Saravana Kumar 00:00

When I was working at Accenture, they finally had to put a team of 18 people to replace me. India’s a happening place now, you know, like you can build world class businesses and you don’t feel like you know, you can only execute it from the west you can do everything from India now. Even if people ask us, our structure is that we have only 10 People in London, the entire team is based out of India. If you have money, India is the best place to live, you get five maids and a driver and everything is taken care of, in the West you can’t do that. In India, If I think you know, somebody gives me a choice: you have exactly the same career prospects and what you can do in one place versus the other. And whether you want to take Bangalore or Coimbatore, I will take Coimbatore at the current moment.

Siddhartha Ahluwalia 00:47

Hi, this is Siddhartha Ahluwalia and welcome to The Neon Show. Today’s guest bootstrapped his company from one customer in Hong Kong to 1000s, including Shell plc, Boeing Co and IKEA. He dreams of creating a Silicon Valley in Coimbatore and helped build the city’s first SaaS unicorn in the process. We welcome Kovai.co’s founder, Saravana Kumar to The Neon Show. I would also like to thank our sponsors, Prime Venture Partners for sponsoring The Neon Show. Hope you enjoy it.

 

Siddhartha Ahluwalia 01:19

Saravana, welcome to The Neon Show. So excited to have you here.

 

Saravana Kumar 01:23

Yeah, thank you very much Siddhartha, I’m a really big fan of your podcast all the way from 100x entrepreneurs I’ve been watching for a long time. In fact, like, you know, some of the things I’ve used this bit longer format, but still I enjoy it like, you know, on the weekends, I typically sit and watch some of the episodes. And that’s how I got connected to you. And I’m really delighted to be here. I didn’t know that I’ll be sitting here speaking. Thank you very much.

 

Siddhartha Ahluwalia 01:50

Travelling specially to Bangalore for the podcast. And you know, you and I have shared a special relationship. I’ve interacted with you many times now. You’re also now an investor in Neon Fund. So glad to bring you to know somebody who has known Neon more personally, as well.

Siddhartha Ahluwalia 02:06

Saravana I would love to start with your childhood, right. What are the earliest childhood memories that have shaped who you are today?

 

Saravana Kumar 02:15

Yeah, sure I keep telling this story because I come from a typical middle class family in India. So I’ve got two siblings, two brothers, and I’m the eldest one. And right from my young age my father runs a small shop in the native town called—

 

Siddhartha Ahluwalia 02:34

Does he still run that?

 

Saravana Kumar 02:36

No, he’s retired now. But, you know, like, when we were younger, so we used to run a small shop—

 

Siddhartha Ahluwalia 02:42

In town called?

 

Saravana Kumar 02:43

It’s called Mettupalayam, it’s actually 30 kilometres away from Coimbatore. However if you want to visit Ooty, then you need to cross Mettupalayam. The foothills of Ooty is this town, (Inaudible) it is a small town Mettupalayam. So that is where I’ve grown up. My dad’s business is very simple, you know, like, you might recollect from your younger age like picture framing, right the puja picture frames—

 

Siddhartha Ahluwalia 03:10

We have so many frames, here in the office(Chuckles)—

 

Saravana Kumar 03:13

You know, Ganapati, Saraswati (Hindu Deities) and all those pictures are very small businesses. Right from when I was 12 or something, I needed to get involved in the business. Because my father was exploring other opportunities. And you don’t have accounts and you can’t leave the employees too. Because they can just sell something and pocket the money because you won’t have any trace of it—

 

Siddhartha Ahluwalia 03:15

And you were doing it after school—

 

Saravana Kumar 03:18

After school. You know, like, that’s—

 

Siddhartha Ahluwalia 03:24

2pm keep your bag in the office, have your lunch at the office and—

 

Saravana Kumar 03:46

No, not that crazy. You know, like normally I’ll come back home, my father will be waiting to pick me up. To be honest, I hated that at that age because you come on you go and play with friends. Right? But that’s my regular routine. And that’s how I have grown up. That continued all the way you know, like, even to my higher education. And even when I went to university, I think my dad, the criteria is something like you know, I will be able to come back and they can carry on in the business side.

Saravana Kumar 04:18

Today, you know, I can relate all those learnings, whatever you have learned during that period is transforming today. One other thing is exposure to dealing with money at a young age because, the principles are same, only the numbers are different—

 

Siddhartha Ahluwalia 04:37

Or the scale is different—

 

Saravana Kumar 04:38

Scale is different, right? So I feel like you know, even today I tell people that it’s very important to teach kids at a very young age. If you’re an entrepreneur, you know, even in our family like I got two boys and all the time you know we talk about everything. Probably my boys are pretty shaped up I will say, like, they know what are the marketing challenges and people challenges and everything. So that contributed significantly. So one more example is, we also sell window glasses. It was like, when you construct a new home, you will need the glasses for the windows, right? So we were also selling that. So for that the way we used to get business is you need to pay commission to Carpenters. So only then will they bring the business to you. And that is the same like what we call partnership model now, like at scale, like, what are the nuances? You know, how do you deal with them? How do you make them happy? All those principles apply. So I think maybe, without even realising that younger age, exposure to business contributed significantly to where we are today. You know, maybe in just a bootstrap business and very frugal. No I won’t say very frugal, still we invest and grow at the same time, but handling money is one of the biggest learnings from that year.

 

Siddhartha Ahluwalia 06:07

Another thing that I want to discuss with you is, have you been away from India, almost 22 years now?

 

Saravana Kumar 06:12

It’s actually 50-50. Now, I’m 46. So I lived the first 23 years in India, and the second 23 years in London.

Siddhartha Ahluwalia 06:22

Your first job in London was Fidelity International?

 

Saravana Kumar 06:27

No. My first job was at a Mumbai based Indian body shopping company. So that’s how I got the job. I was with them only for one year. And then the place where they deployed me to the client, they basically bought me out. That’s what happened. And it is a company called marchFIRST, Inc. which is an American company, but later bought by Logica and then CGI. Yeah, that was my first job. And then I joined Accenture after that until 2010, yeah, I think, a small stint at Microsoft, so four companies in 10 years.

