Master Bootstrapper with a Billion Plus in Exits: Bhavin Turakhia, CEO of Directi and Flock (Part 5)

Sramana Mitra: What scale did you get to with that business before you exited?

Bhavin Turakhia: In the public domain, we exited that business at a valuation of $900 million to this consortium of investors in a public company in China. This happened in August of 2016. It was the third largest ad tech deal ever and one of the largest bootstrapped cash exits globally.

Sramana Mitra: Yes, it’s huge. What revenue level had you reached to get that $900 million valuation.

Bhavin Turakhia: The revenue numbers are still not public, so I can’t give you specifics but the deal size is public. The revenue numbers will probably become public. In China, these transactions go through a two-phase process. Once the whole process is completed and the public company announces it, the revenue numbers will be public at that point. >>>

Scaling a Fast Growth, Venture-Funded Company: Rafael Sweary, Co-Founder and President of WalkMe (Part 5)

Sramana Mitra: What I’m hearing is that you came to the conclusion that you wanted to cater to large enterprises. Based on what you were describing, that was my first instinct to hear that this needs to be an enterprise sale. I was actually surprised that you were going the route of selling online. It sounds like you got to the conclusion anyway.

Rafael Sweary: Initially, we didn’t have the offering for an enterprise. When we were selling online, enterprise customers came to us. They said, “We love your product, but we can’t use it. It’s not secure.” When we fixed that they came to us, “Your product is secure, but you don’t have a delegated admin.” We built that as well.

Then they said, “You product is great but we have different environments. We have our staging environment. We have our QA >>>

Master Bootstrapper with a Billion Plus in Exits: Bhavin Turakhia, CEO of Directi and Flock (Part 4)

Sramana Mitra: In parallel, you started other businesses. At what point did you start the next line of business besides web presence? What was the thinking behind that? What were the circumstances?

Bhavin Turakhia: In 2007, we started dabbling in the online advertising business using a brand called Scenzo. My brother started operating that business. We grew that to a certain size.

Sramana Mitra: What was the thesis of that business?

Bhavin Turakhia: This business targeted publishers who own domains or websites. if they wanted to put up ads on their sites, we had a technology that would figure out the best ads >>>

Scaling a Fast Growth, Venture-Funded Company: Rafael Sweary, Co-Founder and President of WalkMe (Part 4)

Sramana Mitra: When you were selling to a customer, what kind of average deal size were you seeing?

Rafael Sweary: In the hundreds of dollars per year at that time. Once we got into the pricing, we started selling over the Internet. We got our first customers through dialing. After we got some four or five customers, we put it on our website. We started doing marketing. We started generating media attention. We started driving traffic onto our website. Some bought online. For some, we would call them after they sign up and ask them if we can give them a demo. That encourages them to buy.

Sramana Mitra: What were you learning about the companies who were buying? >>>

Master Bootstrapper with a Billion Plus in Exits: Bhavin Turakhia, CEO of Directi and Flock (Part 3)

Sramana Mitra: How long did you go in this mode of in-person selling? What kind of revenue level did that get you to?

Bhavin Turakhia: In that first set of businesses, which we call the web presence business, I actually did in-person selling for the better part of six years.

Sramana Mitra: There’s no choice. At that time, there was no other way of selling.

Bhavin Turakhia: That, and entrepreneurship is a journey that comprises of getting your hands dirty and doing lots of things yourself. Today, I don’t necessarily do a lot of selling except for really big deals. I have teams that do that and to effectively recruit the right people and mentor them the right way, you need to be there yourself. We’ve done it all from legal to marketing. In many ways, it was a good opportunity for us to gain that expertise. >>>

Scaling a Fast Growth, Venture-Funded Company: Rafael Sweary, Co-Founder and President of WalkMe (Part 3)

Sramana Mitra: What were you going to do with WalkMe?

Rafael Sweary: The initial plan was to sell it as a platform for guidance on top of any website. This is how we started. We saw that we had a nice revenue. We were growing, but we weren’t growing fast enough. We launched the product in April 2012. Initially, it had a nice growth curve, but eventually flatlined. We were recruiting new customers but it wasn’t at the pace that we were hoping for. In July 2013, we decided to pivot our business and start charging more.

We were charging $19 a month for a plan and trying to get it to any website on the planet. We said, “Let’s focus on the serious >>>

Master Bootstrapper with a Billion Plus in Exits: Bhavin Turakhia, CEO of Directi and Flock (Part 2)

Sramana Mitra: What was the first business that you and your brother launched?

Bhavin Turakhia: The first one that we launched together was in late 1998.

Sramana Mitra: You said you and your brother did all your businesses together?

Bhavin Turakhia: Yes. In many ways, that was the genesis. Before that, we were independently doing a bunch of consulting and selling various services. Directi was the genesis. For a bulk of our career from that point till now, we’ve done pretty much everything together. By that, I mean we handle independent businesses and parts of various businesses but have co-invested together and built out this series of companies. >>>

Scaling a Fast Growth, Venture-Funded Company: Rafael Sweary, Co-Founder and President of WalkMe (Part 2)

Sramana Mitra: How did you get connected with family offices in the US?

Rafael Sweary: I met them while I was studying here in the US.

Sramana Mitra: The reason I’m asking you is that it’s an unusual way of financing companies. Family offices tend to not participate in early-stage companies. So, it was basically because of personal relationships.

Rafael Sweary: Yes.

Sramana Mitra: You were selling through the resellers of the Microsoft product? >>>