REMORSEFUL RAHUL

Rahul Yadav: The bad boy of Indian startups is finally acting like an adult

Quartz india
Quartz india

Before Rahul Yadav was unceremoniously kicked out from the company he founded, there were whispers about how the 26-year-old former CEO of real estate listings website, Housing.com, could even be India’s version of Steve Jobs.

A dropout from the elite Indian Institute of Technology (IIT), Bombay, Yadav had already built a company valued at $250 million by the time he was a 25-year-old. To his colleagues at Housing.com, he was a visionary, but the young Yadav was also brash and impulsive, running into numerous scuffles with the company’s investors and the media.

All that, though, was a year ago.

Today, Yadav believes he has matured, and regrets how things turned out at Housing.com.

“When I look back, I do feel things could have been done differently,” Yadav told Quartz in 45-minute telephone interview. “I was working like a machine and was extremely stressed. Today, I think I am more mature and seeing the world from a different angle.”

“But what I fail to understand is,” he added, “why am I still being targeted by the media?”

Yadav’s list of antics were rather breathtaking. Once he emailed Sequoia Capital’s India head to stop “messing around with” him. Months later, he wrote a letter to Housing.com’s board of directors, telling them that they were not “intellectually capable enough to have any sensible discussion anymore.” Through a series of Facebook posts, he also made fun of the company’s board of directors and media organisations.

It wasn’t without reason that he earned the dubious distinction of the enfant terrible of India’s startup ecosystem.

Eventually, he was booted from Housing.com in July 2015, seven months after SoftBank invested $90 million in the company to become its largest shareholder. SoftBank currently owns 38% stake in Housing.com.

After his exit from Housing.com, Yadav started Intelligent Interfaces, a company that looked to provide data aggregation and visualisation solutions to the Indian government and private sector. Yadav had announced the setting up of the venture in September last year. The company was registered in October 2015, according to documents available with India’s ministry of corporate affairs.

Yadav has also registered another company, Rental Solutions Private Limited.

Although, he isn’t certain of making a comeback to the real estate sector, Yadav spoke about what happened with Housing.com, his future plans and the lessons he learnt from the fiasco.

What really happened at Housing.com?

Housing.com was set up by Yadav and 10 others from their hostel rooms at the IIT-Bombay. Yadav worked as its CEO since the company’s inception in 2012 until he was sacked last July.

The decision to fire Yadav had been a long time coming, especially due to his multiple run-ins with investors, other startups, and the press. In a statement, after Yadav was booted, the board said that his behavior was not “befitting” of a CEO and that it was “detrimental” towards the company’s future.

Ten months later, Yadav now agrees he was “stupid,” and should have been more “chill” when it came to dealing with work.

“I was never taking any holidays and worked non-stop for four years,” Yadav said. “Among the 11 founders, I was the one dealing with the investors. It was a lot of stress. One thing I have realised is that CEO’s must take vacations. I should have been calm and not blown the whole thing up.”

But he still holds it against investors for being “immature” and “really stupid.”

“The problem with India’s venture capital funds is that they are absolutely clueless about what they want,” said Yadav. “When we got a large amount of money from SoftBank, they had promised to back us for 10 years. They did not care about revenue and profitability and the focus was on increasing supply, which meant burning money. But overnight, we had somebody else in charge of Housing’s portfolio and the focus became revenues and profits. The company wasn’t built for revenues so soon. These Indian VCs force you to burn money and then pull the trigger.”

Before he was sacked, the three-year-old Housing.com had reportedly spent an astounding Rs120 crore on a marketing campaign. Reports also suggested that the company was steadily losing money. But Yadav believes that the company was on the right track.

“We were growing too fast, and we would have hit the billion dollar valuation in may be three years time,” he said.

SoftBank declined to comment on Yadav’s statements. Housing.com has yet to respond to a Quartz request for its response to Yadav’s comments.

Lessons from the fiasco

“There are basically four things I have learnt since the fiasco,” said Yadav.

“First, I had complete lack of emotional quotient. I was just too restless and hyper. I did not understand that people could have an alternate life with their family. I just thought everybody should be working as much as I was working,” Yadav said.

He was apparently so engrossed in his work that he did not even know his nephew’s name.

“Secondly, we scaled up too fast. We should have actually cracked one market completely before venturing out into any other market. If I were to look at Housing again, I would rather crack the model locally and keep refining it before taking it anywhere else in the country. I would scale up for profitability than for burning.”

“Third, we were in a very complex business and I have realised everything can’t be labelled as real estate. If you are in the business of renting, you must develop that, instead of dabbling with other ideas like property buying and selling.”

“Lastly, we diluted 80% stake in the company in two and half years. That was stupidity in the name of growth. India is a slow elephant and it takes time to build up a business and we were burning money too quickly.”

What happened to his latest venture

Two months after he was fired from Housing.com, Yadav announced the launch of Intelligent Interface, which was to provide data visualisation and other solutions to the government and private sector.

“There are a lot of problems in this country. For instance, we don’t have very good infrastructure. And we were looking to solve the problems in the country through Intelligent Interface,” he explained.

The company started working with the Indian Railways, and even hired a former Railway Board chairman to be an advisor, according to Yadav. But it didn’t take too long for the team to realise that things weren’t likely to take off. “We saw opportunities in areas like mobile ticketing for railways and allowing the booking of seats that were not taken during journeys. But the problem is we also realised that the government doesn’t need help. They just don’t want to solve the issues,” explained Yadav.

Instead, he is now trying to take his venture into the private sector. “Either, you can fix the problems in the country, or leave. Fixing the country isn’t possible,” said Yadav. “I am engaged now, and I am not sure if I can leave the country immediately. I am still exploring the private sector.”

So far, the Bansals of Flipkart and cricketer Yuvraj Singh have invested a “few lakhs” in the company, Yadav said. “I have just diluted 1.5% stake in the company and we haven’t raised a lot of money, unlike what is said in reports. I am still figuring out how to make it work.”

What does the future hold

Meanwhile, since his engagement earlier this year, Yadav has also been contemplating playing it safe.

On May 13, Yadav posted on his Facebook page that he was thinking of giving up entrepreneurship to do a “simple job.”

For now, though, Yadav reckons he has a 60% chance of continuing with Intelligent Interface, and a 40% chance of making a comeback to the real estate sector.

That’s probably why he registered Rental Solutions in March 2016. According to the ministry of corporate affairs, the company has two directors: Yadav and Nishant Singhal. Singhal is also a director at YouWeCan, the venture capital fund started by Singh, the Indian cricketer.

“I really liked the domain name and thought of registering it,” Yadav explained. “That is all.”

But does he regret whatever happened with Housing.com?

“Well, it all depends on how things go from now. If I use my learning from the Housing fiasco and do well in the future, then I certainly wouldn’t,” Yadav explained.

“But if things go downwards from now, then clearly that means I blew it and I will regret that.”

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