Full Transcript

Dhruv Sharma: Happy Monday listeners, this is episode 97. We're getting closer and closer to episode 100. And today's first guest is Sahil, Sahil Shah, who's a resident of Ahmedabad, the founder of a company called TM Systems, and he was a national chess player growing up. And now we're gonna have a lot of fun chatting with him. So welcome to the show. Thank you. Thank you so much.

Utsav Somani: Yeah. All right. So when people talk about cybersecurity, I think they think of phishing emails, they think of scam calls and a bunch of other things as well. But you're closer to like the operational technology and factories and IOTs and all of the other things that are truly like technologically need defense. So talk to us about what TM Systems actually does.

Sahil Shah (TM Systems): Okay, so, you know, TM Systems, as an organization, we are primarily focused on helping other enterprises with their cybersecurity journey. So we help enterprises with their end-to-end cybersecurity journey. So when they are building a system or a technology from ground up, we guide them at that phase. If they already have a mature ecosystem in place, we guide them from a security perspective. And then at the end, if at all there is any breaches, etc., then we help with the forensic part and make sure that, you know, we give them the right support to make the attacks do not happen again.

Utsav Somani: And it's almost a three-decade-old company. So how has the threat landscape evolved over this time? Because you must have seen so many different kinds of threats come in every single decade, right? I mean, especially the more recent one, the AI and everyone's talking about Anthropic Mythos. So how have you seen the threat landscape evolve?

Sahil Shah (TM Systems): I think the threat landscape in, you know, cybersecurity has been pretty interesting over the past, you know, three decades. We started with the I-love-you virus, then the Y2K thing sort of came up. And now we are at a phase where, you know, less human intervention is needed, you know, and agents are talking to agents and performing attacks. With Mythos coming in, it is very interesting that, and scary, where, you know, how AI agent is able to find out so many security issues, vulnerabilities, and trying to fix them. And I would say it's positive for us. That's good business. People want more companies who are into cybersecurity to help them and support, understand the technology.

Utsav Somani: Yeah. What a trip down the memory lane, hearing about Y2K virus. Like, I don't think any of our listeners would even know what the Y2K virus is, like the Gen Z crowd definitely, telling them what NAMP is, basically.

Dhruv Sharma: Yeah, exactly. Equalizer. You know, it's not every day that our guests are running organizations that have actually lasted decades. And so we'd love to understand from you, you know, when you build an org like that, how do you keep reinventing across market cycles, across technology cycles?

Sahil Shah (TM Systems): So I think I'll give you a brief idea. So TM is originally a family run, you know, business, and I come from a background of, you know, cybersecurity. I've been into this space for about almost two decades, where previously I used to run another cybersecurity firm. We provided consulting around application security. So, you know, advising companies and finding security issues in the apps, websites, etc. that they make. And then it was taken over by a multinational. And then I sort of joined TM again, a family friends company. And then we decided to, you know, take it global. So overall, I think we as an organization started traditionally from selling IBM computers back in the day, one of the first companies across India to sell those. And then the journey with technology, you know, has evolved over the years. And now, with the advent of cybersecurity, and with the expertise on board we have, I think we are one of the pioneers or sort of leaders in providing such services across India and in Europe.

Utsav Somani: And how do you think about talent? Like, I think you might have to nurture some of this talent as well for them to be at the forefront of finding these vulnerabilities before like, they become more widespread. So how do you find, recruit, nurture talent in this space?

Sahil Shah (TM Systems): Okay, so I think a very good question here. Talent is always a challenge and has always been a challenge. But now, we see that more and more institutions, educational institutions that have come up, like back in the days when we used to study, a lot of the work or the studies that we used to do was around theory and less practical. And now there is more hands on, you know, experience with the universities give to the students. So that is also that is one added advantage that we have. And with AI and YouTube as a learning platform, a lot of the, you know, students or a lot of the people who apply are very well educated. They have a lot of resources available at their disposal to try and train themselves. And we also have an internal training program where, you know, they can make sure their skills are utilized and upskilled.

Dhruv Sharma: And so you told us how you nurture talent internally, but also how do you nurture customer relationships externally? Because, you know, technology keeps getting commoditized more and more. And I'm assuming your global clientele, like one of the modes is, of course, having those strong relationships with them and contacts around their organizations. Talk to us about that.

Sahil Shah (TM Systems): Yeah. So I think this is an advantage of being a service based company. So, you know, when you are a product based company, you're probably focused on solving one single problem. And like us being a service based company, working across different sectors, across different clientele, it gives you that added advantage of having the knowledge of what's happening in the industry, what's happening in the market. And then, you know, we bring that to our clients, help them resolve this. We also regularly, you know, research on new issues. We are regular speakers at international conferences where we tell the people or the industry as to what are the threats that are coming forward, where to look for and, you know, how to protect themselves. So this also gives and establishes a trust between the clients that we have and, you know, that these guys talk sense or know what they are doing.

Utsav Somani: Let's get a little bit technical. So operational technology, OT security is a word keeps on coming up. Can you define in clear terms what it means and maybe what sub verticals are there below that?

