From Boy Next door to failed Restaurateur to successful IOT Startup
How to Succeed with an IOT Startup?
The Internet of Things (IoT) was hailed as the one that was going to herald the 4th Industrial Revolution. QE2 and QE3 (We are not referring to Queen Elizabeth’s Cruise Ships) initiatives of the US Federal Reserve have been unleashing one bubble after the other. From Green Energy initiatives to historical highs of the NASDAQ to Unicorns & Decacorns in Silicon Valley and IOT. All these owe in some form to the US Federal Reserve’s desire to nip any recession.
IOT was one such sector which received the investment and the hype. 50.1 Billion Connected or IOT devices – Projected for 2020. We are already in 2020 and nowhere close to the above number. That begs 2 questions – Where is all the hype around IOT and How to Succeed with an IOT Startup?
The Role of COVID
As wise and grounded entrepreneurs will acknowledge, beyond user love and great products, there is many a time the role of a “Wave” that plays out in economics. Adam Smith called it The Hidden Hand. At Maharajas of Scale, we call it The Wave (Bill Gross calls it Timing in this fascinating TED Talk).
Like Demonetization and the 2008 recession, all startups benefit from some sort of a Wave. COVID is perhaps acting as one such Wave to IOT. Gotama Gowda’s story tells us how he is answering this question – How to Succeed with an IOT Startup? We don’t want to steal his thunder…Read on and Listen On
Journalism to Entrepreneurship
Gotama is a very unlikely entrepreneur. This stemmed from his father’s unlikely career as a farmer turned award-winning filmmaker. Gotama’s father’s career inspired him to tread a different path in Journalism. However, as entrepreneurship struck Gotama, journalism turned out to be a short-lived pursuit.
Gotama started a Quick Service Restaurant and a bakery. Gotama called off the Quick Service Restaurant launch a week prior to opening. However, the bakery’s succeeded and with it he saw a world of possibilities.
The World of IOT beckoned with possibilities Listen to him talk about How he launched and scaled an enterprise IOT with almost no sales or entrepreneur background?
Here are some excerpts from the Episode
See IoT was hot and continues to be just didn’t see that, that I think it didn’t have that moment that ecommerce had or it didn’t, it hasn’t yet had that moment that we are now seeing edtech have, right. Everything is about timing. And I think we’re hitting that timing right now. COVID is going to really take us there
You Can’t Scale Hardware
You go around you talk to a lot of people, you speak to VCs, and the first thing they tell you is hardware is not scalable, right? They will not at the end, they’re not willing to write a cheque.
As a result, what we did differently, very, very differently was we didn’t even look at the VC ecosystem to begin with. For instance, when we started off we were product and client centricGotama Gowda 06:53
Fathers careers inspire Children
My father was a farmer and so he was someone who migrated from a village near Hassan to Bangalore. I looked at him and I thought, like, I mean, he was my first inspiration right? Like for most kids, your your dads, our fathers are your first inspiration.Gotama Gowda 11:07
Watch On Youtube:
Click here for another farmer turned entrepreneur success story: KNM Rao of QuickRide: Season 1, Episode 14
The decision to Shut Down a week prior to opening
I hired a consultant, who was at that point of time, the Pan India chief for F&B for Barista Lavazza, I somehow got connected to him, got him on board as a consultant, got him to help me make the recipes at that point. But just before I opened, and when I say that, I mean like a week before opening night, I had to sort of take the decision and shut it down. And that was my first ever failure ever.Gotama Gowda 13:38
Once I went all the way up to his place that’s outside of Bangalore, took an appointment, waited for like a month to take that appointment, went and met him and showed him the first prototype that I got made.
And he just told me that it’s going to be a showpiece, you’re building something that people wouldn’t want right up to the CTO of, of one of India’s largest telecom companies because of my background, and also he didn’t think smart locks made sense and enterprises said that I shouldn’t be hereGotama Gowda 34:57
How IOT Devices were HandMade?
However, I think two days or one day before, the second PO expired is when we went and sort of gave them those 500 locks. And to make that happen. We sat down and hand soldered all those 500 ourselves like we started like that two days and two nights straight. We hand soldered it. Of course, there was a lot of other background work that had already been done like we had our moulds in place.Gotama Gowda 37:54
In fact, in November, we will be completing five years of officially starting Open APP, although we spent one year in sort of deliberating and building the basic product from here, as I’ve kept saying, and I will continue to say that IoT is the future, we think that we’ve just really begun.Gotama Gowda 1:07:03
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Here's the Word Cloud For This Episode:
iot, india, people, bangalore, journey, build, locks, scale, called, company, years, product, money, point, started, china, means, world, continue, hardware
Gotama Gowda, Krishna Jonnakadla, Tania Jadhav
Krishna Jonnakadla 00:01
This is Maharajas of Scale, a podcast where we go behind the scenes and talk to founders who are demolishing the myths around building and scaling a big business in India. These are the stories that have shattered the assumptions around Indian consumers and are changing the game completely. I am Krishna Jonnakadla, serial entrepreneur, co founder of flit the fashion locator in town and startup mentor; bringing you these stories. Hey, everyone, this is your host Krishna from Maharajas of Scale. We have a young and dynamic speaker today, someone that's bringing What can I say a degree of simplicity to the complexity of managing your home that you all have. We have amongst us today. Gotham, the founder of open app, it is an interesting time to be speaking with Gotham because we've heard of hockey stick growth. And Goutham is actually living through one right now and he share more about that in this episode. Gotaum, welcome to the show.
Gotama Gowda 00:56
Thank you, Krishna for having me. I think you know, it's a pleasure speaking with If you one quick clarification, I'm Gotama.
Krishna Jonnakadla 01:03
Alright, I will address you as Gotama.
Gotama Gowda 01:06
Thanks. Thanks, Krishna. And again, thank you very much for having me. I look forward to this.
Krishna Jonnakadla 01:11
Awesome. So Gotama tell us a little bit about yourself and what you're working on right now.
Gotama Gowda 01:15
So I am your see this I am your sida-sada boy next door, right? I'm a Bangalore boy born and brought up here. And I have what someone would say a very different approach to this whole startup journey than most people because my educational background is in journalism psychology in late from Christ University.
Krishna Jonnakadla 01:34
Gotama Gowda 01:35
Yeah. And then I'm running an IoT startup, not even internet IoT, right? That's like another level altogether. So that's, that's my educational background, most unlikely based to be in right now. I think we can speak more about it later. But right now we are at an interesting point, where thanks to COVID right, there are two industries that we are fully aware have, you know, started growing like crazy. That's a edtech & health tech. But us in IoT, we realized very early, I think, in April itself, that automation is now going to see a spike that it has never seen before. Like, everybody's been talking about IoT for the past, maybe a decade or so. But this is what the industry new did of COVID, to really let people know that automation will do wonders for them. It could be a consumer or an enterprise, right? So the hockey stick growth that you're talking about, we only see now because people have always known the power of IoT and automation, but now they feel the need for it. They're right now at a point in their lives where it makes a difference. So yeah, that's what i think i think the next decade and more after that is going to just be IoT.
Krishna Jonnakadla 02:49
It's interesting, you say that, let's take that a little deep. Personally, I have seen IoT as obviously the Internet of Things means from printer to alarm clock to the ubiquitous Amazon Echo or the Google Home devices that we hear about. And also smart lights, these are all connected. What exactly is COVID changing that, you know, this has become in some sense a inflection point or a watershed moment for IoT.
