Full Transcript

Dhruv Sharma: Hey there, listeners. It's the middle of the week, and The Offline Network is back. This is stream 136. And, to introduce, today's guest, I think we're gonna use their product to to invite them into the stream.

Utsav Somani: Beautiful bottles, guys. I mean, it's a work of art. Like my wife says, after using these perfumes and colognes, I think we can use them as showpieces, in our houses. So, Jag and Neel, welcome to the show. Let's introduce Sarkar. In your own words, what is Sarkar?

Neel Gogia (Sarkar): For us, Sarkar truly means authority. And while we were deciding the name of the brand, this bottle design, how we want to present the brand on our renders, our website, We always wanted customers to feel silent authority, and that's how we wanted the branding to come out across in in a consistent manner. And I think people love that as well. To to be honest, initially, we were dicey about the brand name Sarkar. We got a lot of feedback that, we don't know you are go like, will people consider it as a premium brand or it will be too messy? But, I think the response has been great, and for for us, Sarkar means silent authority.

Dhruv Sharma: Neel, along with your partners, you by now have built not just one but several successful brands. What drew you guys to fragrances as a category?

Neel Gogia (Sarkar): I think, like, me and, one of our cofounders, Rohit and Jag, all of us were discussing. We saw a gap that, in fragrances, either they were brands between ₹500–700 price points or above ₹8,500. They were the white space was in between. And, Indian consumers were looking at, Indian brands like but, like, most of the Indian brands were making cheap copies of international brands, and they were not earning the respect, which, you know, we are seeing in other categories. Like in sneakers, Comet is killing it. Ultra is killing it in health. And we are seeing premiumization in every category, but we feel that fragrance is still a little outdated. Only old-school brands are there, and either international brands are ruling the premium price points. So that was we thought that why not give really good products at an affordable price tag. So we look at ourselves as masstige, somewhere between 1,500 to 2,500 rupees.

Utsav Somani: And this is three years in the making, and France and Spain where you formulated this. And now I mean, maybe just I mean, tell us a little bit about the fragrance, the chemical composition, and how is it made. Like, I mean, you're using a, I think, concentration of 25%. So what is EDT? I mean, there are different, kinds of perfumes and colognes which are there in the market. How do you classify them?

Neel Gogia (Sarkar): Yeah. Would you like to take this one?

Jag Chima (Sarkar): Sure. Absolutely. So when we look at fragrances, there's there's lots of different qualities, and I think most people who use these fragrances never actually understand the ingredients that go into these. So these fragrances, the oils are the oils, the ingredients, they're all sourced internationally mainly. So for example, we use French, Spanish, and Italian, fragrance houses. And every single fragrance is benchmarked against some of the world's best. For example, you might be familiar with the Louis Vuittons of the world, the Dior's of the world. And there's a reason why those are premium. It's not just the margins. It's the actual sourcing of the raw ingredients. What we wanted to do was to bring that quality to India at a price point where people could understand it. So three years in the making meant that we would actually have to sit down with most of the leading fragrance houses and understand how do we be able to bring this at those price points and be within reach of the masses in India. Lots of testing went into it. There was lots of rejections. We created communities, understood what people actually liked, and then finalize those fragrances. We're still, in r and d. We're in fact in r and d all the time. The forthcoming fragrances that we're developing right now are what we call creations. So now we are experimenting with multiple different, ingredients around the world, formulating those together and creating unique fragrances for India.

Utsav Somani: And, the EDT and I mean, how do you, like, I mean, differentiate them? Like, what is a perfume? What is EDT? Like, all of these different, classifications according to oil concentrations?

Jag Chima (Sarkar): Absolutely. So it has to be oil concentration. So we're we're Parfum. So you have to be above 20% to be able to be in that category. We're at 25%. The ultimate objective of having a higher concentration was to give people something that lasts long, the highest quality and benchmark that in the industry.

Neel Gogia (Sarkar): So, adding to that, so 20–30% is Parfum. EDP is 15–20%. EDT is 10–15%. Above 30% is Elixir. So these are some of the categories. Under 10%, I don't exactly remember, but no brand uses under 10% in a fragrance.

Dhruv Sharma: Fantastic. And talk to us about the visual language of the brand as well, Jag and Neel. You know, why pick a chess piece? What chess piece is that really? I mean, I just got one quick glimpse. Talk to us about the colors. Talk to us about even what you said earlier about silent authority and the brand name itself, Sarkar.

Neel Gogia (Sarkar): So, one, we wanted something unique. So we the whole process started with the brand name. We did not decide the bottle first. We figured out the brand name and brand ideology first. So it was Sarkar. And when we were going through the bottle designs available out there in the market, we knew one thing that whatever we need needs to be slightly distinctive because fragrance is a product which people buy while looking at the bottle and not even actually smelling that product because most of it is sold online. So we knew that the bottle needs to have some resonance with the overall branding and the brand name. We could not find a ready-made available ready-made bottle available. So we thought that, okay, we'll have to open an old private mold that to which supply chain constraints, do you want it in India or China? We decided to open a private mold in India. But then the like, I am liking something. Jag is liking something. Bhutan is liking something. We don't know, like, to take a huge risk of opening a mold of lakhs of bottles, like, will we make the right call? So that's when we decided that we'll create a super fans community of Bhuvan superfans on WhatsApp. We had a group of around eighty, ninety folks. We revealed the brand to them, signed NDAs. We'd send them a PDF of three different bottle designs. One was a very, interesting grenade, a bottle shaped in the form of grenade. Personally, it was internal hit. We thought that people are going to love grenade. Then it was this

Utsav Somani: Good luck. People love drinking it other because they're I don't want my perfume coming out of the grenade bottle.

