My guest today is Shiv Sharma. Shiv is based in Singapore and is the Head of International at Stocktwits. He has previously worked a range of tech investing roles including those in Venture Capital, Private Equity, Public Equities, and Investment Banking.
In this conversation, we cover the future of investing, the communities behind it, and the opportunities for Indian retail investors.
I hope you enjoy my conversation with Shiv Sharma.
[00:00:31] – [First question] – Introduction and Background
[00:03:18] – Why Shiv didn’t originally enjoy public equities
[00:04:09] – Differences between late-stage growth and public investing
[00:06:44] – Areas of growth and opportunities in public market investing today
[00:09:05] – The macro-environment and managing risk going forward
[00:12:22] – After being inside the VC bubble, challenges of investing outside it?
[00:14:07] – What should retail investors know?
[00:16:14] – Edges that retail investors aren’t taking advantage of
[00:17:23] – How should retail investors find investing trends?
[00:20:57] – What attracts Shiv to public growth stocks
[00:22:19] – Will the top VC’s always have access to the best companies early on?
[00:24:22] – Where is retail investing heading?
[00:26:14] – Communities role in investing going forward
[00:29:06] – Being anonymous vs open in communities?
[00:30:02] – Aspects of the creator economy to be excited about
[00:33:25] – Why Shiv joined Stocktwits
[00:36:07] – Why launch Stocktwits in India?
[00:39:46] – General themes and trends in Indian equities
[00:41:16] – India and it’s unicorns
[00:43:08] – India’s strengths vs other markets
[00:47:14] – Most undervalued life experience
[00:49:32] – If Shiv was 18 again
Connect with Shiv:
Listen to this episode on Apple Podcasts, Spotify, Stitcher, Castbox, Google Podcasts, or on your favourite podcast platform.
Kalani Scarrott (00:12): Hello, and welcome to Compounding Curiosity. I’m your host, Kalani Scarrott. And this podcast is all about compounding your curiosity alongside my own, through thoughtful interviews with interesting guests. For transcripts and detailed show notes, check out the links in the description. Hopefully you’re as keen as me to learn something new. So let’s get stuck in. My guest today is Shiv Sharma. Shiv is based in Singapore and is the Head of International at Stocktwits.
He has previously worked a range of finance and investing roles, including those in investment banking, private equity, and venture capital. In this conversation, we cover the future of investing the community behind it, and opportunities for Indian retail investors. I hope you enjoy my conversation with Shiv Sharma. So, Shiv, thanks for being here today. I think a good place to start might be in your background as I know you’ve done a range of finance and investing roles. So I’d love to hear about your whole journey and how you ended up to where you are today.
Shiv Sharma (01:11): Yeah, sure. Thanks, Kalani. Super excited to be on your podcast. I think you’re doing a great job here. So I look forward to it. So I started my career off in investment banking in New York, started off at RBC capital markets in the tech group. Didn’t actually want to be in tech, I actually wanted to be in energy and manufacturing old boring industries. But somehow, I got lucky. And I think that was probably, I guess, the biggest break that I actually got in my career, both actually ending up in the tech group.
We had a standard experience there of a couple years where worked my butt off 100 hours a week, and did M&A and IPOs and things like that. But I hated investment banking, so I wanted to move to private equity. And I moved to PE firm for a couple years. And then from there, I really wanted to move to Asia. So I went to INSEAD in Singapore. From there, I actually didn’t get a job in Asia. I worked super hard to try and make it happen, super bullish on, I guess, the entire Asian/Indian growth story and wanted to be a part of it.
But ended up in London for the summer, then interning at Fidelity, investing in Chinese internet stocks, had a great experience, but it wasn’t really a good fit for me back then. And wanting to go back to the private side and being like maybe a bit closer to companies and a bit more hands on. And so, I moved to Cisco’s VC and M&A team in San Francisco and Silicon Valley, where I was investing in software and collaboration companies. Spent a couple years there, about three years there.
Built a great network, had a phenomenal experience, got to investment, some really high growth, well-known companies. And then from there, my wife and I really want to move to Singapore. So I had been coming from a software IT background, when I moved to AWS where I did a few BD and strategy roles in Singapore for the APAC. But the APAC region had a good experience, but it really wasn’t what I wanted to do with my career. And so, then ended up at Stocktwits. Been here for about seven to eight, nine months. It’s been awesome. It’s like my day job and my passion combined into one so it’s pretty intense.
Kalani Scarrott (03:18): So you mentioned at Fidelity that maybe it wasn’t a good fit for you then. If I’m allowed to ask, maybe why not or why do you think public equities and Fidelity wasn’t a good fit at the time?
Shiv Sharma (03:29): Yeah, sure. So when I was at Fidelity, it’s very ironic. I love stocks now. But in those days, I wasn’t as deep into the equity markets. I think there was a lot there. I guess back in those days, the mutual fund industry was going through its pressure. You could see a trend going towards ETFs and lower AUMs and fee pressure happening in the industry. And so, I think I probably would have preferred to be at a more growth oriented hedge fund, back in those days. And then second, I just wanted to be closer to companies. So I wanted to be a lot deeper in a sector and then also be a lot more close to managing teams and how businesses grow and be more exposed to how business decisions are made.
