From dream to reality - The journey of Dream11

Harsh Jain, CEO and Co-founder, Dream11, sits down with Tarun Davda, Managing Director at Matrix Partners India to retrace the journey of building Dream11 – they discuss the key inflection points, fundraising struggles, winning the IPL title sponsorship, Harsh’s personal growth journey as a leader & much more. Tune in.

Salonie: Hi and welcome to Matrix Moments, this is Salonie and joining us today on this episode is a very special guest, Harsh Jain, the CEO and co-founder of one of India’s most prominent and most valuable fantasy sports platform, and a company that truly doesn’t need any introduction, Dream11. Harsh is in conversation with Tarun Davda, Managing Director at Matrix partners India. Through the course of this episode they talk about the Indian gaming industry and its evolution over the past decade. The key inflection points at Dream11’s journey, Harsh’s personal growth journey as a leader, his relationship with his co-founder, Bhavit Sheth, who incidentally has been his friend since they were 7yr old and why culture plays such a large role at Dream11.

This conversation wouldn’t have been completed without talking about Dream11 winning the IPL title sponsorship. A huge milestone for Harsh personally and professionally. We cover all of this and more. Tune-in.

Tarun:

Welcome to another episode of Matrix Moments. I have a very, very special guest on our podcast today. This is a founder who epitomizes the word persistence. I think he started off in 2008 if I remember correctly and it’s only in 2020 that people have realized that Dream11 is an overnight success and so Harsh is going to talk all about that. Harsh, thank you so much for joining the show.

Harsh:

Thanks for having me. Great to be here and share what little wisdom I have with young entrepreneurs.

Tarun:

No, this is actually really helpful, Harsh, and I think your journey especially because I think if there’s one entrepreneur who had all the odds stacked against him when he started off in terms of the domain, in terms of lack of a category in which you were building the company, in terms of all the head winds that one could expect from a funding front or on a regulatory front I think you fought them all and so it would be great to actually just maybe retrace that journey a little bit and share any sort of experiences that you think can help people listening in.

But I’m actually going to start with a really interesting episode that I had personally experienced with you and also a tweetstorm that I remember there was somebody who had written about this and it’s somehow stuck with me. So this was a tweetstorm that I had read that Vishal Mishra who is a Columbia professor had put out about you where this was I think back – probably like early 2010-11-12, I don’t know what time it was, but you were a student back then and had basically reached out to Vishal for help. And this was right around the time you were probably still trying to figure things out at Dream11 and figure out the exact model and the exact product and stuff like that. And I remember it was like the way he described it, you were in touch for the longest time and he didn’t know until much later your family background.

And I’ll tell you why I’m starting with this because I had a different sort of personal episode where I was fortunate to listen to you talking about your entrepreneurial journey at one of the EO forums. And I remember something that you said or it was maybe someone in the audience that really stuck with me where there was a time when Dream11 was doing really well and you kept sort of going from strength to strength raising lots of capital, valuation was going up, revenue was going up, Dream11 had become a household name but there was still people who would tell you that hey, why don’t you go and join your dad’s business and you were still known as Anand Jain’s son. And I think your father made the statement which I think must have made you really proud where today he meets people and they say oh, you’re Harsh Jain’s father. It’s been a little bit of a I think a 360 degree turn for you, so firstly congratulations on such a fantastic journey but tell us a little bit about those early days.

Fantasy wasn’t something that anyone understood back then in the early 2010s. Starting from there how did you iterate on the model, what was it that was just driving you back then when nobody understood what you were doing?

Harsh:

I think like deep-rooted passion for the problem that we’re trying to solve and a little bit of stubbornness of not accepting failure and hopefully learning from all the failures that we continuously have.

That I think combined with the fact that look, I am like fortunate enough to have a very large cushion to fall back on. So it wasn’t like, okay, if this fails and I don’t know what I’ll do, I don’t know where I’ll go. I started very young, I started at 22, that helped a lot. And I keep telling people like please push your kids from college into entrepreneurship if they’re open to it, any kind of entrepreneurship just push them into it. Please encourage them because the amount you learn that time but the opportunity cost is so low it’s like you can fail for years and its okay, at 25 you can take up a serious job. But three, four years you can spend like trying different things, trying the entrepreneurial route.

