It was a cloudy, rainy Wednesday in the middle of June when I met Rahul Yadav, the headline-hitting co-founder of Housing.com. (At that time, he was also its CEO, but, since then, he has been asked to vacate his position.) Armed with a long list of questions, I reached his office in Powai, on the outskirts of Mumbai. Yadav’s tumultuous relationship with his investors, his sparring with industry peers and his social media irreverence have painted an interesting picture of him. At the same time, his genius at the computer is also well-documented.
The fourth floor office of Housing.com was a hive of activity: Presentations, huddles... all the signs of a high-energy startup. It was nearly lunch hour and an appetising aroma of food wafted through the large, cubicled office floor. The spartan corner cabin, which I was told belonged to Yadav, bore no sign of its occupant—no flashy nameplate or anything personal there, not even a water bottle. What, however, dominated the room was a large table with a glass top, which had clearly been scribbled upon often.
Yadav, 26, was 30 minutes late, and apologised profusely. Dressed in a dark blue shirt and jeans, with a freshly scrubbed face and hair in place, he could be mistaken for a student. A few minutes into the conversation, though, I realise his manner was more professorial. Yadav is softspoken, takes long pauses while talking (sometimes letting sentences hang midway) and emphasises everything he says by writing it on the tabletop, drawing arrows, connecting circles and highlighting specific points.
One point is reiterated emphatically. He has no regrets though his tussles with investors feed the rumour mills—just a week after our meeting there were unconfirmed reports about another Yadav resignation, which were denied by Housing.com. But a few days later, the board announced his dismissal, not just from his position as CEO but also as a part of Housing.com.
In retrospect, then, the afternoon we met was just the calm before the storm.
I begin by asking him to elaborate on his ongoing issues with investors. Did he not feel it was creating a sense of instability around the startup’s leadership?
We had to buy one company for about Rs 6-7 crore. I said we should move fast on it, but other people… the investors… were slow. It [the deal] went into a cold storage and we had to buy that company for Rs 17 crore. Baithe bithaye [just like that] we incurred a loss of Rs 10 crore. But if I am to throw a party or a function for Rs 60 lakh, and if I take the budget up to Rs 90 lakh or Rs 1 crore, they have an issue with that.
We also had to create our sales team. This, however, didn’t get as much attention for some reasons. In the last two years, the emphasis has been on technology, product and marketing. Today, I am open to acquiring a company but that would cost us something like $200 million (Rs 1,200 crore) just to get access to its sales team. I don’t need the brand name or sales platform. They [the investors] are yet to make up their mind. If you don’t pay attention, you keep losing small chunks of capital, Rs 10 crore here or Rs 20 crore there. My focus is always on saving money and investing in the right place. I acquired IREF [Indian Real Estate Forum] for Rs 8 crore… I negotiated very hard. The amount is payable over three years. Who can strike such deals? My focus has been to make the company efficient at the macro level. People are so busy making efficiency at small stages that they end up making zero. I don’t want that. My problem is efficiency… Why pay Rs 17 crore when you could have paid Rs 7 crore?
But investors are seasoned and smart. Don’t they see all this?
They are smart but there are people in Housing.com who are smarter. Secondly, I would say they don’t have time. I give 15 hours a day for 365 days a year to Housing.com; they give 30 minutes every month. So, how can there be any match?
But 85 percent stake is with the investors. Did Yadav have any regrets over giving away a majority stake?
This was our first time…. I am learning things, it’s a good learning. I take it as a game. We are playing a game. In a game, sometimes the ball will be a bouncer—it’s fun. I enjoy every part of it.
Did he not know about investors’ ways? He seems to have rushed in wearing blinkers.
All the fund-raising was handled by me. No one tells you anything openly, but all these issues/squabbles are part-and-parcel of the startup business. One of the key founders of a large startup had to hire a UK-based executive for its company. The board refused. In the US, let’s take the example of Jeff Bezos. He holds a 25 to 30 percent stake, he has control in the company. He can take decisions: [His mantra is] I will not make profits, I will serve the people. Here, investors don’t even allow you to hire an executive.
Does he think this is a function of giving away stakes?Fighting with the board seems to be his solution.
Yes, it is a function of the stake. Here, promoters have a 3 to 5 percent stake. The game [of squabbles] has just started and you will see more. A company works on the vision of a person. Today Google can decide that it will pull out of China because the founders believe in that strategy. I don’t have an issue with democracy, but if that’s what you want, you should be ready to spend time with the company. Aapko pata kuch hai nahi [you don’t know anything] and you come and dictate.
I fight with a lot of people. See, it’s like this: You are running towards a goal, many people will come in your way. The focus is to take the ball to the net, it’s not about who is coming in your way. Who is saying what, who should be told what… I don’t care. I want to take the ball to the net. In all this, the premise for Housing.com seems to be getting blurred. His vision hardly gets articulated. Yadav, however, is very clear.
My goal is to solve the problems of housing across the globe, and I believe, in this process, you can keep growing and also keep people happy. The investors can be happy, employees can be happy, users can be happy. If the company grows, investors can rake in better returns, employees can be paid well. To the user also, you can give a great design, a better experience. At the same time, you can add value to what brokers are doing right now. I think I can keep all sorts of people happy while building Housing.com and solving the housing issue for people at large. The endgame is typically either an IPO or the tag of being the largest portal.
Those are derived outcomes; they will happen if the housing issue is sorted. This industry has more money than any other. I want it to be the Google of house-searching. If you are looking for a house, you should think of Housing.com. His clarity may be the reason why he was recalled despite the open ‘rebellion’ (see ‘Being Rahul Yadav’ on pg 78). And Yadav is unabashed about that.