Neel Gogia (Sarkar): Yeah. But, the design was unique, and maybe we were wrong. And that's why I'm glad that we had the community. And then this was this, king piece bottle and third was a very elegant sling bottle with a huge cap. When we and we just sent that PDF with a pool, people chose the king bottle via huge margin, like, this was 80%, and the rest of the options were 20%, and that's what was a clear signal to us that, and then we were able to connect the king shape to the brand name as well and felt that everything falls into place. So we opened two separate molds, one for the bottle, one for the cap, and that's how the bottle and the brand came into place.

Jag Chima (Sarkar): I think there's a there's a there's a lot that goes into it that the before we even get to our communities, nobody really knew about or knows about. So when we say three years in the making, many people will think, well, actually, it can't be that difficult. You get in touch with a fragrance house, you select a few fragrances, you might do a few, you know, iterations, and you go for a launch. Right? But fragrances and the oils aside, even the bottle, we had so many designs that we actually developed. And then we realized what the problems were, the practical problems. Like, we had, an s shaped bottle that we were trying to create at one point. We went to China. We wanted to do it all in India at first, then we were told it's just not possible. There's only three manufacturers in India that actually make bottles. So there was a lot of learnings in the process. And as Neel mentioned, like, you know, we kind of finally evaluated all the options and ensured that even the bottle needs to be practical. You know, there's a lot of tests that you gotta do, drop tests, and, will it fit in a bag and so forth. And then finally, we came to this this design, and that's probably where most of the time goes that nobody realizes.

Utsav Somani: Let's talk a little bit about Bhuvan Bam because, he's, I mean, of course, the face of this. And, so in creator-led brands or celebrity-led brands, who comes first? Is it the brand or is it the celebrity? Like, I mean, you chose Bhuvan because you wanted to launch a fragrance, or you chose Bhuvan and then said we can do something with him?

Neel Gogia (Sarkar): So idea of fragrances, came first. Like, obviously, when we were chatting with, Bhuvan and Rohit, we said that the fragrances like, we love fragrances at the category, and we will be up to build something there. And the resonance immediately clicked that Bhuvan love fragrances in that category. His wardrobe was full of fragrances. So he was definitely interested, but I always feel that celebrity-led brand or a creator-led brand is a overrated term. I think it's always a product-led brand, and, I have personally learned that from the launch of layers and arc as well. It was a great marketing campaign, great, hype. But, eventually, product speaks for itself, and that's what we learned as well that, you know, you'll have to make sure the product is much more refined during initial days rather than just create a marketing hype. And, eventually, it creates more negative marketing for you if it's you are only riding on the back of creator and not product. So product-led with the one year to one and a half year of, you know, great marketing on back backed by the creator, and eventually, brand should outgrow the creator itself.

Dhruv Sharma: Guys, like, the advantages of working with a prominent creator are somewhat obvious. Right? Like, I mean, they obviously have a huge follower base. Marketing is not gonna be that expensive, etcetera. But talk to us about the downsides as well. Like, can you, like I mean yeah. Let me not prompt you. Talk to us about the downsides of of also representing a creator while launching a new brand.

Utsav Somani: Like, what creative freedom and all of those kinds of things? Yeah. Yeah.

Neel Gogia (Sarkar): I think more than anything, we could have launched this brand under one year if it was not good because no one would have known us. We could have done our mistakes silently. No pressure. Like, if we are spending 2,000 rupees on Meta, we are getting 500 visitors on a website. We could have learned much more quickly and then did a we could have planned a mega launch. It comes with a lot of responsibility of acing something for the first time. If you go wrong, hundreds and thousands of creators are ready to bash you because they will get extra that's content for them, and they will get extra views. So that's why even the last year, like, we never planned it to be a three year project. It was supposed to be a twelve to eighteen month project. But since we were not sure, we are, like, we have we'll have get one good launch. Everyone will be talking about it. We need to make sure on day one, we reduce the amount of mistakes we can do. So that's the pressure it comes with that you do not really get a lot of chance to experiment. If this would have been an, you know, any other brand, you can just quickly test the markets, come back, go back to the drawing board before you make much bigger noise in your marketing campaign.

Utsav Somani: And fragrances are typically a try before you buy kind of product. Right? Most of us, like, typically end up buying it when we're at a mall or passing through the airport. So how do you solve for I mean, doing online sales for a brand that you've not, or a product that you've not, I mean, put in front of your customers in person?

Neel Gogia (Sarkar): So firstly, we went ahead with very safe, except regal, rest of the notes were really safe, which India generally loves. And we got it tested by, again, by our community as well. So if someone is buying fresh, we made sure that if they love fresh pregnancy, they will love Orion. If they love floral, the noble is a safe note. We did not try too hard because we wanted our first to make sure that people trust us as a brand. Regal was the only experiment which we did, and either people hate it or love it. There is no in between. But our goal is that moving forward, like, we launch a 20ml pack of four now. We also give about 7ml freebies with every order. We we are planning some, freebie activation with Blinkit as well at in selected PIN codes. Our freebies will go so that we can people can try it more often. But so far, during the launch, people could buy only 100ml for ₹1,500. Now they can buy a pack of four for 1,500. So we are trying to make sure that the entry level barrier is accessible at different price points. But we are not, like, Bella Vita or blah blah blah. We are not currently keen for a 7ml pack of four selling for 400 rupees. We feel that, that's a different way to build a brand, and we are not looking at that approach yet.

