The Cloud Will Connect Us All: How Shivku Is Building Exotel To Be The Lego Of Communication

What you seek is seeking you – Rumi.

When Shiva Kumar Ganeshan or Shivku (as he is known to everyone) graduated in Computer Science from BITS Pilani in 2004, it wasn’t yet cool to be an entrepreneur. In fact, what was cool was to land up at Bengaluru and work for an MNC and that’s exactly what he did.

From June 2004 to May 2009, Shivku continued to work at Yahoo! starting as a software engineer and climbing up the ladder to be a product manager. In the process, he got exposed to a number of different kinds of technologies, services mostly, and it was clear to him that a lot of problems could be solved with technology.

And one such opportunity lay in harnessing the potential of maps: from April 2008 to May 2009, Shivku worked on Yahoo’s Global Maps Vision. He created Yahoo! maps for India but was not able to convince people to fund the project. Says Shivku –

In those days we did not know how to monetise maps. Fast forward to now and Google Maps is making a ton of money from Uber and Ola. We were not able to see that coming at that time. Every time we would press it, we would be questioned why should we do maps, what’s the point in that? How are you going to make money from maps?

Consequently, funding was pulled from that project. Though Shivku tried to fight for it, he understood nothing was going to change. With that thought also came the realisation that the speed with which large companies were moving was too slow for him and he wanted more immediate action. Added to that, he had money in the bank, the security of getting by for a few years comfortably without working, and the confidence that he would eventually land a job somewhere, one way or the other.

Thus, Shivku quit Yahoo! in 2009 and took his first step in the startup world.

Another friend also left Yahoo! and joined hands with him as he decided to build a cheap low-cost navigation device for India, leveraging his learning at Yahoo! The duo researched the market for a couple of months but could not make much headway in the project. His co-founder decided not to pursue it further and that was the end of his first tryst with starting something of his own.

From The Bansals To Exotel

Meanwhile, a couple of blocks away in Koramangala, two young entrepreneurs were starting a small something in ecommerce – today we know it as Flipkart.

Shivku used to hang out with Sachin and Binny Bansal a lot while he was trying to start the map project. So after the project did not take off, “the Bansals” invited him to join Flipkart. And so he did – as Vice President-Products and Technology.

Even back then, Flipkart was doing really well. For six months, he ploughed on at Flipkart, helping them build the tech & product teams, the backend technology for supply chain & resource planning, and a bit of their website. It was all going well but the desire to start something of his own was eating him from inside.

I told myself this is not why I left Yahoo! So to put that voice to rest, I decided I am going to start again.

He says, “I told myself this is not why I left Yahoo! So to put that voice to rest, I decided I am going to start again. I did not know what I wanted to start, I had no co-founder in place, but I decided to take the leap.”

Thus, Shivku was back to being an entrepreneur. He initially started off on the idea of a consumer-to-consumer marketplace Roopit – something like the Olx or Quikr of today. But in those days it was different as there were so smartphones; so all the smartness had to be provided on the voice network. To this end, Shivku created a micro classifieds or a C2C marketplace.

He explains, “The way consumers could communicate was through this voice infrastructure that I had created. They could call into a central number, someone would ask what you are looking for, based on that they would connect you to another person who has something to sell and then you could talk to each other. For this, I coded something like a decentralised call centre.”

At that time, half the people he talked to did not understand what he was talking about, and the other half thought it wasn’t possible. But the project was a result of his need to counter all sorts of connectivity problems while working on Roopit. He wanted to figure out the data on calls – how many and from where and how he could track the calls that he missed.

He realised that he needed one telephone number that would receive voice calls and SMS and ensure that he did not miss a call that would have resulted in a business deal. So it was really just a project for supporting Roopit which transformed into Exotel – the cloud telephony startup for which we know him today.

What Shivku was seeking, had finally found him.

A CRM On Cloud And Its Challenges

With startup friends getting more interested in Exotel and ready to pay for it, Shivku decided to shut down Roopit in 2011 and focus only on Exotel – which was a pure-play tech. Additionally, Shivku started scouting for co-founders and landed Vijay Sharma (who later left), Siddharth Ramesh, and Ishwar Sridharan in his team.