Sahil Shah (TM Systems): Yeah. So I think this is one area which has, you know, picked up a lot in terms of security. So, you know, operational technology in layman language is any machinery that is there. Machine talks a different language than what traditional computers do. And originally machines were designed to give a single output or an outcome. And they were originally designed for keeping security in mind. So let's take an example of a printing machine. So a printing machine or a large manufacturing facility machine, their role was just to print something or to package boxes, etc. But they never had security in mind. And then over a period of years, you know, technology is converging. So the IT and the OT are converging where more and more machines are connected to Internet. People and businesses want more data around it as to how much production is happening. How can I increase my production or what are the issues that are coming forward to that? So now with IT and OT converging, you know, there is security at risk where, you know, you are exposing things like machinery or, you know, energy systems to Internet, which were traditionally not, you know, built to be exposed to. So to protect those systems is something which is very important now. All the critical infrastructure, so your energy systems, your manufacturing units, your telecom systems, etc., all have an OT component to it. So now this industry is pretty important to protect.

Dhruv Sharma: And so you work with clientele in Europe, I suppose. And so obviously you've been complying with GDPR for a very long time. Organizations in our country have to be DPDP compliant in, I think, less than a year or about a year. You want to share some broad learnings for all of us who are running companies, how we should be gearing towards, you know, the upcoming deadline.

Sahil Shah (TM Systems): Yes, so I think, Dhruv, a very interesting point that you brought up that it's good that India is catching up with, you know, the DPDP law where, you know, it is required and mandatory by all small or larger organizations to make sure that whatever data they have is stored or processed under certain guidelines. So the law says that, you know, any identifiable personal identifier information, so it may be a phone number, an email address, an invoice, etc., that needs to be stored or processed with certain consent. So I think the most basic step where organizations can start with is, you know, having a consent in place. So asking their customers or people inside the organization that, yes, guys, you know, we are taking this information for X, Y, Z purposes. So is it fine? So a yes and no. And that's the start of the journey. And the deadline for that is early next year. And some portion, I think by November this year, the companies have to comply. It's a stringent deadline. I believe there is going to be some extension to it because the organizations are still getting ready. But it's a good start from the government, I would say.

Utsav Somani: And a question on cybersecurity safety budgets in the country, given that our ambitions in semiconductor, defense, manufacturing, they're all scaling up.

Sahil Shah (TM Systems): How are we doing in terms of thinking about cybersecurity safety spends in the country vis-a-vis, say, China or U.S.? I think that that is not probably the correct comparison that we can do, because. But what you can look at past decade comparison where what we were spending in the cybersecurity space before 10 years and now, I think there's a significant increase in all the budgets across all the sectors, maybe private or government. There is good support. So there are tremendous spending around awareness about cybersecurity. You see a lot of elderly people getting scammed around cybersecurity, the phishing calls, etc. So the awareness budgets have increased. The next forefront of any government protection would be like cyber warfare. So budgets around those procurement, training, etc. have, I think, increased about 10x. So that is a wonderful thing to hear.

Dhruv Sharma: Saeed, I mean, we've been speaking about AI. You're, of course, helping clients with AI implementation, but even internally, how are you AI proofing the org, right? You've been around for decades, want to be around for a few more decades. So how are you doing that or how can others learn from it?

Sahil Shah (TM Systems): I think I am very, as an individual, I'm very pro AI. I think with AI coming in, it is wonderful where you can increase your capacity, your output, you can add more value than you were adding before. So internally, we are putting certain guardrails around AI of what data to be used, where, which team needs to use what kind of tool. I don't think one AI tool fits all. If you are a consultant, then maybe right now, Claude is one of the good examples to use as a consultant, but as Claude comes with a lot of security controls that are there, so as an organization, you need to make sure that you configure those controls, otherwise your data can be used to train, your data can be shared in other search results. So we are making sure that those controls are implemented. And it is applicable to all the different AI tools that are coming in, especially the ones which are free, where you are the product because it's free.

Dhruv Sharma: Have you also been using agent harnesses to deliver projects in production?

Sahil Shah (TM Systems): Yes, but in limited capacity.

Utsav Somani: Yeah.

Sahil Shah (TM Systems): Yeah.

Utsav Somani: And given that you have presence in Netherlands as well, how are the requirements for say, I mean, a client based out of EU versus a client based out of India different?

Sahil Shah (TM Systems): Interesting question. Okay, so I think the requirements probably are same if it's in EU or in India, but the difference comes in the approach, I would say, where in terms of EU, they want a specific subset of a product, a very niche, whereas India, the requirements come, which are more generalized, and where the client wants more handholding and understanding about the entire surface.

Utsav Somani: And what's the split of revenue between overseas and India for you right now?

Sahil Shah (TM Systems): I think it's 90% overseas and 10% India.

Dhruv Sharma: And what's the Dutch startup ecosystem like, Sair? Like, what's happening in Netherlands and in Amsterdam? And I mean, there's a whole bunch of homegrown companies, but talk to us a little about that as well.

Sahil Shah (TM Systems): I think the Dutch ecosystem is nice, interesting, but overall, very regulation heavy, I would say. And most of the investments out of that come in, come from the States, less investments come from the Dutch market. And that's an area of discussion that is happening significantly. In Dutch, the major focus of startups that have come, at least that I know in the past couple of years, are focused on fintech industry. And overall, one of the companies that have come out of Netherlands and probably the market leaders in the world is, you know, ASML, probably everyone knows about it. They now are stationed in Ahmedabad as well. So, you know, there are very few companies in the Netherlands that we have seen are touching different areas, like unique areas like ASML, but more focused on the fintech. And especially in Netherlands, actually, there is a ecosystem or there is a forum called HSD, Hague Security Delta. So that's a wonderful thing, I think the Dutch people have done, where they have got around 150 or cyber security companies across Europe at one place. And then they try and solve national European level problems, come up with solutions and then try and implement across EU. So that's a wonderful ecosystem, I think, that they have developed.

