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Sunday, March 1, 2020

The long, tough road to exiting your own startup - Livemint

Agrawal then joined another red-hot startup, Housing.com, a real estate search portal based in Mumbai, a year before it scored a $90-million funding round from Japanese conglomerate SoftBank in late 2014. As a core team member of the startup, which was also founded by IIT Bombay alumni, he built an online community for real estate.

He left Housing in 2016, shortly before it went into a downward spiral with its co-founder Rahul Yadav having a public spat with his investors.

Agrawal went on a trip to Vietnam to clear his mind. That’s when he came up with the idea of his own startup, Indiez.

He was at a Hanoi backpackers’ hostel one evening where a bunch of digital nomads were discussing dealing with clients and getting paid.

Agrawal had seen closely the hassles from the other end, where startups scaling up or enterprises digitizing their operations struggled to find tech talent in time. Here was a two-sided problem that needed quick fixing.

PRACTICAL SOLUTION

He decided to create a platform that would improve upon the existing remote working portals. His solution was to create a “managed freelance model", where Indiez would take up a client’s project, help find the right talent for it, including a project manager, and ensure it was delivered on time.

Indiez negotiated the rates for projects, so freelancers didn’t have to do it individually or chase payments from clients. “I thought we could absorb all the pain of the freelancers as well as businesses," says Agrawal.

Indiez bootstrapped its way to product-market fit with clients like Domino’s, MakeMyTrip and McKinsey, before raising seed investment of $500,000 in 2017 to scale up. Haresh Chawla, an early investor in Housing, led the round.

Scaling up was tough. Tech talent had to be found and vetted. Then there was the usual sales cycle with enterprises that needed to outsource projects.

Increasingly, these clients were abroad, as medium-sized enterprises in the US and Europe found the Indiez cost structure favourable to that of a platform like Gigster that caters to large enterprises. Based in India with headquarters in the US’ Bay Area, Indiez was well-placed to tap an Asian talent pool for customers across the world.

But Agrawal found himself torn between client meetings, networking for talent, monitoring projects, and building the tech stack.

In 2018, his three co-founders decided to move on to pursuits that paid better. It was also the year he got married without a steady paycheck: the perfect storm.

Agrawal soon got into a funk. He would have bouts of depression wondering if he was in the wrong business. Finally, prompted by his wife, Bhumika, he decided to take a Vipassana meditation programme in Kandy, Sri Lanka, which gave him time to introspect.

He returned convinced that he wanted to continue working on the remote work problem. He got rid of bad projects, and took up consultancy work on the side to get Indiez out of debt. “I was not drawing a salary because whatever came in went into the company. It was difficult to be married and not earn a salary but somehow we managed," recalls Agrawal.

AMERICAN JUGAAD

Then his wife enrolled in Georgetown University for a law degree, and Agrawal decided to move with her to Washington DC. To make ends meet there, he became an entrepreneur-in-residence at 1776, a startup incubator. In exchange for mentoring startups, he got office space and access to the 1776 network. He took up a similar mentoring role with Bay Area accelerator Alchemist.

The jugaad in America kept him and Indiez going in 2019 but Agrawal was beset with existential questions.

The platform he had built was turning into a services business, taking up one set of projects after another, with little to distinguish them.

Agrawal wanted to return to his first love, which was building software products rather than a services business. He was immersed deeply enough in the domain to know the pain points of remote working. Just like Zoom has made video conferencing smoother, collaborating remotely on projects needed tools that could do more than what Slack or Flowdock offered.

He took heart from the stories of other startups: San Francisco-based Tandem graduated from Y Combinator late last year with $7.5 million in seed investment to develop communication software for remote teams. Another Bay Area startup Deel is sorting out payments and compliance for international contractors.

A FRESH START

Things became clear six months ago when he became a digital nomad, working out of Arequipa in Peru during a month-long vacation with his wife.

The quietude of Arequipa and visits to historical sites like Machu Picchu offered him a fresh perspective. “It gave me the space to think through things," says Agrawal.

By the time he returned to Washington, his mind was made up. He decided to hand over the running of Indiez to senior team members, and focus on products to tackle unsolved problems in the remote work space.

Then serendipity took a hand, and he met Raghu Bharat, founder and chief executive of GoScale, which provides software development services to enterprises. Bharat was building a parallel freelancer platform, CrewScale, and wanted Agrawal’s inputs. CrewScale was at an early stage of building out the kind of platform that Indiez had already created with integrations to tools like Slack, Trello and GitHub to ease workflows.

Agrawal shared his frustrations over growing a services business while dreaming of SaaS products. This quickly led to a win-win proposition of GoScale acquiring Indiez, which has now been finalized.

It was hard for Agrawal to let go of a startup he’d built for four years, and it was a middling exit for Indiez in the $2-5 million range. But it gives the founder the space to move on. The Indiez team will be absorbed into GoScale. The entrepreneur lives to fight another day. His startup idea came to him on a trip to Vietnam and the decision to exit on a trip to Peru. Perhaps another destination will beckon soon.

Sumit Chakraberty is a consulting editor with Mint. Write to him at chakraberty@gmail.com.

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The long, tough road to exiting your own startup - Livemint
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