 

Siddhartha Ahluwalia 07:09

I believe you always wanted to start up your own business, right? So even at Fidelity, you were doing five days a week, then you reduced it to four days, then three days, And then finally you quit.

 

Saravana Kumar 07:20

Correct. Yeah, I won’t say like, you know, whether it was a very strong aspiration to show and start whether I don’t know whether that was there. But right from the engage, I was always doing one thing or the or the other, even 97 something like you know, I was working as a trainer in one of the institutions similar to Aptech kind of thing—

 

Siddhartha Ahluwalia 07:50

NIIT and all these—

 

Saravana Kumar 07:51

Yeah, NIIT and Aptech are local institutes.

 

Siddhartha Ahluwalia 07:54

That time it was big and everybody wanted to—

 

Saravana Kumar 07:56

Every state will have one Training Institute, right? So I was working for a company called Nuva systems in Coimbatore. And even that time I was trying to build training software to sell to. I was always doing bits and pieces. But this one I saw an opportunity, like we’ll probably talk about the first product, how the idea came. And then I saw the idea. And then initially, I was working only on the weekends for some time, then I thought probably I can take it a bit more seriously. And then I went to my manager and I said, the thing is, you know, even today, if you have a really good talent, you want to preserve them one way or the other. That point I always put 100 percent, you know, like it will be when I was working at Accenture, they finally had to put a team of 18 people to replace me, because you’re so passionate about the problem space and even there won’t be any specification or anything, you will go build so many things to help the people out there. And eventually I was building something like it’s called a simulator. Accenture won this biggest contract for healthcare in the UK. So they are connecting every single doctor and hospital together. And there are so many vendors involved like healthcare vendors, and they will come and deploy something and that will break the core system. And every time there’s a lot of delay in testing and everything. So I built a simulator for all these external vendors. I just started as a hobby thing, you know, nobody asked me to do it. I just started on the weekends and kept doing it. And gradually that became like one of the core things for the entire project, that’s like a few billion dollars worth of project. And finally, Accenture hired 18-20 people to replace me. Similar thing happened and the reason I was telling this Fidelity, you know, is the same. I never worried about work. It never felt like work, you know, I really enjoyed it, I did something, and then you’re adding so much value to them. And when I proposed, I wanted to do that, very flexible and then I gradually reduced it gradually to four days and three days and did it for like six or eight months. And that is how I built the V1 of the product

 

Siddhartha Ahluwalia 08:00

So right now your boys are 13 and 16?

 

Saravana Kumar 10:24

I think 17 Yeah. They are three years apart, 16 and 13 now.

Siddhartha Ahluwalia 10:30

Properly settled in London, and you come back to India more and more often. Right? So do you feel that now, the more expats that have moved outside India, there’s a feeling of, I want to come back to India, because what India lacked 20 years ago, 23 years ago, when you moved out, it has made up for that.

 

Saravana Kumar 10:52

I think it’s a kind of mixed sentiment for me, like, what I really wanted to do is moving forward once the boys say no, maybe in another few years, they will go to university and you know, we have free time to decide how you want to do it. I think both countries have their own pros and cons. There are certain things you really enjoy in India and certain things you enjoy in the West. So, we probably will settle down more like you know, six months here, six months there or like even depending on the boys, they really want to go to the US for their studies, then probably we will shuttle between three different countries. But definitely, you know, like a lot of things have improved in the last 20 years at least from the opportunity side, definitely no doubt India’s happening place now, you know, like you can build world class businesses and that side 100%. You don’t feel like, you know, you can only execute it from the West, you can do everything from India now. Even people ask us, our structure is we have only 10 People in London, the entire team is based out of India, you know, sometimes people only use the engineering talent from India and all other GTM teams will be out of somewhere else, but in our case everything we invest and we mentor and all these can be doable in India, on that aspect definitely India is a better place now.

Siddhartha Ahluwalia 12:17

And what changes in infrastructure that you have seen in India in the last 20 years, because India shining has been a mantra for the last 30-40 years. But can you share some concrete examples on why India is shining right now?

 

Saravana Kumar 12:30

The one thing is talent definitely, I think we need to thank all this consulting firms like Infosys and TCS and the Wipro’s what they have done in the last 20-30 years is what the talent pool we are seeing now, it’s a generation right. So, 20 years ago, you didn’t have it, like people were just getting into IT and then they just started learning along. But today all kinds of experiences are there, they have the potential to build any world class product that definitely played a significant role. Today, in fact, India became a powerhouse for talent for the entire world, right. So, that definitely is a positive side. And also the infrastructure side, at least IT infrastructure, like you know, you can get pretty much everything like, high speed internet and those even though it looks trivial, but they are the pillars. And today 4g And probably I don’t know whether 5g is available, you know, 4g and 5g are available, you’re connected all the time. The tech side, everything is happening. Definitely on that aspect, a lot has been implemented in the last 20 years.

 

Siddhartha Ahluwalia 13:43

But people also blame Infosys, TCS, Wipro for creating low cost IT wages, low cost slavery, right? Because I graduated in 2011. My first job was in Amdocs. TCS came to my campus with a 3 lakh rupees annual offer, Amdocs was paying 4.2 lakhs so I decided to join Amdocs. Even today TCS, Infosys pay to freshers who are 22 to 24 years old 3 lakh rupees per annum.

 

Saravana Kumar 14:16

Okay, I don’t know about the fact but maybe, I don’t know whether three lakhs is applicable, across the spectrum or it could be—

 

Siddhartha Ahluwalia 14:30

Any fresher that they have taken.

 

Saravana Kumar 14:32

Okay, I don’t know how they can compete. You know, like if you want a cream of the cream, right?