Utsav Somani: And as a final closing question, talk to us about your chess journey. Are you still active on a national level? No, no.

Sahil Shah (TM Systems): So I think back, it's been almost 15 years before I think I was quite active back in the school days. Had a wonderful time now, as and when I get time, I do play. In fact, recently, currently, there is a chess tournament going on in our company right now. So I just won the first round. So hopefully I can make it through.

Utsav Somani: That's unfair advantage, I mean, they're all playing against you.

Sahil Shah (TM Systems): You know that. Thank you so much.

Utsav Somani: Yeah. Wishing you all the best, I'll see you this weekend.

Sahil Shah (TM Systems): Bye bye. Thank you. Thank you so much, guys.

Utsav Somani: Nice speaking. All right, listeners, moving on to our next guest, we've got Dhaval Jain of MAVE. Dhaval, welcome to the show. Hi, Dhaval. I think you're on mute. Classic Zoom problem.

Dhawal Jain (Mave Health): Hey, what's up? Hey, bro. How are you guys doing?

Utsav Somani: Good to see you. I saw the news that you posted. So congrats on that. Thank you so much. So explain the product in English. Somebody buys almost a $500 headset, does a 20 minute session. What do they get out of it?

Dhawal Jain (Mave Health): What do you essentially get in the healthier brain, a more efficient prefrontal cortex. Now, for some people, that might mean that they can focus better. They can regulate their stress better. For others, it could mean their reflex time is closer to what they want. They're procrastinating lesser. For others, it could mean that they're less anxious. They don't have looping thoughts like they used to. So a healthy brain is essentially the key to unlock a better mind space. For different people, that means different things.

Utsav Somani: And what's the science behind this? Like, why is this happening now?

Dhawal Jain (Mave Health): That is a very good question. So I think this is not happening now. This has existed for a very, very long time now. There are over 30 years of clinical studies published on the technology. But we understand very little about the brain. Like the scientific community understands very little about the brain. So it's through trial and error that we get to a protocol and that works for multiple people. And it also takes a lot of studies, a lot of years of research before you can confidently say that this is safe to be in the consumer market or you can use it at home or the right way to use it is for 20 minutes. All of these are things that we don't get to using first principles, which essentially means a ton of time needs to be spent for research.

Utsav Somani: And just to clarify for the audience, this is not a medical device, right? You know, marketing this as a medical device. This is a consumer wellness device.

Dhawal Jain (Mave Health): This is a consumer wellness device. You and I are supposed to use it. The same technology is also applicable in the medical world with different protocols and with, you know, different types of tools and devices. But this particularly is built for everyday consumers.

Dhruv Sharma: Can you give us a quick 101 on what's TDCS and how it plays into the electrical activity that already takes place in the brain?

Dhawal Jain (Mave Health): Correct. So the natural language of the brain is electrochemical signals, right? Sometimes essentially what happens is given the stressors of modern life, given the lifestyle that we now lead, given sometimes also genetics, there's electrical activity in the brain drops, which essentially means neurons in the brain, the brain cells are not able to communicate with each other as efficiently as they used to. TDCS is Transcranial Direct Current Stimulation. As the name suggests, it uses very low intensity electric current to recharge these neural networks. So what essentially happens is when you wear the headset. So actually, I have the headset. So let's say when you put it on your forehead, these two are the points of electrodes. So this is where the electrodes sit. And we use very, very gentle electric signals that then pass through the prefrontal cortex to essentially complete the circuit.

Utsav Somani: And how heavy is this? And do you need to recharge it?

Dhawal Jain (Mave Health): Like what's the I mean, this weighs about 100 grams. So you pretty much forget about it after you've had it on for like one minute or one and a half minutes. And we engineered the battery such that you don't have to recharge it. So one thing I hate about my devices is having to recharge them every day or every two days. This you only have to recharge like once a month and then it is good to go for like at least 30 to 45 days.

Utsav Somani: And you're supposed to use it daily.

Dhawal Jain (Mave Health): You're supposed to use it daily. It's like gymming. So you do need to take like a day or two as a break in a week. So you use it like five times a day. It's essentially about maintaining being consistent with it. You know, having the right kind of adherence to the product. I would write the best response.

Utsav Somani: So people notice benefits in like focus, mood and stress regulation. Those are the claims that you make. But do you have any, I mean, peer reviewed like sort of beta testing amongst users that you've done, peer reviewed studies that you've published?

Dhawal Jain (Mave Health): Correct. So we did do a 500 people beta last year where the idea was to understand how do people behave with the product? How how easy is it to, you know, adhere to the technology? Because the science and the credibility of the science is very, very clear. So we have nothing. We've not changed anything fundamentally that changes how the product is supposed to work for the brain or how the product is supposed to make you feel better or help you focus better, et cetera. So we've not done any large clinical trials with this product. But what we've done is 500 people beta that is monitored by psychiatrists and psychologists where they regularly perform check ins to understand how people are improving, et cetera.

Dhruv Sharma: I'm curious, Dhaval, in that sample size, if there were, you know, any any people dealing with, say, degenerative conditions like Alzheimer's or dementia.

Dhawal Jain (Mave Health): So our target age group is fundamentally 25 to 45 years of age. It's rare to meet somebody dealing with this.

Dhruv Sharma: But then who were the subjects? I mean, I know it wasn't a clinical trial, but in the beta, like, did you have athletes? Did you have people who, you know, like to be like to perform on the edge?

