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A Masterclass on Product-Market Fit & Hyper-Growth | Karan Bajaj (WhiteHat Jr.)
340 Plays3 years ago
"Money follows a very simple mathematical formula. Its magnitude multiplied by impact."
This is the beautifully simple principle that Karan Bajaj landed on after years of searching for a path to financial independence. It cuts through the noise of online gurus and get-rich-quick schemes, arguing that true wealth is a direct byproduct of creating deep and wide-ranging value for people.
In this episode, host Akshay Datt sits down with Karan Bajaj, the founder of WhiteHat Jr. and a bestselling novelist. In just 18 months, Karan built his ed-tech startup to a staggering:
$150 million annual revenue run rate before its landmark
$300 million all-cash acquisition by BYJU'S —a deal that personally netted him an estimated
$120 million.
Before his explosive entrepreneurial journey, he published
4 novels with major houses like Penguin Random House and HarperCollins and led a corporate life as the CEO of Discovery Networks for South Asia.
Key Insights from the Conversation:- The "50-50-50" Rule: Karan reveals his strict criteria for product-market fit before scaling: achieving a 50% Net Promoter Score, a 50% renewal rate, and 50% of new revenue from referrals.
- Willful Poverty: To break free from financial anxiety, he practiced "willful poverty," taking a year-long sabbatical to travel from Europe to India by road on a barebones budget, a phase that gave him the courage to take bigger risks.
- The Blitzscaling Playbook: The conversation unpacks the engine behind WhiteHat Jr.'s hyper-growth, which was remarkably focused on just two channels: Facebook advertising and referrals.
- From Founder to Politician: Karan shares his next ambitious goal: to enter Indian politics and apply his learnings in scaling systems and operations to public service.
- "The Yogi and the CEO": The discussion explores the central duality of Karan's identity—the mindful, introspective novelist and the aggressive, impatient startup founder.
(00:00) The "Yogi CEO": Balancing a corporate career with spiritual sabbaticals.
(01:22) The Power of Willful Poverty: How living with nothing gives you the freedom to risk everything.
(16:41) The 4% Rule: The mathematical formula for financial independence that sparked the startup journey.
(28:05) The WhiteHat Jr. Idea: Why coding for kids was a "blue ocean" opportunity.
(33:51) From Zero to One: How to build an MVP and get your first paying customer in 4 weeks.
(48:43) The "50-50-50" Rule: The 3 metrics you MUST hit before scaling your startup.
(57:50) The Blitzscaling Playbook: How we doubled revenue every month.
(1:18:19) The $300M BYJU'S Exit: The logic behind selling a rocketship startup in just 18 months. (1:23:47) The "Wolf Gupta" Controversy: Lessons from a marketing campaign that went too far.
(1:24:08) What's Next: From founder & CEO to a new life in politics.
Hashtags:#founderthesis #karanbajaj #whitehatjr #startupindia #entrepreneurship #founderstories #akshaydatt #businesspodcast #scaling #venturecapital #edtech #byjus #exitstrategy #blitzscaling #productmarketfit
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Transcript
Introduction to Zencastr and Podcast Support
00:00:00
Speaker
Before we start today's episode, I want to give a quick shout out to Zencaster, which is a podcaster's best friend. Trust me when I tell you this, Zencaster is like a Shopify for podcasters. It's all you need to get up and running as a podcaster. And the best thing about Zencaster is that you get so much stuff for free. If you are planning to check out the platform, then please show your support for the founder thesis podcast by using this link, zen.ai slash founder thesis.
00:00:27
Speaker
That's zen.ai slash founder thesis.
Karan Bajaj's Success Story with Whitehead Junior
00:00:32
Speaker
Hi, I'm Karan Bajaj. I'm the founder of Whitehead Junior, which was acquired by Bajus. You may also know of my work as a novelist and may have read some of my novels. So great to meet you. Take me on a tour. Take me on a tour. This could be a great intro.
00:00:52
Speaker
The name Karan Bajaj has become synonymous with entrepreneurship in India. He is the poster boy of the startup world and for very good reason. He started up as a solo founder and built a business that was acquired within 18 months of launch in an all-cash deal of $300 million, making it one of the biggest all-cash deals in the startup ecosystem.
00:01:15
Speaker
This might seem like an overnight success story, but as any seasoned entrepreneur knows, overnight success stories take decades to make. And this is that story of the decades leading up to this massive overnight success of Karan Bajaj. Listen on to this masterclass on entrepreneurship, self-discovery and scale-up strategy from one of India's most celebrated startup founders.
Adventurous Travels and Career Struggles
00:01:38
Speaker
I'd always fantasized about living in Mongolia due to some reason. And I was like, look, if I'm not going to do it now, I'm never going to do it. So I spent two months in Mongolia, I think, or Central Asia, including Mongolia, Bhutan, et cetera. Then I always had a dream of backpacking through Europe that everybody had at that point of time because of the movies and stuff. So I packed back through Eastern Europe, not Western Europe, but Hungary, Romania, et cetera.
00:02:01
Speaker
and then i again was pulled to south america so i lived in south america so for two months each i had back to central asia eastern europe and then south america so that was the six-month kind of time off i took i left my job to do it
00:02:15
Speaker
And then I came back to my worst case scenario, which is a different story. What is that like? Like, you know, like, girls are these kind of things, right? The world tells you to follow your dream, etc. You feel kind of like reasonably, and you're cautiously optimistic, right? And I thought it was kind of a bit of my dream to kind of travel and light a bit. And then I
00:02:35
Speaker
In fact, we are alchemists. I converge to your interests and all that stuff. So look, I went in April 2008 is where I left Procter & Gamble. At that time, the US economy was at its peak. So the feeling I had was that, look, I'll come back, I'll lock the doors for a job, and I'll find a job. But I came back in October 2008 on the day Lehman Brothers collapsed. So I came back to the US. I reacted on the day Lehman Brothers collapsed.
00:03:04
Speaker
And it was shocking. Basically, everything dried out. I somewhat misplanned my finances. I had some, obviously, savings, but I was so optimistic about finding a job that I pretty much, in my backpacking, I used a majority of my money. So when I came back, they were like, no jobs. I was in my sister's apartment, sleeping on a couch in the living room. She had two small kids. And I was like, really? It was really the worst case. I had no job. I was just touching 30 at that point because I'd left at age 29.
00:03:32
Speaker
At age 30, I had basically no job, no money. I was sleeping on my sister's couch, no relationship, like a relationship had broken. Then my mother had cancer at the same time due to adding up to the things that were happening that time. She had stage four cancer detected at the same time. So pretty much I was broke, unemployed, no job prospects. I just lived in my worst case scenario after the six-month trip.
00:03:55
Speaker
And then I obviously frantically applied and eventually got a job in the Boston consulting group because they were the only ones, like McKinsey and BC were the only ones hiring for cost-cutting projects during the 2008 crisis. So I felt like I'd gone back a decade.
00:04:12
Speaker
So then what? Then I applied frantically for a job and got it to BCG. Again, a very good thing happened. I think if I'd come back to the Paulo Coelho world where I was an enlightened soul who had just accelerated in my career, then I would have been, I guess I would have gone through this cycle of understanding. I think then was the first time that understanding started to seep in that look, wherever you chase an extraordinary growth experience,
00:04:42
Speaker
you are going to have a miserable time in the short term and a very positive time in the long term. Very good learning shaped. And because what happened after that is that three, four months are pretty much hell, right? Then I got a job in BCG, which I basically hated. I didn't like the BCG job at all. And I was like kind of pretty much like a miserable consultant who was doing Excel files, et cetera. Again, as I said, my Dharma was never go Excel files presentation. I was an operator, executor, creative soul. So I felt like completely
00:05:09
Speaker
like, you know, just very completely fully stifled in BCG. And then, but during that time, I was working on my novel, Keep of the Grass.
Creative Pursuits and Spiritual Journey
00:05:17
Speaker
I finished it, the novel released, it did quite well at that point of time for India, 2008, it did quite well.
00:05:24
Speaker
and that sort of fixed it. It was about like traveling and backpacking and drugs and stuff which was somewhat different theme for India at that point of time and it really didn't have much marketing it became like quite a like success in college campuses that people were starting to read it and
00:05:42
Speaker
So then eventually with BCG also, I think I had a sudden kind of enlightenment and more moment where I said that, look, it's a short term. I just have to learn a lot. And I think the moment my focus shifted from this is a dead end career to I'm just going to learn a lot for the short term, which I think again became a very important paradigm in my life.
00:06:00
Speaker
I just got to learn everything I can. Again, I think I had a very positive experience in BCG because I was like, look, I'm never going to learn how to manipulate an access database again or two array formulas in Excel. So let me just quiet down and learn that. And I think the moment my focus shifted to learning again, I had a pleasant experience in the job. So I think some paradigms that really happened help later, which is that growth is going to suck in the short term.
00:06:22
Speaker
deliver results in the long term. Second, just focus everywhere on what can you learn rather than what can you achieve and you'll do well. Those paradigms really helped me later. And if I had a smooth ceiling after reentry and got back to a job at PNG and done very well, et cetera, I don't think I would have learned those lessons that really helped me later to make big moves. Yeah.
00:06:43
Speaker
Sir, did you find your dharma? BCG was obviously not your dharma. With BCG, I was just looking out all the time, like K.K.S.A. Baharniklu, and I was waiting for the recession to get over. And again, my learning was that if you're not in your dharma, don't worry about it as you may make a duration. Because I think the 18 months or so I spent in BCG was reasonably miserable. I did reasonably well after I started to go on the learning paradigm. But if I'd moved out earlier, it would not have hurt me.
00:07:08
Speaker
But then I went back to brand management. That was what I knew was my dharma. So I went back to brand management after that. And like I last consulting line was craft in BCG and they kind of got me in. So I just took it again in the US only.
00:07:21
Speaker
In the US, I was in a new, then I think after the first novel, writing became more important to me. I wrote my second novel, Johnny Gone Down, which again did quite well. And I had in fiction and that, that did, that did quite well. Like movie, like it was kind of a lot of movie options and eventually Ronnie Scouvala bought it for a movie and stuff. So it did really well. And I started to feel, look, I really liked this act of actually not just writing, but this act of doing
00:07:47
Speaker
extraordinary things which are in accordance with what I want to do like traveling, backpacking etc and then writing about it in either a fictional construct sort of a thing. So then I really wanted to move to New York City. So at the moment I got a job with Crafts, Starbucks, I think I got a bunch of jobs at that point of time. I chose Craft to live in New York City and I wanted to live in New York City and really get very good as an artist. I really wanted to explore the artist side of my career.
