Opportunity Evaluation

Rahul Yadav

Submitted to
Dr. Amit Kumar Agrawal

Submitted by
Divyanshu Joshi D-18
Rutwick Gupta D-46

SYMBIOSIS INSTITUTE OF MANAGEMENT STUDIES (SIMS)

5th Jan, 2017

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Business Idea and Initiation
Rahul Yadav is an alumnus of IIT Bombay, who graduated in metallurgy in 2007. As he
and his friends left the college, they had real difficulty in finding a decent house in
Mumbai. They virtually roamed around the streets of Mumbai for about a month before
finally sharing a small room near the college. This experience is what gave birth to
Housing.com.
Rahul Yadav and ten of his other IIT batch-mates decided to start a new venture in June,
2012, which was initially named Housing.co.in, later changed to Housing.com. The
company was functional initially only in Mumbai for over a year.
Housing.com collects the users data, that is, from the brokers or owners and then it is
placed on an interactive map. The USP of Housing.com essentially is the user-friendly
interface they have managed to build. The initial main reason for the startup was to
reduce the hassle that comes to the customers while they have to deal with the brokers,
apart from a hefty commission charged by them. The websites search results are filtered
by lifestyle ratings, available rooms, child friendliness index (CFI), and location-based
pricing. The company claims to have mapped approximately 650,000 houses in the 40
cities they are functioning. They also boast of their association with 6,000 brokers in all
the cities they are established.
Since the foundation of the company, it has secured four rounds of major funding. After a
year of its founding, in the first series of venture capital funding, also known as Series-A
funding, Housing.com raised $2.5 million from Nexus Venture Partners. These funds
were utilized to establish a Data Science Lab and to further expand into other cities,
namely, Hyderabad, Gurgaon, Bangalore and Pune. The new domain name,
Housing.com, was purchased by the company from a San Francisco-based internet
entrepreneur, Peter Headington. Further, in Sept 2013, they also bought the telephone
number 03-333-333-333 for a whopping $10 million.
In April 2014, in the next series of funding, Housing raised $19
million from Helion Venture Partners. The company went for a
nationwide brand launch in March 2015, where the new logo of
the company was revealed, with the tagline 'Look Up'.

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Rahul Yadav, born in 1989 in Alwar, Rajasthan is certainly one of the most outspoken,
and in some ways infamous, young entrepreneurs. He also made it early to the Forbes
India 30 under 30 list of budding entrepreneurs. His leadership quality can be known as
he has served as the class representative and was also secretary for the university's
student association. While in college, he had built Exambaba.com, which was asked to
shut by the college. It was an online question bank of the previous IIT exam papers.
Nonetheless, this pursuit helped him learn computer programming.

Before entering the Housing.com business, Rahul and his eleven batch-mates had seen
the hardship faced by customers looking to rent a flat in Mumbai. The brokers in
Mumbai, and similarly in other locations, are not the most pleasant professionals to deal
with, as their objective has barely been customer satisfaction, but rather more customers
in numbers, with unreasonable charges.
They also identified the existing portals at that time to be lacking in user-friendliness and
other parameters to make house hunting an easy process. With the IIT alumni contacts,
Rahul and his friends became brokers and even earned around a lakh in one month.
Noting all these discrepancies and focusing on the user interface, the eleven IITians
decided to build their own portal for the customers in Mumbai.
They also knew from early on that if successful, the model can be extended to other
cities, as most of the major cities in India face similar issues for the customers looking for
a house. Rahul Yadav personally remarked once that he had started Housing with the sole
objective to eradicate the need for the public to physically deal with the housing brokers.
In his words, he wanted to make Housing the Google of real estate.
Housing.com have worked on innovation to itself Indias first map-based portal, which
increases the standards for online accommodation sites. They asked the questions, What
if customers want to buy the apartments they are staying in? What if they wanted to
stay long?
Rahul had kept a simple business model in mind, the home buyers would bring in the
revenues and the rent seekers would bring in the numbers to the website. This model was
changed when Rahul was expelled from his own company by the board members of
Housing.com in June 2016.

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Two months after he was removed from Housing.com, Yadav publicized Intelligent
Interface, his new venture, which was supposed to provide the government and private
organizations interactive data visualization. Before starting Intelligent Interface he
explained that India doesnt have good infrastructure and he was looking to solve the
problems via Intelligent Interface.

