Ambarish Gupta, Founder and CEO of Knowlarity, discusses the business of selling SaaS to Indian SMBs.
Sramana Mitra: Given that it is such a high-touch customer service model, the question that I’m trying to ask you is. Right now you’re heavily venture-funded and you can finance your cost. At scale, does this company have the unit economics to become profitable? Ambarish Gupta: Well, that’s true. The unit economics of this product is
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
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?
Sramana Mitra: Was the product you developed acceptable within the Indian regulatory system? Ambarish Gupta: Yes. We solved the problem for India. Most of the emerging markets have the same regulations, which is VoIP is not allowed. We spent our first year developing the first PSTN cloud telephony platform in the world. That was a big breakthrough
Sramana Mitra: Whom did you raise money from and what was the process of raising money? Ambarish Gupta: Initially, I and my co-founder just put in 1-1.5 million rupees (~$20,000 -$30,000) to build the infrastructure. We had built up a small platform and were struggling to find some takers. We didn’t really want to raise money immediately.
Sramana Mitra: It’s not really operating experience. It’s consulting. Ambarish Gupta: If you want to join PE, you need operating experience, for which you have only two options. You either work for a corporate for five years or you work for consulting firms for two years. Two or three years is quite a short time
If you haven’t already, please study our Bootstrapping Course and Investor Introductions page. [Also check out my Entrepreneur Journeys book, Seed India – How To Navigate The Seed Capital Gap in India] Selling technology to small businesses in India is hard work. Customers are uninitiated to technology’s sophistication, and have expectations of high-touch customer service even when they pay little in subscription fees.