From superstar techies to first time entrepreneurial success - The Apalya Story
There is something about entrepreneurs who foresee opportunities. Since 2005, Apalya Technologies have been in the business of providing live television to its users over the air on a wide assortment of devices. Now what makes such a business really interesting is that they launched its offering in India.
India already has more internet users on the mobile than the PC. Today, starting a mobile internet business in India seems most logical. But then again, that's hindsight. Things didn’t seem that obvious in 2005, when mobile users were still grappling with flaky data speeds on underpowered devices.
Two entrepreneurs had foreseen the mobile migration and started a business around it. B Vamshi Reddy and Shiveshankar Byapunedi were superstar techies in large IT companies and had many years of experience abroad, but they didn't have the slightest clue about what it takes to run a business, let alone make it successful.
So how did Vamshi and Shiva go on to build a company that has raised three rounds of funding, acquired a million paying customers, partnered every major telecom player in the country and become one of the premier companies from India to scale globally? Read on to know more.
First time entrepreneurs
Vamshi admits, “I was never really an entrepreneur. Prior to starting up, I was in the US working for Cisco. It was the same case with Shiva, my co-founder, who was working in Finland. Both of us had great jobs and we were settled, so to say.”
Also having the same alma mater made them known to each other and two of them planned to come back to India to startup. This decision, however, came at a price. Vamshi says: “We had our day jobs, and we both had a plan to do something of our own. However, you cannot do these two things at the same time. So we quit our jobs and came back to India.”
What followed, was four months where the duo evaluated idea after idea, in their respective fields of expertise and which also fit the gaps that they saw in the ecosystem.
Vamshi says, “Both of us come from a product background, Shiva especially. He worked in Finland with Nokia and had extensively worked with their mobile OS vertical. At the time, given the growth that we were seeing from mobility, it seemed like an idea space for us to operate in. Today’s world does a lot with mobile phones and its a very personal thing. We were looking for a business that would leverage the utility of a mobile phone and the personal factor that it wields. We were looking for a connector. However, finding that connector was the challenge.”
Starting up and early challenges
After the four-month long industry scouting and strategic SWOT analysis, the duo, zeroed down on their connector. “With more and more people consuming data on portable devices, we thought that entertainment would be a great option for this. And that’s essentially what we’re doing even now - enabling entertainment on the go for people.” Incidentally, Apalya means mobility in Telugu.
Surprisingly, Vamshi’s and Shiva’s families were very supportive of the jump. He says, “The family was there all throughout and that was really good for us. However, challenges were more on the softer side of the business. Firstly, India was a completely new ballgame for us; we didn’t know the ecosystem well enough. Hiring as usual has always been difficult. But most of all, the main players in the telecom industry are a small group of people. Getting to know them takes time, especially if you’re starting from scratch.”
One would also think that the premature state of the Indian telecom infrastructure would be a problem for Apalya, but Vamshi has another story. He says, “We began working on a solution that would work on low speed networks so the variable network speeds and flaky signals didn’t affect our product as such. In fact, I think this is only going to grow. There are already 25 million mobile users on 3G. This number will grow.”
After bootstrapping for the initial parts, Vamshi and Shiva raised their first round of funds from friends and family, which saw them through the proof of concept (POC) stage, post that they raised an angel round from Mumbai Angels, and went on to acquire a few clients. However, there was a problem Apalya faced there as well -- “With our POC, we were able to acquire few clients. But the time taken from customer acquisition to actual deployment of the project was really long. It took us many months before deployment,”
Once they overcame this problem, there was no stopping the company, and they raised three more rounds of funding from the likes of Mumbai Angels, IDG, Qualcomm Ventures, Cisco and of course, Kalaari Capital. Today, Apalya boasts of a million paid subscribers, worldwide and Vamshi believes that over the next year, this number will triple.
Kalaari Capital - A late entrant
Kalaari Capital is usually known to invest in early stage startups, which would see the fund usually make first round of investment in a company. This however wasn’t the case with Apalya. After the Mumbai Angels funding (which was a $500k investment), they were able to show some good progress and had raised our first institutional round from IDG and Qualcomm ventures ($3 million), which they again followed up with great traction.
When it was time for their next institutional round, Vamshi and team reached out to Kalaari. He says, “We had been in touch with Vani (Kola) from Kalaari since the time we started and she always had a tab on our progress. We reached out to her to raise our second round of funding.”
Vamshi equally credits all the investors he has on the board. He says, “If you look at Mumbai Angels, they brought a lot of organizational discipline into Apalya. IDG helped us a lot with our financial dealings. Vani was initially on our board, and the strategic vision she had for Apalya really guided us through the years. She taught us to set ourselves tough targets and be stringent with respect to costs in our day-to-day operations. We now have Rajesh Raju (from Kalaari Capital) on our board who also brings vast experience into the company, which is only a good thing.”
The team
Apalya has 110 people on its rolls. Over 90 percent of these employees are based out of Hyderabad. This workforce is a unique blend of big university pedigree and homegrown talent. He says, “As we started generating some traction, it was easier to recruit those hotshots from big universities. However, we also recruit from smaller universities, and mold them to suit our culture.”
Vamshi believes in keeping an open and transparent work environment. He says, “It is very important that a person’s performance is evaluated by the effort that they put into the work. If you put in effort, it will never go unnoticed at Apalya. We keep the work timings very flexible and people really love that. Furthermore, I’ve always tried to maintain direct contact with all my employees. We still have an open door policy, where anyone can approach me or anyone in the senior management to discuss about anything.”
As the team grows, Vamshi admits that he cannot maintain a personal relationship with all his employees, but he is quick to show his pride and faith in the senior management team.
Lessons Learnt
Having run Apalya to the threshold of massive growth, Vamshi feels that he has come a long way. He says, “I think I’ve matured a lot. We’ve faced and learnt from a lot of challenges and now I think I can help a company get started. Of course this has come at a price. I haven’t been able to spend time with my family, but that is a sacrifice that you should be willing to make if you are to take the entrepreneur’s way of life.”
As a parting note, Vamshi left us with some practical advice for other entrepreneurs. He says -
1) Perseverance is the name of the game. Whether it’s acquiring customers or scaling globally, it’s about staying in there and giving it the time to grow.
2) There are no shortcuts in this game and you will not get immediate results. Nothing happens overnight and you should be willing to run a long race.
3) Along with work, you must take care of your physical and mental well being. None of this is worth it if you’re not going to be healthy enough to enjoy it at the end of the day.
Visit Apalya to know more
Republished from the Kalaari Capital Site
