Meet the Hustlers: Plucky Tortoises stayed ahead, & in demand!

Milind Katti and Abhijit Gangoli braved gusty storms, fought doggedly and kept themselves in the equation. Two decades later, the spirited founders have scripted an inspiring tale from Pune!

For Milind Katti and Abhijit Gangoli, LHS (left hand side) was always equal to RHS (right hand side). Well, the rookie founders got their equation right from day 1. It was 2000. While the world was grappling with the much-dreaded and hyped millennium bug, three young friends in Pune found themselves bugged with an apparently innocuous virus which was not widespread some two decades back. “We became entrepreneurs when entrepreneurship was not as sexy as it is today,” laughs Katti, who met his partners-in-crime during his MBA days in Pune.

The gang decided to take the plunge. “We were three idiots in college who just wanted to start a venture,” recalls Katti, whose father was a teacher in Belgaum district of Karnataka. In 1998, the trio — Katti, Gangoli and the third ally — completed MBA, and did something ‘logical.’ Katti, an electronics and communication engineer, joined Tata Motors, and his friends too settled for a 9-to-5 job.

Two years later, in 2000, the equation changed. Katti was all set to do something ‘illogical.’ The third friend quit her job in Mumbai, and came to Pune. “Guys, I have quit. Both of you quit and come. We will start a venture,” she messaged her friends. “Any logical guy wouldn’t have done what we did,” recounts Katti, who blames the audacity of the youth and a sudden rush of blood behind hastily putting in papers. His father was stunned but supported the idea. He, though, also showed a mirror to the first-generation entrepreneur. “You are a North Karnataka Brahmin boy,” he underlined. “Remember, nobody marries a businessman in our community,” stressed the man who retired from teaching in 2000. “More or less, you are on your own,” he added.

Katti stayed unflustered. The young man first looked at the upside. A job, he argued, was not supposed to dramatically change the equation of life.

His heart and mind were in sync in terms of what he wanted to achieve.

Be bold, take risks, and reap rewards. After all, LHS always equals RHS.

And output is proportional to the input. Convinced with the argument, the would-be founder then looked at the downside. He had built a kitty for two years, which was enough to survive in a place like Pune for over eight months. “If the business doesn’t take off, I will go back to the job,” he reasoned with himself.

Trignometry, Chemistry & Troika

The equation seemed balanced. The friends ventured into the uncharted and exhilarating world of entrepreneurship. Though none knew what to do — and what was coming — they unanimously zeroed in on direct marketing. “The idea was to do business and start something,” Katti recalls. “I know that’s not really the right way of starting up. But that’s how our story started,” he smiles.

And back in 2000, there was a lot to cheer about. The friends had exposure in sales and marketing, and one of them had even worked in a direct marketing agency. That’s how QED Loyalty Management — the first venture started by the greenhorns — started.

The idea was simple. There was demand, and there was supply, but LHS wasn’t equal to RHS. Sample this: mass media advertisers were spending marketing moolah, but had nothing to logically demonstrate the efficacy and impact. Direct marketing, on the other hand, actually had the potential to show the ROI (return on investment). “We knew we could prove our logic. That’s why QED,” says Katti, who was inspired by a concept in trigonometry. QED is an abbreviation for the Latin phrase meaning ‘that which was to be demonstrated.’ QED, he points out, is usually placed at the end of a mathematical proof to indicate that the proof is complete.

Meanwhile in 2000, friends saw enough ‘logic’ in starting QED. And their first big client happened to be Allianz Bajaj Life Insurance. The big-bang move had its ripple effect. Small diagnostic centres, a clutch of restaurants and other corporates were gradually added to the rooster.

Over the next few years, life was beautifully balanced. Steady stream of clients kept coming, business was growing sluggishly and Katti and Gangoli were quite content with their lives. LHS was indeed equal to RHS.

