Ideas|Products|Startups|VCs

In this  ”Walk the Talk with an Entrepreneur” session i am presenting to you an  interview with Pallav Pandey (pic below) COO & Cofounder of Knowlarity Communications, a cloud telephony company based out of India.

How did you come up with the idea for cloud based telephony solutions for Knowlarity communication

Small and medium size enterprises in India are the growth engine of Indian economy. Collectively they contribute $110 Billion of revenue with high growth rate and provide employment to 75% of workforce in India through the manifestation of the relentless entrepreneurial dreams. And, all these entrepreneurs run their business on that small piece of mobile phone.

Myself and Ambarish (Cofounder & CEO) dreamed to enable these millions of entrepreneurs with innovative, inexpensive and hosted telephony based business products.

Cloud enabled solutions as a whole are making it affordable for small businesses to automate their office workflow. Products offered by Knowlarity are filling an important gap in the domain of  intelligent telephony solutions (Fax / PBX) that were not affordable for enterprise businesses before.

What is the USP of Knowlarity Communication.

Knowlarity has built a scalable sales model where we are able to sell products in a cost efficient manner to SME businesses. Knowlarity’s competitive advantage is that we have been able to design a sales model taking into account the recurring nature of cloud business, something which bigger enterprises are not accustomed to do since they have been selling products based on high upfront license fee. Apart from being affordable  our products are scalable on demand and have lower set up times, this is an important consideration for SME businesses that are inherently nimble in their operations.

Knowlarity communication is targeting global SMEs by offering range of products, do you find challenging to push your products in SME segment.

Yes, we had difficulty initially in making them understand the concept. However than we customized the products as per the sme basic requirements on the problems they face in their daily lives and developed products that they need in today’s scenario.

The company is pioneer of cloud telephony in India and creates state of the art products for SMEs and innovative award winning solutions for enterprises. Knowlarity is a young and vibrant company and served more than 40,000 customers in India.

• We explore how Cloud technology and services can help people and companies address their problems and challenges, and realize their possibilities, aspirations and dreams.
• We apply new thinking and ideas to create more simple, valuable and trusted experiences with technology, continuously improving the way our customers live and work.
• No other company offers as complete a cloud technology product portfolio as Knowlarity.

We offer consumers a wide range of products and services from efax to Super Receptionist and from web computing to Mobile Phones. This comprehensive portfolio helps us match the right products, services and solutions to our customers’ specific needs.

Which product is selling fast in the market and for which product you would like to see more traction.

We see demand for our solutions across enterprises ranging from small to large enterprises. Our product portfolio mix addresses needs of all enterprises, Super Fax and Super Receptionist being packaged products cater to specific needs of SOHO and small enterprises and products like Super Caller, Super Tollfree and Super Conference are designed to address needs of mid sized to large size enterprises.

Whom do you compete with directly in International market.

With respect to International competitors, players like J2 Global and Twilio are direct competitors. They would find it difficult to penetrate because of two factors a) their platform supports VoIP which is allowed in a limited way under indian telecom regulatory norms b) majority of their sales is done online and it would be difficult for them to sell in developing countries where majority of population is offline.

Exotel, another young exciting startup is also in similar space, do you feel threatened by them in the domestic market.

Cloud telephony space is at a nascent stage in India which is expected to grow to grow exponentially in the coming years with enterprises shifting towards cloud enabled products. Foreseeing this growth there are Indian Players like Ozonetel and Exotel which have started to offer these services.

Their current play is more towards providing an API and expecting the developer community to design solutions using the same. We feel that this might be too early for Indian enterprises that need packaged products addressing their main pain points, in this regard we have a head start on our competitors.

Cloud Telephony Services is a scale game – you can run asterisk on a desktop and start offering services and get past first hundred customers quickly. But the systems start to fail with higher call volume – appreciate we are dealing with parallel voice circuits and not just data packets which can scale easily using Amazon Web Services. Its a reliable communications game – nobody wants a services that works great “most” of the time. A lot of R&D and VC investment went into making Knowlus platform scalable and reliable.

Knowlarity would gradually promote its API as the market become as the developer community becomes more mature and we expect this to contribute strongly towards our growth.

Knowlarity raised investment from Sequoia Capital, Any advise to entrepreneurs who are planning to raise venture capital

Startups need to identify a niche that they can dominate and then expand from there.

-Hitesh, vcBytes.com

Many promoters and budding entrepreneurs have some notions about termsheet, some treat it as the scariest piece in the investment process and for some getting a termsheet is a milestone.

In simple words, termsheet is a guideline document for entrepreneur issued by the investor. If you are playing a game no fun without playing with rules and regulations. So treat this investment process as game of scaling the venture. I have come across term sheets ranging from $200k-$20M, good news is most of the clauses are common irrespective of size of investments.

Lets look at the most common clauses in a tech investment termsheet i have come across:

Vesting of Founder’s shares :

The shares held by Founding team will be locked for 3 years; subsequently they will unlock in equal annual installments over a period of 3 years. If any of the founding team decides to leave the company at a time before such period , the locked share would have to be sold at par to the existing shareholders of Company and Investor will be given the first option to purchase the said shares. Should Investors decline to purchase the shares, such shares will be sold to other shareholders in proportion to their shareholding. Such shares at the investor discretion can be placed in ESOP Pool.

ESOP Shares:

The company will create an ESOP pool of 6% prior to investment.

Tag Along Rights:

Subject to the lock-in provisions herein contained, in the event the Founders sell their shares to a 3rd party investors would have a right to sell its shares on the same terms to the same party. The tag-along shall be a pro-rata right so long as the total number of shares transferred by the founders is less than 50% of their share holding in the company. If any shares in addition to the above are proposed to be transferred, the investor shall have the first option to sell their shares to proposed purchaser.

Right of first Refusal:

Quikr, an online classified site headquartered in Mumbai raises $32M led by PE firm Warburg Pincus.  This round was a series E round and earlier Quikr had raised investments from Omdiyar Networks, Norwest Ventures, Matrix Partners and eBay. Existing investors also participated in this round. Nitin Nayar, Managing Director of Warburg Pincus comes on the board of Quikr.

It was launched as Kijiji.in on eBay global classified platform and was renamed as Quikr in late 2008. Quikr is currently present in over 40 cities across India.

Quikr provides the local community with a platform to help them buy, sell, rent and find something and address needs across many categories. These categories range from Mobiles, real estate, cars, services, jobs, entertainment, furniture, electronics etc. The company is also exploring the potential of introducing other categories like financial services.

Quikr monetizes from placement of ads in its section, Premium advertisements increase the ad visibility and help reach out to more consumers. The price for these ads varies according to the category of the product or service.

Lets look at the monthly web traction at Quikr :

Worldwide Unique visitors (estimated cookies) 140K 11M Unique visitors (users) 47K 5M Page views 420K 45M Total visits 120K 11M Avg visits per cookie 0.91 1 Avg time on site 4:00 5:20

Seeing the web traction, Quikr money spent on online advertisement and TVC is paying off

-Hitesh, vcBytes.com