Sramana Mitra: We should probably step through that. That’s your first technology entrepreneurship, right?
Rizwan Kassim: That’s the first one that hit any sort of scale.
Sramana Mitra: You started that in the 2006 to 2007 period?
Rizwan Kassim: The company was founded in 2006.
Sramana Mitra: How long did you do that for?
Rizwan Kassim: The brand and the business still exist. It is because of that business that we started Ultra. We still operate that business. It’s not a business we invest a ton in, but it still goes on. We still have subscribers. We were finding subscribers in the most interesting places. When we mapped out our customers, we found out that Arkansas was one of the biggest sources of our subscribers. It took us a while for us to figure out that Walmart headquarters was there. This happened around the same time as another boom in Indian immigration to the US.
Sramana Mitra: I imagine the company was bootstrapped.
Rizwan Kassim: Yes.
Sramana Mitra: How did you launch this? You put this service together and then you basically used Google PPC to acquire customers. That was the logic of the business?
Rizwan Kassim: That was the core. We did have some initial funding from one of our partners. His name is David Glickman. He has founded a number of telco companies. We had our own mini-incubator with a Chairman who had built a number of successful companies and who provided us some funding. We’d meet him once a week. It was an entirely remote company. We focused on enabling our infrastructure to do charging, which is not trivial in the telco business. We went to trade shows and bought the best routes to India as well as the rest of the world. Then it was Google PPC. Now, it’s a much simpler business than the one we’re running now. There’s a certain elegance to it because there were only a few core activities.
Sramana Mitra: Is there anything else that you did strategically to get to $8 million or was it just buying ads and the arbitrage of leads?
Rizwan Kassim: We continue to use the learning from the forward pricing strategy. If you look at the cost curve, we came in at a much lower rate in the beginning than the people we were competing with. Our key differentiation was forward pricing. We had some understanding of the regulations there as well as from our telecom knowledge. We knew that there was going to be decrease in rates. There was actually a free fall in the wholesale rate from five cents to one cent over a year. We forward priced for that. We acquired subscribers and said, “We’re going to bill you three cents.” We always stayed ahead of the price curve.
Including myself and my parents, Indians are very price-sensitive. You were able to get consumers to switch based upon good pricing. Second was good quality. We made an effort to use good quality routes. There was honesty to the brand that’s not typical in calling cards. It’s a fee-laden shifty business. We didn’t do that. It was meant to be an honest brand. That emanated from who we were. We knew that there were other strategies for making more revenues but we didn’t know how to operate those.
To me, one of the key learnings is that your pricing strategy is as much an embodiment of how you think as well as what is strategically right. We weren’t big on promotions either. Our head of marketing was never a big fan of that. We also had a small team, which reduced the operational complexity. We also lean very heavily on our vendors to build features for us because we didn’t have an in-house technology team.