Jag Chima (Sarkar): But also, after that So

Dhruv Sharma: Yeah. Go ahead. Please go ahead.

Jag Chima (Sarkar): I was just gonna say, so, I I think it's a really interesting question. And so, ask, like, when you're buying online, you just can't smell before you buy. So and in with fragrances, that's a it's a really big thing. So the firstly is the communication, the language. You know, when you look at the product, you know, how what kind of emotion is somebody feeling when they're looking at that product online? And also smelling with that messaging will be a big reflection of whether they like it or not. So I think that was a a really big thing, and that's something that we've really focused on. So when you look at the website, there'll be images and emotions that you might get by looking at the ingredients that are in in the product. That helps you to kinda get a little sense of understanding of what it might feel like when you actually end up smelling it. So I think that's a really interesting point. And I think it's worked for us really well. Like Neel said, the fresh one, Orion, when you look at the messaging online, immediately, it strikes a chord with most of the people, and that's clearly one of the best, bestsellers that we have.

Dhruv Sharma: Great. Thanks for sharing, Jag. What I was gonna ask you guys is also about the underlying consumer trends. Right? Like, five, seven, ten years ago, it used to be that you were happy as long as you were smelling nice when you stepped outside. And now I believe the cool kids are layering perfumes, and they're doing what's called perfume wardrobing, I believe, is a topic. Tell us about all of those things too.

Neel Gogia (Sarkar): I think, Gen Z is, the good part about fragrance as a category is people are willing to have multiple fragrances in their wardrobe. Four years, five years ago, most of them only had one fragrance. They used to wait for it to get to work before they buy a new one. Now willingness to try a new fragrance, one, that's high, but two, they don't mind having six, seven fragrances in their wardrobe for every mood. Layering is still an emerging trend, I think, which can pick up, but fragrance wardrobe is definitely a thing, so which helps new brands like ours to that consumers can give us a chance sooner before they wait for their 100ml or 200ml to get over. And, yeah, I think fragrance for different mood and different vibes is a thing now, and that's what we are using for our marketing communication as well. Like, if we go to a product page, we have made sure Bhuvan there are videos where Bhuvan is explaining a fragrance within thirty seconds. K. If you go to a wedding and then you want to feel this way, this is the one for you. Rather than, just explaining it via notes, but expressing it via how you want to feel when you apply it, and I think that's that strikes really well.

Utsav Somani: I think using emotion and basically helping people visualize, via when communicating. But is there a strict no no list, for you? Something that you wouldn't do even if it doubles your sales next month as a brand and as a company?

Neel Gogia (Sarkar): I will not say, like, though currently we feel going to lower AOVs or doing these trial packs is a huge no no, but we never know what is the need of the hour. So one thing we'll definitely not compromise internally would be, the oil quality, fragrance quality because it's the because when you are at this price point, you are not luxury. You are not mass. There is always a very thin line, like, till what extent you want to spend that extra money, on packaging, on bottle, on marketing, or on product. But we have made that internally clearly that we might compromise on we might if given an option, we'll compromise on every other aspect but not product because that's a key messaging that what you're not able to get for ₹500–700, you will get a really good quality at this price point. So fragrance, oils are something which we'll never compromise on.

Jag Chima (Sarkar): We're actually spending a lot of time on that point itself, working with actually the biggest fragrance houses in the world. And I think that's where most, companies in this most organizations in this space fall down by cutting costs on the oil itself. I I think that's the biggest mistake. In fact, if anything, we're going upwards on the scale, rather than going the other way. So, yeah, I think that's probably one of the biggest no-nos that we would do. But, again, like, one of the one of the points is I still feel that this is a very, young market in India. We mentioned layering. These things have been happening in the West for a very, very long time, and it's only now that, India is discovering layerings. But it's still, developing. So most people are still at a stage of looking at deodorants, for example. And they assume that a progression from deodorants is switching to a cologne, whereas the deodorant is a completely different category. And let you know, fragrances is an addition. So it's it's an exciting space to be in at this stage.

Dhruv Sharma: I I I also wanna ask you, like, at at at Sarkar's price point, what is your sense? Like, what olfactory appeal do you think the consumers are going after? Do they want, like, something that has, like, a global appeal, or do they want something that, you know, like, sometimes people say stirs up, like, emotions from what you've seen growing up, like, you know, when rain falls and what the earth smells like and so on and so forth. So that element of nostalgia, what are they seeking?

Neel Gogia (Sarkar): I think, firstly, the consumer at this price point has not, experienced a good premium fragrance product yet. So the key thing which attracts them is, oh, it bottle looks great. Packaging looks great. I I feel the oil will also be great because they're, you know, Bhuvan is there taking explaining us why the oil is great. So there are very limited brands, if someone is upgrading from a ₹500–700 price point, that's the major pull that can we get a 4,000 rupees experience at ₹1,500. So and fragrance is an aspirational category, like, why everyone is paying a huge premium for a great bottle, great packaging, and not just using attars or buying raw oils and just use it because when you are applying it, it you feel a certain way that today I feel like using this brand, today I feel like using that brand. So beyond the product, it plays a role in psychology as well that how you want it yourself to feel and what you truly deserve. So it has a lot of aspirational appeal as well and that which and that appeal is missing at mass price points. So and which is the biggest market in India. So if we show them that if you need to upgrade, this is the best option for you, which gives you good product, good packaging, good feel, I think that's worth selling.

Utsav Somani: And you position the brand to be unisex, although the name Sarkar and even the bottle, like the king bottle, I think is fairly masculine in nature, right, and the visual identity. Like, how do you think about targeting female, customers as well?

