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A Serial Entrepreneur's Framework for Building Large SaaS Businesses with Bhavin Turakhia

Bhavin Turakhia, serial entrepreneur Flock, Radix & Zeta chats with Sanjay Swamy, Managing Partner Prime Venture Partners .

Listen to the podcast to learn about

01:00 - Computers, Computer Science & Entrepreneurship

04:40 - 20+ years Journey of Building Multiple Businesses

08:30: Bhavin’s Template for Building SaaS Companies

19:00 - The Three Objective Measures Of Product Market Fit

23:55 - The Goal Of Fundraising

34:40 - Managing Time Across Multiple Companies

39:00 - Lessons Learned & Advice to Young Entrepreneurs

Read the complete transcript below

01:01 Sanjay Swamy

Hi, everybody, welcome to another episode of Prime Venture Partners Podcast. And this is Sanjay Swamy here and I’m really excited to have with me one of the silently but amazingly successful entrepreneurs from the Indian startup ecosystem Bhavin Turakhia. Bhavin welcome to the show.

01:25 Bhavin Turakhia

Thanks, Sanjay, super excited to be here. Appreciate your kind words.

01:27 Sanjay Swamy

So Bhavin, it’s our pleasure to have you, we’ve read from time to time about several of the startups that you’ve started and exited and now are in I would say no longer a serial entrepreneur but perhaps a parallel entrepreneur since you’re doing multiple things. Walk us through a little bit about your early days. What got you into entrepreneurship? And your journey to date?

01:51 Bhavin Turakhia

Sure, Sanjay. So, I guess I was fortunate to find my passion early on, I started coding when I was 10 years old. A lot of the things, a lot of the outcomes that I’ve achieved today, I would give a lot of credit to my father, he actually instilled the habit of reading a lot early on in life for both me and my brother. So we used to consume, devour books, which we still do, even today, we used to devour books back in the day.

And this was sixth grade, I was living in Mumbai in Arya Vidya Mandir Bandra is my school, an ICSE school and they just added computer science to their curriculum in 1989. Brought in the first computer room. This is the time when computers were green color monochrome terminals with no hard drives, with 5 1⁄4 inch floppy drives, with 360 kB memory, no internet, no windows as a sort of MS DOS, C, C++ JW basic kind of timeframe. So 8086 microprocessors, and I just took to it like a fish takes to water like I really, I would spend all of my time lunch break, short breaks, time after school, so we couldn’t afford a computer back at home until I got to eight standard.

 

And so I would spend every day till 4pm at school. I would spend two hours every day after school till 6pm and then take I still remember that 222 bus from BHABHA hospital back all the way from Bandra to Andheri to get back home. And during this time I went to 30-40 different books and did lots of programming and coding. And so in many ways, I was very clear by then, that I have to do something in computer science.

And also very clear that I’m going to do something on my own. This entrepreneurship bug existed since I was 10 years old. I think a chunk of it is because of my father. One of the things that stuck with me and also been instrumental to my success is that my dad will always keep telling us that, you can achieve anything you set your mind to so that’s become like a fundamental belief system.

And then I read tons of biographies, biographies on Microsoft, Apple, I’d say I have read more than six or seven biographies on Microsoft two on apple, IBM, Intel, Oracle, Xerox, McDonald’s Chrysler, like lots of books on entrepreneurship, well, successful entrepreneurs and failed entrepreneurs. And so it really excited me and I decided I want to do something on my own and something in Computer Science. That’s how the idea kind of germinated or at least the passion germinated, in some ways.

Started my first company, me and my younger brother, we took, we borrowed 25,000 rupees from dad, and started Direct I and so bought our first servers. Before this, I’ve done a bunch of products that didn’t succeed, and then kind of launched this web hosting and domain registration company. And we started selling domain names and hosting to a global audience very shortly. So started from India, and then, globally the Internet had already arrived in the country in 1994. So this is only three years after the internet had come in, VSNL used to sell those Shell and TCP IP accounts back in the day for 15,000 rupees subscription fees. And it was starting to reflect and we started Direct I as a web presence company.

05:01 Sanjay Swamy

This is 1997, you’re talking about?

05:04 Bhavin Turakhia

This was 97-98 basically.

05:07 Sanjay Swamy

And remind us again, how old you and your brother were at the time.

05:10 Bhavin Turakhia

So I was 17. He was 15, basically two years younger to me. And that company grew. And then we owned and operated that for about 16 years. And I continued running Direct I and then started the subsequent companies Radix, Flock and Zeta.

