the amount that productivity, there's like an economic definition, I guess, and then just the general definition, to go up to counteract this effect is, I think, somewhat unrealistic. But again, I'm not an economist, so, uh, I don't know.
- NKNikhil Kamath
And how does AI exaggerate birth rate decline?
- DDDeedy Das
I don't think necessarily it has anything to do with AI. I think there, there is, um-
- NKNikunj Kothari
There's a very clear chart, like, essentially, 2009, it started declining. We all know what launched in 2009, which is the iPhone. So it's not AI as much as, like, our addiction to just digital media and phones in general. Like, and AI will-
- NKNikhil Kamath
People are having less kids because of iPhones?
- NKNikunj Kothari
I mean, there's no... You can't directly, you can't directly point to it, right? There's no research that is that clear. But it is, like, 2009, across the world. And it's because, like, we're just becoming more and more dependent on our digital... Our, our emotional needs are being satisfied by more on the digital side, whether it's like, you know, us watching YouTube Shorts versus going to a bar to, like, date someone. And I think AI will accelerate this problem, for sure. Like, again, I, I, I, I do think we are, we are confiding more in ChatGPT than we talk to, like, our closest humans, including, like, our own partners. And I, and I do think that that has happened, and there's no, there's nowhere that you can ever draw a direct line, but the, the trend is clear, starting when the mobile phone came out.
- NBNiko Bonatsos
Young people now have less sex because they're addicted, uh, to their phone. Um, and, you know, they don't even know how to interact with another human, especially in, in, in the, in the post-COVID world. You could see it with younger people who missed out on school for, like, a year or two, and they were having a hard time, uh, interacting with other people in the offline world.... Um, so when you have, you know, less sex, or you end up having it much later in life, and you get a lot of the dopamine from digital experiences, what does it mean, you know, for, like, the fertility rate? What does it mean for a lot of the vice-powered industries, uh, in a world where in the US and the West, you know, you have Ozempic doing really well? What does it mean for suppressing other vices beyond just, like, you know, excessive, you know, eating? So that stuff is, like, very interesting to just think about, like, the second-order effects that are very hard to imagine. Because, for example, you know, like, to go back to tech with AVs, right? If AVs are everywhere, what does it mean, you know, for the economy around gas stations or Costco or, like, you know, anyone who's supplying stuff to parking lots? I have no idea, you know. Uh, there might be, in this country, amazing businesses, you know, that are supplying, um, products and services to these subverticals. Um, and yeah, the rate is dramatically accelerating. For the first time, there is a new form of intelligence that, uh, is gonna be on par or, over time, superior to a lot of the stuff that we, as humans, you know, can do. So, you know, if you can borrow ideas from the world of sci-fi, what does that mean? Does it mean that we're gonna somehow fade in the background, we're gonna be like the same way that we have pets or cats and dogs right now? AI will love us, uh, and will feed us. The AI will assume the means of production. We'll have universal basic income. We'll be happy. Maybe we'll start having more sex. I don't know. Maybe the NBA will have, uh, ten thousand teams. Maybe everyone will be a supermodel, do sports, or become a poet. But then all the important decisions around running the world, allocating resources, this new form of intelligence is gonna make these decisions, take over, and, you know, it's gonna be the new species that, uh, writes the history books. Who knows?
- NKNikhil Kamath
It's a bit like a democracy and a smarter, benevolent, maybe benevolent dictator on top.
- NBNiko Bonatsos
Yeah.
- NKNikhil Kamath
Is it important that we are making the decisions if something smarter is more capable?
- NBNiko Bonatsos
There are a lot of, uh, questions that, you know, this question, uh, raises here, right? One of the good news is that AI still today is powered with electricity, so if we're unhappy, we unplug it, and we're good, right? Because the battery technology is not that sophisticated-
- NKNikhil Kamath
[chuckles]
- NBNiko Bonatsos
... you know, and enduring yet. Um, but yeah, it does matter a lot, you know, who are the creators of this super powerful pieces of software and systems. Because if they themselves, you know, are all made of the same cloth, and they have groupthink, they won't be able to cover a lot of the, um, different, uh, voices that humans from all over the planet and different backgrounds might have. Uh, and unfortunately, you know, for the world, tech is moving really quickly. Policy cannot catch up. Like, and, like, the hardest thing, honestly, that we face right now is even if you're, like, a PhD in AI working for one of the foundation, uh, model companies, you can't keep up with the pace. This is the single hardest thing. So imagine being, you know, like a policymaker or somebody who thinks about that stuff all day long, um, how do you keep up? And, you know, the tech is improving in the background. This, this is really tricky.
- NKNikhil Kamath
Do you personally believe the world will get there, where we become like cats and dogs in the background?
- NBNiko Bonatsos
I don't wanna be- live in that world. And, uh, but is there a scenario that this might happen? Yes, there is a scenario that this might happen.
- NKNikunj Kothari
But I think I have the more optimistic take-
- NBNiko Bonatsos
Yeah
- NKNikunj Kothari
... which is, like, l- see, since the Industrial Revolution, humans have just known to increase efficiency, like singular, like, you know.
- NKNikhil Kamath
Now it makes sense that you worked at Khosla Ventures. [laughing]
- NKNikunj Kothari
[laughing]
- 48:19 – 53:19
Abundance & capitalism
- NKNikhil Kamath
ahead...
- NKNikunj Kothari
Yeah.
- NKNikhil Kamath
Does abundance hit proportionately, proportionately to the moats of capitalism when there is abundance?
- NKNikunj Kothari
Absolutely. That's what history has, time and again, told us. If you read my favorite book, Capital in the Twenty-First Century by Thomas Piketty-... every time there is growth and development, inequality increases.
- NKNikhil Kamath
Yeah.
- NKNikunj Kothari
I don't think there's very many situations where that's not the case.
- NKNikhil Kamath
But he makes a case for that doughnut economics, right? Like, the marginal utility of money beyond a point.
- NBNiko Bonatsos
Yes.
- NKNikhil Kamath
That goes down.
- NKNikunj Kothari
That's correct. Um, and but that-- despite that, I mean, I think, still think we have a very far gap to fill before, you know, the entirety of society is above the point where the marginal amount of money means nothing. I mean, we see it in a, in, in a little bit, right? There are people who-- I mean, I think about this all the time, where-
- NKNikhil Kamath
But also think about this: you were just saying fertility rates are dropping such that countries in two generations will have one-tenth the number of people they have. So that changes everything too, right?
- NKNikunj Kothari
Yeah.
- NBNiko Bonatsos
Yeah, but let's talk about that. What if we have the artificial womb? I just had, you know-
- NKNikhil Kamath
Good one
- NBNiko Bonatsos
... a baby through a surrogate. I'm in my early forties, my wife is in her early forties. Honestly, it's [beep] amazing. I, I think we need to make having kids cool again.
- NKNikunj Kothari
Yes.
- NKNikhil Kamath
Yes.
- NBNiko Bonatsos
It's not as much about the incentives, but it's more about the narrative. Like, so if we're all to become a lot more religious-
- NKNikhil Kamath
Mm
- NBNiko Bonatsos
... this perhaps would mean that you would get married, you know, earlier.
- NKNikunj Kothari
Yeah.
- NBNiko Bonatsos
This would probably mean that, um, for the religion to propagate, uh, you would have, you know, more kids earlier.
- NKNikunj Kothari
Yeah.
- NBNiko Bonatsos
So one of the reasons, for example, why in Latin America, the fertility rate decline is some of the steepest in the world, is because Catholicism in many of these countries, uh, is not as cool as it used to be in previous, you know, decades.
- NKNikhil Kamath
So would you bet on religion making a comeback because it ought to?
- NBNiko Bonatsos
I think it is making a comeback.
- NKNikhil Kamath
It is coming, yeah.
- NBNiko Bonatsos
Yeah, and part of the reason is, uh, after, like, uh, fifteen years, uh, being stuck on a small screen, and after, you know, twenty years of going to Equinox, Barry's Bootcamp, or whatever, you know, these institutions are for you, depending on where you live, you're trying to find other places that have a meaning. By the way, there might be an AI religion that gets formed.
- NKNikhil Kamath
Mm-hmm.
- NBNiko Bonatsos
Uh, who knows? Uh, that is gonna fulfill the emotional needs that, uh, some humans might have. But yeah, I do think religion is making a comeback.
- 53:19 – 55:39
Raising kids in an Instagram world
- NBNiko Bonatsos
I, I think we should all assume that we're living our lives in public now.
- NKNikunj Kothari
Mm-hmm.
- NBNiko Bonatsos
And it's a little bit hard to say that, uh, if you're somebody, you know, in your, like, forties or older, but, uh, pretty much, you know, every second or third building now on the street has some cameras installed.
- NKNikunj Kothari
Yeah.
- NBNiko Bonatsos
Everyone has a phone with a camera. You have a city with self-driving cars or cameras, like, with all these sensors, um, you- you're living life in public, and then everyth- anything you ever say, uh, online, uh, in theory, you know, somebody can track it. So imagine being, uh, uh, somebody who is in, uh, elementary school right now. By the moment you started using computers, if you created, you know, your account, like on the iPad, by now, you're using ChatGPT to help you with your homework, and you can share your feed links. Everything you know is getting tracked.
- NKNikunj Kothari
I mean, parents are putting their newborn on Instagram. That's like, you know, like-
- NBNiko Bonatsos
That's right
- NKNikunj Kothari
... their digital identity is already being published-
- NBNiko Bonatsos
That's right
- NKNikunj Kothari
... without your choice.
- NBNiko Bonatsos
Without your choice.
- NKNikunj Kothari
Yeah. Now, it's just, like, the moment you push a digital device in any age's hand, it's gone.