 

Saravana Kumar 14:41

Oh, yeah, I think that is their business model. Right? It’s like McDonald’s, you know, you appreciate the McDonald’s business. The entire business model is like that. You know, they are only driven by students and they don’t want to pay. It’s a saying in the West, right? Do you want to work for a McDonald’s salary, whatever The National Minimum Wage set by the government is what you will get on McDonald’s, and that is the business model that they developed unmastered under this and scaled. Maybe the TCS, Infosys, I don’t want to name the company like there’s a very famous company in Coimbatore the accounts department they have a ceiling you know, like I think five lakhs or four lakhs or something like that’s it, I think they will start very low like two lakhs or something and then once they hit four lakhs, you will have an option either to continue that or exit because they will start again from two lakhs and slowly build it up. So we take people from there, maybe from four to six lakhs and then they come here, we don’t have, you know, like they can grow all the way to 12 lakhs- 15 lakhs over a period of time. And maybe that’s the business model for them. So I think it’s very difficult to generalise, but at the same time, sure, these companies build great talent as well even to provide. Okay, let’s leave this salary part, right. But once you have an infrastructure like you know, your laptop, software, access to the internet and that is invaluable, like you probably won’t get it on your own. So I think in that task, I’m pretty sure like, they are the starting point for a lot of people who are building stuff now, right? These are only very few product companies. Today all the product founders when we look at it, If you go all the way back, they have worked in one of those companies at some point.

 

Siddhartha Ahluwalia 14:43

They don’t want cream.(Chuckles)

 

Siddhartha Ahluwalia 14:44

Yeah you’re right, we can compare them to the McDonald’s of the West, what McDonald’s did to the workforce. And why do I think the West has so much ethics in their workforce, right? Because people 15 and 14 years old start working in McDonald’s really early in their life, even while doing the college, they try to earn working at McDonald’s, Starbucks. So they are building the talent factory for India.

 

Saravana Kumar 17:13

No that’s right you know, even they might hire somebody at three lakhs. But in today’s market, I don’t know how they can compete. If somebody is really good. They won’t stick around for more. Right? Within a year they will find something, as long as the tribe is there, they will fly—

 

Siddhartha Ahluwalia 17:31

It was a joke in our college and I believe many other colleges. They used to come in trucks.

 

Saravana Kumar 17:38

Yeah, different slabs, right? Like, if you go to top colleges, the tier one will be Amazon’s, Microsoft paying like, 25 lakhs for the intern. And tier two comes at the bottom and we are actually going up and up. The goal is you know, we want to go as high as possible, financially possible. Because I personally believe quality matters. It’s much easier if you got a 10x guy, you know, like, rather than putting even five people to do that job, and like it thinks everything is simple when you’re 10x guy, even internally, I keep telling people on WhatsApp as an example. Because WhatsApp, when it was acquired by Facebook for 19 billion, there were only 50 people, you know, so you really don’t need a lot of people. Even today, people ask me, Are you going to be like, 600 people? And that’s not the goal, we want it to be 300 and get to—

 

Siddhartha Ahluwalia 18:40

I think that is true for product companies. Right? Because the customer pays you for the product, not for people. But in services can be the arbitrage is the key, they’re paying a sales guy $20 an hour, and they are charging $200 per hour for American—

 

Saravana Kumar 18:53

I think that is where you know, we can’t really compare, because their revenue model is based on the head count. How the cheapest they can get, and then add a markup and what they can do. You can’t really compare the product and service business because this is where it’s very important to understand the business model because McDonald’s is very successful. Nobody is complaining because that is their business model. It’s working. And maybe TCS, Infosys, that is the business model. And that’s working, they will have multiple layers. And at the bottom layer, they’re happy with that, imagine getting paid three lakhs and getting paid $200 a day or something. It’s huge. Their revenue is 27 billion or something.

 

Siddhartha Ahluwalia 19:37

A person they would get let’s say $200 per an hour. So for 10 hours of a normal workforce person, they are able to make $2,000 per day, what even they don’t pay in a month, right?. But there is no doubt that they have built India as a talent pool, right because India has always been an aspirational country. And if we go back to our roots, right, we have been one of the most hardworking people. That’s why we see all the US big Amazon, except Amazon, Microsoft. Everywhere there’s an Indian CEO, it’s just not the Indian CEO’s, right? Because CEO’s are not created magically out of thin air. These are the Indians who slogged for 20 years at various leadership positions in that company, proved their mettle, proved their ability to work with different cultures and then became the CEO, I think a lot of factors combined, right? In the West Indian have become the top leadership talent. Earlier, it was a mix of American and Chinese and it’s now being replaced by Indians. And the second is at the ground level talent is getting created here.

Siddhartha Ahluwalia 20:56

Well, earlier, one of the other things that I want to discuss is 20 years ago, for all aspirational folks, all the hardworking folks, the best ticket for a good life first. Do your Bachelor’s here, apply for Masters outside India, and aim for that better life? Is it still true today?

 

Saravana Kumar 21:15

I don’t think so. Because most of them are more like economic migrants, right? Like, you didn’t have opportunities here for the skill set, what you have built up, and you had a better life outside, but today the salaries are on par, in fact, your saving potential will be much higher in India than in the West. Because in the West it is kind of saturated apart from very few roles. Even in the UK like still 100k is a very good salary. 100,000 pounds is a reasonably good salary and the top guys maybe you know 151- 160, something like that. And in India, 1 crore became normal, right? Like even a bit manager and at leadership level, it became normal here. Okay, I don’t know Bangalore, but in Tier two cities, you can get a high end flat for 20,000 rupees rent or something like that. The savings potential is quite huge. And also the lifestyle, the quality of life is also much higher in India. If you have money, India is the best place to live, you get five maids and a driver and everything is taken care of. In the West, you can’t do that, you know, like even when you are earning that kind of money. You still need to vacuum your house and you know, all those things and challenges are there. So definitely, people are now probably thinking that’s not the only route like before, like okay, I need to that’s the playbook people used to do right? Engineering and whatever GRE,TOEFL (Competitive exams) and then one quick EMS and then settle down in the US. But now definitely the opportunities are there. There are a few India specific downsides, like traffic and other things. But other than that, I feel the quality of life is much better here.