And so yeah, so we then sold that in 2014 at a $160 million exit to a public company called Endurance, but ran it and became the fourth largest domain registrar hosting company in the world, by time we sold in 2014. We had about 10 million domain names registered on our platform several million

websites hosted on our platform and customers in every country in the continent, including some domain registered to some Whois information in Antarctica, so pretty much every sort of country and location in the world for the most part.

06:10 Sanjay Swamy

So, but that is still a 15 to 17 year journey.

06:14 Bhavin Turakhia

Yes, it was. So I actually continued really actively involved in the company, until 2008-2009. I was running the entire show. Around that time, I brought in a bunch of senior management. So there were three businesses and there were three business heads. We re setup Logicbox and Bigrock, they will be managed by respective business heads and I would be working with them strategically.

And then in 2010, I already started working on my business plan for Radix, which is the next company that I founded, that launched in 2012. So radix, basically, in the new GTLD space, we’re a new GTLD registry. We’re now the largest new GTLD registry by market share. What that means is that before 2012, when you register a domain name on the internet, you could only register it in com net org base info, like a few extensions, or country codes, like .in .us etc.

In 2012, ICANN, which governs the entire internet came up with this process of allowing companies to apply for strings that become registries, and people can register domain names within them. So I applied for 31 different strings. We won, they were all auctioned, if there were multiple applicants, we won about nine of them. And so today we operate .online .website .site .tech .store .space, and like a few others. Originally, I started off with a small team and invested about $25 million into it.

Now the company is doing I think close to $20 million, in EBITDA growing about 60% year on year, valued about 400 million plus dollars. And so it’s grown quite a bit organically and it’s a pretty successful business. Thanks to the amazing team we have. Sandeep is the CEO along with our team of about 70 people that does an outstanding job. Sometimes with these companies it’s almost like raising children, they grow, they become teenagers, at some point, they don’t need you anymore. And so it’s a bittersweet moment, it’s a sense of pride. At the same time, it’s like, oh, I’m actually not required anymore.

I talked about this actually later also. I have this notion of how every, I’ve been in B2B SaaS all my life. And for me, I now have sort of a template when it comes to B2B SaaS companies. And I think of them as going through four stages: planning, discovery, scaling and steady state. So yeah, by the time we reach steady state, the value that I add might be incremental or marginal. But I have an amazing team running the show there. So by 2010, I started that company, planning for that company, and it launched in 2012, then 2014, I started Flock and Flock now actually comprises two products there’s a product called Titan, which is even more successful in fact, than Flock.

Flock is a messenger product that competes with Slack and Microsoft Teams, and Titan, which is our email product that competes with Outlook and G Suite and Gmail. So basically, we offer business mail offering mail, calendar contacts, and then messenger sort of ads on like a suite of business communication, collaboration products. And so those two germinated in summer of 2013-2014, as a pivot from some earlier work that I was doing trying and building a consumer chat application. So it kind of pivoted into this enterprise collaboration play.

And then lastly, in 2015, I started ZETA, along with Ramki, so Ramki was working with me jointly as an engineering head and lead and CTO for many of my projects.We worked together for about 10 years. And we are both passionate about payments. So in 2014, we spent quite a bit of time really thinking about how we can disrupt banking payments and commerce around the world. And we found our groove after a year of homework, and that’s the planning phase as I call, it basically with a year of homework and planning. 2010 to 2012 was a planning phase for Radix. So again, lots of homework and planning, basically.

And so we did a year of homework planning, decided which path to take and then started ZETA. Zeta is a modern banking tech company, we essentially provide two products Tachyon and Fusion or two suites. Tachyon basically, is a modern core banking, transaction processing payments and mobile app platform for banks. It’s a bank in a box that enables a bank to launch any retail or commercial product for end consumers and companies and provide a modern neo banking experience and sell more, increase their income, reduce their costs, etc. Fully cloud native fully built on modern tech API ready and so on and so forth.

The second product, which is Fusion, is what we call our embeddable banking suite and it enables Fintechs and distributors to embed prepaid credit loans, debit products inside their apps and experiences. So bill payments and banking products, embed them inside their apps and experiences. So those two areas were predominantly playing the role of a technology service provider, though sometimes we go above and beyond in helping customer support operations and program management, but we predominantly play the role of a technology service provider to banks and Fintechs, and distributors. And that’s basically Zeta. Zeta so far is the only company I’ve actually raised external funding for.