- NBNiko Bonatsos
What do you guys do for your kids? Do you have-
- NKNikhil Kamath
... plans to put them on Instagram? [chuckles]
- NKNikunj Kothari
I haven't used Instagram in four years, so.
- NBNiko Bonatsos
I, I think one of the thoughts I have, which is, like, a hopefully positive thought, is, you know, by the time, uh, my kid is gonna be a teenager, the iPhone won't really exist in its current shape and form.
- NKNikunj Kothari
Mm-hmm.
- NBNiko Bonatsos
So, like, one of the things that I'm amazed by that could be a predecessor, you know, to this argument I just made coming true, is when you have really young, uh, kids interacting with technology, they do so with their hands or with voice. And then you put them in front of a laptop, they see the keyboard, and they freeze. Like, "What am I supposed to do with this thing?" You know? "Because so far I've been talking to my, uh, iPad or, you know, my dad's, you know, like, iPhone." So I think, you know, if we're to forward project, uh, with new software and new AI-first hardware, how we could interact with technology, uh, the small screen might not be as addictive. You know, we might actually have it in our brain.
- 55:39 – 1:00:55
No tech: the next big business?
- NKNikhil Kamath
Do you think that could become a business in itself, uh, no tech, no devices, disconnected-
- NBNiko Bonatsos
It is-
- NKNikhil Kamath
Maybe a real estate project around it.
- NBNiko Bonatsos
It is already a business. So, like, people-
- NKNikhil Kamath
Okay
- NBNiko Bonatsos
... here, uh, around San Francisco, they would go for, like, three, four-day silent retreats, or we don't use technology, to find themselves, to clean, you know, their, uh, their, uh, souls. It's already a business, and it's gonna become more and more of a bigger trend. I mean, for some time, and, uh, first half of the previous decade, uh, Burning Man was that. Now, sadly, you know, Starlink destroyed it, that aspect of it, but, you know, this was a part of what Burning Man, uh, served to the technorati of that era.
- NKNikhil Kamath
India has Vipassana, which is similar-
- NKNikunj Kothari
Yeah
- NKNikhil Kamath
... right? Yeah, sorry.
- NKNikunj Kothari
No, sci-fi books, I, so I exclusively only read sci-fi.
- NKNikhil Kamath
Mm.
- NKNikunj Kothari
It's a perfect picture in the future. I think it's Snow Crash was the book, where they basically had these bars where you go in, and, like, everything electronic is turned off. And it felt to people very unnatural and weird because they don't have everything in their brain recording or intelligent, an extra intelligence layer. I think that's the future people will do to feel human again, like, you know? They talk-
- NKNikhil Kamath
So Snow Cra- Snow Crash is an old sci-fi book.
- NKNikunj Kothari
Yeah.
- NKNikhil Kamath
What are the books of today saying, if you're reading them?
- NKNikunj Kothari
Um, there's... I mean, I only read, like, older books. Like, the newer books, obviously, like, Blake Crouch is excellent.
- NKNikhil Kamath
Mm.
- NKNikunj Kothari
Like, I highly recommend reading everything he writes. Um, but, like, it's like reading the older books is fun because it shows you twenty years in the future. Now, people are using, like, AI as the base and building on top of that. Uh, but Three-Body Problem is, like, my absolute favorite. I've read it-
- NKNikhil Kamath
What does the Three-Body Problem talk about?
- NKNikunj Kothari
Uh, it talks about just, like, m- everything from interstellar space to how, like, humanity travels to different places. I wouldn't do it any justice, like, trying to explain the core fundamental science things, but I highly recommend reading it. And there's-- if you don't want to read it, just watch the Netflix series, which is a poor adaptation, but I know people like video more than reading nowadays. [chuckles] So, uh, it's unbelievably good. It has touches a lot of pieces on society, culture, governance, inters- like, you know, interstellar space, to just, like, even human emotion. It's, like, very, very, very well done.
- NBNiko Bonatsos
You brought up an interesting point, you know, like, people have an easier time watching video instead of reading. Because now we're constantly distracted, and the push notifications, the technology are so addictive, uh, and we wanna get our dopamine hit. So, like, going back to what we were discussing before, you know, there are these offline retreats, but there are also some applications out there, like Clear Space and Opal and others, that help you have, like, a digital detox on your phone.
- NKNikunj Kothari
They're all growing.
- NBNiko Bonatsos
And all of them are growing.
- NKNikunj Kothari
Yeah.
- NBNiko Bonatsos
So this is like, you know, speaking, uh... it's like evidence that consumers are voting with their dollars to block the most addictive, um, products out there, most often social media products. And there is even a new class of, like, consumer hardware startups-
- NKNikunj Kothari
Mm-hmm
- NBNiko Bonatsos
... that are creating versions of dumb phones with some core utilities.
- NKNikunj Kothari
Mm-hmm.
- NBNiko Bonatsos
Because one would argue, if you cannot call Uber or Waymo, that's a problem. If you cannot, you know, uh, text your loved one, that's a problem. But do you really need to have all the different messaging apps or social media apps on your phone? Probably not.
- NKNikhil Kamath
For the sake of playing devil's advocate, 'cause as much as-
- 1:00:55 – 1:06:52
The future of dating apps
- DDDeedy Das
What do you think happens to matchmaking?
- NKNikunj Kothari
Huh.
- DDDeedy Das
Dating apps.
- NBNiko Bonatsos
What happens to dating apps?
- DDDeedy Das
Yeah.
- NBNiko Bonatsos
Uh, they-
- DDDeedy Das
We just met one yesterday, that's why I'm asking.
- NKNikunj Kothari
Which one?
- DDDeedy Das
Niche.
- NKNikunj Kothari
Oh, Nandini!
- DDDeedy Das
Yeah.
- NKNikunj Kothari
Nice.
- NBNiko Bonatsos
Uh, they will evolve, because-
- DDDeedy Das
They do?
- NBNiko Bonatsos
Uh, probably, it will be a continuation of some of these, you know, AI products that know everything about you, and they know everything about a lot of other people that might be a good fit for you. Uh, and they could be able to make, um, curated intros and could be able to handle the beginning of the conversation so that you get to the actual, you know, like, date. Because today's, uh, AI apps in least the West, they're more like entertainment products than actual dating apps.
- DDDeedy Das
Yeah.
- NBNiko Bonatsos
Like something like-
- DDDeedy Das
I think you get the dopamine from matching, not from dating.
- NBNiko Bonatsos
Right. So it's something like thirty percent of people who are in the-- swipe left and right, they've never been on a date.
- DDDeedy Das
Yeah.
- NBNiko Bonatsos
And then, these products were built for, like, a different generation, where, you know, people were not as gender fluid. And for example, you know, if I'm like, um, somebody who is on the younger side and is bi, just having like a straight profile on Tinder doesn't serve me, uh, as well. Then the other thing that's going on, unfortunately, is there's a lot of, um, data discrimination that's happening on the dating apps. So something like eight to ten percent of the guys get eighty percent of the dates. This is really bad news for humanity, and this speaks to a need that's in the background, like a demand for something, uh, new. So, like, for example, if you're a guy and you're not getting any dates, uh, on any of the popular online dating apps, the best thing you can do is delete it from your phone, sign up with a new location. Ideally, you input a location next to an airport, because over there, there are a lot of people coming in and out, and the algorithm gets rerouted, you know, again. So, like, I think the future of online dating, um, is gonna be part of what people are using, like ChatGPT, to do their homework. So, like, anyone who's young now, and they're just addicted to that behavior, they would expect a similar kind of experience for other parts of life.
- NKNikunj Kothari
I think-- I believe, like, we'll all have digital twins. Like, it just makes sense. Like, you know, we already do in ChatGPT, in the memory layer, like, we're inputting so much of our information in there, and so I think dating just evolves very similarly, where, you know, why swipe left or right? Where if your digital twin is able to just figure out from this ocean of other digital twins who's the best match for you, they do the early conversations, and then you just get to meet them, and you just trust the algorithm to do the curation. Today, in Tinder, you're just filling out a profile that has stale data. But imagine if you could take your deepest, darkest, like, all the things that you put in ChatGPT today to do the matching for you. It'd be far more effective because it does all the matching, and it's like, okay, then you have a slider that's like, "How different do you want them?" Or if you have three different dates, it's like, you know, one's like truly a Magic 8 Ball, and one's like ideally matched to who you are.
- DDDeedy Das
But is it an industry that you would bet on? You would want to allocate money behind it? There's a-- There's... One of the dating apps in our, in Menlo's portfolio is like Raya, which is-- was a good investment. Um, but generally, dating apps today are, uh, you'd have to have something unique for it to be a good bet. I think, you know, Niko probably knows more, but you guys both are more consumer investors than I am. I mean, with consumer, it's just really tough to bet on these things unless you see some element of traction already. Like, uh, uh, you need to know that it works, but correct me if I'm wrong.
- NBNiko Bonatsos
And Facebook was a dating product-
- DDDeedy Das
Yeah
- NBNiko Bonatsos
... in the early days.
- DDDeedy Das
Yeah.
- NBNiko Bonatsos
So would you invest in the next Facebook that's gonna look very different than it? Yes, you would. Uh, what is the single best, uh, dating product today if you're a very successful person? Probably Instagram. Because over there, you know, you can slide into other famous people, beautiful people's DMs, and they would reply back at you. Um, but over time, you know, these things will evolve, and then I think there's something to be said about offline experiences around dating, um, becoming a lot more, um, desirable for people. Like, in a world where, like, you know, the online experiences are very addictive and, uh, we have them in abundance, what becomes scarce? The very awesome, cool, offline experiences. So anyone who has the means would want to be part of that. I think-
- DDDeedy Das
If somebody's building a dating app, they should solve not just for meeting someone, but also for the date.