Kalani Scarrott (04:09): The difference between late-stage growth and public investing, what do you think are the biggest differences?
Shiv Sharma (04:15): But the main difference between, I think, late-stage growth investing to public and VC is just a focus on product. I just think you really need to be quiet kind of change your mindset to really caring about product, because the product roadmap and the product decisions you make actually reflected the numbers in the future. So, for example, when you go meet a CEO of a series A company or series B company, the conversation is mostly around product, and it’s not going to be around numbers and P&L and stuff like that immediately upfront.
And so, I think that’s the biggest change from later stage growth investing. Also, I’d say I think what I learned about from the VC world for a few years, it’s kind of I’ve built a few mental frameworks that have stuck with me that I still use, even now in public equities. And I think one of those is around what you have to believe. And so, that I guess is if you were to build a longer-term financial model and you were to think about what it takes for this business to hit 100 million of revenue, for example.
But there’s certainly a … I mean, inflection points along the way where … So, for example, I guess one thing that really stuck with me is helping to build a framework to think through what specifically you’re underwriting, I guess, when you do a deal. So if you were to see company X, Y, Z and get to 100 million of revenue, what changes have to happen externally in the market or to the product itself or to the go-to-market itself?
For example, if you have a SaaS company who is currently selling to the eCommerce, SMB market, but they want to shift, but in order to get to 100 million of revenue, they have to become a more enterprise vendors. And that’s a huge shift that … I guess which impacts your product, which then impacts your overall go-to-market motion as well. So that’s an example right there of breaking down what has to happen. One more example, just to apply to public markets, is around Roku.
That’s a stock I own right now where, for example, right now, we’re going through an overall shift from ad dollars from linear TV to OTT. So, if that were to happen, then what steps have to occur from the Ad$pender side just to unlock more and more budgets and having those convert to OTT, but small things like that that are all product-driven that are mainly around the buying motion and how budgets and how revenue is earned.
Kalani Scarrott (06:44): If we fast forward to today, what areas are you looking at for growth and opportunities in public market investing?
Shiv Sharma (06:51): I guess from my portfolio perspective, I think it’s still the same old. I think it’s still the same cloud software, FinTech, and then also been doing a bit of large-cap stuff. I think there is some value in the large-cap names where they’re not as overpriced and I think there’s some cyclical elements to ad spend. And I think the large-cap names have been discounted because of regulation. And large companies do get less expensive as they get larger over time, historically. And that’s always happened like we always will happen.
But I think these platforms can probably continue to get larger. And there’s optionality as far as spinouts and divestitures and things like that in the large-cap world. I guess one thing there on the usual eCommerce software FinTech names, is that they are getting expensive. And I think people now totally get that there is a lot of value here. I think large mutual funds and all are now owning these and heavy scale and heavy depth now. And so, I think the easy money has already been made there.
And I think there is a lot of valuation risk in terms of with interest rates and the like. Because as you see, rates go up, you’ll likely see nasty pullbacks in growth stocks. So that is something that I’m really cognizant about and really worried about, personally. I do have a heavy exposure to growth stocks. And so, that’s one area, I’d say. And then, otherwise, what I do for my own personal perspective is that if there’s areas where I don’t really have an edge or don’t really know much.
So things like, for example, I guess gaming and AR/VR, and then also electric vehicles are trends that everyone on FinTwit and everyone is really super excited about. They’re not really, I guess, not known things at this point. So I think in those areas, what I typically do is just use ETFs and use people who know that sector really well, just because I don’t have time to do deep dives, and even the interest to understand these kind of micro trends in the depth you need to invest significant amounts of money.
Kalani Scarrott (09:05): So I think it’s probably fair to say that valuations have been on the high side of fair lately, but how do you view the macro environment and the valuation risk going forward, which you mentioned just previously? How do you manage risk and volatility in your portfolio? And how do you approach it?
Shiv Sharma (09:20): Yeah, exactly. That’s a great point. So I’m not a macro guy first, and that’s the first thing. But, I mean, I think you don’t have to be a macro guy to know that you will see valuations come down as interest rates go up. Now, if you believe the whole Cathie Wood thesis around the general trend towards, I guess, lower interest rates and lower inflation environments driven by hyperactivity, I mean, I do ascribe that to an extent, but I’m not a macro guy. So I’m really not the right person to address that.
But I mean, I will continue to follow along with the guys I trust in FinTwit and Stocktwits and the overall investing world to get a feel for it. But how I do diversify is that within FinTech, you do have quite a few buckets that are non all related that are non-purely all in the same work from home bucket, for example, because they all have different forms of revenue. So, for example, I own a lot of the ad revenue businesses. And so, those are highly cyclical as travel comes back and growth comes back. They do get a greater chunk of ad spend, again.
Then also, people don’t realize that even software is not all the same. Even in the SaaS world, while you do see high multiples, you do see also buckets of software where the original or I guess where the end market is not necessarily a focus area in low growth environments. So for example, Smartsheet, that’s an example of a collaboration productivity software vendor, who is a really hot IPO, who’s done really well, who was growing the 40%, 50% range back here before COVID.