Every other company has either been self invested, I’ve put a ton of my capital into both Flock and Zeta actually Flock, Titan and Zeta, in the early days and Radix $25 million, of my personal capital. But with Zeta, we did a small minority round a couple of years ago, with a strategic. That brings you up to speed with my entire history and background.

11:50 Sanjay Swamy

Oh, fascinating. It’s amazing that you’re doing so much of this in parallel and taking on really large problems. And obviously, you have a track record of taking them all the way through to very large outcomes.

You talked about the four phases: Planning, discovery, scaling, and then I guess steady state. Can you deep dive a little bit more into each of these four? And how you think about them? And what are the exit criteria to go from one phase to the other? And which is the thing that most startups struggle with which is where are we, in this journey? I would love to hear how you think about it. And, with some examples would be great.

12:40 Bhavin Turakhia

Absolutely, I love this question. And I love that you mentioned exit criteria, because I can tell you by now, and it’s the luxury of having screwed up so many times that I can create, discuss and present frameworks, etc. But yes, it’s very important to understand what the gating criteria for each next phase is because many times failure is entirely a function of scaling too soon, before you finish discovery, or starting discovery too soon, before you finish planning, and so on and so forth. And this is a conventional mistake which I’ve made enough number of times. So I’ll talk about each of these stages of planning.

The goal of planning is, do I want to enter into this business? Or do I want to build this product? The end outcome or the answer to it is yes, I want to go ahead. Until planning is completed, I will not hire people, except, have a small team of people, so which is what we did in Radix, in case of ZETA, was just me and Ramki, but have a small team of people whose goal is to work with me to do planning, but not actually building. And so we might talk to customers, we might do some tiny amounts of building here and there, but the outcome of that stage is do we want to enter into this business, do we want to build this product.

The outcome of the discovery stage is that we had a hypothesis and we decided we want to go ahead with it. Is it going to succeed in the market? Do we actually have a traction channel? And do we have a product market fit? And I’ll talk about the deliverables there in more granular detail. If you do have both of those then the scaling stage, the answer is that okay, now, I have a product and a business that makes sense and have a go to market strategy. Can I actually scale this?

Can I 10x it or 100x it or 1000x it, basically and what ingredients do I need to get that done? By the time you get to steady state, the deliverables or and that’s the longest stage I guess, in any company’s history is the deliverables are built the right moats to make sure the business continues to be sustainable, optimise profitability, do succession planning, and bring in the right leadership and ensure that the company can sustain and survive. So that’s the way I think of all four phases.

In the planning stage, this answer is going to take a little bit of time, but I want to sort of make sure that I give it justice. In the planning stage I’m really trying to answer six questions. And so I think of them as persona, problem, product, go-to-market, revenue and moat. So to me, these six are the necessary and sufficient ingredients of a successful business plan. As long as you have validated these six, and you validate them to a significant extent in planning, and then you’re further validating them in discovery by actual implementation.

When you validate these six, you basically got a business. So my perspective at that point is I have like, take Zeta for instance, I have a notion I will do something in payments and banking, that’s very ephemeral. But now I have to decide do I want to be a bank and sell to customers? Do I want to be a technology service provider and sell to banks? If I’m selling to banks, what size am I looking at? Am I looking at enterprise banks? Am I looking at small banks? Am I looking at all banks? Basically what is the problem that I’m trying to solve for them? So I need to identify a persona, I need to identify a deep problem that that persona is facing. And I need to identify therefore the definition of my product and there’s a very important rule out here.

The benefit that my product provides for that particular problem that we’re solving for, must be at least a multiple magnitude, 10x of what the existing conventional solutions might be, can’t be a 20% incremental improvement or a 30% incremental improvement because customers are not going to shift their existing products or solutions to new solutions, unless there is a multiplier magnitude of difference in terms of incremental improvement. So, I need to hone in on my persona, understand deeply the problem space and understand why my product is 10x better than existing solutions. Now, it’s not enough to have a great product, how am I going to reach the market? That’s my go-to-market strategy; I should have at least a hypothesis of the first few traction channels that are going to work.

How am I going to make revenue? I know, in many cases, with startups, it tends to be fashionable to not make revenue, but I’ve always focused on understanding early on, I might be wrong, and many times I’m wrong, and a completely different revenue stream opens up, that’s okay. But in the planning stage, I need to have a strong hypothesis on how I am going to end up making revenue. And the last thing is that after I build this business, what’s my protection of creating a sustainable business? Is it an easily replicable business? And there could be different moats. Is capital my moat? Do I have to keep pumping in a lot of capital? Is brand my moat? Is data my moat? Is network effect my moat? Is technology my moat? What are the combinations that I can use to create a sustainable business that I protect?