- NBNiko Bonatsos
Absolutely. Yeah. So I, I work with one team called Two Two Two. They're in New York.
- 1:06:52 – 1:10:14
Key predictions for the next frontier
- NKNikhil Kamath
... Okay, so we've established humans could become like cats and dogs. [laughing] Religion will do well, maybe a new AI religion. Fertility rates will drop, and that rate might exaggerate. We also said matchmaking will change. Digital twin, offline, Instagram is where a lot of people date today. We said socialism and capitalism will move closer to center.
- NKNikunj Kothari
I don't know, and then, and that one, uh, I, I plead the Fifth. [chuckles]
- DDDeedy Das
Yeah. I think more capitalism.
- NBNiko Bonatsos
You know, I visited, um, I visited South Korea this past Christmas.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
And, uh, I went to, like, a viewpoint where you can see the closest town of North Korea in the demilitarized zone, and it's striking to see the difference. It was one of these clear days, because normally there's a lot of pollution and you cannot see. So I could see the streets of that town, and in the thirty minutes I was at that coffee shop, I didn't see a single car, and I was, like, shocked.
- NKNikhil Kamath
Mm.
- NBNiko Bonatsos
'Cause I was like, "Whoa!" You know, we're just, like, two, three, uh, miles away, and here there is stuff happening, and over there, you know, poor people who happen to be born there, not because of their own volition, and they're stuck in the ice ages instead of, uh, economic, you know, growth. So, like, there are certain places where you can compare and contrast, you know, the different systems, uh, sadly, still.
- NKNikhil Kamath
We also said off-the-grid businesses will do well, digital detox, Vipassana kind of stuff. Video over reading will continue to grow. Video will continue to get shorter.
- DDDeedy Das
Yeah.
- NKNikhil Kamath
You want a dopamine spike sooner?
- DDDeedy Das
I mean, capitalism, I think, will always reward whatever hacks your brain to give you reward immediately, and dopamine, and that mean- that's why there is shift to shorter video. It's an easier hack for the brain.
- NBNiko Bonatsos
What if, say, we have, like, brain implants and, you know, there are gonna be ways to hack people's brains, or a new form of digital drugs will be invented, you know?
- NKNikhil Kamath
Like Neuralink?
- NBNiko Bonatsos
Yeah, Neuralink, it's one of the companies that are building the brain implants, right? But like, his- historically, you know, we've liked images more than text. We've liked video more than images. We've liked short video more than, like, long-form video. But I'm saying if most people, you know, or many people have brain implants, there will be new things they'd like, and, uh-
- NKNikhil Kamath
Would you get one? If somebody were to tell you, "Here, Niko, is a bl- brain implant which will increase your IQ by forty percent."
- NBNiko Bonatsos
The... I'm sure there could be a reason for me to do it, you know. By that time, I might have some cognitive decline, right? And I won't like that or-
- NKNikhil Kamath
No-
- NBNiko Bonatsos
I might-
- NKNikhil Kamath
... very, like, optional. Like, somebody... You're okay, and somebody offers it to you.
- NBNiko Bonatsos
Uh, and see, if you had said to me a few years ago, "You could speak all of the world's languages with a brain implant," I would be like: Sign me up.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
Now, unfortunately or fortunately, some of these, you know, like, Ray-Ban smart glasses, you know, are getting there, so this might not be the use case that gets me. But, you know, there's... If you can have, like, cognitive superpowers, why not? Or if I could have a party in my head at all times, or there's a monologue going on in my head, you know, at all times, like, thinking too many things. If that, you know, implant can help me pacify it, great.
- 1:10:14 – 1:13:51
Will urbanisation continue?
- NKNikhil Kamath
What do you think happens to urbanisation? Do we all still want to be in densely populated cities?
- NBNiko Bonatsos
I think so-
- NKNikhil Kamath
Why?
- NBNiko Bonatsos
... 'cause this has been the case, you know, since the very beginning of humanity. Like, we tend to, uh, be more and more dense in our cities. It's great for, uh... We're also social animals. It's great for the planet. It's great for productivity.
- NKNikhil Kamath
If that were true, wouldn't we be one block of people in every country or one block of densely populated people? Why do we have states? Why do different states have different cities? 'Cause the world has been around for long enough.
- NBNiko Bonatsos
But, but in many, uh, countries now, which, you know, countries was a new idea from the nineteenth century-
- NKNikhil Kamath
Mm-hmm
- NBNiko Bonatsos
... um, in many countries, you see certain cities where you have, like, you know, twenty, thirty, forty, fifty percent of the population, yeah.
- NKNikhil Kamath
But not a hundred.
- NBNiko Bonatsos
Not a hundred percent, no, unless it's a very small one, like, uh, Singapore, right?
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
Yeah.
- NKNikhil Kamath
But think of a country like the US. If that was the prevailing trend, there would be one block, either on the West Coast or East Coast, where everybody would live.
- NKNikunj Kothari
I think natural resources matter, energy. There's a lot of other factors also.
- NBNiko Bonatsos
Climate change also matters.
- NKNikunj Kothari
Climate change matters, terrain matters-
- NBNiko Bonatsos
The, the economy, yeah
- NKNikunj Kothari
... economy matters.
- NBNiko Bonatsos
Yeah.
- NKNikunj Kothari
Like, it just doesn't... People choose to leave and go somewhere else, so it- I don't think it's that simple. In theory-
- NKNikhil Kamath
Would you bet on urbanisation to continue with Niko as well?
- NKNikunj Kothari
Hundred percent. Yeah.
- NKNikhil Kamath
Yeah.
- NKNikunj Kothari
I also think... But I think, I think it'll, it'll continue, but then as the income disparity grows, real estate grows... Uh, sorry, as we get more and more things in the digital world, like, real estate actually becomes far more expensive.
- NKNikhil Kamath
Why?
- NKNikunj Kothari
Because that's the only asset people can hold on to.
- DDDeedy Das
That's a real blockchain, man.
- NKNikunj Kothari
Yeah. Yeah.
- NKNikhil Kamath
But if-
- DDDeedy Das
It's a supply-constrained asset.
- 1:13:51 – 1:16:01
Longevity & wellness industry
- NKNikhil Kamath
longevity and wellness as a business, good place to be?
- NBNiko Bonatsos
Great place to be. In any country-
- NKNikhil Kamath
This is the first time you have said, "great," this evening. [laughing]
- NBNiko Bonatsos
Yeah. Thank you.
- NKNikhil Kamath
Yeah, all right. [chuckles]
- NBNiko Bonatsos
I lost my copilot right now. [laughing]
- NKNikhil Kamath
[laughing] What do you think?
- DDDeedy Das
Um, I think long- longer term, great places to, to be-
- NKNikhil Kamath
Mm-hmm
- DDDeedy Das
... and to, to invest in.
- NKNikhil Kamath
Mm-hmm.
- DDDeedy Das
I think biotech is taking a lot of interesting strides in terms of drug discovery, so how do we solve a bunch of the diseases that cause early death, I think is really important.
- NKNikhil Kamath
Mm-hmm.
- DDDeedy Das
There's a lot of cool work going on there. Longevity, I think it's a slower burn, so, you know, I'm optimistic, but on a slightly longer time horizon, um-
- NBNiko Bonatsos
Hence the name, right? [laughing]
- DDDeedy Das
[laughing] I guess so. I, I guess so. Um, and then, I- so I, I am very optimistic about biotech. O- o- overall, I think the artificial womb thing is interesting, for sure, but I think it does call into... It calls into question some concerns around, you know, how many kids will one person be able to have? Because then it becomes a, you know, purchasable asset. Can you have a thousand kids if you can just artificial womb them? Maybe. Some people might wanna do that, and-
- NBNiko Bonatsos
Well, religion has solved for that. It becomes uneconomic, you know, according to most religions, to have many kids.
- DDDeedy Das
At the extreme ends, though.
- NBNiko Bonatsos
Yeah.
- DDDeedy Das
I think that we could see some interesting things happen there, uh-
- NBNiko Bonatsos
We, we need robots to help, uh, raise them, too.
- DDDeedy Das
Well, that too. That too.
- NBNiko Bonatsos
And this would be probably more expensive.
- DDDeedy Das
Um-
- NBNiko Bonatsos
Or you would need a lot more space, and-
- DDDeedy Das
But I think that's-
- NBNiko Bonatsos
Since real estate is becoming more expensive, that's a real limitation.
- NKNikhil Kamath
Do you think real estate will continue to become more expensive? Do you believe in that finite supply?
- NBNiko Bonatsos
One of the issues that we have in the Western world is that the productivity in the construction industry has been stag- stagnating or certain decades going down. So unless we fix that, uh, unfortunately, you know, in most places, real estate will continue to become more expensive.
- NKNikhil Kamath
Right.
- 1:16:01 – 1:25:59
Which sector will boom by 2035?
- NKNikhil Kamath
So we were doing this exercise. See, at the end of the day, we are all capital allocators, right? All four of us, in one way or another. Maybe on the venture side, the private equity side, whatever. So we were trying to arrive at what statements hold the most value for us. Uh, from a rate of change is increasing, world is changing. Ten years from now, which industry would have grown the fastest? I'm gonna share the statements one by one, and maybe we can all opine.
- NBNiko Bonatsos
Mm-hmm.
- NKNikhil Kamath
Disagree, agree, rate them. The first one I'll say is Indian families with rising income, reducing family size, will invest in premium education, outcome-focused education will take preference. What do you guys think?
- DDDeedy Das
Agree. In- only this particular? I think in general that will happen.
- NKNikhil Kamath
Yeah, I'm just saying Indian, 'cause we're sitting-
- DDDeedy Das
Yeah
- NKNikhil Kamath
... in India doing this exercise.
