Master Bootstrapper with a Billion Plus in Exits: Bhavin Turakhia, CEO of Directi and Flock (Part 7)

Sramana Mitra: You have, yourself, generated a huge amount of capital at this point through a couple of exits. You had an all-cash exit of $160 million plus a $900 million exit. That’s a lot of cash. You don’t really need to go anywhere for cash. You have plenty of cash. Culturally and strategically, in your subsequent businesses where you have all this cash sloshing around, are you still following the same kind of discipline of turning things profitable?

Bhavin Turakhia: Fundamentally, yes. The principles are the same. The only difference is we have the ability to take bigger bets and wait for longer gestation periods in exchange for growth. We haven’t compromised on fundamentals. I’ve always believed in the notion of focusing on value and not valuation. If you look at Flock today, more than 98% reviews are all four to five stars.

There’s not a single customer who has bad things to say. We have a Net Promoter of almost 8.7 or 9, which means every customer who’s become a user is a strong advocate and would recommend Flock to other people. When you create that kind of value, you know that monetization and profitability is not really a concern because if you’re giving and delivering, you will end up getting revenue in some form. That’s the way I would see our fundamentals.

Sramana Mitra: However, in the Flock business model, you haven’t started monetizing yet. You’re saying that you will not start monetizing until later. How much investment does that require to do something like Flock? I’m sure you’re not doing the Slack strategy of raising lots of money. Nonetheless, there is investment that you are making from the sound of it.

Bhavin Turakhia: We’ve put in $20 million to start with. We’re still utilizing that. We’re looking to commit an additional $25 million to that business. Going forward, we may choose to raise additional funds. We haven’t yet decided whether we’ll finance it ourselves or from outside. So far, we’ve invested $20 million and we’re going to commit an additional $25 million.

Sramana Mitra: With all the exits that you’ve generated, you said you funded another venture. Are you doing an angel investment thing?

Bhavin Turakhia: Zeta is not a funding. I co-founded it. I have a partner who runs it in Bangalore. Largely because of scarcity of time, we actually haven’t done any angel investing or venture fund investing at all from our current capital base. We’ve just been busy starting and running our own businesses.

Sramana Mitra: It sounds like you are more an entrepreneur. I’m just interpreting what you said. You’re really an operator.

Bhavin Turakhia: The notion of investing doesn’t excite me. I pick up a space, spend about a year investigating it, set up an initial team, build the product, and get it to a point where we’re creating value that’s loved by customers. Then I start out building out the management team under me. That process takes three to four years. At that point, I start getting more hands off. At some point, the business becomes sustainable. For the first few years, I’m fairly involved in every single element.

Sramana Mitra: You like the early stage venture-building process.

Bhavin Turakhia: Yes, it is the most exciting part.

Sramana Mitra: Terrific. I really enjoyed your story. Thank you.

This segment is part 7 in the series : Master Bootstrapper with a Billion Plus in Exits: Bhavin Turakhia, CEO of Directi and Flock
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