But I think that was a combination of all that, right, so at 2008 when the whole idea to do Fantasy Cricket for IPL was because I’m such a big Fantasy EPL fan. My target literally is every year to place in the top in the like 99.99th percentile of EPL Fantasy players worldwide. And so like I’m like a fanatic for Fantasy EPL and I was just shocked that in a country with a billion sports fans -- in the US around 70 percent of online sports fans have played Fantasy sports. And in a country with like today almost 500 million plus online sports fans and even that time there were like over a 100 million kind of online sports fans. There was no fantasy sports at all and so it was a very personal problem that I went to solve and I think that helps a lot. Because if it’s some new cool trend that you’re chasing, right, the minute you hit obstacles earlier on I think most people will just give up. I think that’s very important for founders to get into areas where they’re so personally vested and passionate about that they just won’t give up for like five years. I think five years I’ve seen becomes a key inflection point honestly, I think most businesses take five years to like find their way, of like keep changing, keep pivoting. And then I think after five years if you haven’t found something that you’re ready to scale then I agree that entrepreneurs should look elsewhere. You shouldn’t be so stubborn also to know that okay, nahe chalra hai, fir bhi karte jou. By giving up in two-three years also I think is a big mistake that many people make if you have the wherewithal to continue. And so that persisting does help, the persistence and the stubbornness does help to continue chasing.

Tarun:

Let me ask you an honest question, somewhere at the back of every investor’s mind when they met you back then there’s this bias that investors fight which is they want to see entrepreneurs that they’re backing be all in.

Harsh:

Yeah, yeah, obviously.

Tarun:

And you said that you don’t have that – you know, it wasn’t that if this didn’t work out your life would be over, you had enough of a cushion. How much of that bias you think played into the early days of fundraising experience?

Harsh:

Yeah, there was definitely that bias that was there in people’s minds that okay, you know, if this doesn’t work out for you you’ll just – because again like you said it’s a very tough, tough industry. Legality, regulations, even banks wouldn’t let us open a banking account with them forget the normal legality and regulation we couldn’t open a banking account for our company. Getting a bank account we had to like ask seven banks and like call people and be like we’ll get this opinion, that opinion, then they’ll let us open one bank account. Opening a bank account was a celebration, we got a back account we’re in business.

Tarun:

This sounds like even familiar to the story of like Infosys and a bunch of others where they struggled to get a telephone line back in the days.

Harsh:

Yeah, just different disruptions in different eras but, yeah, similar challenges. For me it wasn’t about creating something nice. For me the bar was much higher, right, I had to create something great because like you said like you heard me speak before about this that if I created something nice, something good, it would always be treated as like a side job. It’s like a, okay, thik hai, woh series A, B chalake, wo thik hai chal ra hai, unless we became that – you know, I don’t really like to talk about valuations ever.

But unless I would achieve something that can become a unicorn and more people would continuously question that oh, why don’t you join your family business.

Tarun:

It’s like a hobby that he’s doing on the side.

Harsh:

Yeah, correct. So I think investors also have to look into like what’s driving this person.

Tarun:

What are the motivations.

Harsh:

Yeah. And I think that for me a lot of investors had to – they said no because of the fact that, a, they weren’t sure that I would continue fighting that fight because it would be a big long fight. And, b, is that if I don’t end up creating something like which goes towards a unicorn will this founder get up and like quit and say okay, let’s professionally manage this or something, then you’ll never get your resale at once. And so I don’t blame anyone, I don’t have any bad feelings or anything for the people. If I was in most investors’ shoes I would have thought the same way.

Tarun:

After hearing 150 ‘no’s some report I was just reading of some news article and infamously I think Matrix was one of those ‘no’s which in hindsight obviously look extremely stupid.

Harsh:

It’s okay, you were in some very good company though.

Tarun:

Yeah. So was there self-doubt at any time, I mean the passion is fine, right, but at some point when you hear 150 people tell you, hey, this isn’t going to work, we’re not going to back this, there’s lot of legal or regulatory kind of mess - was there ever self-doubt, & how did you deal with that?

Harsh:

Yeah, look, we’re talking about like 2008 starting and 2015 getting funded, massive self-doubt and like massive self-doubt for years. But then luckily enough we kept pivoting just to have that every year where we would be like okay, if this year it doesn’t work maybe we should drop it after like three-four years. So every year like for example 2008-09-10 we burnt like 70 percent of our friends’ and family’s seed money that we had raised, we burnt 70 percent of it in one year. And then we survived on like 10 percent of it for the next year.

