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Building Resilient B2B SaaS Companies | Ambarish Gupta (Knowlarity, Basis Vectors)
139 Plays4 years ago
"Before you become a Founder... you have to know who you are."
In this candid conversation, Ambarish Gupta unpacks this profound insight, stressing that deep self-awareness is the crucial first step before embarking on the intense entrepreneurial path. It's the bedrock upon which leadership and resilience are built.
Ambarish Gupta is the pioneering founder of Knowlarity, which became Asia's largest cloud telephony company under his leadership. After navigating the failure of his first startup, he scaled Knowlarity an incredible 60x over 6 years, achieving profitability and global reach. An IIT Kanpur alumnus and former McKinsey consultant, Ambarish now runs Basis Vectors, a Private Equity firm focused on acquiring and growing businesses.
Key Insights from the Conversation:
- Failure is one of the best teachers; learn from it to de-risk future ventures.
- B2B SaaS models are powerful in emerging markets due to lower costs, recurring revenue, and aligned incentives.
- Deeply understand your why—is it money, power, fame, impact?—before choosing the founder path.
- Building a startup requires extreme intensity; be prepared for immense personal sacrifice, especially early on.
- Major shifts in consumer technology create massive opportunities for B2B infrastructure (Derivative Market Theory).
- Getting early customer cash commitment is the fastest way to validate a B2B idea and gain truthful feedback.
Chapters:
- 0:00:00 - Intro: Growing Up in a Business Family vs. Wanting to be a Scientist
- 0:04:33 - IIT Kanpur: Life-Changing Experiences & Academic Disillusionment
- 0:15:05 - First Startup Failure: Painful Lessons Trying to Build a Real Estate Tech Platform
- 0:24:23 - The MBA & McKinsey Stint: Gaining Formal Business Acumen
- 0:28:28 - The "Aha!" Moment: Spotting the Knowlarity Opportunity via eFax
- 0:33:31 - Why Cloud Telephony? Understanding Derivative Market Theory
- 0:40:41 - Building Knowlarity: First Sale, Sequoia Funding & 60x Growth
- 0:49:02 - Taking Knowlarity Global: Expanding Across Emerging Markets
- 0:52:23 - Transitioning from Founder/CEO to Private Equity with Basis Vectors
- 0:56:37 - The Hard Truth: What It Really Takes To Be A Successful Founder
Hashtags:
#AmbarishGupta #Knowlarity #BasisVectors #FounderThesis #StartupIndia #B2BSaaS #CloudTelephony #Entrepreneurship #Podcast #IndianStartups #Failure #Resilience #Scaling #PrivateEquity #Leadership #IIT #McKinsey #BusinessLessons #StartupAdvice #TechIndia
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Transcript
Introduction to Founder Thesis Podcast
00:00:02
Speaker
H T Smartcast You are listening to an H T Smartcast original
00:00:24
Speaker
Hi, I'm Akshay. Hi, this is Aurob. And you are listening to the Founder Thesis Podcast. We meet some of the most celebrated charter founders in the country. And we want to learn how to build a unicorn. I always wanted to learn something and make an impact in real world. I remember going in Bangalore to all these kadadai speaking brokers and you know, half the time they won't really get like what I'm talking about.
00:00:48
Speaker
and I was horrible in, I think, making a pitch as well. My first pitch was, you take one third and the other guy take one third and I take one third. And they said, oh yeah. And it was struggle, really. It was terrible struggle. And then other people told me that you get into this business, it might be dangerous for you. You have no idea. You take this one third to your grave. First-time founders are rarely successful.
Ambarish Gupta's Entrepreneurial Journey
00:01:14
Speaker
And second-time founders are generally successful.
00:01:18
Speaker
There is no better example of this than the story of Ambresh Gupta, founder of Nolarity. Nolarity is among the biggest SaaS enterprise out of India with a presence in 65 countries across the globe. Ambresh, a boy from Kanpur who turned to building a successful business, is now one of the most celebrated B2B tech startup founders in India.
00:01:48
Speaker
Here's Amrish talking about his life in IIT, early started days of molarity, expanding it and finally letting it go. And don't forget to subscribe to the show through htsmartcast.com, Apple, Spotify or wherever you get podcasts.
00:02:12
Speaker
Hi, this is Ambarish Gupta. I'm the founder of Molarity and the founder CEO of Basis Vector. Molarity is the largest cloud telephoning company in Asia based in Singapore and a lot of customers in India and Middle East. Basis Vector is a private equity firm based in New York and invests in US and Canadian businesses as a buyout fund.
Background and Education
00:02:32
Speaker
I'd like to start with you growing up in a business family in Kanpur. Was that in the blood, so to say?
00:02:46
Speaker
I think it was in blood. I grew up in a business family, both my mother's side and father's side. Everybody is a businessman or business woman. You know these jute bags that you use to pack grains, sugar and all those things. We were merchants of that. We were distributed and we were based in Kanpur, just a small city in UP.
00:03:03
Speaker
And that's what I grew up doing. I've sat on the shop buying 7 rupees, getting bags and selling at 11. So I understand what revenue or profit is at a very, very early stage of my life. I was never excited about it. I didn't really find business to be, at least that business to be very intellectually exciting. So I was kind of odd man out in my family to want to be a scientist. I remember my family asking me, why do you want to be a scientist or you do a job?
00:03:31
Speaker
There's a saying in the call with the.
00:03:38
Speaker
basically translates into, the best thing is to get education. The second best is to do business. The second last resort is to do a job and then last resort is to beg. So it's like, you know, why are you moving down on what you want to do in your life? But for me, intellectual excitement was very important. That is how I ended up doing physics. I had a stint with the Bhabhapa Cropping Research Center, BARC, but I ultimately ended up being in IIT Kanpur.
Transition to IIT and Language Challenges
00:04:03
Speaker
You were saying that when you were in school, there was no exposure before IIT.
00:04:11
Speaker
Yeah, before IIT, they have all these programs where people can come down. I think I won some kind of scholarship or something and then they gave me a book and they showed me cool stuff that is available in the atomic research. That's kind of what I exposed to it. I didn't really do anything. The way things happen is your high school, your 12th is standard and then you're trying to figure out which college you go into. I had a lot of interest in science and technology and IIT was the
00:04:41
Speaker
into and I really like JE, preparing for it. I think it was really nice. The exam was very nice. And I got in and I had a good rank. And, you know, if you have a good rank, you take computer science. This is how I ended up doing computer science in one of the IITs, IIT Kanpur. Which year? 2000. So, 96 to 2000, four years, B Tech. How were those four years for you? Was it like life changing experience?
00:05:06
Speaker
It was amazing. Most vivid memories of IIT Kanpur. I mean, I was in Kanpur. It's not Bangalore. It's kind of sleepy town, right? Not much is happening in Kanpur. There used to be amazing mills, but those mills kind of died down thanks to various kind of government policies. And it's kind of a little bit sad situation really, you know, at least when I was in Kanpur.
00:05:28
Speaker
IIT Kanpur is like a gem in the middle of all these disasters. Coming into IIT Kanpur, as soon as you cross the gates, there is a serenity, there's a peacock for them, there's people walking around, focus on education. It's almost like Harry Potter, really. When you go from Kanpur to IIT Kanpur, very nice feeling. I remember the first time I went to IIT Kanpur, and I think it was something related with Jane. It's been a long time. I remember there's something called, in IIT Kanpur,
00:05:57
Speaker
uh, faculty building, which is in fear, there are a bunch of antines and you have all these PhDs come down to have a child, this very nice, inexpensive child, this kind of kind of in the middle of the gardens, right? Um, it's a very, very nice place. And I, I remember like going there and I glanced at there was a guy and there's a girl, uh, sitting there, you know, guy had a book on his hand and there's a girl on the side.