00:08:12
Speaker
And I think then it started a pleasant phase. I think the craft in New York where I almost started to like do 50, like I realized that the job kind of world is like, you just show up and you do like, you know, and I spent like about 50% of my time almost on my writing and trying to make my writing much better. I wanted to write the third novel I got very ambitious about. I was like, Keep of the Dust, Johnny Gondone, I have done reasonably well in India, but this is a small pond in which I'm
00:08:38
Speaker
doing what I know. So I wanted to write a novel which would stand the test of time like Ernest Hemingway or all the books that I was reading at that time. I read very widely when I came to New York, I read very deeply. I was reading books and I was feeling very minor as a writer. I felt like I had not accomplished anything. So I wanted to write a novel that would really stand the test of time. So I think that became almost my obsession at that point of time while my job was going on in parallel. Yeah.
00:09:02
Speaker
Were you taking writing workshops? So I did writing workshops in New York. There were Gautam writing workshops. I did a lot of writing workshops in New York, joined writing groups. Then read every book possible on the art of writing. That again became a... Like in Buddhism, there is this concept called Sharana Manana Niddidhyana, which is to master any subject. First, you need to read and listen as much as you can through secondary sources.
00:09:27
Speaker
then reflect from your own thesis and then experience, which is this nididihana experience, that subject. And that's how learning will sink in. So again, I didn't know it consciously at that point of time, but I was reading and listening a lot about how to be a good writer, reflecting on my own journey as a writer and then writing. And that took up, I would say, half of my life during the craft New York phase. Yeah. Yeah. So did you write the great novel that you wanted to write?
00:09:57
Speaker
I would say I wrote the best novel that I was capable of writing. And again, after that, I never wrote fiction again. Why let Kraft only? I let Kraft, I started to write, but then I really wanted to deep dive. So I took a year off after Kraft. And as I said, the first year of it made me stronger. It's an important thing to do. You learn tremendously. And so at that point in time, several things were happening. I think three things were happening, but I was getting very deep into my writing.
00:10:24
Speaker
So I wanted to have an extended period of time to just write full-time. I wanted to be a full-time writer. Second, my mother who had cancer in 2008, she was going through a dramatic decline. So I took some time off from Kraft again to be with her at her in her last moments. And I think she was very close to me and her decline from cancer was very dramatic and her body really withered away.
00:10:50
Speaker
And I had all these, like I was always interested in Buddhism, yoga, etc. But all of it came rushing to the surface. And I really wanted to...
00:10:58
Speaker
I really wanted to, let me put it this way, I really wanted to get a glimpse of what enlightenment looked like, what is the nature of suffering. So I wanted to take an extended period of time to just deep dive into yoga and meditation. Not with the goal of productivity or career, but almost like a monk-like. I wanted to glimpse why does suffering happen. That was very important to me. So I think that was the second thing that happened. And the third thing that happened was
00:11:21
Speaker
I just feel like this career thing is nothing. You go and work and you come back and it's not going to add up to... which is the feeling I started to have in the last days of Praktangam. But again, I was starting to feel the same way that this is not going to add up to life. This is not going to build some legacy for me here. So I think with that trust in mind, I think I took the next time off. This was much longer. I took one year off.
00:11:48
Speaker
And with this one year off, like my girlfriend and I, we went from Europe to India by road, like really living very barely from reached India. Then did the yoga teachers training in an hour. Were you hiking or were you driving? I would say no driving. But basically the kind of the general path was to take the cheapest mode of transport available, which could be walking, ferry, like, you know, like in some form of hiking, as much as we could, whatever was practical, live in hostels and stuff. The idea was somewhat
00:12:18
Speaker
I like this choice idea of willful poverty, that you have to teach your mind, your body to live with the least it can live with. Like, you know, teach your mind willful poverty, your body, your mind, willful poverty, so that your choices become very authentic because you will try to make a choice less and less for material. It will never be perfect, right? Obviously, we grew up with a certain conditioning where stability, etc., was important, but I was trying to teach my mind.
00:12:43
Speaker
Bhaaja dani ca yeh? Make authentic choices, right? Don't join a company or don't do a job because you think it's a stable job or a secure job, right? Try to teach your mind that you don't need enough. And I think that helped me. Again, it might not be as perfect as Seneca or whatever, but it helped me, like it was a good strike concept. So I read choices at that point of time. So this willful poverty concept helped me a lot.
00:13:04
Speaker
So I think the idea was that we would just choose willful poverty and it helped. Three, four months we reached India with very old, backpacking, cheap means. Then in India, the yoga teacher's training was very bare. There were 60 people in a dorm room, one bathroom, cold showers, I think very disciplined, very austere and disciplined environment.
00:13:24
Speaker
I think it really liberated me later. I would say later it liberated me because I genuinely started to believe at some level that I could live with very little. I'll just do what I think is right for my life. So then I did yoga teacher studying, did meditation, vipassana meditation, multiple three courses back to back, the 10 day silent day retreat. So I did three reasonably back to back. Then I went to Portugal and wrote my novel in an artist retreat, again very
00:13:49
Speaker
good experience for me because for the first time I was becoming a full-time writer and came back to New York, became a full-time writer and finished my novel. So it took a long time to finish that novel. I started during the craft phase. It almost took me four or five years. And as I said, it was the best I was capable of, but not best by the world standards at all. So yeah. Yeah. So what was that novel about? It was called the Jokof Maxis discontent in the US called the Seeker in India.
00:14:15
Speaker
What I was trying to do was to write a novel of spiritual enlightenment as a thriller. So in the alchemist style, but truly a very fast-paced thriller and yet a novel in which there was kind of deep, not just like I would say not hokey or not modern spiritual enlightenment, but the true spiritual styling that the Buddha went through. But I wanted to write it as a thriller so that it was a page turning thriller. That was what I was trying to do.
00:14:42
Speaker
And I think I was reasonably successful at that from my own limits of my own ability. Random House published it worldwide, which was one of my ambitions that the top publishing house publishes it worldwide as an indicator of whether I had reached some kind of excellence.
00:14:57
Speaker
I was rejected 50, 60 times. Eventually Penguin Random House published it in the US, UK, across the world multiple translations. So I felt like I'd achieved some level of, I would say, excellence in this field. And then that's what happened with the third novel.
00:15:14
Speaker
Did you continue the willful poverty once you like became published, this novel came out? Like, you know, did that become a way of life or was that a phase of discovering that yes, I can live in poverty? I think it was never a phase of discovery. I've never, like after that also or before that also, it was never very materialistic. I think most people are like, I'm not extremely like, you know, like there's nothing great, great about me that way. But I am like, which is I.
00:15:40
Speaker
For example, I think I'm at this age now, even after the startup exit, I've never bought any house anywhere. I've never owned a car, I've typically rented cars or taken Ubers. So I would say, I won't call it some very big spiritual principle as such, but I've generally not been pulled to materialism. I think the full poverty just gave us... For example, I think my wife and I, we have two small kids now, six and four.
00:16:02
Speaker
They're very comfortable that if I look at this pandemic, we lived for four months in Goa, then we moved to Sri Lanka, then we moved to Costa Rica. We're living 12 months in Costa Rica and all of us are living out of a backpack each day for two kids because we've just kept moving every few months. And it's got nothing to do with the money I have now or not, but all of our family lives out of a backpack in a small
00:16:24
Speaker
two-room kind of house in Costa Rica in the hills, right? Which we're very comfortable with doing. The kids are going to like a local Spanish school in Costa Rica. They didn't know Spanish before. So we are very comfortable with this idea of uprooting ourselves. So knowing that we need very little to, very little, I would say, comfort and very little security around us. And then executing that plan. So we are living in Costa Rica for this year, very comfortably without. Yeah. So I think it's become an enduring part of life too. Like you do not seek too much certainty.
00:16:52
Speaker
stability, comfort, all of this comes from this idea that look, I can pack up and move. All I need is the backpack on my back. And then the kids have grown up like that, which I think is very good.
00:17:03
Speaker
I guess that phase of willful poverty freed you from seeking financial return in your choices. I mean, everyone has that insecurity of finance, like, what if I don't have money? One way to fix that insecurity is to earn money and build a big bank balance and say, okay, I have one crore in my bank, so I don't need to be insecure. Or the other way is to say,
00:17:29
Speaker
Even with 100 rupees a day, I'm okay, which is the path that you took. I took that path at that point of time, but I would also say that I had this dichotomy where once I returned from that sabbatical, came back to New York.
00:17:43
Speaker
took up a job again, rejoined craft, started to feel a very big disconnect with my life that I was going towards. I would say some kind of a spiritual awakening that was happening, creative awakening that was happening. But then we got married, had kids at that point of time, that point of time for the first time.
00:18:02
Speaker
First time in my life, I started to think about the fact that I was never going to be breaking out of this cycle until I had achieved financial independence. I always felt now that I would be caught into a cycle where I would be working for a few years, then taking some time off. I would become 50 years old and start knocking for jobs again. I think the idea of financial independence became very important to me because of this very creative spiritual life. I felt like, look, I
00:18:28
Speaker
I had two kids now. I wanted to be a provider for them, but I knew that the writing, the creativity, the spirituality, these kinds of chances are very important to my life. And I knew that the conventional structure of a job would never be able to allow me to do that. So actually the idea of financial independence took root.
00:18:44
Speaker
And I had this 4% rule, which is that whatever is the money that I need to live every year divided by 4% should be my network. And I felt I was very far from that. And I think that was actually like a moment in which I said, look, in order to achieve this 4% rule, I'll have to become, being in a job will never allow me to accumulate this network.
00:19:04
Speaker
and I followed the food. Give me an example of that 4% rule. 4% rule would be that suppose you say that annually I need about 2 crores a year to live comfortably. That's where my kids can go to the best schools that I want them to go to. I can live comfortably. So 300,000 divided by 4% is $7.5 million. Taking just one example, obviously it's 1 crore, then it's 3. You divide it by 3.75, whatever. So $7.5 million.
00:19:33
Speaker
if you want to converse annually. So that 4% rule became like, so at that point of time, whatever I arrived at, like say that I need $4 million or whatever, I knew that my current job, even though I was at that point discovery CEO, discovery head in India, I knew that the job construct would never allow me to make $4 million or whatever that number was, $7.5 million and net of taxes at the 4% rule. So then I was very convinced about it. How did craft to discovery happen?
00:20:05
Speaker
Yeah, so I came back to craft, started to feel really disconnected with like, I guess what I was really, I don't know what I was awakening towards, right? I was very interested in creativity, building things. I really became very conscious about my impact after this whole year of yoga, etc. What is the impact of my life? And I was like, you know, here I'm doing snacks and this, this is not a life of impact. So then I left craft.