Gotama Gowda 03:18
First, let me give you a perspective on how it's changed things for us in the Smart Lock industry. And then I will dwell into what exactly it means for IoT, right? So for smart locks in the enterprise space, especially, so we have a, we have a bunch of smart locks for enterprises and consumers separately, but the one that seeing the spike right now is what is called as a GPS enabled Smart Lock. So it's a like, like, it's hardcore IoT embedded, which means you can open this lock, it's a wireless product, so you can open this lock from anywhere in the world. It has a form factor of a padlock, so which means it's truly mobile. What this product simply meant was enterprises today, especially in trucking and warehouses need not have to use Physical keys at all, we've always been in this business and what used to take us, let's say three to four months to close a large largeish deal has now dropped to 15 days. And our and our inbounds have, you know, increased by almost 15 x simply because, you know, now everybody sees the need to automate. And everybody understands that contactless is here to stay. And they also find this a reason to now move on, right? As I was saying, we always known that IoT is important or automation is going to save so much of your time and also money in the long run, etc, etc, better for the world, environment, so on. But what COVID has done has accelerated that, right? So it's given that little nudge that it required and it's pushed it off the cliff.
Krishna Jonnakadla 04:46
Gotama Gowda 04:47
So now Now, that's, that's, I think, why it's amazing. And that's how it has been so smart locks. IoT in general. As I said, the same rules apply. Smart locks especially are a very, very niche category, people have been looking for such solutions didn't find any. Now they started looking harder. So hence our inbound has been, you know, shooting off the rules about IoT. Also, apart from this smart locks is doing really well, I can say that because we building the platform that works with multiple hardware devices, and we interact with, you know, some really good IoT companies out there. And we've been seeing this touch there as well.
Krishna Jonnakadla 05:24
So we'll get into the scale aspect and the quantitative and qualitative aspect of it, you know, in a few minutes, but at a high level touch upon what sort of numbers you were seeing before and how has it accelerated? What sort of scale Are you at right now?
Gotama Gowda 05:40
So let's say an enterprise enterprise used to contribute to our overall revenue and logistics, especially in that would contribute, let's say, 45%. Now it's gone up to 80%. Right, and we do see, so we have both enterprise and consumer business in the consumer business, we're growing 60% Month on Month.
Krishna Jonnakadla 06:00
Okay, I saw some chart from a friend of mine who cover startups, which showed that you were at close to 200,000 locations. And in COVID, you've shot up to 1 million locations. Is that true?
Gotama Gowda 06:13
I think it was, this would have been slightly older number. This was so the that that happened for us last year we hit 1 million plus and that I think 1 million is accesses and this if you've seen this as a graph, but in terms of locations, we've we've crossed 500,000.
Krishna Jonnakadla 06:30
Okay. that is a big number.
Gotama Gowda 06:33
It's a very, very big number. I think we are only one of those companies in the country today to have that kind of data.
Krishna Jonnakadla 06:40
So let's let's understand something What is it IoT was one of those things which was hot at some time ago, and everybody talked about scale but very few achieved it. So what what did you do differently?
Gotama Gowda 06:53
See IoT was hot and continues to be just didn't see that, that I think it didn't have that. moment that ecommerce had or it didn't, it hasn't yet had that moment that we are now seeing ed tech have, right. But that is exactly what I'm saying. Everything is about timing. And I think we're hitting that timing right now. COVID is going to really take us there. But apart from that, if I just have to go back a little bit and talk about what we did differently to get here, honestly, a bunch of things, but more importantly, it was just the grit to get something done. Right, do whatever it takes to be successful. Because I can tell you, in my personal experience, I've come across a lot of entrepreneurs in the IoT space who've started trying to build something around hardware, but, you know, just couldn't succeed, not because there weren't enough avenues. They just didn't want to travel as much. Right. Let me give you a classic example. I remember sometime in 2015, when just before we started, open app, I went to the startup conference, and then there was this guy who was presenting a smartlock at that time, and he had raised like, 20-30 lakhs or something like that, and then on stage and he was demonstrating it. And these were really really early days right globally not even in India, right in the world. At that point of time there were only two successful kind of successful companies out there one was lockitron and the other one was August lockitron was a Kickstarter based company. They is good money on Kickstarter, but then couldn't really take off that was simply because they couldn't get their supply chain right. The product was always great. However, August did both of them really well and got acquired by ASSA abloy for about 400 500 million and ASSA abloy is the world's largest lock company with a total global market share of 10% plus. Right? All of this still happened in 16 and 17. But this company that I'm mentioning that I saw in Bangalore, right, I met the same founder about a year later, and he had already given up and this was the guy I had seen on stage and sort of thought, Okay, this would be a nice place for me to sort of get to in about a year and I meet him in another conference. In a year, a year later, and see that he'd given up it just moved on to doing something in software. Because you go around you talk to a lot of people, you speak to VCs, and the first thing they tell you is hardware is not scalable, right? And will not at the end, they're not willing to write a check. And then it probably you're looking at a Sachin Bansal at that time, we're looking at Ritesh was still very young, but you have you had multiple examples, Paytm was really spiking right or millions of dollars in the system. And then nobody is ready to write a check for 100 K, was was a very, very demotivating sense. And I'm sure a lot of people have just given up because of that. But what we did differently, very, very differently was we didn't even look at the VC ecosystem to begin with. When we started off we were product and client centric. We first got a client then built a product first product client convinced them we could build a product took check as advanced, took that money, built the product and team and built it and built it to scale. And when we could Scale I took a hand loan for 42% per annum, which is 3.5% per month for an for a decent size right for like hundred k for 60 lakhs at that less than hundred K, but about 60 lakhs I took as a hand loan to fund working capital at 42% per annum, and then we raise VC money, right. So we've kind of gone the other way around, we didn't build something because we wanted to get funded or we didn't build something, because we thought that it was cool at that time. That I think is a huge differentiator and which is why we continue to go because we can see, you know, a few years ahead of us than most people because of our experience right now. And that is turning out to be extremely valuable, especially with the kind of inbounds that we have from strategic players, incumbents, even VCs that works sort of want to start talking to us now.
Krishna Jonnakadla 10:52
Very interesting. You covered a very last arc of first story there in about two minutes. Let's, let's take a step back a bit journalism to entrepreneurship. What is the story behind that story?
Gotama Gowda 11:07
See, I actually did my electronics in 12th I did pcme, okay, right. Okay. That's the only academic connection I have to employment. I mean, it ended there when I was 16 years old. Right after that I got into journalism simply because of the fact that I did not need that education with a certain kind of education itself meant success, right. I would attribute that to my family. So I come also there I have a slightly unique background. My father is a national award winning filmmaker. And he's produced and directed the largest number of documentaries for the state and central government, in fact, one of the largest in the country today. 400 plus, so I've seen and he was a farmer, by the way, so he was someone who migrated from a village near Hassan to Bangalore. Work with some of tier one directors and filmmakers out there in the country and then became one and successful himself. So I've seen him go through that journey. And when I had to make that decision after second PUC or 12th, I looked at him and I thought, like, I mean, he was my first inspiration right? Like for most kids, your your dad's our fathers are your first inspiration. And I and I just saw that being unique or being able to take the less traveled path can lead to success. That was sufficient. And there was this funny thing that I heard, which also motivated me not to do my engineering, right. So in Bangalore, at that point, there was a very, very popular saying that said, if you take a stone and throw it in Bangalore, you will hit one of three things. One, Dog second building third engineer, which means there were so many of them, right? So I just knew that it was not the path for me and I decided to take up journalism, psychology and latent state, simply because I believed it was a very, very strong combination and it had what, what it could provide what I would need to sort of equip myself with in the real world. I saw myself getting out of that and jumping into one war zone. And I and I thought, Okay, what would I need to survive? I thought these three things were far more valuable. So which is which is sort of where and how my educational background sort of I mean, that's, that's how it turned out.