 

Siddhartha Ahluwalia 23:20

So if a company like Kovai.co existed in Coimbatore, 23 years ago, you wouldn’t have moved out of India.

 

Saravana Kumar 23:26

That is our pitch now. We all moved out of Coimbatore because nobody created that opportunity. And that is the exact problem. If you look at it Coimbatore, has some of the top colleges in the country. Yeah, I think the PSG College Of Technology, and Government College of Technology—

 

Siddhartha Ahluwalia 23:42

It has 50-60 colleges right?

 

Saravana Kumar 23:43

Yes, some 60-70 colleges, and some of them will come under the top 10 colleges in the country. So all that talent, once they’re done, they don’t have a choice whether they need to move out to Bangalore. Even Chennai is only recently it’s improving, like otherwise even Chennai—

 

Siddhartha Ahluwalia 24:04

Has become the SaaS capital for India—

 

Saravana Kumar 24:06

Now it has become a SaaS capital. But definitely to answer your original question, I would have stayed in Coimbatore. Because at that age, it’s a very hard decision to move out of your hometown because you have a lot of memories, you build up your friendship, your network ,everything. At that young age, you’re breaking everything and then all of a sudden you’re going. For me at age of 22 I went to London—

 

Siddhartha Ahluwalia 24:33

To study?

 

Saravana Kumar 24:34

No straight work. We can talk about that, Friday finished my exam, Monday morning I was supposed to join in London.

 

Siddhartha Ahluwalia 24:43

How did that happen? I would love to know that right? How did you get the opportunity to work?

 

Siddhartha Ahluwalia 24:47

From Coimbatore?

 

Saravana Kumar 24:47

Because the way I did my studies was 94 to 97. I did my BSc in electronics, the full time college—

 

Saravana Kumar 24:48

In Coimbatore, all in Coimbatore and 97′ to 2000′, I did my MCA and college correspondence not college. At the same time I was working for a company out of Coimbatore so by 2000 you know even though I was just graduating my masters MCA, I got three years experience and since I was very passionate about computers and maybe I would have had like, you know, like seven years worth of experience to the outside world in the amount of learnings you had in the three years just you know that time it was a peak.com and y2k was also there but I got more on the.com side and I had an interview and cleared and then straight I got a job to join in London.

 

Siddhartha Ahluwalia 25:42

So you said Friday you got a job and Monday you’re supposed to be there.

 

Saravana Kumar 25:45

No, I got the job earlier, and then Friday gave the MCA exams, I don’t even know the results and on the weekend I flew to London. I said it’s a bit fortunate. I think a lot of good things happened. We discussed about the young childhood so that helped played a significant part and going to London at a young age also because the exposure right like at that time when you look at 20 years ago, the exposure in India was very minimal you know even if you come to Bangalore, that’s when Bangalore was peaking up with all the foreign investments and companies were coming and setting up and everything even then I don’t think the first party work could have come to India you know, it will be like some back office kind of work was picking up so moving to London and straight into some very innovative projects. I was working with Microsoft, Germany for six months. I was also a part of a project and it was a collaboration with Microsoft Germany and we are doing something that all happened when you are 22 and you know that exposure helped significantly as well for you to kickstart much earlier.

 

Siddhartha Ahluwalia 27:00

Talent is getting its due worth in India. That’s your saying right? For high salaries you don’t need to move outside.

 

Saravana Kumar 27:09

Yeah, salary alone is not a criteria anymore. You know like if you’re good there are above 1 Crore is pretty normal yeah, we have a lot of people.

 

Siddhartha Ahluwalia 27:21

Then why would still people, let’s say, every year 8000 people in India give up their citizenship and either we are talking about HNI(High-Net-Worth Individuals) or people who pay good taxes.

 

Saravana Kumar 27:35

Fair answer is that India still struggles with a lot of other factors right. You have money and this one kind of enjoyment is there with all the maids and quality of life. The other side is still a problem. For example, I like cars and you know for me to enjoy that kind of infrastructure it’s not possible here. If people want to travel in Europe or you know definitely, there’s both plus and minus and we’ll come down to individuals preference I’ve seen people moving from US and UK back and happily living here and at the same time I’ve seen people who are there and struggling a lot because to have friend circle where you know they need to think two times before going to a nice restaurant and they you know like so I’ll come down to individual preferences, What do you want to do?

Siddhartha Ahluwalia 28:30

Got it. And generally it’s part of Kovai right? You’re trying to create the Silicon Valley inside Coimbatore right. So you have invested I think $1.3 million in the office that you created right there, what does life today look like for your employee in a tier two city?

 

Saravana Kumar 28:56

When it comes to work and workplace I don’t know exactly how your environment will be, if you’re working in any city like Bangalore or you know we really don’t want to take that equation out. When we started this project like setting up a new office, 2019 is when we made this big decision. Let’s go big and do it. One of the first criteria for me is okay, let’s make sure whatever people get done in Bangalore and Hyderabad or whatever, let’s replicate that infrastructure here. And all the facilities and everything that you will get. For Kovai employees I’m pretty sure, the work life… they won’t miss out, not only just the nice to have things like Office and those kinds of things, even workwise, we do cutting edge things. And we constantly focus on whether we are doing something innovative. Because I feel I’m coming from a technical background, I feel that it’s very important for tech guys. And also, that’s where all this work life balance comes in. Like, if you really enjoy what you’re doing then everything is taken care of. All aspects, I feel, that is what we really wanted to replicate in Coimbatore. Also want to set some kind of benchmark like for others, because it’s the one mile barrier, right, once the first guy breaks it, then everybody does it, that’s also our hope. Somebody needs to do it, right? Okay, let’s be that somebody to break it.

 

Siddhartha Ahluwalia 30:45

I was speaking to one of your leadership people, and he told me that Saravana is very quiet on the outside, but very aggressive, while doing work, quietly aggressive, right? You will never raise your voice. Right? Folks have never seen you raising your voice. But whatever you tell, in a couple of sentences, people would have to write six pages to execute(Chuckles). How’s that possible? How do you do it at that speed?

