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February 13, 2014

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Flying High: How Directi's Divyank Turakhia Earned His First Million at 18 and Went On to Build a Company Valued at $300 Million  

Divyank Turakhia gives new meaning to the term "meteoric rise". He began his career at 14 when he started advising large businesses on how to do business on the Internet. As a 16-year-old high school student in 1998, he co-founded the Directi Group with a $600 investment (a seed that sprouted a global conglomerate that is believed to be worth over $300 million today). 

Turakhia became a millionaire at 18, saw his company's customer base pass 100,000 at 21 and its valuation cross $100 million when he was 23. Last year, at 25, he watched that valuation triple and this year India's Financial Express named him one of the country's "New Business Leaders." The scary thing is the "kid" is just getting warmed up!

Deloitte & Touche has ranked Turakhia's companies among the Top 50 Fastest Growing Technology Companies in India and Top 500 Fastest Growing Companies in Asia for the past three years in a row. In addition, his well-known domain monetization company, Skenzo, was featured by Red Herring in the list of the Top 200 Private Companies in Asia for 2007. 

Divyank Turakhia
Founder and CEO, Skenzo
Co-Founder, Directi Group

Turakhia has been featured in so many business magazines that just about everyone has lost count now (a Google search on his name will bring up many of them). As a result of his phenomenal success, Turakhia is frequently invited to speak at industry conferences and workshops and at top universities in the U.S., India and China where students soak up his advice on Entrepreneurship.

Divyank Turakhia takes "flying high" literally. 
That's him on top of the airplane!

Turakhia has managed to defy gravity in the business world so it is probably not surprising that he spends much of his free time trying to do the same thing for fun. His hobbies include airplane Wing Walking, Aerobatic Flying, Ballooning, Sky Diving, Scuba Diving, Hobby Flying, Paragliding, Sailing, Quad Biking, Trekking, Rock Climbing and other pursuits that leave guys like me exhausted just thinking about them. 

Divyank is obviously cut from a unique bolt of cloth. While looking into what makes Turakhia tick we wound up getting a great case history on how someone could build a nine-figure business in just a few short years. With all of the talk among domainers today about taking it to the next level through development and building real businesses, Turakhia provides an object lesson that we can all learn from. 

Turakhia's story started on January 29, 1982 when he was born in the world's most populous city, Bombay (now known as Mumbai). With an estimated 13 million residents Mumbai has the kind of crowd

it can be hard to stand out in, but Turakhia soundly beat all of the odds. He credits a tight knit family for helping him get started on the right foot. His father is a chartered accountant who runs his own business specializing in tax consulting, auditing and company incorporations and his mother is a law school graduate. "She is a remarkable woman who has devoted most of her life to charity work," Turakhia said. "Since I can remember, she has been spearheading projects that help the underprivileged." Turakhia is also close to his brother Bhavin who joined him in co-founding Directi.  

"Bhavin  is two years older than me but from our childhood on we have had very similar interests, goals, thought process, and even the same friends and peer group," Divyank said. "We work, live and vacation together. I can't imagine having done even half of what I have achieved today without him."

"Some of the most successful companies in the world have been founded by a two person team - Microsoft with Bill Gates and Paul Allen, Apple with Steven Jobs and Steve Wozniak, Adobe with John Warnock and Charles Geschke, Google with Larry Page and Sergey Brin. Having more than a single intelligent, logical, entrepreneurial person at the top ends up creating an environment that is far more productive and efficient. For instance, both of us would have the ability to make decisions independently - but having a short discussion on a particular product, or feature or business decision can lead us to see something that we hadn't thought of - this is very conducive to growth," Divyank added. 

The Turakhia family got a good idea of where Divyank's life would lead while he was still in grade school. "I had a very keen interest in 

Bhavin Turakhia
Directi Co-Founder

working with technology and computers since I was 8 years old," Turakhia said. "I couldn't afford my own computer, so I used the ones that belonged to richer friends. These were the days when the popular home computer was the ZX Spectrum where software needed to be loaded via audio cassette tapes."

