Editor’s Note: This is a new Q&A series from StartUp Beat that features entrepreneurs who have successfully guided their startups (or multiple startups) to maturity. It is meant to complement StartUp Beat’s coverage of early-stage startups and an effort to provide further insight into the experiences of tech entrepreneurs.
Bio: PV Kannan is the founder of 24/7 Customer. He was among the finalists for the ‘Ernst &Young Entrepreneur of the Year Award’, 2010.
PV was featured as a thought leader in the field of global sourcing in ‘The World is Flat: A Brief History of the Twenty-First Century,’ a book by Tom Friedman, and also in ‘Outsourcing Thought Leaders: Managing Business without Borders’ by Booz Allen Hamilton. Prior to founding 24/7 Customer, Inc. in 2000, PV served in various leadership roles at KANA Software, Inc.
SUB: What was your first entrepreneurial venture?
Kannan: My first entrepreneurial venture was Business Evolution—an online customer interaction company that became one of the leading providers to one of the top online retailers. In 1999, the company was acquired by our competitor, KANA Software.
SUB: What prompted you to start 24/7 Customer?
Kannan: On a holiday, after we sold Business Evolution, I started thinking about what my next venture could be. So in December 1999, my friend and business partner Shanmugam Nagarajan (Nags) and I decided to combine our earlier experiences. One was offshoring with programming, which we had experienced during our tenure at TCS. The other was when we were leading Business Evolution, where we had to train our customers regularly about the software that we had developed and implemented at the customers’ site. We would train them repeatedly, because of the high attrition levels of the staff who managed chat and email, at the customers’ site. Also, the call centers were very frustrated with finding people who could write proper English for email and chat.
We got the idea of how advantageous it will be, if these people were based in another country, educated in English and able to provide repeated support at a lower cost. It would be beneficial for the customer and also an attractive employment opportunity for the graduates in that country.
In April 2000, we set up 24/7 Customer in Bangalore and started off with our first customer, doing their customer service with email. Today, we have over 9,000 people worldwide with centers in India, Philippines, Guatemala, China and Nicaragua.
SUB: Was there a point at which you knew 24/7 Customer would hit it big?
Kannan: In 2003 as customers started knocking on our doors—and we could not take all of them—we realized 24/7 Customer had turned the corner and we were onto something big.
SUB: Was there a “tipping point” when 24/7 Customer really picked up steam and where it started growing exponentially?
Kannan: There were two points in time where 24/7 Customer picked up steam—first, when we moved from focusing exclusively on the U.S. market and added Europe. The other, when we entered the Philippines and Latin America as delivery regions. It was the tipping point.
SUB: What were the first steps you took to establishing 24/7 Customer?
Kannan: The first step was to focus on building a strong team and our own ethos and culture that resonated with all the stakeholders—our clients, our employees and the board. Our focus is on clients we love working with and having people in the team who genuinely enjoy working together. When there is no fit whether with clients or people, we do not hesitate to part ways.
SUB: If you had it to do over again, what would the first concrete step to establishing 24/7 Customer have been?
Kannan: More focus on hiring the right cultural fit for early employees. We had to let a few employees go within 18 months of establishing the company.
SUB: What were the most significant obstacles to growing 24/7 Customer to maturity?
Kannan: Nothing that you would not find in a normal startup. We learned who not to hire and what kinds of clients to go after. We got rid of some early employees where the values were not meeting the high standards we expected of them and we waited patiently to get the right investors and board members. Our high standards in who we like to work with—whether it is clients, people or investors—means investing in equal amounts of persistence and patience to get what we want.
SUB: What kinds of outside funding did you raise?
Kannan: We have been funded by the founders, Sherpalo, and Sequoia Capital.
SUB: What were the metrics/milestones that indicated to you that 24/7 Customer had moved past startup stage?
When we grew from a single geography to multiple geographies; when we crossed 3,000 employees across geographies; when we set up multiple centers in a single location; when our clients approached us to provide support in multiple geographies; and when we had Fortune 500 clients visiting Bangalore and making it a point to visit 24/7 Customer as part of their agenda.
