Sales First Product Later approach to get the first customer

Ambarish Gupta Founded Knowlarity in 2009. He did his Computer Science from  IIT Kanpur and  worked for 3 years in US, Europe and Australia as a software engineer. He did his first venture in Bangalore in 2003 but that did not work. He then went to the US and did his MBA from Carnegie Mellon and  worked for a small VC firm for a while and then moved to McKinsey as a strategy consultant working in the Banking, Insurance and IT industry beteen 2007 and 2009 doing BlueSky strategy. Some of his work involved Sales Transformation and he experienced how to build sales organizations in F50 companies. In 2009, decided to come back to India and wanted to do something entrepreneurial and that is how Knowlarity was born.

His hypothesis was that enterprise telephony industry was way too advanced in the US but non-existent in India but knew it will come because consumer telephony is evolving and was the first company to service the space The consumers were getting used to talking to business over telephone from information collection to even registering serious complaints and businesses will need a way to manage these calls. They would need an automated platform especially when they receive millions of calls a day and they cannot do it manually on the phones. India being a large consumer market, the need for this platform will be high and he began building knowlus , a telephony API through which you can build any application to receive and to make phone calls.

On the segmenting, he handpicked 11 large enterprise customers like Jeevan Sathi, Naukri to name a couple and met their CEOs and showed them how they can do something like this. On the logic behind choosing the 11 companies, he de-risked by not going berserk after every company and thought anyone with a large consumer base will have a large problem as the service delivery will cost too much. He chose a B2C market and went after web and technology progressive companies and hence chose those 11 companies. The team did research, came up with solutions to get the conversation started. They used Linkedin to find the CEO name, called up the switch board number and told them that they want to talk with the ceo( with a confident voice) and took their email or phone numbers to be in touch and custom made a superb elevator pitch based on their assumptions of the business issues linked to revenue generation and delivered it within one minute and got face to face meetings.

He proved that if they can pick up a customer’s phone in an automated fashion it will make their life easier and cut the cost of customer delivery. Since these companies were also trying to convert much of the hi-touch service to a low-touch, the CEOs got it immediately. He took his time, built the applications on their platform and sold it. He adopted the Sales First Product Later Vs the Product First Sales Later approach followed by the other companies. Ambarish quotes one case, where they went to Naukri after doing some research on the types of resumes they were having and showed the statistics that they have lots of BPO candidates on their website but their resumes were immaterial and the recruiters needed to hear their voice as a way of preliminary evaluation and got the go ahead. He built the application and integrated that with Knowlus where the candidates will call in and will answer the questions of the employers and the voice files will be tagged to the resumes and both will be sent to the employers which solved a huge problem for the employers and became a big differentiator for Naukri that increased their business immediately. He also quotes that in one of the airlines, he built a solution where someone gives a call and their name is being called out by the system based their Caller ID and one can book a ticket using their voice and the entire service interaction thereafter can be done by the automated voice. He always built solutions to make the interaction between an enterprise and a customer interaction simpler. He was able to sell it to 9 out of the 11 companies that he chose.

The first 11 deals were done by Ambarish as no one other than founders can sell to the first customer. The founders have the passion, drive and an overall idea of how to answer any questions and can also say that they can do it even if they don’t have that feature and can have the rest of the team work overnight to get it done. He began hiring his sales people once the pitch became normal and standardized. Ambarish hired junior sales people early on with less than 2 years experiences and he managed the team. He then got some sales manager and then the head of sales after 2.5 years. Ambarish ensured that he managed every transition of the sales teams directly to get a sense of the market and the sales process and then began handing the process over to the next level of people.

On the dynamics of closure – Since the solution was a hosted technology, the prospect had just issues a Purchase Order and they can test how the system works for them. The major concern that prospects had was about the data security because the application is hosted and the fact that this is a small company for me to bet my business on you. Ambarish was able to convince all the customers and took one after the other and business is pouring now. Ambarish says that Sales was very easy for his team because the value proposition was so compelling and any B2B company in India needed a phone number for customers to call into and the they don’t want their customers to wait endlessly and lose them. Ambarish’s sample ROI chart  – One call centre rep costs INR 25000 a month, i.e,. INR 1000 a day and they handle 30 to 40 calls leading to INR 25 a call which is way too high when the ticket size is just INR 2000 and the profit is INR 100 and the profit is wiped out in just four calls. Knowlarity’s value proposition of reducing the INR 25  to 25 Paise was too good to refuse because all the other things are hosted in terms of servers, infrastructure, database and service my customers. Converting h- touch to low-touch and converting the text to speech with multiple logic, voice recognition, multiple languages, CRM, ERP, Sending SMS and  emails were a powerful combination and customers just kept signing in.

Ambarish’s Advice to early stage startups – Lots of founders come in with technology solutions thinking that their technology comes first and the problem comes in later. Don’t think on those lines but come up with a solution for a massive pain point, go and sell first even if the product is not ready. Offer to customize something for them and build it ahead of time as long as you can take commitment from them that they will pay. He also says that sales is not some voodoo science but it is common sense, put yourself in the shoes of a customer and customers will buy it your pitch makes sense to them.

Knowlarity (http://www.knowlarity.com/), has around 500 employees and has around 10000 customers with 3 offices in India and one in Singapore, Dubai and Philipines each. They have raised three rounds of funding – 2Mn in Angel, 6.5Mn in Series A and 16Mn in Series B.  They have been in Deloitte Technology Fast 500 in 2012, technology Fast 500 EMEA in 2012, Indira International Innovation in 2011, Techcircle Fasttrack 2012, Nasscom Emerge 50 in 2012 and TiE Lumis Entrepreneurial Excellence 2013 and Paul Writer Hot 50 Brands in 2013 to name a few of the awards