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

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

permission of Anytime Learning Pvt. Ltd.

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