Neel Gogia (Sarkar): So one, the bottle king is definitely can be perceived, masculine. But name Sarkar, we want we'll how we are using creators and, eventually, celebrities as well. We just did a campaign with Rhea Chakraborty. We feel that everyone can be a Sarkar. Though in our society, people feel that it's masculine in nature, but we are very conscious regarding this fact, and that's how we are deciding a future SKUs as well that though today, our majority of a consumer might be male, but we want to make sure our fragrances are unisex. And the the way we are marketing the brand, like, 65% of the creators are male, but 35% are also female. Then next week, we'll be live on Nykaa as well. But moving forward, we definitely have plans to change the cap. Maybe this is king. We might have a queen as well. There can be a king-queen gift set. So that's definitely, work in progress. But, we we could start with only one SKU because taking a risk with bottle molds, MOQ was something we want to big we wanted to begin with, but this is definitely not the end in terms of this sort of bottles we'll have.

Dhruv Sharma: Well, we've gone a lot out of, Jag and Neel about Sarkar. Neel, what can you tell us about what's what's going on at IPLIX?

Neel Gogia (Sarkar): IPLIX is great. I think content creator economy is growing at a rapid pace, so since so are we touch wood. IPLIX, like, I gives me a chance to always stay connected to the trends because if I we get chance as cofounders to continuously speak to creators who are creating trends on social media. So and that data becomes really helpful while we are building these brands that what is truly trending in Gen Z and millennials. So but the creator economy is growing really well. I think, officially, the number might hit 7,000 crores this year, but unofficially, we feel that it's upwards of 10,000, so really good time to be in the world of creators.

Utsav Somani: What's happening with these AI, I mean, AI influencers, and there's so much synthetic data now that people are running these faceless accounts, like, all kinds of I mean, we're probably AI content is overtaking what, I mean, human led content is, on social media right now. So how do you see that evolving a year down the line, two years down the line, and how can brands actually benefit from this?

Neel Gogia (Sarkar): I think, AI content will help really help brands with their, content. AI content, AI ads, my team was just showing me an agency who created an AI brand film for a brand which looked really good. So for production agencies, definitely, it's gonna be a hard time. In terms of content as creators, in the field of education education, a lot of AI creators are already out there. Like like, Varun Mayya has his own AI avatar. And in fact, internally, we have created our own AI travel channel that there's a female creator who's giving travel tips, what you need to do in Goa. So whenever it's in education, AI content is definitely working well because you don't need a lot of trust, authenticity, or reality. If you are educating someone, it's a fact you're communicating it in an interesting way. People share it and move on. What AI content has struggled to do so far is truly build an influence and truly build a love around a personality, I think which drives most of the money in the creator economy. That's if that happens, what will happen will agencies like ours build our own AI creators with our own influence? We have definitely tried, but we are most like most of agencies, we are able to build creators who are educating people but not truly able to build influence in terms of their fans. Like, if they say, I use this lipstick. You should also use this. Not enough people will redirect to that website because they love them. So that's something which is missing right now because of how real and more than real, it's more about storytelling, how someone will have to truly drive a story of a character, when will they move to a relationship next, and make sure that this fictional character, people feel that it's truly real and they are they are able to build some influence around it.

Utsav Somani: Dan, what's your view on the world of AI and content?

Jag Chima (Sarkar): I agree. I do feel, though, that as the AI content creators have increased, it has somewhat, added value for people who are non AI content creators. People appreciate them more. Because I think that relatability is now, apparent. A lot of monotony had happened in the with AI content creators, which is has it has to change. Could you kind of see the trends and you kinda see the same thing time and time again? But I definitely feel that it's, the education space for AI content creators is fantastic. I think that's where they will evolve.

Utsav Somani: Awesome. Guys, this was super fun. Thank you so much for coming on TON. Wishing you the best ahead with Sarkar and IPLIX.

Jag Chima (Sarkar): Have a good day. Thank you. Cheers. Yep.

Utsav Somani: Alright, listeners. We're moving on to our next guest. We've got Varun from build3. Varun, welcome to TON.

Varun Chawla (build3): Thanks, Thank you for having me.

Utsav Somani: Are you dialing in from Goa?

Varun Chawla (build3): I am. I've been looking at the app as well. The shirt that shirt is

Utsav Somani: a full vibe in itself.

Varun Chawla (build3): Let's go, brother. Let's go.

Utsav Somani: So what is build3?

Varun Chawla (build3): Ah, build3 started off as a venture builder or a startup studio. As with all startups, we realized something was wrong in our initial hypothesis, and we pivoted. We found more traction as a startup accelerator. We today get 25,000 applications a year, about 5,000 interviews, 800 people get invited, and 600 people join. So we're primarily an accelerator, but morphing into an ecosystem where we provide services, and we're gonna have a 30 acre campus just north of Goa where entrepreneurs, founders, investors, and mentors come and hang out and build. So yeah.

Utsav Somani: Nice.

Dhruv Sharma: I'm assuming it's an in residence program then, Varun. Is it?

Varun Chawla (build3): It's a bit of both. So people can come in, for short bursts. We have a ten week program, and the first and the last week is in person. The middle eight weeks is not. And then some people can choose to stay on and continue to build on there for months or years. So yeah.

Dhruv Sharma: How big is the overall build3 community now?

Varun Chawla (build3): 2,500 people.