00:20:31
Speaker
and I pursued full-time writing. So I'd written the third novel. I was publishing it and I started to write another novel with this interest of becoming a full-time writer to write things that have impact in the world. Then I started becoming attuned to this 4% number. So the third novel, which was being published worldwide for the first time,
00:20:51
Speaker
I gave it my all to market it, et cetera. I thought I would make it a breakout success so that I could earn enough to really, I would say, become financially dependent. But then it did happen in the writing. So I knew I would join, I would like start something again in a way. I started to, I dabbled a little bit with all this lifestyle entrepreneurship because I'd read about it from the Tim Ferriss four hour work week book and all that.
00:21:13
Speaker
I started a small online business with like, you know, online courses, et cetera. But again, I thought that wouldn't scale to the extent that I wanted to with a 4% rule in mind. So then I knew I had to take up a job again. I was always pulled back to India, like, so I like the use of the discovery head role.
00:21:29
Speaker
At the same time, I had the Uber marketing head roll, discovery head roll and Amazon marketing head roll. I think all three of them happened in India at the same time. I chose discovery because it would be my first, I would say, full organization CEO role. But even when I joined discovery, I had this thing at the back of my mind that this is not the path to financial independence. I'll run into the same problem again. I'll work for a few years, get restless.
00:21:50
Speaker
you know, like take some sabbatical, then want to knock back again, it'll get harder and harder at age 45 and 50 to do that. So financial independence became actually an enduring part of my life, you know, after that. Yeah. So for financial independence, again, I think it's been a seven year journey.
Entrepreneurial Experiments and Discoveries
00:22:05
Speaker
First, I wrote a book like with the intention of being financially independent through that didn't work out did a lot of online courses, etc. But this lifestyle entrepreneurship in mind didn't work out of this online course, you were the instructor or what
00:22:17
Speaker
Yeah, so the online course model, I'd read a lot through all these online things that look, you take your subject of expertise, for example, writing, you create a course on how to write a great book, how to write a bestseller, how to get published. And then the marginal cost of replicating that course is zero, right? You just create a course and then you basically set up an architecture with Google ads, Facebook ads, et cetera, then it becomes a self-fulfilling thing, right? You are spending $1 on the ads and $2 on
00:22:43
Speaker
like getting two dollars through the course, and that becomes a self-sustaining annual income. But the reality of it is not that at all. There is nothing called online cash. I dabbed with it for almost a year, and I realized that this is nothing. People in the internet are giving advice on how to make money in order to make money themselves, which is a paradox. So you have to ignore all that. This is not the way to make money. And I realized that, look,
00:23:11
Speaker
Money follows a very simple mathematical formula. It's magnitude multiplied by impact. If you impact a lot of people and you impact them deeply, you'll make a lot of money. And if you're just doing something passively online, you're either not going to have a very deep impact or you're going to have a very limited magnitude.
00:23:30
Speaker
a lesser number of people you will touch or you won't touch them very deeply. Discovery really spoke to me. It was everything I dreamt of. It was creativity, it was business, it was impact. I really thought Discovery was very impactful. And it was about leading a team towards a common mission. India Discovery, till that point of time, had been a reasonably, you know, a stable organization and their mandate was to shake a team for making it a top media organization in the country. So it really spoke to me at every level and I just jumped on it, yeah.
00:24:00
Speaker
So how did you shake up Discovery? So Discovery was the same paradigm. I jumped into it. I realized that what was happening was that Discovery was because of the foreign English content was appealing to, in India, it's a very clear pyramid. There are 2% of people who, like for example, the internet viewership is less than 2% in English. 70% of it is in Hindi.
00:24:25
Speaker
And the remaining is in regional languages, Tamil, Telugu, Kannada, like the South Indian language is forming the bulk of it. So very similar TV viewership in India, very similar market share of English channels is about five to 6%. 70% is Hindi channels and the remaining 24% is regional channels. So I realized very quickly that look, if you don't do original Hindi content,
00:24:45
Speaker
And I try to figure out how to make that happen in a structurally financially solid model where you can combine entertainment and meaning, which has been again a common philosophy for me in all of my work that you have to combine entertainment and meaning. So discovery is purposeful content, but delivered in an entertaining package is what is going to appeal to the masses, right? Similar, I think what I learned in my writing that you have to do entertainment and meaning combined entertainment and meaning in every piece of work that you do creatively.
00:25:10
Speaker
So with that in mind, I did a original content strategy for Discovery, which would combine entertainment and meeting purposeful stories and combined in an entertaining way, but it did not work. But I reinvented the kids channel accordingly. That did really well, went from number 10 to number three. Did a lot of work with the local channel, with military content, did a lot of military content on the local Discovery channel, Hindi content, because that did very well.
00:25:33
Speaker
Some questions worked, but the big bets I took didn't work. But again, it was very principled. I was following a mission of combining entertainment and meaning for the masses. I launched a TV channel called Discovery Geat, which didn't work at all. And yeah, after, like I would say, a very honest effort for three years, I just felt like I had given my best. What were your learnings in terms of things which worked, things which did not work? Two learnings I think I took away from that one. One was
00:25:59
Speaker
very big cultural difference in the US which I'd spent now a bulk of my career in I'd moved for Procter & Gable in 2006. So 2006 to 2016 was in the US and then 2002 to 2006 was in India and then again. One big learning I took away was that in India
00:26:15
Speaker
you have to get into the details as a leader. So in the US, you automatically, almost you will disrespect leaders who are into the details because that culture fosters independence and challenging authority. In India, if you are working to do the details and you are too empowering, people will treat that as a site that you don't care about the details or you are somewhat of a weak leader, right? So one big learning was that I have to go completely into the details. I think a lot of the strategies in discovery were sensible, but the execution was weak because
00:26:43
Speaker
as a leader, I was not at the like at my peak into the details, right? I think that was what big learning from the... Essentially like in Indian companies are not inherently quality conscious. So if you really want to create high quality products, you have to go
00:27:16
Speaker
I think the second learning I took away was that
00:27:20
Speaker
If you are a new entrant, your product has to be 10x better than the existing players in the market. So when I launched Discovery, I think the kid's content was 10 times better. It did well. The mass market content was, I would say, 2x maybe, or 1.5x, but not 10x. And as an entrenched player cycle, then you have to be 10 times better. I think that was the other good learning.
00:27:42
Speaker
I came to White Hat Julia with this very clear, I was just very sad after the discovery experience. I think there were two back-to-back failures. I'd spent five years writing my novel.
00:27:55
Speaker
which didn't do well because it was too niche. I was talking about spiritual enlightenment, etc. So my learning to discovery was that I have to touch masses, right? A magnitude multiplied by depth, right? You have to touch the masses at magnitude. Didn't work because I was not into the details. So I've invited Junie. When I came, I would say they took a lot to take that leap again, saying that, look, I have the confidence that I'll be able to build something again, which will work this time.
00:28:21
Speaker
After two kind of back-to-back, I would say, again, failure is a relative context. I was Discovery CO. I was like published by a top publishing office. So I can't say I was like, I feel like too much like a failure, but I was feeling that I wasn't reaching my potential because I was missing something. By June, I just dug in. I was like, I have to create a 10X product. So I was sort of a stare with my team that the venture capitalists at that point of time, they were shocked, right? They were like, you were a Discovery CO. We bet on you.
00:28:46
Speaker
that only on the assumption that you'll scale very fast. But for seven months, I had $1.3 million, but then my cash one was limited to five lakhs a month. I just did not let go until I had what I felt was a 10x superior product. I had this very strong metric that I defined based on my business model, 50, 50, 50, that my net promoter score has to hit 50. My renewal rates have to hit 50.
00:29:09
Speaker
and 50 percent and then like you know so sorry they're very clear like a kind of parameter that like i have to so what what we kind of like skip to say but i want to understand how that trigger for right hand came about why did you feel that this is what i want to do what was the gap you identified like you know like two things happened one was basically
00:29:33
Speaker
As I said, I knew ownership was very important to me. For seven years, I was trying to figure out this ownership paradigm. So I knew I would do a tech startup. That was clear for me. So even during the discovery last phases, I tried to figure out what would I do in a tech startup.
00:29:48
Speaker
In that phase, again, as I said, that Savanam and Aniruddha reading reflection, experiential phase happened. I read everything about tech that time. So all the books that were coming out about tech, I would research Indian unicorns, Chinese unicorns, all the books, and I started to form a thesis on what ideas would work.
00:30:05
Speaker
And I'd kind of identified, I'd shortlisted four ideas. One was a AI health tech thing where I would map all the genes of India, gene data of India, create AI models and create preventive models around that. So I was interested in that idea. So there were like three, four ideas like that I'd mapped out and it was one of that ideas. I felt again, that because I read these books like the fourth wave, et cetera, which is that the third wave, whatever, like that idea that
00:30:29
Speaker
Our kids will grow up in a completely different world. In that world, anything that is mechanical will be automated. Much of the jobs that we see around us are going to be done through data and automation. Even the jobs that I was doing, even 50% of the discovery CEO job could be automated. I could see it in front of me because it was really making insightful judgment on data that I could see tech too.
00:30:54
Speaker
So I felt like our kids would grow up in a very different world and they were not being prepared at all for that world because the whole world would be about your ability to do critical thinking, creativity, abstract thinking. That would become the currency of the future because everything mechanized would be automated. And when my kids were just entering the school system, they were age four and two at that point of time. And I could see nothing had changed from the time I was a student 20 years ago, while the skills of the future will be completely different.
00:31:16
Speaker
So I got excited about that idea, about creating a company that would be about creativity. And then I looked at the Indian edX space, even the US edX space, Chinese edX space. Everything was about the left-brain, right? So people were creating better and better models to teach maths and STEM and getting into IIT. So I felt that the right-brain space
00:31:36
Speaker
was completely empty, very necessary. And I would have to wake parents
Mission and Growth of White Hat Junior
00:31:40
Speaker
up to that, right? Because obviously, the conventionism would be India making a creative debate show that nobody will buy it, right? And I was like, look, I can create a category here. And so I was very clear that I would attack the right brain, and I would go to creative thinking, critical thinking, because that would be the need of the future for the kids. So that's how the Baita Junior idea came. I was passionate about the idea, and I then jumped into it.
00:32:04
Speaker
Why did you call it White Hat Junior? Because White Hat is an ethical hacker. And White Hat Junior was basically a fun way to say that you'll be a builder, a hacker, but a good one. My understanding is that White Hat Junior essentially was doing coding courses, which is different from what you're telling me in terms of creativity and critical thinking. Yeah, actually, the coding became very
00:32:34
Speaker
up front and center, but the whole point of coding, I mean, why would you do coding at age five, right? It's not to prepare them for a career, right? I think the whole point of doing, it was an easiest way to build things, right? So any kid could learn block coding.