- DDDeedy Das
Yeah, yeah.
- NKNikhil Kamath
Niko?
- NBNiko Bonatsos
Absolutely.
- NKNikhil Kamath
Do you think everybody will spend more on education?
- NBNiko Bonatsos
No, uh, but certain cultures, like in India or in South Korea or where I come from in, in Greece, uh, they absolutely do-
- NKNikhil Kamath
Yeah
- NBNiko Bonatsos
... because they see this as a viable path to, uh, improving their chances of their offspring doing well. In the US, the average person does not care about spending money on their kids' education. "My kid is bad at math, the teacher is bad."
- NKNikhil Kamath
Yeah?
- DDDeedy Das
That's changing.
- NKNikhil Kamath
Why is that, culturally? It's an immigrant nation, and everybody has become successful in the recent past, so didn't they distinguish the successful from the unsuccessful also through the lens of education?
- NBNiko Bonatsos
Who is "they"? Like all Americans-
- NKNikhil Kamath
The American people.
- NBNiko Bonatsos
Even, you know, you forget. When you made it to the top, often you forget. And, uh, for a lot of folks, um, this is not priority number one. If you're, like, an immigrant yourself, uh, or you're somebody affluent, you of course, do care a lot about it.
- DDDeedy Das
Yeah. Every society in the past that has achieved pinnacle status has always shifted to arts and culture as their way to, to spend time, whether it's sports or something else, and in America, it's a very sports-oriented culture more than it is an education-oriented culture, like you said. I, I don't know too many... You know-
- NKNikhil Kamath
Can I ask you guys to give it a rating, one to ten?
- DDDeedy Das
Uh, this one?
- NKNikhil Kamath
Yeah.
- DDDeedy Das
The, the Indian household?
- NKNikhil Kamath
Education one.
- DDDeedy Das
Uh, eight or nine.
- NKNikhil Kamath
Okay. Same?
- NBNiko Bonatsos
I'm, like, a ten. For, like, you come from, like, a country that's on the up and up. Yeah.
- NKNikhil Kamath
Okay. Nikunj?
- 1:25:59 – 1:32:52
Rethinking senior living
- NKNikhil Kamath
This is something we invested in. Funnily enough, me and Hemant did this deal together. We did a couple in senior living. Were you part of that?
- NBNiko Bonatsos
I'm aware of it, but I was not part of it, no.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
Yeah.
- NKNikhil Kamath
Thoughts? The world will be older, senior living, affluent senior living.
- NBNiko Bonatsos
Well, some of the fastest-growing cities in the US are the villages in Florida.
- NKNikhil Kamath
Mm-hmm.
- NBNiko Bonatsos
If there's something to be said, you know, about that model expanding to other countries, um, I think, you know, this one has, like, very awesome long-term, you know, prospects.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
And especially in the developing world, as, like, people become, um, more affluent, their kids are fewer. They don't live with them, but they move for economic opportunity in other parts of the country or other parts of the world. Um, you need, as you age, to be close to other elderly people and/or, um, individuals who are, uh, gonna be able to help you.
- NKNikhil Kamath
This particular deal we did together is a company called Primus, and h- the data he was showing us is, if a seventy-year-old man or woman is at his facility, which is a very affluent, like, high-end senior living facility, the quality of life and the longevity of their life goes up by a significant premium because they have community.
- NBNiko Bonatsos
That's right.
- NKNikhil Kamath
And, and he showed me this really crazy research. Like, when my dad was sick, I got him a nurse, so then he didn't have to do anything. He didn't have to move. Somebody was doing everything for him. That's the worst thing you can do for your parent. Uh, it's very counterintuitive, but I think just that community, the having to play with someone, having some competition, being organized, playing memory games, walking, all of that, with, like, like-aged people, changes everything.
- NBNiko Bonatsos
Absolutely, yes. If you read about, uh, blue zones, which are, like, the different parts of the world where they have the highest percentage of people who are a hundred years old plus-
- NKNikhil Kamath
Mm-hmm
- NBNiko Bonatsos
... uh, the shared trait that they all, um, have to, uh, demonstrate is community.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
So, like, in Okinawa, in Japan, in Ikaria, in Greece, and, like, you know, other parts, you're somebody, you know, who's, like, one hundred years old. Your kids might be dead or incapacitated, but because every day, you know, in your village, you're socialising and you feel like you have responsibilities, this is what keeps you going.
- NKNikhil Kamath
We rated this highly in India, even though there is such a big societal stigma-
- NBNiko Bonatsos
Mm-hmm
- NKNikhil Kamath
... about senior living.
- NBNiko Bonatsos
Mm.
- NKNikhil Kamath
I think the misconception one has is, at a certain point with your parent, you're almost being selfish by keeping them at home with you versus allowing them to make more choices of their own.
- NBNiko Bonatsos
Right.
- NKNikhil Kamath
Yeah. It's a hard thing, especially in India, to overcome. I don't know how it's in Greece, but-
- NBNiko Bonatsos
Same.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
But, you know, because in Greece, again, you know, the, uh, standard of living went up, and then the cost of living, cost of labor also, you know, went up. What saved, um, a lot of families was, like, Eastern European, um, labor talent that visited the country and stayed there as illegal immigrants and then got legalized. But in the beginning, you know, if you had your kid- your, uh, elderly parents sent to, like, a senior living facility, everyone would look down on you.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
So the preferred choice was-
- 1:32:52 – 1:43:50
Content vs. product: what builds a brand?
- NKNikhil Kamath
is content. The theory we were discussing is with search being disrupted in the manner that it is, and people, let's assume, use Google a lot lesser, or any kind of search platform that is throwing up ads, and if anyone wants to build a brand, social media might exist in some form, but Google Ads and the likes of that will not work. So to be able to build a brand, you have to be able to hold attention one way or another through some form of content. And video is working right now, so the alpha between a brand that does well and a brand that doesn't well-- do well, content is going to be the biggest differentiator. Thoughts?
- DDDeedy Das
That's the premise?
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
I very much agree with that. And, like, for every generation, if you know how to speak whatever, you know, the medium where content gets viewed, um, is fluently, you can do really well. So for example, there is, you know, that, uh, Spanish, uh, olive oil Grazia, I forget what it is, you know, that became like a seven million dollar plus, you know, business in, uh, a couple of years just because they know how to appeal to young people. Or like, yeah, are you today hacker? Do you know how to speak, uh, X? You'll do well. Are you a young consumer, uh, founder, who knows how to speak TikTok? You will do well.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
And, you know, i- in a few years, it will be something else. I don't know what that it will be, but whoever knows how to play that game well, this is golden. Attention is all you need.
- NKNikhil Kamath
Huh! I think DD is doing well at that. [chuckles]
- NBNiko Bonatsos
Absolutely. [laughing]
- DDDeedy Das
You're doing pretty well yourself.
- NBNiko Bonatsos
Absolutely.
- NKNikhil Kamath
What are you going to pivot into with all this attention that you have?
- DDDeedy Das
I don't do content for, you know, any practical purpose, uh, which is why I've never went into things like video and-
- NKNikhil Kamath
It's like saying I don't make money for any practical purpose.
- DDDeedy Das
Uh, no, no, it's not, it's not the same. It's, it's like I... You know, everyone's presumably got an education with some goal of making-- having some job. There's other reasons to do it, but having something. But I genuinely don't think I ever did anything online to get an audience or to have money or to have anything. Otherwise, I, I mean, what I would tell people is like: Yeah, if you wanna do content just for that purpose, then you would-- there's always easier ways to do it. You do humor, you do, um, hot topics, you do very debatable, questionable things. And, I mean, some would argue I have done some of that, but not much. I mean-
- NKNikhil Kamath
I think that kind of content gives you a different kind of attention. The kind of content you're creating gives you trust.
- DDDeedy Das
Relevancy.
- NKNikhil Kamath
Relevance. In a way, trust-oriented.
- DDDeedy Das
When I first started, one of my first kinds of things I would post about is just immigration, and the only reason I would do it is because I fo- found myself telling all my friends the same thing over and over again. So I'm like, "Let me just write it down, and then you can go read that." And so I, I don't see it as a-- for me, at least, it was never meant to be a, a business, but to the statement, I mean, uh, Niko definitely knows about this trend, but there's so many of these, like, sixteen, seventeen, eighteen-year-old kids who-
- NBNiko Bonatsos
Right
- DDDeedy Das
... out of nowhere, they come up with an app.
- NKNikhil Kamath
But I think they're being brilliant. I was doing a call with Sam Altman, and he told me the same thing. I was like: "What should young people do?" He said, "Most of them look like they want to be influencers, but I think they have the best idea ever."
- DDDeedy Das
But being influencers was the best idea ever?
- NKNikhil Kamath
By creating content, because you're capturing attention, and if the attention can age, I don't mean tenure in the sense of it becomes old, but as you grow older, if your viewers grow with you in age as well, uh, you keep their attention for a long time. Like, look at Taylor Swift. It's insane, right?
- NBNiko Bonatsos
That's right. Look at-
- NKNikhil Kamath
She, she could soon be the richest person in the world, I wouldn't be surprised.
- DDDeedy Das
And- but then I-- what I was gonna say on the app one was, it's not even them trying to be influencers, it's them actually figuring out how to do their own marketing strategy at a almost nothing cost, right? They-- what they will do is they'll pay off people to, to-- they'll pay off other people to make Discord-- uh, sorry, on Discord to make TikTok videos, and then have, like, some commission-based-... um, agreement, and then these apps are making millions and millions of dollars of money, of revenue, and they're sitting at home in their, in their parents' garage going like, "Okay, well, I've made all this money, and I've spent nothing." So I think it's not them being influencers, it's them figuring out how to tap into the ecosystem to get distribution for the thing that they've built. 'Cause what they identify, w- at least the examples I'm talking about, what they identified is all of these apps look the same. The only thing that matters is distribution, so let me go to the App Store, figure out all the apps that are basically commodity, make my own, and then figure out distribution. That's my money.