 

Saravana Kumar 31:18

I think maybe it’s just natural characteristics. I will say, I’m generally… I can openly admit, I’m a more introverted person. If you put me in a group of people. And if you have like, two really extroverted people, then I’ll go quiet completely. The same time, I think that’s a natural characteristic of introverts, I guess they typically listen more and then are more action oriented, rather than keep talking a lot, maybe that is what we’re transforming here. I’m very firm on what we need to achieve. And I think communication is also very important, like communicating very clearly within short sentences, short paragraphs, this is what we wanted to execute. And then you know, make sure the other person understands your expectations. And then also keep telling, a lot of leadership people, like, there is a difference between delegation. And other I don’t, there’s a word for it, it’s dumping everything to the person and, and moving it, I don’t do that, you know, I work very closely with that person until they settle down. My management team, I invested a lot in building that chemistry between us so, I only need to say a couple of sentences, they understand exactly like, what’s my expectation, and then can do it. But that didn’t come magically, you know, the investment was there in the front. I would do one to one, once every week with them, and then go through what they’re doing and explain my expectations. So just building that bond, and then it becomes easy to do that.

 

Siddhartha Ahluwalia 33:13

But do people face a hard time matching your speed?

 

Saravana Kumar 33:19

Yeah, I think founders have a lot of expectations. When it comes to products we want a good thing today, I’m also realistic as well. Even when it comes to tech since I’am coming from a more tech background, you understand the challenges and you’re realistic with that. It’s not unreasonable expectations, like you know, like, whatever it’s, it’s possible. Yeah.

Siddhartha Ahluwalia 33:42

And do they face AI possessed? A lot of leaders have said that the ChatGPT and AI in the US will kill many Indian startups. Is it true?

 

Saravana Kumar 33:50

I don’t think it’s true, because nobody knows the type of applications it can evolve. In the last few months, like so many new startups all came out based on this AI and ChatGPT thing, whether it will kill the entire thing, It’s doubtful that will have an impact. And in any event, there’ll always be winners and losers, even if we take COVID, right? There’s a bunch of companies who scaled exponentially Well, due to COVID, Zoom is a good example. They went into multi billion valuation because of COVID. And of course, a lot of businesses suffered and died. Because that is how the world operates, right? You need to have these kinds of events that comes continuously and that’s what resets everything otherwise, it can’t be stable or it can be going only up—

 

Siddhartha Ahluwalia 34:04

The world doesn’t grow linearly.

 

Saravana Kumar 34:45

Exactly. It can’t be linear, you need to have some disruptions happening. And it all comes down to which side of the equation you are when that happens. Whether it will kill Indians? There’s one threat that I’m kind of seeing is, today a lot of Indian startups are driven more like inbound driven, basically the general playbook is you build a product, and then you do SEO, and then you go generate organic leads, and then built inside sales teams, and then you close it. That’s the most successful playbook. You know, the others are all very, the outbound and the ABM things are very lean. So nobody knows what impact it will have on the ChatGPT and the organic.

 

Siddhartha Ahluwalia 35:35

Why is there a relationship between organic inbound and ChatGPT?

 

Saravana Kumar 35:40

Because if you look at Google itself there’s a question, you know, will the existence of Google still be relevant anymore?

 

Siddhartha Ahluwalia 35:48

Why is that?

 

Saravana Kumar 35:52

Okay, how does the inbound work, right? You, let’s say, we got a product document 360. And somebody is going to search for a knowledge base software. And then our goal is to rank as high as possible on the first page of Google, not even first page, you want to go on the first 3,2 Because nobody looks after that third or fourth result, you want to be there. And they click and then they come to your site. And that is where you have like a landing page based on the keyword you wanted to make sure like they’re what they’re searching and what your product is matching their requirements. And then the prospects get interested. And then they potentially sign up for your free trial or free trial. And then that’s a playbook. But today, they’re not coming to you. The traffic stops there, you know, they’re within ChatGPT, it stops, It ripped off your answers from your side, right? And it serves there and that user is not coming here. Only when they come here, you can actually do the rest of the journey and convert that part, I think nobody knows what will happen to that part.

 

Siddhartha Ahluwalia 37:01

You think, for example, Let’s say there are a billion Google searches every day. ChatGPT will reduce it significantly.

 

Saravana Kumar 37:10

The searches may still be there because people need answers for their questions. But the searchers coming to your property, you know, that will cut off. If that cut’s off—

 

Siddhartha Ahluwalia 37:22

And why is that? I just want to reiterate again, why will it be cut off?

 

Saravana Kumar 37:25

Okay, I am assuming you’re using ChatGPT, right? If you go and you ask questions. You’re only living within the ChatGPT window, you’re not coming to but the answer is actually coming from documentary 360s, 10 blogs, it condensed everything, it has taken it and then it’s actually giving you all the answers there. If the user is not really Okay, this one only small thing you can do is maybe you know, there is a recommendation where ChatGPT say’s Document 360 is the best tool for you to do that. That is the only thing but actually your conversation stops there. You’re not bringing them to this site. So that is what I see as a challenge.

Siddhartha Ahluwalia 38:08

Another question that I have is, and I keep on wondering about this right, India, the SaaS industry got created in the last 13 years. And everybody has benefited from the guardrails and ecosystem that Zoho, Freshworks built in Chennai. And now what you are building in Coimbatore, right, and now hopefully, we’ll see many more startups coming in from Coimbatore because you have set an example. But India hasn’t produced anything of the scale of Microsoft, Salesforce Inc, right? Even like Amazon Web Services, Google Cloud Platform, do you think this can be solved in the next 10-20 years?