And then we said okay, now we’ve only like 20 percent left or we survived at 20 percent we have only 10 percent left so then we started a services agency, we made money from there. So 2010-11-12 we were actually running a services agency. So if you ask me what did I do in 2010-11 I would say I’m a CEO of Red Digital. And then if you really asked me like oh, but what happened to that other thing I’d be like haan woh ek chota passion project hai side pe, Dream11. So we went from a 40 people company on Dream11 in 2008-09 with 8 people company on Dream11 and 32 people on the servicing side. The 32 people became like 60 people on servicing and those 8 people became like 6 people on the product.

Tarun:

So when did you know it’s working, like when did you feel that okay, the services thing was a distraction, it’s out, I know this is working, like when was that moment?

Harsh:

I’ve never been made for like that servicing business, right, I’m a more of a product person. So the servicing part was just a means to an end. It got us the cash flows and it allowed me to continue being stubborn about not going back to my dad and saying you were right and beg for money or I had to shut it down. So, I was like, no, no, we’re fine, we’re managing, we’ve done this cool thing on the side and he was like okay, he is also learning.

At that time we were like, okay, Dream11 doesn’t work so we just kept pivoting, kept pivoting, kept trying everything. Then in 2012 we pivoted to what you see today and then by 2013 we saw that by that year we saw for the first-time organic users, all our growth was only organic, we weren’t spending money marketing. So organic users coming back, you know, that viral coefficient kicking in over one, going to high twos kind of thing. Every new user would invite two friends, we would ask users where they came from, they would always say like friends and family friends and reference.

Tarun:

You saw that word of mouth sort of kicking in.

Harsh:

Correct. And the most important thing which I think a lot of people like it’s they don’t give enough importance to is retention. Every time it’s a leaky bucket, 1 million come 950,000 of them leave. So my point is that retention, when you see retention kicking in, organic retention, non-incentivized retention, very important. Because again incentivized retention is very easy, I’ll take VC money, I’ll give you that VC money and you come back and play with it, then that’s all incentivized retention and then you start creating all these cool jargon of like CM1 and CM2 and CM3 pool contribution ways to show that contribution margin is positive with some like --

Tarun:

Multiple people attached to it.

Harsh:

That much of that Marwadi genetics have come down in me where I’ve been trained that contribution margin ek hair aur EBITDA ek hai, there’s no CM1, CM2, CM3, right, you’re either negative or you’re positive. So I think that when we saw that retention was high, organic retention, non-incentivized retention and virality was there that’s when I think that’s what we call product market fit. And when we saw that happening we could project our business, project revenues because of which we said that okay, now it’s time to shut the services business and put all that money that we get from selling that into the product side and continue.

Tarun:

One other thing that you’ve told me over time which I again sound very unique and honestly I’ve not heard too many founders even track this metric which is net revenue per employee. And I remember you have told me that – you’ve broken a lot of rules along the way, right, you built a tech company from Bombay which most other people have migrated out of Bombay and said hey, you can’t get tech talent here and I remember you telling me that you know that I need whatever, couple of hundred people to build this into a large company and each employee should generate a million dollars in net revenue for me. I think somewhere -- it was broadly just maybe the numbers are slightly off, but I remember you telling me 200 employees and 200 million dollars of net revenue. And how did you like what were the early – I guess were there mentors that were – you know, there’s no like first time founder. Like, who was guiding you with this stuff?

Harsh:

So one is through the like I said the good old Marwadi business genes like, dhanda banana hai, I’ve never grown up with the concept of losing money or burning money. That’s an acquired taste.

Tarun:

Acquired skill, yeah.

Harsh:

Acquired skill after like going through venture capital fundraising. And I use to read like crazy about US businesses. So I used to read a lot about you know, your PayPal and your Peter Thiel and growth hackers and Airbnb and Facebook and Google and all of them. I used to read like I literally would read everything there was to read and my favorite site at that time was growthhackers.com. And that kind of really taught you that you can burn money but there has to be a method to the madness. Like your contribution margins have to be positive and unit economics have to be solid, only then can you burn money, even that you’ve to project at which point you would burn money till. And it taught me those lessons about saying that okay, you can burn money but every time you raise money it should only have a 12 month burn. And your business should survive no more fundraising ever after. And I think that’s the one principle we kind of always stayed with. We would only raise the amount of money that we could burn in one year after which we assumed we won’t get funded again.

Tarun:

And so in your mind it was always in 12 months I need to become profitable.