Utsav Somani: And how many cohorts have you run and why the name build3? Because, I mean, my first impression was that it's a web three community or a web three. I know. We've

Varun Chawla (build3): had that happen a few times. That's tragic. But we have nothing to do with it with the build3 with the web three world. The three comes from three descriptive words, which is building startups creatively, conscientiously, and through communities. There are descriptors. Why the number three? Because when we started this, you still needed something different to get a domain, and domains were important. So to get build3, even an .org-level domain, you couldn't get build.org. And then you asked the second question. Right? You said, why build3 and something else?

Utsav Somani: The second question was how many cohorts have you run?

Varun Chawla (build3): Ah, yeah.

Utsav Somani: Any numbers that you can share about, where the program has progressed to?

Varun Chawla (build3): Of course. So the accelerator is in its tenth cohort as we speak. It's a fun one because we co-terminate with Edge City, which is in the last week of October. So that's a fundamental collab we're doing for this one. We're on the fifth cohort of our fundraising boot camp, and we're on our fourth cohort of the bloom retreat for women. So lots of cohorts.

Dhruv Sharma: Varun, tell us about the range of support, you know, incoming, courts and companies come, you know, to expect. How does that vary between, say, first time founders and returning founders and so on?

Varun Chawla (build3): Sure. So one think of it as a funnel. Our accelerator or our fundraising boot camp is for either pre-seed or seed stage startups, but as early in the funnel, it's a program. So it's a one-to-many relationship. Right? There's three, four of us running the program, and there's 30 to a 100 people attending the program. Now the four to six folks at the end of the program, we say, here's a modest check and let's move forward. Those are the ones we have a one-on-one relationship where there's a venture builder, venture studio, startup studio, whatever. So sort of one node as a funnel. And then in the program, because the one-to-many relationship broadly we're providing information, which is frameworks, knowledge, some folks who've been there, done that, and a lot of connects, to the typical stakeholders, which is investors, mentors, service providers, and other founders, and some capital. So that's the value we provide at the first stage of the funnel. The second stage of the funnel is very, very custom. So some people are building our teams, some people are building our processes, some people are trying to figure out their second or their first channel, some people are figuring out how to fundraise. Some people are figuring out geographic expansion. So you name it, we've done it on that second part of the funnel.

Utsav Somani: And tell us about some successes because I think India is waiting for its Y Combinator moment Yeah.

Dhruv Sharma: Yeah. Like the

Utsav Somani: in the accelerator space. Right?

Varun Chawla (build3): Brother, you and me. You and me. So, you know, one of my good friends told me it takes a third fund until you can raise the fund on the successes of your first fund. So we are still two and a half years in. That means our average portfolio is one and a half years old. In India, it takes at least six to eight years to get real successes, you know, where b, c level checks are being written. So I can see those early signs, those leading indicators, which is the next round of checks or those better quality, investors, coming in or the better quality clients coming in. You know, moving beyond cofounders and having that team of five, ten people. You know, all those leading indicators that tells you things are working. You've just reached break even. So I have many of those stories to share, which having been an entrepreneur eight times before, I know are real, milestones. But household names, we don't have any yet. But Well,

Utsav Somani: you out

Varun Chawla (build3): of the 45 companies we've supported, six have received follow-on checks, five have perished, and the remaining soldier on.

Utsav Somani: And you gave them a grant because you're structured as a nonprofit. Right? To take some equity.

Varun Chawla (build3): Yes. So all of those things are half right because, so we have a for-profit and a not-for-profit entity. We do provide, some government grant money we receive, which just called the Startup India Seed Fund Scheme that's been channeled through us. We're allowed to give it, for equity, and we have done that. We do have the not-for-profit, and over there, we can receive grants, donations, CSR. We haven't done amazing there yet because we haven't really, I think, put in the right resource to do that. But we have both a for-profit and a not-for-profit, and we do provide a modest ₹25 lakh check. As a 15% discount to your next round. No cap, no floor. So probably the friendliest check you're gonna get in India as far as I know. Or a small check.

Dhruv Sharma: Right. But let's say if we were to will an an absolutely new startup city into existence,

Varun Chawla (build3): not Bangor,

Dhruv Sharma: not Bombay, nowhere in NCR, What would the ingredients be? And, I'm asking this because it's hard to replicate the talent density of those, you know, those concentrated, zones. Yes. Yes. But, I mean, you know this and we know this. Nobody likes to have to, you know, deal with the the infrastructure challenges that inevitably come up with that.

Varun Chawla (build3): Correct. Well, perfect. That's a great question. It's almost like you've read my website. Closely. I did. So you're absolutely right. You can't match those cities for talent. But what you can do is perhaps get a head start on culture and use that as your magic ingredient instead of the density of money and resources. To that. So do you model yourself after somebody like Boulder, Colorado? Right? It's the it's the most tech dense startup ecosystem in the world. Lesser known because it doesn't have as much volume as, say, San Francisco or New York or even London. But there's a lot of unicorns in here in Boulder. There's a lot of investors, a lot of great startups, and it's a great ecosystem, very, vibrant. It has all the players in that ecosystem, and they're very collaborative. And their culture is amazing, and Brad Feld is one of the champions of that, ecosystem. Techstars, which is probably the world's second largest, startup accelerators originated out of there. So steal stuff or borrow stuff from that formula. Right? So how do we create an environment where people encourage failure? How do you create an environment where people give before you get? How do you create an environment which has more investors, mentors, founders, per adult population than you have, folks that are not in the tech ecosystem. Right? Just more of them. So that's sort of the vision over here yet. You know, what do you need in the early stages? You probably need to reduce your cortisol response. You need to reduce your amygdala response. You need to calm down your nervous system to be the most creative focused version of yourself. Well, we've got that in spades. Right? We're focused in, just north of Goa and the Western parts, the eight most biodiverse region in the world. And when people have come down to our space, attended our programs, they said, wow. I wasn't quite sure what to expect, but I'm more creative. I'm more patient. I am coming up with new ideas. I'm meeting new people. I'm having conversations without, feeling like it's a waste of my time. I'm taking time to walk on the beach. I'm I'm dealing with people with kindness instead of being an asshole. I've heard all of this and many, many more things. And I think those are some of the ingredients that we're able to uniquely inculcate vis a vis a typical Delhi, Mumbai, Bangalore, Hyderabad, Pune, which are great for many reasons. We're just playing a different game. We're not trying to be better at that same game. That doesn't make sense.