At the end of my planning stage, I should have a reasonably fair idea. They’re all hypothesis, but reasonably fair hypothesis that I’ve validated through conversations through random tiny builds through research etc, to primary and secondary research I’ve validated these six elements and then the business opportunity is attractive, because I’ve done a revenue modeling saying that, Oh, this is a billion dollar business opportunity. Revenues and valuations is an after effect, but in terms of scale, can I make a large enough impact? Each subsequent business that I’ve started, my ambition has been larger, in order to give justice to my potential. So that’s my deliverable of the planning stage.

17:45 Sanjay Swamy

I’d just interrupt here, the point you make about the planning stage, now for me the issues on the other foot, and I’m more on the venture capital side than the investor side of it, you almost entirely defined our business evaluation processes. It’s exactly how we look at it from that perspective. In terms of the target customer, the problem that we’re solving, is it worth solving? Is it big enough? What’s the value proposition there? What’s the moat this company has got is a 10x better than the State of the Union? And can they build moats along the way? Is the moat distribution? Is the moat product? Is it technology? So very nice to hear you say that, because that’s exactly what we’re also looking for. And I think entrepreneurs also should be looking, it’s a great framework that you provided for them.

18:31 Bhavin Turakhia

Absolutely, and the reason is the same, because you and me are evaluating from the same standpoint, which is, actually, in my case, it’s both I’m wearing a VC hat, because I’m putting in my own capital. But really speaking, if you think about it, you as a fund and investing money, the entrepreneur is investing in a non replenishable resource, which is his time, and both are investors. So you only want to invest both of those if you have a validated business plan. Otherwise, there’s no point in investing, both those resources, I guess. So yes, the valuation should be the same as an entrepreneur hat or a VC hat. I’m wearing both hats. So for me, it becomes even more critical, but I guess the valuation is identical.

Once you’ve gotten past that notion of Yes, I want to do this business, I want to engage in this business at the discovery stage. It’s basically a product market fit and one GTM traction channel that can scale with LTV greater than CAC, this is my deliverable formula, let’s say. So product market fit, in turn has, well three objective measures. So I have a hypothesis and a problem, I’m going to build a quick product and keep thin slicing and building additional thin slices, etc. To get to product market fit. And product market fit has three objective measures, a high net promoter score, which means people want to use and love my product so much that they will recommend it to other people, a high asymptotic retention curve, so I could get 100 people in at the top of the funnel, and I might lose 60, 70, 80 but are 20 people that remain continue to remain perpetually, they keep using my product 8th week, 16th week, 32nd week, it’s adding enough value because then that 20 set will become my honed in persona from the initial persona that I started out. These people find my product so useful, that they actually continue to retain.

The third framework that I found really useful is a new experimentation, wherein, with that set of customers, ask them a question that if I took this product away from you, would you be very disappointed? Would you be disappointed? Would you not care? And our goal should be to get to a very disappointed score of 40%. So out of the people that are using my product on an ongoing basis 40% of them should be extremely disappointed if I took the product away.

If I’ve achieved these three, and these are all three measurable numbers, so if I achieve these three, we know we’ve got product market fit. Now, that by itself is not enough, because I’ve honed in my persona. So out of the top of the funnel, I’ve decided to build an email product, for general employed professionals. When I went in there, I found out the sales professionals actually really love my product and stick to it. Okay, now I know I have a slightly narrower persona than what I started with. But they validate all my three criterias of high net promoter score, high retention, and they’d be very disappointed if I took the product away. Now, do I have a traction channel of being able to get as many possible target segments of this persona target audience of this persona, at a cost of acquisition, that’s lower than the lifetime value that I can get from them.

So again, two simple formulas, lifetime value is my revenue, this discounted cash flow per customer down to today’s net present value. My CAC is whatever my cost of acquisition is for that customer, as long as I can get to product market fit and get at least one traction channel where LTV is better than CAC. For me these days, I answer a third question, which is, is it big enough? Because I might find in the discovery stage that my hypothesis was I will sell the software to every bank, turns out that only the smallest of the banks are going to benefit from my product to the extent that I want them to. And so actually, this is not a massive opportunity, it’s a small opportunity. I might choose to discard in favor of something else. But at least the first two PMF and LTV greater than CAC with one traction channel at scale. That gives me a grading criteria to enter into scaling. At scaling, you bring in GTM people you bring in the right leadership, you pump in capital, predominantly try and exhaust as much of that one traction channel you found and find similarly now towards the other traction channels that you can keep adding to keep getting more and more customers, and then post that you basically get a steady state. So that’s the entire series of what is a B2B SaaS business journey, potentially applies to B2C also.

