Rebel Reloaded: The Rise, Fall and Return of Rahul Yadav
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The gumption and gusto — the ability to think strategically, acting aggressively, and possessing an unfailing, if not occasionally, irrational self-confidence. This is what truly defines Rahul Yadav. But when Entrepreneur asked him why real estate?
He sheepishly shared that an astrologer had once predicted that the industry could give him name and fame. He is as simple as he is complex and as mature as he is childish. He is a man who has lived more life by 27 as any would see in their entire lifetime.
The Rise of A Don
Entrepreneurs who are wild and rebellious — the ones who bend and break the rules – re-write the headlines. Rahul Yadav can take the credit to be one of them. Yadav’s entrepreneurial streak first showed in 2011 when he stood for the college elections and wrote a powerful and a vastly different manifesto.
A geek by DNA – he created an SMS group to report the college happenings. But his high point came when he created an exam paper archive as a ready reference material for his co-mates by collecting exam papers from seniors, canning and uploading them, by creating a domain www.exambaba.com.
This earned him both bouquets and brickbats as half of the professors were in support, while others were not. To make hostel life easier, he also designed websites like hostel affairs, which was later used by IIT Bombay. In 2012 with a group of friends at IIT, he started Recharge123 by borrowing Rs 3 lakh. As his friends left him, he created an online application that was about recharge aggregation.
He scaled it up in no time but soon his margins became thin and the venture saw negative growth. He went on to sell the recharge business to Shashank Joshi, MD, Money On Mobile. Soon Yadav found his true entrepreneurial calling and after dropping out of IIT, he started housing.com with 10 of his student friends. To start his venture, he needed to pay security and rent for the apartment office and gave a final deal to Joshi for Recharge123 for Rs 6,12,000.
While selling to Joshi, Yadav also sold the software to one of the recharge aggregators. The cash received became the early working capital for housing. After four months, 12th co-founder Advitiya Sharma, a white collared professional, joined to give right public image to Housing.
Yadav’s true love in the business was always product development but as he says as an entrepreneur one has to wear many hats. Talking about what made Housing.com stand apart from its competitors, Yadav says, “I was always fascinated about maps. So, we had a map-based real estate product.”
As an entrepreneur, Yadav also discovered that he was very good at selling and could build great conviction with his investors, vendors and customers. The role of CEO came to him naturally. Year 2013 saw great fundin grounds for Housing.
Yadav asked investor Zishaan Hayath for the help of Rs 30 lakh and he gave Rs 42 lakh. “We burned out this amount in one-and-a-half months, which was actually for 18 months. I was never worried about the zero balance,” says Yadav. Then investor Haresh Chawla came on board as a bridge investor providing Rs 1.5 crore.
As Housing was growing fast, a conflict of roles among co-founders started. Here, Yadav created separate departments headed by each co-founder. As Yadav shares, “Many co-founders were always a blessing for Housing, and departmentalization made Housing to stand out as it was not something startups were globally popular for. For initial two years, we never had any co-founder meet.
Each co-founder managed his department like a startup. This created a strong design culture in Housing.” Meanwhile Housing’s popularity was growing, and there were inbound requests from venture funds like SAIF Partners, Matrix Partners and Sequoia.
The first big funding round of Housing came from Nexus Venture Partners. Such was Nexus’ belief in Housing at that time, that they transferred money from their office expense account to meet a shortfall. At that time, the Indian start-up ecosystem started exploding, and Housing was being seen as the most promising hot startup of India.
Yadav, the risk taker, was always confident and never let Housing team fail to meet its target because of money. At this time, he got aggressive and started focusing on things which were not important. Housing had got a 9,000-sq.ft office and hiring was going on full swing.
Yadav shares, “As a startup, you need to maintain your focus on growth. There are some things that you would do naturally as an organization progresses instead of jumping the gun.”
By 2014, Housing had raised eight rounds of funding, Qualcomm and Helion had come on board as investors, and Nexus did one more round of funding. Yadav met Nikesh Arora of Softbank who had come to India to invest in e-commerce and taxi aggregators. “I closed $90 million funding from Softbank,” says Yadav. Arora had told him that he saw a young vision of himself in Yadav. By then, Housing had 40 offices.
He always followed the philosophy for being positive in life and at work, which also inspired his Rs 250-crore LookUp campaign.
Fall From Paradise
A business always has highs and lows, and for a fast growing startup, downside can come early. Housing too was seeing early signs of “Too much Growth Too Fast” by 2014 end. The bad omen for housing.com started when an accident in early 2015 got two of the star employees killed and the co-founder Advitiya Sharma arrested for rash driving and causing death due to negligence.
As Yadav says, “The greatest thing about a business is its people. The worst thing about a business is its people.” It was at this time that Housing was getting eaten up from inside – business leakages, personal jealousies, the media angst against Yadav and growing differences between Yadav and board members. As he recalls, “The last fight in the board was when I was trying to acquire one company.
I thought this was the way to solve the rental problem. Housing.com was always more about providing rental solutions than being into pure play property buying. For this, it was important to have software, which could enable you put up more rental inventory. It was available in Rs 5 crore.
I thought it would help.” But investors denied the acquisition. After a few extremely tumultuous months, in which there were many public outbursts, Yadav resigned twice – on 5 May 2015, gifting all his shares to its employees and on 26 June 2015 – from his position as CEO and had bad relationships with his investors.
In recent development, on 1 July 2015, the board fired him following his very public spat with Sequoia’s Shailendra Singh. He also feels his biggest folly was to be too blunt and transparent right from the start. On why he was incapable of bringing things under control, he says his heart was always on product development and while his role at CEO was critical in the first year, he should have denounced it early on.
He claims that 1 percent of his entire vision for Housing only got executed, while 99 percent remained on papers only.
Rebel with a Future
For Rahul Yadav, housing has matured him by 20 years ahead. He feels like 27 going on 40 but also decidedly it has left him much wiser. He is planning to make a big bang comeback and this time there will be a method in the madness. Inspired by his own role as a CEO and understanding the speed and need for information in this role, he is out with a strong product.
Yadav informs, “A CEO really needs help when he is running the company. His new venture Intelligent Interfaces is all about empowering CEOs. It’s a software making them “Ironmen.” It can also be used by government departments. It’s like awesome visualization with infrared screen that makes organizations efficient.”
He has already got five people in his team and will start operations in Delhi and Mumbai. He has got Flipkart’s Sachin and Binny Bansal as his first investors and will soon get other entrepreneur investors on board. His aim is to make Intelligent Interfaces India’s fastest billion dollar company.
The first week of December will witness the launch of its website out.in. When asked, “Would he like to comeback as the CEO of Housing once again?” he laughingly says, “No comments” adding that he should learn to say that more often.
(This article first appeared in the Indian edition of Entrepreneur magazine (December, 2015 Issue).