05 – The First Thing We Build Is the Team – Ankur Joshi – Founder and CEO of Nuclei

• Growing up lower-middle class and understanding education as the way out
• Moving for his studies at IIT Bombay
• An introduction to a global mindset
• Being motivated to outwork his peers
• Going into investment banking and why
• The family and community pride of him being a banker
• The opposition to him leaving his banking job for the world or startups
• Venture failures and successes
• Build a business that can be sustained for the long-term
• How the internet is changing customer experiences and customer values
• A bank-in-a-box
• The leverage and power of diversity across the board
• The importance of being a global company

1. One of Our Mistakes Was Thinking Small
2. I, Alone, Cannot Build a Business
3. We Suffer Together and we Succeed Together
4. There Was Simply No Other Choice

Read the best-effort transcript below (This technology is still not as good as they say it is…):

Michael Waitze 0:15
Hi, this is Michael Waitze and welcome back to the India Game Changer. Today we are joined by Ankur Joshi, the founder and CEO at Nuclei. Hopefully I got that right. Ankur thank you so much for coming on the show today. How are you doing,

Ankur Joshi 0:29
Michael? I’m doing very good. Thank you so much for having me on your show. Appreciate it.

Michael Waitze 0:34
Yeah. And I owe you an apology. And let’s make that apology public. We were supposed to record Thursday or Wednesday, I completely mucked it up. So I’m sorry.

Ankur Joshi 0:41
No, nobody’s. Nobody’s at all. Thank you. We are all busy people. And I can completely understand where you’re coming from. So thank you. Thank you very love speaking with you. This is the third time you’re speaking. And as I said earlier, right, the Mac which you have of making people feel absolutely at home and comfortable. It’s an amazing, amazing skill set to have. Thank you. I really love that

Michael Waitze 1:06
about you. I really appreciate it. That’s very kind actually, before we get into the main part of this conversation, maybe you can give our audience a little bit of your background for some context.

Ankur Joshi 1:19
Sure, sure. So let me actually go back a bit. So I grew up in a low middle class family, in a small town in center of India. My parents, my dad was running a small business, my mom was helping him in that business. But they did everything they could to make sure that I got a good education. And that was the Northstar, right that that was the objective in life for 20 odd years. Am I I’m a single kid, but I grew up in a joint family. But their objective was to get me a good education so that I could get out of that lower middle class band. And quite honestly, education was the only way out, you know, I grew up in 90s and early 2000s. Right. So that was the only way out and my parents sacrificed a lot to get me that cannot thank them enough cannot appreciate them enough for that. Post post completing my high school, I moved to Bombay, joined the college school at Bombay. That was, again, another benchmark shift for me, because coming from a small town, getting into Bombay, which was a very, very big metro for me, plus, coming across a lot of people who had a very different worldview than me. So I was not thinking globally, I was thinking very, very luckily for me, the main objective in life at that point or point of time was to earn money. And, you know, economically get my family to the next level. But then I came across people who were thinking about higher education, or thinking about Ivy League colleges, who were extremely fluent in English. And I was not, by the way, this is 2003 2004. I was not and that kind of gave me your insecurity complex. And then you don’t realize it, you you generally don’t realize these complexes, but you live with those complexes, you sleep in those complexes, you get up with those complexes, and they’re, they’re your truth, right. So it always sits in the back of your head, that somehow I’m not at par with these kids, somehow I’m, you know, I need to do something extra, I need to do something more, to be at par with them. And that’s what, in a lot of cases, fuels people’s motivation. And that, quite honestly was fueling my motivation that I need to do something extra to be at par with these kids. And this is only in hindsight that I realized and by the way, at that point of time, I was not realizing that a lot of these things that I come from a small town I come from a lower middle class family or my English is not that good, was creating insecurity complex in me, but I was definitely check your so I just said that, you know what, I will work as hard as possible, hopefully harder than everyone else, and be at par with them in different skill sets. So I started playing football, I became part of my Institute’s football team. I started singing, I was a decent singer, but I started singing at a you know, entry level got some, you know, positions there. So that kind of created a different niche for myself and yeah, kind of identity for myself, right? And that’s what people identified me that there’s a person who plays football right. And those insecurities essentially drove me to work harder in life and make sure that wherever I am, even if my English is not good, I will stand out because of my hard work. Such instances such to ease in life, which you have to remind yourself of a lot of times right because You also need to learn to be grateful about what you’ve got. And extremely grateful to my parents in terms of the sacrifices they made to make sure that, you know, I was able to, you know, break my glass ceiling, break my benchmarks go to the next levels. Then I moved to Bombay, I completed my graduation, got into Deutsche Bank into investment banking. The only reason I got there was it they were paying a lot of money, to be honest, right? I was I was not, I was not sure what kind of work I was supposed to do. But

you know, they were paying a lot of money, I was lucky to get a very good boss also. So Leanne was my boss, she was, I think, half Australian, half British. And both of us clicked, right. So she made sure that I worked 14 hours a day, she made sure that I became extremely, extremely attentive to detail, right. And I was happy doing that work, I was happy doing that work, because I knew that I had to work harder than everyone else to be at par. But those two, three years of working with her has given me that skill set of being extremely attentive to detail, right has given me that stamina, I mean, not just that, but also previous years during college years, has given me that physical stamina to work 18 hours a day and not be bothered or not feel tired. And I’m not saying that I work 80 hours a day every day. But if required, I can I’m not scared of doing that. Right. So working at Deutsche Bank for those two, three years, it was really, really good. I love working there. But then after some period of time, I also reached a place where I was like, I need to do something where I control two things, right? I control the variables. And that’s when the whole startup journey started,