- NBNiko Bonatsos
Uh, s- storytelling matters, right?
- DDDeedy Das
Storytelling matters.
- NBNiko Bonatsos
Like, we're all suckers for amazing stories, so whoever knows how to tell a story in a very compelling way and get a lot of attention for it because they speak the language of where- wherever stories get shared that, that moment in time, this is super powerful.
- NKNikunj Kothari
I'll take the other side. I think there's, in the last three years, there's been almost too much attention on attention. While I agree content helps you grab attention, and attention spans are declining, I think there's too much empty calories. Like, I mean, same audience-
- 1:43:50 – 1:47:30
Individual vs. legacy brands
- NKNikhil Kamath
see a world where David is winning against Goliath? People don't want to buy from corporations, but they want to buy from individual brands?
- DDDeedy Das
Yeah, I mean, we have to believe that-
- NKNikhil Kamath
'Cause trust is getting so-
- DDDeedy Das
... we're in the business of backing Davids. [laughing] We're in the business... [laughing]
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
I think this is happening more and more with offline experiences.
- NKNikhil Kamath
Mm.
- NBNiko Bonatsos
Where you wanna-- Like in the universe of, like, tourism, right?
- NKNikhil Kamath
Mm.
- NBNiko Bonatsos
You wanna have the bespoke, uh-
- NKNikunj Kothari
Artisanal
- NBNiko Bonatsos
... local artisanal guide or, like, the hotel, uh, that has its own story, or go to the restaurant that's mom and pop, you know?
- NKNikhil Kamath
Do you feel like this happened because the last ten, twenty years, we bought, we bought products behind a corporation 'cause trust was so deficit in society that we didn't know what went into it? Today, we care less about trust, and we are buying artisanal, handmade. We are buying into individuality again, and is that a trend that's here to stay?
- NBNiko Bonatsos
I, I do like how you framed it, and it depends on the society that, uh, you live in and your, uh, economic participant. I would also add that, um, very often you don't wanna be, uh, buying the same brands that your parents were buying. Might be the case for detergent, but to go to the same, you know, hotel chain that they want, it's not as cool for you. So, like, every generation has its own cool, uh, brands, experiences that they resonate with, and a lot of the large corporations, at least, you know, in the, in the West, have had like a-- they've lost a lot of their brand equity with the youth.
- DDDeedy Das
I mean, generally, the question of David versus Goliath, you, you always... not, I mean, not in every situation, but Davids are a great bet to, to make because Goliaths are usually bigger businesses. They have established practices. They lose their eye on the ball. They're focused on managing things at scale, sometimes reducing cost. So not-- maybe not just the hotel example, but even for many other cases, most businesses do not have any systemic effects of scale, um, that can't be disrupted in other ways. So yeah, in many cases, I would definitely bet against, uh, on the David versus the Goliath. Of course, there are other cases where that is not a good bet, but yeah, older businesses will get disrupted generally for most industries.
- NKNikhil Kamath
Nikunj, thoughts?
- NKNikunj Kothari
Yeah. Cy- cycle of life will continue. You know, big, big gets too big, too horizontal, not enough depth. Small has that, and then from a consumption perspective, I think people will continue to stay away, which means they want the new thing. They want to differentiate themselves, and that will continue to want them to do whatever version of artisanal it might be.
- NKNikhil Kamath
Perfect. Wanna rate this? I just have, like, four more, and then we-- I'll tell you how much you rated which one and which is probably a good sector to focus on for the next decade. David versus Goliath, Nikunj?
- NKNikunj Kothari
The ten is pro David and zero is pro Goliath, correct?
- NKNikhil Kamath
Niko?
- NBNiko Bonatsos
I'm like, an, a, an eight.
- DDDeedy Das
Um, I would say a seven, 'cause there are some places where scale definitely matters, but in many cases they don't.
- NBNiko Bonatsos
One good example is in tech-
- DDDeedy Das
Mm-hmm
- NBNiko Bonatsos
... where you see something like six, seven companies that have created the bulk of the market cap, if that's a way to measure it, um, over everyone else the last, you know, thirty years.
- NKNikhil Kamath
So I had this thesis
- 1:47:30 – 1:58:03
EVs & mobility: the road ahead
- NKNikhil Kamath
two years ago that by virtue of cost per mile or kilometer, most vehicles will become EV or hydrogen-focused in a very short period of time. So I, I spent two years investing in everything from electric scooters, electric buses, trucks, even a flying electric taxi company. When I look back at it now, a lot of these bets did pay off, but the adoption to EV seems to be slowing down, and subsidies are being taken away, not just in the US, but also in countries like India and other places. What do you think is the future there for 2035? Adoption of electric vehicles and hydrogen versus IC.
- NBNiko Bonatsos
I, I think it's-- for somebody to buy a vehicle, and let, let's pick a neutral country, right? That's not the US, it's not China, um, like, but one in Latin America or, like, a smaller, you know, country in Europe. The consideration, you know, would be: What is the cost? How often, you know, would I need to maintain it? What's the cost of ownership? Um, and you actually do see that a number of the Chinese car manufacturers that make EVs, that here in the US you don't see on the street, are actually winning.
- NKNikhil Kamath
They're far ahead.
- NBNiko Bonatsos
Because the price and the total cost of ownership is pretty awesome. So when I visited, you know, different, you know, such countries over the last few, um... over the last year, like in Colombia or like in Portugal or like in, uh, Greece, I was seeing car make brands that I had never seen before. Then I was googling them, and they're, like, massive.
- NKNikhil Kamath
[chuckles]
- NBNiko Bonatsos
So do I think this is a trend that, uh, will continue? Uh, yes, I do think it's a trend that will continue. Might not be everywhere, but in a lot of, you know, countries...... because people want to have a car. It's a means for them to unlock more productivity and get to work and make more money. Um, I do think this is a trend that's not gonna stop.
- NKNikhil Kamath
I'll give you the number in India. If you buy a EV scooter, it costs about two thousand dollars.
- NBNiko Bonatsos
Mm-hmm.
- NKNikhil Kamath
If you buy a IC scooter, it costs you about thousand dollars. But if you ride the scooter for forty kilometers a day-
- NBNiko Bonatsos
Mm.
- NKNikhil Kamath
-on a EV scooter, you save five hundred dollars a year, cost of running. And much easier to maintain 'cause the number of parts are exponentially lesser, but still adoption is not that high. Why, why do you think adoption numbers have slowed as much as they have in the US? Can it just be because the Chinese are making spectacular EVs, which are years ahead of them, and they don't want to even compete in that market anymore? What is it? Why did the subsidies go away even?
- NBNiko Bonatsos
I don't think you can, uh, buy any of the Chinese EV cars here, right?
- NKNikhil Kamath
No, you can't.
- NBNiko Bonatsos
That's the biggest issue.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
If w- if we were to truly operate like a free market, I think they would be doing really well.
- NKNikhil Kamath
The same in India, like, you can't buy Chinese vehicles, but are Americans not buying American EVs because they can't buy Chinese EVs?
- NKNikunj Kothari
It's just a cost thing.
- DDDeedy Das
I think it boils down to what Niko said-
- NKNikhil Kamath
Yeah.
- DDDeedy Das
It's cost and convenience.
- NKNikhil Kamath
Ease, ease.
- DDDeedy Das
There's not enough chargers, and it costs too much. If the cheapest car was an EV, everyone would buy an EV.
- NKNikhil Kamath
Do you think that'll change in the next ten years? What percentage of cars on the road in ten years will be EVs?
- DDDeedy Das
In America, I think it'll change, and that's primarily because of Tesla. That's the only car company that moves fast, and so if that's the only car company that is allowed to operate, then, yeah, then they will figure out how to get the cost down one way or the other.
- NKNikhil Kamath
Do you say hundred percent of cars will be EV in ten years?
- DDDeedy Das
I don't know about a hundred percent, but I would say, like, it would... A majority of cars will be EV in ten years, in my mind.
- NBNiko Bonatsos
Yeah, a good proxy would be like, what percent of cars that are getting sold today are EV, right? And this could kind of tell you how the future might look like, and-
- NKNikhil Kamath
Like around twenty, twenty percent. Sub twenty percent.
- NBNiko Bonatsos
Is it... I, I, I don't know, but, um, so yeah, if that number is accelerating and the-
- 1:58:03 – 2:02:17
Opportunities in beauty & luxury
- NKNikhil Kamath
point number eight of ten, beauty as a category. Beauty products.
- NKNikunj Kothari
Ten.
- NKNikhil Kamath
Yeah?
- NBNiko Bonatsos
Same.
- NKNikhil Kamath
Yeah?
- DDDeedy Das
Yeah, beauty and content are, are, are in line with each other, I mean-
- NBNiko Bonatsos
Look who are the wealthiest, you know, like people outside of tech. Anyone who's in beauty and luxury.
- DDDeedy Das
Yeah. [chuckles] Luxury. It's luxury goods.
- NBNiko Bonatsos
Beauty and luxury.
- DDDeedy Das
Yeah.
- NKNikhil Kamath
Luxury also, ten?
- NKNikunj Kothari
No, I mean-
- NBNiko Bonatsos
Uh, no, I was saying who are the-
- NKNikhil Kamath
Besides tech
- NBNiko Bonatsos
... wealthiest, you know, like, uh, individuals or families outside of technology? Anyone who's in beauty or in luxury goods.