Krishna Jonnakadla 13:24
Okay. And then,
Gotama Gowda 13:26
so and then. So, in terms of what happened and how we ended up with open app, yeah.
Krishna Jonnakadla 13:31
One is education. So obviously, education is one thing, but from that education, what did you do next?
Gotama Gowda 13:38
So it's sort of then. Let me just take you through my story completely. So immediately, I've always been entrepreneurial. So in my final year of college, I started saving up some cash, because I knew that I wanted to do something by myself. And I started saving up cash by doing when I started doing these odd jobs. I actually started off on the distributing pamphlets and doing odd jobs for these large MNC is like Kingfisher, TVS, and all these right, so I used to get paid by the hour. That's how I started off, my dad still doesn't know about it. But that's how I actually started off. And then I got an opportunity to do some basic real estate. And at the age of 20, I used to go to college with property papers worth a few crores in my bag. And the way I would manage my time to show these properties and these were also not one BHK, two BHK I would actually go show plots or acres of land to potential buyers. right. And I had a few deals and also lost a bunch of them because I was a kid and I mean, I was I was not doing this for a living. I was doing this because I needed to save up and I wanted to do something on my own. I saved up a little bit of money got done with college and immediately started in an industry that most people and by the way this I've spoken to enough people right now and most people FMB is the most rated industry in the world, right? Because eating is something that is natural to us and going out and eating in a restaurant is so natural to us. We believe that it is an easy and most people you see out there aspire to have their own restaurant, their own cafe, their own their own Hookah Bar right a bunch of these things because we see consumption and automatically relate it to okay demand. So it was very similar in my case, but I as I said again, my journey has always been about being a little hatkke offbeat, I chose a category so I started a QSR joint QSR are quick service restaurants, right so I stopped more concept of TOSH. This was for anybody who knows Bangalore around Ragi Gudda the temple in Jayanagar. So this was a building right opposite the temple, chose the spot, paid the rent to set everything else up. I didn't. I didn't know jack shit about making like cooking like even now the only thing that I can make is maggi but I hired a consultant, who was at that point of time, the pan India chief for fnb for barista Lavazza, I somehow got connected to him, got him on board as a consultant, help got him to help me make the recipes at that point. And just before I opened, and when I say that, I mean like a week before opening night, I had to sort of take the decision and shut it down. And that was my first ever failure ever. Right. And the reason, I shut it down is very interesting is because the local corporator at that point so so it I was obviously a week away from opening the one thing that I didn't have was my FMB license, right,
Krishna Jonnakadla 16:38
Gotama Gowda 16:39
everything else was there, everything else was ready. And then I went to the local you know, bbmp office and tried to catch hold of the officer, and then came to know that I of course, I have approval because it was a pure vegetarian joint. Like I'd figured out like it was a different type of Bun. There's a lot of creativity that went into it. It's a good bread gbl good bread limited. used to make breads for KFC and McDonald's at that point in time. So that was the quality and gbl was the one who were supplying breads for me, right on top of all of that to that level of quality, and I had not received it and then realize that the corporator expected a price, simply. And I was young again, I was 20 - 21. I didn't know what to do. I went back in for the first time. And I think the last time I went to my dad for my help, right, I went to him and I told him all of this and because he's also slightly well connected, he's from Bangalore, etc. He was able to get somebody from so he was able to get the local MLA to call the corporator. Now the corporator took it to heart and he put it on the temple trustees, and he said they have a problem. Now this has just blown out to be a small restaurant that a kid is trying to start to now being the religion slash temple trust issue types. The MLA just said Look, this is obviously serious if he's what if what he's saying is true. So you just go back get an NOC from this from the template trustees and we're good to go. I'll ensure that your son can open this joint no matter what, And there was no problem at all the trustees didn't give a damn about one small joint opening in front of their gate, right? But my dad told me one thing he said, Look, now you have two options. Option number one, he obviously expects a bribe? You just go ahead pay that price and continue option number two, you tell me you don't want to pay the bribe. We will obviously get that NOC go back and get you your license. But six months down the line, eight months down the line, this guy's going to come back and say no parking or or your literring or whatnot. He's just going to cause more trouble, right. So you have two options. Choose one. I actually picked the third. I shut it down. I shut it down. Yeah, looking back at it. It was the most foolish thing to do. Like if I had to take a decision probably now I don't think I will do that. I would just pay him as a businessman. Now with enough experience I will probably pay him and continue. But I didn't do that. Right. I it was raw passion. I somehow didn't see myself entering a phase of life that I was going to live through for this lifetime, right? One is education, then you move on to business or working or whatever, I didn't go get a job. I decided to do something on my own. And this was going to define the rest of my life, I somehow in a very filmy style, didn't see myself taking that path, doing something that I didn't believe in and I decided to shut it down. And this experience I will never forget, because for the next three days and three nights straight, I had extremely high fever, I couldn't eat, I could not sleep, I couldn't even drink water. And it was it had nothing to do with a virus or bacteria or nothing. It was just out of pressure. It was just out of anxiety, right? I'd saved up money and put it into this business. I was ambitious. You obviously have stars in your eyes, and all of a sudden all of that is gone. Boom, in In like that instant, and, and that happened, and I shut it down anyway. And that's when your relatives start coming in and start telling you that Okay, why do you want to do this get a job or join your dad and a bunch of things. But interestingly what happened is that turned out to be my biggest lesson in failure and I tried to implement that wherever possible in life. From here I moved on to different levels of success. I started my brand again, I continued to be in fnb, but I started a brand called cupcakery, which was also my first exit. Yeah.
Krishna Jonnakadla 20:32
So So what was the what was the insight that you implemented eventually in everything that you did from that experience?