Michael Waitze 6:55
do you? So there’s so many things to unpack that, right? What is the learning. And let me give you a little bit of background just so you can understand where I’m coming from. I wouldn’t even qualify my family as lower middle class, we were poor. Like we were poor. And as a matter of fact, I remember my fourth grade teacher telling me once she grew up really poor, and she didn’t even know it because everybody around her was poor. But we knew we were because my parents like yours thought that education was really important. And because of the way the United States is organized, if you could live in a rich town, you’re almost guaranteed a better public school education than you could if you lived in a poor town where those poor towns are kind of neglected by the public school system. So we knew because everybody else around us was really rich. And if you want to talk about Yeah, being insecure, like I played football, but I played European style football, right? So soccer, what we say in the United States. But I mean, I couldn’t even afford to buy the uniform or the cleats. So I understand this whole idea of like, working hard out working other people and also trying to take a job just for money. I mean, that’s why I went to Wall Street, right? That’s why I worked at Morgan Stanley and Goldman Sachs and I worked at Deutsche securities as well and Tokyo, I completely understand this. But was there something about this knowledge that you could reinvent yourself, recreate yourself? Right, coming out of a small town? And I never want to gloss over this? You know, you said kind of quickly I went to IIT Bombay. It’s like mumbling I went to MIT in a way. You know what I mean? I think there’s a real humility in this in the sense that if you’re a small town kid coming from a lower middle class family and you get into it Bombay, I’ll just say this. My daughter went to school here. You can’t tell what it says. It says Nisha mochi. It was the best sort of private school in Tokyo at the time when we were living there. And when she got in, my wife and I went upstairs and cried. But you understand the feeling, right? Absolutely. So I think this is the idea is that your parents have said to themselves, we’re going to sacrifice we’re going to build this business to the best of our ability. But this kid is not going to have to go through this if we have to die trying. And I’m telling you, when you got into it, Pompeii, they went upstairs metaphorically. And I’m sure they cried. Whatever the sort of cultural association is with that, that’s what they did. Anyway, putting that aside this idea right of recreation, of kind of growing on levels on top of yourself, right to make yourself stronger, smarter, faster, whatever it is. Was there something about the IIT Bombay experience, you think that kind of seeped into you that said, I want to run my own business because I saw so many people that I graduated with doing it. You went to Georgia first, maybe learned about banking or or investment banking and then said, I want to be in control? Is that fair?

Ankur Joshi 9:55
That’s actually true. So a lot of my seniors from college are They were running their own businesses, that’s 2009 2010. A lot of peers for starting up. They were starting up their own businesses. And it of course, it did that that definitely played a big part in deciding to leave my job and, you know, getting starting a business. More importantly, having that degree on your back, right, having that degree on your back gives me that insurance. Yeah, that even if the business fails, I can, I will definitely get another job, I won’t be poor, I will definitely get something to eat right, I can earn something to eat a decent life. So definitely, it gave me a very good peer base. But more importantly, it gave me that insurance, that whatever happens, no matter what happens, I will always have this degree, I will always have this confidence that I can go into market and get a decent job and you really didn’t like so that propelled me to take certain risks

Michael Waitze 11:05
when you when you left your job. What did your parents think?

Ankur Joshi 11:11
Oh, they think I was a fool. So, again, culturally speaking, right, I come from a Maharashtrian family, right? So Marathi family. And historically over the last 50 odd years, generally speaking, a middle class, Marathi culturally speaking goes and works in a bank that retires from that bank. Right? So for a middle class, Marathi families kid to join a bank? That was a Absolutely, absolutely, you know, the pinnacle of it, right? You win. And then you win, like, right, like, and then you’re set for life. You don’t have to do anything else. You just have to retire from that. Look there for the next 40 years. And then for that get to, you know, leave that job in three years. It was not just my parents, by the way, it was the complete neighborhood. Yeah. Which is from the same culture, right compete neighborhood thought that I’ve had gone bad, right. And not just my parents, but my neighbors, my distant relatives, all of them are trying to call me and trying to convince me that please do not do this. Don’t leave your job. And it was interesting time it was really destructive.

Michael Waitze 12:22
So how long ago was that?

Ankur Joshi 12:25
This was in late 2010. So yeah, 12 years ago.

