Giri Devanur : (0.04-1.03)
Hi everyone let’s join and welcome Luis Miranda my dear friend, mentor, and guru he has been the co-founder of the Indian School of Public Policy, he is probably one of the rare guys that i know who has been a part of two of the India’s largest financial companies from the early stages from almost inception he was part of it, built it scaled to unimaginable heights today. He is also the chairam of the Manipalcigna, he is also the senior advisor at Morgan Stanley, and a bunch of other things including chicago booth global advisory board. Now lets welcome and i am really excited to talk to you, I’d been planning to do this few months back now and good that you’re with us today. Lets jump in and Why dont you tell us a bit about yourself to our big audience these days. We are getting lot of attraction. Why don’t you introduce yourself.
Miranda : (1.03-2.08)
Giri Thank you for inviting me to your show. Last time we met actually you know very sad circumstances of a breakfast in Bangalore few years ago when our dear friend disappeared and people were worried about what would happen to him. About me one I am married and I have two kids and thats important. I am going to start up with that because that defines that years ago i was stole and i got to focus on important things in life, to me thats important married two kids. I spent most of my life in india, grew up in india spent two years at the university of chicago graduate school of business, came back in 1989 spent the last 33 years in India. My post business school career would be broken up into three decades. The first decade was in banking, the second decade was in private equity, the third decade which has actually been the most interesting is been in the non profit space. And along the way since 1994 Ive been involved with startups HDFC bank, IDFC private equity and now more recently the indian school of public policy.
Giri Devanur : (2.08-3.06)
Wow! Three decades three, probably most people wont even get in their entire lifetime on of those to do. Now its just a marvelous, I’ve known you what now 1999 onwards its almost such a long journey and ive seen you through the entire process how you have evolved and you know the learning has been great. So, from that learning, what are the biggest challenges faced in the business and startup world especially in India. I mean today morning I woke up reading a news that you know India had the 100th unicorn opened became a 100 th unicorn. When i was an entrepreneur in India, when you started you know the private equity, you were one of the early guys in the Indian private equity world. Geting an 100 million valuation was considered as great now you have 100 of them, whats your take in the challenges faced today
Miranda : (3.06-4.50)
Lets start about what you just talked about, I think one is competition, competition is tough because there is too much money floating around which also explains upon what you mentioned about so many unicorns in India, so its just a lot a money its very different from 20 odd years ago when you were trying to raise money, the world is different. The first challenge i think today is the competition and too much money chasing the years which actually distorted and i think its giving too much power to the investors as a promoters thats the one thing.
The second challenge is hiring, if i remember correctly it must be your first podcast you talked about the fact that they were the X number of jobs in india and there is X- so many jobs people are unemployed in India. So the challenge is finding people to work over here and you see the huge wave the inflation is happening in recent times far away it is people in the post pandemic world sort of assessing what they want to do.
So now thats the second one which is hiring. And the third will be just the whole macroeconomic situation. We went through two years of the pandemic and we still aren’t out of it yet there is still the fear that we have an another buss coming up and then you know you have the pandemic sort of eased out then you have the ukraine war just so exciting this means a lot of unexpected events coming over years which is sort of dashed up.
I was just talking to my wife when we were driving by looking at how many places in bangalore they have shut down shops, restaurants that is very sad to see a lot of these guys who had a great plans, for over the last two years since they covid hits us they have been taken to the cleaners.
Giri Devanur : (4.50-5.10)
So you know like again we know since we talked about startups that you were part of the HDFC and the IDFC when they were startups today you know HDFC havs become such a monstrous large organisation, IDFC as well, what is your learning from those journies to know what we have seen today.
Miranda : (5.10-8.02)
So it was just interesting, one of these is possibly will discuss today a lot is about having purpose. When we started both the HDFC bank and the IDFC private acuity, what was important was what we were trying to achieve. In HDFC bank we want to build up a bank which can show the world that we can have an indian domestic bank of high quality service middle class india. With IDFC private acuity, it was about how can we improve the quality of infrastructure in a country. So lets look at HDFC bank way back in 1994 when we started (it must be sound very old) one was with Adithya puri came out on board deepak RA and HDFC an better company wanted to make sure he had a great banker who is entrepreneurial Adithya Puri came onboard and he built a fabulous team you know we come back to the who verusus the how etc.
Anyway so one was really getting a great team in place, the second was the brand. HDFC was a fabulous brand HD product who started it and it deepak who builded out built up a brand that was highly regarded, they were concerned that us bankers who are gonna come and destroy the brand so they wanted us to be called the bank of bombay or some thing else. And adithya said very clearly if its not called HDFC bank i am not coming back.