- NKNikhil Kamath
Should I just add them and make them one, beauty, luxury?
- NBNiko Bonatsos
And then, like, if we're, we wanna take a glimpse into the future, we would, uh, go into, uh, South Korea, where indeed, they have one of the lowest fertility rates in the world, but they're massive exporters of culture. And over there, if you're a man, there is a more than fifty percent chance that you use beauty products every single day.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
So like, again, you know, this guy's, uh, population, you know, will shrink, but if everyone who is, like, eighty years old looks like a fifty-year-old, that's a good trade for most people.
- DDDeedy Das
And the surgeries in South Korea, and they're so affordable.
- NKNikhil Kamath
We've been ideating what to build in beauty.
- NBNiko Bonatsos
Mm.
- NKNikhil Kamath
We're trying to come up with something. Any ideas? What could work as a product category?
- NBNiko Bonatsos
In beauty?
- NKNikhil Kamath
Yeah, now.
- NBNiko Bonatsos
Like, like beauty gives you confidence, right?
- NKNikhil Kamath
No, but if I want to build a brand in beauty, like we have a team which does a lot of consumer brands that we run, not just invest in. If we build for beauty, what, what do you think would work in today's day cycle?
- NBNiko Bonatsos
Can you help me eliminate my wrinkles?
- NKNikhil Kamath
Right.
- NBNiko Bonatsos
I would pay for that.
- 2:02:17 – 2:06:14
Where live events are headed
- NKNikhil Kamath
concerts, theaters, plays. I would even put something like a high-end restaurant as a live event.
- NKNikunj Kothari
I think the nature of live events is shifting to people want to advertise that they were at a live event on their Instagram predominantly. I think that's the main purpose for most people, um, that go to, go to live events.
- NBNiko Bonatsos
Or others do it, you know, on your behalf, and you lose your job, as the whole world learned last week. [laughing]
- NKNikunj Kothari
Everyone, everyone wants to go to a good Coldplay concert, you know? Um, so... But generally, I'm, I'm more neutral on live events because I do think attention capture is going to be more massive on digital, and so there is going to be a smaller set of people, in my mind, that want to go to live events.
- NKNikhil Kamath
Yeah. Of, uh, net volume, not, maybe not n- number, but the net volume of time spent at a, a live event, I don't really have a strong view that it goes up. I actually don't know. Niko, what do you think?
- NBNiko Bonatsos
I think most live events historically have been, like, shit businesses to run. But in a world where the offline experiences become this course, in a world where we get tired of being online in front of our screens for fourteen hours, there's gonna be a premium. You mentioned Taylor Swift. There's a reason why she's a billionaire.
- NKNikhil Kamath
Yeah, it's crazy.
- NBNiko Bonatsos
She's figured out how to make so much money from her super fans. And to the extent more and more Taylor Swifts exist, which I think, you know, will be the case in the individualistic-driven, you know, society that, um, we live in today, live, live offline experiences, um, will, uh, do really well. And it could be a restaurant. You know, like, what if you know the Japanese, you know, sushi chef you mentioned, was more capitalist-driven? Wouldn't he want to do it in front of, like, a, a massive arena, you know, or tour the world and do it? Maybe.
- NKNikunj Kothari
Well, the scarcity matters, though. The thing is, is scarcity is will never go away.
- NBNiko Bonatsos
You have a good point, yeah.
- NKNikunj Kothari
Yeah. Scarcity will never go away. Desirability comes from scarcibility- scarcity, so...
- NKNikhil Kamath
Want to rate live events? Niko?
- NBNiko Bonatsos
Um, I'm liking the, like, uh, an eight.
- NKNikhil Kamath
Okay.
- NKNikunj Kothari
Um, five.
- NKNikhil Kamath
Okay.
- NKNikunj Kothari
Yeah, I think philosophically I want more live events, but I'm with Deedy, in short term, it's like a six, like, where we'll move towards live events.
- NKNikhil Kamath
Six?
- NBNiko Bonatsos
Again, you know, like, they're mostly shit businesses, but, like, look into, like, what happened with the World Cup for, like, the clubs for-
- NKNikhil Kamath
Yeah
- NBNiko Bonatsos
... soccer in the US. Like, this was a brand-new revenue stream out of nowhere. Like, the winner pocketed over one hundred million, you know, uh, dollars, Chelsea. Uh, we, the Europeans, you know, are, you know, snobs, and we don't care about it, but if the numbers, you know, go up, which is likely in the future, would you pay attention to it? Probably, you would.
- NKNikunj Kothari
But I'd bet still that digital coverage of soccer will have a higher percentage from an eyeballs and viewership perspective, percentage of time perspective than live events.
- NKNikhil Kamath
But supply and demand comes in there, right? Like, the supply of digital is for everyone. The novelty of live is-
- NKNikunj Kothari
Yeah, but I, I think that's what we're betting on. It's like, uh, my way of giving a score is like, what do I think percentage of time-
- NKNikhil Kamath
Mm-hmm
- NKNikunj Kothari
... goes up in live events versus digital? I would bet screen time goes up higher than live event time.
- NBNiko Bonatsos
That's fair.
- NKNikunj Kothari
And then my thing in response to you, Niko-
- NBNiko Bonatsos
That's fair
- NKNikunj Kothari
... would, I think there's more concentration in live events, but not necessarily net volume increase. I think more people gravitate-
- 2:06:14 – 2:11:49
Climate tech & its impact
- NKNikhil Kamath
one, climate tech.
- NBNiko Bonatsos
What, what, what, what is climate tech? What's the definition?
- NKNikhil Kamath
Carbon capture. The thesis behind the statement is someday soon, I mean, it could be carbon credit trading. If there were one large event where, say, ten thousand people die, say, there's a flood in Miami, the water levels keep rising, suddenly everybody will go back to climate and start taking it very seriously. Like, climate tech could even be software. Like, I was at this... I'm part of this group called the Gates Pledge, where I think your colleagues, a couple of them are there, one of them is there. And there was this professor this year who was showing a model that he had built, where the base case is world's temperature will rise by one point six degrees by 2100, and what can you tweak in this software that changes it? Is it a carbon tax? Is it lesser amount of coal? Is it more allocation to nuclear? Uh, there are funds like B- Breakthrough Energy, which are working on this. So all of this somehow comes into climate tech.
- NBNiko Bonatsos
Yeah, I mean, we, we need to do something about it. Uh, the challenge is, you know, that for many humans, it's hard to relate. Even if I live in Miami, and there's a huge flood, and I lose my home, then I might move somewhere else, and I might forget about it. Or my local politician, you know, who is responsible for coming up with subsidies or incentives-... That stuff, like, you know, doesn't get them necessarily re-elected in the next, you know, cycle.
- NKNikhil Kamath
Actually, fair point. There was a fire here in California, and everyone's forgotten about it.
- NBNiko Bonatsos
Yes. We, we forget. It's really unfortunate. I mean, same, same applies to health stuff. Like, you know, we had COVID, and, you know-
- NKNikhil Kamath
Yeah, nobody remembers COVID.
- DDDeedy Das
I think, you know, Niko-
- NKNikhil Kamath
Moderna remembers.
- DDDeedy Das
Yeah.
- NKNikhil Kamath
Their stock price is down from four hundred and thirty bucks. [laughing]
- NBNiko Bonatsos
God bless this guy.
- DDDeedy Das
[chuckles] I think climate tech is a overloaded term 'cause it means so many things-
- NBNiko Bonatsos
Yeah
- DDDeedy Das
... and a lot of it is a bad word, um, especially in venture, for a bunch of historical reasons.
- NKNikhil Kamath
Yeah.
- DDDeedy Das
But energy, I think, unambiguously positive, and energy is a big part of climate, so and-
- NKNikhil Kamath
You mean, like, renewable energy?
- DDDeedy Das
All energy. How do we get cheaper, better, more-
- NKNikhil Kamath
Cleaner
- DDDeedy Das
... sustainable energy? Um, yes, so-
- NBNiko Bonatsos
I-
- DDDeedy Das
everything from nuclear to solar to geothermal, I mean, different-
- NBNiko Bonatsos
Can we have fusion, right?
- DDDeedy Das
Yeah, different propensities of working, and I think that is climate tech. I mean, if we can figure out how to get energy in a hyper-dense way, then we won't need to solve all these other problems. So...
- NKNikhil Kamath
Yeah, geothermal fits into climate.
- DDDeedy Das
So energy, yes. Rest of climate tech, ambiguous on definition.
- NBNiko Bonatsos
But, like, you can come up with, like, creative solutions, right? Like, whenever in the world we have massive volcanic eruptions, there is a cooling of the, uh, temperature, you know, on the planet. So, like, could we do any of that, you know, in ways that is safe for all the industries and the humans that are running on the planet? Could be powerful. Or, like, finding creative ideas, you know, to have, uh, uh, a very positive effect in an eco- economic manner. Like, could we paint all, all of the Sahara Desert in any way that's reflecting, you know, back some of the heat? Who knows? The, the challenge, it's a very complex, you know, space. It's like trying to cure cancer. Like, cancer is not one, you know, disease, you know?
- NKNikhil Kamath
Fair.
- NBNiko Bonatsos
And every little one of the solutions contribute, but then you pay attention to subsidies and l- uh, capital and labour-intensive, and it's more project finance, and...
- 2:11:49 – 2:15:13
Data centers: the best bet?
- NKNikhil Kamath
centers, at least back home in India, have become like a real estate play almost.
- NKNikunj Kothari
Yeah.
- NKNikhil Kamath
Everyone and their cousin and uncle and auntie-
- NKNikunj Kothari
[chuckles]
- NKNikhil Kamath
... are building data centers-
- NBNiko Bonatsos
Makes sense
- NKNikhil Kamath
... who built apartments up until yesterday. Do you think bubble now?
