A startup failure

When I first started Udayy in Dec 2019, I did not in my wildest dreams expect to make it to the second page of ET for this. The last few weeks of March were incredibly hard. Saumya, Karan and I were deliberating on the state of the business. CACs were an all time high, retention low, parent feedback “Your classes are absolutely amazing but my kid and I are just tired of zoom meetings.” After several failed pivots in the last 6-8 months, we took the hard call to shut Udayy. Despite having several months of runway in front of us, we made this decision because neither did we want to  burn investors' and LPs’ hard earned money nor did we want to waste teams’ time on a business which we knew was doomed to fail. We had the choice to fail fast or fail slow. We decided to fail fast. In all of this, our biggest worry was how the team would take it. So many of our team members have been with us since the very beginning of Udayy. They had relentless belief in us. How can we shatter that trust overnight? 

We took the time to lay out a well defined plan for the wind down. 

1. Communication pointers for employees, customers and press etc
2. A generous severance 
3. A tracker to refund customer money for over 3000 parents who did not consume some portion of the classes that they paid for 
4. A simple sheet for employees to update their resumes and career preferences which we would then share within our networks to help find new opportunities
5. Other operational stuff such as vendor communication, closing company g suite etc  

On 4th April, we called a company wide town hall to break the news. We were as transparent with our team as possible, clearly laying down the why behind the what. We requested the team to not sensationalize the closure since it could jeopardize future opportunities for everyone. We communicated the plan of action to set the right expectation for those who would be needed to help us close the customer refunds in the next 15-20 days. We also mentioned how we will stay back in the office and answer any questions that the teams may have. We expected that most people would leave soon after the town hall. 

What followed the townhall left me both surprised and relieved. More than being concerned for themselves, the team was concerned about us as founders. They knew this was our baby and that we deeply cared for it. “Karan, Saumya, Mahak, whenever you are ready with your next startup, we will join you without a blink of an eye. Just call us” “You have taught us what an incredible company and culture look like. We will take a little bit of Udayy wherever we go next.” “It’s warming how you took care of all of us even at the end of this journey by giving us a soft landing.” Some employees who had attended the town hall remotely traveled for 1-2 hours just to meet us and bid farewell in person. Tech team ordered donuts for everyone at around 5 pm. Over the next few days, several team members emailed and sent whatsapp messages thanking us and sharing about their own unique growth stories within Udayy. 

Over the next 15-20 days, many team members and we worked hard to refund customer money. Founders took turns to man the support chat and emails while the team called each and every parent to individually update them about the shutdown and answer any questions (yes we had a script and a list of FAQs for that as well :P).   Many of our students were heartbroken that their beloved Udayy classes and teachers will not continue to teach them 2 weeks from the date of announcement. It was hard for them to accept the decision because according to them things were going great in class. However, the parents deeply appreciated our integrity and thanked us for returning their money. We still have a very small handful of 20-30 parents who we haven’t been able to connect with due to change in phone numbers/no incoming etc.  

Over the next few days after the townhall, we kept contemplating a news outbreak. We were worried that it would negatively impact the team's negotiating leverage and emotional well being. It would have also potentially created massive mistrust in our customers making the entire refund process difficult . To our relief the company closure made it to the news only yesterday ie 2 months since our townhall when almost 100% of our team has found new roles and 99% of customers have received back their money. I appreciate the media houses for taking the time to hear from us before publishing the news.  

While the entire shutting down was probably the hardest thing I have done in my entire life, I am glad that we had the opportunity and the support of our investors, mentors and team to be able to do it in the right way. When asked “Knowing the outcome that  you know today, will you have chosen to embark on this journey again?” my answer is “Yes, without a second thought. While the outcome is not what I had hoped for when I started, I have learnt and grown in more ways that I imagined I would at the beginning of this journey.” I am thankful to have found great co-founders and life long friends in Saumya and Karan. I am also thankful for the support of my family, friends and the broader community who have been pouring messages of good wishes and words of love and encouragement. People who I had not heard from in the longest, took the time to reach out and make sure that I have any and all the support that I may need to rebuild from here.

While I continue to mindfully evaluate what next, I want to thank each one of you for being a believer in my journey. Onwards and upwards from here. ?