Where quick-shooting, high-burn rocket ships blazed, Saravana Kumar, Founder & CEO of Kovai.co, took the Value SaaS route to over $10mn in ARR, while bootstrapping the global brand from his hometown Coimbatore.
2:54: Going from single to a multi-product brand
7:18: HQ Coimbatore & why great products can be built from anywhere
9:03: Choices: On staying solo and 100% bootstrapped
11:12 Marketing before product? What’s changed?
13:15: Challenges of going from single to a multi-product company
15:53: Hiring as a bootstrapped founder
Rajan: Welcome to the ValueSaaS Podcast. Today on the show I have my good friend Saravana Kumar, the CEO and Founder of Kovai.co. Saravana runs this company, Kovai, which is a premium enterprise software company and offers multiple products at scale, both in enterprise and B2B - 100% bootstrapped. I would say a fantastic example of Value SaaS, which means growing businesses in a capital efficient way.
There's one thing that I would say, I've embarrassed Saravana before. I mean friends call him the Sridhar Vembu of Coimbatore. He takes inspiration from him but he doesn't like this framing himself. But he's been a fantastic example of how to build a B2B global SaaS company completely bootstrapped. There are very unique lessons and examples that Saravana has to share and that is what we'll dive into over the next 40 or 45 minutes.
Saravana, welcome to the show.
Saravana: Thank you very much Thiyagar for having me on the show and the nice introduction.
I think close friends keep referring to Sridhar but we are in a different league. As you know they crossed $1 billion in ARR, but it's a good aspiration for us to compare ourselves to Sridhar. A lot of our methodologies and things relate much closer to Zoho because it's a similar model, just the scale is different between the both of us.
Rajan: Awesome. So Saravana, tell me a little bit about how you got started with Kovai. I know you have studied in Coimbatore and then you went to the UK, London, as a developer first. How did Kovai start from that very beginning?
Saravana: Yeah, sure. I think in order to answer that question probably I need to give a bit of a background story on how things unfolded over the last 20 years. So I completed my graduation in India in '97. I did my undergraduate in BSc Electronics, and for three years I did a postgraduate in MCA on a distance learning program. I was working Monday to Friday and the classes were typically on weekends.
The moment I completed my master's in 2000. Luckily, this was when a lot of people migrated from India to either the US or Europe on a typical body-shopping kind of arrangement. The clients were looking at scaling from India and it was a good opportunity. That's how I came to the UK back in 2000.
For 10 years I was working as a consultant for various companies, predominantly on a technology called Microsoft BizTalk Server. It's an integration product, similar to Zapier. In fact companies like Zapier took inspiration from enterprise products like BizTalk Server, and forked it out for modern SaaS businesses. That is where I identified product gaps when it comes to large enterprise customers. Typically companies build a solution, deploy it and then the regular day-to-day challenges start. How do you manage your enterprise scale application running on this technology?
I was doing some custom solutions for a lot of clients and understood there is a market opportunity for it; everybody needs something like that and that is how the first product BizTalk360 got started. For five, six years until 2015-2016 that was the only product we had and that was the only product we were focusing on and we didn't have this name Kovai.co.
Around 2015-2016, we started diversifying ourselves into a multi-product company. At some point, we required an umbrella brand because people were getting confused both internally and externally. We had different email addresses, every product had its own domain and that is when we thought it's important to have an umbrella brand and then tuck in all the products underneath that. That is how in 2018 we created Kovai.co and then the company transformed into what we are today.
Rajan: So tell me a little bit about the name. What was the inspiration, what does it mean, why did you pick that?
Saravana: We are based out of Coimbatore. I'm originally from Coimbatore and then if you look at my entire life, I studied and did everything in Coimbatore and I came straight out of Coimbatore to London. So I don't have any exposure to any other cities in India apart from Coimbatore.
The company was started in 2010, and then after two years of running it from London, we needed to start something when the necessity arose. There was a lot of debate on whether to start from Bangalore or Chennai or Pune or some cities where IT was big. As I said, I didn’t know any of the cities. For me, I even struggle to navigate Chennai, I can't go from one place to another place; that is my exposure to any city in India.