- NBNiko Bonatsos
Not yet.
- NKNikunj Kothari
No.
- NKNikhil Kamath
Bubble if you buy into it now?
- NBNiko Bonatsos
Yeah.
- NKNikhil Kamath
The multiples are not high. You, you get these companies at sixteen to twenty EBITDA, depending on which geography you pick, data center businesses. You think it's a good place to get allocation?
- NBNiko Bonatsos
But do you have any real estate arbitrage? Do you have any energy arbitrage? I would look into that stuff.
- NKNikhil Kamath
Every, everyone has a different narrative. One is near a power station.
- NBNiko Bonatsos
Mm-hmm.
- NKNikhil Kamath
One is also a real estate player, so they have real estate arbitrage. Uh, different people have different thing. India has, uh... We mandated that financial data of Indians has to stay in India.
- NBNiko Bonatsos
Yep.
- NKNikhil Kamath
And as much as a big chunk of data created is in India, so if they mandate that all Indian data has to be in India, it becomes-
- NBNiko Bonatsos
I think that's a very good narrative-
- NKNikhil Kamath
... a huge use case
- NBNiko Bonatsos
... that will be driving, you know, local pockets of demand in many different countries, and then-
- NKNikhil Kamath
Yeah
- NBNiko Bonatsos
... can you bet on the operator that, over time, will be the consolidator?
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
Like, if you can find that-
- NKNikhil Kamath
Yeah
- NBNiko Bonatsos
... awesome entrepreneur, I think it could be a good trade.
- NKNikunj Kothari
I still think it's underrated. I think the amount of compute in each country-
- NKNikhil Kamath
Don't you think compute will get more efficient with time?
- NKNikunj Kothari
Even-
- 2:15:13 – 2:24:18
Vices as an industry
- NKNikhil Kamath
on a few companies I've been reviewing when I'm here. I had a thesis that when we all have more time at hand, when abundance comes about and productivity goes up, I venture to guess that humans will go back to what they always intrinsically did. One big activity is speculation. So I was speaking to companies like Kalshi and Polymarket. What do you think of them as investments? Forget the regulation side of it. Forget one is US, one is outside.
- DDDeedy Das
I love it. Gambling is a good investment.
- NBNiko Bonatsos
Yeah.
- DDDeedy Das
I mean, g-gambling will always hap-- will always be good as long as it's legal, so people... It's a vice. It's a vice investment. People like to speculate and make money off of it. That's, that's a no-brainer.
- NKNikhil Kamath
You think even today at the crazy multiples that they're at?
- DDDeedy Das
Yeah, I, I think so. I mean, the more people come in, more of those markets become liquid, they become more investable, they become market makers, [chuckles] more institutional players might come on. There's a whole bunch of things that can happen around prediction markets, so I think it's a, it's a great, it's a great thing. I would, I would like it. I like it.
- NBNiko Bonatsos
I think you said forget regulation, and, and this is very powerful-
- NKNikhil Kamath
Forget regulation because Kalshi is regulated in the US. Polymarket is more on the blockchain, peer-to-peer betting, more international customers. I'm guessing Robinhood will soon figure out whether they're a partner or they're going to replicate what they could maybe easily replicate. There's so many moving parts-
- DDDeedy Das
Yeah
- NKNikhil Kamath
... when it comes to regulation. I don't know how to put it in a box.
- NBNiko Bonatsos
Yes, like a- assuming that regulation is, like, sold, you know?
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
For the category, is this, uh, gonna be a great category? Yes, I think it's a great category because it's entertainment. You already have evidence from several of these that the consumer eyeballs, you know, are really there. Um, you have, like, a well-driven business model for some of these that really works for other industries. Uh, the margins are, can be pretty awesome, depending on how much the regulators would want you, you know, to part with them. And then the news cycle is great news for all of these businesses.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
So overall, um, uh, uh, again, you know, regulation risk aside, I'm pretty bullish about the category.
- NKNikunj Kothari
Yeah. So, I mean, it's like in the class of entertainment as a whole, especially with abundance, there's gonna be infinite money and time.
- NKNikhil Kamath
Do you bet, Nikunj? I feel like you're closeted something in your outside-
- NKNikunj Kothari
No, no, no, I play... [laughing]
- DDDeedy Das
[laughing]
- NKNikunj Kothari
I, I play poker quite frequently. [laughing] But no-
- NKNikhil Kamath
I feel like there's another version of Nikunj that he doesn't let on.
- NKNikunj Kothari
I... No, I play poker. That's my only betting.
- NKNikhil Kamath
You have to deny it now, no, no. [laughing]
- DDDeedy Das
[laughing]
- NBNiko Bonatsos
Top two percent of sports bettors worldwide.
- NKNikunj Kothari
I play FIFA a lot.
- NKNikhil Kamath
What's your vice, Nikunj?
- NKNikunj Kothari
What's my vice? Um, probably, just like, yeah, probably poker. It's like I spend a lot of time playing poker.
- NKNikhil Kamath
Poker is not a vice, come on.
- DDDeedy Das
[laughing]
- 2:24:18 – 2:29:02
Wrapping it all together
- NKNikhil Kamath
we spoke about how the world will change, well, let me first summarize what got the highest marks. So we said beauty and luxury is, like, a great sector to build in, thirty out of thirty. Followed by speculation and gambling, great sector to build in.
- DDDeedy Das
All vice businesses, vanity-
- NKNikhil Kamath
Yeah
- DDDeedy Das
... and, uh-
- NKNikunj Kothari
Yeah, it's just vanity.
- DDDeedy Das
Yeah.
- NKNikhil Kamath
Followed strangely by education, which is outcome-based.
- DDDeedy Das
Yeah.
- NKNikhil Kamath
Then came world older, sicker, senior living, content, EV adoption. Yeah, those had the same number. That's interesting. We'll put this up on a chart, and we'll say what each of you said and why they said it. I feel like this is very useful data, both for capital allocators like us, but also if I'm a young kid looking to start something, it allows me to extrapolate a rate of growth, so at least I have some tailwind in the industry that I'm building. Right? So-
- DDDeedy Das
I don't know. I would disagree with that last bit.
- NKNikhil Kamath
Yeah? Why?
- DDDeedy Das
I, I think so much about building is more about where your unfair advantage is, not where the macro is going.
- NKNikhil Kamath
Mm-hmm.
- DDDeedy Das
And so I think, you know, take beauty for an example. Like, I... I'm sure some of us have friends, I have friends building in beauty. Often, I think, you know, not doing a great job. It's not 'cause I don't believe in beauty, is I, I think you don't have any unfair right to win. You don't-- You're not doing this correctly. So-... um, I think that- that's a bigger part of the equation for me, especially when, you know, young people come to you for advice, then you're not gonna say, "Just because I think beauty products are gonna do well, that you should go do- build a beauty product." Those are not, you know, synonymous.
- NKNikhil Kamath
Are you still going to contest that your unfair advantage is distribution because of content?
- DDDeedy Das
Uh, for me?
- NKNikhil Kamath
Yeah.
- DDDeedy Das
Um, on what?
- NKNikhil Kamath
On anything you want to build tomorrow.
- DDDeedy Das
A hundred percent. That's one of them, yeah.
- NKNikhil Kamath
The main one?
- DDDeedy Das
Probably. It's the probably the, the rarest one. I mean, I would say I have some unfair advantage on, like, selling to big enterprises, but so many other people do.
- NKNikhil Kamath
Are you worried that you might be perceived as a content creator versus all the other stuff that you do, and hence, you try and push it away?
- DDDeedy Das
Uh, yeah, hundred percent. I don't like people perceiving me as that. I think it's a terrible tagline. I don't want to be called an influencer or a content creator.
- NBNiko Bonatsos
Why not?
- NKNikhil Kamath
Why not?
- DDDeedy Das
Huh?
- NKNikhil Kamath
Yeah.
- DDDeedy Das
Because this is a- I think it comes with an association that I do not, uh, enjoy, right? Like, I, I do it for a certain kind of reason, and I don't think most people who do it, do it for that same reason. And I think when you use the label, then people interpret it for the, the, the, the latter. Like, they think you're doing it for fame, glory, yada, yada, yada, and I d- I don't think I am, and so therefore, I d- don't like the, the label.
- NBNiko Bonatsos
But isn't it like a form of storytelling, form of arts?
- 2:29:02 – 2:32:29
Legal AI: opportunities & challenges
- NKNikhil Kamath
for another opinion on a company called Harvey, Harvey AI. Thoughts? Legal tech. Legal AI.
- DDDeedy Das
Wow, these are very-
- NKNikhil Kamath
These are companies I've been meeting in the last two weeks, and I've been, like, trying to figure out how to maybe do something with them. Allocation-
- DDDeedy Das
It's difficult to get answers out of VCs on companies like this-
- NBNiko Bonatsos
Yeah.
- NKNikhil Kamath
Why?
- DDDeedy Das
... in my, in my understanding.
- NKNikhil Kamath
Do you have exposure?
- DDDeedy Das
Because there's... Yeah, be- there's no incentive for us to ever share a negative view on any... No, I think Harvey's a great company. But then, in general, asking VCs about companies is bad, because if they're invested, they have to be positive, and if they're not, they still [chuckles] have to kind of be positive because you don't-
- NKNikhil Kamath
Okay, with the caveat-
- DDDeedy Das
You don't wanna-
- NKNikhil Kamath
... that you are not invested, you can give me a more objective opinion.
- NBNiko Bonatsos
Not on camera. You'll never get it on camera.