"When I was 9, I started programming in Basic and had a special interest in Computer Game Programming. I created my first three games as part of a school project when I was 12 - a Car Racing Game, an Alien Shooting Game and a Trivia Game - all of which became pretty popular in my school. I loved computers to such an extent that while other kids spent their time playing football, basketball, cricket and the likes, I spent all my lunch breaks and after school time in the computer lab. Between the ages of 12-14, I used to hold after-school sessions to teach advanced concepts in GWBasic to a class of students and teachers that were interested in learning about the same. The school didn't have anyone who knew much about it since this wasn't part of the standard curriculum," Turakhia said.

It normally takes years of computer science training in college to acquire the kind of technical expertise that Turakhia had acquired before reaching his teens. "All the skills that I have are mostly self-learnt. I am an avid reader. I had the habit of reading every book or article that I could lay my hands on - technology, business, management, time-management, biographies etc. The primary advantages of learning by yourself are (1) you can focus solely on the areas that interest you the most, (2) you can learn at a much faster pace, (3) you can learn directly from the best subject-matter experts in the world by reading books and articles written by them," Turakhia said.

Turakhia got on a roll in his teens and 
he has been picking up speed ever since.

"Part of the reason why I read so much is because my father was very passionate about books and through his life he spent a huge portion of his earnings on building a massive library at home. I had multiple books on every topic at my home. He always encouraged us to do things independently and was supportive of everything that we wanted to do."

Turakhia quickly put the things he read about to practical use. "At 13, I co-created the world's largest game and computer program written in GWBasic along with my brother. It took us nearly the whole year to finish the program. When we were near completion we ran into a problem that we hadn't anticipated - GWBasic was not designed to allow a program of this size to run - we could have switched to QBasic but wanted the program to run in GWBasic and hence didn't make that switch. In order to complete the program, we had to start "optimizing" the existing code by re-coding portions of the program, using smaller variable names, and even switching command statements such as "PRINT" to "?" so that we would save 4 bytes. The end-result was an ultimate business simulation game."

"The game starts with an animation sequence which talks about how your business partner deceitfully takes over your entire company and you are now left with no money. The object of the game was to start from scratch, create

a successful business, and get 100% of the market share. To grow the company, the player must manage resources in terms of money and employees, and create and manage ongoing budgets for various departments such as HR, Research & Development, Marketing, Sales, Finance, Legal etc. The game even allowed the player to perform corporate treasury operations by investing money on the stock market. The program used various probability algorithms keeping in mind best practices from various business management books. Playing the game was educational, creating it was an experience," Turakhia said. 

Despite his tender age, the business focus of Turakhia's computer game came as no surprise to Turakhia's friends and family. "I was very entrepreneurial while growing up. At the age of 13, I was selling computer projects to rich school kids who couldn't make their own project. Each project that I made got an A grade, so it was well worth the money for them, and I spent less than two hours in making each project - so it was easy money," he recalled. 

"These were still the pre-internet days. Computer Networks were becoming the buzz word. We started a fledgling bulletin board system (BBS) using the RemoteAccess BBS software and a 2400 baud modem. Only our close friends could connect to it. These were the days when ANSI Galleries and the BBS game Legend of The Red Dragon (LORD) were very popular. I shortly upgraded to the Wildcat BBS Program, and started supporting the NCSA Mosaic browser at 14.4k connection speeds. One had to manually install Trumpet Winsock and Mosaic on their Windows 3.1 PC to view the graphics. Because of our experience of running the BBS, we already knew more about the internet and networking than most other people when internet services were first launched in India in 1995," Turakhia said.

"When I was 14, I started freelance internet consulting for large corporates. I did that for two years. Freelancing worked out perfectly well – it gave me more “disposable money” than the richest kids on the block. I was having a lot of fun doing what I was doing."

"My primary focus areas were helping companies setup their websites, setting up internet gateways, setting-up intranets, setting-up corporate email accounts, managing internal and intra-office network security policies, setting up and configuring any technology related product or software that the company couldn’t do by itself etc. I even assembled computers for a few companies. These were the really old days when nothing was plug-and-play; you had to configure the ISA cards that go into the machines using jumpers. Around the time I was involved with freelance consulting, Bhavin was trying his hands with different businesses - some around selling computers, and others around end-user internet services."

