Divyank Turakhia Of Media.net Says Entrepreneurs Must Fail Fast And Fail Often To Succeed

This article is part of a series by Inc42 that will bring to the fore the voices of key stakeholders to help you cut through the noise and decode the Indian Startup Ecosystem. As part of this effort, Inc42 is also hosting The Ecosystem Summit — an invite-only summit curated to bring together an unparalleled group of CEOs, founders, investors, and industry experts — on November 16.

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Divyank Turakhia is one of the youngest billionaires in a country that has a total of 104  billionaires. India is in the third position on the list of countries with the most billionaires.

But Turakhia’s rags to riches story — the young prodigy wiz genius to the successful entrepreneur he is today — is not just a story of amassing that billions of dollars  but more about the tectonic entrepreneurial growth which was catalysed early on in the lives of Divyank Turakhia and his brother and business partner Bhavin Turakhia when they started on this journey while they were still under 20 years of age.

Turakhia started his first business when he was 14 years old, and co-founded what is now the Directi Group when he was 18. He famously made his first million when he was 18.

On October 17, Monday, another chapter unfolded in Turakhia’s life story. He quit Media.net — his global advertising company which he sold to a Chinese consortium (led by Beijing Miteno Communication Technology chairman Zhiyong Zhang and other unnamed institutional investors) for about $900 Mn in one of the largest ad-tech deals in history in 2016. This deal beat other historic deals in the industry like Google’s $750 Mn dollar acquisition of mobile advertising company AdMob in 2010 and Twitter’s $350 Mn dollar acquisition of MoPub, a platform for monetising digital services, in 2013.

The deal was one of the defining moments of Turakhia’s life, although he insists that the idea of having a single defining moment that gives you an all-encompassing clairvoyance is the stuff of movies and the reality is that many little and big moments and decisions generally lead to that.

Inc42 is excited to have Turakhia join us for an exclusive fireside chat at The Ecosystem Summit to be held on November 16. In a pre-cursor to that, we caught up with Turakhia for a quick chat a day before he left Media.net, where he shared his future plans with us. Our conversation panned from when he made his first $100 Mn to what goes into building a successful businesses and the art of decision making. He also shared with us his views on entrepreneurship, the role people and organisations play in the journey of an entrepreneur, and the Indian startup ecosystem.

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The startup industry is a lucrative and yet cruel industry. Entrepreneurship gives you the chance of chasing your ideas and building the kind of company you want to build, but it is also a hard-hitting reality that 90% of Indian startups fail. It’s a dream where one could wake up to a bountiful world or a barren desert.

But the important point is to keep trying, according to Turakhia, a resident of the bountiful world.

The serial entrepreneur is a car geek who owns some of the most luxurious car,  you name it and he has it, be it a Ferrari or a Rolls Royce.

“As you run the business, you have to think in terms of running it perpetually and, along the way, certain options may come which may or may not make sense, but you evaluate them as they come and focus on running the business,” he says.

Turakhia has a set of fundamental business guidelines that he developed over a long period of time based on his learnings from various experiences and from voracious reading of books.

“I have been reading books since I was five-six years old and I still read about 800-1,000 hours a year,” Turakhia says.

One of these learnings is that there are no shortcuts to success and that most startups, typically, take somewhere between 4-10 years to be successful. He also learnt that entrepreneurs must fail fast, and often, to realise what’s the way ahead, and to be successful ultimately.

“I have made several mistakes and I also learned a lot from other people’s mistakes so that I don’t repeat them. When I was really young — and this is the first mistake I recognised — I had to fire someone and I couldn’t bring myself to do it. It took me a year to fire him, but the realisation I had was that I should have done it sooner because I did disservice to the fired employee by keeping him in a position where his true potential and calling could not have been achieved,” he says.

Over time, Turakhia’s goal has been to rectify and build on those mistakes. If one is caught off guard, then he/she should make many quick mistakes — as many as possible — and use the learnings to help them move in the right direction, he says.

Moving on to the Indian startup ecosystem, we asked him what’s next for Indian startups and whether can we compete with China.

“In the next 5-10 years, we can’t be No. one, but we can be a very significant player. The reason why we can’t be No. 1 has got nothing to do with the local startup ecosystem, it’s got more to do with macroeconomics,” he explains.

The logic is simple — we are among the top 10 countries in terms of our economy size, but India’s position in terms of GDP per capita of countries is 126 and, therefore, consumers have only so much money to spend.

“Indian startups can think globally and, why not, because if the US and Chinese companies are coming to India, why can’t we go over there? The market sizes in these countries, especially in China, is much more and their economy size is way larger than our economy,” he adds.

“We can build from India, but don’t necessarily have to focus only here.”

At this point, the next logical question was to ask Turakhia what goes on in his head when he figuring out where to invest.

To put it more sophisticatedly — what’s his investment thesis?

“I keep trying to find opportunities where the perceived risk is higher than what it actually is and figure out opportunities where the temporary perceived risk is much higher than the underlying actuals and the opportunities,” he says.

