Post Graduate Program in Management

AMBRAISH GUPTA
I read Viktor Frankl sometime back - "Man's search for meaning". It is a long list of the books
I read on trying to discover "what one should do with life". It talks about three ways a man
can make this somewhat transitory existence into something lasting: A) build something B)
appreciate goodness - the beauty and love in the world C) live life with attitude that you may
not control the external world but you control your reaction to it. The first choice stuck. It
may sound philosophical but the answer to those Sunday mornings when you are not sure
how this one is different from the last one, other than the date, is important.
I had my first attempt at entrepreneurship in 2003. I am an IITK CS 2000 batch who followed
almost the beaten path and landed as Software Engineer in Silicon Valley after graduation. By
2003 I was bored and was appalled at the slowness of the life. I bid my job goodbye and
arrived in Bangalore in 2003 with a borrowed idea - rent.com for India.
It was bad time for start a company. Dot Com crash had happened and the environment was
gloomy. My startup partner had a change of heart within a month of the starting the
company. I could not find another partner to come join me. I also could not find anyone to
fund the company either. There was no angel or venture funds pouring money into startups
at that time. But I had $40,000 in savings and I decided to push forward. I rented an office in
Bangalore and hired techies and sales people. I started building a prototype that I could go to
market with. I was able to build a prototype soon and I was in the market. I would go to talk
with real estate brokers and show them the software I built. There was interest but no one
was interested really with the pricing plan I had. I was looking for a commission in the
properties rented on the platform. It did not take off. Within one year, my savings had
dwindled to single digit $ thousands.
The idea was right. We have MagicBricks and 99acres making millions of revenue today.
However I did not execute well. The root cause of the bad execution was A) My lack of the
understanding of business B) Lack of capital to experiment and fail without burning too
much of my energy C) Existence of plan B of going back to MBA school and have an easier
life. The venture failed.
When you don't get what you want to get what you get is called experience :). It was an
incredible life experience. I went back to MBA school at Carnegie Mellon University with
appreciation for every single real world theories of marketing, sales and operations they
taught. However, I had planned to never come back to startup world. I took up job with
McKinsey & Company as a Strategy Consultant in US in 2007 and safely planned to
eventually move into private equity industry in turnaround investments where my
operational experience could be a differentiator.

This document forms part of the Sunstone Business School PGPM courseware. 2012 Anytime
Learning Pvt. Ltd. No part of this file can be reproduced, stored in a retrieval system, or transmitted in
any form or by any means - electronic, mechanical, photocopying, recording or otherwise without the
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Post Graduate Program in Management

Man proposes God disposes. By the time I had timed myself for the move in 2009, subprime
mortgage crisis happened and I could not get into private equity. I decided that I will build
and "turnaround" my own company.
This time it was very "strategic" move. I knew emerging markets were the future growth
engine of the world. I knew telecom in India was growing at 100% growth rate. I personally
understood enterprise business better because they are more "rational" are willing to pay you
for your service if you give them value. So I had to do an emerging market telephony services
company. The idea of Knowlarity was born. I did not want to go through the pain and
sufferings of setting up an office again and having to keep my partner excited. I partnered
with my batch-mate Pallav who was already running a startup for four years and had the
know-how to run a company here. I had a reliable partner now.
With the ingredients in place, we launched Knowlarity - a Cloud Telephony company that
can serve enterprise of any size in emerging markets with hosted IVR. We made money even
before we registered the company in August 2009. We put together system and sold services
to politicians for cool 1CR. This was good money. The business was quick. I spoke with a lot
of large web companies and all those needed a telephony interface the customers could call
and access basic information on their web services. We launched hosted IVR services for
enterprises and later launched fax to email, hosted PBX services for SME. All three were hits.
We have had reasonable success in Knowlarity. We pretty much established the Cloud
Telephony as industry in India. I think the success stemmed from not repeating three
mistakes of my first startup and recovering from new mistakes quickly. This time I
understood the business - from tech to operations to sales. I had raised enough capital that
one failed experiment did not kill my personal energy. I could hire people to run
experiments. Also at the age of 32, I had no plan B this time.
The new mistakes have been more than 3. We made mistakes in technology platform. We had
built it up for outgoing calls business after the cool 1CR. It blinded us though it is inherently
unscalable and seasonal business. It also commoditized quickly. We tried to scale our initial
1CR profits by launching a reseller network where anyone could make outgoing calls
through our system by buying credits. We had massive number of resellers across the
country. We were "outgoing calls king" in matter of months. But the traffic swung wildly and
margins approached to zero because of absolutely no lock-in on the end-customer. We
switched to "incoming calls" high margin business in 2010 with the launch of Superfax - fax to
email product. Subsequently we launched super receptionist - a hosted PBX solution another "incoming calls" high margin product.
We wasted a lot of time chasing government and telecom operators for "quick money". It was
a mirage. it never materialized. The lessons learned was that if the client is big and is moving
slow, all your early mover advantage is fruitless. By the time you educate the client and get
ready for the business, there are 5 more competitors chasing for the same.

This document forms part of the Sunstone Business School PGPM courseware. 2012 Anytime
Learning Pvt. Ltd. No part of this file can be reproduced, stored in a retrieval system, or transmitted in
any form or by any means - electronic, mechanical, photocopying, recording or otherwise without the
permission of Anytime Learning Pvt. Ltd.

Post Graduate Program in Management

We spent a lot of energy in selling goods to SME on credit. A very bad idea. We learned the
importance of cash hard way both inside and outside the organization. Irrespective of the
tracking tools, invoices would be "lost", salesman would disappear and checks would bounce.
In the SME business, when cash hits the bank, customer should get the goods and salesman
should get the incentive.
It is important to make "good" people stakeholder in your success. This means getting high
quality advisors and mentors early on. An entrepreneur is a doer. In the absence of choices,
wrong choices are made. One should not be too hung up on equity participation early on. We
fortunately got this one right in the beginning.
I grew in the role of manager in last couple of years. As an entrepreneur, one is used to
having his arms thrust into every single function in the company. It would be wonderful if
one could do it competently. The problem is that one can't and it frustrates the functional
managers. One should get the best person to do the job and then TRUST the manager to
actually do it. If you feel the urge to "help" it should be sitting with the manager and helping
him rather than doing the work yourself. This also means making the hard decision of firing
the manager if you are sitting with him every single day helping him out.
We are a medium size company now. I am learning the importance of the role of CEO in such
a company. Some of the responsibility that a startup CEO could whisk away comes right back
biting to you - whether it be the responsibility towards your customers, employees or
investors. And there are no ifs and buts about it. The important thing is to learn from the
mistakes quickly enough and NEVER to repeat the same mistake.
The journey of Knowlarity is filled with ups and downs. It is exhilarating to build something
out of nothing. Irrespective of what it ends up being, I have satisfaction of having Sundays
that are different from previous ones.
Links:
Knowlarity: http://www.knowlarity.com
Linkedin: http://www.linkedin.com/in/ambarishngupta

This document forms part of the Sunstone Business School PGPM courseware. 2012 Anytime
Learning Pvt. Ltd. No part of this file can be reproduced, stored in a retrieval system, or transmitted in
any form or by any means - electronic, mechanical, photocopying, recording or otherwise without the
permission of Anytime Learning Pvt. Ltd.