00:06:19
Speaker
And I look at it and there was like morning, right? So there was like light, light, light sun signs, you know, shining on them. And there was a garden in front and that they were sitting on the staircases and having chai. And I said, this is perfection. This is everything a man needs. This is where I need to be. The chai, the book, the amazing conversation, the girl and the staircases and then nice nature environment around you. It's just amazingly place to be.
00:06:47
Speaker
So, when you joined IIT, were you able to speak in English? Because I assume that school has English through Hothini Yogi.
00:06:56
Speaker
I was not actually. And for my situation was actually even somewhat different because I went to this school called Pandit Deendalupadhyas and Adan Darvit Dalar, which is like not Hindi medium. It's intensely Hindi medium. Like we worshiped a Lord Hanuman every day for an hour. It was almost frowned upon to speak in English, even though it was a very good college, considered one of the top two colleges in UP and we had UP state exams.
00:07:24
Speaker
So it was a very high quality class, but we were not allowed to speak in English. So when I went into IIT, I had a little bit of a problem.
00:07:35
Speaker
I wrote English well, but I had no experience of the classes where somebody is speaking English and trying to explain it. First year, I struggled a little bit because when you're used to teachers speaking in Hindi, and I'm from India, our teachers are called achare. So your achare is speaking in Hindi versus you jump into
00:07:56
Speaker
you know, very Americanized English speaking word of IIT Kanpur. You know, I had a little bit of problems, but the way I kind of survived was I just studied books that I could understand written English much better and I could write well as well.
Academic Disappointments and Entrepreneurial Drive
00:08:13
Speaker
So, you know, kind of just kind of worked out. I could imagine many other people who came from Hindi medium school, they would have struggled. I was not alone. The whole bunch of people from UP and Bihar who had come down
00:08:24
Speaker
Everybody survived because it was it was almost I would imagine like roughly thirty forty percent of the people did not really speak English or came from English. What are the other memories from IIT Kanpur?
00:08:37
Speaker
first year was very intense, incredibly intense and disappointing both. So when you take JE you kind of really understand gist of what you are learning in physics and mathematics and and chemistry and one of the greatest experiences of my life have been preparing for JE like some of the great theorems that I learned in calculus, in thermodynamics, in
00:08:59
Speaker
chemistry you know I still remember 25 years I still remember you know it's just really aha moments of like wow this knowledge for the sake of knowledge you learn something but when you go into IIT it's not taking a pause and deep diving into things in the first year it is taking a survey of like a very broad area like you just don't go deep you just fly through things and that's not my style so for me you know if I get into something I really want to understand it
00:09:28
Speaker
And we kind of flew through many of these things. So it was intense because there's so much covered. Also what ended up happening is in computer science, everybody, there were 22 people in my class and everybody had a rank which was less than 100. Everybody was intensely intelligent and competitive. So what ended up happening is you're used to being smart in whatever group you are in. And now suddenly you get into a situation where just like, you know, everybody is like probably more smart than you.
00:09:54
Speaker
So it's a little bit disorienting when you get into IIT, especially in that department. So, you know, I went through a little bit of that disorientation and my regular techniques of like winning were not really not worked out. Many times I would just kind of study and, you know, if I study properly, I would beat everybody else. Here, if you study properly, you would be like,
00:10:15
Speaker
maybe top one-third. It was a little disorientating and getting used to the situation and everybody worked very hard. Overall, amazing memories of first year. We couldn't recreate an IIT, the main motivation of being an IIT, which is the book, the child, the girl, all sitting on the scale cases. But it was an amazing experience in first year.
00:10:38
Speaker
So towards fourth year, what had you become? And what were you thinking of your life after IIT?
00:10:47
Speaker
I became little I would say a little disillusioned the fourth year or third by third year actually I would say I loved the group that I was in this was everybody's incredibly intelligent they kind of pushed me to think about things in in a next level and that was a really amazing experience I think that the PL group is incredibly powerful what you call they are very honest like it's extremely meritocratic and that's very honest you get to see what you're not good at and they'll kind of tell you and you kind of discover what you like and what you're good at
00:11:17
Speaker
And in this group, if you are good at something, you're actually really good at it. So for example,
International Experiences and Move to the US
00:11:21
Speaker
I was very good at physics, and I was very good at anything which was visual and theoretical. By four years of IIT, I knew that I was not going to be in academia because while we were doing cutting edge work in IIT, the word outside IIT had absolutely no impact on all the cutting edge that was happening in the campus. There's a village called Nankari. And while we were working on amazing theoretical computer science stuff in Nankari, people did not have bicycles.
00:11:46
Speaker
I always wanted to learn something and make an impact in real world. And the Academy identity looked like that kind of things. I also in my BTEC thesis, I did something which I spent quite a bit of time in last year. I knew that as soon as the thesis is finished, it will be thrown away. It's no use. So I think there's all these such people, you write a research paper and it's kind of just useless. After that, they didn't really go very well with me.
00:12:09
Speaker
I think that is the reason I had an option to go to PhD, but I dropped that and I decided to go and see the world. So when I came out of IIT, we were all getting jobs in US. So we got a job. I took up a job in US as well, but there was some time. So I ended up traveling and living in Germany as a researcher, worked as a researcher in one of the labs and kind of that way I kind of saw Europe. As in, tell me like which company did you join exactly? And that company sent you to Germany or did you take up another job?
00:12:38
Speaker
No, so we got a job. So we were graduating in 2000. We all got a job in 1999 in a company, a US company in the Valley called Electronics for Imaging. It's like they hired six people, six engineers from the computer science department. And we all knew that we were going to the US to the Valley, which is like the Maca of computer science for everyone.
00:12:56
Speaker
But it was supposed to happen in 2000 October when we would fly, so I had time. I took up an internship in Germany, a place called Fraunhofer Institute of Computer Graphics. And I said, you know, go see the world, right? So you would live in Germany in Fraunhofer Institute of Computer Graphics. I traveled quite extensively. There was three months project internship, which I finished in one month, less than a month. Actually, I finished. First 20 days, I didn't do anything.
00:13:22
Speaker
After that 15 days I finished it, the three-month project. Then they challenged me, telling me that it was a fluke. So I took over other internships and finished in 10 days as well. So they remember IIT Kharagpur now. And after that I said, you know what, I'm going to learn German and I'm not going to do more coding. And I traveled. In Germany, what you can do is you can, at the time at least, you can do
00:13:47
Speaker
get something called weekend pass which is a pass that you can buy for I think two three dollars and some men for students and then you can take unlimited number of trains for all weekend but all slow trains and I wanted to see Germany so you know I would pack stuff with me and we were not getting much money we were very poor so we would kind of go pack stuff I would buy some milk I vegetarian so buy some milk and and some pizza and
00:14:12
Speaker
I would travel in these trains all weekend and I would sleep on the railway stations, which are very clean, so it was just perfectly alright. That's why I did, you know, I would just leave on Thursday, Friday, Saturday, Sunday and come back after the fascinating experience. Post Germany, I come back and...