Michael Waitze 12:29
So but what is when did you find nuclei then?

Ankur Joshi 12:33
This is 2018.

Michael Waitze 12:34
So what happened in the middle? Yeah, this

Ankur Joshi 12:36
is my fourth company actually. Go ahead. gambling. So into this intel, actually, I left O’Shea to start a chain of restaurants. I had no knowledge, I had no idea how to, you know, forget about running a restaurant business, how to even start where to start, right, me and a few of my friends who were very clear that we wanted to do something on our own. And we love drinking beer. We loved eggs. So we thought why not? Let’s let’s start something somewhere in between there. Right? So let’s start a business. We failed miserably for the first couple of years straight. In, in hindsight, when I look at it, like customers used to think that our first store right, first of all was a bank ATM. Because there was no food, pictures or food photograph outside, not even on the menu, right? And so like, we had absolutely no experience of running a business like running a business like even starting out, right? So we fail miserably the first couple of years. But I think we learned so many lessons in those two years, tell me which are paying dividends even today. So you can close in 10. I was an introvert. I did not like public speaking at all right? I was not a sales guy. I couldn’t sell anything. I could convince myself I can sell it sell something to myself. But if you ask me that, please go and convince that person or persuade that person. It was an impossible task for me. I’d never participated in debate. I’d never past participate in any manner of public speaking. I remember once I had to speak in a group setting in school, and my hands and my legs are shaking uncontrollably, right? And people like kids were laughing at me because they could see that my hands. Yeah. So I had no experience of that. But when we started our business, unfortunately, we had no option like there was no one else who had to go and meet investors. I was the one who was from an industry banking background had some interest in finance. So I was the obvious choice that you have to go and speak to investors, you have to go and sell the concept to them. And there again, like of course, you learn from your own failures a lot of times and I failed and failed and failed and failed and failed. But those two years, made sure that I failed and learned enough number of times the reputation the cycles, were went through so many times that I became decent at selling the concept,

Michael Waitze 15:04
which is really important everywhere. Yeah, absolutely.

Ankur Joshi 15:08
Absolutely. Today, all the kids who join our company, I tell them that even if you’re a coder, right, learn to sell. Yeah. Because that’s a skill set, which will get you through life. Yeah. And not just in professional life, but even in your personal life. 21 year old kid, right? If you have to convince a girl to go on a date with you, you need to send in, you need to send that she should? She should. Yeah, it’s everywhere, right? If you need to leave your job and convince your parents to start a business, right? You need to sell to them that this business makes sense. If you want to marry a girl, or a boy, right? You have to go and speak to their family, their parents, and you have to sell to them that you know what, I’m the right person, for your girl for your boy to marry. So sales as a skill set is absolutely absolutely necessary. I obviously came into it too late. But because of the experience, right, because of the because there was no other choice. Quite honestly, I had to do that. I picked that skill set up. And that’s just one of the skills right? Running a business managing the financial books. Yeah. I wasn’t interested in finance, like I was coming from an investment banking background. I was interested in finance, but doing books for a company. It’s a completely different ballgame. It sure is. But what helped was the attention to detail, right? Which I learned that. Yeah, because the boss. So that attention to detail helped that made sure that just looking at the balance sheet, or just looking at a p&l sprint, I could derive insights and ask slightly more intelligent questions. So those two core skill sets, you know, learning finance, learning how to run a business, and you know, focusing on cash flows, plus the ability to sell. And then of course, those two skill sets improved over the years. Do they have, you know, turned out to be blessings?

Michael Waitze 16:58
In the long run? Did that business survive?

Ankur Joshi 17:01
It’s still going on going strong still to learn from? Yeah, so we sold that business in 2017, okay, to one of our investors, who, incidentally, was running a tech company, but wanted to do something, you know, where he could see his physical stores. So to build a brand of his own, yeah. But he’s also as much up, he’s running his business, he has now expanded into two cities, I think he has 40 knots to some food restaurants. So when we left, we had 10, stores, 10 restaurants. Now he has 14, and he’s doing really well. So of course, during the pandemic, it went down a bit, but just just spoke to him last week, and all the stores are doing well or the stores are profitable, making decent amount of money. That’s awesome.

Michael Waitze 17:46
How did you get to nuclei.