Gotama Gowda 20:39
Perfect. So with TOSH, right, I had I took six months from that point of failure to starting cupcakery. And in that meantime, I made a list of all the things that went wrong and could also go wrong if I had to remain in the perfect. The first thing that I realized that was the problem was having a physical store in the first place, right. Like even if I moved To store away from JP nagar, if I had to put it up in, let's say, HSR layout, it's the same system, I cannot get away from it once the store remains the same, which means a physical place will also mean you have to do things for people to walk in, you can't go to the crowd, no matter how much effort you put in, no matter how much money is pulled in already. And again, with regard to branding, you are sort of again stuck to the place because you belong to that physical store, right? I took that insight, and went ahead. And again, in terms of making things I also realized that it was not scalable. Once I shut it down, I realized that it was not as scalable as I thought it would be. Because I had the experience of setting up one space. And I saw that if I had to convert that to hundred, the amount of effort and capex it would take was going to be humongous like there was no way I could exceed a threshold of certain units per day without setting up another store. It was literally impossible like you can make, let's just call it a burger right? Let's say could sell hundred burgers a day and that was your threshold for you to start making the next hundred you have to set up another new store, right? Especially in QSR there is a certain amount of demand only that you can sort of cater to. I took these insights, I use the same consultant that was working with me barista Lavazza who introduced me to my first mentor in my professional journey, which is Mr. C. Rama Chandra, who's the head of family, Nilgiris, Nilgiries from 2005, which got bought out by Kishore Biani, three years ago. So Nilgiris is 100 plus year old company, we all know that it's a humongous success. So I got introduced to Mr. C. Ramachandran, who so at that point in time, 60% of Nilgiris was already owned by actis actis, the private equity fund. So because this man was such a passionate guy, he had his own factory proprietary, somewhere near Bommanahalli. Right? Only for baking cakes and sort of still continuing confectionery items etc I met him I decided to use his space so basically I used to pay him for third third party contract manufacturing simple, and went and implemented contract manufacturing for cakes, okay. So I went to him, I said okay you manufacture this and I on the on the back end I tied up with AB mory pilsbury. Again mmcs, who also made premixes, the consultant that I'd hired from barista Lavasa, he made a very specific recipe that went into those remixes that were made for us like it was custom made. And then it was all produced in that factory, right. And now that is about production. Where did I sell eventually I did not pick up a store that because that was obviously one of the things I learned. I instead picked up at that point. Vespa had recently launched Piaggio, right. I bought a Vespa red color Vespa caught hold of a of a design graduate from nift got him to design a box that looked like a cupcake took that Vespa out in front of a college and saw whether it will sell simple. I made 30 cupcakes got them made, in fact, went in front of Jain college Jayanagar during the break. And so if we could sell it sold, it got sold out in no time that that was proof of concept, right? And when you don't have to even call people to sort of address and tell them to buy and then they start buying, you know, this is scalable. I took that concept bought another Vespa scaled it up did really well then realize that there is more demand that I can cater to, instead of scaling the Vespa by itself. I realized my target audiences are in schools and colleges. I started tying up with canteen owners and people who already have space there to keep my stock. And by the end of it I had I had presence in more than like maybe 30 plus for different point of sales in India, including Gopalan cinemas and INOX cinemas, right? And we were in all tier one schools in colleges of the city. And I eventually about a year and a half into it. I figured that this is not something that I want to scale. Because I didn't see myself going from on a good day we would sell 700 cakes, right a day, a single day. I didn't see myself taking that to maybe 70,000 or seven lakhs because I I realized very quickly that it was going to be operationally intensive and a brand even built with that much you know, sweat and blood into it was not going to give those disproportional returns the way an entrepreneur would want to look at it right I didn't see myself becoming a millionaire through that or a brilliant
Krishna Jonnakadla 25:41
you saw that it could become a good small business but not a startup
Gotama Gowda 25:44
Yeah, I could not play like I could not be on Maharajas of Scale. Let's say that right? It could not be scalable, right. Like it would never be as scalable as what as far as what I wanted to see myself as as how I saw myself as Yup. So that's, that's, that was my first success and I sold it, I sold cupcakery to Mr. c ramchandran for a small royalty based deal. So I made money for the next one year out of that business and how that was useful to them was because I had tied up with AB mory Pilsbury created that little bit of it, which also meant that there was standardization, which meant the first Cthat came out of the oven was the same as the 500. And the consistency and quality with regard to the flavor was because of my tie ups and the pricing, because of all of that was extremely affordable even till date. I so our cakes were anywhere between 20 to 25 rupees, the base was 55 grams and the cream was 25 which means that a package of 75 grams for less than 25 rupees is still something that you will not get anywhere in this country at of that quality. like even so that was valuable. So I sold it Nilgiries then decided to create a muffin line out of that and I'm not really I mean CR's Which was completely owned by the family, that is a brand that they are hundred percent owned decided to use that. And so I made, I made some money after that for the next one year, and which is when while I was looking for opportunities, I sort of stumbled upon IoT IoT as an industry. This was way back in 2014, when a friend of mine who had done mechatronics introduced me to the concept and sort of made me imagine this magical world where you could press a button here and things will happen there. And of course, smartphones, were still sort of becoming a thing at that point. And everybody knew that it was going to scale. And there was one statistic that stuck to me, right, very simply, you know, it simply said that by 2018, or 19, the total number of devices in the world smart devices in the world will cross the human population, right will cross the total number of humans. And that statistics was that that was something that was flabbergasting, and I figured that if something was growing so quickly, right, obviously opportunity was there around it and then started looking around. What is a niche that can be catered to that is a very common need that sort of can address the need of a guy living in a hut to maybe, is there a Is there a consumer behavior? That kind of sticks with anybody living in either a heart to some even Bill Gates, right? is there is there something that we're doing that can be better through IoT, and that's how we sort of stuck to mark locks and the journey began, a journey began from there that is, I mean, that's a whole new segment of how we scaled open app. But this was the journey through which I arrived at open up
Krishna Jonnakadla 28:43
very interesting. So from a food and beverage segment and creating something hatkke or out of the ordinary and you jump into IoT, it sort of feels like the stories that you hear about I don't know if it's true or not. But you do hear their story a lot where Jeff Bezos looked at the percentage by which the internet was growing and then he decided that he was going to you know, jump in and then do something in the internet space. So it feels somewhat like that. Very interesting.
Gotama Gowda 29:14
I don't think Jeff Bezos still made cake.
Krishna Jonnakadla 29:18
Yeah, that's well, it's a unique story, right? But hey, cupcakes, who doesn't love them? They are fantastic. What do you write about the food aspect though? I don't know fits demand aspect whereby you look at people eating out and say, Okay, I could do a restaurant I There is something about it is perhaps the most number one startup idea or a business idea that anybody has. And the funny thing is that also is universal across borders I've seen while in Europe, in UK, a bunch of friends that I used to have you there, they had some downtime, or when around the weekend, you get together to share a drink or two, I would say I'm going to quit all the stuff I'm going through right And then start a restaurant. And you would hear something similar from the friends in US and in India, so and so much so that it's part of popular media right in if you remember, I don't know if you watch the show the show How I Met Your Mother in that they are talking about both of them building a bar and where the bar is going to be called I think Last call where there was never going to be a last call, sir.
Gotama Gowda 30:26
Oh, nice. Nice. Yeah. Very subconscious. And as you very rightly said, it has nothing it's not Indian at all. It's it's a very human thing. Maybe it will be interesting to probably take people offline and understand where that comes from. But yeah, it's also it's a great business, but I think it's also the toughest. That's what I meant when I started off with it. I think its a wonderful business but it's also not as easy as it looks on the outside. It's super operationally intensive, like you have to get a lot of things right to really make money from that is correct.
Krishna Jonnakadla 30:59
That is correct. But I think there are certain repeatable formulas if people who lived in Bangalore, realize that, or they can see hotels everywhere, the so called UDUPI Brahmin in the quick service South Indian restaurants, there they are, they're everywhere. If you follow that format, it is a it is a format that serves multiple palates and tastes. And I think there is a formula there, right? So if you peel that thing a little bit, Upupi hotels where they serve the usual South Indian fare, almost all of them thrive, right? They're doing business from morning till night, as long as you know how to manage that labor and create a certain formula. I know for a fact that if there is an Udupi hotel that is shut down, something has not been managed well, because the founder of the Udupi Krishna Bhavan is a friend of mine. And I know what sort of what sort of success he has seen. So that's interesting. And so there formulize different people have to maintain that consistency that you know, service that pricing and and if you draw a parallel in the grocery business, there is a there is a group of people, I think they can be loosely called the Kerala Muslims. They have a way with that grocery business I have in the last 15 years and India has seen a lot of ups and downs in the last 15 years. And when I see people the grocery business is another one right? A lot of people say I could start a grocery store anytime it is a daily need, and I could make money off of it. But if you fundamentally compare what the Kerala Muslims do, largely, I think it's some sort of like all other business groups out of India, I think they intuitively as part of their DNA have some formula. I've seen that all parts of Bangalore other more retail and then smart retail, all sorts of groceries open and shut down. But these guys don't shut down not not just that they they are profitable. They make money hand over fist and they've figured Out a formula that product mix is so very, very vast even in those smaller places. So big market families, you can you can use a variety of those chains. So ultimately you're right. It's about figuring out, there is a formula, every one of them has a formula. As long as you unearth that, and then stick to that. It is easy. Well, not easy. It is possible to create a profitable business.