00:32:50
Speaker
and realized the magic and my kids were doing scratch at that point of time. So they could realize the magic of, look, I combine these four blocks and suddenly a cat emerges with meows, right? And they're very, you can see a kid's delight that I built a cat out of nothing, or I built this structure out of nothing. Very similar to what you do with Lego. Here you are basically doing it
00:33:10
Speaker
in a much more, like many more combinations available and much more digital objects, many more combinations available, much more creative expanse because you're not limited to that particular infrastructure that you have. So the whole idea was that coding would lead to the mission of the company defined right at the beginning was kids
00:33:28
Speaker
who would be building, who would express their natural destiny as builders and creators. And in the original vision that presented that quibbing, then maths I'll teach that way, music I'll teach that way, right? They would like learn to build and create. And that's very critical to the thesis was actively like very creation oriented curriculum and a life teacher to give you the feedback constantly, a feedback loop, because creativity requires a feedback loop. Somebody encouraging you to build and create. What I saw with my kids is when they were doing product only work without teacher,
00:33:57
Speaker
they were very easily distracted. Especially at the younger ages, below 8th grade, they were very easily distracted. So I saw that happen. So I think a live teacher connection. And then with a live teacher again, my mother was following my dad around in the Indian army. Very important in my life because she was a very university topper, a very educated lady, but she could never build a career of her own because she kept following my dad around. And when I looked around me, I was like, there are so many women in India who are extremely educated, qualified, who could be great teachers for kids.
00:34:26
Speaker
heavily under your ties right now because either their husbands or their kind of primary responsibility has become a caregiver, right? If you're in Delhi, actually you have no other option because your work is two hours away from your home. How will you have kids work two hours away from home, come back every night? I saw my mother go through that same cycle and I was like, so I was like that I could create a very scalable teaching model here with all these, with this very qualified untapped potential of women in India. And I think that whole thing just came together by Tejune.
00:34:55
Speaker
If you like to hear stories of founders then we have tons of great stories from entrepreneurs who have built billion dollar businesses. Just search for the founder thesis podcast on any audio streaming app like Spotify, Ghana, Apple Podcasts and subscribe to the show.
00:35:16
Speaker
how did you like get it off the ground in terms of like what was version one of your product like did you like use like say a zoom meeting and yes just hack it together exactly you're very very exactly so i was very clear that i would do
00:35:31
Speaker
Like speed was very important to me in general and discovery also was very fast. I generally was in a hurry in life. I guess I was in general very hurry about everything in life in some sense. So speed was very important. I think what I did immediately after I got the idea was I did a zero-code prototype in just two weeks. So I got Zoom. Then there was a coding platform Scratch and I got a teacher in Bombay. I created six classes with her within two weeks.
00:35:59
Speaker
advertised, not even advertised, just put it on my own Facebook group that there's free coding trial classes. Your kid will be a creator, actually very similar to how we scale. And within two weeks, I set that framework up and we did free trial classes for 30 kids out of which one kid became a paying customer, right? That all happened within a four week period with no, almost like less than a thousand dollars to just to put the website up. I got enough designer to do it.
00:36:24
Speaker
And the moment I got the first paying customer, I was like, look, I can create a category here. I just have to scale this process at a large scale. Then while you were at Discovery, I gave my notice to Discovery because I knew I would do a tech startup. So I didn't want to be unfair and like first figure out my idea. I gave my notice to Discovery in July, did the zero code prototype, the six one notice period with Discovery. So during that period, I did the zero code prototype in August.
00:36:48
Speaker
I was working full-time at Discovery with full kind of responsibility. Then I did a zero-code prototype in August and got my first paying customer. After that, I really kind of doubled down. I said, I'm going to kind of scale this. I took the results of the zero-code prototype and my vision and presented it to venture capitalists. So I contacted the top 30 venture capitalists of India. I made a list, contacted each of them. I didn't use any of my networks, et cetera.
00:37:13
Speaker
And I pitched to, I think, five of them, Sequoia, Matrix, Nexus, Omidyare, whoever had expressed interest. And I think Nexus and Omidyare came in very quickly. So by October, they had given me confirmation that they would fund me. In parallel, I was building up my team anyway. And by November 14th, I think the company was registered. November 2018, the company was registered. And the first version of the product in market was launched in November. So that was... 14 was deliberate, like, because it's still... It just happened.
00:37:39
Speaker
It was a happy coincidence. November 14th is November. So that's when the company got registered and we launched the first version of the project, a product I think November 27th or December 1st, something like that. And I remember we followed pretty much the same cycle.
00:37:55
Speaker
And for small, I think December, the sales were like four lakhs or five lakhs a month, which gave me a confidence that, look, I have a very clear revenue model here. The supply side is scalable with teachers because of the kind of hugely qualified Indian women. But demand side, people want to try. What I realized was that there was this disorganized hobby space in India where people were going after chess classes or ballet classes. None of them were in an organized fashion here. I could really organize this disorganized creative space of India.
00:38:24
Speaker
And that's how we started. The first version of the product came out in December, two weeks after the company officially formed, because we were working in parallel. And then I think after that, I just was very disciplined until I hit my metrics. This 50-50-50 rule that I had for me, network score being 50, renewal rates being 50, and what was the other 50%? The third thing was 50%. I had this very strong rule.
00:38:50
Speaker
that I should hit this 50-50-50 mark. Till then we kept a very small team. I had only a nine member founding team.
00:38:57
Speaker
The flashpoint was like five lakhs a month. I kept five lakhs a month for seven months. The VCs would be very stunned, right, by you not spending, by you not building the team. I was very clear, based on the discovery experience, that the product doesn't hit that 10x point. As measured by very codifiable attributes that the renewal rate is 50%, Net Promote Score is 50%, I won't scale. So then I was very disciplined about that. Net Promote Score went from
00:39:22
Speaker
13 to 23 to 35 to 50. And then it hit 50. Renewal rates hit 50%. Then I had refill. Refill revenue was the third one. Then my refill should be 50% of the revenue. So again, that led to very good discipline in the company because then at 10x product point, I started scaling. So you were pitching a tech startup, but you were not, I mean, you were not a tech guy. I didn't like, you faced that issue of that, who's your tech co-founder? Who's your CTO?
00:39:52
Speaker
Yeah, absolutely. So Nexus, who put the first check matrix, they were very interested in funding me, really. I think they're my background. I was also quite transparent with them about what I'd failed with in Discovery, what I'd learned. We liked that transparency. Actually, surprisingly, venture capitalists liked that transparency. I was clear that, look,
00:40:11
Speaker
I'm kind of bitten now. I'm just going to have to make this work, right? I'm not going to fail a third time now after. And I told them that I was not into the details. I'm going to be very into the details. It's like I was there. So they like my energy and my passion to make it work. And they have the same question that I've never done tech before. So
00:40:26
Speaker
I think it was no easy answer to that, but I actually think your best, at my stage of life, your best to start without a co-founder. If I were to do it in retrospect, I would do the same thing again. I was 40 years old. I'd lost touch with my, like, you know, I didn't, I wasn't connected with the circle of people who were in tech. The act of finding somebody who's a co-founder, who's passionate about your idea, who's going to leave everything behind to do it at that moment of time, it's going to be almost like a, that's going to be a needle in a haystack.
00:40:54
Speaker
So I did LinkedIn postings for my, I think I wrote very big and obvious postings about in my LinkedIn job posting that we are going to create this like massive great company. I had a lot of tech people apply and I was very clear that I won't look for a CTO through that. I would look for a VP engineering. I found a guy who was a hacker from eighth grade and then I presented him to the VCs. But at that time they were already inclined to fund. I think that allowed them to close the deal.
00:41:19
Speaker
And my founding team principle was this hacker designer marketer. You should have three kind of rules in a founding team. The VP engineering I found as a hacker, the designer were the three curriculum creators and one marketer who did Facebook, Google testing quickly to test what the message is. And I took this founding team to the venture capitalist that there are like seven people, the hacker designer marketer.
00:41:39
Speaker
And yeah, I think that happened quickly. Okay. So you said that there was a disorganized hobby classes market. You were building a more organized version of that in your product. How were you organizing it? Was it like by creating lesson plans? Yeah. And like you teach this, teach this, teach this and like creating. Yeah, exactly. So I think two major components. One major component is that
00:42:06
Speaker
There was no output, right? So the hobby market had no output. IIT preparation, why IIT preparation works is that there's an output, right? Number one, like, you know, AIR rank 32 or whatever, right? So that's going to reach sharply from pre-ATEC to ATEC. It's all about IIT ranking, right? So I said, look, the hobby market has no output. Your kid goes to a ballet class. Where is the output? So here I was like, in 48 classes, your kid will build an app.
00:42:32
Speaker
Very clear. In eight classes, your kid will design a game. In 144 classes, your kid will design a space tech simulation. So really early on in the thesis, output was very important. You have to give the output. That was one way to organize the hobby market. Second way was train the trainer. I realized that I was in the business of great curriculum and great teacher training.
00:42:53
Speaker
So we created very clear lesson plans and trained teachers very well right from the early stages that was the focus. These women that you were hiring, the women who were working from home, these were not necessarily like comp science engineers, they were like smart women with good comp skills who would learn
00:43:14
Speaker
Yeah, so we, right from the beginning, I think what happened was we made grade one to eight in the beginning, later we expanded grade nine to 12th also after the company did well, but grade one to eight may, grade one to three, we said anybody with a, like just a warm, strong personality, because it's all logic exercises with some kind of a logic background, math, science, PSC etc, would work. For grade five to eight, we need coding background. And again, there are a lot of like people who had coding backgrounds and
00:43:39
Speaker
in college and in the returning tech. So for grade 1 to 4, we segmented it as strong logic backgrounds. Grade 5 to 8 would be coding backgrounds. So very, very similar even to now how we run the company, same principle.
00:43:53
Speaker
And how much would these women earn? What was their earning? The great part is right at the beginning, they would earn about 30,000 rupees a month was what would happen right at the start because of the Indian thing. But the moment they opened up the market to the US, Australia, UK, their earnings could go up to 50,000 to 70,000 a month, which is pretty good.