So that's when I thought, ‘okay, why don't we start something from the place where we are, where I am from, that's Coimbatore and also I felt maybe there is something of a social connect as well. In every way anybody can start a business and run it from cities like Bangalore and Chennai. Why don't we start something from Coimbatore? That is how we started in Coimbatore.
Coming back to your question of the name, people from Coimbatore know, there's another name for Coimbatore - Kovai and it looked like a good name, because getting a five-decibel domain name is very hard.
We thought of multiple factors, like how the entire company revolves around Coimbatore, all the people, the culture revolves around Coimbatore. And why not use Kovai as a name because it sounds good. The dot co has got another story. To differentiate a little bit from the city itself was why we added dot co.
Rajan: Got it. So you made the reference to not starting in Chennai, not starting in Bangalore. That seems you broke a thumb rule of how anybody would build a startup. Did somebody come back to you and say that was a wrong choice or do you ever reflect on that and think that maybe you should have started in Chennai and Bangalore?
Saravana: No, if you look at the rearview mirror, you don't know what would have happened. Maybe there may be pros and cons, but when I started, the one thing I thought about was ‘how many people do we need?’ I'm not building a TCS or Wipro or an Accenture where I need 10,000 people.
I was very clear that I was going to be building a product company. Even today people ask us, ‘have you done any consulting?’ Right from day one, we never did any consulting engagements. From day one, it's been a product company. We started building products and for a product company, it's all about the quality of people. Even today we are only about 240 people after 10 years.
We always give the example of WhatsApp. There were only 50 people when they sold it to Facebook at a $19 billion valuation. So in a product company, it's all about the quality of people and it's not a volume game. So we thought we could definitely execute it from Coimbatore.
You may not find a lateral hire suitable for the products but we had the confidence we can train them and mentor them and that is the principle even today. We have a full-blown training program. We call it KOVAI Connect and we hire interns, put them on a six-month training program and we train them to exactly what we need.
We know we don't need people with AI and Blockchain and this and that but we only need specific technology and we train them and that is what is working.
Rajan: So one other thumb rule that you seem to have broken Saravana is that you didn't have a co-founder. Anybody who says I'm trying to do a startup, the first question is I need co-founders and you seem to have not started with one and you seem to be fine without having one right now. Thoughts on that?
Saravana: Sure, I think with all the past interviews I think I've broken three rules basically. One is to stay bootstrapped, the second is being a single founder and the third is coming purely from a technical background and still managing to scale the business.
Okay, let's cover the co-founder story. It was not intentional. When I started, everything was organic, that's how I look at it. It's not that okay tomorrow I'm going to jump and start a company and then I'm going to go find funding and then scale the company in six months. It didn't happen like that, it was more organic.
I was working for 10 years and then I got this idea and immediately the first step I took was I went part-time. So I went to the manager at that time and told him, I have this idea and it might take me a year to build it and I just wanted to go part-time. At the time I was with Fidelity Investments and I did three days for them Monday to Wednesday, and Thursday to Sunday I was building this product. That is how it started.
From a GTM perspective - that again happened organically, it was not intentional.
I have been writing blogs since 2004. Even today when you search for some of the keywords like BizTalk Server, a lot of our articles rank number one. I have written some 600 or 800 articles on the topic.
Even the whole company was growing organically. I was alone, until I had the 31st to 35th enterprise customer. I was doing everything, and then I hired five people in London and grew to 150 customers. For two years, we ran like that. So there was no necessity to have a co-founder. But once you have funding, in the sense of customer money coming in, you are able to hire good talent and then eventually there was no necessity for me to think about co-founders. Today we have a really good management layer.
Rajan: You said something very interesting where you said it was an accident that you started writing blogs and actually had built an audience, and even today are licking the SEO juice from that. Even though you were a technical founder, you did marketing. You did audience-building even before you released your product. Is that how you would do it for your next product as well? Or how have you built your other set of products?
Saravana: Sure, things are different now. With the first product, if I look back, a lot of things that I did unintentionally turned out to be some of the best marketing strategies. Today we put in a lot of effort in doing things that I did organically at the time.
I've been blogging since 2004, and by the time the company was started in 2010, I had six years worth of content and I still remember I think I had about 15,000 to 18,000 daily blog readers.