"The challenge with running any technology-based services business is that you can generally manage only a limited number of projects. Each project might be worth a lot of money, but there is a maximum limit beyond which growth stagnates due to unavailability  

Turakhia's career took off at age 14.

of human resources within your company. Also, the return on human capital is very low in a services business as compared to a products company. Before starting Directi, we recognized that if we wanted to build a company that is really big – we need to focus on volume based products," Turakhia noted. 

"When I was 16 and still in high school, Bhavin and I co-founded Directi by borrowing $600 from our parents. When we started Directi, our strategy was to build a set of mass market products that are indigenously developed, that are global in nature, that do not require customization per customer, that thrive on innovation, creativity and automation. The idea was to focus on building growth-intensive intellectual property and stay away from capital-intensive infrastructure projects or any form of service that would require customization on a per customer basis. This meant that if the products that we built were successful, our margins would be very high as development costs would remain near similar whether we had a hundred customers, ten thousand customers, or a million customers."

"With this we started our first product line. We started a business unit that sells hosting packages directly to end customers. The idea was that everyone is eventually going to require a domain name and a web hosting package. It was the most obvious volume based product that everyone would need."

"The initial investment of $600 was spent towards the payment of our first server's monthly lease. In the first month itself we signed up 40 customers. This allowed us to return the money that we borrowed from our parents and pay the server's lease bill for the next 3 months. Within the first few months, we were hosting the who-is-who of the Indian market - including the likes of National Association of Software and Service Companies (NASSCOM), Centre for Monitoring Indian Economy, Nationalist Congress Party etc. At the 

age of 17 I was already being quoted and featured in publications such as Indian Express, Rediff etc. and at 18, my net worth was over $1 Million," Turakhia said.

Soon after, Turakhia's big opportunity in domains opened up when the Network Solutions (NSI) monopoly in the registration business came to an end. "Until early 1999, Network Solutions was the only registrar (and also the registry), and as several of the early domainers would tell you - the retail price of domains was as high as $70 for two years. Every hosting company including ourselves was a reseller of NSI. With the formation of ICANN in 1998, the functions of the registry and registrar were separated, and 5 registrars were accredited as part of an initial testbed in 1999 - Register.com, Melbourne IT, CORE, AOL and France Telecom."

"As a result, the price of domains started coming down because of the competition. After the initial testbed, ICANN started accrediting other applicants that met the criteria that it had set. In October 1999, Tucows revolutionized the wholesale domain name registration market with its launch of OpenSRS - domains were now available for just $13 a year. We signed up as a Tucows reseller and substantially increased the number of domains that we were registering," Turakhia said. 

"Domain names were the entry point to sell all web services - web hosting, dedicated servers, digital certificates, payment gateway solutions etc.," Turakhia said. "We made a substantial amount of money by selling domains at a low cost, which allowed us to fund our own ICANN accredited registrar. Being ICANN accredited is the logical growth step for any large web services company that sells domains or hosting packages."

"In 2000, we started a new business unit within the Directi Group - Transecute - India's first payment gateway service. The primary reason for starting it was that we wanted to start collecting money online via credit cards for our own domain registration and hosting business, and there was no solution available in India for the same."

"Since we needed to build it for ourselves, we built it out as a product that we could sell to any other customer. We continued to be the largest payment gateway service in the country for a very long time. We are still the only one that used advanced heuristic fraud detection and risk management technology. The algorithms that we wrote back then are still considered to be extremely advanced and used only by the most premier of payment gateway companies in the world as of right now for credit card risk mitigation," Turakhia said.

"We could have patented several of the algorithms, but didn't realize it at the time. Even though the business made a few million 

No matter how rough the terrain
 has been, Turakhia has managed 
to stay ahead of the pack.

dollars over the years and was quite profitable, we pulled out all the resources from the transecute project as it didn't meet an important criterion that we had set for all our business units - it wasn't global in nature - the service could only be sold within India due to banking regulations. We felt that our time would be better utilized on building products and focusing on business units that were global as they would make more money in the long term."

"In early 2001, about 8 months from the time we had applied to ICANN, we got our own ICANN accredited registrar, now known as PublicDomainRegistry.com. We had realized that technology was our primary core competence. We could build web applications better, faster and cheaper than everyone else. Also, we realized that in a global market, customers wanted local support in their local language and also wanted local payment options. The only way to capture a large market share was through partnerships. We decided to adopt a reseller model (currently under the brand name of ResellerClub) and from here on we focused on selling all our web services primarily through a channel of partners around the world," Turakhia explained. 

