Vikrant Bhargava. From $8.5B IPO to True Purpose

0:28Welcome to the Exit Paradox Podcast. with an initial valuation of$8.5 billion, which skyrocketed to$12 billion within just one month. Since then, he's been applying his business acumen to tackle the world's biggest and nastiest problems. In our conversation, we'll delve into how and why he is pursuing this path, what brings him joy and fulfillment, and what fuels his boundless energy, curiosity, and compassion. Today is Vikrant's first public interview since the IPO 18 years ago and his first podcast interview ever. So Vikrant, thank you so much for joining me today. To me, you are truly exceptional, man.

1:10It's like you've cracked the code of a fulfilling life without the need to spend years sitting on a mountaintop alone. I think your energy is off the charts. Whenever I spend time with you, I feel energized and elevated afterwards. So firstly, I'd like to thank you for having me here. It's an absolute pleasure and privilege to be here. I'm not sure everybody thinks that my energy is that high, but yes, I can be a bit restless. So today, I really hope to figure out how you got to this state of clarity about what's important in life and how you mastered your energy. How do you channel it towards the most important goals for you?

1:57So if you don't mind, I want to start from the beginning. I want to know what your parents expected from you. I don't think my parents had any set expectations. My parents, my childhood was pretty relaxed. I don't remember my parents ever telling me to do something. I think they also had it easy with me. I was an easy child where they didn't have to tell me to do stuff. On the contrary, at times they'd have to tell me not to read, not to do certain things. I had very poor eyesight, so I wasn't allowed to read after sunset. But expectations were just to be a good person. I grew up in an environment where there weren't any career aspirations and so on.

2:48I was raised in a regular middle class family in India in the 70s and 80s. Middle class in India was, I would say by UK standards, very poor. But there was no pressure ever put. Did you feel poor at the time? I don't think I knew what rich meant. And therefore, I didn't feel poor. However, I could see the difference where when I first met somebody who had toys that had been brought in from the US, I realized that he had something which there was no way I could afford. What was your family's view on education? Education was important. So I come from a family where my mother had done her master's before she turned 20.

3:39My dad, yeah. So my dad had gone to one of the best engineering schools in India. Middle class India, education was the only way out of being middle class. So therefore education was important. Nothing else really mattered. So while education was hugely important, I don't think my parents had to ever tell me to study. What about your children now? How do you view their education? I think times have changed. We live in a different environment. So my children have all grown up in the Western world where they've been in the Western world, but in an Indian family where both the parents and my wife is far more educated than I am.

4:33She holds a number of degrees. She's a double doctor and a lawyer. the kids have always been aware that we consider education important so they realize that but often I think they have had the feeling where there is no stress of the education does not lead to any stress when I was studying in India in my last two years of school education was it was stressful because I had to get to clear certain exams to get to a particular university that I wanted to get there. I do not think the children here have had that sort of stress except very brief periods sort of applying for university admissions and so on but the amount of effort they put in has been a lot less.

5:20I think it's also because they're smarter. They managed to do a lot more with a lot less effort. I think in general kids here end up doing a lot more within a shorter a period of time. Whereas when I see my sons who are once 18, the other one's 21, my daughter's still nine, the amount of effort they have to put in is a lot. The reason I'm asking is because, as you know, in our community of exited founders, people often debate the value of formal education and question whether it's worth it for their children to go and get formal education, especially those who never quite got it themselves. So in your case, looking back on your life, do you think it was important that you got your education?

6:08For me, it was absolutely important that I got my education. So the badges I got by going through the schools that I went to played a huge role in where I am. So it's the places I attended, which were far more important than what I actually learned. So I think if we separate those out, was the education important? Attending those educational institutions was hugely important. Socially or why? I think it gave me credibility. And when you are competing with 1.3 billion people, that just makes you stand out. If you've been to places which you're in the top 200, 300 of the country, that helps you sort of just stand out.

6:50I think it's much less than relevant for kids today. So with my 18-year-old, for example, school is good for social development, for sure, overall development. But when it comes to university, I think the relevance of university to teach him skills, which would be important for him to, let's say, get a job or work in any career, I think would be limited. And I think for exited founders, the kids are privileged enough to not have to be at university pure because their downside is a lot higher than the downside for most of the people you've been talking to so my downside if I'd not been to the universities I went to would have been very very different to what my kids have so they have a lot more opportunities to pursue things to fail initially and be successful at stuff that they care about that they enjoy that they can excel in I don't think I had the luxury of doing that when I was growing up.

