Even before he founded a billion-dollar company, Yashish Dahiya was different from everyone else in his family. The co-founder and CEO of insurance marketplace Policybazaar Group was the first person in his family to not be in the army, navy or air force. Back in college though, joining the army was his only aim.
“Till college, I just wanted to join the army. The teachers didn’t think I could do anything else. I was disciplined and that is the only life I had seen,” he said in a conversation with Manoj Kohli, Country Head of SoftBank in India, as part of the Global Unicorn series organised by the Confederation of Indian Industry (CII)
Today, Policybazaar’s parent EtechAces is valued at $2.4 billion and is aiming for a $4 billion public listing this year, but this path was not quite obvious in the 1990s when Dahiya was figuring his career out.
“Being a civilian was an alien concept to me. I have never had anyone outside of the army, navy or air force in my family and cousins,” he said.
He gave his engineering entrance exam only because the army entrance exam -- the SSB -- was held twice a year while the JEE was held only once. He got into the prestigious Indian Institute of Technology, Delhi, following which he also did his MBA from the top-ranked Indian Institute of Management, Ahmedabad. “In the (19)90s, as a civilian, you could either be an engineer or a doctor. And I didn’t like biology,” he said.
Unlike his other MBA batchmates he did not take classes in entrepreneurship, but one day a year, students could put up their own stalls and run them. Dahiya ran three stalls, including one selling fruit juices, and running those stalls efficiently convinced him he had what it takes to be an entrepreneur.
In 1996 as he was graduating from IIM, he did not sit for placements. “This was after the Harshad Mehta scam, many banks did not even come, and the (salary) packages were just 2-3 lakh a year. So he started his own tuition classes, which initially earned him much more than a job from IIM would have. “I was thinking pretty short term,” he says.
But his parents weren’t happy with him running a tuition centre and said that neither Dahiya nor his sister would be able to get married because he was a mere tutor.
He then took up a job with ITW Signode, which makes packaging solutions such as wrapping, taping and protective packaging. “I worked very hard for four years. I was not enjoying the salary or the job. I did not enjoy any aspect of it. There was no difference in my effort there and at Policybazaar. I was true to my salt and delivered great results,” he said. He even became the company’s youngest-ever business unit head.
But after he got married, his wife Shikha made him realise that he was severely underpaid there. “(Living) by yourself you don't realise these things sometimes,” he says laughing.
So he went to INSEAD, one of the world’s premier business schools and joined consultancy firm Bain after that. In a year his salary jumped by about 20-30 times. He then became the UK managing director for Ebookers.com, an internet travel booking site. His experience there gave him the idea for Policybazaar.
“Travel is a low-margin business. No matter who takes a seat, the price is the same. But imagine if you can charge people differently for the seat,” he said, comparing it to varying insurance premiums.
“Imagine if the cost of the seat for the airline can be zero for one person, who will never claim, and a million dollars, where he is definitely going to claim,” he added.
While he started Policybazaar in 2008, he had been thinking of venturing into the insurance space in 2006, driven by what an unnatural industry it is and how much could be done. “What you sell here is a promise. You are paying for a promise. And the best-case scenario here, for both parties, is if you never use the product,” he said.
Insurance was (and is) a huge industry, “a $5 trillion dollar market up there with oil and gas and telecom...It is a sector where the consumer engages but does not spend money. Per capita spend was the lowest,” he said.
But unlike many entrepreneurs who start with self-doubt about whether their venture would work, Yashish and his 17 co-founders thought differently. "We that no doubt it would succeed. There was zero percent doubt."
In fact, until Policybazaar raised its first round of funding from Info Edge (parent of Naukri.com), it was unable to pay salaries to any of its 18 co-founders.
"There were originally 22 of us; four really needed a salary so they couldn't stay. And that's fair enough. But we really couldn't pay anybody a salary. Even outside of that we needed 60-70 lakh to invest in the business, for computers and servers,” he said.
Info Edge came in and committed about Rs 20 crore. The money, however, came in tranches of a couple of crores each quarter. “But they understood things well. They gave us an initial cheque of Rs 1 crore to pay all salary arrears and settle that,” he said.
The rest of Policybazaar’s story is well known, but once again Dahiya said something quite unusual: “There is nothing I would change about Policybazaar even when I look back today at the last 13 years. I have been surprised by how accurate we have been at every step...the consumer has woken up and has started to engage,” he says.
Dahiya gives some interesting numbers to chart out the company’s future. “Currently about 6 crore families in India can afford private insurance of a meaningful kind. Only 15 percent of these families have insurance, and this 6 crore will become 15 crore in the next 10 years. That is inevitable. So the market is expanding and becoming much more meaningful now,” he said.
Dahiya spoke about his days before Policybazaar, connecting the dots in retrospect and how he was absolutely sure from day one that Policybazaar would succeed.