Dhawal Jain (Mave Health): So most of the times it was people who are knowledge workers, people such as you, people such as us. Yes. But then we did also have athletes. We did also have surgeons, people who work in very, very high stress environments. But more often than not, it was engineers. It was people who work at startups.

Utsav Somani: And you had somebody with us. I mean, somebody who was a UFC fighter also. I think there was some promotion that you were doing with them also. That's correct.

Dhawal Jain (Mave Health): So Max, in fact, so Max Fain Griffin is a UFC fighter. He just retired. Actually, he'd been fighting in the octagon for about 10 years. The only person to have, not the only, but one of the only few people who have never been knocked out in the ring. One of his concerns was that modern life stressors were getting to him as well, which essentially meant when he's fighting in that very moment, you might not have the kind of reflex that you need, or you might not have the kind of mind space you need to deal with that. So he was one of the first users in the US that we ever got on board. And now he's been using the product for about six months. Very, very regularly.

Dhruv Sharma: You know, one totally unsolicited piece of advice, Dhaval is, you know, who needs to wear this Mave Health device? Is Mike Tyson or any other heavyweight boxer or NFL quarterback?

Utsav Somani: And the kind of damage they must suffer, I think the concussions. I think there's a study also, which they did. Like many of them suffer from not just PTSD, but many other issues because of the number of times they bang their head against each other.

Dhawal Jain (Mave Health): So you'd be surprised to know we're actually on boarding around a dozen NFL players to use the product.

Utsav Somani: That's lovely.

Dhruv Sharma: They're going to get smarter.

Utsav Somani: And is US becoming a bigger market for you because of just the uptake that you're seeing there or something like that?

Dhawal Jain (Mave Health): I think there's definitely more awareness about mental health and mental wellness and how it affects your everyday productivity, etc. So inevitably, US becomes one of the larger markets for us. But we do also work with people in India very, very regularly.

Utsav Somani: But what you're basically improving, like, I mean, stress, focus, mood, all of these are very qualitative things. There's no single metric that you can measure, right? I mean, something like a whoop on an Apple Watch can tell you how many hours you've slept and what is your HRV resting heart rate. These are things that you can measure. And I believe you have a companion app as well. So can we see progress of these things as well?

Dhawal Jain (Mave Health): Absolutely. So I think one thing that we need to fundamentally understand is mental health is not about biomarkers as much as it is about how you feel. And we can't view it from the same lens of physical health where we can't. And also to say a little bit more about it, all of the psychophysiology, the psychophysiology, which essentially means how you feel will determine how your physiology is. So, for example, if you're stressed a lot more, your HRV by default will be very, very low. Your resting heart rate by default will be very, very high. So these are there are these active biomarkers in physical health that can give you a proxy of what you might be going through and how your body is recovering. But then there are also self check-in assessments that have been used in clinical trials. So I think how we can talk about this is also how does one antidepressant or one form of therapy become better than the other? How do we determine that? And this is through all of these clinically validated assessments that you can also find on the app that you understand how you are improving in terms of your mental health.

Dhruv Sharma: Maybe to draw a parallel, when people have a meditation session, a successful one, or take some form of stimulants, like how does that alter their brain chemistry, even if temporarily? And how do scientists measure all of that stuff? And are there any lessons for me to draw from that and incorporate into how you tell the story?

Dhawal Jain (Mave Health): On both those fronts, it is still self check-in assessments. The gold standard of how you measure anything in mental health right now is assessments. And I hope that changes. I hope we're able to figure out the right biomarkers in the brain that help you understand it more objectively. But so far, assessments is the go-to for every single type of product and every single type of use case.

Dhruv Sharma: I've been having one question, Davil, which is, you remember you made the gym analogy and we just spoke about caffeine. So I mean, if you resort to the use of caffeine, sometimes you need higher and higher doses. Same thing in the gym. Your body adapts. You need to employ a progressive overload. So is there such a thing as the Mave device being good for just 20 minutes or will people over a period of time have to wear it for longer and longer?

Dhawal Jain (Mave Health): So I think one of the unique strengths for this technology is the fact that there is no tolerance built up, which essentially means you don't have to increase the amount of time or the amount of stimulation you need to to efficiently power the brain the same way.

Utsav Somani: And congrats on the 2.1 million raised by Bloom. But consumer hardware startups are very, very hard. I mean, regulations, manufacturing, supply, returns, all kinds of issues. What was one unique challenge that you didn't foresee before that you had to face while bringing this product to market?

Dhawal Jain (Mave Health): I think how hard hardware can get in terms of supply chain is one thing that a lot of people warned us about. But we were taking it very lightly coming from a software background that how hard can it be? Eventually, we did realize we did make a ton of mistakes in building the supply chain. But now we are at a point where that essentially becomes our strength because it is so hard. It is very, very hard for other people to just come in and replicate it overnight.

Dhruv Sharma: And as must be the case, whenever you're trying to do something new, I'm sure you meet your share, your fair share of skeptics, right? Like, typically, what is it that you hear from them and how do you address it? And we're asking you this question so that other founders can all take away some lessons from it.

Dhawal Jain (Mave Health): You're talking about supply chain or you're talking about the product itself? I think the two most asked questions would be one, does it work? And if it works, does it have side effects? If it works and has no side effects, then why are we hearing about it for the first time? Essentially, the same questions that you had at the beginning of the show, which is, you know, why have we not heard about it? This is such a great technology.