 

Saravana Kumar 38:44

Yeah, I think that will happen, the way I look at it is if you take it back to the 95′ and 96′ period, where there was no IT in India, right, that is when the IT boom started to come. And then all the consulting companies they captured that way. Infosys, Wipro, TCS and all those companies captured the wave… The 20 years from 2000 to 2010-12, something like that, they capitalised on that, and they’ve all become billion dollar companies and the first New York, NYC, IPO, Infosys, all these things happen. And that created a talent pool, because of that talent pool is now turning into the second generation, and now rather than going into the consulting route, which is kind of saturated now. And now they’re really turning it into product companies. And there’s no concept of real product companies in the last 20 years. Zoho was doing it very quietly and they cracked it and probably they didn’t, you know, like, expose themselves too much and then they quietly built that thing you know, maybe Sridhar Vembu, he was able to learn it from the US. And he has come back and started it. I think maybe in the next 20 years, we will see something like the next wave, now we are building products, it’s all about now how do you build a large scale products like Salesforce and Microsoft, it will happen, eventually it will happen because this talent pool now they understand, how to build product and not even build in India, built in one place, but scale it across the globe, they understand the playbook and they doing it. I think eventually we will see it. Even today, I think, you know, companies like Freshworks are a good example. A SaaS company going IPO is a big thing. A product company going IPO is a big thing. Eventually, at some point, we will definitely see… Today, I think we are competing with everybody, right? And also what I see is the technology side is sorted now. Today, you can build a Salesforce, building Salesforce is not a problem, only the GTM part is the problem. And because that is what we are lagging behind, because we didn’t learn the playbook in the last 20 years, it’s the only technology part we learn now, people creating the small companies and the GTM motions have learned. And the next step will be like, at some point we will see. And also the other thing, what I’m seeing is… all the tech CEOs of this large firms are all Indian driven, and they all have some softer edges to build India, and I’m seeing a lot of founders, that the investments are in a more like not on the money making side, but giving it back to pay it forward. Even SaaS booming, you know, like a lot of motions happening, then those knowledge will also you know, I’m pretty sure Satyam Nadella and Sundar Pichai will be guiding a lot of those companies in India now, and eventually we will see something big happening. Yeah.

 

Siddhartha Ahluwalia 42:07

Is it a hope? Or is it fact based?

 

Saravana Kumar 42:11

It is a fact. I think it will happen. Everything takes time, right? You know, like from where we started from where we are? 10-15 years is a long, long term game. And I think eventually we will see something bigger. Yeah.

 

Siddhartha Ahluwalia 42:27

So two questions that, you know, this conversation brings me to, what are the things that Indian founders, especially SaaS founders, need to unlearn? To create the Salesforce of the world?

 

Saravana Kumar 42:39

I think it’s big. And that’s the number one thing. And because most of the time, I think a lot of early stage or SaaS founders, I think they are very confined, just to build a small product or a small niche and then make a product out of it. If you want to create sales forces, and other’s need to think of something like a massive TAM(Total addressable market) and massive market, that’s very hard, that will come only through experience, because you can’t just jump and create Salesforce immediately. Right. And now we are seeing a lot of serial entrepreneurs, you know, they founded the first company and then second company Nutanix is a good example. Right, you know, Nutanix, and then now they’re building DevRev’s. Imagine like the two big ones, and even, there is a stepping stone, right? Like, they might be doing something. I don’t know, DevRev’s could be Salesforce equal or disrupting Salesforce, you never know. Right?

 

Siddhartha Ahluwalia 43:47

And that leads to my second question, the world of software has never been so crowded as it is for everything that you need to solve. There are 10 or maybe 100 solutions, right? And there are a limited number of enterprise customers (Inaudible) that are there. When you started Kovai, the GTM was simple. You wrote a blog. And customers either found you because there was not too much, you found the gap in Microsoft Serverless, this (Inaudible) and people and you were constantly writing so people who found you right, and you could say just on the blog that, hey, this is a problem that is how you solve it. And I think the other example, also, there’s somebody in Hong Kong said, this is exactly what I want. But today, there will be hundreds of companies writing content, hundreds of companies doing events. How do you differentiate and how do you reach out to those customers?

 

Saravana Kumar 44:43

Yeah, I think one of the challenges because of all this explosive growth, one other challenge, building software has become almost a commodity now. Anybody can build anything, thanks to all the cloud providers like AWS. Because 15-20 years ago, if you wanted to host something at this scale, you know, like, your initial investment will be like a few $100,000, not 100,000 Few $1,000 To get started, but today you can start for free to get that kind of scale. But this also created a negative effect on the customer acquisition because everybody, there’s too much noise in the market, and it becomes so hard to stand out in the crowd. Having said that, there’s still opportunities out there. The one way you can do it is like, if you’re in a very specific niche, that target audience will be very limited. That is exactly how we were able to do the first product. BizTalk360 is a Microsoft server product called BizTalk Server, there were only 10,000 customers for Microsoft for that particular product. So nobody’s actually looking after those 10,000 people, you know, when you find niches like that is basically… when we started writing, when we started helping those companies out there, and we were able to connect and do it. And when people come and ask me for advice, you know, what is the GTM strategy? What can I do? If you look at it, you know, there are not that many, you know, it’s only like seven or eight channels available for us, you know, and it’s all about execution. Rather than just to keep talking about it, like people like, you know, they, I still think, you know, the blogging and stuff will work as long as we have the consistency and the quality of content. Even though there’s a lot of noise, still finding quality content is difficult.

 

Siddhartha Ahluwalia 46:52

As ChatGPT is improving the bar for quality content, you have to improve else, you don’t know what content is written by a machine and what is by a human. And if somebody wants to produce content they can produce using ChatGPT hundreds of 1000s of articles that scale.

 

Siddhartha Ahluwalia 47:08

And one thing as a leader, right? I don’t know, how do you do it? I would love to dive deeper into it. Do you show your employees only your strengths, or do you also show your vulnerabilities.

 

Saravana Kumar 47:08

No, absolutely. Because today, I started something on LinkedIn called, ‘Life of a CEO’, so I will talk about it. I’m very clear, I don’t want to put like, generic advice post. Everybody is giving advice now, right? Whether they have done it or not is too much advice on LinkedIn. So I’m very particular. Unless otherwise, if I can relate to my personal story, you know, done something, this is what happened, I don’t write about it. So then that resonates extremely well with the people because it’s a true story and a true value. As long as you write quality content, it’s still there, all this channel will work depending on you know, your market, your customer base, your understanding of your customer base, etc. And I don’t think you know, that all available, basically, you know, like, seven or eight channels, it’s all about how you execute it.

