Bootstrapping a New Age AI Services Venture: Anji Maram, CEO of CriticalRiver (Part 7)

Sramana Mitra: You said at the beginning of the interview that you were trying to make up for the margin gap in services companies with velocity. Did you succeed in doing that? In the ten years that you’ve been in business, did you succeed in growing at a very high velocity?

Anji Maram: Yes. We are a self-funded company.

Sramana Mitra: That was my second question. Financing strategy.

Anji Maram: We never raised any money from outside. That means every penny we made was reinvested in the company. As founders, our only goal is to grow this company. Since it is a private company, the way we manage margins is totally different. If it is a funded company, then we would have a lot more margins.

It’s the first time for us. We’re starting this company and learning so many things. We made so many mistakes. Obviously, there was an additional cost for our learnings too. Over a period of time, with the guidance of the board members who joined our organization, we were able to bring in more efficiency and increase the margins.

Sramana Mitra: You’ve not taken financing even now, right? Raju Reddy is an independent board member. He’s not a board member representing an investor, right?

Anji Maram: Yes, he is an independent board member. We haven’t taken financing even now. By creating more value in terms of AI and then data modelling and data science related services, we’re able to increase our margins because the value that we are bringing to customers using some of these new innovative solutions is very high.

Sramana Mitra: What kind of margin improvement did you achieve? Of course, what you will achieve with what you’re doing now remains to be seen. It will happen, but it’s not something that you can quantify yet. But you have actuals from the last ten years. What were you able to accomplish even before AI came in?

Anji Maram: Before AI came in, just by bringing in more efficiency, we’re able to achieve 500 basis points margin improvement y-o-y. Next year, we are going to increase at least 300 basis points. With AI, it’ll grow more.

I think here’s where we want to go as a company. If we combine both AI services and traditional services, we should be able to definitely end up twenty plus percentage of EBITDAs, which is good in terms of services companies.

Sramana Mitra: Where are you revenue wise right now?

Anji Maram: We are around $50 million now.

Sramana Mitra: And what is your ambition? Do you want to keep this all private and keep growing like this with full control? Do you want to go public? Do you want to at some point raise money? What is your ambition?

Anji Maram: We had an ambition of taking CriticalRiver services company to IPO. We’re not against raising money. At certain point of time, we may raise money. Is it going to be at a major equity or minor equity? That is yet to be decided. We probably don’t need to liquidate more than 50% to raise the money, right?

Sramana Mitra: No, I think you’re at a significant revenue level. So I think you could raise money in the way you want to raise. That’s not a problem. If you can show the AI component working, you should be able to name your price.

Anji Maram: Exactly. Whichever investor we partner with, we want that investor to be more strategic rather than taking control on the company. We want that investor to help us grow. We want the investor to bring their value to help us grow.

We have a strong brand reputation in the market. We run strong marketing events – flagship events like CriticalRiver Open where our customers love to participate. Customers love to work with us or customers ask more offerings from us so that they kind of get more value from us.

That is the relationship we maintain with our customers. That’s why when we do something, we want to be very cautious. It should not damage the value that we provide to customers. That is a very key thing that we consider when we look at any investment.

I have heard a lot of stories and of examples where when investors come, the companies cannot provide the same level of service to the customers.

Sramana Mitra: There’s a lot of pressure to grow fast and compromise.

Anji Maram: So, at this moment, our goal is to maintain the same quality of service to our customers. We cautiously make those decisions, whether it is in accepting investments or any board of directors. We want to stick to our values.

Sramana Mitra: I wouldn’t rush to outside financing, especially since you’re testing the business model and the pricing model on the AI side right now. I would validate that before I go out to raise financing, because then you know what you are financing. Right now, you don’t know what you’re financing.

Anji Maram: Exactly. I think, this year is going to be a very critical year for us to reshape the company into a new direction. As long as we execute our plans, I think we will have a right path to move ahead. The rest of the finance decisions will follow. So, the goal is to do the right thing to our customers and then take it to the next level basically.

Sramana Mitra: Wonderful story. What does your father say?

Anji Maram: My father is not in this world now. He’s up there watching.

Sramana Mitra: How much of this has he seen before he passed away?

Anji Maram: No, he hasn’t seen any of it. He passed away in 2013.

Sramana Mitra: Oh, you started right after that in 2014.

Anji Maram: But the rest of my family is with me. Without my immediate family – my wife and kids, I cannot do much. I’m glad they’re able to support. My family in India are very proud of what is going on.

Sramana Mitra: Oh, wonderful. They should be very proud. Congratulations, Anji. Wonderful story, and I will follow how you’re doing as you go along.

Anji Maram: Thank you. The only thing I’d advise anyone who is listening is, have those few people around you, who always wish the best for you. Have the right family members, immediate or extended family and good friends with you to support. Good customers and good customer relationships are all the right strengths. Whatever I don’t have, they will give it to me and then they will keep me going and keep me pushing. Those are the reasons why we are where we are today.

Sramana Mitra: Fabulous.

This segment is part 7 in the series : Bootstrapping a New Age AI Services Venture: Anji Maram, CEO of CriticalRiver
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