? Welcome to the XL Podcast
The XL Podcast celebrates extraordinary live and shares the stories of people who have led through choosing their own pathways.
My next guest, Singapore based Rachit Dayal, started a business out of the gate of University with minimal funding. 9 years later, her grows the same company to $10m in sales before being acquired by Japanese media conglomerate Dentsu.
Startup media loves narratives like this, but behind the headlines is a less glamorous story of surviving rejection and keeping the business alive. 2 years on from his Exit, Rachit Dayal, founder of Happy Marketer talks to me on The XL Podcast about his journey, the challenges of scaling a non-investible business and his next move.
As you’ll learn in this conversation, some successful entrepreneurs aren’t driven by Moonshots or game changing solutions, but by the need to just do something different. As Rachit puts it, “I chose entrepreneurship not because I had a brilliant idea, or money lying around or a great vision for where it would go, but I felt that it would allow me to explore”. He mentions Robert Frost’s poem “The Road Not Taken”, a beautiful homage to the adventure that is entrepreneurship. I’ve copied in the last verse below:
The Road Not Taken by Robert Frost
“I shall be telling this with a sigh
Somewhere ages and ages hence:
Two roads diverged in a wood, and I—
I took the one less traveled by,
And that has made all the difference.”
The Power of Showing Up
Behind every success is a lot of “Showing Up”.
Before the Exit, Happy Marketer didn’t run out of some cool buzzing coworking space or startup accelerator but a low-key shophouse on the fringes of town in Singapore. We’ll get to the shophouse in a minute, but first, the success…
The Business Exit from Marketing Interactive 2019
Like most startup success headlines we only see a snapshot of the whole story. No mention of Maggi Noodles here. We also don’t get to hear about the day to day drivers that kept these startups going in the early days, when there were few clients and little comfort that they could meet payroll end of the month.
It’s in these early days an entrepreneur’s motivation keeps the show on the road. Being the tallest memeber of the team meant Rachit played a vital role in keeping the business open. Other team members weren’t able to reach the shutters on the old shop front, so if he didn’t show up to work, nobody could access the office. Often, we don’t see the meaning in the events that define our business careers until we reflect on them later. In the end, it’s not about winning awards or exiting companies, but showing up.
“Showing Up” is underrated.
Survivor bias blinds us in the startup world – we lionize the billion dollar SaaS startups and the fat pre-Series A funding rounds sold on the promise of changing the world. In the midst of all this media hype, there are entrepreneurs like Rachit who aren’t driven by a game-changing “why” but a desire to “Show Up” and make today a better day. Sure, he’s won awards and achieved a business exit, but if that was the main motivation for the journey, he’d have chosen easier and more comfortable pathways to success.
Showing Up means committing to a long, sometimes unpopular, and often arduous path to growth. It means eating eggs, Maggi Noodles and Kailan, foregoing vacations and nights out for the first 2 years to ensure the business had enough cashflow to keep the lights on.
I thought if I could live off $900 a month for 10 years I’d figure it out. Sure, I might lose some friends along the way.
Seven years later, he grew that business to $10m+ in sales before selling it to the Japanese media conglomerate Dentsu. All the while, they had been growing the business in the background, “Showing Up” – building relationships with corporates and key partners like Google. Until the day came when they were too good to ignore. They landed large client accounts, awards and eventually caught the eye of a potential acquirer.
It’s the long hard road to overnight success.
Happy Marketer - Singapore's Most Awarded Agency
Choosing the path of an extraordinary life comes at a high price for many of my guests on the XL Podcast. You’re more likely to succeed if you can say no to what does not make you happy than embrace the big “yes” opportunities. This is the road less taken – the path of most resistance.
Yes, there are economic hardships, like the noodles, but there are also emotional ones. It is relatively easy for people to start their own businesses these days. Keeping going is the key to success. In order to stay on track, you have to manage expectations and other people.
When it comes to success in startups across Asia, I found that the biggest obstacle isn’t a lack of ambition or resourcefulness (you will find both in abundance). It is saying “no” to the good intentions of extended families, peers, and society in general that want to help. It is often the “best for you” that is shaped by their own experiences – a world that values job security and status over individual exploration and discovery. Why risk it all on a startup when you can secure a high paying and comfortable job at a bank?