Gotama Gowda 33:23
Definitely. And you're right about groups. So I and I have made the same observation and with the Kerala Muslims now, I wouldn't say groceries I've seen I would say department stores right? They have a bunch of like the most I don't I don't have a number so I cannot put a percentage to it. But almost every successful departmental store that you walk into his own by somebody who who is either from Kerala Kerala Muslim, right, correct. Yeah. And it's how you look at Guju's doing a certain type of business or, or closer home. Iyengar bakeries in Bangalore are from either from Managlore or Hassane, go Yeah, yeah,
Krishna Jonnakadla 33:58
yeah, that is correct. That is correct. There is definitely a formula that all of them are aware of. Yeah. And that's, which is why the fundamental differences from groceries, it becomes departmental store. So the premises does. The funny thing is the square footage, the premises to those don't change. But the formula is tweaked a little bit, and then these guys go to succeed. So that's interesting. So let's jump into the IoT journey for the numbers fascinated you IoT. Mostly we have seen these are, these are maybe, you know, OEM manufacturer from China and then slapped with the local software. Even that is not very widely done. It takes a certain skill set. Like you said, you know, VCs definitely have a way of saying, okay, hardware is not scalable, but it has its nuances. Again, it's about knowing what to do there. What was that journey? Like? How did you decide and that was not an easy journey to start given. India is not very widely known for hardware the ecosystem is so sparse?
Gotama Gowda 34:57
yes, absolutely not. In fact, see I've had more rejections than not a lot of us. I think I can, I can proudly say that and not rejections. Because like the minute I've said that people assume it's from VCs. It's not actually the VCs we didn't, as I said earlier in my conversation, we didn't start with the VC's. Right? I want more number of people telling me like a couple of examples. The CEO I don't I won't take names of these companies and people but the CEO and MD of one of the largest manufacturing companies based out of Karnataka backed by a P, ROM, etc. Once I went all the way up to his place that's outside of Bangalore, took an appointment, waited for like a month to take that appointment, went and met him and showed him the first prototype that I got made. And he just told me that it's going to be a showpiece, you're building something that people wouldn't want right up to the CTO of, of one of India's largest telecom companies because of my background, and also he didn't think smart locks made sense and enterprises said that I shouldn't be here. Attending technical meetings if I was if I didn't have the necessary background or the product to suit that conversation, right? So it's, it's it's been harsh that way. But it's only motivated me and the team more. So when we started off again, no VC funding, I very clearly knew that that was not going to work. There was no point also, we started off customer first. Initially, the dream was to build a b2c brand out of India, meaning build a smartlock for homes. That's how we wanted to start off, but also realized at that point, the market was not ready. India was not yet a consumer IoT market had shown no signs of it. And there was no reason for us to believe it either. Of course, we looked into some data and realized that if we build something now we'll have to wait four or five years to be able to succeed. We instead found an opportunity, I would say when me and another friend of mine, we were sort of hanging out near MG road. I saw this guy walking around with a huge stack of keys. Right. And he was really crumbling. He was on the phone and he was handling this box, this junction box, the ones that I'm sure you would have seen on the streets of Bangalore, right? that belonged to telecom companies. So he was one of the repair guys. He was one of the ops guys. He was walking around with a huge stack of keys and he was fumbling with it on call. I just couldn't see this fellow, I went to him and I knew it was something to do with locks and keys. I wanted to know if there was a problem statement, went to him asked him what I mean, what he was up to, and then realized that he was from this company called act ACT, ACT fibernet, right. And, and, and he started telling me about how they continue to lose batteries in these so so these so I'll tell you how this works. So for a company for ACT to provide your service, they have a junction box station for every eight customers, right?
Krishna Jonnakadla 37:53
Yeah, I'm familiar with that.
Gotama Gowda 37:54
Yeah. And if you are, if you're a customer of ACT, you will know for sure, because they've had so many issues with it. So fundamentally, there are two things in that box that are of value. One is the internet switch. The second is the battery, the Internet, which is not valuable to you as a common man, it's a valuable asset for the company. But the battery is valuable for the Commonman. Right? The problem started with basic key management, meaning all these were junction boxes had normal lock and keys. And those were handled by their own groundstaff that earned anywhere between seven to eight k a month. Very simple story. Now these guys had keys, which means he almost felt entitled to opening it whenever he wanted. He or she had basically that group of people made a business out of stealing batteries and selling them in black markets. What obviously that meant was not just loss of capital, because they had to continuously refurbish these batteries. It was it was you know, it was your alternative source of powering up the internet switch, but it also meant that their attrition levels started rising, it became such a serious problem. Like you said, you know, of these junction boxes, right? You know of it because ACT has the most popular reasoning when your internet goes down, they tell there's a problem with the box. And Previously, they would still say that Okay, there is a problem with the battery in the box, at least that's the problem we've solved now. So we realized, okay, this is a problem and this was a very, very big problem. So they tried multiple solutions tried, China tried India, tried giving it to these large mmcs as a project to sort of cover nobody had been able to even take it up or or solve this for them. Now I went in. And as again, as a young guy who's really ambitious to have that opportunity to build something I went into then I can do it, I heard them out I of course, I mean, as as, as also primarily a sales guy figured out how to get to the right person, etc, etc. Got to the like, got to somebody technical and then got him to introduce me to somebody in ops and VP of ops. sat down and had a conversation understood their problem statement told them that I can build this week. Now mind you, I am this one guy I don't, obviously non technical, I just thought, okay, problem statement big enough for them to sort of pay me to get it done. Let's try this out took me three months to convince them that we could build a smart lock to solve this problem. And I also got them to write a check for me a 30 to 50% advance, or 50% of advance was our first cheque, and I got a 500 unit order. The first order that I got was for 500 units with 50% of that PO amount in advanced. Now I have I have to cheque, I deposited I don't have the team to build this Neither do I obviously don't also don't have the product right. And the validity of the PO was three months. And during this time is when I got people on board, tried a bunch of things failed miserably, so the PO also expired. By the way. So I had to go back renegotiate get a new PO issued and took and took an additional three months. And in that three months I found you know, a team from IIT Kharagpur also my co founder, Sidesh , right, and his friends from IIT Kharagpur. To come down, they had decided I had I had met my co founder on Facebook, at that point, when I say at that point for almost a year, before that he was always enthusiastic about IoT, and we'd met on a platform on Facebook. And we had we had built a rapport and I convinced him and his team of three more guys a total 4 people to shift to Bangalore to come and build this with me, and they did. They shifted. They came in and literally, I think two days or one day before, the second PO expired is when we went and sort of gave them those 500 locks. And to to make that happen. We sat down and hand soldered all those 500 ourselves like we started like that two days and two nights straight. We hand soldered it. Of course there was a lot of other background work that had already been done like we had our moulds in place. We had a we had a vendor in Pune A finalized for all of that raw material obviously in place. We only assembled the last two days. But we found we found our solenoid vendor from Pune. We caught the guy who manufactured the plastic casing in Bangalore, a bunch of electronics we got from Delhi. So we we we sorted out the supply chain, made 500 locks with our own hands and delivered it to the client. Yeah, so and the rest, I think is just history because from there, there was no stopping us for that single client. We have delivered more than 40,000 units. And then we deployed it across all major cities in the country. We serviced their requirements in all those cities. And it's only after we, you know, got on that journey is is we even raised VC money right? And I and I also, as I explained, when we started going through this when we really started searching is when I also instead of looking for VC money, I knew this can be built out by ourselves. I took a hand loan at that point and these so you always have these angels, right? I won't call them not angel investors, I mean angels, a lot of people around you as an entrepreneur, if you're growing, you need these angels around you that will do things that are out of the norm, like these two people that gives there were two people that lent me the money. They will they will, who are proper financiars like they, they financed people for a living, right? They looked at me and gave me 30 lakhs each without a collateral, non collateral, like if something had gone wrong. Technically, they could hold me for it, but apart from that their money was gone. That's it. There was nothing that I could provide as collateral. They were they gave that money because they saw this order. They saw this enthusiasm they saw the product was real. They just said take it And of course, we obviously gave it back with interest. But I would say there are people like that or otherwise in in, in other startup founder journeys, you'll find those angels can be family members or, or just friends who've been able to go out of their way to help. So that really, really worked.
