BluSmart Proved My Belief Right. Then It Collapsed.

How Did These Guys Screw it Up ?

That was my first thought when BluSmart suspended operations in April 2025. The company had built a fleet of roughly 8000 to 8700 EVs. After the suspension, financiers and lessors began repossessing, selling, or reassigning parts of that fleet. Many drivers were left without work or clarity. The founders were barred from the securities market by the Securities and Exchange Board of India.

My first thought was not: this is sad. It was not: I saw this coming.

It was: how did they screw it up ?

That question stayed with me for days. Then as I sat with the question, I started asking myself:

How did I miss it?

I need to go back nine years to explain why that question hurt.

In 2016, I spent nine months working on an EV mobility model with similar elements to what BluSmart became. Charging infrastructure designed to break even on its own. A leasing model built on the demand that Ola and Uber had created. Drivers who could not afford to buy a vehicle would lease one. I built the entire operating model via own infrastructure approach with a clear focus on unit economics

Then the company’s IPO plans collapsed. Funding dried up. I walked away. The work I did never started.

Here is what I did not see at the time. During my nine month’s stint , I was focussed only on one specific layer of that business: the unit economics. I had never wondered on the capital structure that would fund this business. The funding collapsed before I could get started.

When BluSmart arrived years later, I evaluated it through the same layer I understood. I looked at unit economics because that was where my nine months lived. I never looked at the capital structure because I had no template for it. My 2016 experience was not neutral background. It was an active filter, pointed at exactly the evidence that confirmed my prior belief, and nothing more.

In September 2024, my car was declared as total loss due to water damage. For six weeks I had no vehicle. So, BluSmart became my primary option. Daily commute to office from my house and back. Clean cars every time. Air conditioning that worked. Cars that showed up when I booked them in advance.

I spent over 3 years in ride-hailing across TaxiForsure and Ola. I know what questions to ask drivers. Over six weeks I spoke to more than thirty BluSmart drivers. Most drivers were happy with their earnings and few even told me, earnings were about thirty percent higher than before. From those few conversations, I formed a narrative that BluSmart has figured out the unit economics of the business. They had lower running costs compared to Ola or Uber drivers . I came away believing that they have managed to do what Ola and Uber failed to do in their leasing business.

I felt certain. The model I had once built was working in someone else’s hands.

Around the same time, a friend (who provides services to EV charging infrastructure operators) told me that EV infra businesses are not profitable. BluSmart ran a large charging operation for its own fleet. I heard hum but I told myself: once you are operationally profitable on trips, the infra losses are a scale problem. More vehicles, more trips, lower cost per charge. Eventually, the infra losses will sort themselves out

That reasoning was not stupid. It was also exactly what someone who is not willing to question his prior belief would tell himself.

Six months later, Blusmart operations were suspended.

Blusmart leased it’s EV’s from Gensol Enginnering, which was founded by the same promoters. Gensol had raised close to ₹977 crore from development finance institutions to build the EV fleet. They had raised loans to procure 6,400 vehicles. However as per SEBI, only 4,704 were actually purchased. Around ₹200 crore had no matching assets behind it.

CARE Ratings and ICRA had already downgraded Gensol to ‘D’ months before the suspension. ‘D’ is the default classification. They flagged delays in loan repayments and inconsistencies in their debt-servicing documents. The information was public and anyone could search for them.

I had not looked for them.

Nassim Taleb stated in his writings, that without skin in the game, your beliefs are not reliable. He is right. But his argument describes the condition. What I lived through shows the mechanism.

I was neither investing nor evaluating a job at BluSmart. I formed a belief about it. That belief sat in my head, unflagged, feeling like knowledge.

I now treat this as a recurring condition rather than a problem you solve once. Beliefs formed in zero-consequence conversations keep moving into situations where consequences can be fatal. The question is not whether this happens. The question is whether I can catch it before I make an error.

I face this in two recurring decisions in business: New customers and hires.

When a new customer comes in. Initial conversations go well. A belief is formed in my head before any money is involved: this customer is reliable.

Then contract negotiations begin. They push back on payment terms. Thirty days becomes sixty. Sixty becomes ninety. The belief formed in the good conversation walks into the room and softens the pushback.

i settle for terms that I would have rejected from someone I trusted less.

The moment to run a check on my belief was when they pushed back on terms. Not before, not after. That is the observable moment: the point of commitment, when the belief is about to become a binding obligation.

The question is simple. Will I bet on this customer paying within the agreed terms? Not am I fairly confident. Not does this seem right. Will I place a real bet, with something I actually value, on this being true?

If the answer is uncertain, the terms are telling you something the conversation was not.

The first payment validates whether the pre-signing bet was correctly placed. A customer who pays within a week, without a follow-up, has shown you who they are. A customer who needs chasing has also shown you who they are. You do not need six months to know. The first payment is the retrospective check on the bet I placed at signing.

The same pattern runs through hiring. I like how someone speaks in the interview. A belief forms before I could commit anything. By the time I sign the offer letter, the belief has already solidified in my head.

The check is simple: : when you are about to commit. Will I bet on this person’s ability to deliver, with real money and months of my time on the line?

If the answer feels uncomfortable, I sit with that discomfort before signing.

The public signals in BluSmart were sufficient for me to warrant doubt. The CARE and ICRA downgrades were available. My friend’s warning about the infra business was direct. I should have doubted. The signals were there.

The fraud itself is a separate question. The falsified documents, the assets that did not exist: I may not have caught that even if I had looked harder.

Private company information has limits. But that is a separate matter from whether I should have doubted. I should have. I was not willing to question what I already believed.

This question runs in the background now as a standing check.

It catches some beliefs before they cross. Not all of them.

The condition recurs. You are not solving it. You are building the habit of noticing it, one commitment at a time.

The betting question is one starting point. You will need others that fit your situation better. But you need to see the crossing clearly before any check becomes useful.

In April 2025, BluSmart suspended operations. The fleet it had built began moving to other hands. I had sat in the back of those clean cabs for six weeks and felt certain the model was working.

I was looking at one layer of a multi-layer system and calling it understanding. The unit economics were real. The capital structure above the driver was not. The belief I had formed with nothing at stake had crossed quietly into rooms where the stakes were real.

The signals surfaced well after my narrative had formed. I was not willing to question what I already believed. I had no skin in the game.

Catching the crossing is where you start.