Harsh:

Correct. It has to be breakeven and then moving to profitability after 12 months because kal ho na ho, kind of thing. Like funding may come or not we can’t have a business that’s dependable on funding. Funding for us was very clearly always a catalyst for growth, accelerate our growth but not sustenance. And we’re fortunate enough to be in an industry where we weren’t fighting some large giants like say an Ola, Uber. I mean what do you do if I’m Bhavish and Travis is on my neck and throwing a billion dollars what do you do, you have to just work with that, you just have to go into it.

Tarun:

I remember and you mentioned Bhavish and obviously we’ve been close to that journey and I remember two different occasions where Bhavish said that I’m ahead in market share and I want to take the business to a point where for every dollar that the competitor burns I need to burn 20 or 25 cents to maintain my lead in the market.

I don’t think one can say if they’re doing a dollar I will spend like zero, end of the day there is a market dynamic to it. But to have that clarity saying that I will be 4x or 5x more efficient in every spend than my competitor and eventually that will cause them to slow down because they know they’re spending 5x more than us and still not able to kind of take a lead on us that makes a big difference. And the second is exactly which is whose game are you playing.

With a lot of these global companies that have profit pools outside India for them to use that profit and divert some of it to the Indian market is much easier than a young founder whose metrics are still to be proven out to constantly raise venture capital, constantly go dilute themselves and invest that in fighting it’s just a battle that beyond a point you’re starting off at a disadvantage.

Harsh:

Yeah, absolutely right.

Tarun:

So I’m going to segue into a different topic which I think is very, very timely and very contextual. So I see the T-shirt you’re wearing --

Harsh:

It’s not planned, it just – Manchester United win the day before you will see me wearing those T-shirts that day or the next day.

Tarun:

So I think it’s a big moment, right, and all of us feel extreme pride to see a venture funded company which has sort of actually been built in front of eyes actually become the title sponsor of the largest sporting event in the country and possibly amongst the largest in the world. Beyond all the headlines and what does this like when your laptop is off, your phone is away, when you’re about to sleep at night what’s the thought that comes to your mind saying what does this mean to you?

Harsh:

First of all that’s right, my laptop is off, my phone is never off but when I’m sleeping at night also like I would say like half the times I’m dreaming about something about some work stuff is going on. In fact I’m now trying to actually have a little more like balance as the company scales because as an entrepreneur you’re just never off, you cannot be off.

I think every entrepreneur, every CEO, every CXO in the country today and in all parts of the world is going to sleep thinking about like regulatory issues many times. Those are always on top of everyone’s minds like regulatory clarity, cut the business, just clarity on like I can just focus on my business and carry on and this is the playbook. I think everywhere in the world that’s becoming a large issue

Tarun:

Let me ask you another question, you spoke about regulatory, right, and there’s been a lot of noise recently about sort of this whole App Store ecosystem, Dream11 which is by every court of law in India declared as a legal business model App Store for various reasons doesn’t allow these apps to be listed on the App Store. And I think you’re one of probably the rare outliers that has managed to generate more than 100 million downloads outside of the App Store and I’m sure that was a massive deterrent again when it came to fundraising because people are like hey, whose going to discover you. Like are people going to go and download something from some website where there are multiple security warnings that the OS will give you saying that this app is not safe are you sure you want to download.

Harsh:

This app might break your phone, this app might have some viruses, do you want to install it anyway? Yes, yes, yes!

Tarun:

Exactly. So what is your take on this, what’s our way out?

Harsh:

Dream11 has been arguing with Google Play policy for like five-six years, the whole ecosystem has woken up to it now because of some new policies they’ve put. We’ve been arguing this for like since our inception. And why are we not allowed on the Play Store, in fact it’s gotten to a point where the court in one of the Supreme Court hearings has said that Dream11 is a game of skill, this matter cannot be argued in court again because that was the third time that judges had to like listen to the matter and they were just like this will keep going on and on, are we going to just keep wasting the court time.

And so they’ve actually said in a judgment that Dream11, this point is not to be argued again about their game of skill. And still we have people filing but secondly it also said that Dream11 is protected as under the Constitution Article 19(1)(G) of India. The Constitution of India it’s a constitutional right to run Dream11’s business as a regular business activity. The only person in India who can decide legality is the court. The Supreme Court of India has said this then you’re allowed on the App Store, so we’re available on the App Store. Google Play Store has its own policy and the request we’ve been making to the Play Store for many years now is that you cannot supersede the Supreme Court of India and the Constitution of India for Indian users. You cannot have a policy which supersedes that.