Krishna Jonnakadla 44:17
So the ACT order was in some sense, the thing that kick started holding for you this whole journey.
Gotama Gowda 44:23
Absolutely, that that was truly sort of what put us out there. And to tell you this a from that scale and the revenue that we generated, for that time, we had the largest order for IoT in the country, or probably even most parts of the world as a startup, as a startup, right? I'm not comparing ourselves to the large MCs so and even those 40,000 plus units, we started off I mean, after, of course, making it with our own hands, we set up our own assembly line, we got that manufactured in front of our own eyes. We had a contract with a guy to manage the labor. So which means we had 25 people coming in and literally assembling stuff every single day. And that's how we've built this company from the ground up. And if you see there, it's very rarely that you find another startup that has been able to do this, especially in hardware. And then we found we raised money and when we moved our manufacturing out of India to larger contract manufacturers now that we had scale, we had money, we were also aiming for larger industries, etc. We we started standardizing a bunch of things after that.
Krishna Jonnakadla 45:33
So you you still you manufacture them in India or you were as a manufacturing
Gotama Gowda 45:39
for the last two and a half years the manufacturing used to happen in China in Taiwan. But now again with whatever is happening, the the geopolitical situation and and also COVID, etc. We have already started moving that back to India. So a couple of our products will will I mean, we are going to move that manufacturing back to India. So we've already begun that Process
Krishna Jonnakadla 46:00
interesting Is it is it easy to do that
Gotama Gowda 46:03
see those the fundamental reason why they move out of India was because it is truly hard to manufacture in India right and see all these examples that I gave you the story sounds all great now but I know the kind of sweat and blood that has gone into it and literally, like, like in tell you I can give you examples of when one of my like when my co founder had to carry a bag filled with solenoids, right. So like, thousand plus solenoids, like in a gunny bag and traveled from Pune to Bangalore, on a bus obviously, write which means put it on the bus, move it from place a to place B put it on the bus, come here and then move it to our office and so it's really or even even right now, like when I had to go when I have to go do some pitches. I carry these huge chunks with locks and go around so people so it's it's really not been easy at all in terms of getting The manufacturing done here in India, the journey was not that great, but now we have to do it and I think it's getting better. Also, there's there's more scope. And we've also evolved as an organization, we will work with ems's here that have that can provide us that the kind of quality and, and and scale that we want.
Krishna Jonnakadla 47:21
Right. And what about It is one thing to do more manufacturing back here but a totally different thing to be able to continue to innovate. Do you see the Indian ecosystem rising up to that or do you think as a necessity it will? It will happen eventually.
Gotama Gowda 47:37
SorryI didn't exactly get your question.
Krishna Jonnakadla 47:39
See the initial industry in China was all born out of copying the West right and designs would go for it for instance, today if you pick up an Apple device, it will say designed in California assembled in China right? But that is a that is a thing which is a rarity. A lot of design happens in China experimentation happens in China. There is a lot of supply chain in China. So for a product that you possibly already perfected, and in the IoT world, and in the device world, nothing stays constant, maybe you need updates every three months, six months or maybe a year. So it is one thing to manufacturing, but also to be able to replicate that innovation ecosystem around you. So the question is, do you think you will still continue to be able to get that kind of support even for all of your new product releases? Once you go manufacturing here?
Gotama Gowda 48:28
I believe I look at IoT as two primary things of course, one is hardware and the second one is software, right, there is a certain level of innovation that you can attain when it comes to hardware because you have apart from just innovating on concepts. You also have constraints around what is a commodity and what is not like for example, today, the cost of my bluetooth chip is x. Two years ago, it was drastically different. And if I had to give you a consumer example that is easier to understand like your smart bulbs, three years ago, what cost you two and a half thousand to three K, the same smart bulbs today cost you 500 bucks. And the reason for that is not because, you know, somebody innovated on something and then was able to bring the price down it was simply because of the components that are being used are now being manufactured in bulk, and hence the prices dropped to us to a level where it can become a commodity. That is how hardware overall as an industry works globally, right, except for Super niche things like an IoT, like if you're going deep tech etc, where the price of the device itself does not make a huge difference they use the device to do other things, right. So the way I look at this entire space panning out especially in India and through India, is the software side of IoT, right, because hardware, we will continue to innovate. We will also work with manufacturers but hardware will always be commoditized sooner or later. But now we have continued to Sort of innovate on the firmware and software aspect, and we are building out an integrated platform that can do more. So we're building AI capabilities on top of IoT products. And we see that going hand in hand. And we believe we are right now at a point in the journey, where we're where we are no more smartlock company, we are building a full stack IoT company. Smart Lock was a way to enter the market. we've, we've gotten here. And we've also achieved the status of being number one in the country right now. And of course, it's, it's a huge opportunity. If we just had to build this out, we can build this into a company that can be a few hundred crores in revenue in the next couple of years. But apart from that, we see a much larger opportunity around being full stack and and you know, which with global scale, right, which can truly global scale. So I wouldn't say manufacturing is the only thing that you need to look at if you have to look at innovation in IoT.
Krishna Jonnakadla 50:57
Yeah, yeah. Got it interesting. So it's still Plays toward what India strengths are. And you're saying that is only going to get more and more interesting directly
Gotama Gowda 51:06
Yes,because if for anything else to happen, it's not in my hands, nor in one single entrepreneurs hands, the entire ecosystem has to evolve. That's why I gave that example of the blue chip, the cost of a blue chip coming down, etc, right. So which means that if, if you if manufacturing in India had to become simpler, it has nothing to do with me. It has to do with how quickly the entire system evolves. Now, how quick everybody in the system, including the government realizes that there is a great opportunity right now with a with a giant like China losing ground. And India has that beautiful opportunity to pick up from China from where China's left if you look at it historically. It's something that China did from why while looking at Japan, right in around the 60s, Japan was the China of its time where it was not known for manufacturing great quality stuff. It was actually known Making cheap quality stuff. Then they sort of evolved and became something else later China, in fact, just replicated the same model. If we could learn from that and look at this as an opportunity, then I think you will see some great entrepreneurs building great companies around hardware and IoT, because the talent is definitely there intent, or ecosystem.