And then during COVID, the demand for the product literally went to zero, I actually read a channel check of theirs back in, think, July or June of COVID, I guess last year. And I think the partners and the channel partners were saying there was almost zero demand as all the IT budgets and that all the budgets were all going towards the must have criticality stuff like Zoom and Slack for video and chat or Microsoft Teams or even cybersecurity or even cloud stuff. So that’s an example of where, as budgets come back, as work returns to normal, as people are more focused on the non-critical areas of software and productivity, as people work for more hybrid environments.
And that’s where you can see greater demand for, I guess, productivity tools who are not core to working from home, but are actually instead second derivative plays out working from home. One more example is HubSpot, where that’s the marketing and CRM world where now they’re seeing an acceleration, but during COVID, when everyone’s trying to cut costs, then marketing budgets and sales budgets and things like that are not really an overall priority. And so, I think people can be diversified within secular trend software and these growth stocks, and that’s kind of my plan. But who knows going forward how things go with valuation in the macro side.
Kalani Scarrott (12:22): So you’ve been inside that VC bubble in Silicon Valley. But now being outside of it, what do you think some of the challenges are being outside the bubble and now trying to invest? How are you going about it?
Shiv Sharma (12:35): Ever since I left the Silicon Valley world to be highly exposed to managing teams and products and things like that, I changed my investing style a bit to only focus on the best in breed names that I’m highly comfortable with and plugged into, that have some compensation that I can hold through downturns and hold through volatility and things like that. So that’s the main change. I think also, what’s changed since then, is that I was focused on software. And software now is a pretty known trend.
I think we all can agree that software is in some way, shape, or form eating the world, as the famous quote is, and I think we all understand that and see that trend happening. But the next wave of growth in public markets is what is probably going to be in things like gaming and crypto and clean energy and things like that. And so, that’s where I have almost zero edge. So for me, it’s hard to maintain, go outside my bubble, and stay relevant in those areas. So I say that’s the biggest thing.
And then I think how I address that is now you’re seeing, I guess, the rise of new boutique FinTech type of asset managers, I guess, whether it’s Cathie Wood who started the trend, who’s not boutique at all now. She’s very mainstream. But you see firms like Round Hill who are deeply focused on gaming and on sports betting and streaming, for example. So they had ETFs where it’s easy, because it was easier to buy names like that, for example, but from people who are super focused on this world.
Kalani Scarrott (14:07): So I’d love to transition more on to the retail investing side. So for retail investors, what do you wish they knew, as in what drove stocks? Or what do you think is a key point that they should know?
Shiv Sharma (14:18): When it comes to retail, people get really excited about … I think people get really focused on understanding the business really deep in growth equity, growth stock world. So they feel like they understand the business really deep, then it protects them a little bit. But actually, what happens is, is that at any given point, there’s about two to three different things that really move stocks and investors really care about, and that is usually what drives markets and what drives stock prices for the next few months to a few years.
So for example, like for Twilio, which is a FinTwit favourite, for that, it’s how quickly they can move up to software stack with the segment acquisition and how they can see their gross margins improve and be not just a C pass technology provider to actually being a software platform that even more sticky and adds even more value and leads to higher enterprise customer contracts. And so, things like that versus … I mean, that’s one example. Then also Zoom, I guess, is one more easy example.
I think people, very often, clump Zoom in the work from home bucket, which is for all good. I mean, that’s probably right. I mean, they are definitely working on beneficiary. But I think what people investors really care about there is how quickly and how big this market can be in adjacent areas. So, for example, Zoom phone is a product that I’m really bullish on that I think now has hit a few million number of seats and enterprises, and they’re seeing significant traction with. So that’s, I think, the next leg of the growth story, and plus International. So I think each company has a few different catalysts and metrics and stories and themes. And you need to understand the personality of the stock to figure out what it’s going to do and what the trends may be.
Kalani Scarrott (16:14): Do you think there’s any edges that retail investors aren’t taking advantage of or aren’t using to their full extent?
Shiv Sharma (16:20): Yes, I think everyone has an edge somewhere, they just don’t really know it. And so, if you’re an engineer at Google and you know DevOps better than anyone else and you know the spending habits and how well and how deep you use a product, I think that’s really a valuable insight. But then even if you go walk around the mall and you see the Apple store is really crowded, or if you see your friends all buying Samsungs, and these are all super simple, easy examples of people really don’t spend enough time thinking about. And so, I think that’s one area.
I think the reason people struggle with that is they think like the step going from knowing Apple is really hot to buying the stock is not really like … I mean, there is more to it from a finance and stock market psychology perspective. So I think that’s the step that the retail investors are now starting to feel more comfortable in. Now all that is aided by a massive bull market, for sure. I think that goes without saying. But I do think the psychology overall of the retail investor is changing.
Kalani Scarrott (17:23): So you’ve mentioned already some of the trends that retail investors either should be taking notice of or investing in. But how do you think investors should be finding these trends? Where to look or how do they find it? What should they be doing? Where should they be going for this? How do you think retail investors are able to find these trends and to get in early or even to take notice of?
Shiv Sharma (17:45): I think the good news is, is that a lot of this information is available now. So you can read transcripts. And just what I would do is, is when you read transcripts, you don’t really need to read the whole thing, you can skim through the whole thing. But in transcripts, the analysts typically ask the questions. Now some analysts asked really good questions, and some ask the accounting questions and the finance questions for their own models and their own purposes.