Utsav Somani: And I mean, there are people who've done this, right? I mean, Flow is, I think, one of the companies that is using EEG, I think, globally. And there are a few others who've tried different brain stimulation technologies as well. What does the landscape look like right now?

Dhawal Jain (Mave Health): So EEG is something that Muse does and is well known for doing it, which is they use neurofeedback to improve your meditation sessions. Flow fundamentally brings you the same technology, but specifically for depression, major depressive disorder. So it's kept behind a prescription. It has to be recommended by your doctor, etc. But fundamentally, in just consumer space, there are two technologies that dominate, absolutely dominate neuroscience field. One is EEG, where you're measuring brain activity. And then based on that, you're recommending an activity to do that to enhance that brain activity. And the second one is TDCS, which is more passive, where you can comfortably wear it and, you know, go on with your life for the 20 minutes also that you have it on.

Dhruv Sharma: And there's a company that came into the conversation a few weeks ago. I think even we discussed it called Sabi. You wear the beanie and then it can read your, it's basically Neuralink, but without an implant in your brain. Are you following, tracking that technology, those developments?

Dhawal Jain (Mave Health): Yeah, so the founder of Sabi actually is a college senior. I'm a very good friend. They absolutely have the promise of tracking, being able to track and then transcribe those into words. I'm actually looking forward to using their product as soon as it's out.

Dhruv Sharma: Do you think we can bring them on the show? Just like we have you? We should try.

Utsav Somani: Yeah, please. Happy to make the intro. While we're at it, like what's your take on Temple, by the way? Have you studied the technology behind it?

Dhawal Jain (Mave Health): Again, not something that I've been able to look into very deeply because there's so little information available in the public domain. But again, looking forward to getting my hands on it as quickly as I can.

Utsav Somani: And you're spending a lot of time between SF and India. How are you, I mean, positioning yourself, your product, your company and yourself as well, including a team to sell in both these markets successfully at the same time?

Dhawal Jain (Mave Health): So we are largely based in the US. We want to be as close to the consumer as possible in terms of being able to understand what their lifestyle is like. Only then can we build a product that genuinely integrates in their life. So about nine months in a year is what we spend there. Three months is what we spend here. Most of our marketing focus also remains in the US. But because, of course, there's so many people who have tested the product in the Indian market and we are essentially from India, that brings in a lot of organic traction within the country as well. But otherwise, primary focus is on the US market, although we do service every single person that comes to us from India.

Dhruv Sharma: And then when you build something like this and go through all the regulatory hoops in one jurisdiction, do you get to carry it over to other jurisdictions as well? Or do you have to do that over and over again every new market you enter?

Dhawal Jain (Mave Health): For now, since we've only done two markets, it is pretty much starting from scratch. I hope that eases out soon, where we don't have to start from scratch for every single country that we know.

Utsav Somani: And Dhaval, as a final closing question, what does the next one year look like for you? What is success? Do you have ambitions to go medically approved? Are you looking to sell a lot more number of devices? Or are you focusing on some of the medical research stuff as well?

Dhawal Jain (Mave Health): So for us, what is important is adherence. Like I said, adherence in health is the number one thing that most companies should be tracking for their users because it's very easy to get a foot in the door. It's very easy to talk about stress, talk about focus. Those are some of the most pressing concerns. So anybody making those claims can get a chance to at least have some adoption. It is adherence that we constantly drive and we constantly want to work on. So for us, success would be most people who buy the product at least use it four times a week. That's fundamentally what we're all aligned towards for the next year.

Utsav Somani: All right. All the best. Wishing you more completed sessions at Mave and Arc. Thank you so much, Dhaval. Thank you so much, Dhaval. Cheers, Dhaval. Thank you for coming on the show. All right, listeners, we're moving on to our final segment today. We've got two founders from Legend of Toys, Afsan and Vinay. Hi, guys. Hey, guys. Welcome to the show. Congrats on the new race. Let's introduce the company to our listeners.

Vinay Jaisingh (Legend of Toys): Thank you. I hope you guys are doing well, Utsav and Dhruv. Thank you for having us on this segment.

Utsav Somani: It's my pleasure to have you on the show. Thank you for giving us the time.

Vinay Jaisingh (Legend of Toys): Lovely. So Afsan and I run Legend of Toys, which is essentially a full stack manufacturing brand for toys, essentially, where we are trying to attempt to create a platform of sorts where you have multiple brands rolled into one effectively. We've gone live with Legend of Toys, LOD Cars, which focuses on the RC car segment. Currently...

Utsav Somani: RC is remote control.

Vinay Jaisingh (Legend of Toys): Remote control. Yes, that's right. Yeah. We currently operate across multiple channels. We're available on Amazon. We're available on Flipkart, QuickCommerce, our own D2C website, and a little bit of offline.

Utsav Somani: And this new round, our investors underwriting the manufacturing story, the China plus one story, the toy IP brand or house of toys, like what are they specifically going after when they back you in this new round?

Vinay Jaisingh (Legend of Toys): Specifically going after the brand itself. For us, we believe that manufacturing is a layer within the entire brand, right? I mean, so this is atypical when you compare it against, let's say, the BPC market or other D2C or consumer brands in India. Manufacturing typically happens a little away. Just give me one quick second. Sorry.

Utsav Somani: We have Afsan at least. You can complete, I think, Vinay.

Afshaan Siddiqui (Legend of Toys): Yeah. Yeah. So basically what he was driving at is that...

Dhruv Sharma: This would be a true test of whether you can complete each other's sentences.