Utsav Somani: And talk to us about the 30 acre campus that you're planning now.

Varun Chawla (build3): Okay. So I was recently in The US, and I said we run startup programs. We invest in startups. We have a 30 acre campus surrounded by another 70 acres where people can live and be part of this ecosystem. And somebody said, you're Stanford. And I was taken aback for a moment, and I'm like, wow. That's a massive institution. And my immediate reaction was no. But I slept on it, and I said, if I keep doing what we're doing for a couple of decades, there's no reason we shouldn't. Right? So that's sort of how it's gonna play out. It's a combination of exactly these three things, which is a whole bunch of programs where people can come in, upskill themselves as founders, be surrounded by people who live and breathe this ecosystem for decades and sort of have an intergenerational ecosystem. People have been there, people who wanna get there, people, that 360-degree ecosystem that you need, which is academia, corporate, investors, mentors, accelerators, the founders themselves, education. So how do you get all of that? That's the idea to build at a small level. It's quite ambitious, but that's what we're hoping to get there. Powered by, revenue streams, in the short, medium, and long term. And what tends to happen is if you just base it on equity returns, that's a six-to-ten-year cycle. How do you survive that six-to-ten-years? It's not on 2% management fee. I can tell you that. So surviving on, college like revenue, which is people paying for programs, people paying for room and board, and then having this vibrant, real estate ecosystem where people want to be around entrepreneurs and artists and wellness practitioners, then being able to own and live in and around that ecosystem. That's sort of our medium term, revenue stream.

Dhruv Sharma: Varun, when he just got started talking to us, he told us that it took a it took a few iterations to get to build3. Can you tell us about what you tried earlier? Why it didn't work? Because, you know,

Varun Chawla (build3): a lot

Dhruv Sharma: of times, entrepreneurs, when they're in between gigs,

Varun Chawla (build3): I think one

Dhruv Sharma: of the ideas that somehow enters their mind is they'll create some sort of venture studio.

Varun Chawla (build3): Yes. More often than not, it doesn't work.

Dhruv Sharma: Let's just create a little IP around, you know, what your learnings have been so that the next time someone's, you know, facing, that dilemma, they can just see it and learn from it.

Varun Chawla (build3): Yeah. Hypothesis was, I'm a builder. I'm an operator. I have seen some of this from my own experience, and I put it into service for the next generation of entrepreneurs. I figured having some capital and having this the time and drawing on my experience would be sufficient. Turns out those are all important ingredients, but not sufficient in and often in and of themselves. Having a vibrant community of the other stakeholders of this ecosystem to bounce off and result in serendipitous, conditions is as vital if not more vital. And so that was something we learned two and a half, three years into the game. Also, irrespective of who you are as a founder, you've got a little bit of a cold-start problem. How do you fill up the room with amazing founders? And it takes a while to build up a brand as people who really move the needle, who care about you, who have the resources that are important. If you go back to reading stuff like the Launchpad, which was written in the first few years of Y Combinator when Paul Graham and Jessica Livingston started y Combinator. Similar thing. He was well enough known in some startup academic circles because of him being a professor, etcetera, but not necessarily broadly in the startup ecosystem. And it took two, three cycles, get some of those first few wins, for Relay to become a mass market brand. And so a lot of people believe it's gonna happen on day one and won't unless unless you are a mass market brand already, which is well, like, the Nickel Summit might be one of those people with the foundry. And I think they have a pretty big, reach from their very first cohort. So I think a lot of people think it's gonna be easy to find founders. That's not gonna be true. Just you and your money isn't good enough. The pivot that we made, was to run it as an accelerator cohort with a 100 people each. And those people really, now there's a 100 people other than the five people at build3 helping you on your journey. Now there's a 104 people outside of yourself on this journey together, and that changes everything.

Utsav Somani: And, you did, ninety one Springboard before this, and I think that started as a failed attempt at raising a $2,000,000 fund. Did you wanna do this video then?

