Taking On Microsoft And Google From India: InstaColl Founders Sumanth Raghavendra, Kaushal Cavale, And Their Mentor Sabeer Bhatia (Part 6)

SM: I really like to go-to-market strategy. Who developed it?

SR and KC: The three of us together.

SM: It seems that Sabeer’s role today is very active. Is that right?

SR and KC: Absolutely. He has told us that the first phone call he makes when he wakes up and his last phone call before going to sleep are to us.

SB: This is just one of three active roles I have today, and it is unique. The similarity with the other two is that they are all based in India. One mobile-oriented company already has 12 million subscribers and is actively trying to partner with a telecom operator in India. If we do that, we will have essentially opened the market for a mobile-to-mobile Skype equivalent that does not require data connectivity. We believe we will gross 100 million subscribers over the next three to four years. We have built up a platform for offering telephony applications as a service. Our first product on that platform is a voice conferencing system for India, and the second is a virtual PBX where small to medium-sized companies can get PBX as a service. We offer an online mechanism to completely control their virtual PBX running off our servers. There are a lot of companies in India that are going completely mobile. We can make things much better through a partnership with a carrier such as Airtel. Integration with switches is better, and pricing can be better. We’re getting a lot of traction in developing markets, which is exciting.

The other project I am actively involved in is NanoCity.

SM: What have you done from a financing standpoint to get to this point with InstaColl? VCs in India are not financing these types of ventures, which is limiting and keeps India constrained as a service economy.

SR and KC: When Sabeer came, he put in some money. The reason we wanted to partner with him was not really about the money. We did get a small round of VC funding from an offshoot of SOFTBANK Japan that was created only for India and China. We raised $1.5 million in 2007, and that has kept us going since then. We can operate with a low burn rate in Bangalore.

SM: Especially if you do a few good OEM deals. That might give you the cash you need to finish.

SR and KC: When we started off, we wanted to get someone in the United States to invest in us. That’s why we approached someone like Sabeer who had U.S. experience. It was difficult just to reach out and find someone of that caliber. We have used most of our capital developing the product. Given the nature of the beast that we are battling, we needed to put in the amount of effort we have.

SM: In the grand scheme of things, $1.5 million in product development is nothing. If you can do the whole Office development for $1.5 million, then you are very capital efficient.

SB: I have been supporting them past the $1.5 million point because last year was very tough for any startup. They ran out of money, but I’ve been supporting them for the past seven months because I believe in this company.

This segment is part 6 in the series : Taking On Microsoft And Google From India: InstaColl Founders Sumanth Raghavendra, Kaushal Cavale, And Their Mentor Sabeer Bhatia
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