But every now and then, you’ll see a handful of really high-quality questions, but just squarely hit the nail on the head. I think when I go on in FinTwit, one of the things I see is that you see a lot of people who are just explaining the business in paragraphs and paragraphs and paragraphs, and that’s actually not that helpful. I think that’s probably the best approach, is probably the earnings calls where I would get that feel. And also, I think if you study the companies, what they’re putting in their investor presentation, so not as much the earnings ones, more of the investor day ones, where every once or twice a year, all public companies will have a big investor day.
And that’s where they’ll discuss the growth highlights and where they see the future of the business going. And I think as they start getting into that, you really want to track how that’s going to perform. One example here is Cloudflare. For the longest time, there was this mismatch on Twitter and Fastly was just on fire, and I’m still owned Fastly back then. And it was just going literally straight up for about one year straight during COVID.
In Cloudflare, who’s a relatively similar business, broadly speaking at least, and they’re considered from a Silicon Valley more of a product-centric lens to be a better company and a better product. And they also had the optionality on the cybersecurity side of moving into what Zscaler does. And they’re in super early days of that. But I think that’s an example of where they talked about it. Now, everyone’s comparing revenue multiples on Fastly to Cloudflare.
But the reality there is, I think Cloudflare is quicker and more, I guess, is going to hit that next leg of product growth, which is their second new core business area sooner than Fastly would. And so, that’s, I guess, one example where that narrative was wrong and people were chasing Fastly. I think the reason that happened is a lot to do with one retail investors. But two, and I guess more importantly, just the rise overall of institutions. And so, Fastly was at that time like a sub $5 billion market cap company.
And when they started showing just phenomenal growth in COVID and work from home, you saw institutions who maybe didn’t have allocations to it. They were like, oh shit, that’s an example of where getting a sense on Cloudflare of what they were focused on from a security perspective and how big of a market that is and what that competitive landscape looks like and how big the business that can be, and what gives them the right to be good at cybersecurity from their core business today is the holy grail answer to that question I think that people want to think about.
Kalani Scarrott (20:57): So it’s probably fair to say that you seem to be quite focused on growth. But what attracts you to public growth stocks? What’s the appeal or how do you view it?
Shiv Sharma (21:08): Yeah, that’s a good question. So it’s one where I think why I love public investing so much, is you’ve derisk yourself from product-market fit. You know there’s new product market fit. So, for example, if they have raised an A and raised a B and raised a C and raised a D and gone public and had a nice IPO pop and seen institutions become interested after the IPO. And more than likely, this company is not going to go bankrupt.
They may typically underperform, but I think that’s, I guess, why I love stocks so much, is that it gives anyone the exposure and the ability to buy and participate in massive secular growth companies. Whereas unfortunately, actually, I can’t stand this, but it’s a truth in the way the world works, is that the VC world is run by the same 10 to 15, or 10 to 20, 10 to 30 VC firms who all get exposure to the best companies over time. And so, to me, that’s just awesome. I think as you wish these companies went public earlier instead of waiting to $50, $100 billion market cap to go public.
Kalani Scarrott (22:19): To touch on what you mentioned at the start of that answer about the dynamic of the top VCs having access to all the best companies early on, do you ever see that dynamic changing, either through companies choosing to go IPO earlier? Or do you see there’s any way that that’s ever going to change?
Shiv Sharma (22:35): I hope so. I think you’ve seen platforms like EquityZen give retail investors exposure. Because you have maybe employees who’ve … Or VC funds who’ve been there from really early days who need liquidity. So I think that’s been a very active way for that to happen. But I think in general, it’s quite tough. Because you have too few awesome companies puts awesome management teams with so much capital out there. And I think until that changes structurally, I think something has to change there for that shift to happen that you’re talking about.
And the other thing you’ll see more is that over time, I think to be an entrepreneur, you don’t have to necessarily build a massive business. You don’t have to try to be a Facebook or a Google or a Snapchat or, I don’t know, Zendesk or an Elastic. So I think people will realize that there’s different businesses that don’t have to be as significant or as large. Because end of the day, all people really need is a more fun lifestyle. It’s more flexible and more entrepreneurial and gives you a better alternative than working at a big company.
I guess the minute you see more entrepreneurs with that philosophy, you’re already seeing it today, where with the creator economy and with Zoom and Shopify, you’re seeing mini brands and mini influencers being built and quite meaningful businesses, who are very lean with maybe one influencer, one business person, and a few graphics and video people, and using tools like Canva and Adobe and Zoom and Shopify. I think you may see an investor ecosystem arise focused on that type of area.
Kalani Scarrott (24:22): And to finish on the retail investing side, where do you see retail investing heading? What are some themes or what are you looking out for? What do you taking notice of in the retail investing space? I just love to hear your thoughts.
Shiv Sharma (24:34): Yeah, sure. I think in retail world, I think you’re seeing a general, more awareness levels. So it’s stemming from people being … It’s discussed more so in my social life, my WhatsApp groups are very heavily, I guess, discussing stocks and crypto. I think the interest level across retail investors have gone way up from platforms like Stocktwits and Twitter and YouTube. I think you’re seeing tons of information being shared across all different investing styles.