Ankur Joshi 17:50
So, in between the restaurant chain, and nuclear, there were two of the startups one was in the pharma industry did not do well. So we shut that down within a year. But post restaurant business, I was very clear that we only do you know, do something in tech. I wanted to get involved in tech, our tech products. The second third business, which we had was a b2c app, which, incidentally, we ran that for around two and a half years, incidentally, got acquired by an E commerce player in 2018. Good stuff post that post that we got some exit from that. We were very clear that the fourth company, which we’ve made, we’re going to bootstrap it, and this is now going to be for the long run. So we were promised ourselves a few things right, again, on the back of many mistakes, which we had done over the last eight, nine years. And one of the mistakes which we did was thinking small, always thinking locally, right? And not pushing ourselves to think as big as we could potentially think

Michael Waitze 18:53
one of the things you said that when you joined it was that all the other kids were not all of them. But a preponderance of the kids there. Were not thinking locally, they were thinking globally and that this there was a mindset change for you. Right? When you came out and you started your own business, you then went back to this idea of let’s just do it here, right? If it’s a physical business, it’s so much easier to focus on. And I’m simplifying, right to make the point locally or regionally or whatever, right. But once you start getting into tech, and it’s literally if your distribution is frictionless, and we can talk about how important distribution is you kind of have to think everywhere. No,

Ankur Joshi 19:31
absolutely, absolutely. I think limiting yourself and not hitting your potential. To a certain extent it is criminal.

Michael Waitze 19:44
Yeah, fair. And I understand. This

Ankur Joshi 19:46
is a conversation which I have with so many people, including in my personal life, personal life, professional life, that if you’re not hitting your potential, if you’re surrounding yourself with people who are not pushing you to become a better version of yourself. Yeah. Then you’re just doing injustice to luminaires. But just to yourself. So you’ve said being fair to you. Yeah, you’re,

Michael Waitze 20:10
you’re right here. But you’ve also said this, this thing of we You said we a lot actually, in this conversation when we built this business when we and I get the feeling that the we is the same people. So if that’s wrong, let me know. But it’s got to be some of the same core people No.

Ankur Joshi 20:25
So no, actually, in the last couple of startups, it has been a similar, same people, same group of people since 2016. Okay, last six, seven years, we have been together. And the reason I say d, is that I also have this inherent understanding that I alone cannot build a business. Yeah, no one succeeds. Yeah, it’s never whether it is nuclei or topsoe, or shots, right? My original business, it was never me alone, or no decisions were taken by just me, which made the business successful, even at a micro level, right? Yeah, it is always a collective effort. And specifically, within the we were very, very clear that the first thing we are going to build, this is not the product. It’s not the company, it’s the team. Go ahead. Because that team is what’s going to be our core strength team is going to be our IP, that team is going to be our niche, which will make us successful, right? And it’s not going to depend on a single individual. We need to take nuclear to a level where even if I’m not there, ubi survives. And thrives. Yeah. And that will only be possible. If we have many, many leaders in the team could think collectively who don’t think only of themselves, right. So it’s very, very important to think, as a team rather than an individual. And believe in the fact that we all will succeed together. Or we will not succeed together. Exactly. There is no scenario where two people succeed, or 10 people succeed, and the rest don’t. Right, right. So we all have to be together. We are on this journey together. And this journey pushes you this journey makes you suffer a lot. Absolutely. But you have to suffer together. It’s only when we suffer together that this bond between us will get formed and will be integral. Yeah.

Michael Waitze 22:31
Do you feel yourself building your like core life philosophies and principles, kind of as you go along? Do you know what I mean? When I kind of feel like have you read the book principles by Ray Dalio? Yeah, absolutely. Yep. So you know, one of the things he says in that book is that you know, I have my own principles, you should have yours. But whatever you do, don’t use mine. Because your life experience is different than mine, right? Mine are good for me, but may be completely wrong for you. But he writes everything down. And he says, like, as you go through life, you write these things down and realize this was important to me, but it really isn’t. And you grow through this process of saying, you know, as you get older, right, I’m in my 50s. Now you get these sort of life principles that get become so clear at some point and this idea of, it’s not about me, it’s about us, are we then just starts to dominate everything you do, I think, yeah.

Ankur Joshi 23:24
Absolutely. I mean, it’s been 12 years since I’ve been building businesses, right. And I’ve seen myself grow over the years. Yeah, actually, year on year on year, right, maybe quarterly. Alright, and the benchmarks, which I set for myself, the values, which I held in a very, very high esteem, say back in 2010, right, versus the values, which I have today are completely different. That was my point. Some of them here, some of them are probably an upgrade on the older values. For example, the integrity part does not change. It stays. But let me give you an example. definition of success. It has definitely changed. It has definitely changed. I was extremely money driven at that point of time. Yeah. Because that’s the environment I can work in. Yeah. The culture, the environment, the locality, the people I grew up with all of us actually, money was scarce. Yeah. And so money was our ticket to freedom that if you have money, you can get freedom. And the key part is that in a lot of cases, we say this, that money is our ticket to freedom. And instead of just valuing freedom, we start valuing money. Yeah. And that for me shifted some time in you know, 2016 2017, where I actually said that you know what, money is my definitely ticket to freedom, but freedom is definitely more important than money to chase money. Chase Freedom.

Michael Waitze 24:58
Yeah, so I’ve never felt more free and had less money than I do today. Except when I was a kid, yeah, except when I was like living with my parents. But I believe that you can build on top. Once you have that freedom and you feel free, then you can kind of do whatever you want, and the money will come for sure. Particularly if you get back to this idea of out working, detail oriented and the rest of the things you’ve already been doing. But if you’re chasing just money, and we see this, like you can look at we work is a perfect example of this, right? And a bunch of other startup companies where they just went to chase the money, but the business is not there anymore. Because they’re not free enough to actually build something that’s sustainable. Is that fair?