The importance of brand and good well is very important the moment you loose that you are on a downward spiral. Third was keeping it simple the stuff that we learned about Adithya puri wanted to be a bank that was easy there were other banks who did the fancy stuff they know where it turns the market cap compared to HDFC bank we just kept it simple and kept great at a continuous rate, and thats what is today, today HDFC bank is a most valuable bank at about $110000000000 valuation of peak about two to three weeks back was about 140 come down a bit but that’s really what it is this is this is the best and IDFC private equity it was everybody told me to lose you convict money investing in infrastructure.
And I said I go to prove them wrong because someone says you can’t do it and your show that you can do it and this is the first thing I did was to build in diversity we got people who was fabulous second most hard work and there’s no escape from hard work you want to set up a fund to raise it and to make investments.
What was was the respondents supported to help money then we sort of focused on diligence how do we sort of in a diligence the place that we are at make sure the investments we do it and the year before I left in 2010 in 2009 we were won two great awards one for being the best infrastructure manager HM and secondly the best private equity fund
Giri Devanur : (8.02-8.19)
So yeah you talked about two three things from the purpose to building the team building the brand and hard work which is the execution are those like are the primary qualities of a good leader.
Miranda : (8.19-9.08)
What what is what makes a good leader I guess so it is really about you mean the the soul of it your big date the the person behind the vision it’s a it’s a team effort at the end of the day when I think of leadership I actually go back to a common one of my colleagues made way back in 2000 when I was leaving HDFC bank I got under city and I called the software because you saw someone I’ve been up all ready well you said Luis you’ll be in the toughest path ive ever had you will also be in the status what dealership is about you’re going to get stuff done you cant be the nice guy you need to produce we need to produce results you gotta show profits you got it all well so I’m not but I’m always fair and that’s what people I think is is what leadership is all.
Giri Devanur : (9.08-10.06)
That’s the title of the episode would be be tough be fair. That’s a good segue into you know like the core thesis that we are trying to build in this podcast how to who right as I mentioned to you earlier in the previous episodes of etc as started as. Why do we need more like jumping into making how do I handle this opportunity how do I handle this it is because of the eagle you know like we all have a disappoint just let me think we are the best person but even like if you want to have a heart surgery or anything like that you’re not the one who operate on yourself bring the best doctor and that is what what you know just now mentioned that you know that once you find the purpose was diverting its about putting the right team right I mean what takes to put together the right team.Trying all along to any advice for entrepreneurs
Miranda : (10.06-13.05)
Since you mentioned about bypass i had some of my friends would tell me that in the in the post surgery space you’re going to get very emotional youre gonna find yoursefl helpless and it’s normal and the last one month I’ve never found myself emotionally and also because I never considered myself centre of the universe between my wife and my kids by eagle got bashed up along. So so so so much so I’ve always relied on others to get things done so it is very easy for me which is why my recovery also it was possibly easy I I’m just used to getting things done with other people and and I’ve written about this in the Bosco so about how to make yourself redundant and it’s a fabulous experience because you make yourself redundant you’re not being the same stuff every day remember we’re talking about the stock the friend and he told me how life is like that he said SSDT so what is the beat is the same shit different day and it.
Hi I don’t know whether you got some sort of profanity filled the state but to me it is really about how do you you know they do different things because I’ve been in the same stuff every day it’s 2 stories of 3 stars out of 4 HDFC back in 1993 10 banks got licenses from the central bank of India RBI to set up a bank. Today only about half of them exist yeah those are being taken over by others but half exists are among the most powerful banks in the country and the national banks would you order we all grew up with except for State Bank of India large part of them. So at HDFC bank adithya built out a great team and adithya puri’s point was adithya by the way was the managing director 30 years at the bank they told me to say that if I have to do your job and I don’t need you well that’s somewhat less but they do tell you don’t keep things simple if you can’t solve your own problem that but I mean I don’t need to do it that’s all health problems of course when things get tough like for example with the retail banking or tough time and it’s a neat is I will go back yet no idea at all about bank but he sort of understood it see private equity yeah we were setting up India’s largest private equity fund for infrastructure and I never made an investment in my life at that stage nor had I not an idea what infrastructure supporting it will bring in people who have made investments and you want a structure I need someone and we built a great team over here. People who brought in different skills over yelp and I think it’s called a public policy we’re not going to get the guys have got the best grades we’re trying to get the people who are most interesting we’ll go over there and tell the future champions of the country as opposed to be does the academic right
Giri Devanur : (13.05-13.46)
oday it definitely is not my SSDT I’m talking to you it’s. One of the most exciting but it’s part of me and every day I would like to keep it exciting but by talking to people like you so changing the gear of this conversation a little bit of fun or maybe pick one movie and you know if you have a choice and you know like we talk about it a little bit so that it’s not like it’s not the same boring conversation right you mentioned about emails that teddy women is your favorite movie I have seen there is a great movie what makes you love
Miranda : (13.46-17.52)
that what was interesting because of 2 reasons the first reason was while watching the movie in Bombay 30 odd years ago I did that I got to get married aging fear at that time and we will show where the you know we’re gonna get married on not the people expecting us to get engaged end up doing the movie had decided that’s another one I’m gonna get better.
