Thread by @gaganbiyani

I’m biased but @udemy is a true underdog story + thought I’d share details we’ve never shared before.

ICYMI, we announced a $50M raise at $2B valuation.

Udemy almost died at least 5x. We got rejected by everyone in the Valley. Startups are never a straight line.

*Read on*

@udemy In 2009 @ 21yo, I met @erenbali and @caglaroktay at incubator @founding with 40+ business co-founders looking for technical leads.

Eren + Oktay were clearly the smartest engineers in the whole group, but few knew who they were. They were brainy, less social with thick accents.

@udemy @erenbali @caglaroktay @founding I almost didn’t meet them; @adeoressi threatened to kick me out if I didn't. We bonded over our immigrant backgrounds. I worked for free for 6 months. It became obvious that @erenbali was one of the smartest people I'd ever met, though few others saw it. We became cofounders.

@udemy @erenbali @caglaroktay @founding @adeoressi It was an extremely tough start. None of us had family money.

They were on visas so could not quit. Worked day jobs from 10a-7p; then on udemy until 4am.

I was a consultant and flew cross-country every week. 70 hours in DC, slept on plane, then 40-hour weekends in SF.

@udemy @erenbali @caglaroktay @founding @adeoressi After 1 year of this, $30k in cc debt, nobody would fund us. YC rejected us 3x.

We met over 100 investors and they all passed.

We agreed if we didn’t raise in 1 month, we’d quit. Finally, @rabois (who knew this but didn’t care) said yes. Then @naval put us on @angellist.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList The famous names were great, but other investors - @rfradin and @msugarman - dug in.

Taught us how to run a company. Russ insisted we create a board - so we put him on it!

Starting a board at the seed stage was a company-defining decision.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman When we went to raise our A round, everyone passed again. (despite 20% MoM growth)

We raised on rough terms. I look back on that as my biggest miss. Early rounds on tough terms lead to future rounds on tough terms.

I often wonder how things would be if we were a YC company.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman The founder match didn’t last. Eren fired me for reasons I'll post in future. He left 2 years later.

By Series C, none of the founders were at the company. In fact, today we are on our 4th CEO and yet the business is as strong as ever.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman There is no one path to a gr8 business.

You can lose your founders and still have a great business.

You can be rejected by Sand Hill and raise elsewhere (or not at all).

You can grow up in a one-room schoolhouse in a poor part of Southeast Turkey as Eren and Oktay did.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman The foundation is critical. Eren’s original vision was spot on and we built a growth marketing culture (led by @dinesh9 and @archieabrams) that knew how to grow.

Marketplaces are insanely resilient.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman @dinesh9 @archieabrams Two mid-stage difference-makers: @InsightPartners has been bullish since leading the B. They brought in growth investors + kept buying secondary!

@DennisYang and @DarrenShimkus executed on our expansion into B2B, Int'l + increasing take rate to fund marketing.

It's a team sport

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman @dinesh9 @archieabrams I know this because I started @sprig, an overvalued company that eventually failed.

Was that the whole story? Of course not.

Sometimes the hype is real (see: @AirBnB, @Uber, @Lyft, and so on).

But important to remember there are downsides.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman @dinesh9 @archieabrams @insightpartners @dennisyang @DarrenShimkus Today, many of our peers (marketplaces + other edutech cos) who were higher valued are facing challenges.

Overvaluation means overspending, which increases likelihood of failure.

Hype gets into people’s heads.

Best of both worlds: build hype but stay humble.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman @dinesh9 @archieabrams @insightpartners @dennisyang @DarrenShimkus I know this because I started @sprig, an overvalued company that eventually failed.

Was that the whole story? Of course not.

Sometimes the hype is real (see: AirBnB, Uber, Lyft, and so many others).

But important to remember there are downsides.

@udemy @erenbali @caglaroktay @founding @adeoressi @rabois @naval @AngelList @rfradin @msugarman @dinesh9 @archieabrams @insightpartners @dennisyang @DarrenShimkus @Sprig Final thoughts:

Prepare for a grind. Udemy is 10yo and worth “only” $2B. You don’t have 2 be Uber to be a gr8 biz.

Don't be a sore loser. Eren + I are v good friends. We respect those who rejected us + those who fired us.

Blog post(s) forthcoming; please follow me for more :)