22:50 Sanjay Swamy

Yeah, I think maybe some aspects of the business model might be slightly unclear. But you’re right. It broadly applies there as well. And, of course, we are in talk about the scaling and the steady state phase, we’ll come back to that perhaps later. But as you build these companies out, you’ve seen multiple journeys, and obviously at different stages in life. So recently, you said you did bring in some external capital in the case of ZETA, from a strategic partner. And of course, I guess you’ve built up this ability to invest in your own businesses, but at least all new businesses are taking in a fair amount of capital relatively early in their lives. So generally, what are your thoughts around guiding entrepreneurs on fundraising, when’s the right time for them to fundraise? Not everybody has the staying power, or the luxury of self-funding, so what are your thoughts in terms of when’s the right timing for external capital?

23:56 Bhavin Turakhia

No, absolutely, I think I’ve nothing against fundraising, I think fundraising is actually a critical requirement for any business to grow and sustain. In effect, as I said, I wear both my hats, right. And I’m also fundraising for myself, from myself. That’s an investor hat. And then, owning and operating the business. I think the biggest mistakes that people make in fundraising is not to fundraise for a specific purpose.

The way I see it is, in effect, these phases also help, which is that seed stage funding is entirely intended for covering the planning stage, whether it’s one or more cycles, you should only have to raise a small amount of capital, that’s your seed capital to cover the planning stage, your series A should essentially cover the discovery phase. And then every subsequent raise that you have should cover your growth phase basically. And so you’re typically raising capital for, either a planning stage or discovery stage, or your scaling stage. By the time you get to steady state, hopefully, you shouldn’t need to raise capital immediately.

Potentially, in the scaling stage. Also, depending on your budget to pay back and your LTV to CAC ratio, you may get out of the continuously having to raise capital phase also soon enough. So these are all sort of possibilities. But you definitely need capital for planning and discovery. And in my case, I was fortunate enough to be able to leverage past successes to pump in the capital for both of those and with the focus of revenue early on. We also got to a stage where even scaling stage in many cases didn’t require capital in some cases they do, which is what brings me to Zeta’s fundraise, I guess multitude of reasons there also, which is that Zeta is, amongst my most ambitious plans, business plans till date, the upside is uncapped, the TAM is uncapped, in terms of what our market potential is, our ability to deliver to that is also extremely amazing in terms of the team. My co founder is an outstanding person, huge respect for him; it’s what two of us together can do in terms of delivering against this vision of really disrupting banking with what we call a neo stack, modern banking stack. And disrupting embeddable banking is huge, the opportunity is huge.

And so in that regard, Zeta by the way, further, is also a multitude of companies. So within Zeta, are multitudes of businesses or products, whichever way you think of them. So within Zeta, there are products that are in the planning stage, there are products in the discovery stage, there are products in the scaling stage, right now, they are all, nothing in the steady state stage. They’re all in these three stages. And so, I have personally invested now slightly more than $40 million, into Zeta of my personal capital, Ramki has put a bunch of his personal capital. And so at some point, I guess it was a function of, we definitely need more capital for scaling. So we’re going to continue. I’d be happy to keep pumping in by the way, I have no concerns, and I have high conviction. But there’s a notion of not putting all my eggs in one basket, there’s a notion of bringing in external smart strategic capital that could actually accelerate the journey for us. So that’s the fourth reason for raising capital, which is strategic partnerships.

So in our case, the capital we raised was from our strategic partner Sodexo. We have, again, huge respect for the company they’ve built; it’s a massive global organization. And this partnership came not just with capital, but with also a contract between us where we are actually enabling them and empowering them globally through our technology, and vice versa, they are taking our technology to multiple countries around the world, including India. And so by virtue of that, the value of that deal and our relationship, and how it made us stronger, was actually much higher than the value of the capital they put in.