00:44:12
Speaker
Right. So the 30,000 is like based on number of hours or it's like a typical, like a typical number of hours. Like the good thing you had was that you could choose your schedule flexibility. And I have to remember now exactly like the 30,000 rupees a month was linked to about, if I'm not wrong, about, I would say 30 hours a week, you would choose 30 hours a week at your convenience. Great part was that for women, they could choose it at their convenience because we have four to eight on weekdays and nine to nine on weekends. You could just choose at your will. Part of the, I think the women
00:44:42
Speaker
was so important to me this act of scaling up supply because there was a
00:44:47
Speaker
Like I could see obviously there was a functional imperative that they were such highly qualified women. And I really started to feel a real sense of social imperative also, because we could see that the moment these women became independent, they had more and more sin in their lives, right? Their in-laws respected, then they could make decisions about fighting a court case on their own. There were so many stories, like putting the kids who had died down syndrome in a special needs school. We saw all of this happen. So it became a very big social imperative for me. So
00:45:15
Speaker
I would actually give the credit of opening up the US very early. Typically, Indian startups take three to five years to open up the US after India stabilizes. I opened up the US in nine months after starting the company. It was very driven by supply. I wanted them to have even more flexibility to teach in the night. I knew they were qualified enough to teach the world. I had very strong conviction.
00:45:35
Speaker
And I think, again, a lot of experiences that you don't realize all these backpacking years, I was very convinced that somebody in Mongolia, Hungary, Poland, US, they're all the same. My wife is American. She's not Indian. I think all of this was very, I was very clear, look, an Indian company, I'm going to do it. I'm going to scale outside India. So I was very confident about launching US, Brazil, Mexico, Australia, UK. I was like, look, I'm going to create something that's going to scale all over the world because people are more similar than different.
00:46:02
Speaker
And even the venture capitalists at that time were freaking out because like the general paradigm was that you need a lot of capital to scale in the US. But I was like, you know, it's not different than the capital that I need.
International Expansion and Business Metrics
00:46:13
Speaker
I'll need the same capital in the US. I'm running a cash positive model. The margin that we make is higher than the customer acquisition cost. The LDB to CAC ratio was always very high for my junior. And I'm going to do the same LDB to CAC ratio in the US. So I launched at 1.3 million dollars I launched in the US, right? So I was not.
00:46:32
Speaker
And because I think the women really like the feeling that they would have even more flexibility, they would make more money because of the night shift and stuff. And the advantage pricing in the US would allow like even better talent to come in. So I think the virtual cycle started that way.
00:46:47
Speaker
So opening in the US means what? Did you have to create an entity there and then do that? Or just sitting in India, you just have to start accepting dollar payments, but everything is the same? The coefficient of the two, you had to create an entity there, which nobody wanted to create. I had to push the investors to create, but we had to create an entity there. And then everything else we did from India, which is sales was from India, teachers were from India.
00:47:13
Speaker
And in Brazil and Mexico, though, we have to create completely local operations because the teachers were also local from Brazil, Mexico, because the whole thing was you did the language. It's correct. It was local. Everything had to be translated and created in local language. So like nine months after launching, you went into US like that early.
00:47:30
Speaker
Yeah, because I stabilized the product. Even though I think nine months was also too late. To be honest, I think there's some kind of inferiority complex that, look, an MVP, like save the MVP, make it into a finished product in India, then go to the US. But actually, the US consumer is equally open to an MVP, right? You do an MVP. You learn a lot from that MVP. You make it better.
00:47:49
Speaker
So have we waited almost a year, but I would have done it again. I would probably do it right at the start. I had a global company thesis in mind. Now you could argue that $1.3 million seed funding is too low to diversify across so many markets, which is true. So I think $1.3 million, I would say rather than it being nine months, about being nine months, I would rather say that I spent nine months just building the product.
00:48:12
Speaker
And in that period of time, I was using a market as a test mechanism for the product, and I wasn't scaling. The moment we started to scale, I launched the US quite quickly after. Okay. How do you measure NPS, net promoters within a feed? Yeah, very hard measure. I would say every month we would do a survey with that very simple question on how likely are you to recommend it to a friend.
00:48:34
Speaker
9 then was 1, 8, 7 was 0, less than 7 was minus 1. No kind of fiddling with the numbers because it was not for investors, it was for myself. And I was rigorous that till the NPS hit 50 on a large scale, I would not scale. And then I think that was very helpful because, and referral revenue being 50% of the total revenue and renewal rates being 50%, all three had to hit 50, 50, 50. Till then I won't scale and they were, you know, I was very patient till then. How did you track that this is referral revenue?
00:49:04
Speaker
A referral revenue was basically like we knew who was coming from a referral link. Yeah, so there was a referral link and we had to believe we were tracking on that. People were incentivized. We did a lot of referral programs right at the beginning. Right at the beginning we did that you would get one space tech class free.
00:49:21
Speaker
that didn't work, then we did, you get one class free, that didn't work, then we would do for every five refills, you would get a MacBook. So we kept experimenting, experimenting with different reference programs and the scale and the quantum. It was very important in the thesis of the company that 50% of the revenue should be like, should be refilled enough that people are passionate about the product, proud enough about using the product that they're telling other people.
00:49:44
Speaker
and 50% of the acquisition cost will be zero, really. That allowed me to spend 50% on other experiments, Facebook, Google TV, etc. And so I think I was very clear that till that 50-50, so in the beginning, actually, reference revenue always did well for us. It hit 50% very quickly, NPS took a while to hit 50%.
00:50:02
Speaker
anyone makes 10% in the beginning, then we understood that we had to add a lot of quizzes and projects of the class in order to get the users to renew. I'd like to urge you to engage with the course. That's our achievement. That's our achievement. Facebook is a multi-billion dollar company because people use it seven times a day. If I had junior coding classes, it would be used two times a week.
00:50:24
Speaker
Then the frequency of attraction was not enough for it to become a habit. So quizzes, projects, et cetera, were like, you know, it had then learned deeply. It built a habit around the product. So we did that. Then the renewal date started to go up. And at 50 to 50, so I think the startup model for me was extreme patience in the beginning, learning from the discovery days.
00:50:44
Speaker
And then extreme impatience after you hit that scaling point. So when the moment that hit 50-50-50, I became a different person altogether. Then I was like, we are on a blitz scale. What was your revenue when you hit 50-50-50? One corona month, $150,000 a month. And I think then I was at seed funding. Then at around 50 lakhs, we were starting to hit that 50-50-50 point. Then we did one corona one. Yeah. Yeah.
00:51:14
Speaker
So November 2018, we were zero. I started the company. I think May 2019, seven months later, we hit one corona month for the first time. We replicated that in June and July. May, June, July was one corona consistently. Then that's when I picked up the series of funding very confidently. Until then, I actually didn't want to pick up funding also. I just wanted to make sure.
00:51:37
Speaker
the mold I hit one carat a month and I got a series of funding within a week actually. See, the good part is that if you're very tight about your metrics, when I presented this story, I was very clear, look, this is how they're going to build this category. These are the metrics I'm tracking. These are the metrics. When they call the users, the users were raving about the product.
00:51:54
Speaker
And I got a series of funding of $10 million within a week. I think I got confirmation for that. I had multiple offers at that time. I think Matrix, if I'm not wrong, Matrix jumped in. Chinese investors, et cetera, jumped in. So Nexus wanted to double down. So I had a problem of plenty because, again, the Matrix were
00:52:12
Speaker
Unbelievably good. The cash fund was very less because I'd been very disciplined. I had a team of 19 or 20 by that point of time and the team company was scaling and they could see what I was trying to do. So I think I was very patient as a result of that. The funding came. Then we hit the bank in September.
00:52:30
Speaker
After that, I really built systems to scale. I was very convinced that we would create a $100 million company. I built systems to scale. So it was from September to February, March, September to January, I think. I spent a lot of time building systems to scale, sales for Zendesk, data, re-engineering the tech completely. CTOI hired that point of time because I wanted to build a stable database to scale globally.
00:52:55
Speaker
Tell me about each of these pieces. What are the pieces you need to put in place to scale your sales capability? I think three things overall. There's very strong data flowing through the whole organization. So you have to move from Google Sheet to systems.
00:53:11
Speaker
So at that point of time, I institutionalized this daily management meeting at 10am, which is an enduring legacy of the company for years now. All of the top management every day, Monday to Saturday, with what fails meets at 10am and reviews the data of the previous day. How many trials happened? How many conversion? What conversion happened? What was the renewal rates? Every metric is reviewed at on a daily basis. So you have to have the data flowing into the system in order to be able to do that and make immediate connections. I think first is data. Second is system.
00:53:40
Speaker
Salesforce is a way to get data. I think most importantly is that your database should be strong and stable enough for the right data to flow and it should be connected to all of the systems, which is the next point, which is systems. For sales, there are three kinds of systems. One is basically
00:54:03
Speaker
pre-sale system, which is typically your calling to the user, like warming up a lead, et cetera, like, like, you know, like, even like your campaign, like, so I think we're quite strong Facebook, Google, et cetera, but those linking to that is like your.
00:54:19
Speaker
I would say pre-sales like, you know, like UTM tracking, et cetera, but everything linking back to the database. So pre-sales systems call center to kind of warm up a lead. And the same system has to be very strong for us. It was Salesforce and then calling through the Salesforce Zendesk and Exotel, sorry, Exotel and a talk desk. You know, they use that for India Exotel and for outside India talk desk to link it to Salesforce to make sure that every call is being tracked. Because in the early days of the company, it didn't leave a bunker of revenue.
00:54:48
Speaker
The founder's energy is every, ever present in the organization. The organization is very competent. So everybody's focused on this output. And you just track out. Then when you start scaling, focus has to shift from output to input, which is call duration, length of call, call type, call duration, number of calls per lead, because you get a broader set of team that you have to track on input as much as you track them on output.
00:55:14
Speaker
So I think that there was the sales system and then post-sale systems of customer support, we installed Zendesk and make sure that every call was recorded. So there's data, then there are systems. And third is organizational structure, which I think is very important for scaling, that you have very clear organizational structure. So I had very strong rules that everybody would have
00:55:36
Speaker
eight to 12 direct reports, no more than 12 direct reports, eight. So that led to very strong middle management layer hiring. Senior managers would never have more than eight to 12 direct reports. Then I would create legends within the organization, which is the whole company would operate on meritocratic, very fast promotions, right? So a sales guy would go from sales manager to VP within 18 months. So he would go from sales manager to team leader to director to VP within 18 months, as long as with only one parameter, that is your
00:56:03
Speaker
output performance. So when you say you would create legends, that means like you would create these examples. It means that the whole company would be characterized by superfast promotions if you did well.
00:56:18
Speaker
So it was basically like, you know, like basically what I always used to say, like, look, the vital junior early days were at least 10, 10, six. We would work 10 to 10, six days a week, right? I was very clear at the, thank you. Look, I'm, because we are going to compress 20 years of work in four years, right? I used to call this a 24 principle. See that in orientation. You look at the 20 years of low intensity work is what you do in a profit. That's a choice. I will compress 20 years of low intensity work into four years, right? So you will obviously, the burden on you will be very high. The company will be very driven, aggressive.