I think investing in stocks and crypto gives people the ability to express themselves entrepreneurially where if they have a super stable, cushy job at a big tech company or I guess whatever industry they’re in. I think expressing themselves in the trend they see is something that you’re only going to see explode over time, especially with crypto, where people don’t necessarily have complete exposure to an access to US stock that they use and love every day, especially in India, for example.
Whereas the crypto, it’s completely decentralized, one. And two, it’s the same language. It’s the same protocol or the same thing across country. And it’s great, because it’s so new. So everyone who may be missed that whole finance wave of understanding stock markets and valuation and businesses and stuff like that, they can understand crypto and they’re all learning it all at the same time to get, and that is a very neutral playing field for whether you’re in India or whether you’re in Africa or better if you’re in the US. It’s the same type of language and things to study, which is great.
Kalani Scarrott (26:14): And yeah I think that transitions perfectly into our next topic. So for community, do you think community plays a big role in investing going forward? Obviously, we’ve seen recently with Wall Street Bets and FinTwit. But how do you see it playing out or how are you looking at it going forward?
Shiv Sharma (26:30): I mean, yes, for sure, I think. So the reason I joined Stocktwits, right, is that I’m personally super bullish on investing education, and this whole retail investor trend that we’ve been talking about here, right. And I think there’s two different gaps that I think Stocktwits is that I’m personally super bullish on investing education and this whole retail investor trend that we’ve been talking about here. And I think there’s two different gaps that I think Stocktwits I see being filled. One is community and one is content.
So I think what you’re going to see is that people don’t learn by watching really boring videos on finance and understanding valuation accounting and heavy finance topics. You don’t have time, you’re bored, your people have day jobs and busy personal lives and social lives and work lives and family lives. No one really cares about understanding these academic concepts. But you don’t get extra credit, I guess, for actually knowing more about a company than Warren Buffett, for example, or some top VC firm. It’s the same returns you get either way.
So I think we’ve been lucky to see Stocktwits and FinTwit together really explode with the past few years. And you’re seeing some even well-known professional money managers to Ex-Pro money managers to just really smart retail investors being quite active and building pretty active mini sub communities, whether it’s Substack, whether it’s a Stocktwits premium room and whatever it may be, And I think where it’s going to go is that people will likely have money in mutual funds or in ETFs or whatever it may be.
People will also probably follow influencers who are experts in certain areas, whether it’d be crypto, whether it’d be penny stocks or growth stocks or tech stocks or software space or electric vehicles, whatever it may be. Because it is hard to maintain an edge in all different areas. And you have experts now on FinTwit who focus on certain areas within that. And so, I think people will be willing to pay for insights and subcommunities as well as broader communities, I guess, to gain these insights, one. And then two, I think content is something that really is lagging behind.
I think we all know and love CNBC. I think we all know the failures and the pros. I think it does get a bad rep for sometimes good reason, sometimes not so good reason. But overall, I think there is opportunity, I guess, to create a lot more curated, a lot more specific content on investing in general, whether it’d be NFT’s to art, to sneakers, to tech stocks. So I think that’s the gap I see Stocktwits really filling in the near term and I’m super excited about.
Kalani Scarrott (29:06): Do you see any difference between being anonymous or being openly public in these communities going forward? What are your views on that? Just curious.
Shiv Sharma (29:15): Yeah, that’s a good question. So I think, I guess one reason why I’m so bullish on this trend of community is you’re seeing tier one hedge fund professionals, be on Twitter and Stocktwits. And that, to me, I think is incredible. And they’re often doing it behind anonymous names to your point. I think in order to be someone who’s going to have a community and have trust, I think you’re going to have to go and be more honest and be more upfront. And you probably can’t hide behind a fake name if you want to build a super large community.
As influencers become more mainstream and as you start seeing them hit scale where they have to be covered on CNBC, for example, I think at some point, you’re going to see that change, but we’re in super, super early days of that trend happening.
Kalani Scarrott (30:02): And lastly, on the topic of community before we get stuck into Stocktwits, are there any aspects of the creator economy that you’re excited about? Whether it’s the flexibility or the power to the people type aspect of it, what are you most excited about in the creator economy space?
Shiv Sharma (30:17): I think there’s people who think that influencers are a bubble. Now I’m in a brand scaling mode now in India, and I see the influencer market and what that’s doing and what type of conversion that’s getting. In general, I think people who spend on influencer marketing now have gotten really smart. I think they realize that building brands and the way you market, there’s a whole process to it. So one is, as influencer need to understand your target market, who is our target market? Who is my target user? What are they like?
Once you’ve built that connection with them, you want to build a trust factor with them. And once you have that trust, then are you able to, when you do start trying to monetizing, you do start trying to market, are you able to actually do it in a way that’s very natural? And I haven’t really seen that happen a lot in finance. I’ve seen it happen a lot in consumer products, where maybe you have a … I don’t know, like someone who likes a certain makeup who actually tried 10 different makeups. She chose a brand that she likes. And she believes in it.
I think that type of story makes more sense than, I guess, what I’m seeing in finance influencer type world today. I guess that’s one answer. I guess, the creator economy, I think what I see you there is … I think what you’re doing now is a great example of that. Second, I think what I’m seeing is people build really small with what seem like small niches. And for example, in health and wellness or in yoga, you’re seeing quite a few people who build audiences around clean eating and food and lifestyle and coaching and yoga, all mixed together and one or many different buckets of what I just mentioned.
