Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta (Part 2)

Sramana Mitra: It’s not really operating experience. It’s consulting.

Ambarish Gupta: If you want to join PE, you need operating experience, for which you have only two options. You either work for a corporate for five years or you work for consulting firms for two years. Two or three years is quite a short time compared to five years. That’s why I decided to join McKinley. In two years, I did a lot of work with large banks and insurance companies.

In 2009, when I was trying to come out and join PE, the sub-prime mortgage crisis happened in the US and the whole banking sector collapsed. Companies were not hiring. I spoke with a bunch of my mentors and asked what I should do now. They asked me to get some more operating experience. That is how I thought maybe I should start a company again. The company is bigger this time. And it was good operating experience too.

Sramana Mitra: That is really good operating experience.

Ambarish Gupta: I was in New York in 2009. It looked like a billion dollar opportunity that I could work on. The truth is something like this. You look at the world and you realize that emerging market was growing at 8% and developed market was growing at 0%. The telecom sector in emerging markets was growing 100%. So the chances of success was high. In telecom, the consumer telephony was getting big in the US market. There was a need to have some kind of business telephony. I thought the same thing would happen in the emerging markets. That was the big idea.

Sramana Mitra: In the emerging market telecom sector, what were you going to do? What was the value proposition that your company was going to provide?

Ambarish Gupta: What we did was provide office telephone numbers. There is this company called Ring Central in the US, which provides phone systems for small businesses. You don’t need to buy any hardware. You get nine phone numbers that you could put on the business card or websites. You pay for this every year.

Sramana Mitra: It’s the equivalent of RingCentral for the Indian small businesses. That was the value proposition of your company.

Ambarish Gupta: Yes. It was a combination of RingCentral and Twilio, which provide telephony API to large enterprises. In the US, Voice over IP is allowed while in India and most of the emerging markets, Voice over IP isn’t allowed. You have to develop a different technology which is called PSP and cloud telephony to be able to service this market. This looked like a safe opportunity because it had a large barrier to entry. Voice over IP not being allowed in India was quite a good thing for us.

Second, there are 15 million SMBs in India compared to 6 million in the US. It was an unpenetrated market and I am Indian. So, I came back to India in 2009 to start Knowlarity. It’s been five years since we started. The first time I didn’t have money. This time, I was very safe. I raised money before I came back.

This segment is part 2 in the series : Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta
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