Krishna Jonnakadla 52:21
Oh, yeah. I think greatest strength is our talent. There is there is no doubt about it. the brains of our people, our resilience, and the system itself makes it so hard for you to do basic things, which is why Indians are so resilient. It has got and for some reason we thrive in we create chaos, we embrace chaos and thrive in chaos. And it is evident from cluttered homes to clutter, you know, company or charts to the way in which we communicate, but somewhere, I think different formula has to be found, because it is just like Covid was the moment for IoT. And COVID could also be a moment for the Indian economy. But that's the that has been that potential has always been there. The talent has always been there. I don't think that has ever, ever, ever changed for for some strange reason, we've embraced an absolutely wrong set of policies for a very, very long time. And, and I don't blame the while, you know, this is not a political platform or anything of that sort. But I don't blame the politicians, any of them because they come from us, right. So they have to succeed by keeping us happy. And I remember one headline three years ago, post de monetization, and there was a worldwide slump, this some sort of recessionary tendency, and Flipkart and the likes had withdrawn their offers that they had made a lot of students in their final years campus campus Rec, right, right, right. Yeah. And what really special darkly stood out was IIT grads who had received offer letters and then which Flipkart could not actually support because their business situation changed a bunch of parents of these it grads and the IIT grads themselves had gone out and then met the government saying that the government should intervene. I mean, I when I read that, it it disappointed me so much, if the cream of the Indian if the cream of the Indian ecosystem or so called cream of the Indian ecosystem wants government intervention and protection. God knows why we you know why these people are even, you know, subsidized for that education. Right. And, and India has a lot of security, we have parents, we have their own homes, if we fail to let's say, not find a job for the five years after graduating, our parents or some relatives will take us in gladly feed us right. I believe could possibly not say that for extremely poor people. But millions of Indians at least have the opportunity. But yet, in spite of having their social net, our innovation is so broken, our motivation is so broken. So if we are the people, we are the ones that push those policies, right, we should stop saying, I don't want to put up with shoddy service. I don't want to put up with shoddy products. And I'm going to embrace excellence. Yeah, we, you know, I'm reminded of a piece of correspondence actually a series of letters in outside of Bangalore on the way to Nandi hills. You have this town machinery, yes. And so it houses Sir M Visheshwariya's home, and which has today been converted into a museum. In the ground floor. There are a series of artifacts. So the knighthood and all of those things that are given to him, right, what is interesting, are a series of correspondences between Sir M V and Mahatma Gandhi, and this dates back to the mid 1920s, and Vishveshawia is so so vehement about embracing industrialization. While Gandhi is just going the other extreme. And today in today's light, if you actually look at Gandhi, his views versus Vishveswaria's views, it is so easy to see why a wrong set of ideas triumphed. And we are stuck in, you know , Gandhi is a great man, he did a lot of great things. But unfortunately, we've adopted a very, very, absolutely below average economic model that is not doing justice in Kingdom after Kingdom from vijayanagara to the Gupta kingdom, and to some of the great Mughal kingdoms as well. You know, the religious aspect being putting them aside. They all thrive because of the amount of trade that they did, the products that they created, the plurality that they embraced and the support they gave for business. Somewhere along the way, we only snatched a narrow set of eyes From that part of history, and we've held on to we've thrown away everything that was useful in and some sense only hung on to dogmatic ideas. I don't know, in my opinion.
Gotama Gowda 57:09
I, I agree with everything that you're saying, in fact, I think, yeah, I think we could we could talk about politics, or, you know, my journey sort of started from that, in a way would touch my politics. But you're right. See, but I honestly think Krishna that now's the time where India is seeing that shift that we've all been waiting for. See with Gen Y and Gen Zed. And I don't know what other terminology is out there to call out young people. But But you you will see that with whatever is happening in India right now with in terms of mobile penetration, tier two, tier three, and now we're looking at 5g entering our markets next year, and prices further dropping down in that level of adoption, right? is unprecedented. Like, I'm sure you know, We skipped a few layers with Adhar & Demon, right like, like we went. I mean, we went ahead by four years in the FinTech revolution, just because that happened. And otherwise it would have taken so much more longer to hit the kind of scale that we have in these specific industries. A similar thing will be unleashed because of the dropping of prices. And because of what you see now happening with reliance, reliance, and Gio is actually going to affect a lot of these things. And we will and you will see that there will be so many more opportunities that will come up on top of which large, large, extremely large companies will be built out of India and, and consumption largely in India, which is where I'm going with this in terms of saying that consumers have already worked. So I'll give you an interesting stat to prove that right as a company and as a as something that we've been going through. When we launched b2c last year in November. We did it as an experiment and we launched Smart padlock to begin with, it's actually a very basic product, fingerprint based padlock that you can open, you can store 20, fingerprints, etc. Right? What is amazing is still date, we've sold that product in more than 400 cities in the country, right on line across all states, union territories, except lakshadweep. And, and I'm talking about people in villages that are buying these locks and using it on their sheds and whatnot with a total population of maybe 5000 6000. Right, like in the most remote places, and 400 plus when I say cities, I obviously mean towns and villages included, that was like a crazy eye opener and today, we the minute we launched our door locks with post this unlock 1.0 we've been seeing the same behavior. Most three out of five store locks that we sell online, are bought in are bought by consumers in tier two and tier three cities. So everything's said and done. I think the consumer will demand a certain quality of product, the consumer will demand a certain speed of delivery, etc, etc. And today has access to information from everywhere around the world. So he knows and understands what quality means. So I think Indians will definitely step up to the challenge and government will have to support you know, it's it's a chain once it's it's already started and it will continue to evolve from here.
Krishna Jonnakadla 1:00:33
Yeah, only. I don't have a crystal ball. I'm on eternal optimist, but I I don't know we we have youngsters we have jumped through a lot of things in Telecom. We bypass the pager and all the initial revolution and we went we possibly sort of caught on to telecom right at the beginning of the 3g revolution. Now, and same thing with the FinTech. We bypass the banking revolution and jumped right into digital banking. But on the flip side, a lot of for youngsters, the younger ones who should be driving a lot of change, while a lot of them are hungry, a lot of them have discovered the What can I say the pleasure side of life as well really, really quickly. Right. So, and the unfortunate aspect of it is, there is very little as by aspiration, aspirational leadership, right. So there are you look around wherever in the country, the role models that you can look at, you don't have too many of them, you don't have too many of them for me a couple of weeks ago or maybe a month ago I was listening to this evil the book on Tatas. And if you read up about the journey that JN Tata had to go through to establish Indian Institute of Science. It is really, really fascinating. There are very few Indian business patriarch, you know, there are lots of business families who can lay claim or even remotely claim to have come close to what JN tata That Now, that doesn't make JN Tata great. But what it means is that we need thousands of JN Tatas if India has to transform. I think for me, I see that as a big gap in business and in industry and in politics where you could have larger than life leaders who are showing that there is a new new India that is possible. It is it is yet to happen, but we'll see.
