The inside story: why Viru of Dailyhunt got Umang Bedi to be his co-founder so late in the business journey
As startup traditions go, this one was surely way off the mark. Who brings in a co-founder at such a late stage?
With the marriage metaphor often used in the startup world to explain the inexplicable, it was akin to saying, ‘who gets married at 60’. Not to say that Dailyhunt’s Virendra Gupta and Umang Bedi are 60. Or married to each other. But you get the point.
When former Facebook India executive Umang Bedi, who joined Dailyhunt in 2018 with the designation of President, recently changed his LinkedIn profile to Co-founder of Dailyhunt, it created a buzz in the startup circles. Coming as it did close to Zomato’s announcement of elevating Mohit Gupta as a co-founder, it did make trend-watchers sit up and take notice.
What are the founders of established and highly-valued tech companies thinking? Is this a new way to retain top talent? How does it make sense to bring in an outsider so late in a company’s life cycle? How does the math work? And many similar questions are being asked around.
Traditionally, young founders are advised to be on a co-founder hunt early on in their journey so that both can grow the startup as per the expectations of its Board and investors.
Why did they choose each other?
Virendra, better known as Viru, started Dailyhunt in 2012 as a news aggregator app when his company Verse Innovation acquired NewsHunt, which was started by former Nokia employees Chandrashekhar Sohoni and Umesh Kulkarni in 2009.
Viru renamed it Dailyhunt in 2015.
One of the early pioneers in the local language space, Viru dived into its uncertain waters even before the Jio effect when the total local language internet users were pegged at a mere 40 million.
“Viru took two unconventional bets very early on. One was he bet on local language which was very unsexy those days and the other was mobile-only at a time when everyone was flip-flopping on the idea. I found that very interesting,”
Umang tells me over a telephone call we had to discuss the new developments at Dailyhunt.
“He, of course, says that he was lucky that it fell on his lap,” he adds. It was these visionary and humble traits of Viru that drew Umang to him initially.
The idea behind having Umang on board as a co-founder, Viru tells me, was the fact that he wanted to create a large digital media company that could give the likes of Google and Facebook a run for their money. “And I needed a great thought and emotional partner for that,” says Viru.
The two met in 2016 and found themselves hit it off from the word go. “We started talking quite early in my Facebook days when he was curious to learn about what I was doing to grow Facebook in India and I was curious to know about what was happening in the local language space,” says Umang.
At the time, another major development was taking place in India with the arrival of Reliance Jio and its extremely cheap data plans that lured millions online.
“In 2016, the Jio tornado happened and I was unprepared,” Viru says.
Jio’s free data in the hands of India’s Tier 2 and 3 towns suddenly made the local language market attractive for the big boys from Silicon Valley and China.
“It was around that time that I was introduced to Umang and I was keen to understand how Jio would change the game for us,” recalls Viru.
The two stayed in touch, often exchanging notes and perspectives when finally on December 25, 2017, they went to Goa on a holiday. January 1, 2018, was Umang’s last day at Facebook and in February 2018, he had joined Viru to lead Dailyhunt together.
However, they waited for two years before announcing that Umang would be the co-founder. Umang says, “I wanted to have the right kind of cool off period between being on the board of Facebook so that there was no conflict of interest.”
Two better than one in a big fight
According to Viru, Jio’s cheap data presented a huge opportunity to take the fight to the “big boys of consumer internet companies” -- something that has never been done before.
“The scale of the operation was so large, you needed to fire more shots.”
Thus, when Umang joined the company in 2018, they decided to use the platform that Dailyhunt had on local languages but pivot its model to serve a larger audience.
From a news aggregator serving a more news-hungry older audience, they pivoted to aim to become India’s largest digital media business that would give consumers the ability to discover, consume, and socialise with content -- not just information but also something that is engaging and entertaining.
To do this, the duo changed the product on the Android app to build a discovery-driven environment, change the feed, offer multimedia content, and rework the entire AI-ML algorithm to drive deep personalisation during discovery.
“For consumption, we added tons of videos, for socialisation, the product has now gone fully social, and the content has changed -- it is more hyperlocal and entertainment than just news. As a result, we are attracting a very different demographic. All this built on monetisation and distribution as the key levers,” says Umang.
And the numbers speak to the success of the change in its business strategy.
In the past two years alone, Dailyhunt has recorded a ten-fold increase in its users and revenue, which has now crossed more than $125 million of ARR.
So far the company has raised a total of more than $150 million in funding over seven rounds from investors, including Matrix Partners, Sequoia Capital India, ByteDance, Falcon Edge, Advent Management, Goldman Sachs, and Belgium-based Sofina Group among others.
The duo’s magic seemed to be working. Viru and Umang were ready to play the big league.
Power struggles or empowering minds
But what was powering this smooth synchronisation between two equally accomplished individuals in their own right? What about handling the ego battles internally? Often the sight of the bigger picture or the bigger war is lost in petty ego clashes. And what about the spoils of the victory? Who gets how much stake in the company? How does the math of this new marriage work?
Viru answers the question with his one-liner: “We do not talk about dowry in a soulful relationship.”
He states that there is no formula for making a relationship like this work. Viru claims,
“Like a good match, it all gets sorted out. You cannot templatise it.”