Ankur Joshi 25:39
Yeah. Yep, absolutely. Absolutely. So having the right metrics, and please do not get me wrong. I’m not saying that I’m not here to create value. Yeah, I

Michael Waitze 25:49
get it completely. But it’s the way you do it. That matters, right? In other words, I can create an over I can create money tomorrow if I really want to. But is that is that ability to create that value sustainable over time? No, because anybody can do it really quickly. That’s not so hard to do, once you figure out like what that formula is, but how can I do it so that it’s life changing? Not just for me, but for the kids that I have that follow me as well, right. And for my team, this is the really hard part. And this is why I like to say everyone’s an overnight success 10 years later, because it’s that you laugh, but I really believe this. I say it all the time, it gets important to me, because over time, if you build something like what’s the right word, deliberately, then the base is really strong. And if you build something with a strong base that you build deliberately, and you build it over time, 10 years on, it’s unlikely to fail or less likely to fail. Yeah.

Ankur Joshi 26:44
Yeah. Yeah. Lindy effect, right. Yeah. So if you have survived for X number of years, the probability of you surviving for x more increases a lot. Exactly. And I love because I see that happening so many times, specifically with media. So of course, someone raising $100 million, or somebody years, as you know, a seed round of $20 million, is a very good media headline. Yeah. But when you look at, you know, companies like zero the right.

Michael Waitze 27:13
But you said this, you said like we bootstrapped, and this was this is obviously important to you, right, because you’re spending your own resources to build. And it actually brings up this idea for me at least of freedom, right? In other words, once you take external money, your responsibilities and your level of freedom to develop, design and build are completely different than if you’re just doing it yourselves. Yeah.

Ankur Joshi 27:35
So okay, there are businesses, there are new ideas, which definitely, definitely require external capital. Sure, sure, sure. Because you could be in a business where you’re changing consumer behavior. And for that, you require that capital to invest and educate the customers and change customer behavior. Yeah. Well, I’ll give you an example. Changing the customer behavior of Indians to by using cash from a local store to buy using card from an Amazon or Flipkart. Right, it’s a massive change in customer behavior. It took a decade, and it took billions of dollars of investor money, you cannot do it bootstrapped. It’s extremely, extremely difficult to do it with Shark, right. So there are businesses where you need extra capital, but they are very, very few such businesses. Most of the businesses, can we bootstrap can be run using the first principles can be run, speaking to customers and building the right product. But when you look at Maslow’s hierarchy of needs, right, a lot of people are in a zone where they require external validation. I was by the way, I was in that on that level, as well, where I required external validation. I started from the bottom rung of it. Yeah, I started from the place where, you know, my family was struggling for physiological needs. Yeah. And I wanted to grow to the next level where we had financial security. And then went to self esteem and ego and actualization, but it takes you years to go from one level to the next. Yeah, but a lot of people in the market are in a place where they want external validation, and therefore the fundraise, right? Maybe not be required to do that. But they do it because dopamine, right.

Michael Waitze 29:29
Yeah. So tell me what you’re building with nuclei. And one of the things that I wanted to ask was, what do people think a bank is? And what do you think a bank should be? Does that make sense?

Ankur Joshi 29:49
Yeah, that’s a very deep question actually. Yeah. So we come back to nuclear later. Let me first take up the second part. Go ahead. Banks in general, again, philosophically speaking, right? Not not About a particles particle back, but banks in general or store of value. Okay, I mean, I have something,

Michael Waitze 30:09
yeah, give it to you take deposits, you hold things for me that have value, right.

Ankur Joshi 30:13
So, whatever value will things I have, I will keep it with the bank, and I trust the bank to keep that store of value over a period of time, if you go back 1000s of years, the store of value was gold. Yep, people kept gold people kept gems, they became store of value. After a period of time, you know, the banks were constituted, run by regulated by the government, etc, etc. And you kept your belongings there. I don’t know about outside India, but in India, bank branches also have saved what is deposit boxes, where you will go and maybe keep your property papers or gold etc. Exactly. So they essentially are a store of value. And that has, you know, been very good business for banks over the last 100 odd years. Almost the internet coming in, right? A lot of customer experience has changed. And if you look at people who were born in 60s and 70s, versus people who were born in 80s, and 90s, versus people who were born in 2000, right? These are three different segments completely, very, very different customer experience, right? 60s 70s, those people are absolutely okay with going to a physical branch, it is 19 they resist going to a physical branch, they want to limit the interaction with, you know, bank branches, people who are born in the 90s and early 2000s. They don’t even know what a branch is. Right? They don’t they don’t care. They just don’t care for them. The store of value, the question of store of value is also changing. Right? Everyone, almost everyone in our company who is below 25? Holds crypto. Right? Right? Because for them, the store of value is different. Yeah, it’s not gold for me. Yeah, it’s not good. It’s absolutely not good. For me. Also, it’s not absolutely good for my parents when it’s cold, yeah, like they will be they will happily purchase gold, I will never purchase good sense. It does not make sense. So the whole concept of store of value is now changing. And tanks need to change along with that. The whole concept of doing physical banking is changing. And banks need to change along with that, right. And that’s what it says on our website right behind you right that the take the DNA of bank needs to change. And with nuclei, we want to partner with banks, and we want to deliver them this consumer tech DNA of you know, kids were born in 90s. Were born into 1000s. Were born in the probabilities, right? Millennials, if you make and deliver this consumer tech DNA to the banks, so that they’re able to serve these serve distributions, men serve the segment as well.