00:56:48
Speaker
But in return, it's ready for a principle. I'm going to give you 10 years of growth in one year, right? So the 20 years of coming from manager to VP, which is what we experienced. I'm going to do that all in four years, right? So your journey will be from sales manager to VP in four years, right?
00:57:05
Speaker
And so this is the principle which we'll work on. The team was, I would say, we collected a certain level of people who wanted that. They wanted to compress 20 years of work in four years. They worked with me, this 10-10-6 rule. I was very high energy and I would come to office at 9.30am and I would stay till 11. I just liked it. As I said, I had to work in an obsessive period of time and they
00:57:28
Speaker
I was very committed that people are getting so much, I have to give them that in return. ESOPs were very generous in the company. For that time now, thankfully, everybody in India's startups are getting generous, but right off the gate, I diluted 21% of the company, I think, versus everybody was advising me to do 10%. Even VCs were saying that's too much time for ESOPs, but everybody had ESOPs in the company, and those who didn't have ESOPs were promoted very fast, if they did well.
00:57:53
Speaker
And I think that's very important to set up as a frame. So I think September 2, generally, I did all of these things. I said very cautiously, I did systems, et cetera. Then I started to really press the button. What was your revenue?
00:58:06
Speaker
We were growing very healthily about 30% a month, 30 to 40% a month. So very healthy growth. So 1 to 1.5 to 2, 3, 4. Then I think February hit and I said basically we'll double every month.
00:58:24
Speaker
Right. So we said that we'll just double every month because you set the infrastructure. Systems were set up for scale. And then I think we just went crazy, I would say. So basically, I think February, if I'm not wrong, March, we hit our first million dollar a month, $1 million in March.
00:58:42
Speaker
And then after that April was $2 million, like it was $1 million, April was $2, March was $2, April was $4, May was $8, then $16, $32, $64, going up to $127 million. Sorry, about 27 crores a month. Sorry, I'm wrong. Sorry, 6 crore to 12 crore, 12 to 24, 24 to 48, 96.
00:59:01
Speaker
about 27 crores a month in July or August. Every month, we doubled after that because systems were responding. Again, we made a lot of mistakes. I should have done some things differently, but overall, I think we were delivering the product at scale with the promise the whole engine was working. And the pandemic also obviously helped TED Tech. I have to give credit to that. I can't claim credit to all the pandemic helped TED Tech. And I was just very fortunate. February is when I blitz scaled. I doubled in February, doubled in March. April, everybody liked on lockdown.
00:59:29
Speaker
I don't know if I would have been able to double every month, but after the lockdown, I doubled every month. I opened up a new country. So yeah, we went to like basically $150 million kind of run rate from like a $1 million, $12 million run rate in March to $150 million run rate in August or July at the time of the acquisition. And then question was, so I think that was very important to me because overall the company had picked up $11.3 million and at the time of the Baju's acquisition, we had $14 million of cash in the bank.
00:59:58
Speaker
So we hadn't touched the cash. We had touched, obviously used the cash, but then we were cash flow positive. So at the time of acquisition, we were $14 million cash in the bank. And like I never, I never did not use the dollar rate because I was very disciplined on economics, very disciplined on 50% of revenue coming from referrals. Renewal rates are very high. All of those things, all of those early decisions came in great use later than you scaled because otherwise you would have just burnt a hole with scaling.
Scaling Strategy and Company Values
01:00:25
Speaker
So, you know, if you look at the organization as like plumping, essentially delivering value and money. So what apps do you turn to breadth scale, to double growth? Is it that you turn the tap of your Facebook and Google campaigns, like you start spending more money there and then that once you open that tap, then everything else also open, like what, what, what
01:00:50
Speaker
As I said, the first thing is that the water has to be very good, right? So that's where you spend your time. Like the first six, as I said, I had an 18 month journey for six months was making sure that the water was very good and being very disciplined of not setting up pipes till the water is good. Met six months was setting the pipe. After that was basically opening up the faucet completely opening up the faucet.
01:01:10
Speaker
As I said, if 50% of the revenue is coming from referral, your task becomes easier because almost out of the 127 crores a month, 80 crores came from referral, right? So much easier tasks than trying to acquire everything. The remaining 50%, I think there are, I would say,
01:01:26
Speaker
There is paid lever and then there is organic lever. The paid lever is Facebook works. For me, at least Facebook and TV worked very well. Television, the moment around that time I opened up television. Television and Facebook in India were great acquisition mechanisms.
01:01:43
Speaker
And the other 50% I would say these are very good at organic growth hacking. I used to be a discipline of, I'd read a lot about growth hacking, Sean Ellis, Andrew Chen, I was on top of everything. So we would have a lot of like growth devices built into the product, right? Which is every time you signed up for a trial class, you would get a certificate after that that you could share, right? And then like, so there were a lot of like, at every touch point we would think about how can you share this experience? How can you share this experience? And people would come from sharing that experience. Yeah.
01:02:11
Speaker
Okay. So I want to ask more on both of these things, TV and organic. TV is fairly unusual for like a one year old startup. But I guess you were comfortable because you knew from your discovery experience that TV gives you ROI.
01:02:27
Speaker
we were like i was like we had a TV ad we did the TV ad it was a very bad TV ad actually really that led to the that led to the whole writer jr like kind of backlash right but again i can't regret in like in what way was it about i i can't actually see the TV ad but still i was not able to say it was not a very good it was not it wasn't a good ad but because the whole i think i just lost my way a little bit right i think the moment of the company was so strong that point of time like i really
01:02:53
Speaker
think that the first TV ad should be about the mission of the company. The mission of the company was kids should build and create. That was what was the dominant thread in the company. Every part of the company was run around that, right? Without exception, even sales guys would never call and say, they would always call and say that your kid will be a builder and a creator for life. It was so strong, my training, et cetera, but the first TV ad was about
01:03:14
Speaker
build an app, make millions, they're very, very offensive as a kid, right? So I think that led to the, like, started the whole invite, which was well deserved, I think, but then so.
01:03:23
Speaker
Yeah, so I think the point is that even the Black TV ad had very good ROI here. I could see the results and then we made better TV ads. Which channels did you use? Yeah, in the beginning, I tested everything. So we saw infotainment in English channels perform well. So we obviously have limited budgets at that point of time before the acquisition. And we did those infotainment channels. Later I saw GEC regional, everything do well. But TV is a very good source of acquisition in India. TV is a performance medium.
01:03:50
Speaker
as much as it's a branding medium, which is unusual for any other country. In India, TV is a performance medium as much as it's a branding medium. Yeah. Why do you say that? I have never heard any founder say that TV is a performance medium. Because it's a very strong point of action, which is in our case, book of free trial class. We saw that the CPA or the cost per trial was similar or lower than digital.
01:04:13
Speaker
So it was acting like a performance medium for us. Also, along with being a branding medium, which is people got to know the Whitehead Junior brand, but it was a performance medium as well. And yes, we started TV about 15 months into the journey of starting the company and then everybody started to know the brand. Yeah. Yeah.
01:04:31
Speaker
How did you track? Was it like a unique number? Absolutely. So we had an attribution model that immediately five minutes after the ad played what for the trials, which could be attributed to organic. And then we were like, yeah, tracking it very rigorously. So we had very strong attribution to organic attribution to TV versus to all the growth hacking links versus the digital obviously had their own UPMs. So we were able to very immediately isolate the impact of TV by channel by ad.
01:05:01
Speaker
Wow. Okay. How did you build this system of attributes? Actually, surprisingly enough, not really. There is no TV, like media expert. These are needed. I think most people are
01:05:19
Speaker
Like people who are very, I think, as I said, like, I think the three questions I always used to ask in interviews was like, Banes, what are you reading right now? People who draw a blank from that I knew would not fit into my organization because I was very hungry to learn and grow all the time. I was like, even in my kind of startup days, I was reading all the time.
01:05:38
Speaker
Second question I would ask is what are your improvement areas? Again, people who were like, I need to network better etc. I would reject them because I knew working with me is going to be like, I'm constantly very critical of myself. And the third question I would always ask is what are your three references? And I would call the references myself and the references would be like,
01:05:57
Speaker
Sometimes I would ask you, is this the one person of people that you work with? So in general my hiring, because typically people who are self-learners really focus on improvement. I think so as a result of that, they want subject matter experts, but they build this expertise around whatever the company needed at that point of time.
01:06:20
Speaker
So I think that's how they built these systems. This was all part of the system building phase.
01:06:29
Speaker
Tell me about organic growth hacking. What were the things that you did there just to help people who are not from that background to understand, like someone who's building a product, what are the ways in which he can do organic growth? I would say the dominant principle of organic growth hacking for us was that every moment, every touch point of the product with the user
01:06:50
Speaker
should be a moment where they can proudly share that touchpoint with their friends. So if you take that principle, the moment they signed up for a trial class, they could build a website of their own. So they built a website at the moment they signed up for trial class completely free. They shared that website with people, that they'd built their own website. Then after that, and very simple, everything had to be extremely kind of like, simplicity was very key, complexity Matlab.
01:07:17
Speaker
Then after that, the moment they finished the trial class, they would get a certificate that they could share. Then once they did the classes, they could share out the products that they did after class. So I think one principle was that, look, everything is a shareable moment for the user and create a great enough product that they want to share it. And that was, I would say, one kind of like very strong principle of the organic growth hike, which helped us a lot, right? I'm very conducive to principle. Second, I would say,
01:07:43
Speaker
Setting up a growth team fast is very good, like a good product head who's heading growth. I was good to set it up and a growth team and we were very disappointed. So basically I restructured the company or structured the company into three verticals. All three verticals had very strong leaders.
01:08:00
Speaker
and very important to the founder. So the three verticals were growth, experience, and delivery. Growth was very important to the company, all these growth hacking, PIPs, et cetera, marketing growth hacking. Experience was the actual experience of the class and the projects of the class, and delivery was the operation.
01:08:16
Speaker
The elements came into delivery. Delivery was actually delivering the promise to the teachers operations and the teacher delivering the class as well as our support to the user after class. And all three had very strong leaders. The delivery had eventually begun.
01:08:38
Speaker
Sales was a part of growth, but I got sales to report to me directly because I was passionate about sales. It was part of growth, but I had worked the growth head and the sales head, but sales was within the growth vertical. So I think growth experience and delivery, all three were very important priorities to the company. At every point of time, I would do updates on all three. Even our management meetings were structured as a daily management review plus
01:09:02
Speaker
a growth review, an experience review, a delivery review every week. Every week, what is the plan? Metrics. Very clear. So revenue and cost as a percentage of revenue. And I would track it daily. Cost as a percentage of revenue is a very important metric and no point of time. Cost is like, cost means running out. Marketing cost is a percentage of revenue. All marketing costs as a percentage of revenue should not go beyond 35% based on the model that we had.