Three to Two ‘Idiots” & A Yamaha

Then one fine day in 2004, four years after starting up, the equation changed. The third partner pressed the exit button. “Guys, I am quitting,” said the third partner who was instrumental in getting Katti and Gangoli to Pune to start their maiden venture. “She was in charge of ads and copywriting, and we used to do sales and client servicing,” says Katti.

Though the two cofounders felt stranded with the abrupt exit move, they knew QED was already meandering and the writing was on the wall. “It was profitable but didn’t have spectacular growth,” he says.

The reason was not hard to find. Most of the big boys of the advertising world in Mumbai started their direct marketing arm. This meant that smaller counterparts were getting muscled out, and were fast going out of the equation.

QED too hit a dead-end. LHS, which was 0 to begin with, was now equal to RHS, which had come back to zero after four years.

There was a glimmer of hope, though. Something unexpected happened, and an opportunity came knocking on the door. Nah, it came riding on a Yamaha bike. This happened just a few months before QED lost steam.

One balmy evening, the musketeers were having drinks in a restaurant, and one of their friends happened to work with IT firm Zensar. His CMO bumped into him, and started ranting about how expensive sales executives in the US were spending almost 70% of their time setting up appointments. On their way back, a drunk Gangoli popped up a ‘smart’ idea. “Why don’t we meet the CMO and pitch for an inside sales outsourcing business from Pune,” he suggested to Katti, who was riding a Yamaha. QED was already selling ICICI bank credit cards, and was running an inbound call centre for Allianz Bajaj. Katti loved the plan, changed gears, and the bike zoomed ahead at an electric speed.

The duo managed to get an appointment. Katti proposed an electrifying plan to the CMO. “You are spending $120,000 every year on the sales guys. Right,” he asked. “Why don’t we sit here and do it, and you end up saving loads of dollars,” he warmly suggested, anticipating a warm smile flashing on the face of the person sitting on the other side of the table. Well, the CMO didn’t smile, but he did flash his anger. “You idiots,” he fumed. ”You are selling credit cards in India. What do you know about ERP,” he asked. “Have you guys ever called up CIOs and CTOs of big companies,” he continued with his aggressive volley. “Tumko laga hai ki ye aasan kaam hai (you thought it’s a cakewalk),” he said. The meeting ended. The friends left disappointed.

Three months later, again an opportunity came knocking. This time it was a familiar voice. The CMO called up Katti and Gangoli, and wanted the ‘idiots’ to take a shot at the preposterous. “I know you guys wouldn’t be able to execute it. But no harm trying,” he said, handing over a pilot project of six months to the cofounders. The move worked. QED got buried, and the inside sales’ outsourcing became the core of the business.

In a short span of time, the cofounders showed their heft by working with 12 out of the top 20 Indian IT services company. Business boomed and four year later, the name of the company changed to DemandShore.

Roller Coaster Continues

Now, if you think that life turned hunky-dory for our unassuming heroes —

Katti and Gangoli — then you got it wrong. There was a little twist in the tale, and it came in the form of a global recession in 2008. Katti, though, is quick to tell us the exact year of the damage.

Recession hit DemandShore a year later in 2009, and it was not a blip.

“This was a huge crisis,” says Katti. By 2009, the company was over 100- people strong, and had invested quite a bit in infrastructure and training of employees. All of a sudden, DemandShore lost almost 40% of the work. Though the cofounders have had a decent run over the last few years leading to the recession, there was not a lot of money in the bank. “Amateurish entrepreneurs like us realise the importance of cash only when hit by a crisis of this magnitude,” he says. Cash was the king, and the two wannabe rulers from Pune didn’t have the valuable currency to tide over the crisis. Katti and Gangoli used their credit cards to keep oiling the business and meeting operational expenses, including salaries. Both were optimistic that the recession would fly away in six months or so.