Michael Waitze 33:06
So you you’re creating this natural tension, though, and work with me on this for a second, right? And you brought up this great example of changing behavior. You said it took a decade for people to be able to use Flipkart or use Amazon and think I don’t have to have physical cash to go into a store to buy the thing that I need. I can digitally put in my credit card and then get something two days later or a day later or an hour later. But that took a decade to change. And remember, Flipkart was a new business. It wasn’t like they were dealing with an old business. That also had to change Flipkart knew that when they built it, they’re like, our behavior has already changed. Now we have to convince everyone to behave like we want them to behave. But when you’re going into the banking system, and this is I think, where things get really interesting, it’s flipped already. The consumer behavior, it’s already changed. Like you said, the 25. And under they’re like going to a bank branches open an account, you must be kidding me. It doesn’t work on my phone. And where do I put my crypto in this vault thing that you’re talking about? Isn’t the vault just a wallet? It’s meta mask, right? Like, how do I make this thing work? So it’s reverse. So do you think it’s a decade change to get a bank, a big bank to come in and go, Oh, I get it now? Or do we need to have a generational change, not just a technology change, to be able to affect that? Does that make sense? Because it’s different. Yeah, it

Ankur Joshi 34:27
does. Absolutely. Absolutely. So that Generation Change is also required within a bank, by the way. Yeah,

Michael Waitze 34:32
that’s my point, though. That has to happen in the bank that like, you have to have the 25 year olds take the job at the bank to to so they can go. Well, this is not what I want. Go

Ankur Joshi 34:41
ahead. But we’ll all the bank survive. I don’t think so. I don’t think so. I don’t think so. Will few banks with good leaders survive? Absolutely. Yeah. Will they thrive? Absolutely. Right, because Good leaders know work with quite a few of them, right? They have a knack of unlearning, and learning new things. When you talk about a bank, we work with their whole motto changed a few years back, and became digital to the for human to the core. Right. And they completely completely flipped the way they have been working, not just within the bank, but also partnering with fintechs. And it is very, very impressive that they themselves know their circle of competence. They know that this is something which they will be able to execute on, right? This is something where they will require partnerships with fintechs. And having that level of clarity, not just with one or two people, right, but with a whole range of people across the board. If that level of clarity comes within a bank, it’s very difficult to compete with them, and your paycheck growth path. So that’s supposed to happen, that should happen with a lot many banks, but I don’t think it will happen with every bank, there will be a few banks, which will of course be outliers, they will grow very, very fast. And that probably be because the leaders in their senior management, have the ability have the honesty, to accept the fact that we have to unlearn things, the way they were working in 90s and early 2000s. And things are going to work completely differently in the next 10 years.

Michael Waitze 36:39
So what does it look like when a bank partners with an E commerce company? Like what are they doing that for they trying to be a payment gateway? Are they trying to like? Or is it just trying to do embedded banking inside of the the E commerce company? And I guess part of the question is this is that you have these ecommerce companies, right? morphing into almost like financial services service companies, right? Because they already have I’m gonna pick a number, right? So I think it’s a big number 100 or 150 million customers in India, it’s probably much higher, right? It can be 300 or 400 million people already on their platform, they’re already trusting them to do transactions. So they have a transactional relationship with them. The only thing they don’t have, at least at the beginning is a deposit mechanism. Hey, you know, what, if I’m gonna buy all this stuff with you? Why don’t I just leave money with you either on a regular basis, like I do with my bank, like, I’ve always thought about this when I was at Morgan Stanley. I signed up on day one for I didn’t want to get a paycheck, I just wanted to have it automatically deposited into my bank account, which seemed like magic back then. And it kind of was, yes, but couldn’t you then automatically deposit money into an E commerce account? In a way? And if you did that, because if the E commerce company has a banking license, then they can make loans so they can use your money to make money? And if they can do that, then they can probably discount the stuff that they sell you? Because they’re already making money off your money, if that makes sense. So is this where this is going?

Ankur Joshi 38:07
I’ll be cautious about that. Go ahead, be cautious about that. For a very simple reason. There is a reason why banking industry is regulated. No. Right? Yep. Because there needs to be a regulator who keeps checks on organizations so that they are not misusing public funds. Sure. Right.