BizTalk Server is a very niche product for Microsoft. Microsoft itself has only about 12,000 customers worldwide but they are all really large enterprises, like Shell and BP and those kinds of guys. So it's a very small community and during the six years I built that community presence as well. I used to go speak at technical user group meetings in the evenings and I was building that. So today you can refer to them as good content marketing, good influencer marketing, using community as your GTM strategy. All those things were happening organically.
Today if you look at our latest product, for example Document360, those things require time and effort. Today we operate more like a funded company and do a lot of paid marketing. We hire a lot of people to write content and try to build a community, and for that we do events and all those kinds of things. So it's a completely different story now.
But if you're small and if you're trying to bootstrap, it's always time versus money - you either have one, you don't have both. When you have time you don't have money, when you have money you don't have time. So in the early days you had a lot of time so you were able to do that. Now probably, you need money to scale faster.
Rajan: So you talked about the transition to a multi-product company. Talk a little bit about that. What are the challenges that happen when you go from a single product company to a multi-product company and maybe even start with saying why is there a need for even becoming a multi-product company?
Saravana: Sure, I think in a lot of cases you may not have a need to go for a multi-product company. A small product can be good enough to scale to a very large extent. If you take simple examples like Calendly, DocuSign, simple use cases, you really don't need to be a real multi-product company. I think those two companies are over three to five billion in valuation. So a lot of times you don't need a multi-product strategy.
If I look back probably, I won't do multi-product. If I think carefully, probably I would have invested a lot on a single product and gone deeper and wider on a single product. But in our case, again, it's a choice we were forced into because the original product, Biztalk360, is a very niche product. There's not enough time for you to hang on to the product for a long period. It's a perfect fit for a bootstrap scenario but once you reach the scale, there's only so much you can scale that product and after that you're going to run out and that is where we started looking at diversifying ourselves.
We replicated what we did for BizTalk Server for Microsoft Azure and launched Serverless360, and in 2018 actually a third product Document360 since I did not want to miss the opportunity. That's what happened.
I saw we were building a knowledge base for these enterprise products and we found a huge gap in the market. Either the knowledge base is controlled by a customer support product like Zendesk, Freshdesk, Intercom, etc. And they don't pay enough attention to the knowledge base because it's a very small module in a bigger customer support scenario.
Today for example, we have really big billion dollar SaaS companies. Let me give Stripe as an example. How important is the knowledge base for Stripe? They might have 20 people writing documentation for Stripe. When you have that large number of people writing, today there is no product in the market catered for that kind of scenario and that is the gap we found and we went ahead with Document360. Stripe is not our customer but we are finding customers similar to Stripe who feel that documentation is critical. So that is how we started diversifying into a multi-product company.
Another reason, you spend five-six years building a solid team and I felt that for somebody coming from a technical background, you need to give them enough challenges; otherwise they'll get bored. The product is super mature and if you don't do enough, they're going to go out. I don't want to lose the team.
Rajan: Hiring is one of the biggest challenges for all companies but specifically for bootstrapped companies. You said you made a very unusual choice, you do some training, but how do you tackle hiring challenges?
Saravana: There are different ways at different levels. So for people at junior levels across the board - marketing, sales and engineering everything - we home-grow them. We have a training program.
For the higher-ups, we try to identify people who are from Coimbatore but have moved to different cities like Bangalore, Chennai, who want to care for aging parents and go back to where they are from. That used to be our real mode - identifying talent like that and convincing them. We were really successful in that. It's a time-consuming process but keeping in touch and then identifying people like that and then bringing them on board is what worked for us. Today, we have our own recruitment team and we do standard things to hire people’
The other thing is also branding. We invested quite a lot on the branding side and we started telling our stories. Five years ago people may not have known us enough but since we transformed to Kovai.co, there has been a lot of emphasis on making the brand visible. Today, we do interviews, and have won all these awards as well - The Economic Times Bootstrap Awards, Boomi Bootstrap Award - all those things helped us to build the brand. Today, we are confident anybody in Coimbatore coming from IT background will know us.
Building the brand is also important from a hiring perspective because you hear stories, like five years ago we lost a couple of good people just because they were getting married and nobody knew this company called BizTalk360. A couple of them left and the pure reason was that they started looking for alliances and nobody recognized this company. They wanted to work for TCS or Infosys or something like that. That's usually the case. Yeah. Today, we've overcome a lot of those things.