Going with the flow in life will constantly nudge you into comfortable outcomes. However, if you want freedom, you must be prepared to swim upstream. Rachit doesn’t interject answers to my questions or feel the need to fill in the blanks during our conversation. It is clear that he is curious and thoughtful. These are deliberate choices he makes, shaped by a bigger structure somehow determining his own personal and professional life.
Rachit Dayal – The Troublemaker
In the Happy Marketer story, Rabit relates a moment when he was reunited with his former university classmate Prantik Mazumdar. Initially, Rachit needed Prantik’s business development skills and contacts to get the job done, but he faced a major hurdle – the weight of family expectation. It took quite a bit of persuading. Though Prantik was sold on the idea of building a startup, Prantik’s parents were keen to see their son continue his successful career trajectory in the consulting and government sector.
I was a little bit in awe. I had just met [Prantik] after he came from his school in Indonesia where he was the prefect or head boy. He seemed to be the favourite of the crowd and I was a little misfit. I barely squeaked into University, made it to the flight and made it here with a hundred bucks.
I tell Rachit that this story reminds me of a similar conversation between Paul Allen and Bill Gates in the founding of Microsoft. Allen was the maverick coder who worked behind the scenes. Gates was a Harvard straight shooter with exceptional academic credentials. Allen convinces Gates to drop out of Harvard and start Microsoft with him, appealing not to the material wealth they could create, but to the idea of building something that could make a difference.
By the time he had “pitched” his partner’s family the idea of quitting his corporate career and going against the grain of expectations, Rachit already had years of experience. He had years of practise fielding questions and subtle nudges from an extended Indian family who wanted a safe career vocation for their son. Rachit’s curiosity meant, inevitably, he was going to cross a few lines and break a few boundaries.
Making different decisions is a muscle like everything else. It didn’t start off with me making bold decisions but lots of small decisions early on like not wearing the right shirt to school.
He describes his school life as not being the best looking / smartest / wealthiest kid as pivotal in creating the foundation of his desire to seek at alternative pathways for success. Here was the kid at school who would deliberately wear the wrong shirt, against school rules, simply to test the limits of what was acceptable. It’s a formative behavioral pattern that could go either way: either this trouble maker will fall into the wrong crowd and spend his life bouncing from one crisis to the next or he will somehow, like all trouble makers to paraphrase Richard Branson, end up becoming an entrepreneur.
When Rachit graduated, he deliberated over career choices but after deciding that climbing the corporate ladder wouldn’t offer him self-growth and personal Kaizen, he began to explore his own choices. A combination of a NUS (National University of Singapore) entrepreneurship program and a year spent in the US exposed him to startup cultures that confirmed his belief that, with the right idea and enough belief, he could strike out alone. What, though, wasn’t clear. He dabbled, initially in hypnosis and NLP before finally finding his feet in digital marketing.
Why vs Kaizen
It’s at this juncture I find the story of entrepreneurs like Rachit diverge from the commonly held narrative about what motivates them and drives them to success. In his book, “Start with Why” author Simon Sinek reminds us that “Steve Jobs, and the Wright Brothers had little in common, but they all started with WHY.”
I don’t have a service, I have a version 1.0 of everything. People might not pay for what I have right now, but if I listen to feedback and try something new, another version of this will work with some audience.
The Wright Brothers never set out to build a plane, they worked in a bicycle repair shop. Steve Jobs never set out to redefine the IT and mobile industry, he just wanted to design that interested him. I’d argue that entrepreneurs don’t start out with a “Why” but rather a desire to follow their curiosity and improve things. For Rachit his driver was not settling for a life of mediocrity.
As an entrepreneur you tread a narrow path. On the one side the corporate ladder where you can prove success and status to extended family and wider society. On the other, the myth of “why” and the need to create big game changing narratives about your startup to raise money and impress audiences.
All the hard goals I see fellow entrepreneurs struggle with are arbitrary. Saying you need $400,000 to make payroll came from a 10 minute conversation with an investor. If you focus on these goals you’ll lose your way
In the podcast, we get to the art of “Kaizen” – the Japanese art of constant evolution. Both Rachit and I are tangentially connected to this philosophy on a business and personal level (we’re both married to Japanese partners). Too many entrepreneurs focus on the big goals and the hard numbers that define business success and pay little attention to the daily realities that manifest in the numbers.