Michael Waitze 38:29
Welcome to the financial crisis of 2017.

Ankur Joshi 38:33
Absolutely, absolutely. Right. So and again, like if you look at it as an eighth, of course, it did not work out. But again, there needs to be a regulator who makes sure or who safeguards the public’s deposits. And that’s why banking is regulated. When things go into a private organization, which is not regulated, if you give them more power, you cannot be sure if there won’t be a misuse for sure. Right. So you give an example of we work. And there are many other companies very recently, specifically in India, a lot of startups are going into the forensic audits, to figure out if there was no misappropriation of funds.

Michael Waitze 39:18
We look at the lingo in Singapore, right? I mean, this is happening all the time. There’s so much money being sloshing around at some point, it’s gonna get dangerous. Yeah, sorry. Go ahead.

Ankur Joshi 39:25
Exactly. Exactly. Now, if you’re doing it with investors money who hold equity in your company, that’s okay. That’s okay. It’s a private decision between two individuals of giving money in exchange of equity. Yeah, but if you’re doing that with Publix deposit, then that is not okay. All right. So therefore, banks will continue to save God be regulated and take public deposits. It’s I don’t think we are near a time where a regulator will be okay. With unregulated entities taking public deposits

Michael Waitze 39:58
right on right. That’s why I said like, maybe they get A banking license and then they can do some of these things. But if if they’re not right, and you’re closer to this than I am, I’m asking because I’m really curious. If a big E commerce company or even a physical store doesn’t get a banking license, is there still a way that they can have this close relationship of like embedded banking, so they can provide services either through a third party, whether it’s a bank or not, that says, we can make it easier to transact with you and just give you other benefits? Because we’re closer to you and to your money, as well. Is Does that make sense?

Ankur Joshi 40:34
Actually, absolutely. It makes more sense. And because we absolutely agree with this, tell me how, in fact, building a product, we are calling it a bag in a box. When you bundle a lot of banking products, put it in a single box, and then that box goes and sits within any brand partners app or website. And from, for example, Flipkart, right, so you can go to the Flipkart app, you can access all the banking products, right from the duplicate app, and you’re not working with Flipkart and just understand just using them as a resource to explain, you can access a lot of your products, banking products from within the Flipkart app. And you don’t require a banking app, you can check your card statements, you can maybe also transact dude fund transfers, or I mean, of course, with UPI, that has become much more easier in India, right? What you can do for transfers, you can apply for a home loan, you can check your home loan statements, you can, you know, take up a personal loan, etc, all of this from within a partner app itself. And the key to that is essentially the game will shift from providing a product to distributing a product, the products would still remain with the banks, but the distribution will be diversified. It won’t be just the bank branches or the banks mobile app of the banks, the banks website where you will get those products. But there will be multiple other distribution channels where the which the bank can actually leverage to distribute their products, and it will become a lot more democratic. It will become a lot more competitive in the market. And I think that will only be better for the consumers.

Michael Waitze 42:22
Yeah. So in a way the consumers don’t even see that it’s happening. They know what’s happening via the bank. But the bank is a little bit indifferent, right? Since insurance. And I hate to talk about this always. But it’s so interesting to me, as well, as since banks are a big distribution mechanism for insurance, you can actually build bancassurance into your app as well. So that the 150 200 300 million people that are sitting in executing or transacting with Flipkart or whomever then get insurance products as well distributed to them this idea of building the distribution first and then funneling the products through it is actually quite interesting, right? I mean, this is the key to embedded services everywhere. Yeah, at some level.

Ankur Joshi 42:58
Absolutely. So the one thing which is changing environment, calling it specifically a bank, in a box, that regulations around data security regulations around data sharing, are going to become much and much more stricter. Sure, as we go forward across the world, it’s not just in India, right. So regulators will take a very dim view on banks, sharing certain transaction information or sharing financial information of their customers with third parties. And therefore this box that sits within these third parties needs to be slightly insulated. It can not be transparent to these third parties. And that’s why it is a bank in a you can call it a black box either also, right? So

Michael Waitze 43:39
is there a self sovereign data ownership aspect to this, where you talked about crypto earlier, you said, you know, the store of value is no longer gold, some particularly 25. And unders looking at crypto for some of this stuff. But one of the things that they also believe has value is their own data. I don’t disagree, actually. And if regulators are going to take a dim view on data security and data sharing, right, and want to be careful about how that data gets infused into other things that they do, is there a way to then take value from your own data to in a cryptographic way, and then feed that into the bank in a box?