Startup Struggles and Pivots in India
00:14:29
Speaker
The company that was going to send me to US, there was a visa that was getting delayed so they gave me an offer to go to Australia while the visa was getting ready and I said, why not? So I went to Australia and I lived there for a year. I was fortunate to travel around Australia, Perth, Melbourne, Sydney. I lived in Sydney for a year and then went to the US. I was in the US in 2001 to 2003 working for EFI but I didn't really enjoy the work here that much because
00:14:54
Speaker
couldn't see while I was an engineer working on device drivers and embedded system and all those things you get stuck into kind of a box writing code and I've always been the kind of guy who wanted to see the impact of what I did if I was not able to see like where my code is getting shipped and what it is doing it was not enjoyable for me so 2003 I left US come back to India to start my first
00:15:18
Speaker
I was in Bangalore. I had $40,000. The idea was very similar to what housing.com did, which is a partner search on internet. It was actually even before magic tricks. That was not a very good time in VC industry in India. There's not many VCs. There was no ecosystem or anything. So I can just spend my own money to try to launch this company in Bangalore. And I remember I first lived in Peter and then I was living in Malish
00:15:43
Speaker
And, you know, it's just kind of tried or very painful turning and trying to build company, you know, the just no help. There's no employee wants to join you or founder that I kind of came to you to India with kind of changes mine within a month.
00:15:59
Speaker
It doesn't sound right to me. Now you're on your own. You're already taking this step. Your co-founder was also with you in the US? Yeah, so we both decided that we'll come back to India to start this company. And while he was in the plane, he changed his mind. So I landed without a co-founder.
00:16:19
Speaker
The everything that can go wrong and then you know, it's just it was now you we know that you know You're the so much ecosystem you can get help You know your people who have done this before you can listen to them just nothing like that at the time I remember trying to get an office and Spending three months trying to get an office and what I got I did not have any idea So basically I got a shop floor as an office
00:16:42
Speaker
It's like absolute no idea of business. This is how you start. At least I started. We build up the technology very fast. What was your website called?
00:16:52
Speaker
called Inventi car solutions website was inventicars.com. And we basically were classified for apartment listing. Because when I landed in Bangalore, what I found was like, why is everybody running around? They were like, whole brokers, real estate brokers everywhere. I said, why everybody running around? Why don't you just put this information, take a picture and put this information on internet. And then which is what we did in the US, you know, they just copy paste this idea, this is work, but I couldn't execute it. I just I didn't really know anything about building up a business running the business.
00:17:22
Speaker
Yeah, spend one and a half years trying to do this. So what did you try to do? The product you built yourself, you had a vendor who built it.
00:17:33
Speaker
No, no, I mean, computer science graduate, you know, you're not going to ask a vendor, this is the only thing that I knew. So I recorded it, I went to a university close by and then got a bunch of interns who worked with me for very low pay, because I didn't really have money and there was no investment extensively, aggressively looking for a co founder, got one of my old friend, get interested and then kind of work with me for a few months, but he wasn't really wasn't wasn't into it. There were three of us in US who got disillusioned with being a software engineer in US. It was me
00:18:01
Speaker
within two years. There's another friend of mine named Swamiti Paul, who actually is in Bangalore now running his running company. Swamiti was not interested, so he was also with me, the IIT Kanpur community undergraduate. He wanted
00:18:13
Speaker
to become a photographer or make movies and wanted to get rid of engineering, like not want to do anything. And he came back and he traveled almost six, eight months all over India and Middle East, India and Southeast Asia, traveling like a hippie. And then he come back and then I said, you know what, dude, I need help. My co-founder has left, you know, can you join? And he kind of just joined it, but he just joined it for fun. I don't think he had much of a commercial interest. And then third good friend of mine was also an engineer in Nvidia in the US.
00:18:44
Speaker
And he left and he came back. He wanted to change the political system in India. And he's Nipalla, who ended up being my co-founder-enolarity later. He started a political consulting firm using data to drive the political outcome. So I was part of this group who were willing to take risks to do what we felt was right, rather than what everybody was doing. And you already had the real estate listing site IDEA in US, or you came to India with an IDEA KIKACHKARNAY.
00:19:13
Speaker
No, my idea was different. So I had come to India with the idea of which has also got implemented which was quite ahead of time.
00:19:22
Speaker
you know why do people have to line up to get train tickets various kind of tickets to buy movie tickets and all those tickets so we had created an ATM kind of machine the kiosk where you can and everybody had phone at that time so I was appear to getting phone SMS so the idea was can buy ticket over phone and then you will be sent out a OTP kind of thing or some kind of code that you can punch in the kiosk and you'll get the ticket so you don't have to stand in the line in in the movie theaters and
00:19:50
Speaker
Give it that I was interested in embedded systems and device drivers and those things. I created the kiosk. I remember doing all this research and building up the kiosk. I came to India with the kiosk that I will get this kiosk installed in various places. By the time I landed, my co-founder had a change of heart. While kiosk idea was there,
00:20:12
Speaker
And I stayed with a friend for two months. And while I was staying with a friend, I was looking for like, where to stay, where to rent and stay. And I said, wow, rental place is so difficult. So I mean, I just have a website where, and this looks easier idea to me than installing kiosk in railway stations and movie theaters. So I thought, well, let's just pursue this, given that anyway, my co-founder is gone there. So I started executing this.
00:20:38
Speaker
It's not a problem. Listing is not a problem. How do users look at it? I mean, the business model was bad. It was not the model of it's going to be a website and we'll get the listing and people come. The idea there was that the real estate brokers have properties, but they don't have customers. And the customers need property that they want to get. But the guy that they're chatting with may not be the guy who has that property that they're looking for.
00:21:05
Speaker
So if we create some kind of broker network, which is actually what Pallav has done, which is the one broker has customer, another broker has property, and then if they share the customer and property, the deal happens. And what we wanted was broker makes some money, the customer broker makes some money, and the real estate broker makes some money, the property broker makes some money, and we get some cut in the middle.
00:21:25
Speaker
What we needed to do in this case was go and talk with the brokers and convince them that it should become part of this broker network. I remember going in Bangalore to all these karadai speaking brokers and half the time they won't really get what I'm talking about. I was horrible in making a pitch as well. My first pitch was, you take one third and the other guy take one third and I take one third. They said, oh yeah.
00:21:47
Speaker
And it was a struggle, really. It was a terrible struggle. I remember I had a bike going from point A to point V in Bangalore. It was kind of just nice at the time. It was not as traffic-y as it is today. It was a life very much on the edge. It was no income.
00:22:04
Speaker
I did not know anybody in Bangalore. This was the first time I was in Bangalore. Just no employees, no investors, no advice, going to real estate brokers and giving them a pitch, which really was not working. And then other people told me that you get into this business, it might be dangerous for you.
Pursuing an MBA and Consulting Experience
00:22:21
Speaker
You have no idea. You take this one third to your grave. And I think there's another thing, you know, when I came back to India,
00:22:30
Speaker
I wanted to kind of give myself one and a half years, two years kind of time period. The plan B was also, I'll go to an MBA and if it doesn't work out, go to MBA with some experience in business. That was always at the back of my mind. You had an escape option basically.
00:22:47
Speaker
Yeah, you had an escape option. You don't go to war with your boots. In the back, you have to burn your boots. I didn't burn my boots. It was like fun stuff. Like this is a kind of resorty stuff. And out of college, you immediately went out of India to all these countries. And then you would not really feel connected to the country. You kind of missed out on what the real India is. IIT Kanpur was everywhere, every tower. Before that, you're sitting in, your parents are taking care of you. So you can never really experience India, India as an adult.
00:23:14
Speaker
This was me experiencing India, India as an adult. I would say that is how it was really for me. I would say the overall welcoming reason would be like there was no support system and I did not know anything about business. But I would say 10-20% would be maybe I didn't really care that much either. I had an escape route. So you had no money, then you took a loan to do your MBA? You would have spent your money on this business?
00:23:39
Speaker
We got scholarship, so I cracked GMAT quite well. I went to CMU, so I also got married. I was dating my wife at the time. In Bangalore. In US, my wife was Chinese. I got married in India and I had a court marriage. CMU gave scholarship and a whole bunch of support.