“I love distress deals,” he adds. This is not something many would sat, but Turakhia feels he is really good at them. He cites his successful and extensive experience in creating operational efficiencies and his deep understanding of underlying risks as the reasons why he is good at such deals.

Turakhia’s Success Is A Family Affair

Behind every successful company, sports team or person there are a whole bunch people that work behind the scenes to get the result. Divyank Turakhia’s success story is a testimony to that fact.

“Everyone has different support systems, we would not have been here if it were not for me at I parents. Even though we had nothing (our family) they sacrificed a lot so that we got whatever we needed. When we were young and my dad used to spend 100% of his money on buying books, we did. I remember he used to read us stories which overall conveyed a message that you  can be whatever you want to be,” Turakhia said

Turakhia says it was absolutely amazing to have his brother as a co-founder. In 2005, when I started Skenzo, I could let my brother run the already existing business which had $10 Mn in revenues at the time without even thinking twice and because of that I was able to give my time to Skenzo which was crucial to its success.

So, how does Turakhia take all these decisions?

“Essentially you want to make decisions that are long-term. A lot of the decisions is around the right people and you have hopefully hired a lot of smart people around and you include them in your decision-making process. Once a decision is taken, it lasts only for 90 days according to me because of the dynamic nature of the variables and you shouldn’t mind coming back to it and rechecking it,” said Turakhia.

A New Chapter

During our conversation, Turakhia goes down memory lane and remembers some his milestones — from getting his first $100 Mn when he was 23-24 years old and $300 Mn when he was 25 to crossing a billion dollars at the age of 34.

October 15 was yet another milestone in Turakhia’s life. In an email sent to all the 1300+ Media.net employees, Turakhia informed them of his decision to step down as CEO of the company.

“We’ve had a lot of fun, we failed a lot, but we never gave up! We kept learning from each experience and called each failure an experiment. We failed each day until the one day that we learned that we were successful. More importantly, we had a lot of fun no matter what. We should never forget that,” wrote Turakhia, towards the end of the email, which was accessed by Inc42.

So, what’s next for the serial entrepreneur?

Turakhia will continue to be involved with Media.net until the end of the year and will be associated with the company in the role of a strategic advisor after that.

Apart from this, he will be “forcing” himself to take a break to play catch-up on the “rest of his life” — a break that could last for at least one-two years.

Although a break does not mean no work for the self-made billionaire.

“We have one life (at least that we know of), I am hoping to experience more and see if there are other things that I could be equally passionate about. If you know me, then you know that I can’t have any work, and hence will be taking on the role of running my various global investment portfolios — something that I am excited about but have not been able to give the required time to thus far. Also, in time, I hope that I can give back to this world that has given so much to me,” Turakhia says.

Earlier, in his conversation with Inc42, Turakhia had reflected on how people want want things to happen at the speed of thought and it is completely okay to be impatient because only then does one try and do more things to achieve that. But, at the same time, it is important to also realise that this should not come in the way of your goals because some things take time to come to fruition.

Turakhia is an integral part of the Indian ecosystem story, a part of the global ecosystem, in fact, and it’ll be interesting to see what new role or role he transitions into going forward. We’re hoping he will share more about his future plans with us during our fireside chat at The Ecosystem Summit.

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Pasted below if the entire email accessed by Inc42 that Turakhia sent to his staff, informing them about his decision to step down as CEO of Media.net. Read on to learn more about Turakhia’s entrepreneurial journey and his views on the future of the adtech industry.

Friends and colleagues:

Today, I find myself overwhelmed with emotion. I am — excited, grateful, euphoric, inspired, proud, humbled, tearful, and other things that I do not know how to put into words — all at the same time!

My duties as CEO of Media.net will be assumed by my friend, trusted advisor, and your long-time CTO, Vaibhav Arya (being officially announced in a few hours). This transition has been in the works for years. Arya and I have worked closely together since 2008. First, when he joined us to be the CTO for Skenzo, and then at Media.net where Arya has been our CTO from day zero. Arya equally represents continuity, AND the necessary tech capabilities and world-class leadership required to continue the next phase of growth.

Further, the ENTIRE core team at Media.net across all our offices worldwide have already committed to continuing with Arya, and are going to be dedicated to expanding the overall business.

I am excited to see where all of you take Media.net from here! I will be cheering you on!

Online Advertising is a massive industry. At the same time, it is very confusing and fragmented with hundreds, if not thousands, of vendors. There is an incredible amount of inefficiency in the industry. Our goal should continue to be to help simplify it for all the stakeholders and to help optimize. Publishers need to make more and more money, with lesser ads. You can only do this by making the ads much better — that way the users like them because they are relevant & better, the advertiser prefers the better targeted and engaged users and are willing to pay premium rates for them, and publishers like the additional revenue.