And you’re seeing them start to monetize and build brands and businesses on Instagram and on social and via Zoom and Shopify. I think that is just incredible. I think that trend is here to stay. And I think people can … I think those markets, while they’re pretty inexpensive ticket sizes, I think those market opportunities are massive over time. So I think the other element of the creator economy is I think it’s super bullish for retail investing in the trend of equities and crypto and NFTs and art and sneakers.
I think as people realize that maybe they’re not going to work in Apple, Google, Facebook for the next 40 years of their life, what they really want to do is end up in a beach, opening a bar in Bali. And if you do want that or you do want to have some optionality and flexibility in life, then I think the stock market and crypto world so far this current global political economic structure that we’ve living in today is going to be a means to help achieving your goals. I think that’s one of the reasons why I’m super bullish on the retail investing trend as well.
as people realize that maybe they’re not going to work in Apple, Google, Facebook for the next 40 years of their life, what they really want to do is end up in a beach, opening a bar in Bali. And if you do want that or you do want to have some optionality and flexibility in life, then I think the stock market and crypto world so far this current global political economic structure that we’ve living in today is going to be a means to help achieving your goals. I think that’s one of the reasons why I’m super bullish on the retail investing trend
Kalani Scarrott (33:25): Yeah, that’s a perfect segue into my next topic, which was, what was your reasoning for joining Stocktwits?
Shiv Sharma (33:31): Yeah, sure. So for me, I was looking for a career move. I wasn’t happy at AWS. I thought from a career perspective, there were enough investors out there. So in the VC world, we all know that VC is now like a … I mean, it’s more the same 20 firms who get all the cool companies who are doing really well. And I didn’t think there’s a huge edge in being in that environment. But then on the public side, I saw that it’s all openly democratized. Anyone can buy any stock at any given point.
And people are all using similar or kind of … I guess in the growth world, they all basically use very similar frameworks. Now people will argue this, and it’s largely true from a high level perspective. And so, for me, I thought there was a bigger opportunity, and my passion actually was more around investing education and help trying to find the next set of influencers outside the same 50 who are always on CNBC, for example.
And so, what I found, I guess, and being active on FinTwit and on Stocktwits for the past few years, is that there’s some super smart people who are not necessarily who have big Twitter followings or who are active on CNBC, for example. And so, I think there’s a huge opportunity to help uplift the next set of influencers to create platforms to help them build audiences and monetize. And I think so for us, but a chance to be the platform in which the next generation of investors will use to consume media, I guess, far differently than how our parent generation has consumed, even how we’ve consumed it now.
So if you see what’s happening with TikTok and with social media, I think you’ll see very modern, very fresh ways of financial media getting more mainstream and a lot more fun to digest. Also, I think where we’re going as far as communities put Stocktwits in a pretty good position. So we’re seeing the intersection of social media and investing. I think that is here to stay. I think we all know that’s going to happen. The question becomes is, how quick does it happen? What are the inflection points? I think GameStop has been a huge, huge thing for that trend.
I think, overall, we’ll probably see a lot more stock market investing conversations become centralized onto platforms like Stocktwits, Twitter, Reddit, for example, and not just beyond WhatsApp and Telegram. And so I think, I mean, that’s basically the reason I think super pumped about it. It’s my passion and my day job and one which is a bit dangerous, by the way, to be honest, but all good so far.
Kalani Scarrott (36:07): So as I understand Stocktwits India is basically all systems go at the moment and it’s pretty heavy on your radar. But what was the reason for launching Stocktwits in India? So what’s the plan? Or what’s the process? What’s the reasoning? Just talk me through it.
Shiv Sharma (36:24): I’m the head of International. I guess India is going to be the main market where we have a significant presence outside the US for now. So that’s our plan for this year. India has been my main focus for the past few months. We have started, but we’re still in the brand awareness, brand building phase. We’ve recently opened up the Nifty 100 Indian tickers on the Stocktwits. So we are seeing engagement and we are seeing active community building happening right now, which is awesome and super fun to see. I’m super convinced there is very strong product market fit here.
There’s almost zero, if not, zero competition whatsoever. The way we organize conversations via ticker just makes discoverability a lot simpler and a lot easier. So you’re not confined by the people you follow right now, which is really fun. And so, I think India is super exciting. I think we all know that India is in very early days of equity participation. I actually tweeted out recently, I think, in Paytm’s IPO prospectus, I think they actually mentioned, it was 4% of India has equity exposure, which is insane if you think about it. So we’re in early days, but it’s a super large audience. I think we’re about to hit an inflection point in India as well, as far as equity adoption and equity ownership, so fun times.
Kalani Scarrott (37:46): So yeah, I’d love for you to continue on that topic of India. Maybe just why, why India, especially in terms of Stocktwits there. Just the why behind it.
Shiv Sharma (37:55): Yeah, yeah. So in India, I think what’s really cool to India is that you’re seeing a large population of people who are super interested in investing. I think you’ve seen the trend in brokerage accounts opened up in the past few year be phenomenal. I think you’re going to see now the Alibaba moment of Indian equities, with Zomato IPO coming up pretty soon, and then also Paytm coming up later this year. I think those two moments are going to be watershed moments for the Indian equity markets, where you’re going to see stocks of cool tech companies that people use and love on a daily basis actually become public.
