Of the founder mindset, founder marriage, and MoEngage

When their first venture flopped because of poor retention, Raviteja Dodda and Yashwanth Kumar started up again to solve the churn problem for other mobile apps. Their journey is as flavourful as a plate of Hyderabadi biryani

Entrepreneurs often get by with a little help from their friends and family.

In 2014, Yashwanth and Raviteja’s first startup, DelightCircle, ran out of cash. For the third time. But this time the problem was serious. The founders were living on just Rs 5,000 a month and to keep the company going, they would need a Rs 30 lakh bailout.

Yash felt defeated by the idea of asking relatives for money. That is when his mother said four words that swept over him like a cool breeze in a heatwave. “We are with you.” He and his co-founder got the confidence they needed to gather family investments. Making it through that challenge has led to one of the more enviable founder partnerships in Indian SaaS.

DelightCircle did not quite survive. But the duo’s next, MoEngage, is scaling the peaks of success with an urgency. Started in Bengaluru in 2014, the company has gone global. Until 2020, the consumer insights company had raised about $14 million-$15 million. But between the Aprils of 2020 and 2021, it has picked up a whopping $140 million. But this is not a story of the company’s fund raising journey. Far from it. It’s about the determination with which these two built their company, one day at a time.

Jumping in the deep end

They say co-founders are like spouses. In that sense, the MoEngage marriage began in 2006. That is when Raviteja Dodda from Khammam and Yashwanth Kumar from Kadapa arrived in IIT Kharagpur to study computer science.

From teaming up for projects, it became clear Ravi was a mastermind with ideas, and Yash had a brain for coding. “There was this chemistry that worked. He could visualise things and I could bring them to life.” says Yash. “We knew we had to build something together,” Ravi adds.

Then, life happened. They graduated and disappeared into high-paying jobs with bellwether firms. You can only go so long working part-time on your full-size ideas. Building a business on weekends was not cutting it. One day in 2011 Ravi turned to Yash: “We have to go all out.” And so they quit. Their first venture DelightCircle failed squarely. But not before teaching them everything they know about founding now.

What went wrong: The retention problem

In 2011, the mobile app space was heating up. Android had emerged as an alternative to iOS and Blackberry which at the time was still fashionable. Still, getting people to download and use an app was not as easy as it is today. The duo only realised this after working for a whole year on perfecting their app. “We made every mistake we could,” Ravi says with a grin. We kept on building without thinking of PMF.”

DelightCircle’s purpose was to drive customers to local stores by showing them the best deals around. It was an interesting idea. “Offline retailers would spend about Rs 5 lakh to Rs 10 lakh on a newspaper ad and not even know the ROI. So we thought let’s build a location-based marketing platform for retailers, a discovery engine of these offers and coupons,” Ravi says. But the debut was dull. At the peak, the app managed 200,000 downloads.

The company pivoted to selling coupons, it focused on online deals, then offline deals — but, nothing seemed to drive up retention or drive down churn. Seventy percent of users uninstalled the app within the first month itself.

Turns out, that was not a DelightCircle problem. It was an industry problem.

Through all these ups and downs, the founders’ enviable chemistry continued. Their bond strengthened over evening movies and Hyderabadi biryani lunches. From 2011 to 2015, the two remained flatmates. After Yash married and moved into his own apartment, they have been staying in the same building, on adjacent floors. So even after the company crashed and burned, the duo had not had enough of building together.

Fortunately, the perfect gap in the market had been staring them in the face. They had to work on the retention issue that brought them down. They wanted to help mobile app businesses fight the churn. The only way to fight it was with data. They built designs for a dashboard through which companies could engage with customers in a personalised way, helped by AI-driven consumer insights. They would call it MoEngage.

How it is going: Meeting challenges with the right mindset

The next part of Ravi and Yash’s story was all about fixing mistakes.

“We were honest about PMF and we valued time more,” Ravi recalls. So they worked methodically in two directions — developing the product, and strategizing for its release. That meant before any coding actually began, they got together a professional sales pitch, made a small logo and deck, and built a static dashboard. “We had taken small steps towards how the SDK should be, we had whiteboard designs. Only thing we didn’t crack was segmentation,” says Yash. They waited for potential customers to show enthusiasm.

BookMyShow, TaxiForSure, Ola, Goibibo — they wrote to every mobile app company in mid-to-late 2014. “We were pitching with pricing as if for a real product,” says Ravi. They based prices on how much people were paying analytics companies.” Everyone was interested in the solution. When one of the app companies asked for an immediate trial, Ravi cancelled a Goa trip and Yash began developing. They built the first version of the product in about five days.

The founders had global intentions for their second venture. So they applied to US accelerators and were accepted into Alchemist. That was the easy bit. After the first customer, getting to 10 customers took some time but the market was just getting hotter.

When it came to getting deals with international customers, the US proved hard to crack initially, when they had limited capital. One of the founders they met at the accelerator described Indonesia as a blue ocean market. Because he was closing his own company and is someone who can hustle, the founders convinced him to come on board. He brought in a ‘founder mindset’ to the expansion, building out the international market for the company as an entrepreneur would.

That helped bring the first 10 customers from the international market. Going from 10 to over 100 customers requires a solid team. Given their experience, they hired more people with a founder mindset. Most of them were from a tight circle they knew and trusted. Hiring can be a gamble sometimes and when you don’t end on the right side, it can teach you a few valuable lessons.

They tried to hire outside their comfort zone, twice, but failed both times. “We brought in a VP engineering because I was getting overloaded and needed someone to compliment me,” says Yash. Eighteen months later, they had to let this person go. “He was more like me than not. We needed to hire someone who would be the part I couldn’t be,” Yash continues.

They tried once again. This time the leader they found inexplicably left within a month. “We were confused and at a loss. We had such good luck with hires and this one just wouldn’t stick,” says Ravi. It took them some soul searching and they realised they had to look inwards. If founders want to look for people with the same mindset and dedication as them, the ambition needs to be to find someone on the team who could step up. “And we did. We found a young, smart man who we promoted and groomed for the role. And it worked wonders” says Yash.

This experience is something they believe other founders should take something out of.

Instead of bringing in exclusively external leaders, promote motivated employees internally. “If you know an internal person who has passion and context, with some time they do wonders and are more hands on than external people.”

From Biryani Zone to Novotel

At DelightCircle, they had never found funding. How would they change that with MoEngage? By turning in a profit. In 2017–18, VCs in India did not yet fully appreciate SaaS or what Ravi and Yash were doing. VCs in Southeast Asia were not blinking either. So they got their attention by turning profitable in 12 months, spurred by momentum in India and good traction in Southeast Asia.

Through all the troubles, the two founders maintained old school business principles: being self-sustainable. That helped them focus, eliminate distractions and work towards that as a singular purpose.

As they say, “Karm karo, phal ki chinta mat karo” (Put in the work, don’t worry about rewards). They knuckled down and worked hard and the fruits of their labour followed them. As of 2022, MoEngage has a 750-strong workforce and 1000+ customers across 45 countries, with a diversified customer base across US, Asia and EMEA. The company is now valued at well over half a billion dollars.

“Some things that worked for us in our journey are creating momentum and driving focused execution (with things like OKRs), building the right quality of leaders at every level and challenging the status quo,” says Ravi.

The founders have come a long way from their mini celebrations at Biryani Zone to the company’s most recent anniversary bash of over 500 employees in Novotel Goa.

“These milestones are validation that we are onto something,” says Ravi.

But all of this is window dressing. What is true validation is when Yash’s mother is nudged by friends and families for a job at MoEngage. It doesn’t come as a surprise to her though. She always knew. She told them that in 2014.