And we’ve been requesting them that all you need to do is follow the law of the land. If it’s not proven legal like I know you have many thing not proven legal they’re just like legal opinions then okay, then don’t open that if you don’t want. But what is proven legal and there’s constitutional protection how can you say I will not allow 95 percent of India to have access to it.

Tarun:

And like it’s clearly fallen on deaf ears because it’s not changed yet so what have you’ll heard?

Harsh:

So till now we were the only ones fighting it for five-six years so now there’s strength in numbers and so hopefully Google policy – see, I also don’t blame Google India too much. Google India the Indian arm of Google globally did not have the say because Google policy was controlled by in the US globally. And so they don’t have the ability to say that there needs to be Google policy India team which needs to just look at Google policy in India and so because our issue wasn’t too common it wasn’t a big enough matter. Now that this has become an ecosystem issue I’m sure that they’ll have people dedicated to India policy very soon and they will carve out fantasy sports and other – there are like all the policy problems in India now. So, good, I’m happy, strength in numbers now.

Tarun:

I find it ironic that a company which has had, which has been tested which business model has been tested by the highest authority in the country from legal perspective it’s still not able to convince like you can imagine what some of the smaller companies and smaller early stage founders might be going through.

Harsh:

That’s why we also at least for our industry we said that look all the problems and issues we went through let’s at least help the ecosystem to grow with us. And so we created an industry body called the Federation of Indian Fantasy Sports and then we professionalized it, we institutionalized it. So we’re now like a board member, founder member, but obviously there’s like other operators.

Tarun:

Other members as well now.

Harsh:

There’s an ex Supreme Court Justice, there’s an ex police commissioner, there’s someone from the Ministry of Sports and Youth Affairs, there’s the ex GM of BCCI, there’s the ex-legal head of IMG and it’s headed by an independent CEO and his team and so it’s like a full federation body that has 35 of the largest fantasy sports companies as members which represent like 99 percent of users in India. And then they actually fight for the federation, so they fight for the entire --

Tarun:

And even this federation hasn’t been able to sort of convince Google because now it’s not just one company, right, it’s a federation that represents --

Harsh:

At least now you can open as a fantasy sports operator when you join the federation.

Tarun:

And you get the payment gateway and the bank and all that.

Harsh:

Payment gateway, banking, advertising on like Google, Facebook, all of that becomes ten times easier.

Tarun:

Okay, let me switch gears to the other interesting thing that I’ve observed about Dream11 in the last six months. So this is March 2020 and the country is under lockdown, all sporting events have been shut down, IPL has been postponed which is probably the biggest sort of moment for you guys and there’s just actually no sporting events happening across the country not even small league matches or anything. And Dream11 was highly, highly dependent on cricket as a source of revenue.

Harsh:

All sports are off worldwide.

Tarun:

Correct. How did you guys recover from that because I know you’re one of the few companies that saw almost a V shaped recovery very, very quickly.

Harsh:

So I think here’s where the funding power also plays a role. It gives you the ability to sustain and to go on in these tough times. Cash is very important to have in the bank for all companies, you can’t be living off scrapes and then you also have to run create businesses which have a good margin so that you have some cushion and it doesn’t – if you have that one percent margin business then the minute anything goes wrong it is gone.

Tarun:

You’re going to be wiped out.

Harsh:

Your costs are too high. So as a business that had huge amount of – we saw I think 90 percent of our costs were variable and that is one of the key parts like most of it being marketing. So the day sports went out marketing went out the next day.

Tarun:

Turned the marketing tap off.

Harsh:

Eighty percent of our expenses gone overnight. Then all our partner agreements all of that everything suspended as of first measure and using first measure which everyone agreed to, all the partners agreed to, everyone knew it, we were able to bring down our cost to only ten percent which was basically salaries and rent.

Tarun:

And this was despite you guys actually being fairly well capitalized, this wasn’t like something where you were running out of cash and this was the only thing you could do.

Harsh:

No, because that’s the first thing you do and then then you say okay, now this is my cost. Now let’s assume sports don’t come back for one year how long can we survive on the money we have. And when that answer was more than one year that we can just survive more than one year easily we said okay, then let’s not worry and forget about it. Then there’s no need to jump into some random new thing to do and pivot into something to make money right now. If we’re confident that in the next six months sports will come back and like supremely confident in the next one year sports will come back then let’s just stick to what we do and take this time to wipe out product tech debt that every company carries with it for years and years and years.

