Every Indian Hates This Company - And YET It Did 142 Crores In Net Profit This Year!

Ever heard of Srinivasu MN, Ajay Kaushal, and Karthik Ganapathy?

^ That’s Vasu, Karthik, and Ajay.

They built @BillDesk. It did 141.9 Crore INR in NET Profit last year.

Now that I have your attention, it’s story time…

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Vasu, Ajay, and Karthik were all part of Arthur Andersen Business Consulting back in 1999.

You know those holier-than-thou black suits, white shirts, blackberries in their hands MBA dorks that bored you to death with presentation after presentation?

Our heroes were those dorks :)

That is until December of ‘99….. When all three of them decided to quit their jobs and start their own venture

IndiaIdeas.com is what they called it, and it would later become BillDesk, a software to process payments for financial service providers (banks).

In 1999. When the internet was for the rich white kids of the west, and your local radio channels were throwing flowers on Paes and Bupathi’s first Wimbledon championship.

They were too early in the game (a recurring theme we’ll see throughout this journey)

Turns out, there are advantages to being the first person ever at an open market - you get to pick the freshest fruits and veggies!

At the turn of the century, nearly every bank in the world wanted to have a system to help their customers pay their bills faster, more conveniently.

But they didn’t want to have to hire an entire tech team to do it.

Surprise surprise - guess who’s standing over there in that corner with a readymade solution that banks could simply plug in to their existing ecosystem?

Vasu, Ajay, and Karthik had struck on gold. They managed to rope in all the biggest financial players in the market - from SBI to HDFC - for their bill payments gateway, and it worked tremendously well.

Then, in 2006, they decided to gamble on another thing - payment gateways for merchants.

“What’s that? A tool to help common businesses accept payments from customers? Online? At a time when nearly half of India doesn’t have access to the internet? When iPhone isn’t even a thing? These guys are way too early!”

Hmm? Where did we hear that before?

So 2009 happens. Amazon, Flipkart, and a whole host of e-commerce businesses flock on to the internet to sell their services. One key problem - how do they collect their payments? BOOM! - one of the oldest players in the market, BillDesk. Trusty old Bill, never let’s us down, does he?

Time and time again, BillDesk continues to be there, hiding in plain sight behind all your bank transactions, helping you spend easily, helping your banks accept and pass payments seamlessly, and helping companies make money. It kind of becomes The Godfather at this point.

PayU - the world’s largest payment gateway platform - takes notice.

In 2021, PayU agrees to buy out BillDesk for a whopping $4.7 Billion USD - all cash!

The deal of course, didn’t fall through, but what a legacy, man. 25+ years in business, $110 Billion USD worth of payments, over 4 Billion transactions per year - those are not small numbers!

All this kind of justifies the hundreds of failed transactions and irritated customers on Twitter every single day, doesn’t it?

Here are my biggest takeaways from Vasu, Karthik, and Ajay, and their INR 34,000 Crores empire that they’ve built over 25+ years:

First - Getting the timing right

At Arthur Andersen Consulting, our three founder-heroes realized that there was a problem in the market that was already being addressed outside of India, that had not occurred in India YET.

It was only a matter of time, and someone had to be ready for it. So they made themselves ready. They built a solid payment portal (product).

Then they played the waiting game. By taking aggressive action (we’ll get to this in a bit).

Second - Setting an eye on the ICP

Something the team at BillDesk did in the early days was focus ONLY on financial services.

They took a step back and said ‘Hey, the end users are NOT our customers, it’s the financial service players who facilitate these end users to make those payments. We focus on them and them alone’

This ability to focus on only one core mission, and say NO to every other money making opportunity, atleast in the beginning, is SCARY.

As a founder, when there’s no money coming in, any money seems like good money. And that’s justifiable because it pays the bills, it helps keep the lights on, and it helps you fight another day.

BUT… does it align with your core business principles? Is that the reason you’re building the product? You need to be able to steel your heart because in the long run, you will sway a lot more if you sway here.

BillDesk said no to a retail play early on because it would take away from their core product, and it would drain them financially in the long run.

Third - Playing to your strengths

At Arthur, Vasu and team had worked with @BankOfBaroda on a consulting project. Their prior connection and experience with an enterprise financial client helped them get into a room with potential prospects - which is Bank of Baroda.

Knowing what they already did, and working around that area helped them build a product who’s growth complimented their own skills, and helped build a better product for the end consumer in return.

Fourth - The Early Bird advantage is REAL

You saw how big of an impact being the first player in the market made for BillDesk - not once, but twice, and now with their SI platform that BillDesk is currently working on.

The first mover advantage is incredibly dangerous, if you have the right product and the right team to support it (25% of BillDesk employees have a median tenure of 15 years)

Fifth - Figure out your core numbers [MOST IMPORTANT]

If you take a look at BillDesk’s homepage, they highlight just three numbers, and four key value props:

And I watched an interview (which is the whole reason for this essay, you should watch it too, link down below) where Ajay Kaushal highlights these numbers again:

• What generates the topline?

• What generates the # of transactions?

• What is the value of throughput on the platform?

• What generates margin

If you understand these numbers at a fundamental level and help build your product with your customer and these numbers at the center, you’ll eventually build a good product.

That totally blew my mind! It is that simple? Holy sh*t, yeah it is.

Does your product bring value (either monetary or otherwise) to everyone involved in the transaction? Yes? Good, you will win eventually.

And just like that, you know how these guys have been able to stay in business for over 25 years.

Yes, banks are a bunch of boomers that would rather die than change the way they operate (Legend says the queen used to wait at the bank because of SBI’s lunch times)

Even so, having your banks stay with you as clients for 10+ years is an indicator that you’re doing something right.

BillDesk’s initial business model is fairly simple:

• Charge nothing to banks (they bring the customers AND the utility companies possible, why would you have them pay you)

• Charge nothing to customers (they are already having money debited from their account, making them pay more will only create friction)

• Charge a very small fee to Utility companies (your electricity boards, telephone carriers and whatnot, you are making it easier for money to reach their banks)

• Make it all convenient, easy, fast, and simple.

Now just repeat these steps over 25 years by:

• Hiring the right set of people, AND keeping them

• Scale your tech and platforms according to the market

• Adapt to user behaviour and client demands (back in 2006, payments were made to generate money, now payments are made to generate customers - data points that can be used for waaaay more than just getting one-time revenue)

I absolutely LOVED researching this topic and it’s all thanks to this video I found by Carnegie India

It’s criminal that this video only has 900 views. Go give it a watch, and spread the word!!

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