Kaizen is the underlying principle of the Toyota Management System that provides the foundation for Lean Management and most popular startup thinking today. (See bestseller The Toyota Way by Jeffrey Liker). Rather than start with a clearly defined goal for your product or business, start with what can be improved. Toyota learned that rather than focusing on the hard goals, they would devote their efforts to breaking the process down. Every process has hundreds of cogs. You can improve every cog. And while the impact of a single cog may be meaningless in the bigger picture, the compounding effect on success long term can be significant.
Toyota never set out with a “why” to become the most profitable automotive manufacturer in the world. It started with a goal to create cheap transport and jobs for post-War Japanese. 20 year later in the 1970s, Toyota was still perceived as unreliable and prone to break down. But within another 20, through the constant application of process improvement, Toyota had become the best selling and most reliable manufacturer in the world.
Agency based models, like that of Happy Marketer, are inherently non-investible for early stage angels and funds. Agencies need bodies and rely on the stuff that doesn’t scale – relationships and people. So, where most software and product based startups can turn to funding rounds to achieve scale, agency founders need to have access to the tools that will help them achieve an organic, compounding trajectory for growth.
Constant evolution and the magic of compounding can yield massive results long term. Rachit demonstrates you don’t have to focus on an audacious growth story to 10x your revenues. Instead, you can direct your attention to what’s visible, measurable and controllable now. A dashboard with your key operational data or customer behaviour, for example. These visuals (as Amazon calls them) are powerful tools to constant growth. You only need to improve your numbers 2% a day to double in 7 weeks (according to the accounting ‘law of 72’!).
But it only works if you commit to constant learning, constant examination of what’s working and what isn’t and adopt what’s right as opposed to what’s always been done.
Rachit talks of “process oriented goals” that can be atomized and measured on a daily basis. Rather than focus on building a multi million dollar sales funnel, focus on the number of inbound leads you receive on a daily basis. And rather than focus on building and selling a business, focus on how you can improve and better serve your customers ever day.
Process Oriented Goals are what can bring joy every day
I love that entrepreneurs are mindful enough to use the word “joy” in the context of business life. So often founders are driven to achieve the next goal. When they hit their goals, they are afraid of taking time out to celebrate success and push on to newer and bigger goals. Business life can pass in a blur. Taking time to enjoy the journey, not reaching the destination, is critical to success.
The fact that Kaizen, as Japanese as it appears, was actually taught to post war Japanese industrialists by an American (Edwards Deming) is testament to its universality. The principles of Kaizen apply to startups of all shapes and stripes – Japanese, Singaporean and even American. You can also live your life by these principles.
I’ve spoken to many entrepreneurs about the existential challenge they face after achieving success. It’s a question I’ve wrestled with myself, selling a business before traveling the world for 4 years with my family. Lying on tropical islands after some time gets old. If you’re an entrepreneur, retirement and inactivity leads to boredom and unhappiness. What drives us isn’t Instagram-friendly tropical sunsets, but the challenge of other people and constant learning.
My biggest values weren’t being attracted to something but running way from mediocrity. Whenever I saw people working towards a predictable path, I get fired up to go do something different.
More importantly, we are driven to seek out bigger truths. Everything in Rachit’s life has been an experiment driven less by an overarching goal to change the world but more by the need to satisfy a curiosity, to improve outcomes for customers and the people around him. With success, we don’t stop the seeking, rather we use that knowledge and those resources to seek out new truths that challenge us in different ways.
Success isn’t about exiting the game so we can focus on what we love, but to find a game that we love and keep playing it.
Success means you have the ability to keep Showing Up on a daily basis.
With the hindsight afforded to him with a little personal reflection post exit, Rachit now thinks about how we can continue to satiate that curiosity. He’s still working as the Apac CMO of Dentsu’s interactive arm Merkle and enjoying the challenge of applying his philosophies to a larger playing field. He’s also investing his creative energies into creating his personal brand on Youtube. He mentions Casey Neistat, a Youtuber with 13 million followers, as a personal role model.
But, at time of our conversation, he just bought his camera equipment and not yet started recording. It’s a long way to go, but perhaps these long journeys without defined destination are what drives entrepreneurs like Rachit.
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