00:23:58
Speaker
The whole reason for me getting into MBA school was I was meeting a lot of VCs. I had a few VCs, not a lot, two, three VCs who would not do anything less than five million dollars. But I quite liked the VC job. I thought, well, this is cool because you're kind of close to, this is safe. You don't get pushed around like the way my one last one and a half years have experienced close to kind of exciting stuff, which is using technology to make real world impact.
00:24:22
Speaker
I remember telling me, you know what, you don't have business experience. I said, well, what better business experience you want than somebody struggling on the streets of Bangalore? He said, no, you need proper business experience. Why don't you have an MBA? So I said, okay. So that was actually my idea to get an MBA was to get into VC. And while I was in CMU, I realized, well, VC invest a little money, $4 to $5 million, $10 million, there's something called P, we invest hundreds of million dollars. So, you know, if you are in the business of making a large scale impact with what you've learned,
00:24:48
Speaker
turn, why not get into PE? So move towards PE. When you try to get into PE, you either go to a financial analyst or you get some operating experience, but there's a route from McKinsey. So, you know, I thought I should go into McKinsey first and spend two, three years there and then go into PE. You had a small stint at Booz Allen Hamilton also, before McKinsey.
00:25:08
Speaker
Yeah, so I mean Boos, I mean, you know, internships, yes, that was Boosal and then two years in McKinsey and that was like amazing education on business and I think very fond memories of that's two plus two years and a lot of interest in macroeconomics, for example, the currency theories, the negotiations, you know, the organization theories. It was very intellectually very exciting and it was very real because the people who taught were literally the people who were doing stuff as well. So, McKinsey was like strategy consulting kind of a role.
00:25:38
Speaker
Yeah, so McKinsey, I did a strategy consulting fortune 15 companies, you advise the CEOs on transformation of their businesses. And I work with bank and insurance firm. So you're literally advising 2007 2009 time was you know, the decision era, the banks and insurance firms were a little bit of struggling. Many times they would invite McKinsey to come and do the analysis to
00:26:00
Speaker
number one see where they are and number two have them get out of this very difficult time so you know as far would be part of the team a very intense work very very intense work you know I think Mackenzie was incredibly intense work I would say Mackenzie were more intense for me than already in terms of working hours you know
00:26:17
Speaker
14 hours, 12 hours, you know, absolutely left and center with it. I remember being on the phone call from the hotel room and dozing off during the phone call and she was so tired, not leaving my hotel room for seven days because you know, you're part of a very intense due diligence after seven day realizing that there is a window in the room because did not realize there's a window in the room. You don't let I remember not letting the hotel guys to kind of come in, not changing the bed sheet because it will disturb you. So, you know,
00:26:45
Speaker
It's the same bed sheet, seven days, just eat and then somebody comes pick up the food and just focus on work, work, work 15 hours a day. It's extremely exciting. It exposed a lot of industries. And the US is very fast-paced, I would say, surrounded by very intelligent and very hard-working people. So I think CMU was really a cakewalk for me. It was very easy, but McKinsey was intense. In McKinsey, not only people were smart, they worked also very hard.
00:27:14
Speaker
So by the end of two years, did you get like burnt out and wanted to move on or what happened? It was a little burned out as well. I mean, I always wanted to be in private equity and do something just not just consulting advice, but beyond. For me, that was a stepping step to do something else. I could not see myself as a management consultant because management consultant is just advice.
Nolarity's Founding and Brand Name Creation
00:27:36
Speaker
Advice is up to the client to take it. I think one thing that you'll see is that I want to make an impact. I want to do it.
00:27:41
Speaker
I tried to get into private career at that time, but the banking sector was not doing very well. So I decided, you know what, let's go back and try to start another company. That's how Nolerti got started.
00:27:52
Speaker
So your wife was okay with it? Because I mean, she wouldn't have found India as comfortable as the US, no doubt. See, I mean, she was okay. She was very supportive. What ended up happening was that with my first experience that I knew that the startups failed 90% of the time, I had imagined that this will fail as well. So I had a full plan that when it will fail, what will I do? When it will fail, I have two, three years of experience when I'm struggling. And then by the time body economy will be better, then I'll come back, you know, and do something in private security.
00:28:22
Speaker
Yeah. And then with this, I have both, you know, real experience. I had not managed for it to succeed. So because I mean, logically speaking, that was the right plan. But it was like, if it works out, then something will work out right around it. It worked out. When you came to India, did you have a business in mind that this is what I want to do?
00:28:40
Speaker
Yeah, no, it was all clear. This time, I didn't make the mistake of the first time. I learned from the first mistakes. When McKinsey, we use something called effects, which is factory email service factory emails, you send facts, you get an email, basically a PDF document, I look at the income statement, this is publicly rated company, and it's a 30% debater from a strategic point of view, commodity product like this is very simple commodity product, you shouldn't really have such a high beta.
00:29:03
Speaker
I was very surprised and I dug in and I found out the reason it is a higher beta is because phone numbers are very sticky. Once you buy a phone number, which is a fax number, you don't change it even if it's like three, four dollars more per year per month. For example, they were selling at 12, the company was selling at $9 per month. And would you change your phone number to save $3? No. So I said, wow, that's pretty cool. And this high gross margin is like 80% gross margin business. So it's the 80% gross margin, higher recurring revenue business.
00:29:29
Speaker
And India didn't have it. I said, okay, no product market risk, high gross margins, high level of profitability. And we have a precedence of somebody already doing it. So let's launch it in India. And we call it SuperFacts. This is how SuperReception, by the way, started. So we launched SuperFacts. And it was very easy to do because I was, I literally coded it in like, you know, few days, this whole thing. And it worked.
00:29:51
Speaker
And I said, okay, we are the business. So we took telephone line in India, and I partnered with my partner, you know, who was already running a business. So second mistake, don't get somebody who's kind of, you know, is also working with you. I got a guy who has perseverance to stick on for three, four years, running his own political consulting. And he was kind of getting used to doing political consulting, became a partner. And I was still sitting in the US while we launched the company. So I was very careful this time. And the company started super factually take off, because
00:30:20
Speaker
because fax was a dying industry and nobody wanted to touch. While this was happening, there was this election happening in Orissa and they needed to make phone calls. It was a very new technology, fellow is a great salesman, he went around and sold his idea. The chief minister at that time, I think it was Navin Patnaik. And he was like a new age guy and we got an order and cash from them. It was like start with a bank, right? It was almost a crore rupees order. We changed our technology which sent fax to send, we started making phone calls.
00:30:49
Speaker
and then we executed this order and we made some money and then we kind of got hooked into it. And eFacts also had eVoice, which is for inbound IVR. So I knew that I am not going into uncharted territory. We are doing something that others have done and proven it to have built a great business. So it kind of went into that direction. eVoice and then Facts was just mental and we set money to build up a platform, NoLities. So first platform, Nolus 1.0. And we hired a bunch of people from IIT Kowati.
00:31:17
Speaker
Why did you call it nolarity? Where does the name come from? School. It's a combination of two terms called knowledge and singularity. So there's the whole idea. Have you seen Terminator movies? Yeah, singularity is when AI becomes as an engineer.
00:31:38
Speaker
Yeah, so I have always been interested in AI. In IIT, I was doing natural language processing in 1999. I want to see technology doing something real, right? And what is more real than AI, right? AI and robotics. And I did natural language processing. And basically, natural language processing in 1999 didn't really work. It's because the computers are very slow and the algorithms and data were not available. There were a whole bunch of problems. I left it and moved it.
00:32:01
Speaker
But you know, AI, the idea that there will be a time when you can have intelligence, which is general intelligence, similar level as human being, and given that software can be replicated very fast and they can improve themselves. So what you end up happening is, you know, if you have general level of intelligence in AI, you can have them program to improve themselves.
