One of the significant developments this week was India becoming the first nation to successfully land the Chandrayaan-3 spacecraft on the moon’s south pole. The Indian Space Research Organisation (ISRO) achieved this mission on a shoestring budget of $75Mn, which is minuscule compared to NASA’s $25Bn annual budget & even less than the $100Mn budget of the Hollywood movie ‘Gravity’. This accomplishment makes the feat even more commendable.
A. India – from middling to non-incremental
Beyond the evident reasons, there’s another aspect that fills me with immense pride regarding this mission—it serves as a shining example of what I refer to as ‘non-incremental thinking’.
Growing up in a middle-class household in India, I was surrounded by philosophies & values that championed risk-averseness, downside protection, scarcity, and conservatism. I call this a ‘middling mindset‘.
This kind of environment drove most kids in my generation to strive for in-the-middle, average outcomes that would keep them safe. It’s not a matter of whether this was right or wrong; in my generation, it reflected the centuries of experiences India had gone through before and consequently, where the country stood in Maslow’s hierarchy.
Over the past decade, India has experienced growing economic prosperity driven by strong political leadership, as well as social maturation. This shift is rapidly transforming the nation’s once-middling mindset into a non-incremental one. As the lunar mission has shown, this new thinking is characterized by:
1/ Working on long-term missions that are far bigger than any individual, family, or group [landing on the unexplored side of the moon].
2/ Overcoming fear of failure & instead, translating that energy into persistence [learning from failures of Chandrayaan 1 and 2].
3/ Embracing high-risk-high-reward execution options [handling vacuum, extreme temperatures & radiation in space].
4/ Efficient resource allocation to maximize effort runway [accomplishing the mission at a fraction of a developed country’s budget].
B. Non-incremental startups
While the Chandrayaan-3 mission is now a standout and popular example of the emergence of non-incremental thinking in India’s national fabric, this mindset is also visible in the manner in which the country’s entrepreneurial ecosystem is evolving.
Over a decade of investing in India, both institutionally as part of a VC firm and tech conglomerate, as well as investing my personal capital as an operator-angel, I have seen first-hand the growth arcs of Indian founders & the deepening of the founder talent pool.
In particular, as someone who focuses on ‘Global Indian’ founders, especially in the US-India corridor, I have also closely witnessed the increasing levels of audaciousness within Indian founders to tackle large global problems & build cross-border companies.
In my post-operator, investing 2.0 avatar (1.0 was when I was investing institutionally), I have naturally gravitated toward backing non-incremental founders. The reason is this – one of the significant lessons I’ve learned from founding, building, scaling, and investing in tech companies of all sizes is the overwhelming importance of competition.
In this era of transitioning from Web 2.0 to 3.0, remote work, blurred borders, and now AI, I firmly believe that the lack of sustainable differentiation (what public market investors refer to as ‘moats’) poses the most substantial threat to early-stage startups. This competition arises not only from FAANG companies but also from YC startups, heavily-funded growth startups, solopreneurs, SMBs in overseas markets, and very soon, even from fully automated AI products.
C. The “what if?” question
So what’s the best way to keep competition at bay? To paraphrase from Peter Thiel’s ‘Competition is for Losers‘ lecture:
You want to be doing something that no one else is doing.Peter Thiel
Founders with a non-incremental mindset naturally pick large & unsolved problems to go after that very few people are thinking about. At the core of it is asking an impactful “what if?” question which imagines a future scenario that is an order of magnitude better than the present state of state.
Few examples of impactful “what if?” questions from my own portfolio:
- Yulu – What if every urban Indian could buy or rent an affordable & pollution-free EV 2-wheeler?
- Varda – What if we could manufacture pharmaceuticals in space?
- LetsVenture – What if Indian retail investors could access private markets at the click of a button?
- Playto – What if a kid in the US could learn STEM by building projects hands-on in the comfort of their home?
- Omnify – What if every sports & recreation organization in the world had its own Shopify?
- Lore – What if any group of people could easily organize & jointly own any physical or digital asset?
- BuyStars – What if Indian fantasy gaming could be powered by an underlying digital asset economy?
- BIS Research – What if we could build a Gartner for deeptech?
Contrary to the popular perception that disruptive founders always start with a grand idea on Day 0, pitched in a Jerry Maguire style, each founder embarks on a unique journey towards discovering the non-incremental “what if?” question.
Some unearth its kernel during their operational experiences in a job; a few arrive at it through cathartic life experiences, while others gradually unravel it over numerous experiments, iterations, and failures.
As an investor, I have learned to invest time in understanding both the “what if?” question itself, as well as the founder’s journey in reaching it.
Side note: A heuristic I frequently use to gauge the non-incrementality quotient of a startup is: “Could any two IIT or Stanford kids fresh out of YC build this?”. Attempting to answer this question invariably uncovers various other areas that warrant exploration.
D. Non-incremental startups are better bets
Founders working on non-incremental ideas feel less pressure from competition which in turn, gives them the mental space to patiently & efficiently build the company for the long term. This lays a strong foundation for the business which, post-Product-Market Fit (PMF), combines with their product’s inherent competitive advantages, setting them on the path to building a generational company.
While this approach is a perfect Petrie dish for creating outsized venture returns, backing non-incremental founders also requires investors with a non-incremental mindset. They need to have the guts to be contrarians & stick by their convictions over long periods of time while other investors disagree with them.
As an investor, one has to be prepared for long gestation periods and high failure rates in these kinds of companies. These also won’t be the typical FOMO deals that can give a quick markup via hot follow-on rounds as many investors might either not get the mission or find it unviable.
E. Dare to be non-incremental
To close out, my hope is that the success of Chandrayaan-3 inspires the next generation of India to think big & not be deterred by failure. To Indian founders in particular, I would urge them (like I have done many times before on social media) to embrace significant problem statements. Instead of creating the 10th sales SaaS tool, dare to ask the highest-impact “what if?” questions that reimagine the future.
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