7:53I really want you to elaborate on that. So you think children of exited founders are in this particular situation because they have the financial means or because they have mentorship from their parents who had this unique experience of building and selling a business? I think it's a combination of both. in my case when I was growing up we did not have the financial stability for me to have had the luxury of saying I'm going to take a year to figure out what I want to do so and my education costs my parents nothing practically nothing so my entire education till B school costs less than one month's private school fees in the western world for my kids today my kids for example they don't have that stress so if they wish to pursue starting a business learning about something before they can start a business they can afford to take that time that pressure is not there for them to start delivering immediately they can learn and they have got access to the parents and the parents community so friends around so So in any area that they want to explore further, I'm sure a few calls will get them in front of somebody who can mentor them.

9:15I did not have that. I grew up where we were growing up in cement factories. So the colonies, if I wanted to do something, learn more about cement manufacturing, yes, but nothing beyond that. How interesting, given that obviously you've spent so much energy and time and money supporting education for underprivileged kids. So to me, you're an expert in education. You have three children of your own, but then you've seen so many other children go through the education system. So your opinion is an expert opinion for me, and it's fascinating. So I think it's different for different people. So I still think for the ultra poor in places like India and countries like India, education is hugely important.

10:02But I think we should differentiate between just getting a degree and education. So a lot of people end up collecting degrees, which are not going to help them find jobs. I don't think of that as education. I think education should be something that helps one do something productive with their lives. and if it's not teaching skills which can be used later there is absolutely no point in wasting time trying to get uh collect those degrees what can we do as parents to avoid raising spoiled kids get kids to learn the value of money uh is one if they're growing up as most of our kids would be in a privileged environment they have to feel comfortable with money unless you say that you're not going to give them anything when they grow up.

10:52So I don't, our kids, they know that they are comfortable. They've grown up very privileged. But I don't think my kids are spoiled at all. I'd like to believe they're not. And I think it's more of be comfortable with what you have. Don't be arrogant. Be conscious of what others don't have as well. So you don't rub anyone the wrong way. and respect people. So often when we say spoiled, a lot of it actually comes down to how people behave with other people. And I think there, if they see parents being respectful of others and that respect shouldn't come from money, it shouldn't come from economic status, it should just come in your interpersonal dealings, I think kids will learn that on their own.

11:45So you're thinking leading by example. is the general approach. Yeah, so kids learn a lot from the families, from the environments they grow up in. There is a bit of hard wiring. All kids are different, but they learn a lot. The environment plays a big role. So it's not one of those where you say you deprive them of money or sort of do anything fancy. It should just be one of those. It's not that money is an important factor in many of the things. they should realize that they can't be spending more than they should or what would be inappropriate for them and my son's got a hobby of a of a rich kid he flies he's got a private pilot's license i asked him to make a budget for the whole year when he was going to university which he was allowed to keep a budget for flying he had he has a budget for his flying as well which most of the other kids won't have and that's a fair amount of money but it's actually not as expensive as many people think it is but still he made the budget i sent him his entire year's budgetary spend and i did not nickel and dime him on his budget so i sent him his entire amount but i sent did one wire transfer to him and he's been responsible for then living within his own budget so he knows he's not going to get more how is he doing so far he said okay when did you start this process of training him or and your other kids to manage money completely staying within their own budget was more a recent one at university but they've never ever spent more money than than i guess that would be seen to be normal so i would often hear complaints from them that their friends are getting laptops and games and so on that I would say no to and they would have to sort of spend more time pleading, requesting, cajoling, threatening before they would get stuff even though we could afford them.

13:54So they couldn't just have whatever they wanted. They got whatever they needed not whatever they wanted. So I want to explore how your motivation changed over time. So you went to university. What happens next? The pressure that I would say not just me, but many of my classmates had been through to get there was intense. So it was almost like a fuse, sort of the gasket had blown off a pressure cooker. You get there and you feel you've made it in life. Only to realize that you may have been the smartest in schools, wherever you were. And you get to this place and then the target almost became to be average.

14:31because average was actually good enough. So I wouldn't say I was a motivated student while I was at university. My target was to be in the upper half of the class and I managed that in an extremely efficient manner. So what was your dream at that time? It's a good one. Good question. I would often grapple with what do I really want to be doing because there was a side of me that wanted to do something good for India. and I wouldn't call myself an irrational patriot. It would have been nice to do something there, but I wanted to have money. So it was a tricky one. So I took the easier option, which was to go to business school in India and look for a company which potentially would post me overseas over time.

