“Don’t build a product you can’t sell and don’t sell a product you can’t build” is Saravana Kumar’s mantra when it comes to building a SaaS startup. The founder from Coimbatore, India, has bucked every startup playbook trend there is to create a $10 mn SaaS company, Kovai.co. We spoke to Saravana about his early journey, how he built and scaled Kovai.co from a single product company to a multi-product company while being wholly bootstrapped.
Q. Tell us about your journey in founding Kovai.co and how did you get the initial traction
Saravana: I moved to London in 2000 and spent ten years there working as a consultant. I worked with Microsoft briefly, specialised in a product called BizTalk Server, a product used for enterprise integration. I spotted many challenges in using this product as an enterprise, specifically security, monitoring, governance and auditing. As a platform company, Microsoft was not solving these problems. They were more focused on strengthening their core platform.
Around 2010 when I was in a Microsoft community event in Seattle, I realised how widespread this problem was. I returned to London and started working on a solution as a hobby project. When I returned to Seattle a year later for the same event, I demonstrated what I had done with the idea. I got a lot of positive feedback on the product. I returned to London, spent a couple of months polishing the product and then launched it in June 2011.
Two things lent me credibility when I started. I had a special credential called ‘Most Valuable Professional presented to me by Microsoft, and I had been blogging about Microsoft BizTalk Server since 2004. This helped built trust among my audience, and I got my first customer from Hong Kong within a month. Having a blog was advantageous because I had a readership of around 15,000, a real focused audience. It also helped me get feedback from the users.
Q. In your early days, you acquired enterprise customers like Shell, Microsoft and Pfizer. How do you approach these enterprise companies as a bootstrapped startup?
Saravana: We had an advantage in closing these big customers because of the nature of our product. The use case for BizTalk360 is only with the big companies and not the small companies. Having a technical background and not knowing a lot about sales and marketing also helped because if I were overthinking the product initially, I would have dropped the idea.
Credibility is also important when selling to enterprises. I had received interest in the product because of my blog, and I also maintained good relationships with the individuals in the company. Maintaining these relationships is essential because they help build trust and create referrals with other enterprises.
A classic mistake you can make is turning into a consultant for these big companies. Do not focus too much on solving all their problems and offering a custom solution. Focus on your product and its generic application.
Q. What are some of the mistakes that you made as you scaled?
Saravana: Hiring is always tricky because, at every stage, you will hire misfits. It is always an experiment, and it is essential to remember that organisations will always have resources that they are overly dependent on. It is important to function in their absence.
A common mistake is trying to imitate a successful company. Every company culture is different, and it is good to take inspiration, but you need to do what works best for you. In the early stage, I used to look at other SaaS companies with an open culture, and I was transparent with my revenues and employee salaries. This has its challenges, and I quickly learned from it.
On the product side, a saying that I like is ‘don’t build things you can’t sell and don’t sell things you can’t build’. Don’t jump and build a product if you can’t sell it and don’t sell things that you do not have the required skill sets to build.
Q. How do you look at hiring new people and addressing their skill gaps?
Saravana: As a startup founder, you need to fire yourself every six to eight months constantly. When I first started, I did all the demos myself, but it’s crucial to find new people, delegate work to them, and find new people and delegate their work. That’s how a company grows.
When you hire new employees, you will not get 100% of what you expect. It’s completely natural. I follow the rule if I can get 75%-80% of what I can achieve from the new employees, it’s good enough for me. If I’m sending a weekly newsletter, for example, rather than perfecting the entire content of the newsletter and delaying it, I would prefer one that is 85%-90% up to my satisfaction but goes out on time regularly.
Q. How did you transition from a single product to a multi-product company?
Saravana: It is important to start with a single product and make sure all the engines of this one product are set. Nail down your marker, strategy, and revenue. Don’t jump to do multiple things because it requires a lot of attention to scale a product.
We went multi-product mainly because our flagship product, BizTalk360, is in a niche industry, and the Total Addressable Market (TAM) size is small. It was also important for me to retain the talent that was in my organisation. Because of the small TAM, it becomes more about looking after the existing business. Having a technical background, I know my engineering team would rather look for a new challenge than stay once we hit the saturation point.
We started a second project, Serverless360, and then Document360, and we also acquired another startup Cerebrata so now we can move people around, and they get better opportunities within the company. This is how we turned into a multi-product company.
Q. Why did you choose Coimbatore as your hub to set up your company?
Saravana: I’ve lived in only two cities my entire life London and Coimbatore. It is challenging to run a company in the west because of the expensive R&D and the cost of failure. That’s why I decided to start the company in India.
I chose Coimbatore because it is my hometown, and I know the city well compared to Bangalore, Pune, or Hyderabad. The only drawback is I have a smaller pool to draw talent from. But I strongly believe in having a small core team than hiring a large volume of people. This is why we have 200 employees, a relatively small number of employees for a $10 mn business.
Q. If our listeners would like to reach out to you, how can they do that?
Saravana: LinkedIn is the best option. Be sure to quote this podcast, so I know where you’re coming from.