Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta (Part 6)

Sramana Mitra: What’s his background? What did he do after IIT?

Ambarish Gupta: Like most IIT guys, he went to Silicon Valley and worked for startups for eight to nine years. I got him back. He was also my colleague in McKinsey in the Pittsburgh office. He has a PhD in Highway Engineering from the University of Illinois. Then, he worked in McKinsey for four years. A lot of people in the product team working on this platform are people who have returned from the Valley.

Sramana Mitra: You said there are two other challenges. What are they?

Ambarish Gupta: Operations and sales. Let me first talk about the challenges in sales. In India, the target customer base is your typical mom-and-pop stores, travel agents, real estate brokers. They don’t know anything about getting traffic for their website and digital marketing. They had to be educated about these through traditional modes such as channel partners and through phone calls. The access to this market is very costly because it’s physical and it’s slow. If you want to sell the product, you have to educate them. It’s a difficult market to get in. We addressed this challenge by simplifying the product to the level where it could be understood by the target market.

The third challenge is operations. Operations is very complex because if your customer doesn’t understand how to use a software, they’re going to ask you questions, which increases the cost. It’s not like they can read the FAQs and figure out things. They’ll call you up and expect someone to respond to their doubts.

Sramana Mitra: They’re not sophisticated customers basically. What does that do to your business model? This is not an easy profitable customer base to service. What are the unit economics of your business? Do you have enough profit margin? How do you build a scalable and profitable business given that those are the dynamics of your customer base?

Ambarish Gupta: You need to have some kind of physicality in the business. Channel partners really help out because they’re already supporting these customers for something else like laptops, SMS, websites, etc. They already have a relationship and are able to offer local support to the customers. We can just ride piggyback on them at a low cost. They can explain this as well. On telephone, we have to offer support to these SMBs. We’ve close to 8,000 SMBs now. We literally have a small call center in the company to answer their questions, do engagement for the whole year so that we can help them use the software and derive value out of it. We have to have operational infrastructure to educate these customers about the value of the software after they buy it from us so that they renew again.

This segment is part 6 in the series : Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta
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