01:09:27
Speaker
Experience was again, very strongly tracked in every class had a rating. So there was a class ratings and then there was obviously net promoter score and renewal was also an experience metric. Renewal rates were also an experience metric and then had like a CSAT. So all of them had about three metrics each that I would like track religiously on a daily basis. Never let it fall.
01:09:46
Speaker
Every time, anytime they would fall, there would be a panic in the company. I top down, there would be a panic to make sure that no metric. So you said that when you become bigger, you switch from tracking output to tracking input. I want to understand why is that? Like I would have thought that tracking output is
01:10:04
Speaker
more aligned with company goal and therefore forget input. See the whole work from home movement, revolution, flexiars, all of that says, why are you tracking my inputs? Just track my outputs. And this is again counterintuitive. So I want to understand your
01:10:19
Speaker
Yeah, I thought of this. See, the overall cut is that the electric type will output an input, not just input alone at that, but input becomes incredibly important when you move from a founder-led company, which is about 200, 300 people who are driven by the founder's energy and the founder's mission. The next set of 5,000 people who are coming, some of them obviously are driven by the mission, and obviously part of the founder's role is to get people to drive to the mission, but they're also driven by the act of having a job.
01:10:44
Speaker
which is a salary at the end of the month. So now when you're talking about a sales pitch, in the beginning, I didn't need to record any call because everybody was driven by the founder's mission and they believed in the mission. They didn't pitch the customer with that passion of the mission. Now the later people are coming in, they feel a sense of connection to the mission overall, but now how you pitch the energy that you pitch
01:11:09
Speaker
The role of tracking input is that you can make everything better with proper training. So if I look at my sales training program, we had seven touch points in sales. Just to give you one example, right? The moment somebody got selected for Whitehead Junior,
01:11:25
Speaker
They would get the pitch and the quiz before they even joined. They had to answer that quiz, right? And there would be awards for people to answer the quiz when. Then they came, they would have a seven-day classroom training, very dedicated, focused seven-day classroom training. At the end of every day, there would be a quiz and a viva.
01:11:41
Speaker
And at the end of seven days, there would be a qualification buy-by. You couldn't call a customer until you had qualified into the buy-by. So that was the second touch point. Then you actually started calling angel leads or dead leads or leads who were expired, who had not converted. And you had a set of trainers who were helping you to make sure that you had a good pitch. Then you had a qualification criteria, then you kind of called. So there were seven touch points in which there was concentrating. And the input tracking helped us understand how to
01:12:10
Speaker
customize the, improve the performance for every person. So I think the input tracking goes to scaling the organization where people are not just driven by the mission, they are driven by the job and that's a healthy thing. They are driven by their job and how to help them get better at the job through tracking the input and making the input better and better.
01:12:27
Speaker
So I think everything in the company was architected towards like just like a touch point, like, you know, like basically deep training and knowing the data during the input phase in order to improve the training of the system that delivers so that we could architect it to scale, right? Rather than architect it to individual people. No, the company still has to believe in the mission, etc. I think I defined the values of the company too late, should have done that early.
01:12:50
Speaker
because we went from 300 to 5,000 people in the pandemic, right? I didn't realize the impact of that's all this energy. The founder's presence daily in the office is very different from the remote working. I could have done a better job at scaling the organization during that point, but you know, get mistakes made. I tried to penalize myself for
01:13:10
Speaker
in action rather than action you know action you'll always make mistakes so i try to i try to go easy on myself for mistakes made in action there's a very good McLeod really quote right make mistakes of ambition not mistakes of slop so i mean i'm very hard on myself for mistakes of slop
01:13:25
Speaker
like not defining the values of the company, but I'm easy for mistakes of ambition, which is scaling the company very fast. So yeah, go easy on the mistakes of slot and go hard on yourself on the mistakes of slot, but go easy on yourself on the mistakes of ambition.
01:13:42
Speaker
You know, I run like a 40% company. To me, defining value sounds abstract. It sounds like stuff you read in MBA, vision, vision, values. But what is? So I think for the 300 people, you are the value. So you are the 40% company, you are the values, what you are living every day.
01:14:08
Speaker
It becomes the values of the family and we don't need to define it. But I should think, I need to listen up, it is in a theoretical exercise because they see you, you want the values. You can't say meritocratic utopia or something like that and then not promote people if they're doing very well. So I live with that. I'd promote people on the spot if they were doing well. So they knew it was a meritocratic utopia.
01:14:29
Speaker
at five thousand people they don't know they just entered the company they're lost in the sea of the company they don't know that this is a true meritocratic utopia i tell them that there is this is a meritocratic utopia where if you do well you'd be promoted within three months six months there is the legends who have been promoted in 18 months who become vps like so the values is basically like so if i take a look at the whitehead junior values right now they're
01:14:52
Speaker
very, very defined in terms of like 10X thinking, never think of small things. Like, think of how do you, like, how does every kid learn music in the world, right? That's how I had junior kind of initiative, because it's going to be 10X. Or think of military-connected utopia. Here, the only thing that matters is your performance. And here is a track record of people getting promoted on performance. It holds the whole layers of the organization. How do you make values more than just words? I think there are very good systems for that, right? I think you, for us right now,
01:15:21
Speaker
Like if I think of all the touch points, basically the values I've mentioned in every town hall once a month, there are group discussions at the last mile of the organization discussing the values. So we do that once a month again, after the town halls where they discuss on how they can bring it to life. Third,
01:15:39
Speaker
The values are the reward values in everything, right? There's anonymous recognition from your peers. If you're doing very well in values, that leads to formal recognition. And then, so basically you are like every day, you just keep mentioning the values again and again for informal recognition, formal recognition, building it to the appraisal system, bringing, that's how like we've done it overall. I think I could have done this much earlier and I would have had like, yeah, I would have done better overall. Yeah.
01:16:04
Speaker
So if you're scaling it from 40 to 400, I would say do it now. You don't need it. It's a theoretical exercise for running. Realize the absence of it. There are two questions around. Let me ask this one first. So that 300 to 5000 journey, how did you actually hire at such a large scale? I would say very strong systems.
01:16:24
Speaker
They would be like it was recruiting software architected to round one, round two, round three, round one would last for 20 minutes, round one would last for 10 minutes, round two for 20, round three for 30. We had full-time people doing R1 and R2 who were extremely solid people in the company, who did very well in the company. So the sales managers became full-time round one, round two interviewers, and we asked them to do that for the company and created a merit system for them that if they performed it well, they would get incentives. So we created incentives for them also.
01:16:52
Speaker
and round three had to be senior leader were to give an allocation of their time so it created systems around that how to architect the r1 r2 r3 so that you always got the best people into the company yeah then i think i think that's how we like we created a recruiting engine overall so we were able to go from 300 to 5000 people but again i did a shoddy job with welcoming them once they were in the company with proper values and stuff it was really
01:17:15
Speaker
just you have to work very hard here that became the dominant thought versus you're working hard for it deeper cause you're serving kids you're serving teachers and you are disproportionately growing your own career I could have done all that much better but yeah anyway we have a mistakes made yeah
01:17:31
Speaker
Well, like you would welcome each one, like they would... 300 to 5006 months, right? So we were doing 150 people a week, right? 150 to 200 people a week at some point. All remotely, there would be a structured orientation. I would be present in the orientation in the beginning, like we would have a very structured orientation. Could have done better though. And these were what? Like teachers or sales people? Sales people, like we're saying, we were doing sales operations to support them because the live operation is very intense.
01:17:59
Speaker
Right, because just think about it in a live class, your microphone will break, your video will break, somebody has to correct immediately. So a live operation is actually quite intense. So we had very good, strong operations people, salespeople hiring. We were expanding from, I had the 753 strategy, which is seven countries, India, US, UK, Brazil, Mexico, Australia, Indonesia, five courses, coding, maths, music, English,
01:18:24
Speaker
and fine arts and three formats, one to one, one to four and school, B2B. So we had seven, five, three
Strategic Acquisition by BYJU's
01:18:30
Speaker
strategies. So that obviously led to many permutations and commission the company and people were like, like a hide across the gamut for that.
01:18:38
Speaker
Okay. What was the split of revenue between these five courses? I mean, most people know White Hat for just coding, but were the other courses contributing? Because coding was there in the acquisition, we had only coding. Then we launched maths after the acquisition, then music. So I would say at McNell, it would be 60-40, 60% would be coding, 20-20% would be music, 20% would be math. So they're growing because they are obviously, they don't have the
01:19:04
Speaker
the history of coding and then coding was such a distinct problem. Now, music is also picking up a lot because it's such a distinct promise that you can learn guitar and piano in the comfort of your home. So I think they just stood out also. Part of it is also just standing out. And their distribution channels, what was the split? 50% reference, very clear, 50% reference. I would say 30% organic, 20% organic, 25% organic.
01:19:27
Speaker
growth hacking, 75% yoga, purchase percent candor, equal split between digital and TV. 12.5% digital, 12.5% TV. But the 50% referral, 25% organic growth hacking meant that 75% of the revenue was free. Right. Amazing. So then I was able to stay paid well without diminishing returns. Yeah. Right, right, right. Okay. And did you also do B2B?
01:19:54
Speaker
Yeah, we started B2B and it's a long gestation period. But I think if I'm not wrong, we are in 400 schools right now in India. And other markets are also doing B2B now because we started in India. So in a way, India split for us into the
01:20:12
Speaker
first 30 million who are active on digital, et cetera, who are live online classes, and the next 200 million which are going to come into it through the physical infrastructure of schools. I think I always planned for India to be a deep market, the top 30 million which every internet company is targeting through the live online infrastructure, then the next 200 million through physical schools, et cetera.
01:20:37
Speaker
And I'd wanted the company to grow horizontally, internationally. So we are in seven countries now with pretty deep roots. So even the B2B remains one-to-one classes? No, B2B is the kind of school, one school with 20 kids in there, like 20, 30, 40 kids in the class. It's a completely customized curriculum and product for that.
01:20:58
Speaker
Okay. So like a school may say, okay, I want class four to learn XYZ skills. And then you would design that curriculum and there would be like, like three periods in a week, which are essentially like white. Exactly. Exactly. Yeah. Got it. Okay. Okay. Okay.