Afshaan Siddiqui (Legend of Toys): So we have been friends for nine years now. We met at ISB and we do complete each other's sentences. So let me just quickly finish his thought. So the idea there is that the investors, and obviously the confidence comes from the idea that it's all built on brand. But we realized that our market is slightly more unique in the sense where the brand does not honestly just represent only the branding elements. It represents the full stack. Otherwise, you're not able to take care of the quality and the way that this market has been running for, and because it's a legacy market, right? It's nothing new. But the way it has been running all this while is that there has been absolute disregard for quality. And there has been a large amount of dumping which has happened from offshore vendors. And our vendors itself, where they are bringing a lot of stuff and just dumping it in the market. So that is what we are trying to clean up. And that is what the investors are ready to underwrite. They are saying that it is a brand led with a strong story, with very strong fundamentals behind it, which is your manufacturing, which is quality control, which is the right kind of messaging, which is the right kind of consumer handholding. That is what they're underwriting.

Dhruv Sharma: Guys, can you talk to us a little bit about how the screen, that flat rectangle has distorted the toy market? Camp toys, all right, like physical toys. Can you talk to us about that?

Vinay Jaisingh (Legend of Toys): So actually, if you look at it, over 80% of the world's toys actually doesn't use a screen yet.

Speaker 7: Yeah.

Vinay Jaisingh (Legend of Toys): Much more, actually. It should be closer to about 90%. So you do have some amount of profilation of screens and toys when you talk about, let's say, for example, Nikos.

Dhruv Sharma: But also like children picking iPads. Children, yes. Are you going to be an iPad baby or are you going to be like a physical toy baby?

Afshaan Siddiqui (Legend of Toys): You know. It's a big question.

Dhruv Sharma: Yeah, big question.

Utsav Somani: Very contentious one, too.

Vinay Jaisingh (Legend of Toys): How Netflix competes with sleep.

Utsav Somani: As how Netflix competes with sleep, you guys are competing with iPad or any screen, basically, for that matter.

Vinay Jaisingh (Legend of Toys): Well, actually, what we're doing is making parents very, very happy. Because if you look at new age parents, if you look at millennial parents, if you look at early Gen Z parents, they actually don't want their children to be on screens. And this comes out again and again when we talk to consumers, right? So if you talk to parents today and you ask them whether they're okay with their child looking at Chhota Bheem on an iPad versus playing with a remote control car, because that's a very myopic question to ask, they almost always come back and say, we'd prefer it if they play with the RC car. Because so the trend around screens actually happened with people from our generation, where screens came in when baby boomers were parents and they wanted something to keep their children engaged. They were like, this is something new. Why don't you use the screen? But if you look at more new age parents, they actually want us to use or stay away from screen-based play. And that's, in fact, our positioning. So if you look at our positioning, if you look at that entire spectrum of what children want, right? On one end, you do have that extreme where kids want YouTube, kids want an iPad, a game on the iPad, so on and so forth. That's one extreme. On the other extreme, you have parents who want a very high amount of STEM-based toys or learning-based toys, right? Or learning-based games, which increases the amount of learning the child is going through or is experiencing, right? Kids are happy with something in between. So if you ask them and you tell them that, look, either you get a toy, which is a toy, and you're learning out of that toy in some form. So using an RC car is some amount of cognitive development, for example, motor skills, so on and so forth, right? On the other extreme, you're going to be given flashcards to learn about the Taj Mahal. They choose this. So this then becomes that confluence of compromise between the child and the parent. And that's where we win. And that's where we position ourselves as well.

Utsav Somani: In talking about brand building in a space like this, because here you have to appeal to the child, because he's the end user, he or she's the end user, but parents are the one making the buying decision. So how do you think about marketing or targeting users? And I mean, end user is not the end purchaser, right?

Vinay Jaisingh (Legend of Toys): End user is not the end purchaser.

Dhruv Sharma: There's the question, how do you get the child to manipulate the parents? Exactly.

Vinay Jaisingh (Legend of Toys): Go ahead, Afshan, go ahead.

Afshaan Siddiqui (Legend of Toys): Yeah, so there's a ton of pull built in there. That's where the entertainment factor comes in, right? If you look at our products, I mean, we did not start with the zero to five segment. We started with five plus, six plus, even seven plus segments. So these RC cars that we are trying to bring in, the idea was that, what is the world playing with? And where is the world going in general? And we said that, are these available in India? Are these not available in India? This is sort of a mix of what is beneficial for the kids and the parents and plus our own aspiration as well. I mean, these are the toys that we didn't get when we were kids, right? So we said, fine, number one, democratization of this. So we will bring these toys in. And second, if you look at that whole demand from the kid's perspective, you make it so lucrative and you make it so entertaining that the kids themselves are driving that decision through their parents. The car looks cool, it has lights, it glows, it goes fast. And then there is a whole backdrop of stories behind it, which is, this car is actually not just an SUV, it's called NOX, right? And NOX is a particular kind of character. Then you have other drifters, Nightwolf. And so for example, Nightwolf is a street racer, right? Grew up without parents and trying to make his name in the world. While in the same world, there is another car which is called Flair. Now Flair is the one that comes from legacy. And Flair is just trying to fill in his dad's shoes because his dad was a drift king when he was younger. So he has seen the tracks, he has done all of that. So this is the kind of world that you're building and to compliment the product or basically engulf the product inside it so that there is one cohesive story that you can present to the world and say, the child which is more than five or six years old is going to get this, right? So once you build that world out and then you start thinking about, okay, you know what, how do I integrate this and expand this world to include a four-year-old, a three-year-old, a two-year-old. So that's a journey that we are trying to traverse. We just happened to start at the five plus segment right now where the kid can sort of get his parents to buy the stories for him. And then ultimately we will expand to get the whole or capture the whole spectrum.