Rajan: I remember in one of our earlier conversations, you mentioned that Freshworks is also an inspiration and you said you want to transform Coimbatore the way Freshworks transformed Chennai. What is the state of that in your effort of doing brand building of not just the company but also saying that Coimbatore is a great place to work for talent like that.
Saravana: I think for me personally, I look at two companies as a benchmark or inspiration coming from Tamil Nadu. Zoho is one and then Freshworks is the second company, even though they both went in different directions - one is bootstrapped, one is on the funding road. Girish is a good friend and I've seen their story right from day one because we became friends right at the early stages of Freshworks and we've been in touch, and I've seen both the stories on how they both scaled.
The quote I normally share in the interviews is what Freshworks has done to Chennai, we wanted to do that for Coimbatore. Even today, when I talk to people in Europe, they think Chennai is the SaaS capital of India. Companies like Freshworks and Zoho and Chargebee played a major part and I felt that place was vacant for Coimbatore. Nobody was actually aiming in that direction, and two, three years ago we started this transformation to put Coimbatore on the map of well-known SaaS companies.
I feel to some extent, maybe indirectly, we influenced that to some extent because today there are a lot of companies. There's a company called RFPIO, they do great things with RFP management, and a bunch of other companies are coming up. Also with COVID, there was a lot of movement into tier two cities. All our interviews could have been influential for these big companies in establishing there is a model that this guy is proving and showing. That is how I see it.
Rajan: Got it. So in your entire entrepreneurial journey, what were some of your most exciting moments? If you were to call that as the highest highs - what would those be in the last many years?
Saravana: The highest highs, saying you need to pinch yourself from where you started and where you are today. I'm happy as a person, I feel we have been able to contribute a lot. We have been able to show a model where you can start from scratch, almost zero, and scale it to this level in seven to ten years time, and influence a lot of people within the community. If you look at it, there are 240 people in the company and overall you're influencing close to thousands of lives at scale.
Rajan: What would your key advice be - maybe three that you can talk about - for somebody who's building for SaaS for the first time and wants to take the capital efficient, ValueSaaS, route you're taking?
Saravana: Yeah. So when you say capital efficient, you mean?
Rajan: As in bootstrapped.
Saravana: Yeah. So if you're going down the bootstrap route, what I will say is pick a very small niche. That is what worked well for me. BizTalk360 is a good example where the customer pool is only 10,000 - as I said Microsoft themselves have only 10,000 customers. Also you need to be a subject matter expert, where you know exactly what the pain points are and you are well aware of the problem space. It's not attractive for a lot of funded companies to get into such a space because the market is not big enough for them. So, it worked out well from a bootstrap perspective.
You can understand your end goal as well, what do you want to build. To be honest, BizTalk360 alone would have been sufficient if you're looking at it as an individual. I could have stopped at that. But I wanted to create something bigger and that's where we switched. That is one thing.
The second thing, calculate that it will take at least three to five years, I'll say probably five years for you to make sense out of it. It won't happen overnight. It might take a couple of years for you to find a product market, build the features required and then GTM motion and then slowly organically grow. You need to see whether you can live with that problem or be passionate about that problem for five years. It is a long period.
Tendulkar is successful because he loved that for 20 years. Right? You need to be passionate about that problem space for five to seven years. It takes longer, there's nothing called overnight success and you need to be persistent for a very long period. And third, make sure you're happy. That is very important. It's a long game, it's never a sprint, it's a marathon. Don't put your family under pressure. For example, not having enough funds; I have seen a lot of people like that.
They're betting everything, all the savings and taking loans. You need to balance it out nicely. That's why knowing the end goal is very important. You just need to be very careful and balance it out. If you don't enjoy it at the end of the day, what's the point of doing it? Rather you go and work for somebody and have a peaceful life. You need to just balance it out correctly.
Rajan: Awesome. Saravana, thank you so much for taking the time. This is such a pleasure. Always great catching up with you. It refreshes a lot of memories where you did great things. Thank you. Thank you again for doing this.
Yep. Thanks, Thiyagar. Thanks for having me on the show.
Rajan: Awesome. Bye-bye.