Talk:Karan Bajaj

This is a text copy from The Economic Times:

WhiteHat Jr, a platform that trains children to code. By selling his startup within 18 months of launch, for $300 million (Rs 2,220 crore) in cash (earning for himself a neat 40% of it), its founder Karan Bajaj has done the same for other founders in the hyper competitive startup world — set an unrealistic baseline expectation.Autobiography of a multimillionaire yogi: The

It could be argued that the business premise of WhiteHat Jr, a platform that trains children to code, beckoning parents with ads featuring tech billionaires and garages where trillion dollar companies were started, sets unrealistic expectations. Perhaps fitting then that by selling his startup within 18 months of launch, for $300 million (Rs 2,220 crore) in cash (earning for himself a neat 40% of it), its founder Karan Bajaj has done the same for other founders in the hyper competitive startup world — set an unrealistic baseline expectation. Perhaps startup founders now will be fielding calls from their own parents, asking how come Bajaj’s son has done better than them. Eighteen months is what it takes most founders to move from an angel round to Series A funding, trying to convince a battery of VCs that their model has legs. In that time, setting a scorching pace for himself and his company, Bajaj scaled an idea into Rs 95 crore in monthly revenue in July, 4,000 employees and a large number of paying customers in India and in the US and convinced someone to put down a very substantial amount of money in cash, creating wealth for himself and his early employees, and handsome returns for investors. In the week that marks 25 years of the internet in India, it also perhaps sets the pace for innovation and entrepreneurship in the next quarter century. WhiteHat Jr, which teaches coding skills to kids between ages 6 and 18 (Class I to XII), has seen tremendous traction among parents who want their children to be equipped to exploit the opportunities in a rapidly digitising world. The user base doubled every month to swell to 20,000 classes per day delivered by 6,000 teachers in India to kids in India and the US — its two markets. Edtech giant Byju’s, itself valued at more than $10 billion, announced on August 5 that it was acquiring WhiteHat Jr in an all-cash deal. The equity owned by the investors were bought outright, while Bajaj and employees who own equity get partial payment for their equity now and the rest is structured as performancelinked earn-outs over three years. Bajaj says the acquisition process was straightforward. It started with a Whatsapp message from Byju Raveendran, founder of Byju’s. Negotiations must have taken may be six hours cumulatively, he says. The six weeks it took to close the deal saw annual revenue run rate of WhiteHat Jr jump from $85 million to $150 million. The company sold at 2X of its annualised revenue run rate in July — perhaps low for a rapidly growing, cash flow positive venture. “I could have argued that 5X or 10X is better value, but then the company has not lived through ups and downs. Scaling up has been in less than a year. We haven’t lived through even one whole business cycle. Anything higher would have been a high risk for the acquirer,” Bajaj says. Bajaj believes the startup can scale up ever more under the Byju’s umbrella. “I will continue to run it and will try to tap maximum synergies. Byju’s has plans to go public and I would like to support that and learn how to take a company public.” But an all-cash deal means his success is not predicated on Byju’s. If White Hat Jr’s journey has been unusual, so has been the unfinished journey of its maverick founder, whose life has seen a long corporate career at marquee companies, punctuated by travel breaks and writing sabbaticals, three books, one of which might become a movie, and a stint at an ashram in the Himalayas, teaching and practicing yoga. When Bajaj’s acquaintances first heard he was throwing up his lucrative job as CEO of Discovery India to plunge into a startup, there was consternation. He was 39 years old by then, not a carefree 21, and the father of two young children. Bajaj, though, has shown time and again that he has little use for conventional wisdom. It is a trait he credits to his solitary days in Manila as a 22-year-old brand manager with Procter & Gamble, his first job after an MBA from IIM-Bangalore. “I didn’t know the local language, there was no Indian crowd there or anybody from my past, no need to think ‘log kya kahenge’. I was not caught up in the echo chamber of opinions and that got me to be authentic to myself,” he says. From Manila, he moved to Singapore and then the US with P&G. But when he began to feel that what he was doing was not “authentic”, he quit. He spent the next six months backpacking overseas, travelling in Mangolia, Central Asia and South America, returning to the US in October 2008, smack in the middle of a recession. The life of an itinerant is one he has evidently embraced. His nearly two-decade corporate career is punctuated with such breaks in between jobs where he typically spent 2–3 years. His longest consecutive stint was his six years with P&G. Yet, his argument about his life choice is forceful. As someone consumed by whatever he does, he says he gives himself \ to his job 24/7. “What I work on, I make it my life. I don’t have concepts like work-life balance,” he says. “I don’t know that a CEO who makes his job his life for 2–3 years is somehow lower than a CEO who is speaking at conferences and building his own brand. I don’t build my brand, I just do my work well and deeply.” In his time at work, he says, he is like a yogi. Bajaj does not use the word yogi lightly. While he was always drawn to eastern spirituality, the loss of his mother to cancer in 2012 nudged him to spend close to a year in India, leading an austere life at the Sivananda Ashram, first in Madurai and then in Uttara Kashi, doing yoga and meditation, in a quest for answers to existential questions. He says his time there helped him realise he was good at running organisations so he thought he could keep doing that, with “purity and selflessness.” The yoga and meditation, which he practises daily, are also what sustains his energy over long working days, typically stretching from 10 am to midnight. (He jokes that this might be unfortunate for those working with him.) When he returned to the US and a job at his old organisation, Kraft, the contrast felt too jarring. He quit in less than two years to focus on his writing and publishing his third novel. Then, when he was offered the position as CEO of Discovery India, he felt it was a job with purpose, and packed his bags. It might not be everyone’s cup of tea but Bajaj says his purpose in life is “to go the peak of excellence in a field and then never look at that field again, and go do something else.” Thus, he does not intend to write another novel or don the hats of a startup founder again. Nor does he intend to invest in startups, though his multimillionaire status has meant pitches for angel funding are landing in his inbox. His reasoning is simple: while he is risk-heavy when it comes to life, he is conservative in his investments. And startups are impossibly hard, and risky, he says. “Startups are very hard to pull together. Everything has to work — the economics, hiring, management, culture, tech. Founder has to see both tech and business together, besides coping with competition nipping on the heels. Startup is one investment that will not suit me,” he says. A “radical minimalist” who does not own a house, car or any major fixed asset and tries to cut down on material possessions every year, he says he has little use for the millions of dollars he has recently come into. Instead, he says he intends to devise a proper “wealth dispensing plan” at some point to give back to society. Expanding the Mind Bajaj saw an opportunity in offering coding lessons to kids after reading Coding as a Playground by Marina Umaschi Bers, a professor at Tufts University. “Kids who code early have a profound psychological shift — they see very early that you can combine two things and make something out of that. It is a mental explosion that happens That really spoke to me ” that happens. That really spoke to me. Once he had done his research, he took no time to decide to quit Discovery in October 2018 and start WhiteHat Jr even while serving his long notice period. He also raised funding in this period, working on weekends on his startup before plunging full time into it in February 2019. Between October 2018 and May 2019, White-Hat had less than 10 employees but kids were coming to learn coding — numbers were doubling every month. The company was closely watching the Net Promoter Score (NPS). NPS measures the willingness of customers to recommend a company’s product or service to others. .......