00:32:22
Speaker
smarter than human being. And then they're programming themselves to become human. So you have exponential growth in terms of intelligence happen. And that's what's called singularity, knowledge singularity, you know, at that moment.
00:32:32
Speaker
You know one day you will have in the power of AI and that is what is called knowledge singularity because that that AI will know everything you all the data anyways it's consumable digital format now it can read everything and store everything for one time and just been fascinated by that idea of knowledge singularity and thus all know that his name is not a similarity. Me and Swamitip who was my first co-founder in my previous company we chatted on Google chat while we were coming up with a name and
00:32:59
Speaker
can we come up with a name in like seven minutes and the chat is still i published a chat on a blog post i said no and he said he doesn't look good but then we can look at the option and i know that he looks good let's do no and i became a lady and then my platform become no less and you know employees become a lot of things and you know everything started from there.
00:33:19
Speaker
You realize how accidental these things are. You look back and you say, there was no thought. I think I don't know why people go back and kind of build up some kind of, I always knew this kind of story. It's all accidental, right? You're bouncing from one place to another place, just trying to live life as honestly as possible and just see these things just happen.
00:33:37
Speaker
So I want to understand better on how you technologically improved what was existing before then. Like I remember an IVR meant you have an Airtel or somebody installing a line in your office and that line probably Airtel or somebody programs it. So it has to be physically there. So how did you
00:34:01
Speaker
innovate on that and you know, can you tell me a bit about that? Like from the technology standpoint, what was the innovation that you got in? And were there other people doing the same stuff at that time? Nobody was doing it. The way technology worked at that time was you installed a box in your premise. You installed a software. So you took telephone lines and you installed a box with the software attached to it. So when the call came, you know, it will go into a box and it will play the IVR.
00:34:30
Speaker
But the problem with that was, and the US also had gone through that kind of journey. The problem with that was you have to take a telephone line from Intel and Reliance and all of these guys and you have to go buy a box and you have to make sure the box is always up and it's all call center line. So it was very error prone, very difficult technology really. 2009 also was the year that the emerging markets started providing more to the world growth than the developed market.
00:34:54
Speaker
For me to move from New York to New Delhi, it was very strategic in the sense that I felt that emerging markets were the future. As an Indian sitting in the US, I had an advantage being in India and being able to operate there because I really understood that market. That's kind of a high-level idea. Also, the technologies which work in emerging markets were all cloud because cloud is cheaper, much, much cheaper. You buy a box which is $5,000 versus you pay $200 per month.
00:35:19
Speaker
Pay as you go model, so you don't have, no businessmen in India have money to invest in big boxes. Pay as you go, SaaS model worked for very cost conscious Indian businesses. The focus on providing service, if you're getting paid, if the provider is getting paid every month, they have to make sure the services are high quality.
00:35:38
Speaker
versus you sell a box and disappear. So it aligns the provider's interest as well. It's cheaper, almost one ton the cost. Everything cheap in India works because people don't have money. So you want to bring technology which has a huge impact on productivity, but it's a lower cost. So telecom was growing 100% year on year at the time. But at a very static level, if you think
00:35:55
Speaker
about it, there is something called derivative market theory. Derivative market theory basically says that as soon as you have a market, any one market kind of comes in. Because of that market comes in, the other derivative markets are coming. I'll give you some examples. So for example, it comes from the fact that if you have a hammer, everything looks like a neighbor. That's another example. If you have a car, you will drive. And if you drive, look at your credit card statement, you'll start spending more money on dhabas rather than neighborhood restaurant.
00:36:22
Speaker
In post-Second World War, during the Second World War, everybody had to win, so everybody spent loads and loads of money on various kinds of weapons and war machinery. Tanks became very good during the Second World War. The missile technology became massively improved in the Second World War. The people developed organization theories around how to do very fast
00:36:47
Speaker
manufacturing, you know, all those things, because if you did not know, you will be, you know, you will be looted by the other country, right? So you it was a do a die kind of situation. So like loads of technological development happened during the Second World War, one of which was, you know, tank technology became very robust and very good. And Volkswagen, for example, you know, which is, you know, German car manufacturer, which Volkswagen, the German name is People's Car. It was actually Nazi Germany's tank manufacturer.
00:37:09
Speaker
They made tanks. So they used this technology to put in the cars and it was much improved technology. It's kind of more efficient, more power and all those things. America one and Russia one, it came from America. They took up the technology and took the scientists and engineers with them.
00:37:25
Speaker
And that is all by the America's moon mission. You spend quite a bit of help, talent help from the folks who were sending missiles. The outcome of the technology was that people had cars and car which would go long distance without breaking down. The cars means that people did not have to live in downtown. They can live in suburb far away from this. Suburb kind of come into the play. Suburb means that your white pickets and all the niceties around the suburbs, all those technologies started developing.
00:37:50
Speaker
If you give every Indian a mobile phone in their hand, what are they going to do? They're going to call. And my thesis was they're going to call business. Earlier, they couldn't reach out to business. You never call Colgate or Pepsi, whoever, in India, because how would you reach out to the business? You could only reach out to the business, which is you can physically visit. But if somebody's sitting in Delhi, you're in Kanpur, you cannot visit them. But if you have a phone, you're going to call them. So what I expected was consumer to business phone calls will skyrocket. If everybody, every consumer have phone, and that's what had enough happening.
00:38:19
Speaker
But business were receiving phone calls. Suddenly last year they were receiving like, you know, 100 calls per month. Today they're receiving 1000 calls per month. So how do you manage these phone calls? As soon as complexity go up, you need a business phone system to manage, you know, call routing, recording.
00:38:34
Speaker
Log analytics and all the boost of the business needs and it didn't really have any business telephony India got consumer telephony, but no business telephony So my thesis was even consumer telephony has happened business telephony will happen right and I'll the one who will do it And that's all know that he you know the thesis was born
00:38:50
Speaker
Also, my first company was consumer and consumer are very high risk. Big companies are low risk because you ask money from people upfront. And one big thing that I believe is that if you ask money from people, they'll tell
Business Model Evolution and Global Scaling
00:39:03
Speaker
you the truth. For example, if I come and give you my product, actually, do you want to give it a try? This is an amazing project. So yeah, it looks good. It's very nice. Thank you, Amresh. But if I come and tell you, actually, I can use this product, but I'll charge you $100 per month and I need 12 months in advance.
00:39:19
Speaker
You look at it, it's a dupe. It's not $100 worth per month for that. What do you have built up? Go away. I'll pay $5. No, maybe not $5. Because of which B2B companies fail quickly because you go till you get truth and then either you fix it or you don't fix it. And that way you will get the signals very quickly on whether this is going to work or not work.
00:39:39
Speaker
This time my idea was I'll do B2B. It's boring, it's much more, spend a lot more time building up the company. But it's a lower risk and I was ready for lower risk situation. I wanted to reduce my risk every... I did everything possible to mitigate my risk this time because of my first experience. You've got a partner who was already running a company so you don't have partner who has a problem of kind of changing his mind halfway. Getting into industry which was growing very fast, rising, tight, raises all the boards. So what is going up, hopefully things will
00:40:05
Speaker
be good, not taking product market risk, quote unquote, inspired by Ring Central and e-voice, right, to do it in Indian market. Very nice mode. Indian PSTN voice laws meant that, you know, you could not get into geographies using voice. So all the Ring Central e-voice use voice technologies, you know, voice technology, which was not allowed in India. So we built up a new kind of technology. And technology I could write, you know, I understood computer science very well. That we could solve, but that also meant that our stack was very different from them. They couldn't get into US, you know, Indian market. They have still been 10 years, they have not
00:40:35
Speaker
be able to get into the market. So, you know, from that very, very safe company, I started IVs, half, you know, quarter a million dollars from a bunch of friends. So I was not dependent on my own savings, which, you know, which was another reason that I stopped last time. So everything that went wrong last time, I currently corrected it. And, and that is how this company got started. Yeah, we got very good response. By 2011, we were seeing that product market fit start happening. A lot of people wanted our product and started going
00:41:02
Speaker
Before 11, so 2009, mid of nine, you started this. So when did you get your first sale? How long did it take you to build the product and reach first sale? We started with the sale, like this Naveen Patnaik thing happened even before the company started, actually in 2000, May. So we made the money before the company was incorporated. So as I said, it happened, you kind of like scrambled to write the code and build the product very quickly so that you can execute.
