Dailyhunt: Only the adaptable survive (and thrive)
The journey of Dailyhunt, which crossed the $100 million ARR mark in March 2020, has been underpinned by a culture that promotes evolution and a leadership that embraces change.
Published June 24, 2020
As the Covid-led recession sets in, I’ve started to reflect on a company metric that I had never spent much time thinking through before: Adaptability. How does one even measure that in a company? What makes one company more adaptable than the other? Speed of execution? Intellectual honesty to kill products that are not working? Ability to read when fundamental change is in the air?
Dailyhunt provides some answers. I have known the core team for 17 years, and Sequoia India has been an investor for five years. Over this period I have watched the company morph from a mobile VAS company to a vernacular news aggregator app to an AI-led local language content discovery platform that serves up a wide range of hyper-personalized video and print content, spanning news, sports, lifestyle, entertainment, finance and more. Today, they serve over 50,000 publishers and have over 150 million users on their app.
In March 2020, Dailyhunt announced it had crossed the 100 million ARR mark – a notable milestone at a time when many startups were facing slowing demand amid the Covid-19 pandemic. They celebrated…. by re-imagining themselves once again.
Users across India have been sharing all the great local content they find on Dailyhunt over WhatsApp, Facebook and other platforms. At a brainstorm session last year, a question was raised: what if Dailyhunt could turn its consumers into creators and keep all that social activity their content was generating within the app as well?
On May 15, Dailyhunt launched social features that allow peer-to-peer and community interaction all in the language users most prefer. Millions of existing Dailyhunt users have logged into the new social function in the last few weeks and have collectively invited over 78 million friends and family members to connect – some who are already on the app, and some who’ve recently joined and started engaging in these social conversations. The initial results are very encouraging as the company once again zigs and zags to meet the market opportunity.
Dailyhunt’s journey from scrappy startup to a growth-stage social content company that’s hitting scale has been underpinned by a culture that promotes evolution and a leadership that embraces change. Their story offers four specific insights for startup founders looking to adapt, evolve and emerge stronger from the unprecedented Covid crisis.c
Make bold bets and embrace change
Virendra Gupta is all about bold bets.
Nine years ago, he did a global scan and realized there were no large digital media business that were able to compete with the likes of Google and Facebook, except in China – which was protected by the great firewall. India’s ‘firewall’ was more of a language barrier. While educated, urban Indians speak English, the vast majority communicate and consume traditional news content in one of India’s myriad local languages. Viru saw that as a competitive advantage for a digital content brand “made in India for India by Indians.” One of his early design choices for Dailyhunt was to build only for mobile, an unusual choice for a time when most content publishers offered only English content and predominantly on web desktop browsers.
His big bet on mobile, and on local languages, was made well before Jio hit the market in 2015, sparking India’s mobile internet revolution. Today 64% of India’s 510 million internet users speak primarily in their local language, while 36% are English users; by 2025, the number of internet users is expected to hit 906 million, 77% of those will be vernacular-first, according to a report by Google and KPMG.
Still, the road was challenging and marked with setbacks. Large media brands like Times of India, Dainik Bhaskar etc had distribution and controlled the offline media spends. Tech giants like Facebook had made the ‘news feed’ a core part of their proposition.
In 2018, Viru realised he needed new organizational capabilities and made another bold bet — he brought Umang Bedi, the former head of Facebook India, on board as a partner and Co-Founder to help take Dailyhunt to the next level. There are not many founders who are willing to share their recognition and equity, particularly so late in the game.
With Umang setting ambitious goals, Dailyhunt has kicked into high gear these last two years and unleashed the next phase of evolution by:
1. Building a strong tech backend and evolving the app’s text-and-image focused feed to support more immersive content, with a strong emphasis on video.
2. Growing the volume, velocity and range of content supply by signing deals with 50,000 publishers and independent content creators – including exclusive partnerships with the likes of Discovery Networks for high quality videos.
3. Building a sophisticated AI and ML stack that can understand and process content in 14 local languages, understand a user’s preferences, and track over 10 billion human interactions per day to serve up a unique, tailored feed to every user.
4. Creating an ad tech stack that offers real time bidding, zip code level targeting and a performance optimization engine that helps match advertisers with the right audience. What’s more, small business can utilize self-serve tools to upload and create their own ad creatives, as well as bid on the audience.
All these changes were driven by Umang and Viru despite the company having a relatively small bank balance. Too many founders feel they can’t dream big without capital. Umang and Viru didn’t buy into that myth; they were sure capital would follow performance. It has paid off. DH is now a full ‘marketplace’ with a flywheel in motion that incentivises the audience to stay on the platform, attracting advertisers – which incentives publishers to provide high content via a share in ad revenue, attracting a wider audience and compelling users to spend even more time on the app.