"The business grew substantially over the years. By the time I was 21, the business had over 100,000 customers. ResellerClub is currently one of the Top 5 private-label web solution providers in the world. It has over 50,000 resellers in 200+ countries. PublicDomainRegistry.com is currently the 10th largest ICANN Accredited Registrar worldwide withover 2 Million domains registered. It is also currently one of the fastest growing domain registrars in the world."

Directi's success allows Turakhia to travel in style.

"Before starting to build the software that would power our own domain registrar, we created a separate business unit that would build this software so that it could be used by ANY company that is ICANN Accredited. The unit was created entirely independent of the existing business and treated Directi's own Registrar as an external customer. This business unit was officially launched under the brand of LogicBoxes in 2003 as the first and only comprehensive business automation solution for ICANN Accredited Registrars. As of now, it is the world's #1 largest provider of complete business automation solutions for domain registrars," Turakhia noted.

"LogicBoxes currently powers the infrastructure and software of over 50 ICANN Accredited Domain Registrars, several ccTLD Registrars and thousands of Web Hosts worldwide. It also provides Consultancy Services to Registrars, Registries and Web Service Providers. These services range from obtaining and managing ICANN/ccTLD Accreditations, to providing Business Process Automation and Outsourcing solutions. LogicBoxes has had a 100% success rate in obtaining an ICANN Accreditation for its clients. Several domainers have acquired their own domain registrar via LogicBoxes in order to obtain ultimate control over their own domains. LogicBoxes has also started providing consultancy services and business automation software to companies that want to apply for their own gTLD (registry) with ICANN," Turakhia added.

Domain monetization was the next world Turakhia set out to conquer. "In early 2004, Directi signed a deal with Google to monetize its own registrar traffic. Since domain parking wasn't part of our core business, we didn't utilize our primary development team for it, and both Bhavin and I didn't pay much attention to it. We assigned the project internally to the small team that was then managing our not-for-profit WebHosting.Info business unit. Around the end of 2005, the members of this team stopped working with our company. The revenue generated from the project was small, and the majority of the profit was a direct result of Directi's own registrar traffic, so I took over the domain parking project with the intent to shut it down, and use one of the existing parking companies for monetizing our own traffic," Turakhia recalled. 

"When I started evaluating the solutions in the market, including our own, I realized that despite the fact that all the domain parking companies have been in this business for several years, the technology used by each of them was primitive and basic. I saw this as a very large opportunity and immediately built a new team of about 20 people to start working on my ideas. Since late 2005, I have spent near 100% of my time solely on the Skenzo Business Unit and continue to do so."

"Because of the superior 

technology that we put in to place, we started growing very rapidly. By the end of 2006, we had over 100 people working in the Skenzo business unit and we were the #1 fastest growing domain parking company in the world for 2006 by revenue and head count. By the end of 2007, we had over 200 employees working with Skenzo and we were once again the #1 fastest growing domain parking company in the world for 2007 by revenue and head count and had also become the #2 largest domain parking company in terms of monthly revenue, second only to Oversee.net (parent of DomainSponsor), who had been in the business since 2000," Turakhia said.

"Over the last 12 months, we have monetized over 20 million unique domain names. At any given point of time, we are monetizing over 5-7 million unique domains. Our diverse client base includes some of the world's most successful and influential domain portfolio holders, domain registrars, and online publishers. As of right now, with 250+ employees, Skenzo is the largest domain parking company in terms of head count," Turakhia said.

"We were the first company to build a managed parking platform where clients who have their own direct advertising feeds can use our superior technology to make more revenue on their own direct ad feeds. We continue to innovate rapidly and most of our resources are spent towards building newer technology.  Our primary strategy and advantage has been the use of self-created leading-edge technology, high-quality research, and proprietary processes that allow us to consistently produce long-term superior results for our customers," Turakhia added.