Saravana Kumar 48:25

I’m very transparent with my company, like I speak to everybody, you know, like, there is no hierarchy in terms of, you know, like even interns and everything, and I tried to be as transparent as possible. A, you know, like, vulnerability in the sense, you know, there are certain things like, the founder’s journey is always lonely and you can’t disclose everything with everybody that part is always there. Even certain things, you can’t even talk to your first level management people about certain things you need to digest yourself. Those things I go outwards, like, I go find fellow founders or advisors to show it. But internally, I would like to, you know, keep it very, as transparent as possible.

Siddhartha Ahluwalia 49:15

I think, since and even before because you mentioned you were so passionate, you would have 70 or 100 working hours per week, throughout your life. And Mr. Narayan Murthy has said, right, youngsters need to work 70 hours per week. Is it only true for ambitious folks or is it just true that, if India needs to build, that needs to be the norm like China? Like Jack Ma once quoted, Very early like it was I think ’24/7 something’.

 

Saravana Kumar 49:48

Yeah, that I read that thing and it’s going viral. Now. I think now everybody is doing some LinkedIn posts related to that, right. It depends on How you see it, you know, in my case, I’m sure, I will tell you my pattern. I get up at 4.30am in the morning, every day, that’s my regular routine from 4.30am to 7.30am, I do my core work. And then by nine o’clock, I go to the office, and then up to five, I work and come back. And then I might do bits and pieces here and there. Out of this, how do you classify your hours, right? If you look at it the entire thing as a work, then probably you’re doing like, 14 hours a day work—

 

Siddhartha Ahluwalia 49:49

Even the weekends for you?

 

Saravana Kumar 49:53

The weekends are the same. Because as a founder, you don’t switch up, you know, 24/7, you’re always thinking, on the other hand, what I believe is, everybody has only like 4 to 5 hours of mental power to do something useful, the remaining things only can do supportive work. So that is where I build up this habit of getting up early in the morning. 4.30 to 7.30 is my peak hour. And I read a book a long time ago, I think your brain is at work. Everybody got a sweet spot, three to four hours. So some people it’s early morning, some people we call night owls, right? Only after 10 o’clock, they become productive. So that’s the core hours where you will be productive. And the remaining things are all like supportive work. And I think in the knowledge worker segment, this work life balance. You need to find a job, which you’re really passionate about, I think that is the key rather than looking for it the other way around. Whether I want to work for so many hours, once you find the passion, then it’s actually part of your role. You know, like, Okay, you do some work with something personnel, you go, and then you know, you come back and continue. You need to carry on, like, you can’t turn off. In certain professions, it might work out, for example, a bank employee, right? Where a teller in the cash counter at something if you ask him to do 14 hours a day, that’s a real work, I see a lot of things you know, like Air hostess right, it’s unfair, if you tell them you know, you work 70 hours a week, it’s impossible, because that’s a real work, physical work, mental work. But you need to understand the context. If you’re on this site, more like knowledge and thinking, you can’t just turn off and say, Okay, I’m turning off six o’clock, and I’ll turn back on by 10 o’clock the next morning, it doesn’t work. So it’s all about finding your balance. And you need to enjoy your life. At the end of the day, why do you want to work? Right, you need to have a balance. So don’t just look at the headlines, you know, understand the context, because I saw two different arguments. I think one side in a WhatsApp group, people were blaming this and then you know, even somebody said a rude word, like an idiot, and those kinds of things, but you need to understand the context. If you don’t want to do it’s fine. You know, it’s up to you. But if you really want to be ambitious and grow faster, you need to put your efforts into it. Opportunities won’t wait. You miss the window, it’s gone. India is in the right place, you know, the talent pool is there. Most of our talent is in our 20s and 30s. And if we miss that window, somebody will take it. China capitalised on it right, today they became a superpower. And we keep complaining about India, and this is not there that is not there. It’s a collective effort. If Mindset switches, then you know, it’s fruitful for everybody in the long run. Yeah.

 

Siddhartha Ahluwalia 53:56

And I want to come back to a few things that we spoke about earlier about people moving from, let’s say, India to the US. Now. There’s another movement, which happens a lot, right. In the last four years. Bangalore has seen the highest migration ever. That’s why the roads are so crowded. Even though I blame myself because I’m also a migrant from North India to Bangalore, do you think this will continue like people from all cities like Coimbatore and why will they keep on coming to Bangalore?

 

Saravana Kumar 54:25

I don’t think so. It will eventually slow down. Because now they understand, What are the challenges of moving to Bangalore, the quality of life definitely suffered for everybody, right? Simple things travel, you know, like I’ve been caught up in this a few times. Google Maps says 5km and it takes 1 hour. Like anywhere you know, you want to step out of the house. You need 45 minutes or one hour for you to go from A to B, whatever the distance, it’s not ideal, like most of the time you end up sitting at home and you don’t want to step out. At the same time tier two cities are developing, you know, Coimbatore for example, it’s booming, but I also have a concern like, Will it turn into another Bangalore in 10 years? You know, this is where the government’s need to step in they don’t they should learn from mistakes because Bangalore grown too fast too quick, you know, like they couldn’t react—

 

Siddhartha Ahluwalia 55:32

It was like Bangalore was on steroids.

