Featured Videos

Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta (Part 4)

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 for us.

But we ran out of money. So, I went back to the US to some of my friends in New York who had made good money in hedge funds We were able to raise convertible-backed half a million dollars and used that to launch a hosted EPBX product in 2011. >>>

From Friends and Family Funding to $30 Million Exit: Vertical Response Founder Janine Popick (Part 5)

Sramana Mitra: What was the competitive landscape when it came to keywords in AdWords. It sounds like that was a major channel and that did become very competitive.

Janine Popick: Brutal.

Sramana Mitra: Absolutely, brutal is the word.

Janine Popick: You’re competing with people who can spend a lot more money. That’s what it comes down to. Any of these guys are getting $10,000 to $100,000 a month from their customers. We’re getting either free or $10 a month. It’s one of the reasons why Vertical Response decided to release a freemium product to let the freemium do the marketing for us. We launched that product a year and a half ago. We needed to compete. It was fine in 2005 to 2007. These days, the term email marketing is brutal. >>>

Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta (Part 3)

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. The Chief Minister of Orissa Naveen Patnaik was campaigning for elections. He wanted to be able to call 7 million people in 10 days. We were able to demonstrate our ability call 10,000 people in a day but the requirement was for 70,000 calls in a day. We were able to get the order from the political party but in the next 10 days we went from one server to ten servers.  >>>

From Friends and Family Funding to $30 Million Exit: Vertical Response Founder Janine Popick (Part 4)

Sramana Mitra: That’s perfectly fine. Let’s double-click down on some of the strategic moves as you were building the company. You talked about your financing strategy. You kept raising money till about $1.3 million at the same valuation for almost a year and a half. What about customer acquisition? What about the team? What strategies did you follow in each of those categories?

Janine Popick: Customer acquisition came about in two ways. One was to go after each and every small business owner. That needed to be part of the way we offset our business development because business development deals can either work great or they don’t pay off at all. To start with, we were doing things like co-branding all our products so that anybody could say that they had an email marketing company. >>>

Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta (Part 2)

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 compared to five years. That’s why I decided to join McKinley. In two years, I did a lot of work with large banks and insurance companies.

In 2009, when I was trying to come out and join PE, the sub-prime mortgage crisis happened in the US and the whole banking sector collapsed. Companies were not hiring. I spoke with a bunch of my mentors and asked what I should do now. They asked me to get some more operating experience. That is how I thought maybe I should start a company again. The company is bigger this time. And it was good operating experience too. >>>

From Friends and Family Funding to $30 Million Exit: Vertical Response Founder Janine Popick (Part 3)

Sramana Mitra: 2001 was a very difficult time.

Janine Popick: Over two developers that I’d worked with previously asked me if I wanted to start this company. I agreed. My husband agreed not to start the company with me, which was actually a great thing because he came on later on and helped us kick-start our marketing and sales. He and I are in the same business, which makes for a really interesting yet boring conversation sometimes. We came back to the US and I started talking to lots of VCs. They were very eager to take the meeting, but funding was rejected.

Sramana Mitra: At that point, you were basically discussing a concept? You didn’t have anything going. You were just asking VCs for money to start something.

Janine Popick: Exactly. I had a really great PowerPoint that looked like a product. >>>

From Friends and Family Funding to $30 Million Exit: Vertical Response Founder Janine Popick (Part 2)

Sramana Mitra: What did you do for Xoom.com?

Janine Popick: I was in charge of all of the direct marketing and e-commerce. We did a lot of email marketing and a lot of marketing out to millions of people that would sign for their free webpage. We would try to upsell them clipart and all the bells and whistles that you’re going to put on your webpage.

Sramana Mitra: Email marketing at that time was quite new.

Janine Popick: We were like cowboys. There were no rules. People would sign up to get their free webpage and we would get their email address and try to upsell bells and whistles for their webpage, but we also try to sell them other things. One of my favorite stories at Xoom.com was we would offer a chat room so people could put chat rooms on their websites. We would monitor what people were talking about in the chatroom. >>>

Scaling a Cloud Telephony Company in India: Knowlarity CEO Ambarish Gupta (Part 1)

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. Knowlarity is succeeding in a market where many have failed. Sequoia Capital and Mayfield are backing the company.

Sramana Mitra: Let’s start at the very beginning of your personal story. Tell us where you’re from. Where were you born, raised, and in what kind of circumstances?

Ambarish Gupta: I grew up in Kanpur. Kanpur used to be a great industrial town with a lot of government-owned industries. As a child, I watched this city go literally down the drain. I grew up in a business family. I had a lot of interest in Physics and Mathematics. >>>