Skenzo's growth caught the eye of capital investors. "Earlier this year, the Ashmore Group acquired a significant minority in our Skenzo business unit.  The Ashmore Group is one of the world’s leading Investment Firms managing over $36 billion. This was the first external investment in any of our businesses. It was a late-stage investment – the business was already making good money and didn’t need any capital. We got Ashmore on board because we wanted a partner that had the expertise, the experience and the track record necessary for our aggressive growth plans for this business unit. Historically, we have grown all our businesses organically. We wanted a financial partner on board who would assist us with inorganic growth, who would assist us with evaluating and closing M&A transactions, who would help the business access various types of capital for further expansion in the future," Turakhia said.

Directi has continued to grow rapidly this year. The company currently has over 550 employees. "By the end of this year, we will be moving into our new headquarters, a $45 million facility that is 100,000 square feet in size," Turakhia said. "The new facility includes really cool amenities including a Bowling Alley, a fully-equipped Gym, Pool, Table Tennis, a large DVD Library, a Movie room, Multi-Player gaming room with Arcade games, Xbox's, Playstations, WII's, a Salon where employees can get free massages, haircuts, pedicures, manicures etc, a full-fledged canteen that provides free lunches, dinner etc.  We are also in the process of signing another deal to acquire yet another facility that is also about 100,000 square feet in size and expected to be ready by mid 2009."

Directi will move into a new 100,000 square foot headquarters building later this year.

"Every business that I have been involved with has seen exponential growth," Turakhia noted. "At the minimum, each business has doubled in revenues and head-count every year. The first business was started with $600 that was borrowed from my parents, and after that every new business and product development initiative has been funded solely from internal accruals."

"The combined product portfolio of various Directi businesses includes Traffic Monetization Solutions, Online Advertising Solutions, Communication and Collaboration apps, Social Networking software, Instant messaging, Context Analysis Engines, Antispam and Antivirus Solutions, Large scale Billing and Provisioning platforms,  DNS Management Products, Linux and Windows Server Management Software, Web Hosting Control Panels and much more. Every product that we have launched is focused on a global audience, and every business that sells these products ranks among the Top 10 businesses worldwide in their respective industry's segments."

As if that weren't enough, Turakhia noted that "Directi recently acquired the .pw ccTLD registry. We have been developing some products around this over the last two years. The goal of the project is to provide a unified, ubiquitous, intuitive and extensible communication platform to users and businesses worldwide. We have committed substantial resources to this new initiative. Bhavin is currently heading this initiative."

Turakhia said the company's phenomenal growth has been fueled by bringing the right people onboard. "Since our inception in 1998, our policy is to hire the best, provide them with the resources and authority, and then step out of the way," Turakhia said. "Without the best people, you can’t build the best company. We make mistakes, just like anyone else. But we also make more decisions, better decisions and faster decisions than most other companies."

"Authority is decentralized. Hierarchy is purely structural in nature. Every employee has the authority to make independent decisions with respect to their work. My job is merely to make available and accessible the right training and knowledge, the best tools and resources, and the information that an individual needs to make better decisions. I try to spend a significant portion of my personal time towards Human Resources. When the majority of the people within the company pro-actively make decisions by themselves, the growth rate increases significantly," Turakhia said.

"The environment at Directi helps nurture innovation, creativity, and collaboration. We also strive to provide a very dynamic & fun work place -  check out http://careers.directi.com/work-culture/.  Some of the benefits and fun stuff we encourage are Interest Groups where individuals within the organization are encouraged to start and operate their own interest groups. There are salsa workshops, treks, multi-player games, movies and many other interesting activities that are held regularly by these interest groups with complete support from the organization."

"We also offer Concierge Services to all employees so that their day-to-day tasks and chores are effectively taken care of.  We sponsor various educational courses for all employees to foster personal growth for individuals which benefits them as well as the organization. In addition, Directi's attendance policies are structured such that each team

has their own flexi timing. This enables individuals and teams to plan their work hours and personal time in the most efficient manner."

With amenities like that, it's not likely Directi will ever face a shortage of talent that wants to work there. While Turakhia could sit back and let others carry the ball now, the energetic 26-year-old says there is much more to come from him. "I have an infinite number of new business ideas and new product development ideas. So I would say that in 5-10 years we would see a lot more products, a lot more businesses, a lot more customers, and a lot more revenue!" Turakhia concluded. 

*****


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