From there on, Exotel also pivoted. Says Shivku, “We saw that computing had already moved to the cloud, and so at some point in time, we knew that telephony would also follow the same way. Earlier people were buying servers and installing Oracle software and then running them, which has all moved to the cloud now. The same analogy can be applied for telephony as well. So if earlier people were buying an EPABX (Electronic Private Automatic Branch Exchange) box, putting a person in charge to handle, now it has also moved to the cloud.”

However, they realised that not all people had an EPABX to begin with and there were regulatory challenges in fully replacing it. So, things like intercom were not possible. Therefore, Exotel was repositioned as a call management software.

As most consumers would want to talk to companies over the phone than email, the only CRM or ticketing system a company needed was that which works primarily on voice. Hence, Exotel was ultimately positioned as a CRM built primarily for voice, as compared to other CRMs which are primarily built for email.

From there on, Exotel started sharing its APIs with companies so that they could use these building blocks to integrate communication in their business models while it took care of reliability, scalability, and other infrastructural hiccups such as power cuts. It provides virtual phone numbers and telephony applications to help businesses manage their business phone system via a virtual phone system.

Exotel believes that every business, irrespective of its size, should be able to utilise features like IVR, call recordings to sound professional and serve their customers better.

Ultimately, what Exotel today is as Shivku states, “We are the Lego of communication.” A lego piece, which powers over 3 million conversations between businesses and their customers every day and has connected over 93 million people with businesses in the last financial year.

Confusion And The Cloud

But getting here was hardly a cakewalk.

Explains Shivku, “The experience to start Exotel was similar to starting anything innovative such as Uber or ecommerce. People did not understand cloud telephony, they wondered if it was VOIP? Since we were selling it as a SaaS product, that too was not very well understood. There were concerns if it was possible to receive calls if the internet went down.”

Similarly, the government also took time to understand cloud telephony as a concept – that it was not VOIP and it did not involve bypassing of revenues or led to a reduction in revenues for the government or telcos. What helped their cause was, in fact, the competition. Because by the time Exotel started, competitors like Knowlarity (which was founded in 2009) had already started, so the players worked together to get cloud telephony recognised as a concept.

Now, things are relatively much better.

Now we are in a position where we don’t have to call up and explain what cloud telephony is.

Says Shivku,“Now we are in a position where we don’t have to call up and explain what cloud telephony is. We just say that we provide cloud telephony/hosted telephony services and people understand. They know Exotel now. They might not be able to explain the concept but they understand that it is an easier way to get rid of all those wires and EPABX and set up stuff on the cloud and manage communication.”

Of course, he agrees that regulations still have to change a little bit. He seconds that laws are not keeping up with times but they will continue to work with the government and operators.

“Certainly the obligation of explaining about cloud telephony to the market as well as the authorities rests with us. You start the discussion by mentioning APIs and you have lost them. Confusions exist and it is our responsibility to work with the government and explain to them that it is a marriage between internet and voice but not really VOIP. I think of us as application providers on top of the existing voice network.”

“We are a little like a website or an app, or a Flipkart on top of data. What I do know is it is a very legitimate industry increasing the revenues of both the government and the operators,” he adds.

Uber, Flipkart, Quikr – All On Cloud

From acquiring its first customer to landing more than a 1,000, Exotel has come a long way from the days when people did not understand cloud telephony.

Shivku recalls that his first startup client was a startup called MyEnglish – which planned to teach English to people in the hinterlands by connecting them with English speakers/teachers in the top four metros.

MyEnglish eventually shut down but Exotel’s clientele has risen to some 1,300 paying customers including the who’s who of the startup world such as Uber, Ola, Flipkart, Quikr, Swiggy, Urban Ladder, Oyo, Practo, and Zivame, among others. Over 1,000 companies use it for managing their incoming call centres, about 300-400 use it for SMS services and a few 100 companies for missed call marketing.

Since inception, about 15K companies have tried Exotel, with a lot of them continuing to use Exotel for free.

Exotel monetises as a SaaS product. For the SMB category, billing is akin to that of a prepaid card. So businesses can top up their accounts, and call charges, SMS charges. Software rental sort of charges will be deducted as per usage. Free trial offers some INR 1,000 worth of calls and SMS free. For enterprise companies, billing is mostly transaction-based, depending on per minute or per lead charge.

Shivku claims that Exotel is posting a 10% M-o-M growth in revenues, even after five years of existence.

For enterprises, the proposition has been cost savings – some even to the tune of 45%. Shivku explains that many companies are now using it to power communication between field executives and customers. And one of the primary motivating needs is for cost savings. While earlier they were following the model of reimbursement of cell phone bills of field executives, now they have converted to a model where the call from companies is free.