The rookie entrepreneurs got their maths wrong. Recession dragged on for over two long years. Katti and Gangoli exhausted their means, reserves and hope. They had mortgaged their houses and hoped to sail through. “We were almost bankrupt,” says Katti, who was now dependent on his teacher wife to run the kitchen. “She was earning Rs 14,000 a month, and there was no way I could draw any salary from my business,” he says.

The entrepreneur had his grave moment of weakness. He mulled quitting and hunting for a job. His wife, though, always egged him to carry on. “I keep telling people that entrepreneurs usually give very little credit to their spouses,” he says, acknowledging the role of his wife in his gruelling roller-coaster. “Had she also joined the ‘quit chorus,’ I would have settled for a job,” he says.

Two years starting 2009 were not only financially painful but also mentally wrecking. Katti recounts the pain. “I couldn’t buy a stroller for my daughter,” he says. Imagine the agony of a father, he stresses, who didn’t have Rs 2,000 to ensure that his kid gets a pain-free vaccine. “The cheaper option was for Rs 300 but it had side effects in the form of pain and fever,” he says. The father felt helpless. “It was tough. It was very tough,” he says.

What helped the cofounders survive the torrid time was just one trait: grit. “Frankly speaking, we are not the smartest entrepreneurs,” says Katti. “But what compensates for that is loads of perseverance. We never gave up,” he says. They did survive, and took the business from 100-odd people to over 800 in 2018, and the size of the venture was around $11 million. “At one point in life I didn’t even have Rs 2,000. And in 2018, business was $11 million,” he smiles. Life was sailing smooth, and then came another bewitching twist.

By 2018, the cofounders realised a potential, yet realistic, hiccup. The $10 million to $100-million journey was going to be exacting. “We could have taken DemandShore to $100m, but would have been draining,” says Katti. So when a good acquisition offer came, the cofounders deliberated a lot and eventually decided to sell. There was another reason to exit. “That would also give us enough financial security and bandwidth to build DemandFarm, which was not taking off,” he explains the move. He cofounded DemandFarm with Gangoli in 2014.

LHS, RHS & Equation Of Life

The struggle with DemandFarm, interestingly, had to do with a little overconfidence displayed by the friends. Buoyed by the success of DemandShore, the partners decided to take DemandFarm to the US. And the duo did have the money raised from Mu Sigma founders and his friends. “It was a fantastic product and we were sure of its success,” says

Katti. The gambit, though, failed.

Katti explains what went wrong. The real problem with DemandFarm, he stresses, was lack of knowledge about enterprise SaaS business. “It took a while to understand ICP, product management, GTM in B2B SaaS business,” he says. The cofounders ended up spending the entire $1 million and DemandFarm was in trouble.

Meanwhile, in 2018, came an acquisition opportunity for DemandShore.

“There was ample money on the table,” he says. Katti wanted to sell, his partner wanted to stay put. Finally, they agreed and sold the business to Salesify, a Ziff Davis Group company, in August 2018. The result was money in the bank and freedom to focus sharply on the product business in the form of DemandFarm.

The bet has paid off. A SaaS business in account planning and account based selling space with 80 people, DemandFarm claims to have over 100 customers globally, including 30 enterprise biggies. The business is almost profitable and is growing at a CAGR 50%. Though it’s still Day 1 for the founder, 22 years of toil has taught one seminal lesson: don’t give up. “Hang on, keep hustling, keep fighting,” he says. The entrepreneurial journey, Katti points out, will have its share of highs and lows, but if one has a cofounder, then life becomes easy. “Given a chance to start again, I will again pick up my cofounder,” he says.

Any suggestions for budding founders? Of course, Katti has a twin mantra to offer. First, never forget the Tortoise versus Hare tale. Keep fighting, be street smart (you don’t need to be smartest of the lot), and keep walking. Second one is the most interesting nugget. At times — in fact too many times, life might seem to be unfair, and the equation might be loaded against you. “But remember, in the end, LHS always gets equal to

RHS,” he says.