Gotama Gowda 1:02:26
So, Krishna, I draw a very interesting parallel in with regard to this. And I and I sort of attribute India where it is now to the early days of America. And I say early days, I mean, early 1800s right. When you when Lincoln it just died and then you had a few masters Post the civil war. Yeah, post the Civil War, like you had you had Vanderbilt, and then you know, post his era then the Rockefellers and the Carnegie's and, you know, and then Ford and and i and i, and the reason I am I draw a Parallel is simply because India is I believe at that nascent stage. It's really we're really in our early days right now, we are looking at this global opportunity that we had never looked at like India, as we can clearly say, we, we, we haven't built companies that have scaled outside our borders, like not enough of them. But now is when you will feel like when you see tomorrow that, you know, a startup from India has scaled and become really like oyo although irrespective of their business model, and what many people think about it is still a great story is still a young chap who's used VC money or not, but built something out there that Ivanka Trump is going to tweet about is great. I mean, I'm just saying that scale that to be able to travel that journey is amazing. But now, I'm not saying it was the most efficient use the most efficient way to get there. But it was only the beginning. Now you'll see more people learning from such journeys, building models that are far more efficient, far more profitable. SAAS is something that is scaling, you will see a lot of edtech rising IoT also hopefully, in that, in that sort of on that level, right, but very early days is what I feel is truly the next decade and two belongs to India is is, as you said, I'm also an eternal optimist, but honestly, I that's how I draw.
Krishna Jonnakadla 1:04:23
So I think SAAS might be that moment. You're absolutely right. IT services again became the oligarchy, kind of a model where only three or four families or founders really became you know, wealthy while you know, they spawned a lot of people I got a chance to go, you know, visit the world as a result of that. You're right, SAAS could be a model. And in some sense, you're right about the parallel though. One of the things about the US is, there is a state bunch of states called the Rust Belt states. So these are Illinois, Wisconsin, Michigan Pensilvania, which used to be home to a lot of manufacturing, which is now out of China. Right? You know, the funny thing that you will find is over there is every small town in those Rust Belt states, okay, has a billion dollar company and if you if you read up their stories of two, three examples I can give you is two examples I can give you is Whirlpool. Okay, so Whirlpool is based out of a city called Ann Arbor, Michigan, which is home to the Michigan Business School. And and you know, the thing that stands out is when you go to the cities, there is hardly anything there. It is not a thriving ecosystem. It is very desolate, and all these are heavily heavy states where there's a lot of snow and the winters are harsh. But whirlpool, which was born out of there is a global corporation. And there is another Corporation called Dover, which is which is a $9 billion Corporation and you could keep going On and on and on. And you'll keep finding examples like that Kellogg's, which also came out of I think Michigan. So there are so many companies which were all small, very, very small in the early 1900s, but became multinationals. So SAAS could be because manufacturing, we are already behind manufacturing. While we definitely need to grow in manufacturing, SAAS could be that modeled segments, like IoT could be the model,
Gotama Gowda 1:06:26
correct software product companies, SAAS IoT, I mean, IoT and IoT software, IoT, maybe a bit of IoT hardware, but truly see, you will have more inspiration when you have more Indians on the world stage.
Krishna Jonnakadla 1:06:40
Gotama Gowda 1:06:40
Now, I already at a point where more Indians are already on the world stage as CEOs, or as as managers running these companies started by Americans or Chinese or someone else. When you have more global companies out of India, that's when I mean you will see a search. That's when we we did
Krishna Jonnakadla 1:07:00
Right. So what's next for open AP?
Gotama Gowda 1:07:03
I think, you know, the way I look at it, IoT is in the journey has just begun. In fact, in November, we will be completing five years of officially starting Open APP, although we spent one year in sort of deliberating and building the basic product from here, as I've kept saying, and I will continue to say that IoT is the future, we think that we've just really begun. In fact, we've taken these five years to establish ourselves as a credible player in a specific vertical, which is smart locks. With both businesses going strong b2b and b2c. Now we are evolving into becoming a full stack IoT platform, which definitely has the potential to go global. Right. We've already tie up with some of the largest names out there, out there on boarded them on our specific platform, soon to be launched. So the whole industry by itself is going to be, I think 500 plus billion. I don't really know what it's going to be 500 plus billion in the next two years. I'm talking about just by 2022. Right. And the story about the total number of devices that I told you that I looked up and which was five years ago. Now, if you look at it from here, is going to cross 40 plus billion. I think if I'm not wrong, that number is 47 billion by 26, or 27. Right? So it's this this journey has just begun, I think five years was prep. From here is truly where we think we will start looking at scale at from a whole new dimension. Still, now we only were looking at growth, we were looking at adding a single zero an extra zero to our every year, right to what we've been doing. But the next journey is going to be about speed. We have our fundamentals right. We know exactly Where what we are doing our turnaround times are one of the fastest for for this kind of companies globally? I think we are, we will incorporate speed into our modus operandi and and we will look at changing some fundamental things around when consumers home very soon.
Krishna Jonnakadla 1:09:16
Very interesting.So bottom line, this has been a awesome conversation we've had discussed a wide range of topics, your initial start in journalism from an education perspective, your brush with food and beverage, and then eventually, in some sense, maybe an accidental jump into IoT. But I if I have to see a common thread, I see that it is your entrepreneurial nature and spirit that has kind of sustained and helped you thrive. And along the way, I think you uncovered a few lessons as well. Right. So you need to be there. I remember, I'm not sure. I don't know if it was Barry Diller who runs this multi billion dollar company called interactive cor. Barry Diller used to be The chairman of paramount, Viacom, which owns Paramount at one point in time, and his line was, it is in the sixth year that you truly see an enormous amount of scale. So and then you hear six months Times of India economic times, most of our media makes it look like you only started yesterday. Like Sam Walton says, When somebody quizzed him about overnight success. He said, yeah, it was an overnight success. 20 years in the making, but but I think looks like you've established a fantastic platform, a fantastic foundation and have the fundamentals right. I think your heart is right, your mind is right. We know you will scale greater heights, Maharajas of scale will be there to talk to you again to see what that vantage point looks like and also cheer you on to your next summit.
Gotama Gowda 1:10:43
Thank you very much Krishna and that thing about six years, very encouraging. I think he might have drawn parallels and reference from the Chinese bamboo. That's that's also what is said about the Chinese bamboo. Right, right. They say you can if you sit there and look at it closely, you can see it grow. That's how With a cross in the 6th year so, again, fingers crossed, hope you're right about that reference. And irrespective we're here for the we're playing the long game, we're very, very clear about it. I didn't start this because it was fancy then I started it because I truly thought that this was a long term opportunity. And the need was very inherent for anybody out there with regard to locks and access. And now that we've established ourselves as a market leader in our country, we are now expanding that business and we are now going broader into the into the larger segment of IoT. And this will be a very, very interesting journey. We are here for the long run, would you be nice to see this play out? If, if nothing this will be really, really fun.
Krishna Jonnakadla 1:11:42
Amazing before we sign off any words of wisdom for potential entrepreneurs and existing entrepreneurs that are listening to you on Maharajasof scale?
Gotama Gowda 1:11:51
I don't think I am at a level where I can advise somebody but look, I think the only the way I look at this is very simple, right? I know that I am not special. And what I mean by that is, it could be in terms of either what we've achieved my background, etc, etc, etc. But of all the innumerable examples that I've either read about or have seen in front of my eyes and aspire to be there's one characteristic that truly truly truly attributes to success if there's one word that is equal to success is perseverance. Right? Like if you have the bloody balls, if I can say so, to go out there the courage to face anything out there and and then do whatever it takes success cannot really elude you. It's only a matter of time. And you just keep going at it with more. Yeah, you pend the universe to your way. Yeah, so that's it. I as I said, there's nothing more that I can say. Because every journey is truly truly unique. I just feel that live it out to the fullest. Do whatever it takes. Bloody keep pushing.
Krishna Jonnakadla 1:12:59
Keep at it . Fantastic. With that note, thanks for being on the show, and have a wonderful day.
Gotama Gowda 1:13:04
Thank you for having me.Thank you. Thank you very much. Thank you very much.
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