Varun Chawla (build3): Boom. I love it. I haven't heard this one in a while. I don't know why you dug this up, but this is all true. So, yes, it was an accelerator. I think about six months no. About a year into that journey, we realized nobody was trusting us with their money, other than actually curiously, Rajan Anand then trusted us today. He was our very first LPN. He said, here's my ₹1 crore; stop preaching, Varun. But more interestingly, he was the only LPN. We couldn't get any others. So that was a field attempt at raising a fund. But as small funds go, you try to create other revenue streams because 2% or 2,000,000 is is is is nothing. So we had to create other revenue streams. And one of those revenue streams was a coworking space. So I was in charge of coworking. Then I'm a co founder who was in charge of fundraising. So, unluckily, he didn't have that, that have success. But I got three coworking spaces going in that first year or in that first eighteen months. And then when it was time to do or die, we said, let's see what's working. And we saw Andre knows his coworking's working. That's our business. Our fourth cofounder joined at that point. He dropped in a million dollars and said, let's go, and we did. So, yes, it was an accelerator, failed attempt because we couldn't raise, became coworking. And, what we're doing now is a lot of that same formula. The difference being I am building for purpose today, and allow me just thirty seconds more to speak on this because I'm very passionate about this, is I believe entrepreneurship, like nuclear fission, can be used to make bombs or build great clean energy. So nuclear so entrepreneurship can also be used just for individuals to get rich and famous and, you know, not do anything for the world or society. Or you can actually say I'm gonna do something awesome for the world and society. And if I do that, well, I know I'll be taken care of financially and reputationally and all of that. That's not and just I think if you build in that order, I think that changes everything. And I wanna, support and enable founders who wanna build in that order. They wanna build for, you know, making the world a better place first and then, you know, getting rich and famous second, third, fourth.

Dhruv Sharma: And what's next build3 over the next I mean, you're only two and a half years into the game, Varun, but what's next so then what's coming over the next twelve to eighteen months?

Varun Chawla (build3): Yeah. No. Thank you. So the startup ecosystem, which you touched on earlier, the 30 acre campus, that's really the newest thing happening for us. We think we've built, if you look at a city as a combination of hardware and software, we've built the software experience. You know, we have, you know, nearly a thousand entrepreneurs coming onto campus along with mentors, investors, and service providers all coming. So we have that vibrancy, that human energy, which I call the software. We've built that. But, when you pair it with good hardware, you can really amp things up, especially monetization becomes much easier. You you try to sell somebody iOS, that's not gonna work some so well, but you sell them a MacBook or you sell them an iPhone with iOS on it, suddenly it's awesome because that combination of great hardware and software really wins. Right? So that's the idea. We're gonna pair this great software that we're proud of, that we've built with an amazing campus, and that hardware and software is gonna unlock some new things for us revenue wise. And I'm sure a whole bunch of second, third order effects, which I'm gonna struggle to articulate today, but know in my heart they're gonna come.

Utsav Somani: Alright, Varun. Thank you so much for coming on TON. Wishing you a very best ahead.

Varun Chawla (build3): Cheers, guys. Thank you much. Cheers.

Utsav Somani: Alright. Couple of news items to cover today. Get us started with this one.

Dhruv Sharma: Woah. What are we looking at it? So can you do a quick read up?

Utsav Somani: I think they were since he posted something about this. So it's basically a maths problem, which has not been solved for ninety plus years. OpenAI put 10,000 agents. They solved it, or at least they put out a statement that they solved it. It's one of the seven Millennium Prize, problems. They spent approximately 25,000,000, in compute to get this done, and I think the reward is a million dollars for solving this problem, the Millennium Prize thing. And, now there's what you would describe as the LOFO, basically, between two people who ELOFRO.

Dhruv Sharma: Okay. Yeah. Yeah.

Utsav Somani: People who use ChatGPT to solve it to researchers, and now OpenAI is sort of coming out and saying that we've actually solved it. So yeah. Yeah. Good reminder that nothing that you I mean, everything that you put on ChatGPT, even your private documents together, they're all can be used to train, content.

Dhruv Sharma: So true. I think we were chatting about this earlier in the day that, you know, how now that the AI cycle has been going on for at least three or four or five years, I think people are no longer satisfied with just seeing everyday automation. People wanna start seeing invention. And, OpenAI and Tropic have always been within inches of each other. With this story, I think the unfortunate build itself is what should have been a story about mathematical or scientific breakthroughs has become a story about, I don't know, IP.

Utsav Somani: Right.

Dhruv Sharma: Right. You know, this it's it's turned into an IP IP dispute. This, of course, is I mean, look, listeners, we don't mean to sound like experts. We're not. I'm I'm hear hearing about Navier Stokes for the first time since I don't know. We studied CFP in college. So we're no experts, but it is considered to be a very prestigious problem within mathematics to solve. I think one way to understand this also, should I do the scientific demo?

Utsav Somani: Do the demo.

Dhruv Sharma: Could be fun. You're popular science for kids. So here, I have a little glass with me and, I think that so there's water in this. This is just water. And we're gonna try and color this water with something. So now you can start seeing this. So one version of this problem is if you start swirling the glass, within a second, this, you know, the swirl is not gonna turn into a tornado. Those are just words. Like, you know, someone needs to fetch mathematical proof for it. And so, of course, like, you know, there's water. You can either treat it as millions and millions of molecules or just as one sort of common substrate. And, so, yes, I mean, you know, the Navier Stokes, equations, a set of differential equations, defined applications and combination of fluid dynamics. We were talking about, about that with Cushy just the other day. And so it's an unsolved problem. In fact, the the $1,000,000 prize for this problem comes from the Clay Mathematical Institute, which even as of as of this time says this remains an unsolved problem. But but mathematicians have been taking professional I mean, like, full time mathematicians have been taking a crack at solving this problem for the longest time. They've tried different approaches. They made some progress. And then what happened quite recently was that some of them came very close to they thought they came very close to solving it with one approach, and word got out. And there was an ongoing effort at OpenAI also to solve the same problem, and they got ahead of, you know, the team that was gonna make the announcement. Apparently, there was a back channel between those two those two parties as well, and then OpenAI came out with this announcement. And ever since, hey, it's turned into a little bit of an online debate. But, but, yeah, there's, there's all sorts of commentary around it as well. So I'm wondering if there's any we'd like to share with with our listeners.