In the June 2018 to March 2020 period, DAUs grew 4.7x and the DAU/MAU ratio rose from 39% to 44%. There also was a significant uptick in March on account of Covid, with 10 million new daily active users and a 56% increase in total time spent on the platform, over the month before.
To lead effectively, sometimes you need to follow
Last year Umang, Viru and I were on a Himalayan adventure together. As I reflect on our weeklong climb to the Annapurna Base Camp, the experience underlines for me how different these two founders are, yet how well they complement each other.
Umang was the frontman – the protein bar chomping, metric driven device junkie, constantly analysing calories and steps as we navigated the Himalayas. Umang liked to set the pace and normally hiked ahead exploring new routes. Viru, on the other hand, was the Group Confidante – he chose to hang back in the group and help those who needed motivation, counsel and companionship as we all wearily plodded up and down the steep slopes. That was how it was in the early days of the trek.
Mid way up the mountain, at the end of a particularly tiring day, Umang began to get the shivers and experience nausea (early symptoms of Acute Mountain Sickness); that’s when a different side of Viru sprang into action. He took over to manage the situation and produced blankets, and even hot garlic soup, to prevent the situation from spiralling.
This complementary attack-defence approach, where they are able to switch between leading and following each other, is what makes this founder duo tick. The success of this partnership has re-affirmed my view that addition of world-class hires can make huge impact when the founder is mature enough to create a platform that allows for everyone to excel.
Create a culture that promotes evolution
This is an organization that’s become incredibly fluid, and that’s because of the premium the leadership team places on the ability change and adapt. Ruthless prioritisation is core to this. Viru and Umang spend 70% of their time running the business, 20% of their time on imagining and creating new futures – and 10% of their time selectively killing products and initiatives that didn’t work in the past, or don’t jive with where they’re going.
When Umang joined in 2018, DH offered users access to eBooks, along with the news, and had relationships with India’s largest book publishers. As the two sat down to envision the future, they realized DH would not be a transactional platform. So, they killed the business – even though DH, at the time, was the second largest seller of e-books. Their thinking: it’s important to devote a sizable chunk of your time imagining what the future could be. And you need to selectively destroy what’s holding you back from creating that future.
Founders cannot quickly transform a business alone; it’s a team effort. To power Dailyhunt’s evolution from a news aggregator to a rich content discovery platform, Umang and Viru embarked on a program to transform the culture of the company. They worked closely with their management team to define the core values that today define what DH is all about. They settled on five values: Move fast; An Entrepreneurial spirit; Integrity without compromise; Ruthless Prioritisation; and Delivering on Commitments.
Changing the culture of an organisation takes time, effort, and commitment – and begins with clear, visible changes in behaviour of the leaders of the organisation.
The organisation was set up as cross-functional teams or ‘pods’ and took tangible steps to create a culture of risk-taking, experimentation and ownership. Umang describes what they do as “empowering teams to the point of discomfort”. When the team sat down last year, for example, to talk about taking DH social, the team behind the idea was asked to come up with a set of key metrics and OKRs to drive this initiative. Umang felt the targets they set were too aggressive (and actually told the team so) – but nonetheless gave a green light on what they proposed. The team exceeded their launch projections four weeks after the product went live. “It’s up to the team to come up with the metrics,” he says. “Our job is to challenge them, and to challenge each other, then stand back and let them run the show.”
Understand and evolve with your customers
Customer needs are evolving faster than you think. A key learning from the Dailyhunt journey is the importance of a relentless focus on consumer insight. Viru bet early that Internet users that are coming online for the first time will want to consume content the same way they do offline – in their local language.
The next layer of insight was that while India is a country of many cultures, languages and communities, there are shared values and social mores. As they built their algorithm, they took this into account in a couple of different ways. Dailyhunt trained their AI/ML stack to keep the content clean by weeding out racy or raunchy stories and videos – and also to run non-linear recommendations on topics users follow to provide a range of diverse perspectives and different points of view. A content discovery platform that tracks your preferences and serves up more of the same can quickly become one dimensional. The team felt that isn’t in the interests of India. They wanted to create a wholesome, balanced media feed that avoids turning into an echo chamber.
With their new social product in the hands of their entire user base, we’re excited to see how they advance their twin mission to serve Bharat – and to create the largest digital media content discovery platform in the country.
In conclusion, its too early to declare victory at Dailyhunt, but it is clear that their ability to evolve and adapt will stand them in good stead in these uncertain times. Do share with me your own examples of highly adaptable start ups that are not wasting a downturn. What sets them apart on the metric of Adaptibility.