Tarun:

Great point.

Harsh:

And so our team was more than happy with that. And so they were like very happy that for mahine ke liye 3 mahine ke liye, we’ll get a chance to wipe out --

Tarun:

Actually fixing the stuff that you always wanted to do but never got around to doing.

Harsh:

So we told the teams take two months now and only go into debt mode, and sports came back way sooner than we thought and even in those three months we actually had this Tajikistan basketball, Nicaraguan football. We scoured the globe and found these.

Tarun:

And none of these were on Dream11 earlier, right?

Harsh:

No, no, none of these were.

Tarun:

So what gave you the belief that it will work like how did you even think of it?

Harsh:

What’s the cost? There’s no cost to it, it’s a digital product, right, so they’re playing anyways with or without us, we just had to get the XML feeds and sign up with their tournaments and then we started. So the cost is minimal to start and try it out, if it works good, if it doesn’t work good we’ll stop it.

Tarun:

And what did you learn about your user experience because at least my advice would have been that they’re doing this for the love of cricket but clearly that’s proven to be not correct.

Harsh:

Sports fans dying of boredom at home will consume whatever sports you throw at them. If it means finding out about, you know, learning about Nicaraguan football and Belarus football and Tajikistan basketball they’ll pick it up because they need something at home.

They were like crazily bored, no sports and so that hard core sports fans. And so we really learnt that and that’s also very interesting because the minute sports started coming back the same contest and the same matches that were doing well in the lockdown plummeted. So it wasn’t like they were they loved Nicaraguan football or Tajikistan basketball they love sports. So in the lack of sports --

Tarun:

They were making do with that in the lack of cricket and others.

Harsh:

But the minute anything came back they all pivoted again to the main sports. So, yeah, we were able to survive and thrive during this time because of our ability to also experiment and pivot. And continuously you have to create that culture in the company and that’s what I keep talking about culture, culture, culture. You have to let people experiment, you have to delegate, you have to get out of micromanagement, you have to create a culture where people can experiment without the fear of failure. You have to celebrate failures, focus on learnings and that’s the only way to succeed. You have to create the culture where you encourage people to go and have the guts to try it out. And if you fail we will come and celebrate it, right, but just don’t fail on the same thing again and again, right, because then that’s stupidity.

Tarun:

So that’s a very again interesting segue and one of the things that has always struck me right from what you had said about 200 employees, 200 million dollars in net revenue and all of these are very early signs of just top down thinking around how you want to build an organization and obviously culture has a big role to play in that.

I’ve been fortunate to have walked around your office, the new one, and it really gives you a fantastic vibe. Obviously the way the office is set up is just one small part of culture, right, but what is culture for you and when did you as a founder start thinking of it as something that is important as you sort of build and scale this company?

Harsh:

I think I would honestly say somewhere after we got funded maybe around our series B when we started growing to beyond 50 people you start seeing that the new people coming in who’ve been here for a few months are not as culturally aligned. See, when you’re like 30-40 people or lower than that everyone is so culturally aligned because you’re like talking to each person on a daily basis. Whatever your culture is it is ingrained heavily and in your early stages most people have been with you for a while. You’re not like recruiting like a super huge pace and all of that so they’ve had years to spend with the founder or founders and that culture is set.

Then when you start scaling up you start seeing that it’s a studied fact that every time you triple up your anything, your base, everything will break. So we were at like 15-20 people and I saw this happening, like 50-60 people our culture broke, our systems broke, all of it broke. So then you have to go and so then we went and wrote down our culture, actually rewrote it. No, we never had it in writing before that because it was an understood thing. So then we wrote it down and then when we went from 50 people to 150 people again all the systems broke because now the way we were still running when we were like 100 people were still like micro management.

All decisions were taken by me or Bhavit my co-founder. And so once you cross the 100-150 people you can’t, you have to have CXOs taking the decisions so everything broke again. Now at 150 we grew to like 450-500 people now we’re just growing and now everything is breaking again. So it’s not something that you can put down and just let it go. You have to adapt, you have to change the entire org structure, the systems, the processes to continuously evolve. And

I think the hardest thing for someone like me who is a very like hands on founder is to like leave the steering wheel and step back and say you can go. I can see that you’re driving into a little bit of an accident, right, but go. As long as you don’t drive off a cliff go bang into that car, see that you made a mistake or prove that I was wrong and one of us will learn and then we’ll carry on. But I think that’s one of the toughest parts of a founder to let go of the steering wheel because you built it with like your blood, sweat and tears for so long that you’re so scared that someone else is going to drive that car off the cliff.

