[The Knowledge Project Ep. #141] Kunal Shah: Core Human Motivations | Free Podcast Summary

Kunal Shah (@kunalb11) is the founder and CEO of CRED, a reward-based credit card payments app that is considered the second-fastest-growing unicorn startup in India.

India still operates under a deep-rooted caste system. The business caste is where everyone in the family does business. And this doesn’t just mean having a job, it means being an entrepreneur. A few traits of the business caste:

1. Willing to reduce social status in return for commercial success

2. A natural understanding of value: Why would somebody pay for this?

3. Natural need for spotting trends

4. Constant need to make the community successful

• People give you time or money where their core motivations are mostly met, or when there is a hope that their motivations will be met.
• The best gross margins exist when you allow humans to jump their social status
• Utility alone is being priced out
• Since the cost to provide utility is dropping, business models are evolving from rent-seeking to skin-in-the-game
• Instead of just providing a service (utility), companies need to invest in their customers (vanity)

• Many people in India work for a monthly wage, so they have no concept of how much they are worth per hour
• This creates a culture that does not value the balance of time, energy, and money
• Only free products work in India; subscription products fail miserably. They refuse to pay extra for convenience or entertainment.
• Western businesses love to come to India to pump their DAU (daily active users), but none will convert to ARPU (average revenue per user)

Example: Netflix initially failed in India by attempting a subscription model. Indians are much more willing to give up their time watching ads than pay a subscription. In fact, India had to regulate ad companies because they were taking so much advantage of this.

India may never supersede China economically—here are two reasons why:

• Less than 6% of urban Indian women are part of the workforce, even though most of them are well educated. They never had a one-child policy like China to support such a workforce.
• India is one of the top three markets for SaaS providers, but none of their customers are local. No Indian business understands the concept of efficiency.

• Avoidance of pain: People are motivated to avoid things that are painful, such as physical pain, emotional pain, or social pain.
• Seeking pleasure: People are also motivated to seek out things that are pleasurable, such as food, sex, or social status.
• Meaning: People are also motivated to find meaning in their lives. This can come from a variety of sources, such as religion, work, relationships, or art.

Entrepreneurs can use this knowledge to build successful businesses by creating products and services that appeal to these core motivations.

For example, a product that helps people avoid pain might be a pain reliever, while a product that helps people seek pleasure might be a luxury item. A product that provides meaning might be a religious text or a work of art.

It is important to understand the cultural context in which you are building a business. The core motivations of people in different cultures can vary.

For example, people in some cultures may be more motivated by avoiding pain, while people in other cultures may be more motivated by seeking pleasure.

Entrepreneurs should observe reality and pay attention to what people are actually doing, not just what they say they want.

This means understanding the needs and wants of your target market, and identifying the problems that they are facing.

Entrepreneurs need to be willing to take risks in order to succeed.

This means being willing to fail, and being willing to put yourself out there.

• Entrepreneurs need to build a strong team around them.
• This team should be made up of people who are smarter than you and who are passionate about the same things as you.