So that’s the other reason and it made logical sense to then take some money from outside, as well as benefit from this deal. So I would say as long as people have a clear purpose in mind, clear outcome in mind. And they are raising for that, I think there’s no problem, I feel that there’s two concerns, I have in fundraising. And this then morphed into multiple other concerns, the side effects of those concerns, which is either you raise, you’re in this constant sort of raising equation, with no focus ever on revenue and profitability. And purely this is I mean, I’ve seen this journey play out during the time and sort of late 90s, early 2000, when people used to chase eyeballs.

It’s kind of manifesting itself once again, in some form or the other with no real line of sight on a tangible persona, problem statement, etc. Like, for instance, one of the things that I will never ever do, and I tell my people I’m strictly against is paying people to use my product, like this whole notion of perpetual cash backs and burning capital to acquire customers actually postpones product market fit by such a huge degree. Because if you pay your customers to use your product, you never realise whether you have product market fit, whether they’re truly using you for the value that you’re generating, or are they using you because they have incentives to use your products. Like every consumer company today is giving discounted pricing on if somebody’s going to give me my meal at 20% lesser than what it would cost me to buy from the restaurants, sure I’ll buy it from your app, but am I buying it because your app actually is adding value because the discount that’s always questionable.

So you are in this false positive cycle for years for decades. In some cases, basically, you don’t know you have a moat, you don’t know you have product market fit, you don’t know you have a high Net Promoter Score, and all of those are false signals from your incentivization processes basically. So I will spend three times more money in building the right product than I would in burning cash to get people to use my product. So to me, that’s a very clear, clear principle basically. But raising funding for the sake of raising funding, raising funding without a purpose in mind, raising funding purely for distributing that money amongst customers. Not having a focus on getting into product market fit and creating a true purpose of a product. Without naming names there are some products in the country today, nobody can point, including the people themselves can’t point and tell you what the core purpose of that product is.

This is the other thing I don’t believe in the notion of super apps except in China. If I’m a user, I buy a Ferrari because it’s the fastest car; I buy a Tesla because it’s an electronic car. They stand for a particular purpose and a problem they are trying to solve. Most products in India, like everything in the kitchen sink, everybody has a wallet, everybody has a prepaid card. Everybody has ecommerce. It’s just that everybody has insurance, everybody has investment, everybody has wealth management. Suddenly now I have this product that does everything averagely but doesn’t do one thing well, and so that to me is not product market fit that’s you trying to still find product market fit because if you couldn’t make money from 10 things, the 11th thing is not going to make you money, you have to figure out how to make money from the first thing or discarded it.

And that’s my perspective, which is capital for the sake of, people have burned. So this is the other formula. I’m concerned that many companies have burned billions of dollars trying to find product market fit, which to me is ridiculous. I have burned money trying to find product market fit, by the way, and I’ve pumped in a chunk of my capital in completely wrong ideas and hypotheses. But the expectation is that a typical seed stage should cost you in the hundreds of 1000s to a couple of million, and the series A should cost you a couple of million to 10s of millions. And by the time you should have a clear product market fit with a potential future revenue line, it might not be an immediate revenue line. But if you’re constantly spending billions of dollars or hundreds of millions of dollars, and you still haven’t found product market fit, that to me is a wastage of capital. So, those are my perspectives on fundraise and the right use of capital in the right way.

31:40 Sanjay Swamy

Amazing insights, Bhavin. Personally we at Prime, resonate with a lot of what you’re saying. I think putting good money behind bad is just always a bad idea. And it’s totally fine with companies saying, look, this is not working, we’re going to try something else, and so on. But, adding something incrementally without being 100% laser focused, I think startups win, because they do one thing really, really well. And if they’ve not found that success then find something else. And that’s okay, but trying to add something, as you said, average, on top of something average is just never a great idea for a startup. So that’s a fabulous insight.

So switching gears a little bit, I’ve heard that I would never know in which apartment of yours you are, because all your apartments look identical.

Is that a fable? Is that a myth? Or is that reality? I mean, you told me you’re now in London, but I heard you could be in Dubai or Mumbai and would look exactly the same.

32:40 Bhavin Turakhia

The background is different; the room I operate in is different. But I am a stickler for productivity and efficiency. And I have an identical setup everywhere. So I have three monitors. Here, I have a standing desk; I have a chair, chair cushion, a keyboard, mouse, docking station, the entire setup exactly as this is replicated in all four apartments in New York, Dubai, Mumbai.and here, London, is replicated in my offices and in fact, recently, before COVID, for about a year and a half, two years, when I was coming into Mumbai, I was operating from a hotel because my house was under refurbishment so I took a service apartment but I would only spend about three days in Mumbai, and three days in Bangalore. But again, for those three days, a day before my arrival, my team will actually set up everything exactly the way they wanted. And there’s a document which prescribes even the angles of the monitors. I’m a bit OCD, when it comes to some of these things basically, like how they should be placed on the table, and everything is exactly identical in every one of these places.