Executives can now give a missed call or call a central 1800 number for communication on the field, which has brought down the overall bills of many ecommerce companies. In one instance, it has been almost 45%.

Adds Shivku, “It is a very frugal alternative for SMBs. As it’s on the cloud, no capital expenditure is involved. So earlier, if only an ICICI Bank could use such a system, now it’s possible for masses to use such services due to cloud telephony.”

Meanwhile, the team of 100 has largely remained bootstrapped post the first round it raised in 2012.  It netted $500K (INR 2.4 Cr) in Series A funding from Mumbai Angels and Blume Ventures then. While the startup has not been able to raise any funding post that round and is looking for investment, Shivku adds that this move is less out of need and more out of the fact that raising some cash would definitely help them grow faster.

Acquiring, Expanding, Growing

Not that growth has been a problem either because, as of last month, Exotel is an international company after its foray into Singapore.

An initial investment of $10 Mn (about INR 66.5 Cr) is planned for the next two years, the majority of which will be used for operational and sales spends and to gain ground in Singapore, Malaysia, and Indonesia. Also in the pipeline are plans to open an office in Singapore in the next six months.

Additionally, it has undertaken two strategic acquisitions last year alone.

In November, it acquired customer feedback platform Voyce. For Exotel, the acquisition made sense as there are several use cases that Exotel does which are about feedback giving, which could be as simple as asking a customer to give a missed call if he liked a product or service.

Exotel aims to play very deeply in voice recognition, both speech to text and text to speech.

Says Shivku, “Feedback collection and customer happiness at large is a very important concept for Exotel. That’s why we acquired them. Over time they have started playing other roles in the company.” Case in point, Varun Raj, co-founder of Voyce, is now heading overseas operations of Exotel.

Similarly, in February last year, it acquired Singapore-based Croak.it! which allows users to share their voice messages in clips of up to 30 seconds. It also has several intriguing features which allow users to mix several clips and create a new sound. For Exotel, the rationale was simple – Croak.it! had tremendous access to voice data in different accents and languages. And at some point in time, Exotel aims to play very deeply in voice recognition, both speech to text and text to speech. Hence the interest.

It is this interest in ‘voice’ that also led to Exotel opening a new research division Exotel Labs to spur innovation in the voice space in March this year. Towards this endeavour, the company roped in Balaraman Lakshmanan, the founder of Crispify, as a Research Software Development Engineer.

The motive is clear – to focus on quality, transcription from voice to text and vice versa, accent deduction, emotion detection, and attack all quality problems on a software level.

Shivku notes that the company’s growth has also been an outcome of working with a lot of startups which have demonstrated fast growth. He adds, “We think of ourselves as a backbone or enabler of startups. Almost every startup has used Exotel at some point of time. Everyone needs a phone number, everyone needs to send an SMS and we have made it easier for them to set up these communication aspects so that they can focus on their business aspects.”

In fact, there’s a poster in his room which says, behind every successful startup, there is Exotel!

And that’s how he intends to keep it. Of course, he acknowledges the other aspect too – that startups tend to fail a lot. But he is ok with that. Because on the other hand, whichever startup does succeed, there is a very high chance that it becomes really big. Something that he has experienced with Flipkart, Uber, and Ola.

And with this position, also comes the responsibility of providing a reliable platform to these fast-growing companies. Hence, most of Exotel’s new initiatives are around reliability, scalability, and subsuming the underlying vulnerability of the  telecom infrastructure. A job that’s not easy, given the rising spurt in cloud telephony startups vying for that very pie.

Competition In Cloud

Consider this – Exotel’s closest competitor Knowlarity has so far raised about $22.5 Mn from investors like Sequoia Capital and Mayfield and claims to have over 12,000 customers. Then there are others such as, Ozonetel, Sonetel, MyOperator, and Sipper Global Informatics vying for the same space which, as per Shivku, is a $7 Bn opportunity.

But Shivku believes there are considerable differences. For instance, he asserts that Knowlarity and Voicetree continue to focus on the SMB side, whereas Exotel’s focus is now more on helping an SMB which has grown larger, to scale faster. Further, they focus a lot on the product side while Exotel focusses on the platform side. He adds that while traders companies know Knowlarity better,  tech companies and startups know Exotel better.