Tarun:

What you said is really interesting, let me ask you this question, your co founder Bhavit is and your relationship with him is less spoken about. If I were to ask Bhavit to describe your leadership style in three words what words would he use?

Harsh:

We both agree.

Tarun:

But like you said it’s hard to let go, I need to be involved. Are you a micro manager by say like what would you --?

Harsh:

Yeah, so I would say it’s definitely a evolution for me as a founder CEO but I’m very hands on, right, very hands on, I’m a task manager. I like all my stuff in organized way like we use monday.com, I don’t know if you’ve used it.

Tarun:

Have you always been like super organized as a person?

Harsh:

I’ve had a lot of OCD always like I keep my remotes on my bedside in a line and like my clothes are like in a proper way in the cupboard and I’ve always had that OCD part. And I think Bhavit and I being school friends knowing each other since you’re like 7-8 years old and being in the same group of friends that is something that I think even investors like should really treasure in any kind of company because I think there’s some crazy stat like 40 percent of businesses fail because the founders fall apart.

I think that understanding if you can have from before solves so many problems and if there’s clear understanding between founders of who is taking the call in what areas I think that’s very important. It was very clear like Bhavit is the COO and I’m the CEO, these are the things he handles, these are the things I handle and it’s very clear. And we both keep having open arguments with each other, open debates about the other one’s opinion but finally you can disagree and commit. So you can argue all you want but finally when a call is taken you disagree and commit.

Tarun:

If you were to look back on the Dream11 journey and talk about one or two key inflection points for the company and it could be something that you’ve already spoken about or something that you haven’t shared earlier like what were those one or two key inflection points for the company?

Harsh:

So I think one was definitely raising a round of funding.

Tarun:

The first one.

Harsh:

Yeah, after like two years of going across India, across Bombay, Bangalore, Delhi, obviously Silicon Valley as well, up and down doing everything finally raising a first round of funding after like going to the IC with a bunch of VCs twice, twice or thrice we went to the IC and IC for all the other founders on the call is basically your last sign up, your last approval before you can get that term sheet. And failing there, right, getting that first round of funding is always special because even with the family money put in then they can be like okay, someone else is either as smart as I am or as stupid as I am to put the money. So like Misery loves company, so there’s someone else who is believing in their own money to put in not just family and friends.

I think the second biggest inflection point was that getting judicial clearance. So one is having legal opinions that your business is okay, it’s a regular business, it’s a game of skill clearly, it’s the same as it is globally and it is not gambling and betting and all these things. And the other thing is to get a court judgment whether Indian judicial system a High Court and a Supreme Court in writing or saying that yes, that’s true. That had a huge impact on our business. And I would say, yeah, those are the two big ones. Of course now Dream11 IPL but that’s more recent right now. Those two are by far those big, big cataclysmic events kinds of thing.

Tarun:

Again I want to just double click on the part where you mentioned about the judicial sort of clarity, first time founder, young founder, obviously very little exposure to legal systems, regulatory systems in this country. You’re juggling fund raising, you’re juggling hiring.

Harsh:

Still very, very – like I have no idea what’s going on.

Tarun:

But you’re juggling on the one hand fund raising, you’re juggling hiring people, getting a team in place, you’re hiring building a product, you’re hiring getting some sort of customer traction and stuff like that how much time like how did you – is this something that was front and center for you like I need to get this like for you was the judicial clarity was that your core agenda in saying I want this?

Harsh:

For many years we said that okay, we need like judicial clearance if we really want to progress and go faster and there might be a VC here and there who agree to fund us without that but the real ability to talk to like 20 VCs or PEs tomorrow depend on that. And that was front and center, for years we said that should we just go to court.

But then once we asked many people if, can we go to court to get this cleared and they were like no, the court will not accept it. So then we’re like, oh, so we can’t go to court because the court is saying that there’s like 10,000 cases backlog so why are you coming to get a certificate, why should we give you a certificate when there’s no case against you. So basically, you have to wait for someone to file a case against you to get approved hopefully.

Tarun:

And that too will take its own due course I guess in terms of time.