And so, until now, you’ve seen the Indian indices be comprised of one-third of banks for the most part. And then after that, I think IT is number two, number three. In all of that, IT is primarily the Indian outsourcer like IT Mphasis. And so, also I think those trends are super bullish for India. I think you’ll see an even more equity adoption amongst, I guess, the millennial and Gen Z audience than you’re seeing today. And then also, what I see is that just from speaking in colleges and you can be involved with investment clubs and outreach with other young likeminded people is that the knowledge of the young investor in India is phenomenal, especially in more technical analysis and more trading.
So I think I spoke to a college this past weekend and the level of depth and sophistication that they have on technical analysis and on treating chart patterns is phenomenal, way, way above than what I know at that age when I was, I guess, growing up in the US. So it’s super exciting times. I think there is a massive interest to learn about investing in India these days.
Kalani Scarrott (39:46): To talk more about the Indian market in general and Indian equities, what trends or themes are you excited about in India specifically?
Shiv Sharma (39:55): I guess there’s a few takeaways I have with the Indian market. So one, India is a secular growth market. So even though the key indices may include banks and have a lot of cement and paint and then also infrastructure companies, people have to realize that these are all secular growth trends where insurance and banking and infrastructure are all in early stages of penetration and adoption, one. And then two, I think that India is about to go on an Alibaba style moment. So I think there’s a Paytm IPO coming up pretty soon, which is going to be India’s largest IPO.
The founder is a person who is probably India’s first truly self-made entrepreneur who’s built a massive business from scratch himself. And I think that’s going to be the first going to go public, that is a product that people know and love and use across the country. That same thing happened with Alibaba in China. I think that’s going to drive a wave of retail equity adoption for people who realize this is the first brand that I truly aspire to and I look up to and I use the product every day. And it’s a company that I can have some connection to person. I think that’s going to unlock. I think that, plus the next wave of consumer tech IPOs, there’s going to be a big thing for Indian retail investing.
Kalani Scarrott (41:16): Yes. So you mentioned Paytm. But in general, just what’s going on in India? It seems like there’s pumping out unicorns like there’s no tomorrow. Do you think it’s a case of TAM? What’s going on there? What are they doing differently? Is it the rise of the middle class? How do you see it? And maybe some of the reasoning or explanation behind it do you think?
Shiv Sharma (41:37): I think people aren’t missing it. I think people are all over it. I think if you look at the global US VC funds and how from Tiger Global, the CodeTwo to the rest and the beginning of what they’re doing in India. I think they’re placing serious bets. And like you said, it’s all TAM and consumer spending and the rise of the middle class and digital adoption in smartphones and things like that. I think also, it’s not just the VC ecosystem, it’s also around mini secular trends. So one example can be like the trend of jewelry stores going from mom and pop local store being centralized and having franchises.
They can be things like women who used to live in tier five, tier four, tier three cities moved to tier two, tier one cities, and therefore they maybe start working. So their dress changes from classic Indian attire to Western attire. So the number of secular trends in India outside of the standard VC ecosystem are just massive. Right now, I think the risk in India is going to be the macro and the COVID impact, which has been quite devastating. I think the issue in India you’re going to see is that I think the large cities are well covered and you’ve seen strong recovery there. But the rural economy in the rural areas, I think we don’t even know what the impact would be there yet at this point.
Kalani Scarrott (43:08): So how do you view India when compared with overseas markets? Maybe could you highlight some of the strengths versus the US, do you think? Or what are your thoughts around that?
Shiv Sharma (43:18): So I think India is in more early days. So when it comes to consumer, I think the benefit is that you’ve seen a lot of domestic brands being built in consumer internet world who, from the rise of the smartphone to then they’ve being Indian and being local, they’ve been able to make that shift from tier one cities to tier two, tier three cities, and the regionalization customization in regional languages that US companies like a Twitter and Snapchat, for example, have not done well.
It is very difficult for them to localize at that scale in their India operations to that tier two, tier three cities. I think the local guys have done really well. I think that’s the first observation. That was the first one. I think the second thing you’re going to see in India, I guess, the first was consumer tech, the second is going to be in the software B2Bworld. I think there you’re seeing two waves of companies go public, and actually not go public yet, but at scale and attract venture capital dollars. One is India for the US.
And that’s where you leverage India’s strong engineering developer talent, who ordinarily have worked at large outsourced application development shops like TCS and Infosys and help build US brands. But I think the trend of those developers building India, but then supporting Indian SaaS products that have a market overseas is a huge trend. So I think what fixes a company that invested in Cisco has now just raised a massive D round from SoftBank. And so, what they do really well is that they’re the first company to really scale that I’ve seen personally could be wrong.
But the first time that I’ve seen personally who has built a US focused go-to-market motion, predominantly in India. Prior, it’s been coming like fresh desk and fresh works who’ve done it for SMB who can use inside sales and calling and where the sales cycle is less complex. But what fixes has been able to do this at scale at a lower price point in the US, which is super, super tough to do. That’s one thing. And the second thing is that you’re seeing a second wave of software startups sell to the rest of the world.