 

Saravana Kumar 55:34

Yeah, exactly. If it was on steroids, right, like, all the way from the airport to here, like a one hour journey. It’s busy, you know, like all big buildings, malls and everything, it’s just on some steroids, right? Maybe they should learn and they shouldn’t repeat the same mistakes in tier two cities now because it’s a good time to build up the infrastructure and make sure the regulations are there. Because in the UK, if you’re building 1000, you can’t build 1000 apartments in the first place. It will be like if you’re building 100 apartments on the road, they will check everything whether the transport facilities are there in and out traffic is there, how many cars will be there for each apartment? What will the water supply require for that and everything is evaluated. But here I think in a small road, there is a road room for only a couple of cars. You know, you build like 500 apartments on the other side if it’s going to be congested. So I think the government probably needs to step in and make sure that it’s not repeated. Yeah. In India, if I think you know, when somebody gives me a choice, you have exactly the same career prospects and what you can do in one place versus the other. And whether you want to take Bangalore or Coimbatore, I will take Coimbatore at the current moment, because commuting is fairly easy. And then the weather and pollution and everything is good compared to Bangalore.

 

Siddhartha Ahluwalia 57:10

There’s an airport in Coimbatore?

 

Siddhartha Ahluwalia 57:11

I think that will follow a lot of IT problems also like how Indian IT cities got created with even Hyderabad and Bangalore. They solved international travel. First for the cities. Correct. If they solve this for towns like Coimbatore why is that? I think a lot of the companies would be happy to move there, because of the cost structure and Indian IT operates on the cost arbitrage. Correct?

 

Saravana Kumar 57:11

There’s an airport and the only downside that I see in Coimbatore at the moment is that the international connection is not there. There are only couple of flights on to Singapore and one to Sharjah, it’s nowhere it’s a connection because I will comfortably I can reach Chennai or Bangalore or even Cochin within 10 hours I can reach but, It will take another six seven hours for me to go from Chennai to Coimbatore. That’s what will make it really tiring. But I was thinking, you know, if they connect either Coimbatore to Dubai, all the problems will be solved. So that’s the only connection they need. Apart from that, yeah, it’s good.

 

Saravana Kumar 58:17

How many SaaS companies today would be in Coimbatore?

 

Saravana Kumar 58:17

Yeah, I think yeah, definitely. I think international travel is one. I’m a bit surprised with Coimbatore because the Tirupur which is nearby, it’s not an IT, but it’s like a massive textile hub for the whole world. I’m a bit surprised they don’t have good international connections. Because every time I’m doing that I travel from Chennai to Coimbatore. I will see at least a few expats all the time. Yeah. So

 

Saravana Kumar 58:41

Not that many. There are only two known companies, one is us, and the other one is Responsive (formerly RFPIO). At a reasonable scale, lots of small ones are coming but notable ones. We don’t have that many at the moment.

Siddhartha Ahluwalia 59:09

I hope this will change in the next 10 years. Right? If you can share what numbers you are at, then we can talk about the future of Kovai.

 

Saravana Kumar 59:18

We are on a $10 to $20 million journey now. 10 is actually a bit of an old number. It’s our 2020 number, but that’s a public number we are on the journey. I think one of the long term plans is whether we can create a $100 million company by 2030. We are looking at multiple products and then scale to that level. And I think we are hopeful we will be able to achieve that and all the focus and directions are that.

 

Siddhartha Ahluwalia 59:54

And do you also plan to go for an IPO?

 

Saravana Kumar 59:59

I won’t say we have solid ambitions if you’re not looking like that is your end goal, because IPO is not really an end goal, right? Because running a public company is a completely different ballgame, at least from the normal employee perspective, it might work out too well. But from a founder perspective, your whole journey starts once you get an IPO. I have seen people like Girish Mathrubootham you know, like, it’s not the end game. It’s just a, you know, that’s where you start. You might get an exit at that point. But the journey begins. At this moment, we are looking only at the revenue milestone, yeah.

 

Siddhartha Ahluwalia 1:00:44

But what I believe is an ecosystem only gets created once a certain company hits and Freshworks has demonstrated that right, it’s the scale of a large public listening, because a lot of people got financial independence created huge like, Its a number that almost 100 people got into dollar millionaires, right, which is eight crore rupees or per person across 100 people, and more. Right, right. So, and today, there are 30 companies that have started out of Freshworks. For I think, 30 companies to start out of Kovai that’s the number I am aiming at.

 

Saravana Kumar 1:00:51

No, that’s true. But I also believe, you know, an IPO may not be the only way to distribute wealth. Because we have structures in place. And we are also constantly evaluating how to redistribute wealth within the company. Imagine like, if you can reach 100 million revenue with 500 employees. Right. So then you can distribute the same level of wealth without going IPO as well. So that is how I see it one way to do it, because IPO comes with its own challenges as well, right? It’s not as straightforward, right? If distributing wealth is the only thing you know, I don’t think IPO is the only choice.

 

Siddhartha Ahluwalia 1:02:08

I think the only challenge with an IPO is every time you have a new set of stakeholders, investors, they come with their own different set of expectations. For example, even in the case of a startup, like you take a seed cheque from a fund like us, and you then go to series A there are different set of investors, right? You go to Series B Series C, right. So there are new kinds, an IPO is the base that exposes you to everybody, not everybody can meet you can have millions of shareholders. So now, for your company, that might be a 20 year journey to go to IPO. But for these shareholders is day Zero in your company.

 

Saravana Kumar 1:02:44

Exactly. Yeah. And I understand but I think, maybe I’m coming from more like a bootstrap model. I’m sure like, if you’re on 100 million ARR, people I have mentioned somewhere like I don’t want to, the idea is not to build a large company. In terms of headcount, it’s not—

 

Siddhartha Ahluwalia 1:03:06

5000 members company—

 

Saravana Kumar 1:03:07

Definitely don’t want that. I always keep telling internally as well, like we are more tech and we need to focus more on a more efficient company rather than a headcount. And with that kind of a number. If you can hit big milestones, the wealth can be distributed easily.

Siddhartha Ahluwalia 1:03:28

Thank you so much, Saravana, I would love to keep on talking and talking. Maybe for the next episode. I’ll have some more points to discuss with you. But thank you so much. It’s been such a wonderful conversation.

 

Saravana Kumar 1:03:41

Thank you very much Siddhartha for having me. It was really great, it’s a good conversation. I really enjoyed it. Thank you.