Vinay Jaisingh (Legend of Toys): Now, an interesting thing that has actually popped out from this is that you're able to break away from remote control cars, the product, right? So you actually have kids who, and we've seen multiple use cases here where kids come back and say, I want Flair. I don't want an RC car, I want Flair. So the moment you characterize the toy, the toy then becomes a sub-brand, if you may.

Dhruv Sharma: It comes to life, they start bonding with it and all of those things that happen, yeah.

Vinay Jaisingh (Legend of Toys): Exactly, exactly. So which essentially means then if you have someone, you have a child, let's say the child is about 12 years old, playing with Flair in his society. He's playing with Flair. And when another child asks him which toy is this or which car is this, he does not say this is Legend of Toys, this is LOD cars. He says, this is Flair. Now what this essentially does for us and what we're trying to build it into over a period of time is that the child actually walks into his parents' room and says, I want Flair. And if the parent brings back a random remote control toy, the child says, this is not Flair, I want Flair. And that's how the IP builds.

Utsav Somani: And do you do anything to support this IP? Like companion, I mean, not companion apps, but something that you can see maybe to build on this brand universe?

Vinay Jaisingh (Legend of Toys): Yeah, absolutely. So right now what we're doing is, we know this is a very long journey. It's not something that's going to happen overnight. This is in effect, the Hot Wheels story, right? This is in effect, the Barbie story, but broken into a universe where it becomes immersive play for the child across different age groups, different categories. We've started seeding the thought, right? So let's say, for example, you start with Flair and you start with a comic inside the box of Flair. And it's not just the comic, it's also the box itself. So I'd love to show you a box. We'll try showing you a box towards the end of the segment. But the box has Flair story and it says that, hey, I'm Flair. And this is what I do. And this is where I'm from. And this is my home. Don't throw me away. Don't throw my home away, right? So it starts there. And then the box is opened up. The box is a container. It gives you the experience. Now, let's say, for example, so if you were to buy a Ferrari from Italy, right? You'd go to port and receive it in a container. So it gives you that feeling. You keep it. You open up the box. And then there is a comic strip inside. It's a 20 panel comic strip. And it gives you a snippet in the day of Flair's life or it gives you the origin story of Flair. Eventually, what will happen is you'll have a lot of this content, which is created on off-product medium, which is effectively, let's say, for example, we're going to have these stories on built into the website. We're going to have animated versions of this on YouTube, which essentially means Flair story doesn't start and end with that comic. It is beyond the comic. It is before the comic, at the comic, and beyond the comic.

Utsav Somani: And India is notoriously price sensitive, but not in categories like pets or children. Do you notice that your customers tend to be price sensitive or price insensitive?

Vinay Jaisingh (Legend of Toys): Actually, we tend to notice that customers are willing to spend a premium, right? Now, when I say premium, we're not a premium brand. We are an aspirationally affordable brand. We tend to launch products on the top side of the market, which is, again, very atypical, given how Indian brands typically launch at the bottom of the market and slice upwards. We do the exact opposite. We actually come in at the premium side of the market, right? And people are willing to spend because you're giving them something which doesn't exist. You're giving them value, which doesn't exist in the market, which hasn't existed in the market before, right?

Utsav Somani: And that brings me to the quality control and quality check aspect. In India, I think manufacturing typically tends to have lower quality than global counterparts. That's why people end up importing and even bypassing the BIS compliances and other things as well. So what is your secret sauce behind ensuring that quality is top-notch?

Afshaan Siddiqui (Legend of Toys): So, Utsav C, one correction I would like to make there. So it has been legacy systems have been very, very price sensitive. And that is where the quality bit comes into picture, right? So if you want to be anywhere and everywhere and you want to appeal to every kind of customer, you are going to end up compromising with quality because that's going to take some amount of premium. So that is where there is the beginning of where we start. And we said that we are going to give our customers the best possible value at that particular price point. So we realize that instead of being price sensitive, we call it value conscious market. India is more of that, right? So for the right amount, you should give them the right value and the consumers are ready to buy. That's number one. Number two is when you start to think about it like that, you realize that providing quality at any given price point is a mindset, right? How a lot of these vendors or sellers in India were actually circumventing all of that is they were taking a lot of this material in bulk and they are just dumping it without putting any kind of effort on top of it. We said that's the first thing we need to fix, right? So instead of doing batch testing, instead of just getting containers and containers from China, instead of doing all of that, we said, no, we are going to go into the component selection route. So first of all, you make a kick-ass product and then you say that, you know what? I'm going to put the best quality component in that for that particular price point. That's number one. Number two, you come here, you put it all together and you put it all together in the most loving fashion possible and thinking about the consumer in mind. So you're likely to make less mistakes. That's number two. And number three is instead of doing batch testing, et cetera, you do 20-point checklist on each of those products. So we are hopefully, probably the only people in the market, the only brand in the market who checks each and every piece that goes out of our factory. And I know that it takes a lot of amount of time and effort, but we are ready to pay that premium in order to create a segment which does not exist, which is that slightly above the premium experience for our consumers. So I think that is one thing, that has really helped us be able to...

Dhruv Sharma: I also love that you guys have after sales. Like if I crash my flare into a wall, I can actually bring it to you for repairs, much like you're driving a car to a workshop. So I think that's great also. I mean, not just for the child who might have a very traumatic experience losing the car, but also for the environment.