Harsh:

Yeah, but it is what it is, so for years we ran the business cleanly and in good faith and then one day someone decided to take us to court and then only through that we could actually argue our case and thankfully win it – but you know, through all of this like you’re saying regulatory, legal, running a business, figuring out fundraising I think there’s two things which are most important. One is like co-founders, one founder is I think it’s a disaster. And most VCs also know that, right, you also are supremely dependent on this one person as an investor and secondly, it’s just too much, it’s a very lonely journey. You need to have some friend or co-founder who can share that.

And secondly and most importantly I think is the family support. I’ve been married ten years now and my wife has been there through every jab, punch, seemingly knockout punches all of it and she’s constantly been there at home saying it’s okay, we’ll figure it out, why don’t you do this, why don’t you do that. She is my – when you say you have to hire a CXO team, before my CXO team she was my CXO team, she was my advisor for HR, for like anything that I would go to for people issues because I’m actually very bad at empathy and all of that. I’m more practical and pragmatic and she’s like super high on empathy and that does really help coming back and I would come out. She would wait downstairs in the car while I would go up in America and in many of these fund raising pitches go up wait there 45 minutes, get a no, come back down, no, didn’t work, okay, let’s go to the next one. And she’d be waiting in the car. So when you have to have a companion, you know, where I’m getting at is companionship is an extremely critical part in this journey. If you have that support behind you then it’s hats off to the person who can do it without that support because I don’t think I would be able to.

Tarun:

You know, Harsh, you’re one of the rare people who actually calls out their spouse and their co-founder who may not be as I guess publicly recognized but thank you for doing it. I think it just underscores your humility because I don’t think people give enough credence to the fact that every founder’s journey no matter how flashy and nice it looks from the outside just how gut wrenching it has been over the years and how their families and their co-founders and rest of their support system what role they have to play.

Harsh:

Yeah, it’s very important, I think that’s very important for the ecosystem to learn about that, so it’s great that you guys are covering it.

Tarun:

Now thank you so much. I know we’re out of time but last question from my side and any closing remarks. I know you’ve shared actually a bunch of pearls of wisdom for young entrepreneurs and anyone else whose watching this but anything else that you think would be a helpful lesson to take away from your journey?

Harsh:

I think I would say like for all the founders out there please do not think that your idea is an amazing idea that every advisor anyone you want to meet will make them sign an NDA and like send them an NDA and say otherwise I won’t share my idea. If the idea is what is so special then you’re already in trouble. All that matters is the execution and if someone is stealing the idea will mean that you can’t execute it then it’s better you give up today only.

Tarun:

Even if it was unique when you started the reality is within 12 months of you starting there’ll be like --

Harsh:

And what you say is that so easy in that ecosystem, so I would just say that go out, obviously if you want to predict an idea if it’s a very good idea you don’t want like the whole world to know about it before you started executing. But go out and meet people, meet good people, get their advice and take every meeting take that criticism in your stride and work on it. And just if you think it’s a great idea and if you’re willing to be passionate about it and if it has a large addressable market just go for it. It’s fine, let every person you meet, every guru come and tell you it’s a crap idea, okay, take all the feedback, try to incorporate how what they found crap about it but don’t let anyone tell you otherwise, take all the criticism but go for it.

Tarun:

I think just underscoring the point which you made which is take every or each of these conversations while your eventual goal is to fund raise and get a cheque but using each of those meetings as a learning opportunity which I don’t think a lot of people do which is like this is just free feedback from people who are potentially may have seen several more ideas and several more sort of instances of success or failure just using that as a learning opportunity but obviously at the end of the day as an entrepreneur you need to back your intuition.

Harsh:

Entrepreneurs going to VCs learn from what they’re saying because they’ve seen hundred companies. You agree or disagree is fine but at least try to learn from them.

Tarun:

No, I think that’s a great point, Harsh. This is amazing. Actually this has been honestly one of the most enjoyable episodes I’ve done. I think every statement you have made it just resonates so much and I think that could only come from somebody who has personally seen every twist and turn in the journey that one can throw at you, right. So thank you so much for doing this, I think it’s just super inspiring to see and wish you and Dream11 much more success going forward.

Harsh:

Thanks a lot, Tarun. And wishing you the same and along with your portfolio hope all your portfolio companies have done strong V-shaped jump back.

Salonie:

Thanks for tuning in. For more Matrix Moments episodes, you can head to www.matrixpartners.in/blog. You can also follow us on Twitter, LinkedIn, and YouTube for more updates.