15:20So I joined Bank of America as my first job after business school. So at that time, your motivation was financial. It was financial. So I had, I wanted a better life than I think we had had. It was okay. But I had seen, I had seen what people could do if they had money. I hadn't seen too many people with money. But it was one of those where I would say by the time I got to university, I was a bit more aware. There were students there who were from wealthy backgrounds. Not too many. Most people were regular middle class, but there were a few. so money had become a motivator then. So how did you go from there to building a business?

16:04So my first salary was higher than my dad's salary who'd been working for 27 years he was plant manager of a big cement company so in that sense I was relatively well off for a 23-year-old, 22, 23-year-old. However, I think my salary was 1 ,500 pounds a year at today's exchange rate. Did I feel like I had arrived in life? No, definitely not. Around the same time was the internet boom was taking place in the US. So while I did not know what salaries and so on my friends were earning, many of them were millionaires on paper because I had stock of companies that were doing phenomenally well. So for me, one of the things that then I had in my mind was to try and join a startup, which is what most of my friends had done.

17:01They had joined startups and they had shares in a bunch of companies, which had made them ridiculously wealthy. So it was more of how to join a startup. So I took, again, an easier option, but a more achievable option was to join a large company, which was a startup in India. So I was the seventh professional to join British Gas in India that had just set up its operations. My salary more than doubled from where I was at Bank of America. So the pay was also good. And I thought I had the optionality of being part of an early member of a team, which was going to do lots of stuff in a large country with the comfort knowing that they wouldn't run out of money because it was part of a big company.

17:47Sounds very well thought through. So I took that. My philosophy in life is always, if the worst case option is not too bad, I'm happy to take those chances. I was still keen on joining a startup, which by then it had become clear to me, had to be in the US. But I couldn't get as an Indian passport holder, living in India, there was no way I could get to the US on an employment visa. It was just not a possibility. So I started to look for jobs outside the country to figure out a way to eventually get to the US. And two months later, after having found a way to get a visa to get to the Dominican Republic, I found myself in the Dominican Republic, having joined this startup, which was 20 people working out of a free zone in the domain in santo domingo with three business verticals and the three verticals being e-commerce payment processing and online gaming gambling and all three were sort of on the cards at that point in time so i was there running the operation in the Dominican Republic, but it was a small group.

19:02It was a small startup. I was 27. I think there were a couple of people in the team who were slightly older, sort of early 30s. The rest were all, as I called them, overgrown babies. They were part-time college students, not particularly professionals. It was an interesting setup that I moved to, but that was how I got to my startup. That startup ended up becoming a large company. with a bunch of things that we did. Just five years later, right? Yes. How did that happen? We had software that we would sell to other people wanting to get into online casinos. We also had a couple of our own sites.

19:45Now, this is me having moved from India, never having set foot in a casino, never having... I played cards as a kid, as a child, but I never enjoyed playing cards. Until date, I don't know the basic hand rankings of poker. I couldn't play a game of poker to save my life. But I found myself in this business where the one line of business with promise was software for online casinos. And so I tried figuring out the business and very quickly realized that people were betting against the house where we had a month before I had moved to the Dominican Republic had a person, a customer who had exploited a bug.

20:33So I think he had cashed out over a million dollars. And given that we were, it was our fault in our software, we ended up paying him. But it was one of those things which for me was just a high risk thing which we shouldn't have been in. and somebody happened to show me a poker site which looked like a risk-free way of doing business or building a business when I first saw this poker site hey I said this is interesting this is like an exchange where you get people to come in they play with each other they transact with each other you're facilitating transactions and as long as there are enough people you're just collecting a commission which after the loss that the company had had seemed like a very sensible way forward so we ended up launching a poker site which was developed by programmers sitting in india none of whom knew how to play poker they'd have books on shelves with rules of poker yeah it sounds funny it and i think it was funny and shocking for people i love the simplicity So that was our inspiration to get in.

21:49By the time we launched our poker software, there would have been 10, 15 other sites that had already launched. And I think most people had been inspired by Paradise Poker. I think it was a number of things that happened to go our way that actually led us to becoming the largest poker site in the world. According to public records, at the time the company went public, your personal net worth was 1.6 billion dollars. No so that's incorrect because in the public record it's easy to calculate it was not 1.6. After we went public and the stock hit a high it had gone up to somewhere like over one. Yeah.