- DDDeedy Das
You, you just can't. Like, basically, every company you're gonna ask us about, all of us are gonna say great things. Like, that's just what's gonna happen [chuckles] almost no matter what, unless it's a clear disaster company that, you know-
- NKNikhil Kamath
Niko might. He might say... [laughing]
- DDDeedy Das
I don't know, Niko, are you gonna say anything bad about a company?
- NBNiko Bonatsos
Um, I mean, you can give some criticism, you know?
- DDDeedy Das
Sure.
- NBNiko Bonatsos
Would you go all out? You wouldn't.
- DDDeedy Das
Yeah.
- NBNiko Bonatsos
Right? Um, I, I don't know as much about, you know, uh, Harvey to give you an informed opinion, okay? And I'm not saying that to sound-
- NKNikhil Kamath
Mm
- NBNiko Bonatsos
... politically correct. But do I think they're building on the right side of history? They are. Have they been amazing at signing up a lot of the largest law firms on the planet? They have. Has this led to them, um, achieving a capital, uh, like, fundraising advantage? It has. Does this mean that... Has this translated into them recruiting amazing people? It has. Uh, is their product the best in the space? I have no idea. I'm not close, you know, to the company. Uh, but as you know, Nikunj was saying, the product has to be really good, you know, because-
- DDDeedy Das
Yeah
- NBNiko Bonatsos
... attorneys, for better or for worse, you know, after FOMO goes away, they do care about these things. So, like, you know, given where they are now, probably you would get a really good informed opinion about them if you talk to many of their customers, who've been bombarded by everyone else and their mother who've been starting AI legal tech companies. That's actually one of the spaces we miss here, that has, that have been so busy. So if someone is starting now, a new legal tech company, say, in Series A, probably you would say no to, you know, in the US, because they're so busy. Um-
- DDDeedy Das
I have the opposite take on that. I think, um-
- NBNiko Bonatsos
Okay
- DDDeedy Das
... not on Harvey, but I'm saying in general, especially with the RL focus and models stabilizing-
- NBNiko Bonatsos
Yeah
- DDDeedy Das
... I think the era of second mover advantage just starts this year.
- 2:32:29 – 2:45:00
India in the global AI race
- NKNikhil Kamath
what is India's play in all this? Like, you know, I'm talking to young entrepreneurs in India. Where does India fit in? You can be candid. Don't say, "On camera, I won't say this, that, and the other." I think a big problem in many parts of life is when we don't recognize that there is a problem. I don't think you can find a solution if you don't first get there.
- NBNiko Bonatsos
And, and that's where I think what you mentioned before is important. Like, kn- having a knowledge of where the trends are happening and where you know the growth is going to be. Sure, you always want to play, you know, for your strengths, but isn't it even more amazing when you can play, you know, towards your strengths in the biggest market opportunities? Like, I find myself incredibly lucky that, you know, seventeen years ago said, "I'm going to go and have a career in tech," because none of my friends or people I grew up with, you know, did that, and it's just a lucky accident, you know, for me. So like, just knowing where the trends are heading to is important for-
- NKNikhil Kamath
Yeah
- NBNiko Bonatsos
... like the youth.
- NKNikhil Kamath
Yeah.
- DDDeedy Das
I mean, I can give a couple of thoughts on in India and in AI. Um, and generally, I've been somewhat public about this too, and some people have not liked it. But I think unlike other things, other kinds of technology in the past, where you could, uh, create a local economy with that technology, I mean, for example, you had-
- NKNikhil Kamath
[coughs]
- DDDeedy Das
- your even sharing services and the gig working boom. So Oyo, you know, existed in India just like an Airbnb would, or you have an Ola just like an Uber. You can create local versions of those businesses that work for that a- area, and you're not really competing unless that other company comes and tries to compete in that area. On the-- on, on AI, I don't think there is any local advantage, so I think everyone is competing on the same playing field. And there are a couple of common things that come up that people say, "Hey, these could potentially be local advantages." Like, one is, okay, let's get data for, um, languages in India. Like, yeah, that's, that's great. I think that's perfectly valid. If Google doesn't pour more resources and try to get the same thing, and you have an advantage, that makes sense. I like that view. But for most other things, I think, you know, I would love to see, I would say, India try to compete on that global scale, and that needs capital, that needs talent, that needs, um, you know, just a, a, a desire to want to be on the cutting edge. And in my mind, it's not there yet. I mean, I think that's empirical. None of the top models are Indian models. They're, they're American, and they're Chinese, um, in any field, I mean, audio, video, image. So I would say in the global playing field of, of AI, I mean, the most prominent Indian figures are probably like somebody like an Arvind at Perplexity, or maybe some of the researchers at some of these labs and things like that. So therefore, in my opinion, today, they're-- I, I wouldn't say they are competing at a global level. I don't know if they have people on the ground have ambition to, but I think, you know, there's a couple of gaps to be filled and if we do have that ambition.
- NKNikhil Kamath
What can they change? I mean, the am- ambition is definitely there. What can India do to get competitive in this realm?
- DDDeedy Das
I think one of the things that is... I'll say an observation first, and I'll answer the question. I think one of the observations I have in general about how, uh, how India reacts to technology is India reacted to AI like, "I want to be a part of this," well after this was a thing, and that general mindset will rarely make you win at a thing. Um, and so if you compare that to China, for example, I mean, there are many differences. I mean, China has had so much local talent, so much development in math, so much research in AI for many, many years pre-LLMs that allowed them to then capitalize on that and go like, "Okay, look, we can probably do something here, too. We have the base built out." And I think for India to do something in, in AI, like, I don't know if a lot of that base is built out. There's a huge talent leakage problem. Most of the top AI talent in India is here, right? And literally, a three-square-mile radius from where we are. Um, there's a talent problem, there's a, there's a comp problem. Why would I, an AI researcher, want to be paid in rupees? I don't. I want to be paid a million dollars or a hundred million dollars like they're getting paid here. Um, and then there's a general systemic problem on, like, on count, which is capital is a little bit harder to get, and then resources are harder to get, and then people haven't done work on GPUs in India. If you go to-- if you go into Bangalore today, how many people have ever programmed a GPU? Very hard to do anything in AI if you've never programmed a GPU. If you're starting from scratch, you're gonna have to catch up. So I think there's a lot of systemic factors, and then to solve that problem, invest in core research, figure out how to keep talent in the company-- in the country, and, uh, you have to do it a long time before something picks up for you to be able to take advantage of that. There's no accident that China was able to take advantage of that. They had a lot of foundation built in many, many years. So that's my take.
- NKNikunj Kothari
... I've, I've spent, you know, half my life here, most of my professional life, all my professional life here, so I don't have a view on the Indian market. I mean, a lot of things Deedy says, I echo, but I do think we have to kind of-- the best-- I think India has a two-decade, uh, advantage from a pure median age perspective. Like, the youngest talent in the world is in India right now, and I feel like if you don't capture it in the next two decades, like, that shifts to Africa or shifts to the next country. And I feel... I don't know what the answer is, but I would love to see us capture the advantage there, at least from a pure being-in-the-prime perspective. India is in its prime from a population standpoint and, like, the depth of talent and the depth of, like, you know, young people. So that's one. That's the optimistic side. Now, what do you do with it is, is the main problem, and I- but I kind of echo differently than Deedy. Like, you don't need the best AI researcher. I mean, it would be great if India had a lot of great AI researchers and they all stayed there, but the brain drain problem has been true for the last fifty years and will continue to stay true. All the best Indian entrepreneurs I know are trying to move here. Uh, but you try to figure out, like, where in the playing field do you play? Like, you know, Freshworks is a great example where they, like, took a product that... but figured out the right markets for it. Is there products in this new AI application era, or are there products in the biotech space? India has insane amount of talent and hospitals and vaccines, like, centers out there, like manufacturing side. Take manufacturing as a sector, like, you know, the China N plus one model can really benefit India. So take the sectors it's going to be phenomenal at, and then go from the very bottom up to the top and see how can you allocate capital, people, training to win those markets, versus play the Me Too movement. I feel like a lot of Indians I meet in India just, like, have this envy, and they look at the US market, and they want to be in the US market, versus play the games you're going to be excellent at and then find ways to-
- NKNikhil Kamath
Which are?
- NKNikunj Kothari
Huh?
- NKNikhil Kamath
Which are?
- NKNikunj Kothari
I mean, the things I mentioned. Again, but I don't know the India market as well. It's like, but I do believe, like, the China N plus one is happening. Like, it's a hundred percent happening from a manufacturing-
- NKNikhil Kamath
Not in AI.
- NKNikunj Kothari
Not in AI. But that's what I'm saying, don't, like, don't miss the AI boat, but play on the application level, which I think India still has fantastic product engineers and designers who can go build that. That's a talent that is easily portable from the pre-AI era. And then pick the markets where it's going to be excellent at. I don't know if that's minerals. I don't know if that's mining. I don't know if that's robotics. I don't know the India market, but instead of playing the Me Too side, like, "Hey, I want to do this also," find what's going to be excellent at and then concentrate capital and people there.
- NBNiko Bonatsos
Wouldn't you guys just say that now is probably the best time it's ever been for a young prospective founder to ever become active in India?
- NKNikunj Kothari
Because-
- NKNikhil Kamath
Yeah
- NBNiko Bonatsos
... you know, access to knowledge-
- NKNikhil Kamath
Relatively.
- NBNiko Bonatsos
Relatively, yeah.
- NKNikhil Kamath
To our own past.
- NBNiko Bonatsos
Exactly.
- NKNikhil Kamath
Yeah.
- NBNiko Bonatsos
So access to knowledge, thanks to-
- NKNikhil Kamath
The internet
- NBNiko Bonatsos
... your podcast and everyone, you know, being part of the global internet generation, it's no longer a problem.
- NKNikhil Kamath
Yeah.
Episode duration: 2:52:16
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