From finding a name of the company to bringing together the 10 co-founders, I worked all the way till here. The name was chosen by me. No investors or experts or team members suggested the name. But his fight is for independent decision-making.
Today I did a Rs 5 crore transaction, which was again lying in cold storage. I went directly to the bank for a loan without the board’s approval. I mailed them telling them to decide what they want to do. Thoda halla machega [there will be some hue and cry]. I don’t want to give Rs 15 crore, I have said for the nth time. This company is in the society software space. Is the deal such a good fit that it merits a fight with his board?
I see 100 times higher potential for it with Housing.com. There are 20,000 new buildings coming up. Before anyone else installs their security system, we can do it in the buildings we will have access to through this acquisition. If we do that, we also get control over those 20,000 buildings. The software will help us ascertain which flat is vacant. I think it’s a no-brainer that it’s a good acquisition target, which will be highly accretive. But the decision to acquire was lying in a cold storage somewhere. The reason is they don’t have time. Thirty minutes in a month won’t help. I can’t sit quiet. Tomorrow may be a long day for him due to this acquisition.
It will be considered unethical, breach of agreement.How will he handle it?
Do what you want to do; I have done what I could. At the end of the day they know it’s a right call. Why would they put up with his stubbornness, I have to ask.
Who else can take such calls? I work for the best of the company. The problem is this, the solution is also this. This is the way I operate. And if they do end up bringing in a new CEO…
That’s his role to play. You need to tell me my game and I will play it. If the truck [read Housing.com] goes back due to the new CEO, I cannot do anything about it but if my box [the new role] is in that truck, I will ensure the box goes ahead. But he won’t have any decision-making powers.
That’s okay. I give my best to any role that’s given to me. Right now, I have been given the role to run the company. I am doing that in the best way possible for me. He voluntarily told his investors to bring a new CEO, saying that he would play a smaller role. (He spoke too soon, clearly.)
See, I take at least 10 important decisions a day as a CEO. If I am not a CEO, I will have a different role. In whatever I do, I have to be very productive, very efficient. If they ask me to make a product, I will make a good button for the website. Whatever work is given to me, I will do it to the tee. If that involves cleaning and mopping, I will mop till the surface shines. If I need to make a product, I will make such a strong product that its conversions cannot be matched by anyone else. If they give me sales, I will bring in staggering revenues that no one can match. I need to know the problem. I will bring the solution.
Is there an internal conflict on what his role should be?What kind of an organisation structure is in place, I check with him.
They want me to be like any regular company where, if a decision needs to be taken, they will take it next quarter. But I want to take it tomorrow. Processes should be put in place to facilitate growth.
I am saying give me any role and I will do my best in it. I have no great affection for anything.
Is there a plan B?
I have no inclination of starting another company; I don’t know what this word is, ‘entrepreneurship.’ The bigger the role, the more responsibilities you have. And one needs to be diplomatic too. Imagine the PM of a country; he weighs every word he says. On the other hand, imagine a product head, you create a product. It’s about choices in life.
There is a board. I take most decisions here. The next big plan for Housing.com?
In real estate, there aren’t enough good, qualified brokers. In India, you need one crore brokers, but there aren’t even 20,000 good brokers. I need to train 10 to 20 lakh people.
We are category leaders and the onus is on us to train them. We are initiating discussions to create skilled real estate agents. Classes and courses will be there and that too at a massive scale. We will create professionals. It could be in partnership with institutes or just classes. Each person will make a few lakh rupees every month, I guarantee that.
We want to create electronic locks that open with a tap [of the finger]. These locks will automatically give a potential occupant the details of a room or a kitchen when they enter it. This is where the future of housing is heading. We are at an internal discussion stage right now.
We will get into housing. The website app was created by us, now we are creating brokers. I will put several million dollars into the thinking of one building—how the lift should be, how the doors should be. After that we will go to builders. The designs are so good that they will make the developer and customers crazy.
Our design won’t change the cost. We will give our brand too. Breaking even can’t be far from his mind.
You need to make compartments for that. If it is our standalone classifieds business, then yes. In a year’s time, it can break even. For things like the society security management, they need investments first. On May 14, he gave his shares away to his employees. Has this plan been cleared by the board?
Yes, they have been cleared verbally. Some technicalities are left. But also challenged others (Deepinder Goyal of Zomato, for instance) to share their capital with their employees. Was that necessary?
You know startups grow multiple times in a year’s time. The employees decide this but they don’t get proportionate returns. They get hikes. If today, a company is Rs 100 crore and employees make it go up to Rs 500 crore, this increase is the employees’ doing.
It’s a variable that is bigger than the company itself. I think employees should get a percentage of the growth. In a hyper growth industry, why not increase the chances [of scaling up] by involving everyone? But cornering them publicly?
It’s for fun also. Just because I am a CEO, can’t I enjoy? I won’t give up my fun part. Work hard but have fun too. Don’t you make fun of friends and pull their legs and laugh heartily? I can’t go home with a boring face. I am always like that. People are now noticing me because Housing.com has become big.
His Facebook post about Infosys chief Vishal Sikka, telling him that he wanted to sleep in an airport lounge, was certainly noticed.
People misread me and judge me. My excitement for Vishal Sikka was exactly on the same lines as someone else’s had they met Katrina Kaif. I met him, I was happy. People took it to a different tangent. He is a celebrity to me. Now, I think and think again if anything I say can be misinterpreted.
But too little, too late, perhaps. And, really, nothing has changed. Yadav continues to speak his mind, even after his exit from the company he co-founded. His response to his dismissal was typical Yadav, invoking Robert Downey Jr’s Tony Stark in a Facebook post. All of this begs the question: Is Yadav, who is just 26, refreshingly open or foolhardy or unnecessarily in-your-face? The jury is still out. And so is he. At least, for now.