22:33I think less than 1.6 but somewhere over one. How did that feel? I have never counted paper money as money. The billion plus whatever didn't really mean anything. I would say I had more money by the time we went public that going public did not really change the way we lived. It was purely being rich before to being publicly rich. I think that was a big change. Did you finally feel you arrived financially? So I still remember when I had the first million dollars in the bank. So that was a big deal. And if we go back just a few years before that, I tell my wife, half in jest, I said, if I have sort of 30, 40 million rupees, I'd build a hospital, you work, I will sit and play video games.

23:27And so that was a very modest ambition. We ran through the sort of 10 million rupees to a million dollars to then many tens of millions of dollars. and at that point in time I was so busy that the money did not really change how we lived except that I ended up buying two, three apartments when we just moved to Gibraltar because I knew I could just afford it. I bought properties without looking. So the money gave me the ability to buy properties and I'm not a property lover. So your definition of financial success was linked to properties you could buy? I think that was a change that happened with financial success.

24:16Financial success was knowing that I had the freedom and the ability to buy properties. So Vikrant, you are notoriously private. In fact, you told me that this is your first podcast interview. And I'm very grateful, very flattered that you chose this one to be your first one. So when Party Gaming went public, it was a very loud IPO. It was the largest internet company that went public ever by that time on London Stock Exchange. How did that affect your relationship with other people? So I would say I'm not notoriously private. I'm very open in person. But I think I was scarred by the publicity we got.

25:0332 years old two young kids at that point in time one literally a newborn three months old we had paparazzi type we had photographers with long lenses in one chap who had parked outside our apartment building in Gibraltar and I had been very much in the public domain before that so I had done interviews with a bunch of newspapers even pre-IPO and post-IPO but I think it was that one sort of long lens photographer in Gibraltar who pressed on the buzzer. We didn't want the person coming in. Sort of freaked me out and I said enough. I don't want to be in the press at all. My friends had been warned by me.

25:45I had prepped them in the months leading up to the IPO that we were going to go public and it was going to be big. I don't think anybody really understood how big. What was the company's valuation at the time? When we went public it was four billion pounds eight billion dollars my exchange rate was two to one then so yeah that's a huge number i'm sure it affected people close to a billion dollar top line close to a half a billion dollar bottom line business when we ipo so it wasn't sort of a sort of huge uh p multiples and so on so it was a it was a big ipo so getting my friends ready was something i had started to do pre-IPO.

26:26The rest of the people didn't really matter. I've moved around so many places over the years that I don't have too much contact with many of the people pre except my friends and my friends know me to be the same person. But prepping them worked. Prepping them worked but there is still a difference between prepping a person and seeing the effects of the money or what that money can buy so till date I'm conscious when people come to my house when I've invited friends who have not been to my place before to be ready for the fact that I live in a big house and I don't want photos posted on any social medias outside of my my surroundings my house I'm still pretty much a similar person yes it's not the same I can afford to spend money on many things that most many of my friends close friends from university for example can't but they've all done well most of them have done reasonably well so it's it's fine so what was that moment when you felt okay financially i'm set for life that's a pre-ipo we were already i felt very comfortable set for life and my so net worth multiplied as i say net worth uh bank balances multiplied post IPO but they had they were already meaningful enough pre-IPO to feel to for me to have felt comfortable for life.

27:52How did that change the way you thought about what you wanted? I don't think it changed anything at all at that point in time because I was too busy working so it was only in 2005 post IPO that we had the luxury of some time and a much larger bank balance to even start to enjoy the money even slightly but still not sort of think about what I wanted to do with the money. I started to deeply think about post-2006 where I had exited the business and that was I think it was a start of a long journey which still continues. When you suddenly had the luxury of both time and money how did that feel honestly at that point in time it was miserable because we had i had the money the money hadn't changed i didn't know what to do with the time and i had suddenly come into possession of a lot of time i I was not used to time.

29:01I was used to a very large team and working crazy hours and spending whatever little time I had with the kids. But also that wasn't much while I still tried to make the maximum I could for the kids. But when I stepped down, it was a rough separation. And I went from being super busy to all of a sudden feeling like I had lost my life. control of my child because the company had been and I'd spent more time in the business than on my children till then. I at that point in time felt like you take a child that's been taken care of properly who's being given to somebody who's likely to abuse it. So for me it was more of I stepped down and I shut myself completely from the business to the point when people ask me today as to how the business is, where the company is.

30:01I don't know if it's public or private. I don't know who owns it. I literally, when I stepped down, there were no Google alerts set for the business. So that was, I didn't want to know anything that was happening. I was probably protecting myself by not wanting to know what was happening. And I did say, I don't want to see my child being abused. I don't even want to know. I would see people, but I was very clear that I did not want to talk about the company. I didn't want to know anything about what was going on in the business. That was quite a lot of years ago. Is it still the case? So many, most of the old guard have left.