00:41:29
Speaker
Actually, the sale happened before product was made. After that, me and Pallav spent 72 hours straight writing the code. I did not sleep for 72 hours in bread bowl and whisky. That can keep you away for 72 hours. So we wrote in for and I remember writing it. And it was very weirdly written, very, very weirdly written code and structured bread work.
00:41:52
Speaker
So can you tell me, like, what is the code that you wrote? The fundamental technology is your friend calls you on your cell phone, right? And you say, wait, wait.
00:42:10
Speaker
And then you want to talk with another friend, you call another guy and bridge both of them on your phone. Exactly what this what you do, like you another guy. And now, Mr. A, who called you, you and Mr. B, you who you called are all in the same call, right? So cloud, that's what cloud telephony is fundamentally, you know, your call comes, and then your IVR technology looks up into database to find out, you know, who should the call the call should be forwarded to connected to
00:42:47
Speaker
Conferencing. In your phone, on your cell phone, it's not the hardware which is bridging the connection. It's the software that's bridging the connection. It's basically merging two MP3 streams. So after the Naveen Patnaik, and then you spend 72 hours to build it, then when did the next sale happen after that?
00:43:01
Speaker
and from another telephone line you make a phone call to that person and in the software you bridge these two connections.
00:43:05
Speaker
So in the meantime, we made good money, roughly 1.5 crore rupees. And then after that, we said, how about we just give it to everyone? So we build up a reseller network. By the end of 2009, we had so much sale that our system was crashing like every second day. We were in the outbound call business. And I remember that the time the price was 45 pesos per pulse, we buy it. And we were buying at 39, we're selling at 45 pesos per 30 seconds.
00:43:29
Speaker
And there was no margins during Diwali and holidays, everybody, election, everybody wanted to use our system and other times nobody wanted it. Most of the time nobody was using it and sometime everybody wanted it. We had to take telephone line and maintain the system. So there was a cause associated with it.
00:43:44
Speaker
So what we realized was this was not a good business. We need to move from outbound to inbound, which was recurring, which was, you know, once you take up a number, you don't want to change it by the high-gross margin because incoming calls are free. So we sometimes went 10 early. We started thinking about it, but really launched in 2011. You're making money all along 2010, but it was mostly outbound business. You know, the inbound business started in 2011.
00:44:08
Speaker
And when did you do your first fundraise? One through you did Friends and Family Round before starting only, but like a formal fundraise? 2009 was the first fundraise, Friends and Family, and then 2011 was another Friends and Family Round. And it was all convertible debt, which was, I think, probably the first company in India to do convertible debt. 2012, January, is when we raised money from Sequoia.
00:44:33
Speaker
How easy or difficult was that, like getting Sequoia to invest? I think we were a little bit lucky. Our thesis was very similar to Link Center. Sequoia had made good money in Link Center in the US. From that point of view, they said, okay, well, Link Center kind of business in India makes sense. So I think that kind of played out. We also had quite a bit of traction. We had 500 customers by the time who were paying. We had 50 people.
00:44:56
Speaker
that time. The background I had understood both technology and business was the IDE, graduate and quite a bit of entrepreneurial experience as well. So it was kind of a pretty good team. Why did you decide to raise funds when you were like, you told me that you were like cashflow positive, you were not burning though. Why the need to raise funds?
00:45:16
Speaker
no you're not actually positive i mean in the beginning we're actually positive but then we need the we started out by making money but uh but very quickly we said we do things properly you know that is where you hire engineers and and build up systems and then you know that was one time sale and you know it dried out your revenue dropped and your um your costs go up so we were unprofitable and those
00:45:37
Speaker
Really, the interest really never was to make money really in this business. For me, it was making an impact and proving a point. You know, I wanted to build up the company in a VC-backed way so that there is a capital so that never is constrained in terms of fulfilling the theme of building up a great business out of India. So, both Sequoia funders, then what happened after that?
00:45:59
Speaker
Sequo Fund has happened when the VCs come, the dynamics change a little bit as well. So now there's like one more person who has a certain way of looking at the world for better forevers. So I think you kind of little bit adjust to the dynamics as well. And we grew. We grew quite well. We had a little bit of a hiccup in 2012 in the first half, I remember. But after that, we grew. We grew a static post that did very, very well in 2012, 13, then 14, we raised Series B from Mayfield and Sequo combined.
00:46:29
Speaker
left around 2013 but I think it was more early stage person but you know the dynamics in early stage in a company are a little bit different where you're kind of making decisions very very quickly changing things and all those things versus a little bit later stage where dynamics are very process-oriented you know way of looking at the world and I think he was not enjoying it as much this change in dynamics especially after the funding happened so you know it's a it's a very
00:46:58
Speaker
he maintained all his equity as well. And then I got one of my friends to come and join, become a CEO in the company, to take the company forward, you know, and then it worked. So what was the revenue trajectory like? Like when you raised from Sequoia, what was the revenue that year? And then by the time you left, what had the revenue become? You know, how did it evolve over the years?
00:47:22
Speaker
I can't tell you that numbers, especially now that I'm out also, but you know, I remember between Sekua coming in and around the time I leaving, we grew 60X and became profitable as well. So I would say six years, 12 to 18, pretty incredible journey, you know, a real business, just EBITDA and cashflow profitable.
Transition from Nolarity to Basis Vector
00:47:43
Speaker
Currently, you know that it doesn't need cash from anyone. It produces cash. Massive growth, massive growth. 60X growth in six years is extremely rapid.
00:47:52
Speaker
What was the reason for the growth? What's the secret behind it? I mean, it was successful business. It was the right place, right time, the right technology, right pricing, support from our investors, very hard work from the employees. We grew from 50 people to 400 people. Was it largely inbound sales, inbound inquiries based?
00:48:19
Speaker
We did both inborn and outborn. We pretty much created this market. We had to educate the market. And we educated the market. One of the reasons that you see me, I'm a somewhat private person. But for Nolarity, I ended up being a very public person. When I was a founder, running the business as CEO, we had a lot of press. And we got involved in a whole bunch of things. And I was very vocal and talked a lot as well.
00:48:41
Speaker
PR for us was one way to have people know that we exist, not in the startup world, but in general business ecosystem, and that worked very well. When people got to know that there's a technology which can do so many interesting stuff, allow you to connect with your customers over communications, over phone, and all those things. This was really the only communication method available to communicate with your customers. We use this mechanism to have people get educated in a very inexpensive way. The people reach out to us, and many times our sales team, we had 300 people sales team, 100 channel partners,
00:49:10
Speaker
Cloud telephoning would be pretty much educated in India on what cloud telephony can do and wherever cloud telephony currently is. When did you decide to go global beyond India? It was right from the beginning. I mean, I didn't really want to build up an Indian company. I wanted to build up a global company which would serve Middle Eastern and South Asian market as well, all the emerging markets.