So I guess you’ve seen software start built in India who sell to the Middle East and Africa, to Southeast Asia, and India as well. And I think that’s a trend too that people don’t realize that you’re going to see the digitization of SMEs and things like that also in other parts of the emerging world.
Kalani Scarrott (45:55): Do you have any maybe advice or things to look out for, for someone thinking of investing in India? What should they be aware of? Or what should they know going in do you think?
Shiv Sharma (46:06): I’d say overall, you’d want to focus on the best. And I think what’s going to happen is that what you’ve seen in the rest of Southeast Asia and even China, is that the best platforms who have critical mass and engagement and user metrics are likely the more likely ones to be able to add different products on and retain their existing market share. I think for consumer tech, that’s going to be the Holy Grail area. I think second, what I would avoid is investing in areas you’re not as comfortable with, maybe the number two, number three players in the space.
Because they may have on paper attractive valuation, but maybe their CAC is really high. I think India has a problem with monetization, because you have very small ticket sizes and the marketing spend can be quite high. So understanding CAC trends is something that is quite critical. So I’d say that’s what I would really focus on. That’s what matters the most. And the safe one way to derisk yourself from that is just to focus on the best.
Kalani Scarrott (47:14): To move into my final round of questions, more generally this time as well, what’s been your most undervalued life experience, do you think?
Shiv Sharma (47:23): For me, I guess the main life experience is to put yourself in situations that are quite different and unique and out of your comfort zone. I think that’s what I’ve had. I’ve been fortunate to have the most success in is when I’ve taken those calculated risks, the first one being going INSEAD. At INSEAD, it’s very … I mean, I think people don’t ordinarily speak very highly of the MBA experiences because it is not that helpful from an educational perspective. It’s helped through career, but not actually very practical.
But I think like it is … I think INSEAD, for me, was an opportunity to meet people who are completely different from all over the world who are not just in my social bubble that had boxed myself for the previous six years of my life. I think that has really opened my brain, made me be more aware and cognizant of other ways and ways to be happy in life.
Kalani Scarrott (48:15): Has there been any books or maybe large influences that have shaped your worldview, whether investing or career or more generally?
Shiv Sharma (48:23): So probably not books, unfortunately. I’m actually not a huge reader, per se. I just read a lot of Substacks and blogs and try and follow really smart people and really good podcasts. I actually love this podcast so far as well. So there’s a Stocktwits podcast called Panic With Friends, where Howard Lindzon interviews other entrepreneurs and CEOs and public equity investors and learn from their experiences and understand frameworks of how they think about investing in the trends we’re in.
And then I guess what I’m looking for next is how people are going to evolve from the first step being from where SaaS and FinTech and ecommerce have ruled the world to the next phase of AR/VR and crypto and gaming. And the third step is going to be once rates do normalize and this world we’re in of excess liquidity does change because that won’t last forever, what that new paradigm looks like. And I have no clue what that is. But my goal is to follow along the smartest and best brains out there to figure out how they navigate it.
Kalani Scarrott (49:32): So if you were 18 today, where would you be spending your time? What would you be working on, do you think or how would you be going about it do you reckon?
Shiv Sharma (49:40): So if I was 18, so I got this one advice that is super controversial, but I think it’s smart. When I was in college that … So there was this one career consultant who was trying to pitch their service and they were like a coaching like this career coaching for students firm, who came and said, look, we’ll help you get into Goldman Sachs and McKinsey. Tell us what you want, we’ll interview prep and do CV prep and get you in. And the reason we think this is a good thing for you in your life is that you should follow the best people, the best people who are in this generation, the class ahead of you, maybe the most successful people you know in politics or in venture, hedge funds, whatever private equity that time, all follow the same path.
You should follow that path. I think that is something that has always stuck with me. And I think I don’t always agree with it, but I do think like, if I was 18, I would be asking the 19-year-olds what they’re doing. I would be asking the college kids who are in the 20s what they’re doing. I’d ask the young professionals who are in the mid-20s what they’re doing, what they’re seeing. And use that insights to craft back what suits me and my personality, my skillset.
if I was 18, I would be asking the 19-year-olds what they’re doing. I would be asking the college kids who are in the 20s what they’re doing. I’d ask the young professionals who are in the mid-20s what they’re doing, what they’re seeing. And use that insights to craft back what suits me and my personality, my skillset.
Kalani Scarrott (50:52): Yeah, I think that’s a perfect way to wrap up. So, Shiv, thank you so much for your time and patience over these two recordings. So listeners, obviously, we’ll get this as one, edited, perfect episode. But I just really appreciate all this. And it’s been a pleasure, mate. So thank you so much.
Shiv Sharma (51:09): That’s cool. I appreciate it, man. Thanks for having me on your show, Kalani.
Kalani Scarrott (51:13): If you enjoyed this podcast episode, be sure to check the website, compoundingpodcast.com. On the website you’ll find every episode complete with transcripts, show notes and other related resources. Also be sure to sign up to my weekly newsletter, Curated by Kalani, where I share what I’ve been reading, learning, and watching for that week. Same as the podcast, it’s compressed to impress and I aim for maximum return in the time invested. So sign up at kalanis.substack.com. You can also connect with me on Twitter @ScarrottKalani. Once again, links to all content mentioned will be in the description. But until next time, have a good one.