Utsav Somani: Commentary on not on this, but I wanna switch to Anthropic news if we're done with this also. Yeah.

Dhruv Sharma: Yeah. Yeah. Yeah. There's one I will quickly maybe read out one tweet from Nassim Taleb, which is unless you do math just for pleasure, not status, you're in serious trouble. There's also one from, you know, the hostess saying amazing how fast math is being solved. Many benefits will accrue this particular solution. But all of this was before the whole fight broke out, I think.

Utsav Somani: No. No. I mean, AGI is here. We should ring the bell. Yeah. But, talking about Anthropic, one of their, researchers actually resigned, and he said that neither company, OpenAI and Anthropic, are acting responsibly. They're racing to the self-improving superintelligence that can really just take away life. And one of the actual employed, I mean, basically, this person is focusing on alignment at Anthropic, and he says that there is a ten percent chance that AI kills all human beings in the next decade. This is the person who's employed at Anthropic, talking about this. And but, I mean, there's something positive also. So, apparently, there's a rumor going around on X where they think that Anthropic has solved cancer, a noninvasive treatment to eradicate all cancer in humans and dogs, and they plan on announcing it at their IPO. So, I mean, magic can happen. I mean, this is insane if it does, come true.

Dhruv Sharma: Yeah.

Utsav Somani: And, yeah. All of this, of course, treated with a pinch of salt. But All people are getting increasingly

Dhruv Sharma: suspicious with the concentration of power just in, you know, the the hands of those one or two or three frontier labs, and I think only a matter of time before their ongoing efforts even from governments around the world to regulate and disperse that power somewhat to dilute its, its effect.

Utsav Somani: Yeah. I think regulation will definitely catch up for AI. It will have to play catch up. Otherwise, I mean, the hell that it can unleash or the heavens that it can show us, I think, will be somewhat, fun. Anyway, talking about personal AI agents, instinct was in the news. Of course, everyone's tried it. It's a thing that you can just chat with on WhatsApp and iMessage and get things done. And people have used it for various things, like getting that hard to get reservation or track anything under the sun. And it was powered by Stripe's link, payment mechanism as well. So it was making purchases for you. And now seems like Meta, Facebook, previously, has now joined the gang. So they've launched news in The US, which you can basically just ask to do anything under the sun, and it'll pretty much do it. Like, you can ask it to, like, make a list for you, take care of something, send that email, even send it, like, video clips and it can, sort of, pull out the important points for you and create a wizarding list because, I mean, people are sharing these recommendations via reels and short form content. So if you just forward it to, Muse, it'll just pull out the list of recommended places. It's just insane. And, Harsha from Lightspeed has also put out a market map of AI assistance. So there are some which are very human led. There are some which are pure AI, and there was some like Swiggy Group, which was, a combination of human and AI. So AI assisted chatbots as well. Exciting. I think exciting. I mean, because, if AI has that power, to improve lives and improve productivity as well, why not? Right? Have you tried around, any of this, Drew?

Dhruv Sharma: Yeah. Yeah. No. Absolutely. And and while we have, while we are showing this, on our screen, we might as well, extend an open invitation to Harsha of Lightspeed to come chat with us about this. But, to what we were discussing earlier, Muse itself. So I I think, Zach has this idea, this vision of personal superintelligence. In fact, he's in that camp which advocates for, you know, at least bringing some power outside the hands of those Frontier Labs. Of course, he's talking his own book because, you know, there are people who feel that, may have come at least the first half of the cycle. But, yeah, Muse is very much I think Harsha also makes and, hopefully, she'll come on the show to talk more about this, but she also makes a case for, you know, how no one, could you know, no one's gonna benefit more from personalized superintelligence than India. And, you know, there's lives here can, you know, can be somewhat hard, complicated, overwhelming, etcetera. So, you know, I lead should have been a personal, personalized agent built in India for the world. Only a matter of time before we get there. But, yeah, until then, we have news. We have Vermis. We have a whole bunch of them to try.

Utsav Somani: Yeah. It's a fascinating way. Like, I mean, all of this could have been actually done via Chargebee, which is giving it a new interface, a new way to interact with it. I think that's the fascinating part on how this becomes more accessible to more people just by making it simpler. But, yeah, I think the true test for AGI or a super age I mean, I mean, super agent for yourself would be if it can book a train ticket in India, and use those websites. Yeah. Alright. Huddl is in the news again. There's apparently a 700,000,000 price paid by, the parent company no. Not the parent company. El Caterton, which is a fund run by LVMH. So yeah. Seems like, I mean, the fitness trend is here to stay for HyRocks.

Dhruv Sharma: Yeah. The global exercise trend. How about our listeners? Are you guys participating in HyRocks? Are you are you part of run clubs? What do you like? I mean, let us know what you do for, for fitness and and just for health overall. Hyrax, we've covered in the show, by the way. If it's of interest to you, we have a prior episode. I can't remember the number, but we spoke with Dileep Green Matter Capital, and we covered Hyrax at length. I think, like, not a bad bad outcome. Right? So it says, like, this piece says $20.17, $6,700 in enterprise value in just that much time and having fun while doing it. It's a German company, I believe. It's based in Hamburg. Sounds fun.

Utsav Somani: Crazy. We do

Dhruv Sharma: a high risk sometime.

Utsav Somani: We're doing the half marathon first, so let's train for that first.

Dhruv Sharma: Yeah. Step by step. One at a time.

Utsav Somani: Alright. Perfect, listeners. That's it from us. Wednesday, we're signing out. We'll see you on Friday at 04:00. Bye bye.