00:49:30
Speaker
And our technology was well suited for those markets. From India, we became a Singaporean entity sometime in 2013. So you can see very early, we wanted to be Singaporean company because that way we would service Southeast Asian and Middle Asian market from Singapore holding up here, then sitting in India, where you end up having a lot of friction in managing many of these things. You shifted base to Singapore, or that was just like a... It was holding up, you know, most of business was still in India, so I mostly stayed in India.
00:49:57
Speaker
What was the split between India and outside India, like by the time you left? What percentage was India? I mean, still majority came from outside India, but very significant minority came from outside India by the time I was leaving.
00:50:13
Speaker
So the going global expansion was again funded through the series B and further that you did, because I imagine that would have been expensive to open up offices outside and get the sales cycle running. Yeah, I mean, it was expensive. It took a very long time to kind of just go through the process and making sure that we ticked all the tick marks, you know, as when we launched in Dubai, for example, of Philippines or Thailand, many of these countries.
00:50:40
Speaker
you run a business where there is some part which is kind of stable and running steadily and then there is some part which is outside market which is kind of you're doing experiments. So you kind of have to balance out by doing experiments and running a proper business as well. There should not be all experiments because then you don't know what is going to work on you kind of just keep burning money and you should not be all boring just kind of regular business because then it's not good either.
00:51:01
Speaker
So, in 2018, you decided to move out of Nullarity. What prompted that? It was a long time, really. Very, very long time. You know, if I wanted to do business, I would have been doing business, you know, selling jute bags. I am not, you know, that kind of person. You want to...
00:51:20
Speaker
build something which makes an impact, but you know, once it is kind of self-sustaining and kind of doing things by yourself, why would you just sit there and waste the time? Also, when the companies get big, they do not want too many changes, like new things to be very stable. So you want less change and I am not, I am a change agent and there are a whole bunch of other ideas that I have because of which basis sector started. Okay. So how did you handle that transition? Like?
00:51:44
Speaker
Did you find your own replacement or you know, how did that happen? I mean, you are the CEO and founder and for you to leave also, I mean, from a PR angle also would have been risky and you know, so how did you manage that? I mean, this happens all the time, pretty much a little bit given and you know, it's kind of both sides really. Many cases it doesn't happen, many cases, you know, but most of the cases, most of the time it happens.
00:52:10
Speaker
It's just the work become very different from what you were doing when you started off the company and building up the company. From PR point of view, it's not a big deal. Everybody's seen this done and dusted situation. In terms of hiring, it's exactly the same. You hire people and get them
00:52:26
Speaker
not as a CEO position, maybe some other position and give them a try. If it works, then you kind of just inch them forward to kind of give them more power. That's how it works.
Reflections on Founding Success and Lessons Learned
00:52:34
Speaker
So you want to get a gradual. So is basis vectors a way to return to your original dream of being in a PE?
00:52:44
Speaker
Originally, I wanted to work in a PE, now I'm running a PE. I would say I always believe in the thesis. In a PE form, you can make a much larger impact. You have multiple CEOs now working in the portfolio company. It's a much larger impact that you can make. It's less operational than what, for example, running your own business. It's a very natural stepping stone for me. It's a little bit going back to what I was planning to do as well.
00:53:10
Speaker
So how did you get a basis vector off the ground? I think I now have so much credibility. I am one of the few people in the world who have run low cost large scale SaaS companies. I mean, the first time was starting companies difficult. Now you are like a proven thesis. So it's a lot less difficult.
00:53:29
Speaker
Tell me a bit more on how it operates. Like how does a PE or a VC fund operate? Like you find H&Is and institutional investors who will give you money and let you invest it for them. And like, how does that whole process happen?
00:53:44
Speaker
Yeah, it was something like this, you know, exactly. So, you know, initially, you'll find people who you already knew, and then you take their money, and then you'll find people who have bigger chunk of money, right, you have to have some investment experience as well that you can demonstrate whatever thesis that you have, I have so much operating experience, most of the VCs, especially in India,
00:54:02
Speaker
don't know don't have any operating experience what end up happening is that these people they sit in front of LP they somehow be able to answer the question of how they will be able to demonstrate be able to make a good investment is by showing the investment prowess for me the thesis end up being very different when I sit in front of somebody with money I can tell that you know I'm going to get very much involved and see look what I built and
00:54:26
Speaker
a decade doing it and everybody knows this and you can go and check. Most of the time, they already know. Otherwise, even I have a conversation, they know that this guy understands what he's talking about deeply and then I understand. McKinsey US is a big brand and it's kind of a big stamp in terms of understanding business in general and investment world in general. So it's going to just combine these two.
00:54:50
Speaker
And out of 5-10, somebody will give you money and there's a lot of money in the world. It's a chasing right places to get invested. You as a capital allocator, helping facilitate that. It's not like you're begging anything, basically providing a service. They need to get return on their money for their investors. They are company managers and they do not know how to make their 7-8%. You go there and then make it possible for them.
00:55:16
Speaker
As an angel investor, what are some of the companies you backed in India and what was the reason to back those companies? No, I've done a bunch of angel investments but not done and not planning to.
00:55:32
Speaker
So what makes you invest in a company? Is it like the recommendation matters a lot or is it like you're impressed by the team or do you look at the market size that they're addressing?
00:55:47
Speaker
These are all B2B SaaS companies. They come to me, I knew through some network and I just gave them some of my personal money. So there's a company called Infido, there's a company called EasyCom, HireXP, Sunnestone Business School. These are a few examples of the companies that I invested in. Team, thesis, market size, all those things. The way I would think about starting my own business, I would look at whether the team will push through or not.
00:56:17
Speaker
skill set. I am not an angel investor, believer. From a commercial reason point of view, the angels are called angels because it's a money down the drain. That's why they call angels. They should not expect any return. People do angel investments because of fun. Angels don't have a thesis. There's no method of madness around angel investment. You meet a guy, you say, oh, I like this guy. He's doing something.
00:56:39
Speaker
I want to stay connected. In general, investment as an investment vehicle, the only thesis that works is spray and pray. That's not something exciting. There's no integral excitement in spray and pray. What does it take to be a founder of a startup that scales up well? Is it like just being lucky or is there a science behind it? And are you able to spot, okay, he's a founder who will scale up a startup.
00:57:04
Speaker
I think before you become a founder, you have to be a good leader. And before you are a good leader, you have to be a good human being. And before you become a good human being, you have to know who you are. So there's a little bit of dirt. Otherwise, loads of bullshit, lot amount of bullshit is floating around. Why do people want to be founders?
00:57:20
Speaker
How come just 10 years back, nobody wanted to be founder? What has happened just now is because people are watching on TV, on the newspaper, youngish people getting loads of money and fame, and they're saying, oh, this sounds cool. I should do it as well. That's the worst possible reason to want to be a founder. But that's what 90% of people are doing. It's just a cool thing, the way it was a cool thing to go to US and get a green card.
00:57:43
Speaker
US just 20 years back or become an engineer or doctor was a cool thing and then there was a consulting was a cool thing. The problem is that you know if you don't intrinsically like what you're doing you're not going to be very good at it and in other jobs you know you can be not very good at something and you can still survive. If you're a founder where everything is already indexed already stacked against you like so high not enjoying it or not being very good at it is a death nail.
00:58:08
Speaker
it will kill you. Only source of happiness when you're running a company or when you're a founder, if you end up kind of raising investment, you know, unlikely chances of raising investment and growing is going to be your own sense of internal satisfaction that you're doing what you like to do. That's only source of happiness.
00:58:24
Speaker
And if that is not there, you did it because your buddy who raised investment from somebody else and look how cool he looks. That's why I'm doing it. You're not going to succeed because you're not going to pull 15 hours. You'll burn out very quickly. You will not do everybody's dirty laundry.
