The Neon Show
00:00:00 · Siddhartha Ahluwalia, Bhaskar Ghosh
[00:00:00] S0: The biggest challenge for founders today are model companies. They are eating forward revenue. They are eating backward revenue. [00:00:04] S1: Building software products is really hard. It is just so that software engineering is so profoundly affected by Gen AI, but the taste of a product, the design aspect of a product, how do you land it. These are nontrivial things, which I don't think can be automated away. [00:00:16] S0: In the last twenty five years, what worked for India was highly qualified labor that could do IT services. Now we are seeing this is a third era. How big companies can we see in this era? [00:00:25] S1: I am very excited about the technical talent and leadership I saw in India native companies like RazorPay, PhonePe, Swiggy, Flipkart. These are the engineers and leaders who are thinking about much deeper systems problems. I am still optimistic that will keep on happening in India. So if I look at my portfolio, whether it's in Rocketlane or Usher or Yugabyte, the best engineering teams is all sitting in Bangalore and Madras. This daring and technical depth that these teams bring in is really important for the future of the India U. S. Squadron. [00:00:58] S0: How will the new age AI services company get the business? [00:01:02] S1: That's a great question.
00:01:02 · Bhaskar Ghosh, Siddhartha Ahluwalia
[00:01:02] S1: That's a great question. [00:01:09] S0: Hi, this is Siddhartha Ahluwalia. Welcome to The Neon Show. I am your host and managing partner at Neon Fund, a fund that invests in the best of enterprise AI companies like Atomic Works, Pod Draft, CloudSec between The US India corridor. Today I have with me a very very dear friend, a person who I consider a mentor, friend, well wisher, Bhaskar Ghosh. Bhaskar, welcome again to The Neon Show. Thank you so much for coming again. [00:01:36] S1: It's a pleasure. And you are my mentor. [00:01:39] S0: I'm a sick man. I don't know anything. [00:01:42] S1: I love... I just want to say thank you. Just for everybody, this is the same shirt I had to wear last time. And I was sick last time and I was partly sick. But big fan of Siddhartha. Full disclosure, I'm an LP in his fund also. I love, Siddhartha, I love your curiosity about Indian history, but also the energy you bring and how you work with entrepreneurs. And the level of detail that you have at your grasp. And the fact that, you know, what I feel differentiates people and I hope, you know, I try to hold myself to that standard is people who other people follow. So, you know, it looks... It's obvious that you did companies in your past life and all your co founders, people who worked with you are on great terms with you, they follow you. And I think that is the true index if somebody is a leader, but more importantly a good person. So, very happy to I be
00:01:42 · Bhaskar Ghosh, Siddhartha Ahluwalia
[00:01:42] S1: I love... I just want to say thank you. Just for everybody, this is the same shirt I had to wear last time. And I was sick last time and I was partly sick. But big fan of Siddhartha. Full disclosure, I'm an LP in his fund also. I love, Siddhartha, I love your curiosity about Indian history, but also the energy you bring and how you work with entrepreneurs. And the level of detail that you have at your grasp. And the fact that, you know, what I feel differentiates people and I hope, you know, I try to hold myself to that standard is people who other people follow. So, you know, it looks... It's obvious that you did companies in your past life and all your co founders, people who worked with you are on great terms with you, they follow you. And I think that is the true index if somebody is a leader, but more importantly a good person. So, very happy to I be [00:02:38] S0: want to start with something that you believe very corely in, which is, you know, the new set of services that are getting developed. People are talking about AI enabled services, reimagining of IT services industry like TCS, Infosys, so if you have to explain to a layman first principles wise, what are the various opportunities available in the services ecosystem today for entrepreneurs who come from software era, SaaS era?
00:03:09 · Bhaskar Ghosh
[00:03:09] S1: That's an amazing question and as you and I talked about, I'm deep into it and trying to struggle my way through creating thesis and actually investing in companies, maybe even building companies. Services and I think the reason it's very relevant to this conversation is it's such an important part of the Indian economy. If you think about it, some numbers would be helpful. I think if I don't get this wrong, the amount, the revenue coming into India from services BPO, IT, non IT is about 400,000,000,000. The total economy around the services economy, if you add the families and the schools and the hospitals and everything else, is 1,200,000,000,000. And if I am not getting it right, Indian economy is approximately 3,700,000,000,000. I think I'm getting the ballpoint. So think about the magnitude of impact this industry and its secondary economy has. At 8VC and at a personal level, when we do builds, when I think about a new thesis, we ask the question why now? In the services industry, the reason people are excited about it or they think there will be massive dramatic transformational changes happening is because of the new wave of Gen AI. Right? Because not because of old machine learning, not because of old neural nets, but because of this whole, you know, foundation models which are based on transformers, which can do very very powerful things. So from a very Silicon Valley tech centric point of view, the the why now question leads to a few simple answers. One is, in many of these services industries, now just a brief aside, the services can be in the context of software as a business or non software as a business. Software as a business can mean you are doing IT services consulting BPO in the context of SAP consulting, Salesforce consulting, ServiceNow consulting, MuleSoft consulting, database consulting, so on and so forth. Testing, everything. Data migration, everything. And then it can be the other vast space of everything which is not related to software. It can be for call centers, it can be for accounting, it can be for HR, it can be for CFO's office, it can be for legal, it can be for travel, it can be for clinical trials.
00:05:29 · Siddhartha Ahluwalia, Bhaskar Ghosh
[00:05:29] S0: It can [00:05:29] S1: be it is massive. Silicon Valley is obviously technical people like us, whether we are builders or investors. Reason we have suddenly started looking at this very closely is the Why now? Question around tech. The LLMs and the models coming in along with the tooling around it are helping us do a few things really well suddenly. One is about unstructured data extraction and handling and management. If you look closely at a lot of these services, if you look at the human centric workflows in these services, it's about doing stuff with unstructured be spread... [00:06:06] S0: For our audience, can you explain as the terms that...
00:06:06 · Siddhartha Ahluwalia, Bhaskar Ghosh
[00:06:06] S0: For our audience, can you explain as the terms that... [00:06:08] S1: Oh boy. Unstructured data could be a spreadsheet, could be a handwritten note, could be a PDF, could be a Word document. And the... I mean the handwritten note part is extremely important actually. And you do stuff with data, look at it, you extract something, you write it into something, you read it from something, then you do something with it. And so human in the loop data management and doing stuff with data which is unstructured is a massively important and significant part of this of these companies. Number two is, there's a lot of human beings involved in what we call workflows. Which is you know, you do something, you write something, you decide something and you require domain knowledge to do it. And you have lots of hops in these workflows. So humans, you know, remember back in the past life industries like RPA tried to do this automation well, but for various reasons they could not. Leaving that aside, so unstructured data handling, the multi hop workflow automation stuff, and then there are other areas like you can handle domain specific languages which is a more software aspect in the context of Salesforce and others that we talked about. All of this can be automated with a very high degree of robustness, correctness, and speed with these new models. That is the central reason that you can now get a lot of this multi hop workflow functionality done automagically. With some right set of tooling around it which we can discuss separately. [00:07:42] S0: Can you give some examples?