Divyank Turakhia on what it takes to bootstrap a business and get a multi-million-dollar exit
Standing ovations are rare, more so at TechSparks. But when bootstrapped billionaire Divyank Turakhia finished a crackling fireside chat with Shradha Sharma, the audience couldn't help but stand up and applaud the young entrepreneur. The Turakhia brothers - Divyank and Bhavin - joined India's billionaire club in 2016 with the tech company they founded in their teens. His story is the stuff of legend - how a Rs 25,000 loan turned into a near-billion-dollar exit. Not many were surprised that Divyank also topped Barclays' Hurun India Rich List of 2018 of startup founders. Like his brother, who gave us some great entrepreneurial insights at TechSparks 2016, Divyank spoke about how their bootstrapped company evolved to become a global giant. The insights were many; the tone was spirited.
“So how many private jets do you own?” Shradha asked.
Divyank's immediate response? “I fly them all!”
The sale of media.net put them on the Forbes' list of Indian billionaires. The advertising technology company is, however, only one of the several successful, mainly bootstrapped, ventures to Bhavin and Divyank’s credit.
There is something powerfully inspirational about founders who build businesses from the ground up and with no backing. How do you build businesses like that without any funding?
What decisions do you take every day?
“Different businesses require different manners of funding. There are businesses that require funding from the very beginning, some much later, and some never,” said Divyank, who is known for scaling businesses to great heights. Some of his other businesses, apart from Directi and media.net, include Flock, Zeta, and Radix.
Explaining what really matters in building a business, Divyank said, “It really doesn’t matter when you start, everybody has ideas. And every idea and industry has a lot of money. Whether it is ecommerce, power or oil, all of them have a lot of money. The way to think is any of the top 500 companies in India aren’t from one particular sector but from across. What actually matters is the amount of time you take to execute the idea. It’s the decisions you take on an everyday basis that matter and make you successful or not.”
Different strokes for different folks
What also matters is how one looks at different solutions for the same problem. Divyank says that in school, all of us are taught that there is one right answer to one question. “But the reality is every question has multiple answers. During different times and circumstances, different solutions work for the same problem,” he said.
He adds that whether one is a two-people startup or a 10-person startup, that’s just starting up - the answer to how one grows from a 10-people company is different from how one scales a 200-person company. The access, ability, resources...everything is different.
"Therefore, when you’re an early-stage startup, it’s important to focus on resources and how you use them."
Divyank adds that the most important resource is your personal time, and hence one needs to delegate quickly.
“Whatever you can hire someone else to do, hire immediately, especially if they can do it with 70 to 80 percent efficiency. As you scale, you need people to help. Twenty-people startups becoming unicorns is rare. You need to add people and grow on a weekly and a monthly basis,” Divyank said.
Bootstrapping all the way
"So, did you not go looking for funding or did you not get funding?" Shradha asked. Divyank affirmed that he didn’t look for funding because the businesses they built were profitable and didn’t need funding.
Bootstrapping and growing startups take time. Divyank believes that many startups fail because the founders give up along the way. Things take time. “When we started our first business it took us six years to get our first 100 customers, and the next 100 took a few more years,” he said.
These days, people just want to grow faster. “You can raise money and grow faster; many feel that this will allow you to reach your vision faster, people are valued-based on how much they raise, but the Indian startup ecosystem is in its very early stages. For most companies, local markets are still developing. There is no other benchmark that you can use,” Divyank pointed out.
But have all his businesses been profitable? “Well I didn’t have any choice. I had no money when I started; from that point the only option I had was to make the business more profitable,” he shrugged.
He would keep building rules on the runway they needed. Initially, it was 12-18 months of payroll, and to hire more people. Hire the right talent and train them to grow with you. It was a continuous cycle.
“We focused a lot on how to help people grow from a learning and career standpoint along with us and continue to motivate them. This helped us manage more and be able to retain great talent. In product companies, value creation is done by people who have been with you,” Divyank said.
You can’t really time an exit
“The timing is never in your hands. Eventually, when we did do the exit, we had seven offers; we had a lot of backup options. We had a much lower offer that we were happy to take but didn’t get through. The idea is to build a business thinking that you will own it forever, and not that you will exit in three years,” Divyank said.
If a strategic partner can add value and if it’s an opportunity you want to explore at that point in time, go for it, he advised. Most exits take 5-15 years. The founder should continue building his or her business because s/he wants to irrespective of that exit.
“In this time frame your company can be 10x or maybe even half, and it’s the case for every company.”
As a startup founder, you are working 12-15 hours in a day for a long time, but what matters is what you spend time on doing. “One of the things I possibly got right was the ability to ask myself what can I do to create more value, and ask that question at the end of each week,” Divyank recalled.
How often do emotions drive your business?
It is important to analyse what you could have avoided doing, could have done more efficiently, and what you want to pay more attention to, he said.
“Everyday in the morning I get up and think of the 1,000 things what are the super-critical four or five things I want to focus on. And how do I plan my day accordingly? It always is in a descending order and I never drop the ball. Even if everybody else drops it. You are the one who has to make sure no matter what happens you pick up and help people figure out how they do it better in the future.”
He added, “Passion is important to build and to win. From an emotional standpoint, personally, I am more emotional about people than things. I am not emotional about my business. I am emotional about the people I work with; the business I look at from a numbers perspective.”
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