30:41So I'm still friends with my people. I had a disagreement with one of my business partners at that point in time. She and I are very good friends now. So that was one rough year. So that separation, when I had the luxury of time and the financial stability, yes, financial stability, nothing had changed, but that time was not welcome time. It wasn't time that I had planned for or was looking forward to. When it happened, it happened because of circumstances. So it wasn't fun. How was your sense of identity affected by that exit? That's a good question. Was my sense of identity affected at all? I think I went from being a person who had built a very successful business.

31:42We had outsmarted all our competitors and outgrown all our competitors to become larger than the rest put together. there was a period where I shut all advertising because we couldn't handle the customers we were driving onto the platform it felt nice so that gave especially then so now when I think about it it's many many years ago but at that point in time it gave a particular kick however I'm not sure I take my identity from that so as an individual I don't think I really changed too much. I'm sure some people will disagree, but at my core, I think I'm very much the person I was when I was 20 years old.

32:23Yeah, I do have a lot of money. I totally appreciate that. I understand that. And it gives me a lot of freedom to do a whole bunch of things. And the fact that I have no stress whatsoever on the money side, it's hugely liberating. What about the loss of structure? You said you had hundreds of employees and then you had nobody around you. How did that feel? at that point in time I didn't know the word today I would say it was slightly it was depressing so I probably if I had gotten myself checked then I would have been depressed at that point in time so I went from having a very large number a team of people that dependent on that was dependent on me uh that I ran so I shouldn't say the team was dependent on me but that I that I oversaw to suddenly just having one person reported to me, and that was somebody who's worked with me now for many, many years, my executive assistant, from an office to not having an office, working from home.

33:23And I say working. I wasn't really working. It wasn't working from home. It was more of being responsible for a lot of money that had come into my bank accounts, which was at that point in time being run by various bankers. So it was more an obligation to just sort of oversee how that was deployed as opposed to making interesting decisions on an operating business. So that's far more interesting than looking at a portfolio which was deployed into a bunch of funds. Would you say you were bored on top of being miserable and depressed? Yes, it was quite boring. So did you regret exiting the business?

34:11If I had to go back in time, would we go through the process again? I'd advise people to go through it, but be better prepared for it. Because as I said, being publicly rich is not that easy. It's easier to be privately rich. But it was a good experience. So I would highly recommend going through it if it's meaningful. my exit from the business happened later which was when I stepped down from the business so where I mentally and sort of operationally exited the business that was not as I said I I could have lived with I could have stayed on in the business and be super stressed and then I would have had a heart attack in two more years so do I regret that not at all so it was absolutely the right thing I did at that point in time.

34:56Yeah. How long that miserable period in your life lasted? So I think it lasted a few years. Longer than it should have. We were living in a small place, Gibraltar. If one's in a big city, you can get intellectual stimulation by meeting a lot of interesting people. That unfortunately was not the case in Gibraltar. If it moved out sooner, that would have helped even while I was in Gibraltar I would fly to London every other week just to have some interesting meetings yeah but building that network took some time so after we moved from Gibraltar in 2008 I we moved to London I think another couple it took me another couple of years by the time I took an office and that was more to get into the discipline of going to a place to work to look at look at interesting business ideas get involved with things as opposed to going down to your study in your pajamas which I realized I was not setting a good example for my kids because for them they probably thought that was work which was which is not real work so I ended up getting an office this is I think 2009 2010 and that's when I started to get operationally involved with a few things so I incubated three startups in India I started work on a serious note on a tech platform to help charities raise money in India I got a lot more active with investments in the UK so I'd say I actually it took me four years i only got back to sort of proper work and a proper routine around 2010 so how is your exit from party gaming change the way you you think about wealth so party gaming we were still in wealth creation uh post exit i switched into the wealth preservation mode.

37:05So I'd say pretty early on, I realized I'd made way more money than I ever thought I would. And the hunger, the desire to sort of run after more money was not really there. It was more of pretty comfortable with what we have. What that meant was I was not shooting for hefty returns. It was more of just make sure that we get inflation, recover inflation, and we're okay so it was diversification I say that but we didn't eventually end up diversifying a lot but it was more of manage risks don't do anything crazy don't invest in things that look obviously risky so it was a portfolio of what I would consider as very conservative for most people especially most entrepreneurs.