Snakes, Ladders & Varun Shoor

An early headstart, a thrilling beginning, a promising future, and a tough journey. The bootstrapped founder from Jalandhar battled heavy odds to anchor Kayako to an exit.

Only two sets of students were allowed in the classroom. The founder from Jalandhar recalls his not-so-memorable school days. “There were intelligent boys, and then there was Varun Shoor,” smiles the bootstrapped founder who flunked in class IX and barely scraped by in class X. “I wasn’t good academically,” confesses the self-taught coder who displayed an intense fascination with computers, internet, and programming.

Unfortunately, the child was not programmed for regular school learning. “We had a strict teacher in Class XI, and any student who failed to answer questions was thrown out of the class,” he recalls. So, during any question hour, when most of the students were shown the door, the room was left with a handful of smart kids and Varun. “She hated me, never asked any questions from me, and that’s why I managed to stay inside, I was invisible.” he smiles.

He did stay inside, but not for long. After completing his school education, Varun decided to drop out of college. And he had a compelling reason to do so. When Varun started Kayako in 2001, he was just 17, and was already earning a decent amount of Rs 15,000–20,000 every month. The enterprising father didn’t snub — in fact, he encouraged him to take the entrepreneurial plunge — when his lad broached the topic of skipping college. “Continue with your venture. And if at all it fails, don’t worry, come and join me in the hand tools business,” he offered a safety net to his son who was taking an unconventional path of disconnecting with higher studies.

Varun was indeed making an unconventional move. Back in 2001, starting up at such a young age was not the norm. In fact, the word startup too might not have existed in India, especially in a small town like Jalandhar where family-run businesses were the norm, and the second generation was expected to join the legacy businesses. What magnified the efforts of the young lad was his audacious move to make a mark in the digital world. A high level of self-belief in one’s abilities and capabilities made the job easier. “I had a decent start,” he says.

‘Decent’ quickly turned into a ‘dream run’ for the young man. By 2005, Varun was running a profitable $4-million business. The scale and numbers kept ballooning over the next few years. Varun was galloping, he didn’t take any outside money, and the bootstrapped business briskly climbed the success ladder.

Then in 2011, life took a venomous turn.

Snake in the Grass

Varun got embroiled in a lawsuit in the US. “It was a messy affair,” he recalls. Things didn’t work out well between Varun and an employee hired in the US. The friction, which started from 2010 onwards, culminated in a brutal legal fight, and it meandered for the next five years. To an outsider or somebody who is starting up today, legal battles might be a plain-vanilla affair or might not be life-threatening. The reasons are obvious. Now, there is a thriving VC ecosystem, there is a flourishing founders’ support network, and there is tremendous awareness around the dos and don’ts of entrepreneurship and how to navigate the landmines.

Back in 2011, there was none. “I didn’t know that a statement could be twisted and claimed as a promise — and then can be enforced in the court of law,” says Varun. “I also didn’t know that contracts didn’t need to be signed, they could be decided from mere interactions between two parties” he adds. Another thing that the young founder didn’t know was how to deal with a situation when life suddenly takes a sharp turn. A decade of success and then comes a sudden cliff and you are experiencing a free fall. As the battle got protracted and days morphed into months and years, the entrepreneur was forced to live with a deep sense of anxiety and uncertainty. “I felt immobilised for all those years,” he recalls. “It’s not easy to live in fear,” he says.

Indeed, there was fear, and it was existential. “What if the case ends in killing the company,” was the question that continuously haunted Varun. The costly distraction took a heavy toll on the business. Once a leader in the segment by a wide margin, Kayako now trailed its rivals. A venture-backed startup can still come back in the game, but for a bootstrapped venture, the gap keeps widening. Varun started skipping the office. “That was my escape route,” he confesses, adding that he also went on the verge of slipping into depression. Finally, in 2015, the case was settled, and the gritty founder mustered courage and energy to make a new start.

A comeback, though, was not easy. Varun explains why. A founder, he underlines, is always like a soldier manning a border outpost. “When you are on the frontlines, your instincts are charged by the feedback from the customer,” he says. “For a founder, being on the frontlines gives you the pulse of the customer. As you move away from the frontlines, your thinking gets tainted. You continue to live under the impression that you know what’s best for the customer, but you are so detached from the frontline that your mind deceives you.” he says.

“The launch was an absolute disaster,” says Varun describing the launch of the new product, designed to compete with the new aggressive competitors in the market. “We were so detached from the feedback on ground that we made some dumb decisions,” he says. Around 50% of Kayako’s revenue used to come from an on-premise edition. The new product shut down on-prem. “I thought consumers would easily move to SaaS. They didn’t.” he rues. This meant that Kayako now faced a huge customer churn. “There was also a massive drop in new sign-ups,” he recalls. The events took a heavy toll on the founder who was banking heavily on coming back in the game with the new launch. “I started experiencing panic attacks,” he says.

The Fightback Begins

Imagine the mental state of a founder who started when he was 17, and then fought legal battles for five years, and after 17 years of entrepreneurial journey, he is facing the prospect of going back to zero. Varun quickly realised that things were slipping out of his control, both on the personal and professional levels.

“Have you ever played snakes and ladders,” he asks. “When I was so down and out, a simple game gave me hope, I realised that even if the snake before 100 crashes you down to 2, you can still roll the dice. You always have another chance.” he says.

The founder decided to fight back by starting to focus on his mental health. One step at a time and one day at a time became his mantra. On the work front, he decided to take the bull by the horns. A more hands-on approach was the need of the hour, and he did that. He also made his intention clear to his employees. “The ones who might feel that they will get suffocated by my micro-management are welcome to quit,” he announced. Over two dozen resigned or were let go, but Varun continued to take things under his control. He fixed the product, sales, and marketing and after a few quarters put the company back on the growth track.

There was collateral damage, though. Years of intense and gruelling entrepreneurial journey sapped all his energy. In 2018, came an acquisition offer, and he gladly accepted. “I wanted to take a break and fix my life,” he says. “And the only way to do so was to detach myself from Kayako,” he adds. Exiting from the company was liberating, financially, mentally as well as physically.

A few years later, the founder decided to come back into the ring of entrepreneurship but this time with an intent to raise funds from investors and go big. “There was a desire to seek validation,” he says. “I thought people didn’t give me credit for what I’ve done,” he says. A blueprint for a payroll product was prepared, Varun was about to reach out to a bunch of investors, but then the pandemic played spoilsport.

Always A Bootstrapper

Three years later, Varun reckons that he is fortunate that the new plan didn’t take off. The pandemic pushed him into deep introspection. “I found out what I wanted in life,” he says, adding that he never wanted to raise funds.

“Once a bootstrapper, always a bootstrapper,” he remarked.

“I’ll tell you about my happiest point in life,” he says. “It was when business was doing an ARR of $1 million, I had low headcount, full freedom and I worked on the business because I was enjoying it — it was a fun life,” he says. “I had the freedom to travel, freedom to cook with family, freedom to pursue my hobbies,” he says.

“That is my ikigai and I intend to design my life around this. I love building lifestyle businesses and that is what I am pursuing now,” he says.

So, what would be his biggest takeaway? The biggest learning, he reckons, is to pursue the journey for reasons that make you happy. There is no single formula for success, you define your success. “It is difficult to find the answers, but they will come to you if you keep your ear to the ground,” he says.