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Capital Efficient Entrepreneurship: Venky Balasubramanian, CEO of Plivo (Part 6) 

Sramana Mitra: However, your per minute numbers are a premium over the carrier’s per minute numbers that you have to turn around and pay, right?

Venky Balasubramanian: Technically, yes but not really. In practice if you go to a carrier directly, what you do in effect is a service running more than 10,000 minutes. Our price points are much more lower than what you get from a carrier directly.

Sramana Mitra: So you have volume discount. Because people are riding on top of that volume discount, they get that discount. What you’re charging those customers is still a mark up over the price that you are getting from the carriers.

Venky Balasubramanian: Right. >>>

Capital Efficient Entrepreneurship: Venky Balasubramanian, CEO of Plivo (Part 5) 

Sramana Mitra: If I were making that decision, I would have made a different decision. If I had $15,000 to $20,000 coming from two customers, I would not raise angel financing and part with equity at that point.

Venky Balasubramanian: I agree, which is why I’ll get to what we did a year later. A couple of things happened. It was also about timing. By the time we closed that round, we got the money from the customers. At that point, there was not much going on in terms of our customers. It also stems from the fact that, at that point, we were more focused on figuring out how we can go a little more aggressively. I agree with your view that raising money isn’t always the best.

At that point in time, we were pretty happy with the decision we made. Using that money, we hired a few more people within a month. We also applied to Y Combinator in 2012. What’s interesting is we had apply to YC in 2011 as well but was rejected. Like I said, I was fascinated with the startups that my >>>

Capital Efficient Entrepreneurship: Venky Balasubramanian, CEO of Plivo (Part 4) 

Sramana Mitra: Your business model was in providing consulting services, training, and support?

Venky Balasubramanian: Back then, we had no plan to monetize. This was still a project for us. We had no business model.

Sramana Mitra: You were based in Bangalore and Mike was based in France?

Venky Balasubramanian: Yes, I was in Bangalore back then. Mike was still in France.

Sramana Mitra: Where is Mike from originally?

Venky Balasubramanian: He’s from France. >>>

Capital Efficient Entrepreneurship: Venky Balasubramanian, CEO of Plivo (Part 3) 

Sramana Mitra: You didn’t have comparable functionality with Twilio?

Venky Balasubramanian: We actually had better functionality back then in terms of what we launched and in the framework itself. We have a lot of incoming interest from customers of Twilio who liked what they saw. It was hard to believe for a lot of folks back then because it was just two people – Mike and I sitting out of our apartment and writing all this code. A lot of folks came in and said, “Whatever you claim on your website, does all of it work?” The code was all there on GitHub. The code was there right in front of them. We have a lot of consulting projects where they say, “I want to move out of Twilio and onto your framework.” This is around June of 2011. To be honest, we did not have a plan of starting Plivo as a business. It was a still an open source hobby project. We did get a lot of consulting offers from folks wanting to use our framework. >>>

Capital Efficient Entrepreneurship: Venky Balasubramanian, CEO of Plivo (Part 2) 

Sramana Mitra: What specifically were each of you trying to do?

Venky Balasubramanian: I was trying to pull ideas for my new startup back then. The first idea I had was a click-to-call. My co-founder was trying to build a framework for these IVRs. I was trying to build a framework to basically call to India every day instead of every week.

Sramana Mitra: Why IVR at this juncture? There’s been plenty of stuff going on in IVR. What was the gap in IVR that caused you to think there’s an opportunity to build another company in that space?

Venky Balasubramanian: Being telco engineers ourselves, we’ve seen this problem in the market where if I were to build a system, it took us a longer time. You had to understand all the different protocols and all the different systems underneath. With startups, speed is everything. If you can go to market faster, the better it is. >>>

Capital Efficient Entrepreneurship: Venky Balasubramanian, CEO of Plivo (Part 1)  

Venky has built a fast growing, profitable company with just $2 million in angel financing, raised as two convertible notes. Excellent navigation, and a lot to learn in the domain of smart, capital-efficient entrepreneurship.

As we are bound to see the market crash in the upcoming quarters, these are the type of companies that will thrive in the post-bubble era.

I frankly can’t wait.

Sramana Mitra: Let’s start with the beginning of your journey. Where are you from? Where were you born, raised, and in what circumstances?

Venky Balasubramanian: I was born in India and was raised here. The first 10 years of my professional life was essentially all telecom before Plivo. I was in software development, a bit of sales engineering, and a bit of actual sales as well across different geographies, including Southeast Asia and Latin America. Then seven years into my professional telecom life, I got bored and I wanted to do my own thing. I was >>>

Scaling to $10 Million from Kentucky: Steve Huey, CEO of Capture Higher Ed (Part 7)

Steve Huey: University of Pittsburgh is a client, and we’ve had conversations with people at Princeton. Some of these schools have more applicants than they need. What they’re chasing is the right applicant. By understanding the behaviour of students and their families, you can market to them that you can assist them in finding the information they need. This has changed the game for us. In the past, we’ve had a lot of schools that you would not know. Now, most of the schools that we’re working with or are signing contracts with are playing football on Saturdays and are actually very selective schools. We still like serving the traditional schools that we’ve served in the past, but it certainly is nice to have two of your clients play football against each other on ESPN Sunday Night Football. That was the inflection point in our company. Over the last eight months, we’ve doubled. We’ve doubled the people, and we’ll probably end up doubling again.

Sramana Mitra: The company is self-funded? >>>

Scaling to $10 Million from Kentucky: Steve Huey, CEO of Capture Higher Ed (Part 6)

Sramana Mitra: What else is interesting in your story? Are there any other strategic moves that you want to discuss?

Steve Huey: One of the biggest things that happened was about a year and a half ago, when we were introduced to a McKinsey study that talks about a consumer’s decision journey. The story that they used is the idea of people buying a car. When do you actively start trying to buy a car? The time from when you actively say, “I need to buy a car”, to the time that you buy a car is two weeks. You can imagine car companies. If they were only going to market to you when you’re actively engaged in buying a car, they’d have to pick the two weeks out of five years. This McKinsey study talked about the consumer’s decision journey where they have your brand.

If I were going to ask you what car you’d like to buy, odds are that you probably have a few brands that you’re familiar with and are interested in. Going to college is a huge investment in the United States. In fact, most families don’t believe that college is affordable to them. The adoption of this student decision journey of where they’re going to school is a significant departure of how the industry has been run. Typically, people have >>>