There is no luxury of being data driven in tech business, says Webaroo CEO Beerud Sheth

Q Change is the norm in the tech business. What have you been through?

A I am proud of all the changes we have gone through. When we launched (in 2007), we believed that mobile is a whole new medium because in India PC-based Internet penetration is too low. Mobile was the only way to communicate with millions of people and at that time everybody had feature phones, not smartphones. The only way to reach people on feature phones was via SMS. We started with a consumer side social network or social messaging. Based on SMS, we allowed people to create their own groups and followers in parallel to Twitter. It was free. So, by using GupShup, you could send jokes to about a lakh people. That exploded to get about 66 million users in India. But along the way, between TRAI regulations, it was unfortunate, but SMS costs went up to an artificially high level. We were subsidising SMS so far, but then that became really expensive for us. Plus, there was another regulation that you could not send commercial messages or you could not put advertising in those messages. Advertising was the only revenue model for us. These were not tech-savvy policies. So, that was around 2012 that (we) scaled down on the consumer side. But then we saw a big opportunity on the enterprise side. Banks, ecommerce companies and social networks started using our platform to communicate with customers, because we already had the users. There we were not subsidising so that became a sizeable revenue model for us.

Q How are you changing and adapting now?

A Now as people are switching from feature phones to smartphones, we also switched to messaging apps. Just as people are moving from SMS to WhatsApp, Line and WeChat on the consumer side, there is a huge opportunity on the enterprise side as well. WhatsApp is great for consumers, but it is terrible for business. WhatsApp limits each group to around 50 people, while a company might need to communicate with hundreds or thousands of employees. So, if you want to send a message to 500 people, you need to have 10 WhatsApp groups. The reason why they limit this is that there is too much clutter. If you send messages to 50 people and get response from all of them, it's hard to read all of them. So, we have come up with an innovative way to reduce the clutter and therefore support teams of unlimited size.

Q How does that work?

A We have invented something called SmartMessages. So when a message is sent to 14 people and someone replies, the same message gets updated. Companies are using it for things like getting daily sales reports from their large sales teams. The manager can say fill in your sales revenues for today. So, all the employees which are there in the group, when they reply individually, you get the total down there instantly. There are no 5,000 replies, but one, and companies can click link to get more information. Companies can do attendance tracking, sales monitoring, by HR departments to get views on policies, etc.

Q What does it mean to evolve a product for a company?

A It is a big leadership challenge. I think there are a few things that work very very well. One is you have to be very honest and transparent. A lot of it gets decided by data. You can look at the data and tell them, look what's happening so we need to see what the options are. The other thing is that you need to collaborate. Here are the problems, here are the challenges we are facing. What should we do next.

There are two things. One obvious answer is to look at data. And the not so obvious answer is by the time the data comes about, it is too late. You may have a strong opinion but you may not have the data. It may sound mystical, but a lot of it depends on seeing the future and debating the future.

There are some tricks. You can put your engineering team on some tasks that are not about day to day operations. Go work on it and show me a demo. Yes we do send a lot of messages but show me how it works on a messaging app. Then show it to a few customers and ask them, if you had this will you like it.

I lived in the Valley for 20 years. A lot of what I learnt there was constant debates on what is happening and can happen. You can build upon others, and yet form your own opinion. This whole business is about somebody coming in with a crazy idea which others may not believe. You just have to go with guts and conviction and just do it. How many times did Steve Jobs did market research. He never did that. Data plays a role in convincing people.

Q Give me an anecdote.

A Lot of difficult board meetings. Sometimes people might be frustrated with external data. Being the CEO, I had to bear the brunt of all of it. In all these situations, you can depersonalise. It's not me, it's not them, it's not the anger or the disagreement. You can think of why it happened, could we have prevented it. For example, the whole world is moving from feature phones to smartphones. Currently, all our revenues come from enterprise side of GupShup, but in a year or two, that may change. Even though today, we don't have any customers or revenues with the new product, tomorrow the whole business may have to move that way.

Q Was it a data-driven change?

A In the tech business, you don't have the luxury of always being data-driven. You are always dealing with uncertainly. You don't have all the information as data. It has to be intuition-driven.

Q Did it come from the customer?

A Yes, it is important to be a good listener. Customer will never tell what they don't even know or what doesn't exist. What they can tell is their problem. Somebody in the sales team met a political volunteer who had 300 groups on WhatsApp, with 50 people each to communicate messages. That was painful-that could come at a birthday party or a celebration. The entrepreneurs may say, oh my god that's an opportunity. But that's not the solution yet.

Q A change like this necessarily comes from the CEO or from listening to people in the lower rung.

A More than CEO, the decision can be that of the product manager, though inputs can from anywhere, from customers, employees, etc. But somebody has to connect the dots, which is the hardest part. The customer pointed out a problem, the engineer pointed out a constraint. The sales and marketing guys pointed out an opportunity and a price point, perhaps. And the board tells you these are the resources we have. So now you need to come up with something that adds up all that at the price point that the sales person suggested.

Q Who puts the stamp?

A In tech companies, people swear by the founder CEOs. The stamp of authority is meaningless if you don't have the product vision. Nobody has any monopoly on creativity. In this business, there is no room for ego. You have to be humble not only with your team, but with your customers as well. You cannot say because you have created one successful product after another, you should buy our next product.

Q What is the plan ahead?

A We are very optimistic about the traction we have had so far. WhatsApp has shaken the whole world. The number one thing that we do with our phones is messaging. So we know how friends and family communication is going to happen now, but we don't know how corporate communication is going to happen. You are driving a car and you see a wall ahead of you. Let's say a plane on the runway, so you slow down or you speed up. So you say no lets speed up, get some velocity and it will clear the barrier. When you are running out of cash and your runway is getting over, do you hire more engineers to get the product ready faster and get it adopted or do you cut down on your engineers and slow down your development? In our case, we are saying okay, the fast forward is, we will double up and focus on growth.

Q Are you revenues declining as you do so?

A The funny thing is it is not declining. If you look at telecom companies, their feature phones and SIM card sales continue to grow, even as smartphones are selling more. So I think, even to this day and 10 years from now when I need to send a message to 10 crore people, if you are a political party or a large bank or the government, you will have to depend on the SMS. So that business continues to grow. But we know that there is a bigger opportunity that we may like to look at.  The good part of it is to have a good revenue source that can fund new innovations.

Q What sort of revenues are you generating from the GupShup enterprise product?

A We don't talk revenues, but it is in the hundreds of crores range.

Q How many enterprises are using it?

A 500 large corporations and 25,000 SMEs.