Thirteen years, three months. That’s how long Kavin Bharti Mittal spent trying to build the world-class consumer internet company out of India. Mittal went against all odds, he fought, he pivoted, he even raised a lot of money, and yet one day all of it was gone.
Hike Messenger, which was once India’s most daring tech experiment, has officially shut down it’s operations. But why? What exactly was the trigger? India’s ban on real-money gaming. And for Hike this was a knockout punch.
Remember Hike Messager?
Oh god the Nostalgia! The stickers, the hide chats option, the nudge option, the personalized wallpapers for each chat, takes me back to the good old days. 2012 was something else, even when WhatsApp was already dominating the world, Mittal thought we deserved something different and built Hike for us.
And people loved it! Just in 4 years of its launch it became India’s fastest Unicorn. Mittal was only 28 at that time, and he had huge companies like Softbank, Tiger Global, and Foxconn cheering him on. Hike Messenger raised $250 million, and had 30 million monthly users. At this point, it felt like Mittal had cracked the consumer tech code in India.
But in reality, the ship was sinking. Why? Because of people’s habits ingrained in their systems, cheap internet and not to mention WhatsApp’s relentless effects. And just like that in 2019, Hike had to pull the plug on messaging. Was the game over or did it start a new level all together?
Pivot #2: Gaming Glory (and Trouble)
Remember F.R.I.E.N.D.S iconic episode, the couch one where Ross kept screaming Pivot and at the end of it the couch just fell to the ground floor and tore apart? That’s exactly what happened when Mittal decided to go all in on something entirely different. In 2021, he launched Rush, a 14 mobile games platform, incorporating Web3 technology and play-to-earn features before it became popular. It was a daring, risky, and, to be honest….kind of genius move.
It actually worked for some time. Rush made $500 million in revenue, expanded to the US market, and had employees working in India, Dubai, Singapore, and the US. They termed themselves “SWAT teams”, small, highly skilled, and rapid-moving.
But then the ban came. India, in one ban, prohibited the very business model that made Rush possible. Mittal confessed that although the US branch was doing well, it was not worth the trouble of a global reorganization without India which would take a lot of money. Harsh, brutal logic, but actually the right decision.
Why Shutting Down of Hike Messenger Made Sense
The truth is that this wasn’t about the execution mistakes. It was about structural traps which Indian startups keep falling into.
- Too dependent on India– When around 90% of your base is in one country, the reality is that just a single policy change can wipe you out.
- Too many pivots– There’s something called pivot fatigue, that every team likely faces. Because every restart burns time, money, and credibility.
- Too risky a model– Real-money gaming is basically at the mercy of regulators. That’s a single point of failure.
- Too big an opponent– Competing with global giants like WhatsApp is so hard, and it’s almost impossible for a company to standout unless it offers something completely unique. That’s exactly what happened with Flip too, the billion dollar company that had to shut down.
Here’s where the founder realized that sunk cost fallacy wasn’t worth another decade. And shutting down was a wise decision that was taken.
The Lessons Buried in Hike Messenger’s Fall
Hike is a story that lies in the groove between being inspiring and terrifying for you if you are an entrepreneur in India.
- Design for the regulators rather than just for the users. Because if all of your revenue depends on a loophole, it’s just waiting for the bomb to burst.
- Never rely totally on just one market. India is large but not entirely safe. I’m not trying to be critic here, all I’m saying is never put all of your fruits in one basket.
- Company valuation is of no importance if the economics of the business are negative. Being a unicorn is fantastic for the media and headlines but not enough for survival.
What This Means for Everyone Else
Mittal definitely says this is not his end, just an additional chapter. To tell you the truth? I think so too. Such failures don’t extinguish the fire in the entrepreneurs, they actually make it stronger.
For the industry though, the ripple effects are real:
- Investors would prefer to be more skeptic concerning any enterprise in sectors sensitive to the policy in the next time.
- The 100-strong Hike team will disband and the members will become new employees in other companies, new conducts will be able to grow in the place of the old ones.
- Regulators have just proven to be able to shake the very foundations of billion-dollar companies in a matter of seconds, and as a result, it should frighten every startup.
So what do you think? Was shutting down the right option? Or should have Hike opted for another Pivot? Comment down your thoughts and let me know.