Rahul Yadav the bad boy of Indian Startups

Personal characteristics of Rahul Yadav
Was considered a visionary by his colleagues in Housing.com
Though he dropped out from Indian Institute of Technology Mumbai, being such
a talent, he founded a real estate company at the age of 24
Even though he was a college dropout, his company was valued at USD 250
million only at the age of 25
He was considered the Indian version of Steve Jobs, as like Jobs, even he dropped
out of college, founded a big company and was later kicked out from the company
he himself started.
On the other hand, there have been instances where he has been found guilty
doing in appropriate things such and being involved in a lot of controversies.
He was involved in spats with other Indian start-ups founder where he made
shrewd comments publically about them which included Ola cab co-founder
Bhavish Aggarwal, Zomato co-founder Deepinder Goyal and also Alok Kejriwal
of Games2win.
On one of the occasions, he had an online session with the public where the public
could ask any question to him, he made casual and candid comments about
everyone starting from stakeholders to Investors in his company.
He even announced making weird statements that he would distribute his share of
4.75% stakes worth over INR 150 crore amongst all the 2000+ employees.
He made unacceptable comments about the board members of the company and
resigned from the company, only to take it bake the same evening and apologizing
to the board.

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 Rahul Yadav was very aggressive in his approach. His company became the
biggest real estate company n just a span of 2-3 years beating old time players
who were in the business since years. But at the same time people also considered
him arrogant and overconfident which was reflected during many of his
interviews.
There were many instances where the investors were not happy and concerned
with the style and way in which Rahul worked. Few of his decisions raised many
eyebrows. His aggressive approach was not considered so by the Investors.
He spent huge sums of money on ads, which were all over the places. Pumping in
money in every form of media right from Television, Internet, Newspaper, Bill
boards to other form of print media and OOH. Housing spent over INR 120 Crore
on their Look Up campaign and when Rahul was questioned about this, he
believed that it was completely normal. According to him, it was the second phase
in which the company was. After making a unique and wonderful product, it was
necessary to make people aware of the product that they could offer which was
much better than that of his competitors. The reviews also suggested that thought
the interface of Housing was better than others, but still it was not very helpful
and slow. The end users were not satisfied, as it did not help them solve the
problem. He dismissed and ignored these important customers feedback by giving
various excuses and still claimed that Housing was the best amongst its peers.

The above instances show that though Rahul Yadav was a visionary and very unique
in his approach, which saw the company raise to heights in its initial years, but his
ways and approach were not ethical and justified. His overconfidence, arrogance and
the way with which he treated other people was also not called for, which finally led
to the downfall of Rahul Yadav as he was removed by the board of the company that
he himself founded. Even today he is seen making different comments over his social
media accounts. These also contribute to the reasons why he is famously known as
the bad boy of Indian Startups

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Potential Competitors: Porters Five-Force Model

According to Porters Five-Force Model, we look at potential competition to Housing in

the following way:
1. Supplier Power: Here you assess how easy it is for suppliers to drive up prices.
In our case, there are not many suppliers in the main business as it is mainly a
brokerage firm in Real Estate. Thus it does not become an influencing factor.
Though it can affect little in other areas like marketing activities, day-to-day
needs where the cost can escalate.
2. Buyer Power: Here we consider how easy it is for buyers to drive prices down.
Again, as it is a service provider business, there is no much scope for buyers to
influence the business as most of the service for the buyers is free and the
company makes revenue from other sources.

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 3. Competitive Rivalry: What is important here is the number and capability of
your competitors. This is a great influencing factor as there are many similar
websites like OLX, 99acres, Magicbricks, Quikr, which are older and even, have
larger finances and reach. Thus one of the reasons for Housing not growing as it
was expected after its initial years is due to Competitive Rivalry.
4. Threat of Substitution: This is affected by the ability of your customers to find a
different way of doing what you do as we just mentioned that there are many
similar websites, and it is a perfect competition market, every user looks for their
needs on all the websites and chooses for the one which is most suitable for them.
Thus, there is no Brand loyalty in such business and number of people visiting
your website does not ensure that they would be using your service.
5. Threat of New Entry: Power is also affected by the ability of people to enter
your market. If it costs little in time or money to enter your market and compete
effectively, if there are few economies of scale in place, or if you have little
protection for your key technologies, then new competitors can quickly enter your
market and weaken your position. Exactly is the case of Housing, where there is
no much barriers to enter this kind of business, and very often there are new
entrants in the market, though all do not succeed. Another notable point is also
that few of bigger companies with large funds diversify into such business, and
with higher investment they easily have a competitive advantage.

Lastly, to look at the value that the entrepreneur is delivering to the stakeholders, we
have already mentioned that Rahul Yadav was very casual and shrewd in his approach
and was often found making unacceptable comments in public to his stakeholders and
insiders of his company. Though his ideas were unique and he was able to take the
company to great heights, it was his personal attitude that killed all his good work. Even
if there were monetary benefits, still people were lately less interested to be associated
with him, and this finally led to him being axed from his own company. This highlights
that, even if a person is great at his work and has large potential, it is very important to
stay humble and grounded at every stage and always strive to achieve greater heights.

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TURNITIN REPORT