Ankur Joshi 44:18
Absolutely, absolutely. So on data sharing, right, the organization or a bank, which has my data, should not have the right to share my data with a third party Correct. For short, the grid should not be the case. The regulator also agrees on that. But I as an individual, because essentially, the data is mine. Yeah, right. I own that data. Yes, interest rates within a bank, but I actually own that it’s yours. I as an individual should have all the rights to pull my data can share that with any third party, whether it’s a Flipkart or Amazon, if they require it. They can, they can ask me for it and the bank should facilitate that. Yeah. So that’s exactly what is happening in Europe as well. That is exactly happening in India with account aggregation coming in. So that will happen. But still, if you look at it, at the end of the day, the banking product still is a bank’s product. And it needs to be sold to end consumers for them to get that data, right. The distribution channels for selling those banking products will become diversified. And for that diversification or distribution channel, we are creating this back in a box product.

Michael Waitze 45:28
Interesting. Do you think about or do you know about something called the Mac Alliance? This is a software Alliance. The reason why I ask is because it sounds like your BEN, tell me again where I’m wrong here. But it sounds like to build Yeah, you can look it up, right. It’s microservices based. So all the stuff that they do, and this is they’re trying to build this alliance for advocating for best of breed enterprise technology stuff. Yeah. And I’ve, I’ve spoken to the people there. And this is why I asked about it because your stuff has to be API first. Otherwise, it couldn’t connect to all these places. You couldn’t get third party using it. It’s probably cloud native, because you’re building it in 2021 until 2018. But still, it’s today. Right? You see it, it’s microservices. And the last part is headless. But this idea of headless pneus is already embedded into your approach. It’s a bank in a box and the head part of it doesn’t really matter to you because it can be served through any interface. Yeah.

Ankur Joshi 46:16
Correct. Yeah. So absolutely, absolutely. That’s exactly what we are building, right. So microservices, because you have to build your architecture in a way which is scalable. Yep. Which is also secured because microservices, that short, your second, second overall product together, of course API first, because

Michael Waitze 46:36
otherwise, what are you doing? Yeah,

Ankur Joshi 46:39
yeah, exactly. And 2022. If you’re not, you’re not a tech company anymore. And it needs to be scalable, across the world, right. It’s an and that’s our objective. So that you have to think big, we cannot be building a product for geography or for a country, we have to think we have to build products, which can scale up nicely. And the good part is financial industry. If you look at it, banks in central banking products in general, to differ from each other, too much not realize multiple geographies, right. So you go to Middle East, you go to Southeast Asia, you go to Australia, New Zealand, you go to Africa, slightly different, you go to Europe, it’s not Latin America, it’s not that different. Now, there would be definitely be certain nuances around these products in each geography. But those nuances can be easily integrated. Therefore, it is if you build a good product with a good use case, we’re just solving a real pain point. I think it’s not too difficult to scale up globally.

Michael Waitze 47:38
So that’s the thing that Ryan, you mentioned this before. Again, all the way at the beginning of our conversation, you talked about this idea of coming from a small town or a small village into a big city and not having a global view and you arrived. But I get the sense that you’re imbuing this company, you have not just to serve the banks in your I want to say local, but I mean, India is so large, right? That even even that is not so local for people that don’t understand. And remember, for people that are unfamiliar with India, right, I mean, a lot of my friends, a lot of my Indian friends will tell me that you could literally go 100 miles away, get different food, different language, different cultures, all these sorts of, you know, the norms are different as you get further and further away. So even in a country like India, you’re building for different things. But the banks themselves are big. And the services that they offer are relatively homogenous. Yeah. And I think that’s true globally, as well. Do you see limitations to your growth globally, outside of your local market? And if not, like, are you still meant to hire people in those individual places? Because if the culture in those countries are different in the languages, a different still requires local sales, if that makes sense.

Ankur Joshi 48:46
So two things, right one, one is to do with sage. Yep. The second is to do with our own company and our own culture. Go ahead. If if we have to become a global company, we need to have the ability to think globally. Yeah. If everyone in our company today speaks a single language comes from the same culture. How can we think globally? It’s not possible when I just counted on my fingertips? I think our team speaks around 1516 languages, comes from I think four or five countries, if I remember correctly, like at least they were born or grew up in those countries. And the whole objective is that yes, we need to diversify the company from a cultural perspective. We might be speaking different languages, but I don’t think we have enough diversity. We need to have people who will probably speak 50 different languages. Yeah, probably right. As a team right. And the sales aspect is is a secondary part that will be a side effect that will be a byproduct of that. Fair enough. Because the perspective which an Indonesian product manager can give us a Belgian product manager can give us a Dutch developer or Ukrainian developer can give us we won’t get those perspectives only if Bangalore? Yeah, we just won’t. So if you have to become a global company, we have to think like a global company need to be a global company. And in that order, right, so we have to first be a global company, then you will be able to think like a global company, and only then will become a global company.

Michael Waitze 50:24
Got it. Okay. I want to let you go. We’ve been at this for a while, and I think that’s a great way to end I really appreciate your time. Ankur Joshi, the founder and CEO of Nuclei. I hope you enjoyed this as much as I did. That was awesome.

Ankur Joshi 50:38
Michael, it was all my pleasure, as always, really, really enjoyed speaking with you. Thank you so much for hosting