He feels in the kind of relationship he has with Umang it has to be purpose-driven.
“You have to find meaning with each other. One is fighting an unknown battle and hence there has to be a great deal of honesty,” adds Viru.
According to Harvard Business School professor Noam Wasserman and author of the bestseller, The Founder’s Dilemmas: Anticipating and Avoiding the Pitfalls That Can Sink a Startup, “Nearly 40 percent of startup teams spend a day or less agreeing on their equity. Of those, an overwhelming amount split their equity evenly.”
Considering most early-stage startups fail due to founder disputes, it would seem there needs to be a better way to handle the equity split that takes into consideration aspects like domain expertise, commitment and risk, and business knowledge.
The Founder’s Pie Calculator by Carnegie Mellon University professor Frank Demmler has often been referenced by Silicon Valley to work the equity math between co-founders, and may perhaps, come in handy for Indian startups, 47 percent of which are two co-founder led (according to a survey of Indian entrepreneurs by Excubator, a startup incubator and consultancy firm).
But in the case of Dailyhunt, it is more than just a cold professional arrangement.
“It is a unique situation,” says Vikram Vaidyanathan, MD, Matrix Partners India. Vikram, who sits on the Board of Dailyhunt, believes that it wasn’t as if they were actively looking for a co-founder. He adds,
“We weren’t looking for a person for the role, but we created the role for the person.”
Vikram shares that though the Board was looking to hire senior executives at Dailyhunt for various roles, Umang’s entry and the subsequent title happened only because of the strong chemistry that he shares with Viru. Incidentally, all the senior roles have also been filled.
Keeping his fingers crossed so as not to jinx this “unique partnership”, Vikram says, “Both (Viru and Umang) are mature individuals, and they’ve invested time in building this partnership. They are aware of their strengths and shortcomings, can handle differences of opinions, and trust each other to make big decisions.”
Such partnerships, he believes, signals the maturity of the Indian startup space.
Yet for someone like Umang, who was MD, India and South Asia, at Facebook, what tilted his decision to join Viru when he could have joined a unicorn or even a large corporate for a fat paycheck?
“When I turned 40, I realised three things looking in the mirror. One: My title defined my identity. Second: I wasn’t having too much fun or enjoying myself doing what I was doing. Most operations for global multinationals tend to focus on the go-to market versus creating value or product. Third: I was 140 kilos and had physically turned out to be a person I did not want to be.”
Umang had set up his own B2B startup in his quest for the big transformation in his life. “But as Viru told me, your heart lies in consumer internet space. He put that in my mind ke bhai saath mein karte hai... yeh toh bahut badi cheez hai (let’s do this together. It is big). At that point in time for a founder to do that shows he has the highest humility and a sense of empathy,” adds Umang.
“Viru is not only the nicest man I know on earth but he is truly a soulmate and a brother. I would say he is the closest to me other than my wife,” emphasises Umang.
Stating that Viru is one of those unique founders who does not suffer from what he calls ‘founderitis’, Umang says ‘founderitis’ is a disease that has many manifestations. “The first one is that it is all about me as a founder, the second one is I know what’s right, and the third one is I think I can do it all,” adds Umang.
Viru reciprocates this genuine respect and fondness that the two have for each other. “We are brothers in arms. I was looking for a thought partner and a soulmate,” Viru tells me, adding that he found him in Umang.
According to the company filings, Umang was appointed Executive Director from April 2020, and details of his shareholding are not yet available.
Umang reiterates that all the mathematics was set right upfront. “These things just sort themselves out when we come together on the first principle basis of building a value-driven company,” he adds.
For Viru, one of Umang’s most important traits is his entrepreneurial mindset and drive. “It is not about functional skills. Not about bringing efficiency in operations. Nor is it about incremental stuff,” says Viru. For him, having a dynamic co-founder at this stage was to have someone who could fight alongside him in the war.
Giving a peek into how they work, Umang says, “We don't work with titles. We don’t work with ‘yeh meri cheez hai, yeh meri team hai’ (this is my project and this is my team). There is no org chart. It is a very flat organisation. Everyone who is one down; we do appraisals for them together. We involve ourselves in key decisions, yet we focus on problems. The way we divide our work is we say, ‘here’s a problem that we need to solve, and here’s another problem we need to solve.’ Problem A needs a cross-functional team and problem B also needs a cross-functional team. So Viru may drive one problem and keep me apprised and I’ll drive another and keep him apprised.”
Interestingly, their first call is with each other at 4 am in the morning and the last call is also with each other at 11 pm in the night.
“What is important is to ensure trust, transparency, and absolute intellectual honesty. To be able to understand each other’s fears, insecurities, worries, and perspectives,” says Umang.
He claims that coming from small-town, middle-class homes, the two share similar value systems. Umang spent his initial years in Surat before he moved out for higher education and eventually to Harvard. Viru grew up in Jodhpur and finally moved out to IIT Bombay.
At the beginning of their partnership, Viru was the more thoughtful one and Umang was the more aggressive one. “Today I would say Viru is the more aggressive one and I am the more thoughtful one. We balance each other so nicely that it is almost like yin and yang.”
Some partnerships are not made in heaven, rather they are like the blockbuster jodi that plays out very much here on earth through trial and error. When they flip the coin, both win.
Edited by Tenzin Pema