33:50 Sanjay Swamy

Really interesting. So tell us a little bit about, we’ll come back to startups and entrepreneurship in a second but outside of that, you’re running three companies in parallel right now and all are in fairly serious phases of scale up and substantial amounts of personal capital at stake. A lot of these are building on the back of your time and your reputation and people have joined you and other teams working with you. How do you find time for yourself and personal time, family, things like that? Entrepreneurs struggle with this right when they’re doing one thing, but they sort of struggle and I frankly as a VC also tend to struggle. So just curious.

34:40 Bhavin Turakhia

Firstly, I don’t have a personal family in the sense that my younger brother we’re very, very close. I have mom and dad who have been instrumental for everything that I am in life and I am really close to them etc, but that’s not time consuming. I don’t have children I have to take care of; I’m not married so I don’t have some of those responsibilities. So in future we’ll see what comes but as of today, pretty much all my time is dedicated towards I guess my babies, which is Zeta, Flock, Titan and Radix.

Radix I will say and I mentioned this before, there was a point in time until 2013-2014. I had a high amount of involvement. By the time I got to 2016 it kept reducing post, 2016-2017 it takes up less than 5% of my time today. Sandeep Ramchandani who’s the CEO and his team under him, Neha, Suman, he’s got a brilliant team under him and they are outstanding, so actually I have to spend very little time.

In fact, if anything I get pulled in, and I can give strategic contributions that help based on my experience, etc, but not in normal day to day business. The business is towards the latter half of scaling. And it’s pretty soon moving into steady state, in a couple of years, it will get there basically. So it’s actually two companies right Zeta on one side and Titan and Flock on the other side, that’s where I spend most of my time or all my time, it’s about 50-50. Some weeks it’s more here some weeks, it’s more there. Zeta actually does take up a little more. So I would say that, probably a higher chunk goes into Zeta of late than Flock and Titan.

But nonetheless, that’s where I spend most of my time. And I would say that so work wise, because you asked that question, I’m blessed to have, again, an amazing team in both places, that takes a lot of the burden. I think there’s one thing I get proud about is that I’ve been very, very consistently focused on hiring the best talent, bringing in the best people, as co-creators, along with me, so that’s always helped.

So that’s one reason why, I guess I do end up saving a ton of my time, both because I don’t have some other responsibilities. I think I also did this with Zeta. And we have engaged in a couple of M&A, slash funding cycle discussions, but not having to constantly be in the mode where you’re raising one round, and the next round etc, also, at least saves 30% of my time. I think founders end up spending about 30% of the time on constant fundraising, I haven’t had to do that. So I guess that’s an extra 30% that I saved.

So those are things that enable me to deliver on multiple companies at the same time. An amazing platform and an amazing team and the fact that I save time, by not having to do consistent fundraising all the time, at least. And then over and above that, to be honest, this is my life. I’d only use the money or capital I have for some philanthropic goals in my life, in the future. But for the most part, this is what keeps me most excited, most occupied. I love solving problems. I love building products. And that’s really a reason why I do what I do. I strongly believe that each of us has a moral obligation to make an impact proportionate to our potential. And I believe that I still have a long way to go there. And so yeah, I’m really happy, just working away whether it’s, weekdays, weekends, all the time, for the most part, I have some hobbies. I like adventure sports here and there.

London’s good except when the weather’s really bad during winter etc. But otherwise there are lots of parks, you can take a walk around in, I live right next to Regent’s Park, and pretty close to Hyde Park, my favorite park in the city actually. So, I could take walks in the park, do some activities, here and there. That’s fun for me. But otherwise, for the most part, it’s Zeta, Flock and Titan.

38:49 Sanjay Swamy

Amazing, amazing. I think we’re close to the end of the time we had planned. I have one last question for you, which we tend to ask a lot of our podcast guests. Over the course of these 15 years, I’m sure you’ve seen and heard and changed a lot of things along the way. But looking back today, what would you advise your younger self? If you were starting out again, first of all -would you do the same thing? Would you do things differently? And what advice do you have for younger entrepreneurs? Like your younger self?