Afshaan Siddiqui (Legend of Toys): Yeah. But see, it ties into everything, right? I mean, providing after sales service, that was another question that we had to answer because we were like, you know what? The sale doesn't end at ordered, right? It has to be after that. Now, if I were to keep that customer with me throughout my life, imagine getting a child, you know, who's addicted to or, you know, he really likes your brand at age six. I would want that dude to stay with me till age 18, right? Or even beyond. So that's what we said that, okay, fine. You know what, we're making these repairs, you know, it's not that expensive, but the customer experience, you know, that takes you several notches up. So what does it cost to us? And, you know, it only costs a little bit of compassion, to be honest. There's nothing beyond that. And we said, okay, you know what? We are going to be the first ones to do after sales service. And you know what? We're going to do it free of cost. Maybe only the component cost that we will recover. But other than that, you know, we will just repair everything and anything that comes. And plus, I mean, think about it. It's so wasteful. I mean, one tire, which, you know, wears out in a particular toy is useless. So I said, why do it? We'll just send you the tire. I mean, just replace it. We'll make you tiny tinkerers along with us.

Vinay Jaisingh (Legend of Toys): Selling price of a toy from Legend of Toys? We are currently at an average order value of about 1800.

Utsav Somani: 1800.

Vinay Jaisingh (Legend of Toys): Yeah.

Utsav Somani: And that's gotten you to the 30 crore ARR mark, I think, which was reported publicly as well. So kudos on hitting that mark. What's next for you guys across the year?

Vinay Jaisingh (Legend of Toys): So you're going to see us in a couple of other categories very soon. That's going to happen over the next 45 to 50 days. Exciting categories, stuff that would make you want to play with your child or make you want to play with your friends, right? So inclusive play is what we're gunning for. Not to say that that category cannot be played individually as well. It can be. We're also going to be dabbling a little bit with licensing and licenses which would excite all of us. Kidults as well as kids.

Afshaan Siddiqui (Legend of Toys): Five year or 50 year old? Both.

Vinay Jaisingh (Legend of Toys): Yeah.

Utsav Somani: Nice. Dhruv, you had a question. I think I interrupted you. Sorry.

Dhruv Sharma: Oh, no, I didn't. But now I do. I wonder if you guys being in the toys business have studied Lego, right? Like, how did they come back from the brink of extinction to become, you know, like this rage all over again? Cultural phenomena.

Vinay Jaisingh (Legend of Toys): That's actually an internal case study.

Dhruv Sharma: We'd love for you to share with our listeners as well.

Vinay Jaisingh (Legend of Toys): Yeah. Abhisar, you want to pick that up? That's your...

Afshaan Siddiqui (Legend of Toys): So Lego, I mean, credit where credit is due. I mean, that's a beautiful story, right? They started with a brick and that's what they built their whole empire on. And they were going and, you know, penetrating market after market and, you know, trying to capture as much of the imagination of the general public as they could. And, you know, around the 90s, late 90s, you know, early 2000s, you know, that company, they had expanded so much. They had done the water parks. They had done, you know, amusement parks and, you know, they built so many assets out of it that they were spreading themselves too thin. So nearly around 2000 to 2003, you know, they nearly went bankrupt. And, you know, that's when they sort of regrouped and said that, listen, I mean, we need to trim this down and we need to, you know, start focusing on the most important thing, which is the Lego brick, right? So that's where they started. And they said, OK, fine, we are going to understand our customers. Till then, they weren't listening to their customers, right? Then they went on to the forums and the boards and they started understanding what their customers were doing. And what they found was really interesting. Most of their customers, who were actually passionate, loyal customers, were actually adults. And they were into the habit of collecting. They were into the habit of building something new. And that's where they got their first unlock. The second unlock was their collaboration with, you know, global IPs. So these were the two things where the whole company shifted their focus, trimmed all the extra fat down and said that, you know what? We are going to focus only on this brick. We are going to focus on our customer segment. We are going to listen to those customers. They got a lot of their ideas from those forums. They launched IPs. And that's where the turnaround happened. So that is another thing that, you know, also plays into, you know, our psyche and our understanding and our context a little bit as well. Because what we have noticed here is that while we were trying to sell on early days of LOD, right? We were trying to sell remote control cars and drones. And, you know, we saw a lot of good response from, you know, the slightly older market as well. And from that perspective, the Tier 1, Tier 2, Tier 3 split also was very, very surprising for us. So we realized that, you know what? Here, a similar story can play out. We cannot ignore a segment which is, you know, big, very nostalgic about, you know, the kind of toys that they did or did not get to play with. And, you know, so that's how the kidult market also plays a big role in, you know, our strategy and, you know, and our approach. So while kids are big, we are not ignoring kidults either. And I think that's our inspiration from, you know, the Lego story. But the second part of it is, obviously, I mean, don't spread yourself too thin. Focus on your segment, focus on the category. And that's why we're taking our time, you know, launching category by category, each one, you know, taking its own sweet time to mature and so on and so forth.

Utsav Somani: Guys, thank you so much for coming on the show. This was phenomenal. Thank you so much. And wishing you all the best as you build this awesome toy company, but also global IPs from India. Wishing you the very best.

Afshaan Siddiqui (Legend of Toys): Thank you. Thank you, Dhruv. Nice talking to you.

Utsav Somani: Cheers. All right, listeners, that's it from us. We'll see you on Wednesday at four o'clock. Bye-bye.