So we came out of the theater I know this guy at church get stations selling vegetables so I went up to him and I asked him whether I should marry because it’s always a boarded a market for such diligence etc. And he said I should and so anyway so we the next I proposed to her so so it’s very important for me that that will be as a sort of a lot of some of the most attachment and I did get on a flight many years later I told him know the story also you I’m sorry can we do it all was on a flight at the. One reason actually relatable CVS store.
We will be discussing today 6 lessons that we can take from this movie that is important one is you can believe in fairy tales and happy endings.entrepreneurs dream. I’ve been told over the years you’re crazy coming back to India you know those leaving a multinational bank to start up a bank trying to invest in infrastructure but when I go to meet you over the chris capital people said how can you be a HDFC bank to join after the bubble has burst the.com bubble has burst and quitting when I was and i was told i was crazy the fact is that yes fairy tales do happen that was the first lesson. Second is we talk about the purpose.
You’re almost asking Robert again you know what do you do and you know and and you know if you know anything and then he realizes it later on if it decides that he’s going to build ships because it’s not just about you know so so what was what do you make was an important question I think that’s a very important question and she’s not a fancy educated person you’ll be better than ever it was investing is not only about making money about people it’s about the people involved because like southern border it’s not just about taking an asset stripping it down to me is the most boring way to make a life to live you can make a lot of money and a lot of people have big money that way but to me that’s something which I just wouldnt do to but although we started ideas you private equity does all the work rules that could be how do you build up stuff as opposed to just rip things and make money I mean there is a purpose for that but that’s a different level person involved well the fourth is the role of mentors we will talk about the importance and hotel manager there are name was done is on the back of the bus bombings form sent and she went to him for help thank you can notice the door out of the hotel if you go to see what the problem is and he basically go getting clogged how do you get out of there it also so that’s so important in life how do you have what the role of a mentor and I’ve been involved in stopping mentorship programs I’ve been the beneficiary of Mentos and I’ve seen out of the.
Fifth is the role of luck. Richard your driving is that fancy car but you don’t. But I do they’re always you go you go talk to the guy and she said it brought it up I gave you that that was my guy thank you so much luck. And finally 6 vessel would be common sense advice general Medicaid but you just talk about something what do you make what what do you like do you like this guy I do use a type of friends you hang around with stuff like that and even in the movie Julia Roberts was the bureau also Richard yeah so yeah so that’s my story on pretty woman all. I will be on your show but yeah that’s important.
Giri Devanur : (17.52-18.10)
That’s a great movie I remember that well I remember some dream says everybody comes here this is Hollywood land reads some dreams come group some don’t but keep dreaming right that’s my favourite what is your favorite scene why.
Miranda : (18.10-19.14)
The iconic cedars that’s you were doing there always is we do rodeo drive and is that song really willing to go. He’s got a you know however the shop on buying stuff you know so so so so that so that that that that’s a greasy but I think what’s also important as those scenes where she’s having those discussions with him about his business so Johnson what do you do in one and he says I buy companies also make an order and what do you do with them he says I just strip them and sell them all the money yes you mean you don’t make anything and you’re going to sit thanks for instance you know when I was a kid I like building blocks but today we don’t make anything yeah I’m awareness or someone who only study to them that would stand that to make this highly successful millionaire understand what life is about was great she made him go for walk she made him bunk a day at work like that it’s a simple thing but it goes both the roses welcome the large effort.