39:25 Bhavin Turakhia

Yeah, absolutely, tons, actually. I mean, and I’ll try and boil it down into a few most important ones. But as I said, I have screwed up on a multitude of occasions. The first thing I would say I’ll touch upon it briefly is focus on value creation not valuation.

Valuation is a side effect of value creation, a lot of people end up getting caught up in this, it’s an unfortunate consequence of our industry that we celebrate valuation wins, we don’t celebrate value creation wins. Because they’re harder to articulate, the media finds it very easy to say, Hey, here’s another unicorn billion dollar valuation. But it’s much harder to say, hey, here’s a company that truly solved this problem for this target persona. And this is what they built, you have to spend it, it is almost investigative journalism to actually write about that, very easy to write about valuation.

So unfortunately, the media ends up predominantly only celebrating valuation wins. But I would say as an entrepreneur, as a problem solver, focus on creating value, focus on creating meaningful value and valuation will follow. The other thing is my biggest mistakes have been ideas that I had that were stupid, but I didn’t bother to validate them. Build a muscle to validate fast and validate always, there’s always a way, sit and think through and that’s why that framework, as I said, if you can’t very, very cleanly and clearly and with confidence, being true to yourself, sometimes that’s also hard, people start believing, their own sort of spiel. But whilst being true to yourself, if you can clearly articulate that you do have a persona, problem product, go-to-market, etc. If you do have those, six ingredients, then you have a business plan. Otherwise, keep validating until you have that in the discovery phase. Again, now take your hypotheses and validate them until you can prove them in the market. So build that muscle and culture in your organization to validate fast and validate always, that I think is the second one that I will talk about.

This is not really advice but a framework and tool that I wish I had discovered 15-18 years ago, which is OKRs, we now do everything on OKRs. In our organization, it was introduced by one of my product leads, a guy called Nenad in the company. And since then I’ve become a fan since several years now. So we still have a long way to go in properly adopting them, I’ll say it’s always a lifetime journey, but they make a meaningful difference in focus, in prioritization, in getting a line of sight, in aligning the entire organization to focus on working towards the same solution, same outcome, etc. So I think that’s something I would have recommended to my 20s version. Adopt sooner, it did make a meaningful and continues to make a meaningful difference to our organization.

42:03 Sanjay Swamy

So actually, OKRs at Prime is like a religion, my partner Amit Somani was at Google and a big, big fan of it. And so it’s mandatory reading and we strongly encourage our founders to adopt OKRs throughout their organization, I can’t say that we have been 100% successful, but we’ve seen the change in the efficiency and clarity of purpose, in the companies that have internalized it.

42:33 Bhavin Turakhia

Even companies that do it badly will still see a benefit. So you can only keep getting better at that. I have a series of training courses on OKRs, about an hour and a half worth of videos that are on my YouTube channel, that you can check out that we use internally for everybody. 100% of the organization joins and goes through that. Because the biggest problem I found with OKRs is actually trying to change. I mean, internally, I’ve been thinking that we should change the terminology; people don’t understand objectives, key results and initiatives. So if people set the wrong objectives or set the wrong key results or half pick them and things like that. So this is just training on how to write a good objective, how to write a good key result. What are they? Why are they beneficial? and how to choose high impact initiatives? That’s the way we think about initiatives, which is that you can always keep busy doing things, but it’s important to actually do the one thing that makes the biggest impact, then do 10 things that made minor impacts in the OKR that we’re trying to chase basically.

So there’s a bunch of videos on my YouTube channel, that I think will make a world of difference in internalizing how to adopt OKRs. So those would be the three things I think that I would talk about to my younger self, I would also build the muscle to hire at a higher bar sooner. I remember categorically, sometime in 2007. When I really started thinking about, we are hiring good people, but I want to hire the best. So when hiring the top 5 or 10 percentile, I would want to make it the top 1 or 2 percentile for some of the roles where it’s really relevant. And I feel like if I had built that muscle to hire at a higher bar sooner, progress would have been faster also, I guess. Yeah, those are the advice.

44:24 Sanjay Swamy

Wonderful Bhavin. Every answer of yours, I think if I was an entrepreneur starting out today, and even otherwise, I’d probably play it over and over again. It’s packed with insights and really good live examples as well. Thank you so much for being on our show. We really loved having you here. And we’ll have this out on the internet soon. I’m sure everybody listening to this and particularly younger entrepreneurs will benefit a great deal through our podcast. Thanks so much for your time.

44:56 Bhavin Turakhia

Thanks, Sanjay. My pleasure. Thanks for having me.
 

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