Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta (Part 5)

Sramana Mitra: What kind of companies do you recruit as channel partners?

Ambarish Gupta: These are like a tiny version of SIs in India. SMBs in India for their technical support requirements depend on large local companies who for example distribute laptops, computers, and computer accessories.

Sramana Mitra: How do you find them?

Ambarish Gupta: These are little guys but they’re tech savvy. They are listed somewhere on the Internet. They are selling websites so they definitely have websites. We find them on the Internet and just call them up.

Sramana Mitra: That worked out. So now you have a pretty good feet-on-the-street force out there that are in close touch with customers who are basically bundling your services alongside other technical services.

Ambarish Gupta: Exactly. On our direct payroll, we have a small number. We are currently around 500 people now.

Sramana Mitra: 500 people! On direct payroll, these are not channel, right?

Ambarish Gupta: Right. Out of these 500 people, 300 are in sales. The rest are in operations and technology. Out of these 300 people, close to 70 are in direct sales. The rest do channel partner support. Close to 100 people just support these channel partners. Channel partners themselves will probably have 2,000 people under them. If you look at the number of people selling Super Receptionist in India, there are 2,000 people, but only 300 people are on direct payroll.

Sramana Mitra: Once you started building this channel, how did the revenue ramp? In 2010, you launched Super Fax and Super Receptionist in 2011. How did the revenue shape up from there?

Ambarish Gupta: It has been going pretty well quarter by quarter. On an average, we have had consistent growth between 30% and 40%. At McKinsey, I did a lot of sales confirmation work for large banks in US. I also worked at Microsoft in developing channel partner strategy. I understood how to build a highly process-oriented salesforce. That is what we implemented right from the beginning in Knowlarity. Even if you had two people, there would still be a process. It used to be a running joke in the company that we are born adults. But the advantage of that was that we had a very consistent growth. Every month, we’d get new orders and grew around 35% percent on a quarter by quarter basis. In 2011 after launching Super Receptionist, we received Series A funding from Sequoia Capital.

Sramana Mitra: How much did you raise at Sequoia?

Ambarish Gupta: We raised $6.5 million. The money came in January of 2012. We received Series B in August 2014.

Sramana Mitra: How much was that?

Ambarish Gupta: That was $15 million.

Sramana Mitra: What kind of revenue run rate are you at right now?

Ambarish Gupta: Revenue ranges between $5 to $10 million. Annual revenue run rate is around $10 million.

Sramana Mitra: What’s next? You’ve obviously found a rhythm. You have found levers that are capital-driven to grow. You understand how to sell. You have a good process with selling. What other strategic levers have you identified in the process of scaling this company?

Ambarish Gupta: There are three challenges in building this company. One is technology. Dealing with telecom operators is difficult, and the connectivity they offer is not of high quality. Because the whole telecom infrastructure in India is very haphazard and you are providing a service on top of it. People don’t care whether the connectivity went down from the telecom operator side. They want to make sure that your line is up. The second is on a shoestring budget, you are solving very difficult telephony problems.

Sramana Mitra: Who’s your technical brain? Do you have a CTO?

Ambarish Gupta: In the first year, I was the technical brain. In 2010, I hired my batchmate from IIT-Kanpur. He was in the US and I brought him back to join me.

This segment is part 5 in the series : Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta
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