Giri Devanur : (19.14-20.01)
Taking one more aspect from that will be seen especially in India and the like start ups altering the lawsuit litigation and they like Medicaid but I do have things that happen to you especially like you’re seeing that I do not like the growth of unicorns is creating another set of issues with a venture capitalist and so on. The corporate governance has become a kind of beating what’s your advice on that know how how do you like you’ve got at the start up which is growing you know your book at the corporate governance mechanism I remember you gave me advised them over 23 years back and I carry it even today it’s been such a great advise I would like to know normally any changes in that kind of thought process on corporate governance
Miranda : (20.01-21.18)
There is no economic negotiable corporate governance is non negotiable it is stupid to lose money because of bad governance and I walked away from the boards I have refused to get out of Saddam’s already because of issues on public up. Life is too short to be a involved in such organizations I got out of ideas and ideas to private equity we never had one your legal battle with any of the people we back your responses yeah we lost money. Roger we will greet investors we lost money to make money it’s so you know so that was that but we never got involved because we spent time with each other for the address. I’d rather believe the September someone I don’t know who said it although rather work with a good deal and be stuck with a bad. All right and that’s important you know so it’s so neat I remember we looked at one investment and we found during a forensic check that that yes sometimes with. I would like to shop the story very successful boxer but not. I was a quality we yes I still short but you know so so that’s really all I know that it’s gonna go sure who
Giri Devanur : (21.18-22.03)
I was talking to one manager okay large bank you know like a few days back he was asking me nor his views on corporate politics right he was saying I hate corporate politics and it’s become a big problem right yeah so I you didn’t call me I mean I googled after that meeting that why is it that the too formal training for professionals on corporate politics you’re part of the center for public policy and you know like you are running multiple courses in the 19 school of public policy why don’t you guys set up a corporate politics training program for managers
Miranda : (22.03-23.01)
yeah that’s a very interesting one I I I I’m not aware. Whether you had business schools people are trained on already you had no idea navigate politics. It’s just part of life. I hated it. I think you got to learn to live with and and I always told my supervisors that the day my independence is compromised I quit. I love the idea to private equity when we stopping entrepreneur and there was too much of control coming in they’re not from up in the company it’s something fun that’s really what I think is important which is an interesting point for may be we just raining people how to handle corporate politics maybe train them how to avoid corporate politics that I didn’t think about that but I think it’s a very interesting question he thinks
Giri Devanur : (23.01-23.33)
If politics correctly used can be a force multiplier. How do you Align people how do you bring people into messages and things like that. No manager gets trained i heard you know on podcast few days back wherein every parent tells the kids all you have to concentrate on study concentrated on study right what do you teach is to learn the art of concentrate itself Same way we all all corporate politics is part of life that they don’t normally change Hey nobody trains
Miranda : (23.33-23.37)
is very interesting very interesting i need to look at this. Ill get back to you on this.
Giri Devanur : (23.37-23.48)
all right that’s great the next 3 questions are quick once because we are arriving at the thirty minute window. If you have to hiire one last person to your team who would that be
Miranda : (23.48-24.21)
I’m not gonna really answer this because the next time you see this person you ended up in jail or something like that. Somebody was different from me it would be started IDFC private equity I had my goals on what was a backward that ice bundle. People but that’s what’s important because you know we complemented each other somebody and similarly at the Indian school of public policy my partner is blocked shot. Will you be bringing different skill sets and and that’s what creates a diverse city I think is what’s very important
Giri Devanur : (24.21-24.25)
can you please suggest one other cool person and we can interview for this podcast
Miranda : (24.25-24.30)
Our common friends what dont you reach out to him all right.
Giri Devanur : (24.30-24.46)
Why not yeah he’s cool I would love I would love to know what years right and finally any advise for our young entrepreneurs and managers who are working on building great team and great companies in the future.
Miranda : (24.46-26.08)
I’m old school okay so so much so my advice is old school one is companies are built great by execution and having great team, so make sure you have a great team focused on execution that’s one. Second is focused on cash flows so I thought of advisory committee at 4 and then teach you which also for my number not a market place for industrial goods and am not like the German most L. and D. it would be a non sticky launched at about 6 or 8 weeks ago said though the team didnt not all about valuations today that companies in the space of the dollar valuation etc look instead at how much cash can you generate approve action so. So the first one is execution the second is cash flows on the surfaceand the third is find a life partner who will be your best friend. And your worst and honest critic I found it on fiona. Yeah. John that’s and they are important because otherwise life gets lonely you don’t have that balance you don’t know who to trust yeah you have somebody what do we disagree or disagree at all we have arguments about what that sort of person in your life
Giri Devanur : (26.08-26.50)
Great so thank you very much I love that be tough be fair that’s going to be the title. I think you need should be be tough to be fair to their teams I really appreciate you taking time luis I definitely meet you for one great lunch when I’m next in Mumbai. Thank you very much luis appreciate your time.