01:21:15
Speaker
But the direct-to-consumer product is pure one-to-one. There is one-to-four. One-to-four, we initiated one-to-four about six months before for accessible price points and mass learning. So I think that happened. So as I said, this is a 7.3 strategy, seven countries, five courses, and three formats. One-to-one, one-to-four, and B2B. So we had followed the 7.5.3 strategy. And I think the team is following it now. Obviously, the new CEO is here, and they'll have their own view on how to do it.
01:21:45
Speaker
Okay. So now let's talk about Baju's acquisition. So tell me about that. Like, what made it happen? What was the trigger and what were your thoughts on it? Yeah. So basically we were 18 months in or 15 months in November, 2018. I started back in June is when, which is by June, but a bunch of acquisition offers came at the same time as I was raising series B fundraising. And I think there were three kind of motivators to do the acquisition. One, for me, it was very clear decision. Everybody was like,
01:22:15
Speaker
like they're very, this is already unsupportive, right? Because they thought the company was scaling so well that why would you go for an acquisition at such an early stage? But for me, it was very, it was kind of crystal clear overall. One was basically my fineness of fame I had gotten before with my writing and my discovery, head, role, etc. So I wasn't looking, okay, Karan Bhajani, I had no value in my life at all the act. So I was like, look, this is a company with a
01:22:39
Speaker
everything that we are doing, they've done for seven years. They have a much better international presence. They've cracked fundraising. If I think of the true, pure mission of why I started the company of kids being builders and creators, it'll be under this umbrella. It will just rapidly scale. And that's what happened. Because of that, we were able to do maths faster, music faster, launch into countries faster because of, I would say, where you went is very boundless vision of the world. That was one.
01:23:07
Speaker
Second, I think in a startup, it's very hard to reach a point where acquirer acquired an investor. All three are happy. Very hard, right? Typically what happens is you are at such exaggerated valuations when your company is doing well that the acquirer has to buy it at 3x for return. Like you buy a billion dollar company for $3 million, such a high bar for the acquirer to be happy. The acquirer obviously, so they've been perfect balance. Now in my case,
01:23:34
Speaker
I had raised only two rounds, Seed and Series A. If I think of the investors, their last date come in at $6 million, right? And they were getting $300 million exit in 15 months. Under the rough in India, right? $6 million to $300 million in 15 months on cash.
01:23:50
Speaker
right? No equity, et cetera, all cash. So the investors were happy. They acquired a Deju who was getting $150 million, 100 company for $300 million. Typically people were asking for panics, the valuations. I knew I didn't live through cycles. So I was, and then from that team perspective, my perspective also, I diluted very little, right? With two rounds of funding. So I had 40% of the company, the team had really good equity, 300 million cash would be life changing for most people, right? So
01:24:15
Speaker
So I got the trifecta. Would I be able to achieve it again? Maybe. But why would I be able to achieve it again when I had this trifecta? So the mission was well met. The team and the investors were getting a good return. Baju would be happy. And the third thing was very personally. I know I'm a guy who does things, but need passion and commitment for a few years.
01:24:37
Speaker
And that I don't. That doesn't mean I'm any less of a person for not believing in the mission. I believed in my novels. I believed in my work. I believe in my yoga. But I just get very obsessed with things for a period of time. And then I feel the restlessness to learn more, to expand my life more. So I again knew that, look, it's a five-year journey for me. It's not bad. He's committed to education for the rest of his life till he's 80. And it's so admirable.
01:25:05
Speaker
No, I'm not right. I just can't do that. So I did some things about lucky didn't believe in the big thing. No, I believe in the machine. We are simply in the mission. We have more energy and better self to do it because I'm a person who's just restless for
01:25:24
Speaker
like new learnings, new kind of my mind works in better than I'm just learning new things all the time. Right. So I just have to embrace that part of me and drift out into the world. So, so again, I felt like I have to, I will make this choice either now or two years later. Now it's a favorable time to make that choice. So it was really clear in my head. I was like, there's no question. It's a great thing for everybody involved. And why would I? Dilly-dally. Yeah.
01:25:54
Speaker
I'll do this for 12 to 18 months more. We were very clear about it at the beginning. I think he liked me for the 12 to 18 months you were there, even though I had made enough wealth. But I worked 24-7, right? I just worked 24-7, right? I just like working 24-7 in an adult. So even after that position, I think I just gave it all my whole life and my heart to the company.
01:26:18
Speaker
and I can move down enough. Did things change after acquisition in terms of how it was running? I forced him to get a lot of credit. All positive. He did everything. He invested more in the company. He had a bigger ambition, a bigger vision. He's great. I think he's going to change the nature of education in the world over.
01:26:39
Speaker
Even the times I got criticism, I didn't feel as bad as when I saw Baju get criticism because he's actually a true visionary. I've only worked for one visionary in my career. He's a true education visionary.
01:26:50
Speaker
I think everything was positive, but it's a bit like the shape of thesis in a way. The shape of thesis in the sense that everything is the same, but something has changed in the soul of the thing. So I think a little bit I felt a bit like I think I could have had a better run with badges, but something did feel different. I would say the only big thing that felt different was
01:27:15
Speaker
I was used to the constant hustle to reduce cash burn. I was very micromanagerian. Part of me became a bit more lenient, I would say, sometimes. But in general, I would say 90% of things didn't change, and whatever changed changed very much for the positive. There were a bunch of controversies post acquisition. Would you like to talk about them?
01:27:41
Speaker
I should. I would say mistakes were made from my end. Let's put it this way. I think the advertising was not right, some push of the advertising. The reaction, the criticism was also way overblown. Okay. So what next for Karan with ads? It makes me quite focused now. After this one year, I'm taking a break. After this, I want to enter politics in India or I want to enter politics. So I want to
01:28:08
Speaker
I have a very, like I want my life to be just committed to service at a very large, use my, I guess, hopefully you'll be able to use my strengths in scaling and systems and operations and all the mistakes I made learning from those also to have a very kind of like just devote my life to be able to have a very, very large impact in the public
Future Plans in Politics
01:28:27
Speaker
domain.
01:28:27
Speaker
So I'm kind of preparing myself a little bit for that by like reading a lot about this, like formulating my views, reflecting on what I've not done. And in this period, I'm just creating some content for like everything. I like return to be as honest as I can about what I learned and sharing that with people so that they have slightly better, like, you know, they have better scaling journeys.
01:28:46
Speaker
But how do you prepare for politics? I'm saying, Samir, I'm preparing for civil services or giving the civil services examination. I'm preparing for a civil services examination. So I'm reading everything about the constitution of the country or the constitution of different countries, what shaped the political climate of different countries, what has been the progress and independence for India, what have I learned from US politics. So in a way, I'm giving myself a political science course, if you will.
01:29:15
Speaker
Okay. Yeah. And you're forming a thesis. Exactly. They're kind of the same Sharon. So I'm in the reading listing phase right now, really reflecting on what I want to be. And then I'm going to jump in 24 seven. And hopefully this chapter will be much longer than all my previous chapters. You know,
01:29:31
Speaker
because I think it's the, I guess it's a pinnacle now, so this is the pinnacle of my life, I don't have any more, this won't be, you know, again, getting restless after a little bit, you know, yeah, I want to kind of come back to this chapter for the next 20, or maybe the right thing to think about it is that I committed to the corporate or the private sector for the first 20 years in its own way, and I'm going to come to the public for the next 20 years. So will it be like an MPMLA kind of thing? Will it be like a
01:29:59
Speaker
I don't want to support from the outside. I'm just really good at operations. I'm good at running things. I'm not good at advising. I was not a good management consultant. I was thinking I was a better CEO, like I was into the detail. So I'm very good at being a P&L owner and running the details. So I want to be in the inside, not the outside. Now, how do I enter, et cetera, that all I have to work out in the next few months.
01:30:24
Speaker
As an independent or with a party? I want to use the party as a channel to do things quickly. The independent cycle, at least in my history of what I've studied in the world, not just in India, the independent cycle is a 50 year cycle. Basically 10 election terms, five years each, right before you.
01:30:43
Speaker
are able to do anything of scale, which is good for certain people. As I said, if I'm a Baju and I have a very strong sense of that, but I also know myself, I'm an operator, I want to operate fast. Yeah. Andrew, do you have any thesis you'd like to share in terms of what you think is the way forward politically speaking for India? Very early, very early for me to have any, very unformed, I would have very unformed thesis.
01:31:11
Speaker
But generally, I think the idea of India is wonderful. I think this is such a unique... There is no history at all of so many different languages, so many different linguistic and human, physical human characteristics being different, all organized into one state.
01:31:31
Speaker
The only other example was USSR and it disintegrated. So this idea of like this multiplicity of India, it sounds like a cliche, but actually in real life, holding together sense independence is unbelievable, actually. I am like, I am really passionate about that idea of India in which like there is not Southeast West with such different linguist tendencies, such different physical characteristics, such different food, et cetera, all hanging together as one identity. And like contributing in some way to this idea is like,
01:32:01
Speaker
a philosophical like cause as much as it's a material like upliftment, I think there is a spiritual cause to this work of the idea of India, which I'm very passionate about. Okay, got it.
01:32:13
Speaker
Cool. I'd love to chat with you once you actually get into politics and then update on the story. So what made you agree to this podcast? I don't know why. Surprisingly, I say no to everything right now because I'm mad.
01:32:32
Speaker
Something about the being reached out, I think. Nothing more than that. I think something about the way you express yourself, the honesty of what you said, the outreach. But typically, I'm just saying no to everything because I'm very introverted right now. I read a lot. I think a lot. I write and try to contribute whatever I can to the world, what I've learned. But for the most part, I'm very... I'm hiking in the mountains a lot.
01:32:55
Speaker
I'm about to do the Camillo de Santiago, which is the 700,000 kilometer hike from, I don't know if you've ever heard of it, but it's a wonderful thing. So it's a hike from the Pyrenees in France, the mountains in France, to a town called
01:33:10
Speaker
Santiago de Compostela. It's called the Way of St. James. It's a Catholic pilgrimage. I'm not obviously Catholic, but I'm doing it as a pilgrimage, 1000 kilometers high. So I'm just basically doing things like this, just like extending my self-discipline overall before I make the next move. Yeah.
01:33:27
Speaker
you're in that like that spiritual rejuvenation spiritual integration phase and my way of spiritual rejuvenation is through like hiking and writing do my advanced yoga teacher's training gonna do this hike like doing some other experiments like
01:33:43
Speaker
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01:34:03
Speaker
Before we end the episode, I want to share a bit about my journey as a podcaster. I started podcasting in 2020 and in the last two years, I've had the opportunity to interview more than 250 founders who are shaping India's future across sectors.
01:34:19
Speaker
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01:34:40
Speaker
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