Our industry has helped the world become a better place. The Internet and the world would be very different without online advertising in its current form. Imagine if only the rich could afford to search on a search engine, or consume high-quality content, or stay connected with all their friends no matter where they are, or a million other things that everyone does online without having to pay for each use. All of us simply take this for granted. Empowering publishers and app owners with the monetization tools that allow users to consume content and navigate the universe of knowledge for free – without having to pay “tolls” makes the user experience far better and easier. Creating revenue for publishers and app owners by efficiently connecting advertisers and relevant users, significantly improves the investments that these publishers can make. Hence, what you do makes a BIG difference in the world.

That said, if you don’t do it, someone else will — as it also is a $300 billion per year industry with double digit growth 🙂

It has been about eight years since I founded Media.net as a bootstrapped startup. As you know, about two years ago we sold it to Shuzhi (formerly known as Miteno) in a transaction valued at $900 million, one of the largest ad tech exits ever. We have continued to grow consistently since the sale. We are one of the top 5 largest online advertising businesses worldwide by market cap. We have recently crossed 1300 employees worldwide vs 800 in 2016. Our last financial quarter (Q3 2018) has been our highest revenue quarter ever, and we are projecting this financial year to be our highest revenue year ever i.e. another record-setting double-digit growth year.

Yes, you have seen great success and have had an incredible journey thus far. But, your historic performance should not mean that you slow down in any way. In our industry, only the most innovative companies will thrive. The rest will disappear. To stay relevant, you must continue to build revolutionary products and not get comfortable. We are always in version 1.0 for everything. Everything that we see around — is, can, and will be — a lot more efficient in another 5-10-20-50-100 years. Hence, never believe everything is already done — ’cause nothing is ever done.

One of our biggest market advantages has been that good software isn’t written in months. Building a large scalable platform such as ours takes years of investment and hundreds of employees. Many companies will have the money to invest and can recruit great talent, but they will still need to spend years to create what YOU have today. That is our BIGGEST moat! Keep building on it and do not let it shrink in size.

When there is volatility and turmoil (and there always will be time and time again), DON’T get greedy and try to manage for a specific financial quarter or year. Our margins have always been normalized, even where we could have dialed this up. Normalized and transparent margins make it extremely hard for any competitor to cut you on price. Always run the business for the long term.

Another Media.net differentiator is the scale and diversity of our ad tech portfolio and products: search, display, mobile, native, local, products and video. Keep adding to this carefully. Focus is important.

As I start to think about the future, I am very happy with everything that I have done and I believe that there is never any use for regrets. I learn from missed opportunities where a lot of value could have been unlocked. Everyone has opportunities that they considered and, perhaps, did not pursue, and then saw others implement successfully. If I had not FOCUSED on what I was doing, then I would have never become successful. Each time you are thinking about adding something, you need to calculate the opportunity cost.

Lastly, we really need to start leveraging the deep relationships and know-how that we have in China. China continues to be the #2 largest online advertising market and we have all the components required for making China a significant source of revenue & partnerships.

This letter is getting to be longer than I expected 🙂

Many of you have been my friends, my family, my home for a material part of my working life — many of you at Media.net, in some cases starting even prior to that at Skenzo, and, in some instances, starting even prior to that at Directi. You have been with me through my biggest triumphs and also through my most challenging periods. Thank you for this amazing adventure that we have all shared and thank you for the incredible support and confidence that you have shown in me through all these years. I am forever grateful.

We have had a LOT of FUN! We failed a LOT! But we never gave up! We kept learning from each experience and called each failure an experiment. We failed each day until the one day that we learned that we were successful. More importantly, we had a LOT of fun no matter what. We should never forget that.

Evolution has made humans the ultimate learning machines. All we need is a healthy dash of curiosity and the realization that each one of us can do absolutely anything if we are willing to put in the effort and are willing to constantly learn and evolve. There are no shortcuts. Everyone stumbles and falls. Enjoy the lessons from the interim failures, and you will always come out a winner.

Now, as for me, until the end of this year I am still fully hands-on with Media.net — as much as always, to help with the continued transition and, subsequently, I will be available for the long-term to Arya and the Shuzhi team in my capacity as their strategic advisor. If any of you need me for just about anything, I will always be just a phone call away and always happy to help.

It has been more than two decades (I was 14) since I started working out of a shared bedroom in my parent’s 800 sq ft apartment on the outskirts of Juhu in Mumbai, India. I have spent all my life building businesses. Starting Jan 1, 2019, I will be forcing myself to take a break to play catch-up on the rest of my life (hopefully the break lasts for at least 1-2 years). We have one life (at least that we know of), I am hoping to experience more and see if there are other things that I could be equally passionate about. If you know me, then you know that I cannot have no work, and hence will be taking on the role of running my various global investment portfolios — something that I am excited about but have not been able to give the required time to thus far. Also, in time, I hope that I can give back to this world that has given so much to me.

I am always happy, but also always hungry. My passion for always wanting to do more is lifelong. So yes, there will always be more to come 🙂 …  Stay tuned! And I look forward to celebrating our continued successes!

(With inputs by Pooja Sareen )