00:58:40
Speaker
Unfortunately, a lot of people don't want to hear this. This is a hard path, figuring out yourself. People can smell confidence or lack of confidence as a leader. You want people to come and work for you at half the cost, half the pay, and then hope something will happen. You want to go to angel investors or investors and give you money. You want to go to customers and give them your half-paid product and then they should buy your product. Good luck.
00:59:04
Speaker
You have confidence and the confidence comes from knowing yourself, what you want to do and what will take the bullet for. You're 18, 20 year old, you graduate from the college, you never made a decision in your life. You've always followed what your parents said or your peer group said. So you can't have confidence until you try out things and fail.
00:59:23
Speaker
There are people, of course, who in the college, they have made their own decisions and they're very self-aware and then they're kind of doing things their own way. I think this path of knowing what you want, having the confidence, and then once you have a confidence, you're quite comfortable failing. Screw it. I'll fail. I'll try it again. Because anyway, there's nothing else that I want to do. So I'll just do it. Maybe you'll fail. Maybe you'll succeed. But at least you can do it. If you don't have that, it's difficult.
00:59:47
Speaker
In the first couple of years of Nolarity, how hard did you work? Was it like Mackenzie hard with 12 hours, 15 hours days? Or did you have better work-life balance? At number one, I hate the term work-life balance because the work-life balance term presumes that you don't like your work. So it's like if I ask you, hey, I'll give you gold and I'll give you silver.
01:00:17
Speaker
So will you want to balance out like how much gold you have and how much silver you will have all gold. So as you come in Akshay comes a smart guy he takes like I said you can take 100 kilograms of gold and silver in whatever proportion you come back and say you what I am taking 100 kilograms of gold.
01:00:32
Speaker
I said, Akshay, what kind of stupid person are you? You did not do silver-gold balance. What he will say is that, well, I don't want balance. I want all gold. Why would I want to have silver? In the same way, it's a work-life balance. If you are doing what you're liking to do, but what you really want to do,
01:00:51
Speaker
Why would you, I can understand you biologically, you need to eat, you need to do other things and then you need to sleep, right? I can understand those things because otherwise you cannot work also. It's not like I'm not saying that you should not have it. I'm saying that if you want it, that means what you're doing is not what you wanted to do. So please stop it and do something else. Yeah. So, so I think work-life balance to your question on priorities, you know, for six months, we had all engineers sleep in the office. We did not have night off and it smelled, it smelled very bad.
01:01:21
Speaker
And I mean, even you were sleeping there, was it? Yeah. You would have like three o'clock meetings, conversations, you know, all those kind of things happen. You know, we were very intense. When we started out, I was doing some project with Microsoft at the time. So I literally had like four hours sleep at the time. I was working 20 hours a day in the morning. We needed money as well. So in the morning, I'll work for Microsoft.
01:01:44
Speaker
And the rest of the 12 hours, I would work on no letting idea. And then I was in US in Seattle. The team was in India. So I would stay up all night and then daytime I would go to work. You know, founder, if there is a founder who is unwilling to put in this level of hard work and effort for whatever reason, should that person even think of becoming a founder?
01:02:04
Speaker
I mean, what is the meaning of becoming a founder? What is the meaning of becoming a founder? Becoming a founder means what you want to start a company, correct? I mean, that's why I understand. Now, starting a company, there are various intensity level of the companies that you can start. The question that you should ask is, why are you wanting to start a company? What is the reason you want to start a company?
01:02:22
Speaker
Now, if the reason is money, you want money, then there are specific kind of companies you can start, or you can take up a particular job which will give you a lot of money. If you want fame, then there are specific kind of companies or certain job professions you can take, which will give you fame. For example, you can try to get into media, that will give you fame.
01:02:40
Speaker
So the question that you ask is, what do people increasingly want? And I don't know why people don't want to talk about this. It's all very sensible choices. Men, women want money, power, fame, you know, all the good stuff in life, right? You are here for a couple of decades, you will die out, right? So might as well have joy, you know, whatever God has made available to the mankind. But you have to be clear, like what you want.
01:03:00
Speaker
Now, when you want these things, you can't have all three because it's just very difficult to get. So you basically kind of plan out. Like you say prior to that, you say, oh, I want money more, maybe power a little bit less and then fame even less. You know, even if nobody knows me and I'm kind of a wealthiest man, I'm very happy. And you introspect and you say, this is what I want. Actually sacrifice fame. You want to focus on one thing because that itself is difficult. Once you decide, then you have other choices available. You can take a job.
01:03:24
Speaker
You can become politician, you can go into media, you know, all those things. GC entry text takes you to starting a company. Why a startup? There's a whole bunch of other companies that you can start. Let's say you say, oh, I want money, money. There are some money reasons I want to start a company. Let's say that be the reason.
01:03:39
Speaker
I want to be very wealthy person. And then fame is maybe second for you. So while I'm making money, I want everybody to clap as well. How amazing man I am. If you're choosing that path, there are various kinds of companies you can do. Why start a new product, you know, become a Microsoft or Salesforce partner. And most people coming from technology background, they'll do very well. They have other franchisees you can take. When you're not taking product risk and you can get wealthy, how much money do you need? Million dollar every year, you know, that will give you a very good life in India.
01:04:04
Speaker
If you do decide to start a company, the question that you should ask is, if I want to make money, do I want to be the founder or do I want to be co-founder with somebody else kind of doing it? What you want to do is, whatever you want, you want to reduce the risk. And the reduce the risk by picking up the right tool and right path to choose so that you are happy and you get what you want with the highest probability of happening it. The doing a consumer startup, the back angel startup, this is for crazy people. Marc Zuckerberg said no to billion dollar.
01:04:34
Speaker
when Yahoo wanted to buy. He's fighting with the US government today, holding on to Facebook. These are very different kind of people. Fortunately, most of the people are sane in the world. And think about in a very sane way, like what in your life, what is the priority? Money, power, fame, independence. And these are the four things that I've seen. If you want independence, maybe not starting a business is probably a very bad idea because you are responsible for everyone. You have no free time for yourself.
01:04:59
Speaker
So I think people need to make the right decision and pick up the right career option and not just blindly follow what everybody else is doing. But if they do decide to become a founder of a venture backup, very important for them to know who they are. If this is what they will do, whatever may happen, they will go to RAM through concrete walls. We are okay not seeing the family for months, okay being miserable, okay being
01:05:24
Speaker
not receiving any acknowledgement. Anybody saying you did a good job ever. Everybody always complaining, the working day and night. And at the end of the day, still not making enough money. You know, that is when they should do it. I think a lot of founders also follow the thesis. The problem with the thesis is that out of everybody who's doing it, two or three will be successful. You being in that group is very unlikely. Just statistically, that is not nothing against that person.
01:05:58
Speaker
This is not what John D is going to be there. There's a differentiation. So think deeply about the idea that people work on, besides, of course, trying to be a founder itself. I mean, if it is fake, right, founding journey will figure it out very quickly, believe me. So back was a wish to come. Taking us through his journey from the streets of Canco to the mecca of management consulting.
01:06:24
Speaker
to starting India's very first club telephone SaaS company and eventually settling in his current role of a private retail investor. The one thing that you should take away from this journey is that you should embrace failure because it really is the best teacher.
01:06:51
Speaker
If you like the Founder Thesis Podcast, then do check out our other shows on subjects like Marketing, Technology, Career Advice, Books and Drama. Visit the podium.in that is t-h-e-p-o-d-i-u-m.in for a complete list of all our shows. This was an HD Smartcast Original.
01:07:24
Speaker
log on to HD smartcast.com to listen to more such podcasts