Then there is the difference in use cases.

He explains, “Because we have always intended to hook our APIs into the business models of very large companies, our focus is different. Similarly, if you are focussed on selling SMBs, your focus would be different. So the kind of segments we are selling to is different. And how we are selling is also different. So people bucket us differently from competitors. Of course, in the future, it is likely that one or two large players would emerge and take over other aspects of the business as well.”

For now, Shivku is happy with the way Exotel is powering these unicorns as well as generating unique use cases for cloud telephony to impact people at the grassroots level.

From Underprivileged Children To Far-Flung Farmers: All Connected Through Cloud

Shivku believes that one of the most pioneering works that Exotel has done is in the realm of consumer privacy for almost all hyperlocal aggregators and marketplaces to protect the consumer’s number. Be it Ola, Uber or Swiggy, now a service provider’s phone call is redirected through a cloud which then calls the customer, thereby ensuring that the customer’s details and privacy are secure. This is also the aspect for which most people know Exotel.

However, there are many other unique use cases which have been made possible with cloud telephony.

Consider, for example, NGO Pratham’s collaboration with Exotel for their initiative “Missed Call Do, Kahaani Suno” (Give a missed call, hear a story) campaign in February this year. In this campaign, Pratham used the power of calls to enable children to listen to a story in a language of their preference. Any child who wanted to listen to a story would just have to give a missed call to the number. Post this, the child would get a call back with an IVR being played to him. After the child selects the language of his choice, he would then have a story read out to him. In two-three days about 3,000 children consumed 36,000 stories.

The project helped children from all walks of life access stories in local tongues, thereby spreading the joy of reading to a larger audience at no cost to them. For Shivku, it meant giving back to the children the joy of growing up with stories.

He adds, “When I was a kid, my grandmother used to tell me stories before going to sleep. These kids are missing out on that and that has a significant impact on how you think about the world.”

In fact, November 2015, saw the launch of Exotel.org, a portal for non-profits and social enterprises to access the company’s telephony solutions at lower rates than commercial outfits.

All of this stems from the fact the fact that Exotel feels strongly about voice as a medium to engage the masses. Explains Shivku, “People in hinterlands can’t read, so SMS and newspapers won’t work but voice, especially in their language, will work as an effective engagement medium. So to reach the masses there, cloud telephony could be a big pull given the fact that engagement through the cell phone becomes cheaper than any other medium.”

Another interesting use case of cloud telephony has been Squadrun, which has employed it to create a virtual call centre without having to set up a physical infrastructure. So now hundreds of people looking for vocational employment distributed over various geographies can be harnessed, rather than opening a captive centre at one place and figuring out the inherent logistics. Hence, an outsourced distributed call centre as a model has emerged because of cloud telephony.

Need more proof how it can impact masses on a grassroots level?

Take the case of the direct to farmer m-commerce platform AgroStar which has made it possible for farmers to procure agri-inputs such as seeds, crop nutrition, crop protection and agri-hardware products needed for their farms by simply giving a missed call on the platform and eventually accessing its mobile app.

Adds Shivku, “When you think of ecommerce, you think of a website, a shopping cart, and a payment gateway. But AgroStar is enabling ecommerce for farmers simply through a missed call. All a farmer has to do is – give a missed call and someone can take his order of seeds, fertilisers or whatever his requirement.”

The result? AgroStar has been able to reach 7 Lakh farmers in Maharashtra, Gujarat, Madhya Pradesh, and Rajasthan, bringing mcommerce to their doors in the simplest of ways.

No wonder, Shivku has reasons to be hopeful and excited about the overall impact cloud telephony can create in the ecosystem. Besides cost savings for large enterprises and SMBs, and enabling use cases which were not even possible earlier, it also has the potential to have a significant societal impact. And he is pretty gung-ho about it. He concludes,

“Our APIs can be used to create opportunity in different ways. Voice and SMS is one of the most powerful mediums to reach the masses in a country where 60% of the population still lives on a dollar a day. All they have is a feature phone and voice is how you can engage with them most effectively. So the ways in which people can use cloud telephony is really just in their imagination.”

Given the vulnerability of our underlying telecom infrastructure, intermittent internet coverage, and the wide disparities in our socio-economic strata, we could not agree more with Shivku on this. There’s a whole lot of opportunity that is waiting to be dialled in through the cloud – the question is how startups will leverage it to make possible more such unique use cases?

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